Tuesday, 31 May 1983 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 1.45 p.m. , and read prayers. Address-in-Reply: Presentation to Governor-General The PRESIDENT —I inform honourable senators that I have ascertained that His Excellency the Governor-General will be pleased to receive the Address-in-Reply to his Opening Speech at Government House tomorrow, Wednesday, 1 June at 5.30 p. m. I extend an invitation to all honourable senators to accompany me on the occasion of its presentation. The Clerk-Petitions have been lodged for presentation as follows: Marriage To the Honourable the President and Members of the Senate in Parliament assembled. We the undersigned citizens of Australia concerned about the high and increasing rate of divorce and family breakdown, convinced that the Family Law Act has weakened marriage by making divorce a trivial matter, the present Act paying scant regard to its own definition of marriage as a life-long union; and believing that the legal bond of marriage should be strengthened humbly petition for the Family Law Act and the Marriage Act to be amended in order to: 1. reject any moves towards divorce by post; 2. restore the former prohibition of marriages between close relatives by blood or marriage; 3. protect the rights and welfare of aggrieved partners of a marriage who are threatened with being divorced against their will; 4. ensure that in divorce judgments paramount attention be given to whatever course will best serve the welfare of dependent children of the marriage; 5. encourage counselling towards reconciliation; 6. restore objective tests to irretrievable breakdown of marriage in terms of: (i) intolerable behaviour; (ii) desertion for two years; (iii) separation for three years. And we pray that you may be conscious of God's sovereign purpose for our Nation . And your petitioners as in duty bound will ever pray. by Senator Richardson (from 34 citizens). To the Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia showeth that: The Universal Declaration of Human Rights affirms the principle of the inadmissibility of discrimination and proclaims that all human beings are born free and equal in dignity and rights and that everyone is entitled to all the rights and freedoms set forth therein, without distinction of any kind including distinction based on sex. However extensive discrimination against women continues to exist. It is an obstacle to the participation of women on equal terms with men, in the political , social, economic and cultural life of this country. It hampers the growth of the prosperity of society and the family and makes more difficult the full development of the potentialities of women in the service of this country and of humanity. Your petitioners therefore humbly pray that the Commonwealth Government will act to ratify the convention on the elimination of all forms of discrimination against women. And your petitioners as in duty bound will ever pray. by Senator Martin (from 90 citizens). To the Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that whereas the Government of Australia has signed the United Nations Covenant on Civil and Political Rights which in Article 23 (1) states that ''The family is the natural and fundamental group unit of society and is entitled to the protection by society and the State''. And whereas the terms of the United Nations Convention on the Elimination of All Forms of Discrimination Against Women would violate the above Article 23 (1). We humbly pray the Government to refrain from ratifying the Convention on the Elimination of All Forms of Discrimination Against Women; Believing that its implementation would result in: (1) Undue cost to the nation at this time. (2) ''The elimination of any stereotyped concept of roles of men and women at all levels'' as described in Part 3 Article 10 (c), being a disruption of traditional parental roles, is likely to result in emotional disturbances of childhood. (3) The strong encouragements to mothers to join the workforce, with the provision of networks of creches and child care centres as outlined in Article 11 of the convention is likely to result in maternal deprivation and psychological disturbances among children with an increase in childhood psychiatric illnesses. (4) The sexual role changing as recommended in Part 3 Article 10 (c) is likely to contribute to further marriage insecurity and breakdown. And we pray you may be conscious of God's sovereign purpose for our Nation. And your petitioners as in duty bound will ever pray. by Senators Peter Baume (from 19 citizens), Bjelke-Petersen (from 294 citizens), Button (from 17 citizens), Durack (from 107 citizens), Lajovic (from 98 citizens ), Robertson (from 456 citizens) and Watson (from 120 citizens). To the Honourable the President and Members of the Senate in Parliament assembled: The humble Petition of the undersigned citizens of NSW respectfully showeth:- That a fixed term period of Parliament places the security of executive government above the common good of the people. Your Petitioners therefore humbly pray that the Senate opposes legislation to facilitate the introduction of a fixed term period of Parliament. And your petitioners as in duty bound will ever pray. by Senator Lajovic (from 13 citizens). Petitions received. Notice of Motion Senator GARETH EVANS(Victoria-Attorney-General) —I give notice that, on the next day of sitting, I will move: That leave be granted to introduce a Bill for an Act to amend the Family Law Act 1975. Notice of Motion Senator GARETH EVANS(Victoria-Attorney-General) —I give notice that, on the next day of sitting, I will move: That leave be granted to introduce a Bill for an Act to amend the Migration Act 1958. Senator PETER RAE(Tasmania) —I give notice that, on the next day of sitting, I shall move: That an Address be presented by the Senate to His Excellency the Governor- General, as follows: MAY IT PLEASE YOUR EXCELLENCY- We, the Senate of the Commonwealth of Australia in Parliament assembled, desire to present the following Address:- The Senate- (a) noting the Constitutional responsibilities of the Queen, the Senate and the House of Representatives in relation to the passage of all proposed laws of the Commonwealth; (b) noting that each constituent part of the Parliament of the Commonwealth advises the others of agreement, amendment, and assent, as the case may be, to all such proposed laws; and (c) noting that substantial numbers of laws which pass both Houses of the Parliament and receive the Royal Assent provide that such laws or provisions thereof shall come into operation on a day to be fixed by Proclamation, requests your Excellency to notify each House of the Parliament of each Proclamation which is made to specify a day on which an Act of the Parliament or any provision thereof shall come into operation. Senator CHANEY —I ask whether the attention of the Leader of the Government in the Senate has been drawn to the Prime Minister's statement in the House of Representatives last Tuesday, 24 May, in which, when talking about the Opposition, he said: It can take bus loads of decimated Liberals to Bruce; it can take them where it likes. But the people of Australia will say: 'Do not knock this Government; do not criticise this Government because we know that it is honest and fair dinkum' . Does the Leader of the Government believe that that is what the people of Bruce said last Saturday? Senator BUTTON —The Prime Minister's statement has been drawn to my attention. It is a reasonable interpretation that something less than one per cent of the electors of Bruce disagreed with the Prime Minister's view. Senator TATE —Can the Attorney-General indicate whether the decision of the High Court of Australia in relation to the validity of the World Heritage Conservation Act 1983 will be accepted as ultimate and binding on the Federal Government? In particular, will he indicate whether, in the event of a decision by the court against the validity of the Act, the Government intends using other constitutional powers which may be thought to be available to it to prevent the construction of the Franklin Dam should the State Government still wish to pursue that project? Senator GARETH EVANS —I am now in a position, following full Cabinet consideration of this matter yesterday, to give a clear statement of the Government's position in the hypothetical event that the Commonwealth's regulations or legislation or both should be held invalid in the present High Court case and that this legislation, as a result, is unable to be used in defence of the Tasmanian wilderness. In stating the Government's position on this issue I make two points: Firstly, if the cause of the invalidity is some easily remediable, technical defect identified by the court, we would reserve the right to act accordingly to correct that defect. Secondly, and more importantly in terms of the substance of Senator Tate's question, if, however, the legislation or regulations were to be held invalid for some more fundamental reason and accordingly it became a question of whether we would seek to employ additional or alternative legislative or executive measures to stop the construction of the dam-for example, the use by the Commonwealth of its grants or loans power or its power to control overseas borrowing-we would not. In this situation we would treat the High Court decision as being in every respect the end of the matter. As I have said on a number of previous occasions, speaking in a personal capacity, the financial powers in particular are a very blunt instrument of uncertain effect and utility. It is the Government's view that they would be inappropriate for use for this purpose. I make only the following point: The legislation now before the court is of great complexity. Its passage and the preparation of the current litigation which commenced today have involved an enormous investment by the Commonwealth Government of time, energy and expertise , not to mention political commitment. In the event, which, I repeat, is an unlikely event, I believe, that the Commonwealth's action fails in this respect to stop the construction of the dam, I think it will be concluded by most reasonable Australians that we will have done our best. Senator DURACK —Does the Attorney- General recall writing a letter dated 12 May 1983 to a constituent who had written to him expressing his concern at media reports about future Government policies on the taxation of lump sum superannuation payments? I ask him whether he recalls saying in reply to the constituent, in particular: . . . the new Labor Government has not taken any decision- I am referring to his letter dated 12 May- in this regard and any consideration of the matter could only take place in the Budget context when all areas of Government income and expenditure are announced . If the Attorney-General recalls that letter was he then misleading his constituent or was he kept in the dark about this policy which has shocked so many thousands of Australians? Senator GARETH EVANS —I know that during Senator Durack's administration of his department and ministerial office the existence of word processors and the managerial techniques of correspondence answering that go with them were not recognised. I am afraid that in this particular instance, as I recall it, something has obviously beaten the system. It was a standard form letter by which I replied. It was written to a very large number of constituents over a long period. I regret that it appears essentially that a form letter response sneaked out. I congratulate the shadow Attorney-General on the triumph of investigative technique which he brought to the asking of his question. Senator COLSTON —I direct a question to the Attorney-General. Has the Government received from Mr David Combe an application for a grant of legal assistance for representation before the Hope Royal Commission on Australian Security and Intelligence Agencies? If so, is such assistance being provided to Mr Combe? Senator GARETH EVANS —Mr Combe's solicitors have requested that a special grant of legal assistance be made to Mr Combe to be represented at the royal commission so far as its proceedings relate to him. That application was not for legal assistance in the ordinary legal aid sense but, rather, an application for special assistance before an inquiry conducted by the Government. There are precedents for such payments, and the Government has now decided to pay the reasonable legal expenses of Mr Combe. Having regard to the level of legal representation that could be appropriate in the proceedings as they affect him, and the legal representation being made available to other parties to the commission, maximum figures of the order of $2,500 per sitting day and $2,000 per preparatory working day have been approved by the Cabinet. This should enable Mr Combe to employ very high quality legal advice indeed. Senator CHANEY —My question is addressed to the Attorney-General and it follows that asked by the shadow Attorney-General a moment ago. I refer to the answer, in which it is clear that the Attorney-General claimed that he merely sent out a form letter which had come off a word processor, and that that excuses him. I ask the Attorney-General: Is he following the practice which caused so much difficulty to Dr Cairns, when he was in office, of signing letters without reading them? Senator GARETH EVANS —It is not my practice to sign letters without reading them. It certainly is my practice to sign letters without there being a date stamp on them and without further investigation as to their passage in and out of my office-whether in Melbourne or in Canberra: I have a word processor in both places-I cannot say when the letter was signed. Senator Chaney is very welcome to table the letter. I congratulate him also on his triumph of investigative technique in this matter of manifestly momentous importance. Senator ELSTOB —Is the Attorney-General aware of the proposals, released last Friday by the New South Wales Law Reform Commission, for a new transport accident compensation scheme for New South Wales? What are the financial implications for the Commonwealth of the proposed scheme? What steps can now be expected to fulfil the Government's election promise to proceed in co-operation with the States to the establishment of an integrated Commonwealth-State compensation scheme which ensures speedy compensation at reasonable levels for accident victims? Senator GARETH EVANS —I am not sure whether I can answer all parts of the question but I will answer as far as I can. I am aware of the Sackville report. It has been the subject of Press reports. I have received copies of the working paper in the last day or so from the Commission. I have been in close consultation with the New South Wales Law Reform Commission over the last 18 months to ensure that, so far as possible, there is co-operation between the new Commonwealth Government, as it was anticipated, and the State governments in the working out of a comprehensive policy approach to no-fault accident compensation , it being the belief of this Government that a unilateral Commonwealth approach to this matter of the kind recommended the last time around in the Woodhouse inquiry is not appropriate in this area, and that we need to adopt a rather different co-ordinated and integrated approach to the change of law and practice in this area. I very much welcome the appearance of the New South Wales Law Reform Commission paper. The importance of accident compensation law can hardly be overstated. It is of the utmost social and economic significance and it is apparent to anyone who scrutinises the present system that it urgently requires reform. As to the particular features of the scheme-as I understand it-proposed by Professor Sackville's Commission, it provides for compensation of all victims of transport accidents, regardless of whether fault can be shown, by means of weekly payments for loss of earning capacity to a level of 80 per cent of gross pre-accident earnings up to a maximum earnings level of 125 per cent of average weekly earnings. It provides for payments to be indexed in line with increases in average weekly earnings. The scheme provides for all medical, hospital and rehabilitation expenses to be met. It provides for additional compensation to a maximum of about $50,000 to be available for permanent physical disability such as loss of a limb and it provides for the abolition of common law negligence actions which at present, of course, require the injured person to prove that someone else was at fault for the accident. The cost of the scheme as estimated by the Commission would be, on a fully funded basis, $112 per vehicle per annum instead of the present third party premium which averages $154 per vehicle. If those figures prove to withstand close scrutiny they will amount to a very substantial improvement in the position of the ordinary vehicle owner in this area as well as supply what is lacking at the moment-a universal compensation coverage for traffic accidents. I am unable to give a detailed response on the financial implications of the proposed scheme for the Commonwealth. I know there are some. They would certainly need to be worked out in co-operation with the States. I will give the honourable senator a further and better answer in that respect. Senator CHIPP —Is the Attorney-General aware of recent statements by the Victorian Chief Commissioner of Police that 550 crimes a day are being committed in Melbourne alone, the majority of them being very serious? Is the Attorney aware that Mr Miller stated that the only feasible solution in combating organised crime is to give selected officers of law enforcement agencies access to taxation files? Is the Attorney aware of the comments of Mr Douglas Meagher Q .C. that Australia cannot afford years of debate on these issues because we have only a year or so if we are to fight organised crime effectively and that to do so will require a 'fundamental change in law enforcement procedures'? Will the Government, in establishing the national crimes commission, consider giving such a body the power to see tax files which until now have been the sole province of the Australian Taxation Office which willingly collects money from illegal activities yet refuses, even to royal commissioners, to disclose its sources so that crime can be controlled? Senator GARETH EVANS —I am aware of the various statements to which the honourable senator has referred. As to the very sensitive question of whether a crimes commission or some similar agency should be given access to taxation records, I simply make the point that this is one of the matters that will be addressed, in terms of the arguments pro and con, in the Green Paper which is currently under preparation in my Department in consultation with the Special Minister of State and which it is intended to have publicly available within a matter of weeks with a view to being debated at a national seminar of all relevant interests towards the end of July. It is one of the issues which we regard as certainly needing to be resolved in this respect. I might also mention that a number of aspects of the policy question to which Senator Chipp has referred are also addressed in the report of the Stewart Royal Commission of Inquiry into Drug Trafficking which will be tabled in this place later this afternoon. Senator JONES —My question is addressed to the Minister representing the Prime Minister. I draw Senator Button's attention to the problems being faced by Queensland primary producers in relation to the drought and flood losses which are possibly as high as $440m. Has the Government received any requests for assistance from the Queensland Government for natural disaster relief? If so, what action is the Government considering at this juncture? Is the Government considering the establishment of a natural disaster relief fund? Senator BUTTON —The Commonwealth Government has received at least one request from Queensland for assistance of the kind mentioned in the honourable senator's question. Special assistance has been sought from Queensland in respect of fodder and that request is being examined urgently by the Government. The honourable senator referred to the question of flood relief. I draw the Senate's attention to the fact that the armed forces have already been made available and have been helping magnificently during the emergency phase of the flood situation. As a general matter, the Commonwealth stands ready to offer assistance to the Queensland Government for flood relief. Of course, natural disaster relief arrangements are already in place under which the Commonwealth Government reimburses the States on a three to one basis for a number of expenditures. Examples are immediate relief in respect of personal hardship and distress, grants for restoration of public assets and emergency protection and repair works by government authorities, concessional loans to small business, concessional loans to church and voluntary non-profit organisations, freight subsidies for primary producers and assistance to government authorities for disposal of helpless and unsaleable stock. They are some examples of the current natural disaster relief available. As I said at the beginning of my answer, at this stage there has been only one request for relief from Queensland. That related to fodder and it is being examined as a matter of urgency. Senator Chaney —Mr President, we ask that the paper that the Minister quoted from be tabled. The PRESIDENT —A request has been made that the paper be tabled. Senator Button —I table the paper. Senator JESSOP —Does the Attorney-General agree with the Minister for Foreign Affairs, Mr Hayden, who said last Thursday that the campaign by Senator Primmer against officers of the Department of Foreign Affairs amounted to 'trial by Hansard, conviction by innuendo and, I believe, an inexcusable smudging of the character of the people to whom I have referred'? If so, why could he not find it within himself to deplore the allegations in such a forthright manner when he responded on behalf of Mr Hayden earlier on the same day? Does this reluctance to endorse wholeheartedly his colleague's approach reflect concern about antagonising the Victorian Left, or is it simply an example of the Attorney- General's lack of support for the former leader of the Australian Labor Party-a man in whose downfall he is said to have played a major role? Senator GARETH EVANS —I decline to comment on the latter matters raised in Senator Jessop's question. As to the former matters and the substance of his question, I have nothing to add to what I said on this matter in the adjournment debate. I said then, and I repeat now if it needs to be repeated, that I believe that Senator Primmer's allegations have been made with a spirit of great sincerity and in a fierce belief as to the rightness of what he is alleging. As a result I will not do anything which might be construed as imputing ill motives or any other lapse on the part of Senator Primmer or any other of my colleagues to whom the same evidence was available. Equally, however, I repeat now, as I said on that occasion, that I do not believe that the evidence which has emerged from the series of inquiries that has so far taken place in relation to this matter substantiates the allegations in question but it may be, given that both the Ombudsman and the Public Service Board are still inquiring into aspects of the matter, that such substantiation will appear, in which case I do not think it would be appropriate to state any concluded view as to the allegations in question. Senator JESSOP —Mr President, I wish to ask a supplementary question. I ask Senator Evans whether he agrees with Mr Hayden's remark. Senator GARETH EVANS —I have nothing to add to my previous answer. Senator ROBERTSON —Is the Minister representing the Minister for Finance aware of the extent of tax dodging that went on in Darwin through so-called bottom-of- the-harbour schemes? Is he also aware that some companies use the Northern Territory to conduct their share transfer business, therefore depriving the States of stamp duty revenue as Territory stamp duty rates are considerably lower? As the Territory is heavily dependent on the Australian taxpayer's support, will the Northern Territory Government be encouraged in future to desist from these operations as they reduce Commonwealth, State and Territory government fund raising? Senator WALSH —I was aware of the fact that the Northern Territory is heavily dependent upon Commonwealth revenue, as Senator Robertson mentioned in the latter part of his question. Indeed, I have noted from time to time that nobody has a more voracious appetite for Commonwealth money than the present Northern Territory Chief Minister, although incongruously nobody is a more vocal critic of the Commonwealth taxes which raise the revenue which he so voraciously consumes. For example, he has a proposal now, in a time of alleged financial stringency, to increase the size of the Northern Territory Parliament by six members to the point where there will be one member of parliament, plus lavish staff provisions, for every 2,000 people. I am also aware of the other matter to which Senator Robertson drew attention- that is, that the offices of accounting firms in Darwin have been used on a very wide scale to assist tax avoidance and evasion-and presumably that matter must have been known to the Northern Territory Government and the Northern Territory Chief Minister. Indeed, one may even wonder whether it was done with that deliberate intent. Although the Northern Territory Chief Minister has a heavy demand for Commonwealth revenue, he has simultaneously, through the provision of charges and stamp duties which facilitate tax evasion, been helping over many years to erode the Commonwealth's taxation base. When searching documents in the Perth Corporate Affairs Office with respect to a former Minister in a Liberal government, Sir Victor Garland, I noted from the transactions documented there that the shuffle of assets and ownerships over two States and one Territory was facilitated by the office of Peat, Marwick, Mitchell and Co. in Darwin and that that firm of accountants and many other firms of accountants in Darwin have facilitated tax avoidance and evasion for a vast number of transactions. I also understand, of course, that certainly not all, but nearly all, the members of the Darwin accountancy firms which facilitated those activities are deeply involved in the Country Liberal Party of the Northern Territory. Senator MISSEN —My question, which is addressed to the Minister representing the Minister for Foreign Affairs, relates to Australia's responsibilities to its citizens overseas who have contravened the laws of another country. First, does the Government believe that it has a special obligation to Australians in trouble overseas and in some cases a duty to intervene in foreign legal systems to ensure that Australians receive a fair trial? Secondly, what action will be taken by the Government to ensure that the rule of law is applied as far as possible to all Australian nationals detained abroad, especially in those nations operating under systems of law which do not accord with standards that would ordinarily be observed by civilised communities? Thirdly, will the Government present to the Parliament a statement outlining its attitude on these issues generally and the duties required of our representatives overseas, along the lines I requested of the previous Government in my Senate speech of 27 May 1982 my question without notice of 16 November 1982 and correspondence with the previous Foreign Minister? Senator GARETH EVANS —The detailed matters, and in particular the question of a statement, I will refer to the Minister for Foreign Affairs for a detailed reply as soon as possible. As to the earlier parts of the question, it is in fact the case, as the honourable senator will be well aware, that Australian consular posts overseas do their best to ensure that Australians in trouble with criminal authorities in other countries are given access to lawyers and are otherwise enabled to take advantage of such protections as the legal systems of those countries give them. There are limitations of resources and otherwise to the kind of commitment that Australia can afford in this respect, and it is very much part of the business of Foreign Affairs to try to warn Australians travelling overseas that they do so at peril of criminal punishment if they offend against the laws of other countries, however draconian the substantive laws or the criminal procedures of those countries may appear to us to be in some cases. It may be that more can be done in this respect. I will draw the honourable senator's question to the attention of the Minister in the hope that that will produce a satisfactory reply. Senator COATES —I ask the Minister representing the Minister for Aboriginal Affairs whether she is aware that the Tasmanian Government has frozen the distribution of a booklet called The Forgotten People, which depicts the history and culture of the Tasmanian Aboriginals. Does the Minister realise that this booklet was intended to be the first of a series produced with Commonwealth funds by the Curriculum Branch of the Tasmanian Education Department, the material therein being aimed at increasing the understanding of Aboriginals and improving race relations in Tasmania? Does the Minister not agree that this action by the Tasmanian Government is an example of extraordinary sensitivity and censorship by a government that is more at home with nineteenth century thinking and shows an irresponsible attitude to Commonwealth-funded projects? In view of the fact that the project is Commonwealth-funded, what action can be taken by the Minister whom she represents? Senator RYAN —The Minister for Aboriginal Affairs informs me that he has received representations on this matter from the Tasmanian Aboriginal Education Consultative Committee and has taken it up with Mr Gray, whose Government is to consider, at Cabinet level, the introduction of the booklet. I must say that I am alarmed to hear that the Tasmanian Government has at least acquiesced in this course of action with regard to information of this kind. I would have thought that in Tasmania, of all States or Territories of Australia, the need for curriculum designed to inform children about the real history of the Aboriginal people of the State was overwhelming. I find it very disappointing that when socially useful material of this kind is developed with Commonwealth money the Tasmanian Government can, for reasons that it has not yet explained, decide not to proceed with it. So, as well as conveying to the honourable senator and to the Senate the information received from my colleague, Mr Holding, I will undertake to investigate the matter myself and to provide Senator Coates with more information. Senator Peter Baume —I ask that the document from which the Minister quoted be tabled, in accordance with Standing Order 363. Senator Ryan —I table the document. Senator PETER RAE —I ask the Attorney-General: When Mr David Combe was taken through and agreed to Mr Hawke's statement line by line, in relation to the Australian Security Intelligence Organisation-Combe-Ivanov affair, were any threats or inducements of any sort made or held out by the Attorney-General or by anyone else to influence the acceptance or otherwise of that statement by Mr Combe? In other words, was it the case that he was 'verballed' by the Attorney- General himself? Senator GARETH EVANS —Tempted as I am to reply in loving and elaborate detail to the provocation just thrown out by the honourable senator, I repeat, as I have on numerous occasions in the last few days in the Senate, that all matters of fact relating to the conduct of the Ivanov-Combe matter by the Government are now before the Royal Commission on Security and Intelligence Agencies which is to have its first sitting tomorrow morning. If the honourable senator has any skerrick of evidence to substantiate the kinds of allegations that he now makes to me under cover of privilege in this place he will have his opportunity to do so before that royal commission of inquiry. Senator PETER RAE —I ask a supplementary question. I simply ask the Attorney- General: As this is a matter that is peculiarly and significantly within his own knowledge, will he answer the question directly? Senator GARETH EVANS —No. Senator CROWLEY —My question is directed to the Minister for Education and Youth Affairs in her capacity as Minister Assisting the Prime Minister for the Status of Women. Is the Minister aware that in South Australia the Housing Trust contributes $1.4m per annum towards the 11 women's refuge shelters; that the Department of Community Welfare contributes around $750,000 towards the cost of shelter staff; that Crisis Care estimates that 40 per cent of its time goes on domestic violence disputes; that the police estimate that 25 per cent of their time goes on domestic violence disputes; that the Family Court of Australia estimates that 80 per cent of the counselling cases in Melbourne concern break- up of marriage due to domestic violence; and that a considerable percentage of social security costs, in terms of supporting parent benefit and unemployment payments, results from breakdown of marriage due to domestic violence? Given this rough estimate of the considerable cost to our society of domestic violence in dollars alone and not taking into account the human cost, can the Minister say what research, if any, is currently being conducted into ways of coping with or preventing domestic violence in our society? Senator RYAN —I was not aware of the detailed amounts of money that are being spent by the South Australian Government on problems associated with domestic violence but I certainly am aware of the growing burden that this form of anti- social activity imposes on the community and on taxpayers in general, not only in South Australia but also in all States and Territories of Australia. It is also a sad fact, but one that we have to acknowledge, that in the last seven years of the Fraser Government's mismanagement of the economy, with the concomitant increasing levels of unemployment, domestic violence increased. Any person who is in contact with the work being done by women's refuges in this regard will be aware that as unemployment rises so does the rate of domestic violence and so, of course, does the call on the emergency services that women's refuges and similar crisis services are able to operate. The Commonwealth Government is very well aware of the problem and is very concerned about it. The honourable senator asked me about research being done into this problem. In answer to that part of her question I am able to tell her that in Victoria, South Australia and New South Wales State government task forces have looked into and produced reports on domestic violence. In New South Wales a report containing wide-ranging recommendations including legislative reform and reforms in the area-- Senator Withers —You are reading your speech. Senator RYAN —Mr President, I believe that some members of this chamber are interested in what steps are being taken to investigate and overcome this problem. Probably Senator Withers is not one of them. Senator Withers —The Minister is reading her answer. Senator RYAN —Mr President-- The PRESIDENT —Senator Ryan, I suggest that you answer the question that has been directed to you by Senator Crowley. Senator RYAN —The New South Wales Government has before it a report which has made a number of wide-ranging recommendations concerning changes to the law and reforms in the housing area. In South Australia and New South Wales legislation is being introduced to allow courts to attach powers of arrest without warrant to orders for the prevention of violence. A similar provision is included in the Family Law Amendment Bill soon to be introduced into this Senate. Perhaps on the occasion of the debate on that legislation honourable senators who are interested and concerned and anxious to be constructive in this regard will be able to have a constructive debate. Senator Peter Baume —Mr President, under Standing Order 363 I ask that the document quoted from by the Minister be tabled. Senator Ryan —What is all this about? The PRESIDENT —Order! A request has been made that the document be tabled. Senator Ryan —I table the document. Senator MESSNER —Does the Minister representing the Treasurer accept the proposition put forward in a document presented to the National Economic Summit Conference and entitled 'Projections of the Australian Economy to 1985-86', which suggests that variations in the level of the consumer price index and the growth rate of the gross domestic product may affect the size of a deficit? Can the Minister inform the Senate of the assumed rate of these two variables at the time Treasury calculated next year's deficit at $9.6 billion? What are those estimates at present? Senator WALSH —I understand that this is the latest of the gee-whiz explanations of the discredited former Treasurer for his failure to tell the public the truth about the advice which had been given to him in the week before the election concerning the projected level of the deficit for the next financial year, to get him out of the hole into which that deception of the Australian people had landed him, to the permanent damage of his reputation. Senator Lewis —Wasn't it also given to Mr Hawke before the election? Senator WALSH —Of course it was not. It was given to Mr Hawke on the day after the election, with the further information that the discredited former Treasurer , who was then and still is the Deputy Leader of the Liberal Party, was told on the day before the election that the projected deficit for next year was nearly $10 billion. Four days before the election he was told that the projected deficit would be something between $9 billion and $10 billion. On both of those occasions he went to the then Prime Minister and said: 'Will we tell the public about this horrendous deficit forecast of which Treasury has notified us?' Mr Fraser said: 'No, don't tell them that; give them the mushroom treatment'. That is exactly what the Deputy Leader of the Liberal Party did. I cannot remember off the top of my head what real gross domestic product growth rate was assumed in any of the scenarios that the Treasurer put before the Summit Conference last month, nor do I know what the latest Treasury projection is. I will ask the Treasurer for information on that. As a matter of common sense, other things being equal-the drought having broken-the projected growth rate would have increased over that which was previously forecast. I might add, since Senator Messner is one of the few people in the Opposition who have sufficient interest in this subject actually to understand the significance of this point, that there is a difference between June-on-June forecasts-I hope Senator Messner is listening-and year-on-year forecasts. They are not necessarily the same thing. Indeed there can be wide divergences between the two. Senator Messner —We do understand that. Senator WALSH —I gave Senator Messner the credit of actually understanding that and taking a serious interest in the subject-a degree of diligence and application which I commend to some of his colleagues. For the purposes of the likely size of the deficit, it is the year-on-year growth factor, in comparison with the previous year, which is the more important. Senator HEARN —I address my question to the Minister representing both the Minister for Trade and the Minister for Primary Industry. According to the Australian Bureau of Statistics, potato imports into Australia for home consumption in 1981-82 were 700 per cent above the 1980-81 level. What research is being done to assess the effect of these imports on Australian growers? Senator WALSH —I must confess that I was not aware of the statistics which Senator Hearn has just cited, nor do I have any advice from the Minister for Trade on that subject. I will refer her request to the Minister for Trade and pass on the reply at the earliest opportunity. Senator LEWIS — Is the Minister representing the Minister for Finance aware that according to the document 'Projections of the Australian Economy to 1985-86', which the Government presented at the National Economic Summit Conference-I recognise that the Minister was not present as a representative-an increase of some one per cent of gross domestic product would result in a deficit decrease of some $480m? Given that the Treasurer's senior adviser, Dr Barry Hughes, has indicated to journalists that revised estimates suggest that gross domestic product will rise to 4 per cent and that the original estimate of next year's deficit was based on an assumed rate of growth in GDP of 0.5 of one per cent, can we expect a $1,600m reduction in the original estimate to be announced very shortly? Senator WALSH —As Senator Lewis suggested, I do not recall off the top of my head the precise figures detailed in any of the scenarios, but the figure he gave seems to me to be a credible figure. I do not dispute it. As to whether Dr Hughes told journalists that a revised forecast of growth was 4 per cent, I do not know; I would have to ask Dr Hughes. I have no official capacity in which I can ask him, although I could ask him privately. If he did say that, a matter which needs to be further refined, as I pointed out to Senator Messner, is whether he was talking about June-on-June growth forecasts or year-on-year growth forecasts. That is an important point which would have a major influence, of course, on both government revenue collections and government expenditures with regard to unemployment benefits. The very last part of Senator Lewis's question seemed to me to be identical with the question asked by Senator Messner , and I will refer it to the Treasurer, too. Senator FOREMAN —Is the Minister representing the Minister for Employment and Industrial Relations aware that the costs associated with the Builders Labourers Federation deregistration case this financial year increased by approximately $ 700,000 over and above the amount originally appropriated? Does the Minister agree that these excessive cost rises are a direct result of the previous Government's preoccupation with union bashing and, indeed, its confrontationist approach to industrial relations generally? Is the Minister of the opinion that the additional funds required, and in fact the total cost of the case to date, which is about $1.8m, could have been avoided if the agreement and discussions as outlined in the Minister's Press release of 16 May had taken place before the commencement of the deregistration proceedings? Senator BUTTON —There have been long and complicated matters before various tribunals and the court relating to the situation of the Australian Builders Labourers Federation in the last year or two. On 16 May the Minister issued a statement in relation to the discussions then taking place before the Federal Court of Australia in Melbourne. In that statement he indicated that all parties to the proceedings for deregistration of the Builders Labourers Federation, including the employers, the Federal Government and the BLF, were in agreement and had the concurrence of the Australian Council of Trade Unions. The agreement arrived at on that occasion was that the BLF would give certain undertakings to the Australian Conciliation and Arbitration Commission, as it had in 1976, regarding its obligations under the Conciliation and Arbitration Act and the use of the dispute settlement procedure of the Act rather than resorting to industrial action. That agreement formed the basis of a further undertaking as to negotiations between the parties to achieve a lasting settlement in the building industry and, indeed, in the role of the Builders Labourers Federation in that industry. In those circumstances I agree that the prolongation-if that is the appropriate word-of the Builders Labourers Federation deregistration case was a waste of money, and if a different approach had been adopted by the previous Government the situation which the honourable senator asked about could have been rectified much earlier. Senator Chaney —Mr President, I ask that the paper from which the Minister quoted be tabled. The PRESIDENT —The paper is tabled. Senator TEAGUE —I ask the Minister representing the Treasurer whether he is aware of the following statement by his colleague in another place last Thursday : At the time the Government was presented with that figure-- That is $9.6 billion- the prospects for growth in 1983-84 were, in actuality, far less than they are now, given that the farm sector is likely to be a lot stronger. Does this statement represent a retreat from the Government's former ploy of presenting next year's deficit as a finite and fixed amount, and does it represent a recognition that this figure has always been flexible? If so, why have the Government and the Minister persistently talked up the amount of next year's assumed deficit? Can the Minister confirm that this talking-up was simply an attempt to keep in check calls from Government back benchers that the Government's election promises be implemented? Senator WALSH —Apparently Senator Teague thinks that if the projected $9.6 billion deficit, of which the Treasury notified the former Treasurer on the day before the election, had been published it would have been a matter of no consequence. The honourable senator may believe that, but I can say that the former Prime Minister certainly did not, and nor did the former Treasurer, because they decided not to release the information. Mr Fraser said: 'No, don't tell them. Give them the mushroom treatment'. Senator Chaney —Mr President, I take a point of order. Standing Order 100 provides: In answering any such Question, a Senator shall not debate the matter to which the same refers. Senator Walsh has answered a number of questions in a way which I am sure fits within the provisions of that Standing Order. I ask that you require him to answer the question and not debate it. The PRESIDENT —The Leader of the Opposition would know that Ministers are entitled to answer questions in the way in which they think fit. But I ask Senator Walsh, in answering the question, to bear in mind the Standing Order to which the honourable senator has drawn attention. Senator WALSH —The deficit projected by the Treasury at that time was based on the on- going programs of the Fraser Government and, of course, on certain assumptions about factors which would either assist or impede economic growth. Since the election there have been significant changes, at least two of which affect the prospects for economic growth. I told the Senate that I would seek from the Treasurer the latest growth forecast. But I will name at least two factors which will have significant and positive effects on the likely growth rate in the next financial year. They are equally obvious. The first is the fact that the drought has broken. If other things had remained equal, that would have increased the reasonable expectation of growth in the next financial year. But other things have not remained equal. Since then we have had a change of government. Because of that, the expectations of growth would very reasonably have been revised upwards. Australia, instead of having a cowardly and fiscally irresponsible government, now has a courageous and fiscally responsible government which everybody appreciates will do a much better job of managing the economy than did the discredited Liberal-National Party Fraser Government which it replaced. Senator ROBERT RAY —My question is directed to the Minister representing the Minister for Finance. What restitution does the Government intend to offer temporary government employees who are dismissed after they contract tenosynovitis-commonly called the rapid movement disease-whilst in government employment? Senator Messner —Not seen on your side. Senator ROBERT RAY —Senator Messner finds the whole thing funny; it is not. I refer to a dispute currently occurring in the Australian Taxation Office in Melbourne, in which I believe two temporary keyboard operators have been dismissed by senior management of the Taxation Office after contracting tenosynovitis from rapid finger movements involved in their work. Does the Minister agree that it is manifestly unfair to offer six months employment to those keyboard operators on the basis that they will be offered permanent employment on the completion of that service, but then to dismiss them because of a disability caused during that six month period? Arising out of this question, can the unions representing the two keyboard operators-that is, the Administrative and Clerical Officers Association, the Australian Public Service Association and the Federated Clerks Union-expect some reasoned negotiations by Taxation Office management over the fate of the two employees, rather than its current blanket refusal to reinstate them? Senator WALSH —I have located a note on this subject which has been provided for me by the Minister for Finance. I am told that, following discussions last week with the unions involved and the Public Service Board, the Minister for Finance, who is, of course, also responsible for the Australian Taxation Office, will be meeting tomorrow with officials of the Taxation Office branch of the Federated Clerks Union. The union will be represented by its National President, the Victorian Secretary and probably by one of the affected keyboard operators. The Federated Clerks Union has been asked by the other two unions-that is, the ACOA and the Australian Public Service Association-to represent them at the meeting. Senator SCOTT —Has the attention of the Minister for Resources and Energy been drawn to yesterday's editorial in the Australian Financial Review which stated that next year's projected Budget deficit figure of $9.6 billion was now inoperative; that that figure was calculated on an assumption of a gross domestic product rate of only 0.5 per cent; that now, as a result of the wages pause and an easing of the drought, that rate is likely to be around 4 per cent; and that the real projected deficit figure is in fact far lower? Does this indicate that the Government and the Minister have misled the public and Parliament by continually referring to rubbery projected deficit estimates? Senator Robert Ray —We have heard this question three times already. Senator SCOTT —It has to be pursued. Senator WALSH —Senator Scott asked whether the Government and, I think, I have misled the Senate and/or the Parliament. The answer to that is no. What I have stated on numerous occasions-apparently members of the Opposition like to hear me say it on numerous occasions because they keep asking questions about it-is that the projection handed to the discredited former Treasurer on the day before the last election was that the deficit in 1983-84, based on no changes from present conditions, would be $9.6 billion. I have stated that in this chamber many times and it is absolutely true. It has been confirmed in writing by the Secretary to the Treasury himself. The answer to the question is no. Neither this Government nor I, nor Mr Dawkins , Mr Keating, Mr Hawke, Senator Button or anyone else who has made a comment on this subject has misled either the public or the Parliament. The person who misled the public-the only reason he did not mislead the Parliament, I suggest, is that it was not sitting at the time-is the discredited former Treasurer who was told that the projected deficit was $9.6 billion. At the same time as he was told that, he was telling the public that the deficit projection was $6 billion. I suggest that if Senator Scott wants to chastise people who have been misleading the public, and they would have misled the Parliament if they had had the chance, he should seek them in the ranks of his coalition partner party rather than among the members of this Government. Senator RICHARDSON —I ask the Minister for Social Security whether his attention has been drawn to an article in the Brisbane Daily Sun within the last two weeks . The report stated that a former officer of the Department of Social Security has appeared in