2002-05-294012REPS255902002-05-29—————The SPEAKER (Mr Neil Andrew) took the chair at 9.30 a.m., and read prayers.Bills2559R15632559Bill presented by Mr Truss, and read a first time.255909:31:002559Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—I move:That this bill be now read a second time.The purpose of the Agriculture, Fisheries and Forestry Legislation Amendment Bill (No. 1) 2002 is to amend the Quarantine Act 1908, the Imported Food Control Act 1992, the Pig Industry Act 2001 and the Wool Services Privatisation Act.This bill will extend the Quarantine Act 1908 to Christmas Island in accordance with the government's policy to align conditions and standards in the Indian Ocean territories with those of comparable communities in the rest of Australia. The Quarantine Act already extends to the Cocos (Keeling) Islands. These amendments will extend the Quarantine Act to Christmas Island in the same way as the act has been extended to the Cocos (Keeling) Islands.The amendments to the Quarantine Act will deliver an updated legislative framework for quarantine on Christmas Island to replace the existing quarantine regime. The quarantine regime currently in force on Christmas Island is the Quarantine and Prevention of Disease Ordinance, a law adopted from the colony of Singapore. This ordinance has applied to Christmas Island since 1958. When the amendments come into effect, the formal responsibility for animal and plant quarantine functions on Christmas Island will move from the Minister for Regional Services, Territories and Local Government to this portfolio.In recognition of the differences in the pest and disease status between the mainland of Australia and Christmas Island, the bill will ensure that appropriate quarantine barriers continue to exist between Christmas Island and mainland Australia. At the same time, this approach will give Christmas Islanders the flexibility to determine a level of protection that best suits them, having regard to their own trading needs and the island's unique pest and disease status.This bill will also amend the Quarantine Act to support two initiatives to improve the arrangements for the payment of fees for quarantine services. One initiative involves the payment of fees by agents for the clearance of imported goods. AQIS provides import clearance services for thousands of importers each year. In most cases, these importers are represented in their dealings with AQIS by a small group of agents—that is, customs brokers. Where an importer is represented by an agent, the usual practice is that AQIS invoices the agent, the agent pays AQIS and then the agent collects the amount paid from the importer. This arrangement works well and has the general support of the customs broker industry. However, in a limited number of cases the agent insists that AQIS invoice the importer directly. The AQIS experience has been that seeking payment from the importer in these circumstances is often time consuming, costly and not always successful. To avoid the risk of bad debts arising from an agent refusing to pay AQIS on behalf of his/her client, the bill will amend the act to impose an obligation on each customs broker, as an agent of the owner/importer, to collect amounts payable for import clearance services and to pay the amounts to the Commonwealth regardless of whether the agent has received the amount from the owner/importer. The amount so payable would then become a debt due to the Commonwealth by the agent and recoverable in a court of competent jurisdiction. The other fee payment initiative concerns the amendment of section 86E of the Quarantine Act to clarify that, in cases where a fee for service can be calculated in advance of the service being provided, the determination under section 86E may require that the fee be paid before the service is provided and that in such cases a Quarantine officer may decide to withhold delivery of the service until prepayment is made. This approach is expected to significantly reduce the risk of bad debts. The bill will also amend the Quarantine Act to overcome the limitation in the act that generally restricts the pool of persons who may be called upon to assist in the protection of Australia's borders in non-emergency situations to Commonwealth, state or territory government employees.This limitation in the act means that the Australian Quarantine and Inspection Service does not have the flexibility it requires to respond as quickly and as efficiently as it would like in order to meet demands for increased levels of quarantine intervention at the border. The need for this flexibility is particularly relevant in the current environment, where AQIS is implementing enhanced quarantine border controls in accordance with government decisions in the last budget.The amendments to the Quarantine Act will empower the Director of Quarantine to appoint a person who is not a Commonwealth, state or territory employee to be a quarantine officer. In particular, the Director of Quarantine will be able to appoint a person who is in a contract pool to be a quarantine officer. As a result of these amendments, the directors of human, animal and plant quarantine will be able to enter into contracts to create a contract pool. A person who is an employee of a company such as a labour hire firm or a body corporate that is established for a public purpose by or under the law of the Commonwealth or of a state or territory, such as the CSIRO, will become a person in a contract pool as a result of a contract between the Director of Quarantine and the company or body corporate. A person who is self-employed will become a person in a contract pool as a result of a contract between the Director of Quarantine and the self-employed person.Before appointing a person from a contract pool, the Director of Quarantine will need to be satisfied that the person is a suitable person to be a quarantine officer and that the person has agreed to comply with the APS code of conduct. The requirement regarding the APS code of conduct has been included because persons from a contract pool exercising quarantine powers should have the same level of accountability as government employees exercising those powers. On appointment, persons from a contract pool will have all the powers of a quarantine officer under the act except the powers under sections 66AC, 66AE or 66AF, which are offence related search and seizure and warrant powers. These powers are excluded because a contract pool person who is appointed as a quarantine officer will not be required to exercise these powers. In addition, the contract may provide that a contract pool person who is appointed as a quarantine officer will not exercise certain powers that are specified in the contract. Furthermore, the amendments will also impose a duty of nondisclosure on a contract pool person who is appointed as a quarantine officer for the purposes of section 70 of the Crimes Act 1914. The amendments will state that a person appointed from the contract pool will not be an employee of the Australian Public Service.The bill will amend section 11 of the Quarantine Act to clarify that this provision of the act applies to making arrangements for the appointment of state or territory officers as quarantine officers and to amend the provisions of the act dealing with appointments to clarify that state or territory officers who are the subject of such arrangements may be appointed as quarantine officers. The amend-ments will also clarify that a state officer may be a chief quarantine officer.The bill will also make a number of clarifying amendments to the act.The bill will amend the Imported Food Control Act 1992 in response to recommendations arising from the national competition policy review of the act.The amendments will insert a statement of the objective into the act to clarify its purpose. The objective will be: `The object of this act is to provide for the compliance of food imported into Australia with Australian food standards and the requirements of public health and safety.'The regulation of labelling noncompliance of imported food involves the use of significant Commonwealth resources. The bill amends the act to allow for the importation of food that does not comply with Australian food standards with respect to labelling but creates an offence to sell that food. This will allow an importer to correct a labelling deficiency before the product is sold, hence ensuring that consumer interests are protected but in a manner that is more efficient for industry and government. The adoption of a co-regulatory or partnership approach with industry is a key government objective. The use of compliance agreements as an alternative mechanism to the current system of inspection by officers of the Australian Quarantine and Inspection Service has been identified by the review as the preferred mechanism to promote a partnership approach. The amendments will provide legislative support for compliance agreements. However, to ensure that human health is not jeopardised and the integrity of the imported food inspection system is maintained, the amendments will provide that a failure to comply with a requirement set out in a compliance agreement that causes a significant risk to public health will be an offence attracting a maximum penalty of 10 years imprisonment.The purpose of the amendments to the Pig Industry Act 2001 and the Wool Services Privatisation Act 2000 is to allow the research and development bodies for the pork and wool industries—Australian Pork Ltd and Australian Wool Innovation Ltd—to carry forward research and development expenditure eligible for Commonwealth matching contributions from one financial year to the next.All rural research and development bodies attract Commonwealth matching contributions. However, the Commonwealth imposes two limitations on the amount of the matching payments. Firstly, the cumulative total of all matching payments made by the Commonwealth to the research and development body since its inception must not be greater than the cumulative total of the industry's research and development levies received by the Commonwealth. Secondly, Commonwealth matching payments in any one financial year must not exceed 0.5 per cent of the amount determined to be the gross value of production of the industry for that financial year.This second limitation in particular can have the effect of research and development bodies being unable to attract the total amount of matching contributions that would otherwise be available. This is especially the case for years when research and development expenditure is unusually high.Therefore, the legislative framework for the research and development bodies for all industries, except Australian Pork Ltd and Australian Wool Innovation Ltd, allows these bodies to carry forward unmatched eligible research and development expenditure by submitting a claim in the following financial year. In this way, by rolling over their claims, research and development bodies can ensure that it is possible for all eligible research and development expenditure to be matched by Commonwealth contributions.However, Australian Wool Innovation Ltd and Australian Pork Ltd are precluded by legislation from carrying forward eligible research and development expenditure in this way. It is the view of the government that this situation creates an anomaly that is inconsistent with the government's research and development policy framework and disadvantages the wool and pork industries as a result.The amendments will ensure the legislative arrangements under which the Commonwealth matches eligible research and development expenditure for the pork and wool industries are consistent with the red meat and horticulture industries and those research and development corporations and councils operating under the Primary Industries and Energy Research and Development Act 1989.I commend the bill to the House and present the explanatory memorandum.Debate (on motion by Dr Lawrence) adjourned.Tariff Proposals256209:44:002562Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—I move:Excise Tariff Proposal No. 2 (2002); andCustoms Tariff Proposal No. 1 (2002)The tariff proposals which I have just tabled contain alterations to the Excise Tariff Act 1921 and the Customs Tariff Act 1995. These alterations were previously gazetted on 12 April 2002, having effect from 15 April 2002.Excise Tariff Proposal No. 2 (2002) and Customs Tariff Proposal No. 1 (2002) formally place before parliament changes to the acts to allow the exemption of certain food grade white mineral oils, certain aromatic process oils and certain polyclycol brake fluids from the product stewardship arrangements for waste oil.The product stewardship arrangements include the imposition of an excise-style levy on oils through the Excise Tariff Act 1921 and the Customs Tariff Act 1995. The original intention of the levy was to reduce the impact of waste oil on the environment. Where oils are used in the manufacture of another product, such as cosmetics, rubber or plastics, these oils are not contributing to the waste oil problem and the government has decided that they should be excluded, where feasible, from the product stewardship levy.These proposals exempt from the levy those products which are solely used for the manufacture of another product and do not result in waste oil. The definitions ensure that only those products that are used in the manufacture of a non-oil product are identifiable for exclusion and cannot be used as a substitute for oil that should attract the levy are accorded the exemption.Other minor related changes that are consequential to the above amendments have also been made to the Customs Tariff Act 1995.Comprehensive summaries of the alterations contained in these proposals have been prepared and are being circulated.I commend the proposals to the chamber.Debate (on motion by Dr Lawrence) adjourned.Bills2562R15522562Debate resumed from 16 May, on motion by Fran Bailey:That this bill be now read a second time.09:47:002562Melham, Daryl, MPMr MELHAM4T4BanksALP00—The Australian Protective Service Amendment Bill 2002 has been presented by the government as part of its counter-terrorism response following the terrible events of 11 September last year. All members of this House will be supportive of appropriate and well-considered measures which strengthen Australia's counter-terrorism capacity. This bill, on the face of it, is minor in terms of its legislative scope. It is merely the first phase in what is proposed to be the eventual full amalgamation of the Australian Protective Service into the Australian Federal Police. Under the bill's provisions, the APS will be established as a statutory agency with the Commissioner of the AFP as the agency head. Apart from this, however, for the immediate future it will be business as usual for both the APS and the AFP.The second reading speech by the Parliamentary Secretary to the Minister for Defence stated that under the provisions of this bill:The current competition arrangements applying to the Australian Protective Service would be preserved, including arrangements allowing private security agencies to bid against the Australian Protective Service for the Commonwealth guarding contracts.Employees of the Australian Protective Service would remain public servants and retain their conditions and entitlements under the Public Service Act 1999 and various industrial awards.No provisions governing Australian Federal Police employees would apply to Australian Protective Service employees.Nothing in the proposed arrangements would affect Australian Federal Police employees and their relationship with the commissioner.Following the passage of this bill, the government will explore steps to further align the AFP and APS, having regard to current competition and efficiency arrangements applying to the Australian Protective Service. This bill does not address the significant issues the government knows to be important. It does not tighten nor increase coordination of Australia's operational effectiveness to counter terrorism. This bill resolves none of the strategic or organisational issues the government itself said were important in requiring the integration and consolidation of our Commonwealth law enforcement agencies. This bill has been pushed into the parliament in an overcrowded legislative calendar in order to meet the government's self-imposed deadline.The government announced their proposed changes to the APS with much fanfare. We were told by the Attorney-General's Department in Senate estimates in February that the relevant legislation would be comprehensive and detailed. The government made much of the benefits that would follow from total integration and they said that by 30 June the APS would be an operational arm of the AFP. It will not be—at least not in any meaningful sense. This bill does not do what the government said they wanted to do. All this bill does is make the APS a stand-alone statutory agency. All it does is change its CEO from the Secretary of the Attorney-General's Department to the Commissioner of the Federal Police.In doing so, the government's incomplete approach creates an anomalous situation in which the Commissioner of the AFP, who enjoys a high degree of operational independence under the AFP Act, will be placed in the position of being instructed, directed and told what to do by the government of the day in regard to his position as the head of a statutory agency. This could have significant implications in relation to AFP-APS joint operations. The commissioner could never be sure that his operational plan for using the APS in partnership with the AFP would or could not be countermanded by political direction. As an example, consider the need to contain a demonstration at Parliament House. If the commissioner's joint AFP-APS operational plan to best manage the situation was, let us say, `light touch, stand back, wait and see what develops', what would happen if the government were to insist to the CEO of the APS—as they could under this legislation—that the APS adopt a more immediately interventionist approach at this demonstration? You could potentially put the joint operation at risk. The Commissioner of the AFP should be responsive to the broad priorities of government, but nothing should directly or indirectly undermine his operational independence.To have the main providers of Commonwealth protective security services operating from within the Commonwealth's premier law enforcement agency does make good sense. Labor thought it made good sense, which is why it was Labor policy at the last federal election: we could see the benefits that would arise from a merger. The difference between Labor's policy and the government's approach is that we thought it through: we examined the issues thoroughly and offered a complete solution, not a quick fix. We proposed the creation of the Federal Protective Service, a protective service that would form an integral part of the AFP, with its own deputy commissioner to command and coordinate all the protective security and counter-terrorism responses necessary to ensure the safety of Australians and Australian interests.I should also take this opportunity to reiterate Labor's strong view that the APS should manage Australia's detention centres. The government should not take any further steps in the tender process for detention centre management and should have APS take over at the expiration of the contract with ACM. Having a public sector agency manage detention centres would enable much more effective parliamentary scrutiny and accountability in this difficult and controversial area. The key critical difference between what Labor proposed and what the government is doing today is that we would have done the job properly. We would have removed the conflicts that are inherent in requiring the APS to continue to operate commercially. We would have funded it properly so it could operate as it should, as a key instrument of government in the armoury against terrorism. The government's initiatives in this field acknowledge that these difficult times require different responses in terms of heightened preparedness to fight terrorism. This government has made a move but it is a very small move, and it is unable to offer the parliament any detail on the next steps it anticipates taking. The government has not done even half the job. This government has quite rightly acknowledged that, in order to upgrade security at airports and on aircraft, significant amounts of money have needed to be spent. It funded the recruitment and training of 110 sky marshals working as part of APS to be ready to protect the travelling public. It has put aside significant funding to upgrade the security at our airports, recognising that this is the first line of defence in the response to terrorism. This it has done in the form of a $51.5 million allocation to the APS since September 11.But if airports are important enough to have direct funding to ensure that adequate levels of security are present at all appropriate times, why aren't other important security requirements dealt with on a similar basis? This government is allowing important decisions about the security of government assets to be influenced and sometimes ruled by considerations that have nothing to do with security. It still requires the APS to operate commercially. The minister has said repeatedly, in the context of this change that would see the APS become an operating arm of the AFP, that `the APS will continue to operate commercially'. This government starves agencies of funds and then their decision about security becomes just another one of the competing demands on their limited funds. Either we are responding to the events of September 11 by getting all our security and counter-terrorist resources equipped, trained and armed appropriately to carry out their duties for all Australians or we are saying to the APS, `You still need to turn a buck and sell your services in a competitive market.' The result of this is that we are putting the security of our important and sensitive national assets in the hands of the market. Market forces will determine what level of security is provided at Lucas Heights or sensitive defence establishments.This bill has, as its immediate consequence, the certainty that another piece of legislation will follow. The parliament will have to consider further legislation, prepared by this government, sometime in the future in order for it to achieve what it said was urgent and necessary back in February. When will this be done? How much more time does this government need to do its job? We do not know the answers to those questions yet. This is just part of a disturbing trend of mismanagement of Australia's federal law enforcement arrangements. In this regard, the opposition is particularly concerned about the government's decision making in respect of the National Crime Authority. What is the future of the NCA? Not much it appears—another agency to suffer at the hands of a Prime Minister who wanted it abolished after its efforts to prosecute Mr Elliott and after its chairman dared to offer the view that an examination of heroin injecting rooms might be appropriate.As a consequence of this government's style of policy on the run—announcing a change and then rushing around trying to create the legislative underpinnings after the event—the government's key Commonwealth law enforcement agency has been operating for the current year in a climate of uncertainty and fear for its survival, just at the very time that international events dictate that we should have all parts of the Commonwealth counter-terrorism and law enforcement agencies working in harmony. This is not a government that inspires trust. This is not a government that deserves to be trusted to get it right in the law enforcement arena. We will want to see the detail—the evidence that government has carefully sifted through the issues, examined a wide range of options and consulted widely. We will want to see a proposed model for the Australian Crime Commission that will make a real contribution to the national effort in the fight against crime. And the same goes for the inevitable revisiting of the APS Act. I understand there is going to be extensive consultation in the next phase, and Labor welcomes that. We are prepared to work cooperatively with the government in that respect. Labor is prepared to accept today's bill as an interim measure, subject to the detailed examination which will be undertaken by the Senate's legal and constitutional committee. Government must move quickly to spell out the detail of its plans for the eventual integration of the APS with the AFP, and we will be looking for the government to introduce quality legislation that enhances the capabilities of our law enforcement and protective security agencies to safeguard the Commonwealth and protect all Australians.09:59:002565Baird, Bruce, MPMr BAIRDMP6CookLP10—I listened with interest to the shadow minister's response to the Australian Protective Service Amendment Bill 2002. While I was very pleased to hear that the opposition will be supporting the bill, nevertheless, there were some factors in his response that I believe need addressing. He raised the issue that, in terms of administrative arrangements, it would seem appropriate to simply amalgamate the APS into the Australian Federal Police; in other words, this agency that is at the centre should be simply amalgamated and have its own deputy commissioner. That is what I understood him to mean.One of the key reasons, as I understand it, that the APS was established as a separate statutory agency under the Commissioner of the Australian Federal Police was the IR implications of the different conditions under which it operated. There was some industrial pressure over its simply being amalgamated into the Australian Federal Police and this was a way of resolving the issue. While it can operate for its main purposes as if it is part of the Australian Federal Police, it remains an independent body and its conditions and entitlements are not affected. There is simply a change in arrangements so there is a separate statutory body under the commissioner. While I listened to what the shadow minister said—and on a straight organisational basis it had some merit—nevertheless, in terms of protection of the working entitlements of the people involved, I am surprised that members opposite would want to change that. I understood there was quite a lot of pressure in that regard.The shadow minister also said he believed the APS should take responsibility for the management of detention centres. It is an area in which I have a particularly keen interest. If the shadow minister looked at the report on the visit of the human rights committee to the detention centres he would find that the committee was not particularly critical of the way in which these centres were managed. Given the circumstances, it was thought that ACM did a reasonable job. I am not quite sure on what basis he makes that suggestion because the way they are managed now is seen as being a more efficient and more cost-effective way of dealing with them. I would query why that recommendation was made.His final proposal concerned the National Crime Authority. He raised the possibility of this becoming the Australian Crime Commission. I think he is ignoring the fact that it was the state premiers who called for the overall coordination of security and crime intelligence around the country. Much of that initiative came from various law enforcement bodies around Australia. The new board will be made up of representatives of the police forces of various governments around Australia. With the state governments being Labor governments at this stage, I am a little surprised at his comments. That initiative was not in terms of the Prime Minister simply announcing that that is the way it should be; it was a response to the need for the overall coordination of intelligence. For example, at the moment when you get to the border you can no longer pursue the criminal involved. As Chairman of the Joint Standing Committee on the National Crime Authority, I have obviously been involved in briefings on this matter, so I am a little surprised at those comments. I see that one of the other members of the committee is sitting opposite.Obviously I was very pleased to see the shadow minister agree to the need for Australians to have changed security arrangements. The events of September 11 certainly brought home to us that we live in a changed world, a changed environment. I think it was illustrated during budget week, when we met to consider the budget in this parliament, when there were two low-flying planes in Sydney—an RAAF Hawk trainer jet closely tailing a US Air Force Boeing 737. The situation led many people to conclude that the 737 was a hijacked plane and it was being chased by a military aircraft as it sped towards Sydney's central business district. Outdoor areas were full of people looking up at the sight; the talkback lines were full, jammed with concerned callers. The spectacle turned out to be no more than a training and photographic exercise between the Australian and US air forces. Two aircraft circling in normal times pre-September 11 would have caused no particular concern. But the world has changed very much in the last 8½ months. For most people, before September 11 such a thing would have seemed quite innocuous; today, such a thing causes significant concern and apprehension. How do we respond to September 11? It is impossible to determine just how much concern has arisen within the country, but we are aware it is significant. We must try to balance the legitimate concerns of people about security measures being adequate against the constant struggle to maintain important civil liberties. I think the Prime Minister put this dilemma succinctly when he said that, in a sense, the government is `damned if it does and damned if it does not. If we do not respond and an incident occurs, people are entitled to criticise us. There is always the haunting worry that, whatever response is taken, an incident might still occur.' I think that is true for us as we consider this legislation.Following the terrorist attacks on the United States, the government quickly initiated a review of Australia's security and counter-terrorism arrangements. It was interesting that, while section 51 of the Constitution provides that the Commonwealth has power to make laws to aid the defence of the Commonwealth and control the forces to execute and maintain the law of the Commonwealth, there is no specific antiterrorist law in Australia, with the exception of the Northern Territory. Instead of a single law, our legal framework against terrorism is contained in many pieces of legislation across a wide range of portfolios. I notice the member for Wentworth is in the chamber. Given his quite considerable legal expertise, I am sure he will be touching on those aspects in his speech when he follows me shortly. The review identified some significant gaps in this legislative framework and these are now being addressed through a series of bills. One of the significant recommendations made in the review was that the relationship between our key counter-terrorist agencies be brought closer together to ensure adequate levels of intercommunication and cooperation.Then we come to the recommendation regarding the Australian Protective Service. The APS play a vital role in the protection of the Prime Minister, the Governor-General, various other government ministers, visiting heads of state and dignitaries. They also protect important Defence Force sites and the ANSTO research reactor at Lucas Heights, which is in my area. The APS often operate in competition with the private sector in some of their fields of operation, particularly training and information technology. In response to the shadow minister, who asked why they needed to operate on a commercial basis, one of the major complaints of people who operate in the private sector is that they see it as unfair competition if you have government organisations that compete with them directly and they have an unfair level of subsidy through the government. So that is one of the forces behind making them operate on a commercial basis; otherwise, you would be subject to a major area of complaint. Either you have them operate commercially and they are able to compete with the private sector or, if they are going to be subsidised by the government, you cannot have them compete with the private sector. You cannot have both.As a result of the review, this bill moves the Australian Protective Service over to a statutory agency under the Commissioner of the Australian Federal Police by 1 July this year. At present the Secretary to the Attorney-General's Department has responsibility for the service. The clear advantage of this change is that it allows the closest possible coordination between two of our key counter-terrorist agencies. I was very pleased to hear the shadow minister say that this was obviously important. I think we are going to see probably more amalgamations in the future, as discussions are under way regarding the proposed ACC and bringing in the various agencies there. I think the days of having separate organisations that are aligned but operate somewhat independently are over. It is important when we are dealing with terrorism that there is an overall coordination. The APS will continue to operate under the auspices of the Australian Protective Service Act 1987. Its power, duties, uniform and everything else regarding its day-to-day activities will remain unchanged. As I mentioned before, the amendment does not change the status of APS employees as public servants, which means they retain all their existing conditions and entitlements. The changes being made are occurring alongside a number of other improvements to the existing security framework in this country. The government has announced $14 million for the APS to expand airport security, including the bomb-sniffer dogs program, and has announced increased Protective Service officer presence at a number of major airports around Australia, and the recent federal budget brought down by the Treasurer provided new funding of $31.6 million for a number of measures, including provision of air marshals on selected commercial flights.In summary, this bill provides for a simple change arising from the recent review into Australia's security framework. It will make the Australian Protective Service a statutory agency under the Commissioner of the AFP, rather than being administered by the Attorney-General's Department. The change made by the legislation ensures that there is better cooperation and coordination between the two key elements of our national security framework. In the light of the new circumstances that occurred after September 11, I believe this is an important first step—as the shadow minister has also indicated—and we look forward to seeing further legislation in this area. I am sure foremost in the minds of Australians is the question of our national security. That is why this bill has been brought into the House. I am sure all members will support this bill.10:11:002567Kerr, Duncan, MPMr KERRRH4DenisonALP00—History did not begin on September 11. This debate is being conducted as if we are in a vacuum of ignorance regarding the history, the circumstances and the context which places before us the Australian Protective Service Amendment Bill 2002. It is appropriate to say at the outset that what we are dealing with in large part is the need to restore the integrity and the structures of our capacity in law enforcement and our capacity to respond effectively to terrorist threats—after those events became so obvious in the public mind that it forced that realisation on this government. But, unfortunately, it is a realisation that emerged after the event.One of the great tragedies is that there is no honour in being a prophet before one's time. Few people come to you afterwards and pat you on the back and say that three years ago you were wise to warn of the looming crisis in the way in which we were handling the structure of our security agencies. Few say that you were wise to warn of the need to integrate our security agencies into an overarching framework that saw responsive law enforcement as critical to national security—as are the defence services—of the need to do something about the massive run-down in the capacity in the Australian Protective Service, of the need to restore funding to the Australian Federal Police and of the need to make certain that the ministers responsible for law enforcement had a seat in the national security cabinet so that issues that go to drug law enforcement, antiterrorism and the whole gamut of those ways in which states are undermined, other than by direct military attack, could be dealt with in a serious and sustained way. Few say that you were wise to warn of the need for us to develop a white paper process for law enforcement so that we can actually have long-term thought given by our Australian community to the resources and the strategic placement, utilisation and management of those resources, with proper discussion, rather than the kind of covert quick fix solutions that we have so often fallen for in the last five or six years when we are confronted with difficulties in the law enforcement environment. We need to have the kind of open and transparent process which we accept as being absolutely essential in the area of defence. We accept that, because defence is the fundamental responsibility of a national government, all Australian citizens have a right to be brought into the loop about how we position ourselves—whether we look for a forward defence strategy; how we acquire assets and whether those assets should be configured in such a way as to enable us to have preventative capacities only or to give us some advance capacity for operations off our shores; whether we should be focusing on peacekeeping operations and the like. All those issues should properly be put into public debate. In law enforcement under this government, all those issues are pushed under the carpet, disguised from any public debate—the government knows best, the citizen is kept out of any loop, and we are treated as mushrooms.The situation that we now confront is one which emerged as a critical necessity some years ago. It is not new. It should not be simply a response to the events of September 11 and pressing antiterrorism issues. It ought to have arisen as a response to what was essentially a structural run-down in the morale and capacity of the APS over a long period of time under the policies that this government were implementing. The APS originally evolved out of the law enforcement environment. It was part of the Australian Federal Police in the first instance. It was structurally separated out to enable a more effective management arrangement for static guarding duties, which were not those thought to be most appropriately integrated with a police force which was becoming increasingly more targeted and professional, building up its strength for its investigative side and becoming an elite policing agency. So the two structures were pushed in different directions: the AFP retaining some security roles, mainly to do with close personal protection, while the roles of the protection of buildings and assets and the like were given over to the APS. The APS also at that time, if I might mention a point raised by the member for Cook, had responsibility for the security of the then detention centres—detention centres, I might say, not akin exactly to those which exist now. They had a very different structure and a different way of operating in those times but, nonetheless, the APS was there. It was thought appropriate by the government of the time that the APS should exercise a role where the freedom of a person was being constrained and that that role be carried out through an agency directly responsible to the parliament. When the shadow minister says that we hold the view on the Labor side that the APS should resume its role as the provider of security services at detention centres, it reflects not merely a practical appreciation that there have been significant numbers of reviews which have ascertained that the management structure of the existing detention centres has led to instances of gross abuse. There is also a fundamental philosophical point that when you are holding people against their will in custody, whether it be in circumstances akin to those of detention centres or whether it be in other circumstances, there ought to be a direct line of accountability back to the parliament rather than accountability via a contract arrangement with a private provider.Returning to the main point of this legislation, once the separation from the AFP had occurred, the agency was quite substantial in scale and operated well for quite a long period of time. I recall when I was minister for justice it twice won the Australian award for best security agency, an award given across all the providers of security services in this country. However, that has not been its recent history. Increasingly, it was either forced to not tender for contracts or, for its own commercial reasons, it decided not to tender for certain contracts. I do not know, it may have been the government's own ideological disposition to favour the private sector which led to decisions not to tender for particular contracts. So its scale was diminished as it lost contracts to provide security at airports and various other services. It lost the critical mass that enabled it to provide an adequate range and depth of training and it lost its reputation as the premium provider of security. It also lost the contracts for the detention centres, of course, which again cut down its size. So it became essentially a small node of specialist security operational staff without any promotion structure, without any adequate training, and without the institutional framework to ensure that it had sharp-edged, operational mastery of the task that it was charged to undertake. That, of course, led to grave morale problems—obvious ones. There was not a single pay rise for APS staff for four years, I believe—it may have been a little less than that but certainly for three or four years. These people were treated essentially like second-rate employees. Their conditions were eroded substantially. They were certainly treated—I was going to say the ubiquitous Australian words but I will draw short of that given the Speaker's present strategy for removing such words from Hansard anyway—very poorly. Their morale sank and the readiness of Australia to deal effectively with the kinds of threats that potentially could have arisen was substantially corroded. We are in great fortune that the trigger events that have led us to respond now to strengthen our responses have occurred in other places, because we really had run down. It was not just the APS; we had also run down a series of other agencies over time—and if anyone wants me to regale them with the history, they can remember the very large cuts that were made to the Australian Federal Police in the first term of this government and the way in which large cuts were also made to the NCA and how over time those reductions were in part redressed only after critical reviews took place which pointed out that essentially the core capacity of law enforcement in this country was being so eroded that they could not undertake basic tasks that the community expected of them. So the whole system was run-down and it was not a focus of this government's attention. Instead of the issue that you put at the forefront, that you see as part of your fundamental first line of government responsibility—as it should be—it was way down at the third, fifth, sixth or ninth order of priority.It was very difficult to get a public debate about this, by the way. I remember making speech after speech about this. We went to election campaigns drawing attention to it. The media did not make much focus of it. We were living in a rather complacent environment and, as a fish rots from the head down, the complacency was led by a complacent government undermining the effectiveness of its agency structures, not looking at issues that obviously should have been on the agenda. I remember drawing attention at an early stage to the need for us to have an effective strategy against attacks on our critical infrastructure. Part of that is that aspects of that critical infrastructure are guarded by the APS. We have never had an effective response, even now, to the issues of critical infrastructure, notwithstanding the significance of those issues. It was not even on the radar screen before the events of September 11. Now it is on the radar screen, and I imagine something ultimately will be done.What we now face is a situation where we have the unready government, the government that has had to react after the event to try and do what it can to make certain that our responsive capacity is more effective. It is doing it against a background where its own indifference and failure to plan are costing it the opportunity to move fast. We are very fortunate in this country. Some of the complacency I mentioned before is justified, and it is a matter of great good fortune for Australia that we have been able to be complacent to a large degree. We have suffered some instances of a terrorist nature in this country. We had the bombings in Sydney associated with the charges that were then laid against an Ananda Marga leader who was later acquitted. We do not know who was ultimately responsible for that particular event. On the scale of threat, Australia has fortunately thus far been left largely off the map. But we know from information that is given to security agencies, and ministers in this government must know too, that there is a background level of threat that is always present and there have been people in this country from whom the Australian government quite properly would expect some level of threat. So we cannot pretend that these things were never within the contemplation of government. They were. Under the present administration they were given so little priority and so few resources that their operational capacity was undermined. I come to this particular proposition. It half does what we proposed as part of the 10-point anti-terrorism plan that was put forward by the federal opposition after the events of September 11. I might go back one step. That 10-point plan was not just a quick tick-off from that event; it was a culmination of various strategies that had been announced by Labor over a long period of time that we believed were necessary to improve our security standing. So each of those points were points that we had articulated or pointed to as serious options that we would pursue in the future that this government had not done. When the events of September 11 came, Labor put forward a 10-point initiative, part of which was to amalgamate APS back into the Australian Federal Police and to have its management under a separate deputy commissioner. That was to recognise that there are different tasks that the APS actually undertakes and that there were different industrial arrangements that were in place that would have to be negotiated and thought through to make sure that the industrial interests of all those that were engaged in the Protective Service were properly protected. But at the end of the day what we wanted to have was a seamless system which would give the Australian Federal Police operational command and control of security response in a comprehensive way so that the single agency would be able to provide an integrated and effective response to any threat that might emerge.This bill goes only part of the way. It does give the Commissioner of the Australian Federal Police command and control in a simple sense of the APS, but it does not do it in a way which is consistent with his ordinary responsibilities as police commissioner. When it comes to his responsibilities as police commissioner, the act which establishes the APS says that the Commissioner of the Australian Federal Police is not subject to direction in any operational matter by a minister of the day. That is very important, because it is one of the fundamental safeguards against abuse that the citizen has that the police are not subject to political control, manipulation or direction in any operational decision by a minister of the Crown. It is a convention that is observed in this parliament that when ministers are asked about operational matters they decline to provide information because they are operational in their nature. Ministers are briefed about these matters but they do not carry ministerial responsibility for the carriage of those operational matters; they are the responsibility of the commissioner. But this bill sets in train a deadly trip-wire that we must make certain is only temporary and brief. It gives a separate arm of the police commissioner's responsibility as head of a Public Service department. As head of a Public Service department, the commissioner is now subject to ministerial direction in the way in which he carries out those operations which he has charge of as head of the Australian Protective Service. As a shadow minister quite correctly has pointed out, if you have a blended operation where the police commissioner takes a strategic view about how to approach it wearing his hat as Australian Federal Police Commissioner, he can still be countermanded now by a minister who gives him directions as to how to deploy the resources he has at his disposal as head of the Australian Protective Service. That is a fundamental unravelling of a key point of delimitation that we have always held to be fundamental. The opposition is allowing this bill to go forward on the understanding it has with this government that this is step one in a process that is intended to be short and that is meant to enable the next steps to move forward to ensure that those kinds of administrative anomalies are fixed and for those changes to be made so that we cannot have a situation where we corrode the confidence of the Australian public that law enforcement—that is, the prosecution and detection of crime and the suppression of terrorism—has gone into the political sphere.I think we already have a heightened sense that this government is pushing the boundaries of what is proper by way of its pressure on institutions, Public Service departments and the like and, if the police are thought to be the servants in any way of the political process, then a fundamental point of lack of confidence in that system will occur and it will be hard to ever get it back. So I suggest that one of the things we should think about—and perhaps the Senate might think about when it looks at this legislation—is a sunset clause. If this government does not fulfil its commitments to bring forward further tranches of legislation, then in an abundance of caution we need to ensure that we do not have these inconsistencies. This act must not continue a situation that allows corrosion and the growing sense that the police commissioner is becoming the creature of executive government to occur. We must make certain that that does not occur. I am sure the present commissioner would never wish it to occur and would resist it, but we must not allow it to happen. (Time expired)10:31:002571King, Peter, MPMr KING00AMQWentworthLP10—There is no greater cancer in the sound governance of any effective police force than a command structure that does not act and will not tell. Almost every report—and there have been many—into the police services in this country in recent years reiterates the importance of responsive command from the top down and the ready flow of information from the bottom up. That is not to say that there is any fundamental problem in the existing protective and policing services of the Commonwealth. But when the stakes are higher than normal, and in times of national or international conflict, we cannot ignore the imperative to do all that we can as legislators and stewards of the national interest to have internal security arrangements of the highest order of efficiency and readiness. And now is such a time. The purpose of the Australian Protective Service Amendment Bill 2002 is to establish the Australian Protective Service as a statutory agency with the Commissioner of the Australian Federal Police as the agency head. That measure is a response to the September 11 terrorist attacks in the United States, and the government's high-level review of Australia's security and counter-terrorism arrangements and the relationships between Australia's key counter-terrorist agencies, including the Australian Protective Service and the Australian Federal Police. Significant gaps in the legislative framework were found. To promote the closest coordination between the Australian Federal Police and the Protective Service and to ensure that Australia can best meet the demands of the new terrorist environment, the government has proposed that the Australian Protective Service become an operating division of the Federal Police. This amendment will bring the Protective Service under the command structure and administrative umbrella of the Commissioner of the Australian Federal Police.The Australian Protective Service and the policing services in the Commonwealth have had—dare I say it—a somewhat chequered history. Before I go into that, it might be worthwhile to briefly describe the current role of the Protective Service. It provides what is now described as counter-terrorist first response operations at major airports and security services at Parliament House, the office of the Prime Minister, the residences of the Governor-General, the Prime Minister and high office holders, sensitive defence establishments, foreign diplomatic missions and the Australian Nuclear Science and Technology Organisation. But it was not until 1917 that the Commonwealth saw fit to establish any policing force at all. The early force had a short life between 1917 and 1919 and existed primarily to monitor the activities of unlawful associations at the end of the First World War and immediately thereafter. From 1917 to 1979, Commonwealth policing functions were often combined with both protective security and intelligence gathering services. In 1949, the intelligence gathering arm was given to the newly created Australian Security Intelligence Organisation. In the 1970s, there were a number of inquiries into the efficiency and the effectiveness of the police force and growing concern about organised crime in Australia. These included the Milte inquiry in 1973, the Carmody report in 1974, and what was later known as the Bennett report. But it was not until 1979 that the Commonwealth established the Australian Federal Police force, and this followed the well-known bombing of Sydney's Hilton Hotel in March 1978. Former London Metropolitan Police Commissioner, Sir Robert Mark, produced a report following a detailed inquiry and the Australian Federal Police Act 1979 was passed as a consequence. The AFP, as then established, was split into two arms: commissioned and non-commissioned police officers and commissioned and non-commissioned Protective Service officers. In 1979, following the Hilton Hotel bombing disaster, the Protective Service was officially recognised as part of the Commonwealth policing and protective services. In 1984, the Australian Federal Police Amendment Act was then passed, which brought into existence the AFP, separate from the APS. But it was not until 1987, under the Australian Protective Service Act that a separate statute was enacted which brought into existence the Australian Protective Service. It was described by the then minister, Tom Uren, as a `new departure in Commonwealth security arrangements'. But its main focus was property functions, and the interesting story over the next 20 years was really one of trying to determine whether the proper focus of the Australian Protective Service was to protect property and simply to act as a second, or lower order, guarding service, whether it should be privatised in some way or other, or whether it should be merged with the police forces. Those arguments featured in a number of different inquiries, including the reports from the first AFP Commissioner, Sir Colin Woods, and a report in 1992 by Mr Mike Codd AC entitled Review of plans and arrangements in relation to counter-terrorism. That report of Mr Codd in 1992 was in fact somewhat prescient because he did recommend that the APS be given powers which would then be subject to the AFP Commissioner but, regrettably, the government of the day did not act upon that recommendation. This legislation effectively does so.There is some query as to the correct description of the proper role of the APS. It has been referred to as the Commonwealth government specialist protective security provider, but perhaps a better description might be the Commonwealth's first response security service. If it is seen in that light, it seems to me at least to have a natural place alongside the policing services of the AFP, under the control and direction of the Commissioner of the Australian Federal Police.Apart from the new functions that are provided for in the legislation and the new structure that is set out in it, it is also important to note that the Commonwealth has provided a number of new functions for the APS and has given effect to those in the recent budget. This includes the commitment of some $14 million for the 2001-02 financial year to expand and improve airport security, including expansion of the explosive detection canine program. Ongoing funding will be provided over future years for that and similar projects. The upgrading in airport security should result in the deployment of additional specially trained Commonwealth uniformed Protective Service officers. That will assist in ensuring that Sydney and Melbourne airports and flights to and from the major cities of this country are properly secured and that there are appropriate first order responses from the APS to possible terrorist activity. The upgrading of security standards at 11 major airports is expected to be completed by the end of June this year.I also mention the introduction, under the same rubric, of what are described as air security officers, who will fly covertly on Australian flights. The air security officer program was established in December of last year. It has been suggested, at least in one recent article in the press, that a community policing service will become more and more important, not only in ensuring that there is an effective counter-terrorism measure brought about by the APS but also in maintaining civil order and even in ensuring that intoxicated persons in aircraft bars and public areas will be removed, ensuring the smooth and orderly operation of airports.The legislation itself is not particularly complex. It provides that the service will be transferred from the Secretary of the Attorney-General's Department to the Commissioner of the Federal Police. The current relationship of the Secretary with the Australian Protective Service will therefore cease. The Commissioner of the Australian Federal Police will be in control of the AFP through the AFP Act 1979 and, in addition, the Australian Protective Service through the APS Act 1987. The Australian Protective Service will be established as a statutory agency and the commissioner will be the agency head. The legislative changes that will bring this about are relatively simple. The current bill simply amends the act by transferring responsibility in the way I have just described. The amendment is effected by replacing references to the Secretary of the Attorney-General's Department with references to the commissioner and the Australian Protective Service respectively. Also, there is reference to the establishment of the statutory agency as a new agency for the purposes of the Public Service Act and the Workplace Relations Act.These proposals and the legislative provisions that bring them into effect have properly been described as a win-win situation but, at the end of the day, the important point is not who wins within the Public Service but whether the Australian public and our national security is enhanced. It seems to me that having regard to the history of the Commonwealth's protecting and policing services, which I have outlined, and the various reports to which I have referred—particularly the Codd report in 1992 and the high-level review of our counter-terrorist structure that occurred after September 11—ensures that that will, in fact, be the case.The minister, when introducing the legislation in the Senate, spoke about closer alignment of the AFP and APS in the future. That possibly suggests there will be further legislation to deal with issues such as rights of arrest and appropriate protections for officers in the Australian Protective Service. It seems to me, however, that under the current arrangements there is sufficient power and appropriate provision for the APS to carry out its work effectively. It is now a service of a thousand officers, having grown from approximately 600 in 1994 to the present extent. Because it is a first order counter-terrorist response, it is appropriate that the Australian Federal Police have additional and other protective powers which are, in effect, the front line, but the first order response that the APS will offer is, I believe, an important preliminary and first start response for the Australian public.In addition to the work that the APS will do in ensuring that the fight against terrorism is effectively prosecuted within Australia, it will assist the Australian Federal Police in the fight against crime. In the House only yesterday we heard the Prime Minister detail the effective measures taken by the Commonwealth over the last six years in fighting the war against drugs. I am sure that the Australian Protective Service will be an additional useful arm on a first-response basis for the AFP in dealing with that important issue.The opposition have suggested that their 10-point counter-terrorism plan, which was noted during the election, is a better response, but there are a couple of things to be said about that. Firstly, it is gratifying to hear that the opposition will support the legislation in toto. Secondly, their own record in government, in addressing the problems of the APS and the disparity and discord between it and the APF and within the APS, particularly during the early 1990s, is not a good one. I have already mentioned the failure of the opposition to address the Codd recommendations in 1992.The government does have a plan and a suite of bills. This is part of the legislative response in the war against terrorism. It has brought about some very effective measures to ensure that the APS internal service is upgraded at airports and in protecting the various secure places of the Commonwealth, particularly Parliament House and the other places that I mentioned—for example, residences, Defence establishments and so on. The legislation currently before the House is a very important part of a total plan to ensure that the Australian public continues to be protected by a government that above all is concerned about the internal security of the nation and wants to see that our democratic, stable government continues.10:47:002573Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—In closing the debate on the Australian Protective Service Amendment Bill 2002 I would like to thank the members for Banks, Cook, Denison and, finally, Wentworth for their contributions. Members will be aware that last year the government initiated a high-level review of Australia's security and counter-terrorism arrangements. This review identified some significant gaps in Australia's legislative framework. In addition to these significant reforms, the government also reviewed the relationship between Australia's key counter-terrorist agencies to ensure that Australia can best meet the demands of the new terrorist environment. As a result of these reviews the government has proposed that the Australian Protective Service become an operating division of the Australian Federal Police. This bill will transfer responsibility for the Australian Protective Service from the Secretary of the Attorney-General's Department to the Commissioner of the Australian Federal Police. The proposed amendments will allow the closest possible coordination between two of Australia's key counter-terrorist agencies. I would like to respond to a number of issues that were raised in the debate. The member for Banks argued that the government has failed to tackle the real issues in improving law enforcement integration and strategy. This bill, as the member for Wentworth has just pointed out, is one part of a much broader government approach to maximising the effectiveness of law enforcement and intelligence. This includes the new antiterrorism legislation before parliament. It also includes the agreements with the states and territories reached at the leaders summit to ensure national approaches to law enforcement. A key feature will be the new Australian Crime Commission. As part of the second phase of the approach to the Protective Service there will be consultation on steps for further alignment within the AFP and with it. The government, contrary to assertion by the member for Banks, is taking a comprehensive approach.The member for Banks suggested that the Commissioner of the Australian Federal Police could never be sure he would not be directed as the Australian Protective Service director could be directed. He argued that that undermines the independence of the AFP Commissioner. There is no conflict of interest in the two roles of the AFP Commissioner that will result from this bill. For both the APS and the AFP there are mechanisms for the government to lay down directions. The government takes, and will take, a consistent and coherent approach that allows on-the-ground operational decision making by the agencies. The position of the AFP Commissioner will in fact be enhanced by the commissioner having oversight of the Protective Service. The functions of the AFP and the APS are clearly set out in their separate acts. This will provide the necessary separation in practice.The member for Denison made a somewhat similar point. He suggested that there is a conflict between the commissioner's independence under the AFP Act and being a public servant subject to direction under the APS Act and the Public Service Act. I emphasise that the government's proposed approach has the full support of the AFP Commissioner. The AFP Commissioner and the APS Director were both closely involved in the consideration of these proposals. They are completely comfortable with the proposed arrangement. A sunset clause, as suggested by the member for Denison, would be a retrograde step that would set up the prospect that the government's sensible step to align the AFP and the APS would be unwound. The government has made it clear that there will be a further phase, but there must be proper time for consultation.The member for Banks suggested that the bill falls short of the comprehensive approach that the government promised. The government has clearly placed on record the reasons for a phased approach. The employment frameworks for the APS and AFP are quite different: employees of the APS are public servants; employees of the AFP are not. The government is not prepared to change these arrangements immediately, and I cannot understand why the opposition would want to charge into changing the position of the employees. Any further steps will be carefully considered by the government, and that will be done in consultation with the employees.The member for Banks commented that the APS should manage Australia's detention centres and that this area of operation should not be open to private competition. I am advised that there is a process on foot in relation to this and I do not propose to comment. I simply note that competitive outcomes offer the optimal level of effectiveness and flexibility in some contexts. The member for Banks said that Labor would have fully funded the APS and he suggested that this is vital to avoid conflicts of interest for the APS commissioner. He said that if the government thinks that airport security should be fully funded, why would that not apply to other facilities? I see the additional funding provided to the APS by this government as a significant positive. At the same time, there are situations where competitive tendering arrangements provide the most effective outcome. The APS has fared well in this competitive climate, reflecting positively on the service and on the government's approach.The member for Denison suggested that under the Howard government the size, morale, pay and career structure of the APS have been greatly undermined. I reject that criticism. I do not accept that government policy has had the effect suggested by the member for Denison. The government has placed great emphasis on equipping Commonwealth law enforcement agencies with the legal tools and resources they need. For example, new funding for the APS over the next four years will total $128.5 million. It is the opposition's proposal to simply repeal the APS Act and override employment conditions without pausing for thought that that would undermine law enforcement morale.The member for Denison suggested that the government was involved in covert quick fix solutions, involved in the structural run-down of APS and the morale breakdown in APS and he suggested that the government has run-down the capacity of APS. He argued that that is why these changes have come about, not as a result of the events of September 11. The APS enjoys strong professional regard and has been successful in securing commercial activities beyond core guarding duties. This clearly demonstrates its continuing professionalism. In the 2002-03 budget, there is a clear demonstration that the government has not neglected the APS or other law enforcement agencies. There will be record funding for the AFP, in excess of $500 million, and there will be new funding for the APS over the next four years, as I mentioned, of $128.5 million. Successful execution and operation of the air security officer initiative is a strong sign of APS professionalism and capability to respond to new issues and security demands.The government's strong view is that the placing of the Australian Federal Police and the Australian Protective Service under the control of the one commissioner will provide for the closest possible coordination between the two agencies. In keeping the Australian Protective Service as a separate entity, this bill will preserve the employment status of current Australian Protective Service employees and the competitive arrangements of the APS. The bill reflects the ongoing commitment of the government to effective national law enforcement. I commend the bill to the House.Question agreed to.Bill read a second time. 257510:56:002575Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—by leave—I move:That this bill be now read a third time.Question agreed to.Bill read a third time. Bills2575R15512575Debate resumed from 16 May, on motion by Mr Slipper:That this bill be now read a second time.10:56:002575Emerson, Craig, MPDr EMERSON83VRankinALP00—The Diesel Fuel Rebate Scheme Amendment Bill 2002 seeks to amend the Customs Act and the Excise Act to extend the Diesel Fuel Rebate Scheme to operators of retail and hospitality businesses in remote areas which use diesel fuel to generate electricity for their own use. Businesses that will benefit from the rebate include caravan parks, tourist resorts and roadhouses. The government made an election commitment to this initiative and, as such, we will not be opposing this bill. However, we will be moving a second reading amendment to which I will refer a little later. I want to refer to the environmental implications of this legislation. Is the government giving up on developing renewable remote power generation alternatives such as photovoltaic arrays, wind turbines, and hydro units? It is appropriate that I ask that question because there has been a deathly silence on the part of the government about any activity that might be going on in developing these alternative energy sources for remote areas. That deathly silence about activity indicates to us and to the community at large that there is no such activity going on at all. If that continues for much longer, the government will have broken yet again another solemn promise because, in the context of introducing the GST in a deal with the Democrats that I described at the time as the dirty sleazy diesel deal done dirt cheap, they said they would be looking to develop alternative energy in remote areas. That was a requirement of the Democrats but of course the Democrats have been lily-livered in terms of their insistence that the government go ahead with this. We on the Labor side of politics will be applying maximum pressure on the government so that we can do everything in our power to persuade them to meet this particular promise that they made. It was a grubby deal with the Democrats to get the GST through the Senate. In that grubby deal, that dirty sleazy diesel deal done dirt cheap, the Howard-Costello-Anderson government introduced the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme. The Democrats, in seeking to restore some sort of credibility in terms of their environmental credentials after this disastrous marriage of convenience over the GST, did push the government to include sunset clauses into each of these bills. The sunset date was set for 30 June 2002, which is imminent—just a little over a month away—but there has been no activity on this front at all. The government has in fact done nothing about developing an alternative to these two schemes. As a consequence, Labor reluctantly agreed to an amendment to the schemes to extend the sunset date out to 30 June 2003. The Deputy Prime Minister's alternative to these two schemes is an Energy Grants Credits Scheme, but so far neither we nor anybody else have seen what this Energy Grants Credits Scheme is going to look like. I know that everyone in the transport industry is eagerly awaiting the release of information about this scheme.The Deputy Prime Minister and Minister for Transport and Regional Services was so keen to control the Energy Grants Credits Scheme that he wrote to the Prime Minister urging that the Department of Transport and Regional Services be nominated as the lead agency for developing this scheme, and then just a few days later as the Acting Prime Minister he wrote back to himself and agreed with his request. We can just see the correspondence: `Dear Prime Minister, I would really like my department to have carriage of the development of the Energy Grants Credits Scheme,' and then he goes over to become Acting Prime Minister and says, `Dear John—Dear Me—I agree.'84HZahra, Christian, MPMr Zahra—Sir Humphrey would be proud.83VEmerson, Craig, MPDr EMERSON—Sir Humphrey would be proud, as the member for McMillan has said. So the minister seemed pretty keen to have carriage of the development of this scheme. But what has happened as a result of that keenness? Absolutely nothing. It seems to have dropped off the agenda. You would think he would be doing something about it, but he has not. The road transport industry need to know the nature of the new energy credits scheme because it is likely to have a direct impact on operating costs, on decisions about capital investment, on business expansion, markets and technological choices for their businesses and for their families. So we on the Labor side trust that the government will give these interested Australians the opportunity to discuss and assess fully the proposed energy grants scheme prior to the sunset of the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme. This brings me to the second reading amendment. While we are not opposing the bill, we are moving a second reading amendment in the following terms: 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) failing to deliver on their commitment to develop an Energy Grants (Credits) Scheme to replace both the Diesel and Alternative Fuel Grants Scheme and the Diesel Fuel Rebate Scheme; (2) failing to prioritise support for the accelerated uptake of renewable electricity generation as a viable alternative to diesel rather than extend the diesel rebate that would lead to long term greenhouse gas reductions; and(3) conducting the Fuel Taxation Inquiry only for cynical and expensive election purposes with no intention of a genuine review of fuel taxation issues”.My colleague the shadow minister for the environment will have a lot more to say about the greenhouse implications of this legislation and about the government's failure to date to develop the Energy Grants Credits Scheme, so I will not dwell too much on that other than to say that the report that was referred to in the third point in the second reading amendment—that is, the fuel taxation inquiry—is the Trebeck report and that the Trebeck report was released on the night of the budget so that it could be smothered. That was the purpose of releasing it at that time. That report outlined design principles for the Energy Grants Credits Scheme, including the introduction of a business fuel credits scheme for all businesses, not just those that are favourite of the day of the coalition government. It recommended that the business fuel credits scheme should replace the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme and it recommended mechanisms to develop the environmental component of the proposed scheme.The Trebeck report, therefore, provides the framework for this government to implement its commitments to a fuel grants credits scheme. But what has been the outcome of the government's consideration of that report and of the recommendations? The answer: absolutely nil, deathly silence. It is no coincidence whatsoever that the government released the Trebeck report on the night of the budget. It has ignored completely that report.Let us just look at some of the costs involved in the government ignoring that report. The government spent almost $4 million of taxpayers' money for an inquiry that it has completely ignored. So it appears that there is almost $4 million down the drain for a start. It is also important to note that the government invited Australian organisations, businesses and individuals to prepare detailed and costly submissions to the inquiry. That invitation was accepted by almost 300 organisations, businesses and individuals, who made 341 submissions. That is an enormous amount of effort on the part of businesses in the wider community, an effort that appears to have gone to waste completely, because the government has apparently completely ignored that report.We have to ask then why the government initiated this particular report into fuel taxation in the first instance. I think I can answer that quite clearly: it was in response to Labor initiating an inquiry into fuel taxation and the petrol, diesel and other fuels industry. We did that long before the government did. At the time, the government said, `Why would you have another inquiry, because there have been more than 30 Senate inquiries and other inquiries into the fuel industry in Australia, and an inquiry initiated by Labor is totally unnecessary.' We did not find it unnecessary at all.We travelled Australia as a petrol inquiry and sought submissions not only from business organisations but also from the grassroots, from people who were invited to come along to our inquiries and tell their stories about the impact upon them of higher fuel prices—and they did. They came in droves. We had more than 400 submissions, and we had hundreds of witnesses coming along and giving evidence. They were not just giving evidence about petrol. As soon as you got out of the major cities, one of the burning issues in the bush, so to speak, was the high cost of diesel and whether the diesel schemes that were operating were, in fact, passing on the benefits of any subsidies or rebates to the users of diesel. Many opinions and concerns were expressed to us. As a result of that inquiry, we produced a very comprehensive report. I will go to that in a moment. Meanwhile, back at the ranch, the government was criticising Labor for taking on the task of conducting an inquiry, saying that it was not necessary. But, of course, things changed very early last year when the government of Western Australia fell, to be replaced by a Labor government, and when the Beattie Labor government was returned with a massively increased majority. It was evident that fuel costs was a very important issue in both of those election results. The coalition changed its tune and said that it was just possible that a fuel tax inquiry might be warranted. In the early part of last year, the government said, `We, too, are going to have a fuel tax inquiry.'We made a commitment at the time that the outcome of the fuel inquiry conducted by Labor would be released in the form of a report before the election. The government, on the other hand, refused to make any such commitment. Now we know why they refused to make that commitment: they never intended to implement any of the recommendations of the report. During the Aston by-election, the government belatedly—it was around four months later—released the terms of reference for that report, which became the Trebeck report. Moving at a snail's pace, they announced an inquiry in the early part of the year and in the course of the Aston by-election said, `We are now going to announce the terms of reference of the report.' They put everything in the slow lane so that they did not have to release the outcome of that inquiry until after the election.Contrast that with Labor's response and the report that we put together. During the federal election campaign, Kim Beazley released `Kim Beazley's plan for fuel', a comprehensive plan that built on a report that ran to 90 pages. That comprehensive plan for fuel addressed all of the major issues in relation to fuel, including fuel taxation in Australia. The report found that in the industry—I am referring to both petrol and diesel—the agents of competition were small independent operators. The emergence of small independent operators has been a powerful force in keeping fuel prices down. I am, of course, referring here to the third point in the second reading amendment. Labor asked: what is required to be done to protect the interests of small independent operators against predatory pricing by the oil majors? The answer was that we would make a number of changes to the Trade Practices Act and to the way that the act was implemented.We announced those changes in this plan. The plan included bringing back the petrol prices watchdog, the ACCC. The ACCC had been removed as the petrol prices watchdog and also the diesel fuel prices watchdog by this government. It removed it in its first term. Also, the present government in its first term moved to abolish or repeal the franchise act and the sites act, both of which, though ineffectual—I am quite happy to concede that point—by design, were there to protect small independent operators against predatory pricing by the oil majors. What was the response of the government to that? Rather than to protect small independent operators that are the agents of competition in both the petrol and the diesel fuel markets, it tried to favour the large oil majors and, in favouring them, would have allowed them to engage in predatory pricing. Labor thought that that was a particularly bad idea and, as a result, we opposed those changes in the Senate. Fortunately, on this occasion, the Democrats joined with us and those changes did not get through. But the one change that was able to be implemented, because it did not require legislation, was the removal of the ACCC overseeing both petrol and diesel prices. Labor announced at the last election that we would bring back the prices watchdog.We also announced that we would strengthen the Trade Practices Act to help the small independents compete on a level playing field to combat predatory pricing by the oil majors. We announced too that Labor would negotiate a strong and enforceable oil code to give security to small businesses operating service stations. We said that we would introduce a national transparent wholesale pricing system, which is called terminal gate pricing, in consultation with the states and the industry and that we would establish an indicative price system in service stations in up to 150 locations around Australia so that regional motorists could make informed judgments about petrol retail margins. I can advise the House that the initiatives in Labor's plan for fuel were very warmly welcomed by the small independent operators. They saw, for the first time in several years, a chance to survive against the behaviour of the oil majors. It was very instructive to learn of the reaction of the government to Labor's plan for lower fuel prices. The government said, `If you go ahead with this scheme, it will force petrol prices up.' Here we were introducing more competition into the market, protecting the agents of competition—that is, the small independent operators—against predatory pricing by the oil majors, and the Treasurer of this country said, `If you try to look after the interests of the small independent operators—the agents of competition in the market—against the behaviour of the oil majors, that will force prices up.' It is yet another example of the Orwellian language used by this government: that if we try to protect those agents of competition the result will be higher fuel prices. So the government opposed strongly the measures that we announced. The government said that it would review the Trade Practices Act, and that review is under way now. It has taken six months to get it under way, but the terms of reference are tilted in favour of big business more generally in that they seek to nobble or restrain the activities of Professor Allan Fels, the Chairman of the ACCC. So the outlook is not very encouraging for the small independent operators at all.On 31 March this year, the shadow Assistant Treasurer, the member for Werriwa, released a five-point plan encompassing five changes to the petrol industry that we consider very important in maintaining a downward pressure on prices. I will take the House through the plan very briefly. The points are as follows:(1) If the oil companies do not agree to end this practice [of spiking their petrol prices before public holidays], Labor will introduce specific penalties and sanctions for price exploitation during holiday periods.