Thursday, 2 June 1983 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I inform the Senate that the Prime Minister (Mr Hawke) is leaving Australia today and will return on 21 June. In the Prime Minister's absence, the Honourable Lionel Bowen will be Acting Prime Minister. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: Their opposition to any change in the taxation of lump sum superannuation. Your petitioners humbly pray that the Senate in Parliament assembled should reflect our opposition to any changes in the taxation of lump sum superannuation by voting against any such motions. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 44 citizens). To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of we, the undersigned citizens of Australia, respectfully showeth: In the pursuance of justice and fair play, the government's taxation portion must be removed from the home purchasers time payments and transferred to a small levy or taxation deduction from all wages and income in all aspects, including the home purchasers and not this grossly unfair crippling procedure that exists today. From the foundations to the last coat of paint, interest and inflation expectations are applied to the family homes with interest rates of unreasonable magnitude to the completed structure. Truly, this is a national monetary obligation, particularly in as far as the home purchaser is concerned and a major cause of wage demands and the grass roots of inflation. We therefore humbly pray that your House take urgent action to apply such a percentage levy or taxation. by Senator Bolkus (from 72 citizens). To the President and Members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Australian Capital Territory respectfully showeth: That being mindful of the important role that the variety of Community Health Centres play in the provision of health care for the citizens of the Australian Capital Territory and of the vital part played by Scullin Health Centre in the provision of such care in Central and Southern Belconnen, are distressed at the uncertainty over the possible closure or disruption of current medical, paramedical and ancilliary services at that Centre. Your petitioners therefore humbly pray that the Senate will prevail upon the Minister for Health to take no action that would in any way affect the continuity of operation of all existing services at the Scullin Health Centre or diminish services to patients, professional and other staff at that Centre until the report of the Task Force on the structure of the Capital Territory Health Commission has been published and the community served by that Centre has been fully consulted. And your petitioners as in duty bound will ever pray. by Senator Reid (from 736 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 Boswell (from 5,622 citizens), Hill (from 156 citizens) and Walters (from 55 citizens). To the Honourable the President and Members of the Senate in Parliament assembled. We the undersigned citizens of Australia, believing that men and women are equal but different, convinced that Australia can provide equal opportunity for all citizens without foreign treaties, concerned that ratifying the UN Discrimination Convention would give a Communist-dominated international committee the power to judge Australia's laws, humbly petition that your Honourable House will not ratify the UN Convention on the Elimination of All Forms of Discrimination Against Women. And we will always thus petition. by Senator Macklin (from 20 citizens). Petitions received. Senator MARTIN(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) recognises that major capital development programmes (1) have the potential to create long-term employment opportunities which would not otherwise be available, especially for unskilled and semi-skilled workers; (2) have a significant multiplier effect on the economy by virtue of the encouragement that long-term employment prospects gives to workers to invest in home purchase and other forms of consumer spending; (3) contribute to the development and achievement of the potential of our towns and cities, and our nation; (4) are an investment in the future of our towns and cities, and our nation; (b) therefore deplores the decision of the Commonwealth Government to reduce expenditure for 1983-84 on the Brisbane Airport development by $20m, which will result in- (1) the loss of more than 500 jobs on that project in 1983-84 alone; (2) uncertainty as to the future of the project, particularly regarding its completion by 1987 in time for several planned world events in Brisbane in the late 1980s; (3) the consequent loss of expenditure of hundreds of millions of dollars on projects associated with these events and the thousands of jobs they would create in Queensland; (4) the loss to Australia of millions of dollars from overseas visitors to these projects and events of international importance; (c) urges the Federal Government to keep its election promise to maintain the priority for funding for the Brisbane Airport development which obtained under the previous Liberal Government. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) recognises that major capital development programmes (1) have the potential to create long-term employment opportunities which would not otherwise be available, especially for unskilled and semi-skilled workers; (2) have a significant multiplier effect on the economy by virtue of the encouragement that long-term employment prospects gives to workers to invest in home purchase and other forms of consumer spending; (3) contribute to the development and achievement of the potential of our towns and cities, and our nation; (4) are an investment in the future of our towns and cities, and our nation; (b) therefore deplores the decision of the Commonwealth Government not to fund the Alice Springs to Darwin rail link in order to save $545m, which will result in- (1) the loss of more than 1,000 jobs directly and many thousands indirectly in the steel, concrete and associated industries; (2) uncertainty as to the future of the project and particularly regarding its completion by 1988; and (3) the loss to Australia of millions of dollars in tourism, commerce and trade (c) urges the Federal Government to keep its election promise to maintain the priority for funding the Alice Springs to Darwin rail link development obtained under the previous Liberal Goverment. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate- 1. Recognises that major capital development programmes: (a) have the potential to create long-term employment opportunities which would not otherwise be available, especially for unskilled and semi-skilled workers; (b) have a significant multiplier effect on the economy by virtue of the encouragement that long-term employment prospects gives to workers to invest in home purchase and other forms of consumer spending; (c) contribute to the development and achievement of the potential of our towns and cities, and our nation; (d) are an investment in the future of our towns and cities, and our nation; 2. Therefore urges the Government to continue the planning and commence construction of the Darwin Airport, which if not built in order to save $86m, will result in: (a) the loss directly of many hundred jobs; (b) uncertainty as to the future of the project particularly regarding its completion by 1987; (c) the loss to Australia of millions of dollars in tourism. Senator MacGIBBON(Queensland) —I give notice, that on the next day of sitting, I shall move: That the Senate- 1. Recognises that major capital development programmes: (a) have the potential to create long-term employment opportunities which would not otherwise be available, especially for unskilled and semi-skilled workers; (b) have a significant multiplier effect on the economy by virtue of the encouragement that long-term employment prospects gives to workers to invest in home purchase and other forms of consumer spending; (c) contribute to developing and achievement of the potential of our towns and cities and our nation; (d) are an investment in the future of those towns and cities and our nation. 