court after allegedly receiving almost $700 from a Brisbane company for providing it with official information which he was not authorised to give. In view of the seriousness of this incident, what action is being contemplated to prevent similar occurrences in the future? Senator GRIMES —Yes, my attention was drawn to the article in the Brisbane Daily Sun and has been drawn to other instances whereby officers of the Department of Social Security have been offered bribes and, unfortunately, in a couple of cases, have received bribes by debt collecting agencies seeking information from files held by the Department of Social Security. I can assure the Parliament and the public that this Government takes very seriously the provisions of the legislation aimed at preventing such occurrences in the future. We will pursue very vigorously any prosecutions in any case of this type which comes to our notice. It is unfortunate that debt collection companies feel that they must conduct their affairs in this way. Officers of the Department of Social Security have been notified that this sort of thing has been going on. They have been notified that they are at risk of being approached by companies of this type. They are also being notified of the consequences of any actions by them in contravention of the privacy legislation concerning the Department of Social Security. I assure the honourable senator that, although unfortunately there are people in the community like this who will offer bribes and very occasionally people who will accept them, we will do all in our power to prevent such occurrences in the future. Senator CRICHTON-BROWNE —Did the Minister for Education and Youth Affairs tell a seminar at the Australian National University yesterday that the North West Cape Naval Communications Station in Western Australia is a prime nuclear target? Is this an official Government view? Was the Minister's speech, as reported, cleared by the office of the Minister for Foreign Affairs? Senator RYAN —The answer to each of the three questions asked by the honourable senator is yes. I simply repeat that the Government recognises that the existence of Pine Gap is a nuclear target. Senator Withers —He hasn't asked about Pine Gap. Senator RYAN —North West Cape. All the facilities of the United States of America in Australia are accepted by us as a part of a deterrent strategy. Senator McINTOSH —What is the view of the Leader of the Government in the Senate of the Opposition's criticisms of the May economic statement? Is it not the case that the Opposition is simply adopting a mindlessly negative approach to measures which the former Government had neither the will nor the political purpose to implement? Senator MacGibbon —Mr President, I raise a point of order. The honourable senator is asking for an opinion. The PRESIDENT —Order! I will allow the Leader of the Government to answer the question in the way in which he desires. Senator BUTTON —The Senate will get an opinion too, Mr President. I agree with the honourable senator's criticism of the Opposition's attitude to the May economic statement, which was a necessary and valuable first step towards restoring the balance of the economy. I am not alone in expressing that view. That view is shared, for example, by a former member of this Parliament, Mr John Hyde. He expressed a view in last Friday's Australian Financial Review in these terms: For the main part the mini-Budget was a catalogue of things that the Liberals should have done long ago, yet every time he- That is, Mr Keating- announced a sensible expenditure cut or elimination of a tax privilege, he was greeted with catcalls from the Opposition. Mr Hyde went on to say that the Labor Party is being 'far more far-sighted than the Government it replaced'. In my view the Opposition would do well to look at Mr Hyde's comments and take them into account. The Opposition should retreat from the mindless attitude that it has adopted to date. During Question Time today there have been a number of interjections from Senator Withers and Senator Walters about somebody called Bruce. I do not know which of them has a strange relationship with somebody of that name. Whichever it is, let me remind the Senate that the Government took courageous decisions, which it knew would be unpopular, before the Bruce by-election. At that by- election, those unpopular decisions having been taken, only one per cent of the electorate were prepared to shift their confidence to the mealy-mouthed Opposition which has devoted its energies to defending entrenched privilege in this country. Mr President, I ask that further questions be placed on notice. Senator Chaney —Mr President, I draw your attention to the fact that the hour has not yet expired and the Leader of the Government in the Senate has asked for questions to be put on notice. The PRESIDENT —Order! The Leader of the Government has asked for further questions to be placed on notice; it is a matter for the Senate. I understand that Senator Gareth Evans has an answer to a question. Senator Messner —That is a change. Senator GARETH EVANS —It is a change in this case because I am finally giving an answer to a question asked on numerous occasions by Senator Walters, who has sought for strange and exotic reasons known only to herself to have tabled in this place aircraft movement records relating to certain flights which took place over Tasmania. I am able to inform the honourable senator that that material is now available, and I table it accordingly. I take the opportunity, in giving a further answer to this question, of saying that Senator Walters, I am afraid, waxed indignant in the adjournment debate last Thursday night on the basis of a perceived breach of undertaking on my part to table these papers before the Senate rose that day. I inform her that that was a misunderstanding. I was giving no such undertaking. I was indicating that I would ensure that she had the papers before the Senate rose for the session, and the context in which I gave that answer would make that perfectly clear. Senator GARETH EVANS —Whilst I am on my feet, perhaps you will permit me, Mr President, to give further and better particulars on the question raised by Senator Elstob about the potential financial implications to the Commonwealth of the New South Wales proposal for a no-fault accident compensation scheme. The answer to that part of the honourable senator's question is essentially this: The key feature of long term reform in this area will be the financial involvement of the Commonwealth. As the New South Wales paper makes clear, the proposed scheme would produce significant financial advantage for the Commonwealth by, first of all, reducing social security benefit payments to those who do not at present get compensation, and, secondly, by increasing revenue by providing periodic payments which are subject to taxation. The financial advantage of the scheme and the fact that it would provide compensation for the estimated one-third of traffic accident victims who currently get no compensation make the Government optimistic that real reform can at last be achieved in this area. Senator Peter Rae —I raise a point of order, Mr President. While the Attorney- General is in the mood for answering questions, I wonder whether he would reconsider his refusal to answer a question of mine earlier at Question Time. The PRESIDENT —Order! There is no point of order. Senator GIETZELT —Mr President, last week Senator Robertson asked me a supplementary question without notice concerning the building of railways by the Commonwealth since 1911. I am now able to provide the following information on the major new railways whose building was initiated by Commonwealth governments. Those commenced by Labor governments were the Kalgoorlie to Port Augusta railway in 1911 and the Tarcoola to Alice Springs railway in 1974. Those commenced by Conservative governments were the Pine Creek to Katherine River railway in 1913, the Katherine to Birdum railway in 1923 and the Oodnadatta to Alice Springs railway in 1926. Since 1911 a number of standardisations of existing railways have been commenced by Commonwealth governments of both political persuasions. A Labor government commenced the Adelaide-Crystal Brook project in 1974. Those of significance commenced by Conservative governments were: Grafton to South Brisbane in 1924; Albury to Melbourne in 1958; Kalgoorlie to Perth in 1961; and Port Pirie to Broken Hill in 1963. Discussion of Matter of Public Importance The PRESIDENT —I have received a letter from Senator Dame Margaret Guilfoyle proposing that a definite matter of public importance be submitted to the Senate for discussion, namely: The continuing confusion and distress caused by the Government's hastily conceived and ill-explained changes to lump-sum superannuation. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator Dame MARGARET GUILFOYLE(Victoria)(2.53) —The Opposition brings forward this matter of public importance because it believes there is just criticism of the Government for its continuing confusion and the distress that has been caused by the changes that were made to lump sum superannuation payments in the mini-Budget announced by the Treasurer (Mr Keating) on 19 May. We have brought this forward in the terms that it was a hastily conceived change and that it has also been ill-explained. I think that both of those statements lead me to suggest that its hastily conceived nature can be verified by the statements that have been made by members of the Government and by those who support them. Although the Treasurer stated on 19 May in his economic statement-I refer to page 18 of it-that it was a policy change that had had considerable consultation and a comprehensive review, I think that we must agree that it could hardly have had that comprehensive review considering the statements that have been made by the numbers of people who are interested in the decision that was taken and by the numbers of people who are affected by it. If the decision had not been hastily conceived and had been the subject of comprehensive review, as stated by the Treasurer in his statement to the Parliament, we would need to wonder why the Prime Minister (Mr Hawke) was able to be reported in the Australian of 22 April as saying words to the effect that the worry about superannuation tax changes was unfounded. I am not aware of any withdrawal of that statement by the Prime Minister. He led the people of Australia to believe that it was an unfounded worry and that there were not to be changes to the methods of taxing superannuation payments. I would go further and say that if it had been the subject of comprehensive review, as stated by the Treasurer, it is of concern to see the letter signed by the Attorney-General on 12 May which was sent to a constituent and which was the subject of a question addressed to him today. In that letter he stated: I can advise that the new Labor Government has not taken any decision in this regard and any consideration of the matter could only take place in the budget context when all areas of government income and expenditure are announced. That letter was signed by the Attorney-General on 12 May. If we accept the Treasurer's statement to the Parliament that there was a comprehensive review we would need to ask whether there was any advice by the Attorney-General as to the nature of the legislation required for the changes that were envisaged in the statement. We would need to ask why the Attorney-General, on 12 May, chose to sign a letter-regardless of whether it was produced by a word processor-to a constituent in those terms. If it were a policy on which a comprehensive review had been undertaken one would wonder why someone such as the Honourable Paul Landa, the Acting Treasurer of New South Wales, could write to a member of the New South Wales Parliament on 24 April and state: The matter raised was only speculation at that stage and I understand that the Federal Government has now announced that it does not intend to increase the tax rate on lump sum superannuation payments. That statement by the Acting Treasurer of New South Wales was made as a result of the statement by the Prime Minister I quoted earlier which was printed in the Australian of that earlier date and in which he said that any worry was unfounded and that there was to be no change made to the arrangements. These statements by members of the Australian Labor Party make us wonder whether this matter was subject to comprehensive review. If that were so one would need to question the understanding of the Australian Council of Trade Unions executive. Mr Kelty, in an interview reported in the Sydney Morning Herald on 26 May, said that his meeting with the Prime Minister last month-that was April-had led him to believe 'that wage and salary earners' lump sum benefits would not be affected by any Government decisions'. There is a further question as to whether the decision had been ill-conceived or hastily conceived and whether it had been the subject of the consultation that we had been led to expect would automatically occur under a prices and incomes arrangement which was to solve all problems between the incoming Government and the trade union movement. I would have to suggest that it would have been expected that changes to superannuation payments would have been the subject of consultation in view of the arrangements in the prices and incomes policy. Yet Mr Kelty has said that, according to his understanding with the Prime Minister in April, there was to be no change. One would also need to ask whether there had been consultation on any of the factors related to the policy change when we now know that there is a government and ACTU working party to study the lump sum taxation proposals in order to sort out exactly what is to be envisaged in the various facets of the scheme. This working party will need to address itself to a number of the arrangements the Government undoubtedly has in its mind as it has moved into this area of taxing the lump sum payments of people who receive them through the superannuation schemes of this country. In looking at the ill-conceived nature of the change we probably do need to go back to the philosophy of the mini-Budget, of the economic statement of the Treasurer last week, because the philosopy in that statement penalises those in the community who have tried to provide for their own superannuation, who have been thrifty enough to get themselves involved in superannuation policies. That economic policy statement is certainly an attack on the thrifty because if we were to broaden the degree of effect that it has we would find that people who had saved their money to invest it in retirement through superannuation, had invested in health care, in sending children to private schools or in the jobs of others by investing in Australian industry or by being small shareholders in companies, or had worked hard to increase their income and saved for a home, would be penalised by an economic statement such as that of 19 May. That gets to the philosophy of the changes to the superannuation scheme that were announced by the Treasurer at that time. As I understand it, there were no consultations with the life assurers or the superannuation funds prior to the policy change. Since the announcement of the change a number of statements have been made by those concerned with superannuation arrangements. I understand some consultation has taken place since that announcement was made. It would have to be described as an ill- explained change because I doubt whether anyone yet knows the full implications of the Government's proposals. We were told yesterday by the media announcements which followed some Cabinet decisions that there were to be some slight changes at the margins with regard to what had been announced on 19 May. The Treasurer was able to assure us that those changes made no difference to the revenue proposals. So they are changes at the margins. In fact, some of the changes that he announced yesterday were changes that were understood to be part of the original arrangement. Perhaps when considering the arrangements with regard to superannuation lump sum payments we ought to go back to the scheme that previously existed. The old arrangement, which had existed for many years, had the effect in regard to taxable income that a person receiving a lump sum had 5 per cent of that lump sum included in his assessable income for the year of receipt. That arrangement was made in that way because it was accepted that as that lump sum was received there would be an earning rate on it, and the rate of 5 per cent was the rate agreed to at that time. It is true that since the time of that arrangement there may have been a greater earning rate on the lump sum than 5 per cent, and if the Government had wished to review that part of the arrangement there may not have been the concern, alarm and distress that was caused by the change which was announced. People accepted that there was some earning rate and 5 per cent was imputed as an earning in the year in which that lump sum was received. Then each year, as that lump sum was invested, they were assessed on the income which was earned from those funds which they had invested for the future. That rate might have been somewhere around 5 per cent, or it might have been greater if they were able to make advantageous arrangements. I do not think anyone argued that the principle that in the year a person received a lump sum it was imputed that he had some earnings on it was not sound. It was certainly not imputed that a person had earnings at the marginal tax rate. That is the big difference in the philosophy between what was the original arrangement and what is now envisaged by the Government. The change which I understand the Treasurer has now announced, which seems to placate some sections of the community but not all, is that employee contributions received as a lump sum or converted into an annuity will now not be taxable. That is probably fair enough, but that was almost implied in what was said by the Treasurer in his earlier announcement. I do not think that made any concession at all to what had been announced earlier or what was at least some people's understanding of it. He has also announced that the proportion of the lump sum which will be taxable will be based on the period of service to the changeover date and its relationship to the total service of the employee concerned. I would have thought that could have been almost implied in what he said earlier about work done after the date of the announcement on 19 May. From the wording with regard to services rendered or work done after that date, one could have been looking at a period of time and not at an actuarial assessment from one period to another. So I do not know that the changes have alleviated in any way a policy which has vastly changed superannuation arrangements in this country. The Treasurer in his announcement has shown the Government's philosophy with regard to capital gains or the holding of capital. Perhaps that is what ought to be looked at as we review what the Government is doing in this policy. To suggest that under this economic arrangement the only part of a sum paid to a person after his working lifetime which can be non-taxable is the part that he contributed himself shows that there is very little conscious desire on the part of the Government to see Australians emerge from their working lifetime with any form of capital accretion or capital improvement in their circumstances. This is why so many members of the trade union movement, in particular Barrie Unsworth of the Labor Council of New South Wales, have been so assertive in the things they have said about this change in people's expectations for their retirement. The Treasurer, at the same time as announcing these changes to the superannuation arrangements, announced the introduction of income testing for the age pension for persons of 70 years of age and over. I believe that in linking those two changes we see the philosophy of the Labor Government with regard to Australians holding any sort of capital: If they do, there will be a punitive tax on it. In this policy we see the beginnings of the capital gains tax which the Government would dearly love to introduce and which quite obviously it has in its sights as a means of raising revenue in the future. That is why alarm is being expressed. The consultations we might have expected on the prices and income accord arranged with the trade unions apparently did not occur . Over 80 per cent of participants in private superannuation schemes take their benefits in a lump sum. It seems to me that consultation with those who may have been able to give that information to the Government would have been very profitable. It seems to me that the sorts of things that have alarmed people with regard to the treatment of the payment of a lump sum on death or on forced retirement through invalidity-the sorts of things that perhaps will need to be worked out through the working party-could have been thought through before the Government embarked on its change to the superannuation entitlements of Australian people. The Treasurer said in the introductory remarks in his economic statement that he wanted to see that those who received occupational superannuation were those more in need. He said: . . . occupational superannuation goes mostly to people who are neither needy nor poor . . . That is not what we are hearing from the trade union movement. If one looks at the opportunities which a working family man has to accumulate any sort of capital through his working life, one can hardly come to the conclusion that he will be able to do more than provide for his own needs and those of his family. Therefore, at time of retirement he would expect, as the result of making contributions to a superannuation scheme, to have some sort of entitlement, one that, according to trade union leaders, would enable him to perhaps pay off his home or improve his position in whatever way he chooses. In regard to the proposed change, I say that the choice to improve one's circumstances as a result of having contributed to a superannuation fund will be removed. The Opposition has brought forward this matter of public importance because it believes that the alarm that was caused by this ill-conceived and ill-explained proposal, which was announced on 19 May without any preliminary understanding on the part of the Treaserur (Mr Keating) and despite the assurances that had been given by the Prime Minister (Mr Hawke) in April, has caused many people to be very deeply concerned about future arrangements, as they will be personally affected. To proceed with these sorts of economic policies without first looking completely at the effect that they will have is not the right way to deal with them. When I was the Minister for Social Security I always found that it was a matter of concern and resentment if benefits enjoyed were withdrawn. Unless an equitable reason for so doing can be given, there will indeed be resentment. In this case, the combined effect of taxing the entitlement to lump sum superannuation and of withdrawing the income test free pension at the age of 70 has vastly changed the expectations of the great bulk of the Australian work force. It is argued that benefits accrued until 30 June of this year will not be changed, but that is of little consequence to those who find that, in respect of the next 15 or 20 years, vast changes are to be made which will affect the amount of superannuation to which they will be entitled upon retirement. For all these reasons the Opposition has brought forward this matter of public importance. My colleagues have matters of detail to which they wish to address themselves. I wish simply to refer to the hastily conceived and ill-explained policy of the Government and to the concern that quite justifiably has been generated in the Australian community because of this precipitant change to superannuation entitlements and to age pensions for people over 70. Senator WALSH(Western Australia-Minister for Resources and Energy)(3.13) —I can well understand Senator Dame Margaret Guilfoyle's pique. After all, in 1980 she was a member of the razor gang which procrastinated for eight months and finally claimed ultimate savings of $560m, many of which were one-off savings and most of which were never achieved. By contrast with that dismal record, the expenditure review committee of this Government produced, in a very much shorter time, projected savings of almost $1 billion in the next financial year, more than $2 billion in the year after and, beyond that period, savings at a very slightly greater rate. It is no surprise to find that the Liberal Party and Senator Dame Margaret Guilfoyle, in particular, as one who was directly involved in the last exercise, feel some pique that this Government has been so much more successful than was the discredited government which it replaced. I observe in passing that it is no surprise either to find the Liberal Party defending tax rorts which imposed penalties on the great bulk of the Australian population-tax rorts, most of which the Liberal Party initiated or exacerbated. In the 19 May statement the essential changes to the taxation of superannuation lump sum payments were announced. I wish to deal first with another matter raised by Senator Dame Margaret Guilfoyle. It concerns a statement of the Prime Minister which was reported in the Press on 22 April. I have in front of me a copy of the Australian of that day. It quotes the Prime Minister directly, as stating: . . . there has been some concern about accelerated resignations. I think I can say I will have the matter before Cabinet so it can be decided. The article goes on to quote the Prime Minister as having said: Without pre-empting the decisions that have to be made in the Cabinet procedures, I think you will find there has been no basis for the speculation . . . I stress that the speculation, in the Prime Minister's words, was 'concern about accelerated resignations'. The only reason for accelerated resignations would be a fear that lump sum entitlements already accrued would be subject to different taxation arrangements; in other words, they would be taxed retrospectively. It was clearly in that frame of reference that the Prime Minister spoke. The Prime Minister guaranteed that there would be no retrospective element, and there is no retrospective element. I return to the statement of 19 May. The essential features of the changes were as follows: Firstly, lump sum entitlements accrued to that time would be taxed at the previous rate; that is, only 5 per cent of the lump sum would be included , as Senator Dame Margaret Guilfoyle said, as assessable income in a tax return. Secondly, entitlements accrued after that date would be taxed at a rate of 30 per cent or perhaps higher, with two exceptions, both of which were clearly spelt out in the statement by the Treasurer (Mr Keating) on that night-firstly, a partial exception that a person's own contributions, whether made before or after 19 May, would continue to be taken tax free as a lump sum; and, secondly, that a 100 per cent lump sum payment would not be subject to tax at all, provided it was used to purchase an annuity to produce a lifetime income for the superannuitant. As I said, a person's own contributions before that date would be taxed at the old rate and such contributions after that date would be completely exempt from tax. The basis upon which entitlements or accruals would be determined was clarified by the Treasurer yesterday after discussion with the superannuation funds. The Treasurer announced that the basis of accrual would be period of service. An alternative, which I think Senator Dame Margaret Guilfoyle also mentioned, would be an actuarial calculation of the amount which was actually available to be withdrawn on that date if the superannuitant chose to withdraw it. If the actuarial choice were taken by the Government it was essential that an immediate cut-off point accompany it. If that basis of assessment had been chosen it would have been possible to amend the rules of funds before 30 June if that was to be stated as the changeover date. Since the former option, that is, a proportional accrual, was chosen by the Government there was no need for an immediate 19 May cut-off date. For that reason and for reasons of accountancy convenience, the Treasurer announced that the changeover date would be 30 June next. The Treasurer also gave more details yesterday on roll-over provisions. There are two important matters yet to be settled-first, the portability of superannuation entitlements and, secondly, the details of the proposed annuity scheme. Discussions on both of those matters are proceeding with the funds, the Australian Council of Trade Unions and other interested bodies. I stress that by the very nature of these changes they could not be discussed prior to essential announcement by the Government. They could not be discussed for the very reasons that prompted the Prime Minister on 22 April to make his statement. He said that there would be concern about accelerated resignations from people who feared that there would be retrospective changes. I ask the Senate to visualise the following situation: Supposing the Government had announced at the beginning of April that it was reviewing taxation arrangements of lump sum payments. We have already seen from the Liberal Party when it was still in government how irresponsible it can be in promoting speculation and panic about financial matters. The former Prime Minister tried to start a run on the banks; he failed. The present leader of the Liberal Party tried to start a run on the dollar and, to the great cost of the Australian nation, he succeeded. If this Government had announced in April that it was reviewing and holding discussions with the life offices regarding annuity payments and the taxation of lump sum entitlements there is absolutely no doubt that the present irresponsible Leader of the Liberal Party would have followed the example he set in February and would have started a run on the funds. There was an unsuccessful attempt to start a run on the banks; a successful attempt to start a run on the dollar and he would have started a run on the funds. I observe in passing that the behaviour of the Liberal Party and of its present leader in particular, both before and since the election, is reminiscent of Adolf Hitler telling Speer to destroy Germany in the dying days of the Third Reich. The situation with respect to the taxation of lump sum entitlements prior to 19 May was this: Contributions made to funds by employers, and in some cases by employees, were deductible from the taxable income of the employer and of the employee where the employee's contribution qualified. The income received on those contributions in the funds was exempt from taxation. This was in contrast of course to alternative forms of savings. The interest earned on deposits in savings banks and government bonds is fully taxable. The income on deposits and investments made with superannuation funds was exempt from tax. At the end of a period of contribution, which in most instances was very short-I will return to that later-95 per cent of the sum taken out of the fund was exempt from taxation . Let us remember that almost all of the money paid in was claimed as a tax deduction and the interest earned on the payments in was tax exempt throughout the period the amounts were in the fund. When the amount was finally withdrawn 95 per cent of it was exempt from tax. The annual cost to revenue of all of those positively discriminatory conditions was estimated to be nearly $2 billion and rapidly escalating. The person who had prior to 19 May claimed a tax deduction through the employer, and in some instances from his own income, received the benefits of tax-free income in the funds. Under the previous arrangements that person could take a lump sum payment , 95 per cent of which was exempt from tax, and then-thanks to Senator Dame Margaret Guilfoyle, who presided over this change in 1976 when she changed the basis of testing for the age pension from a means test to an income test- Senator Sir John Carrick —Are you going to change that? Senator WALSH —It is very complicated to change it back now. The matter has been investigated. It is another legacy with which this Government has to cope and which was inherited from the irresponsible Government which this Government has replaced. I simply state the fact that thanks to the changes made by Senator Dame Margaret Guilfoyle in 1976 the people who had obtained all of those benefits that I have stipulated could then invest the lump sum, 95 per cent of which was tax free, in an investment which received capital appreciation rather than income and were then entitled to receive an age pension as well. This is an example of the double-dipping syndrome. For all of those concessions, in excess of $2 billion, most of the working age population of Australia, and the 58 per cent who have never had the opportunity to be in a superannuation fund, paid the penalty. The Australian Bureau of Statistics survey of 1979 showed that only 42 per cent of employees working more than 20 hours a week were in superannuation funds. I might add that slightly over 20 per cent of women were in superannuation funds. The women were in a position to take substantially less advantage of the concessions than were men, a matter which I might have thought would be of some interest to Senator Dame Margaret Guilfoyle and some of the other women senators on the other side. The concession was predominately one for the higher income groups, and the lump sums , when taken, were even more heavily skewed towards the rich. A good example, I suppose, of that and of the feather bedded groups which will be affected ultimately by these changes is the airline pilots who were threatening to go on strike a week ago. Let us look at Boeing 727 airline pilots. They receive salaries of up to $60,000 and work a 74-hour month. Their salaries have increased by 42 per cent since July 1980 and their lump sum entitlements after-- Senator Sir John Carrick —Almost as much as a Minister. Senator WALSH —I will refer to politicians in a minute. I thank Senator Sir John Carrick for reminding me. Lump sum entitlements after a period of 25 to 30 years are between $350,000 and $400,000. The class of people for which this Opposition is fighting today has salaries of $60,000 for a 74-hour month, and lump sum entitlements, tax free after 24 or 30 years, of $350,000 to $400,000. Senator Giles —Not many women amongst them, either. Senator WALSH —No women, I believe, fly 727s. Senator Sir John Carrick —Tell us about the Federated Ironworkers Association of Australia-all the members in it. Senator WALSH —There is a misconception, I fear, among some people who purport to speak for blue collar workers about this matter, and that is unfortunate. I say 'purport to speak for blue collar workers', and I make no further comment except to say that the facts speak for themselves. Fifty-eight per cent of the employed population has no superannuation. Those who do have superannuation are heavily concentrated in the higher paid occupations. Those who take advantage of the lump sum tax provisions are even more heavily concentrated in the upper income ranges. The equity facts speak for themselves. We are alleged, according to the terms of this matter of public importance, to have hastily conceived this idea. I suppose compared to the pusillanimity and prevarication which were the hallmarks of the previous Government the action was hasty, and it needed to be. We had to do something about the $9.6 billion projected deficit which we inherited from the discredited previous Government. We did not prevaricate for eight months, as did the razor gang, of which Senator Dame Margaret Guilfoyle was a member, to produce meagre, inconsequential projected savings, most of which were never realised. Our action was perhaps hasty in its execution but it was not hasty in its conception. The report of the Asprey Taxation Review Committee and the report of the Hancock National Superannuation Committee of Inquiry which lay on the table throughout the seven dark years of Fraserism, both recommended that this system had to be changed. The Hancock Committee said: The investigations and discussion underlying this report . . . have made it clear to us that to design a rational and equitable superannuation system embodying lump sums which are nearly tax-free is an impossibility. The Asprey Committee stated: If a person is entitled to a lump sum he should be quite free to receive it, but he should not gain an unwarranted tax advantage in doing so. Throughout the seven dark years of the Fraser Government those reports lay on the table. No action was taken because of the cowardice and irresponsibility which were the hallmarks of that Government. On this subject, the present Leader of the Opposition (Mr Peacock) has stated: We were in government for decades and we never did this. That was to their eternal shame. Senator Button earlier today quoted from an article by the former honourable member for Moore, but it bears repeating because it is very important. I commend it to those members of the Opposition, if there are any, who want to take a serious and responsible interest in the government of this country. The former honourable member for Moore, Mr Hyde, in an article in the Australian Financial Review last week, stated: I listened to Mr Keating's mini-Budget speech with interest and discomfort. For the main part the mini-Budget was a catalogue of things that the Liberals should have done lone ago . . . . . . . . . . to start to take away the tax privileges of occupational superannuants who get two bites at the cherry, are policy changes with long-term fiscal benefit. I do not know whether the commendable honesty displayed in that article by the former honourable member for Moore is a cause or an effect of losing his seat. But we have seen precious little evidence of honesty and responsibility from the previous Government, the present Opposition. I make one final point. Anyone who listened to Senator Dame Margaret Guilfoyle and was unaware of the facts may have gained the impression that superannuation policies which are finalised as lump sums are, in the main, taken out by people and contributed to for the greater part of their working lives. A survey by the Australian Bureau of Statistics in May 1979, which, I understand, is the latest available evidence, shows that 61 per cent of the schemes from which lump sum payments were taken had contribution periods of 10 years or less, and 34 per cent had contribution periods of five years or less. Finally, Commonwealth public servants-and State public servants in the majority of States-were never entitled to withdraw as a lump sum of contributions made by the employer. That situation will continue. For the benefit of the Opposition, I again quote the former honourable member for Moore: The opposition must build its reputation and it should resist any temptation to score cheap political points. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator WATSON(Tasmania)(3.33) —We are debating today a matter of public importance in these terms: The continuing confusion and distress caused by the Government's hastily conceived and ill-explained changes to lump-sum superannuation. The projected changes in the basis of assessment of lump sum payments, when considered in conjunction with the implications of the introduction of taxation on capital gains in the Taxation (Unpaid Company Tax) Assessment Amendment Bill, which is now in this House, mark a new era of an attack by this new Government on capital structures that could fundamentally change the whole nature of the ownership of property in Australia. The company tax Bill provides that realised capital profits from assets that were held for generations will now, artificially, by an absurd hypothetical assumption, be subject to tax if realised under certain conditions since 1972. This is the beginning of a fundamental attack on all of those people who seek to acquire or build capital. What sort of society will we have in future? Why is this Government against capital formations? I suggest that it is a manifestation very early in the period of this Parliament of its implementation of socialist ideals of the very worst kind. Many people in society seek an early retirement for a number of reasons-stress, business pressures, sickness and so on. The taking of a lump sum as a consequence enables such people to set up an alternative career or to buy into a new business. In future that opportunity will be denied to them. That option will be taken away by this regressive legislation. Other people, because of the nature of their occupation, retire somewhat early in life. People from the defence forces-the Australian Army, the Australian Navy and the Royal Australian Air Force-are typical of people who retire in their 40s or 50s. They take a lump sum and they have the opportunity nowadays to move into a new occupation, a new vocation. If they are locked into a superannuation-type scheme they are locked into dependence on government for a long time. What about the cost? It is far cheaper for the Government to pay a lump sum than to pay the continuing cost of an annuity or a pension. The cost benefits to a nation certainly favour a lump sum payment compared with a pension paid over eight years. Look at the cost and the equity at the same time. We are tending to force people more and more on to government handouts, government pensions. A lump sum often allows people for the first time in their life to pay off their home-to get out of the hands of insurers, money lenders. Senator Tate —On the contrary. Senator WATSON —I ask Senator Tate to think of a person who, for example, moves from Tasmania to Sydney and who wants to buy a house of comparable standard. He has to mortgage himself to the hilt, perhaps to the extent of $80,000. A lump sum payment on retirement gives him the opportunity, for the first time, to pay off that house. What does the Government expect him to do? Does it expect him to seek alternative accommodation away from his friends, to go back into the bush or somewhere else, into less expensive accommodation while continuing to receive a pension? The Government is seeking to force people out of their chosen way of life. It is trying to force people, I suggest, to stay in employment against their will. It is attempting to limit the choice of people who, for example, want to move from one vocation to another. I suggest again that this is the thin edge of the wedge of an attack on capital formation. Section 26 (d) of the Income Tax Assessment Act which has been there for years provides that only 5 per cent of a lump sum payment received as a consequence of retirement is subject to inclusion in taxable income. Service after 30 June 1983 will be subject to tax, if received in a lump sum, at rates which are pretty savage. Tax payable will be 30 per cent on all amounts up to $125,000, 46 per cent on the next $100,000 and 60 per cent on amounts over $225,0000. Not much after tax lump sums will be left for these people who receive lump sum payments. The Government appears to be deliberately forcing people not to take lump sum payments. It will not pay people to take lump sum payments. Senator Walsh —They can take an annuity. Senator WATSON —That is true. There is an opportunity for a taxpayer, within 90 days, to convert his lump sum payment into an annuity. What great changes have been made in exempting employee contributions? The present legislation before the projected changes provides that the annuity will be taxable and the undeducted purchase price may be taken as a legitimate deduction to get the net taxable amount. Because the Government has lifted the threshold of the concessional rebate from $1,590 to $2,000, few ordinary workers-I think the iron workers were mentioned-will benefit from that concessional rebate. The concession of not taxing the employee's contribution is a lot of hot air when one examines the full extent of it and compares it with the existing legislation now on the statute books-it has been there for ages-under section 26AA. Tremendous confusion exists in the community as this matter of public importance states. Shortly after the election of the Labor Government there were threatened wholesale resignations from industry because people feared that they would have to pay full tax on their lump sum payment. Later it was rumoured that the first $100,000 would be exempt from tax. Still the uncertainty continued. Treasurer Keating was understood to have warned his Cabinet colleagues of the dangers of introducing a mini-Budget. He said that there were dangers to this new Government in implementing hastily, ill-conceived measures. He was overruled. As a result, we have chaos. Who are the sufferers? The ordinary working men of Australia. In the Australian of 22 April 1983 Bob Hawke sought to allay a lot of the fears of the people. An article in the Australian stated: The Prime Minister, Mr Hawke, will seek Cabinet agreement to hold the tax on lump-sum superannuation payments at 5 per cent. Mr Hawke's move is in reaction to rumours in the superannuation industry that tax on lump-sum payments is about to rise. The rumours have led to several resignations to take advantage of the present very low tax. This is another example of the confusion and the inability of people to deal with the situation. Taking into account the reversal in policy by Messrs Keating and Hawke one may well ask: Who is really running this country and who is making the decisions? The only major change in yesterday's announcement was in the implementation date, from 19 May to 30 June. I think everybody agrees that that change makes sense because the original date was a stupid date in the first place. Let us look at some outside comments. An editorial in the Examiner stated that the nature of the reform was such that the Government may come to regret it. The editorial believed that it was a crude solution to the abuse of lump sum schemes and the main victims were the hard working, provident middle class. They were the people who are the main victims. A senior superannuation expert said that the scheme obviously was hastily put together and the details were not thought through. What about Mr Keating's statement? It failed to deal with the issue of lump sum payments to spouses and children of people who die. This raises important questions. The fear is that the benefit will be taxed in full. In other words, it is another form of death duty. All those people should take note of the potential of this legislation. During the election campaign former Prime Minister Fraser warned that people may have to put some of their savings under the bed. He was turned upon in a most vicious manner and with derision by Mr Hawke. In retrospect, looking at this decision and other decisions, how prophetic the remarks of former Prime Minister Fraser were. The Minister for Resources and Energy (Senator Walsh) raised the question of the Asprey Taxation Review Committee, particularly in relation to this area. Why did not this Government, at the first opportunity, implement the recommendations of that Committee? This Government has mucked it up. It has failed to follow the recommendations of the Asprey Committee. In fact, it has gone much further than any of the recommendations of the Asprey Committee. Asprey acknowledged that there was some need to remove a disparity between pensions and lump sum payments . The Asprey Committee gave the formula to neutralise the traditional differences between pensions and lump sum payments. Its recommendation was based on a percentage which effectively brought a commutation of a lump sum back to a pension equivalent. The Hawke Government has gone far beyond that recommendation . Look at the rates that will apply. Why have people in the past shied away from pensions towards lump sum payments? They have done so because of inflation. Private sector employers, unlike public sector employers, are unable to provide all their employees with indexed pensions. Are we witnessing the beginning of a national superannuation scheme? If it is, how will the Government finance such a scheme? The Government has talked about inheriting a deficit this year of $4.6 billion and of inheriting a deficit next year, if the projected figures are correct, of over $9 billion. Despite the size of the deficits it does not take adequate steps to try to reduce it. Major questions have to be answered. What about all those people who have life assurance policies that will mature upon their retirement at 65 years of age? Will such policies be subject to tax? What about whole of life policies? A whole area of uncertainty exists in relation to lump sum payments. When the Australian Labor Party talks about lump sum payments it is not talking in the restricted sense about lump sum payments on retirement; it is talking about lump sum payments per se. As such, it opens up a very wide ambit of uncertainty. Young people, for example those in their early 20s, who are single, move from job to job just to get experience. They will find on leaving their jobs that at least 30 per cent of their lump sum superannuation payment will be taxable. People leaving employment after only a few years in a job will find that the net amount that they will receive for a lump sum will not even be equal to their own contributions. Blue collar workers and young people seeking experience frequently move from job to job. These are some of the people who will be the main victims of this vicious change. It is about time that the people of Australia knew the full extent of how this will hurt the ordinary young person trying to make a start in life, changing from one job to another. Such a person will not get the benefit of a concessional rebate now with the threshold now raised to $2,000. No wonder storms of protest are coming from the union movement and middle Australia. Is it any wonder that we saw a swing of 4 per cent against the Government in the Bruce by-election? Australians are beginning to wake up to the wide impact of some of these changes. The rhetoric of 'trying to bring Australia together' is quite good. But the legislation and the specifics are so broad that they will cut across this whole idea of consensus. I believe that the ineptitude that has been shown with lump sum changes raises serious questions about the Government's ability to handle matters in the forthcoming August Budget. Further, one wonders whether we will see widespread introduction of capital gains tax. Individuals-middle Australians-through the direct taxation system, pay the bulk of tax in Australia. Through these sorts of measures they will continue to pay a proportionately higher amount of tax. The only way to get Australia operating in a viable way again and to eliminate the Budget deficit is to get the economy moving. None of these measures will achieve this purpose. These measures will lead people away from superannuation towards trying to accumulate savings through unit trusts and other devices. I think such a trend would be regrettable and regressive. Therefore, I support the matter of public importance. There is continuing confusion. I call upon the Government to clarify its position urgently and immediately to remove this distress from the ordinary working people of Australia. Senator TATE(Tasmania)(3.47) —I would not deny that there has been some confusion and anxiety in the community in relation to the Labor Government's announcements concerning superannuation entitlements and their taxing. If there is anything we as a Government have learned it is that, in conjunction with acting courageously, it is necessary to make very clear explanations of that action. We are now some days on from the announcement of the mini-Budget. Much has been clarified, yet the Liberal and National Parties continue to try to maintain a level of hysteria in the community which is only unsettling to superannuitants and those facing retirement. As one commentator has said, an incredible rash of bloody-mindedness seems to have seized the