(2) Establishment of a warning “yellow card” system, so that the ACCC keeps a register of bona fide complaints of misuse of market power within the petrol industry. This information would then be used in assessing penalties for proven breaches of the Trade Practices Act. If these measures do not alter market behaviour, criminal penalties and larger pecuniary penalties will be introduced.(3) Establishment of an “effects test” under the Trade Practices Act, so that firms will be prosecuted for abuse of market power when their actions have the effect or likely effect of substantially lessening competition in a relevant market. (Under the current laws, the abuse must be proved to be intentional, rather than having a market effect.)That is our policy: to introduce an effects test. The fourth and fifth points are as follows:(4) Reversal of the onus of proof under the Trade Practices Act. In cases where market conduct has substantially lessened competition, the onus of proof under Section 46 [of the Trade Practices Act] would shift from the complainant to the alleged offender.(5) The introduction of genuine wholesale competition, allowing service stations to shop around for the best price at the terminal gate. In particular, independent service stations should have the same access to discounted wholesale petrol as the major brands.That is the five-point plan which has been released by the shadow Assistant Treasurer and which builds on Labor's plan for fuel that was announced at the last election. I now move Labor's second reading amendment:That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House condemns the Government for:(1) failing to deliver on their commitment to develop an Energy Grants (Credits) Scheme to replace both the Diesel and Alternative Fuel Grants Scheme and the Diesel Fuel Rebate Scheme; (2) failing to prioritise support for the accelerated uptake of renewable electricity generation as a viable alternative to diesel rather than extend the diesel rebate that would lead to long term greenhouse gas reductions; and (3) conducting the Fuel Taxation Inquiry only for cynical and expensive election purposes with no intention of a genuine review of fuel taxation issues”.Contrast Labor's considered work, its hard work and its policy development on fuel with the government's complete lack of interest in this. The government commissions a $4 million report, the Trebeck report. It releases the Trebeck report on budget night, and it ignores the Trebeck report completely; it ignores the submissions of hundreds of organisations and individuals around this country. Subsequent to the election, the new Minister for Industry, Tourism and Resources, the member for Groom, said that he would do something about fuel pricing and the market behaviour of the oil majors.84HZahra, Christian, MPMr Zahra—That's what Peter McGauran said, too.83VEmerson, Craig, MPDr EMERSON—Absolutely—Peter Mc-Gauran said it, John Moore said it after 1996 when he was the industry minister and the Treasurer has said it on numerous occasions. But the only initiatives that they have sought to take are initiatives that would weaken competition and advantage the oil majors against the small independent operators. It is clear from our discussions with those small independent operators that if the government had its way they would be in desperate trouble. They are already in enough difficulty as a result of the behaviour of the oil majors, but if the government legitimised that behaviour and made it even more acceptable in legislative terms it would be the end of the small independent sector in Australia and therefore the end of competition.The new minister obviously had representations from the oil majors and from the small independents, and he said, `I've got a good idea: we'll negotiate an oil code.' This is the very oil code that the government, in its first term, said that it would negotiate. When it could not get agreement, it abandoned the oil code. It said that it would not seek to repeal the sites act or the franchise act until there was a strong, binding oil code, but it reneged on that commitment and tried to get the repeal of those two pieces of legislation through the Senate. As I said earlier, the attempted repeal of that legislation was blocked in the Senate.The government's track record on fuel is an appalling one. The new minister is starting from scratch. He says, `We'll now get this oil code in.' There is no real sign of progress on that but at the same time, true to form for the coalition government, he says, `What we're going to do is repeal the sites act and the franchise act.' It comes around and it goes around: for six years the government has been flopping around on policy in relation to fuel and coming up with precious little.I indicate on behalf of Labor that we will not be reintroducing the indexation of fuel. I note that the Trebeck report completely leaves that open and in fact recommends it—as did the terms of reference for the Trebeck report, which said that fuel taxes should not and would not be allowed to rise in real terms. That explicitly opened the door for the reintroduction of indexation. The Trebeck report recommended that and we now are in a situation where it is an open possibility that the government could do that, but it would not be a possibility under a Labor government.I close by indicating that Labor will in fact support this bill because it does give effect to an election promise. We on this side of politics consider that it is important to honour election commitments. The government gave one, and we are going to support the bill as a result of that. But equally we are concerned about the government's inactivity in developing the credit scheme, because this is very important for the environment. It is important given that the date in the sunset clause for the two existing pieces of legislation has been moved from 30 June 2002 to 30 June 2003. It is very important that the government gets active on this front and creates some certainty for business under which business might be able to plan its future investments. We call on the government to get serious about alternative energy as a source of electricity generation in remote areas, because it has not been. Instead it did a dirty, sleazy diesel deal and it was done dirt-cheap with the Democrats, who then said, `Well, that's fine. We'll have an alternative scheme somewhere down the track,' and there is no sign of that more environmentally friendly scheme. It is for that reason that we have moved the second reading amendment, because we are sick and tired of the government's inactivity on these important issues. 10000Causley, Ian (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Hon. I.R. Causley)—Is the amendment seconded?84HZahra, Christian, MPMr Zahra—Yes, I second the amendment.11:24:002581Secker, Patrick, MPMr SECKER848BarkerLP10—I rise today to join the debate on the Diesel Fuel Rebate Scheme Amendment Bill 2002, but before I go on I think it is very important to point out that the member for Rankin seems to be supporting the Trebeck report on fuel taxation. One then has to ask if that means that he and the Labor Party support the reintroduction of CPI indexed increases in fuel excise, because the main reason we rejected that report is that that was such a key part of that report. At no time have the Labor Party ever said that they will not reintroduce CPI increases in fuel excise.83VEmerson, Craig, MPDr Emerson—On a point of order, Mr Deputy Speaker: the member has obviously not heard the speech. He has a prepared speech and has not heard what I have just had to say, so he is completely wrong.10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—That is not a point of order.848Secker, Patrick, MPMr SECKER—I certainly have heard what the Labor Party have said over many months. In fact at no time have they ever ruled out CPI indexed increases in fuel excise. They have not ruled out getting rid of the 1c and 2c subsidies to country fuel outlets, something that the member for Hunter actually let out of the bag before the election, so the five-point plan that the member for Rankin referred to is really just another stunt. He referred to the yellow card as if we are going to be playing soccer with fuel taxation, and the trouble with the whole speech of the member for Rankin is that it had little to do with this bill. Many sections of my rural electorate of Barker have long felt the benefits of the Diesel Fuel Rebate Scheme.84HZahra, Christian, MPMr Zahra—On a point of order, Mr Deputy Speaker: I know that the Speaker has made rulings previously in relation to when honourable members in this place get up to comment on things which have already been the subject of personal explanations, and the reference which the honourable member is making to Labor's fuel policy is inconsistent with what has been stated in ALP policy.10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—There is no point of order. If members opposite are concerned about what the member for Barker is saying, I am sure subsequent speakers can clarify the record.84HZahra, Christian, MPMr Zahra—We are concerned about it, Mr Deputy Speaker, because he is completely wrong.10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—The member for McMillan will resume his seat.RW5Nelson, Dr Brendan, MPDr Nelson—On the point of order, Mr Deputy Speaker: I think you have dealt with the matter very well.848Secker, Patrick, MPMr SECKER—I honestly believe it is high time that these benefits were felt by wider parts of the community. At present the Diesel Fuel Rebate Scheme provides a rebate of 38.143c per litre for diesel and 7.55c per litre for light fuels. The rebate is applied to various activities such as mining operations, other than for the purpose of propelling any vehicle on a public road; rail transport, other than for the purpose of propelling a road vehicle on a public road, in the course of carrying on an enterprise; and marine transport, other than for the purpose of propelling a road vehicle on a public road, in the course of carrying on an enterprise. It is also applied to residential premises to generate electricity used in providing food and drink, lighting, heating, airconditioning, hot water or similar amenities, or meeting other domestic requirements of residents of the premises of a hospital or nursing home or at any other institution providing medical or nursing care or at a home for aged persons. It is also applied to one of the most important activities for my electorate—primary production, other than for the purpose of propelling a road vehicle on a public road. The important part of the logic behind this rebate is that some of the excise is obviously used for road infrastructure. If those vehicles or generators are not being used on a public road, then they should not be taxed. The purpose of this legislation before the House is to extend these eligibility provisions of the Diesel Fuel Rebate Scheme to retail and hospitality businesses who use diesel and light fuels to generate power for their own use where there is no ready access to a commercial supply of electricity or other forms of energy. This legislation gives effect to a policy initiative announced by the Howard government during the 2001 election campaign and will primarily assist small business operators in remote areas of rural and regional Australia by providing them with access to the customs or excise duty paid on diesel and light fuels used by them to generate power for their own use. It was very interesting to hear the member for Rankin saying that the Labor Party support the election promises that we made and that that is one of the reasons they support this legislation. But it will also be interesting to see whether they take the same consistent attitude with other promises that we made in respect of, for example, the superannuation surcharge tax reduction.This legislation shows that the government is honouring its promises and providing the Australian population with an initiative that they voted for at the last federal election. I can assure you that there are many in my electorate of Barker who will benefit immensely from our government's initiative to provide wider eligibility to the Diesel Fuel Rebate Scheme, not to mention those in the rest of rural Australia. Throughout Australia there are many regional businesses who suffer because they have no ready access to commercial power supplies. These businesses suffer much greater running costs than their urban or, for that matter, country cousins who have access to a commercial power supply. Not only do these businesses have to allow for the normal day-to-day costs of running their businesses but also they have to account for the cost of fuel to power the businesses, which more often than not costs a lot more than it otherwise would if they were connected to a commercial power supply.Our government is committed to rural Australians and we have always been committed to small business. It is this commitment which has seen us introduce this piece of legislation to try to help small business in rural Australia reduce their energy cost. Unfortunately, this is not something that those opposite can boast, as seen by their insane ramblings in the House yesterday concerning the sale of Telstra. To make my point, I remind the House of the comments made by the Deputy Prime Minister and Minister for Transport and Regional Services, my colleague the Hon. John Anderson. In question time yesterday, the Deputy Prime Minister was forced to remind the Labor Party of something that they had quite clearly chosen to forget—and no doubt had hoped that others would, too. I refer to the dirty deal that Labor did to abolish the analog mobile phone system. I can assure you that they did not have regional Australians in mind when they closed that deal.8I4Martin, Stephen, MPDr Martin—Mr Deputy Speaker, I rise on a point of order. The legislation that is being debated has nothing to do with Telstra. In fact, it is on the Diesel Fuel Rebate Scheme. I ask you to bring the speaker back to the matter before the House.10000Scott, Bruce (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Hon. B.C. Scott)— I remind the member for Barker of the purpose of the bill before the House.848Secker, Patrick, MPMr SECKER—The disdain those opposite hold for rural Australia never ceases to amaze me. In many instances when we the coalition give the opposition the chance to show their support for rural Australians they hide behind party politics and try to score political points at the cost of rural Australians. I hope this is not one of those instances and that those opposite actually realise just how far reaching the impact of this piece of legislation will be. The important thing for them to remember with this piece of legislation is that we are catering to businesses that have no choice. These businesses do not choose to use diesel and like fuels to power their businesses; they have no choice, and they have no choice because the commercial power supplies are not available to them. There is no supply in these areas.With the proposed changes to eligibility criteria for rebates contained in this bill we are targeting businesses such as roadhouses, caravan parks and tourist resorts so that they will now be eligible to claim a rebate on the fuel they use to generate their power. With your indulgence, Mr Deputy Speaker, I would like to take a moment to reflect on the three categories of businesses that I have just mentioned. I have just said that roadhouses, caravan parks and tourist resorts will benefit from this bill. Once these changes are passed, these types of businesses will then be able to claim the diesel fuel rebate for fuel used by them to generate their power. On the face of it, it looks good, it sounds good and I am guessing that the owners will think it is good. However, that is only on the face of it. When we take a closer look, though, we see that there are much wider reaching benefits of this piece of legislation. When we put it into business terms, the broader picture is even better. By subsidising a company's energy costs, we are inadvertently giving the operators more money with which to run their businesses. With more money being put into these businesses we often see more money going back into the local economy with more jobs being created and thus an upward spiral affect sweeps through the region and things look up. If we look at the businesses I have mentioned as being included in those that will benefit from this bill, we will see that they are often a linchpin in the economy of the local rural community.Driving through my electorate of Barker, I often stop at the local roadhouse. Having a large electorate of some 52,000 square kilometres, I often need to refuel, grab a bite to eat, have a rest, stretch my legs and take a break. Think about driving from Adelaide to Alice Springs to Darwin. A perfect example of the benefit this piece of legislation will bring to businesses can be found at Cadney Park, not much more than a service station and a caravan park. If, for example, these businesses are fuelled by diesel or like fuels, they are exactly the types of businesses we are trying to target.If these businesses, both in my electorate of Barker and in the electorate of Wakefield, like Cadney Park, can use the Diesel Fuel Rebate Scheme to cut the energy costs so that they can pour more money into their businesses, I have no doubt that there is a very real possibility that the spiral effect that I previously described will kick in and start to improve the local economy. If that happens, our government will have achieved exactly what we are setting out to achieve.Another point that I would like to make about the businesses that I have mentioned is that the majority of them operate on the tourist dollar. Sure, you have the local community that you sell fuel or a litre of milk to. However, more often than not—even in the rich pastoral land of my Barker electorate—you are attracting the tourist dollar. Roadhouses are the ideal place for someone to take a break from their driving and have a rest—something I often do, as I have previously described. Stopping for the night in a caravan park or tourist resort to break the journey also results in more income for the operator. Cut the energy costs of this operator and they suddenly have the funds needed to perhaps put in a swimming pool or refit their cabins or restaurant and generally provide a better tourist experience for their customers. This in turn will provide a very real possibility of bringing not only those tourists back but also their friends and acquaintances whom they have told of their experience. This results yet again in that extra tourist dollar. As I have explained previously, when the operator then spends this extra tourist dollar in the local economy, it starts the whole spiral effect that I have previously discussed.Once this legislation is passed, a business which uses diesel and like fuels in the course of carrying on an enterprise that qualifies for the rebate, and which has purchased this diesel fuel on or after 1 July 2002, will then be eligible to receive this rebate. It is proposed that the rate of the rebate applicable to these businesses will be the same as that applying to primary production—a rate which has already gone a very long way to improving the energy costs of farmers in my electorate of Barker. So, on the whole, if you look at the impact of this legislation, we see that a growing group of businesses will now be eligible to claim this rebate and reap the benefits of it. Whilst this makes me very happy, and while I think the government is going a long way to help rural businesses and rural Australia, I have to say that I would like to see it go one step further. I was recently approached by a business in the rural city of Murray Bridge, which is in my electorate. This business would benefit profusely from the diesel fuel rebate. I know that they would benefit because they used to receive the rebate—I repeat: they used to receive the rebate. The owner of this business, a crash repairer, has been forced to use diesel to fuel the heat tunnel which is required to bake the paint on the repaired cars. To fuel this tunnel using electricity—which, I might add, is available—would mean that the cost to run the heat tunnel would just about put them out of business. As they are unable to fuel the heat tunnel with a cheaper gas option, as—once again we hear the all too familiar story—there is no infrastructure because they are too far away, they have no other option but to use diesel. For a while there, the diesel option was working well. The company fuelled their heat tunnel with diesel, claimed the rebate and things were not generally too bad. Then along came the Democrats, who wanted to kill off the new tax system, and we had the inaction by the Labor Party. We sought to have the new tax system legislation passed, and the Democrats set about to sabotage it as much as possible and the Labor Party were just completely uncooperative on this legislation. The end result of this sabotage was that this particular crash repairer, situated in Murray Bridge in South Australia, could no longer claim the diesel fuel rebate. This was a devastating outcome for them. The cost of running their business increased dramatically, and as they still do not have the option of fuelling the heat tunnel using gas they had no choice but to say, `Thanks, Senator Lees, and the rest of the Democrats and the Labor Party; thanks for nothing.' I fully understand that there needs to be some give and take. I also fully understand that to run a scheme such as this costs money. But I do not understand how one small interest group can have such an impact on rural Australian businesses. While I mention only the crash repairer in Murray Bridge, I can assure you that there are hundreds of other rural crash repairers who faced the same dilemma at the stroke of the Democrats' pen—yet another party who refuse to acknowledge the impact of their actions on rural Australians; yet another party who politically point score at the cost of rural Australians. By allowing this crash repairer to access the rebate, and by helping rural Australians to reduce their fuel costs and inadvertently giving them more money to put back into their businesses, we are once again seeing that possible upward spiral in the local economy. However, by denying this business eligibility to the rebate, the Democrats are preventing every possibility of this business, and every other business like it, cutting their energy costs. It makes me very sad, and the sooner we can rectify this situation the better. I honestly believe that this is something which needs rectifying soon.Turning back to the legislation at hand, I want to say that this is certainly a step forward. I have already said that I would like to see it go further and cover businesses such as those of my constituents; however, this piece of legislation is still going a long way to improving the lot of rural businesses forced to use diesel and like fuels. This bill has far-reaching consequences—far greater than simply cutting the energy costs for the businesses affected—which will certainly provide greater benefits to rural Australian economies. While considering such legislation, I cannot stress enough to members that we need to think outside the square. On the face of it, this is a great piece of legislation, designed to benefit small businesses in rural Australia. Dig deeper, and this is a fantastic piece of legislation, the flow-on effects of which have great potential for improving rural Australian economies.I congratulate the minister and his department on this piece of legislation. I look forward to the day when the roadhouses, caravan parks, tourist resorts and other such businesses in Barker can reap the full benefits of this government's commitment to rural Australia. In fact, I think another area we need to look at is the area of excavation. I have another constituent who runs an excavation business, building subdivisions on the South Coast and building dams and the like. Thanks to the Democrats' changes and their interference and the Labor Party's inaction on the Diesel Fuel Rebate Scheme, that constituent is no longer able to claim the diesel fuel rebate. It seems crazy because, as is the case with most excavating companies, that particular company does not drive its vehicles on the roads; they are on private property in most situations. I would like to see the rebate extended to that area as well. I commend this legislation to the House. 11:44:002585Windsor, Antony, MPMr WINDSOR009LPNew EnglandIND00—I rise to speak in support of the Diesel Fuel Rebate Scheme Amendment Bill 2002. I was quite interested in some of the comments that the member for Barker made in relation to some rearrangements with the new tax scheme in the last parliament. I would encourage him and other members of the government to consider revisiting some of the diesel rebate impacts of the changes that took place in the last parliament. I would also urge the Labor Party to consider some of the examples of businesses that the member for Barker mentioned in his address.I do support the bill. The bill extends the eligibility provisions for the Diesel Fuel Rebate Scheme to retail and hospitality businesses that use diesel and like fuels to generate power for their own use where there is no ready access to a commercial supply of electricity—and I would like members to just remember that particular phrase: `no ready access to a commercial supply of electricity'. It gives effect to a policy initiative announced by the government during the 2001 election campaign and will principally benefit small business operators in remote areas of Australia by providing a rebate of the customs and excise duty paid on diesel and like fuels used by them to generate power for their own use. I support the initiative of the government in relation to that.The government may well have noticed that I have a notice of motion on the Notice Paper which relates to an extension of this particular rebate scheme to businesses. It is not unlike the matter the member for Barker raised a moment ago. The notice of motion follows along similar lines to the extension to hospitality and retail businesses but it also incorporates those businesses that are in quite remote areas and do not have the advantage of commercial supplies of electricity. In my view, they should be entitled to the rebate scheme. I will give an example to the House of a particular instance in my electorate. The former member for New England also raised this particular issue during his term in parliament but nothing has happened in the intervening period. I am disappointed to say that these sorts of businesses have not been included in this particular piece of legislation.The business I refer to by way of example is called G and C Foundry, located about 22 kilometres from the community of Uralla, which is south of Armidale. It is on a property owned by a Geoff Swilkes and his wife and family. The business grew out of what was essentially a hobby for Geoff and his family originally and they have developed quite a successful foundry on the property. They employ something like 21 people. They have two large generators powered by diesel, because of the unavailability of electricity in that particular location. The generation of electricity by diesel does mean that there has to be a full diesel charge paid for the use of the diesel. I fully understand the implications of standing order 292 in relation to money bills, appropriation bills, and private members being able to impact upon the organisation of Treasury, but I would ask the parliamentary secretary in the chair to take on board this particular instance. There are many other instances around Australia like this one, and I would encourage the government to look very closely in the future at extending the rebate scheme to those sorts of businesses. It would cost G and C Foundry about $1 million to locate the electricity grid at their particular business. Obviously that is above any commercial reality. Currently, the truck that delivers the fuel to the generators at G and C Foundry claims a rebate but the business that operates internally with the use of that diesel is not able to claim the rebate, and obviously that has cost implications for that particular business. Those cost implications, I believe, are important. That particular business make, amongst other things, planting equipment for Australian agriculture, for the cotton industry. They are an import replacement competitor, so they are out there doing all sorts of things that the government and members of parliament are encouraging Australian business to do—to fight in the real world, to get into the global economy, to take advantage of local technology and expertise and to try to out-compete some the imports coming into this nation—and here they are being taxed by the same government that is encouraging them to have a go by imposing the full diesel excise upon them. I think there is a degree of hypocrisy in relation to the way in which this scheme has been applied and, as I said, I encourage the government to revisit it. I am fully aware of the implications of the Democrats' arguments in the last parliament, but this is a new parliament and I would encourage the government to revisit some of these arguments. I pledge my support in terms of any negotiations that may need to take place with the Democrats or with any other members in the Senate to try to bring some sanity to the regional implications of this sort of legislation—or the lack of the legislation being applied to remote businesses. I would be only too willing to assist in any way that I can.The issue of fuel across regional Australia is obviously very important in a whole range of ways. I take the opportunity to encourage the government and the parliamentary secretary in the chair—and I am sure the Labor Party would be interested in this as well—to look very closely at the future use of ethanol in relation to fuel replacement. Currently within my electorate there is a proposal for a $55 million ethanol plant to be located somewhere on the Liverpool Plains to take advantage of the grain sorghum production in that particular area—and I recognise that you, Mr Deputy Speaker Scott, would be familiar with the possibilities of ethanol, grain sorghum and other grains in relation to the production future fuels. I think it is important that this parliament encourages the future use of ethanol and other alternative fuels.I understand that there are currently some debates going on in relation to that particular issue, but it seems to me that the only way the parliament will really drive this issue is to legislate at some future date that fuel used in Australia should contain a certain proportion of ethanol or alternative fuel base. I think that will assist in driving the economics of that industry. It has happened in many states of the United States, and I would encourage the government in particular, but also the Labor Party, to look at ways and means of putting in place some practical legislation that will help drive that industry towards its future. If there were a legislative framework in which fuel had to include five or 10 per cent ethanol across Australia, the impact on the grain industry would be quite enormous. As most people who are concerned with the environmental debate would fully recognise, that is a fully replaceable fuel, not a fossil fuel. If we are serious about driving some of the environmental agendas that some people in this place talk about from time to time, I think we have to look very closely at how we as a parliament can assist that through some regulatory frameworks.I refer briefly again to the example I gave in relation to the G and C Foundry. I would like to read into Hansard the amendment that I would have put before the parliament if standing order 292 did not preclude a private member being able to impact on an appropriation bill. I would suggest to the government that it take on board the following amendment. It would mean that after paragraph 78A(1)(d) of the Excise Act 1901 the government would insert the following:(e) in manufacturing or service enterprises satisfying requirements set by the Minister under subsection (4D) as remote or isolated industrial enterprises unable to access normal electricity services economically.It is essentially similar to the amendment the government has made in relation to the retail and hospitality industries. I suggest that when possible that particular amendment be included in the government's deliberations.Obviously the taxation of fuel has been a never-ending debate in relation to road funding and the equity of access to those funds as between regional and city users. I take this opportunity to say to the House that, in terms of the excise generally charged on fuel, for every cent of excise that is charged it raises about $280 million in income to the government. Currently the government receives about $13 billion in excise annually and it spends something like $1.6 billion of that on roads. I think that in the budget debate a number of people will be taking some issue with the government in relation to that. I note that the budget papers give some forward projections of a drop in that funding of $1.6 billion over the next three years: I think it goes down to about $1.1 billion by 2004-05. That should be of concern to many people, not only in regional Australia but in Australia generally. I also note that the Minister for Transport and Regional Services has developed what he calls the AusLink plan, which is very scant on detail at the moment. I do not mean that in a critical sense—I am aware that the minister is going to have a process of consultation in relation to how that plan is structured and how we can remove from the electoral cycle the funding of roads. I would encourage the minister for transport to actually pursue that. But I would argue that, before embarking on other sources of road funding across Australia in relation to private and public partnerships and those sorts of examples that have been mooted, even though we do have very scant detail on the AusLink plan, the government should look very closely at the funds that it does raise from fuel excise at the moment and the highly inadequate amount of those funds that is spent on roads—$13 billion is raised and $1.6 billion is spent on roads. For every cent of excise, you get another $280 million, so I encourage the minister to not throw that out and assume that no more money can come out of that particular pot. The minister should look very closely at how more money could come out of that excise bucket in the future to be spent on roads. We are spending about 6c a litre on roads now. If we double that to 12c a litre, that would have a revolutionary effect on road funding across Australia.In conclusion, I support the bill. I encourage the government to look very closely at the proposed amendment which standing order 292 precludes me from introducing at this particular time. As I mentioned earlier, I would be very happy to assist in any way in future negotiations with the Labor Party and the Democrats in another place to look at how some of these provisions which are being extended today to retail and hospitality businesses can be extended further to include those more remote businesses that do not have access to power generation that people in the city take for granted.11:59:002587Cobb, John, MPMr JOHN COBB00AN1ParkesNP10—I strongly support the Diesel Fuel Rebate Scheme Amendment Bill 2002. It is part of the 2002-03 budget. It is also very much an election commitment. This scheme—very correctly—gives a rebate to the retail and hospitality industry where there is currently no access to commercial supplies of electricity for their own use and that of their business. In my electorate, which is almost totally based around small business employment, this simply extends a very necessary commitment beyond those areas that already use the rebate: namely, mining, parts of primary production, rail transport and marine transport. Those also able to access it currently are residential premises, hospitals and nursing homes, or any other medical institution or aged care home that require the generation of their own electricity. Bringing the remainder of disadvantaged small business in an electorate like Parkes in line with that is commonsense and totally necessary. Other speakers have suggested other areas that we should look at. This government has attempted to do so in the past without success. The cost of running power generation for small business in isolated regions is not insignificant; it is quite huge. When you consider that to do that in these areas this bill is judged to be costing $20 million, it shows just how significant it is. The benefits that will flow through to small business, especially the emerging tourism industry, cannot be discounted. When you look at an electorate like Parkes, this becomes even more obvious. My electorate of something like 268,000 square kilometres goes from the Queensland border down to the southern areas of Hillston, Grenfell and West Wyalong, and from the South Australian border east through to Dubbo. What the diesel rebate scheme as it exists actually does is incalculable. My electorate—and we are talking about an area that is heavily involved in mining, in all forms of agriculture, light engineering, construction and exports—is basically the bread basket of New South Wales. The contribution that the diesel fuel rebate makes to that production is simply enormous. What we are doing by taking that rebate through to the hospitality and retail industry, where they are unable to access commercial electricity, is putting them on a level footing in an area that is tough going, where it takes entrepreneurial spirit and a certain amount of guts to run a business in areas where normal electricity supplies do not exist. I am certain I can guarantee this House that the small business operators in that area will welcome this bill with open arms and with very good reason. As I said, this bill is part of the government's election promise. It definitely promotes tourism and all forms of small business within remote and regional Australia. What this bill recognises is that in an area like Parkes it is not just primary production, mining and the historical forms of production which are absolutely critical and which need the government's protection. To my mind, this is not a rebate; this is not applying a tax on needy industries in the way it has always been applied. The fuel rebate, as it is called—and I repeat—is not a rebate. It is simply not applying a tax; it is not a subsidy.There is $20 million involved—not a light gesture—in this rebate to the hospitality and retail industry. I think the fact that $20 million is involved points out how much it is needed. As I said earlier, those businesses which can set up in areas where commercial electricity is not available deserve all the help we can give them and they should be encouraged to do so. It will be money very well spent. This government is once again showing its total support for those who are willing to get up and have a go for private enterprise and small business and all the people—and I stress `all the people'—especially in a seat like mine of Parkes where all the employment pretty much surrounds small business.The curtailing of the indexation of the excise put in by the Labor government—and making it obvious that it has gone—I think is supporting every criterion that the coalition has ever aspired to in terms of responsible management and encouraging small business, and doing the best for them and for the general population. Taking away the indexation of the excise for a family that has to travel 100 kilometres simply to do their weekly shopping is no small gesture. People in rural electorates cannot avoid the huge cost of fuel usage: they are high fuel users and enormous Australian producers per head of population. Without doubt, the excise obviously is a higher burden to bear for those in country regions than it is for those in metropolitan areas. It is as much about the cost of taking kids to school as it is about what we do for small business. Various people have talked about alternative fuels. The one thing we have to do is not bring a cost upon us that we cannot bear. Whatever we do about alternative fuels, it has to be affordable, not idealistic; rather, responsible and done with commonsense. I utterly support this bill. It is certainly needed in any country electorate. I have great pleasure in supporting it.12:08:002588Thomson, Kelvin, MPMr KELVIN THOMSONUK6WillsALP00—The previous speaker, the honourable member for Barker, said he did not think that the diesel fuel rebate was a subsidy. I fear he is living in a state of false consciousness. The Diesel Fuel Rebate Scheme Amendment Bill 2002 amends the Customs Act and the Excise Act to extend the Diesel Fuel Rebate Scheme to retail and hospitality businesses that generate electricity for their own use, where there is no ready access to a commercial supply of electricity. It gives effect to a government commitment during the 2001 election campaign, and Labor will not be opposing it.Because the rebate only applies to businesses where there is no ready access to a commercial supply of electricity, it will principally benefit small businesses in remote areas of Australia. Typically, businesses that benefit from the rebate include caravan parks, tourist resorts and roadhouses. To be eligible for a rebate, the fuel must be used at premises where the retail or hospitality business is carried out. The fuel does not need to be used at the premises but it must be used nearby. There is no requirement that the enterprise that generates the electricity has to be the sole user of the electricity; however, the rebate is only payable for the diesel fuel used to generate that portion of electricity that the enterprise itself actually uses. The rate of rebate applicable to diesel fuel for electricity generation for retail and hospitality businesses will be the same as that applying to primary production. The rate is currently equal to the full amount of excise paid on the fuel. For those who receive it, it is quite a substantial matter. In indicating that we do not oppose this legislation, I want to also indicate my support for the amendment to the motion that the bill be read a second time—moved by my colleague the member for Rankin—which does a couple of things: it seeks to expose the announcement of the fuel taxation inquiry as a cynical and expensive election gimmick, which had no genuine purpose in seeking a review of fuel taxation issues.0V5Slipper, Peter, MPUK6Thomson, Kelvin, MPMr KELVIN THOMSON—The parliamentary secretary interjects that this is a bit unfair. Anyone who followed the history of this at all would understand exactly what happened. In the middle of the Aston by-election, the government announced—I was there on the day they announced it—that they would hold an inquiry into fuel taxation. This was in response to great public concern about levels of fuel taxation. The subliminal message out there for voters in Aston and around the country generally was: `We have heard your cries, we hear your pain and we want to do something about fuel taxation.' Then the Trebeck inquiry was publicly released by the Treasurer on budget night, with a myriad of other documents—a truckload of other documents—thus ensuring that that inquiry would receive no public scrutiny and could be quietly buried by the government. It was a cynical and expensive election gimmick, as my colleague the member for Rankin has indicated in the second reading amendment which Labor will be supporting.The other elements of his second reading amendment, which I also wish to refer to and support, are the government's failure to prioritise support for the accelerated uptake of renewable electricity generation as a viable alternative to diesel, which would lead to long-term greenhouse gas reductions, and the government's failure to deliver on their commitment to develop an Energy Grants (Credits) Scheme to replace both the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme. This is something the government have been promising us for some time, but it remains out there in the never-never and, frankly, it is not good enough.Electricity generated from renewable sources is often an effective way to reduce reliance on diesel for electricity generation. I believe that establishing renewable sources provides a long-term solution. They continue to provide energy year after year; they would overcome the need to burn, I understand, 52 million litres of diesel fuel each year, year in and year out; and, of course, renewable sources also decrease the emission of greenhouse gases. Their total contribution to greenhouse gases may not be that large, but it does provide an opportunity for the Australian government to demonstrate a genuine commitment to reduce greenhouse gas emissions.The area of renewable remote power generation is an area where I think the government should stand condemned for having promised much some time ago and yet having delivered so little. If we go back to the time of the Democrats' GST deal, the government committed to spending some $264 million over four years from 2000-01 to 2003-04 to support renewable remote power generation. We did not support the GST, but we did think that that was quite a good thing. In the first two years of the program, instead of spending the $132 million which had been promised, they only managed to spend $16.6 million—a fraction of it. In this year's budget, they have reduced that four-year commitment to $51.2 million over the same time frame, pushing out spending way into the distant future. They now say they will spend $106 million for the first six years of the program—that is to say, $17.7 million per annum compared with the original promise of $66 million per annum. So in terms of commitment, that is a quarter of what they promised the Democrats and the Australian people. On the government's past track record, we can confidently expect that this might be watered down even more come the next budget. Remote renewable power generation is a clear opportunity to replace fossil fuel generation with renewables, invest in our regional infrastructure and provide a more sustainable future for our regions. It will provide them with access to cheaper fuel and electricity costs, yet the government has failed to deliver on its promise of such investment. It shows that Prime Minister Howard and the government's professed greenhouse abatement commitment and their professed commitment to the sustainability of our regions are a farce. As a result, many of our remote retail and hospitality operations remain dependent on diesel power generation and they are the victims of increasing fuel prices. The Prime Minister could have gone a long way to delivering sustainable outcomes with money that he has already committed. What he needs to do is to deliver on his promise, but he has broken that promise. That is simply another example of this government's failure to deliver on greenhouse gas emissions, its failure to deliver on climate change and its inconsistent approach to policy in this area. The government has consistently failed to engage with the environmental aspects of fuel use and it has failed to tackle the issue of climate change. Unfortunately, the government thinks that it can get away with promising billions in this area and then failing to deliver on that promise. In terms of the government's commitment in this area of greenhouse issues generally, the Governor-General's speech stated:The government's ongoing funding package of $1 billion over five years for greenhouse gas abatement is among the largest by any government in the world. These funds are assisting to develop strong ... government-community partnerships that are beginning to reduce the rate of greenhouse gas emissions. No, they are not. The Australian Greenhouse Office's draft third report shows a massive blow-out in emission projections—I will come back to that—and the budget revealed that $1 billion funding package disappearing over the horizon and into the sunset. In its 2000-01 budget the government promised $245.8 million of greenhouse expenditure but a year later only $119.2 million—less than half—was spent, and that included a $104 million underspend by the Australian Greenhouse Office. I think that the Australian Greenhouse Office is experiencing serious problems. The government is not giving it any sense of direction. Its chief executive officer and its second in charge have resigned in recent times. I feel that the Australian people are not getting value from the Greenhouse Office and that it is completely rudderless at present.The budget further showed that greenhouse expenditure over the coming three years is to be cut by $162.3 million. It has become blindingly obvious that the government has broken its promises under the Measures for a Better Environment package—the Democrat GST deal—and that the original allocation of $796 million to the Australian Greenhouse Office has been slashed to only $254 million. Included in the Measures for a Better Environment package are things such as the Greenhouse Gas Abatement Program, the Renewable Remote Power Generation Program, CNG and LPG vehicle conversion and the development and commercialisation of renewable energy, and they call into question the government's bona fides into the world's most urgent environment issue: climate change.It was not just this budget which cut the Measures for a Better Environment package and saw this problem of underspending going on. There are a whole range of programs: the Diesel National Environment Protection Measure, oil recycling, the Greenhouse Gas Abatement Program, the Renewable Remote Power Generation Program and the Renewable Energy Commercialisation Program. Each of those programs in 2000-01 was systematically underspent. For the Diesel National Environment Protection Measure, the government promised $700,000; it spent $266,000. For oil recycling it promised $2.8 million; it spent $1.3 million. For the Greenhouse Gas Abatement Program, it promised $6.8 million; it spent $6.2 million. For the Renewable Remote Power Generation Program, it promised $5.8 million; it spent $3.79 million—an underspend of $2 million. In each of those areas during 2000-01 there was systematic underspending. Much of that money is rolled over or rebadged into other programs and reannounced as more good news. BV5Adams, Dick, MPMr Adams—The greenest budget!UK6Thomson, Kelvin, MPMr KELVIN THOMSON—This time we had the environment minister standing up and saying that we have the greenest budget ever, courtesy of money which had not been spent in previous years and reannounced as more good news. In relation to the last budget, $243 million was counted as environmental expenditure by the government but in fact it is being spent by Customs on border surveillance activities, which sounds suspiciously to the opposition like Pacific solution money being dressed up as environment expenditure.8I4Martin, Stephen, MPDr Martin—The coastguard!UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Coastguard it may be, but if you want to take that approach to it you might as well roll up the whole Defence budget and call it environment expenditure on the basis that—10000Scott, Bruce (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Hon. B.C. Scott)—Order! I bring the member back to the legislation before the House.UK6Thomson, Kelvin, MPMr KELVIN THOMSON—Thank you, Mr Deputy Speaker. I am happy to receive your guidance in this matter. I urge the government to look at the issues that we have raised in our amendment. The government needs to prioritise support for the accelerated uptake of renewable electricity generation. The government needs to implement its commitment to develop the Energy Grants (Credits) Scheme. These are things which it said it would do. These are things which, amongst other things, would help to contain greenhouse gas emissions. I want to make that point about greenhouse gas emissions quite forcefully because the draft third report from the Australian Greenhouse Office showed the projected emissions increase— excluding land clearing, for which figures are still unavailable—between 1990 and 2010 as a massive 33 per cent. The draft third report is to be compared with the second report from the Greenhouse Office, which projected that the emissions increase—again excluding land clearing— between 1990 and 2010 would be 18 per cent.The draft report attributed this blow-out to higher than predicted emissions growth and it states that the impact of government measures announced in 1997 has been less than earlier predicted. Australia's emissions are now projected to grow by 128 million tonnes of greenhouse emissions expressed as units of carbon dioxide to 518 million tonnes of greenhouse emissions between 1990 and 2010. That leaked draft report suggests that the government's measures to tackle climate change have failed and that a much greater sense of urgency needs to be shown, and that is the point we want to make with regard to their need to accelerate the uptake of renewable energy generation as a viable alternative to diesel. They need to get to work and act on their commitment to develop an Energy Grants (Credits) Scheme. It is hard to believe that this government are giving up on developing renewable remote power generation alternatives such as photovoltaic arrays, wind turbines and hydro units. It is shameful that the government say that they are happy to support the burning of 52 million litres of diesel fuel each year without investigating alternative energy sources.With regard to the Energy Grants (Credits) Scheme and getting the GST through the Senate, the government introduced the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme back in June 1999. In what I think was an attempt to restore some modicum of credibility after their position and capitulation on the GST, the Democrats pushed the government to include sunset clauses in each of the bills. The sunset date was set at 30 June 2002. At that time, the Deputy Prime Minister said that there would be an alternative to those two schemes in the form of the Energy Grants (Credits) Scheme. The 30th of June is approaching fast and the government has done nothing about developing that alternative to these two schemes. As a result, we have been put in a position where we have to agree to an amendment to the schemes to extend the sunset date to 30 June 2003. So far, neither the opposition nor anyone else has seen what this Energy Grants (Credits) Scheme is going to look like. We are eagerly awaiting the release of information about that new scheme. Everyone in the transport industry is eagerly awaiting the release of information about that scheme. People in the transport industry are entitled to the release of information about that scheme. At the time of the original legislation, the government said that the new scheme would maintain the equivalent benefits of the old schemes and the Minister for Transport and Regional Services also said that the new scheme would:... provide active encouragement for the move to the use of cleaner fuels.The road transport industry is entitled to know the nature of the new energy credits scheme as it is likely to impact directly on operating costs, decisions about capital investment, business expansion and things of that character. I hope that the government will give those interested Australians the opportunity to fully discuss the proposed Energy Grants (Credits) Scheme prior to the sunset of the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme.In closing, I urge members of the House to support the member for Rankin's amendment and I return to the Trebeck fuel taxation inquiry which was launched with great fanfare and hullabaloo and buried quietly on budget night. The government spent almost $4 million of taxpayers' money on an inquiry which they have completely ignored. They invited Australian organisations, businesses and individuals to prepare detailed and costly submissions to that inquiry and there were 341 submissions, so plenty of Australians took the inquiry seriously. The Treasurer set in train a process that would raise expectations and he then dudded them by burying the inquiry on budget night. The fuel taxation inquiry was called for cynical election purposes with no intention of a genuine review of fuel taxation issues. The government misled the Australian community on that point. Based on that, I urge the House to support Labor's second reading amendment.12:28:002592Adams, Dick, MPMr ADAMSBV5LyonsALP00—I hope I get on better now than I did on the last occasion when I rose to say something in the House. The Diesel Fuel Rebate Scheme Amendment Bill 2002 has been introduced to try to sort out another problem in the rebates of diesel fuel. Two acts have to be amended to cope with these changes and the purpose of the amendment is to insert section 164 into the Customs Act extending the Diesel Fuel Rebate Scheme to retail and hospitality businesses in remote areas which generate electricity for their own use when there is no ready access to commercial supply of electricity. Of course, that in itself could be a positive thing.To be eligible for the rebate, the fuel must be used at premises where the retail or hospitality business is carried on and the fuel does not need to be used on the premises, but the use of the fuel must nevertheless be geographically approximate to the premises. The location of the plant using the fuel must be in sufficient proximity to the premises as to enable it to be identified with the premises. Those standards are laid down.There is no requirement that the enterprise that generates the electricity has to be the sole user of the electricity. However, the rebate is only payable for the diesel fuel used to generate that proportion of electricity that the enterprise itself actually uses. This amendment bill does not extend to business with ready access to a commercial supply of electricity that generate their own power or who operate an emergency backup generator. A business would be regarded as having ready access if a commercial supply of electricity was present or convenient to the business and immediately available for connection.The electricity has to be used in the course of carrying on an enterprise whose principal purpose is the retail sale of goods or services or the provision of hospitality. The rebate is not payable to an enterprise for the generation of electricity for supply to retail and hospitality businesses. The example that I was given in the bill's explanatory memorandum was: ABC Corporationoperates a diesel generator to generate electricity in a small remote township in South Australia. ABC Corporation supplies electricity to the residents and businesses in the township, including various retail and hospitality businesses, on a commercial basis. ABC Corporation is able to determine by apportionment the amount of diesel used to generate the electricity it provides to the retail and hospitality businesses. ABC Corporation, however, is not eligible for a rebate for the diesel fuel used to generate the electricity it provides to the various retail and hospitality businesses as the electricity is not used by ABC Corporation in the course of carrying on a retail and hospitality enterprise—though, I should imagine that occasionally they would have hospitality in the ABC Corporation businesses—The various retail and hospitality businesses are not eligible for a rebate as they have not purchased the fuel and used it to generate the electricity in the course of carrying out their various enterprises.So there was a real anomaly there. Another section of the amendment bill allows for a rebate for the generation of electricity by an enterprise for retail or hospitality purposes to be payable at the same rate as if the diesel fuel had been used in primary production. It also inserts a definition of `retail sale'. This definition excludes enterprises whose principal purpose is the generation of electricity from falling within the meaning of the enterprise that has as its principal purpose the retail sale of goods and services.Another part of the amendment bill extends the restriction on the power of an authorised officer to examine premises. An authorised officer can examine the residential areas of premises only if the rebate application relates to fuel purchased for use at those premises and the occupant of the premises consents. The amendment of this act will apply only to diesel fuel that is purchased on or after 1 July 2002.We have to amend the Excise Act before that comes in. The amendment is to insert a paragraph into the Excise Act to extend the Diesel Fuel Rebate Scheme to retail and hospitality businesses that generate electricity for their own use where there is no ready access to a commercial supply of electricity, using words similar to those used to amend the Customs Act. What a messy way to deal with this problem and sort out some anomalies. What happens when another group wishes to have some consideration under the Diesel Fuel Rebate Scheme? Do we just extend it again and have more amendments to sort out their problems? The government certainly made some promises during the election to try and deflect attention away from the rising petrol prices that were occurring at the time, and this is one of the results of those promises.Before the election I was contacted by a member of my constituency who had bought a small shop at Ansons Bay, a very remote area of my electorate. He was paying enormous amounts at that stage, particularly when the price was really high, to provide power for the shop and to provide for the needs of many shack owners in the district, and there seemed to be nothing available to help him. This will certainly assist him, and I am sure it will help several small businesses that play an important role in isolated areas. They also provide many services, and it would not be easy with some of the costs that they are presently paying.I understand that the actual beginning of this promise started, as the member for Wills said in the previous speech, with the Aston by-election, which was when this actually came up and was made an issue. It would be really good to know what has actually happened to the fuel taxation inquiry. I thought that this inquiry would suggest ways to provide energy grants or credits in order to cover some of the anomalies of equity—this was promised to us—and that the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme would then be phased out and new ideas and new ways of doing things would come forward which would be in the interests of the environment and in the interests of conserving the fuels and using better fuels than we use now. But where has the new scheme gone? What is going to happen? It has not been said. The government has rejected the inquiry's report and, despite all of the work that was being done to start a more developed scheme, we have this mishmash of bandaid measures to try and keep the country off the back of the government. The same thing happened when we went through the absurd fluffing about with the taxation laws amendment bill in 1999. There were all sorts of moves made to try to discriminate against the forest industry and to try to cut a sleazy deal with the Democrats over the GST, and of course they were caught out. The timber industry in my electorate had been held to ransom because of this shabby deal between this government and the Democrats, and Wilson Tuckey, the then minister, ran around like somebody with his head cut off, trying to find a solution to this issue. I think we finally passed an amendment bill to sort that out. Even back then when I described a number of flaws in this rebate scheme and the need for it, and, when we saw there was to be an inquiry, we thought that maybe we were going to head down a track where some real issues got sorted out, but of course that has been killed by this government.The definitions are fuzzy. I can see that we are going to have similar problems with this amended bill to those we have always had. It really is a mess. This side of the House is going to support the second reading, but we have no other options. We were waiting to see the outcome of the inquiry and the development of energy credit schemes to see if there were other ways of doing things. The opposition's amendment deals with some of those issues and also points out that the government has failed to give priority to the accelerated uptake of renewable electricity generation or to give the support that it should have done in that area.I know the trucking industry was waiting to look at that inquiry into the Energy Grants Credit Scheme and was going to develop its future along those lines. That has all been put back. This comes, of course, from a government that claims to be a green government and, as was pointed out by the member for Wills, the unspent proportion of the environmental budget from last year and the unspent money being brought forward and announced again only goes to show that this government is not fair dinkum in those areas. I support the opposition's amendment to this bill.12:39:002594Katter, Bob, MPMr KATTERHX4KennedyIND00—I rise to speak on the Diesel Fuel Rebate Scheme Amendment Bill 2002 with some considerable experience in the area of providing electricity to isolated communities. I had the responsibility for some 28 communities, some as small as 24 people on Stephens Island in the Torres Strait and some as big as some 4,000 people on Palm Island. The electricity for those 30,000-odd people that lived in those 28 communities, which a lot of people refer to as Aboriginal and Torres Strait Island communities, was supplied by the Department of Community Services, for which I was the minister.There was no delivery of electricity by the government into the Torres Strait Islands. I myself and one or two very excellent departmental officers did the work, and we established that it would be $5 million cheaper if the Torres Strait Islands were electrified with solar energy rather than supplied with diesel plants. The net result of that was that we set up a trial on Coconut Island, which proved enormously successful. In fact, the only problems that we had were with the diesel generator when it was to kick in during very protracted periods of overcast conditions.The incoming Labor government, which rather hypocritically made a lot of noise about who is doing what about gas emissions and renewable energy sources, abolished the scheme and put diesel generators on every single island. I said that it was the despoiling of paradise. Some of these islands are very beautiful and they are very small. They are much affected by big, noisy diesel generators pumping out fumes, and bringing diesel in across very dangerous coral reefs is just not the way to travel across the Torres Strait, but that did not worry the incoming government.It would have afforded Australia the opportunity of becoming the pre-eminent country in the delivery of solar energy in the entire world. It was the biggest contract by far ever made available in the world, and it would have enabled operators to get on to economies of scale in their production lines. The world head of General Electric rang me from the United States, and they were very keen to offer the most attractive deals to secure the contract. It is terribly depressing even now for me to think about what that brainless incoming government of Mr Goss was responsible for in their decision. The sequel to the story, I might add, was that when we actually did the trials on Coconut Island, which is a small island of about 100 to 200 people, we found out that, if we mixed wind generation with solar generation, the savings were not $5 million over a 20-year life cycle but $8 million. So it was $8 million cheaper to go to the solar answer rather than to go to the diesel answer, which is even more depressing when one reflects upon the decision taken by the incoming Labor government. The only reason that they made that decision was that it was a Bjelke-Petersen government idea, and therefore they had to go against it. That was the only logic that ever emanated from them. In certain circumstances, solar energy should be the alternative that is adopted, but there are other circumstances in which solar energy is very inappropriate. If you have a situation where you need a lot of energy quickly—for example, if you are using welders or freezers on a station property, where you need a huge surge of power to bring the welders or freezers into operation—solar energy is not the appropriate vehicle to deliver the sort of energy hit that is needed. Also, there is a huge capital cost difference. If you are talking about, for example, a station property, you might be looking at $100,000 to $150,000 for an adequate solar set-up, whereas a diesel generator might cost you as little as $5,000. If you are looking at a life cycle of 20 years, you look at a different set of economies, but a person with his back to the wall is going to put his money quite rightly into his cattle production rather than look at a 20-year time frame. A hundred thousand dollars is a lot of money for a small businessman to find.A previous speaker, the member for New England, spoke about ethanol, and it is hard to come to this debate without ethanol leaping to one's mind. We have the rather embarrassing situation now where the United States Senate unanimously decided to amend their energy bill and move to a five billion gallons a year project supporting ethanol content in fuel in the United States. A lot of this is environmentally driven. Of course, the motorcar used to do 600 kilometres on a tank of fuel but, when lead was taken out of petrol, it did only 500 kilometres. So, to get the octane rating up, something had to be put in to replace lead and in most cases MTBE—I will not go into what MTBE is—was put in as a replacement. MTBE is arguably much more damaging to the environment than lead is. Also, it is very expensive. Whether the United States Senate are moving this way because they want