Opposition. It is trying to score every political point that it can. I can assure honourable senators and those listening to the debate that the Government will not be bowed by the Opposition's incredibly selfish attitude in trying to muddy the waters. The Government will remain firm and committed to the basic principles and the tough decision which it announced. If that decision were fundamentally denied it would bring back the memories of the seven years of opportunistic politics of the Fraser Government. We will stand firmly by that decision. I, for one, am very proud to be part of a Government which has as its Treasurer a man who has taken a tough decision and will not back away. What makes all the humbug and bluster from honourable senators on the other side of the chamber all that harder to bear is that they know that the decision is the correct and necessary one. All the committees which have looked at this matter over the years have reported and recommended to that effect. So much so is this the correct decision that David Potts, the economics editor for the Australian newspaper, had this to say in his article entitled 'At least Labor has some guts ': The reforms were well overdue, and for the most part more equitable. Claude Forell of the Melbourne Age wrote an article headed 'Courage in the mini- Budget'. That is the type of response from those who are recognised as being amongst the most respected commentators in Australia. As I have said, that makes all the humbug and bluster all the harder to listen to. What are these Government changes all about? We as a nation are concerned with ensuring that retirement incomes are available to the elderly in our community. Our concern as Australians in a civilised and decent society is to ensure that those who reach a stage in their lives where they are no longer contributing paid labour to the work force are able to live at an assured level of dignity, as is their due. An income to achieve that can be derived from superannuation funds to which a person, as an employee, has contributed over a number of years, or it can be derived from the Department of the Treasury, which of course is supported by the working taxpayers of this country, as a pension under the social security system. If people can make self-provision through a superannuation scheme that should occur. That should provide the means of income in retirement. A person ought not to be able to take the superannuation as a capital lump sum and deal with it in a way which does not attract or generate any great income and in addition take a pension from the public purse. The extremely generous taxing of the lump sum- only 5 per cent of it was taxed-reflected recognition that the community, the taxpayers and the Federal revenue should forgo ordinary taxing of that amount in order to encourage people to make provision for their retirement through superannuation funds. In fact it has been estimated that some $2 billion is forgone by the Treasury in dealing so generously with those lump sums. That would not be so bad if the lump sums were converted into an annual income which was then used to sustain the persons concerned-the superannuitants-through their retired years. Taxpayers have to find money for a social security pension to support those people with a lump sum stashed away in a non-income bearing manner. So we have a form of double dipping into the public purse. That double dipping causes great hardship for the great majority of people still in the work force sustaining those who have retired. Quite simply, that sort of rort had to be stopped. As I have said, that was generally acknowledged by all commentators and all committees who reported and recommended courses of action to the Government. The Government's purpose is to try to restore a situation where self-provision for the years of retirement is encouraged and works so that one has an annual income generated by the suitable investment of the moneys that have accrued in a superannuation arrangement. That seems to me to be perfectly sensible. Events over the last few days have further clarified the situation. A non- retrospective taxing arrangement has been put forward to the Australian people. There is no panic whatsoever. Senator Watson spoke about people taking early retirement on the basis of rumours before the mini-Budget. There is no need for people to retire early to escape some punitive retrospective measure in these arrangements. All entitlements which accrue until 30 June this year will be dealt with under the old tax laws. The change will come into operation on 1 July ; nothing could be clearer than that. It will come into effect next financial year. That is a perfectly well understood concept. An employee usually contributes to a superannuation fund which is supplemented by the employer. The employee's contributions taken as a lump sum at retirement will not be taxable at all. On the other hand, a person who provides for his or her own superannuation by paying, say, $1,200 a year without the benefit of employer contributions to the scheme, of course receives a deduction for that payment under our present tax laws. That is, that person gets a tax concession along the way. So if that person takes a lump sum at the end, that is subject to the standard rate of tax, usually 30 per cent. But even then, that whole lump sum can be rolled over into an annual income within 90 days and it does not then attract the lump sum tax. That is the next point and the crucial point: That a lump sum that relates to service after 1 July this year will be subject to the new tax rules. However, that lump sum will be wholly exempt if converted to a pension or other annuity within a specified period-normally, 90 days. In other words, an employee, after retirement, has three months during which to assess the situation, and to discuss it with his bank manager or insurance fund adviser. Of course, if prudent, he will have undertaken discussions before he retired, and the retired person can roll over that lump sum into an annual income rather than pay the 30 per cent tax on the lump sum. Of course even there, I repeat, in relation to the employee's own contributions over the years, after 1 July, he can take that as a lump sum on retirement and no tax is payable. So there is a provision for some lump sum moneys which are not taxable, which provide for that expenditure on retirement which might add a holiday or some purchase of a household item, or help to pay off a mortagage or whatever, and then the rest of the money is rolled over into an annual income. That is really the point: We have here devised what is acknowledged by all commentators to be a fair and equitable scheme. After all, where does the burden now most heavily fall in relation to the provision of revenue to sustain the present system and the payments of pensions to those who really ought to make self-provision for their retirement? This matter was completely misinterpreted by Senator Watson. It is the ordinary taxpayer who presently bears the heaviest burden in relation to our present arrangements, and most of those ordinary taxpayers do not belong to a superannuation scheme. Most low income earners within the private sector do not belong to a superannuation scheme at all. Only 45 per cent of the work force are members of a superannuation scheme anyway, and many of those are in the public sector. So, let us hear no more of the claim that this proposal will have a disastrous impact on the little man. The fact is that the little man, as I say, rarely has the benefit of such a scheme, yet he pays taxes now which are higher than they ought to be on two counts: First, revenue is forgone by the Government in that it taxes only 5 per cent of the lump sum and the revenue has to be made up in some other way; and insofar as many more pensions are paid to the elderly than needs to be the case, he is also making a greater contribution to the Government's taxation coffers than need be the case. So the ordinary working taxpayer of Australia is paying much more tax than he ought to pay under the present arrangements and that will not be so under the arrangements announced by the Treasurer (Mr Keating). The fact is that this measure will relieve some pressure on the ordinary taxpayer who is being asked to assist an elderly population which is growing as a segment of the general population. From looking at statistics based on a net intake by migration of 75,000 a year, one finds that in Australia the population of those over the age of 65 was about 14.9 per cent at 30 June 1981, but in only 10 years it will grow to 17.2 per cent. That is a difference of about 500,000 people. So one can see that the number of the elderly, the retired, who will be dependent on assistance from the community in one way or another will grow, and therefore this sort of arrangement needed to be brought into operation now. This measure does nothing to impair the ability of Australians to ensure a steady and adequate income during retirement. In fact, it will inevitably encourage more planning by individuals and more competition between investment funds for their business. That is another point which was not properly addressed by Senator Watson. It is my belief that this arrangement will lead to a far better mobilisation and utilisation of our limited domestic savings, of the capital available in Australia. It will be directed more into the investment funds of the major insurance companies or into government bonds, which probably should have some factor built into them to protect their real value, and will thus allow major national expenditure to be financed. Finally, this measure will allow governments and the electors to choose between lower taxes, as I have explained, as double dipping is done away with, or directing the equivalent tax moneys into other more needy forms of job creation and social welfare. That is the real point. This measure will provide greater tax moneys for other, more necessary, more urgent needs in our social and economic situation. As Claude Forell in the final paragraph of his analysis of this proposal in the Age of 25 May said: But the Government's priority must be to help those who cannot help themselves, and of these, the growing legion of the jobless are bearing a disproportionately heavy burden of a depressed economy. They are the forgotten people who deserve our first concern. This measure will enable resources to be directed to their plight. Perhaps I may also quote the final paragraph of an article in the Australian Financial Review. That is not the most radical paper in Australia nor the most socialist or demonic. It had this to say: What has happened to all the back slapping and goodwill of the Summit? At a time when one-third of our young people are unemployed, when we are in the worst economic situation since the 1930s, when our economy is slipping further and further in the international economic race, and when our medium term future is still far from bright, good old Aussie bloodymindedness prevails. Sadly, the phony heat generated over this issue encourages feelings of black despair for our longer term future as a nation. I believe that we may feel the same despair about the present Opposition, the Liberal Party and the National Party, as they try, as I say, to muddy the waters , to keep an unsettled, confused state of mind among those who are about to retire, rather than acknowledging the very real benefits to the national economy , to ordinary Australian taxpayers and to the great proportion of the population which is aging, and which this measure represents. Senator HAINES(South Australia)(4.2) —The motion consists of two basic statements. One is a statement relating to the confusion and distress caused by the Government's changes to the superannuation plan, and the other relates to the benefits or otherwise that will result from those changes. I do not think that there is an honourable senator in this place who is not aware and whose staff members are not aware that a great deal of confusion and distress in the community generally has resulted from the Government's proposals as put down by last week's mini-Budget. The calls that have been coming into my office-I am sure that they are much the same as the calls that have been coming into the offices of other honourable senators-show two basic things. One is a misunderstanding of the proposals-which I thought, as far as they went, were fairly clearly explained in the mini-Budget last week-and the second is a concern that there is no lump sum ceiling or threshold being provided in these superannuation changes. The first point is covered by the fact that there is a consistent lack of understanding in the community about the changes which were proposed to occur on 19 May and which will now occur on 30 June; that is, the 5 per cent rule will continue for lump sums to which an entitlement has accrued prior to 30 June, and the new system will come into operation only for those amounts which accrue after that date-not for the amounts which are actually received, but for the portion which accrues. That has not been particularly well explained, and it has certainly not been particularly well understood by the majority of people in the electorate. The second problem, the concern that there is no lump sum amount which does not attract punitive taxation measures, is a major one for those who are in receipt of only small superannuation payments, and that, of course, is the majority. These people have written to me and telephoned me expressing a need for, say, a $50,000 lump sum entitlement which will not be hit hard by taxation measures. These people argue-I think with some justification-that they have paid into a superannuation scheme all their lives or will continue to do so in the future with the intention of getting back on their retirement a lump sum with which they can do a number of things. The most favoured of those is to pay off their mortgage. I would point out at this stage that for every mortgage which is paid off, one more can be taken up by somebody else. The other point that concerns these people is that they have worked hard all their lives and they see their retirement as an opportunity for indulging in some luxuries such as a little travel, upgrading their home, a new car, a new washing machine, a new refrigerator or whatever turns them on. The third thing people like to do when they retire, particularly those who retire earlier than 65 years, is to buy into a small business. They like to use part of their lump sum payment as equity for that small business. Of course, the concern, confusion and distress in the community over these matters are not helped by some rather misleading media reports which occurred early in April prior to the mini-Budget proposals being announced and which, for all I know, may have been due to misleading Government leaks. Two of these reports to which I would like to refer today appeared in the Australian Financial Review of 12 April and in the Sydney Morning Herald of 9 April. Both of these reports, regardless of whether they intended to, implied that some form of retrospectivity was going to be applied. The Australian Financial Review article headed 'Lump sum rumours send execs scuttling' made these points: Rumours that the Federal Government intends to tax lump sum retirement benefits have led to a spate of early retirements by senior executives from Melbourne- based mining companies. I interpolate at this point that I do not have a great deal of sympathy for these people who are leaping out of their employment and taking the lump sum payment simply on a rumour since it raises the question, in my mind at least, of what other rumours these people have operated on during their working lives. The article goes on to state: A director of CRA Ltd, Mr L. J. Carden, said yesterday that 17 senior employees of CRA had opted last week for early retirement. Questioned on rumours circulating in Melbourne that up to 60 executives had retired last week, Mr Carden said no more than 30 people throughout CRA and its associate companies had decided to take early retirement. The article further states: The rumours are unusually definite, suggesting that the Government intends to retain 5 per cent tax on lump sum benefits under $100,000 but to tax benefits of between $100,000 and $200,000 at 35 per cent and benefits over $200,000 at 60 per cent. There certainly is an implication in that statement that the measures would apply retrospectively. An article appearing in the Sydney Morning Herald headed 'Tax rumours prompt early retirements' stated: Contributors to some superannuation funds are rushing into early retirement to avoid an increase in the tax on lump-sum payments. . . . . The company secretary of a large Australian group said yesterday: 'For the past three days we have had people coming through the door and taking their money and leaving the company. . . . these people who have worked for us for 30 years or more are gambling with the balance of their careers and retiring on the basis of a rumour.' . . . . . . . the Government should move quickly to make its intentions clear. Much of the concern expressed in those lemming-like activities of certain executives and by people telephoning my office is, of course, groundless but there is no doubt that the quality and availability of information to set them straight is totally inadequate. My staff have been reduced to photocopying the paper handed out the night the mini-Budget was brought down and sending it to people, scribbled over as it is with comments I made at the time, because the White Paper is in short supply, newspaper reports show huge gaps and too many details are as yet undecided. Indeed, the Treasurer (Mr Keating) has made additional statements in the last day or so after consultation with various groups that have been upset by the proposed changes. Even the Commonwealth superannuation fund counselling service was unable to give much information when contacted by my office yesterday at the request of a Commonwealth car driver who had me as a sort of captive audience when travelling between the airport and my home. He expressed some concern-justifiably so-over what will happen to him in 12 years when he retires. The problem is that most people seem to think that all past contributions will be taxed and that this will cut into the $30,000 to $50, 000 they plan to use on retirement to buy a house or the other things I mentioned. I give as an example a letter received recently which states: I am writing to you . . . in the hope that your party will oppose most vigorously the 30 per cent tax on superannuation payments. . . . . I am an invalid pensioner who could be classed as a 'battler' who was hurt whilst working as a coal miner. I have been struggling along on pension payments for some time, looking forward to the day when all the 'red tape' would be finalised and I would be able to collect my lump sum superannuation payment so that my wife, myself and 2 small children could have a bit more comfort in life and my children, aged 13 months and 6 weeks, could have a decent education. How can you educate 2 children on the invalid pension? This superannuation appears at last to be paid in the not too distant future, I hope. My family and I presently live in a cramped one bedroom house. The majority of my superannuation was to finance a decent home and the rest would educate the children. This super should be approx. $50,000, which, I am sure you will agree, hardly puts me in the super-rich bracket. Of course, this invalid pensioner will not be affected by the new 30 per cent tax because his lump sum accrued some years ago. But he does not realise that and he is getting worried and upset. Certainly, the matter of public importance brought forward by Senator Dame Margaret Guilfoyle is correct in saying that there is a lot of confusion and distress in the community caused by the Government's ill-explained changes to the lump sum superannuation provisions. If the Government had acted less hastily, some informative literature presumably could have been prepared and people like the gentleman who wrote that letter could have been saved a fair degree of distress. Certainly the Australian Financial Review believes that the Government has been somewhat remiss in not providing lucid information about the matter. In an editorial of 23 May the Australian Financial Review stated: Unfortunately, the superannuation decision shows all the signs of the haste in which it was taken . . . It should, incidentally, be noted that the Government has no right to complain about media misinterpretation of any aspect of the statement: It placed great strains on the physical resources of the media by the way in which it made the document available. The changes in the superannuation taxation regime were not fully explained in the Thursday statement. It is becoming increasingly apparent that that was at least in part because the detail had not been fully thought through. The Canberra Times, supporting most of that statement, has stated: The transition from the old to the new arrangements is to be gradual, but by failing to detail the reasons for change and the new arrangements Mr Keating and the Government have provided more questions than answers. I certainly regret the confusion, concern and distress that has been caused to individuals in the community. I believe that that could have been avoided if the Government had been a little more concerned about providing a reasonable explanation. But I am not personally opposed to the changes proposed by the Government, with just one proviso. The Government's changes, as previous speakers have already said, are aimed at ending the epidemic of double dipping which has been going on in recent years. Recipients of very large superannuation lump sums have put these payments into some sort of non-interest bearing deposit or put them in their children's name and go on to claim the pension. That is hardly the point of the exercise in the first place, as superannuation is meant to be a contribution towards providing for one's own care during old age. In addition, these changes are intended to end another tax lurk; that is, the situation in which directors of private companies can whip in and out of superannuation schemes, converting the untaxed contributions of both themselves and their employees into 5 per cent tax lump sums. Neither of these things is socially desirable and I for one applaud any action which this Government or any other government takes effectively to prevent them. However, I repeat: There are very real fears in the community relating to the fact that it may no longer be possible in the future for people to take small lump sums which they intend to use for the sorts of measures that I mentioned earlier-paying off a mortgage, buying into a business, travelling and generally enjoying themselves after 30 or 40 or more years of fairly hard work. I hope the Government is prepared to change its mind on this issue and to allow in the future people to take a lump sum of, say, up to $50,000 and to convert the rest to an annuity to provide a guaranteed income for the rest of their lives. This would provide the best of all existing worlds. I am pleased to see in the Treasurer's statement that the Government will amend the Life Insurance Act to make it possible for life offices and superannuation funds to sell annuities on more attractive terms than at present. I point out to the Senate, though, that until and unless Australia develops a complete national portable contributory superannuation scheme we will be constantly faced with ad hoc changes which, even with the best will in the world, cause distress and confusion in the minds of the general public as well as in the insurance industry itself. Senator Sir JOHN CARRICK(New South Wales)(4.17) —The Senate is debating a serious matter. The proposal of the Hawke Labor Government to tax savagely lump sum payments from superannuation attacks and does violence to the central fabric of Australian society. Australians have always believed that they had the right during their lifetime to save week by week, to put aside money for their retirement years. They believed they had the right to acquire capital in their retirement years, to pay off mortgages, to help their families, to set themselves up in small businesses or to dispose of that small capital at death. This proposal does violence to that basic principle and in doing so seeks to change the structure of Australian society because its application does not affect just superannuitants. We cannot simply say that we will stop a group of people acquiring capital and let others acquire capital in other ways. Clearly it will spread across the community in a massive attack on the right of Australians to acquire capital. We are not talking about wealthy people at this moment; we are talking of 1.8 million Australian employees. To cover that 1.8 million employees, from the wealthiest to the lowest in the tax scale, one would have to take in people on about $180 to $190 a week. We are talking about members of the Federated Ironworkers Association, about people in the lowest grades of the Public Service and something like one million people in private industry, 83 per cent of whom now receive lump sums. So what we are looking at is an attack, and a device to be used is that the Government will make it difficult-well nigh impossible-for people under superannuation funds to hold on to capital at the end of their journey in employment. The Government will force people into annuities. To force someone into an annuity is to force that person to abandon forever his capital. To give people the choice of doing that is a good idea but the use of force is an abhorrent principle. That force acquires two points. People would be forced to take an income from that annuity, which would be taxed by the Government, and the Government hopes to force them to be ineligible for an age pension. The great confusion of this debate is the confusion of two principles-the right of people to save, however modestly, and also the great responsibility of the people of Australia to ensure that the retired, aged and needy get a fair go. I, for one, must say at the outset that I believe this society has moved to a point where, with 89 per cent of aged people getting an age pension, clearly we have an almost universal pension and there is a need to look at the real requirements of the needy. I point out that the Government's approach is wrong-headed because it destroys the basic fabric of our society. This society will be at its strongest when it is a society of little capitalists, when it allows people the right to invest and to dispose of their capital. What right has any government to say: ' You millions of people have no right to choose the way in which you dispose of your capital; the big insurance companies will do that. We will institutionalise investment in Australia and will not allow it at the other level'. Of course, the Government did that in the mini-Budget when it wiped out the $1,000 concession for dividends. It always attacks anything that is the initiative of the individual. This matter goes further than that. Clearly, if the situation is left where it is today, tomorrow people will be working on a thousand schemes of avoidance. People do not have to save for their old age by superannuation. Many other schemes, such as fixed trusts and the buying of property, do the same thing. We need to look at where the Government will go from here. I ask the Minister for Social Security (Senator Grimes) to give us an assurance that this is the end of the road, that only superannuants and not others involved in fixed trusts or who have purchased property will be involved. Of course, what will happen is that the very nature of superannuation schemes will be altered. If the employee's share of a superannuation payment is to be tax free, the arrangement, as part of a pay package, will be that the employee will be given more in his wages so that he can pay more of his share, to be tax free in the end, and the employer less. It is fundamental to this debate to reject the nonsense of a $2,000m tax concession. The fact of the matter is that the arbitration system has accepted continually that superannuation payments are a part of wages. Let nobody deny that. I hope the Minister responds to that because if he destroys that concession all that will happen is that another wage package will come up in which the benefits will be altered. There is a need to do some explaining because yesterday the statement of the Treasurer (Mr Keating) widened the fear in the community. He said: In doing so, the Government has had no intention of varying its decision that, on grounds of equitable treatment of the various groups in the community, there must be a change in the present rules that virtually exempt retirement and kindred lump sums from tax. It is up to the Government to state quite clearly what it means by 'and kindred lump sums', because that gets to the very heart of any kind of capital accretion which a person may have and which a government may decide is a retirement benefit. Is the acquirement of a property or of a fixed trust as a capital something to be attacked? This is what we call a sleeve trick. Of course, it must be. If the aim of the Government is to force people out of age pensions, it will not stop with superannuitants. For example, it knows that there will be new schemes. It knows that millions of people have other devices for gaining capital . Quite clearly if the Government is intent on stopping capital accretion so that people may gain the age pension, it must be aiming to attack every person who is acquiring capital with low income potential by forcing them to turn that capital into income. Otherwise, what is the purpose of what it is doing? Of course, it is interesting to recall that Senator Walsh attacked the Fraser Government for removing the property tax and said that that is where the situation really started. I asked him-and I now ask Senator Grimes, because Senator Walsh failed to answer-'Will you give the people of Australia a guarantee that you will not alter that, that you will not reinstitute some kind of property test?' What we need to know now is the width of the Government's assault upon the Australian people. It cannot stop with superannuation; that is quite clear. It must be operating on a wider front. It must be out to tax capital gains over the widest possible area. Will ordinary people who now see superannuation being taxed buy better homes over the years which are beyond their needs but which will provide some money for their children? Can such people rest in safety, or is the family home to be threatened? What nonsense has been talked! Ministers have said that there is no retrospectivity in this situation. All of the 1.8 million people who went into this scheme over the years, those who have been in it for 30 or 40 years and those who have been in it for one year, did so with one clear understanding-that they were going to get the benefits at the end of their contribution to the scheme and that they would be free to dispose of their assets as they wished. Every person who went into the Australian defence forces knew that, if he came out in his middle years, he would have the right to take a capital sum. Is this the kind of justice that the Government is inflicting upon the community? Is this what it says is not retrospective? In fact the decisions, the planning and the lifestyles of 1.8 million people have been retrospectively altered with violence. We should bear in mind, as so many have said that it is of no good someone saying that he has been in a scheme for 30 years and has only 10 years to go. The fact is that it is the later years of a superannuation scheme in which the real benefit and the real money build; and, of course, it is those latter years that this Government is attacking. So the Government's scheme is quite violent in its long term approach. It cannot be said to be attacking privileged people. Are 1.8 million people privileged? Are trade unionists privileged people? Are public servants privileged people? In any case, let the Government say that that is where it will stop. Let it say: 'We are going to pick on superannuitants. All who want to save their money and dispose of it in capital growth, low income investments are all right, except superannuitants'. What nonsense! Quite clearly the signifies only one thing-the Government will be out to get such people at the next round. If it is not, what violence it is doing to superannuitants in this community! Are we now to say to people: 'You can go into any scheme of avoidance that you like, other than superannuation, and that will be legal'? Will we have bottom-of -the-harbour situations chasing through this area in the years ahead? People are entitled to know now-not in the future-what they can do legally with their money . People have been misled in their beliefs. Let us put aside all these shibboleths. It is not true that there is a $2 billion concession to the Australian community. The Australian Conciliation and Arbitration Commission has indicated that superannuation is part of the ordinary wage package. In any case, if it were true that it is a concession, are the other concessions that employees are now getting to be threatened? Are we now to say: 'Anything you are getting as a concession or as a benefit will be threatened in future'? Where does all this start and finish? Very simply, the situation is that, for quite wrong reasons, this scheme has been invented. It is profoundly important for the Australian community to make sure that those in most need in this community get better help. The Australian community has elected to support a scheme in which 90 per cent of those eligible for the age pension get it. Rightly or wrongly, that is what has happened. It is no solution to try to wind back that situation by picking on some people and destroying the fabric of their lives and their right to save and to invest. Even at the point of death the Government has its hands in the till at this moment. I know of nothing more destructive. Senator GRIMES(Tasmania-Minister for Social Security)(4.32) —I rise to conclude the debate on this matter of public importance. In doing so I wish merely to make a few remarks about what I consider was the hysterical contribution of Senator Sir John Carrick, who preceded me in the debate. I wish Senator Sir John Carrick would do several things. Firstly, I wish he would read and, if necessary , listen to the tape recording of remarks by the shadow Treasurer and previous Treasurer of this country which have not been in the hysterical tone that Senator Sir John Carrick introduced and which have not raised the spectre of the thin end of the wedge argument raised by Senator Sir John Carrick in the Senate but which looked at the issues that have been presented to the Australian people . Secondly, I think he should look at the article in the Australian Financial Review last Friday by the former Western Australian member of parliament, Mr Hyde, who in very careful measure looked at the proposals of the Government and urged the Opposition not to make the hysterical and scaremongering response that Senator Sir John Carrick has made. Thirdly, he should look at the comments of the people in the insurance and superannuation industry in this country who also by and large are in favour of these changes and who have not indulged in the sort of nonsense that he has gone on with. Finally, I ask him to look at the economic statement put down by the Treasurer (Mr Keating) on 19 May and the statement put down yesterday. I will certainly not waste the time of the Senate by reading from the statements in this debate. But the honourable senator will read in them about the pro rata apportionment of the benefits that will be available under the system introduced by the present Government. If he reads pages 60 and 61 of the statement of 19 May he will find a clear definition of ' lump sums and kindred payments'. Were he to read all that, he may not come into this place not knowing what he is talking about and carrying on in the way he did. The Opposition has characterised these changes as hasty and ill-explained. It characterised them, in Senator Sir John Carrick's terms, as an attack on the fabric of Australian society. The Senate should remember at all times that there is at present and has been for some time general agreement that the existing arrangements in this area are inequitable and are ineffective in meeting their objective of encouraging people to provide for their income needs after retirement. I heard Senator Watson make the point that the aim of the superannuation scheme is apparently to provide people with capital sums so that they can invest in industries, in real estate and so on. The aim of the superannuation schemes of this country, like those of every other country, and of the tax concessions on superannuation which, whether Senator Sir John Carrick likes it or not, are estimated by the Australian Taxpayers Association and by the Treasurer to cost about $2,000m, is to enable people, quite rightly, to prepare for their retirement and for the provision of an adequate retirement income-not for the other purposes to which Senator Sir John Carrick has referred . I suggest that the new arrangements, in the words of the Treasurer, will provide a firm basis for the development of a secure system of retirement provision such as aged people deserve. They will mean that no longer will the 42 per cent of the community who, for one reason or another, have access to superannuation schemes be, as far as it can be prevented, subsidised by the 60 per cent who are not in that fortunate position. The problems presented by the existing arrangements are well-known, as indeed they were to the previous Government. On 6 September 1979 Mr Howard, who was then the Treasurer, and Mr Street, who was then the Minister for Employment and Industrial Relations, issued a statement on occupational superannuation in which they said: . . . there does seem to be a very wide measure of agreement on one point-namely that the current framework of legislation is in need of considerable reform. During the succeeding 3 1/2 years the previous Government took no action to introduce that reform, which its two senior Ministers had acknowledged as being necessary. The then Government established in 1979 a task force to consider the role of occupational superannuation, but the task force was limited as to what it could do and report upon by the fact that before the 1980 election the previous Treasurer caved in on the issue of taxing lump sums. The task force was left with no scope for arriving at a rational policy on this subject. Therefore, its report could talk only about less contentious issues such as regulation and provision of annuities. However, the then Government still recognised that the situation was not right and was marked by inequity because, during the presentation of the 1982 Budget, Senator Chaney, who was then the Minister for Social Security, announced that he and his Government would crack down on income rigging arrangements that were being used to avoid the pensions income test and would partially address the problem of double dipping, which has been talked about in this place by people on both sides almost incessantly since, as Senator Walsh has said, the previous Government introduced, half way through a previous term of office, the income test for pensions, as against the means test. However, even after Senator Chaney made that firm statement as part of the Budget presentation the then Government again backed down. Many questions were asked in this place by Senator Giles and me and others as to when the Government would do what it said it would do in presenting the Budget. The Government took no action and finally backed down. I made the following point at the time: When the Minister made the announcement following the Budget, the Government did not know what it was going to do or how it was going to do it. The Government announced a serious legislative change and did not have a clue what it was doing. At the time the Government created anxiety and uncertainy in the community. It continued to create anxiety and uncertainy during that whole period. The present Government has a clear idea of what it is doing in this area. It has moved to stop double dipping where that problem actually arises-in the taxation system, the tax rorts, not the pensions area. It is doing that in consultation with, and with the support of, the bulk of the superannuation industry and of the life insurance industry. The Government's proposals are sensible and moderate. They closely follow the findings of independent experts over the years . The National Superannuation Committee of Inquiry, chaired by Professor Keith Hancock, which had been appointed in 1973 by the previous Labor Government, considered that: The present treatment of lump sums is an obstacle to other tax reforms affecting superannuation. The Committee concluded that: The investigations and discussion underlying this report . . . have made it clear to us that to design a rational and equitable superannuation system embodying lump sums which are nearly tax-free is an impossibility. That is the point, I believe, of Senator Haines's statement that we will not get anywhere until we get a sensible national superannuation scheme, and we cannot do that while there exists provision for the payment of lump sums almost tax- free. The Taxation Review Committee chaired by Mr Justice Asprey took a similar view. It said: If a person is entitled to a lump sum he should be quite free to receive it, but he should not gain an unwarranted tax advantage in doing so. The Government's arrangement is not radical or wild, nor is it without precedent . It is a reform item that has been on the agenda of major inquiries into taxation and superannuation schemes over a long period. It has been talked about by honourable members and senators on both sides, here and in another place. It has been the subject of addresses that I have made over the years to the Association of Superannuation Funds of Australia. It is not something that has come like a bolt out of the blue. It is not a violent change. The proposals are modest and avoid any suggestion of retrospectivity. I repeat, for it is worth repeating, that only entitlements arising from service after 30 June will be subject to the new arrangements. People who expect to receive a substantial lump sum will not be disadvantaged by the change, except in respect of extra entitlements arising after 30 June. Nor is there any suggestion that double taxation is involved. Tax will be payable only on future lump sums which arise out of a contribution or interest on which tax had not previously been payable. Thus, employee contributions, which are paid out of taxed income in the hands of employees, will not give rise to a taxable lump sum. There will be tax-free lump sums. The new arrangements are partly designed to end tax avoidance arrangements whereby essentially superannuation has become a form of untaxed deferred pay. They are also designed, by reducing the long term burden on the Budget and the opportunity for double dipping, to reduce the inequity of taxpayers who do not belong to any superannuation scheme subsidising the entitlements of those-mostly higher income earners-who do. It is important to note that they are designed to encourage moves toward a more rational and consistent retirement income system. Australia is almost unique among countries of the Organisation for Economic Co- operation and Development in regard to the extent to which lump sums, instead of superannuation pension, are taken on retirement. It is also unique in regard to the extent to which entitlements may be dissipated, upon changing a job, prior to entitlement. The unfortunate result is that a system that was designed to help people obtain a retirement income results in many people reaching retirement with little guarantee of a regular income beyond their basic age pension. Under the Government's proposals employees would still be entitled to receive a considerable tax-free lump sum, which would represent the return on their own contributions, in cases where such contributions have not attracted a tax rebate . Under many schemes this will mean that at least a third, and sometimes a greater portion, of the lump sum will be exempt from taxation. Each dollar that the Government forgoes in superannuation tax concessions, which primarily accrue to the better off employee, is a dollar that is not available to improve basic age pension entitlements or to devote to other uses in the community. Those who defend the present concessions should consider the likely impact on the well- being of all aged, or disadvantaged, citizens. I repeat, these measures are not confined to curtailing unjustified taxation benefits. The objective is to extend, to many who do not now have such an opportunity, access to secure, regular incomes throughout retirement. To do this , we are removing the legislative barriers which have effectively prevented life offices and superannuation funds from selling pensions; reviewing present arrangements under which the return of the capital component of such pensions is taken into account in the age pension income test; and canvassing the possible introduction of new types of securities, including indexed bonds, which could assist life offices and superannuation funds to meet the needs of retired people for secure, regular income. We are exempting from tax entirely-including the existing tax on 5 per cent of the amount-lump sum payments rolled over into new schemes; lump sum superannuation payments which are used to buy pensions, including the existing tax on 5 per cent of the amount; and that part of the lump sum which represents the return of the employee's own contributions, unless they have already attracted a tax rebate or deduction. These measures will enable many Australians to plan for their retirement with far greater confidence than they have at present and will enable, and not inhibit, the development of a national superannuation scheme. The arrangements were introduced deliberately with some details not made clear because we wished to consult with the unions and with the industry itself. That is what we are doing. We acted speedily and responsibly to bring to an end the sort of speculation that Senator Haines was talking about. Imagine what the speculation would have been if we had consulted with the industry for months before we announced the changes. We have made a clear, unambiguous statement of our intent. The details of the implementation will be resolved in a couple of weeks. If that is hasty and ill-conceived, how does it compare with the previous Government's prevarication from the time the previous Treasurer, in 1979, pointed out the unsatisfactory situation in this area, an announcement which was followed by no legislative change? If that is unsatisfactory and is creating anxiety in the community, what happened when Senator Chaney announced as a result of the 1982 Budget that he was going to attack the double dipping situation and the manner in which people used their lump sums to avoid the income test, and then he did nothing despite frequent questioning in this Parliament for many months until he was forced to admit that he would do nothing ? The MPI is a nonsense. The ACTING DEPUTY PRESIDENT(Senator Lewis) —Order! The Minister's time has expired. Senator GRIMES(Tasmania-Minister for Social Security) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. Official Establishments Trust-Annual Report 1981-82 2. Review of Australia's Demographic Trends 1983-Report 3. Multiculturalism for All Australians-Our developing nationhood 4. National Consultations on Multiculturalism and Citizenship-Report 5. Australian Dairy Corporation-Annual Report 1981-82-pursuant to section 29 of the Dairy Produce Act 1924 6. Proposals for Works Within the Parliamentary Zone-pursuant to section 5 of the Parliament Act 1974-together with a tabling statement 7. Australian Capital Territory Milk Authority-Annual Report 1981-82 8. National Exhibitions Centre Trust-Annual Report 1981-82 9. Board of Accident Inquiry on an Accident to Beech Super King Air 200 Aircraft VH-AAV at Mascot, New South Wales on 21 February 1980-together with a statement relating to the report by the Minister for Aviation 10. Advance to the Minister for Finance-Monthly Statement April 1983 11. Commonwealth Employment Service-Annual Report 1981-82 pursuant to section 22 of the Commonwealth Employment Service Act 1978 12. Commonwealth Ombudsman-Annual Report 1981-82-pursuant to section 19 of the Ombudsman Act 1976 13. Third United Nation on the Law of the Sea-New York 9 March-30 April 1982- Report of the Australian Delegation-2 Vols 14. Australia-Japan Foundation-Annual Report 1981-82-pursuant to section 25 of the Australia-Japan Foundation Act 1976 15. Army and Air Force Canteen Service Board of Management-Annual Report 1981- pursuant to section 23E of the Army and Air Force Canteens Service Regulations 1981 Report Senator MARTIN(Queensland)(4.48) —I move: That the Senate take note of the paper. I speak only briefly on this paper, which was tabled in the House of Representatives last week and which attracted a great deal of publicity particularly in relation to the aging of the population and some projections that were made in that area. I wish to give some brief emphasis to another section of this paper. It is a fascinating document because it brings together many tables about ages and community structures, makes some comment on them-on occasions, cryptic comment-and then passes on. It is up to us to make what we would of the information presented in it. I refer very briefly to that section that relates to the changing structure of families in Australia today. The report states: In 1976 20.1 per cent of all families were headed by women. I point out that a family is treated as being a single person living on his or her own, a couple, a parent with children or whatever. The report continues: By 1981 this had risen to 24.6 per cent. This was due to the increase in single person families and- I wish to emphasise the following- those families headed by single persons but with others resident, which are traditionally more frequently headed by females than males. Single person families actually had a higher proportion headed by males in 1981 than in 1976. This was due to an increase in male single person families at age 45 and over, by far the largest group of single person families. The report makes no comment on that matter. One can only guess at the reasons for it but I think the obvious reason is the increasing rate of divorce in society. From time to time one hears men say: 'We hear a lot about women's issues; what about men?' Perhaps some men in our community could make some comment on that change in the nature of families in Australia and the sorts of problems that change might be bringing with it for middle-aged men in Australia. I could only guess at those problems. I do not intend to continue along that line but I invite some comments. I wish to emphasise the following matter: The report makes the point that while single person families had the largest absolute increase between 1976 and 1981, single parents with dependent children had a higher proportional increase of 57 per cent. The report shows that an increasing number of women in society are in the position of being head of the household, not having a partner and having to rear dependent children. This issue comes up in other contexts, notably in debates on the issue of the payment of the supporting parent's benefit. There have been calls from time to time in the community to raise the alarm at the rate of increase in payment of the supporting parent's benefit. It is necessary over and again to point out that the largest category of increase in recipients of that benefit is that of the divorced person who depends on the benefit in order to rear his or her children. The great majority-I repeat, the great majority-of recipients are women. I raise the issue because it will be relevant in a subsequent debate in the Senate. According to information provided to the Opposition by the Government, the Attorney-General (Senator Gareth Evans) will this week introduce amendments to the Family Law Act. I believe that this factor will be highly relevant to sections of those amendments. It is relevant in other areas too, of course. I just mention an area that concerns me particularly. It concerns me very much that an increasing proportion of children in our society are being raised on welfare, for a variety of reasons. One reason is increasing unemployment. The other reason is the increasing rate of divorce and the fact that women with young dependent children find it enormously difficult to have access to any income other than welfare even if they want to. We live with an historical legacy of undereducated women, who when they were girls at school grew up in a society that believed that it was not necessary to give girls very much education because they would get married and a husband would support them subsequently. These women now do not have job skills which would enable them to re-enter the work force in order to earn money to support their families better than any pension can ever support them and to have prospects for future development after their children are no longer so heavily dependent on them. There are the problems of lack of access to child care facilities and lack of access to education. Our authorities do not like adults attending school during the day. That is the problem that we and out educational institutions will have to face. As I said, I intended to speak only briefly in order to raise that very important point in the report. That point was totally overlooked by the Press in its reports last week but it concerns what I think is one of the most fundamental, important and challenging changes taking place in Australia today. Question resolved in the affirmative. Reports Senator CHIPP(Victoria-Leader of the Australian Democrats)(4.54) —I move: That the Senate take note of the papers. There are two papers before the Senate. One, produced by the Australian Council on Population and Ethnic Affairs, is entitled 'Multiculturalism for all Australians-Our Developing Nationhood' and the other, produced by the Department of Immigration and Ethnic Affairs, is entitled 'National Consultations on Multiculturalism and Citizenship'. The first paper is a product of the ethnic affairs policy task force. The Task Force met on 10 occasions and carried out a postal survey of interested and experienced groups. Seminars were held in the capital cities. The Task Force followed a request for advice from the then Minister for Immigration and Ethnic Affairs, Mr Ian Macphee, to whom I pay a warm tribute for his enterprising and progressive work in this area. The paper argues that to make multiculturalism successful minority non-English speaking groups must not flourish on the margin of Australian society but must be orientated towards Australian society and given the incentive to belong. Secondly, multiculturalism is not the province of ethnic groups but something that concerns the whole society. Four principles on which multiculturalism is to be based are: Firstly, social cohesion; secondly, freedom to maintain one's own cultural identity; thirdly, equality of opportunity; and, fourthly, equal responsibility for, commitment to, and participation in Australian society. The term 'ethnic affairs' should apply to all intergroup relations. The Council recognised that effective implementation of multiculturalism requires changes in attitudes and institutions. Multicultural education is the first key to these changes. Without information there is ignorance. The Council also suggested the criteria for funding of the various groups. I now turn to the paper entitled 'National Consultations on Multiculturalism and Citizenship'. The consultations were held between 27 June and 28 July 1982. I observe in passing why it has taken so long for the Senate to be able to debate these very important papers. Seminars were held in capital cities to sell multiculturalism. They confirmed that multiculturalism is the only mechanism to prevent the racial divisions that have occurred in other pluralistic societies. A return to assimilation is not in Australia's best interests as it would deny us the benefits of cultural diversity. During the consultations strong criticisms were made in most States by conservatives, reactionaries, crackpots and fruit cakes. These people were offended by the thought that multiculturalism involves all Australians. As a summary the paper suggests that multiculturalism is a live issue, cultural differences should be an accepted feature of our society, multiculturalism has to be more than a marginal series of programs for minority groups, and multiculturalism has to be more than a marginal series of programs for minority groups, and multiculturalism is not radical-it is simply a recognition of reality concerning the composition of Australian society. We have a long way towards accepting our multicultural society. In 1981 a national opinion poll showed that 62 per cent of people under 25 years of age favoured cultural diversity. Eighty-eight per cent of people did not regard immigration as a problem to Australia's development. The two papers are a welcome and excellent contribution to the debate. The person who presented them to the Government, Professor Zubrzycki, has been a pioneer in multiculturalism and, as such, is a great Australian who deserves many plaudits. Praise needs to be given to this Government and previous governments for their appreciation of and the need for multiculturalism. Such a policy is vital to the cohesion of Australian society, as 20 per cent of our population was born overseas. Only Israel has more. One of the main things coming out of the papers is the desperate need for a national language policy, which policy the Australian Democrats sincerely, enthusiastically and vigorously pursue. In fact, the Democrats go further and say that all children who come from non-English speaking parents should first be educated in their native language before proceeding to another. We commend the work of those involved in these papers which have been presented to the Senate. We hope that meaningful debate will take place, rather than the disgusting, hateful and unhappy sort of comment that comes from some natural born Australians who seem to get a moronic buzz from their sinful and racist views which we detest and deplore. Senator MARTIN(Queensland)(4.59) —I rise to speak in much the same vein as Senator Chipp. I did intend to talk about the 'fruit cakes' as well, but at this stage I interpolate that not all are Australian-born. I will come back to that subject. The paper entitled 'Multiculturalism for all Australians-Our Developing Nationhood', as Senator Chipp pointed out, was discussed around Australia. The second report, entitled 'National Consultations on Multiculturalism and Citizenship', is based on the discussions regarding that paper. As the report points out, 20 per cent of our population today was born overseas. More than half of these people came from non-English speaking countries. They and their offspring born in Australia presently number more than 2.5 million in a total population of 15 million. More than one-third of overseas-born people regularly use a language other than English and over 500,000 of them are estimated to suffer a severe disadvantage because of their lack of English. As Senator Chipp is no doubt aware, the Senate Standing Committee on Education and the Arts is currently looking at the subject of a national language policy. That is only one aspect; there are others, apart from those of non-English speaking migrants of course. I do not speak on behalf of the Committee-the Chairman, Senator Colston, is present-but I think Senator Colston would not be offended if I said that we hope to report within a few months time with a useful document. The issue of multiculturalism has become a controversial one in some areas in Australia. It is one that touches on a number of areas of government policy. Probably it has been most visible in the area of education. Our schools, of course, are a key to social change and how we handle social change. The issue of multicultural education has been vigorously debated. When my party was in government I had a very close involvement in the then Government's education policy. An area that I very much enjoyed in that context was that of multicultural education. Whilst there might be vigorous debate, and in some cases vigorous opposition, to multicultural education, it was not my experience or sense of the feeling of Australians that there was general opposition to it. I felt and feel that those who come from diverse cultural backgrounds to this country have given Australia a great richness. When I was growing up one heard about migrants' richness, principally in terms of new cuisines and different types of restaurants, but these days there is a greater appreciation of that richness. Attempts to extend to the Australian-born as an ethnic group some of the richness of that culture is, I think, to be welcomed. I think it has added something to our entire education program. I wish to comment very briefly to the remarks made about the national consultations. Senator Chipp raised the matter of fruit cakes. Although the paper did not term people as such-actually it was very circumspect in its words- it did get the massage across. The paper mentioned that many participants in the national consultations rejected the idea that adaptation or sensitivity was called for by Australian institutions. A very good comment was made as follows: As long as this attitude predominates, it will justify the complaint that, for some, commitment to Australia is in effect a commitment to a dominant social group to which newcomers have no access. That seems to me to be a central and critical point on the subject of assimilation, multiculturalism or whatever we currently term it. The paper went on to state: A vocal, and apparently well-organised, minority are opposed to the social changes that have already taken place in Australia and wish to see Australia adopt racially discriminatory migrant entry policies . . . This group contained substantial numbers who were themselves migrants from a wide range of countries, as well as Australian-born people. At that point I pick up Senator Chipp's remark. In 1979 I travelled overseas on a study tour. I was interested in the subject of Indo-Chinese refugees. On my return I was interviewed by the Press. I was asked whether there was not strong opposition to the growing intake of Indo-Chinese refugees, to which I replied that I had received quite a number of telephone calls expressing opposition to our taking in Indo-Chinese refugees. I found it interesting that 90 per cent of those who rang me to express their opposition had foreign accents. I am pleased to report to the Senate that I have received no telephone calls from anyone on the subject since I made that statement. However, I did receive a number of letters with interesting names and signatures. I do not want to be misunderstood . Some people thought I was being anti-migrant by those comments. Australia has had a long tradition of opening its shores to migrants and refugees. It is only in recent times that we have really realised the richness of culture that has come to our country. It is welcome that we have a paper that discusses all those issues. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Question resolved in the affirmative. Report Senator MacGIBBON(Queensland)(5.5) —I move: That the Senate take note of the papers. I found the report of the Chairman of the Board of Accident Inquiry to be an absorbing account. In fact I could not put it down once I started to read it. Five minutes is a totally inadequate time in which to deal with as voluminous and intensive a report as this one. I apologise to the members of the Committee; I do not mean in any way to treat them with triviality. I intend to discuss this report in much greater detail in a speech during a first reading debate. I read the report carefully, and there are some questions I would like to ask about the findings. I differ, with respect, from some of the findings of the Board. In a few minutes it is very hard to do this and appear responsible. Briefly, what happened was that a King Air 200 aircraft took off and climbed to about 80 or 100 feet on runway 07/25 at Sydney and then commenced a turn to the left. The aircraft lost power in the port engine and crashed into the sea wall at the end of runway 16/34, which is the runway which goes out into Botany Bay, after a flight time of around two minutes. The point to be appreciated is that the crash occurred when the aircraft was flying away from the runway heading, the runway on which it was apparently the intention of the pilot to land, and that would have required a turn of about 110 to 120 degrees, according to the well-researched map of the flight path which is found in the opening part of the report. The aircraft, in the latter part of its downward leg was below the height of the sea wall, flying in ground effect. This situation received no comment at all in an otherwise very intensive and exhaustive inquiry. It is a major problem to me that there was an aircraft right down at sea level within a few feet of the sea surface and below the height of the rocks. The assumption that a turn of about 110 degrees in a very short radius with a power impairment was going to be made, is just not logical. But any lay person reading the report would not appreciate that point. At that height that sort of turn is quite impossible. The presumption one must make is that from about the time that the aircraft was established on the downwind leg for runway 34 it was starting to go out of control and by the time it was on the latter half of the downwind leg it was completely uncontrollable. I cannot understand why the pilot did not chop the power and ditch the aircraft into Botany Bay. It was a very hot day; there would have been a lot of boats out there, and the accounts are that the water was as smooth as a millpond. That could have been done with absolute safety. I think that the report is inadequate, despite its great complexity. I think some of the questions we have to ask the Department of Aviation relate to air traffic control, the airworthiness surveyors and the flying operations business and its legal department. Page 271 of the report dealing with air traffic control misses the point entirely with relation to the approach of the Ansett 727 aircraft. That aircraft should have been cleared from the circuit. The point was not that it cleared the runway by the time VH-AAV reached the threshold of runway 34; the point was that the presence of that aircraft committed the pilot of VH-AAV to flying downwind when he could have turned on to the runway, had he had a clear runway. The performance of the air surveyors is astonishing. They knew that maintenance was inadequate. Furthermore, every aircraft owner in Australia-I have been an aircraft owner for more than 14 years-knows that the New South Wales region is notorious for its laxness in the control of maintenance. On repeated occasions in this company the air surveyors lacked the moral fibre to implement the laws which they knew were being broken. The report referred to the Examiner of Airmen. There were two consecutive failures to cope with an asymetric power situation on an instrument rating renewal, and nothing was done about it. The legal department did not know that there had been two changes in ownership. Then we come to the business of operations manuals. Where do we stand with operations manuals? It is a fight I have been waging with two Ministers for aviation. Who draws them up? What is their authority? Do these documents protect the pilot or the operator in the face of a breach of air navigation orders? Operations manuals do not, apparently , have to conform with ANOs. Then we come to the company. What was it doing? Was it pushing for profit rather than safety? We now come to the pilot himself. It is very hard to agree with the finding of the Board that he could not be blamed for what happened. Quite simply, that aircraft could have been flown in the circumstances. It was not a superhuman matter. The aircraft was so designed, I believe with the greatest of kindness to the pilot's next of kin, that he should have coped with the situation. Senator COLLARD(Queensland)(5.10) —I take up where Senator MacGibbon left off. An opinion at the end of the report of the Chairman of the Board of Accident Inquiry, relating to the causes of the accident, states: In the opinion of the Board, these errors were not culpable because of the combination of adverse circumstances which the pilot faced during the emergency and which required a standard of skill beyond that of the average pilot. That is a most strange form of wording to use in such a finding. The report lists a few things, and Senator MacGibbon has touched on them: The aircraft was overweight; the auto-ignition system was not on; there was water; the interstage turbine temperature was set below that for which the engine was certificated. All these things were mentioned and then the report contained that statement. A lot of people reading this report would get awfully frightened if they had to travel on a twin engined aircraft. On the surface the report says that the average pilot flying a twin engine aircraft is not capable of handling that aircraft in an emergency situation. That, of course, is a lot of nonsense. Our pilots are very well trained. Indeed they do not get their licences unless they are able to handle an aircraft in an engine out situation. I take issue with that point. I am a little cynical. Recognising that the Department of Aviation has been pressing for two pilot operation on certain commuter operations, it would almost be easy to suggest that that paragraph was put in there at the behest of the Department to give it more leverage when the new two pilot operation is brought in on 1 July. It is interesting that, having gone through all the things that could have been wrong and then adding that paragraph, the first recommendation is on crew complement. I suppose we could all say that two pilots are better than one. Take that to its ultimate conclusion and three are better that two and four are better than three. That has not been borne out by the facts and statistics on aircraft accidents over a long period. A lot of people like to see two pilots operating an aircraft. I do not blame them for that, but there is an economic consideration. Unfortunately, the Department, hiding behind the guise of safety, on many occasions brought in recommendations over which the Minister or the Parliament have no control. Of course it takes a brave Minister and a brave parliament to say to the Department that it cannot do that. The Department would raise the issue of safety and everybody would go to water. The economic effect of this two pilot operation for which the Department is now using the repent as a crutch will be rather devastating. The airline business world-wide is in a very bad economic state. The commuter airlines in Australia are probably in the worst position, with the current economic downturn, servicing the small ports and the rural areas, particularly of New South Wales, the Northern Territory and Queensland. I think that this will be another impost. A lot of commuters will go out of business. People will not be able to afford the 20 per cent fare increases that this change will bring about. A lot of ports which are now being serviced quite well with the smaller twin engined aircraft with one pilot will no longer receive a service. I commend the Department-even though as I said I have my reservations about its bringing in the two pilot operation, with the economic impost and the hardship that that will ultimately mean-for taking up some of the factors which the regional airlines have asked it to look at. I understand that the Department has agreed to reduce fuel reserve requirements in some circumstances. It is looking at Special Federal Aviation Regulation No. 41 in the United States which means that the operating weights of some commuter aircraft can be increased. This will help some commuter airlines to carry a bigger payload in some types of aircraft which have two pilots. They might be able to resolve the problem in this way. I hope that the Department of Aviation looks at that SFAR 41 quickly, before many of the commuter airlines opt out of some of the ports at which they call. Obviously, when that happens, they will not return for a very long time. Senator HAINES(South Australia)(5.15) —I fully support the comments already made by Senator MacGibbon. There is no question that the report of the Board of Accident Inquiry, which is before us at the moment, is one of the most astonishing that I have seen for a long time. I do not want to cover again the areas that have been covered by Senator MacGibbon and Senator Collard, particularly in view of the Board's recommendation with regard to an increased crew component. I want to concentrate on two other areas resulting both from this report and from the ministerial statement that was brought down as a result . As has already been mentioned, the plane crashed within two minutes of take-off . It killed the pilot and 12 passengers. The Minister for Aviation (Mr Beazley) and Senator Collard, the previous speaker in the debate, have made mention of the fact that the area of commuter operations is the fastest growing area in the industry at the moment, carrying upwards of one million people a year. That is relevant when one looks at the fact that the obvious reason for the crash was the failure of the port engine. The main faults found were water in the fuel system and the fuel pump and the fact that 14 newly installed fuel nozzles were badly sooted over. I accept, according to the report, that the latter fault was not related, in this instance at least, to the cause of the engine failure. Unlike Senator MacGibbon, I am not a pilot. I have no special technical expertise in this area and, as a lay person, must accept that finding. I am concerned that a substantial part of the report-about 15 pages-was concerned with looking at maintenance procedures or, in this case the lack of maintenance procedures, that led to water remaining in the fuel system. Some rather astonishing comments are made in the report relating to this point, not the least of which is the comment on page 44 which states: The ratio of licensed to unlicensed aircraft maintenance engineers was low by the standards of major airlines. Of course, one could argue that the solution is to increase the number of licensed aircraft maintenance engineers, in the same way that the number of pilots in the cabin are being increased. Nevertheless, it seems that some of the problems that led to this accident were caused by deviousness on the part of the company, rather than accidental oversights. Indeed, on page 56 of the report, under the heading 'Review of Maintenance Procedures' the Board makes this comment: The deficiencies in the Advance Airlines maintenance documentation for the day of the accident were so numerous that little would be gained by discussing all of them in detail. Debate interrupted. Senator GILES(Western Australia) —I table additional information received by Estimates Committee B and seek leave for it to be incorporated in the Hansard record of the Committee's proceedings. Leave granted. Reports and Ministerial Statement Senator GARETH EVANS(Victoria-Attorney-General) —For the information of honourable senators, I table the report of the Royal Commission of Inquiry into Drug Trafficking dated February 1983 and the report of the Royal Commission to Inquire into Certain Matters Related to Drug Trafficking dated March 1983. Ordered that the reports be printed. Senator GARETH EVANS —by leave-I move: That the Senate, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the report of the Royal Commission of Inquiry into Drug Trafficking dated February 1983 and the report of the Royal Commission to Inquire into Certain Matters Related to Drug Trafficking dated March 1983, presented by the Attorney-General this day. Question resolved in the affirmative. Senator GARETH EVANS —I seek leave to make a statement relating to the reports and to move that the Senate take note of the statement and the reports. Leave granted. Senator GARETH EVANS —In February 1983, the Royal Commission of Inquiry into Drug Trafficking constituted by Mr Justice Stewart delivered its report to the governments of the Commonwealth and the States of New South Wales, Victoria and Queensland. In March, His Honour delivered his report to the New Zealand Government which had also given him a Commission under New Zealand law. Both the Australian and the New Zealand reports are being tabled in the parliaments of each country today. Mr Justice Stewart's report will also be tabled in the Victorian Parliament today and in New South Wales and Queensland parliaments when they resume. The Letters Patent given by the various governments to His Honour required him to inquire into, and report on, the drug trafficking activities of Terrence Clark and associated matters, including any changes to the law or to administrative procedures which appear necessary. Responding to these terms of reference, the report contains a number of findings essentially relating to criminal activities of Clark to 1979. Activities of some of Clark's associates are also described. The extent of criminality revealed in these findings has caused grave concern to governments, in particular, the importation and trafficking of illicit drugs on a massive scale; laundering of money both in Australia and overseas; and murder and violence associated with these activities . The report also contains a large number of recommendations for future action. Most of these recommendations are for changes in the law or administrative practices; others are for prosecution action. There have been preliminary consultations among the interested governments on the subject matter of the report and the report has been put to study within the governments. The Commonwealth Government has decided that: Relevant Commonwealth departments will complete their studies of the report and make recommendations as to action on it within three months; the Government will decide and announce its response generally to the report and in particular to the recommendations contained in it during the Budget sittings; with the agreement of the States of New South Wales and Victoria there will be a committee of Commonwealth, New South Wales and Victorian officials to co-ordinate investigatory and prosecution action in respect of the report. The Queensland Government does not appear at this time likely to be directly involved in any prosecutions which might spring from the Commonwealth, New South Wales and Victorian investigations to be made consequent upon the report. The Queensland Government has, however, requested that it be informed of the progress of such investigations and has offered to render any necessary assistance which might be requested. Statements to be made by the New South Wales and Victorian governments will indicate the action being taken by those governments to respond to the report. In considering what portions of the report should be released for general publication, the governments have been very concerned that the report in many places names individuals as associated with Clark or as committing, or possibly committing, offences against the law, some of a very serious nature. This concern was communicated to Mr Justice Stewart who, in reply, indicated that, having reconsidered the question of publication, it remained his view that it would be proper and preferable for the report to be tabled as delivered, except for certain portions marked 'confidential', and subject to the deletion of references to a person who is the subject of current criminal charges. The report answers the terms of reference given to the Royal Commission by the various governments and, having regard to all these considerations, the Government has concluded that the report should be tabled as delivered, subject only to the exclusion of the matters indicated by Mr Justice Stewart, namely, matters marked 'confidential', and references to a person the subject of current charges. I would emphasise that the Government's decision to so table the report was reached after due consideration of both the need for the public to have knowledge of the findings of the Royal Commission and of the interests of the individuals named in the report. In tabling the report, the Government wishes to make it clear that, as indicated in the report itself, the naming of a person does not mean that he or she is guilty of any offence or necessarily involved in any criminal activity. Much material which is not admissible in criminal proceedings is put before a royal commission. Guilt can only be established in criminal courts on evidence which is admissible and which establishes guilt beyond a reasonable doubt. The Government hopes that the media, and all other persons, in commenting upon or discussing the report, will respect the fundamental rights and civil liberties of persons who might be named in the report. I should make it clear that the Government's decision in relation to the tabling of the report was made after full consultations between the four Australian governments concerned. This consultation involved the Attorney-General of each Government, and the decision now announced represents the agreed view of the four governments. The Royal Commissioner in part six of his report, has made a number of recommendations as to the estabishment of a crimes commission. These recommendations will be looked at in the course of the review that the Government is now carrying out of the National Crimes Commission Act 1982. A Green Paper is being prepared and it is anticipated that this will be distributed shortly. A conference will be held in Canberra on 30 July 1983 to which will be specifically invited representatives of State governments, members of the judiciary, commissioners of police, representatives of interested professional bodies and public organisations as well as, of course, Mr Costigan and people associated with existing commissions of inquiry of a relevant kind. At the conclusion of this review the Government will decide what amendments, if any, are required to the National Crimes Commission Act with a view to the introduction and passage of the necessary legislation in the Budget sittings so that the Commission can commence operations in January 1984. Before I conclude, I should refer to certain criticisms contained in the report in relation to the Attorney-General's Department. My Department has examined these criticisms and yesterday furnished me with a report on them and on the actions that have been taken or are being taken in relation to the matters they raise. The departmental report acknowledges that unacceptable delays did occur in the response to the recommendations of the Commission's interim reports Nos. 3 and 4, and I am satisfied that a number of criticisms made of the Department's performance in this respect have substance, although there were some mitigating factors. Although an internal disciplinary investigation has resulted in one officer being counselled in respect of his role in this matter, it would appear that the problem within the Attorney-General's Department was less one of individual performance than of managerial systems. In this respect I believe that the matters of concern to the Royal Commissioner, Mr Justice Stewart, will be squarely addressed by the major management review of the Department which I have set in train in the last two months. In particular, it would appear that the establishment of a Commonwealth directorate of public prosecutions, which is proposed for later this year, would meet a substantial part of the Royal Commission's concerns about the conduct of Commonwealth prosecutions. I move: That the Senate take note of the statement and the papers. Senator DURACK(Western Australia)(5.26) —If there is anyone left in Australia who had any doubts about the existence of organised crime in Australia, the serious threat that it represents and the need to take urgent action in respect of it then the tabling of this report of the Royal Commission of Inquiry into Drug Trafficking-it inquired into the Clark syndicate-should completely dispel lingering doubts of that kind. This report is voluminous. Unfortunately, the size of it may in fact deter many people from reading and studying it to the extent which it clearly deserves. I hope that despite the challenge that is presented by the size of the report, and in many cases perhaps the more technical aspects of the subject with which it deals, the challenge will be taken up and a study will be made of the report. I am pleased to note that the Attorney-General (Senator Gareth Evans) indicated that a time limit of three months has been placed on a close study of the report by officials. This report clearly deserves the closest study by officials and, as I said, by many other people. The origin of the Stewart Royal Commission of Inquiry into Drug Trafficking is very interesting. In its time it was a unique royal commission. It arose out of difficulties and frustrations which a joint Commonwealth-State police task force had run into in the obtaining evidence in relation to some familiar aspects of organised crime. The Royal Commission was given the very specific mandate-it appears to have achieved its goals-of taking a particular organised crime syndicate, namely the Clark syndicate, studying that in depth and detail and, thereby, describing the way in which a fairly typical organised crime syndicate was set up, the way in which it operated and the people who were associated with it. Then, of course, it was expected that the Commission would make recommendations on the basis of the close study it made of that particular syndicate. The Royal Commission appears to have achieved exactly what it was set up to do. Another aspect-perhaps this is an even more unique aspect-is that the Commission was set up because of the frustrations and difficulties being experienced by a joint Commonwealth-State police task group as a result of the limitations the law imposes on police investigations. The Commission was able to achieve its aim. The existence of joint Commonwealth -State police task forces-they had been set up prior to the establishment of the Stewart Royal Commission-is a most important development in the understanding of organised crime and its ramifications in Australia. We have taken the first steps to respond to the problem which was seen to exist but with which our traditional police forces seemed unable to cope. Organised crime has a national feature. Organised crime does not observe State boundaries and does not worry about the fact that its activities contravene different laws involving police forces in each State. It operates on a national basis. Of course, it owes a great deal of its success to the fragmentation of the laws, the number of different police forces and the prosecuting systems that exist in Australia. It, of course, has been able to exploit the fact that this fragmentation exists. No recognition whatsoever is made of the fact that there are Commonwealth laws and State laws. One operation can breach some Commonwealth laws, some State laws and laws of different States. So it is absolutely vital in this area that there should be co-operation between the Commonwealth and the States in the investigation, the policing and the prosecution of organised crime syndicates. As a result of the recommendations of the Royal Commission of Inquiry into Drugs, headed by Mr Justice Williams and the New South Wales Royal Commission into Drug Trafficking, headed by Mr Justice Woodward, the Commonwealth-New South Wales Joint Police Task Force on Drug Trafficking was established as an ongoing body to tackle these problems in the way in which I have said it is imperative to do so. A second joint police task force was then established. It comprised not only the police forces of the Commonwealth and New South Wales but also those of Victoria and Queensland. It was set up as a result of some apparent leaks from the former Narcotics Bureau. This task force identified those leaks. That group was headed by the Assistant Commissioner of Victoria Police, Mr Hall , who is now I understand, the Deputy Commissioner of Victoria Police. In fact two joint police task forces were working in this area. I recall very clearly that when I was Attorney-General I received a deputation led by Mr Hall. The members of the task force emphasised the very great difficulties they had experienced in the course of their investigations because of the limitation of their powers. They made it very clear that something further was needed. That was a very important step in the decision ultimately taken by the Fraser Government to establish this Royal Commission headed by Mr Justice Stewart. We now have the report before us this afternoon. The setting up of the Royal Commission has been a unique step in the process of studying the ramifications of organised crime. Certainly, as I have said, the work that the Commission has done and the report that it has made have been major steps towards our understanding further the nature of organised crime and its challenge to our society. I am pleased to say that there has been a very considerable increase in the recognition of this threat, particularly by the police forces in Australia. I believe that, in the last few years-perhaps with the experience gained by these joint police task forces-the police forces in Australia, whether they be State or Commonwealth, certainly have greatly advanced their recognition of the need to work together to overcome this fragmentation. In many cases suspicion and jealousy and so on have played their part as frequently they do where there are different bodies of people. In recent years great advances have been made by police forces meeting and talking together. One of the great achievements has been the establishment of the Australian Bureau of Criminal Intelligence. That was a major step forward, and I give it full recognition. But, of course, a great deal more requires to be done. There will have to be a recognition by governments that many more resources will have to be made available to any bodies of this kind that are set up in the future. Indeed, I fear that more powers will have to be given to the police as well. The next matter for which there has to be greater recognition than there has been is that the Commonwealth Government simply will have to play a much greater role in these matters than it traditionally has played. Certainly, it became more and more apparent to me in my latter years as Attorney-General that some of the problems we had with organised crime in Australia resulted from the fact that the Commonwealth had left the question of tackling and facing this challenge to the traditional forces, namely those in the States. It also became apparent that there would need to be new institutions, new arrangements and greater resources at the Commonwealth and the State levels. Nothing I am saying should detract from my very firm view that essentially this must be a joint enterprise by the Commonwealth and the States, but there has been a great increase in the breaches of Commonwealth criminal laws. Drug importation itself is a breach of Commonwealth law. Through the experience of the Commonwealth both at the investigative and prosecution levels we have realised that the importance and the threat of organised crime is a matter to be tackled by the Commonwealth and the States. This issue has got caught up, to some extent, in the problem of Federal-State relations. As I have said, perhaps it goes back to personalities and jealousies that arise between people. It would be unfortunate if the solution to these problems got caught up in the arugments about Federal-State powers. As I have said, the solution to the problem is co-operation, joint exercises and a recognition that the Commonwealth will have to be involved. I think it would be in everybody's interests that the Commonwealth should be involved, and involved more and more. When all is said and done that is where the greater resources will be available; the resources will need to come from the Commonwealth. The more the Commonwealth is involved in these co-operative or joint exercises the more likely it will be that the Commonwealth will make resources available to them. The other matter that clearly arises in this report is the need to face squarely the question of police powers of investigation and new forms of conducting prosecutions. Again, I believe that we will have to modify our traditional way of approaching both investigation and prosecution in regard to the challenge of organised crime. One of the first problems that has to be clearly established-it is a conceptual problem in many ways-is an adequate definition of organised crime. Having spent a good deal of time last year in thinking about it and studying it, I believe that an acceptable definition can be found. Once we have done that we then have to face fairly and squarely the question of how modifications will need to be made and greater powers of investigation given to whatever institution is established. This report makes a large number of recommendations, many of which I suppose have been thought about before. But the time has clearly come when the recommendations contained in this report, involving greater police powers of investigation and new forms of prosecution, must certainly be decided. I do not think we can keep postponing these very hard decisions much longer. Of course, one of the decisions that has to be made concerns greater police access to the interception of telephones. That is something that has been recommended by the police for some time. Certainly, the powers to be given and the circumstances in which permission is given would have to be very carefully defined. Mr Justice Stewart's recommendation in this regard will have to be tackled and decided upon . Another extremely important recommendation is the power to question suspects, pursuant to a magisterial order, and the power to detain people for a certain period in order to make inquiries and ask questions. People should not be forced to answer but the police should have the opportunity of being able to question them. One of the matters that the joint police task force found very difficult was dealing with sophisticated people with access to all the best professional legal and accounting advice. It is very difficult to investigate persons of that sort without additional powers being given to the police. Certainly, those matters have to be fairly and squarely faced and decided upon over the coming months as a result of the recommendations in this report. Another very important matter in the prosecution process is whether there ought to be-the Attorney-General has mentioned this-the establishment of a directorate of public prosecutions at the Commonwealth level. But there is another matter which perhaps is of even greater importance. It is one of which there has been growing recognition, certainly during the period I was Attorney-General. That is the necessity of granting immunities to people who are involved, perhaps even quite deeply involved, in some of the organised syndicates. Certainly one hopes to be able to get people who are, perhaps, not so deeply involved in matters to assist the police and to give evidence against the principals. There is a long record of granting immunities, but traditionally in Australia there has been great reluctance to grant such immunities. I have shared that reluctance. I am sure that the present Attorney-General will also, if he has not already experienced it, share that reluctance. But it is absolutely imperative that immunities in these cases have to be given. They have been given, and we shall have to make greater use of them in the future. In the United States of America, where there is the greatest protection to civil liberties under the Bill of Rights, prosecutors have emphasised continually, in discussions I have had with them, the supreme importance of the granting of immunities. I notice that Mr Justice Stewart, Mr Justice Williams and Mr Justice Woodward have all recognised the absolute necessity for the granting of immunities as part of the process of successful investigation and prosecution in cases of organised crime. In dealing with the prosecution side, I do not have any firm view against the establishment of a Director of Public Prosecutions. Mr Justice Stewart recommends the possibility of investigating a joint Commonwealth-State public prosecutor, and that may fit in very well with the need for co-operative arrangements, which, as I have said, are absolutely necessary, certainly at the police level and between governments in tackling this major problem. Certainly there has to be some new and improved method of conducting prosecutions at the Commonwealth level. At the very least, there would need to be established a major prosecution section in the Attorney-General's Department, with someone at a very senior level being given the role of a chief prosecutor, in much the same way as has traditionally been the case in the States. The time has come when this role does not sit very easily simply within the Commonwealth Crown Solicitor's Division of the Attorney-General's Department. The demands of organised crime and the extent of breaches of Commonwealth laws are now such, as I have said, that there is a much greater role, and it will have to be a growing role, for the Commonwealth in this area. The organisation of the Attorney-General's Department must recognise that, and changes must be made. Maybe as a result of the study that the Attorney-General has indicated- although he has made no decisions, I understand-a Director of Public Prosecutions is the answer. I would be interested in giving further consideration to the subject. However, I am convinced that some new institution for the prosecution of crime at the Commonwealth level, or new administrative arrangements for it, will have to be made. At the same time, I believe that the political responsibility for this matter ultimately must rest with the Attorney- General, he being responsible to this Parliament for what is done. The traditional approach is not good enough. Finally, I should like to refer to the need for the National Crimes Commission. I have not had the opportunity of studying properly the recommendations or discussions by Mr Justice Stewart in regard to this matter, but I am familiar with the fact that both he and Mr Costigan have realised that there has to be a really new institutional arrangement in Australia to tackle this problem. There has to be some body, some new institution, which can have as its sole and whole task meeting the challenge of organised crime. The National Crimes Commission which was proposed to this Parliament and approved and passed by the Parliament at the end of last year is the major answer to it. I fully accept that it is desirable, and, in the long run, not only desirable but necessary, that the States should join in it. I do not think that one has to wait until the States come to some co-operative arrangement with the Commonwealth before that body is set up and is under way. It is a pity that it is not under way. The Government has been approaching this question in a far too leisurely fashion. The legislation was there and ready to be proclaimed and to go into business by now. It is a shame that the Government did not proceed with it. The question of balancing civil liberties and the need for investigation of these crimes, and the increased powers that are needed, were all considered with great thought last year and were fully debated in this Parliament. I do not think that this matter needs this leisurely approach of a Green Paper and another seminar. Goodness knows then how much longer it would be before the legislation is through and the Commission is set up. I should like a firm undertaking from the Government that this National Crimes Commission will be set up by 1 January 1984 . I note that the Attorney-General seems to be firming up every time he speaks about it-perhaps under the influence of what the Prime Minister (Mr Hawke) said recently about the need to have a Crimes Commission operating at the beginning of 1984. But up until a week or so ago the whole question of whether this Government would set up a Crimes Commission seemed to be very much still in the air. So I want a firm assurance from the Attorney-General that a National Crimes Commission will be set up and will be operating by 1 January 1984. All these other questions can be looked at. Sure, the idea of having a seminar on the subject is a very important and a very good idea. All I am saying is that I do not think that these things should delay the establishment of the National Crimes Commission any longer. If ever a National Crimes Commission were needed, it is clear from this report that it is needed now, and there should be no further delay in having it working. Senator CHIPP(Victoria-Leader of the Australian Democrats)(5.53) —The Senate is debating the report of the Stewart Royal Commission of Inquiry into Drug Trafficking. The Commission was given relatively narrow terms of reference-to inquire into the activities of a creature called Terrence Clark, associated matters and any changes to the law or administrative procedures which appear necessary. Mr Justice Stewart has documented some horrific happenings that occurred in Australia which hitherto many Australians would have thought would live only in the minds of fiction writers and people who write fairy stories-of people being deliber- ately killed, of collusion between police forces and drug rings, of the amount of heroin estimated to be used in Australia and smuggled in . To the extent to which the report documents evidence or cases against certain individuals, it is a valuable contribution to the debate on this matter. I am disappointed in the report and will give my reasons in a moment or two. Before I do, let me put the matter in perspective. Australia today does have a massive problem with organised crime. I have been saying that for the last 10 years and as each year goes by the problem gets bigger in geometric and not arithmetic proportions. I am pleased in some way that my contentions are now being supported by people such as Mr Justice Stewart and the Chief Commissioner of Police in Victoria who the other day said something that is almost unbelievable-that 550 crimes of violence, most of them of a serious nature, are committed in Melbourne each day. It is almost incomprehensible that in one city over 500 crimes, mostly of a serious nature, are committed in a day. Dr McCoy, an international expert on the matter, in his book concerning heroin smuggling and drug trafficking, estimates that there are 40,000 drug addicts in Australia. I have stated at many seminars and before criminologists and other people interested in drug rehabilitation that, in my view, the profits from heroin dealing in Australia today are of the order of $250m a year, that the profits from the importation and illegal sale of cannabis are a similar amount something like $250m a year; and that the profits from illegal gambling, essentially in Sydney, are of the order of $100m to $150m a year. So we are talking about profits of organised crime in Australia of something like $600m to $700m a year. I am not talking about turnover. I am talking about profits. That also borders on the incomprehensible. I want to ask a rhetorical question. Most politicians, magistrates, judges and policemen would turn in a person who offered them a bribe of some moderate amount. I am firmly of the view that every member of this Parliament, if offered a bribe of a few thousand dollars by someone to do something dishonest, would immediately report that offence to the Australian Federal Police and have that person brought to the bar of the Senate or the House of Representatives. Without wanting to impugn