to clean up the environment, because they want to get rid of the very dangerous MTBE—which is what they have said publicly—or because they want to provide assistance to the grains and sugar industries in the United States is for someone else to determine, but it is a fact that they have moved into this area. I know that Germany, France, Canada, Brazil—all of these countries—by law have a percentage of their petrol content supplied by agricultural biomass ethanol.If every country on earth is doing this, why is the country with the most urbanised population on earth the one country on earth that is not doing it? You would have to say that it is due to the incompetence of government decision makers; there is no other answer that would leap to your mind. Not only is ethanol necessary because MTBE and the other additives that have replaced lead need to be taken out—and that is agreed upon by almost every government in the world except here in Australia—but it also has the ability to deliver viability to the sugar industry without raising the price of petrol, a fact which is of great interest to the sugar industry and grains industry. The member for Parkes, who spoke previously, made a good point: we cannot get carried away with all of this environmental fairy floss and price ourselves out of the world market so that we will have difficulty feeding our children and buying medication, as we are seeing now with things like Gleevec.Madam Deputy Speaker, I make the point to you that not only will the use of ethanol rescue the sugar industry, improve environmental conditions and remove a very dangerous poison from our atmosphere in Australia but also this industry will not raise the price of petrol. I speak with authority, because Transfield came to the Queensland government with a proposal and I was the relevant minister at the time. They were not happy to agree to $360 a tonne for sugar, but they agreed. We got the best advice that we could get in the world, from Fleur Daniel and Wright Killen of Austin in Texas, who are the leading world authorities. They went over the figures and said that we had a moveable margin, from a reduction of 2c a litre in the price of petrol to an increase of 4c in the price of petrol. That situation has improved dramatically because the oil companies have put the price of petrol up very considerably in Australia in the intervening time frame. The question is: why are we not doing this? A second question is this: if we do it, how can we do it in such a way that it will help Australian producers of grains and sugar? The issue is being raised that the current mooted proposal by the government would provide no advantage to those industries at all; in fact, it would impose another cost burden upon those industries. Having said that, I do want to praise the government today for their initiatives in this area. There has been a grave and grievous injustice. Every person in Australia enjoys the supply of electricity—in almost every case, at one time subsidised by the government. Every single line that was ever put in initially carried a subsidy from the government. Every single person that enjoys the flow of grid-system power in Australia has enjoyed a subsidy from the government at some stage. In sharp contrast, the people that live in rural Australia once again are getting the rough end of the pineapple. They have been taxed on their electricity. Whilst the city consumer has been subsidised with his electricity, we find the country consumer being taxed on his electricity, and that tax came by way of the cost of fuel.Let me go back to the Torres Strait for one moment. That project was worth $25 million. Over a 20-year time frame the cost, had we put in diesel generators, would have been $30 million, and that $30 million would have been going into petrol. So we have this huge cost to the Torres Strait Islanders of $30 million over 20 years for their electricity, and the vast bulk of that $30 million would have gone to the federal government by way of excise tax. So those people, up until the time of this decision—and there was another decision which may have already put them in this category, but most certainly this concerns all the rest of the people that are on diesel generators for their electricity supply—were paying nearly a 50 per cent tax imposition to the Australian government on the supply of their electricity, a tax which is not paid by a single urban consumer in this country. So the gravest of grave injustices has been sitting there for a considerable length of time, and it is an absolute disgrace that past governments allowed that situation to continue. So we thank most sincerely the people that are supporting this bill today and we thank the government most sincerely for moving in this direction.Before I shut down on this issue, it is very important to show you the benefits to Australia. If a person comes from Japan to Cairns, they might have one holiday and do the Daintree or Tully whitewater rafting. If you want them to come back, you have to offer to them some alternative tourist attractions, and almost invariably in Australia those tourist attractions, almost by their very nature, are in very inaccessible areas. In North Queensland if I were to say Hinchinbrook Island, it is an island and very hard to get to. Dunk Island is the same.Then there is Adele's Grove, and I must pay a very great tribute to Lloyd Campbell, the developer of the tourist industry and of Lawn Hills and the adjoining Adele's Grove. Almost single-handedly he has created a very significant tourist industry for Mount Isa, a town that has been reeling under the incompetence of the Labor member of parliament who introduced fly-in mining and took his own town from a population of 30,000 down to under 20,000. In sharp contrast has been the wonderful achievements of Lloyd Campbell, the big bus operator in North Queensland, in developing this wonderful tourist development for Mount Isa. Michael Archer, the Director of the National Museum, has been getting a lot of publicity today over the Tasmanian tiger being recreated via DNA but he is also the great promoter of the Riversleigh fossil deposits, and they also provide a wonderful tourist attraction in the Mount Isa area for people going there. Probably the most exciting part is the palaeontologists—and they are mostly amateur people, I might add—in the laboratory in Mount Isa. They bring the fossils back to Mount Isa and work on them there, and tourists are actually taken into the laboratory and can see the fossils being treated. We have a camp up there at Adele's Grove which is hundreds and hundreds of kilometres away from grid system power and, of course, it has to be supplied with power. There is a massive cost imposition upon this project and some of that cost has been alleviated by what the government is doing today. Dunk Island is a really beautiful and wonderful island off Mission Beach, another spectacularly beautiful part of the world—not of Australia but of the world—and again these places have to be supplied with electricity from diesel generators and they are classic cases of solar energy really not being of a great deal of assistance. The great and wonderful work of the Collins family in developing the lava tubes at Undara is yet another example of the creation of an international tourist destination by people that have struggled very hard in putting these things together. There was no way that any of these developers could remotely contemplate $200,000 or even half-a-million dollars for a solar energy set-up, even though in the longer term it may have been cheaper. They could only afford the $5,000 or $10,000—maybe $25,000 in some cases—for the diesel generators. So there has been a grave injustice which has been on the books for far too long in this country. That injustice is being fixed up today: no longer will these people that live in rural and regional Australia—and I pay great tribute to all of the people that worked hard and fought hard to get government action on this matter—have to pay tax on their electricity while their city cousins enjoy a subsidy on theirs.12:58:002597Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—The government wishes to thank all honourable members who were listed to speak and indeed the honourable member for Kennedy for his surprise contribution. The Diesel Fuel Rebate Scheme Amendment Bill 2002 gives effect to the government's election commitment to extend the Diesel Fuel Rebate Scheme to those outback retail and hospitality businesses which have to use diesel to generate power because they do not have access to mains power. The government cannot accept the second reading amendment moved by the honourable member for Rankin, and I would like to touch briefly on each of the three points mentioned by the honourable member in his second reading amendment.Firstly, the member for Rankin, as point one of his proposed amendment, queried that the government had delayed the implementation of the Energy Grants Credit Scheme. I want to reassure both the honourable member for Rankin and the House more generally that the government is indeed committed to introducing the Energy Grants Credit Scheme by 1 July 2003. The scheme will maintain entitlements equivalent to the Diesel Fuel Rebate Scheme and the Diesel and Alternative Fuels Grants Scheme while providing greater incentives for cleaner fuels.The recommendations of the inquiry did not support this approach, and the scheme will now be developed in the context of normal government business. We anticipate bringing forward legislation in due course, but with a view to starting the new scheme from 1 July 2003. Members of the opposition—in particular, the member for Wills—referred to renewable energy and had the audacity to seek to criticise the government for, in their words: failing to prioritise support for the accelerated uptake of renewable energy generation as a viable alternative to diesel rather than extend the diesel rebate that would lead to long term greenhouse gas reductions ... Members of the opposition are so far from the truth it is amazing. As the minister for the environment pointed out, the budget which was just brought down was the greenest budget this country has ever seen. Dr Kemp has indicated that the Howard government is strongly committed to increasing the use of renewable energy in Australia as a way of meeting our increasing energy needs without adding to our greenhouse gas emissions. To this end we have committed over $300 million for renewable energy support focused on three areas. Key achievements include the Mandatory Renewable Energy Target—world first legislation—that guarantees that enough new renewable electricity is generated over the next 10 years to supply the residential needs of a city of four million people. This initiative is being achieved by establishing an innovative market in renewable energy certificates and is expected to deliver in excess of $2,000 million of new investment in renewable energy in Australia. Another key achievement is the development, with industry, of a strategic action agenda to guide the development of a sustainable and internationally competitive renewable energy industry in Australia with target annual sales of $4 billion by 2010. Other initiatives include $6 million of targeted grants funding to address financial institutional barriers to the uptake of renewable energy, assessment of renewable energy resources, development of standards for equipment and training and accreditation of system designers and installers. A further initiative is increasing the uptake of renewable energy technologies in remote areas, with funding for rebates on equipment of around $20 million, saving over 50 million litres of diesel fuel each year. For many remote households in Australia these rebates will make affordable 24-hour power for the first time, substantially improving their quality of life. An initiative of increasing the use of photovoltaic technology will enable around 6,000 householders and owners of community buildings such as schools to convert sunlight into electricity and run valuable education programs. Another achievement is grant and equity programs worth over $70 million to support commercialisation of new technologies and applications that generate and use renewable energy. Over 60 projects have been funded for a wide range of renewable technologies, including solar photovoltaic, solar thermal, biomass, hot dry rock, wave, hydro and wind. These projects are delivering additional benefits such as job creation in regional areas and addressing environmental issues such as waste minimisation and salinity. So the government has a proud record in the area of renewable energy. It is an absolute joke to see paragraph (2) included in the second reading amendment. I would also like to mention, given the fact that opposition members referred to climate change and greenhouse policies, that in 2001 the Intergovernmental Panel on Climate Change released its third assessment report on the science of climate change. It found increasing evidence that human activity is already altering the global climate system and projects further changes, including average global temperature rises of 1.4 to 5.8 degrees celsius during the 21st century, increased frequency of extreme weather events such as floods, droughts, bushfires and cyclones, decreased snow cover and sea ice and, over the longer term, an associated increase in the sea level.The Howard government has played a significant role in international efforts to respond to the threat of climate change and we reject any suggestions to the contrary. Australia under this government has been prominent in negotiations to settle rules for the operation of the 1997 Kyoto protocol which were finalised in Marrakesh in late 2001. It remains the view of the government that a framework of climate change agreement requires the participation of all major emitters, including developing countries, to be effective. The Howard government recognises the importance of sensible greenhouse policies which will enable Australian industry to remain competitive and grow. Australia is undertaking significant mitigation of greenhouse gas emissions. Since 1997 the government has committed almost $1 billion to Australia's greenhouse response, which indicates how thin are the criticisms sent in our direction by members of the opposition. The government has established the Australian Greenhouse Office, still the world's only national agency specifically tackling climate change. The government's response embraces strategic investment, regulation, voluntary approaches and market based measures for abating greenhouse emissions. Overall, current Australian greenhouse mitigation actions are expected to reduce greenhouse gas emissions by about 60 million tonnes per annum during the first Kyoto commitment period—from 2008 to 2012. Particular programs include the $400 million Greenhouse Gas Abatement Program, targeting opportunities for large scale, cost-effective and sustained abatement, with an expected reduction of up to 11 million tonnes in 2010; the Mandatory Renewable Energy Target, which requires the electricity generation to source an additional 9,500 gigawatt hours of renewable energy per year by 2010, an expected reduction of up to seven million tonnes in 2010; promoting energy efficiency, including by changing residential and commercial building codes, and introducing generator efficiency standards and minimum energy performance standards for appliances and equipment, an expected reduction of up to 14 million tonnes in 2010; and the Greenhouse Challenge Program, a joint voluntary initiative between the government and industry to abate greenhouse gas emissions, an expected reduction of up to 16 million tonnes in 2010. Is it any wonder that the Howard government is the greenest government in Australia's history and the budget which was delivered by the Treasurer a couple of weeks ago is the greenest budget in Australia's history? I was very curious as I listened to the speech by my friend the honourable member for Rankin. He criticised the government's fuel inquiry and he outlined to the House how much that particular inquiry cost. He sought to draw a connection with the cost of the inquiry and then suggested that the government should, simply because we had an inquiry, accept the recommendations. He is a very great worry for the Australian Labor Party if he would say, in government, that whenever a report of an inquiry is brought down the government of the day should accept its recommendations—whether or not those recommendations are appropriate for the advancement of the Australian people.For those listening, I think I should answer the query, `Why did the government have a fuel taxation inquiry if it rejected all of its recommendations?' The facts are as follows. In response to community concerns about high fuel prices, the government established an inquiry into the total structure of fuel taxation and related issues in Australia. The fuel taxation inquiry conducted a rigorous review of a number of key fuel taxation issues, including the complex interface of the various grant and rebate schemes. We did get a lot of submissions for the inquiry, and that is very positive. The government has, however, decided against implementing the main recommendations of the inquiry, as the government considers they would have negative implications for the fuel industry and for consumers.The government will carefully consider the recommendations of the inquiry for a production subsidy for ultra low sulfur diesel funded by an increase in the excise for all diesel. The government has already made a commitment to apply an excise differential to encourage the early introduction of ULSD with sulfur content of 50 parts per million or less. This excise differential will consist of an additional excise on regular diesel of 1c per litre from 1 January 2003, rising to 2c per litre for 2004-05. A production subsidy would be aimed at easing the administrative requirements of applying the DFRS and DAFGS to differently taxed types of diesel.The proposal to tax all fuels based on their relative energy content would impose tax on previously unexcised fuels such as ethanol and LPG. The member for New England mentioned the importance of ethanol. This would have implications for the LPG retail fuel industry and LPG conversion businesses, and it is also contrary to the government's election commitment to maintain excise exemptions for fuel ethanol and biodiesel. I am pleased to be able to assure the honourable member for New England on that particular point, which he raised in his contribution. The government will not be implementing that recommendation. The government will not reintroduce fuel excise indexation. You have to remember that this is Labor's tax and it was pricing fuel in Australia out of the reach of ordinary decent Australians. The indexation of fuel excise was abolished in March last year in response to community concerns about high petrol prices, and the government are pleased to be able to assure the Australian community that we will not be revisiting this issue. The replacement of the existing Diesel Fuel Rebate Scheme, Diesel and Alternative Fuels Grants Scheme and excise concessions and remission systems with a business fuel credit scheme for on-road and off-road users is similar to the government's policy in A New Tax System. One of the concessions agreed with the Democrats to secure support for the new tax system legislation was that full rebates had to be restricted to certain classes of on-road and off-road use. The Energy Grants (Credits) Scheme, announced in the government's Measures for a Better Environment package in 1999 to replace the existing DFRS and DAFGS, is proposed to be implemented by 1 July 2003. The purpose of the EGS will be to provide active encouragement for the use of cleaner fuels while at the same time maintaining entitlements that are equivalent to those under the DAFGS and the DFRS, including for use of alternative fuels. Under the fuel taxation regime proposed by the inquiry, the Fuel Sales Grants Scheme and the Petroleum Products Freight Subsidy Scheme were to be discontinued. Both of these schemes were designed to assist regional and remote consumers, and people in these areas would be affected by the removal of the schemes. Therefore, the government has decided to maintain the FSGS and the PPFSS. We are certainly not going to apologise for that. In summary, the fuel inquiry provided a valuable insight to the situation. The government has considered the report, and I have outlined the government response. In the brief amount of time I have available, I want to thank the member for Barker for highlighting the tourism benefits of this measure and the benefits for regional Australia. As honourable members would appreciate, prior to 11 September last year Australian tourism had record numbers of international visitors. The Minister for Small Business and Tourism delivered on the coalition's election package on tourism, which will help the tourism industry to get back on its feet. I must say that I am privileged to represent Australia's premier tourist area, namely the Queensland Sunshine Coast. The delivery by Minister Hockey of the government's election package was warmly welcomed by the Tourism Task Force, interestingly headed by former Labor tourism minister John Brown. We thank Mr Brown for his very strong support of the government in this area. I suppose he is living proof that, when one stays around for a while, one can learn as one goes on. I just want to assure honourable members that the Howard government remains totally committed to small business and tourism. The member for New England brought forward a thought-provoking suggestion. In effect, he queried why the Diesel Fuel Rebate Scheme did not include industries such as foundries and crash repair businesses. As I have indicated before, the original government proposal under the new tax system was to provide a comprehensive credit for all off-road diesel use. This approach was supported by the fuel tax inquiry. The government, in their negotiations with the Democrats over the ANTS package, agreed not to pursue that approach, and the government stand by this agreement. We are still working through the design of the Energy Grants Scheme and will be re-examining this issue in that light. I am pleased to advise the honourable member of this fact. The extension of the Diesel Fuel Rebate Scheme originated from the recognition of some of the difficulties suffered by small outback tourism operators. The National Party's policy document Securing Australia's tourism future states:Another measure which will help tourism operators is the extension of the Diesel Fuel Rebate Scheme. A re-elected Coalition Government will extend the eligibility for the Diesel Fuel Rebate Scheme to small retail/hospitality businesses producing their own electricity from diesel, provided there is no access to grid power. Businesses such as caravan parks, tourist resorts and road houses will benefit from the Scheme ... This measure compensates such businesses for the considerable costs of power generation in regions where there is no access to the power grid and where excise imposts can disadvantage isolated communities. This government has constantly indicated its commitment to rural and regional Australia, including those people resident in isolated communities. The government does this by providing a rebate of excise or customs duty on fuel used by retail and hospitality businesses—not just small retail and hospitality businesses—to generate power for use in the business after 1 July 2002. The member for Rankin said that the opposition were supporting this bill because the government were delivering on an election promise. I call on the Labor Party to support the government with all legislation delivering on our election promises. They ought not thwart the will of the Australian people. I am particularly pleased to recommend that the House support this very important bill, and I thank honourable members for their indication that this will occur. I commend the bill to the House and oppose the second reading amendment moved by the member for Rankin. 10000Corcoran, Ann (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Ms Corcoran)—The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved as an amendment that all words after `That' be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.Question agreed to. Original question agreed to. Bill read a second time. Message from the Governor-General recommending appropriation for the bill and proposed amendments announced.260113:19:002601Mr SLIPPER,MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—by leave—I move:That this bill be now read a third time.Question agreed to. Bill read a third time. Bills2601R15452601Debate resumed from 16 May, on motion by Mr Slipper:That this bill be now read a second time.13:20:002601McMullan, Bob, MPMr McMULLAN5I4FraserALP00—Thank you very much, Madam Deputy Speaker Corcoran. It is the first time I have spoken in here while you have been in the chair, and I congratulate you on achieving that high position. The New Business Tax System (Consolidation) Bill (No. 1) 2002 arises from one of the main recommendations of the Ralph Review of Business Taxation. It is a very complex bill, but in its essence it seeks to implement a system which allows wholly-owned groups to choose to be taxed as a single entity for income tax purposes. We have been waiting a very long time for this reform to take shape. After all, it was announced with great fanfare as part of the so-called A New Tax System package back in August 1998. At that stage, it had a proposed start date of July 2000. You might say, `If it had a proposed start date of July 2000, how can we be debating it in May 2002?' That is a very good question. By the time of the announcement of the results of the Ralph Review of Business Taxation in September 1999, this proposition had already been deferred, with a solemn promise being given that, instead, it would come into effect in July 2001. But, come March 2001, we heard from the Treasurer that this proposition had been deferred yet again—this time to start in July 2002. One thing should be clear from that: the government has had four years to develop this proposition. Obviously, we welcome the fact that the legislation has finally made its way into the House. I am a little surprised—to put it politely—that, despite having four years for preparation, the government has managed to introduce a bill only six weeks before the proposition is due to come into effect. It is a very complex bill which would warrant a lengthy and detailed examination by the parliament, but there will be no opportunity to do so. This is wholly consistent with the contempt with which the government is accustomed to treating the parliament. Governments slip into this attitude after they have been in office for a while; this government seems to have done it very quickly. Six weeks for the parliament to scrutinise nearly 200 pieces of legislation which are of fundamental importance to the future of business tax reform in this country is an entirely inadequate timetable. Nevertheless, the opposition will do all we can to meet this absurd timetable set by the government so that progress is finally made on this measure. Therefore, we will not oppose the measure in the House and will seek to have a Senate inquiry which is sufficiently prompt, as the Senate is capable of—I hope it will agree to it, although it is not totally within my power or that of the opposition—to allow the bill to start on the agreed commencement date. The Labor Party have consistently supported the principle of consolidations. It is a concept which is designed to do two important things which we support as objectives: firstly, to minimise compliance costs; and, secondly, to strengthen the integrity of the tax system. In principle, it should do that. I am a little bit worried that the accompanying material tends to cast doubt over whether this particular proposition is going to do either—I will come to that in a moment—but the principle is sound and we support it.Consolidations was a key part of the package of business tax reforms agreed between the then shadow Treasurer and the then and now—we are not sure for how much longer—Treasurer in November 1999. At that time, the Labor Party indicated that it would support the broad package of business tax reform on the condition that the measures not then before the parliament, particularly the revenue raising measures, would be implemented as stated and in full. We were concerned even then that any slippage on these measures in the future could expose the government in terms of its commitment to maintaining the integrity of the tax system. We have now had 2½ years to deliver on the consolidations part of the agreement. Perhaps that does not constitute real slippage. Maybe the government thinks that is satisfactory. We are concerned about the integrity of the overall package and the revenue neutrality commitment. Nevertheless, it is heartening to see some legislation finally come forward addressing the following important integrity areas: tax avoidance through intergroup dealings, loss-cascading by the creation of multiple tax losses from the one economic loss and value-shifting to create artificial losses where there is no actual economic loss. Anyone who has studied, even in a cursory manner, the recent history of the Australian taxation system will be aware of some of the excesses of the eighties that were perpetrated by transfers between groups—excesses that would, we expect, certainly be intended to be prevented by this measure. Unfortunately, even with the lengthy gestation period of this bill, the government has been unable with any accuracy to determine what the true cost of the measure is going to be. It is quite unique in my experience that the full extent of the costing in the explanatory memorandum is:The consolidation measure is expected to cost approximately a billion dollars over the forward estimate period. This cost largely relates to the transitional concessions and the expectation that groups will be able to use their losses faster than is allowed under the current law. I will come back to some detail about that in a moment. It is extraordinary that the costing for a $1 billion measure should be dismissed in such a peremptory manner. I ask the Treasurer—although I am sure that, true to form, he will not come into the House to respond to this debate; I assume the parliamentary secretary will come on his behalf—to remedy this situation by releasing full and detailed costings for this measure. I make it clear to the officers now in the advisers' box that, assuming the parliamentary secretary does not do that—and if the government is true to form in the House, he will not—when they come before the Senate committee we expect that they will have the answers to these questions. It will not be acceptable to us that they be taken on notice at that time. Take them on notice now and have answers when we meet because this is $1 billion of taxpayers' money. We want full and detailed costings for this measure.I understand why the year-to-year measurement will be tricky. The rate at which some practices will be undertaken in response to the bill will be hard to determine. We certainly should be able to break it down with more accuracy than we have at the moment not only as to time but also, more particularly, between the various aspects— which cost relates to transitional concessions and which to the faster use of losses. In particular, I ask the parliamentary secretary on his return or the officers subsequently to inform the House or the parliament through the Senate, if they do not do it here, the following: (1) what are the updated costs to the revenue per year over the forward estimates period; (2) what is the split between the transition costs and the ongoing costs to the revenue; (3) what have been the costs to the revenue of all the changes to the original Ralph recommendations and, in particular, the full cost of the decision to alter the rate at which transferred losses can be used by the newly consolidated group; and (4) the transition costs to business of this measure? In addition to that detail, what I want to be able to establish, as a result of the information that is provided, is why there is an ongoing cost to revenue from what is supposed to be an integrity measure. If we are improving the integrity of the system, we should be getting more revenue. I want to know how we can be implementing an agreement that was supposed to be, for the package as a whole, revenue neutral—and implementing an enhanced integrity measure, which is the basic reason for our support—if this is costing us $1 billion. If, at the end of that process, there are some transitional costs and if, by the end of the forward estimates period, it is starting to produce surpluses, that will be of interest to us and we would appreciate knowing that. But if it is going to have an ongoing cost, why are we doing it? Where is the benefit from this enhanced integrity if the taxpayers are losing? So I am going to insist that we receive that information—here or in the Senate. These breakdowns are critical to understanding the true cost of the measure. Without them, it is not possible to determine if the final form of the measure is consistent with the agreement made between the Labor Party and the government in 1999, and that is critical to our continuing support.As I say, we support the principle—it is a good principle; we have always supported it. It should be an integrity measure—it looks like an integrity measure—but, if it is, why is it costing us $1 billion? In particular, with regard to the transitional costs of the measure, I note the explanatory memorandum admits that, due to the magnitude of the consolidation measure, for large corporate groups, especially head companies, the start-up costs may be significant. I understand that—I would like to get some understanding of what they are—but such changes do incur costs. Press reports suggest that these significant transitional costs could last for at least two years. I would be interested to know if that is the Treasury-tax office estimate and, if so, what the implications of that are. What is more, I have had repeated representations that the transitional costs will impact even more heavily on those small businesses that will be affected—which will not be most small businesses but will be some. I would like to get some information about whether that is the Treasury-tax office view.I have to say, with regard to the transitional measures, that I support the government's decision to begin addressing these transitional costs by allowing the existing grouping provisions to operate in parallel with the consolidation regime until 1 July 2003. I note that the government intend that to be the end of it, and I think they should insist upon that. We get a lot of slippage in regard to transitional concessions. I will take a lot of convincing that that date should be varied. I assume, and see from their statement, that that is the government's view, and if they retain that view then they will retain our support.We are concerned that the government have a track record of imposing horrendous compliance burdens on business. The introduction of the business activity statement was a debacle, and it remains an unnecessary, complex burden on small business. For approximately 12 months now, we, as an opposition, have been articulating a GST simplification measure. There is a private member's bill in this parliament that would substantially simplify the burden of compliance and its cost on small business. I look forward to the government eventually finding a way to get around the embarrassment that the idea originates from the opposition and accepting it. I want to turn now to the issue of revenue neutrality. There has been a long period of support from the Labor Party in opposition—and there were previous measures when we were in government, but those are not relevant to this debate—for business tax reform. We have supported measures and agreed to support measures that the government had said it intended to introduce but then backed away from. That has been a problem for us, but we continue to support the principle of improved integrity and improved compliance. Our support, however, has always been on the clear condition of revenue neutrality—that is the significance of the information which I am seeking from the officers and from the Treasurer. As the Leader of the Opposition made clear in his letter to the Treasurer agreeing to the business tax reform package:... Labor is willing to pass the business tax package if it pays for itself. Labor will hold the Government to its promise on revenue neutrality. We cannot accept a reduction in business taxation at the expense of individuals and families who will be bearing the brunt of a GST, nor the use of the Budget surplus to fund business tax reforms.We stand by these principles and will apply them to the overall package of business tax reform as it is brought forward by the government.So I say again to the officers: we want detailed costings on the progress of the implementation of the business tax reform package agreed between the Treasurer and the then shadow Treasurer, now Leader of the Opposition, Mr Crean, to allow us to judge if this agreement has been met, and we will be seeking that information through the Senate committee. If there is no progress in other areas, the revenue impact of this measure makes us concerned that the revenue neutrality proposition will not be met and that, through the GST and income tax, families, PAYG taxpayers and working men and women in small business will be paying the price through higher interest rates as a deficit emerges, as it has this year, or the surplus disappears. So I want those detailed costings on the progress of implementation of the business tax reform package, including this measure, to allow us to judge if the agreement which we made with the Treasurer has been met.These costings should include not only the impacts of any general taxation measures but also the myriad special concessions offered to particular companies and projects. It is time for some transparency. What the opposition wants to know is: what is the state of the balance sheet on business tax reform? If, as we suspect, the tax concessions for business have been delivered faster than the measures designed to strengthen the revenue position of the Commonwealth, then the Australian people have a right to know. After all, as the Leader of the Opposition observed in his budget reply, budgets are about choices and about the impact that those choices have on people. That is why this measure has to be seen in the context of the overall debate about the tax system and tax reform. It is about the priorities that governments reflect in their tax reform agenda.There are many good propositions for reform of the tax system. We have to proceed with some priority as to those which we intend to pursue and implement. For example, the opposition has already begun to put on the table some of its choices with regard to tax reform. I refer in particular to the proportion for tax credits and the proportion to improve taxation of the superannuation system. The tax system can be a crucial vehicle for improving equity. It can play a crucial role in helping, for example, the transition from welfare to work. It is time we looked again at serious tax reform targeted specifically at this problem—the working family tax credit concept.Working family tax credits are a means of ensuring a living wage for low-income earners and their families by, effectively, giving back a portion of the tax paid in order to help with costs of living and of raising a family. This shares between business and government the responsibilities for maintain the living wage. By reducing the cost of employment, a working family tax credit system provides a substantial incentive for employers to create more jobs, while protecting the minimum wage and thus the living standards of low-income earners. In addition, delivering these payments through the tax system enables such payments to be tailored to the needs and circumstances of specific households. Most importantly, working family tax credits can substantially improve the integration of the tax and social security systems, to smooth the welfare-to-work transition and hence provide strong incentives for increased work force participation. Similar income tax credit programs have been a very important part of the successful policy platforms of progressive parties in the USA and the UK, aimed at supporting families, tackling poverty and making work pay. In the current policy review process we will seek to learn from these overseas experiences in developing our own policies to address these critical issues. In doing so, we will be seeking to set out the long-term goals of the policy, while being mindful that we may need to work gradually towards these goals. The necessary commitment to careful fiscal management will put stringent conditions on the pace of implementation of any tax credit programs and the levels at which various thresholds are set. Furthermore, spending on any such program will have to be weighed carefully against competing priorities. Nevertheless, I strongly support a priority in the tax system to address the continuing malaise of high unemployment.Another example of efforts to use the tax system to improve equity—one where the contrast between the government and the opposition is very stark—is the approach to the taxation of superannuation. The Leader of the Opposition, in his budget reply speech, outlined proposals to cut taxes on superannuation for all Australians, not just the wealthiest three per cent of Australians who would benefit from the Treasurer's plan to reduce the superannuation surcharge. While pensioners, the sick and the disabled were hit in the budget, the reduction in the surcharge delivered the wealthiest three per cent of the population a tax cut. The opposition has pledged to vote against this measure and has proposed, in its place, either of two fairer options to redirect the superannuation tax cut to all superannuation fund members. We are considering these two options to redirect the Treasurer's superannuation tax cut.At the moment, the government imposes a 15 per cent tax on contributions made to superannuation funds. This, clearly, directly reduces savings and retirement incomes. We now have an opportunity to implement a fairer proposal which will improve the budget and boost retirement savings, but this chance will be lost if the government introduces its unfair changes.The alternative propositions that the Leader of the Opposition outlined are either to cut the superannuation contribution tax for all Australians from the present 15 per cent to 13 per cent, or to cut the tax as far as 11.5 per cent for people aged 40 and over. Either option would add thousands of dollars to every superannuation fund member's retirement income. The opposition has outlined how these measures can be funded without any negative impact on the budget bottom line. They are economically responsible.There are parts of the government's superannuation package which the opposition will support, provided the detail of the legislation is as we anticipate on the basis of the outline of the measures, but we will not be supporting the superannuation surcharge cut. We think that that money—$370 million over the forward estimate period—can be spent much more effectively and fairly.It is worth noting that the Treasurer deliberately misrepresented our alternative, fairer superannuation plan. Our plan involved redirecting savings from three measures over three years. The Treasurer, in the costings which he released, pointed to the saving from one measure over one year to seek to make the contrast with the costs of the measures. It gave him a cheap line of attack but it led to misleading conclusions—so misleading that the Treasurer must have known they were not correct.It was extraordinary to see also that the Treasurer's critique of our measures was based on the accruals measure of the budget, because the Treasurer has explicitly repudiated the idea that his budget should be measured on an accruals basis. He spent days denying what accruals measures show clearly—that the budget is $3 billion in deficit this year. He shifts from one measure to another as circumstances suit. In conclusion, Labor has long supported genuine business tax reform in this country. We commend the principle underlying this consolidation bill. We will not oppose the bill in the House. We will watch the implementation of the measure very carefully to check that it does not add to the compliance nightmare for business. We note again for the record that the Labor Party's agreement with the government in November 1999 to progress business tax reform was on the clear condition that it would be revenue neutral and preserve the integrity of the tax base. Therefore, we will ensure that this bill receives more detailed scrutiny through Senate committee consideration. However, on the basis of our in-principle support for the measure, we are prepared to allow it to pass through the House, notwithstanding some serious reservations about the manner of implementation of the principle which we support. Therefore, we will not be opposing this measure.13:45:002606Cadman, Alan, MPMr CADMANSD4MitchellLP10—I reject any comments that have been made about this government not being a reformist government. Today we are entering into the first part of a two-stage process to reform the taxation of business. The clear objectives in this process seek not only simplification and cost-effectiveness for business but also to close down loopholes. There is a benefit for business and there is a benefit for the community in the objectives of the government in this New Business Tax System (Consolidation) Bill (No. 1) 2002. It certainly is complex—there is no doubt about that—and there has been a great deal of concern expressed by various spokesmen for business who are saying that they do not quite understand what the government is up to. But to say that this government is not one of reform is absolutely inaccurate. What this government has done since coming to office is, first of all, establish a sound economy—that was its No. 1 objective—so that people had a growing opportunity to enjoy the chance to work, to have an improved opportunity to pay off their house and to make sure that the weekly grocery bill was predictable, not rising with inflation. That had to be done first of all. The government then reined back the huge and profligate spending of the previous government that resulted in a $10 billion deficit year on year but, in all, a total overseas debt of $90 billion—two-thirds of which has been paid off. So those were the prime objectives of the incoming government, and a step-by-step approach has been adopted together with the changes to industrial relations—another important part of reform.Having done that, we then looked at the tax system to see how we could reduce personal income tax. The government reduced personal income tax and substituted a broad based consumer tax which, I would remind the House, is the thing that the states collect and forget to mention. The states have got more money now than they have ever had in their lives and they still whinge about not having enough money to do all the things that they dream up, especially coming into an election campaign. Having transformed the economy, workplace relations and the tax system in Australia, next in line is business tax. I would remind the House that, unless Australia is efficient in its tax system, we bear an unnecessary cost as compared with other nations. This is a vital and necessary step. It is one of simplification—it is called consolidation; that is a good description—and it seeks to close loopholes.Wide ranging comment has been made by various commentators on the government's agenda, but I really do need to set the record straight when I notice that there have been some claims that there is no third-term agenda and there is no reform. The reform is running because Australia needs to continue on a process of change, continue on a process of bringing itself forward and continue the lead it has established as a nation in the region. In fact, in world terms, it is a lead that Australia has established as compared with many similar nations. In fact, Australia has the soundest economy of all developed countries. Things are going well for this nation. But if you take your eye off the ball, you start to lose the focus and you start to lose the advantages that you have, and that must not happen. This bill today seeks to reform business taxation as part of that process; it is the first part of a continuing process. It is the goal of the government, which has consulted with the business community about these changes, to have the change take place smoothly and over a period of time. Therefore, very careful thought has been given to the implementation. The first thing that needs to be recognised is that this legislation does not start on 1 July; it comes into effect on 1 July but gives businesses one year to decide on the processes which they want to have in the consolidation and simplification process. So they have until 30 June 2003 before they actually have to declare to the Australian Taxation Office the precise formula that they have chosen.For some businesses—and here I refer to the opposition's spokesman on Treasury matters—it is going to be an expensive process because there are valuations that are required. Coordinating accounts and bookkeeping processes into a central unit is required by this consolidation measure and that requires companies and divisions of organisations to keep separate accounts—and these organisations are residents of Australia—and it requires them to consolidate that process. It is not an easy process. Some estimates I have seen indicate that the cost to businesses of doing this will be about $1 billion. To consolidate, this is a typical tax bill in some ways. Simplifying it means that it is going to cost more just to begin with and then, over a period, it gets better. That is what businesses really do think about this.I know that our colleagues in New Zealand have been very successful in this regard. I notice in the gallery some distinguished visitors from New Zealand who have had great experience in the consolidation of taxation measures. I refer in particular to the wonderful leadership shown by the Labour Party in New Zealand—quite unlike that of the Labor Party here in Australia, which has refused to recognise the advantages of a goods and services tax. It has refused to recognise the advantages of a better business tax system. It has consistently obstructed the efforts of this government to make changes that will benefit every man, woman and child in this nation. The changes are not designed for the big corporates; they are designed for average Aussies. But the Australian Labor Party, unlike its New Zealand colleagues, will not have a bar of it. Unfortunately, we have had this constant obstructionism in the Senate as we have tried to make changes.We have achieved substantial changes over the past five to six years in economic, industrial and tax terms. The ones that we are considering now represent the most massive ones that the business community has seen. I have outlined that there is a 12-month period during which businesses can make the changes. Some of the things that are in line to be considered are part of the second stage of this package. I understand that some aspects of the second stage of the legislation will be introduced before the end of the financial year and some will be considered during the first part of the spring session of the parliament. Some of the areas that still need to be considered are further cost setting rules, including those applying to the formation of a consolidated group, transitional rules, the joining of other consolidated groups, MEC groups and trusts, core rules applying to MEC groups, life insurance, interaction of a consolidated regime with international tax provisions, treatment of attribution accounts and foreign tax credits, interposition of a non-operating head company, and the removal of intercorporate dividend rebate. These terms would make your head spin. No wonder it is going to take a period for business to deal with the issues. No wonder the process may cost up to $1 billion.The bill that we are dealing with today has some very clear objectives. It will allow wholly-owned groups of entities to make a choice to consolidate. This means if you have got a group of organisations under the same control, you can consolidate all of your accounts and organisations. That has not happened before. Companies have been able to play off against one another processes that have allowed them to unfairly reduce taxation. It has allowed them to build a tiering-down process whereby they pass on, to entity after entity, tax advantages that have minimised, in a most irregular way in some instances, their requirement to pay tax. This measure will stop that. It will allow wholly-owned groups to make a choice to consolidate. There will be a one-off chance. If they do not take this chance, it will have gone forever. Those groups that decide not to consolidate will then face the prospect, as has been said by some, of tighter enforcement of regulation. I noticed in some of the material I have read that one of the downsides to this process for those that choose not to consolidate will be a tighter regulatory regime which may make it harder for them to operate and more difficult to meet the compliance requirements of the tax office.Under this legislation, there is a need to determine the membership of a consolidated group, including the membership of certain groups with a single non-resident head company. That is an innovation that needs to be watched. We need to be careful about that because we do not want to be giving advantages to an overseas company or a non-resident head company. I know that that is covered in the detail of the legislation. There is provision to determine the cost of assets for income tax liability purposes, including membership interest in relation to consolidated groups. That is the valuation of the whole consolidated group, which is expensive and time consuming, but it is a necessary part of the consolidation process. It allows in certain circumstances pre-consolidation losses to be transferred to the head company of a consolidated group and for the prescription of how these losses may subsequently be used by the head company. This could mean that there is a reduction in income tax for those consolidating groups. Whilst it may be hard to calculate, the way in which losses are managed is a very important feature that I know the ATO will be looking at as the consolidation takes place. The legislation allows for the transfer of franking credits to a consolidated group and for the provision of PAYG instalments for consolidated groups. This process, pay-as-you-go taxation, means that they pay tax as one entity as they go. It will determine the tax liability for income tax payments within a consolidated group where a head company fails to pay on time. It removes the existing grouping provisions, including those allowing transfer of losses and CGT rollover relief for the transfer of assets between wholly-owned company groups.I reiterate my earlier comments that the government is implementing reforms. The target that we are dealing with today is the consolidation of taxation. It is a reform that will provide simplification for businesses and reduce their costs, having regard to the type of method they choose to make their tax payments. I therefore commend this legislation to the House and seek leave to continue my remarks later.10000SPEAKER, TheThe SPEAKER—It being 2 p.m., the debate is interrupted in accordance with standing order 101A. The debate may be resumed at a later hour. The honourable member for Mitchell will have leave to continue speaking when the debate is resumed.Questions Without Notice2608260814:00:002608Zahra, Christian, MPMr ZAHRA84HMcMillanALP00—My question is to the Deputy Prime Minister, Minister for Transport and Regional Services and Leader of the National Party. It concerns a Chinchilla grain grower—a lifelong National Party member—whose Telstra service problems the Deputy Prime Minister ridiculed yesterday. Is the Deputy Prime Minister aware that because this farmer's CDMA phone broke down he borrowed a digital mobile but it could only be used by standing over the kitchen sink? Why doesn't the Deputy Prime Minister agree with this farmer that government ownership is essential to decent bush services because it ensures that `the noisy wheel gets a bit of oil'? Deputy Prime Minister, when will you liberate this farmer and long time National Party member from his kitchen sink?2608Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for his question and express my appreciation that the ALP is showing so much concern for telecommunication services in rural Australia. Can I at the outset repudiate, though, the member's—I think— very cheap slur: that I ridiculed the farmer from Chinchilla yesterday. 84HZahra, Christian, MPMr Zahra—Yes, you did.10000SPEAKER, TheThe SPEAKER—The member for McMillan has asked his question and will extend to the minister the appropriate courtesies.4K4Mr ANDERSON—I did not ridicule him. Those members who were interested enough to be listening to my answer yesterday would have heard me say that I would be only too happy, if he were to contact me, to have the problems of the member for Maranoa's constituent investigated. I would have been perfectly happy to have done that.Let me make a couple of other comments. Plainly, he has experienced some difficulties. I did actually inquire as to whether or not he had mobile phone coverage. I found, interestingly enough, that he has a little fortuitous coverage and at this stage they do not have a tower but, under a program put in place by us called Networking the Nation, they may shortly get mobile phone coverage via a CDMA tower. I trust that the member for McMillan has explained to the member for Maranoa's constituent that if the coalition had not moved to replace the analog phone system that the ALP cancelled he would not have access to mobile phones in any way, shape or form.260914:03:002609Somlyay, Alex, MPMr SOMLYAYZT4FairfaxLP10—My question is to the Minister for Foreign Affairs. Would the minister update the House on the recent cooperation between Australia, Indonesia and Thailand to stamp out the crime of people-smuggling? Is the minister aware of any alternative views?2609Downer, Alexander, MPMr DOWNER4G4MayoLPMinister for Foreign Affairs10—I thank the member for Fairfax for his question and recognise the great interest he has in Australia's determination to protect its borders—and for the excellent work, by the way, that he does for the people of Fairfax as well, both here and back in his electorate. Australia does have a broad range and growing program of cooperation with both Indonesia and Thailand on people-smuggling. Both of those countries support our commitment to taking strong action, decisive action, against the activities of people smugglers.Last week I visited both Indonesia and Thailand, and while I was in Jakarta I was able to meet not only with my counterpart, the Foreign Minister, Hassan Wirajuda, but also with the Cabinet Secretary, Bambang Kesowo, and the Coordinating Minister for Political and Security Affairs, Susilo Bambang Yudhoyono. During my visit to Thailand I had the opportunity of meeting with the Prime Minister and the foreign minister. What was significant on this issue during my visit was the determination by both Indonesia and Thailand to work with Australia to deal with people-smuggling as a follow-up to the conference that took place in Bali, co-chaired by Australia and Indonesia, at the end of February.In the course of this afternoon, with our ambassador for people-smuggling, John Buckley, I shall be meeting with senior officials from Thailand and Indonesia to discuss the activities of the two working groups that we established at the Bali conference. Since April, Ambassador Buckley has travelled throughout the region very productively.Australia, Thailand and Indonesia, as well as other key countries, are cooperating in a whole range of different areas to address people-smuggling: through sharing of intelligence, through cooperation between our police forces, through cooperation between our immigration officials and so on. It is true to say that this cooperation, coupled with a message that Australia sends out to the world—that it is determined to protect its own borders in an unequivocal way—has proved to be effective. There is no doubt about that. Since November last year, no boat has managed to land with unauthorised arrivals on Australia's shores. We should not, though, for a minute be complacent about that and make a claim that no boat could ever arrive. Obviously, that would be possible. But the fact is that this government has—in the teeth of a lot of opposition, by the way, from those opposite—been very determined to address this issue, and it has been effective in addressing this issue.The honourable member asked if there were any alternative approaches. The fact is that the approach of the alternative government in this country, the Australian Labor Party, is an approach that does not bear description. It is little short of a shambles. For example, on the issue of mandatory detention of illegal migrants to Australia, the Leader of the Opposition this morning was out there at his doorstop—the Leader of the Opposition's doorstops always make a great read; we enjoy reading them during our question time meetings—playing it both ways: `Maybe detention for a short period of time, but we are not really sure about the detention.' The New South Wales Labor Party says that mandatory detention should be abolished and the Leader of the Opposition is out there in the public saying, `Oh, no, I support mandatory detention.' In fact, so bold was he that he said a little while ago, `No-one that I have heard has argued for the abolition of mandatory detention.' I think the New South Wales Labor Party, or significant elements of it, may disagree with that. Of course, there are plenty of people sitting behind the Leader of the Opposition who do disagree with mandatory detention, who went to the last election arguing that they all supported the government on this issue. They won votes from people on the basis of supporting the government on this issue and, as soon as the votes were counted, they were out there saying, `We're not really sure about this'—people like the member for Fremantle, the member for Sydney; all the usual suspects from out there on the far left of the Labor Party; all the bourgeois leftists out there. During the election campaign they said, `We agree with the government,' and when the campaign was over they said they did not. But I know that at the end of 2004 and early 2005 you will be agreeing with the government; you will be clinging to us. Then a week or two after the election, you will be saying, `Oh, we didn't really mean that.' Bourgeois leftists, I am afraid, send out confusing messages.Distinguished Visitors261010000SPEAKER, TheThe SPEAKER—I inform the House that we have present in the gallery this afternoon members of a delegation from New Zealand, led by Mr Chris Carter, New Zealand Junior Labour Whip. The delegation is visiting Australia under the auspices of the Australian Political Exchange Council. I welcome the delegation. I had an opportunity to meet with them earlier today. They are accompanied by a delegation from the Queensland State Parliament Members Ethics and Parliamentary Privileges Committee. On behalf of the House I extend to them a very warm welcome to the parliament.Honourable members—Hear, hear!10000SPEAKER, TheThe SPEAKER—While I have the attention of the chamber, I also indicate to the chamber that we have, though not as visible, in the glass gallery, 30 students from the St Cloud State University in Minnesota, USA, who are undertaking a tour of the facilities here in Canberra and looking at the way in which the parliament and both chambers operate. I extend to them a welcome as well.Honourable members—Hear, hear!Questions Without Notice2610261014:11:002610Edwards, Graham, MPMr EDWARDS83RCowanALP00—My question is to the Minister representing the Minister for Defence. Can the minister confirm that the Department of Defence has been allocated a further $351 million to cover it for foreign exchange losses in 2002-03? Can she further confirm that this comes on top of foreign exchange losses of $486 million in the previous two financial years, despite a warning from the Auditor-General in May 2000 after similar losses of $3 billion had already been incurred? Finally, can the minister confirm that foreign currency mismanagement over the last two years alone has cost the taxpayer more than the entire war on terrorism?2610Vale, Danna, MPMrs VALEVK6HughesLPMinister for Veterans' Affairs and Minister Assisting the Minister for Defence10—I thank the honourable member for his question. As outlined by the Treasurer on budget night, the government has indisputably delivered on its commitment to strengthen Australia's defences, to fight the war on terrorism and to protect our borders. Defence will receive an additional $1 billion in 2002-03 in line with the government's white paper funding commitment. Additional funding of the deployment of Australian troops in the war against terrorism in 2002-03 is around $524 million. This government will also be allocating an additional— Opposition members interjecting—10000SPEAKER, TheThe SPEAKER—The member for Cowan asked a question about foreign exchange losses and he is entitled to have an opportunity to hear the answer.VK6Mrs VALE—The government will also be allocating an additional $1.3 billion over five years for a range of measures to upgrade security within Australia.2V5Swan, Wayne, MPMr Swan—Mr Speaker, I rise on a point of order. Under standing order 145, this answer is not relevant to the question, which was about currency losses.EZ5Abbott, Tony, MPMr Abbott—Mr Speaker, at the risk of pre-empting you, the minister was plainly coming to the relevant answer to the question.10000SPEAKER, TheThe SPEAKER—The minister has been responding to the question for, I think, less than 30 seconds. I would not be able to determine whether or not what she was saying was relevant to the question until she had had an opportunity to set the scene and respond to the question.VK6Mrs VALE—Thank you, Mr Speaker. In accordance with established practice, Defence does operate on a no-win, no-loss basis. Unlike the opposition, which is intent on furrowing its brow, gripping its hands and paying lip-service, this government is intent upon honouring its commitment to the Australian people and funding to support real improvement in our security.261114:15:002611Billson, Bruce, MPMr BILLSON1K6DunkleyLP10—My question is to the Minister for Immigration and Multicultural and Indigenous Affairs. Would the minister advise the House on progress in the processing of claims for refugee status by boat arrivals? What events are impacting on the current rate of new claims? Is the minister aware of other policies on unlawful arrivals both here in Australia and overseas, and can he inform the House of the success of these alternative approaches?2611Ruddock, Philip, MPMr RUDDOCK0J4BerowraLPMinister for Immigration and Multicultural and Indigenous Affairs and Minister Assisting the Prime Minister for Reconciliation10—I thank the honourable member for Dunkley for the question because I know the honourable member for Dunkley is very interested in and supportive of efforts to ensure that we maintain an efficacious migration program and, particularly, have places available to help those offshore who may need resettlement places in Australia. The one way you can maximise places for those who have the greatest need is to be able to ensure that those who are seeking to come to Australia, and in some cases make asylum claims, are properly tested and, if they are not refugees, make them available for removal.It is very important I think for members to be aware that there has been very considerable processing of those who have come since July 1999. More than 9,200 claims were assessed and the number of boat arrivals in detention now awaiting a primary protection visa and those who are being held having made asylum claims has fallen rather dramatically. At the moment we would have something of the order of 700 people in detention in Australia who arrived unlawfully by boat. The number awaiting a primary protection visa decision has declined from 1,159 in August 2001 to just 53 as at 17 May.It may be illuminating for members to see this table in relation to boat arrivals being processed in Australia at the moment. It reveals that we have only 53 applicants who are awaiting a primary decision. We have 352 people who have had protection visa claims finalised. We have 74 people who have applications before the Refugee Review Tribunal. We have 29 cases where the claims have been considered by the Refugee Review Tribunal and remitted. We have 220 at the moment who are before the courts seeking judicial review. I have also a table that members may be interested in dealing with those matters in percentage terms. It shows that more than 49 per cent of people—352—are being held for removal. They are not refugees. It is very important to have an understanding of that.I hear from time to time that there are policy approaches calling for streamlining the processes to enable prompt decision making. If people come with documents, decisions can be made within four or five weeks—and were. More complex cases can take longer, particularly where there are identity fraud issues and credibility concerns and where there is a general absence of identity documentation. The fact is that we have been able to get to a point now, with no boat arrivals onshore in Australia since November of last year, where very few people are pursuing primary applications. I have noticed that some people have been suggesting that this is not the result of government policy; it is in some way a result of the weather. I would have to say that this has been the longest monsoon season on record in Australia—some seven months. The fact is that government policies are working. We are not claiming victory but we are working towards, and remaining vigilant in, protecting our borders. Are there other approaches? There are. There are some people who believe you should dismantle mandatory detention and give people the very clear signal that if they get to Australia they will be in the community.4G4Downer, Alexander, MPMr Downer—Name them.0J4Mr RUDDOCK—I will not name them all. That is what they argue. Some people argue that you should not, in effect, protect your borders and you should not send people back even if they are going back to a situation where they are safe and secure. And some people argue that you should not process people in offshore centres. Each of those measures has had a very significant impact on ensuring that Australia has a very small problem in comparison to what we see elsewhere in the world. Essentially, they are arguing that we should adopt the failed policies that have led to a situation where the sort of approach that we are taking could be implemented. In the United Kingdom—and I have read about Tony Blair's secret plan where they are now talking of using the defence forces—we saw in the London Telegraph on 19 May that asylum seekers are disappearing into the community in the United Kingdom at 130 a day, or 276,000 in the last decade. People who have received negative decisions in relation to asylum claims are not available for removal. If you want further evidence of that, there were reports out of France earlier this year of more than 90 per cent of asylum seekers disappearing. The United States of America immigration service web site reports that 89 per cent of non-detained individuals with final orders for removal fail to surrender for deportation. I notice that some people say we ought to be adopting the Swedish model. Aside from the fact that they have the most draconian measures that apply to the whole of their population to enable them to identify where people are, Sweden saw a 100 per cent increase in asylum claims this year. In other words, when you look at the alternatives that are being advocated, they are alternatives that have failed Europe and have failed them in terms of being able to manage their borders.YU5Tanner, Lindsay, MP0J4Mr RUDDOCK—I hear the honourable member saying that they obviously do not consider it to be a problem. You ought to talk to some of your fraternal colleagues in the Labour Party in the United Kingdom. They recognise that, if you fail to manage these issues, they can have a very destructive impact upon your social cohesion. We are one of the most tolerant, diverse societies in the world because we have been able to manage our borders and our programs successfully over a long period of time. I do not want to draw too many conclusions. I just hope that the Labor Party can remain vigilant in supporting us on these issues. In relation to those issues that delay people's final decision in relation to the questions of the way in which the courts are again taking a proactive position to undermine the efforts that this parliament supported as recently as the end of last year, I hope you will be onside again when it is necessary to implement those measures and we will not be waiting round for three or four years to find out whether you are going to come to the table.261214:24:002612Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Minister representing the Minister for Defence, and it relates to the earlier question which he did not fully answer. Minister, can you confirm that foreign currency losses by the Department of Defence over the last two years alone have cost the taxpayer more than the entire war on terrorism? Minister, I understand how this is no win, but can you explain to the House how it is no loss? 2613Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—In my capacity as representing the Minister for Finance and Administration, who made an announcement on this subject, I am very happy to inform the House of the government's position. The minister for finance on 28 May, yesterday, announced the government's position in relation to foreign exchange risk management. He did that after a careful evaluation of the report of the Australian National Audit Office which the question referred to. He also did that after taking independent advice, including from Access Economics, the economic adviser to the Labor Party. Access Economics in its report—a report with which I thoroughly concur—gave four reasons why there should not be hedging in relation to individual departments. The first reason is that the government benefits from a huge natural hedge—that is, that the government holds foreign denominated assets, particularly at the Reserve Bank and, in relation to a devaluation where you hold those foreign assets in relation to that natural hedge, you make a considerable dividend.3J4Sawford, Rod, MP10000SPEAKER, TheThe SPEAKER—The member for Port Adelaide, for the second time!CT4Mr COSTELLO—In fact, as the dividends from the Reserve Bank have shown, over recent years—3J4Sawford, Rod, MPMr Sawford—A Robbie Waterhouse hedge.10000SPEAKER, TheThe SPEAKER—I warn the member for Port Adelaide!CT4Mr COSTELLO—it has made huge dividends in relation to the holding of foreign assets.The second point that was made by Access Economics in its report was that the government is large enough to self-insure—that is, the government has incomes in foreign currencies as well as outlays in foreign currencies and spreading its risk over the whole of its operations gives it the capacity to self-insure. The third reason that Access Economics gave was that the government can take a long term in relation to these matters—that is, it takes a much longer term in relation to currency movements than the financial markets do. If I may say so, if individual departments were in fact hedging, they most likely could be in a position where they were hedging against each other and hedging against the government's overall position in relation to the currency. The fourth reason that Access Economics gave which the government accepted in relation to the report of the ANAO was that now is not the time to change the policy, particularly at a time of appreciation in relation to the Australian dollar. What the questioner obviously overlooked was the fact that since 30 June in this financial year there has been a very large appreciation in the Australian dollar which has actually worked to the advantage of the defence department. If you had entered into currency hedging at the beginning of the financial year, as the Australian Labor Party was recommending, the defence department would have lost the benefits of the appreciation in relation to the Australian dollar. For all of those reasons, the defence department is operating, as it did under the Labor Party, on a no-win, no-loss basis, as the minister explained. That is, in those years when there was a depreciation and foreign currency contracts required more Australian dollars, they were supplemented; in years like this year, where the Australian dollar is actually appreciating and they would get a decrease in a foreign currency contract, they will have to return their wins back to the budget. There will be no wins; there will be no loss—endorsed by Access Economics, announced by the minister for finance, the policy of the Australian Labor Party and, as the minister so adequately explained, a position which protects Defence as well.SJ4Tuckey, Wilson, MP10000SPEAKER, TheThe SPEAKER—I warn the minister!Distinguished Visitors261310000SPEAKER, TheThe SPEAKER—It has been little frustrating this afternoon welcoming people in the gallery without first chastening members in front of me, but it has been brought to my attention that we also have in the gallery Mr Richard Lewis, who is a former planning and heritage minister in the Western Australian government. I welcome him. Honourable members—Hear, hear!Questions Without Notice2614261414:29:002614King, Peter, MPMr KING00AMQWentworthLP10—My question is directed to the Treasurer. Would the Treasurer advise the House of the importance of good budget policy in delivering sound economic outcomes? Is the Treasurer aware of any alternative fiscal approaches? 2614Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the member for Wentworth for his question. I thank him for his interest in economic policy and questions in relation to budget policy at least from this side of the House. I can inform the honourable member for Wentworth that the government's economic strategy, since it was elected in 1996, has now repaid, by the end of the 2002-03 financial year, $61 billion of the Labor Party's debt—that is, of the $96 billion of Labor Party debt, this coalition government has now retired $61 billion, undoing the damage of the Labor Party years. In addition to the lowest interest rates in 30 years, 928,000 new jobs have been created in Australia during that period. In its response to the budget, the Australian Labor Party indicated that it intends to oppose savings measures which will allow us to take fiscal policy further. It is opposing measures which would save over four years $1.5 billion in relation to the disability support pension and the Pharmaceutical Benefits Scheme. Utter irresponsibility—attacking the government's physical strategy in the vain hope that the economic consequences that follow will somehow damage the government's standing in the community! But that is not all. In his budget reply, in addition to blocking $1.5 billion of measures over four years in savings, the Leader of the Opposition alluded to the fact that he wants to offer $6 billion in tax credits—$6 billion in tax credits, which he has not announced how he would fund. He had a $500 million to $1 billion hole in his superannuation proposals. On 21 May, the member for Perth said he wants $500 million per year extra into Medicare. On 15 May, the Leader of the Opposition said he wanted an Australian Coastguard. The member for Cunningham wants to increase the Austrade budget. He wants to increase the export market development grants. The member for Gellibrand wants to increase initiatives in children's health. The member for Werriwa—one of the last of the great spenders—wants matched savings accounts, and he wants to give more money to people to buy shares, although it is not entirely clear if there is any other member of the Labor Party who agrees with him on this point, and it certainly was not mentioned in the Leader of the Opposition's reply. So there we are: $1.5 billion of savings which they are voting against plus, conservatively, probably about an $8 billion or $9 billion unfunded promise coming out of the Leader of the Opposition's budget reply. Bob McMullan said this to the Fabian Society on 4 May 2002:There is evidence to suggest that one public perception which distinguishes Labor's success at a local level from our recent failures at the national level has been fear of a lack of discipline in our fiscal policy—why would he have said that; we are only about $10 billion and counting—and concern about the implications of this for interest rates. That was the famous speech where he buried the roll-back policy. I was watching last night on TV where they are going to take a gene from a Tasmanian tiger—an extinct species—and bring it back to life. I thought if they could take something from the roll-back policy and clone that back to life we could actually see what an extinct Labor policy looks like. We could actually understand what he really had in mind after five years of work on the roll-back policy. `Roll-back'—there is a word we do not hear much around here anymore. There are no salads in plastic bags anymore, are there? No Hockey bear pyjamas down here at the dispatch box. Some people would describe these as mickey mouse policies. It took me back to Don Watson in his biography of Paul Keating. He said:Mickey Mouse was a name to be feared by all advisers in the Keating office. To be touched by those two words was poison. Bleeding heart, froth, fairy floss and Creanites were others. A Creanite was someone who sympathised with industry policy of the kind advocated by Simon Crean. These names were dreaded in the way that Trotskyist and revisionists were dreaded in another time and another place. You knew your economic credibility was shot. That was the previous Labor government, where `Creanite' was a term of abuse which meant your economic policy was shot. They are now all Creanites. The Labor Party frontbench—Simon and the Creanites they call them. Simon and Creanites! Once upon a time, the Labor Party stood for economic responsibility; now it is a Creanite party.261514:36:002615Crean, Simon, MPMr CREANDT4HothamALP00—My question is addressed to the Treasurer. Yesterday, and again in question time today, he has complained about people `misleading the Australian public' about his budget. Treasurer, given that your budget includes a $1.2 billion cash deficit for this year, why did you tell the voters in the seat of Higgins in this taxpayer funded brochure that you have delivered your `sixth consecutive surplus'? Treasurer, will you now agree to withdraw this false document, correct the public record and issue a new one stating the truth about your deficit?2615Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—That is a very good leaflet, and I would recommend it to the Leader of the Opposition. It is true that it is taxpayer funded, in the sense that it comes out of a member's entitlement, but I do not think I would be the only member in this place who uses their member's entitlement. I may not spend as much as the former member for Paterson. If he had not spent that money, he could probably have floated the whole Commonwealth account himself. It is a good leaflet; it gives a good explanation of Australia's budget position. We believe that Australia's budget position is in a sound place. We have repaid $62 billion worth of Labor Party debt; we are budgeting for a surplus; we have the lowest interest rates in 30 years; and we could do even better if the Labor Party would pass our budget through the Senate.DT4Crean, Simon, MPMr Crean—I seek leave to table a copy of this misleading document, published at public expense.10000SPEAKER, TheThe SPEAKER—Leave is granted. The Leader of the Opposition will resume his seat.DT4Crean, Simon, MPMr Crean—And I want to know when he is going to—10000SPEAKER, TheThe SPEAKER—The Leader of the Opposition is defying the chair.261514:38:002615Farmer, Patrick, MPMr FARMER00AMOMacarthurLP10—My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Would the minister please advise the House of the progress in the delivery of the Sustainable Regions program. What benefits will this policy deliver to rural and regional Australia? Is the minister aware of any alternative policies?2615Anderson, John, MPMr ANDERSON4K4GwydirNPMinister for Transport and Regional Services10—I thank the honourable member for Macarthur for his question. At a time when the economy is certainly doing very well, not only by historical standards but also by international standards—prosperity levels are rising, unemployment is falling and opportunities for young Australians have probably never been as outstanding as they are at the moment—it is important to remember that there are regions, both rural and urban, where for various reasons things are not so bright. This government has not forgotten those regions.84HZahra, Christian, MP4K4Mr ANDERSON—I am glad that the member for McMillan is indicating his support for doing something for these regions. He might be able to persuade the member for Batman of the value of the Sustainable Regions program. It has now been successfully implemented in eight prototype regions: Campbelltown and Camden, the far north-east of New South Wales, Gippsland, Playford and Salisbury in South Australia, the Kimberley region in Western Australia, the north-west and west coast of Tasmania, the Atherton Tablelands and Wide Bay Burnett. Some of these regions are unquestionably doing it tough. As an indicator of that, last night I was told that in Rosebery, on the west coast of Tasmania, it is possible to purchase a home outright by simply using the government's first home owner's grant—and you can take change home after that—which does tell a story. In some of these regions, intergenerational unemployment is a major concern. That is something that the Sustainable Regions program will be particularly targeting. Local advisory committees are now established in each region. They are starting to work well. During the day and again last night, I met the chairs and the executive officers of those advisory committees at an all-day meeting hosted here by my department. I express my strong appreciation for the ministerial support of the program. I note that the Minister for Children and Youth Affairs, the Minister for Education, Science and Training, the Minister for Agriculture, Fisheries and Forestry, the Minister for the Environment and Heritage, the Minister for Forestry and Conservation and the Minister for Citizenship and Multicultural Affairs were with us last night, as we met with these people and talked about their hopes for revitalising investment and employment opportunities in these regions. One advisory committee member told me of a plan for an integrated approach to developing 1,000 jobs over the next couple of years in their depressed region. That sort of approach, working in partnership with local leadership, is what the government is looking for.The member for Macarthur asked me whether I was aware of any alternative policies. I am afraid to say that I am. At the last election, despite the member for McMillan's apparent enthusiasm to see the program expanded, the Labor Party's policy was to abandon the program—it was to scrap it; it was to do away with it. In fact, their alternative policy proposal was to say to depressed regions—84HZahra, Christian, MPMr Zahra—Rubbish!4K4Mr ANDERSON—Rubbish? I will find it; I will dig it out for you. I would love to dig it out. I will dig it out and I will table it. Their proposal, as a substitute, was that—Mr Zahra interjecting—10000SPEAKER, TheThe SPEAKER—The member for McMillan is warned!4K4Mr ANDERSON—depressed regions should go out and borrow; they should go into debt to fund regional development. I note that the member for Macarthur, who is in regular contact with me about the program in his area, somewhat outdoes the member for Werriwa, who is always expressing his concerns about programs for depressed areas in regional Australia but has shown no interest whatsoever in the program in his own backyard. I would also have thought that the member for Lyons, who yesterday became a bit excited about the politics of Telstra, might have been interested as well in the Sustainable Regions program. I do not think I have had a single contact or letter from him, and yet, as I said, in his part of the world Australians have very real needs, which this government is determined to meet, who, for whatever reason—and usually it is rapid technological change more than anything else—are not quite enjoying the same level of opportunities that are spreading through the rest of the community as a result of sound management. I again simply make the point: Labor's approach was to scrap this program altogether and to replace it with loans. Their objective was to drive hard-pressed regions into debt.261614:43:002616Andren, Peter, MPMr ANDRENKL6CalareIND00—My question is to the Minister for Agriculture, Fisheries and Forestry. Minister, can the government assure the public and producers and exporters of Australian honey, like Warren Taylor of Australian Queen Bee Exporters, Blayney—10000SPEAKER, TheThe SPEAKER—The member for Calare knows that the insertion of the name is not necessary to clarify the question.KL6Mr ANDREN—that it will initiate testing, banning, detainment or recall of any of the 2,500 tonnes of Chinese honey imported into Australia to March this year in light of decisions by the EU Commission and the Canadian Food Inspection Agency to detain, ban and recall all honey of Chinese origin, and any products containing it, as it has been found to contain the antibiotic chloramphenicol, which is linked to development of aplastic anaemia in humans? 2617Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—I thank the honourable member for his question. Australia sets detailed standards for the health of food sold on the Australian market. Those standards are set by the Australia New Zealand Food Authority, which is an organisation representing the Commonwealth, the states, the territories and New Zealand. We cooperate as best we can to develop standards which ensure that there are no unacceptable residues in Australian food products, whether they be imported or produced domestically. The same standards apply to domestically produced products as apply to imported products. Products coming into Australia are tested to ensure that they meet the appropriate standards. I am not aware of the particular circumstances of the import referred to by the honourable member but I will seek some more information on that particular issue, and if there is anything further to report to the House I will do so.261714:45:002617Pyne, Chris, MPMr PYNE9V5SturtLP10—My question is addressed to the Minister for Employment and Workplace Relations. Has the minister been briefed on reports of a conflict within a registered organisation under the Workplace Relations Act, the AMWU? What does this mean for economic growth and jobs, particularly in Victoria, and does this struggle have any relevance for the development of alternative policies in the field of workplace relations?2617Abbott, Tony, MPMr ABBOTTEZ5WarringahLPMinister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service10—I thank the member for Sturt for his question and for his vigorous participation in internal party democracy. I am aware of a power struggle inside the Australian Manufacturing Workers Union between Doug Cameron, the man who wants Australia's car industry to operate on a stop-start basis, and Craig Johnson, the leader of the ultramilitant Workers First faction, who currently faces criminal charges arising from a series of violent site invasions in Victoria. The Leader of the Opposition's commendable concern to curtail violence in Western Sydney contrasts with his deafening silence about increasing violence inside the trade union movement. Regrettably, inside the AMWU it is militant versus ultramilitant.DT4Crean, Simon, MP10000SPEAKER, TheThe SPEAKER—The Leader of the Opposition knows that there are forms of the House available to him.EZ5Mr ABBOTT—It is Marxist versus maniac. Doug Cameron stands in the tradition of Senator George Campbell, who was famously described by Paul Keating as having 100,000 dead men around his neck as a result of his role in deepening the 1983 recession. Craig Johnson's commitment to creating employment involves turning up uninvited outside a business and exercising his right of entry by smashing down the door with a crowbar. I have been asked about alternative policy development. I can inform the House that the AMWU over the last six years has donated $3 million to the Labor Party—and $3 million is responsible for a hell of a lot of policy development. Thanks to the notorious 60-40 rule, the AMWU has the largest single bloc vote inside the Victorian Labor Party. Because the AMWU cannot decide whether to pay its dues and send its delegation, the Victorian Labor Party cannot elect a president and it cannot fill some 50 other positions.2V5Swan, Wayne, MPMr Swan—Mr Speaker, I raise a point of order. The minister is now clearly out of order. He is now talking about matters which have nothing to do with his portfolio responsibilities. I ask you to bring him to order so that this place can operate in a civilised way. We will not continue to tolerate his abuse.10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business will resume his seat.Honourable members interjecting—10000SPEAKER, TheThe SPEAKER—I am not being assisted by the member for Deakin or by members on my left.XH4McGauran, Peter, MPMr McGauran—In response to that point of order, may I remind the House that the minister was asked about a registered organisation under the Workplace Relations Act. He was further asked what this meant for economic growth and jobs and in regard to alternative policies. The minister's answer is perfectly in order, as was the question.5I4McMullan, Bob, MPMr McMullan—Mr Speaker, further to the point of order: irrespective of the structure of a question or how you write a question, you cannot bring into order comments that have nothing to do with your portfolio. It does not matter how you write the question; you cannot put within order the capacity to make comments about the internal affairs of political parties which are not yours, such as you ruled out of order yesterday. 10000SPEAKER, TheThe SPEAKER—As the member for Fraser is well aware, as the Manager of Opposition Business is well aware, and indeed as the chair is painfully well aware, there is a difference between the way in which questions can be framed and answers given, and there are separate standing orders for both. I have no wish to revisit the nonsense that descended on this place yesterday and so I am listening closely to the minister's response. The question was in order and the minister is obliged to respond to the question.EZ5Mr ABBOTT—Thanks to the 60-40 rule, 13 years after the fall of the Berlin Wall, a Trotskyite is able to sabotage the operation of the Victorian Labor Party.10000SPEAKER, TheThe SPEAKER—The minister is not assisting.EZ5Mr ABBOTT—But do not expect a Creanite to fix the situation, Mr Speaker.2V5Swan, Wayne, MPMr Swan—Mr Speaker, under standing order 145, the minister is clearly out of order. He is clearly not relevant to any area of his ministerial responsibility. Yesterday in this House you ruled out of order a question on similar grounds. There must be some resemblance to the minister's responsibilities. This is clearly irrelevant.XH4McGauran, Peter, MPMr McGauran—Mr Speaker, on the point of order: the minister was further asked what relevance this conflict has for the development of alternative policies in the field of workplace relations, which is directly and completely within his area of ministerial responsibility and which he is presently addressing.10000SPEAKER, TheThe SPEAKER—As the Minister for Science and all members are aware, I note questions as they are asked. I was conscious of what he had been asked. The question was perfectly in order. I invite the minister to respond to the question and I invite him to do so without being excessively provocative.7T4Crosio, Janice, MP10000SPEAKER, TheThe SPEAKER—The Chief Opposition Whip!EZ5Mr ABBOTT—As I was saying before I was rudely interrupted by points of order, a Trotskyite is sabotaging the Victorian ALP and don't expect a Creanite to fix it! The Leader of the Opposition—7T4Crosio, Janice, MP10000SPEAKER, TheThe SPEAKER—I warn the Chief Opposition Whip!DT4Crean, Simon, MPMr Crean—Mr Speaker, on the point of order: the lines that the minister has just used were exactly the same lines he used before a point of order was taken on him just a minute ago, at which point you noted that his comments were not helping the House. Are you going to continue to let him get away with defying your ruling or is it just another cup of tea you are going to have with him—10000SPEAKER, TheThe SPEAKER—The Leader of the Opposition will resume his seat! The Leader of the Opposition knows that, with remarks like that, he is straining any relationship that ever existed historically between the chair and the Leader of the Opposition. The remarks are not only unfair to the chair or any occupier of it but also, in fact, totally out of context and untrue and are built on statements made by the member for Werriwa, not statements made by the chair.DT4Crean, Simon, MPMr Crean—Mr Speaker, the comments that I referred to were made by you from the chair yesterday, when you were commenting about the minister's outbursts—10000SPEAKER, TheThe SPEAKER—The Leader of the Opposition will resume his seat! The Leader of the Opposition might care to recognise the level of misrepresentation he is exercising—unwittingly and, I believe, unintentionally—simply by referring to the Hansard as for obvious reasons I did myself this morning.2V5Swan, Wayne, MPMr Swan—Mr Speaker, on a further point of order: standing orders 75 and 76 refer to offensive words and personal reflections respectively. Those on this side of the House are constantly receiving abuse and personal reflections from the minister opposite. I believe that it is about time you took some action and asked the minister to desist— 10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business will resume his seat! The Manager of Opposition Business is well aware—in fact, I have been criticised for being too sensitive about issues that have been raised and aired in this House—that where members are offended by anything that is said I have taken appropriate action. There was an incident yesterday which was repeated regularly from members on my left, but no-one took issue as to whether or not they wanted the matter withdrawn, and the statement made was not unparliamentary. The minister has not made an unparliamentary statement or I would have taken action against him. The minister will respond to the question.EZ5Mr ABBOTT—Thank you, Mr Speaker. Let me simply observe that touchiness in the parliament is always a product of tension in the caucus! The Leader of the Opposition proposes to reduce the union shareholding from 60 per cent to 50 per cent. For the benefit of members opposite, let me remind the House that Rupert Murdoch controls News Limited with a 30 per cent shareholding, so a 50 per cent union block vote will still mean that the ALP is owned and operated by the union movement and still nothing but the political arm of the ACTU.261914:57:002619Swan, Wayne, MPMr SWAN2V5LilleyALP00—My question without notice is to the Minister for Children and Youth Affairs representing the Minister for Family and Community Services. Does the minister recall the Prime Minister promising before the election that disability support pensioners would not have their benefit cut? Does he recall the Minister for Employment Services promising this House two weeks ago:Whether you are a disability support pensioner coming off DSP into new work or into the unemployment field and into the Job Network, you will be accommodated.Minister, how can we be expected to believe that those you want to cut off the disability support pension will be guaranteed a place in employment services or rehabilitation? Minister, isn't this just another empty Howard government non-core promise?2619Anthony, Larry, MPMr ANTHONYXJ6RichmondNPMinister for Children and Youth Affairs10—I thank the member for Lilley for asking this question because he knows just as well as the members on this side of the House that reform is absolutely critical when it comes to disability support pensioners and, in particular, in respect of providing incentives to focus on ability rather than disability and leaving many of these 650,000 people languishing on a disability support pension until they reach pensionable age. I might add that, when it comes to the DSP, it is interesting that when the Labor Party was in government in the early 1990s you changed the invalid pension to the DSP—2V5Swan, Wayne, MP10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business has already been granted a good deal of licence!XJ6Mr ANTHONY—perhaps not for the intent of helping people on DSP but for reducing unemployment figures in that particular year. You stand over there with such sincerity yet you yourself, member for Lilley, can be quoted on numerous occasions as saying—Opposition members—You!XJ6Mr ANTHONY—Mr Speaker, obviously not you; you are doing a tremendous job as the Speaker. But, member for Lilley, you yourself have stated:Solutions must be found to the growth in DSP in order to ensure people with disabilities have the fullest opportunity available to reach their potential and make their contribution.2V5Swan, Wayne, MPMr Swan—Mr Speaker, on a point of order under standing order 145, I asked the minister a very specific question: will they be guaranteed a place in rehabilitation—10000SPEAKER, TheThe SPEAKER—The member for Lilley will resume his seat! The minister is responding to the question and he will be heard.XJ6Mr ANTHONY—So from the structural mess that we inherited from the Australian Labor Party, this government, through the McClure report and legislation that will come before the parliament this afternoon, will ensure that those people with disabilities that may not qualify for a disability support pension in the future will be put into adequate rehabilitation and training courses. We are making 73,000 places available for that. What is more, more money will be going into the Commonwealth-state disability agreement as well as into employment services—an increase from $1.3 billion to $2 billion. The challenge for the opposition is to support these measures, which will ultimately mean giving people with disabilities an opportunity to participate in the work force to reach their maximum potential— 83YHoare, Kelly, MP10000SPEAKER, TheThe SPEAKER—The member for Charlton is warned!XJ6Mr ANTHONY—rather than let these people languish on the disability support pension, which was clearly your policy for years whether by accident or by design.262015:01:002620Moylan, Judi, MPMrs MOYLAN4V5PearceLP10—My question is to the Minister for Agriculture, Fisheries and Forestry. Would the minister update the House on the implementation of the government's $1.4 billion national action plan for addressing the important issue of salinity and water quality in regional Australia. What will be the benefits to Australia of this plan?2620Truss, Warren, MPMr TRUSSGT4Wide BayNPMinister for Agriculture, Fisheries and Forestry10—As the member for Pearce well knows, the National Action Plan for Salinity and Water Quality is the biggest and probably most important environment program that has ever been implemented in this country. It will address some of the very serious issues associated with salinity and water quality which are threatening the lifestyles of many Australians and indeed much of our precious environmental biodiveristy. The reality is that the Commonwealth immediately put $700 million for this program on the table and, bit by bit, the states are finally coming on board to participate in this magnificent initiative.Yesterday, the Prime Minister announced that agreement has been reached with New South Wales. Bilateral agreements have been signed and $400 million will now start to flow towards addressing significant salinity and water quality issues in that state. Money is already flowing to Queensland, to South Australia and particularly to Victoria to undertake programs in those states following bilateral agreements which have enabled the action plans to be put in place.I am pleased to report to the House also that early last week Western Australia at last signed the intergovernmental agreement. It has taken them a year and a half, but finally the Western Australian government has agreed to sign the intergovernmental agreement. Western Australia has, sadly, been left a long way behind the other states by the reluctance of its state government to take on board this initiative which has been so welcomed by people who are actually affected by the problems of salinity and water quality. Indeed, in Western Australia, farm organisations, community organisations and, I might add, members on this side of the House have been very vocal in demanding that Western Australia participate promptly in this program and ensure that funds start to flow to that state.I am somewhat disappointed, however, to find that the Western Australian government have attached a significant number of conditions to their involvement in the intergovernmental agreement, and that is going to make it hard for us to negotiate a satisfactory bilateral arrangement to enable funding to flow. I guess chief amongst my disappointments is the fact that, even though the Commonwealth has offered Western Australia $158 million under the national action plan, Western Australia are only prepared to put up $60 million. As a result, instead of $316 million being available for essential salinity and water quality projects in Western Australia, only $122 million will be provided.That is very disappointing, because most people who know something about salinity acknowledge that some of the biggest problems are in Western Australia, some of the biggest issues that need to be addressed are in WA and also many land-holders in Western Australia and community groups have probably done more than those in other states on their own accord to address these sorts of issues. These are the people who wanted to participate in the national action plan and see these sorts of things occur.The honourable member for Kalgoorlie will be particularly interested to know that the Western Australian government have also indicated that they do not propose to fund any works in one of the priority regions under the national action plan, the Ord River. So there will be no money available under these arrangements, if Western Australia have their way, for programs in the Ord—one of the major areas for agriculture and where salinity issues are a rising concern. In the electorate of the honourable member for Pearce, the upper Swan Valley and the Avon Valley are particular priority regions. Under these arrangements, there will only be about one-third as much money available for projects in that region as there could have been if Western Australia had properly embraced this program and been a part of ensuring that all of Australia could reap the benefits of the national action plan. We will be patient in working with Western Australia to try and find satisfactory solutions. I am pleased that they are at least committing themselves to the intergovernmental agreement. But we can only be patient for a certain amount of time. Other states would be only too happy to take up the $100 million that it seems Western Australia are prepared to turn down. There are members opposite who have a fair bit of influence with the Western Australian government, I am told. Those are the people who ought to be out there demanding that the Western Australian government put up their share of the money so that Western Australia can participate fully in the national action plan and not have their works discounted by two-thirds because of the lack of commitment by Western Australia to this important program.262115:07:002621Swan, Wayne, MPMr SWAN2V5LilleyALP00—My question is to the Minister representing the Minister for Family and Community Services. Minister, in your previous answer you confirmed that the 200,000 disability support pensioners removed from that pension to unemployment benefits will have access to a training place or a rehabilitation place. Minister, why are you giving that guarantee to this House when this leaked cabinet question and answer document states, `Question 33: Will people be guaranteed a place in a service? Answer: Customers will not be guaranteed a place in a service?' Minister, why have you misled the House and, more particularly, why have you so misled people with disabilities?10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business is aware that the accusation of misleading the House requires a substantive motion. I invite him to rephrase the last sentence of his question.2V5Mr SWAN—Minister, why did you tell the parliament something which is contradicted in writing by a cabinet document?2621Anthony, Larry, MPMr ANTHONYXJ6RichmondNPMinister for Children and Youth Affairs10—I certainly take with a pinch of salt the documentation or the views that the member for Lilley has. The only people that are misleading the House here, quite frankly, are from the Australian Labor Party.10000SPEAKER, TheThe SPEAKER—Minister! I have interrupted the minister. In fact, he has not indicated an individual, but I ask him to restrict his reference to misleading the House.XJ6Mr ANTHONY—It is the opposition in their attitude towards people on disability support pensions who are being totally hypocritical when it comes to the reforms that were first advocated by the McClure report and that we are instigating. The important point to emphasise here is that, with these measures of reforms, we are giving those people who have a disability an opportunity to participate back in the work force—2V5Swan, Wayne, MP10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business!XJ6Mr ANTHONY—through adequate training and rehabilitation, whether that is through being referred on by our personal support providers, through the Job Network or through the 73,000 places—2V5Swan, Wayne, MP10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business is warned!XJ6Mr ANTHONY—which are in the budget that we will be planning for over the next couple of years. The attitude being taken by the opposition is quite breathtaking because they have actually failed to provide any leadership or any real policies to assist this group of Australians which is growing at an increasing rate—there are over 650,000 now; more than the number receiving unemployment payments—or to provide them with an opportunity to participate back in the work force. The changes that we are proposing, particularly the extra assistance that we are putting through the Commonwealth state disability agreement—which we expect all the Australian Labor parties to sign up to as well—along with the employment assistance bill, will provide a far greater range of opportunities for people with disabilities than ever before. The challenge for the Australian Labor Party is to support our legislation. 262215:11:002622Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—My question is to addressed to the Minister for Employment Services. I refer to the minister's visit last week to Melbourne, where he outlined enhancements to the Job Network flowing from the 2002-03 Commonwealth budget. Minister, would you advise the House of the Howard government's measures that will provide further support to those job seekers genuinely looking for work? Would you also inform the House what measures will apply to dole recipients who are not genuinely looking for work, and are there any alternative approaches that exist in relation to these issues?2622Brough, Mal, MPMr BROUGH2K6LongmanLPMinister for Employment Services10—I thank the member for Kooyong. It is a very serious question, and one which I am prepared to give a full answer on to the parliament. It is interesting to take on the issue that has just been raised by the member Lilley. I assure the House and all disability support pensioners who, under the budget measures that have been announced by the government, will be coming into employment services that it has obviously missed the attention of those opposite that intensive support customised assistance—the maximum assistance that can be provided by the Commonwealth to these people—are uncapped places. It does not matter how many people who were formerly disability support pensioners come into this system; we will accommodate them. There will be no virtual waiting rooms, unlike under Labor where people were parked outside for years. That does not occur under Job Network 3, so perhaps another reading of the budget papers by those opposite would be advantageous.There are a number of very significant issues coming out in ESC3, which is the next contract round for Job Network. It is called an active participation model because we know activity equals outcomes and outcomes equal jobs. We will be ensuring that Job Network members have greater engagement with the unemployed person. We will be providing a guarantee of service to the unemployed. We will also have the job seeker account, which will allow a great deal of flexibility between the Job Network member and the genuine job seekers of this country.I am also asked about those who are not genuine about unemployment. I released two attitudinal studies last week, which are available on the web site, of 3,500 surveys of unemployed people—Opposition members interjecting—2K6Mr BROUGH—`It is a disgrace,' I hear the member for Melbourne sing out across the chamber.10000SPEAKER, TheThe SPEAKER—The minister will ignore interjections.2K6Mr BROUGH—The Leader of the Opposition also calls it a disgrace. I will tell you what a disgrace is. A disgrace is what was identified in this report, and that is that one in six—16 per cent—of Australia's current unemployment recipients, those receiving financial support at taxpayers' expense, described themselves as cruisers. Perhaps some of those opposite would describe themselves also as cruisers, people who are comfortable in their roles without actually being too engaged with what they are doing. On this side, we are identified more as the drivers of employment—XS4Lawrence, Dr Carmen, MP10000SPEAKER, TheThe SPEAKER—The member for Fremantle.2K6Mr BROUGH—people who are prepared to work hard and work hard for the unemployed in developing policy—XS4Lawrence, Dr Carmen, MP10000SPEAKER, TheThe SPEAKER—The member for Fremantle.2K6Mr BROUGH—rather than the vacuum that appears opposite as far policy is concerned. XS4Lawrence, Dr Carmen, MP10000SPEAKER, TheThe SPEAKER—The member for Fremantle is defying the chair.2K6Mr BROUGH—The carping you hear opposite is quite strange when you consider some of the support that I and the government gained when we put this information into the public arena. There has been a great deal of support from a wide variety of people, including some unemployed people who, on talkback radio, have identified that they know many such people. But one comment has come out which has surprised many, a comment that is somewhat inflammatory: someone referring to these people as `scum that need to be weeded out'. It was not anybody on this side. It certainly was not the Minister for Employment and Workplace Relations; he would not make such comments. It was, in fact, the member for Lilley who called these people `scum'. How does that fit with what the Leader of the Opposition is now saying and what the member for Melbourne is saying?Honourable members interjecting—10000SPEAKER, TheThe SPEAKER—Minister! The minister will resume his seat.2V5Swan, Wayne, MPMr Swan—Mr Speaker, I rise on a point of order. I find that comment offensive. I did not call those people `scum'—that is completely inaccurate.10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business will resume his seat.2V5Swan, Wayne, MP10000SPEAKER, TheThe SPEAKER—The Manager of Opposition Business has already been warned. He will resume his seat. As the Manager of Opposition Business is well aware, if he has been misrepresented, I will of course facilitate him at the appropriate time. I understood that the minister was in fact quoting, and it was in that context that it hardly seemed appropriate to ask for a withdrawal.2K6Mr BROUGH—So that there is no misunderstanding, I would like to quote from the Australian of Tuesday, 21 May. `Rorters are scum, says ALP' is the headline. The article reads:Labor's family and community services spokesman Wayne Swan said people who rorted the welfare system were “scum and they need to be weeded out”.It is great to see a champion of the cause, of what the coalition has been trying to do for six years, without the support of those opposite. You are condemned by your collective comments during the answer to this question.I am also asked about alternative policy. Unfortunately, there is no alternative policy from the Leader of the Opposition. He has given himself 1,000 days to sort out the mess that is the Labor Party; perhaps at the end of those thousand days—and a few RDOs and all the other activities that the union 60-40 rule allows—he will get around to supporting a decent employment policy which accommodates those people who are coming off DSP and gives them a fair go, as the Howard government has been doing for six years.262315:17:002623McMullan, Bob, MPMr McMULLAN5I4FraserALP00—My question is to the Minister for Small Business and Tourism. Minister, what positive propositions for Commonwealth action to assist in resolving the public liability insurance crisis, particularly as it relates to small business, will the Howard government be taking to tomorrow's meeting of state and federal ministers on this issue? Will it be proposing the national accident compensation scheme, which you suggested in January? Will it be recommending this week's suggestion for state governments to return to running insurance businesses? Or will it take the view of the finance minister that state governments should not be involved in such businesses? Isn't it a fact that section 51 of the Constitution states that the Commonwealth has power over insurance? When will the government take its share of the responsibility for this national crisis, instead of passing the buck to the states?2623Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Small Business and Tourism10—Last time the member for Fraser cited legal advice—WU5O'Connor, Gavan, MPMr Gavan O'Connor—He's got his back to you, Joe.10000SPEAKER, TheThe SPEAKER—Member for Corio! DK6Mr HOCKEY—Last time the member for Fraser cited legal advice as to the powers of the Commonwealth in relation to insurance, I wrote to the member for Fraser and asked him if I could have a copy of that legal advice.WU5O'Connor, Gavan, MPMr Gavan O'Connor—Give him that loving look, John.10000SPEAKER, TheThe SPEAKER—The member for Corio is warned!DK6Mr HOCKEY—The member for Fraser sent me a copy of his legal advice. He did ask me not to disclose it—which I am happy not to do—but I will quote from that legal advice. It says the following:Opposition members interjecting—ZD4Howard, John, MPMr Howard—Do you object?5I4McMullan, Bob, MPMr McMullan—No.DK6Mr HOCKEY—You do not object? I am happy to table it—would you like me to table the legal advice?10000SPEAKER, TheThe SPEAKER—The minister is aware of the obligation he has to address his remarks through the chair.DK6Mr HOCKEY—I will table the advice from the member for Fraser.10000SPEAKER, TheThe SPEAKER—I am taking the liberty of assuming that the member for Fraser is happy with that action—DK6Mr HOCKEY—Just the advice, not the source.10000SPEAKER, TheThe SPEAKER—Minister! I am taking the liberty of presuming that the member for Fraser is happy with that action, given the minister's preceding remarks about its legal status.5I4McMullan, Bob, MPMr McMullan—Given that it does not disclose the source, I am quite happy for it to be tabled.DK6Mr HOCKEY—One provision in the advice says this:Basically, the Commonwealth cannot use section 51(xiv) of the Constitution in relation to this matter.That is the insurance power. The legal advice that he sent to me in fact contradicts his very question about whether the Commonwealth has power in relation to this matter.The second thing is this: Senator Helen Coonan, together with the states, has been working hard on coming up with solutions in relation to public liability. There is a key point: there was a Senate inquiry into public liability insurance and there was no submission from the Commonwealth parliamentary Labor Party. If they are really interested in public liability, where are their suggestions?There is a suggestion that has come from the finance minister in Victoria, and I am happy to table this release as well. He announced yesterday that Victoria is going to provide coverage to 12,000 community groups. In the spirit of bipartisanship in supporting a resolution to this matter, we welcome the efforts of the states to move on public liability insurance. We will provide whatever support we can, within the context of the powers that we have—the very powers that the member for Fraser has damned with his own legal advice.The summit convened by Senator Coonan on Thursday will work towards further solutions in public liability. It is a very difficult issue, but there is action happening on short-, medium- and long-term solutions, and we will continue to work towards a resolution that gets Australia's community groups, small business and tourism operators back on track.262415:22:002624Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—My question is to the Minister for Small Business and Tourism. Can the minister inform the House of key issues affecting Australia's 1.2 million small businesses, about 7½ thousand of those being in my electorate of Eden-Monaro, particularly the concerns raised by delegates at the national summit of the Council of Small Business Organisations of Australia being held in Canberra this week? Minister, are there any alternative views on the ways to address the challenges for Australian small business?2624Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Small Business and Tourism10—I thank the member for Eden-Monaro for his interest in small business. As a former small-business person he would understand the many challenges that small businesses face in dealing with the complexity of the modern economy and, in order to make a buck, in attempting to meet the demands of their customers. The Council of Small Business Organisations of Australia, COSBOA, has its national small business summit this week. The Prime Minister addressed it last night and was very well received, I understand. The Prime Minister reminded the small business community of how important it is to maintain steady hands on the economic levers of the country, how important it is to maintain the low interest rate environment, how important it is to keep the budget in surplus, how important it is to keep inflation low and how important it is to drive economic growth. The Prime Minister also reminded the members of COSBOA how important it is to try to exempt small businesses from the impact of the unfair dismissal laws created by the Labor Party. I addressed the small business summit this morning. I was asked a number of questions, but there was one question I could not answer and it was this. The question was: why is the Labor Party determined to oppose relief for small business in relation to unfair dismissal laws? Honourable members interjecting—DK6Mr HOCKEY—We have got one volunteer on this side and now there are two; we have a few volunteers with answers. But there was a second question as well: why was the Labor Party opposing the Commonwealth government's proposal to give the ACCC power to protect small businesses who are the innocent victims of secondary boycotts? So there were two questions in relation to workplace relations and commerce where small business is involved, and the Labor Party has put the interests of the trade union movement ahead of the interests of small businesses. It is a little hard to understand. The Leader of the Opposition said, when he first became Leader of the Opposition just a few months ago, that he was turning over a new leaf. He said, `We in the Labor Party now want to listen to small business; we want to take notice of small business,' and then on the two occasions when he has been put to the test the Leader of the Opposition has now voted for the unions ahead of the interests of Australia's small businesses.Government member—He's looking after his shareholders.DK6Mr HOCKEY—It might have something to do with his shareholders. It might have something to do with the 60-40 rule or the 50-50 rule or whatever the case is, but the former Leader of the Opposition, the member for Brand, Kim Beazley, said it in August 2000, when he summarised it beautifully, and these words should be etched in concrete. He said on 6PR, `We, the Labor Party, have never pretended to be a party for small business.' How true it is. It is very hard to be a party for small business when it is a party for the union movement.262515:26:002625Smith, Stephen, MPMr STEPHEN SMITH5V5PerthALP00—My question is to the Minister for Ageing representing the Minister for Health and Ageing. Is the minister aware that over 8,000 doctors, mainly in Queensland, need medical indemnity insurance certainty from the government by the end of this week? Given the government's handling of the UMP medical indemnity crisis has seen doctors either walk off the job or suffer from a crisis of confidence, what urgent steps will the government take before the end of the week to guarantee the continuity of medical services?2625Andrews, Kevin, MPMr ANDREWSHK5MenziesLPMinister for Ageing10—I thank the honourable member for Perth for his question about this important issue. This is something which the government has in hand. It is a matter which is being currently addressed by Senator Coonan in relation to her responsibilities and also being addressed by the Minister for Health and Ageing, Senator Patterson. The government has put in place provisions which ensure the situation of doctors throughout Australia so far as, in their case, their provisions to the end of June this year, and for beyond that further negotiations are going on. That includes a proper assessment of the situation of UMP vis-a-vis the investigations of the provisional liquidator. When those matters are fully ascertained, further announcements will be made.262615:27:002626Johnson, Michael, MPMr JOHNSON00AMXRyanLP10—My question is addressed to the Minister for Citizenship and Multicultural Affairs.4T4Melham, Daryl, MPMr Melham—Is it about the preselection goings-on in Ryan?10000SPEAKER, TheThe SPEAKER—The member for Banks! The member for Ryan has the call.00AMXMr JOHNSON—Would the minister inform the House about research showing the contribution that second generation migrants have made to Australia and how this relates to the government's focus on settlement services?2626Hardgrave, Gary, MPMr HARDGRAVECK6MoretonLPMinister for Citizenship and Multicultural Affairs10—I thank the member for Ryan and take the opportunity to also congratulate him on his very well based citizenship ceremony that he conducted last Saturday in his electorate and the way in which he involved local community groups in a very effective way.4T4Melham, Daryl, MP10000SPEAKER, TheThe SPEAKER—The member for Banks is perfectly well aware of the fact that he has been defying the chair.8K6Fitzgibbon, Joel, MP10000SPEAKER, TheThe SPEAKER—The member for Hunter is warned!CK6Mr HARDGRAVE—Unlike those members opposite, the member for Ryan and all those on this side take very seriously the importance of Australian citizenship and, for that matter, the fact that ceremonies should be conducted in a very non-political environment. The member has asked about some very important landmark research which I revealed last week—and it certainly does apply to his electorate, mine and many others—and which shows just how successful Australia's high migrant population has become, particularly the second generation migrants: people who have gone through the system legally and have contributed enormously to our nation-building exercise.In 1996, there were 3.4 million second generation migrants. That is about 20 per cent of the total population. The study shows migrants who came from Asian, eastern European and southern European extraction to Australia in the postwar period have in fact been particularly successful members of the Australian family. In fact, this study has shown that this particular group have gone on to achieve some better educational and occupational outcomes than many—of those opposite, I was going to say—of those with an Australian born parent.There should never be any resentment about success people achieve for themselves. In fact, I believe that much of the effort the parents who brought their children to Australia—or brought themselves to Australia to then have children—showed has in fact rubbed off on their kids. There is some determination to in fact achieve something for their parents, and they achieve well for themselves and indeed for the entire nation. They are a highly motivated group who really want to show that what their parents went through is something they respect. I think they should be encouraged and emphasised.This government has an emphasis on migrants coming to Australia from a non-English speaking background learning English. There might be some 170 different languages spoken by various people around this country on occasions but it is English that is the language which all cultures and all backgrounds use to speak to each other. Our Adult Migrant English Program is a very professional organisation. Unlike countries like Great Britain, where one million people do not speak English, this government is determined to ensure that people have their best set of opportunities to learn the language of this country. In fact, even the British government are consulting with us over our approaches to settlement.ZD4Howard, John, MPMr Howard—There are a lot of things they are consulting with us about.CK6Mr HARDGRAVE—A lot of things, Prime Minister? At the end of the day, the British government are wanting to learn from our example and what we have managed to achieve. With citizenship as the cornerstone of our very inclusive but culturally diverse society, the government will be continuing to be committed to promoting Australian values—very much so—as part of the good settlement outcomes here in Australia. We want to back the individuals who come to Australia with a determination to succeed. We want to ensure that the second generation actually achieve something as well. The figures that have been released show very simply that services such as the Translating and Interpreting Service, migrant resource centres, the Community Settlement Services Scheme and the Integrated Humanitarian Settlement Strategy services are all assisting in that aim. This means more jobs for more Australians with better qualifications. ZD4Howard, John, MPMr Howard—Mr Speaker, I ask that further questions be placed on the Notice Paper.Questions Without Notice2627262715:32:002627Howard, John, MPMr HOWARDZD4BennelongLPPrime Minister10—Mr Speaker, I would like your permission to correct part of an answer I gave yesterday. 10000SPEAKER, TheThe SPEAKER—The Prime Minister may proceed.LN6Hatton, Michael, MPZD4Howard, John, MPMr HOWARD—That was a knockout interjection. In answering a question on drugs yesterday I referred to an evaluation campaign which I said I thought had been conducted by the Australian Bureau of Statistics. I was wrong in saying that. I am advised it was not conducted by the Australian Bureau of Statistics; it was conducted by Wallace Consulting Group, a market research company. Wallace Consulting collected the data and the Department of Health and Ageing wrote the report. But everything I said about the survey remains absolutely correct.Personal Explanations262715:33:002627Mr McMULLAN,MPMr McMULLAN5I4FraserALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKER, TheThe SPEAKER—Does the honourable member claim to have been misrepresented?5I4Mr McMULLAN,MPMr McMULLAN—Yes.10000SPEAKER, TheThe SPEAKER—Please proceed.5I4Mr McMULLAN,MPMr McMULLAN—The Minister for Small Business and Tourism asserted that a document which I tabled indicated that the Constitution did not give the Commonwealth the power to act on the matter of public liability insurance. It says no such thing. I thank him for tabling the document. What it says is that section 51(14) would not be sufficient basis for his proposed national compensation scheme.DK6Hockey, Joe, MPMr Hockey—There you are! 5I4Mr McMULLAN,MPMr McMULLAN—No, you are wrong.10000SPEAKER, TheThe SPEAKER—Member for Fraser, I am extending to you a good deal of license.5I4Mr McMULLAN,MPMr McMULLAN—Thank you. You are.10000SPEAKER, TheThe SPEAKER—You might at least address your remarks through the chair.5I4Mr McMULLAN,MPMr McMULLAN—I was improperly responding to interjections, Mr Speaker. I am sorry about that. It does make clear that the Commonwealth has comprehensive powers in this area—DK6Hockey, Joe, MPMr Hockey—Tell the truth.5I4Mr McMULLAN,MPMr McMULLAN—and I will rely on all members reading the tabled document if they want to know who is telling the truth, because it has four dot points that make it clear where the constitutional power lies—10000SPEAKER, TheThe SPEAKER—The member for Fraser knows that he is now getting beyond the reasonable area of a matter of misrepresentation.5I4Mr McMULLAN,MPMr McMULLAN—and that you are wrong.10000SPEAKER, TheThe SPEAKER—As far as I know, I am still right. I would point that out to the member for Fraser.15:34:002627Mr SWAN,MPMr SWAN2V5LilleyALPManager of Opposition Business00—Mr Speaker, I wish to make a personal explanation.10000SPEAKER, TheThe SPEAKER—Does the honourable member claim to have been misrepresented?2V5Mr SWAN,MPMr SWAN—Yes.10000SPEAKER, TheThe SPEAKER—Please proceed.2V5Mr SWAN,MPMr SWAN—During question time the Minister for Employment Services misquoted from a transcript. I would just like to accurately quote it:For our part we won't support rorting of the welfare system at all ... this Government has been ... out there ... beating the drum about ... a crackdown—on welfare fraud, and if there are— still 100 000 people—doing that—then Minister Brough and all of his colleagues are completely and utterly incompetent.I seek leave to table these comments.DK6Hockey, Joe, MPMr Hockey—Three pages?2V5Mr SWAN,MPMr SWAN—Yes, the full text is there.10000SPEAKER, TheThe SPEAKER—Is leave granted?EZ5Abbott, Tony, MPMr Abbott—For what?10000SPEAKER, TheThe SPEAKER—The member for Lilley is seeking leave to table a statement that corrects what he believes is a misquote used at question time.EZ5Abbott, Tony, MPMr Abbott—No.2V5Mr SWAN,MPMr SWAN—You are kidding!10000SPEAKER, TheThe SPEAKER—Does the member for Lilley have anything to add to his personal explanation?2V5Mr SWAN,MPMr SWAN—Mr Speaker, it was out of deference to you that I did not quote the full paragraph. I am happy to do so. That is why I asked to table the document.DK6Hockey, Joe, MPMr Hockey—Where have you been misrepresented?10000SPEAKER, TheThe SPEAKER—Minister! The member has already indicated where he has been misrepresented and sought leave to table a statement. I was seeking leave and so far as I know it was denied. If the minister or the Leader of the House have had any reason to reconsider that, I will facilitate them. If not, I simply need to know whether or not there is leave to table the statement.Leave not granted.7T4Crosio, Janice, MPMrs Crosio—You have got to be joking.10000SPEAKER, TheThe SPEAKER—I would remind the Chief Opposition Whip of her status in the House. I recognise the fact that she was provoked by the Minister for Employment Services or I would have taken action.Questions to the Speaker2628262815:37:002628Ferguson, Martin, MPMr MARTIN FERGUSONLS4BatmanALP00—Mr Speaker, I have a question for you. I refer you to the Hansard of 16 May this year, wherein I posed the following question to you:Mr Speaker, in accordance with your endeavour to facilitate the operation of the House and to avoid this problem in the future, I request that you write to the Minister for Transport and Regional Services, drawing his attention to my explanation and asking him to refrain from misrepresenting my position in the future with respect to the Roads to Recovery program.Mr Speaker, you responded as follows:I will consider the matter raised by the member for Batman. I am not in the habit of telling him one thing and doing another, as he knows; so I am not pledging myself to write that letter. I will consider what he has raised and the implications of it for other issues, should they be raised, and report back to him.Mr Speaker, it is some time since you took on board that request. You have failed to convey your answer to me—nor have you invited me around for a cup of tea, like the minister for workplace relations. Could you please inform me of your response to that very serious question?2628SPEAKER, TheThe SPEAKER10000PON/A10—The member for Batman has unwittingly misrepresented the position of the chair, as did the Leader of the Opposition, using a quote that has no reference to the chair at all. So I would ask the member for Batman to look at yesterday's Hansard and consult with the Leader of the Opposition or me about the matter that he has referred to me in the latter part of his statement.I will go back to the Hansard. I genuinely thought that I had later on the same day made a response that indicated the difficulties that chairs often have with determining the degree to which misrepresentation can be addressed under the standing orders and how a chair can then oblige a minister not to make a statement that may in some way reflect that misrepresentation without unfairly confining the debate. It is a dilemma that all chairs have faced. It was never my intention to leave this matter unaddressed. I thought I had addressed it later in the Hansard. If I did not, I apologise to the member for Batman and I will get back to him with a response.Personal Explanations262915:39:002629Mr MARTIN FERGUSON,AM, MPMr MARTIN FERGUSONLS4BatmanALP00—Mr Speaker, I wish to make a personal explanation.10000SPEAKER, TheThe SPEAKER—Does the honourable member claim to have been misrepresented?LS4Mr MARTIN FERGUSON,AM, MPMr MARTIN FERGUSON—Most grievously, Mr Speaker.10000SPEAKER, TheThe SPEAKER—Please proceed.LS4Mr MARTIN FERGUSON,AM, MPMr MARTIN FERGUSON—The problem relates to the Minister for Transport and Regional Services, the Deputy Prime Minister and the Leader of the National Party yet again misrepresenting my position in the House today. On this occasion it was not in relation to the Roads to Recovery program; it was in relation to the detailed policy on transport infrastructure and regional services announced by the opposition and me, as shadow minister, during the last election campaign.I refer the House to very detailed policy announcements going to Labor's plan for infrastructure and Labor's plan for regions announced publicly during the last election campaign—documents very closely examined by the department during the election campaign, as is well known to the minister.10000SPEAKER, TheThe SPEAKER—I must interrupt the member for Batman at this point because, as everyone in the House is aware, this has been a more extensive personal explanation than would normally be tolerated. He cannot advance an argument, and I believe he has not done so at this point in time, but he must indicate where he has been misrepresented and use other forms of the House to advance his argument.LS4Mr MARTIN FERGUSON,AM, MPMr MARTIN FERGUSON—In the course of question time today, the Minister for Transport and Regional Services misrepresented my position with respect to those detailed announcements. He suggested to the House that the only policy announced by the Labor Party going into the last election went to loans. That is a deliberate lie and misrepresentation of my position.10000SPEAKER, TheThe SPEAKER—The member for Batman will resume his seat. All the member for Batman has done is to take a gracious effort from the chair and abuse it. I endeavour to accommodate the member for Batman, and I expect better from a man of his experience.EZ5Abbott, Tony, MPMr Abbott—Mr Speaker, I think that the member for Batman not only abused your generosity but also used unparliamentary terms.BV5Adams, Dick, MPMr Adams—What are you on about? Is this a point of order?10000SPEAKER, TheThe SPEAKER—I would remind the member for Lyons that the Leader of the House has the call.EZ5Abbott, Tony, MPMr Abbott—He accused a minister in this government of telling a deliberate lie, and that is plainly out of order. And not only should he withdraw; he should apologise.83REdwards, Graham, MP10000SPEAKER, TheThe SPEAKER—The member for Cowan cannot help himself, can he? The member for Batman made reference to the Minister for Transport and Regional Services having lied, and he knows that is unparliamentary. I ask him to withdraw it.LS4Mr MARTIN FERGUSON,AM, MPMr MARTIN FERGUSON—I withdraw the reference to the lie and seek the permission of the House to table documents going to the announcements on infrastructure, regional development and transport made by the opposition and me during the last election campaign. In seeking leave to table these documents, I would remind you, Mr Speaker, that the minister himself indicated today that he would table the documents. I seek leave to table those documents.Leave not granted.Questions to the Speaker2629262915:43:002629Smith, Stephen, MPMr STEPHEN SMITH5V5PerthALP00—Mr Speaker, I have a question for you. My question relates to your exchange with the Leader of the Opposition during question time in respect of the conduct of the Minister for Employment and Workplace Relations and your reference to your comments in the Hansard yesterday. I quote in respect of that reference:That does not alter the fact that I considered the minister—that is, the Minister for Employment and Workplace Relations— to be well wide of the mark in his answer and I intend to have words with him about that at the conclusion of question time.My question to you, Mr Speaker, is: did you have words with the Minister for Employment and Workplace Relations? If you did have words with the Minister for Employment and Workplace Relations, did you counsel him, as you did today, not to be excessively provocative? If you did not have words with the minister, why not?2630SPEAKER, TheThe SPEAKER10000PON/A10—The short answer to the question is yes, I did have words with the minister. No, I do not intend to canvass the matter any further, any more than I would any other conversation I had had with any other member of this House.5V5Mr STEPHEN SMITH—With respect, Mr Speaker, I would have thought, given the great interest of the House in this matter, your reference to it during question time to the Leader of the Opposition and your reference to it to the member for Batman, who has just made a personal explanation—that, firstly, the sensitivity and, secondly, the demeanour of the House yesterday arising from that incident—it might be very relevant to the House for you to detail the admonishment, if any, that you gave to the minister.2630SPEAKER, TheThe SPEAKER10000PON/A10—No House has ever had as extensive an explanation from the chair as the last two parliaments have enjoyed from me.2630Crosio, Janice, MPMrs CROSIO7T4ProspectALP00—I appreciate that statement, Mr Speaker, but I too would like to refer you to page 2337 of Hansard yesterday, again referring to your reply: `that does not alter the fact that I consider' et cetera, and where you said, `and I intend to have words with him about that at the conclusion of question time'. I would invite you, Mr Speaker, to inspect the tapes because it was clearly heard on this side of parliament that the exact words you used—and I will not quote them—were that you were going to invite the minister to your office to have those words. That is not in Hansard. If you recollect, we all said, `Are you going to invite us to your office as well?' That is why I question why Hansard has been altered in that respect and I invite you, Mr Speaker, to have a look at the tapes. At the same time you are looking at those tapes of yesterday, could you also have a look at the Hansard on page 2332 where, in a question from the member for Macquarie, he is referred to as `Senator Bartlett'. I understand in this House we are members of the House of Representatives and I am sure that will be corrected. But I request an answer, Mr Speaker, when you have had time to look at the tapes, as to your answers given there in the statement you made yesterday.2630SPEAKER, TheThe SPEAKER10000PON/A10—There has been no correspondence—written, phone, by letter, or anything else—between me and Hansard. The matter is closed.Documents2630263010000SPEAKER, TheThe SPEAKER—I present the Auditor-General's audit report No. 53 of 2001-02 entitled Assurance and controlled assessment audit: goods and services tax administration by Commonwealth organisations.Ordered that the report be printed.Documents2630Mr ABBOTT (Warringah—Leader of the House) (3.47 p.m.)—Papers are tabled as listed in the schedule circulated to honourable members. Details of the papers will be recorded in the Votes and Proceedings.Business26302630Mr ABBOTT (Warringah—Leader of the House) (3.48 p.m.)—by leave—I move:That, for the sitting tomorrow and the sitting on Thursday, 6 June 2002, so much of the standing orders be suspended as would prevent questions without notice being called on at 2.30 p.m. This is to accommodate tomorrow's state dinner for the Thailand Prime Minister and I believe a similar function with a different visiting dignitary on 6 June.15:48:002630Swan, Wayne, MPMr SWAN2V5LilleyALP00—Mr Speaker, I would just like to make the point that it would be helpful to the workings of this House and the relationship between the government and the opposition if there was some communication about these matters and the first time we heard about them was not on the floor of the parliament. 15:49:002631Abbott, Tony, MPMr ABBOTTEZ5WarringahLPMinister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service10—Mr Speaker, I am happy to acknowledge that the Manager of Opposition Business has a good point. The first I heard of it was close to the end of question time and there has been so much toing and froing since that time that it has been very difficult to have a conversation with the Manager of Opposition Business. But I certainly can assure the Manager of Opposition Business that in future I will do better on this point.8K6Fitzgibbon, Joel, MPEZ5Abbott, Tony, MPMr ABBOTT—Joel, I am happy to apologise.Question agreed to. 10000SPEAKER, TheThe SPEAKER—I thank the Leader of the House for his accommodation.Honourable members interjecting—10000SPEAKER, TheThe SPEAKER—It would be a good idea if a little more grace were extended across this parliament.Matters of Public Importance2631263110000SPEAKER, TheThe SPEAKER—I have received letters from the honourable member for Fraser and the honourable member for New England proposing that definite matters of public importance be submitted to the House for discussion today. As required by standing order 107 I have selected the matter which, in my opinion, is the most urgent and important—that is, that proposed by the honourable member for Fraser, namely:The failure of the Government to come up with a coherent strategy to respond to the crisis in public liability insurance.