a single person in this place, including myself, I wonder whether we would have a 100 per cent response to that question if the bribe was $250,000 a year for a series of 10 years. I just wonder about that. One has to look at this whole concept of organised crime, when it is earning profits of this magnitude, and ask oneself: Is anybody in public life safe? Senator Lewis —They can use other techniques too. Senator CHIPP —Indeed. I thank Senator Lewis for his valuable interjection. If Senator Lewis and I, as members of the national Parliament, express concern over this matter what sorts of fears must be expressed by ordinary citizens who wonder whether they can any longer trust their elected representatives, the police who protect them, the magistrates and the judges? This sets off ripples throughout the whole of society. This is the magnitude of the problem to which Mr Justice Stewart was asked to address himself. I am disappointed in a sense that most of his recommendations, as I have read them in the very small amount of time at my disposal, seem to concentrate on reforming law enforcement procedures. As I understand the former Attorney- General, my friend Senator Peter Durack, most of his remarks were directed along that line as well. It is a very valuable line of debate and a very valuable contribution to make to this debate. But I believe that approach is attacking the problem of organised crime from the wrong direction. In a moment I will quote from Mr Justice Michael Kirby, who says that we ought to be paying attention to the cause of crime and not just the symptoms. We have to ask ourselves in a non-political party way-we should be able to have a bipartisan attitude without scoring political points off each other-a question such as this: If cannabis is giving organised crime profits of $200m to $250m a year and if Mr Justice Stewart, Mr Justice Williams, Mr Justice Woodward and every other royal commissioner who has inquired into organised crime conclude that we cannot stamp it out, is it not a logical proposition to contemplate at least the placing of cannabis in a situation where crime cannot make a profit out of it, namely, by decriminalising it? One does not have to advocate the use of cannabis. I state as a personal view that cannabis ought to be decriminalised and legalised. That is not the view of my party because it is a moral question and we believe that it is not proper to bind Australian Democrats members of parliament by party policy on moral questions. I very vigorously hold the view that cannabis ought to be decriminalised and, in fact, legalised. At the same time I would say to any young person or any other person I meet: 'For God's sake, do not use cannabis. It is harmful; it is bad'. Senator Durack —You still have huge profits with heroin. Senator CHIPP —I will come to heroin in a moment and I will advocate something else that might shock people. I believe that law enforcement procedures have failed and they have been seen to fail. There is no suggestion that they will solve the problem of organised crime, drug abuse and the sale of illicit drugs. I am of the view that if cannabis were legalised, advertising prohibited and the strictest controls concerning quality and places of sale applied, the profits or organised crime of $200m a year could be cut from underneath the people involved . There should also be a concerted and vigorous advertising campaign by government health departments to say to young people: 'For goodness sake, don't be stupid enough to harm your body by using this very harmful substance-cannabis -whether it is in the form of marihuana, hashish or hashish oil'. I hope that in the Green Paper the Attorney-General (Senator Gareth Evans) will present that approach to ruining and combating organised crime will at least be discussed on a non-party basis. I hope that the Reverend Fred Nile and his ilk will not dash out tonight and say: 'Don Chipp is permissive: He is advocating legalisation of marihuana'. I hope that none of my political opponents will try to capitalise on this statement. I plead for a reasonable and reasoned debate on this question. An article on this issue which referred to the comments of Mr Justice Kirby, a person for whom I have an unbounded admiration, states: A major reason behind the growth of organised crime was the failure of legislatures- That is, this Parliament- to reform the system of criminal law, which was based on centuries-old English common law. The article went on to state: . . . many people were shocked to find that activities not regarded by the community as wrong were in fact criminal. He gave as a silly example-he is not silly but this is a silly example-the recent raid by New South Wales police on the Sydney home of a well-known jockey who was arrested. What was he doing? What was his terrible offence? He was charged with playing a game of cards at his home with his friends. If law enforcement agencies are going to act in that sort of pathetic way what sort of respect will people have for the law? The article goes on to report Mr Justice Kirby as stating: Most members of the Australian community would regard this use of the criminal law, and of police, as surprising, even perhaps wrong. The attempt to use the criminal law to enforce perceptions of morality which are now not held with general community consensus tends to undermine respect for the law. It bred cynicism among citizens and corruption among officials, and was the fostering-ground of organised crime. In the distance between what the criminal law says is wrong and what the community regards is wrong lies the opportunity for organsied crime. Here is where prostitution, pornography, gambling, marihuana and so on flourish. Is there one person in this Senate who genuinely and sincerely believes that law enforcement will stamp out the use of marihuana in this country? If so, let him stand up and say so; otherwise, he is a hypocrite. Is there one person in this Senate who believes that law enforcement will stamp out prostitution in this country? If so, let him stand up and say so. But if honourable senators oppose legislation, I appeal to their morality. I do not ask them to condone prostitution or the use of cannabis-I plead with them to condemn the sorts of things that are socially evil-but I ask them to ask themselves whether they are not, by opposing the legislation of these things, giving organised crime an incredible opportunity to make the kinds of profits I mentioned earlier? It is because of these things I am disappointed that royal commissioners like Mr Justice Stewart and all of those before him have not addressed their minds to stamping out the causes of organised crime rather than the symptoms. I appeared before royal commissioner Stewart. Does he not know that law enforcement will not stamp out the importation of heroin or hashish? Did he not get evidence from law enforcement agencies to the effect that an army of narcotics agents at every wharf and every airport would confiscate only 10 per cent or thereabouts of the drugs smuggled in? That is a world-wide figure, a figure I received from all the narcotics and law enforcement agencies I visited when abroad in 1972 studying this problem as the then Commonwealth Minister for Customs and Excise. It was almost spooky that every police force in the Western world that I visited, when asked what quantity of drugs it could stop, said about 10 per cent. Ninety per cent will always get through because there are thousands of ways in which these kinds of drugs-on which mind-boggling profits can be made because of their illegality, particularly with heroin, can be brought in. While fantastic profits are possible, there will always be enough people who will take the risk of their liberty or their money and try to make those incredible profits. Therefore, I am disappointed that Mr Justice Stewart went so far down the track of improving law enforcement techniques. I agree with most of his recommendations but I believe that he has taken entirely the wrong approach. Senator Durack interjected a moment ago in regard to heroin. I estimate that the profits from the sale of heroin on the streets of Australia total between $ 200m and $250m. I suppose every member of this Parliament has seen the pathetic, soul-destroying sight of a young person addicted to heroin, prostituting his or her body in Kings Cross, Acland Street in St Kilda or wherever it takes place, knowing that while this is going on syndicates are making millions of dollars profit. Senator Durack by interjection said that following the decriminalisation of cannabis we would still have the heroin problem. I hope that in the Green Paper to be produced by Senator Evans there will also be the 'outrageous' suggestion that we also look at legalising heroin. Before anybody has a heart attack over that proposition, let me say that I am not suggesting for one moment that capsules be on sale at everybody's friendly neighbourhood chemist. I am suggesting that we look at the British experiment under which heroin is prescribed by a qualified medical practitioner for a person who has already been diagnosed as a heroin addict. That might not work in all cases but at least if we can get the addict, this 18, 19 or 20-year-old person who is psychologically disturbed, lonely and who has probably been sexually abused as a baby-I understand that that is the portrait of the heroin addict-under some sort of medical supervision, control and advice, we have a fighting chance of reaching out and touching him or her. At the moment, if they are left to the mercies of those creatures who peddle this killer drug on the streets of Kings Cross or Acland Street, St Kilda, they will go down a one-way street with a certain destination. Senator Peter Baume —You would agree that the only cost of that enlightened approach would be increased community use? Senator CHIPP —That could be a cost. Senator Peter Baume —That is the only consequence. Senator CHIPP —I thank Senator Baume for his interjection, which is helpful. I concede it is a possible danger. Senator Baume was a party to the very courageous decision of the Senate Standing Committee on Social Welfare, which I understand he chaired, about legalising or decriminalising cannabis. I have said on that matter that if we want to talk about legalising it we have to have a corresponding massive education campaign throughout Australia to say that taking this drug is an evil, stupid and wrong thing to do-as I believe taking cannabis in any form is a stupid an harmful thing to do. I believe that that challenge would have to accompany legalisation. Senator Baume might be right. All I am asking is: Can we not leave political point scoring aside and debate these new concepts on a non-partisan basis? For that reason I compliment Senator Evans on the concept of the Green Paper which is to be brought down. Senator Evans has baulked at the idea of a crimes commission, which the Liberal Party and Senator Durack strongly advocate. I thoroughly support them but Senator Evans has held back, I suspect because of his innate fear of offence against civil liberties. Notwithstanding one or two aberrations in regard to civil liberties on his part, I do believe he has a genuine concern for them. I do not think anybody can accuse me, over my parliamentary career, of not paying regard to civil liberties of individuals. However, I believe one can carry concern for civil liberties to such ridiculous lengths as to destroy civil liberties in another area. In other words, what is the point of having a totally clean slate in not offending civil liberties in legislation if there is a ballooning problem of narcotics addiction, with thousands of young Australians losing every form of liberty, including civil and health. At the risk of being tedious, I repeat the famous words of George Santayana, who talked about fanatics. We do have fanatics in the area of civil liberties. Honourable senators will recall that his definition of a fanatic is a person who redoubles his efforts long after he has forgotten his aim. There are people who do champion civil liberties against every other consideration. I plead with Senator Evans and the Government to let it all come out in the Green Paper so it can be debated. Senator Walters —Do you think it might be difficult for the young to understand an educative process showing how bad marihuana, heroin and everything else is if we say: 'But we will make it legal'? Senator CHIPP —I thank Senator Walters for her interjection. It is a valuable interjection and something to be contemplated. She may well have a valid point. That would depend, of course, on the efficacy of the advertisements. Mr Deputy President, I thank you for your indulgence in allowing my friend Senator Walters to interject. For years we were negative about things such as smoking and we said, 'Do not smoke because it will kill you or you will finish up with lung cancer', all of which turned out to be the wrong kind of advertising. Because human nature is perverse-this is what Senator Walters is getting at-if you tell young people not to smoke marijuana because it is bad for them they will probably smoke it; if you tell them not to speed on the roads they will go faster. Senator Peter Baume will correct me if I am wrong, but I pay tribute to the Health Department of New South Wales which tried that exciting social experiment in health advertising in Gosford, I think. Senator Peter Baume —Lismore and Kempsey. Senator CHIPP —It was a positive approach-'Kiss a non-smoker and taste the difference'. I am sure that that appeals to Senator Walters and those of our vintage, but it certainly appeals to the young. The problem is to put this message over in language and in vehicles which the young understand and can embrace. I thank the Senate for its indulgence in giving me the opportunity of speaking to this retort. I hope that there will be an enlightened approach to the question of drug addiction by the Parliament first. If there is a non-party approach to this question, we can look forward to an enlightened public debate on Senator Evans's Green Paper. If party politics are played in this Parliament about it, we can forget an enlightened public debate, no matter how good the Green Paper is. Debate (on motion by Senator Reid) adjourned. Motion (by Senator Lewis) agreed to: That leave be given to introduce a Bill for an Act to establish Anzac Day as a national day of remembrance and to provide for observances in the Australian Capital Territory to mark Anzac Day. Bill presented by Senator Lewis, and read a first time. Senator LEWIS(Victoria)(6.19) —by leave-I move: That the Bill be now read a second time. I am pleased to introduce this Bill into the Senate. Anzac Day, the 25th day of April, being the anniversary of the landing of the Australian and New Zealand forces at Gallipoli, has become the traditional day of remembrance of those who made sacrifices for Australia in armed conflict. The first observance was in 1916 and since then it has become a day of commemoration and public holiday in each State and Territory-truly a national memorial day. Anzac Day is unique in the world as a national day; it does not commemorate a victory or a defeat or the end of conflict; it does not denigrate a foe or glorify war. Simply it commemorates the sacrifices of the members of the Australian armed forces and their auxilliary services who served Australia in the cause of freedom and who suffered death, injury or loss as a result of their service as members of those forces in the course of armed conflicts in which those forces were engaged. When asked what Anzac Day meant to them, few people would express their feelings in identical terms. For the widows, parents and children of those who have given their lives one element must be public acknowledgement of the debt owed to them. To most their thoughts would be very personal and private, a privacy that should be respected. To those who survive it is an opportunity to remember their fallen comrades and to pay tribute to them. We should ensure that this simple truth and purpose of Anzac Day be neither obscured nor denigrated. For many the remembrance is of mateship in adversity which made the sacrifices and hardships tolerable, a selflessness which is one of our finest traditions. It is interesting to note the recent finding of three academics from the Australian National University-Dr Hank Nelson, Professor Gavan Daws and Mr Andrew Pike-that mateship was so strong and effective among Austraians that it could be regarded as the prime reason for Australians having the best survival rate in the horror prisoner of war camps of World War II. The classic statement is that no one ever saw an Australian die alone. Today Anzac Day needs protection. Its purpose is in danger of becoming obscured by small minorities who seek to exploit the day to further their own causes. By legislation in the Defence Regulation Act of 1921 the word 'Anzac' is protected and neither it nor any word resembling it may be used as a title or commercially except by permission of the Governor-General. But the Federal Parliament has not yet marked the day as a national day of remembrance. That is the first purpose of this Bill. It is a debt we owe to those who served. The second purpose is to provide for national commemoration services in the national capital. Since 1916 the Returned Services League has conducted services to commemorate this day throughout the nation. Indeed one of the objectives of the league is to '. . . establish and preserve, . . . the commemoration day known as ''Anzac Day'' '. It seemed to me, therefore, to be appropriate to place the care and conduct of the national services in the hands of the national president of that body. I have discussed this matter with the current national President of the League, Sir William Keys, who approves the concept but wishes to ensure that those who participate do not see their day as having been 'taken over' by the League. I would not object to the organisation of the national ceremonies being under the control of a committee made up of representatives of the participating bodies. I do not believe however that it is necessary to enshrine such a committee in the Act. Firstly, I point out that the Bill provides for the organisation to be in the hands of the national President, which is a high office in Australia. Probably the national President will establish such a committee to assist him. Secondly, provision is made in the Bill for appeal to the court if a person is aggrieved by a decision of the President. I commend the Bill to the Senate and express the hope that the States and the Northern Territory follow the example. Debate (on motion by Senator Gietzelt) adjourned. Bills received from the House of Representatives. Motion (by Senator Gietzelt)-by leave- agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Gietzelt) read a first time. Second Readings Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(6.25) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- TAXATION (UNPAID COMPANY TAX) ASSESSMENT AMENDMENT BILL 1983 This Bill, and a further Bill I will introduce shortly, will give effect to this Government's election undertaking to recover personal tax avoided by former owners of companies that were the subject of bottom-of-the-harbour schemes. The Taxation (Unpaid Company Tax) legislation was passed by the Parliament last year with the support of the Labor Party in opposition. Indeed, I remind honourable senators that the legislation would not have passed without our support. Although we supported the legislation, we made it clear that, in government, we would act swiftly to strengthen it in several identified areas and to remove a tax avoidance let-out included by the former Government. Our intention to do this was reaffirmed during the election campaign and the electorate has clearly given us a mandate to proceed with the implementation of these reforms. I turn now to the details of the Bill. Measures to Recover Personal Tax By far the greater part of this Bill is related to amendments to give effect to our decision that the restitution expected of those persons who benefited from the sale of shares in companies that were stripped of pre-tax profits should not be limited to the tax that ought to have been paid by the companies concerned. Rather, they should also pay the tax that, as shareholders or other former owners, they escaped through receipt in a non-taxable capital form of accumulated after-tax profits that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands. In our view the revenue is just as entitled to have these tax losses made good as it is to have the lost company tax made good. This Government, unlike the former Government, believes, and made it clear last year and during the election campaign, that it sees no distinction in principle between the two. This Bill will accordingly insert in the recoupment tax law rules to be applied to fix the liability of former owners of a stripped company for personal income tax on accumulatd profits received by them as part of the price received for the sale of their shares. Broadly, these rules will require a former owner of a stripped company to pay income tax on the basis that the company had paid a dividend to the former owner at the time of sale of the shares. The amount of this imputed dividend will be the same proportion of the company's total after- tax accumulated profits as the proportion of the sale consideration received by that owner. The amount of after-tax accumulated profits will be determined after allowance has been made for the unpaid ordinary company tax that is to be recouped under the existing legislation, as proposed to be amended. I observe that personal tax liability under the Bill attaches to profits of stripped companies that have been effectively distributed to former owners, regardless of whether those profits were, in the hands of the company, of a revenue or a capital kind. This rule reflects the clear and long-standing position that a distribution by a company out of any kind of profit is classed as taxable income of the shareholders. But it also does no more than follow the way in which Part IVA of the Income Tax Law-which received the unanimous support of this Parliament when it was introduced in 1981-operates in cases of dividend stripping and similar schemes, including schemes of pre-tax profit stripping. Where Part IVA operates, the shareholders concerned are liable to tax on profits that are stripped from the company under the scheme, and that is so regardless of whether those profits are of a revenue or a capital kind. In other words, we are not by this Bill introducing any new concept of taxation in relation to distributions to shareholders out of capital profits of companies. The Bill provides that a dividend will be deemed to have been paid in circumstances where the former owner is liable to make good unpaid company tax; that is, where there is a liability for vendors recoupment tax or there would have been such a liability if any payments of company tax made after 25 July 1982 were disregarded. That date is, of course, the date on which the former Government announced its intention to legislate to recover unpaid company tax escaped through bottom-of-the-harbour schemes. This qualification is necessary to ensure that the liability for escaped personal income tax will not be avoided simply by making a payment of the company tax in pursuance of the former Government's announcement or the legislation enacted last year. The requirement that there be or would, but for payments of company tax, be a liability for vendors recoupment tax means that, where the liability for vendors recoupment tax is or would be less than $100 and the Commissioner of Taxation exercises his power under the existing law not to pursue the liability, there will be no liability for the relatively small amounts of personal income tax that would otherwise be liable to be recouped. Where the former owner concerned is a natural person the imputed dividend is to be included in his or her assessable income. In the case of an entity not itself subject to income tax on the dividend by reason of its tax exempt status or, in certain cases, the inter-company dividend rebate, the imputed amount will of course be treated as tax-free income in the hands of that entity. Where a company, or a person as trustee of a trust, is allocated a dividend that is deemed to have been paid by a stripped company and the owners of that company, or the beneficiaries of that trust, are the same persons as the former owners of the stripped company at the date of its sale, the company or trustee will, in the first instance, be liable to pay dividend recoupment tax on the dividend at the maximum personal rate applicable to the year of income in which the sale of shares occurred. However, there is to be a right for former owners in this situation to elect to be taxed on amounts equal in total to the amount of the dividend deemed to have been received by the company or trust concerned. If this election is made and the Commissioner is satisfied that the allocation of the deemed dividend among former owners is reasonable and that personal tax, if any, payable by the former owners will, subject to the hardship relief provisions of the income tax law, be paid by them the interposed company or trust will be freed from its liability for dividend recoupment tax. In a similar fashion a stripped company will, where a liability for personal tax or dividend recoupment tax exists, be freed from its liability for undistributed profits tax payable under Division 7, and the former owners will accordingly no longer be liable for vendors recoupment tax on an unpaid Division 7 liability. I mention that a liability for personal tax or dividend recoupment tax will exist even where the only unpaid company tax giving rise to a liability for vendors recoupment tax is a liability for undistributed profits tax under Division 7 of the Income Tax Assessment Act. As with the existing recoupment tax law, it will be possible under the provisions being inserted by this Bill to trace from the primary level to the next level and, as necessary, successively to further levels where a company or trust has ceased to exist, has different shareholders or beneficiaries as a result of shares or beneficial interests having been sold, or is unlikely to be able to meet a liability for dividend recoupment tax on the dividend which is deemed to have been paid to it. The automatic tracing process applicable in this case will continue until a dividend is deemed to have been paid to a natural person-or tax-free entity referred to earlier-or to a company or trust that still exists if, in the latter situations, the company or trust is one the ownership of which has not changed since the stripped company was sold and has the capacity to meet the dividend recoupment tax payable. A significant feature of the Bill is the provision of a time-to-pay facility in relation to the personal income tax and dividend recoupment tax liabilities which are to be imposed by this and an associated Bill. This provision is modelled on an existing facility-which is to be retained in a modified form- which permits former owners of companies who are liable to pay a share of unpaid company tax to meet that liability by instalments, typically over twelve months without late payment penalty being charged. Initially, the Government proposed that the existing facility be abolished from a date to be proclaimed. On review, we have accepted that the facility for time to pay should be retained and indeed extended so that a liability for personal tax or dividend recoupment tax may also be paid over 12 months without attracting additional tax for late payment. The modification of the existing facility I referred to a moment ago is to impose a strict limitation to 12 months as the period for which an arrangement to pay unpaid company tax may be made. Similarly, the proposed facility in relation to personal tax and dividend recoupment tax will require full payment to be made within a period of 12 months if the penalty-free concession is to be attracted. An application for time to pay personal income tax or dividend recoupment tax in respect of a share of a stripped company's accumulated profits will need to be made within 30 days after service of the notice of assessment relating to that liability. Consistent with this it is envisaged that it will generally be necessary that applications for arrangements to pay unpaid company tax by instalments be made within 30 days after the company's tax liability is notified to former owners. Post-sale avoidance schemes The recoupment tax legislation contains a let-out provision that operates where the stripped company was the subject of an unsuccessful post-sale scheme to avoid tax. Under this escape clause there is no liability to recoupment tax liability on the people who benefited by non-payment of the company tax. This provision was inserted by the former Government for reasons which are best known to it. In our view it defies logic and it is our announced policy to abolish it. This is to be done by the Bill. Pre-sale avoidance schemes Consistently with the removal of the post-sale avoidance scheme provision, this Bill will also ensure that, in ascertaining the potential tax liability of a company for the purposes of determining whether the recoupment tax legislation applies in relation to it, any pre-sale scheme which is ultimately established to be ineffective of its tax avoidance purpose is to be disregarded. There are several further amendments contained in the Bill designed to improve the administration of the legislation or to correct technical deficiencies. The Bill proposes changes to the cumbersome procedure that requires copies of notices of company assessments to be served on a wide range of former owners. This procedure is very time and resource consuming and is, in our view, quite unnecessary. This Bill provides that in future it will, where only former shareholders are involved, be sufficient if a copy of the company's notice of assessment is served on the principal vendor-shareholder. Otherwise service may be effected on any three representative former owners. This approach is considered to provide an appropriate balance between the requirements of practical administration and perceived fairness to former owners of companies. It is also proposed by this Bill to remove one of the pre-conditions to liability for recoupment tax-the requirement that the company was by a stripping scheme rendered unable to pay its tax-which was inserted by the previous Government, it seems for presentational purposes. The element that the requirement expresses is, in substance, present in all cases of pre-tax profit stripping to which the legislation applies and a specific reference to it is quite unnecessary. The 'Stripping Scheme Test', and an associated provision requiring full disclosure by the Commissioner of known details of it, is being exploited by some taxpayers as a means of delaying issue of recoupment tax assessments. Because of their availability as a pure delaying tactic, the provisions are having and will, unless removed, continue to have an adverse effect on revenue. Finally, we propose in this Bill to re-insert in the recoupment tax legislation a provision removed by the previous Government which authorised the Commissioner of Taxation to report to this Parliament the names of persons who fail to meet their liability for vendors or promotors recoupment tax. It is, in our view appropriate that this Parliament, and through it the people of Australia, should know those who remain unrepentant of their attempt to escape their rightful share of the tax burden. The Commissioner is already required to provide in his annual report to Parliament details of breaches or evasions of the taxation laws and it is consistent with that duty that he be authorised, where he considers it appropriate, to report details of failure to pay recoupment tax. I note that revenue implications of these amendments are significant. The measures contained in this Bill are estimated to yield $570m in total and, subject to what I am about to say, $250m in 1983-84. Payment of personal tax by instalments over a period of 12 months in lieu of payment within 30 days will result in revenue which would have otherwise been collected in 1983-84 not being collected until 1984-85. This is not revenue lost but merely revenue deferred. An accurate estimate of the amount involved has not, in the time available, been possible. Preliminary estimates indicate that a figure of up to $100m could be involved. Studies are currently being made of administrative measures by which this impact on revenue in 1983-84 might be lessened. If the Government had required payment not only of tax owing but also of an additional amount for the period of delay in payment, the total revenue yield would have been $840m. As usual with amendments of the taxation laws, an explanatory memorandum giving details of the amendments contained in the Bill is being circulated to honourable senators, the main memorandum being complemented by a supplementary memorandum that deals particularly with changes made to the Bill during its consideration by the House of Representatives. It will be clear that while the Government is committed to the principles of the Bill as originally introduced in the other place it has shown a readiness to modify its impact in some areas where we have been persuaded that change is warranted. In that light, I commend the Bill to the Senate. TAXATION (UNPAID INCOME TAX-DIVIDENDS) BILL 1983 This Bill will formally impose a tax-to be called dividend recoupment tax-on the dividend amount determined in accordance with the rules being inserted in the recoupment tax legislation by the amending Bill I have just introduced. The underlying purpose of the amendments is to recover personal income tax escaped by individual former owners of stripped companies. That will be done in a direct manner wherever possible. However, in cases where former owners held their shares through interposed companies or trusts recovery may in certain circumstances be by way of imposing on one or more of the interposed companies or trusts a tax equivalent to the maximum personal rate of tax applying in the year of income in which the shares in the stripped company were sold. This Bill will impose that tax. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. INCOME TAX ASSESSMENT AMENDMENT BILL 1983 [No. 2] Bills received from the House of Representatives. Motion (by Senator Gietzelt)-by leave- agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Gietzelt) read a first time. Second Readings Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(6.26) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- INCOME TAX ASSESSMENT AMENDMENT BILL 1983 [No. 2] This Bill to amend the incomes tax law will give legislative effect to a range of measures that had been announced by the former Government but which it had not implemented by the time the recent election was announced. As mentioned by the Minister for Finance (Mr Dawkins) in his statement of 30 March 1983, the new Government was confronted with several matters of unfinished taxation legislation, and had to move quickly to determine their future and assign a legislative priority to those that we as a government decided should be put into place. These questions were addressed in his statement of 30 March and this Bill represents the extent to which it has been possible, in the relatively short period that has been available to us, to have the various measures ready for introduction. Deductions of Tax at Source from Payments for Work and Services The major proposals which the Bill will implement is the introduction of a system of deductions of tax at source from payments for work and services. Associated with these measures are reporting arrangements for householders who undertake larger domestic building projects and some related amendments to the pay-as-you-earn provisions of the law. This package of amendments was announced by the former Treasurer in the 1982-83 Budget. As the Minister for Finance indicated when he announced on 30 March 1983 the Government's decision to proceed with them, these measures will apply from 1 September 1983. Mr President, the need for these amendments is clear. Although there is no simple means by which the menace of tax evasion by the non-reporting of income, whether received in cash or otherwise, can be eliminated, the Government is confident that these measures will help in a most significnt way to deal with the problem. The measures involve no new taxes, but only a new system for the collection of tax which is properly payable. Very briefly, they involve the deduction of tax by a person making a payment for contracted work or services and a remittance of amounts deducted to the Commissioner of Taxation on a monthly basis. There will, of course, be an entitlement to a credit in annual assessments for tax deducted from payments. As previously announced by the Minister for Finance, the intitial operation of the system will, subject to two variations, be confined to payments, to be prescribed by regulation, that are made and received by persons and firms operating within the building and construction, architectural, consultant engineering, surveying and other technical building services, joinery and cabinet making, road transport, motor vehicles repair and cleaning industries. There are to be some variations of this basic intra-industry approach. These will be in respect of the limited categories of payments from sources outside the building and construction and road transport industries to persons and firms operating within the industries, of which the Minister gave initial details in his statement of 2 May 1983. While the new system will have the scope I have mentioned, the Bill is cast in terms that permit its extension by regulation to payments in other industries as soon as it is practicable to do so. I stress that under no circumstances will householders be required to make any deduction of tax at source under the proposed measures. However, under associated provisions, a householder who undertakes a private or domestic building project, the cost of which exceeds $10,000, will be required to register with the Commissioner of Taxation and report to him payments made in relation to that project. The Minister for Finance announced on 2 May 1983 the Government's decision that , except where an exemption or reduced rate certificate has been granted, all payments within the initial scope of the system will be subject to deduction at a single rate of 10 per cent of the gross payment. The Minister also indicated then that, in setting this rate, the Government had to balance the competing considerations of possible cash flow implications for payees if it were too high , and the enforcement benefits of the system that would be lost if it were too low. There is also the fact that, because of the limited initial scope of the system, deduction of tax at this rate will, in many cases, be confined to only a part of a payee's total business receipts. It is therefore expected that the rate set will in most cases be less than the tax payable on assessment. But for those for whom it might be too high, the Bill makes provision for the Commissioner of Taxation, on the application of a payee, to approve a lesser rate where he is satisfied that that is justified in the particular circumstances. The new system is primarily one of deduction of tax at source. The measures will, however, permit the Commissioner to issue certificates of exemption which will allow a payee to obtain payment without deduction of tax. Understandably, these certificates will be available only in circumstances where the person concerned has been in business for a significant period and is able to demonstrate that, among other things, a satisfactory taxation record has, in all respects, clearly been maintained. To repeat what I have already explained, these measures are aimed at eliminating a significant form of tax evasion. Consistently with this objective they contain substantial penalties-court-imposed and statutory-for breaches of obligations under the system. The Bill will also make amendments to the PAYE provisions of the income tax law to correct technical deficiendies in that area and to clarify the boundary between the PAYE system and the new system of deduction of tax at source. These associated amendments will also ensure that the PAYE provisions do not apply to payments made by householders that are wholly or principally for the labour of a person who is not an employee of the householder within the ordinary meaning of that word. I come now to a range of industry incentives announced by the former Government that are to be given statutory effect by the Bill. Each of these changes was the subject of modifications outlined by the Minister for Finance in his statement of 30 March 1983, the amendments contained in the Bill give effect to the former Government's announcements. In these circumstances, and as a detailed explanatory memorandum on the provisions of the Bill is being made available to honourable senators, I propose to refer to each matter only in broad terms. Accelerated Depreciation The first of the changes is a new system of accelerated depreciation allowances for new and second-hand plant that is acquired by a taxpayer under a contract entered into after 19 July 1982 or that a taxpayer commences to construct after that date. Under the new system, eligible plant will qualify for depreciation on a prime cost basis at a rate of 20 per cent except where, under existing law, eligible plant would attract a rate more than 20 per cent. In those cases a 33 1 /3 per cent rate will apply. The accelerated rates will not apply to motor vehicles-principally cars and station wagons- of a kind at present excluded from the 18 per cent depreciation loading, to structural improvements or, as announced by the Minister in his 30 March statement, to works of art. As part of the package announced by the former Government, the special rate of depreciation applicable to certain primary production plant, including structural improvements for the storage of hay, grain or fodder, is to be increased from 20 per cent to 33 1/3 per cent. I divert at this point to mention that I will shortly be introducing a further Bill-the Income Tax Assessment Amendment Bill (No. 2) 1983. That will, in part, reflect the Government's view that the 33 1/3 per cent rate to apply to primary production plant under the proposals announced by the former Government is excessive. Under amendments proposed by that further Bill, the depreciation rate will revert to 20 per cent, with broad effect from 20 May 1983. In his statement of 30 March the Minister for Finance said that plant that was made the subject of sale and leaseback and similar arrangements would be excluded from the benefits of the new system proposed by this Bill in circumstances where the lessee/end-user would otherwise be depreciating the plant according to previously applicable rates of depreciation. The Bill gives effect to those exclusions. The Minister also said then that the Government was considering the extent to which plant that comes under new ownership by virtue of mergers and re- organisations of business operations would qualify. It has not proved practicable to incorporate measures dealing with this matter in this Bill. The Minister will however, shortly be announcing details of the Government's proposals that will, as in the case of the sale and leaseback exclusion, have effect from the date of introduction of the concessions. Depreciation of Non-Residential Buildings The proposal under this head is a system of income tax deductions for capital expenditure on the construction of new buildings used for the purpose of producing assessable income, otherwise than in providing residential accommodation, where the construction of the building commenced after 19 July 1982. Capital expenditure on building extensions or alterations will similarly qualify. The deduction will be available on the same general basis as the one now available for traveller accommodation buildings, so that fixed annual deductions of 2 1/2 per cent of the construction cost will be allowable over a 40 year period. As announced by the former Government, buildings used in connection with traveller accommodation will continue to qualify for deduction under the existing depreciation arrangements provided for them. Mining Capital Expenditure The Bill will amend the arrangements for deducting capital expenditure incurred , after 19 July 1982, in developing a mining property or oil field. Deductions are at present available on a diminishing balance basis calculated by reference to the lesser of 10 years or the estimated life of the mine or oil field. In broad terms, allowable capital expenditure incurred after 19 July 1982 will be allowable by reference to the same maximum life of 10 years, but calculated instead on a straight line basis. The general effect of the new arrangements will be that allowable capital expenditure incurred in a year of income will be deductible in 10 equal instalments in years of income beginning with the year in which the expenditure was incurred. The Bill also corrects some technical defects in earlier provisions. Investment in Australian Films The Bill will modify the scheme of tax incentives for investment in the production of qualifying Australian films so that the special 150 per cent deduction that, under the present law, is not available until after the relevant film has been completed and used to produce income, will be allowable in the year in which the eligible expenditure is made. Deduction on the new basis will be conditional on the investor becoming the first owner of an interest in the copyright in the completed film, and using that interest for the purpose of producing assessable income, within two years from the close of the financial year in which moneys are first expended in, or contributed towards, the production of the film. In the event that these conditions are not satisfied any previously allowed deductions will be withdrawn. A further requirement for deduction is that a production agreement securing funds necessary for the production of the film be entered into by the close of the financial year in which moneys are first expended in, or contributed towards, the production of the film. In addition, moneys contributed towards an eligible production are required to be held in a non-interest bearing account opened in relation to the film in the Australian Film Industry Trust Fund. Arrangements for the establishment of that Fund, which is to be administered by the Department of Home Affairs and Environment, are currently being made. In these circumstances, the requirement that contributions be deposited in an account in the fund opened in relation to the film will apply with respect to all contributions made on or after 1 July 1983. The unexpended portion of contributions made before that date will be required to be transferred to the account by 1 July 1983. Payments out of an account opened in the Trust Fund are to be made only for the purpose of expenditure in the production of the film to which the account relates, or by way of refund to contributors. A system of withholding tax is to apply in relation to amounts withdrawn from the account otherwise than for the purpose of expenditure in the production of the film. Amounts withheld under these arrangements will be applied against tax due on the amended assessment disallowing the 150 per cent deduction claimed by the relevant investor in respect of the amount of his or her contribution not expended in the production of the film. Finally, eligibility for the new deduction arrangements is to be supported by a formal declaration that is required to be lodged by an appropriate person-generally the producer-within one month after the end of the financial year in which contributions towards the production of the film are first made. With the exception of the modifications outlined above, the existing requirements of the concessions will remain unaltered. The year of expenditure basis of deduction will apply to eligible expenditure incurred by an investor under a contract entered into on or after 13 January 1983. Collection of Tax Payable by Non-Residents The last of the changes that was foreshadowed by the previous Government is the introduction of special measures to facilitate the collection of tax payable by non-resident beneficiaries of trust estates. This change is connected with steps taken last year to make non-residents ineligible for the zero rate of tax in the personal tax scales. In order to improve Australia's capacity to collect tax payable by trust beneficiaries who do not reside in Australia, this Bill will operate so that the trustee of the relevant trust will be primarily responsible for payment of the tax on income of the trust to which a non-resident beneficiary is presently entitled. The non-resident beneficiary may also be assessed in respect of the trust income, with credit being allowed for the tax paid by the trustee. This change will apply to trust distributions that are made on or after 18 May 1983. Finally, the Bill also contains amendments to make it clear that interest paid by the Commissioner of Taxation under the proposed Taxation (Interest on Overpayments) Act 1983 will be taxable to the recipient in the income year in which it is paid and to make a technical change in the provisions which limit the cost for depreciation purposes of certain motor vehicles. This later amendment is consequential on a change made in the basis of calculation of the motor vehicle purchase sub-group of the consumer price index, on which annual changes in the limit are based. I commend the Bill to the Senate. INCOME TAX (RATES) AMENDMENT BILL 1983 This Bill will amend the Income Tax (Rates) Act 1982, which declares the rates of tax for individuals and trustees, who generally pay tax at individual rates. The provisions of this Bill are consequential upon the amendments proposed by the Income Tax Assessment Bill 1983 to strengthen the collection provisions of the income tax law in relation to non-resident beneficiaries of trust estates. The rate of tax payable by a trustee taxed on behalf of the non-resident company beneficiary is to be the general company rate of 46 per cent and will be declared and imposed by the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1982, which will be amended by a Bill which I will introduce shortly. The present Bill will in these circumstances remove from the scope of the Income Tax (Rates) Act 1982 a trustee who is to be taxed on behalf of a non-resident company beneficiary. I commend the Bill to the Senate. INCOME TAX (INDIVIDUALS) AMENDMENT BILL 1983 This Bill will amend the Income Tax (Individuals) Act 1982 which formally imposes personal income tax payable for the 1982-83 financial year. The rates imposed by this Act are those declared in the Income Tax (Rates) Act 1982. As I explained in my second reading speech on the Income Tax (Rates) Amendment Bill 1983, a trustee of a trust estate who will be liable to be assessed and to pay tax on behalf of a non-resident company beneficiary of a trust estate is to be taxed at the rate of tax applicable to companies generally and not at individual rates. As a consequence, this Bill will amend the Income Tax (Individuals) Act 1982 so that it does not impose tax on trustees to be taxed in respect of non- resident companies. I commend the Bill to the Senate. INCOME TAX (COMPANIES, CORPORATE UNIT TRUSTS AND SUPERANNUATION FUNDS) AMENDMENT BILL 1983 This Bill will amend the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Act 1982, which declares and imposes the rates of tax payable for the 1982-83 financial year by companies, trustees of corporate unit trusts and trustees of superannuation funds. As I explained in my accompanying second reading speech on the Income Tax (Rates) Amendment Bill 1983, the amendment proposed by this Bill will extend the operation of the Income Tax ( Companies, Corporate Unit Trusts and Superannuation Funds) Act 1982 so that it also declares and imposes the rate of tax payable-46 per cent-by a trustee of a trust estate who is to be taxed on behalf of a non-resident company beneficiary. I commend the Bill to the Senate. INCOME TAX (PAYMENTS FOR WORK) CONSEQUENTIAL AMENDMENTS) BILL 1983 This Bill is complementary to the Income Tax Assessment Amendment Bill 1983 which I introduced earlier. You will recall, Mr President, that in introducing that Bill I outlined for honourable senators features of the proposed system of deductions of tax at source from payments for work and services. The purpose of this Bill is to ensure that a debt payable to the commissioner in respect of such unremitted tax deductions will, in a bankruptcy or liquidation, have the same priority as do unremitted pay-as-you-earn tax deductions. A technical explanation of the Bill is contained in the explanatory memorandum that is to be made available to honourable senators. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Gietzelt) read a first time. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(6.27) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill to amend the income tax law will give effect to some of the taxation proposals announced by the Treasurer on Thursday, 19 May 1983. The Government's reasons for making those and other changes are set out in the statement of the Treasurer (Mr Keating) of that date and it seems unnecessary for me to go over the same ground again in this introductory speech. The measures included in the Bill affect taxpayers in the 1982-83 year and, for administrative reasons, need to be given immediate legislative effect. A further Bill covering the balance of the taxation initiatives announced on 19 May will be introduced in the Budget sittings. Among concessions being terminated by this Bill are the two year write-off for the cost of converting oil-fired plant to an alternative energy source and the 40 per cent conversion allowance for the cost of non-oil-fired plant installed to replace oil-fired plant. As indicated in the Treasurer's statement, neither of these deductions will be available where the expenditure is incurred under contracts entered into after 19 May 1983 or the conversion work is commenced after that date. The special 100 per cent depreciation allowance for petroleum fuel storage facilities will also cease in respect of facilities acquired under a contract entered into after 19 May 1983 and facilities that the taxpayer starts to construct after that date. In a case where fuel storage facilities continue to qualify for the special write-off, an additional eligibility requirement will be that they be in use for the purpose of producing assessable income or installed ready for use for that purpose before 1 July 1984. As I mentioned in my second reading speech on the Income Tax Assessment Amendment Bill 1983 amendments proposed by that Bill will give effect to certain concessions for primary producers announced by the previous Government. By that Bill the special rate of depreciation on a range of primary production plant, including structural improvements for the storage of grain, hay or fodder, is to be increased from 20 per cent to 33 1/3 per cent, broadly with effect from 19 July 1982. As announced by the Treasurer, the over-generous 33 1/3 per cent rate is to be discontinued and the 20 per cent rate re-instated. The 20 per cent rate will, however, apply only to eligible plant and improvements acquired under a contract entered into after 19 May 1983 or which the taxpayer commenced to construct after that date. To clear the way for implementation of the Government's Medicare policy, the rebate for basic health insurance contributions is by this Bill to be discontinued in respect of premiums paid to secure cover after 30 June 1983. The Bill also makes provision, as part of an overall package of measures to apply in the housing area, for the termination from 30 June 1983 of the income tax rebate introduced by the former Government in last year's Budget. That rebate, which applied to the portion of interest payments that exceeded 10 per cent per annum on loans of up to $60,000, was quite inequitable in the way it directed assistance away from those most in need. The earlier-the March 1982-home loan interest rebate will, of course, remain in the law and legislation to modify it as proposed by the Treasurer will be introduced in the Budget sittings. Interest Withholding Tax Finally, the Bill also gives effect to the proposal to withdraw the general exemptions from withholding tax in respect of interest on the overseas borrowings of so-called 'Australian entities' and the Australian Industry Development Corporation. The exemption now available in respect of interest on overseas borrowings of Australian resident companies by way of widely distributed bearer debentures issued overseas will not be disturbed and, as I will explain later, new provisions will maintain exemption for government and government authority borrowings affected by the withdrawal of existing exemptions. Withdrawal of the two exemptions will apply to interest on loans raised in pursuance of contractual obligations entered into after 19 May 1983. Interest on existing loans will not be affected. In addition, interest on any loans which are raised in pursuance of contractual obligastions entered into after 19 May 1983, and which meet the requirements of the existing law may continue to be exempt, but only where the interest is paid before the date on which the legislation is enacted and is attributable to that interim period. Exemption of interest on the overseas borrowings of the States, and of Commonwealth and State authorities, which are raised in pursuance of contractual obligations entered into after 19 May 1983 will be maintained by a new provision . Exemption from withholding tax for interest on external Commonwealth loans at present operates where there is a determination by the Treasurer that exemption should apply in relation to the loan. The Bill provides for this procedure to apply also to borrowings of the States, and of Commonwealth and State authorities. The Bill provides, however, that a certificate will not be given if the funds from a particular borrowing will be used by an authority in direct competition with private sector enterprises. A memorandum explaining the technical feature of the Bill will be made available to honourable senators and I think that I do not need to say more at this stage. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Gietzelt) read a first time. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(6.28) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to amend the Racial Discrimination Act 1975 to remedy a situation which has arisen as a result of a High Court decision which was handed down two weeks ago. The case arose from a complaint made under the racial discrimination provisions of the New South Wales Anti-Discrimination Act. The Court took the view that the Commonwealth's Racial Discrimination Act was intended to cover the whole area of racial discrimination prohibition in Australia, and therefore it was not possible for the State legislation to operate in the same field. The Government takes the view that constructive developments have taken place in some States in the field of anti-discrimination law and that federal measures should not impinge upon those developments. The High Court decision has meant that the constructive New South Wales racial discrimination provisions are no longer effective. The New South Wales Government has asked that urgent action be taken to overcome the effect of the court decision, and the Government agrees that it is desirable to do so. This Bill makes it clear that State and Territory legislation which furthers the objects of the Racial Discrimination Convention can stand along side the Commonwealth legislation. The States of course will need to ensure that their legislation does further those objects and is in a form in which it is able to operate concurrently with the Commonwealth Act. In New South Wales there were a large number of complaints in various stages of investigation when the Court decision was announced. The Bill has been drafted in such a way as to allow these cases to continue under the State legislation. As it will be possible in many cases for a person to pursue a remedy under either Commonwealth or State law, provisions have been included to prevent a person from taking action under both laws in respect of the same matter and also to prevent double penalties. I commend this Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Gietzelt) read a first time. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(6.30) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill gives effect to the Government's proposal, announced by the Treasurer (Mr Keating) in his Economic Statement of 19 May 1983, to introduce an income test on those age and service pensions for persons aged 70 and over which are currently paid free of an income test. The provisions of the Bill cover both age pensions paid under the Social Security Act 1947 and service pensions paid under the Repatriation Act 1920. Since November 1978, age and service pensions have been determined free of an income test in respect of persons aged 70 years or more at the May 1978 rates. The single rate is $51.45 a week and the combined married rate is $85.80 a week or $42.90 a week each. However, pensioners have been eligible for a higher indexed rate subject to the normal income test. The Bill amends these arrangements by introducing an income test which will apply to those pensions which are currently paid free of an income test. Where a single person's income is $200 a week or below, and a married couple's combined income is $333 a week or below, pension will continue to be paid at current rates. However, the rate of pension will be reduced by a dollar for each two dollars of income in excess of those limits. Pension ceases to be payable to single persons when income reaches $302.90 a week, and in the case of a married couple when combined income reaches $504.60 a week. In the case where a married person is being paid a single rate of pension by reason of seperation due to illness, pension ceases to be payable when combined income reaches $538.80 per week. In any other case where a married person is being paid the single rate of pension, the pension ceases to be payable when combined income reaches $504.60 a week. In the case of a married pensioner couple, where one is under 70 years and the other is 70 years or over, the rate of pension for the person over 70 years will be calculated in accordance with the new income test, and the rate payable to the person under 70 years will be calculated in accordance with current income test arrangements for persons under 70 years. Blind pensioners will continue to be paid age or service pensions free of any income test. It is estimated that these changes will bring savings of approximately $167m in 1983-84. This figure is based upon an estimate that about half of some 220,000 current income test free age and service pensioners will have their existing entitlement reduced or terminated. In particular, $7m will be saved in 1983-84 in connection with service pensions where an estimated 6,000 people will be affected by the new arrangements-4,000 will have entitlement reduced and 2,000 will cease to be eligible for pensions. The proposed amendments will apply on and from the first pension pay day after 1 November 1983, which will be 3 November in the case of age pensions and 10 November in the case of service pensions. Arrangements are being made to contact all age service pensioners affected by these changes before the amendments take effect in order to ensure as smooth a transition as possible. Mr President, these measures arise from the Government's commitment to the development of a fair system of retirement incomes based on an awareness of those in greatest need. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill returned from the House of Representatives without amendment. Bill returned from the House of Representatives without amendment. Bill returned from the House of Representatives with a message intimating that it had agreed to the amendments made by the Senate. Bill returned from the House of Representatives with amendments. Motion (by Senator Geitzelt) agreed to: That consideration of House of Representatives Message No. 57 in Committee of the Whole be made an Order of the Day for the next day of sitting. Sitting suspended from 6.32 to 8 p.m. Reference to Standing Committee Senator TATE(Tasmania)(8.1) —I move: That the National Service Amendment Bill 1983 be referred to the Standing Committee on Constitutional and Legal Affairs for inquiry and report as soon as possible. The Senate is being asked to send a reference to the Senate Standing Committee on Constitutional and Legal Affairs which is to do with a private member's Bill which I introduced into this chamber some time ago. The Senate gave me leave to introduce a Bill for an Act to amend the National Service Act 1951 in respect of persons whose conscientious beliefs do not allow them to engage in military activities. Some may ask why the Committee should accept a reference to do with compulsory military service at a time when it is not a live issue in the Australian community. The larger answer would lie in the remarks I made in my maiden speech on 23 August 1978. That was that as legislators we ought to be reinforcing the individual conscience-an activity which culturally marks us as a free society where the common good cannot be relentlessly pursued by means which destroy the individual's personality. But, more specifically, I believe it is precisely a time when there is none of the hysteria associated with a military campaign that is most suitable for a careful look at the issues involved. The types of questions of interest to the Committee, and about which we are anxious to receive evidence include the following: The large question is what is to count as a conscientious objection. How does one distinguish a belief binding in conscience from a sincerely held political view? Is there such a distinction? Does a religious, moral or ethical basis to the conscientious objection need to be demonstrated? Of pressing concern to many of us, particularly after the experience of national service during the Vietnam war, is the fact that, as presently drafted, the Act protects the integrity of the individual who maintains opposition to all military service in any circumstances-the Quaker position or its secular equivalent. But there is a strong tradition in Judaeo-Christian and Western ethics which distinguishes between particular military conflicts and attempts to discern whether a war is 'just' or 'unjust'. A properly informed conscience will rebel at participation in an unjust war, but would be willing to participate in a just war-for example, clear defence of national territory. Again, activities during an otherwise just war, such as the indiscriminate slaughter of civilian populations, can lead to the conclusion that the war has become unjust. The Constitutional and Legal Affairs Committee will need to determine whether and how this discrimination between wars can be allowed for. The Committee will need to take evidence from the Government and defence forces to ascertain the sort of impact which such a wider provision might have on the recruiting program for service in an armed conflict which our democratically elected government has endorsed. Would it render it impossible to raise the forces necessary? How, if at all, could the defence forces deal with changing judgments of the moral propriety of the conflict as it progresses? I can assure you, Mr President, that the Committee will be very aware of these problems. A third area which the Committee may wish to consider, and in relation to which it would appreciate evidence, is the question of who should determine the validity of the conscientious objection. During the Vietnam war, the task was entrusted to the magistrates court, where it was not always clear that the magistrate confined himself to ascertaining the facts of conscientious objection . Too often the Bench was tempted to find against the applicant on the basis of confused reasoning, or that divergence between principles and practice which afflicts us all. It may be that some other tribunal could be established and the questions it ought to answer could be more clearly defined. I have indicated some of the matters which the Committee will need to consider. I hope that we will be aided, as quickly and briefly as possible, by individuals or organisations by way of written submission, which may later be supplemented and clarified by public hearings. Advertisements will appear shortly in the national newspapers inviting submissions to the Committee here at Parliament House. I commend the reference to the interest of all Australians. Question resolved in the affirmative. Ministerial Statement Debate resumed from 26 May, on motion by Senator Button: That the Senate take note of the statement. Senator CHANEY(Western Australia-Leader of the Opposition)(8.5) —Tonight the Senate is debating the economic statement which was put down in the House of Representatives on 19 May. At the request of the Government we are conducting a cognate debate. I mention that now to ensure that that is the basis of this debate. It is a cognate debate on the statement and on the legislation which is presently before the Senate which will put into effect some of the measures which were announced in the mini-Budget. During the debate there will be reference to the Wheat Marketing Amendment Bill, the Income Tax Assessment Amendment Bill (No. 2) and the Social Security and Repatriation Legislation Amendment Bill, all of 1983. The economic statement which was made by the Treasurer (Mr Keating) on 19 May is of considerable importance to Australia, not least because the statement is the first real indication that we have had of decisions being made by the Government as against its indulgence in rhetoric and public education. The statement is seen by the Government itself as being important. Indeed in the early paragraphs it is made quite clear that whilst the statement covers a limited number of decisions by the Government it is to be taken as indicative of the direction in which the Government will be moving. The Treasurer said: The decisions . . . should be taken as indicative of the directions in which we will be moving in the months and years ahead and, in particular, in the Budget for 1983-84 to be brought down on 23 August. We have in this statement something which has an importance quite apart from the actual measures that it proposes and which falls to be implemented during the current sittings of the Parliament. I think it is fair to say that the statement is a great disappointment to all shades of economic opinion. I will summarise during my speech the reasons I say that. Effectively the statement casts aside the basic policy of expansion on which the Government went to the people. The statement on 19 May broke many, if not most, of those Labor promises which still remained to be broken. The statement fails to come to grips with the deficit of which the Government has made so much since the election. The statement was brought down in an economic situation which Labor, under the Prime Minister, Mr Hawke, promised to change. Yet it is fairly neutral with any changes being contrary to what was promised the Australian people. In summary, the statement is a nothing. That means that Labor has deserted its fundamental campaign promise to change the Government's economic policy. In August last year when the previous Government, the Fraser Government, brought down its last Budget the Australian Labor Party's reaction and response to that Budget was recorded. In August last year the then Leader of the Opposition, Mr Hayden, began his speech on the Appropriation Bills by characterising our Budget as 'a betrayal of the Australian people'. His final description of that Budget was that it was destructive. In between that initial comment and his final description was a lot of colourful rhetoric. If honourable senators go through that rhetoric they will find there was only one fundamental criticism of what the Fraser Government was doing last August. That criticism, made by the Labor Party through the mouth of Mr Hayden, was that the Budget was insufficiently expansionary. There were two aspects to that: The deficit was found to be wanting-that is, it was not a sufficiently high deficit for Australia's current circumstances-and the tax cuts which were put forward by the Government were inadequate. It would not be politically realistic to expect the present Government to give us an honest, unbiased assessment of what last year's Budget was really like, but I think in this economic statement we now have an implicit acknowledgment that the former Government's Budget and post-Budget strategies were working. I think we should look at the words used by Mr Keating in his statement. He said: . . . we expect some improvement in economic activity in the course of 1983-84 with the main impetus coming from: Then he listed half a dozen reasons. The first reason he mentioned was: The fiscal stimulus implicit in the Commonwealth Budget for 1982-83 and in prospect from 1983-84; the improvement in the international economy; a marked slowing in stock decumulation so that a greater proportion of increased demand will be met from additional production; the improved prospects for farm production and exports; the pick-up in dwelling construction already under way; and finally, but of fundamental importance, the improved prospects for ongoing moderation of income claims as the prices and incomes accord is implemented. That statement is something of a landmark because whilst neither the Government nor the Opposition can claim credit for breaking the drought or for the improvement in the international economy, most of the encouraging signs picked up by the Treasurer in the passage I have quoted and eleswhere in the statement flow directly either from the last Budget or from the wages freeze instituted by the previous Government. All too evidently, the Budget of the Fraser Government- the last Budget-was neither a betrayal nor was it destructive. It is evident that Mr Hayden's rhetoric of August 1982 was just a little too colourful, and it is evident too that there has been a change of heart on the part of the Labor Party. I think we have gone beyond the tacit endorsement of the former Government's policy, ungenerous and limited as it is in this statement. The whole tone of the economic statement suggests nothing less than a complete turnaround on economic policy. In some respects the turnabout is rhetorical because there is little real underpinning of the directions which the statement suggests, but it is meant by Mr Keating to be indicative, and we are presumably meant to take some notice of the rhetoric as well as the actual measures which are proposed. It is important to remember in assessing the statement that what was said by Mr Hayden immediately after the Budget last year was pursued by the Labor Party for the next six months. If one looks at the documents which were put down by Labor before the election one sees a continuation of the sort of themes which were struck after the Budget. Labor's national recovery and reconstruction plan states: The principal cause of our continually poor economic performance and our current alarming decline has been the constant contraction and eventual collapse of the demand for goods and services. It said later that the Liberals: . . . used Australia as a guinea pig in an abortive monetarist experiment. Each year budgets were more contractionary. Each year monetary policy was tightened. Again, a little later in Labor's economic statement it is stated: We were told that even last year's deficit was 'still contractionary'. Labor did not rest on putting forward a criticism of what the then Government was doing. It offered an unmistakably clear alternative and went on offering that alternative right to the day it was elected. I shall quote from that same document, the ALP economic policy, which was produced only a few months ago. That document states: The principal thrust of Labor's economic strategy will be to reject the policies of contraction and embrace the policies of expansion . . . Later it states: . . . the achievement of these aims requires a substantial change in national economic policies to urgently lift demand . . . Again a little later it states: Labor will not wait until the 1983-84 Budget to commence this recovery program. Immediate action will be taken to stimulate activity in key sectors. There is no room for doubt about what Labor was saying was required. There is no room for doubt about what Labor was promising the Australian people. Indeed, some of the machinery was spelt out in detail. I shall quote from the election policy speech which again was given only a matter of a few months ago by Mr Hawke. What were we told by Mr Hawke in that policy speech? We were told this: There can be no lift in profits or a lift in growth unless there is a lift in demand. And that cannot be done by taking money out of the weekly pay packet or the pensioner's cheque. Later, he said: . . . increased growth will be restored by . . . tax reductions for low and middle income earners. I really do not have to repeat the details of the sorts of tax cuts indicated by Labor. We all remember that six million Australians were to get them. I do need to repeat the Prime Minister's words about promises. He stated: I offer no fistful of dollars to be snatched back after the election. We were given to understand before the election that the ALP, if elected, would not only pursue an expansionary policy but also that there would be no ceiling on the expansion. Why else were we told in February that Mr Hawke's idea of an acceptable deficit was four times higher than Mr Hayden's had been in August? Why else were we told by the present Prime Minister to throw away our calculators? We are entitled to ask whether the party which is led by Mr Hawke, the Labor Government, is the same party which has now produced this economic statement. Three months ago it described the Fraser Government as being obsessed with monetary matters. Now Mr Keating-in this I think he is quite right-is expressing concern that the growth in money supply is off target. With all due caution he does not bother to state a revised target. He is a more careful man than that. Without a single blush he states: Monetary growth as rapid as the current level of 12 per cent or so is not consistent with this Government's objectives and prompt action is necessary to bring it down. This statement was made by the leading economic spokesman for the party that talked about the monetarist policies of the previous Government. Now, without a blush, he describes those policies as not having been pursued adequately or effectively. He tries to don the same clothes as the previous Government. Indeed , the central feature in this statement is that he is taking action to bring the money supply under control. We are entitled to ask whether in this statement we can detect the beginning of a splendid monetarist obsession on the part of the new Labor Government. We can be forgiven for wondering whether this is the same party which, before the election, in the most explicit terms wanted to increase demand by increasing both weekly pay packets and pensioner's cheques. Mr Keating is now expressing his approval that wage increases moderated in the March quarter and that real wages declined slightly. What an extraordinary change! The economic statement put down by Mr Keating expresses approval of the fact that wage increases have moderated in the March quarter. The conversion is not limited to Mr Keating. Many honourable senators will recall the speech made by Senator Walsh in a matter of public importance brought forward by the Opposition on 4 May. On page 177 of Hansard he stated: I believe, and the Government believes and has made explicit on many occasions, that a fall in real wages is very likely an essential component of a package for economic recovery. Again, that reflects very clearly what Mr Keating said in another part of the economic statement, in which he talked about the factors that have contributed to our economic malaise. He stated: . . . realistic expectations, generated for political ends, which had resulted in large increases in real wage levels for some and unemployment for others; A confused electorate might be entitled to ask: 'Whose rhetoric is this? How can this come from the mouths of those who preached such different policies a matter of a few months ago?' Of course, the economic statement, does not, in a direct sense, come to grips with those problems. Rather than face that reality head on, it takes a number of actions which eat away at the real incomes of ordinary suburban Australians. This Government, through the abolition of the home loan interest rebate, the health insurance rebate and a number of other smaller measures, has whittled away at household incomes, something which a few months ago it would have told us would reduce demand and thereby damage the economy. The tax cuts which were promised to stimulate demand are passed over in silence. It appears, as we claimed before the election, that further tax cuts could not be afforded; or was the demand diagnosis that Labor put forward wrong in the first place? The Opposition can be forgiven for wondering too-I believe that this sense of wonderment would be shared by the Australian people-whether this is the same party which showed such a cavalier disregard for the size of the deficit. Now Mr Keating tells us that a prospective deficit approaching $10 billion is simply not on. That is, of course, yet another of the road to Damascus conversions with which this Government's short life has been littered. We can welcome those conversions. But once again the Treasurer's response falls short of his Government's new-found rhetoric. He displays, in his analysis of the deficit problem, an astonishing naivety. I quote the Treasurer again. Apparently in all innocence, he said: We found that a substantial proportion of the costs of tax concessions announced in and immediately prior to the 1982-83 Budget by the former Government-amounting to around $3000m-first come to account next financial year. The statement by the Treasurer that the Government has discovered what the actual tax promises made by the previous Government were and that they came into effect only since it came into government suggests either that it failed to read the Budget or that it read it but failed to understand it. I believe that either is possible on the performance we have seen over the last month or two. The Treasurer's response to the allegedly horrendous legacy the Government has received is also astonishing. The new expenditure initiatives announced in this statement will add an estimated $557m to outlays next year. There are savings which are estimated to total $985m but the bottom line comes to net savings of $ 428m. But, of course, the statement does not pick up some of the committed expenditures for next year, principally the proposal for a new compulsory health care system. If those new expenditure proposals of the Government are included, of course, the savings are in fact negligible. The impact on the deficit of the actions taken by the Government and proposed so far is virtually nil. That is why I said earlier in my speech that this mini-Budget is a nothing. It does not come to grips with the deficit which we are being told by the Government over and over again is so important. It is also true that in the statement Mr Keating has not said what he or the Government now considers to be an acceptable size for the deficit, nor has he had the honesty to admit that as growth estimates are revised upwards, the projected deficit must shrink. Honourable senators will recall the guarded way in which questions on that subject were answered by the Minister for Resources and Energy (Senator Walsh) this morning. It is quite clear to any observer that the $9.6 billion figure which is still being used by the Government whenever it can is a figure which has been greatly reduced by the recent forecasts of growth in the Australian economy. That figure is one on which no reliance can be placed . Yet this statement which was put out on 19 May, on a day when senior Labor advisers were admitting that the growth forecast had been revised, makes reference in the early paragraphs to the 'parlous budgetary situation which we have inherited'. Why was the Government not honest enough to come out with a revised estimate when it has been so critical of the previous Government's failure to put that matter before the people? This economic statement is, of course, a first attempt by the new Government. In many ways we welcome the apparent conversion to fiscal and monetary rectitude which it represents. But the conversion, as I said earlier, is rhetorical rather than real. In various ways which have already been the subject of debate in this place the measures in this statement are misconceived. We all look forward with enormous interest to seeing what the full Budget will bring in August. In the time which remains to me I would like to touch on those matters which in fact are left unresolved by this statement. The Treasurer, in the concluding remarks of his statement, touched all too lightly on the central issue of wages. He then skittered off, leaving behind a trail of platitudes. We gather, perhaps wrongly, that the Government cannot bring itself to move towards a wages policy which resembles scenario C of the National Economic Summit Conference. That, we are told by the Government, would be a triumph of hope over experience. I think it is fair to ask: If that is true, if the scenario which promises a reduction in unemployment in Australia is a scenario which could hope for but not achieve, what in the world was the point of the Economic Summit? It would appear that the only point of the Summit was to ratify, before a wider audience, the Australian Labor Party-Australian Council of Trade Unions accord. The Summit did us the great service of diagnosing the problem. It pointed to the remedy but in the end the Government, indeed many other observers, said that the remedy was too hard. It is simply not attainable; it is not in line with reality. I think that is the tragedy of the situation in which the Government has placed itself in this economic statement. Given the very considerable good will generated before, during and after the Summit, might we not have expected that there could have been some triumph of hope over experience, that the unemployed in Australia could have expected that that reality which stands in the way of their getting jobs might have been overcome? I remind the Government of Mr Hawke's words in the closing stages of the election campaign: There is a need for a new coalition-not the coalition of fear but the coalition of hope. I think the most damning thing that could be said about this Government is that it has put the reality squarely before the Australian people in the material that it put down at the Economic Summit and it confessed that it was unable to come to grips with the problem. That inability is in the face of surveys which showed quite clearly that the great bulk of the Australian people would support an extension of the wage freeze in the interests of maintaining and improving the employment situation. That has been written I suppose in every newspaper in the country in letters which are high enough for any Government Minister to read . I quote from one recent headline entitled 'Keep Pay Freeze, Say Most'. The article states: Most Australians want the wage freeze extended after next month. And most of these say it should be continued for at least six months. The sad fact of the matter is, as the Government has conceded, that industrial realities do not permit it to pursue that course which would help the unemployed in Australia. A number of things are made quite clear by this statement. It is clear that the Hawke Government gained office by a massive deception of the electorate. It promised expansion and it is practising contraction. It promised an end to monetarism and an end to calculators and it practises a real concern for monetary supply. It said that the calculators would be thrown away and it talks of nothing but the size of the deficit. It promised to put demand creating dollars into the pockets of pensioners and taxpayers and it has done the reverse . I really wonder which honourable senators on the Government side are able to look their constituents in the eye and truly say: 'We are doing what your elected us to do. We are behaving in the way in which we said we would behave before we were elected'. In less than three months in government there has been a reversal of form which is borne out, I believe, by the extensive quoting in this place today of what Mr John Hyde had to say. Who would have believed at the time of the election that this Government would be justifying contractionary policies on the basis of arguments in the newspapers put forward by Mr Hyde? I wonder whether the gentleman who took his seat-the new honourable member for Moore (Mr Blanchard)- will have very much trouble explaining to his constituents that their mentor appears to be the former honourable member for Moore who is supporting what is being done. I do not believe that honourable senators opposite can escape the irony of the quoting of those passages in support of the case of the Government today. What I have said about that might indicate support for the package. I must say that in the pre-election period I confidently predicted that all the promises of the then Opposition, soon to be Government, would be broken. But I wish to stress what I see as the key point of concern for Australia-concern about the question of jobs and the creation of employment. We have a clear demonstration by this Government that its wages policy cannot come to grips with the circumstances which are required to create greater employment in Australia. Reality is too strong for this Government. That reality is the reality of the trade union movement which can hold the line against a clear majority of the public in Australia. Until the Government is able to overbear that reality it seems that the promises it made to the Australian people last March will never be fulfilled. Senator GRIMES(Tasmania-Minister for Social Security)(8.30) —As arranged, Mr President, I shall speak briefly on the economic statement and the associated Bills, the Wheat Marketing Amendment Bill 1983, the Income Tax Assessment Amendment Bill (No. 2) 1983, and the Social Security and Repatriation Legislation Amendment Bill 1983, in what is, in fact, a second reading debate tonight. First, I should like to comment on the clever speech which has just been delivered by Senator Chaney. He has reprimanded the present Government because, in three months of government, we have not reversed the disastrous results of the previous Government's economic policies-policies which took that Government seven years to develop. It took that Government seven years to bring this country to the stage where it is, and seven years to be emptied out of government ignominiously by the electors. We are accused by Senator Chaney, after only three months of government and before being able to bring down a Budget at normal Budget time, of breaking all sorts of promises. Of course, Senator Chaney did not list those promises. But what is more important, at no time in his 25-minute speech did he make any positive suggestions about what his side of the House would have done if the present Opposition were in government- except to say, and to say it very indirectly, that it would have maintained the wages freeze. Not once during his speech did he put forward one positive suggestion. That is typical of the previous Government, and it is typical of the reason it was thrown out. It was thrown out because it had run out of ideas. It was thrown out because it had seven years in which to fulfil the promises that it made. I remind my colleague Senator Walters of one promise that it made-'We will reduce the tax burden'. Senator Walters —And we did. Senator GRIMES —In fact, as a percentage of national income, tax receipts rose from 23.3 per cent in 1975 to 25.5 per cent in the 1982 Budget. If the honourable senator regards that as a decrease in taxes, she had better go back to kindergarten. Every time the previous Government introduced tax cuts, those cuts went to people such as Senator Walters and her ilk, the more wealthy in the community, those who are insulated from the sorts of problems which face the disadvantaged people in this community. But let me bore the good senator opposite by reminding her and Senator Chaney that last August we were told in this place that the Budget deficit would be $1.5 billion. We were told that by honourable senators opposite and by the then Treasurer. We knew that it was wrong. We knew that it was phoney. We knew that it was introduced because the then Prime Minister wanted to have an election in September, if possible, and in November if a September election was not possible. He, unfortunately, was unable to do that. Later, the previous Government upgraded that deficit to $3,000m, and then to $4,500m. Senator Chaney, as Minister for Social Security, told us in this place that the outlay on unemployment benefits would be $1.5 billion, and we told him on that night that he was at least $300m short. He later had to admit that, and the then Treasurer, two months later, had to admit that the Government would be $600m short, and even that was a conservative estimate. We were told frequently-I hate to remind honourable senators of this-by the then Treasurer and the then Prime Minister that the deficit, if the previous Government's policies continued next year, would be $6 billion. We know that the Treasury told the then Treasurer and the then Prime Minister, just before the election, that it would be $9.6 billion. We know that the then Treasurer, the then Minister for Finance and the then Prime Minister, because there was an election campaign, deliberately chose to delude the people of Australia, deliberately chose to hide that fact from the people, deliberately deceived the people. As Senator Walsh said this morning, if the Parliament had been sitting then, the previous Prime Minister would have deliberately deceived the Parliament, because that is his form; that is obviously the previous Prime Minister's form. Senator Chaney will get very annoyed at this, because he always tries to protect his previous leader in this regard. Senator Chaney —I raise a point of order, Mr President. The statement that it was the form of the previous Leader of the Liberal Party to deceive the Parliament is objectionable and should be withdrawn. Senator GRIMES —As the gentleman referred to by the Leader of the Opposition ( Senator Chaney) is no longer a member of parliament and has not been a member of parliament for several months, I am under no obligation to withdraw that statement. The ACTING DEPUTY PRESIDENT(Senator Elstob) —There is no point of order. Senator GRIMES —Thank you, Mr Acting Deputy President. I am glad you know the Standing Orders a bit better than the honourable gentleman opposite. As I said, the then Prime Minister deliberately misled the people of this country and would have done so in this Parliament if he had had the opportunity. But he had dissolved the Parliament. In fact, he had called an election at a time to suit him. He was defeated at that election. Three months later we have the situation in which, whereas the previous Government for seven years tried to blame the Australian Labor Party Government of between 1972 and 1975 for all the problems which faced this country at that time, the present Opposition apparently will take the credit, if it can, for any ray of sunshine, including the breaking of the drought. That is a dreadful way to describe the breaking of the drought. The now Opposition will try to take the credit, if it can, for its period in government for even such a thing as the breaking of the drought and for any ray of sunshine which appears on the economic front in this country. The simple fact of the matter of which we have to remind the Opposition over and over again is that we came to power knowing that we had an horrendous unemployment situation, that the level of unemployment was going through the roof and that from May to October last year the trend in unemployment in this country was the complete reverse of what it had been in previous years. In fact, at the same time inflation and interest rates were increasing. That was the situation which faced this Government when it came to power. That situation was only aggravated by the fact that this country, this Government and this Parliament had been misled about the state of the economic situation in relation to the Budget deficit. We came into power and the first thing we did at the first Cabinet meeting was to announce that we would have the economic summit which had been announced by the Prime Minister (Mr Hawke), then the Leader of the Opposition. Incidentally, we announced that we would increase the unemployment benefit for those without dependants, which was also a promise made in the election campaign. We set in train the introduction of a national health insurance program-Medicare-which was a firm promise made by us when we were in Opposition. At the National Economic Summit Conference those of us who were privileged to be present sat in this Parliament with business leaders, representatives of the welfare community and representatives of the trade union movement in this country. Over four days we discussed the sorts of problems which were facing this country and how we might solve them. The result of that Summit was universal praise. The economic commentators and leaders of the business community in this country said that at last people were actually getting together and discussing what was wrong and what might be done. There was only one jarring note at that time and, of course, that came from the now Leader of the Opposition, Mr Peacock, and the Leader of the National Party, Mr Anthony. But even people in the Opposition such as Mr Macphee and others who take a more reasonable attitude to this matter said that the Summit had been a worthwhile and useful exercise. The Government then looked at the difficult problems which were facing this country-not the least being the horrendous deficit-and brought down an economic statement. It was not a Budget but certainly it was a statement which should be seen in the context that a Budget will be brought down later this year. The Government brought down policies in that statement which, I put to the Senate, have been more than well received by the vast majority of people in this community. We introduced programs to stimulate the housing industry and the development of housing in the community, the housing industry at present being at its most depressed since 1961. The building industry and the permanent building societies have universally praised the measures put forward by the Government in its economic statement because they are aware that the measures will result in an increase in construction, an increase in the number of houses being built and an increase in stimulation to the housing industry in general. We introduced unpopular measures in some quarters. We had a debate this afternoon about the new arrangements relating to superannuation payments. I point out to the Senate that although there were complaints from some people, particularly people like airline pilots who receive large lump sum payments with very- Senator Walters —And all the people in Bruce. Senator GRIMES —I will talk about that in a moment too. We will not get away from that. I was referring to airline pilots who receive large lump sum payments and privileged tax provisions. The insurance industry and the superannuation industry-in fact, almost every economic commentator in this country-praised what the Government was doing. I note that the Deputy Leader of the Opposition and former Treasurer has not criticised those moves, unlike some churlish senators opposite. They believe in nit-picking and trying to sow confusion amongst people , especially those who will not be affected by these measures and some who will benefit from them. They try to sow these seeds of dissent amongst such people but the responsible members of the Opposition, industry itself and responsible economic commentators in the community are saying what Mr Howard, Mr Macphee and Mr Street said in this Parliament in 1979: The laws governing the superannuation industry and in particular the tax treatment of lump sum payments are unsatisfactory, unfair and opposed to the development of a national superannuation scheme. That view is also expressed in the report of the Hancock National Superannuation Committee of Inquiry and the report of the Asprey Taxation Review Committee. Despite all this and despite the fact that there has been so much comment from reasonable commentators, people in this place still nit-pick about the economic statement in this regard. I remind the Senate that the key issue upon which this Government was elected- it is a matter we are very much concerned about-is the plight of the unemployed. Unemployment has doubled; it had reached record levels and was continuing to rise inexorably under the previous Government. Therefore in the economic statement and in the policy documents and legislation which came down with it, as the Treasurer (Mr Keating) says: . . . the objective has been to frame our budgetary policies to contribute both to reducing unemployment and to winding back inflation. That is why in instituting the community works program, in winding back the deficit, in acting against unemployment to stimulate private industry and in acting to stimulate the building industry we have taken this line in the economic statement-the mini-Budget, if that is what people want to call it. We did it first of all so that we could provide some immediate stimulation for employment through the community works program and through the housing program but at the same time we could prepare the way for the Budget to promote a stimulation of both the public and private sectors in the community. We wanted to stimulate employment directly because it is a real problem. We were concerned also about the unemployed, in particular the single unemployed, who have been deprived of index benefits by the previous Government since 1978. That is why in the first couple of days of government we provided for an increase in the single unemployment benefit rate. Our aim will be to maintain a policy which is concerned with increasing employment in this community, which reverses the disastrous situation facing the housing industry and the building industry in general in this community, which is responsible and which does not promote the inflationary policies that the previous Government wished quite clearly to promote in its last Budget. At the same time we wish to show concern for those in the community who are disadvantaged. That is why we took the hard decision, realising that until we removed the anomaly which existed in the superannuation system, whereby the 40 per cent who were able to receive lump sums were subsidised by the 60 per cent who were unable to receive lump sums, we would not make the first step towards redistributing the welfare dollar in the community. Those decisions were not popular. One would expect from hearing Senator Chaney, the interjections from Senator Walters, and others in the community that the taking of those unpopular steps, which we had to take, had resulted in the Government becoming enormously unpopular. Yet in the Bruce by-election, sure, by misrepresentation and everything else, one per cent of the people changed their votes. Senator Walters —Oh, come on! Senator GRIMES —If that is the result of taking what Senator Chaney described tonight as horrendous economic steps and of doing what Senator Sir John Carrick described this afternoon as striking at the very heart of