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—15:51:002631McMullan, Bob, MPMr McMULLAN5I4FraserALP00—I welcome the fact that, given the nature of the two MPIs submitted, the member for New England will be able to participate at a later stage in this debate and pursue the very proper interest he has in this matter. The crisis in public liability insurance is one of the most serious public policy issues to emerge in Australia in recent years. We in parliament talk about a lot of issues but this is one that is affecting the way Australians live every day in every community around the country, and it is very important. The response of the Howard government has been half-hearted, contradictory and clumsy.My colleagues and I, particularly the shadow minister for financial services, Senator Conroy, have been holding forums around Australia and receiving suggestions and input from our colleagues about the community impact and the small business impact of these matters. For example, Water Sport World, a company in Nelson Bay that specialises in parasailing, which has been running for more than 10 years, has never made a claim but its public liability insurance has leapt from $1,800 to $24,000, threatening the survival of the business. In Victoria, the Outdoor Tourism Association estimates that 350 businesses have been forced to close as a result of premium increases. In the course of a forum which I conducted with the member for Cunningham in Wollongong recently we had two very interesting examples. One in particular you would think would never be affected by this issue. The philatelic club, the stamp collectors, of the Illawarra has been running for 60 years, and you would not be surprised to know that they have not made a public liability insurance claim during those 60 years. But they have had a 200 per cent increase in their public liability insurance and strong legal advice that they have to maintain the policy. The Australian Speleological Society has been organising caving expeditions to the Buchan Caves in Victoria for 40 years and, over the years, hundreds of people have made the journey. It is true that there have been three deaths, but they were all from road accidents on the drive to the caves. Nobody has been injured in the activities of the society but its public liability insurance has gone from $4,500 to $18,000, endangering the future of the very society. We all know that this is a problem that has been emerging for a long time. The problems have been brewing for many years and the government has been lobbied on it for over two years. But it was not until January this year that the minister who was then responsible—he has since been demoted to be Minister for Small Business and Tourism, and this is probably why—came up with his proposal for a national accident compensation scheme. Under this scheme, businesses would pay a levy to the government, which in turn would dispense funds to victims. It may be that the member for North Sydney was trying to follow in the steps of a former member for Kooyong, a Mr Menzies, who in 1939 put some considerable work into developing a national insurance scheme for the Lyons government. He stuck to his plan. Unfortunately, the day after this minister floated his plan he said he had changed his mind. When Minister Menzies worked on his proposal and the then Prime Minister knocked it off, he resigned as a matter of principle. They keep knocking off your proposals, Minister—we are waiting for the resignation.It is clear that this minister, who failed over HIH and has been a failure consistently about matters to do with insurance, has been going backwards and forwards. What is very hard to imagine as a physiological attempt is that he has been doing backflips as well. He said there should be a New Zealand type scheme. Now he says it is a responsibility for the states, as if the states are going to introduce a national compensation scheme. He said that the states should establish insurance offices when 10 years ago he was closing them. He has been buck-passing and saying it is a responsibility for the states when it is clear, and it is clear in the advice which he tabled today which he still does not seem to understand, that the Commonwealth has extensive and specific constitutional responsibility in this area of public liability.He seriously misinformed and misled the parliament yesterday in three significant ways. First of all, he said that the Victorian government will be establishing a government insurance office, which is of course not the case. The Minister for Finance in Victoria has made it clear that it is not the case. They are proposing to coordinate the purchasing arrangements. They have entered into a very good scheme, but it is not a government insurance office.DK6Hockey, Joe, MPMr Hockey—What about this press release?5I4McMullan, Bob, MPMr McMULLAN—You have not read that and you do not understand it. It does not say they are establishing a government insurance office, nor is anybody else saying that. You are desperate. He then said the fundamental point is that state governments are responsible for insurance, which is just wrong. The third point is that he went on to say that—shocking thing—the states were taxing insurance. I thought that this was the first federal government in history to impose a tax on insurance. It is called the GST, and you supported it. And you talk about the money that is flowing to the states from tax on insurance. The GST money is going to the Commonwealth—that is exactly where it goes. Every dollar this year is going to the Commonwealth, and you know it. None of the states are getting any net benefit from the GST, Joe, and you know it. The Commonwealth is getting millions of dollars and the government is trying to pass the buck to the states because it has done such damage to the budget elsewhere. This is just like the failure on medical indemnity insurance, where the government has been dragging its feet for 12 months to two years. You could argue it has had evidence of structural problems in medical indemnity insurance since early in its term of office. We tried to put a proposition to the government in July last year but it would not respond before the election. Then it called a summit, and then yesterday we heard the Prime Minister talking about calling another one. What do you do when you have got nothing to do? You keep calling summits. We all know that in April the government caused chaos and mayhem in the medical industry, with serious disruption to medical services. We saw further confusion last week with the New South Wales Supreme Court. Now we have over 8,000 doctors, mainly in Queensland, who need to know with certainty what to do about their own indemnity insurance by the end of this week, and we have had deafening silence from the responsible minister today. So we have this series of inadequacies and failures by this government with regard to a whole range of critically important insurance issues. What I want to make clear today is that we on this side regard the current levels of premiums for public liability insurance as unacceptable. I want to start to outline what my colleague the shadow minister for financial services is outlining at the Small Business Forum—the sorts of responses that the Labor Party think we should make. I want to announce what we think the Commonwealth should be doing to resolve the crisis in public liability. It needs to recognise the important role played by volunteers. It must be mindful of the many benefits that non-profit organisations and sporting bodies provide to both individuals and the community. It has to recognise how the crisis in public liability insurance has disproportionately affected many small business operators. There needs to be a balance in the system that does recognise the rights of victims of negligence. These rights are essential in our society.The Commonwealth needs to play a role in resolving the crisis. The Constitution explicitly says that insurance is a Commonwealth responsibility and the Commonwealth needs to accept its responsibility.DK6Hockey, Joe, MPMr Hockey—It is not illegal.5I4McMullan, Bob, MPMr McMULLAN—Yes, it is. It absolutely is. You should hand back your degree. That is exactly what it says. Two years ago Labor announced its support for the reform of taxation laws to remove the current disincentive for structured settlements. We get a few promises now.DK6Hockey, Joe, MP5I4McMullan, Bob, MPMr McMULLAN—You have announced it—it has not happened. Structured settlements are usually less costly to an insurer, and they should lead to a reduction in premiums. In addition, they ensure ongoing income support for victims. We need to have a mature debate about whether we need to require damages in respect of future economic loss, and medical and domestic care to be paid by way of annuity. If we do, we have to ensure that such annuities are safe and that people are protected from a collapse like that of HIH. We need to introduce legislation to exempt volunteers from potential liability for an act or omission done or made in good faith. We also need specific laws protecting good samaritans. We have all heard of cases in the United States of doctors not prepared to assist at a car accident for fear of being sued. That is a situation which we must not allow to develop. It is also appropriate for the states, as they are, to be reforming their laws in respect of damages for personal injury. We support the general thrust of these reforms, but it would be desirable for common national standards to be achieved. We can go further. Work needs to begin on developing a national uniform tort law. The Chief Justice of the Supreme Court in New South Wales, Justice Spiegelman, said recently:Over a few decades the circumstances in which negligence would be found to have occurred and the scope of damages recoverable if such a finding were made, appeared to expand considerably ...He indicated a number of areas—including the test of reasonable foreseeability, standards of professional negligence and proportionate liability—which possibly could be reformed, and concluded that such changes could lead to a reduction of the pressure on premiums. So it is timely now to consider a national system of tort law. An area of reform which clearly should be considered is liability for injuries suffered by people engaged in criminal activities. Similarly, there should be reconsideration of liability for injuries suffered while intoxicated or under the influence of recreational drugs. We particularly want to emphasise the need for the Commonwealth to amend the Trade Practices Act to ensure consistency with these reforms so that the potential reductions in premiums from tort reforms are not lost because of Commonwealth laws. We must remove the risk of damages blowing out on another front.The Commonwealth also supervises the insurance industry. It has failed spectacularly in this role to date. We need to ensure that APRA has the powers, including the powers to require data on the industry, and the capability to exercise those powers to ensure the integrity and viability of the insurance market. All of these reforms have one aim: a direct community benefit through reducing the spiralling cost of insurance. We need a strong mechanism to ensure that the benefits of these reforms flow through to consumers. Therefore, the Commonwealth must also formally direct the ACCC to monitor public liability insurance premiums to ensure that the cost reductions flowing from tort reforms are passed on to consumers. Colleagues probably would not be able to hear the great extent to which the minister went in claiming that all those suggestions were very good ideas. The pity is nothing is happening. DK6Hockey, Joe, MPMr Hockey—That is not right.5I4McMullan, Bob, MPMr McMULLAN—The Prime Minister says, `We will have another summit.' The Commonwealth minister is consistently saying that this is the states' responsibility, the states should act. The substantial majority of those matters which I have just outlined are initiatives which the Commonwealth needs to take or to coordinate. It needs to undertake or coordinate, and that will not happen without leadership from the Commonwealth—and there has been nothing. We have been waiting for years. The Treasurer's web site says that he is the minister responsible for this, assisted by Senator Coonan. We have been waiting for years for him to take an initiative on any of these insurance crises in this country. He has done nothing. It is beneath his interest. There is no way that by taking action on this it can help him be Prime Minister so he is not interested; he sends out his campaign director instead.This is a serious issue of public policy about which the government have failed the people of Australia. We on this side of the House have been out doing the checking—like the member for Braddon. He took a survey in his electorate and found the startling concerns of community organisations in his electorate. This led many of us to take similar measures. There is a crisis in this government and every time you propose a solution the government say, `We agree. We are just about to do that.' Then you come back three months later and they are still just about to have a summit to think about whether they ought to do something about thinking about whether they ought to do something! They wait for the states to act.It is good that the states are acting. It is welcome that they are seeking to coordinate their activity, but they are getting no leadership from the Commonwealth. They get this minister throwing out ideas as if he is an independent think tank—throwing out ideas which the government repudiates day after day, week after week. Every idea he has gets repudiated. They have a shelf life of 24 hours. In some instances, it is just as well because they are very bad propositions. Nevertheless, what we need to do is have a government that is prepared to take a lead. We are prepared to outline the course of action we think needs to be taken. We wait with interest to hear one initiative from the Commonwealth government about this, then we will turn to your failures on medical indemnity, to professional indemnity and then to all the other areas of insurance and regulation on which you are continuing to fail. (Time expired)16:06:002634Hockey, Joe, MPMr HOCKEYDK6North SydneyLPMinister for Small Business and Tourism10—I welcome the contribution by the shadow Treasurer. I hope he remains in the chamber for the debate. However, I make this point: where was the shadow Treasurer when I first raised the issue in December last year? Where was the shadow Treasurer with his proposals for a solution to this problem in January, in February, in March and in April? Now, at the end of May, he decides, in consultation with someone who has been shadow minister for financial services for four years now, that he in fact will follow the lead of the Commonwealth and will follow the lead of some of the state Labor premiers and try to come up with a solution to a problem that is plaguing the interests of community groups, small business operators and tourism operators who have been affected by public liability insurance premium increases.It is worth giving some background to the problem. The first point is that public liability premiums have been rising steadily for two to three years. There are a number of reasons for that. The first is that public liability premiums were perhaps cheaper than what the market rate should have been because there were players in both the domestic and the international market who were undercutting the market in order to try and buy market share. The second point is that there has been a blow-out in the number of claims—not just the size of claims but the number of claims—in relation to public liability. From recollection, they have risen from around 44,000 claims in 1998 to around 88,000 claims in 2000, and there have been steady increases since. Of course, the collapse of HIH had some impact on the number of claims, but there is clearly an expectation right across the community that the number of claims will increase. The other factor is that the risk management practices of some industries in the Australian community have been short of what they should have been. If you want to take two industries that have differing risk management procedures, you need to look at the scuba diving industry, which is quite heavily self-regulated and has bulk purchasing of premiums, and the casual horse riding industry, which does not have industry-wide risk management procedures, has no national industry association and does not pool its purchasing. In the case of horse riding, premiums have increased by up to 1,000 per cent, if they can be obtained, whereas in relation to scuba diving, which is obviously an inherently dangerous sport, premiums have not gone up by anything like that. Risk management is an issue that was not addressed by the shadow Treasurer—it was not even mentioned by the shadow Treasurer—yet it has a very important role to play in helping to reduce the premiums for public liability.The other factor is that of course September 11 changed the world and of course it changed the global insurance market. But the issue in relation to reinsurance—and every policy that is purchased in Australia effectively has some form of reinsurance—is that, after September 11, the cost of reinsurance has dramatically increased because of the risk profile in the broader community. That is being passed on to insurance premiums right around the world. There is, of course, a further factor that is causing insurance premiums to rise: there has been an intergenerational shift of responsibility. Insurance companies are today paying out massive claims for events that occurred 30 or 40 years ago, and they are not only building the cost of that event into their current insurance premiums but also passing on the anticipated increase in the cost of events that may occur over the next few years.It comes back to the fundamental point that there has been a change in the culture of the community as a result of some of the actions of plaintiff lawyers. We want members of the community to go back to the days of taking responsibility for their own actions. That is the way I grew up and that is the way, I think, everyone in this House grew up. There are absurd examples, and I will cite one because, when I saw it on television yesterday, I was absolutely outraged. There was an extended advertisement on commercial television yesterday for the Australian Injury Helpline Compensation Service. The advertisement, promoted by two high-profile individuals, helps to create the culture in the community that, if you are injured, go first to the lawyer, go first for the money, rather than seek to have the injury and the problem addressed in the first place. That is a fundamental change in the culture being pushed forward by the plaintiff lawyers. I do not apologise for taking on the plaintiff lawyers in relation to this because I have seen ads in hospital emergency wards saying, `We will come and visit you in the emergency ward if you have just been injured.' And I have had examples cited to me by small businesses and tourism operators where the first phone call made by a party who is injured is to their lawyer—not to their doctor, not to the ambulance, but to the lawyer—because they see it as an opportunity to make money. We have to change this culture. It is only a small part of the community that is making the rest of the community pay the massive price.The shadow Treasurer came into this place in a fairly unctuous manner and said, `We've got this raft of solutions. We've come up with the solutions.' After the issue has been out amongst the small business community for so long, today, in late May, suddenly, on the road to Damascus, along comes the shadow Treasurer saying, `Public liability is an issue out there, and here are our suggested responses.' There was deafening silence for more than six months. We had to drag the states, kicking and screaming, to the party. Bob Carr has not done it of his own volition; Bob Carr was dragged, kicking and screaming, on this issue. And why? Because there just happens to be an election early next year and it just happens to be a fact that half the community groups in New South Wales have had to cancel events because they could not obtain public liability insurance. On each occasion I have suggested a response that I hoped would prompt the states to react. On the Today show, I said that lawyers are advertising in the accident and emergency wards of hospitals and, 24 hours later, Bob Carr reacted. Through his legislative powers, he said that he would ban lawyers from advertising. I raised the issue of the national compensation scheme as a proposal to go forward, trying to raise the urgency of the matter on behalf of the small business and tourism operators, and the states started to react. I raised the issue about state insurance offices, and I will tell you why.The opposition parodies my suggestion about the states getting involved in insurance. Let us hear what state insurance offices are in operation. New South Wales, Victoria, Queensland and South Australia run their own workers compensation insurance offices. State schemes in compulsory third-party insurance operate in Victoria, Western Australia, South Australia, Tasmania and the Northern Territory. A builders warranty scheme operates in Queensland and in the Northern Territory. That is a taste of it. Yesterday the finance minister of Victoria announced that he was taking Victoria back into the business of writing insurance for 12,000 community groups. He is asking them to pay a premium to a joint venture operation, and if there is a claim they will pay back the appropriate damages. That sounds to me—5I4McMullan, Bob, MPMr McMullan—Like a group insurance scheme.DK6Hockey, Joe, MPMr HOCKEY—Like an insurance scheme; that is exactly right—an insurance scheme run by the states for the states. The fundamental issue that the shadow Treasurer does not understand is this: if the states are using their constitutional regulatory powers to regulate particular areas of law, they cannot step away from the marketplace which may have responsibility for providing insurance. I will give an example. If you want to operate as a builder in some states you need two things: a builders licence and builders warranty insurance. Those state governments are saying that under their regulations and laws you have to get both—`We will give you the licence but we will contract out to the private sector the right to give insurance on the basis that, if you cannot get it, you cannot operate.' There are hundreds of builders out there that cannot operate because they cannot get insurance and because there is now one operator in the insurance market in New South Wales and in Victoria. They are quite properly for-profit companies and they will say, `We will not provide insurance to anyone who has any level of risk.' What happens? The building industry in those states closes down.009LPWindsor, Antony, MPMr Windsor—A market failure.DK6Hockey, Joe, MPMr HOCKEY—That is exactly right; there has been a market failure. When there is a market failure it is the responsibility of the government with primary responsibility in that area to step in, as has happened in Victoria in the last 24 hours, as Bob Carr in New South Wales is doing at this very moment, and as the Queensland Premier keeps threatening to do but has not taken action. The South Australian government have stepped in and said, `We will pay half the premium for certain organisations that have difficulty paying the premiums for public liability insurance.' There has been no action in Tasmania. Western Australia announced in the last two days that they are going to change their negligence laws as well. We have a number of measures that we are working on with state governments to address the issue, but we are looking at a range of issues. Senator Helen Coonan is working with the states on risk management procedures and tort law reform on a national basis. She is working with the states on changes to any other laws that may be necessary to ensure that we can make public liability insurance not only more accessible to community groups, small business operators, tourism operators and sporting groups but also, importantly, more affordable. There is one further issue that I would like to raise. No matter what the shadow Treasurer says, he cannot run away from it. The states receive every dollar of tax in relation to insurance—every dollar! Here we have the shadow Treasurer defending the Victorian government which has the highest insurance taxes in the world. I am happy to table a document which shows that New South Wales receives $386.2 million a year in insurance taxes. Victoria receives $238.6 million. In country Victoria, out of a premium of $187.55, $87.55 goes in taxes to the state government. Almost half—40c in every dollar—of an insurance premium in Victoria goes to the state government.00AMMHartsuyker, Luke, MPMr Hartsuyker—That's Labor for you!DK6Hockey, Joe, MPMr HOCKEY—It is Labor for you. Are they offering to give any of it back? When the community is in a desperate state—community groups, small businesses and tourism operators—they are getting fat on the hog on state taxes, and are they offering to give any of it back? No. We are the ones who are reacting to the community problem, but we were reacting six months ago when the shadow Treasurer and the Leader of the Opposition were asleep. We are going in to bat for those small businesses, community groups and sporting organisations. We are in the business of putting the community first, not our mates running the state governments.16:21:002637Sidebottom, Sid, MPMr SIDEBOTTOM849BraddonALP00—The one thing that we can learn from that performance and the clear message is that this government has done nothing but talk, and you, Minister, are the foghorn of all of it. You jumped and jumped and flipped and flopped from late last year until now, firing your shots. Admittedly you got some reactions, if that is what you like about it, but let me tell you why some action has occurred on this issue in Australia. It does not have much to do with this House or, I must say, with politicians in general at the moment. It comes from our communities and our families because it has a direct impact on our community. Lo and behold, what do we find? Yesterday and today, the Prime Minister discovered the issue. According to the Australian, he called for:... a `very aggressive and fundamental' rethink of public liability laws ...He related that to school sport. He then went on to say that we have got to change the culture in this country from a culture of litigation, which he paralleled with the United States, and he used the example of the gun laws and how this national government stepped in to deal with a very serious national issue. Let us not kid ourselves; we have all said it and it is true—this is nothing short of a national crisis, and we talk and talk. Everyone involved in this will say that this is a complex issue, but pointing the finger and saying that it is a Commonwealth responsibility or a state responsibility under the Constitution will get us nowhere, at least in the short term. People are crying out for some form of response and attempts are being made. Contrary to what the minister just said, Tasmania is a small island and it is almost impossible for Tasmania to try and go it alone on these issues. Because of that, we have joined with Victoria. In terms of local government, we have considered pooling schemes to assist organisations. Coincidentally, with the Prime Minister talking about gun culture, only a couple of days ago it was put to me that the situation is so serious that we should look at the imposition of a levy like the Medicare levy to pool moneys in the interim to assist states and communities to deal with present issues about paying premiums. The long-term issues of dealing with tort laws, restructuring the industry, the Trade Practices Act, the ACCC examining how the industry operates and the premiums involved could be left to later.The Prime Minister has finally woken up to it and it is about time. It is so important that the Prime Minister should be making statements and taking leadership of the issue. The federal government has not taken leadership of the issue except to call for a summit. It helped to coordinate that summit and the summit did its best in terms of the states and the federal government to knock together a 12-point plan. I believe the summit is meeting again tomorrow and no doubt it will report back on the plan. In all good faith and goodwill, the state governments, local government and the federal government will try to deal with these very complex issues. I am not a specialist in this area. I represent a community where people are saying, `Look, we accept that it's complex, but what do we do now? How do we go about tackling this?' It will not help if we point fingers at each other and say that it is somebody else's responsibility. This is like many issues we banter about and around which we tend to lose focus. This is a serious community issue. People want us to get together, put our heads down and work together to do something about it. We do not need someone firing away suggestions that they know will have no practical result in the long term. We have a Commonwealth minister who is responsible for tackling the issue in good faith and who I believe has not been tackling it vigorously enough. However, that minister is being hampered by another minister who has been shooting suggestions out when it has nothing to do with that minister. It makes you wonder what they are up to. I noticed a report about the exchange yesterday between the member for Werriwa and the Minister for Small Business and Tourism. The report stated:What made Hockey's vigorous defence of government intervention all the more fascinating—and it was fascinating and today's exchange proved that—was the fact that he is not even the minister responsible for dealing with the insurance crisis.When he was the minister he let HIH go through to the keeper and he is now firing off suggestions which will not have any practical import for dealing with the insurance industry. The report continued:That happy duty falls to Senator Helen Coonan.Why did he pipe up at all? To embarrass her? Who knows.If the intention is to play politics with this, no wonder people are throwing their hands up in disgust.My colleague the shadow Treasurer—and who one day will be Treasurer and more in this place, I certainly hope—talked about a survey that I put out in my electorate. No doubt many members in this House have conducted surveys. I know we do not need to be told that we have problems, but we do need to appreciate them more specifically. I reckon my survey response was similar to the responses received by all members. It gets deep down into the roots of our communities. Without going into a lot of detail about my survey, I received over 200 responses. It was a reasonable survey and we cut it off fairly quickly. However, we saw premium increases from 30 to 200 per cent and, in one case, there was an increase of over 600 per cent. No wonder people are beginning to shudder and cannot perform the services they are concerned about. What gets into the guts of lots of people is that, of those more than 200 responses, only six had made claims in the previous five years. In fact, if we go through our communities, in the main they have made no claims and, if they have, those claims are quite petty. I accept that the question of tort law reform is absolutely crucial. There are massive payouts and, while the value of the claims has been rising, the premiums have been rising accordingly. Of course the Plaintiff Lawyers Association fires back saying that this is the structure of the industry and they have been reaping the profits. They say that they cannot use their data properly because they do not have a national database to ascertain claims in specific community areas. No doubt the summit meeting tomorrow will look at that issue as it is a very important policy area that needs to be examined. The industry is saying that it cannot absolutely prove that the lawyers are causing the problem, while out there, Mr and Mrs Average—Jack and Jill—are saying, `I don't give a hoot what your arguments are there; do something about it; make it a national approach and fix it.' They are concerned that we continue to talk about it. I have examples that I was going to share with you, and I know you have similar ones, about instances that are affecting communities. An example is the Bothwell show—not in my electorate but an important community event in the Central Highlands in Tassie. It is important to note what happened to it. It was cancelled, as were many events in your own communities. The public liability premium for the Bothwell races has escalated from $200 in the early years to $600 two years ago. That doubled to $1,200 last year, and this year it was $4,300. Do you know what? If it is a result that they could not plan properly in that industry, then I say they have had that problem for 100 years, or since cocky was an egg.What is wrong with that industry? That has not just emerged now. I know September 11 and the other events that have occurred—HIH and so on—have affected that, but they still have to make calculations and they have not. What is wrong with this? There are greedy people, there are people that have abused this system and also people who will not take responsibility for their own actions. We all accept that, and we will try and do something about it. But we have to act and we have got to get some practical solutions on the ground, to work together with it, instead of pointing the finger. I only hope that we act on that so that the Bothwell races, as well as every other race day that we have in our community, can go ahead, because it affects us and our families. It is the Australian community that the Prime Minister quite rightly said we have to do something fundamentally and something aggressive about in order to do something with it.16:31:002639Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—The subject matter of this debate is indeed a matter of public importance. The issue of public liability insurance has attracted much interest and concern. It has been given a great deal of attention by the Commonwealth and, more latterly, by state governments in recent months. But I must say that the contribution to this serious matter by the members opposite advanced not one whit the examination of the problem or possible solutions. It is naive in the extreme, or perhaps it is just too cute by half, for a federal Labor opposition to try to shift responsibility for this issue from state and territory governments, which just happen to be Labor, and try to lay blame entirely on the door of the federal government, for that is what their matter of public importance states:The failure of the Government—the federal government—to come up with a coherent strategy ...I will demonstrate why that is absolutely untrue and it is not a debate that they are able to put forward with any credibility. I guess that is why federal Labor have made no submission or no representation at all to the Senate inquiry into this issue. They have nothing to say, and just talking amongst yourselves does not count.By contrast, the coalition has responded in a timely and appropriate fashion to the issues surrounding public liability insurance and has identified, through inquiries—and I of course refer, firstly, to the excellent summit chaired by the Assistant Treasurer in March this year and other meetings convened with relevant state ministers—the causes, the effects and possible solutions. But what did we hear from Labor? Absolutely nothing. Talk about finger pointing. The coalition has come up with a series of sensible initiatives which are within the federal government's sphere of responsibility and has shown leadership and support in areas outside its responsibility.There is a question of the division of responsibility here. State governments, local governments, insurers—a number of stakeholders—have responsibility, as does the federal government, and it has responded. I reiterate what the Minister for Small Business and Tourism has said: the undeniable fact is that the Commonwealth does not carry primary responsibility or constitutional power for the underlying issues at the heart of this matter. The common law of negligence, tort law and the legislation that deals with issues such as occupiers' liability and so on are all state government responsibilities. You can try and torture the Constitution and its interpretation all you like—trying to shield the state Labor governments from their responsibilities might be a laudable ALP political objective, but the fact is it ignores the reality of the division of responsibility in this area. It is just fundamental federalism. Let us have a look at what the states are able to do and should do if they have the political will. First, I had better counter entirely the suggestion that the federal government has not responded with a coherent strategy. The Commonwealth has shown tremendous leadership in this area, and I certainly commend the Assistant Treasurer for convening the meeting of state and territory ministers and the President of the Australian Local Government Association, for in fact that meeting, at the Commonwealth's behest, brought together the representatives of the state governments who have—and I say it again—the primary responsibility for resolving problems in the public liability insurance area and, indeed, in other insurance classes.We can forget the mad rhetoric from over there and turn to what the communique actually stated was resolved, what was agreed at that meeting. The ministers agreed that many of the issues concerning the problems of rising premiums and reduced availability of public liability insurance were complex, cross-jurisdictional, requiring collective action from government and industry in the immediate and long term. The ministers received an expert report identifying the major factors behind rising premiums and reduced availability of public liability insurance. They referred to the changing community attitudes to litigation; the change in courts' views of what constitutes negligence—and that is a matter that I will turn to in a moment; the increased compensation payments for bodily injury claims; the past underpricing and poor profitability of the insurance industry; the collapse of HIH, a major player in the public liability market; and a decision by insurance companies to be more selective about the risks they cover.The state and territory ministers at this meeting convened by the Assistant Treasurer noted that a number of jurisdictions had already undertaken a range of initiatives—accepting responsibility, clearly—including facilitating group insurance for not-for-profit organisations, tort law reform and the development of risk management guidelines. This reflects the fact that the state jurisdictions have the power and the responsibility to introduce change in this area. But the Commonwealth did agree to implement the changes in areas over which it has responsibility. These include the issue of structured settlements. The Commonwealth agreed to introduce legislation to make tax changes to encourage the use of structured settlements for personal injury compensation. We are doing sensible, coherent things in response to the issue.Secondly, the Commonwealth, along with the states and territories, agreed to examine relevant sections of the Trade Practices Act and comparable state and territory legislation to consider the extent to which individuals can legally and confidently assume personal responsibility for high-risk activities. Thirdly, the Commonwealth agreed to consider widening data collection on the insurance industry by APRA and will report to a subsequent meeting on the impact of the new prudential requirements for general insurers. The ministers also noted that the Commonwealth had asked the Australian Competition and Consumer Commission to update its recently released report on insurance industry market pricing by July 2002, and the report is to analyse the competitiveness of the public liability and professional indemnity markets. ASIC will also be asked to provide advice on improving the information to consumers in insurance policies.We have got answers to some of the problems, but let us have a look at what the states must also do. The state and territory ministers agreed to make such legislative changes as are necessary to remove the barriers to structured settlements as an alternative to lump sum payouts. They agreed to examine targeted claims cost reduction by, for example, protecting volunteers and community and appropriate sporting organisations from actions. Subject to some issues, they agreed to look at broadly based tort reform—and a couple of the states have in fact done that—and legal system costs and practices, such as legal advertising. The state governments were also looking at encouraging group insurance buying where appropriate. Finally, they were to provide advice to the heads of treasuries on risk management practices introduced in their jurisdictions that have assisted in making insurance more available and more affordable. There was also work to be done by the insurance industry. The insurance industry was to advise the heads of treasuries on other effective risk management procedures and was to collect more detailed information on claims experienced through a cooperative industry arrangement. A representative of the Insurance Council of Australia will be at the next meeting of ministers, which I understand is tomorrow. What was the response to this Commonwealth initiative? It was overwhelmingly positive. Again, the opposition seems to be out of step with just about everybody in this sense. The Victorian parliamentary colleague of the member opposite, the finance minister, John Lenders, said in a press release on 28 March: ... the Victorian Government had achieved progress on all the issues it had raised with the Commonwealth at yesterday's Ministerial Council meeting on Public Liability Insurance.... ... ...Mr Lenders said Victoria had led the way in responding to the public liability insurance crisis ...He acknowledged again the states' responsibility in this area, and he boasted about the other states at the meeting agreeing to mirror Victoria's group insurance product for community groups and the like. The Treasurer of New South Wales, Mr Michael Egan, said:I have to say that I have been coming to meetings of the Commonwealth and state ministers now for seven years and this is the most productive one that I have attended. I think today we have laid out the foundation for very substantial and longer term reforms that will work.This was an initiative of the Commonwealth government, so praise indeed for the coalition's lead in pushing the state and territory governments to address the problems, to confront and to acknowledge their responsibilities and to explore situations which are largely within their hands for the states and territories to have the power to change the general law which will reduce the cost of public liability insurance. That includes tort reform, the capping of claims and the like.I thought it was interesting yesterday to read a press release of the Australian Amusement, Leisure and Recreation Association—an organisation that deals with businesses operating in the amusement, leisure, recreation and tourism areas. In their release they said:It is clear to all that the jurisdiction for public liability lies with the states and not the Commonwealth. All state governments must be called upon and urged to act expeditiously before the crisis becomes a complete firestorm.Hear, hear! The Australian Amusement, Leisure and Recreation Association have got it right. But we did not stop there. The Commonwealth has been encouraging all stakeholders to be fully engaged in finding solutions, demonstrating our genuine commitment to ensure availability and affordability of public liability insurance and the recognition of the impact on business and community groups and local councils and the like. The Council of Australian Governments, again convened by that Commonwealth in April, furthered that aim.I, too, call upon the state governments across Australia to acknowledge their responsibilities and to embark upon a sensible coherent path of tort reform. It needs to be a uniform approach, I suggest, across the states and territories, and the federal government will continue to provide the leadership and the support to enable the states to meet their responsibilities and to come up with solutions. Indeed, the issue of tort reform is long overdue and a number of states, including, I must say, the New South Wales Labor government and the Queensland Labor government, have acknowledged their responsibilities in this area and have introduced and published ideas on tort law reform. That is at the very heart of this. We can look at numerous cases to see where the field of negligence has expanded. (Time expired)16:41:002641Windsor, Antony, MPMr WINDSOR009LPNew EnglandIND00—Mr Deputy Speaker Jenkins, thank you for giving me the opportunity to speak during this debate. This is the first time that this parliament has actually debated what is probably the most critical issue in Australia at the present time. I attempted and successfully suspended standing orders about four or five weeks ago, with the support of the member for Calare, to have this very issue debated. The government decided that it was not important enough and, using its numbers, moved on to other business. Yesterday this debate was taken out of play in relation to being discussed in this House. There have been on a few occasions a number of members of this House who have raised the issue in the grievance debate and in other forms of the House, but this is the first time that this parliament, the elected representatives, have actually discussed this issue within each other's presence. That is something that none of us can be very proud of because this issue, in regional Australia particularly, but in Australia generally, has the capacity to do more damage to the development of our social fabric and community wellbeing—and the smaller the communities the more damage it can do—than any other issue that we have before us at this time. I am very pleased, even though I do not particularly agree with the politics of the way in which the MPI is written. I did write to the Speaker with slightly different wording to say that the parliament should develop a strategy in relation to showing some leadership on this issue. So I do not particularly agree with the Labor Party's wording of the MPI and the politicisation of it but, having said that, I thank the speakers who have spoken. If we look past a bit of the bluster, we have started to put some points down that could lead to being part of the solution to this particular dilemma. So I congratulate those speakers for being involved in this process.There has been a lot of talk about who is responsible. I know the member for Calare and the member for Kennedy are also very concerned about this; we do not want this issue to be driven into the blame game that is always played, particularly between the states and the federal government. I think the states and the federal government do accept some responsibility. The Prime Minister, in answer to a question from me on this issue, made that point very plainly: that he did not think this would be solved by one level of government. I agree with him; I do not think it can be, but I think it requires a degree of leadership from all governments.I was very interested to hear what the member for Braddon had to say about how this issue has been driven by this parliament or other parliaments: it has been driven by the community. I think that that is saying something about the way in which the community have been represented on this issue. The community have had to absolutely scream that they are in agony about what is going on in relation to public liability. Politicians generally have sat back and watched to see who can be advantaged by the play of the day. The community has kept on saying, `We want you to address this.' This issue has not come out since Joe Hockey mentioned it in January. I would have been one of the first—and I am sure the Minister for Small Business and Tourism would endorse this comment—to send him a message saying, `Good on you, Joe; that's the sort of thing we need. You've raised the issue of a national plan, of some sort of national leadership.' He was quickly jumped on from a great height and disappeared for a month or so. But I congratulate him for at least having the intestinal fortitude to raise the issue and raise the possibility of some sort of national process to come to grips with this issue.It is an issue that has been out there for a long time. The medical profession in particular have been screaming for five or six years about what is going to happen, and now it has arrived. All of a sudden, we are all surprised and heading for cover, making some efforts here and there to try to organise a result. I would hope that at the summit tomorrow—and hopefully the Prime Minister will be involved as well—we have some real leadership at a federal level. That does not mean that the federal government has to do it all; obviously the states have a role. Bob Carr, for example, has been on the front foot in relation to this issue in New South Wales. Obviously the states have a role to play in terms of tort law. But it is not right to say that, just because the states have dealt with this issue in the past, they should deal with it. Under section 51 of the Constitution, the Commonwealth can be involved in insurance. Even though it has only been involved at the contractual level, the company level and one other level that I cannot think of at the moment, that does not mean that the Commonwealth cannot be involved at other levels in coming to grips with solving this problem. One of the members who spoke today mentioned the firearms issue. Firearms are a state issue. They have always been a state issue, but for some reason in 1996 the Prime Minister of the day, John Howard, decided to show some leadership on firearms. I personally disagreed with him on that issue but that is neither here nor there. Other than some minor Customs variations, we do not have any national firearms law, but we have what is essentially a national law driven through the states. What is wrong with the federal government showing the same sort of leadership on something that is much more important than the money that was wasted on the firearms buyback and those sorts of things? This is a critical issue that concerns the wellbeing of everybody. Our communities are at real risk in relation to this issue.The Minister for Small Business and Tourism mentioned market failure, and I think he has highlighted a particularly important issue. We are seeing—and I will make a recommendation on this in a moment—a situation where big business, in this case the insurance companies, are looking at some of the very minor parts of their business and determining that they are not interested in them. You can see it in relation to horseriding and pony clubs et cetera. There are small organisations out there that have not paid enormous premiums in the past but are part of our social fabric and are unable to obtain insurance. We had an instance in my electorate where a business that has been in business for 20 years providing trail rides et cetera and has never had a claim could not get insurance. It is dealing with some dodgy brothers in the Philippines trying to get some form of insurance. It is highly inappropriate that we are allowing that sort of thing to happen in Australia.We know the problem; what are the solutions? There are a few things that I would like to put to the House. We have two distinct but similar problems: medical indemnity—that is the one that is screaming at us now—and the public liability issue generally, which is of concern to everybody. In my view, the government should underwrite the non-profit and community organisations, those volunteers within our system. On analysis, they are the groups that are not costing the insurance companies money. The government should analyse that and, if need be, should underwrite those organisations. The government should underwrite medical indemnity beyond June 2002 to give some degree of certainty. That does not mean that it does so for the rest of the decade but it puts in place some certainty; it gives the doctors of our community some certainty as to the way they can operate.The government should investigate—and it could involve the Law Reform Commission in this—a possible federal claims act or some form of no-fault insurance that could be derived through the Law Reform Commission. I think that anything that comes out of that must look very seriously at structured settlements, which have been mentioned before, and the possible capping of claims, which some of the states are looking at. We should look very closely at supporting the states and having some overarching framework at a national level. It would not mean that all the legislation has to be catered for at a national level but that the system actually works across the nation; that may be through various state agencies. I would encourage the ministers and the state premiers that are going to be at the summit tomorrow to look beyond the politics of this, for God's sake, and do something for the people that are out there screaming for a resolution. They want this fixed. It can be fixed. If it costs us some money by way of a levy, that is what has to happen, but we cannot let our society disintegrate, which will happen if medical indemnity and public liability are not fixed.10000Jenkins, Harry (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Mr Jenkins)—Order! The discussion is now concluded.Delegation Reports2644264416:52:002644Ripoll, Bernie, MPMr RIPOLL83EOxleyALP00—by leave—I present the report of the Australian Parliamentary Delegation to the 10th annual meeting of the Asia Pacific Parliamentary Forum held in Honolulu, United States of America, from 6 to 9 January 2002, and ask leave to make a short statement in connection with the report.Leave granted.83ERipoll, Bernie, MPMr RIPOLL—It is a great honour and privilege to have the opportunity to present this report and to mention the names of the delegation, the leader of the delegation being Senator Winston Crane, senator for Western Australia, the deputy leader of the delegation being me, and the other member of the delegation being Mr Anthony Byrne, the member for Holt, from the Australian Labor Party. It was a very small delegation but a very powerful and appropriate one. There was to be one other member of the House to accompany us but unfortunately, due to the fires in Sydney at the time, he was unable to be on the delegation. This was the first meeting of this forum not to be held at the venue of a national parliament. The US delegation actually contracted out the organisation of the meeting to the East-West Centre in Hawaii, which was the first time for this type of meeting. It worked very successfully and the forum this time around included a special item which has never been discussed before—the issue of terrorism, the forum being so soon after the September 11 attacks in the US.While we were in Honolulu, the delegation was superbly supported by Mr Paul Robilliard, the Consul-General, and Mr Stephen Ross, the Consul, and I would also like to thank Brenda Herd from the Parliamentary Relations Office for her excellent work. As I said earlier, while Australia's was a small delegation—probably the smallest—we actually played a key role, a leadership role, in all of the motions and the processes of the APPF. I would also like to especially thank Judy Middlebrook, whose hard work within the group's redrafting resolutions was critical to the performance of the Australian delegation and to the regard of Australia in terms of this very important Asia Pacific forum.The meeting was attended by 101 delegates from 24 member parliaments and by one observer from Brunei Darrussalam. The meeting saw the return for the first time of Fiji to active membership after an absence of quite some years. As I said before, this was the first annual meeting which was not held in a national parliament and it was actually outsourced to the East-West Centre, headed by Mr Charles Morrison. I would also like to mention his excellent work and the work of the secretariat, particularly the great job they did in putting together a very comprehensive program.The APPF, as a matter of background, was formally established at its first annual meeting, which was held in Tokyo in January 1993. The tenth annual meeting in Honolulu was one of the most innovative in that it dealt with an extra item, being terrorism, but also in the way that it allowed speakers from outside the forum to participate in the forum itself. I want to mention some of the names as I think their presence was quite significant at the time, given the US terror attacks. There was Mr Jim Kelly, who is the Assistant Secretary of State for Asia Pacific Affairs; Admiral Dennis Blair, the Commander in Chief of the US Pacific Command; Mr David Sanger, White House correspondent for the New York Times; Mr Mark Valencia, Senior Fellow, East-West Centre; Ms Eileen Shea, Project Coordinator, Research Program, East-West Centre; Mr George Lissandrello, President COO, Infoserve International; and Mr Charles Morrison of the East-West Centre. It was quite significant to have these speakers at the forum and it was a break from tradition, but I think it was an innovative move that will be continued in future meetings.There were only 13 resolutions adopted by the plenary sessions of the annual general meeting, compared to previous years when there have been 25, 20 or 18. Australia sent forward four draft resolutions covering the following agenda items: terrorism; security—international dimensions; environmental issues with an emphasis on global warming; and economic growth in an era of globalisation. On the issue of terrorism—which was probably the most significant one on the agenda and really was, at the end of the day, a focal point of the whole forum—not surprisingly the 24 countries in attendance condemned terrorism in all its forms and encouraged cooperation with United Nations attempts to combat terrorism. All members were called to sign, ratify and implement as soon as possible the relevant international conventions and protocols on terrorism. Several delegates also noted that support for terrorists fed upon a wide variety of political, economic and social problems, including poverty. I want to make a special note here that the member for Holt, Anthony Byrne, who spoke on this matter, picked up on this point when he spoke on the draft resolution and said: ... the war on terrorism cannot be defended by military efforts alone ... governments have to work nationally, regionally and globally. We need international cooperation through more broad based, multilevel institutions.The issue of economics and trade is one of the traditional areas of the APPF agenda and this was only slightly different in this case for this particular meeting. Delegates discussed a range of consequences of artificial barriers to trade and how we might implement better economic transfer between different countries. Again Australia played a key role in amalgamating a number of draft resolutions from other countries. Particular importance that I placed on the draft resolutions from Australia concerned the environmental outlook and, in particular, the Kyoto agreement and its signing by Australia in 1998 but its non-ratification. I want to mention the issue of a proposed second meeting put by Mexico. While it was agreed by the forum, it was certainly not supported in its general terms by Australia—one meeting is enough. I thank all the organisers and note that it was an extremely successful meeting.16:59:002645Byrne, Anthony, MPMr BYRNE008KOHoltALP00—by leave—Thank you to the member for Oxley. I would like to compliment him for a comprehensive overview of the conference in Hawaii. I think having been a delegate to the 2000 APPF conference in Canberra and comparing it to this particular conference in January this year, the war on terrorism and the events of September 11 completely overlaid, overshadowed and set the whole tone of the actual gathering. It was quite a sombre gathering. I know that in particular the Americans by sending the third in their political sphere, the Speaker, Dennis Hastert, and their Senate Majority Leader, Thomas Daschle, wanted to emphasise the importance of this particular gathering, particularly—as I have been quoted by the member for Oxley—to emphasise that in prosecuting the war on terror we need regional frameworks of cooperation and communication.In attending that conference and building relationships—as we have with a number of the other delegations and a number of the other individuals—it lead to a point that was raised in one of the recommendations arising out of this particular report: that is, that there may need to be some consideration given to having ongoing members or having a consistent period of time over which members from a particular delegation stay on and may attend two, three or four conferences. I know, for example, that the Americans, the Canadians, the Japanese and the Chinese delegations tend to do that. I think it is something that future Australia delegations should consider.As I said, what struck me was the focus on terrorism. I was very happy to move Australia's resolution in relation to that. We moved four good resolutions. The member for Oxley spoke in particular about the resolution on global warming as well. I understand that in particular our resolution on the security of international dimensions, which actually focused on people-smuggling, was very slightly amended by the Singapore delegation but was almost accepted in its totality. In keeping with our presence in past times, we punched above our weight.I have been told that I do not have too much time to speak on this particular issue, so I will conclude my remarks shortly. But I would certainly like to thank those involved in providing the support to us as a delegation, particularly Brenda Herd, Paul Robilliard and Stephen Ross from the Australian Consulate in Hawaii; Philip Alice from the Department of Foreign Affairs and Trade; and Derek Woolner, formerly of the Parliamentary Library. In particular, I would like to thank Judy Middlebrook. It was fairly frantic. For a small delegation like ours wanting to participate as fully as we did, there was fairly frantic activity, particularly when we were trying to combine resolutions from each of the particular countries. Judy Middlebrook, as the member for Oxley will attest, played an invaluable role in ensuring that we were appropriately represented. I would like to thank her for her support, her advice and her counsel throughout the conference.It was a significant conference. I think what arose out of that conference is that people want to strengthen the APPF. They understand that it is relevant. They understand particularly after the events of September 11 that the architecture of these sorts of organisations should be improved and should be strengthened. I certainly hope that people reading this report take that from it and that we can actually make a constructive step to broaden and deepen the APPF. In particular—I think the next delegation is in Kuala Lumpur next year—it would be constructive if we could contemplate some level of consistency in terms of the representatives from each of the delegations. As the member for Griffith will know in his capacity as shadow minister for foreign affairs, it is the establishment of relationships and the communication in relationships that is important in maintaining an international dialogue. I believe that this organisation provides the framework to do that, apart from the purely economic considerations that are formulated in APEC. I would urge us to seriously think about that the next time around.Committees26462646264610000Wilkie, Kim (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Mr Wilkie)—The Speaker has received advice from the Chief Government Whip and the Chief Opposition Whip nominating members to be supplementary members of the Standing Committee on Family and Community Affairs for the purpose of the committee's inquiry into substance abuse in Australian communities.Mrs VALE (Hughes—Minister for Veterans' Affairs and Minister Assisting the Minister for Defence) (5.03 p.m.)—by leave—I move:That Mr Wakelin and Mr Quick be appointed supplementary members of the Standing Committee on Family and Community Affairs for the purpose of the committee's inquiry into substance abuse in Australian communities.Question agreed to.Bills2646R15262646Bill returned from Main Committee without amendment; certified copy of the bill presented.Ordered that this bill be considered forthwith.Bill agreed to.2646Mrs VALE (Hughes—Minister for Veterans' Affairs and Minister Assisting the Minister for Defence) (5.04 p.m.)—by leave—I move:That this bill be now read a third time.Question agreed to.Bill read a third time.Bills2646R15452646Debate resumed. 17:05:002646Cadman, Alan, MPMr CADMANSD4MitchellLP10—Deputy Speaker Wilkie, I am delighted to see you in the chair. I will wind up my remarks on the New Business Tax System (Consolidation) Bill (No. 1) 2002, which is a complex piece of legislation the result of which I think will be beneficial. It is a process which allows companies to consolidate their entity for the purposes of taxation and a whole range of other purposes. It is a process of simplification for business but which will also help to reduce the prospect of tax avoidance or minimisation by a series of pass-on processes where companies are related.I believe that the government has to be careful to make sure that where there are unintended consequences identified with this consolidation process the government is ready to listen and to make changes. But of course it is not the government so much in this instance as the Australian Taxation Office which first of all identifies the problem and then proposes the legislation to make changes. I believe that the government will be listening—and it was during the GST debate—but I would want to see a quicker response from the ATO when difficulties are identified so that these changes can come about with a minimum of fuss. I notice that the Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, promised a new approach to tax changes, where business could codesign laws with the government. I think that is a very welcome change, and I am sure business will welcome the approach that Senator Helen Coonan is making to tax law. She said:This signals a new inclusive way for the Australian Tax Office to roll-out complex tax legislation. We develop it more or less as we go, with business making a contribution and users making a contribution.I like that approach, and I think that we will resolve some of the problems that were obvious in the past. As with all legislation, there are of course costs and benefits. I will quote from the CA Charter magazine with regard to the costs consolidated groups have. It states:Transition costs may be significant depending on group structure and group assets, valuation rules and substantiation requirements and whether safe harbour valuation are developed. Software changes, information gathering, professional advice, valuations for ACA calculations and loss-factor calculations.All those must be a downside. There are some estimates that I have seen which say that the process will cost businesses up to $1 billion. But there are also concessions of about the same amount from the government. Let us hope it turns out square at the end of the day. The article in CA Charter continues:Retention of single entity for FBT, PAYGW and possibly GST tax liabilities.I would really like to see us get to work on that to make sure that those factors can be consolidated. I cannot see why the FBT factors cannot be consolidated—really, for the life of me, I cannot. It would seem to me that, if it were of benefit for employees across companies, they should be consolidated. I would like to have a response when the parliamentary secretary comes into the chamber as to what the difficulties are in the consolidation for a single entity for FBT, PAYGW and the GST—although I believe the GST would have a reporting process that would allow them to group and consolidate for GST. I am not sure that I agree with that point made by the Chartered Accountants. The article goes on:Possible adverse impacts on existing tax assets. For example, access to and speed of tax-loss utilisation. Ongoing notification requirements for changes to consolidated groups and deconsolidations. Due diligence process changes required for acquisitions and divestments of entities.For the non-consolidated group, there is the prospect if companies decide not to consolidate of the introduction of additional integrity measures for the non-consolidating group. That could be quite onerous, and it is something that I would advise companies to watch for. There is also the prospect of what they would face in the removal of current tax grouping concessions and dividend rebates.The fact is that it is a one-off chance. It has to be completed by the end of the next financial year—that is the end of June 2003. The benefits include eventual savings, calculated at $1 billion over three years. Maybe that is a bit optimistic, but there are savings. It allows companies to ignore intra-group transactions for tax purposes, including intra-group dividends. The CA Charter lists further benefits as follows:Pooling of franking credits drives better imputation and dividend management.Potential benefits for resetting asset cost bases on a subsidiary by subsidiary basis pursuant to ACA method.This is part of the Howard government's agenda. The introduction of the new tax consolidation is part of it and so is the development of a free trade agreement with the United States, which is significant, as well as a change in industrial relations and significant other measures of reform. (Time expired)17:11:002648King, Peter, MPMr KING00AMQWentworthLP10—It is with pleasure that I associate myself with the remarks of the honourable member for Mitchell and the comments that he has made in support of the New Business Tax System (Consolidation) Bill (No. 1) 2002. But it is possible that purists will lament this proposal, not because it fails to address a question of public importance but because of the fear that it will destroy the personality of every corporation in big business. Some people, it must be said, do marvel at the interlocking web of corporations in corporate groups and tremble, even, as they uncover the layer of agencies between them. It was Lord Denning, the famous law lord who said not so long ago, `There is the veil of corporate personality which protects the individual from any personal liability at all, and that is the fundamental principle of our company law.'It is that fundamental principle which is, in a sense, the subject of this current proposed legislation. The evils that it sought to address had been brought to the attention of the government, both by the business community and by the Australian Taxation Office for different reasons. So it was on 14 August 1998 that the Treasurer announced a review of business taxation. Subsequent to that time, he announced two further amendments to the proposals that he had made in both 1998 and 1999. What the Treasurer said on that occasion is worth repeating. He spoke of the need for a modern, competitive and fair taxation system. He spoke of the need for such a system in the contemporary business climate. Now that we are in the 21st century, that requirement is even more significant.A number of key changes were proposed at that time and, most importantly, the Ralph report was put into play at that time. The authors of that report, John Ralph, Rick Allert and Bob Joss—three leading members of the business community—conducted a thorough investigation of all the issues. There were two discussion papers and an information paper and there were a number of consultative meetings. They cooperated closely with Treasury and the Australian Taxation Office. An excellent report was delivered in July 1999 and then released by the Treasurer, following his announcement on 21 September.The key changes that were proposed by the government at that time were as follows: first, the lowering of the company tax rate from 36 per cent to 34 per cent for the 2000-01 income tax year and 30 per cent thereafter to amongst the lowest company tax rates in our region; second, improved incentives to save and invest by introducing an internationally competitive capital gains tax regime; third, a reduction in the compliance burden for 95 per cent of businesses and about 99 per cent of primary producers by the introduction of the simplified tax system; then, fourth, implementation of the entity tax arrangements outlined in the new tax system report prepared by Mr Ralph and his colleagues. Those are the matters that are the subject of the current legislation. The Treasurer commented that the new business tax system will make a significant contribution to reducing tax avoidance through the removal of complexities and anomalies and improved anti-avoidance measures.The government's response to the Ralph report has been brought forward in two stages—although the second stage has been extended. But before I go to the substance of the legislation I just wish to briefly comment on the nature of the reforms proposed by the Ralph report which are relevant to current debate. It is sometimes easy to overlook or forget the imperatives that drive particular reforms, particularly when they are complex and broad ranging, as are the present ones. The introduction to the Ralph report says:We are living in a time of unparalleled change. Australia must have a taxation system which equips it for the coming decades not for those that have passed. If we do not achieve this Australia will not enjoy the standard of living that this nation has the potential to deliver.Those words in July 1999 are even more true today. At pages 69 and following, the authors of the report described consolidated groups and the entity proposals which eventually have found their way into the legislation which has been brought before the House today. It is correct that there was some deferral of the bringing forward of the exposure draft, which was originally released in December 2000—although this was not proceeded with. On 7 February 2002 the Minister for Revenue and Assistant Treasurer released the New Business Tax System (Consolidation) Bill exposure draft and explanatory memorandum, which is now the subject of debate. Importantly, the ATO released its own commentary on its web site on 21 March, and I would encourage those interested in this topic to examine the interesting material that is on that site in relation to this matter. The significant features of the consolidation measures now before the House may be summarised as follows: firstly, the new tax arrangements will treat for income tax purposes only wholly-owned groups as single entities and will apply to subsidiaries that are companies, partnerships or trusts. These arrangements are due to commence from 1 July 2002. They will make it easier for companies to do business and encourage greater commercial flexibility within group businesses—for example, by allowing pooling of losses and credits and the tax-free transfer of assets within a group and fewer impediments to group restructuring by allowing assets to be moved between group entities without triggering a capital gain or loss and without the need to meet formal rollover commitments. According to the Treasury estimates this will save business about $1 billion over three years. The important provision is that the head company will pay the income tax liability for the whole group. I will come to the core concept shortly. Importantly, though, consolidation will not affect other obligations within the groups such as GST, FBT and PAYG withholding. May I come directly to the central issue which I wish to draw attention to in the current debate. In the explanatory memorandum dealing with chapter 2 of the proposals, the single entity rule, which is the basic principle upon which the legislation proceeds, can be found. It says:The income tax treatment of a consolidated group flows from the rule that an entity is treated as part of the head company while it is a subsidiary member of a consolidated group. Actions of the subsidiaries are treated as actions of the head company as this is the only entity the income tax law recognises for the purpose of working out the income tax liability or losses of a consolidated group.The consequences of this proposal for accounting and returns are very significant. The consolidated group will maintain a common tax accounting period for all its member entities. It will keep consolidated accounts for certain tax purposes—for example franking, losses and foreign tax credits—and it will lodge a single income tax return with no separate lodgment requirements imposed on its members. Furthermore, transactions between members of the consolidated group will be ignored for income tax purposes. On the question of liability, which I raised at the outset, the head company will be liable for the income tax related liabilities of the consolidated group that are referable to the period of consolidation.Lifting the corporate veil in commercial life is a very significant proposal. There are differing views about whether or not this is appropriate. But from the point of view of the current legislation the business community has been concerned, and its concerns were expressed very cogently in the Ralph report, because it was not able to bring to bear in its accounts and in tax returns significant losses which in effect made the group not as profitable as it would otherwise have appeared from the tax position of the head company or other companies within the group. So bringing to bear losses was an important consideration. A second consideration for the business community was the added costs and burdens of providing returns, often complex and often within interlocking webs, throughout the corporate group. From the ATO's point of view there were similar problems, but concern was particularly focused on the fact that it was necessary to identify the source of income on a group basis but referable to individual companies to ensure the proper collection of tax. What has been achieved is a compromise and it is a compromise which, in my view, is appropriate in all the circumstances. However, it must be said that in other areas of the law such compromises have been steadfastly refused. And it must be said, even in relation to the liability of some of the companies within corporate groups outside of the area of tax liability, that lifting the corporate veil will be completely impermissible. The tension between those two imperatives will be interesting in future as they are played out in the courts and perhaps in commercial life. So far as the Labor Party is concerned, it has singularly failed to address the problems of equity arising from complexities in the tax system in relation to business and to embrace the challenges and opportunities of globalisation so evident in the various submissions contained in the Ralph report. As was noted earlier by the member for Mitchell, the delegation from New Zealand, including the opposition's cousins in that country, comes from a country where in fact they have been happy to embrace measures such as these in relation to business taxation. In these circumstances I am confident that the government's approach is the correct one and that the criticisms implied and sometimes expressed from the opposition in some of the remarks that have fallen especially from the shadow Treasurer are without foundation.Let me conclude by remarking that it is my hope that the business community will embrace these changes. It is important that the business community do so, because the legislation contains an option in section 703-50 which must be taken up within the following 12 months after commencement of operation of the legislation. That option is in fact a challenge and an opportunity for Australian business. The politicians have delivered on business tax reform in spades—now it is up to the business community to begin the equally important task of making this legislation, which it has so long called for, work, not just for the benefit of the business community but for all Australians. As the authors of the Ralph report stated in their detailed analysis of the need for those proposals and as the Treasurer himself said in the press release in 1999 when announcing the various changes which are still going through this House, at the end of the day these measures are about equity, and it is on that basis that they deserve our support. Perhaps the last word on lifting the corporate veil belongs with Thoreau, who said a long time ago:It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience.In the spirit of that remark, I would say to the business community that it is up to you now to make this legislation work. It is up to you to do so in the same spirit in which the government has brought forward this legislation for the benefit of the business community as a whole.17:27:002650Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—in reply—I am certainly hopeful that the government will receive the support of the House in relation to the New Business Tax System (Consolidation) Bill (No. 1) 2002. However, prior to the vote taking place, I would like to say a few words to sum up what really has been a very positive and thought-provoking debate. The government is pleased that both sides of the chamber see the wisdom of this particular bill, and we anticipate a positive result when the vote is taken. The consolidation measure represents a significant change to the taxation of corporate groups. The bill introduces most of the key elements for an optional consolidation regime for certain wholly-owned corporate groups that will treat such groups as a single entity for income tax purposes. A phased introduction of further bills is planned for the remaining elements of the regime. The consolidation regime originates from the recommendation of the Ralph Review of Business Taxation, A tax system redesigned, that groups of wholly-owned entities be permitted to choose to be taxed as a single entity rather than on an entity by entity basis. The measures contained in the bill will address efficiency and integrity problems in the current taxation of wholly-owned groups, including ongoing compliance and general tax costs; double taxation where gains are taxed when realised and then taxed again on the disposal of equity; tax avoidance through intragroup dealings; loss-cascading by the creation of multiple tax losses from one economic loss; and value-shifting to create artificial losses where there is no actual economic loss. I listened carefully to the debate before the chamber, and I would just like to touch on some of the matters that were raised by speakers. Some speakers referred to complexity—and the member for Mitchell was one of those. We all know that there is some complexity now but a lot has been done to reduce that in terms of consulting with business and designing the law and administrative arrangements to suit them. The bill replaces some very complex areas of the existing tax law—the intercorporate dividend rebate rules, the capital gains tax roll over rules and the lost transfer rules—with a single more coherent structure. In any event, the complexity is outweighed by the benefits for business and this is why the business community has expressed support for the measure. It is also true that much of the complexity arises in the transitional phase. For stable mature groups the result should be a reduction in compliance costs, not an increase in complexity. I am very pleased to be able to assure the honourable member for Mitchell of this fact.It is illuminating to note that more than 99 per cent of small businesses will not be affected by the consolidation measure. The consolidation measure is a streamlining of the current tax system and that, of course, is to be applauded. It replaces the current incomplete set of grouping rules. The government has been working with the business community and their advisers to determine an appropriate approach for small business. Most people would accept that this is the correct way to approach this important matter. While there may have been some cost and complexity in the short term, in the longer term the consolidation measure should produce a better outcome for all business taxpayers. A number of the transitional measures in the bill make the change to the new system as easy as possible, especially for small business. These include simplified rules for assets in the transition phase and an extension of the existing grouping provisions for a further 12 months, with additional time for businesses and advisers to prepare.Finally, the tax office is providing a comprehensive package of information and support services to help businesses and their advisers to understand the measure. Again, it has taken some time since consolidations were first announced in November 1999, but this time has been well spent. This is the first time that the Australian Taxation Office used such an intensive consultation process in the design of the law involving the release of two exposure drafts and substantial documentation about how it is envisaged the measure will work. As the Business Council of Australia said in their press release of 7 January:The preparation of the draft legislation has been the subject of a comprehensive consultation process involving leading private sector tax experts. This represents a substantial improvement over previous practice and should result in a smoother implementation of the new system. The Institute of Chartered Accountants in Australia said:... the introduction into Parliament of the first package of legislation for the tax consolidations regime represents a milestone in the collaborative approach to tax law design. They went on to say:This package of legislation is a demonstration of the benefits achieved by seeking input into the drafting process from external experts. Later, the institute said:... the ICAA believes the increasingly open and constructive consultation processes adopted by the ATO in designing new tax legislation and administration arrangements augurs well for the future.PriceWaterhouseCoopers said:Our experience is that officials implementing consolidation are extremely responsive to well argued submissions. Ernst and Young said:The consultation process embraced by the Government and taxation community has proved to be successful in many ways. So while it has taken some time to bring the legislation into the House, I think most honourable members would accept that that time has been well spent. This is a very substantial measure and the government was really determined to make sure that we got it right. I am confident that we have, indeed, done so. In terms of whether government has lost by the delay, it ought to be noted that the government has introduced loss integrity measures in 1999 to prevent the creation of artificial losses prior to the commencement of consolidation. There is strong support for the consolidation measures because they are expected to create significant ongoing compliance cost savings to business by removing existing tax consequences for intragroup transactions 2V5Swan, Wayne, MP0V5Slipper, Peter, MPMr SLIPPER—The member for Lilley ought not to interject. He ought to listen; he might learn something about this particular area. We have a very good message to sell and the honourable member, I think, would benefit by listening diligently rather than by delaying me by, shall we say, pointless interjections. Overall, the consolidation measure is expected to reduce ongoing compliance costs for wholly-owned corporate groups. Consolidated groups will lodge a single tax income tax return, maintain a single franking account and will no longer have to account for intragroup dealings for income tax purposes. The measure will also remove income tax impediments to the restructuring of corporate groups. The consolidation regime will provide Australian corporate groups with economic savings by removing the double taxation of the same economic gain. The revenue will also benefit because the regime will improve the integrity of the tax system. In conclusion, I would like to thank the honourable member for Fraser for his support of this measure. I also note that in his speech he referred to the referral of the measure to a Senate committee. On behalf of the government, I would like to thank the member for Fraser for his early warning and his undertaking that, if the measure is sent to a committee, it will be dealt with speedily.Costings for the measure were provided in November 1999—quite some time ago—in the Treasurer's press release. Those figures have changed because of the deferral of the measure and other parameter changes. We will provide more information on the costings as soon as possible. In view of this and the fact that there has been so much information about this measure publicly available for so long, I am extremely doubtful that reference to the Senate committee will be necessary. I hope that the member for Lilley conveys that message to his colleague the member for Fraser. This is an important step, an important measure, a very important bill. I thank honourable members for their backing of the government's proposal. I commend the bill to the House.Question agreed to.Bill read a second time.2652Mr SLIPPER (Fisher—Parliamentary Secretary to the Minister for Finance and Administration) (5.38 p.m.)—by leave—I move:That this bill be now read a third time.Question agreed to.Bill read a third time.Bills2652R15502652Debate resumed from 16 May, on motion by Mr Anthony:That this bill be now read a second time.17:39:002652Swan, Wayne, MPMr SWAN2V5LilleyALP00—Before I speak about the detail of the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002, I want to make a few comments about the progress of welfare reform under the current government. Back in September 1999, an article entitled `Welfare payment cuts loom' appeared in a Saturday edition of Brisbane's Courier-Mail. It was a piece foreshadowing changes to welfare that would be announced by the then Minister for Family and Community Services, Senator Jocelyn Newman. The article outlined government plans to force parents off payments when their children turn 12 and the extension of mutual obligation to the disabled. The government's 2002 budget disability pension measure was foreshadowed. This was the extent of the vision of the Howard government on welfare reform at that time—an ill-disguised attack on the social safety net; a view that a gaping hole needed to be cut in the net through which tens of thousands of people were to be pushed. It is now a matter of history that Senator Newman was forced to shelve her welfare blueprint. It was put back and locked in her bottom drawer, and the government was forced to set up a consultative process to look at welfare reform in Australia. The McClure welfare reform committee was appointed with haste, and thus began the three-year charade to cloak the government's cold-hearted intentions to cut the heart out of our already frugal system of social security; that is, to get back to where they started—their original intention: to cut that hole in the safety net. We have argued, sometimes in vain, that the government was indifferent to real reform of the welfare system, to getting people into work if they have the capacity, to rewarding work over welfare and to building capacity. I do not think we need to convince anyone any more, because this bill in many ways takes us back to where the debate began. That is particularly the case when it is considered in consultation with the Disability Services Bill.This bill transgresses one of the central principles of the modest McClure report recommendations—that you cannot ask more of people without investing more. It is a clumsy attempt to extend the government's mutual obligation principles to parents and to the mature age unemployed. It delivers them into a system that breaches people who are complying with the rules and yet fails to catch the real rorters. It delays one of the only positive measures announced in last year's budget—not this year's budget—the working credit, which in itself does not represent a reform because it is a tool that was developed by the previous Labor government but abandoned by the current government. We were delighted when it emerged as one of the recommendations that was accepted by the government and announced in last year's budget because one of the central things that we must do in this country is reward work over welfare. So for the government in this budget to delay by six months the commencement of that measure, given that it was three years in the making, is a real testimony of their incompetence and lack of political will to reward work over welfare. In that time, we have wasted three years of unemployed Australians' lives and we have wasted many more opportunities that could have been there for the 650,000 disabled Australians, and we have had another three years of neglect of almost half a million parents in this country.What we have today in the parliament is the product of a lot of huffing and puffing. This bill was tabled more than 12 months after the Australians Working Together program was announced. And what does it do? It delays the investment further. Following this, as I said before, we will have a bill which implements indiscriminate cuts to the payments of 200,000 disability support pensioners. I assume the government is anxious to get this show on the road and through the houses of parliament. What I want to say today is that will not happen all that easily. While we will allow this bill to pass the House of Representatives today, I can assure you that we will be moving amendments in the Senate. You have run out of rope when it comes to welfare reform. We are sick of the promises of greater investment, when all you deliver is cuts. You know and we know that you have to make the investment to make a difference and save money, but you just want to save money—you do not want to make the investment.We have put our weight behind the McClure report because it did provide a pathway towards modest reform, but these two bills together throw McClure into reverse gear. You are now speeding backwards. Do not take my word for it; take the word of Patrick McClure, the author of the McClure report. We did not agree with everything suggested by the McClure committee but, in the interests of progressing real reform, we lent our broad support. But we cannot offer bipartisanship on so-called reforms that leave people behind, trap them on benefits and cut their benefits. I make the offer again to the government: if you want to get involved and work with us on real welfare reform, based on the principles of the McClure report, we will sit down with you—we will do it on a bipartisan basis—but do not bring measures in here which are not recommended in the McClure report and are not within the spirit of the McClure report, pretend they are real welfare reform, and then say you want to engage in some real reform and call for us to cooperate. We will sit down with you and we will agree on a program of real welfare reform which rewards welfare over work and which invests in the capacities of people, which is essentially the thrust of the McClure report, if you come to the party on those approaches. By and large, those approaches are not in this bill. Before I deal with some of the provisions in detail, I want to talk about the lack of consultation, which also demonstrates your lack of faith in joining with us to progress real welfare reform. You have not provided any time for us to scrutinise the legislation. You dumped it in the House at the end of the last sitting week—10000Wilkie, Kim (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Mr Wilkie)—Order! I remind the honourable member for Lilley to refer his remarks through the chair.2V5Swan, Wayne, MPMr SWAN—Yes, Mr Deputy Speaker. Those opposite dumped this legislation in the House at the end of the last sitting week, in the same way as they dumped the terrorism and security bills—massively complicated bills that have tremendous implications for the lives of people in our community and tremendous implications for their living standards—and expect us somehow to scrutinise them within a week and come back with a comprehensive response. We are not going to do that. We have the role in this House of holding the government accountable and of scrutinising legislation in detail. Because of your rude, arrogant approach to this legislation we have simply not had time to scrutinise it as we would wish. We will take the time to do that between now and when the legislation reaches the Senate, and we will come back with some considered approaches. I hope that by the time the government will have come to their senses and we can sit down and pursue real welfare reform. We warned the government prior to the budget that the start dates of some of the measures in the legislation would be put in jeopardy by their failure to table the bill earlier. It is a disgrace that these measures were announced well over 12 months ago in the last budget and that the legislation made it to the House of Representatives 12 months on. That is just grand incompetence. The minister should be ashamed of that performance and so should the government.It is now clear that one of the reasons for all the secrecy and procrastination was that the centrepiece of the government's 2001 welfare package on working credit was to be delayed. The consequence of the government's failure to heed the warnings is that there will be no opportunity to discuss or rectify issues we have with the bill because it was tabled only the week before last. We will use the processes of the Senate to ensure that proper scrutiny is given to the measures contained in the bill. If the Democrats join with us, it will inevitably lengthen the time it takes for the legislation to pass through both houses. The government will have to be content with that because of the way in which they have so mishandled the process of welfare reform.I want to turn now to schedule 1, which outlines proposed changes in relation to people in receipt of parenting payment. Broadly speaking, the schedule contains a new participation requirement for parents with a youngest child between the ages of 13 and 15. It is intended that these parents will need to participate in an activity of 150 hours duration over a six-month period; that is, six hours per week. The bill makes a very limited exemption for parents with a severely disabled child. The bill includes penalties for parents who do not meet their requirements. It provides that they may be breached and subject to more regular scrutiny to ensure that they meet their participation requirements. Labor have said before that we support the provision of additional support to allow parents to participate. However, at the time that the budget was brought down, we cautioned that that participation should not be at the expense of their parenting responsibilities. While we note that some thought in the legislation is given to this issue, we are certainly concerned that that thought does not go far enough. We are concerned at the restrictive definition used to create exemptions. There have long been problems with the government's classification of child disability, and there are tens of thousands of families around the country who can attest to that. Given those problems, currently the only grounds proposed for exempting parents from activity tests relate to the classification of child disability. We have serious concerns about that process. Also, I am not sure that the activity testing regime itself is money well spent. The 400,000 people who receive the parenting payment single allowance already have a very high rate of participation in education and training, yet the government are proposing a system that monitors everyone, instead of just those with older children who may be at risk of failing to make a successful transition to work when their children are older. We will want to discuss those measures with the government and with the people who are affected. We simply have not had time to look at them in the detail that their seriousness requires. The government do not have a good record in this area. When you look at the figures relating to lone parents it is easy to see that the very harsh cuts that the government engaged in in their 1996 budget removed a considerable amount of support from this group and trapped a significantly large number of them on welfare.DK6Hockey, Joe, MPMr Hockey—It was because of your black hole.10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—Order! The minister should be reminded that he is not in his seat—2V5Swan, Wayne, MPMr SWAN—No, he is not—10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—and that his interjections are out of order.2V5Swan, Wayne, MPMr SWAN—and he has got the gear stick in reverse. He is racing backwards on welfare reform! One of the reasons why there has been a significant increase in the number of lone parents on benefits in this country is precisely the cuts that the minister was part of in the 1996 budget. Had he maintained existing programs he would have had a lot more people moving from welfare to work. Those cuts created a very significant welfare trap. There is one thing that the government are champions at: creating welfare traps. They go around the place, talking about incentive. It is one of the key principles that they like to say that the Liberal Party stands for. But when you examine the taxation arrangements they put in place only 18 months or so ago you see that they punish people financially for moving from welfare to work, including lone parents. In particular, they punish unemployed people even more severely when they attempt to move from welfare to work.The reform of the tax system 18 months ago was supposed to provide incentive so that people would receive more money from working, but they left in place a taxation arrangement of 70c in every additional dollar earned over the threshold for someone on Newstart allowance. How is that rewarding work over welfare, Minister? You have one set of incentives for the people at the top end of town; it is good for them to get a big tax cut but, when it comes to the people at the bottom end of town, what do they get? They get financially punished when they attempt to stand on their own two feet and provide for their own families. That is not welfare reform.DK6Hockey, Joe, MPMr Hockey—What did you do to real wages?2V5Swan, Wayne, MPMr SWAN—We had a working credit and you have had to bring it back and put it in the budget. This measure in the budget which you have just delayed six months is simply the resurrection of a scheme that the Labor government had while in power so it could reward work over welfare. However, someone on your salary with your background representing your electorate would not have a clue—10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—Order! I again remind the member for Lilley to refer his remarks through the chair and I remind the minister that he is not in his place and he is not to interject.2V5Swan, Wayne, MPMr SWAN—He is always out of place. The place the minister really likes to be is at the boardroom table because he hasn't got a clue what is going on at the kitchen table. He is like the Minister for Family and Community Services: he spills more red wine in a day than he is going to take from a disability support pensioner in a fortnight when they are moved from the pension to Newstart allowance. That is why we get so angry about some of the measures in these bills. It is the double standards of this government. If you are on eighty grand or eighty five grand a year they will put a tax cut for you in the budget, but if you are on a disability support pension you get cut $52 a fortnight. That is the double standard of this government. There are cuts to the incomes of those on low incomes and big tax cuts for people at the top end of town. This minister spends so much time watching the share market, he has not got a clue what is going on with prices at the supermarket. However, I will return to the bill. DK6Hockey, Joe, MPMr Hockey—Who gave you that line?2V5Swan, Wayne, MPMr SWAN—You did, Minister, from observing your behaviour in this House. It is pretty easy, actually. It is pretty typical of most ministers on the front bench because that is where they come from. They do not have a clue what life is like in the real Australia. You would not know. You would not have the faintest idea what it is like in the real Australia; you wouldn't have a clue.DK6Hockey, Joe, MPMr Hockey—You've never had a real job! Have you ever worked in the private sector?10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—Order! The Minister!DK6Hockey, Joe, MPMr Hockey—He has never had a real job.2V5Swan, Wayne, MPMr SWAN—Are you trying to emulate the Minister for Employment and Workplace Relations by being absolutely obnoxious? Is that what you are attempting to do?10000DEPUTY SPEAKER, TheThe DEPUTY SPEAKER—Order! The minister will cease interjecting as I have instructed and the member for Lilley will refer his remarks through the chair.2V5Swan, Wayne, MPMr SWAN—Thank you for your protection, Mr Deputy Speaker. The 400,000 people receiving parenting payment single are a group with a high rate of participation in education and training already, yet the government is proposing a system that monitors everyone instead of just those with older children who may be at risk of failing to make a successful transition to work when their children are older. The notion of social participation put forward in this bill also raises some concerns, most importantly how the government proposes to monitor people undertaking volunteering and other activities.Schedule 2 establishes a tax exempt language, literacy and numeracy supplement of $20.80 per fortnight to assist people undertaking approved language, literacy or numeracy training and who receive one of the following payments: disability support pension; mature age allowance; Newstart allowance; parenting payment; partner allowance; widow allowance or youth allowance. We have no problem with this measure.Schedule 3 establishes the personal support program—PSP—which replaces the community support program—CSP—something which ministers on the other side would know nothing about. I might add that one of the indications of how out of touch that side of parliament is is that on the speakers list for the two bills we are dealing with today, which affect more than one million Australians, you are lucky to see two speakers from the government. They think welfare reform is so important that nobody from the government can even come into parliament and support it. That is just an appalling show and an indication of what a low priority these bills have with this government.There are a number of issues here that need to be looked at, most notably the inclusion of PSP activities within participation agreements and the fact that this may result in the government mandating participation that is social rather than economic. We want to look more closely at the way this program will operate to ensure that those who are homeless or extremely disadvantaged are not exposed to indiscriminate breaching. Early last year this government was involved in indiscriminate breaching, which even the Minister for Family and Community Services admitted, which caused a flood of people into the services operated by organisations like St Vincent de Paul. When St Vincent de Paul put its hand up to say to the government, `Look, this is just a huge social tragedy,' they were abused by the minister who said they did not understand poverty. That is how out of touch this government is with what is going on in our community. Schedule 4 seeks to abolish the mature age allowance and the partner allowance. The abolition of the mature age allowance is extremely regrettable. Schedule 5 seeks to establish new participation requirements for those who would formerly have received mature age allowance and who will receive Newstart if this bill is passed. These requirements are intended to be more flexible than those applicable to other Newstart clients. Modified breaching rules are also included. I note the intention to save current recipients receiving this payment. However, it is unclear whether new applicants for Newstart who are in the age range now covered by mature age allowance will be on a similar wicket.This is the broader problem with the government's approach to a common work force payment. Rather than work over time to bring everyone up, they seem determined to reduce everyone down to the lowest common denominator. That is what we are getting with DSP, and that is what papers that we have seen internally from the government show they are intending to do in other areas, particularly when it comes to lone parents. Most of our mature aged unemployed are people who have worked hard in tough, blue-collar jobs over their working lives. They have paid taxes and deserve our support, not a kick in the teeth. The application of mutual obligation to this group, and with it the threat of breaches, I think is significantly at odds with community opinion, and it will be something that we will be scrutinising very closely. I just wish the government backbench was scrutinising it as well, but apparently not. These matters are not of concern to them. In this regard, the use of participation agreements should be about targeting support and assistance, not tripping people up in order to save money. I am not sure this bill has the balance right in this area.Schedule 6 introduces the working credit, which is, as I said before when I was educating Minister Hockey, simply a modified implementation of what was announced in the 2001-02 budget, and the credit is of course similar to Labor's earnings credits scheme. Can I record my disappointment that this measure is being delayed. It is one of the few measures announced in the last budget that will play a positive part in people's return to work, because it recognises that this government has created a welfare trap in its new taxation arrangements which does punish people who do what the government says it wants them to do, which is to work. And that punishment, sadly, is going to continue for another six months.Schedule 7 contains an amendment that enables Centrelink to better record family homelessness. It amends the Social Security (Administration) Act and the A New Tax System (Family Assistance) Act. If privacy considerations are addressed sensitively, this is a welcome measure. It advances Centrelink's ability to identify people at risk, ensuring they are less likely to slip through the cracks. I am concerned that the delayed passage of this bill may affect the start date of this measure; however, our overriding concern with other measures may necessitate that.Before concluding this evening, I want to make a couple of comments about breaching. We have in this legislation a different approach to penalties. There has been an attempt to address the situation of parents and older unemployed people. My reservations earlier point to the fact that we do not necessarily believe that the government has got that right yet, and we certainly want to spend some time looking at it. I would add to that the belated recognition by the government of the problems its indiscriminate approach to breaching has caused.There is clearly a gross imbalance between the level of breaching activity and the incidence of wrongdoing on the part of job seekers and other income support recipients. The government has recognised that its system has not been ensuring compliance but trapping people in red tape and certainly hurting thousands of others. It is not good that the government has too quickly dismissed many of the suggestions made by Professor Pearce in his independent report on breaching. We want to spend a lot of time looking at what the government is proposing and at how that lines up with what Professor Pearce and his group came up with. This report of Professor Pearce's spends a lot of time focusing on compliance. The government has consistently claimed that its breaching policies are not about revenue raising. Every week over the last couple of years—since 2000—we have had a press release from this government, boasting about how tough they are on cracking down on welfare fraud. So it was somewhat stunning when the Minister for Employment Services last week came out and said that there were 100,000 dole bludgers in the system. If there were 100,000 dole bludgers in the system, what has the Minister for Employment Services been doing for the last three years? What has the Minister for Family and Community Services been doing for the last six years?If there is a big problem in the system, you have caused it. It is your system. Remember, you are in government. You cannot continue to campaign and vilify the unemployed, people on disability support pensions and lone parents as if you are not in government. If there is a major problem there, it has been created by you, by your own policies. That was one of the greatest own goals that has ever been kicked by any minister in any government for a very long period of time. It points to the fact that, instead of engaging in real welfare reform, what this government does consistently is go out there, create smokescreens and diversions and find another group that they can pick on and vilify in the community so that people will not actually see what they are not doing in bills like this one. That has been the strategy of the government.Nobody in politics supports people rorting the welfare system. Just as the Prime Minister said in the House yesterday that we on both sides of the parliament are on the same track in terms of the evils of drugs, it is the same when it comes to welfare fraud. But what this government wants to do is go out there and attack vulnerable people, because its policies are simply out of whack with its rhetoric. That could never be demonstrated more than when you look at what the government has not done in these bills and what it is intending to do particularly to disability support pensioners. Since when is helping people move from welfare to work done by cutting their income by $52 a fortnight? How does that help someone get a job? It most certainly does not.No side of politics should tolerate welfare fraud. We did not in government and in fact established the data matching programs that ensure compliance and weed out fraudsters. In fact, there is a fair bit of evidence that the government has actually cut back in its front-line fraud detection staff in recent years. But when our systems are chewing up Centrelink staff's time on appeals and costing people on very low incomes, who are trying to play by the rules, we might just have to admit that maybe there are some problems in the system.There are serious cracks in this welfare system. It is seriously in need of reform. There are cracks in the system restricting the ability of people to move forward. We made this point substantially in our submission to the McClure committee a couple of years ago. We have outlined a set of principles which we can support. We are pleased that many of the suggestions that we made in our submission were in fact included in the McClure report. We are delighted that that is the case. That is why we say that, if this government walks away from some of the sillier, harsher measures in these bills which are not consistent with the McClure process, we can sit down with the government and chart a course for real reform—for reform that rewards work over welfare and for reform which respects the capacities and dignity of people to participate in our social and economic life.That is not contained in these bills. There are bits and pieces: some good bits, some silly bits and some bad bits. Let us get rid of a lot of vilification and scaremongering and let us sit down and genuinely reform our welfare system. Parts of that process are included here; none of that process is included in the disability support services bill, which is why we are going to oppose it outright and why the government should dump it before it goes any further. In the interests of making a fairer and more cohesive Australia, this country and this parliament deserve real reform of our social security system—one which rewards work over welfare, one which respects the dignity of individuals and one which invests in their capacity to stand on their own two feet so that they can look after their families and get a fair go. That is where we will be; that is where the government ought to come to. 18:08:002659Pearce, Christopher, MPMr PEARCEA8WAstonLP10—I rise tonight in support of the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002, which puts into action initiatives from the government's Australians Working Together package. Before I talk more about the bill, I would like to express my disappointment about the comments that the House has just listened to. I regret the fact that the member for Lilley finds it so necessary to be so negative about this particular initiative, and I am disappointed by that. We heard the member for Lilley talk a lot about his view that this government is punishing people. He is a member of a group of people that, when they were in government for 13 years, went about systematically punishing almost the entire Australian community. I remind the member for Lilley that home loan interest rates got up to 17 per cent. I can recall the time I undertook my first mortgage. My wife and I were stunned at how much interest we had to pay during those years. I felt very punished. I also remind him about the state of Australia's economy during those years: the lack of economic growth, the level of unemployment and the level of government debt. We heard today how this coalition government has now repaid $61 billion of Labor government debt. I felt very punished throughout those times, as I know millions of Australian felt punished, because of all those things.However, we are tonight talking about the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002. In fact, this bill covers seven key areas. They include: parenting payment participation agreements; language, literacy and numeracy supplements; the Personal Support Program; closure of access to mature age and partner allowances; flexible participation requirements for mature age Newstart recipients; the new working credit scheme; and the new Family Homelessness Prevention and Early Intervention Pilot. This list highlights the very comprehensive nature of this bill.The Australians Working Together package, which was announced in the 2001-02 budget, will invest almost $1.7 billion over four years to help modernise Australia's welfare system. Initiated by the Howard government, Australians Working Together is part of the government's commitment to delivering better outcomes for our social support system. This is a good news story. This is a new program, a new initiative, that will help Australians. The focus of the Australians Working Together package is finding the right balance between incentives, obligations and assistance in helping people to get a job. Helping others in need has long been part of our Australian way of life. Governments have always had a very large role to play in that. In fact, each year the Commonwealth spends over $20.8 billion to provide income support for over 2½ million people of work force age. It goes without saying—and I think we almost have the agreement of the opposition—that there is need for welfare reform.We need to do this for several reasons. Firstly, we need to address the increasing number of working age people on income support. Between 1965 and 1998, the proportion of the work force age population on income support rose from five per cent to 22 per cent. Also of concern is the fact that some 68 per cent of people of working age receiving income support in 1995 were still on payments in June 2001. The second concern is that long periods on income support can lead to multiple disadvantages. In this area, those particularly affected include indigenous Australians, people with a disability and lone parents. As of June 2001, some 845,000 dependent children were living in jobless families. Around 61 per cent of these children were in lone parent families. The third concern is that spending is becoming unsustainable. Australian spending on welfare payments has more than doubled, from three per cent to seven per cent of GDP since the 1970s. Over the next three years, Commonwealth welfare outlays are expected to grow by more than 10 per cent. Doing nothing is not an option. It is these concerns that are driving the Howard government's commitment to reforming our welfare arrangements to deliver a more modern and responsive system that encourages people to engage in the community and to actually make a contribution. In response to the need for reform, in 1999 the Howard government established a reference group chaired by Mission Australia CEO, Patrick McClure, to advise the government on possible approaches to welfare reform. The government also released a discussion paper in late 1999 entitled `The Challenge of Welfare Dependency in the 21st Century'. This was aimed at stimulating debate about welfare reform in Australia. In August 2000, the reference group on welfare reform released its final report. The report set out five areas for action. They were: the need for individualised service delivery, the need for a simple and responsive income support structure, the need for incentives and financial assistance, the need for mutual obligations and the need to enhance social partnerships. Importantly, the report also outlined the three key aims of welfare and the welfare reform process. These aims are: to achieve a significant reduction in the incidence of jobless families and jobless households; to achieve a significant reduction in the proportion of the working age population that needs to rely heavily on income support; and to grow stronger communities that generate more opportunities for social and economic participation. They were the aims, and they are three great aims to have. It is important to keep in mind this significant framework when considering welfare reform initiatives.The Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002 is an important first step in Australia developing a modern and responsive social support system for people of working age. Australians Working Together is a whole of government package of measures which balances expanded assistance with improved financial incentives, assistance to work and train, and modest changes to requirements.The new working credit in this bill will encourage those of working age to enter the work force in either full-time, part-time or casual employment. The initiative will allow people to build up credits at times when they have little or no income, credits which they can use to keep more of their payments when undertaking employment. The working credit also makes it easier for people to access payments if they lose their job within 12 weeks of payments stopping. The working credit is another way that the Howard government is encouraging people to engage in the work force, both for their own good and for the benefit of the wider community.We heard from the member for Lilley that the new working credit is in fact a previous Labor policy that is being reintroduced. The fact of the matter is that it is not the same policy that is being introduced; the working credit is a new initiative in this bill and it is quite different from what Labor had. For example, all people of work force age on income support will have access to a working credit limit of $1,000. This is more generous for allowees than the scheme that Labor operated. The previous scheme had different limits; for pensioners it was $1,000 but for allowees it was $500. Our new working credit limit provides a credit limit of $1,000 for all people of work force age.Parents, both partnered and single, often face significant difficulties in returning to the work force when their children are older. This is generally due to a lack of recent experience, skills and contacts, but there are many other reasons. This bill introduces a part-time participation requirement to encourage and help parents prepare to return to work as their precious children grow older. The requirement will apply to parents receiving payments with a youngest child aged 13 to 15. The requirement will be to undertake one or more of a broad range of activities for up to a maximum of 150 hours in a six-month period. Often people in our community face non-vocational barriers—barriers like homelessness, drug and alcohol problems, mental illness and, regrettably, domestic violence. These people are not generally able to participate in employment activities or to benefit from the employment assistance available. As part of this bill, the government is replacing the current Community Support Program with an expanded Personal Support Program. The new program takes a more flexible approach, encouraging social participation as much as economic participation to help participants stabilise their lives and become engaged with and contribute to their community over time. The bill also supports income support recipients undertaking language, literacy and numeracy training by providing a fortnightly supplement to cover the incidental costs. For many families, the cost of child care can be a significant obstacle to getting more involved in training and other activities in their community. This bill helps parents by simplifying the process for accessing child-care assistance. Those people who receive non-activity-tested income support payments face a greater risk of long-term dependence than those receiving activity tested payments. In view of this, the bill provides for the closure of access to mature age and partner allowances, which have no provisions for requiring, encouraging or facilitating participation.This bill also provides assistance for Newstart allowees aged 50 and over in improving their labour market prospects, by providing greater flexibility and support in the assessment of barriers, the development of participation plans and referrals to programs. Finally, the bill enables the use of Centrelink customer data to be used in the new Family Homelessness Prevention and Early Intervention Pilot. The pilot aims to identify families at risk of homelessness and assist them in regaining stability in their housing and financial circumstances, which I am sure all members of the House would agree is a very important objective.The government has consulted widely with the community on the development of Australians Working Together to ensure that it is most effective in assisting Australians to return to work and prevent welfare dependency. Forums were held in 43 locations across Australia, focus sessions were convened with people who currently receive income support, and the government received over 90 written submissions on the reforms. But the government has not stopped there: the government has established a consultative forum as part of the ongoing dialogue with individuals and organisations on the very important area of ongoing welfare reform. In short, Australians Working Together will provide better personalised assessment and service, more opportunities for training and work experience, and better incentives. It will allow for greater encouragement to increase earnings. It will also provide reasonable requirements for people to find work or to help and contribute to their local communities. It is important to remember that the issues and solutions that we are debating are not isolated to Australia: both the US and the United Kingdom are undertaking similar welfare reform strategies which share the three-pronged approach of improved financial incentives to take up work, increased obligations on job seekers and expanded services to help job seekers get a greater share of available jobs.Finally, in debating this bill, I think that it is important to consider the actions of those that oppose it. Any delay in the passing of this bill will adversely affect the Australians that it is indeed intended to help. People undertaking language, literacy and numeracy training will not get the supplement in time to help them with the incidental costs of their training and there will not be enough time to explain to people how the working credit works, an important consideration which came out of our community consultation process. To ensure that those in need are best helped, I would urge the parliament to pass this bill without delay so that Australians Working Together can be put in place and Australians can enjoy the benefits that this program will bring. The Howard government is serious about achieving genuine reform, reform which delivers practical benefits to all Australians. This bill is only the first step in the process but, Madam Deputy Speaker, as you more than well know, every journey must begin with a first step. This is an important package of programs and initiatives. It is a package that has been developed through intensive community consultation. It is a package that will help Australians. It is a package that I commend to the House and a package on which I would ask the opposition to support us. 18:25:002662Lawrence, Dr Carmen, MPDr LAWRENCEXS4FremantleALP00—There are abroad a whole range of arguments and policies already derived from the concept of mutual obligation and indeed from welfare dependency, and that is what we are seeing at least in part of this bill, the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002, and I believe it has the potential to be very destructive to the new group that is included—single parents. I guess I have to declare an interest here: for five years of my son's life I was a single parent, so I think I understand the circumstances of many of the people that you are trying to draw into this very unattractive program. What is happening here—as has happened with the unemployed—has the potential to turn what I would regard as a reasonable contract between citizens and their government on its head.One of the leading proponents of mutual obligation, who I think was indeed brought out here by the government—Lawrence Mead—defines mutual obligation as `the idea that the needy'—it is back to the old charity days—`should receive aid, but only in return for some contribution to society and not as an entitlement'. I might ask: what is bringing up a child if it is not a contribution to society, particularly at the moment when we are hearing people screaming about the declining fertility rate? I would have thought that bringing up a child satisfactorily was probably the most important thing any human being could do.We have also heard the Prime Minister's construction of mutual obligation. He says that those in receipt of assistance should give something back to society in return. Again I ask the question: who is suggesting that single parents are not giving something back to society? In fact they are giving a great deal more than partnered parents, because they have only half the manpower or womanpower to do the job. What we are looking at here is a new paternalism, and it is described that way by Lawrence Mead. It is the government telling you how to live your life—an intrusion into your daily life and into the choices you might make.There is a view that has been encouraged by the current government—indeed they have paid for a lot of opinion polling to support this—that people on pensions and benefits really do not want to work and they will not make the transition back to work without the threat, and imposition, of penalties by the government. That is what they mean by the `new paternalism'. It is assumed at base that welfare benefit recipients have a negative attitude to employment generated by what the government call the `culture of dependency' which flourishes when people require financial assistance from government to survive because, for example, they are unemployed or sole parents or disabled. The government seem intent on pushing what is essentially a punitive agenda—it does not matter how much you dress it up in bland language—rather than having a policy goal to improve opportunities for those in receipt of financial assistance.We have seen a steady shift away from what is described as `a rights based system', with entitlement dependent on limited eligibility criteria, to one where payments are highly conditional on individualised and quasicontractual arrangements between the benefit recipient and the government—and if you get the contract wrong, you are in deep trouble. While most people—and I am one of them—would agree on the need to provide services tailored to individual needs and circumstances, I think it is true to say that the trend toward individualised relationships in social welfare is in danger of undermining rights of entitlement which accrue from generalised citizenship. It is interesting that only some people have to meet the payment. Mutual obligation does not apply to everybody who is in receipt of benefits from the government; it is highly selective. On the other side, any failure by government—and there are many—in delivering its side of the bargain and its side of the contract does not attract any penalty at all. What is the penalty if the government does not provide the services it claims it will? There is often no public disclosure of that failure either and very little in the way of public outrage, but if someone on unemployment benefits or a sole parent engages in breachable offences everybody gets to hear about it and they certainly get punished. The recipients of benefits in any case are amongst the most disadvantaged in our community—in every sense, including access to the media. They do not get to complain on A Current Affair or on the 7.30 Report but the government certainly can. Indeed, they are more likely to be pilloried at the moment than assisted. The minister responsible calls them `job snobs' and with his colleagues encourages the view that they deserve their fate—`They have really brought it upon themselves'—and that they are losers, this latter insulting Americanism gaining increasing currency in the Australian vocabulary.As I said earlier, I am not opposed to the idea that the recipients of taxpayers' funds have a responsibility to use those funds to the best advantage of themselves, their families and their communities. That is a reasonable contract between the government and its citizens. But this should be true whether they are sole parents, farmers in receipt of agricultural subsidies or businesses given tax breaks for investment purposes. And the latter two groups are not punished if they fail to deliver in quite the way the government envisages. For unemployed people, obviously, and now apparently for sole parents, that should mean providing for themselves and their families, looking for work, improving their education and maximising their employment opportunities. That is very important. But being punished for failing to do it in the way the government suggests I think is unreasonable.We have seen in the recent Pearce report, which has looked at breaching and mutual obligation requirements for the unemployed, some of the effects on that very disadvantaged community. In summary, it said that the system's operation was arbitrary, unfair or excessively harsh. It went on to say that it actually may diminish people's capacity to seek work because they do not have the resources to do so. It indicated there was often very poor communication with job seekers, an inappropriate selection of activities, undue rigidity in its administration and too little training of the staff. And yet we are going to impose this now on another group: sole parents.It said that breaches were often made without regard to the law or without sufficient investigation and consideration of individual circumstances. It noted the fact that some—because of homelessness, uncertain accommodation, literacy and language difficulties, physical or intellectual disabilities or mental illness—are actually unable to understand and to comply. In other words, there was no reasonableness in assessing breaches as required in the statute. And I might mention there are very high levels of breaching of indigenous people as well for many of the reasons I have just outlined.Job seekers in these circumstances, the Pearce report found, incurred substantial financial hardship from breaches, breaches which were often minor, inadvertent and in many cases did not indicate deliberate intent. People were forced to fall back on support from relatives—emergency aid indeed—something that may not be available for sole parents, when you think about it. A lot of the unemployed are younger people, who probably can fall back on their parents. Where does a sole parent go if they are breached? Some of them have to go to the charities, often the very same charities who were indicating that they should be breached—a bit of a dilemma for some of the churches and charities in our community, one which they have not satisfactorily resolved. Many of them in fact turn up at MPs offices when they have nothing with which to pay the rent or the electricity bill. And it pushes some people, according to the Pearce report, into illegal or unsafe earning. I presume that is code in some cases for prostitution; for drug dealing. That is a terrific outcome! Penalties may make it, as it said, even more difficult to seek work. It described the penalty regime as excessively harsh and unfair. The durations and rates of reduction in benefits are harsher, it observes, than penalties imposed for some criminal offences which threaten bodily harm and they often trigger extra penalties—bank penalties; utilities cut off. There is, according to the Pearce report, insufficient coordination and cooperation between key government agencies and conflicting messages to people. This system is now going to be applied to sole parents, a system that is clearly not working in the first place. I make the observation that, like the unemployed, most single parents are not volunteers to that condition. They do not start off that way; they start off as a couple.The analysis and the solutions provided in this bill in relation to sole parents are simply wrong-headed and it appears that the government has abandoned the idea that the state has a collective responsibility for the wellbeing of all of its citizens. Apparently only some of its citizens fall into that category. By trying to make people entirely accountable for their own situations, they overlook policy changes which might actually support them. Broader rights and responsibilities for citizens have been replaced by compulsory contractual relationships, as I have indicated, and they would in this bill, too, with behavioural criteria imposed as a condition of benefit receipt. Who makes those judgments? Not the individuals concerned. Although they are supposed to be in agreement, it can be changed arbitrarily by the secretary of the department.The necessity of reintegrating the allegedly welfare dependent underclass into the community for some people provides the justification for mutual obligation and the concept of rights without responsibilities. You will hear all of that talk. Unfortunately, as I have said, there is no reciprocal obligation on government to ensure that there are enough jobs, and that is the key to all of this. Getting sole parents back into the labour market is important for their own sakes and for their future income security but doing it this way is not going to help at all when for every job there are approximately seven job seekers. We are simply going to add to that pool, even if the amount of work involved is relatively small.With this analysis, persistently high unemployment and underemployment are always said to be the result of labour market inefficiency: `Wage levels are too high; the trade unions interfere; the welfare policies create dependence.' The government—and others, I have to say—have been fixated by these supply-side measures. They are interested in full employability: making people job ready. But where are the jobs? They are not interested apparently in full employment. That is to be traded off. So you have a pool of ready labour. And what happens in those circumstances is that costs fall disproportionately on the most disadvantaged in the society.These individualist explanations and individually tailored explanations of unemployment are very convenient. They absolve the government of responsibility. Unemployment, in other words, has been rendered an individual problem. `If only you train up a bit and motivate yourself a bit more and look for jobs a bit harder, everything will be fine.' It is a fallacy to blame the unemployed, whether they are young job seekers or sole parents—who actually have double the rate of unemployment of the rest of the community, so they are looking for work as well—for failure to provide jobs. The ratio of unemployment to unfilled vacancies over the last 20 years has been approximately 11 to one. As I said, it is currently running at six or seven to one. The unemployed and sole parents cannot find jobs that are not there. There is an insufficiency of jobs.The supply side's explanation for unemployment looks at the attitudes, motivations and skills of the `job snobs', as the minister responsible describes them, and the `cruisers', as the other minister responsible describes them. We are told that it is the generosity of the welfare system that is eroding individual incentives. They seem to perceive dependence on benefits as an individual preference. In my experience, that is very rare. The minister responsible, the Minister for Employment and Workplace Relations, says: The role of the welfare system in creating and sustaining unemployment has been one of the great unmentionables of the Australian public debate... it required powerful incentives for long-term job seekers to take jobs that are there as well as new types of work for people who can't readily find paid employment.That claim simply does not stand scrutiny. As I say, the ratio is seven to one.The relentless imposition of active labour market programs designed to force the unemployed to churn through the training programs or compliance programs like Work for the Dole is simply not providing a solution to unemployment, and it certainly will not help sole parents. The real problem is constrained aggregate demand. The assumption behind many of these schemes is that there are enough jobs available if only people would take them up. In my view, the problem is not with our social security system or with sole parents or with the unemployed, but with the labour market. It is not that people do not want to work or have become dependent; it is that there is not enough stable full-time work—and I underline `stable'. It is possible to get short-term, casual jobs and churn through them. Many people do that. Many sole parents do that. That is why women are notably in poverty in our community. The mutual obligation rhetoric is too easily used to make those on unemployment and other benefits appear to be responsible for failings in our system which are beyond their control. It is much easier to blame the victim. Much of the growth in jobs has been in low-paid part-time and casual work. So the jobs that are available are increasingly in that sector of the labour market. I am sure you are all aware that those in work often find themselves in poverty and in receipt of supplementary benefits. They are the so-called working poor—very familiar in the United States and increasingly familiar here. Adding sole parents to the labour market will increase competition for jobs. I think it will increase desperation among job seekers, and people may indeed be prepared to work for less and less and work under more onerous conditions.Mutual obligation contracts are latently coercive and repressive. This is not an equal power relation between the state and the individual. I think vulnerable citizens have a lot to fear from coercive case managers and overzealous and rigid bureaucrats, especially if they do not have any rights of appeal. In my view, there is far too much emphasis on the obligations of recipients and their failings and not enough emphasis on expanding opportunities, on encouragement and on involvement of those needing financial assistance. The McClure report, and now the government's response to it, had the effect of redefining carers, particularly sole parents, as people who should be supporting themselves through paid work or preparing for it through education. We now seem to have abandoned the idea that people who provide care or people who need care should reasonably be in receipt of income support in recognition of the additional restrictions and obligations they are already dealing with. Being a single parent is not easy. As Elspeth McInnes points out, mutual obligation redefines unpaid care relationships often provided within families as a dispensable private luxury and puts involvement in the labour market ahead of that—but only for some people; not for partnered parents, one of whom could quite happily stay home and indeed would get a tax benefit from that.This bill, based on those principles I have outlined, provides for those on supporting parents benefits with children between 13 and 15 to take part in approved activities for 150 hours every six months. Not all of these, of course, are workplace related, but many of them are. These activities have to be part of an approved program of work which forms a participation agreement with the employment secretary—who, by the way, can vary that agreement at any time. Failure to enter into an agreement will result in a loss of benefit for 13 weeks. Failure to comply with an agreement will result in an eight-week breach. And all this for an additional $20.80 a fortnight. That is really extraordinary.I am deeply concerned, as I hope all members of parliament are, about the extension of breaching provisions to single parents, particularly because of the effects on their children. Of course we need to help move sole parents out of poverty traps and avoid long-term poverty. But the government wound back the effective and popular transitional and retraining programs for women out of the work force and there are now long waiting lists for those programs. To me, it is counter-intuitive that bullying and punishing people will make them confident and independent job seekers—it will do the reverse. Sole parents feel their parental responsibilities just as keenly as partnered parents, and they have additional responsibility. They might be a favourite target of the US guru Lawrence Mead, the promoter of `new paternalism', but the circumstances are very different here in Australia. Despite Mead's claims, data from the US show that forcing sole parents into work does not necessarily improve their financial circumstances. As I say, there is too great an emphasis on compulsion, on compelling sole parents to take up further social and economic participation, regardless of the interests of the child—and that is the important point. Australian Bureau of Statistics data show that half the sole parents are already in the paid work force. So why the moral panic? The unemployment rate, as I have suggested, is high. So many of them are looking for work as well. If you add the figures together, 72 per cent are either undertaking work or study in any 12-month period. Furthermore, the average duration on parenting payment is three years. They are not staying on parenting payments for very long periods. They are actively seeking work and they are involved in the education system. Research by the ABS and FACS shows that sole parents have a higher degree of participation in the voluntary sector than any other group of beneficiaries, except those on Newstart who are, in many cases, being forced to do so. I think it is important to be reminded that we are all taxpayers at some time in our lives, depending on the care of others. There is a bit of an argument that says that mutual obligation is necessary because one group of taxpayers cannot be expected to support another. But we are all in one category or the other at some period in our lives—typically both, especially with the GST, where the burden falls most on low-income earners.These measures appear to be based on the assumption that parenting needs tail off when children reach adolescence. I think the reverse may be true. That may indeed be the most difficult period for parents. It misunderstands the dynamics about people becoming sole parents. It is not that they have been sole parents since their children were babies; this may be exactly the moment when they become sole parents—when their children are 13 to 15. The trauma of separation or death is the moment you will be forcing them back into these activities, when their children need them most and when they need the most time. So there would be a great deal of stress and unresolved tensions. Adolescence is a time of great need for children, with tensions regarding independence, peer pressure, and so on. Whether you are talking about bullying, truanting, school leaving, minor crime, drug and alcohol issues or sexuality, most parents worry about this period more than any other. Yet this is the point at which we are telling parents they have to get engaged otherwise they will be breached. We will be pushing a great many people into poverty with these measures. I think the parliament should think long and hard before it moves what is a failed program under mutual obligation onto a group of people who are already very vulnerable at a time when, as parents, they will be most vulnerable. I think it is heartless and inefficient. It is really not something that we should adopt in Australia just because it is fashionable in the United States of America, just because visiting gurus tell us it is good medicine—but it is for a disease we do not have. (Time expired)18:45:002666Billson, Bruce, MPMr BILLSON1K6DunkleyLP10—I follow the contribution from the member for Fremantle, and I had never realised that only those with empathy resided in her electorate or in her office. It was quite remarkable to hear about the evils of people who have committed their lifetime and career to Centrelink and other service providers—how insensitive they are, how blind they are to the needs of individuals, how disconnected they are from what is going on in our community. Only the member for Fremantle can see those things. What wanton nonsense! But that is the kind of contribution you get, emotive and designed to provoke fear, when these sorts of issues get discussed in this parliament. Tonight's discussion on the Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002 is not about cutting people's benefits. It is about a program to spend an extra $1.7 billion to work through a program which seeks to identify the skills and capabilities of all our citizens and to support those individuals to develop their maximum independence, to secure the wellbeing that comes with active citizenship through labour market participation and through social engagement. It is not about punishing. It is not about damaging those that are already disadvantaged. Above all, the great irony in the contribution from the member for Fremantle is that she talks about the concept of entitlement and why people are buffeting this concept of entitlement. Is the only entitlement she is interested in maintaining people in that situation of disadvantage? Is that the only entitlement that motivates her? She talks about situations where bureaucrats will heartlessly impact upon the lives of individuals that are already in households under stress or facing some financial difficulty or difficulty entering the labour market. Is she blind to the fact that this is a program designed to take the very best of what our bureaucracy and government policy have to offer, to take the entitlement to be disadvantaged and transfer that into an opportunity to advantage people's personal circumstances, to improve their health and wellbeing, to get involved in our community? That is what this is about tonight. It is about dealing with the financial, the psychological, the social and, in some cases, the physical disadvantage of being disconnected from our community. It is about working in partnership with people on income support to develop opportunities for them and their families into the future. It is a collaboration between the government and its citizens, particularly those that are doing it tough, particularly those that are facing barriers to fulfilling their full potential and their full engagement with our community. The member for Fremantle talks about how immoral it is to support these things. It is immoral not to. It is a just, courageous and needed measure we are debating tonight to make sure that those citizens on income support have every opportunity to be supported, to be guided, to be assisted into full engagement within our community—$1.7 billion over the next four years to improve opportunities for people who face barriers through their family circumstances, through long-term unemployment, through other barriers to their full participation. That is the discussion that we are having here tonight. It is nothing about cutting; it is about spending more. It embraces those five key areas of action identified in the McClure report, so eloquently described by my colleague the member for Aston. It is about individualised service delivery. This is a mature, sophisticated nation and not everyone's circumstances are the same. It is disingenuous to say that everyone's circumstances are the same.One of the most positive measures in this package is the fact that people on income support will have an ally. There has been an enormous transformation over the last 12 months through Centrelink and its associated agencies to ensure that citizens that are clients of those agencies and of Centrelink have the best possible advice available. They have allies. They have the opportunity to develop a personalised plan that responds to their circumstances—not, as the member for Fremantle would have you believe, blindly imposing unreasonable obligations on people not able to support them. That is nonsense, and the member for Fremantle knows it. Otherwise, she just came in here to deliver a speech she had whipped up for some other audience, tickled it around the edges, and thought she would give that a run. It is good emotive stuff, unrelated to the measures that are in this package. The package is about a simple and responsive income support structure. As a client of Centrelink, as a recipient of income support, you should not have to know all the answers about our income support program before you enter Centrelink. You should not have to know the right question to get the answer you need. You want people there that can understand, empathise, and relate to your circumstances and then guide you through a vast menu of opportunities that sit alongside income support. So we are trying to simplify those support payments. There are incentives and there is financial assistance for people to engage in activities that will improve their future prospects. Why is there mutual obligation? Because we know the consequences of disconnecting from the community, of disengaging from the work force, of being isolated socially. We know the health consequences. And we know the intergenerational transfer of missed opportunity. I sat here quietly, respectfully listening to the member for Fremantle and I wondered: what is it she is proposing? Do we sit back as a nation and see people who are disadvantaged and facing barriers but do nothing to assist them? That is immoral. But that is her proposition.You could not possibly go and talk with people about their personal circumstances. You could not possibly work alongside income support recipients to identify their aspirations for the community or what their capabilities are. Their capabilities may have been dormant for a number of years because they were focusing on the crucial role of raising children—and I will come back to that point. It is blatant misrepresentation again from the member for Fremantle. What do you do? Do you just let people go, let them wither in our society with a future that is only one income support payment to the next and then face transferring that onto the next generation—people with capabilities and opportunities if only they had some support? And that is what this package is about. That is what the $1.7 billion is about—providing those tools. Those sorts of unearthing, nurturing and supporting of the capacities people have just do not happen; you actually have to sit alongside them. You have to join and partner them in looking at those opportunities.The parenting payment participation agreement is not as it was represented by the member for Fremantle. The proposition we are discussing tonight is for parenting payment customers whose youngest child is aged 13 and over. It is not like they have just been born and are breastfeeding and we say, `Look, leave your kids somewhere else and go and participate in an activity.' It is not that. But the member for Fremantle, through her omissions about what the program is, leaves you to arrive at that conclusion. That is not what this proposition is about. The youngest child is aged 13 and over, with obvious exemptions for those with higher care needs. There is a complete exemption for a severely disabled child requiring constant care, and there is an adjustment for people with additional care requirements or maybe milder disabilities, or external care responsibilities like foster care, and there is an invitation to come in and talk about what their aspirations are for the future. And the member for Fremantle describes that as some heinous imposition on their entitlement.SJ4Tuckey, Wilson, MPMr Tuckey—It sounds like the contraceptive pill.1K6Billson, Bruce, MPMr BILLSON—The minister might know more about that than I. I am a humble family man from the Mornington Peninsula. In this respect we have the flexibility there to partner with individual parenting payment recipients to come up with plans and an undertaking between them with some incentives for participation that take account of their particular circumstances. That is a good thing. Where there is participation in approved language, literacy and numeracy programs, there will be a supplement. That is a good thing. If you have those deficiencies in your skills, it is very hard to participate in other opportunities like returning to studies or part-time participation. The great irony in the contribution of the member for Fremantle was that she was saying how horrible it is to impose upon parents. Then she goes on to say that half of them do it anyway and they are the most mobile group and they are well educated and those sorts of things. What is this? Is it an argument that something is evil but in case it is proven not to be they are doing it anyway? Isn't that an enormous imposition? Her defence is that they are doing it anyway. So clearly there is merit there recognised in individual parent circumstances, and we are trying to work with those who have not been able to secure those opportunities. It is a good thing, a moral thing, a just thing for a government to seek to do. For those that have literacy, language or numeracy barriers to their participation, surely removing those barriers is a gain—something we should strive to do. There are additional resources in this package to do just that. Even at a local level, some of the service providers on the Mornington Peninsula recognise the benefits of that. Job Futures in Mornington says: One of the obstacles we have had in the past is that return to work clients wanted to do more expensive courses but we could not find the funds. Greater funding means better services to our clients.There is an endorsement from people at the coalface. Skills Plus says:Evidence indicates that getting people back to work, even part-time or on a volunteer basis, improves their overall wellness and adds to the economy.Another endorsement from people working at the coalface with the clients that will benefit from those programs.The Personal Support Program is, in my view, a wonderful improvement. We used to have something called the Community Support Program for people who faced a number of non-vocational barriers. It was not their skills, there were other issues holding them back from participating in the workplace. Those issues might have been homelessness, a drug or alcohol problem, domestic violence or a mental illness. In the past, participation in the Community Support Program was voluntary, and I vividly remember some citizens from my electorate with a bipolar personality disorder having difficulty recognising the benefits to them of participating in this program. The very nature of some of those non-vocational barriers makes it improbable that the people that would benefit most from those programs would volunteer to participate in them. That, sadly, is the reality, and that is why in the community I represent we had capacity for Community Support Program participants and not nearly enough participants. At least through this new initiative, once the recognition has been made that that kind of support will assist the income support recipient, they are obliged to participate. I think that is responsible and appropriate because, by not making that investment in that individual, there is no prospect of people with those multiple non-vocational barriers benefiting from our Job Network services. They are not able to benefit; they are not ready to participate in those programs. By investing in some of those issues like homelessness, a substance abuse problem or some personality or mental disorder, by tackling those issues first, we prepare and we make more capable that individual to benefit from the other programs that are in place.There are other measures in this bill, but I did promise to keep my comments brief. In closing, I would like to talk briefly about the working credit. For people that have been out of the work force for a long time, the single biggest challenge they face is evidence to provide to an employer that employing them would be a sensible thing to do. Under the current arrangements, if there is half a job opportunity, maybe a one-off 15 hours of work, what is the choice one makes? Do you accept that and risk some of your benefits, or do you think, `There is certainty in my income support. I'm not so sure where that little job opportunity will take me,' so it is overlooked? We want to give people the confidence not to have to overlook those opportunities. Where there is sporadic or short-term employment or even if they decide to try out a job, not sure whether it hits their buttons, we should encourage that. In this package, through the working credits, there is an opportunity to bank those credits in periods of low income so that, when they are receiving income through these sporadic, short-term or trial job opportunities, they are not disadvantaged by losing their benefits. This is a remarkably sensible move as part of this package.My final comment is a tribute to the people in Centrelink. This is an enormous microeconomic reform in the public sector. We are bringing together a vast array of agencies and government programs and putting allies at the coalface to work with income support recipients. This is a reform of biblical proportions in the public sector, and I commend those that have taken up the challenge. It is a gutsy move where we are looking to have case managers working with our clients to identify with those clients opportunities in a collaborative way that will improve their future prospects. That means we need counter staff and case managers that are across a whole spread of programs and opportunities for those people so that when an income support recipient presents to Centrelink they have an ally, someone who will work with them and help make the very best of these programs that are in place. I commend these bills to the House because not to pass them would be unjust, as it would consign some of those facing the greatest disadvantage and barriers to opportunity to continue to do so into the future. As an elected representative, I am not prepared to use the terms of the member for Fremantle to guarantee their entitlement, to guarantee that they will continue to need that entitlement for the rest of their lives. Let us liberate people. Let us work with them. Let us collaborate