the Australian way of life and other motherhood statements, we do not mind; we will take such measures . The problem with the previous Government is that it talked about taking measures in the 1982 Budget. Senator Chaney told us that it was going to stop double dipping but six months later had to admit that it could not do so. He really ought to have said that it was not game. The previous Government talked about it when Mr Howard and Mr Street announced in 1979 that something would have to be done about the inequities of the retirement provisions of the superannuation funds in this country. It talked about it for seven years, and during all that time it tried to blame the Whitlam Government which had been in power for only three years and which had had its term of office interrupted by an election. This Government is a responsible government. This Government will continue to take responsible decisions, even if they are unpopular, and this Government will take courageous decisions if they are necessary. We quoted Mr Hyde's article not because he necessarily agreed with Labor Party policies, although he agreed with some of the things we had done, but because his article in essence was a call for the Opposition to be responsible and to judge what was done on the good it would do to this country. Yet I am afraid that last week in the Senate we did not get that. What is more, this week in the Senate we are obviously not going to get that. We will get nit-picking; we will get the sort of rhetoric we heard this afternoon from speakers on the matter of public importance; we will get a continuation of the inane interjections that we hear from the female senator from Tasmania. That disappoints me, because we never pretended, and do not pretend now, that we can solve the problems of this country after only three months in government. We are flattered that Senator Chaney tonight upbraided us for not solving the problems in three months. But I am absolutely certain that we can do a very much better job in three years than the previous Government did in seven years. We certainly will not have to go to elections early and make promises which we know we will have to reverse as soon as we get to power, as the previous Government did at the last election, the election before and the election before that. In fact, the people of this country respect the people who make hard, courageous and difficult decisions. They will continue to respect the actions of this Government, as they did after the statement by the Treasurer (Mr Keating) on 19 May, and they will continue to do so after the Budget in August this year which will be the completion of that program. Senator HILL(South Australia)(8.50) —The economic statement was particularly disappointing in its omissions when it purports to be indicative of the direction the Government intends to take. My leader, Senator Chaney, spoke in a general way of its failures but I want to look at one omission. Senator Grimes has called for positive suggestions from the Opposition. I hope I can give him some. They are from a report that was in the hands of the Government at the time of the mini-Budget and upon which the Government should have acted. The omission that I particularly want to look at has been spoken of by the shadow Minister for Science and Technology, Dr Harry Edwards, who condemned the Government for taking no positive action in the mini-Budget to help launch high technology industries. We should not be surprised at this omission from the mini-Budget. The inertia against change within the Labor Party had earlier been forecast when the Minister for Science and Technology (Mr Barry Jones), in a speech to the National Science Forum said, in far too dramatic a way for the Government to accept: . . . our decline in manufacturing employment is not a temporary anomaly to be rectified by tariffs, wage freeze, bounties, quotas and other fiscal measures-or Buy Australia campaigns. He announced: I will . . . be presenting a paper to the Economic Summit Meeting in Canberra next week which, as you would expect, puts a very heavy emphasis on science and technology. Of course, his invitation to speak was withdrawn. It was publicly reported that his speech was too controversial. There has recently been a growing recognition that the Australian economy is undergoing fundamental change. It is a pity that that fundamental change has not been recognised by the Australian Labor Party. Regrettably, that change has not been planned or guided. It has come about because it is inevitable as enterprise and economies accept the need for efficiency to survive and realise the role that products of the technological revolution can play in that challenge. It is a fundamental and structural change. That was not appreciated by the Labor Party , as is evident from its mini-Budget statement. It is a structural change over and above the current world recession. Although that recession has on the one hand tended to accentuate the pain of change by more rapid dislocation, on the other hand it has sharpened the distinction between those embracing the benefits of change and those who have attempted to reject the inevitability of that change. Its most marked public posturing has been in its effect upon employment in manufacturing where, despite considerable government protection in many areas, employment in Australia has fallen by over 100,000 people, or 8 per cent, in 12 years to June 1981. The Deputy Leader of the Government in the Senate, Senator Grimes, said a few minutes ago that his Government had come to power for a particular reason-to overcome that shocking unemployment. The current Minister for Science and Technology, Mr Barry Jones, has, I believe correctly, said: We do not have an industrial society in decline and needing temporary support to restore but a new kind of society based on a different economic basis ( knowledge and skill rather than on raw materials and muscle power). Extractive and primary industries, important as they are, will be insufficient to maintain an improving standard of living for Australians, although the enormous natural advantage Australia has in these areas, and with a small basically well educated population and a stable system of government should have provided an excellent launching position. It will be the nations with high skills which produce goods and products which will be strong and wealthy in the future. Look at the tremendous growth rates of countries such as Japan, Taiwan, Singapore and now, South Korea, which evidence the fact that ready availability of natural resources is not essential. Not even the oil price hike slowed Japan. Lest it be said that the Asian nations have started from a lower base, which is of course true, look at Switzerland, Sweden, Denmark and the Netherlands. In Western developed societies the nations with the greatest increases in GNP since 1955 have lacked natural resources and instead have put heavy emphasis on the development of skills. Senator Tate —What about arms expenditure? That is a very important factor; the fact that Japan does not spend very much on arms. Senator HILL —We would all very much like to see a world that spent less on arms . We are most certainly in agreement. Senator Tate —There would be more money for technological development. Senator HILL —That is very true, I agree. In fact it might be said that natural wealth has encouraged apathy, whereas those without natural advantage have more readily accepted the challenge of change. It is this challenge of change that the new Labor Government will have to face up to. Change itself is not bad. Those of us who accept the concept of a dynamic economy realise that it will be continually changing and developing desirably for the benefit of all. To adopt the words of the cover story in this week's Time magazine on the subject of the new economy: Yet even as the lights are dimming in some old line industries, technology is spawning boundless opportunities in such esoteric fields as micro electronics, lasers, fibre optics and genetic engineering. It is pity that the draftsmen of the mini-Budget did not bear that fact in mind at the time of drafting. The example was given of the Apple Corporation in the United States of America which, in six years, has evolved from a two-man operation in a garage to a corporation employing more than 4,000 people in permanent jobs, not temporary, part time jobs. On the subject of developing high technology enterprises for Australia, the report of the Espie High Technology Financing Committee was in the hands of the Government at the time of drafting the mini-Budget. It stated: Major studies in USA have shown that nearly all the net new jobs in the private sector are created by young, high growth companies. What is of great concern to Australia, as was observed by the report, is that Australia is failing totally to generate new establishments which grow to replace those being lost. I understand that of the 50 largest companies operating in Australia only four, all overseas owned, have been formed since 1936. In Australia the tendency is rather towards consolidation, towards already existing companies, and new industries are being taken up by foreign companies. It is what the Minister for Science and Technology, Mr Barry Jones, has referred to as the corporate profile of an aging country, not a new one. It is a pity that the Government did not bear in mind the very correct words of its relevant Minister in that regard. Indeed, it is stated in the Espie report: Australia's performance in the high technology sector is being outstripped by many of its developing neighbours in the Asian region. These are the countries to which we should be exporting technology. What we are looking at is increasingly paying for high technology products from developing countries-not just mass produced items-from our exports of mineral resources and primary production and, therefore, increasingly importing unemployment. That particularly is what this new Labor Government should appreciate. What is happening, as is stated in the report, is that the trend in Australia is to a de -industrialization process rather than the normal progression for a post- industrialised society. The Espie Committee was, of course, an initiative of the Fraser Government, which may soon be forgotten. Its task was to examine problems facing the creation and growth of high technology enterprises in Australia. First, it emphasised the important potential of high technology enterprises in employment and wealth generation in the Australian community which, the report states: . . . have the potential to create demand not only for highly qualified employees but for a broad cross section of skilled and unskilled employment and recognized a number of obstacles in the development of such industries. Time does not permit me to detail the obstacles, but they cover areas of lack of management skills and the failure of education in that regard; the need for ever continuing and substantial research and development expenditure because of the high rate of obsolescence of high technology products; deficient effective interaction between high technology enterprises and academic and research institutions; the lack of a well developed industrial technology infrastructure necessary for the supply of specialised components and technical services to its high technology industries; continuing loss to overseas of good, technically qualified people because of a lack of business employment opportunities in Australia; similar loss of Australian inventions; lack of resources and skills to market high technology products; alleged reluctance of the Commonwealth Government to purchase Australian high technology; and a general community attitude unsupportive of entrepreneurship and profit making. In each of these areas of obstacle the Committee proposed solutions. It is these solutions that the Government should have referred to in its mini-Budget. Of course, none of the solutions raised was mentioned. But above all, the report identified and made recommendations in relation to the financial obstacles inhibiting the development of high technology enterprises in Australia. On one of the financial obstacles the report stated: High technology entrepreneurs have unreasonable difficulty in raising finance for the start up and early growth phases of their enterprises . . . The report lists a further five obstacles. To save the time of the Senate tonight I seek leave to have them incorporated in Hansard. Leave granted. The document read as follows- (b) Equity finance, which is the appropriate funding for the start up and early growth phases, has rarely been available in Australia. Loan finance, when it can be obtained, involves servicing costs which compound cash flow problems. (c) The Australian finance market has a serious gap, namely the lack of a venture capital market(1) with an established modus operandi, identifiable physical location, specialised skills, entrepreneurial attitude and ongoing multiple sources of funding. This deficiency substantially reduces the prospects for start up and the chances of success for Australian high technology enterprises compared to their counterparts in other countries such as the USA. (d) The difficulty in trading in shares of private companies in Australia inhibits venture capitalists from taking and reinvesting their gains and is an impediment to the establishment of a venture capital market. (e) Given the absence of a venture capital market, existing financial institutions such as banks(1) are currently being requested to fulfil an inappropriate role as providers of capital for start up and early growth and have refrained from filling this role. Furthermore, the current restriction on interest rates for small business overdrafts discourages banks from lending to high risk ventures. (f) While Australia does not have a generally applicable capital gains tax, the Government has been forced to adopt a variety of measures to overcome tax avoidance. Two examples of these, which severely penalise many high technology enterprises and discourage prospective venture capitalists, are undistributed profits tax on private companies and the tax treatment of share issues to key employees. (1) This is a highly specialised financial service. It requires an ability to assess the commercial implications of specific technologies, the judgment to select high growth ventures where market prospects are uncertain, and the capabilities to provide advice and support to management at critical periods in the development of enterprises. Private venture capitalists also need to develop a well balanced portfolio of equity investments to obtain the rates of return needed to offset the uncertainty of individual ventures. These returns are achieved by overseas venture capitalists primarily through taking gains on the value of shares rather than through dividends. Senator HILL —The question that immediately comes to mind is whether the Government need concern itself with more than the macro- economic matters of attempts to lower inflation and interest rates in order to provide an answer to the financial obstacles which have been recognised in the report as necessary to be overcome in the development of high technology in Australia. It is interesting that Espie says on that subject: This Committee knows of no country which has succeeded in establishing a climate for investment in high technology enterprises without the Government taking positive action and, at a minimum, adopting a catalytic role. Espie believed government could take a priority role in overcoming the deficiency that the Australian society has no effective vehicle for marshalling its people's savings towards the equity funding of new industrial enterprises. To the Committee, government incentives were necessary to channel capital into the crucial start-up and early growth phases of enterprises-that is, the phase when the market potential of an enterprise and its products, and the eventual returns to an investor, are most difficult to forecast. Espie sought the best vehicle or mechanisms for the flow of venture capital to high technology enterprises. In particular, he assessed venture capital companies-that is, small specialised financial organisations which provide 'seed ' start-up and development capital and management guidance to new businesses such as those operating in the United States of America. He also assessed a new government venture capital authority of which there are numerous overseas examples, including the Japanese Development Bank, the British Technology Group and the Irish Industrial Development Authority. A variation in the form of an innovation authority was recommended some years ago in the report of the Crawford Study Group on Structural Adjustment. He also looked at an expaned role for existing government owned financial institutions, particularly the Australian Industry Development Corporation or the Commonwealth Development Bank of Australia. Espie also considered direct incentives, say in the form of a taxation benefit for an investment in new high-tech enterprises with perhaps mandatory management guidance. Further, he assessed incentives directed to large corporations to set aside funds for investment in growth business. He also considered support for innovation centres, being centres typically providing advice and resources to assist in commercialising new technical ideas of which examples exist in the United States, Denmark and the United Kingdom. The Committee saw greatest merit in venture capital companies. It then looked at the best method of attracting venture capital to such companies and considered the provision of a special tax incentive to equity investors, direct government grants, a government loan, subsidised loan or loan guarantee and methods of government persuasion. It recommended that the Government should take urgent action to encourage the creation of private investment organisations to provide management guidance and equity capital for the start-up and early growth of eligible businesses with high growth potential. That is a recommendation which, with respect, should have been taken up by this Government in its recent mini-Budget. Investors in what would be called 'growth business investment management companies' should, it is recommended, receive a full tax deduction for equity capital paid to a GBIMC up to an amount approved by a licensing board. A minimum of $200m over five years should be permitted. The cost in terms of gross revenue forgone would be about $20m a year for five years. The cost to government would, therefore, be negligible compared with potential benefits. The proposal has been applauded by the Liberal shadow Minister, not only because of the low cost involved, but also because there would be no government involvement in the key areas of picking commercial winners and losers. But the Government failed to so act in last week's mini-Budget. In fact, the disincentive to investment by small investors-the double taxation of dividends- which had been partly relieved by the last Liberal Government, an act which I then applauded, was reinstated. One suspects that if the Labor Government acts at all, it will lean towards government funding through government corporations with government involvement in the decision-making process. It will be adverse to the minimum government interference approach of the Espie committee. I hope that when the matter goes to Cabinet for consideration the Minister will remember what he said on 5 April. He stated: I am the first to concede that government's have had a poor track record overseas in providing assistance in high technology investment. On 16 May this year, only a week or so ago, Professor Slatyer, President of the Australian and New Zealand Association for the Advancement of Science Congress, said: Immediate action must be taken to increase Australia's level of technological innovation if the country is to improve the productivity of existing industry and develop new industries. He identified, with low levels of participation in education and industrial research and development, a lack of venture capital as a major contributor to Australia's poor technological performance. The Espie committee has set out a well researched and documented recommendation. The Time magazine article stated: Technology has set off a scramble for jobs, profits and global markets. Australia must not be left behind. Australian manufacturers must continue to utilise the advances of high technology in a continuing quest for greater efficiency. It must be recognised that innovation can lead to growth and new employment opportunities. The high technology entrepreneur must be supported. Senator COOK(Western Australia)(9.7) —I have been caught short because I did not expect my colleague (Senator Hill) to finish speaking so quickly. However, he did make a valiant attempt to do what more senior members in his party have failed to do; that is, answer the challenge issued on page 16 of the economic statement where the Treasurer (Mr Keating), in talking of the Opposition, stated : If they say that they would have taken steps to reduce the 1983-84 Budget deficit as much as we will do in this statement, or more, then they accept our measures or propose alternatives. What would they have done? What would they have done for job creation and housing? What tax expenditures would they have amended? I look forward to hearing their alternatives. That is what the Treasurer said on 19 May in bringing down the economic statement. I believe we would be entitled to hear a response. Certainly, we heard no response from the Leader of the Opposition (Mr Peacock) in the House of Representatives. One can comb his speech, which bears a remarkable similarity to the speech delivered here tonight by Senator Chaney, and find it thick on rhetoric and thin on constructive propositions. No alternative package is canvassed by the Leader of the Opposition. Although we might not have much confidence in his economic ability, we expected to see something positive in the contribution to the debate in the House of Representatives by the honourable member for Bennelong (Mr Howard)-to use the words of my colleague Senator Walsh, the discredited former Treasurer of Australia. Nothing in Mr Howard's speech either could be classed in any sense as a constructive proposal. The only proposal, that put forward by Senator Hill tonight, seems to borrow very heavily from the Minister for Science and Technology, Mr Barry Jones. In terms of there being a credible alternative and meeting the challenge of the Prime Minister (Mr Hawke) to put up or shut up, the Opposition, on its performance, ought to shut up because it has produced nothing that is at all constructive. That is not surprising because, as we saw last week, the Opposition cannot claim credibility for its economic philosophy or economic policies. We saw in the Sydney Morning Herald on 26 May that Mr Macphee, Mr Howard and other members of the Liberal Party are factionalising over what should be the Opposition's wages policy. Senator Messner —Tell us what yours is. Senator COOK —Our wages policy ought to be well known to the honourable senator. If it is not, I will send him a copy of the prices and incomes policy. It is a comprehensive wages policy that gives reasonable and rational expectations to the work force and enables there to be an equality of sacrifice across the community. That is opposed directly by the lack of any wages policy by the Opposition. The newspapers report the Opposition's factionalism. It still cannot agree. It was not able to agree in January last year when its present leader, then back bencher Andrew Peacock, claimed that the Fraser Government did not have a coherent wages policy either. The Opposition cannot debate the economic scenario in Australia and not produce a proposal on that front. While it carps and harps and attacks what happens with wages in the real world, the absence of any cohesive view from the Opposition makes all of its criticisms meaningless. Senator Walters —Are you trying to tell us that it was not Fraser who brought in the wages freeze? Are you really trying to tell us that? Senator COOK —The honourable senator knows that the wages freeze is not a wages policy. The wages freeze is in fact the negative of a wages policy. It has nothing to do with there being a coherent wages policy. It has to do with reducing wages and trying to pretend that with the consequential reduction in aggregate demand in the economy there will be some form of resurgence of economic growth. I turn now to what I regard as a somewhat remarkable speech-remarkable for its thinness of logic and understanding-by the Leader of the Opposition in this place, Senator Chaney. Senator Chaney, in a speech reminiscent of that delivered by his leader in the other place, tried to make a falsehood stick. He tried to argue that the Labor Government was guilty of broken promises. Of course that is an accusation that comes passing strange from a party whose record of office is to break the promises that it offers to induce electors to vote for it at election time. Nonetheless now being directed against the Labor Government is a continual harping on the slogan 'broken promises' in the fond belief, I believe, that if it is repeated often enough some people might be misled into believing it. The allegation made by Senator Chaney and his colleagues in the other place does not stick. I remind Senator Chaney, before he bows out of the chamber, and other honourable senators that prior to the election the present Prime Minister and Treasurer made it clear that if on gaining office they found that their understanding of the economic situation had been wrong because the position had been distorted and misrepresented, and it became apparent that the Australian community had been less than well advised by the former Government, and if following the National Economic Summit Conference a different view came forward, they reserved their right to alter the economic direction. That was made crystal clear prior to the election. What did we find? We found that it was indeed a prudent statement because after the election-just a day or so after-on Treasury being consulted, we discovered that the Budget deficit was in fact of the order of $9.6 billion. Prior to the election, the then Treasurer had led the community of Australia to believe that the Budget deficit was to be more like $6 billion. Senator Messner —Which year are we talking about? Senator COOK —We are talking about the Budget deficit as projected by Treasury. Senator Messner —For which year? Senator COOK —For the current year. The projected Budget deficit as informed by Treasury to this Government upon its taking office was said to be of the order of $9.6 billion. Senator MacGibbon —Which financial year? Senator COOK —The former Treasurer, Mr Howard, was arguing that it was in fact of the order of $6 billion. Senator MacGibbon —Which year? Senator COOK —I have answered that interjection. Does the honourable senator want it answered again? Senator Messner —Which year? Senator COOK —I have already answered that question. Senator Walters —I raise a point of order, Mr Deputy President. The honourable senator is misleading the Senate. He is certainly misleading this chamber. I ask him to withdraw- The DEPUTY PRESIDENT —Order! Senator Walters, that is not a point of order; that is a debating point. Senator COOK —I turn to another argument that has arisen in this chamber. It resulted from the Opposition taking its place in the Parliament and attacking the significant achievements of the Hawke Government in terms of the National Economic Summit Conference. Most editorialists-in fact all that I have read-and most independent commentators have praised the initiative of the National Economic Summit. Indeed, one of the significant features of it was that for the first time a massive amount of real information about the performance of the economy was made available to the Australian community. What the Opposition in this place and in the other place has tried to do is to attack the achievements of the National Economic Summit. Opposition senators have argued-I think with some justification-that the unemployed were not directly represented at the Summit. However, from that, Opposition senators have gone on to pretend that they can therefore represent the voice of the unemployed. At the National Economic Summit Conference the Australian Council of Social Service was represented. It is a body which is better able to articulate the needs and aspirations of the unemployed on an organised basis than almost any other in Australia. Today and last week Opposition senators have criticised the Government's superannuation proposals. I say to them that they cannot have it both ways. They cannot criticise the superannuation proposals of the Government and, at the same time, argue credibly that they somehow or other represent the aspirations of the unemployed. Bruce McKenzie, the official representing ACOSS at the National Economic Summit, articulated the problem in these terms: Tax concessions for superannuation are valued at around $2 billion a year. They remain the cherished privilege of less than half the workforce, while those without work have to beg for small increases in their income security payments. The freezing of some of these meagre payments, such as those relating to the children of pensioners and beneficiaries, has brought 700,000 children face to face with poverty. It is absurd to suggest that such people can sacrifice more. If we are talking about the need for a government to obtain revenues to look after the interests of the unemployed and float expensive job creation programs and inject money into housing development, a government inheriting a Treasury as threadbare as the one this Government inherited, needs to address itself to the principle of equality of sacrifice. The argument of the Opposition would be more convincing if it were able to come forward and say what its equality of sacrifice would be. Senator Peter Rae —What incredible garbage! What about job creation through investment? Has that occurred to you at all? Senator COOK —Job creation through investment is the basic engine of economic growth for this Government. This Government is committed to a level of economic growth that, over the next three years, will create half a million jobs. The main device for doing so will be growth in the economy. I now turn to the logical, orderly and clear concept of what is needed by this Government to improve the economy. We started out with a prices and incomes policy which was endorsed by the people. We then moved to the National Economic Summit Conference and invited the people of Australia to come together on the basis of real knowledge and information as to what was happening in the economy, and from which Summit a communique was issued that provided a unity of purpose in many key respects. We then moved from that position to give expression to the needs of the Summit and the prices and incomes accord in the May economic statement, and from that we will move to the Budget for next year. We have developed a cohesive and coherent progression. We have a platform endorsed by the people. We have brought this country together. The economic statement has helped us to shake out some of the problems we have inherited and put us in a position for further growth. As to whether we have inherited problems-since that seems to be the main thought entertaining a number of honourable senators opposite-let me quote from the Australian Business magazine of 24 March. Referring to the position of the Australian Labor Party Government, it states: 'The Labor Party was left sitting on the eggs of the serpent.' With the blessing of hindsight that is how one senior Labor Man of the Scullin Cabinet described what happened when Labor came into power in 1929. The claim that Stanley Bruce, the outgoing conservative Prime Minister, deliberately lost the election in order to give Labor the responsibility for taking the country into depression is probably no more true than saying much the same about Malcolm Fraser. But it was true then and it is true now that Labor found itself incubating the eggs of the serpent. Malcolm Fraser has bequeathed a dangerous legacy to Labor in the form of the 1982-83 Budget and what that means to the Budget to be brought down in 1983-84. One of the key problems that confronted us as a government in framing the economic statement was the costs imposed on the economy after the election, by virtue of the Budget that was brought down before the election, that transmitted costs up the calendar. There is no doubt that many of the programs announced in the Budget last year by the Fraser Government were designed to try to make that Government appear to the electorate as one that ought to be returned to office. There is no doubt it was a political Budget. There is equally no doubt that it has now imposed upon this Government a series of costs and promises that have added to our deficit and harnessed us with the problem that this May economic statement addresses. The first point that I think needs to be made about the May economic statement is that, in terms of costs on the consumer price index, it imposes, in a full year, a cost of 0.17 per cent. In terms of pressures on wages that is a negligible cost. If one considers the supplement of Medicare to be introduced from 1 February, one sees that its cost and associated savings in terms of the consumer price index will help redress the ship and bring the economy around much more. Senator Peter Rae —Do you mean the deck chairs will slide to the other side of the deck, like the Titanic? Senator COOK —It is better than the Titanic the former Government was in charge of. The other aspect of the mini-Budget is to create employment by establishing a housing program. This will mean that the increase in housing loan approvals that we have seen since the election of the Labor Government will be built upon and that 130 to 135 homes will be built in the second half of 1983-84. The economic statement provides in the period 1983-84 for the allocation overall of $733m to job creation initiatives. That is an increase of $383m or, as the statement says, 110 per cent over the 1982-83 period. The economic statement comes hand in glove with legislation that the Government has introduced in the other place to wipe out bottom-of-the-harbour tax avoidance and to improve the situation in an area that the former Government failed to do anything about. It remains a national scandal and a national monument to its inability to manage the economy. It is interesting that honourable senators opposite have been critical of the May statement in the way they have been. But I think that they ought to be reminded that their criticism is not shared by important sectors of the Australian business community. After the economic statement-- Senator Peter Rae —I suppose you will quote another March statement to support your comments on the May statement. That's what you have done so far. Senator COOK —Senator Rae might be interested to know that I am going to quote the opinion of the Confederation of Australian Industry on the May statement. He may not be interested in what the Confederation of Australian Industry said, simply because it might support our position and make his untenable. That does not in any way prevent me from quoting it and putting it on the record. The Confederation said: Although it imposes additional sacrifices on some sections of the private sector, the Confederation of Australian Industry believes that, in broad terms, the Government's Economic Statement is responsible. An initial assessment suggests that the economic statement is a constructive and genuine attempt to simultaneously fight the twin evils of inflation and unemployment, and contain the increase in the Budget deficit, while also providing some stimulus to economic recovery. Senator Peter Rae —Now quote the full statement. Give us the rest of it. Senator COOK —If the honourable senator wants the rest of it, I will read over the page. It continued: It is clear that this strategy can work only if there is a strong and sustained commitment to moderation in claims for higher incomes, particularly wage increases. The Government's reiteration of its view that there must be a recovery in profits from their present historically low levels to ensure restoration of prosperity is welcomed. Senator Walters —What are you doing about that? Senator COOK —We have a wages policy. That wages policy will be presented in due course to a hearing of the Australian Conciliation and Arbitration Commission. While the honourable senator may not respect that body, it is the body to which the Australian Government goes to put its wages case and where the Confederation of Australian Industry and the unions will go-and the arbitrator's decision will be accepted. In terms of support for what the Government has done, I cannot do better than rely upon the statement of the Confederation of Australian Industry. But it is not alone. Senator Peter Rae —You just cannot understand the subtleties of the way it expresses itself. Senator COOK —Senator Rae will get a chance to speak later. He cannot deny that what the Confederation says endorses the proposition. It is not alone, of course . Many other organisations and public figures have joined in the acclaim of the Government's statement. One other organisation that I select to show the breadth of public support is the Council of Social Services of Tasmania. A Mrs Jane Longbottom is reported in the Hobart Mercury of 21 May as having said on that day that the Council 'welcomed the Government's mini-Budget as a first step in achieving the goals of the Economic Summit'. I think that in view of that comment it really ought again to be the considered position of the Opposition to stop carping, to stop its negativity and to stop throwing mud and to look constructively at what can be done to resurrect and reconstruct the economy of Australia. There is no greater task before us. The Opposition, while it might be politically uncomfortable for it, ought to join the multitude, join the consensus, and support the direction of economic management of this Government. Senator BJELKE-PETERSEN(Queensland)(9.31) —In this cognate debate I wish to refer to the Government's economic statement and also to the National Economic Summit Conference which was held in April, for I consider that these matters are interrelated. A great deal has been said about the Hawke Government's first so- called step towards bringing Australia out of its present economic malaise and back into the realms of prosperity. Indeed, if one job had been created every time the words 'consensus' or 'conciliation' were uttered over the past two months I am sure we would not have an unemployment problem at all. The Summit Conference was designed to bring together all sections of the community which influenced the Australian economy to achieve a consensus approach on the best course of action for Australia's economic recovery. I must admit that I would have thought it would be obvious to a student of economics such as the Prime Minister (Mr Hawke) assures us he is that what this country needs is not a mini-Budget but a policy of wage restraint, or the wage pause as brought in by our Liberal-National Party Government, combined with an increase in private capital investment, increased Government expenditure on works, less taxation and therefore greater consumer spending. I am only sorry that Senator Cook, who preceded me, just did not realise that he was not speaking to trade unionists in a trade hall debate. As it turned out the Economic Summit did not represent all sections of the community. The Prime Minister, in his election policy speech, said: No Australian resource is more important than our land. No sector of Australian industry is more important than our great primary industries, which still provide 50 per cent of Australia's export income in normal circumstances. Yet this so-called most important resource had only one representative at the Economic Summit. The mini-Budget attacks primary industries right, left and centre. Unfortunately, the mini-Budget discriminates against farmers and people living in country areas. The farm sector is being asked to meet a disproportionate share of the cost of stimulating housing and employment. Sadly, rural people will be contributing one third of the total estimated savings of $ 985m outlined in the mini-Budget. Country people now face an increase in petrol prices, telephone charges and aviation fuel prices. They will pay more tax as the result of changes to income averaging provisions and the extended period of depreciation on plant and storage facilities. When one considers that rural people in most of Australia have suffered firstly a terrible drought and now the worst floods for many years this Government's total disdain for country people is very sad to see. Industries Assistance Commission figures confirm that farm assistance dropped to 8 per cent in 1980-81. This compares with a current rate of assistance to manufacturing industry of 24 per cent-that is, three times the level of assistance to farmers. The other day I received a letter from a lady who lives at Gatton. She said she was stirred about the unfair treatment of farmers in Labor's recent economic package. She said she hoped I would voice my opposition to it, which I am certainly glad to do. She said: As a mother, I am even more concerned by the apparent serious consideration which the federal government is giving to reducing their payout for family allowances. On a recent 4WK two way radio programme a Social Security Department employee outlined a cut back based on gross income. In each of the past three years an average of 40% of our gross income has been consumed by essential operating costs before we can begin to budget for financial commitments, living expenses, taxation and unavoidable updating of plant and machinery. I would think a proportion of self-employed parents face an even greater outlay for operating costs. She went on to say that it seemed to her a reasonable assumption that the more money parents have the more they would spend on their children. She said: Therefore I see the child endowment payments as being a meagre return on the various taxes that swell the national coffers as all parents, regardless of income level, provide for their children. Parents are involved in loving and caring for the world's greatest resource. Let us not see that task go totally unassisted by Australia's Federal Government. There is a great need to uphold the traditional family. I hope that, at the very least, allowances are left unaltered. There is no doubt that the decision to cancel the Bicentennial Water Resources Program was short-sighted. Of course, much water has gone to waste in the floods which we have just experienced. That water could have been stored for future use for when we have another dry period. We all know how often such periods occur. On 19 January 1983 the then Minister for National Development and Energy, Senator Sir John Carrick, announced further offers of assistance to Queensland for both ongoing and new projects under the National Water Resources Program. This included $2.7m for the Eton irrigation project near Mackay; $1m to assist stage two of the Leslie Dam near Warwick; and the Herbert River flood mitigation project was to proceed. Altogether Queensland was to share in this National Water Resources Program for 1982-83 to the extent of $9.85m. On 25 January the previous Prime Minister, Mr Malcolm Fraser, said: Australia ought to be looking at water resource and water conservation programs . The former Federal Government had planned to spend $640m over the next five years on water resources development projects around the nation. I consider that cancelling such a very important program for our country people was a very short -sighted decision. Small business, that sector of the business community which employes in excess of 60 per cent of the Australian work force, was not adequately represented at the National Economic Summit Conference. The women of Australia, those of us who make up over half the Australian population, were not invited to contribute in any meaningful or significant way, although the Minister Assisting the Prime Minister for the Status of Women, Senator Susan Ryan, took her place at the Conference. I wonder whether the fact that we did not have so very many women there indicates what is meant by discrimination against women.The fact that women were omitted from the Summit hardly makes it representative of the Australian community. There has been a great deal of talk and backslapping about the consensus which was achieved at the Summit. Certainly, consensus was achieved because no decisions of substance were made. All that euphoria and good will were not channelled into economic energy and decision-making. The Prime Minister can be well satisfied that an elaborate and costly public relations exercise, televised throughout the nation, conditioned many Australians to accept restraint, particularly if it can be claimed that the sacrifices are borne equally. Senator Cook —Mr Deputy President, I raise a point of order. The honourable senator is reading her speech. The DEPUTY PRESIDENT —There is no point of order. This matter has been discussed many times. I am sure Senator Bjelke-Petersen is using copious notes. Senator BJELKE-PETERSEN —Thank you, Mr Deputy President. I noticed an honourable senator opposite certainly had copious notes as well. The results, I must admit, in the Bruce by-election prove that many people feel that the sacrifices asked for in the mini-Budget are far from equal. Senator MacGibbon —What was the result in Bruce? Senator BJELKE-PETERSEN —The result in the Bruce by-election was a substantial win for the Liberal Party. I was very delighted to note that result. The people in that electorate realise that what the present Government has done has certainly meant sacrifices have not been borne equally. The Chinese sage, Confucius, once ob- served: 'It is no use running even harder if you are running on the wrong road'. I think that is a point that we want to remember. The Summit showed that there is little difference between big government, big business and big unions. The Summit probably helped to add to the general understanding of the severity of the economic problems that are facing Australia , but it did not actually solve any problems. I wonder what people feel was achieved. Most said that unemployment was the major problem to be tackled. Whilst everyone agreed on that point, nothing seemed to be done about it. I was interested to read in the Australian not so long ago a statement by Dr Klugman who was said to have told Caucus that the Government should get on with the things for which it had been elected. He said: We were elected to create jobs. In fact we are trying to stop Tasmanians from working. Senator Walters —Not to take away jobs. Senator BJELKE-PETERSEN —That is exactly what he said. This Government now has to face the formulation of a sound economic policy. Despite the fact that the mini-Budget made $300m available for a community work scheme which will provide some thousands of jobs for about six months-I am glad to know that this has been done-it is certainly nowhere near the 500,000 jobs that were promised in the election speech by the Prime Minister. Senator Gietzelt —Give us a go. Senator BJELKE-PETERSEN —Some thousands of jobs. I guess some thousands of people will be happy that they have work for six months. I point out that other decisions by this Government have meant the loss of jobs for people. I refer specifically to the cutting out of work on the Townsville Airport. I also mention the $20m that has been cut out on the Brisbane Airport work. It is a shame that a lot of jobs have been lost there. Senator Martin —It is very selective. Senator BJELKE-PETERSEN —That is right. Queensland is being penalised. Senator Walters —So is Tasmania. We are losing Wynyard. Senator BJELKE-PETERSEN —Yes. Many jobs are going by the board, including 1,200 jobs that have been lost at the Ben Lomond uranium mine. The Bradfield scheme has been cancelled. That proposition could have produced many jobs in North Queensland. Gold Coast home units were not allowed to proceed. These were all projects that would have allowed good employment opportunities in Queensland. Mr Keating has rightly been called the abominable no-man. Senator MacGibbon —He was just a union organiser before he came here. Senator BJELKE-PETERSEN —I do not know about that. I do not think he is doing too good a job as Treasurer. There is no doubt in my mind that the Government has abrogated its responsibilities. This Government was elected to govern. Admittedly, even novices in government need advice, but that advice should come from the right quarters. I do not think that we needed a Summit to tell us that inflation needs to be reduced, that wages should be kept down and that tax reductions should be forthcoming. I am quite sure if Mr Hawke wanted to achieve consensus on anything, he would achieve it on the fact that we need tax reductions. He would have no trouble on that issue at all. I am still convinced that the National Party's proposal for a single rate of tax of 25 per cent has much to recommend it. Holiday loading and penalty rates are two other problems that need to be tackled by the Government. The Summit enabled Mr Hawke to abandon many election promises which, in actual fact, were never really on. I would like to know what happened to some of the promises that the Prime Minister made. He promised to provide immediately reductions in income tax; to retain the tax rebate for home loan payments. He also promised to introduce a first home ownership assistance scheme as an alternative to the existing Home Deposit Assistance Scheme, which will be retained. He promised not to increase tax on lump sum superannuation payouts. That promise seemed to go by the board. He also promised not to take money out of weekly pay packets and not to affect pensioners' cheques. I could continue relating the broken promises. But we must not forget that the health insurance rebate was to be retained until the introduction of Medicare. What did the Summit actually achieve? It came to the conclusion that employers should restrain dividend increases; non-wage incomes, such as doctors' and lawyers' fees, should be controlled voluntarily; taxes may need to be raised; the Industrial Relations Bureau should be abolished; there should be union involvement in the planning and introduction of new technology, which Senator Hill spoke about earlier. These are hardly the sorts of decisions on which economic recoveries are made. Surely the Government could make some decisions to spend less. That is important. The Labor Party faces a fundamental dilemma over its prices and incomes policy. This type of policy, I might add, has been a failure when tried in other countries. The Summit failed to agree on the specific guidelines to be used by the Australian Conciliation and Arbitration Commission. One of the main issues which emerged at the end of the Summit was whether union consent to policies of wage restraint to prevent further dismissals was more theoretical than real. The Builders Labourers Federation, the Building Workers Industrial Union, the Transport Workers Union and the Electrical Trades Union of Australia all emerged as unions whose leaders claimed that they were not committed to any policy of wage restraint. Businessmen at the Summit failed to nail down the unions on anything but rhetoric. No vital decision was made to continue the wage pause until the end of the year. That decision is the most important thing that should have been resolved at the Summit Conference. The first decision made after the Conference was made by the BLF when it decided that it wanted to strike for increased wages. The militant unions have fixed on the differences between the Economic Summit communique and the Australian Council of Trade Unions-ALP prices and incomes accord to justify continuing wage claims. To my way of thinking, it all hinges on the definition of wage restraint. Clearly, on that definition