and make sure that the opportunities this nation provides are theirs for the taking and for participating in.19:01:002670Ellis, Annette, MPMs ELLIS5K6CanberraALP00—The Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002 gives effect to a range of measures announced in the 2001-02 budget. They form part of the Australians Working Together package from the government. These measures are supposedly the first stage in the response from government to the McClure report on welfare reform. Reform of the Australian welfare sector is in itself a welcome initiative and we do not shy away from it at all. In fact, most countries in the OECD are struggling with similar reforms, similar questions and similar pressures. The commissioning of the McClure report by the government was an attempt to examine closely the cost of welfare, the number of people remaining on long-term welfare, and the increasing number of people receiving the disability support payment. I think it is fair to say that the government and, in fact, McClure see participation as a key in the equation; in other words, to change the mind set from one of receipt of benefit to one of benefit as payment for participation. We have no problem with participation per se. I believe the difference between the government and us lies in the methods and changes used to create that participation. Indeed, in many areas we may come to agreement, but we must debate the areas of concern. I would like to take this opportunity to talk about the changes to the parenting payment. I refer to the webpage of the Department of Family and Community Services entitled `What people on parenting payment need to know'. The information outlines the new arrangements that will come into place for recipients of the parenting payment. I quote the particular section here with which I have a particular concern. It follows on from the dates of initiation of the new steps involved in the payment of this payment. It says in rather bold letters:If you have a child with a severe disability you will not have to take up an activity. In other words, an activity test as applied by the new rules for the payment of this amount. I have a particular concern with this. I refer to parents of a child or children who may have a chronic illness or a disability. Page 3 of the webpage states—and I quote this again:If you have a child with a severe disability you will not have to take up an activity. I ask what I think is a really important question: what will be the definition of a `severe disability' in the context of this new regime? I sadly recall the changes that were made under this government in previous recent years to the child disability payment where we saw some categories of disability or chronic illness ruled out of receipt of that payment. I remember very clearly the debate at the time involving the families of sufferers of cystic fibrosis, and I particularly want to mention that here. As I understand it, and as I recall it, the heading `cystic fibrosis' was taken off the list of disabilities or illnesses used at the time to qualify for the payment of the child disability payment. There was a new assessment tool brought along at the same time. If I remember correctly, if a child suffering from cystic fibrosis was receiving all of the care needed from a parent at home—all of the physical treatment and other treatment that was needed by that child—then the child was assessed as doing quite well and therefore no payment was made. So there were two things that happened: one of them was the removal of cystic fibrosis from the list; the other was the new assessment tool to be applied. I refer to that with great purpose. I do not know how many members of the government—and I am not wishing this upon them—have actually had close-up dealings with a family where someone in that family has a very severe chronic illness or disability, or whether they have talked one-on-one in a fairly intimate way with families and parents in that position. The word `severe' really worries me when we talk about this particular interpretation. I would call cystic fibrosis a pretty severe impairment, and I do not think anyone here could disagree. We could talk about children who sadly find themselves going down the road of being diagnosed with cancer. At different times through their progression they can be pretty severely affected. We could talk about children diagnosed with Down syndrome. In some cases that can be pretty severe; in other cases, we could call it moderate. But what is really going on within that family? What is really happening to the family—to the parents and to the siblings should there be siblings—when these diagnoses are made? Autism is another one. There is a whole list. We could read out a whole list of chronic illnesses or disabilities affecting children. And my question is: will they or will they not be severe enough within the government's definition to have an activity test imposed upon the parent? We could ask why that actually matters because all parents of all children are busy. But let me put it to you and to the House that the parents in the majority of these cases find themselves immersed. They need to deal with a child with an illness or a disability; they need to understand it; they need to become a medical and bureaucratic expert to deal with it; they need to try and find every door they need to knock on to get the help and assistance they require. I think you, Mr Deputy Speaker, and everybody else in the House understand and agree entirely with what I am putting, that it is not an easy path to go down when you find yourself a parent—in this case a sole parent—dealing with a child in any of these categories.I am of the view that an activity test should not be put upon any of these people should they reach a test less than `severe'. If you have a couple of small children and one or two of them have autism—it is not at all unusual for two children in a family to have autism, for heaven's sake; sadly, that happens too often—it is not unusual for the burden on that family to be pretty great. What I am saying is: why on earth do we believe, as the previous speaker was saying, that we should allow these people to have the freedom to progress and release them from welfare? I do not know, but I cannot see how the imposition of some activity test to qualify for an income that will enable you to exist should be even considered when there is a child or children in a family with a recognised illness or disability with which they have to deal. I cannot understand it. I really would like the government in their reply to this bill, and the Senate in its further examination of this bill, to consider seriously and honestly what this means.In fact, it could be optional. Some parents may like to do this—I do not know; they may. Some may find it impossible and, if that is the case, I do not believe that we, as a parliament and as law makers, should be putting upon those people a burden additional to what they are already dealing with. I think we would all agree that, in many cases, you do not have to have the label `severe' in front of the word `disability' to understand and recognise the problems that may be occurring.Cystic fibrosis is a perfect example, purely because of what those families and those sufferers have already gone through, given the changes to the child disability payment in recent years. They have already copped it; I do not believe they should be copping it again. There are other categories—as I said, the list is almost endless—where we could consider some compassionate judgment, rather than just the cold hard facts: severe or not severe, and you fall to one side of the line or the other. The real questions are: what definition will be used? What sort of an allowance for change to that definition will exist, if any? I want to very quickly make another couple of comments. If this bill is, in fact, attempting to reform the welfare system that we have—and I think that is what it is purporting to do—then why is it not doing something about the family tax benefit A and B? Why are we not seeing some reform there? I am hoping that maybe very soon we will. I do not think that there would be a member in this place who had not, in the last 12 months, been touched, affected and approached by people who were caught up in this terrible fiasco of incurred debt when, in fact, they were doing the right thing. I know that families who came into my office who were able to provide every piece of evidence one would wish to attest to the fact they had done everything they could to adhere to the rules of family tax benefit A and B are still facing debts. The thousand dollar waiver was lovely. We need an election every year if we are going to have that every year. In the meantime, I am not hearing any word from the government to say that we will be reforming that.Very quickly, to finish off, with the Disability Services Amendment (Improved Quality Assurance) Bill 2002, we are also looking for further assurances and guarantees that what will be required to get it through the process successfully is there. I am not hearing words to that effect either. In closing, I reiterate the importance that I believe needs to be placed on the definition of a child with a severe disability, given the impact felt by the families should it be, as I suspect, a category drawn up by the government under the child disability payment system which will exclude a raft of families, none of whom I believe deserve to have the regime of this new bill put upon them.19:12:002672Irwin, Julia, MPMrs IRWIN83ZFowlerALP00—Here we go again with another bill with a misleading title. But this time it is more than just a twist to put a bit of spin on the way the legislation can be reported. This time not only is the title of the bill—Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002—misleading but it is a downright lie. Here is a government that has developed wedge politics into an art form. Here is a government that has lied and distorted the truth to describe asylum seekers as terrorist—10000Causley, Ian (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Hon. I.R. Causley)—The member for Fowler should realise that the Deputy Speaker does not like the word `lie' and she will refrain from using it, even if it is against the government.83ZIrwin, Julia, MPMrs IRWIN—Untruths then, Mr Deputy Speaker. Here is a government that tells so many untruths and has so many times distorted the truth to describe asylum seekers as terrorists and child killers. Here is a government that has set out to demonise trade unionists. Here is a government that has set out to demonise the unemployed as dole bludgers, and now it sets out to demonise mature age job seekers. What does it call this bill? Family and Community Services Legislation Amendment (Australians Working Together and other 2001 Budget Measures) Bill 2002—`Australians Working Together'! What hypocrisy! What a hide! The most diverse government in this country's history has the hide to call this bill `Australians Working Together'. Whoever thought up that title could get a job as the editor of Pravda because, even with this government's record, that title could have come straight out of Stalinist Russia. I would even suggest that the minister should go back to his office and recommend the award of the Order of Lenin to the person who came up with the title of this bill.As for Australians working together, this bill will result in anything but Australians working together. In reality it is nothing more than an attack on some of the most vulnerable groups in the community. It uses the blunt instrument of our social welfare system to address the labour market policy failures of the past decade or more. As the figures used to justify the crackdown on disability support pensions clearly show, for the past decade or more we have simply placed a large number of long-term unemployed into the too-hard basket. Give them the disability support pension or put them on the mature age allowance, but get them off the list of the unemployed and everyone will be happy. The government is simply going to dump the contents of the too-hard basket into the wastepaper bin. There is no long-term fix for the problem—no real intergenerational policy. This is just another example of this government pulling the safety net out from underneath some of the most disadvantaged people in the community. As I said at the start of my remarks, this is definitely wedge politics—we have to remember that. This government is driving a wedge between those Australians in work and those unable to take part in the work force. You will notice that I did not say, `Those who work and those who do not work,' because that is a different question, and the government does not want us to look at that issue. What the government wants us to practise is downwards envy—those in a job who look with envy, although I cannot see why, at those who cannot work or cannot find work but who receive some social welfare benefit. Those of us in a job should somehow be envious of those unable to find work or those who, through a disability, are unable to work. You really have to have a perverted set of values to be envious of someone in those circumstances, but it seems that there are many on the other side of the House who are. The one thing they do not like to talk about is upward envy. In their view of the world, if someone has gained wealth it is because they worked hard or saved and did not waste their money. According to members on the opposite side of the chamber, they deserve to enjoy their position even if, when the truth is known, they had other advantages. But let me explain how these differences work and how our failure to plan in years past has led us to our present position.If you come to Liverpool in my electorate on any weekday and you walk through the Macquarie Mall, you will see a large group of middle-aged men—men of southern or eastern European origin and men of Middle Eastern origin; men in their late 40s and 50s; and men engaged in their passion for chess. Liverpool council has provided a large-scale chess place and large-scale chess pieces in the mall. On any day you will see dozens of these men, watching the big game or playing quietly in smaller games on the side. Apart from their passion for chess, most of these men have one thing in common: they do not have a job. Many have been unemployed for years and many have disabilities which make their former occupations impossible. Many have poor English skills, and in spite of their chess skills they have few skills in demand in the labour market. If you walk a little further along the Macquarie Mall you will come to the John Edmondson Memorial Club—the local RSL Club. Remember it is a weekday, but you will find the club doing a brisk business. Between the Ploughman's Bistro and the pokies, there is hardly a spare seat in the club. You will notice that a good few of the patrons have grey or white hair and are over the age of 65. One of their few pleasures is a day out at the local RSL.It is hard to imagine that anyone would envy an old age pensioner, but if you talked to some of the chess players out in the mall, that is exactly the sort of envy you would find—men who would just like the security of being able to plan their remaining years; men who in many cases have spent more than 40 years in the work force; and men who performed backbreaking work from the age of 12 and now have broken backs. But there is little sympathy for them. If this government is true to form, we will soon see a Sixty Minutes program showing us disability pensioners bending their backs. We can expect on prime TV a rush of cases like the Paxtons—we all remember the Paxtons—enjoying life on a disability pension. It is all part of a strategy to demonise those on social welfare. No-one will say that while we were happy to ride on their strong young backs, we never thought of their futures. No-one will acknowledge that some have already lived beyond their life expectancy in the country of their birth. No, we will snigger and pass it off as `Mediterranean back'. At an age when most of those men would hold high status in their community, instead of treating them with dignity and respect and recognising their contribution to our society, this government wants to demonise them. Contrast that with the treatment that this government has given self-funded retirees over the age of 55. You will not see on Sixty Minutes any scenes of self-funded retirees out on the golf course, enjoying the years of generous tax concessions and, thanks to this government, now enjoying even more. No, the men in the mall did not have any of the advantages that others have enjoyed. They probably did not pick up a generous redundancy package, because they worked for many different employers. Many started work at 12 years of age and did backbreaking work for many years. They probably did not get training to improve their skills over their working lives. We have just used them up like a machine that was flogged into the ground, and now that they are of no more use to us we will throw them onto the scrap heap.You see, in our accounting practices, we depreciate machinery. We understand that it cannot go on producing for ever; it comes to the end of its useful life. If you want a machine to last longer, you have to maintain it and even improve it over its lifetime. We have to do the same thing with people, but who is going to be responsible for that? We often hear the term `human resources'. I do not really like the term because people are people, not resources, and we exploit resources. At least it should suggest that the workers in an organisation need to be continually developed if they are to remain productive. These days employers take a very short-term view. They do not always invest in their people. They will make statements like, `People are our most important asset,' but really they do very little to continuously develop all their employees. There is a great story about W. Edwards Demming, the American quality guru. Demming was to consult to a major American company and when he arrived to look around he was told that the company was going to lay off a large number of staff. `We're getting rid of the dead wood' he was told. `Oh, really,' said Demming, `Were they dead when you hired them or did you kill them?' I think that pretty well sums up what we have seen across many Australian companies over the past decade or so. Many workers, those with limited or obsolete skills, were treated like dead wood. They were good for nothing. They were cast off and no longer the responsibility of their employer or the industry.Going back a decade, we had a training guarantee levy which required employers to devote one per cent of their payroll to training employees to upgrade their skills. That scheme was subject to a lot of abuse with managers taking the lion's share of the funds to go to seminars held in ski resorts and similar places. However, its intent was to see all Australian workers keep their skills up to date so they did not become dead wood. However, that is now history and I regret that the levy was dropped. When you look at the timing, the demise of the training levy coincides with much of the rise in disability support pension payments. I can only add that some unions have had the foresight to include training clauses in enterprise agreements, although this government has fought that at every turn.This bill would close off mature age allowance and partner allowance from 1 July 2003. In their place we would see flexible participation requirements for mature age Newstart allowance recipients who are aged at least 50. There would be a more flexible approach to the application of the activity test and access to an expanded range of services.It seems that we acknowledge the problem of mature age unemployment, but we cannot really figure out what to do about it. We can regret not providing training while they were in the work force and we can regret allowing them to become dead wood, but unless we come up with some long-term solutions to this problem, we will still be faced with this issue 10 years from now.I have so far overlooked another important and, in many ways, even more disadvantaged group—mature age women. The bill looks at one group, that is people receiving parenting payment whose youngest child is aged 13 to 15 years. The majority of these are single parents. The bill will require this group to participate in an activity involving 150 hours over six months. For these women and for others approaching mature age, the return to work and, in some cases their first job, can be a very daunting prospect. Again, while it is expected that the activity will involve other agencies such as TAFE courses, the amount allocated seems minimal when you consider what needs to be achieved. I greatly fear that an underfunded program can short change participants and leave them not much better off than they were at the start. This really is where my criticism of the bill lies. There may be some success, but when all is said and done we are paying the price now for our failure to plan and provide for a skilled work force for many years past. We have allowed our most precious resource, the skills of our people, to run down and we will pay a high price to renew them.As we have seen with the issue of dry land salinity, you can only go for so long before the land becomes underproductive and you then face a huge cost to repair the damage. I fear that our neglect of our natural environment is matched by our neglect of our labour force, but all this bill offers is a stick to force people to take part in some activity in the hope that they may finish up in a job somewhere down the track—people who were abandoned long ago by a system that only cared for the present, and the amount of money allocated to these programs is nowhere near enough to provide the intensive training necessary to get these people into any reasonable employment.We are left with the conclusion that these programs are nothing but another too hard basket into which to put mature age workers. You cannot help but see that the government looks at it as the cheapest alternative. It would cost too much to provide real assistance, real training and real prospects for mature age job seekers. So let us change the rules. Let us not hassle them too much with activity tests and, like old soldiers, they will simply fade away.As I said at the beginning, this bill is not about Australians working together; it is another cheap solution to an expensive problem. It has a few useful measures, but these are underfunded and do not go far enough. Looking at some of the useful measures in the bill, the package allows for the payment of a supplement of $20.80 per fortnight to people on specified income support payments who undertake approved language, literacy and numeracy training. This is a worthwhile measure designed to meet the incidental costs of participating in this training. It at least acknowledges that people who undertake training do face extra costs—fares, parking and other expenses. The working credit program brings back Labor's earning credit scheme, something this government abolished back in 1996.Debate interrupted. Adjournment267510000SPEAKER, TheThe SPEAKER—Order! It being 7.30 p.m., I propose the question:That the House do now adjourn.267519:30:002675Latham, Mark, MPMr LATHAMK26WerriwaALP00—I rise to congratulate the New South Wales government on its decision to fully redevelop the Minto public housing estate in Campbelltown. Today's announcement by the state housing and planning minister, Andrew Refshauge, is an opportunity to put the mistakes of the Radburn era behind us. The Radburn scheme was originally designed for middle class communities in the United States. It has never worked for welfare housing communities in Campbelltown: its public space has been underutilised, the private space available to tenants has always been too small. I would maintain that the best public housing is the housing that looks like every other neighbourhood. Our communities need a social mix—public and private housing coexisting, rather than large broadacre estates. The Minto redevelopment will achieve this goal. Through public-private partnerships we should be able to redevelop all of the nation's public housing estates. The last federal Labor government achieved this purpose in its reforms to the defence housing system. I want the next Labor government to work with states and territories to do the same for public housing estates.While state Labor is achieving results for Campbelltown in my electorate, the federal government continues to ignore one of its important responsibilities—the construction of the M5 ramps at Brooks Road, Ingleburn, and at Raby Road. Between the Crossroads and Narellan Road at Campbelltown, a distance of 14 kilometres, there is no opportunity for southbound vehicles to join the M5 or for northbound vehicles to leave it. This problem has retarded the development of the Ingleburn and Minto industrial estates and pushed a large number of heavy vehicles onto our suburban streets. For the past six years, I have been urging the federal Minister for Transport and Regional Services to support this vital project. The final draft report for the construction of the ramps was completed in March 2000, yet in the last three budgets the government has refused to provide the necessary $5 million in funding. This is despite a benefit to cost ratio of 13.9—a high return on a relatively small federal investment. It is also despite last year's election promise by the member for Macarthur, Mr Farmer, to build the ramps. This is his first broken promise—a real kick in the guts for the Macarthur economy. The federal government has its priorities upside down. It is spending $12 million on a thing called the Campbelltown-Camden Sustainable Region Advisory Committee—yet another useless talkfest and bureaucratic report into unemployment in Campbelltown. Our region does not need more committees and reports; we need more capital works and more jobs. I urge the government to immediately redirect the $12 million for its longwinded, long named committee into real employment projects, starting with the M5 ramps.The government is out of touch and so too is the member for Macarthur. When asked by the Macarthur Chronicle newspaper to outline the benefits of the recent federal budget to his electorate, this is what Mr Farmer had to say:There are many business people in Macarthur who use aeroplanes, and I am sure they will feel safer knowing that sky marshals are on each flight.Putting the obvious mistake aside—that the sky marshals will be on flights randomly, not every flight—this is a demonstration of how out of touch the member for Macarthur has become, how removed he is from the pressing needs of Macarthur. At a time when disability pensioners in his electorate are having their benefits cut, when old age pensioners will have to pay more just to visit the chemist, when the federal government has slashed funding for the Claymore, Airds, Rosemeadow and Ambarvale public housing estates, the member for Macarthur's first concern is for his mates in business class and how they feel as they hear the clatter of the drinks trolley and the smell of freshly cooked gourmet food on their flights. In fact, the member for Macarthur could not give a hoot about the poor, the aged and the disabled—the pressing needs in his electorate.Poor old Forrest Gump—always running but never delivering. We can say run, Pat, run; but, more importantly, how about delivering on these vital election promises? The last budget has left the member for Macarthur off the government's funding list. Nothing is being done to implement the following election promises: the funding for the badly needed M5 ramps, special funding to upgrade Camden Valley Way and Appin Road, special job creation projects to reduce unemployment, extra resources for the University of Western Sydney, extra funding for school and health services in Macarthur, funding for drug rehabilitation and prevention programs plus new laws for drug related crime—all promises made by the member for Macarthur prior to the last federal election, none of them delivered in the Costello budget in this House a few weeks ago. The member for Macarthur can run, but he cannot deliver. He is not living up to the election promises that were made to the people of his region. This is a shameful lack of performance, and it is the reason that so many people in Macarthur are becoming disillusioned. (Time expired)267619:35:002676Bartlett, Kerry, MPMr BARTLETT0K6MacquarieLP10—I rise to bring to the attention of the House a matter of grave concern to many residents in my electorate—that is, the question of the future of Blue Mountains District Hospital. In recent years, the New South Wales government has presided over a steady decline in services at the Blue Mountains hospital at Katoomba. Local residents have seen the withdrawal of a number of specialist services including a haematologist, kidney specialist, rheumatologist and obstetricians. One of the key issues has been the failure of the Wentworth Area Health Service to attract sufficient anaesthetist services to the hospital. We have also seen a reduction in bed numbers and a failure to deliver on psychiatric services promised the state election before last—that is, promised seven years ago and still not delivered. Further, the current inadequacy of anaesthetist services has seriously compromised the effectiveness of the accident and emergency unit. The periodic suspension of anaesthetic services severely undermines the role of Blue Mountains District Hospital as an acute care hospital. The fact is the New South Wales government and the Wentworth Area Health Service simply have not tried hard enough to attract much needed anaesthetist services to Blue Mountains District Hospital. The latest blow, revealed just two weeks ago, has been a decision to downgrade maternity services. We have seen a steady reduction in obstetric services and were informed just last week that all maternity services will cease from Blue Mountains District Hospital for the next six months, from 1 June. This is astonishing, alarming news which just ought not to be the case. The promise—so-called—is that they will be restored next year with a trial midwife based obstetric unit.This raises more questions than answers. Can we trust their promise to reopen the maternity unit next year? If the midwife trial does not work, will the government promise to restore full maternity and obstetric services? How can they guarantee the safety of mother and child if complications occur during childbirth? How can they expect women in labour under these conditions to safely make a one-hour trip to the nearest hospital, Nepean Hospital? The answers to most of these questions have not been forthcoming. The simple fact is that the current situation is totally unacceptable and the planned midwifery model may also prove to be unworkable.In the meantime, for the next six months, there are no maternity services at Katoomba. This is totally unfair to families. It adds extra inconvenience and expense for families which are expected to travel from Katoomba or Blackheath to Nepean or, in fact, Bathurst. I received an email just last week that illustrates the plight of many families because of this outrageous decision by the state government. This email is from a father. He says:As an expectant father in Blackheath—due in mid-July—we have been informed by our obstetrician at the sixth month of pregnancy not to plan for birthing at the Blue Mountains district hospital. Given my partner's past birthing history, which on two occasions involved emergency caesareans, specialist care from a doctor who knows my partner's birthing history is essential.He goes on to say that in relation to Nepean:There is no present possibility as a public patient, even with a booked CS, to involve a doctor known to us at the Nepean unit. All good public doctors in Sydney have been booked out for months. We are now forced to attend Bathurst hospital to meet our needs and birth our child.It is outrageous that residents in the upper Blue Mountains are being forced to travel to Nepean Hospital, and even then there is no guarantee of entry and they are forced to go to Bathurst for the birth of their children.This raises a serious question of safety. Assuming access to Nepean Hospital, what happens in adverse weather conditions or when the highway is blocked by traffic congestion, as frequently occurs? Even when the midwife service opens next year, what happens when unexpected complications occur during birth? Will the Wentworth Area Health Service and the New South Wales government guarantee emergency backup anaesthetist and obstetric services? Will the New South Wales government ensure that the safety of mother and child are not in any way compromised?The New South Wales government is just not taking seriously enough the needs of upper Blue Mountains residents and is willing to sacrifice them in its effort to network and to rationalise health services across the Wentworth area. This is just not good enough. The New South Wales government needs to take far more seriously the urgent needs of residents of the upper mountains and guarantee adequate health and safety services for those residents. (Time expired)267819:40:002678Hall, Jill, MPMs HALL83NShortlandALP00—I, like most members of this parliament, have constituents who were stationed at Maralinga during the atomic testing by the UK government in the 1950s and 1960s. One such person is Albert Martin, who served in the RAAF transport division as a mechanical transport driver. He worked on jeeps, trucks, cranes and all forms of earthmoving transport, and none of the vehicles he drove or operated were airconditioned. To use Mr Martin's words, `They were full of dust and flies.' Mr Martin operated cranes at Taranaki, the site of the Vixen B tests in 1957. Albert Martin has acute promyelocy tic myeloid leukemia and now, when he should be putting all his efforts into fighting for his life, he is fighting the Commonwealth to accept liability for his illness under the Safety, Rehabilitation and Compensation Act 1988.Recently he has been informed by the Military Compensation and Rehabilitation Service that records of his service could not be found. They say that he was at Maralinga but, unfortunately, they cannot find any records that he was exposed. I will go through a response that he received from the Military Compensation and Rehabilitation Service. It says:It is established that you were at a test site at the time of, or after, a test was carried out there.... ... ...You suffer from a disease which is characteristic of exposure to ionising radiation.But another point that must be satisfied for him to be eligible for compensation under the act is that it has to be confirmed that he was actually exposed to a dose of ionising radiation at the site. The first two points I mentioned have been established but, in relation to the point about being satisfied that he was a actually exposed to a dose of radiation, it says, `You were at Maralinga. You worked on cranes and you were on those sites. You also advised that on occasions you went into the decontamination caravan where you showered off and still showed a reading, and you were given some sort of device to monitor your radiation exposure.' But a 1984 Australian Radiation Laboratory document entitled `Personal monitor records from external exposure to beta and gamma radiation during engagement in the program of British nuclear weapons test in Australia'and also a 1982 United Kingdom Ministry of Defence document do not show they have been unable to locate an entry for Mr Martin. They say that he was at Maralinga at the time of testing—he served there between 9 January 1963 and 20 May 1963—but, unfortunately for him, the records have disappeared. That is not good enough.The person that he worked with, his partner, whilst he was at Maralinga, Mr Jim Coleman, died in September 1989 of exactly the same disease. The same thing happened to him: the department could not find his records. However, after some time they did pay him the compensation that they are now denying Mr Martin. Mr Martin is extremely distressed by what is happening. He is pleased that the Department of Veterans' Affairs have established that he was actually there and have accepted the fact that the type of leukaemia that he has can be caused by exposure to radiation, but he is extremely upset that there has been no action on, and no acceptance of, his claim. The minister has also written to him and supported the statement made by the department.I urge the government to support, not abandon, Mr Martin. He was an innocent victim, a dedicated worker. He is a person who is fighting for his life, a man who believes that he has been used and abused by the government. I believe that governments are here to support workers, to support people like Mr Martin. He did not know that he was in a dangerous situation when he worked for the RAAF. (Time expired)267819:45:002678Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—Mr Speaker, you will know, as most members of the House will know, that I represent an electorate which has Australia's largest defence base, Lavarack Barracks in Townsville—the home of Australia's Ready Deployment Force and the base from which, through RAAF Townsville, virtually all of Australia's overseas operations have been mounted in the last 10 to 15 years. I am pretty close to the Australian Defence Force, and I take a very strong interest in what the Australian Defence Force does for our nation. I want to report to the House that I was very privileged to take part in the Australian Defence Force Parliamentary Program recently. All members of the House were invited to participate, and I would encourage members to participate in this mighty program. There is a choice of being in any of the three services, and there is also the possibility of doing things as a triservice arrangement in Canberra, Sydney, Melbourne, Darwin and so on. I chose the RAAF, much to the consternation of my associates in the 3rd Brigade. I did that because on a number of occasions I have been to the Townsville high range field training area and I am pretty across what the Army does; I wanted to see for myself what the Air Force does. I was posted to RAAF Edinburgh for a week. It was a mighty experience, and I have come away from it with even greater respect for what the men and women of our Australian Defence Force do, for which the community holds them in very high regard.I gained across-the-board experience during that week. On the first day I was with all of the recruits at Edinburgh. These are the people who have newly come into the Air Force and are posted to the recruit training unit. I was very impressed by the way the instructors dealt with the recruits. It is a 10-week period. The way that the instructors train the troops, the men and women, was very interesting. I would like to say to anyone who is listening tonight that, if you have any interest at all in having a great job, you should go and join the Australian Defence Force. So many different careers are available these days; there are so many different callings and so many interesting jobs. It is just terrific. The recruits, incidentally, are not just young people: the people who enter the Defence Force are people who are married and people with grown-up children, and they are all seen as one. Nobody sees age; they are all seen as people who are training to join the Defence Force. So a key message is: go and see your local defence recruiting centre in the morning and ask for information. It is a terrific career.I also went camping overnight at Murray Bridge with the recruits, which is a challenge that you should take up, Mr Speaker. The temperature in Murray Bridge is not quite what it is in Townsville, as you would realise; however, I did survive the experience and had a great time out there on the range with all of the recruits. On the next day, I was with the aviation medicine unit and saw how in some things we lead the world—for example, in what we are doing in aviation medicine. It is a small unit that is based at Edinburgh but it does things that lead the world, and we can be mighty proud of that as well. As part of my experience there, they put me in a hyperbaric chamber and flew me up to 25,000 feet in 2½ minutes and reduced the oxygen supply to simulate a loss of cabin pressure in an aircraft. What occurred there was nothing short of spectacular. You think that you are in control of what you are doing but in fact you are not. As part of that test, they asked me to do a subtraction; they wanted me to subtract 75 from 666. After I came back down to earth and became normal again, I looked at the answer I had written: 5,921. I did not know at the time that that was what I had done in the subtraction.I wish to thank Air Commodore Phil Byrne and Squadron Leader Jack Frost, who looked after me when I was there. I very much appreciated the experience of being in the RAAF.10000SPEAKER, TheThe SPEAKER—I reassure the member for Herbert that the experience of camping is not unknown to the Speaker or, for that matter, to the member for Hindmarsh—although separately, not simultaneously.267919:50:002679Mossfield, Frank, MPMr MOSSFIELDMK6GreenwayALP00—Recently, a community organisation in Greenway, the Timbertop Bushcare group, received some bad news. They were advised that Blacktown Council's application on their behalf for funding to assist in purchasing a section of the Cumberland Plain woodland adjacent to Norman Street, Blacktown had been rejected by Environment Australia. After hundreds of man-hours in Bushcare coordination and letter-writing, this group were, understandably, very disappointed by this news. The bushland that the Bushcare group is endeavouring to preserve is currently privately owned and is destined for residential development, that juggernaut of bricks and mortar that is rapidly devouring Western Sydney. These nine hectares of bushland have for over a hundred years been known as Timbertop. The bushland has native fauna and flora which are an important component of the area's cultural heritage and are a good example of environmental biodiversity. The plot is broken down into lot 100, the western portion, which is three hectares in size; lot 101, the eastern portion at four hectares; and a further two hectares of surrounding land including nature strips. In 1994 an environment and open space strategy study provoked Blacktown council into purchasing lot 100 for open space. The environment study recognised the high value of the whole set, but less than half of the site was purchased due to financial constraints. This woodland is part of the Blacktown Creek corridor, which starts at Prospect Reservoir and joins the Toongabbie Creek corridor at International Park. This corridor is made up of several large parks, including William Henry Park and Orana Park.Blacktown Creek is in a varying state of ecological bad health along the corridor. At its upper reaches the creek is contained in a concrete drainage swale. Only at its lower reaches at Orana Park does it retain its natural form. A significant community of grey box gums is evident adjacent to the upper reaches of the creek on the privately owned land in question. For the information of those members who are familiar with the zoning technicalities of bushland, the land in question is listed on schedule 1 of the Threatened Species Conservation Act 1995 and is recognised as an endangered community in part 3 of schedule 1 of the act.In 2001 stage 1 of the Western Sydney Native Vegetation Mapping Project by the National Parks and Wildlife Service gave the bushland a category A rating. The Upper Parramatta River Catchment Trust refers to this bushland as one of the most significant areas of remnant Cumberland Plain bushland in the catchment. The Land and Environment Court has refused one application for residential development involving some 55 lots. This apparently is the reason given by Environment Australia for refusing to supply funds to help preserve this site. However, as I understand it, the developer is currently redesigning his submission to reduce the number from 55 to 26 lots, which will most likely be accepted by the Land and Environment Court. Blacktown council has expressed its willingness to purchase the land for rezoning and hence conservation, but it is unable to do so entirely by itself.The Timbertop Reserve Management Committee are to be congratulated on the magnificent job they have carried out in preserving this important piece of native bushland in Western Sydney, and you can appreciate the disappointment of this group when they were informed that Blacktown council's application for funding to purchase lot 101 had been rejected by the minister, the Hon. David Kemp. Unless this land is purchased by the council with the help of Environment Australia and the federal government, this historic and significant piece of bushland nestled amidst the urban sprawl will be lost forever. Only yesterday I received correspondence from the Secretary of the Timbertop Bushcare group, Robert Carr, and the letter presented a degree of urgency about the matter. It says in part `regretfully, Blacktown council has been presented with a preliminary development application' and that `history shows that if our urban bushland is taken for granted it will quickly be taken away from us'. So I intend to campaign continuously for the preservation of this remaining remnant of the Cumberland Plain bushland in my electorate.268019:55:002680Johnson, Michael, MPMr JOHNSON00AMXRyanLP10—It gives me great pleasure to rise this evening to say a few words about a special event that happened in my electorate on the Saturday that has just passed. It gives me great pleasure to speak about a citizenship ceremony that took place in the suburb of Jindalee, which is within the constituency of Ryan. As the House would no doubt be aware, the decision to become a new Australian citizen is a major step in one's life. It involves commitment, responsibility, public recognition, celebration of the present and hopes for a common future. Indeed there are many members in this parliament who have taken that decision, and I certainly count myself as one of them. These are the themes of participation and inclusion, the very essence of our Australian citizenship. As a citizen, those who become Australians are formally linked and identified with this country, its people, the laws of our land and our government. Last Saturday, 25 May, the Centenary and Districts Chamber of Commerce, the local Rotary Club of Sumner Park and I had the very great pleasure of the opportunity to host a local citizenship ceremony. My role was that of the presiding officer on the morning, and I had the very special privilege of witnessing 27 new citizens take the oath or affirmation pledging their commitment to Australia and declaring themselves citizens of this great country. This was a very special experience for me and one that I am keen to repeat in the years ahead in my capacity as a the federal member for Ryan.At the ceremony I spoke of how I believe citizenship is a very special and unique bond that unites all Australians irrespective of their background, religion or what they have come from. It is also a very special opportunity for those Australians-to-be to formally declare their strong feelings for our country. It is a very symbolic gesture on their part as well, and our rich heritage stems from the contributions of each of these individuals.Australia is indeed founded on the industry and endeavour of people born in over 180 countries from around the world, and I hope that we remain a nation of individuals who treasure our personal backgrounds and that, whilst we may hold different views and we come from different backgrounds and cultures, we are first and foremost united in our pride at being Australians and working together for our common prosperity and future. I wish to note that there are still over 900,000 residents of this country who have still to take that pledge to become Australian citizens, and I would encourage them to take that step. I am proud that as Australians, new and old, we are members of a community that is democratic and in which everyone has equal rights and freedom of opportunity. It is one of the great things about our country that we all have the equality of opportunity to make the most for ourselves and our families.This evening I want to compliment a few of the people who were involved in putting that special ceremony together. A lot of work goes into a citizenship ceremony, and I would like to acknowledge, first of all, one of the distinguished residents of Ryan, Mr Keith Hamilton, who is the President of the Centenary and Districts Chamber of Commerce. He did a wonderful job being the MC for the occasion and the ceremony ran like clockwork due to his presentation and involvement.I also want to thank the Rotary Club of Sumner Park, which made a very special contribution to the morning, and Dr Gordon Young in particular and the many volunteers from Rotary who participated. I also want to mention and give thanks to two of Ryan's very special young people who entertained us in the morning: a student from one of the local Ryan schools—Corinda State High School—Tagi Lale, who performed the national anthem very beautifully and very movingly on the morning; and also Carolyn Beck from Queensland Opera, who did a wonderful rendition of that unofficial Australian national anthem.I close my remarks this evening by saying also that it is appropriate to acknowledge the Minister for Citizenship and Multicultural Affairs, the Hon. Gary Hardgrave, and I compliment him on his new responsibilities in that portfolio. His skills and enthusiasm—10000SPEAKER, TheThe SPEAKER—Order! It being 8.00 p.m., the debate is interrupted.House adjourned at 8.00 p.m.2002-05-29—————The DEPUTY SPEAKER (Hon. I.R. Causley) took the chair at 9.40 a.m.Statements by Members2682268209:40:002682Swan, Wayne, MPMr SWAN2V5LilleyALP00—On two occasions in the last fortnight, the Minister for Immigration and Multicultural and Indigenous Affairs, Mr Ruddock, has let the cat out of the bag regarding his decision to site a detention centre at Pinkenba in Brisbane. Despite his promise to consult with the local community about locating this 550 person medium security detention centre in the middle of the city, close to the built-up suburbs of Hendra, Hamilton, Ascot and Clayfield, and not to do so if the local community disapproved, he appears to have made up his mind.Two new pieces of evidence show that he is not genuine. The people of Pinkenba have said they do not want it but this is irrelevant to Mr Ruddock's department, who told local residents a fortnight ago at a meeting with BRATS:I don't think he was thinking of the community in the sense of you here today, I think he was talking about the wider community. What this actually means is that Mr Ruddock has no intention, despite what he has said, of consulting with the Pinkenba community, the wider northside community or the wider community of Brisbane itself.The minister has not even had the decency yet to meet with local residents. An overwhelming number of local people do not think the proposed site is suitable because it is located less than one kilometre from major transport routes, homes and schools. This site has no direct access to police, ambulance or fire brigade, but Mr Ruddock expects the state government to look after those problems. In fact, his officials told locals at Pinkenba that they would not be assisting the local police if there were problems if the facility was built.The second piece of evidence is that Mr Ruddock has told shires like Bowen that want the facility that it is going to Pinkenba. The Mayor of Bowen met with the minister recently and after the meeting this is what the Mayor of Bowen had to say:I think they—that is, the Commonwealth government—were quietly confident that Pinkenba would be accepted and, yeah, again, I think Pinkenba, I certainly left the meeting thinking that Pinkenba was the red hot favourite.So Mr Ruddock is telling those shires that want this facility, that desperately need this facility in rural and regional Queensland, that they are not in contention. One of the reasons he is giving for this decision is that he wants to locate it beside the airport. Yet his officials told locals at Pinkenba less than two weeks ago that there were only 170 people a year detained at the airport. So the justification for locating it on this site beside the airport is blown away by the evidence that his own officials have given the local community that there is not a great volume of people detected breaching their visas, work requirements and so on at the airport itself. The truth is that this facility could be located anywhere in Queensland or south-east Queensland. It does not need to be located in a built-up metropolitan area right beside schools and densely populated suburbs. So the truth is there is no justification for locating a medium security prison right in the middle of the city. (Time expired)268309:43:002683Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—A couple of weeks ago in the Main Committee I commenced a three-minute statement to congratulate a couple of organisations in my electorate for achieving awards, but unfortunately a division was called and we did not get very far. I mentioned the Bega Chamber of Commerce, which was judged as the best small business chamber in New South Wales with membership of less than 100, because of the great innovative work that they do in promoting the Bega commercial area.The other award I wanted to talk about was the South Coast Tourism Awards. There were winners from right around my electorate along the coast. Some of the winners I would like to congratulate include the Forest Gallery, just north of Batemans Bay. Gary and Di Ellis have a wonderful gallery there. They won an award for cultural tourism and they have certainly built up a fantastic business and gallery, showing some wonderful art from our region. The Eurobodalla Coast Convention Bureau won the award for the meetings industry. Mogo Zoo won the regional attraction award. Bill and Sally Padey own Mogo Zoo, and Scott Stewart runs things down there. It is the most fantastic attraction. I say to anybody who comes to Canberra that, if they have a weekend free and they intend staying in Canberra, they should go down and have a look at Mogo Zoo. It is probably one of the most unusual zoos in the country. It really is a great attraction, and that is why it won the regional attraction award.Catalina Country Club won the award for registered clubs. Dukes Camping World in Batemans Bay won the award for tourism retailing. Wayne and Katrina Duke have really developed that terrific business in Batemans Bay, providing all sorts of things for camping and associated areas. Broulee Beach Van Park won the tourism and caravan park award for up to four stars, and the Coachhouse Marina Resort in Batemans Bay won the same award for up to five stars. Jill and Barry Birss, who own the Coachhouse Marina Resort, and Andrew Ziems, who is the general manager, certainly have a great product.Other award winners include Robyn's Nest in Merimbula, which won two awards: accommodation up to five stars and the bed and breakfast category. Michael Britten developed that facility, and it is a wonderful place to stay if you are in Merimbula. The Rural Tourism Network, Sapphire Coast Producers Association, won this award for excellence in general tourism services. Margaret Taylor put together a map of the area, including where you can stay and things to see, which is terrific. Sapphire Sun won distinction in the media category for a tourist booklet along with Rural Press. Val Bobbins, from the Eden Visitors Centre, was a joint winner for contribution to tourism by an individual. Professionals Real Estate won an award for holiday lettings and real estate agent, and Old Mogo Town won an award as well. (Time expired) 268309:46:002683Jackson, Sharryn, MPMs JACKSON00AN2HasluckALP00—I present a petition this morning, which has already been certified by the Clerk's office, from 286 Western Australians, calling on the Commonwealth to provide a Medicare licence for a magnetic resonance imaging, MRI, machine at Princess Margaret Hospital in Perth. PMH is WA's only children's hospital.The petition read as follows—To the Honourable the Speaker and the Members of the House of Representatives assembled in the Parliament:This petition calls upon the Commonwealth Government to grant and MRI Medicare licence to Western Australia's only specialist children's hospital, Princess Margaret.An MRI (Magnetic Resonance Imaging) machine is an essential disnostic tool for a range of paediatric medical conditions.Your petitioners therefore ask the House to ensure that the Commonwealth provide children in Western Australia with access to Medicare MRI scans at Princess Margaret Hospital.from 286 citizens.00AN2Jackson, Sharryn, MPMs JACKSON—The Labor state government has committed to buying the $2 million diagnostic machine but, because the Commonwealth will not provide the Medicare licence to run it, the operating costs for this year will be borne by a WA charity, Telethon. I, along with many Western Australians, was bitterly disappointed that in the recent budget the government failed to grant the Medicare licence for the MRI machine. An MRI, magnetic resonance imaging, machine is an essential diagnostic tool for a range of paediatric medical conditions. They are extremely expensive to operate and children's hospitals in most other states have a Medicare licence to operate their MRI. It is not fair that the Commonwealth government expects Western Australian taxpayers to not only purchase the machine but pay for its entire operation.The health minister, Senator Patterson, has written to the WA state government saying that the granting of Medicare eligibility would be based on `priority areas of need'. If this is not an area of priority need—that is, young children in Western Australia—then what is? WA Labor MPs and the community will continue to push this government for an MRI Medicare licence for Princess Margaret Hospital. Of the 10 MRIs in WA, just two are in public hospitals: Royal Perth and Sir Charles Gairdner Hospital.WA has not received a single Medicare licence to run an MRI in a public hospital for at least nine years. There is only one Medicare licensed MRI south of the river in the Perth metropolitan area. All the licences issued by the Commonwealth in recent times have been to private operators north of the river. The Royal Perth Hospital and Sir Charles Gairdner Hospital units have long waiting lists and children have to be transported from PMH to `Charlies' for their MRI scans—a situation that is becoming increasingly intolerable. Public funding of MRIs has to be done in a fair and financially sound manner. There is nothing fair in the way MRI licences have been handed out under this government. They have overwhelmingly favoured the private system at the expense of the public system, which has inevitably led to deep inequities in terms of access to this vital medical technology. I urge the minister for health to reconsider her position.268409:49:002684Haase, Barry, MPMr HAASE84TKalgoorlieLP10—A national summit on public liability insurance tomorrow provides the opportunity for state governments to show that they are serious about achieving rapid and effective change to the industry. Already business operators are shutting down or modifying their activities as a result of a financial mauling by the insurance companies. The escalating cost of public liability insurance is something that will affect everyone who lives in Australia and it puts our way of life at risk. I make the point, however, that, although of immense national concern, this is an issue where the federal coalition government's role is largely to coordinate and provide leadership. Senator Helen Coonan, the Assistant Treasurer, is doing just that by convening this second national summit tomorrow. To ensure real change, it is up to the states to work collectively in pursuit of a nationwide solution. Public liability insurance is not in the realm of federal legislation; it is governed by state legislation which controls and regulates various insurance matters. From a constitutional point of view, this has nothing to do with the federal government. This is a factor which the states are finally recognising and taking on board. For that, I congratulate them, including Western Australia. I urge them to work with all speed to secure the Australian way of life. We need the states to take the problem seriously and to use this summit to put their best minds to work and adopt a national solution to ensure that claimants do not use the state-by-state differences to shop around for the best price. Prices and conditions should be consistent no matter where in Australia you live.There are numerous factors which have to be addressed to ensure this coordinated approach across jurisdictions, which in turn will make public liability insurance more affordable and available—in particular, reforms to reduce the cost of claims. These may include targeted claim cost reduction by, for example, protecting volunteers and community and appropriate sporting organisations from actions; broadly based reform of tort law, under which negligence claims are dealt with; and reform of legal system costs and practices, such as advertising by lawyers. This is an issue that, if not resolved, will change society forever as we know it in Australia, including the numerous sporting and recreational organisations—from pony clubs to go-cart racing, mountain climbing, school fetes, volunteer busy-bees, agricultural shows, fair days in country towns, lamington drives, sausage sizzles and fun runs. All of these community-spirited events that make up the mosaic of Australian life are in jeopardy. We run the risk of having our lives changed forever if a workable solution to escalating premium costs is not quickly developed and agreed to by the states. I trust they will work together to reach a speedy solution. (Time expired)268509:51:002685Andren, Peter, MPMr ANDRENKL6CalareIND00—One of the more cynical exercises in the recent Calare election campaign was the National Party candidate's brash undertaking that, if elected, he had the guarantee of party leader, John Anderson, and Liberal Party President, Shane Stone, that a Liberal-National government would provide $10 million in funding for the upgrade of the Mount Panorama motor racing circuit. The Bathurst Western Advocate reported the candidate's guarantee on the front page of the 25 October edition, under the banner headline `Elect Shearing or no money: Mt funding conditional'. In the article the candidate described the deal as a `three-way party' between himself, John Anderson and Shane Stone. `If I am not elected,' he continued, `Mr Anderson and Mr Stone said there are no guarantees.'The electorate, I must say, was largely disgusted by such tactics—such abuse of proper and fair governance. The reaction from Mr Anderson and Shane Stone featured in the same paper over the next couple of days. On Mr Anderson's behalf, a spokeswoman said, `Funding for electorates was never conditional on having a government member' and, further, `funding was not conditional on Mr Shearing being elected.' Mr Stone also distanced himself from their guarantee but reiterated his support for the Mount Panorama upgrade.Bathurst City Council's proposal then was for a three-way—local, state and federal—government funded upgrade of the track and facilities at Mount Panorama, this country's premier world-class touring and production car racing venue. This proposal was acceptable to the government if the National Party candidate was elected. It is the same proposal for which Bathurst City Council still seeks federal funding. The Bathurst 1000 is one of the world's most prestigious car races, enjoyed and watched avidly by millions of people around Australia and across the world. Other planned races will also enhance the track's reputation. Racing at the Mount generates 1,050 jobs and contributes $71 million to the nation's gross national product. That is over 1,000 jobs annually for the Central West. The council have already committed $4 million to the upgrade, a serious commitment in anyone's terms. They need $10 million from the federal government, matched by the New South Wales state government. Nothing has changed in their proposal since the election. It is as valid as it has always been and worthy of the support of this government and the state—election year or not. This is a measure of both this government's commitment to rural and regional Australia and the National Party's integrity. If the government agrees Panorama is worth funding, do something. If you now say that you do not support it, then you have deceived motor racing fans and the entire Central West community.268609:54:002686Hunt, Gregory, MPMr HUNT00AMVFlindersLP10—I rise to speak on the issue of rural services within my electorate of Flinders. In particular, I am delighted to report three significant developments which contribute rural services. The first one is a postal service for the town of Lang Lang. McDonalds Track on the edge of Lang Lang is a road which has a significant number of residents who have not had, to this point, direct home delivery. I was recently approached by residents of McDonalds Track seeking home delivery and making a case for it. In turn, I was able to make that case to Australia Post. In addition I have had support from Senator Tchen. As part of that process Australia Post have assessed the needs of the residents of McDonalds Track and they have decided that there is a good case. I am delighted to announce that the residents of McDonalds Track will receive home delivery of their mail. It is a simple development but an important one for the community of Lang Lang.The second rural service I wish to address is in relation to doctors in Koo Wee Rup. Koo Wee Rup currently has a very hardworking doctor, Sandy Chandranath. There is a doctor in nearby Lang Lang, Dr Stewart, but they find themselves taxed. After considerable discussions with Terrona Ramsay from the Koo Wee Rup and District Health Centre and Dr Chandranath, we put a submission to the Minister for Health and Ageing setting out the special needs of Koo Wee Rup for additional medical support. Again I am delighted to announce that the minister has made an allocation of a place for an overseas trained doctor which will have a significant impact on the quality of life and the security of health for the residents of Koo Wee Rup. This is an excellent outcome and I would like to thank the minister for that outcome.The third area of rural service that I wish to address is that of mobile phone coverage in towns with over 500 people. There has recently been an announcement of additional mobile phone coverage for four towns within my electorate. The first is San Remo, the second is Tooradin, the third is Tyabb and the fourth is Warneet. In all of these towns there are significant mobile black spots, which are simply functions of the emerging system. The result is that, due to the Commonwealth's commitment to provide mobile services for towns with over 500 people, all of these four towns have now been guaranteed that they will be given additional coverage. With respect to these three issues, McDonalds Track, Koo Wee Rup doctors and mobile coverage, I am delighted to make these announcements on behalf of the community.10000Causley, Ian (The DEPUTY SPEAKER)The DEPUTY SPEAKER (Hon. I.R. Causley)—Order! In accordance with standing order 275A the time for members' statements has concluded.Bills2687R15262687Debate resumed from 21 May, on motion by Mr Slipper:That this bill be now read a second time.09:58:002687Latham, Mark, MPMr LATHAMK26WerriwaALP00—The International Tax Agreements Amendment Bill (No. 1) 2002 will bring into force two international tax agreements, one with the Russian Federation and the other with the United States of America. Of course, such agreements are subject to bilateral international negotiation. Labor recognises this reality and for that reason supports the bill. Schedule 1 in the bill is a double taxation agreement with the Russian Federation. This is the first time Australia has had such an agreement with Russia or indeed the old Soviet Union. The agreement is intended to promote trade and investment between Australia and Russia and this is a good thing. Given the lead time involved in negotiating international instruments, the agreement was conceived in a period when there was far greater optimism about Russia's economic prospects than there is today. But Russia remains a very significant economy—not only a significant European economy but one with strong implications for and growth opportunities in the Asia-Pacific region. Russia will always be there and, whatever the difficulties they are experiencing at the moment, the benefits of open trade and investment between our two countries remain strong. The lower dividend withholding taxation rules, regulations on transfer pricing and related party transactions will benefit investors, traders and suppliers of services between Australia and Russia. Importantly, the agreement provides appropriate protections for Australia should Russia establish internal tax havens at any time in the future as part of Russia's federal arrangements. I also note that the Joint Standing Committee on Treaties supports the proposed agreement that is now before the House.Schedule 2 in the bill is a protocol extending the existing double taxation agreement with the United States of America. The old tax treaty between Australia and the USA was signed in August 1982. The United States remains Australia's second largest merchandise trading partner, our second largest export destination, our largest market for services and, of course, the largest foreign investor in Australia. Yet it is fair to say that the treaty was signed not only in a different century but in a different economy. The productivity revolution that we have seen in Australia over the last 20 years, driven by economic openness and the enterprise of individual Australians, has changed the Australian economy beyond recognition in the period since this treaty was initially signed, in 1982. More specifically, in the period since the old treaty was signed, a number of our trading competitors have made agreements with the United States that allow lower rates of dividend withholding tax than Australian companies now enjoy in the United States, and new questions have arisen in the taxation treatment of capital gains. It is important, then, for this double taxation agreement to be updated and modernised. To this end, the protocol provides an exemption from withholding tax for cross-owned companies, it updates the capital gains provisions of the treaty and it provides a lower rate of US `branch profits' tax for Australian companies—this, of course, is the US equivalent of what we call dividend withholding tax. I know that a number of major Australian companies have welcomed this reduction in the tax rate in particular. The bill also make some changes to the treatment of royalty withholding tax provisions in domestic tax law, the exact scope of which is not all that clear in the bill. While the new provisions of the US agreement are technical and the politics are not controversial, it represents a significant tax expenditure—indeed, a yearly revenue cost to the Commonwealth of $190 million. Labor support for this major reduction in tax on business reflects our commitment to getting Australian capital working productively. Competitive tax rates on business are a necessary part of continued improvements in Australia's productivity; they are not sufficient, of course, but they are absolutely necessary.Labor agree with the objective of ending the double taxation on Australian companies in the US; indeed, we have been calling for this particular provision for many years. But we also recognise it gives away a large revenue benefit. Interestingly, this has happened while the government is negotiating a free trade agreement with the United States. One would have thought this is an example of one arm of government not talking to the other: while Australia is conceding a large revenue benefit in this particular piece of legislation, another part of government administration is negotiating a free trade agreement with the same country. One would have thought these two matters could have been coordinated. Certainly they could have been handled better. But, given the context and the contents of this bill, it would not be appropriate for Labor to move amendments or to oppose it. On that basis, we support the measure before the House.10:04:002688Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—There is an old American proverb, apparently from the frontier—it sounds very Reaganesque—and it says: if you don't believe in cooperation, watch what happens to a wagon when one wheel comes off. That proverb could easily be applied to international economic relations in the 21st century, not least those relations that relate to international taxation mechanisms. In fact, I am most pleased that we have an opportunity in the Main Committee today, in debating the International Tax Agreements Amendment Bill (No. 1) 2002, to examine the workings of the taxation agreement entered into between Australia and other nations—in this particular instance, the United States of America and the Russian Federation—for there are few more misrepresented aspects of economic policy than what is known as double taxation.For many years, the question of double taxation and the agreements entered into to prevent its occurrence have been grist to the mills of the more lunar realms of Australian politics. Double tax agreements are aimed at avoiding the double taxation of income, where that income is earned in one country by the resident of another country. It is immediately obvious that these agreements are growing in importance every day: more Australians, individuals and corporate entities than ever before earn incomes overseas while retaining their residency in this country and, likewise, more foreigners earn an income in Australia today than ever before. So by avoiding the double taxation of the same income, the agreements entered into by Australia also help minimise avoidance and evasion of taxation.This is an important point. Double taxation agreements are entered into by Australia because it is in Australia's national interest to do so. The incomes subject to these agreements include that earned through business, dividends, interest and royalties, and each agreement outlines the particular taxation treatment of such income, including the particular country's laws by which the income is to be taxed. The original 1953 International Tax Agreements Act provides in subsection 4(2) that agreements entered into in this way can overrule provisions of the 1936 and 1937 Income Tax Assessment Acts. However, the parliament can legislate for specific laws to override particular double tax agreements. Over 40 nations have double tax agreements with Australia, including many of our regional neighbours, our principal trading and diplomatic partners, the members of the European Union, and our close economic partner, New Zealand. By separating out the role of taxing international income between nations and, where necessary, granting credits, the agreements prevent double taxation. And by sharing taxation information, evasion and avoidance across international borders can be stymied. In the case of the particular bill before the chamber, Australia will recognise in law the double taxation agreement signed with Russia on 7 September 2000. Originally this was to be achieved by way of the International Tax Agreements Amendment Bill 2001, but of course that lapsed with the calling of the 2001 federal election. Essentially this is an agreement of the standard type—allocating, as it does, taxing rights on the same basis as those other agreements entered into by Australia. The agreement reduces withholding tax rates applicable to dividend and royalty flows between our two nations. In the event that this bill is passed by the end of this year—one hopes!