the BLF has differing ideas from those of the rest of the community. I certainly believe, as I said before, that the wage pause should be extended to the end of the year, with future wage movements to be made more on an industry basis in line with productivity. We have seen from the mini-Budget that Mr Hawke is not concerned about pensioners, because the means test on the pensions of the over 70s has been abolished. Senator Colston —Which Joh doesn't get. Senator BJELKE-PETERSEN —He is also not concerned about the middle income earners. Joh has never taken the pension, even though he was entitled to it. Senator Colston —That is the only Federal money he never took. Senator BJELKE-PETERSEN —The Federal Government will have to give Queensland plenty of money shortly to help with the floods there. The Government certainly has not worried about the middle income earners because the interest rebate on home loans was removed, nor is it giving a fair go to those who have looked after their future security through superannuation schemes. The Budget is an attack on the thrifty. Those who save their money, invest in their retirement, invest in their health, invest in sending the children to school, invest in the jobs of others by investing in Australian industry as small shareholders and work hard to increase their incomes to save for homes are the ones who are penalised. Queensland families will lose at least $4 a week through the abolition of the tax rebate on health cover and they will face a bill of $120m when Medicare is introduced. I asked a question the other day in which I made the statement that people in Queensland will have to pay for hospital care, which they get for nothing now provided they are willing to go to public hospitals to get their own health care. Senator Martin —Queenslanders are two-time losers, aren't they? Senator BJELKE-PETERSEN —That is exactly right; they are in many ways. They have lost in relation to jobs and they are also losing in relation to Medicare. Senator Colston —And look at the Government they have, too. Senator BJELKE-PETERSEN —I am talking about the Federal Government. The State Government in Queensland is doing a remarkable job. Senator Martin —Under extremely difficult conditions. Senator BJELKE-PETERSEN —Exactly, especially with the present Federal Government . If Mr Hawke actually went into the election without making himself fully aware of the economic situation I think it was irresponsible of him and his party. If he knew the facts then he was dishonest. The National Economic Summit Conference , for all its rhetoric and euphoria, was merely a clever tool for the Labor Government to relinquish its responsibility to uphold its election promises. Now , of course, the Prime Minister can say that it was all done by consensus at the Summit and that all this action is supposedly condoned. I noted with interest in the Governor-General's speech that this Government promised to establish an Economic Planning Advisory Council. I wonder whether somebody from the other side of the chamber would be able to tell me why Ministers in the Government are paid such high wages if they are to require continually summits and committees to tell them what to do. I wonder what their departmental heads are there for. I wonder whether they will ever be able to judge a situation for themselves and act accordingly. It is as obvious as can be that we need a period of serious wage restraint. Somebody said in a speech earlier that he did not get any constructive advice. It is my feeling that the Government needs to make sure that we have a period of serious wage restraint. Members of the public want a wage pause and they want it until the end of the year. They want less government interference in business projects, greater productivity and less tax if we are to get the economy back on the rails. If the unions and the Government do not allow business-I do not just mean big business, I mean small businesses too-to make reasonable profits and investors to get reasonable returns then we will not create a climate which is job generating and inflation reducing. The major constraints to economic recovery are the cost of labour and inadequate profits. Senator McIntosh —What do you consider is the minimum wage to live in dignity? Senator BJELKE-PETERSEN —That is for the Conciliation and Arbitration Commisson to decide-not me. The only hope to sustained growth lies in the significant easing of increases in the cost of labour. Only with sustained growth in the private sector will the unemployment problem be eased. An early lifting of the wages pause or delay in the restoration of profitability will substantially retard economic recovery in Australia. Whilst there are signs of economic recovery, both in the United States of America and elsewhere overseas, we must get our own house in order before we can expect to participate in this recovery. Senator Sir JOHN CARRICK(New South Wales)(9.55) —The Senate is debating the economic statement brought down by the Treasurer (Mr Keating) on 19 May. It is described-correctly-as a mini-Budget. Let me put it in context. In August last year a Budget was brought down by the Fraser Liberal Government. That Budget conferred upon the Australian community considerable benefits in terms of increases in real purchasing power. It added to the purchasing power of the Australian people, on average, between $17 and $20 a week, free of tax. This en- abled them to have their purchasing power in good order when the wages pause was brought about. Last year the Fraser Government, in conjunction with all six State governments, introduced a wages pause. This was confirmed at a Premiers Conference and by a series of industrial commissions. That was the most significant economic step taken to that point. There was an election, and the Australian Labor Party made quite a number of very substantial promises, the primary one being that if it was elected it would lower unemployment by 2 per cent in its first three years in office. That was the key promise made. It also made a string of other promises. The Labor Party came to office, and then it said, 'We cannot discharge any of these promises because we have discovered a Budget deficit of $9.6 billion.' Since then, the whole of the Labor Party's alibi has been built around a figure of $9.6 billion. Labor supporters use that figure when it suits them. They cast it away when it does not suit them. For example, at the National Economic Summit Conference, they used that figure, yet in fact when they put forward their options A, B and C, they did not use it. They adopted option A, which was based on an entirely different figure. It was convenient for them to decide when to use it and when not to use it. The trouble now is that it has been demolished for them, and they no longer have an alibi, because even in its economic statement the Labor Government admits that the impetus given by the sound Budget policies of the previous Fraser Government was bringing about substantial improvements for the year 1983- 84. Indeed, in citing the six main reasons why 1983-84 would be a better year, it gave not one which emerged from its own policies. Fundamentally, those reasons arose out of Fraser Government actions. Let me quote them from the economic statement. The statement says: As I noted in my address to the Summit Conference, we expected some improvements in economic activity in the course of 1983-84 with the main impetus coming from the fiscal stimulus implicit in the Commonwealth Budget for 1982-83 and in prospect for 1983-84. I pause there. It is that Budget, its costs and its program, that the Hawke Government is now trying to destroy with its completely phoney arguments about a $9.6 billion deficit. The second fundamental argument-it is the final one given, but is of fundamental importance, is- The improved prospects for ongoing moderation of income claims as the prices and incomes accord is implemented. Fundamentally, the only aspect of that prices and incomes accord in position is the wages pause that the previous Fraser Government brought in. Indeed, the other claims are: The international economy, a marked slowing down in stock decumulation, the improved prospect for the farms, and the pick-up in dwelling construction. It is important to remember that although only the other day the Labor Government was claiming that it had hoped to get 128,000 houses, on average, it is now saying that the figure is running at 117,000 and increasing. In other words, in housing the impetus has come about basically because of the policies of the Fraser Government. I make it clear that repeatedly tonight a number of Labor senators have said, ' Show us your policies'. Indeed, I do not need to do so. The Keating statement itself said clearly that the policies of the Fraser Government, in its Budget and its wage pause, were the absolutely correct policies upon which the Labor Government is depending for the main improvements for 1983-84. Debate interrupted. Mr and Mrs R. Copland-Department of Main Roads Employees, Queensland-Adjournment Debate The PRESIDENT —Order! It being 10 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator HAMER(Victoria)(10.1) —I want to bring to the attention of the Senate what seems to me to be an outrageous act of ministerial incompetence and insensitivity. The facts of the matter are these: In March 1981 two English people, Mr and Mrs Roy Copland, first applied for permanent residence in Australia as self-supporting retirees under section 5 (ii) of the current ' Migrant Entry Handbook'. Migrants in this category must have reached the Australian retiring age and intend to retire in Australia. They must have substantial assets to bring to Australia and sufficient income to support themselves for the remainder of their lives. Mr and Mrs Copland were able to show that they had sufficient cash assets to transfer to Australia and that they were able to support themselves in Australia for the rest of their lives. But their application for permanent residency was initially rejected in September 1982 on the basis that Mr Copland was still in his late fifties-that is, under the normal Australian retiring age. However, the letter which rejected their original application invited them to appeal to the Immigration Review Panel. Mr and Mrs Copland accepted this invitation and an appeal for reconsideration by the Immigration Review Panel was lodged in November 1982. In the application for review the sponsor indicated that although Mr Copland was below the normal retiring age in Australia he was, in fact, fully retired and had no intention or need to work in Australia. This intention was accepted by the Immigration Review Panel and the sponsor was informed on 25 February 1983 that the appeal had been successful. The sponsor was Mrs Hank, the sister of Mrs Copland, the English migrant. Mrs Hank is a permanent resident in Australia. She was informed that the application of her sister and brother-in-law was now successful subject to the couple meeting the settlement criteria, health and character requirements and provision of evidence of funds to transfer to Australia of at least $300,000 prior to visa issue. The Australian High Commission in London was also informed of the successful application of Mr and Mrs Copland. Acting on this decision, Mr and Mrs Copland sold their home in England to raise the final amount of money required to meet the $300,000 necessary for transfer to Australia. They completed all arrangements and met all criteria required by our authorities. They both enjoyed the very best of health and they had the highest possible character references. In addition, of course, they had a sister already resident in Australia. On 6 May 1983 Mr and Mrs Copland, therefore, confidently went to Australia House to make the final arrangements and to secure their visas for entry into Australia. They were then informed that a message had been received from the new Minister for Immigration and Ethnic Affairs (Mr West) rescinding the decision of the Review Panel and revoking the approval for their residence in Australia. At that time no public announcement had been made by the new Minister of any intention to change the immigration rules. It was not until two weeks later, on 18 May, that he made the statement, which statement I am about to quote, to the people of Australia in the House of Representatives. He said: I have removed the concession granted by the previous Government to wealthy people between the ages of 55 and 65 which allowed them to migrate provided they had significant amounts of income or capital. This announcement was two weeks after he had rejected the application from people long approved and who had made arrangements, including selling their house, in order to come to Australia. The Minister went on to say: These persons were a potential addition to the labour market. Surely this is irrelevant in the case I am talking about. Mr Copland had already indicated that he had no intention or need to work. Why not simply mark his visa and entry papers with a 'No work' stamp. The Minister also went on to say: It could be inferred that it was possible to 'buy'- Those are his words- permanent residence. This is a very strange statement. The wording and extensive scrutiny of entry applications make it impossible for the criminal, the unhealthy and the undesirable to buy their way into Australia. On the other hand, why should it be made to appear criminal to bring considerable resources to Australia to support oneself in retirement in this country? We welcome the tourist dollar-in fact, we hear constantly from the Government how important the tourist dollar is-so why should we not welcome the retirement dollar? With the enormous burden we carry in Australia for social security, we should welcome, within reason and after thorough scrutiny, those who can support themselves in Australia in retirement and old age. I believe a number of questions require answers from the Minister for Immigration and Ethnic Affairs in this Copland matter. The first is: Is it proper for a Minister to revoke an approval given under existing rules and policies and at a later date, after he has revoked it, announce to the public the new rules under which the former decision had been revoked? Secondly, why have an Immigration Review Panel if its decision can be accepted at one moment and be revoked without notice at a later date? Thirdly, whilst conceding that the Minister has the right to change policies and rules, does he not agree that these changes should be made only after the date of the public announcement and not before? Fourthly, as I mentioned before, does the Minister not consider it an advantage to Australia, especially-to use his own words-during times of economic recession, to permit permanent residency to those who do not require or want work but who have the capability to support themselves without placing any burden on the already overburdened social security system? Fifthly, has the Minister not persistently stated the strong commitment of the Australian Labor Party to the reunion of close family members? Has he forgotten that Mrs Copland has a sister, Mrs Hank, who is permanently resident in Australia? As I said at the outset, this is an outrageous decision, made by a very unwise Minister, and I think he should look at it again and alter it as soon as possible. Senator COLSTON(Queensland)(10.8) —As honourable senators will be well aware, there have recently been extensive flood rains in Queensland. In particular, these rains have resulted in widespread floods in south-west Queensland. Some towns in these areas are still isolated. However, people in these towns are in no immediate danger and both the State Emergency Service and the Australian Defence Force are doing a tremendous job in assisting in flood relief. Unfortunately there has been considerable loss of stock and agricultural crops which, ironically coming on the heels of a drought, will create even more difficulties for people on the land. Last weekend I had the opportunity to inspect some of the flood damage and to speak to residents of south-west Queensland. I imagine that many of the immediate problems associated with the floods have been experienced in a similar way before and will be experienced again. I also imagine that some communities in northern New South Wales are experiencing similar problems. However, this evening I intend to inform the Senate of one incident which indicated a total lack of compassion on behalf of the Queensland Government and a country shire council. Honourable senators will be well aware that the south-west area of Queensland has experienced a prolonged drought. However, when the rains came, certain employees of the Department of Main Roads found that for them the rain was not 'liquid gold'-a term used not so long ago by Mr Neville Wran. In short, they were sacked. My information is that the Main Roads Department had about 35 workmen operating on two roads in south-west Queensland, the Augathella to Morven road and the Charleville to Augathella road. These men were permanent employees of the Main Roads Department but when it rained it was decided that they could not be usefully employed and they were thus sacked. They were told that they could have their jobs back when it stopped raining. This was a callous move by the Main Roads Department, a move for which the Minister responsible, Mr Hinze, deserves severe condemnation. What did these men tell their families when they were sacked? Did their electricity bills suddenly cease because it was raining? Did the kids' shoes not need mending because of the rain? Were doctors 'and dentists' bills a thing of the past because it was raining? No, but it is satisfactory for Mr Hinze and his departmental officers to continue to draw their salaries whilst it is raining. Perhaps Mr Hinze was peeved because racing has been called off in Brisbane with monotonous regularity due to the unseasonal weather. But for people on low wages , some of whose homes were threatened by the floods, to be sacked was a devastating experience. As one of the workers said to me on the weekend: 'It all depends on where you get your corns. Get them on your backside and you keep working. Get them on your hands and you are sacked'. Today we heard in the Senate that the Queensland Government has requested flood assistance from the Federal Government. I am certain that any requests from the Queensland Government will be considered sympathetically. But if the Queensland Government genuinely could not pay these men when it rained-and I doubt that that would be the case-why did it not approach the Federal Government for aid to keep them on? Surely these men have as much right to be protected during a period of a natural disaster as do others who have received and will receive substantial assistance. Mr Hinze was not alone in his lack of feeling for loyal workers who suddenly had to tell their families that their pay cheques had been stopped. One local council acted similarly and then said that its men had volunteered to take a week off. I understand that the men were faced with a cumpulsory choice. There was nothing voluntary about it. They were told that they could take a week off without pay, take holiday or long service leave, or they could be sacked. When the men chose to take a week off without pay they were hardly volunteers. Yet this is the story that was put by the shire council which gave them this choice. I understand, and I am sure that all honourable senators understand, the financial problems faced by local councils. But surely they do not have to resort to this kind of action when it rains. After all, how often does it rain in south-west Queensland? It does not rain much. I will give some figures which show that rain in this area is not very usual. Charleville, for example, has an average annual rainfall of 512 millimetres, or about 20 inches; Cunnamulla has 361 millimetres average rainfall, about 14 1/4 inches a year; Roma, closer to the coast but still really part of south-west Queensland, has an annual average rainfall of 592 millimetres, about 23 1/3 inches. To give an indication of how low that rainfall is, these compare with Brisbane's 1,150 millimetres or 45 1/4 inches a year and Innisfail's 3,726 millimetres or 4 yards and 2 inches a year. If the council did have financial difficulties so it could not keep these people on in that short period when it rained in south-west Queensland, I cannot understand why it did not approach the State Government for assistance. Given the Main Roads action, I doubt that such an approach would have been successful but at least the council could have tried to keep these men on. This is not the way to good industrial relations-to sack loyal workers when it rains, especially when a lot of people in that area would have been getting assistance for the drought and will be getting assistance for the floods. These men should have been kept on. I trust that the next time similar circumstances arise, the Government of Queensland will show more compassion to its loyal hard working work force. Because they get corns on their hands they should be looked after, not dealt a shoddy deal as they were on this occasion. Senator GRIMES(Tasmania-Minister for Social Security)(10.15) —I was informed tonight before I came into the Senate for the adjournment debate that Senator Hamer wished to raise a matter concerning immigration. Therefore I came in in an attempt to give Senator Hamer an answer on the assumption that he wanted an answer. It is clear that he really did not want an answer. Despite that fact I will seek from the Minister for Immigration and Ethnic Affairs (Mr West) some details on the matter which Senator Hamer raised. I make this comment because in the past in this place senators who have raised matters on the adjournment to which they wished to receive answers have sought answers from the Minister representing the Minister in the other place. They have given the Minister some details about what they were going to talk about so that the Minister could in fact answer in a pertinent way. Senator Hamer could have done this and informed me of his problem just as he informed the Press some time ago when he released to the Press Gallery in this place-embargoed until 10 p.m.-a detailed Press statement giving the gist of the speech he was to make tonight, the attack that he was to make on the Minister for Immigration and Ethnic Affairs, without giving that Minister a chance to reply. Although he may have some concern about the fate of Mr and Mrs Copland, he obviously has more of a concern for and more of an eye to a headline than he has for that matter. When I was an Opposition senator in this place I tried many times over the years to get to this country the relatives of people from England . I was knocked back many times by Ministers for Immigration in the previous Government because those relatives did not have enough money. On what Senator Hamer has told this place tonight, I accept that there may have been some injustice done to the Coplands and I will seek the facts from the Minister. Senator Hamer's principle seems to be that if one has $300,000 one should be able to buy one's way into this country and, going on the policy of his previous Government, if one does not have any money at all one should not be able to come to this country even if one has relatives here. That is certainly not a principle that I agree with, yet it seems to be Senator Hamer's principle. However, I will do my ministerial duty and seek an answer from the Minister for the honourable senator, whether he really wants me to or not. As for Senator Colston's remarks, I believe that he has just demonstrated the normal actions of conservative governments in Queensland in their treatment of their workers. I do not think there is very much I can add. If Senator Colston wishes me to seek assistance from one of the Ministers in the Government I will do so. Senator MARTIN(Queensland)(10.18) —I wish to speak very briefly on the comments of Senator Grimes. Senator Grimes —I thought I was closing the debate. Senator MARTIN —Not in the adjournment. Senator Grimes —Why not? Senator MARTIN —Not in the adjournment. Senator Grimes —It was impossible while you were in Government to get a speaker up after the Minister had closed the debate. The ACTING DEPUTY PRESIDENT(Senator Elstob) —I have called Senator Martin. Senator MARTIN —I will let others argue that out with Senator Grimes. I cannot respond on behalf of Senator Hamer because I do not know all the details of what Senator Hamer has done although he gave a fair resume tonight, I think, of some of the efforts he had made. I just say to Senator Grimes that he might, as he pours his criticism on to Senator Hamer, also spread a little of it on his fellow Ministers. There was an adjournment debate in the Senate last week in which a number of senators spoke on a variety of matters. The Minister for Education and Youth Affairs (Senator Ryan) did something quite unprecedented. In replying, after a reply to the issues that had been raised, in the adjournment debate she attacked Senator Peter Baume. Senator Baume was absent. She had not warned him of the subject on which she was going to speak. It is quite unprecedented, in my nine years in the Senate, for a Minister to use an adjournment debate to attack a private member without the subject matter having been raised during the adjournment debate or any indication having been given to that senator that the Minister was going to raise that subject. I sought leave to speak briefly to reply on behalf of Senator Peter Baume since he was not here . The Minister on that occasion denied me leave to defend one of my colleagues on the subject that she had raised during the adjournment debate. So before Senator Grimes gets too carried away by his righteous indignation I suggest he look at his own back yard. Question resolved in the affirmative. Senate adjourned at 10.20 p.m. The following papers were presented: Defence Act-Determinations 1983- No. 7-Sinai Allowance No. 8-Advance and Rear Parties Allowance No. 9-Ceremonial Duties Allowance No. 10-Recreation Leave Public Service Act-Determination 1983-No. 7. The following answers to questions were circulated: Question No. 22 Senator Bolkus asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice, on 21 April 1983: (1) Was Mr Charody the only person vouching for Mr Houghton; if not, who else was involved. (2) Was Mr Houghton granted permanent resident status in 1969; if so, how long has he lived in Australia before the grant of such status. (See answers to Questions Nos 2036 and 2038, Senate Hansard, 21 September 1982, page 1094). Senator Grimes —The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator's questions: (1) Records show that when Mr Houghton arrived in Australia on 12 February 1972 the immigration inspector recorded in the interview report 'Vouched for by Mr Charody of Parkes Development and Mr Leo Carter, ASIO'. (2) Mr Houghton first arrived in Australia in January 1967 and applied for resident status in January 1968. Resident status was granted to Mr Houghton in November 1969. Question No. 44 Senator Bolkus asked the Minister representing the Minister for Foreign Affairs , upon notice, on 21 April 1983: (1) What moneys have been expended since 1 January 1976 in the Minister's areas of responsibility and what moneys are being planned to be expended in the following areas: (a) Computer hardware and software; and (b) Repairs and servicing of computers. (2) When was expenditure incurred in each of the above categories. (3) Which items purchased above are now obsolete or will be so in the next five years. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: (1) (a) Expenditure incurred on computer hardware and software from 1 January 1976 to 31 May 1983 was $7.717m; and (b) Expenditure for repairs and servicing of computers was $2.113m. The amounts above do not include expenditure for dedicated word processing equipment. (2) Expenditure incurred and planned for computer hardware, software and for computer repairs and servicing are as follows: ($ million) Computer Spare Computer repairs parts for hardware/ and in house software servicing repairs 1975-76 17 . . . . 1976-77 419 . . . . 1977-78 420 . . . . 1978-79 4 128 177 . . 1979-80 452 325 . . 1980-81 1 193 360 . . 1981-82 237 375 507 1982-83 851 238 86 1983-84 *4 891/2 446 411 90 1984-85 *1 549/1 818 *423/317 90 1985- 86 *1 333/3 046 *453/347 90 * Planned expenditure includes two options for upgrade of the Department's Central Processing Units in Canberra. (3) Computer items purchased and now obsolete or replacement planned within the next five years are: four character printers (1982-83); two IBM 370/138 central processing units-London (1982-83); two IBM 370/125 central processing units-Washington (1982-83); two IBM 370/145 central processing units-Canberra (1983-84); forty-two visual display units (1983-85); and two IBM 370/148 central processing units-Canberra (1986-87). Question No. 46 Senator Bolkus asked the Attorney-General, upon notice, on 22 April 1983: (1) What moneys have been expended since 1 January 1976 in the Minister's areas of responsibility and what moneys are being planned to be expended in the following areas? (a) computer hardware and software; and (b) repairs and servicing of computers. (2) When was expenditure incurred in each of the above categories? (3) Which items purchased above are now obsolete or will be so in the next five years? Senator Gareth Evans —The answers to the honourable senator's questions are as follows: (1) and (2) For all areas of ministerial responsibility, other than the Australian Security Intelligence Organisation, the amounts expended or previously approved to be expended are shown below. Hardware Repairs and and software servicing 1975-76 acutal . . . . 1976-77 acutal . . . . 1977-78 acutal 50,316 950 1978- 79 acutal 244,232 2,579 1979-80 acutal 290,403 18,393 1980-81 acutal 53,385 49 ,113 1981-82 acutal 211,538 70,688 1982-83 acutal to 31.12.1982 304,292 33,334 1982-83 approved 2,772,436 222,300 1983-84 approved 803,000 476,000 1984-85 approved 184,400 589,800 1985-86 approved 10,000 605,800 (3) For all areas of ministerial responsibility, other than the Australian Security Intelligence Organisation: No equipment is currently obsolete. It is expected that within the next five years, nine visual display units and ten terminal printers will become obsolete. Question No. 78 Senator Colston asked the Minister representing the Minister for Administrative Services, upon notice, on 22 April 1983: (1) What was the total amount spent in: (a) Australia; and (b) each State and Territory on Government advertisements associated with the 1982 Federal Budget, including agency fees if applicable. (2) Were any agency fees payable in conjunction with this advertising campaign in relation to each State and Territory; if so, to whom were the fees paid and how much was paid in each case. (3) What was the total cost in: (a) Australia; and (b) each State and Territory of advertising (i) on television; (ii) on radio; (iii) in newspapers and other print media; (iv) in or on any other advertising media (specify); and (v) for agency fees. (4) On what television channels and radio stations, in what newspapers and other print media and in or on what media listed in 3 (iv) above were the advertisements placed in each State and Territory, how many screenings, broadcasts or insertions were made in each case and what was the cost, including agency fees if applicable, in each case. Senator Gietzelt —The Minister for Administrative Services has provided the following answer to the honourable senator's question: (1) Amounts spent for payment of accounts for media and production costs for Commonwealth Government advertisements associated with the 1982 Federal Budget and bearing the wording 'The Family Budget', including standard agreed service fees, applicable to campaign advertising arranged through the Australian Government Advertising Service Branch of the Department of Administrative Services were: (a) In Australia: All (b) below, plus: $ (i) National media 81,554 (ii) Costs of preparation of advertisements 148, 544 (b) In each State and Territory: New South Wales 709,664 Victoria 467,677 Queensland 253,578 South Australia 126,787 Western Australia 130,047 Tasmania 28,418 Northern Territory 9,941 Australian Capital Territory 14,186 Total amount spent in Australia 1,970,396 (2) Agency service fees totalling 3 1/2 per cent of the gross media bill and totalling 13 1/2 per cent of some net costs of production of advertisements, as agreed to between the Australian Government Advertising Service and the Australian Government Advertising Advisory Council, have been paid in conjunction with accounts presented by the Commonwealth Government's official master placing/charging agencies. None of those fees are retained by those master placing/charging agencies but have been transferred by those agencies to the funds of the Australian Government Advertising Advisory Council. No specific service fees paid by the Government departments will have been retained by any specific advertising agency. Agreed service fees totalling $77,839 were contained in accounts presented to departments for payment of media and production costs for the advertising. Those fees, together with all commissions allowed by media to the Commonwealth Government's master placing/charging agencies within the gross cost of media space or time used for this advertising, will have become part of the funds of the Australian Government Advertising Advisory Council from which all advertising arranged through the Australian Government Advertising Service during the year receive payment for their services. (3) (a) Total cost in Australia: $ (i) Television 939,862 (ii) Radio . . (iii) Newspapers and other print media 881,990 (iv) Other advertising media . . (v) Agency fees (included also in (i) and (iii) above) (67,067) (b) Total cost in each State or Territory: New South Wales: (i) Television 397,253 (iii) Newspapers and other print media 312,411 (v) Agency fees (included also in (i) and (iii) above) (29,998) Victoria: (i) Television 284,248 (iii) Newspapers and other print media 183,429 (v) Agency fees (included also in (i) and (iii) above) (15,314) Queensland: (i) Television 99,762 (iii) Newspapers and other print media 153,816 (v) Agency fees (included also in (i) and (iii) above) (8,559) South Australia: (i) Television 70,860 (iii) Newspapers and other print media 55,927 (v) Agency fees (included also in (i) and (iii) above) (4,287) Western Australia: (i) Television 60,301 (iii) Newspapers and other print media 69,746 (v) Agency fees (included also in (i) and (iii) above) (4,401) Tasmania: (i) Television 14,370 (iii) Newspapers and other print media 14,048 (v) Agency fees (included also in (i) and (iii) above) (961) Northern Territory: (i) Television 3,055 (iii) Newspapers and other print media 6,886 (v) Agency fees (included also in (i) and (iii) above) (244) Australian Capital Territory: (i) Television 10,013 (iii) Newspapers and other print media 4,173 (v) Agency fees (included also in (i) and (iii) above) (545) National (i.e. Multiple States Coverage) (iii) Newspapers and other print media 81,554 (v) Agency fees (included also in (i) and (iii) above) (2,758) Note: Costs of preparation of advertisements (as shown in paragraph 1 (a) (ii) of this answer) are additional to these media costs. (4) New South Wales: Television channels: ATN7, TCN9, TEN10, NBN3, WIN4, CBN8/CWN6/MTN9, RVN2/AMV4, NEN9/ECN8/NRN11/RTN8, BKN7. 374 telecasts at a cost of $397,253. Newspapers and other print media: Sunday Telegraph, Sun Herald, Sydney Morning Herald, Daily Telegraph, Daily Mirror, Daily Sun, Newcastle Herald, Wollongong Mercury, Albury Border Morning Mail, Bathurst Western Advocate, Broken Hill Barrier Daily Truth, Coffs Harbour Advocate Opinion, Dubbo Liberal, Goulburn Evening Post, Grafton Examiner, Lismore Northern Star, Maitland Mercury, Murwillumbah Daily News-Gold Coaster, Orange Central Western Daily, Tamworth Northern Daily Leader, Wagga Wagga Daily Advertiser, Lithgow Mercury, Griffith Area News, Taree Manning River Times, Armidale Express, Inverell Times, Kempsey Macleay Argus, Port Macquarie News, Queanbeyan Age, Singleton Argus, Bowral Southern Highland News, Cooma Express, Cowra Guardian, Deniliquin Pastoral Times, Gunnedah Namoi Valley Independent, Forbes Advocate, Macksville Nambucca Guardian News, Moree North West Champion, Mudgee Guardian, Nowra News Leader, Tumut Times, Boolaroo Westlakes Advertiser, Bega and District Times, Eden Imlay Magnet, Forster Cape Hawke Advocate, Milton Ulladulla Express, Milton Ullaldulla Times, Moruya Southern Star, Moruya Examiner, Nowra South Coast Register, Nowra Shoalhaven and Nowra News, Windsor Gazette, Wauchope Gazette, Cootamundra Herald, Parkes Champion Post, Wellington Times, Young South West News Pictorial, Bega District News, Finley Southern Riverina News, Glen Innes Examiner, Leeton Irrigator, Moss Vale Post, Muswellbrook Chronicle, Narrabri Courier, Temora Independent, West Wyalong Advocate, Yass Tribune, Connabarabran Times, Corowa Free Press, Gilgandra Weekly , Hay Riverine Grazier, Junee Southern Cross, Kiama Independent, Quirindi Advoate, Scone Advocate, Condobolin Lachlander, Crookwell Gazette, Dungog Chronicle, Gloucester Advocate, Grenfell Record, Gundagai Independent, Narrandera Argus, Narromine News & Trangie Advocate, Tenterfield Star, Barham Bridge, Barraba Gazette, Bellingen Courier-Sun, Blayney Lyndhurst Shire Chronicle, Bombala Times, Bourke Herald, Coonamble Times, Canowindra News, Dorrigo Don Dorrigo Gazette, Harden-Murrumburrah Express, Henty Observer, Hillston Spectator, Molong Express, Tumbarumba Times, Walcha News, Yass Post, Bingara Advocate, Boorowa News, Braidwood Tallanganda Times, Cobar Age, Guyra Guardian, Lake Cargelligo Lake News, Manilla Express, Nyngan Western Mail, Peak Hill Times, Uralla Times, Walgett Spectator, Warialda Standard, Warren Advocate. 634 insertions at a cost of $312,411. Victoria: Television channels: HSV7, GTV9, ATV10, BTV6/GMV6, BCV8/GLV8/STV8. 211 telecasts at a cost of $284,248. Newspapers and other print media: Melbourne Age, Sun N. Pictorial, Herald, Sunday Press, Sunday Observer, Melbourne Truth, Ballarat Courier, Bendigo Advertiser, Geelong Advertiser, Mildura Sunraysia Daily, Shepparton News, Warrnambool Standard, Ararat Advertiser, Colac Herald, Echuca Herald, Hamilton Spectator, Horsham Wimmera Mail-Times, Sale Gippsland Times, Swan Hill Guardian, Wangaratta Chronicle Despatch, Bairnsdale Advertiser, Kyabram Free Press, Kerang Northern Times, Morwell Latrobe Valley Express, Maryborough Advertiser, Portland Observer, Traralgon Journal, Benalla Ensign, Hastings Sun, Healesville Mountain Views, Leongatha Star, Mornington Peninsula & Westernport Post, Portland The Western Advertiser, Castlemaine Mail, St Arnaud North Central News, Stawell Times News, Yarrawonga Chronicle, Benalla North East Ensign, Cobram Courier, Euroa Gazette, Foster Mirror, Kaniva Times-Nhill Free Press, Numurkah Leader, Orbost Snowy River Mail, Yarram Standard-News, Rosebud South Peninsula Gazette, Pakenham Gazette, Seymour Telegraph, Werribee Banner, Westernport Frankston Peninsula News, Warragul Gazette, Korumburra South Gippsland Sentinal Times, Camperdown Chronicle, Donald/Birchip Times, Kyneton Guardian, Warracknabeal Herald, Alexandra Standard, Boort Standard & Quambatook Times, Bright Alpine Observer, Cobden Times, Bohuna Farmer's Weekly, Corryong Courier, Creswick Advertiser, Daylesford Advocate, Hopetoun Courier, Kilmore Free Press, Mansfield Courier, Mirboo North Times, Mytleford Times, Ouyen & North West Express, Robinvale Sentinal, Rochester Campaspe Valley News, Sea Lake Times-Ensign, Terang Express, Wedderburn Express, Yea Chronicle, Dimboola Banner, Avoca Mail, Ballarat Potato Grower News, Beaufort Riponshire Advocate, Beechworth Ovens & Murray Advertsier, Edenhope Kowree Advocate, Heathcote McIvor Times, Jeparit Leader, Maldon Times, Mortlake Dispatch, Penshurst Free Press, Port Fairy Gazette, Rainbow News, Skipton Western Plains Advertiser, Trafalgar News. 328 insertions at a cost of $183,429. Queensland: Television channels: BTQ7, QTQ9, TVQ0, DDQ10/SDQ4, TNQ7/FNQ10, MVQ6, ITQ8, RTQ7/SEQ8. 276 telecasts at a cost of $99,762. Newspapers and other print media: Brisbane Sunday Mail, Brisbane Sunday Sun, Brisbane Courier Mail, Brisbane Telegraph, Brisbane Daily Sun, Bunaberg News-Mail, Cairns Post, Gladstone Observer, Ipswich Queensland Times, Mackay Daily Mercury, Maroochydore Sunshine Coast Daily, Maryborough Chronicle, Mt Isa North West Star, Rockhampton Morning Bulletin, Southport Gold Coast Bulletin, Toowoomba Chronicle, Townsville Daily Bulletin, Warwick Daily News, Charters Towers Northern Miner, Roma Leader, Roma Western Star, Stanthorpe Border Post, Charleville Times, Goondiwindi Argus, Innisfail News North, Home Hill Observer, Longreach Leader, Mundubbera Central & North Burnett Times, Proserpine Guardian, Allora Advertiser, Childers Isis Recorder, Clifton Courier, Cunnamulla Watchman, Esk Brisbane Valley Sun, Gympie Times, Innisfail Advocate, Ingham Herbert River Express, Ayr Advocate, Dalby Herald, Beaudesert Logan-Albert Times, Biloela Central Telegraph, Bowen Independent, Caboolture Near North Coast News, Chinchilla News/Murilla Advertiser, Cleveland Redland Times, Emerald Central Queensland News, Kingaroy South Burnett Times, Redcliffe Herald, Townsville North Queensland Register, Wynnum Herald, Blackall Barcoo Independent, Boonah Fassifern Guardian, Pittsworth Sentinel, St George Balonne Beacon, Tully Times. 328 insertions at a cost of $153,816. South Australia: Television channels: ADS7, NWS9, SAS10, SES8, GTS4, RTS5A. 150 telecasts at a cost of $70,860. Newspapers and other print media: Adelaide Sunday Mail, Adelaide Advertiser, Daily News, Mount Gambier Border Watch, Port Pirie Recorder, Whyalla News, Angaston Leader, Clare Northern Argus, Gawler Bunyip, Kadina York Peninsula Country Times, Mt Barker Courier, Murray Bridge Murray Valley Standard, Port Augusta Transcontinental, Port Lincoln Times , Renmark Murray Pioneer, Streaky Bay West Coast Sentinel, Tanunda Barossa & Light Herald, Victor Harbour Times, Millicent South Eastern Times, Naracoorte Herald, Bordertown Border Chronicle, Cleve Eyre Peninsula Tribune, Jamestown Review Times Record, Loxton News, Strathalbyn Southern Argus, Penola Pennant, Balaklava Producer, Kingscote The Islander, Kingston S. E. Leader, Pinnaroo Border Times, Waikerie River News. 159 insertions at a cost of $55,927. Western Australia: Television channels: TVW7, STW9, VEW8, GTW11, BTW11, Plus Mining Network and Christmas Island. 162 telecasts at a cost of $60,301. Newspapers and other print media: Perth Sunday Times, Perth Independent, Perth West Australian, Perth Daily News, Kalgoorlie Miner, Geraldton Guardian, Albany Advertiser, Bunbury South Western Times, Busselton Margaret River Times, Esperance Express, Katanning Great Southern Herald, Mandurah Coastal District Times, Manjimup Warren Blackwood Times, Narrogin Observer, W.A. Country Newspaper Pty Ltd Group: Northern Advertiser News, Northern Times, Midlands and Central District Herald, The New Pilbara Times, Collie Mail, Wagin Argus, Gnowangerup Star. 114 insertions at a cost of $69,746. Tasmania: Television channels: TVT6, TNT9-60 telecasts at a cost of $14,370. Newspapers and other print media: Hobart Mercury, Launceston Examiner, Burnie Advocate, Tasmanian Mail, New Norfolk Derwent Valley Gazette, Franklin Huon News, Scottsdale North-Eastern Advertiser, Smithton Circular Head Chronicle, Currie King Island News. 45 insertions at a cost of $14,048. Northern Territory: Television channels: NTD8-18 telecasts at a cost of $3,055. Newspapers and other print media: Darwin Northern Territory News, Alice Springs Centralian Advocate. 10 insertions at a cost of $6,886. Australian Capital Territory: Television channels: CTC7-29 telecasts at a cost of $10,013. Newspapers and other print media: Canberra Times-5 insertions at a cost of $4,173. National Print Media (i.e. multiple state coverage): Australian, Australian Pensioners Monthly, Prime Time, Senior Citizens National Gazette, Australian Women's Weekly, Acropolis, Athletic Echo, Greek National Vema, Greek News, Greek Times, Grecian Post, Hellenic Herald, Neos Kosmos, New Country, O Kosmos, Gunes, Halkin Sesi, Sydney Ekspres, Turk Dayanisma, Yeni Dunya, Yeni Turkiye, Yeni Vatan, Yorum, Tercumen, Il Globo, La Fiamma, Il Corrierre De Settigioni, Corrieo Portuguese, O Portuguese N. Aust. El Espanol, Extra Informativo, Noticias Y. Deportes, Spanish Herald, An Nahar, Al Watan, El Telegraph, Sada Loubnan, Saout Et Moughtareb, Nova Doba, Novosti, Croation Weekly, Belle of Saigon. 120 insertions at a cost of $81,554. Note: Costs of preparation of advertisements (as shown). Question No. 80 Senator Colston asked the Minister for Social Security, upon notice, on 21 April 1983: What would be the annual cost at current prices of disregarding disability pensions payable under the Repatriation Act 1920 for the purposes of the income test for all pensions and benefits payable under the Social Security Act 1947 in (a) 1983; (b) 1985; (c) 1990; (d) 1995; and 2000. Senator Grimes —The answer to the honourable senator's question is as follows: If Repatriation disability pensions were disregarded for the purposes of income tests under the Social Security Act, it is estimated that the increase in outlays on social security pensions and supporting parents' benefits would be of the order of $25m in a full year. This cost is based on data held on the computer masterfile as at December 1982. It is not possible to project this cost to the years requested. The decrease in the cost as compared with the cost shown in the answer to the honourable senator's Question No. 2460 of 25 May 1982 is the result of an increase in the number of pensioners aged 70 years and over with income not stated and the increased free areas of income applying from November 1982. It is not possible to estimate the cost for pensioners whose income details are not known. Question No. 86 Senator Messner asked the Minister for Social Security, upon notice, on 22 April 1983: (1) What are the number and percentage of age pensioners in each State and Territory. (2) What percentage of pensioners receive supplementary assistance in each State and Territory. (3) What amounts were made available for services for old people living at home in each year since 1972-73. Senator Grimes —The answer to the honourable senator's question is as follows: (1) and (2) The information sought is shown in Table 1. Table 1 AGE PENSIONERS-11 MARCH 1983 Percentage Percentage of receiving Number Australian supplementary current total assistance N.S.W. 504,872 36.5 15.5 Vic. 371,013 26.9 13.0 Qld 212,360 15.4 15.4 S.A. 136,356 9.9 14.8 W.A. 104,950 7.6 16.7 Tas. 40,693 2.9 15.3 N.T. 2,783 0.2 21.7 A.C.T. 8,723 0.6 22.0 Aust. 1,381,750 100.0 14.9 (3) The information sought is shown in Table 2. Table 2 DEPARTMENT OF SOCIAL SECURITY AMOUNTS MADE AVAILABLE FOR SERVICES FOR AGED PERSONS LIVING AT HOME ($) Financial years Type of Service 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 Totals Delivered Meals Service 587,777 1,372,944 1,490,292 1,799,253 1,911,173 2,207, 825 2,279,981 2,492,927 3,623,797 4,252,788 22,017,753 Home Care Services 915, 928 1,218,068 3,099,754 5,668,376 6,891,077 9,137,848 8,585,615 10,374,984 11, 538,075 12,723,969 70,153,694 Welfare Officers 34,289 74,202 319,280 648,030 670,080 721,324 822,075 1,053,673 1,253,911 1,399,337 6,996,201 Senior Citizens Centres 736,397 650,628 1,196,756 3,560,692 3,996,839 3,946,196 3,050,323 3,245 ,358 4,000,000 3,999,999 28,383,188 Totals 2,273,391 3,315,842 6,106,082 11,676,351 13,469,169 16,013,193 14,737, 994 17,166,942 20,415,783 22,376,093 127,550,868 Question No. 87 Senator Messner asked the Minister for Social Security, upon notice, on 22 April 1983: (1) What was the actual weekly rate and the current dollar value of the invalid pensions, as at 30 June each year since 1972. (2) What was the 'average' invalid pension since 1972. Senator Grimes —The answer to the honourable senator's question is as follows: (1) See Table 1 below. (2) See Table 2 below. Table 1 MAXIMUM RATES OF INVALID PENSION, 1972-83 Real value (June quarter Actual rate 1982 prices) As at 30 June Standard Married Standard Married $ p.w. $ p.w. $ p.w. $ p.w. 1972 18.25 16.00 52.77 46.26 1973 21.50 18.75 57. 38 50.04 1974 26.00 22.75 60.63 53.05 1975 36.00 30.00 71.81 59.84 1976 41.25 34.25 73.34 60.89 1977 47.10 39.25 73.77 61.48 1978 51.45 42.90 74.76 62.34 1979 53.20 44.35 71.00 59.19 1980 61.05 50.85 73.58 61.29 1981 66.65 55.55 73 .80 61.51 1982 74.15 61.80 74.15 61.80 1983 82.35 68.65 n.a. n.a. Table 2 AVERAGE RATES OF INVALID PENSION PAID 1972-82 Standard and Standard Married married Total rate rate rate payment As at 30 June (a) (a) (b) (a) (b) (c) $p.w. $p.w. $p.w $p.w. 1972 18.62 12.80 17.00 17.80 1973 21.38 19.51 20.60 22. 07 1974 25.60 23.17 24.56 25.99 1975 35.44 30.69 33.36 35.16 1976 41.85 34.43 38.35 40.10 1977 45.90 38.10 42.02 43.74 1978 50.05 41.42 45.68 47.46 1979 51 .55 42.81 47.02 48.74 1980 59.20 51.10 54.86 56.67 1981 63.84 51.92 57.68 59. 50 1982 71.35 58.03 64.53 69.28 (a) Includes additional pension for children. (b) Includes wife's pension/allowance. (c) Includes wife's pension/allowance, additional pension for children, guardian's allowance and supplementary assistance. Question No. 88 Senator Messner asked the Minister for Social Security, upon notice, on 22 April 1983: (1) How many terminations of invalid pensions were effected each year since 1972. (2) What were the reasons for the terminations. (3) What was the percentage variation for the terminations and reasons for termination. Senator Grimes —The answer to the honourable senator's question is as follows: (1), (2) and (3) The information sought is shown in the table below. INVALID PENSIONS TERMINATED 1972 TO 1982 Year ended 30 June Reason for termination 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 NUMBER Cancellations- Income(a) 1,491 646 891 1,229 819 981 1,148 1,423 2,009 1,935 1,877 Not Permanently Incapacitated 1,204 775 821 676 606 609 672 879 1,045 1,867 1,701 Granted service pension 575 645 774 910 1,069 1,010 1,222 1,325 1,730 1,912 1, 456 Inmate of mental hospital(b) 545 388 310 307 303 191 223 182 103 33 0 Other 1,816 1,536 1,743 1,615 1,472 1,539 1,493 1,874 2,314 2,712 2,055 Deaths 6,220 6,487 6,826 7,406 7,734 8,046 7,664 7,654 7,734 7,649 7,290 Transfers to other pensions 11,869 12,618 12,710 8,476 5,929 8,468 29,738 15,050 15,810 14, 987 15,509 Total terminations 23,720 23,095 24,095 20,619 17,932 20,844 42,160 28,387 30,745 31,095 29,883 PERCENTAGE CHANGE DURING YEAR Cancellations- Income(a) +69.0 -56.7 +37.9 +37.9 -33.4 +19.8 +17.0 +24.0 +41.2 -3.7 -3.5 Not Permanently Incapaciated +4.8 -35.6 +5.9 -17.7 -10.4 +0.5 +10.3 +30.8 +18.9 +78 .7 -8.5 Granted service pension +45.9 +12.2 +20.0 +17.6 +17.5 -5.5 +21.0 +8.4 +30.6 +10.5 -23.5 Inmate of mental hospital(b) +0.4 -28.8 -20.1 -1.0 -1.3 -37. 0 +16.8 -18.4 -43.4 -68.0 -24.0 Other +28.0 -15.4 +13.5 -7.3 -8.9 +4.6 -3.0 + 25.5 +23.5 +17.2 -4.0 Deaths -6.9 +4.3 +5.2 +8.5 +4.4 +4.0 -4.7 -0.1 +1.0 -1.1 -8.0 Transfers to other pensions -11.2 +6.3 +0.7 -33.3 -30.0 +42.8 +251.2 -49.4 +5.0 -5.2 +8.0 Total terminations -2.9 -2.6 +4.2 -14.4 -13.0 +16.2 +102.3 -32.7 +8.3 +1.1 -8.0 (a) Prior to 30 June 1976, income and/or property. (b) From November 1980, no longer a ground for termination. Question No. 142 Senator Messner asked the Minister for Social Security, upon notice, on 11 May 1983: Is the Minister undertaking a review of the guidelines for the assessment of invalid pensions; if so, when will the result of this review be made public. Senator Grimes —The answer to the honourable senator's question is as follows: A substantial operations and methods review is being undertaken within the Department into arrangements for processing applications for invalid pensions. The review is still in its early stages. I would expect that the results of the review will be made available when all stages have been completed. The review is being undertaken as a matter of high priority, but I cannot at this stage indicate to the honourable senator when it will be completed.