—the agreement will come into effect from 1 July 2003.One of the primary reasons this particular agreement was negotiated by Australia is the hope that an improved taxation structure with Russia will facilitate our trade and investment with that country. At present, Australia's publicly disclosed exports to Russia consist principally of traditional agricultural commodities: meats and wool, mostly. The value of goods and services exported totalled about $186 million in 2001. On the other side of the coin, the principal Russian imports into Australia include alcohol and metals, and Russian imports totalled just $23 million last year. So this is clearly an underdeveloped relationship. Only 0.2 per cent of Australia's exports go to Russia and we rank about 112th in destinations for Russian exports. Our investment in Russia is estimated at about $25 million—that is chiefly one Amcor plant—and Russian investment in Australia is estimated at about $36 million. So the continuing effects, I must say, of the 1998 financial crisis in Russia have not helped the economic relationship.There are signs of greater exchange between our two nations, as testified to by this taxation agreement and the fact that the head of the Russian space agency visited Australia last year and signed with the Commonwealth an intergovernmental agreement on space cooperation. In fact, in the previous year, the Russian Deputy Prime Minister, Valentina Matviyenko, visited Sydney for the Olympic Games. Australia has also been a strong backer of Russia's entry into full membership of the Asia Pacific Economic Cooperation process—Russia's full entry into APEC was completed in 1998. Australia also supports, on acceptable commercial terms and in accordance with the organisation's rules, of course, Russia's membership bid to the World Trade Organisation. Finally, the last session of the Australian-Russian Joint Commission on Trade and Economic Cooperation was convened in Canberra seven years ago. A number of further meetings of the commission have since had to be postponed because of governmental changes in Moscow, but I understand that the department of foreign affairs hopes that a mutually convenient date will be found for the commission to meet again sometime soon. The International Tax Agreements Amendment Bill (No. 1) 2002 concerns not only the Russian Federation; it also concerns our chief strategic partner and ally, the United States. The US-Australian agreement on double taxation was entered into in August 1982 and has been an economic reality since 1983. The bill before the chamber will bring into legal effect the protocol recently signed between Australia and the United States. That protocol updated the agreement in relation to a number of specific matters. Firstly, it removes withholding tax on certain dividends so as to enable major Australian companies to repatriate the profits of their US subsidiaries without further tax being payable. Secondly, it reduces the rate of dividend withholding tax from 15 per cent to five per cent on dividends derived by companies from other direct investment where the shareholding in question totals 10 per cent or more. Thirdly, it exempts from withholding tax the interest paid to financial institutions so as to ensure Australia's growing standing as a global financial centre. Fourthly, it reduces withholding tax on royalties from 10 per cent down to five per cent. Fifthly, it protects Australia's right to tax capital gains. Finally, it addresses widespread concerns amongst the business community as to the application of Australian capital gains tax on expatriates departing Australia.By way of background, I draw the attention of members to the recommendations made by the Ralph Review of Business Taxation and the longstanding concerns about the high level of withholding tax applied by the US government, including the case of James Hardie Industries last year. Unlike the Russian agreement, this protocol to the US agreement does have a likely revenue cost for the Commonwealth, estimated by the Australian Taxation Office to be about $190 million annually. This matter was the subject of much recent discussion at a public hearing of the Joint Standing Committee on Treaties. While the $190 million cost is apparently easily determined, the potential offsetting gains to Australia from increased trade with the US are difficult to quantify. It should be noted that the reduction of the US tax payable by Australian residents reduces Australia's obligation to provide foreign tax credits to the Americans, and the clarification of Australia's right to tax American residents in respect of capital gains tax is an important protection of our tax base.Like the Russian agreement, this protocol will come into effect from 1 July 2003, provided this bill passes through the parliament before 31 December 2002. I commend the bill to the chamber.10:12:002690Washer, Dr Mal, MPDr WASHER84FMooreLP10—The International Tax Agreements Amendment Bill (No. 1) 2002 contains two elements. The first relates to an agreement negotiated between Australia and the Russian Federation signed in September 2000. This agreement contains provisions for the avoidance of double taxation and the prevention of fiscal evasion in relation to income flowing between Australia and Russia. The second element of the bill is a protocol amending the Australia-United States double taxation convention. The US protocol was signed on 27 September 2001. Additionally, the bill includes consequential amendments following changes to the treatment of equipment royalties paid to US residents arising from the protocol.The amendments will apply generally to deal with all cases where a domestic law royalty payment is not treated as a royalty for the purposes of a tax treaty. Australia's tax treaties are primarily concerned with relieving jurisdictional double taxation. The law as it stands at the moment may allow the same income derived by a taxpayer during the same period of time to be subject to comparable taxes under the taxation laws of two different countries. Clearly, this is prejudicial to foreign investment and trade. The stated purpose of tax treaties is to avoid double taxation and prevent fiscal evasion with respect to taxes on income, but their wider function is to facilitate investment, trade and the movement of technology and personnel between countries. They are widely used to develop and strengthen bilateral relationships between countries, especially in commercial areas. Tax treaties also provide certainty and protection regarding the level of taxation on investments abroad which may, for instance, be valued by business when deciding on the location of a regional headquarters. In its stage 2 response to the Review of Business Taxation, the government agreed to recommendations that priority be given to renegotiating Australia's ageing tax treaties with major trading partners; in particular, with the United States, the United Kingdom and Japan.In following these recommendations the government's belief was that Australian investment offshore would significantly benefit from a lowering of the dividend withholding tax on non-portfolio dividends; that is, dividends paid on 10 per cent or greater shareholdings, under these old tax treaties. The existing tax treaty with the United States was signed in 1982 and took effect from 1 December 1983. Although signed in 1982, it largely reflects the positions agreed by both countries in the early 1970s. Industry, commerce and technology have come a long way since then. The process of globalisation has altered the way in which the world conducts its commercial enterprises and tax treaties reflecting trade agreements of 20 or 30 years ago are out of date and out of step today. As at 1999-2000, the United States was Australia's second largest merchandise trading partner after Japan and our second largest export destination with a two-way trade totalling $33 billion, 16 per cent of total trade. As at 1999-2000, the United States was the largest foreign investor in Australia with investment of $215 billion. US investment in Australia is diversifying with many US firms establishing regional headquarters and other operations here. The United States is the largest investment destination for Australian investment abroad with investment of $156 billion in 1999-2000, of which $90 billion is direct equity investment that would benefit from reducing US dividend withholding tax. Unless the tax treaty is updated, the rate of dividend withholding tax on US subsidiaries and branches of Australian companies will continue to be higher than for competitors from the other countries that have negotiated lower rates of dividend withholding tax with the US. So the US protocol is designed to reflect these close economic links between Australia and the United States of America as a first step in building a cooperative and up-to-date tax treaty network for Australia. It will significantly assist trade and investment between the two countries. Business has for many years been concerned about the lack of competitiveness of Australia's tax treaty with the US and, in particular, the higher level of US dividend withholding tax. The protocol will remove withholding tax on certain dividends enabling major Australian public companies to bring profits made by their subsidiaries back to Australia without further tax being payable. This new arrangement will provide benefit to the majority of Australian corporate groups with operations in the US. Dividends derived by companies from other direct investment where the shareholder has 10 per cent or more will have their withholding tax reduced from 15 per cent at the present time to five per cent or to nil for certain dividends paid by subsidiaries of public companies. The reduction of withholding tax on royalties from 10 per cent to five per cent will reduce business costs for technology and know-how. The net yearly cost to revenue from the US protocol is estimated to be $190 million. Some potential offsetting gains for Australian revenue are unable to be quantified. However, while the withholding tax reductions involve a cost to revenue, the benefits are widely spread in the economy with the most direct benefits accruing to business. The coverage of capital gains will protect the revenue and also benefit business by making the taxation treatment of capital gains more certain. The Russian agreement contained in this bill generally accords with Australia's other modern comprehensive tax treaties and is not expected to have a significant effect on revenue. However, the government believes that the conclusion of the Russian agreement will strengthen trade, investment and wider relationships between Australia and Russia. Given the size of the Russian economy and its dependency on imported goods and services, there is considerable potential for future growth in these areas. The agreement seeks to reduce or eliminate double taxation of income flows between Australia and Russia caused by overlapping tax jurisdictions. It also establishes greater legal and fiscal certainty within which cross-border trade and investment can be carried on and promoted. Another purpose of the amendment to the bill is to create a framework for exchange of information and cooperation between respective tax administrations as a means of combating international tax avoidance and evasion. The International Tax Agreements Amendment Bill (No. 1) 2002 will provide the legislative authority for the domestic entry into force of the new, comprehensive tax agreement with the Russian Federation and a protocol amending the Australia-United States double taxation convention that I have already outlined. I believe this bill will foster the development of trade, investment and economic cooperation between Australia and the Russian Federation and Australia and the United States. I commend the bill to the House.10:20:002692Slipper, Peter, MPMr SLIPPER0V5FisherLPParliamentary Secretary to the Minister for Finance and Administration10—in reply—Mr Deputy Speaker Causley, it is always a pleasure to speak in the Main Committee; in particular, when the Main Committee is under your very firm and fair control. The International Tax Agreements Amendment Bill (No. 1) 2002 is a particularly important bill, and the government would like to thank all honourable members for their participation and also for their support.The bill is one of a range of measures which include the delivery of an internationally competitive company tax rate of 30 per cent, the introduction of GST in the place of wholesale sales tax and inefficient transaction taxes, and the recently announced review of international taxation which will lead to a more internationally competitive tax regime with fewer disincentives to offshore expansion and fewer impediments for multinationals setting up in this country. The bill provides domestic legislative authority for a new, comprehensive double taxation agreement with the Russian Federation and a protocol amending the Australia-United States double taxation convention.Honourable members would be interested to know that the Russian agreement, which was signed on 7 September 2000 will, broadly speaking, allocate taxing rights along the same lines as Australia's existing double tax agreements. The agreement was negotiated with a view to facilitating trade and investment between this country and the Russian Federation. The government looks forward to the strengthening of trade and investment and wider relationships between Australia and Russia which the successful conclusion of this agreement will bring. The Australia-United States double tax agreement is one of Australia's oldest double tax treaties. This protocol, effectively an amendment to the existing treaty between the United States of America and Australia, is designed to bring it up to date. It was signed on 27 September last year. The treaty reflects the close economic relations between Australia and the United States and is a major step in facilitating a competitive and modern tax treaty network for companies located in Australia. It is expected to assist significantly trade and investment flows between the two countries. The protocol will remove withholding tax on certain dividends, enabling major Australian companies to bring profits made by United States subsidiaries back to Australia without any further tax being payable. This zero per cent withholding tax on dividends will benefit many Australian corporate groups with United States operations.In addition, there will be a reduction in the rate for dividend withholding tax on certain other direct investments, which should benefit an even wider class of companies. The rate reduction will apply to franked and unfranked dividends. The protocol also contains an exemption from interest withholding tax on interest paid to financial institutions and government bodies to improve Australia's standing as a financial centre, a reduction in royalty withholding tax from 10 per cent to five per cent to reduce Australian business costs for technology and know-how, and protection of Australia's rights to tax capital gains.As I said at the outset, this is an important bill. The government is appreciative of the support that all honourable members on both sides are giving to it, and I am very pleased to be able to commend the bill to the House.Question agreed to. Bill read a second time. Ordered that the bill be reported to the House without amendment. Ministerial Statements26932693Debate resumed from 15 May, on motion by Mr Macfarlane:That the House take note of the following paper:East Timor—Ministerial Statement, 15 May.10:25:002693Bishop, Julie, MPMs JULIE BISHOP83PCurtinLP10—It is indeed timely that, on this morning when the front pages of our national newspapers are carrying the story that Lieutenant General Peter Cosgrove has been appointed Chief of the Australian Defence Force, we should in the national parliament be speaking on the birth of the new nation of East Timor—for of course Lieutenant General Cosgrove led the successful international peacekeeping force into East Timor in 1999. Last evening, as we watched television news reports of his appointment and saw his face on the screen again, we were reminded of the role he played in East Timor as leader of INTERFET and of the images of him in his slouch hat sweltering in the heat of Dili, East Timor's capital—images that I believe will forever be etched into the Australian psyche.Today we can look back over the history of East Timor—a beleaguered recent history that culminated on 19 May 2002 with the beginning of a new era. But we cannot avoid the reality that few places have suffered as dismal a recent history as East Timor. Left—some would say dumped—by its colonial ruler, Portugal, after that country's revolution in 1974, it was invaded by Indonesia the following year. Intimidation and torture were commonplace. Massacres and famine followed. It is estimated that the combined effect of the killings and starvation resulted in the deaths of as many as 250,000 people—nearly a third of its present population. But after two decades of repression and hopelessness, in 1998 and 1999 there were a number of diplomatic breakthroughs. One had the impression that we were witnessing a relatively smooth and rapid process which would lead inevitably to independence. But there was still that other side to Indonesia, where the militia ran riot and there seemed to be so little hope on the ground for freedom for the East Timorese. Then, in April 1999, Indonesia and Portugal reached a tentative agreement to offer the East Timorese a choice between greater autonomy within Indonesia or outright independence. Much has been written about Australia's diplomatic efforts in reaching this point.On 27 April 1999, at a meeting in Bali with our Prime Minister, John Howard, President Habibie of Indonesia announced that a vote would be held on 8 August and that he would respect the outcome. The months leading up to that vote were crucial, and it may have seemed perverse that there should be so much pessimism when there was at last a chance to bring this long nightmare to a close. But it was a perilous course for East Timor. Of course, history records that the East Timorese voted unambiguously for independence—over 78 per cent of the East Timorese voted for independence from Indonesia—but murderous retribution followed. The international community were outraged. The scenes of violence, murder and intimidation were in our lounge rooms every night, via the 24-hour news services, and it shocked the conscience of all humanity. We saw gangs of militiamen, who, for months, had waged their vicious campaign of intimidation against the pro-independence supporters in East Timor. They took this referendum result as a signal to rampage through Dili, firing wildly and setting fire to buildings. Sadly, despite the imposition of martial law, violence seemed to continue with impunity.By about 8 September 1999, much of the city was devastated and deserted by civilians. A besieged and unarmed United Nations mission, which had overseen the ballot, was desperately hanging on, trying to look after some 2,000 people who had taken refuge in its compound in Dili. You will recall, Mr Deputy Speaker, that across East Timor hundreds, possibly thousands, were feared dead and refugees were flooding into West Timor and into Australia. They told of the appalling bloodshed, including the massacre of 100 people in a church in one small town. When the office of the Red Cross in Dili came under attack and some 2,000 East Timorese who had fled there were removed by armed men at gunpoint, the international community were rightly outraged. Those hiding in the home of Bishop Carlos Belo, the Nobel Peace Prize winner and the spiritual leader of the mostly Roman Catholic territory, were also led away. Although he was a pro-independence figurehead, I think the world thought Bishop Belo was the last person the gangs would attack, but as they burned his house down he was spirited away to safety in Australia.It was into this chaotic mayhem that Australia took bold steps. The tiny territory was by now in the glare of the entire world's attention. Although most journalists were chased out or forced to hole up in the besieged United Nations compound in Dili, chilling reports continued to emerge. They revealed systematic killings, a mass exodus of East Timorese from their homes, many being forced into the hostile neighbouring province of West Timor, and undeniable complicity by at least some elements of the Indonesian armed forces. By 15 September, when the United Nations Security Council had authorised the Australian led force of some 8,000 soldiers, including many Asian soldiers, thousands of East Timorese were feared to have been killed. Yet, despite so much orchestrated violence against people whom the government had always maintained were fellow Indonesians, it took a week of threats and denunciations from outsiders to persuade Indonesia and the generals to relent. Of course, for the United Nations and its INTERFET troops the first priority was to get food and water to the homeless and the next task was to restore order on the ground. It was quite a fearsome task. Nobody had any idea what that would entail, partly because the situation was unique, partly because the United Nations had authorised the mission with such unprecedented speed. Most certainly, Mr Deputy Speaker, you will recall that tensions increased when Indonesia ended the security pact with Australia. I recall our then defence minister said this meant Indonesia's armed forces `will probably not be very cooperative'.Apart from the obvious difficulties of coping with such a humanitarian crisis, the peacekeepers certainly faced a variety of dangers. But I guess at last there was something to be hopeful about in Dili. When the first members of INTERFET arrived in East Timor on 20 September, whilst there might have been few to welcome them at the time, as more soldiers from the Australian led force came ashore those who had fled the weeks of violence began to return to greet them. General Cosgrove's leadership has been well recognised, as has the role played by Australia.I recall being in Berlin in November 1999 on one of the Australian political exchange programs and meeting with a number of members of the German parliament. Members from across the parties spoke of their angst over the request by the United Nations to be involved in the UN led operations in East Timor. It would have been the first time Germany had provided military support outside its immediate region, most certainly the first time since World War II, and it was a matter of considerable concern to the members of the German parliament. Essentially, they said they agreed because it was the right thing to do and because Australia had asked them to do it and they knew that Australia would be doing the right thing in this regard. The world's newest country came a step closer to reality on 19 October when the Indonesian assembly agreed that, after 24 years of brutal rule, East Timor would be set free, thus confirming the results of the referendum. Australia, leading the INTERFET force trying to restore order in East Timor, was amongst the first to congratulate Indonesia for at last giving up its claim.Now to the future. At midnight on Sunday, 19 May, the East Timorese received perhaps the best news of their lives, indeed in their country's history. For after centuries of foreign domination, sometimes exceptionally bloody, they finally had their own independent state. Australians were proud of the role that Australia had played in reaching this momentous stage in East Timor's history.Australia has recognised the significant international support that will be required to assist East Timor to independence and to help repair the post-referendum violence and destruction. Our initial humanitarian effort in 1999 and 2000 totalled around $81 million, and then we pledged $150 million over four years in bilateral aid to ensure certainty for East Timor in the transition period and the early independence years. Our humanitarian and aid assistance has come on top of our significant defence support for East Timor. It is worth noting that between July 1999 and June 2001, Australia's contribution to the peacekeeping effort was valued at some $1.4 billion. Over 15,000 Australian defence personnel have served as members of the international peacekeeping force. Few would begrudge the East Timorese their moment of great happiness, but the fact remains that this tiny country of about 750,000 people starts life in poverty. Australia will continue to support East Timor. The goal of our aid to East Timor is to reduce poverty and to build East Timor's capacity to govern a peaceful, democratic and independent East Timor. 10:36:002696Danby, Michael, MPMr DANBYWF6Melbourne PortsALP00—Australia, on all sides of politics, welcomes the independence of East Timor. Unfortunately, since events in 1975, I think all sides of Australian politics would now, with 20/20 hindsight, admit that we have a sorry history on this particular topic. I came into this parliament in 1998 and was pleased to support the former shadow foreign spokesman, the member for Kingsford-Smith, who, in a timely way, addressed our party's attitude on the issue of East Timor. The former shadow spokesman, in a very timely way, turned around our policy and supported independence for East Timor. He argued very strongly, before the current government thought it was the right thing to do, that the United Nations and Australia ought to have a very assertive role in telling the Indonesian military, in particular its militia thugs, that violence in East Timor would not be tolerated. I remember question time after question time the former shadow spokesman raising with the foreign minister and the Prime Minister the issue of violence in East Timor. He repeatedly suggested alternatives that Australia ought to be putting forward in order to make the Indonesian military and the Indonesian government address the violence of the militias in East Timor. Unfortunately, his advice was not taken in as timely a fashion as it might have been by the Australian government. One particular event that I remember in 1999 was meetings that were held by various spokesmen of the opposition and the government with key US military leaders, CINPAC and the US joint chiefs of staff. The US made it very clear, prior to the mass murder in Dili by the Indonesian militias, that they had never been requested by the Australian government to put pressure on the Indonesian military and the Indonesian government. Washington might have indicated that such an outbreak of violence would be detrimental to US-Indonesian relations. I believe that if that pressure had perhaps been exerted by the Australian government, if that explicit request was made to the US, American pressure may have caused some elements in the TNI to hold back at the time.We all have the possibility now of seeing history with 20/20 vision, and those events in East Timor happened. We then had the Australian government taking the right decision for military replacement of the TNI in East Timor by the ADF. We had General Cosgrove and 4,500 Australian troops showing that the Australian military is one of the best organised, most proficient and effective forces in the world. We had 4,500 Australians peacefully replace 26,000 TNI troops in East Timor.The way in which General Cosgrove, the Australian military and the individual soldiers down to the lowest squad or platoon level behaved, especially in those first days in East Timor, goes to their great credit. It is the reason why General Cosgrove is recognised all over the world as a person who is spectacularly successful at peacekeeping operations. I understand from speaking to individual soldiers and to various officers who were there that the Australian military at the individual soldier level was on many occasions confronted with potential live fire situations with TNI troops. It was only the good sense, the proficiency, the strong orders and the good discipline of the Australian military that prevented a major conflict breaking out between us and the Indonesians. Anyone interested in good Australian-Indonesian relations, as I am sure we all are here in this House, would be very grateful for the proficiency of the Australian military in those particular circumstances. We have a great deal to thank them for, as do the people of East Timor and, I believe, the people of Indonesia because none of us would have wanted this conflict to spread. The Australian military went into Dili, 4,500 of them sealed the border, started the reconstruction of East Timor, allowed the United Nations to come and set an example of peacekeeping which I know seeks to be emulated around the world. I was recently in Germany and was very surprised at the way the German Greens, in particular, were seeking to emulate Australian military peacekeeping operations. I was told by a leading official in the German foreign minister's office that the Australian example was of great interest to Germany, particularly to the more realistic element in the German Greens. Mr Fischer, the German foreign minister, was constantly sending Green parliamentarians down to Macedonia where the German armed forces were in their first deployment a la the Australian military in East Timor. Mr Fischer argued that sending German Greens—parliamentarians—down to Macedonia showed them that military forces could have a beneficial effect in peacekeeping and in preventing conflict becoming wider. He apparently wryly observed that even people who are intrinsically opposed to military deployments could be brought around to see their benefit if violence and conflict could be prevented.With the independence of East Timor, we have the beginnings of a relationship between that country and Indonesia. A few clumsy incidents have taken place recently but the basic picture is of the previous president and the current president recognising that new country. We have Australia trying to repair its relations from a very sincere point of view pursued by all sides of this House. We want to have good relations with Indonesia. We want to have good relations with East Timor and we should not underestimate the difficulties that that new country will have. Australia has been generous in its commercial negotiations over the Timor Gap Treaty, over oil in the Timor Gap. I hope that the large amount of revenue that that will eventually provide for East Timor will enable that country to be economically independent. Certainly we all hope that that is so. In the meantime, it is necessary that Australia and the United Nations continue an involvement in that country. We do not want other countries to drop the ball and leave the whole game to the new country of East Timor and its friend Australia. We certainly want them to keep up their level of involvement. When I was in Europe with a delegation led by the President of the Senate, we were constantly emphasising that in a non-partisan way in every country that we visited.If I was to end with one sour note, it would be to record the disappointment of many people who are friends of East Timor in the system of laws, language and taxation that apparently the new country is seeking to adopt. It is the system of laws, taxation and language of Portugal. Portugal was one of the most disgraceful colonial powers during the colonial era. It did nothing for East Timor. It seems to me a great shame that East Timor is now going to adopt the Portuguese system of doing things. I would have thought that a country that is so close to Australia, where probably the most important air link is to Darwin, might have adopted English. People at the village level and below the elite in East Timor would have more proficiency in that language. It would hook them into the modern world, into the industrialised world, in a way that would make the possibility of East Timorese adapting to globalised economic activity easier. Unfortunately, that does not seem to be the way they are going. In my view, Australia should not give up on this issue. We should be making sure that at the regional level and at the educational level we are providing every opportunity for English language training, that we bring East Timorese specialists to Australia constantly and that the method of communication, if possible, is in English. I was disturbed by an article by Mr Geoffrey Barker in the Australian Financial Review that outlined that, after the first successful taxation collection by Australian taxation experts for the new government in East Timor, they were going to impose the Portuguese system of taxation. As soon as the Portuguese experts who were there to assist East Timor encountered some difficulty, they left for a resort in Bali. That is not a promising beginning. I am sure that all of the opposition wish the new government of East Timor well. Australia could not have done more, in my view—even if some of us have niggling doubts that we could have done it a bit earlier—to assist East Timor, and a great deal of that credit goes to the Australian military and General Cosgrove.10:47:002698Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—From time to time, I find myself reflecting on what an extraordinary privilege it is to be a member of the Australian parliament. When you think about Timor and how events there have unfolded in the life of this government, it clearly brings home the privilege that I speak about—the privilege to be a member of a government that has acted decisively in the interests not just of the people of East Timor but effectively in the interests of the world, and to see how there has been such a successful outcome. There is also the privilege in being right there at the front line with the men and women of the Australian Defence Force and their response. Yesterday, I attended the announcement of the appointment of the new Chief of the Australian Defence Force, General Cosgrove. I know that a number of glowing comments have been made about General Cosgrove in relation to his role. But it should not be forgotten that there was another commander there yesterday, Admiral Chris Barrie. It was actually Admiral Barrie who planned the whole operation—so successfully planned it—and it should not be forgotten that great credit should go to Admiral Barrie as well as to General Cosgrove as the commander of INTERFET.I well remember that, on the night that Australia was to commit troops physically to East Timor, I was present at the lines of the 2nd Battalion of the Royal Australian Regiment at Lavarack Barracks, Townsville. There was only General Cosgrove, the Prime Minister and me—no-one else. We were with the troops. It was an extraordinarily sobering experience. With the commander of the 2nd Battalion, Lieutenant Colonel Salter, we had a final dinner with the troops and mixed with them. There was this great stillness across the whole battalion. They did not know what they were in for the next day. The next day they would be entering East Timor for the first time. There was an apprehension among the young soldiers. They had trained for many years for this kind of operation, and now it was for real.The men of the 2nd Battalion did us proud as a country. A couple of months after they left, I was very privileged to be able to join them in East Timor. Having visited East Timor and seen the dreadful destruction and desecration of that country—most buildings were burnt out and most farms were destroyed—and the plight of the people of East Timor, it was very moving to then see the wonderful welcome that the Prime Minister of our country received when he went out into the country, when he went into the refugee centres or when he was handing out food to people who were in need. I well remember landing at Maliana, where the PM moved quite freely among the local people. They all wanted to thank him for Australia's involvement in East Timor. It was done in a very genuine way. As an aside, it was very interesting to see, when some translation was needed, who was doing the translation. Right next to the Prime Minister was an officer from the Australian Defence Force speaking Indonesian. It was quite remarkable. When I went to Batugade, the site of an old 16th century Portuguese fort where other elements of the 2nd Battalion were located, I landed on the beach in a Blackhawk helicopter. The Blackhawk helicopter was from 5 Aviation Regiment based at the RAAF base in Townsville. As I walked up the beach, the pilot turned the engine off and came up and tapped me on the shoulder. He said, `G'day, Pete. What are you doing here?' It was Captain David Burke. I did not recognise him when I was on board because he had the big flying goggles over his face. He was one of the two pilots involved in that dreadful Blackhawk accident in the Townsville field training area a couple of years previously. He was in one of the helicopters that crashed, and yet here he was working for the Australian Defence Force in East Timor, flying Blackhawk helicopters. What a marvellous person. He was badly injured from that accident, but he recovered. He got back behind the controls, and there he was on the beach of Batugade, saying `G'day, Pete.' He lives only three streets from me in Townsville. I also want to pay tribute to the men and women of 3CER, the Combat Engineer Regiment, who did such a wonderful job restoring some of the infrastructure that was run-down. In particular, I would like to acknowledge Brigadier Mark Evans. I do not want to muck up his career path, but I would like him to be promoted to Commander First Division when that comes up in a couple of weeks time. We will keep our fingers crossed for Mark. He is a fellow who certainly deserves it. The point that I want to make today is about the role of the Australian Defence Force in the operations in East Timor, how they have been so wonderfully received and how they have done such a marvellous job. I proudly say that the initial response was from members of the ADF from Townsville, with 10FSB, 3CER, 2nd Battalion and 5 Aviation Regiment. Our garrison city has been the response unit for virtually all of Australia's overseas operations in the last 10 to 15 years and will continue to be so. I was particularly pleased yesterday to see General Peter Leahy promoted to Chief of Army. General Leahy was also a former commander of 3rd Brigade in Townsville. He is a person who plays a straight bat, who has an extraordinarily sharp mind and who has tremendous leadership qualities. I know that his promotion will go down very well in relation to the leadership of the Australian Army.I am really pleased to see the path of East Timor through to independence. To have a new nation in such difficult circumstances is a wonderful achievement. It reflects very much not only on the will of the East Timorese but also on the role that the Australian government played. I am very pleased to be able to say, as we all are, that I was part of a government who supported our international role in doing what was right for those people. I do think that in the years ahead we will repair our relations with Indonesia. I think we are well on track in that regard. I was very pleased to see President Megawati embracing our Prime Minister. I look forward to very cordial relations between all three countries in the years to come. 10:55:002700Ripoll, Bernie, MPMr RIPOLL83EOxleyALP00—Firstly, I would like to say that this is probably one of the most momentous occasions that you could think of in history. When we talk about East Timor's independence and the formation of a new nation, it is as the 21st century's newest nation and one that has struggled greatly and had this huge connection to Australia and its region. I am extremely honoured to be able to say a few words on this occasion to mark this great historic moment.It has been an extremely long path for the East Timorese people. It is always important to reflect on history before moving on to the present. As most people would know, East Timor was set up in 1642 through Portuguese traders as a trading post for sandalwood. Dutch colonial rule expanded over the rest of the Indonesian archipelago at the same time and, through a treaty in 1859, gave the eastern part of the island to Portugal and the western part to the Dutch. In a period of over 300 years not a great deal changed. There was certainly not much development and not much input into East Timor. The Portuguese administration, following a coup in Lisbon in 1974 and through 1975, had a change in policy in terms of its colonialisation. At that point they literally packed up their bags in East Timor in Dili, got on a boat and headed out to a small island off the coast called Atauro. This is where they domiciled themselves for a little while.The next 25 years or so are fairly well documented in terms of what took place with the invasion by the Indonesian troops and the recording of some 200,000 lives lost through either the process of invasion or famine and disease and the occupation that took place. Quite sadly, in 1978 Australia was possibly the only major nation to formally recognise the annexation of East Timor as the 27th province of Indonesia. History sometimes has a funny way of dealing with things. What we are seeing now in Indonesia is a totally different set of circumstances and a totally different scene under a different administration. The country is now itself in a democratisation process that is very much different from the previous rule from Indonesia.Indonesian President Soeharto was forced from power in 1998 due to an economic crisis. It was his successor B.J. Habibie who took not only Indonesia and Indonesians by surprise but the whole region and the world by saying that it would be okay for the East Timorese to have a vote on self-determination and autonomy which we now know they rejected. Instead, at very high cost, they decided it would be much more worthwhile to strive for independence and to become a nation in their own right.What followed is again well recorded in history—brutality by the militias and the TNI to pay back the East Timorese people for their vote of independence and also because of the loss of an enclave, a power base and a means of income for many of the Indonesian military. That history aside, today we are seeing a completely different set of circumstances. East Timor's independence is, as Jose Ramos Horta has stated, `a triumph of faith and conviction over tyranny'. Those words say a lot about a nation, its people and its leaders. It is a victory of the human spirit, a spirit that has enabled the East Timorese people to shake off the chains of oppression. The path to independence, as I stated before, was an incredible path but it had the support of an overwhelming majority. Something like 82.5 per cent of the population voted in favour of independence. This was done with great courage, in the full knowledge that they would pay a high price. The price for many of them was their lives. For many others it was brutality and the destruction of their cities, towns, villages and infrastructure. It was a horrendous time. I have great personal admiration for these people for what they endured and for their ability to see beyond it, just as Xanana Gusmao had seen the possibility—and never lost hope—of independence for East Timor. He had fought against the odds for so many years, and so did the East Timorese people. They took the very first opportunity they could to determine their independence, regardless of the price to be paid. The healing process that is now taking place is a time of great remedy and a time of great pain. The suffering the East Timorese people endured during that time has not ended. It will continue for some time, until the wrongs of the past can be righted. This is being done through a number of mechanisms right now in East Timor—through the judiciary, through reconciliation and, similar to what happened in South Africa, through truth forums where the people of East Timor can come forward but then return to their villages and get on with their lives. The proximity of East Timor to Australia and its neighbours is significant in terms of our economy, our trade, our neighbourhood and the friendship between our nations. This gives East Timor, the newest nation on earth, great potential to take control of its destiny and independence and to give its people a decent shot at life. I want to mark for the record the significant decision of the new government not to take on board World Bank loans or assistance from the IMF. This country is the poorest country on earth, but it is prepared to start at the lowest denominator and stay there until it can come out of it on its own. East Timor does not want to be beholden to the World Bank and to massive loans. I think it has learnt a lesson from other countries that have gone down that path in the past and found that sometimes that alternative is not so great and has caused more problems than it has resolved. I want to congratulate East Timor on that decision. For me the independence of East Timor has particular personal significance, as I visited East Timor exactly 12 months to the day after their first vote. When you arrive in East Timor and fly over Dili there are a couple of things you notice straight away. The first thing you notice is the haze from the fires that burn almost continuously through the countryside as the people burn off some of the bush in their own way and get rid of rodents. The second thing that strikes you is the absolute carnage. It is really hard to describe to people just how bad it is. It looks like a scene out of a textbook—perhaps a site that has been destroyed by nuclear weapons or something like that. It is quite incredible. Only a few buildings stand. Buildings and homes are completely burnt out and infrastructure has been destroyed. It is a scene of incredible carnage. Much further out than that, what I saw in the countryside on my way out to Baucau were the farms. Not only were these farms destroyed as much as they could be but things had been made more difficult because the water pumping stations on farms, where they had pumps just above the wells, had been hand-cut with saws and had had arsenic and acid poured down them to destroy not only the pumping mechanism for the water but the water supply itself. Animals were slaughtered. It was incredible to see the lengths that the retreating militias had gone to to ensure that the people of East Timor not only suffered at the point that they made their decision for independence but suffered into the future from having their infrastructure and resources and their very food, livelihood and everything else taken away from them, including their shelter. I heard incredible stories of what took place in those days, of homes being looted and burnt and people being killed. It was quite disturbing. I have to say that that is not the lasting image burnt into my mind the most. In fact, this may sound odd to some people, I suppose, but the lasting image in my mind is that of a really happy people. When I was there, the images of the people's faces were quite incredible. There was actual joy on their faces, and at first I did not really pick this up. I saw it, but I could not quite understand the depth of this joy and happiness and exactly what it meant. The look on people's faces was one of being free, of being liberated with their nation's independence: it meant so much to them.Driving around the town at about 10 o'clock one night with a friend of mine, whom I will mention specifically in a moment, I asked, `Why are so many people wandering aimlessly around the streets and up in the hills and so forth at 10 o'clock at night? What are they doing?' He said to me, `You have to understand that they are now free and they are just walking because they can.' It was a very significant thing to see people out walking for only one reason—because they were allowed to. The curfews were gone, and they felt that their country was now their own again. It was an incredible experience.I also want to mention our troops in East Timor, particularly the Army, who did such a fantastic job, and also the RAAF who—unknown to some, I suppose—were actually first in and had prepared the ground and whatever was needed to ensure that the operation that took place in East Timor was successful. The Australian-led UN mission was incredibly successful and is now world renowned. General Peter Cosgrove did an amazing job and is reaping the rewards of that success now, I believe, because of his reputation and his ability to lead. Also worthy of special mention are our Australian volunteers in East Timor, our aid agencies, our police force—so many people went over to help who felt that in some way they owed something to East Timor. I congratulate all of those people on what they did and on the great dignity which they restored to the people.Something else I saw there was the great ideal of entrepreneurship: virtually immediately after they had been liberated, people were setting up beer shacks, food shacks and selling agencies, and hawkers were on the street—basically anyone who could tried to make a dollar. There was really not much money for the East Timorese people: they are extremely poor, and food and other things were extremely hard to come by. Everywhere we went the presence of so many UN troops, Australians and people from the global community sparked the economy along at that stage. On our visit to Baucau a most wonderful lunch was provided to us all by the Victory Cafe run by an expat out of Darwin, who had returned immediately to his homeland. The Victory Cafe provided, I have to say, great food, great company and a great time.Last Saturday, not only did I have the privilege of representing the Leader of the Opposition, Simon Crean, at the East Timorese celebrations in Brisbane but I felt honoured by the very fact that they had asked me to come and speak to them because of the associations that I have had with the East Timorese community in my area. It was an absolutely fantastic celebration. About 600 people attended St Brigid's Catholic Church at Red Hill, and there was a great atmosphere of joy and celebration of their independence. When hearing some of the East Timorese people themselves speak about what independence meant to them, I noted that one word kept recurring, and it was `dignity'.Something that will stay with me also is that, after having been ruled by others for so many years, finally the East Timorese have their own identity and culture to show to people. They sang us their songs, they danced for us, they wore their traditional dress and really showed us what it meant to be East Timorese. They wanted to express to the Australians there, `We are a people with an identity, a culture and dignity and now we want to be part of the international community.' I felt a special bond celebrating this night with them. I also want to make special mention of a good friend of mine from the East Timorese community, Daniel Madeira. Daniel has an incredible history. He served in Angola. He has pictures to prove it and always likes to show people his great history of having trained in the army and having been the trainer who was superior to Xanana Gusmao and who trained Xanana. He has some photos of that time and fond memories. He did all he could from Australia, as did so many East Timorese, to help the independence cause. Unfortunately, I could not be in East Timor for the declaration of the newest nation on earth, the Democratic Republic of East Timor Loro Sae. (Time expired)11:10:002703Hartsuyker, Luke, MPMr HARTSUYKER00AMMCowperNP10—I concur with the sentiments of the member for Oxley in regard to the lasting impact that the incredible destruction suffered in East Timor had and also the incredible optimism which the East Timorese are carrying forward with their new nation. I commend the Minister for Foreign Affairs on his ministerial statement, which gave a realistic and positive appraisal of the history and future outlook for the independence of East Timor. I am proud to be part of a government which has been proactive in the birth of a free and independent nation and I am proud of the role our country has played in assisting one of our closest neighbours to achieve a democracy which we take for granted in this country.I commend the Prime Minister on his strength and leadership which have been pivotal in achieving the outcome which East Timor now enjoys. The Prime Minister's letter to Indonesia's then President Habibie in December 1998 was an important milestone on the road to independence for East Timor. The Howard-Habibie summit in April 1999 in Bali helped pave the way forward for independence. The leadership shown by the Prime Minister and the significant political and diplomatic effort made by Australia assisted to galvanise support for this new nation. Our support for East Timor has been more than just words. Australia has provided substantial financial, logistic and military support in addition to our diplomatic efforts. We have provided very substantial commitments: $81 million for the year 1999-2000 and $150 million over the following four years. Between July 1999 and June 2001, the total Australian contribution to the peacekeeping effort was valued at $1.4 billion, a substantial contribution by any measure. Over 15,000 Australian Defence Force personnel have served with the international peacekeeping forces during this time. No history of the progress of East Timor would be complete without proper acknowledgment of the fine role played by the Australian military. Our forces played a vital role in securing independence, first through INTERFET under the command of Lieutenant General Peter Cosgrove and later through our peacekeeping forces working with UNTAET. Their professionalism and ability to get the job done allowed them to win the hearts and minds of the East Timorese. Also, one should not forget the families of these service men and women who endure the pain of separation which is part of military life.Australia has been heavily involved with the establishment of an administrative framework for the new East Timorese government. Such infrastructure is essential for the success of independence in the longer term. As the minister pointed out, building a stable and sustainable democracy is critical to the future of this new nation. Australia will have a proud place in East Timorese history. We have helped with the development of budget management and taxation systems, as well as with the basic functions of government, including the training of over 1,000 civil servants from central and district administrations. We have also contributed through scholarships targeted at developing and improving skills. The Minister for Foreign Affairs highlighted a number of areas in his statement concerning the way forward for East Timor in building the new nation: reconciliation and peace building, good governance, human rights and support for the more vulnerable people in their society. East Timor has released its first budget—a sound and responsible document which broadens and deepens the economic base to develop an environment conducive to private sector investment and which will be important for the economic growth and development of the nation. Resolving land tenure issues and developing a legal and administrative framework to assist in investment will be crucial. I commend the Australian government for recently entering into a treaty for the joint development of the Timor Sea petroleum resources. Developing these resources will be crucial for East Timor's economy. I look forward to seeing this resource, so valuable to East Timor, provide an engine of growth for their economy. I look forward to those resources being developed in a spirit of cooperation between our countries. I believe that our government has dealt in a fair and reasonable manner in the negotiations over this resource.Ongoing work on human rights matters is a challenge, and the efforts to date are encouraging. The Commission for Reception, Truth and Reconciliation in East Timor, set up to provide a legal mechanism for reconciliation and reintegration at a community level, is one such step that is producing positive signs for the future. The President of East Timor has taken a leading role in meeting with former militia leaders and encouraging refugees to return to their new nation. Again, Australia has been helping in this process through a $13 million program for refugee repatriation since 1999.The wider international community has clearly embraced independence and the nation of East Timor. Locally, I am pleased to see many positive steps have been taken towards reconciliation and the development of a relationship with Indonesia. This relationship still has some way to go. The constructive approach made by President Megawati and her government is to be commended. There are many positive signs being displayed by both countries, and I believe this is laying the foundations for good East Timor-Indonesia relations into the future. President Megawati should also be praised for her participation in the independence day celebrations. I was honoured to be a member of the Australian parliamentary delegation that observed the presidential elections recently in East Timor. Those elections were very well managed, peaceful and successful, with an estimated turnout of 86 per cent of voters at the polls. The outcome was very well received by both the people of East Timor and the international community. Praise is due for the help and assistance given by the Australian Electoral Commission, which has also been working to develop skills and resources for managing the electoral process. I also believe the East Timorese must be commended for the way in which they embraced the electoral process and took ownership of their elections and their future. During my visit, the East Timorese were very optimistic about their nation's future. I found the spirit of the people, their overwhelming desire for independence and their spirit of nationhood very encouraging. This spirit will prove vital to the future development and success of East Timor's government systems. I was also very encouraged by the admiration, respect and appreciation afforded by the East Timorese to the Australian peacekeeping forces in their country. I mentioned earlier how our forces had won the hearts and minds of the East Timorese people. The Australian Defence Force personnel that currently serve in East Timor are held in very high regard by the East Timorese. When I was travelling in East Timor with the Army, it was quite an amazing experience to actually pull up in a small town or village and see the children come running out from the houses, perhaps with a soccer ball, encouraging the troops to play soccer. Perhaps they would come seeking small gifts, and the troops often had small gifts for the East Timorese children—perhaps some pictures to colour in and some colouring pencils. It was quite a heartening experience to see on the ground how the troops had won the hearts of the East Timorese and how that affection was reciprocated between the troops and the people. It was a great experience and something for which our troops must be truly commended. I commend them for doing such a fine job and acting as such fine ambassadors for our country. I am sure that the actions of our military forces have laid some very fine foundations for a strong and fruitful bilateral relationship with East Timor.Nationhood for East Timor has just begun, and there are many very daunting economic and social challenges ahead, but the momentum that has been generated and the spirit of the East Timorese people that I have observed will see their newfound freedom continue and I am sure they will work very hard to make their nation prosper. 11:20:002705Gambaro, Teresa, MPMs GAMBARO9K6PetrieLP10—When East Timor officially gained independence on 20 May this year, it not only signalled the newest nation of the 21st century but also represented a change in the dynamics of our South-East Asian region. In writing a new chapter for this neighbour, the East Timorese have signalled their desire to progress forward, but with an understanding of how the past 20-plus years have added a chilling chapter to their history that will help shape and mould their future as a people and as a nation. At times that history was brutal and was written in blood and tears, but it is their history.The establishment of the Commission for Reception, Truth and Reconciliation recognises the importance of providing avenues for reconciliation and also of providing that at a community level. Although the commission is at a very early stage, it is pleasing that East Timor has chosen this path. As Jose Ramos Horta, the new East Timorese Foreign Minister, said on 20 May, `We are a proud and simple people who deserve peace, who deserve freedom.'A European journalist in Cambodia in 1993, during that country's first democratic elections following the Khmer Rouge regime, recounts a discussion he had with an Australian psychiatrist and anthropologist in the book A Fortune Teller Told Me. In discussing the emotional state of the Cambodians, the journalist, Tiziano Terzani, notes that the usually superstitious Cambodians would be better served with experts on ghosts to `exorcise the ones that made the air so heavy and the nights so sleepless'. His Australian friend Maurice Eisenbruch says that the Cambodians are victims of mass trauma, the consequence of years gone by when they saw so many people disappear. Their discussion underpins the importance of the East Timorese commission as a way for the country to grapple with the troubled waters of their immediate past. Australia has helped refugees either to return to East Timor or to be resettled in Indonesia. Since the presidential elections in which 86 per cent of the population turned out to vote, many have chosen to be repatriated. This is a very important step in the nation building of East Timor. The East Timorese commission recognises the impact of the past 2½ decades on the souls of the people of East Timor. The new leaders want the perpetrators brought to justice, but they are mindful that nation building, not revenge, is their agenda. Their involvement, and the involvement of Indonesia in helping to steer towards a political agenda, is pivotal. The reception given the Indonesian President, Megawati Sukarnoputri, at the inaugural independence celebration, and Indonesia's ad hoc human rights tribunal on East Timor, have shown that bridges can be built between the two countries in acknowledging the past.Australia will play a very important role in securing this. The trilateral meeting in February this year with Indonesia and East Timor will assist in ensuring the progression of increased cooperation in the region. Partnerships such as the South-West Pacific Dialogue, which will hold its inaugural meeting later this year, will also further strengthen this cooperation. It will not be easy, but the international focus on East Timor will assist them to progress. International relations are important for East Timor, and the international community is very eager to embrace this new nation. This commitment will be ongoing.Together with the United Nations, Australia has worked hard to help East Timor realise their independence. From the outset Australia has shown its commitment to East Timor, and this commitment is unflinching. We participated in the first UN monitored operation, UNAMET, and led the INTERFET mission to restore security in East Timor. UNAMET secured the public's favour with independence and INTERFET was significant in restoring order and security to the island nation, particularly following the events of 1999. Around 15,000 Australian defence personnel participated over the course of INTERFET. Our involvement in the UN Transitional Administration in East Timor has helped to rebuild much.Australia acknowledges that it is important to assist East Timor in the future. In 1999 and 2000 our humanitarian effort totalled $81 million. We have also pledged $150 million over four years in bilateral aid to provide a level of certainty for East Timor now and in the ensuing years. Our aid is absolutely essential to help with health, sanitation, water supply and community development projects in a vast number of rural areas and for the vast majority of East Timorese where they live.At the request of the East Timorese people we built the National Exhibition and Community Centre near the centre of Dili at a cost of $2.5 million. This centre not only will provide a showcase for local and visiting displays and for trade shows but will also be available for community forums and events. We have helped develop partnerships that will strengthen civil society through projects focusing on human rights, support for vulnerable members of our society, governance and peace building.Building local capacities both in Dili and in the rural districts will be very important to ensuring East Timor's government grows and that it strengthens. We have also trained East Timorese civil servants and assisted in developing budget management and tax systems, and we have helped them in many other areas of government. If East Timor is to deepen its economic base and encourage growth, investment and job opportunities, then it is absolutely essential that a legal and regulatory framework be established. Around 70 per cent of East Timor's 800,000 population are unemployed and the average East Timorese works for around $1 per day. Indonesian occupation helped build roads, schools and health clinics but the violent events following the autonomy vote of 1999 saw much of that lost. It was interesting listening to the member for Oxley describe earlier the devastation to that infrastructure and how it resembled a city that might have been devastated by nuclear explosion. I found that very telling and also quite soul destroying. Much of the local infrastructure, including the schools and hospitals, was destroyed—and that has been mentioned by a number of earlier speakers—by the Indonesian military and the local militia. It was an absolute devastation to the people and an absolute loss in all areas.Although much was rebuilt or restored to operating levels during the 2½ years of UN administration, it was not until October last year that the full wave of 240,000 students returned to schools. You cannot imagine what they must have been doing in that time, but to have so many of those students able to return to an educational system is very important considering that in 1999 the literacy level was 50 per cent for men and even worse for women—34 per cent. When Indonesia first occupied East Timor in 1975 it was a very low five per cent. Although Indonesia initially helped build infrastructure during the years of occupation, the requirement that Indonesian be the administrative language and the forbidding of Portuguese in local schools meant that there was a great deal of animosity towards the Indonesians and their language.One of the biggest challenges facing East Timor is the change in language and the way it is taught in schools. Today the push is to restore Portuguese in the schools and to promote the most popular of the 15 indigenous languages and Tetum. Around 91 per cent of the population speak Tetum, while an estimated 63 per cent speak Indonesian and only five per cent speak Portuguese. Although Portuguese will be introduced progressively into the schools over the next 13 years, many young people are concerned that the change in language may limit their employment prospects in the future. They see Portuguese as a colonial language not as a progressive one, but the new leaders of East Timor have decided that the use of Portuguese during the resistance to Indonesian rule has rendered it an important feature of this new nation. Furthermore, Portugal and other Portuguese speaking countries, such as Mozambique, Angola and Brazil, have all supported East Timor in their push for independence. Another concern is that only one in 15 local teachers speak, write and read Portuguese. They are assisted by an aid program from Portugal, where around 140 teachers are helping to instruct local teachers in language and education.The immediate future of East Timor is contingent on international support, to help this nation reach its goals. Australia is helping East Timor to rebuild its health system through AusAID. The Specialist Medical Services Project will run for four years at a cost of $3 million and provide specialist medical services. In East Timor there are no practising East Timorese surgeons or specialists and limited resources for essential surgical capabilities. The project will be managed by the Royal Australasian College of Surgeons and involve a general surgeon and an anaesthetist. It will run for three years and include 13 visits a year over the three years of visiting specialist teams. Another project will involve the provision of some 10 four-wheel drive ambulances for the East Timor District Ambulance Service. A training package, valued at $430,000, will be delivered for ambulance personnel as well. These measures will help to provide a sustainable district ambulance service for the population, the majority of whom live in those rural areas. A third project will implement a mental health program in all 13 districts of East Timor. It is absolutely pivotal to the success of East Timor as a nation that assistance be given and that we ensure the longevity of this nation—that their dream for tolerance, forgiveness and peace is achieved. It is not easy for this new country but much international support is helping to pave that way. On top of that, the strength and determination of the East Timorese people is to be applauded. It is not an easy process for a country to overcome such a turbulent history, but East Timor stand a very good chance of succeeding and succeeding well. They have endured much but they are committed to finding peace, tolerance and forgiveness. I, for one, sincerely wish them the very best.11:32:002708Ripoll, Bernie, MPMr RIPOLL83EOxleyALP00—by leave—I want to say that, while unfortunately I could not be in East Timor to celebrate the declaration of the Democratic Republic of Timor Loro Sae, the Australian Labor Party did send a contingent to represent us there, comprising the Leader of the Opposition, Simon Crean; our shadow foreign minister, Kevin Rudd; and our parliamentary secretary for the Northern Territory, Warren Snowdon.I also want to make special mention of one person in particular who is now a senior minister with the new administration. His name is Jose Teixeira. Joe, as he is more commonly known to most of his mates around Brisbane—and certainly he has been one of my very good friends for many years—is East Timorese. He grew up in Australia from 1975. He is a lawyer by trade and he worked very successfully in Brisbane as a partner in a law firm. Joe decided that for him, as an East Timorese, going back to East Timor—and he has been back there for nearly 2½ years, I think—was an incredibly big decision but an easy decision to make. It was something that he felt just had to be done. He owes so much to Australia, yet owes so much to his own country. What he wants to do is pay back Australia by taking everything he has learnt here and doing everything he can to rebuild and help the people of East Timor actually in East Timor.He is very excited about his new role. I spoke to him a couple of days ago and he feels it as a great responsibility, a great weight on him and on his government, that they need to succeed—not for the outward appearances of what it means to them to be successful but for the people of East Timor. So I wanted to make special mention of him. I think it is unusual in some sense to have a boy from Brisbane over there as a minister in East Timor right now. It is a great honour for me to know him and be his friend and to be able to speak to him. I also congratulate his family—his wife and his three children—for actually deciding to go over there and live in East Timor. It is a very big decision and a very difficult one. In a sense they are sacrificing a comfortable life here for what is a new and adventurous but more difficult life in East Timor.In conclusion, I would like to congratulate three people who are extremely significant in the new administration and also the whole process of independence: Xanana Gusmao, Mari Alkatiri and Jose Ramos Horta. These three people, together with so many of the freedom fighters and the people who believed in them and helped them, fought for independence not only within East Timor but also in the international community. I congratulate them. I wish East Timor well. I know East Timor has an extremely bright future and faces many challenges economically, politically and in developing new relationships with its neighbours. I think it is extremely important to note that Australia, Indonesia and East Timor should work closely as very near neighbours. In the end I think this tripartite relationship will be the success of East Timor and its current leadership. Debate (on motion by Mr Jull) adjourned.Main Committee adjourned at 11.36 a.m.Answers to Questions in Writing2710The following answers to questions were circulated:2710(Question No. 223)2232710Ferguson, Laurie, MPMr Laurie Ferguson8T4ReidALP00 asked the Minister for Citizenship and Multicultural Affairs, upon notice, on 14 March 2002:(1) Does the Public Service and Merit Protection Commission's (PSMPC) Workplace Diversity Report 2000-01, dated 24 October 2001, note that there has been a continuous decline in the employment of NESB 1 staff over the past decade in Commonwealth departments and agencies.(2) Does the report also state that while there had been continuous, gradual improvement in representation of people from NESB 2 until 1998, now a decline is taking place.(3) Does the report point out that people from a non-English speaking background continue to be underrepresented in engagements compared to their representation in the Australian Public Service and they are leaving at a higher rate than that at which they are joining.(4) Has his Department sought advice from the PSMPC on the factors that have contributed to these trends; if so, what was the Commission's advice.(5) Have a number of Commonwealth agencies reported to the PSMPC that they have no need for specific strategies to remedy employment related disadvantage on the basis of ethnicity; if so, which agencies have made such a claim.(6) What are the implications of the findings of the report for the Government's Charter of Public Service in a Culturally Diverse Society and what measures, if any, has the Government adopted in response.2710Hardgrave, Gary, MPMr HardgraveCK6MoretonLPMinister for Citizenship and Multicultural Affairs10—The answer to the honourable member's question is as follows:(1) Yes. Further analysis of the Australian Public Service Employment Database indicates the numbers of NESB 1 employees commenced to decline annually after end June 1993 (there having been a slight increase from 6,183 at end June 1992 to 6,225 at end June 1993). (2) Yes. Further analysis of the Australian Public Service Employment Database indicates that the continuous gradual improvement in the representation rates of NESB 2 employees actually extended until end June 1999. The representation rate of NESB 2s declined in each of the subsequent two years.(3) Yes. (4) The PSMPC has advised that the decline may be partly because there are fewer people employed at junior and clerical levels in the APS where, in the past, people from non-English speaking backgrounds have been concentrated. It should be noted that, because the provision of EEO data is voluntary, there might be some under-reporting in EEO categories. The proportion of people self-identifying as being from non-English speaking backgrounds upon being engaged has normally been lower than their representation in the APS. This may result from initial reluctance to identify racial or ethnic origin. It should also be noted that participation rates are not ends in themselves. Good diversity management involves much more than diversity statistics.(5) In response to the Public Service and Merit Protection Commission's questionnaire in preparation for the 2000-01 Workplace Diversity Report, agencies were asked what strategies they had in place to eliminate employment-related disadvantage on the basis of race or ethnicity. One APS agency, the Australian Geological Survey Organisation (AGSO), reported that there is no need within the agency for specific strategies to remedy employment related disadvantage on the basis of race or ethnicity. It was reported by AGSO that the technical nature of their work attracts applicants from a variety of racial and ethnic backgrounds from within Australia and overseas.Three APS agencies, the Australian Centre for International Agricultural Research (ACIAR), the Australian Radiation Protection And Nuclear Safety Agency and Insolvency and Trustee Service Australia reported that they currently have no specific strategies in place to eliminate employment related disadvantage on the basis of race and ethnicity. ACIAR reported that the nature of their work and their international profile enables them to attract staff from diverse ethnic and cultural backgrounds. All three agencies reported general measures in place to promote diversity and to eliminate discrimination. Other agencies' responses to the question varied as to the degree of specificity of strategies used to eliminate employment related disadvantage on the basis of race or ethnicity.(6) There are few, if any, direct implications for the Charter of Public Service in a Culturally Diverse Society. This is clear from the 2001 Access and Equity Annual Report that was tabled in the both Houses on 15 May 2002. The good overall quality of the returns provided for the 2001 Access and Equity Annual Report shows that Departments and Agencies are addressing diversity management issues seriously. The Annual Report also signals numerous enhancements that Departments and Agencies have planned for future years.The Charter represents a nationally consistent approach to ensuring that government services are delivered in a way that is sensitive to the language and cultural needs of all Australians. The Department of Immigration and Multicultural and Indigenous Affairs (DIMIA) developed a performance management framework for Charter implementation in 2000. All Departments and agencies are now reporting against the framework's performance indicators, which cover five core roles of government agencies: policy adviser, regulator, purchaser, provider and employer.The management of employees, including the recruitment and retention of employees identifying as NESB 1 and NESB 2, is the responsibility of each Agency Head. The Government has introduced and implemented public service legislation which requires Agency Heads to put in place measures to eliminate any employment-related disadvantage on the basis of race or ethnicity. It is expected that agencies will take account of, and respond appropriately to, the matters identified in the PSMPC's Workplace Diversity Report 2000-2001. The PSMPC provides a range of support to agencies to help them manage workplace diversity, including the elimination of any employment-related disadvantage on the basis of race or ethnicity. The PSMPC support includes:· the provision of advice to agencies about the development or review of their Workplace Diversity Programs;· facilitating a Workplace Diversity Co-ordinators' Network to discuss key issues and share experiences;· the co-ordination of a regular newsletter to agencies on diversity issues; and· the publication of a booklet Guidelines On Workplace Diversity, which is designed to assist agencies to meet their legal obligation to develop a Workplace Diversity Program, and to help them embed the principles of workplace diversity in their culture and their management systems. 2711(Question No. 304)3042711Thomson, Kelvin, MPMr Kelvin ThomsonUK6WillsALP00 asked the Treasurer, upon notice, on 14 May 2002:What is the annual number of insolvencies recorded for Victoria since 1996, and what share of these are registered in the postcode areas of (a) 3130, (b) 3131, (c) 3132, (d) 3133, (e) 3134, (f) 3058, (g) 3056, (h) 3055, (i) 3057, (j) 3060, (k) 3044, (l) 3039 and (m) 3046.2711Costello, Peter, MPMr CostelloCT4HigginsLPTreasurer10—The answer to the honourable member's question is as follows:The Australian Securities and Investments Commission (ASIC) publishes monthly reports on levels of insolvencies, categorised both by State and by type of external administration. ASIC figures, including those for Victoria, are published on the ASIC website, www.asic.gov.au. Figures are not provided for insolvencies by postcode.