2. Therefore, deplores the decision of the Commonwealth Government to reduce expenditure for 1983-84 on the new domestic terminal and hard-standing tarmac areas of Townsville Airport which will result in: (a) the loss of jobs in Townsville in this project; (b) uncertainty as to the future of the project; (c) will grossly inconvenience domestic air travellers in this gateway to the north, by committing them to an overcrowded, unsuitable, obsolescent terminal designed for passenger numbers of a bygone era; (d) will thereby retard the commercial development of North Queensland. And therefore urges the Federal Government to keep the agreed Fraser Government 's plans to develop Townsville Airport to an adequate standard. Motion (by Senator Button) agreed to: That so much of the Standing Orders be suspended as would prevent the Senate proceeding forthwith with the matter of public importance submitted to the President this day. Discussion of Matter of Public Importance The PRESIDENT —I have received a letter from Senator Chaney proposing that a definite matter of public importance be submitted to the Senate for discussion, namely: The Government's election confidence trick in promising one thing and doing another and its sorry record of mismanagement and maladministration. 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 CHANEY(Western Australia-Leader of the Opposition)(10.4) —The Opposition brings forward this matter of public importance for discussion in what are the closing days of the first parliamentary period of the new Government. We bring forward for discussion the statement, 'The Government's election confidence trick in promising one thing and doing another and its sorry record of mismanagement and maladministration.' It is quite clear how this debate is going to be conducted. The Government has made that quite clear by the way it has started shouting, catcalling and carrying on before any- thing has been said. I suppose the Government's attitude to debate in this place is best summed up by referring to the handwritten note which was tabled by Senator Walsh yesterday as the information which he had used as his guide to answering questions in this place. We find, underneath references to what has happened to gross domestic product, the words, in Senator Walsh's handwriting, 'Bucket Howard'. That, I suggest, shows the standard of debate we can expect from Government senators. They have nothing to do with argument; all they wish to do is enter into vulgar abuse. The matter of public importance which I have brought forward raises a number of major concerns about the three-month-old Government of Mr Hawke. The first concern is the way it gained office, promising one thing and setting out to do another. The second broad area is its record of mismanagement and maladministration. Government senators interjecting- Senator CHANEY —Government senators might like to howl me down but the case can be made out against the Government simply by quoting the Government itself. The Government, the Australian Labor Party and Mr Hawke are damned out of their own mouths. Honourable senators do not have to rely on what was said by politicians from the Opposition or on what was said by journalists to make out this case; they have only to look at what was said before and after the election. If there is any query about whether this is a Government of broken promises I invite the people of Australia and honourable senators opposite to read what Labor said before the election and to read what it has said since the election about what it is doing. If there are queries about maladministration in this Government let us not enter into dispute and let us not worry about disputed areas; let us look at the area where the Government has admitted to maladministration and failure on the part of its Ministers. Mr Hawke has had to carpet a series of Ministers in the first three months of this Government. It cannot be denied by Government senators that there has been maladministration in this Government when the Prime Minister (Mr Hawke) has had to pull Senator Evans up over his use of the Royal Australian Air Force against the civil Government of Tasmania-the spy flights. The Prime Minister has reproved Senator Evans about that piece of maladministration. The Prime Minister has had to reprove Mr Young for his loose- mouthed approach to security matters. The Prime Minister has had to reproach his Minister, Mr West, for speaking against the Government on wages policy. The Prime Minister has had to reprove Mr John Brown for his extraordinary anti- tourism statements. So this is not a matter of the Opposition saying that there is maladministration; the Prime Minister has made it quite clear that he regards his own Ministers as having engaged in maladministration during the early months of the Government. The admitted list is enough to give substance to this debate today. But let us look at some of the not admitted examples of maladministration. Not one Government senator could look himself in the eye and say that these are not examples of maladministration. Consider Senator Evans's copybook demonstration on how not to protect the civil liberties of David Combe. Senator Evans is not here but we know what high regard Government senators have for his protection of the civil liberties of Mr Combe and how ably he was assisted by Mr Young with his loose-mouthed approach to national security! Who else in the Government was guilty of the same sort of behaviour? Nobody sitting opposite would really defend Mr Bowen for his gratuitous entry into the foreign affairs field in suggesting a peacekeeping force involving Japan in Kampuchea. That is an indefensible situation. It is typical of the early record of this Government. I return to the broken promises part of this debate. Even briefly to list and describe the promises which have been broken by this Government would take more than the 20 minutes which is allotted to me in this debate. But the central concern which I put forward is the promise which the ALP, Mr Hawke and every major Labor Party spokesman made before the election that they would change the Fraser Government's economic policy. There is no doubt what was meant by that. The Labor spokesmen from Mr Hawke down promised to change Australia's economic policy. They made it quite clear that they would change to an expansionary economic policy because they claimed that was the solution to Australia's woes. Let us look at what was said by Mr Hawke and in the official documents of the Labor Party. We were told before the election in Labor's national recovery and reconstruction plan: 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. That is a direct quote from Labor's own document. Labor's document also stated: The principal thrust of Labor's economic strategy will be to reject the policies of contraction and embrace the policies of expansion . . . the achievement of these aims requires a substantial change in national economic policies to urgently lift demand . . . Labor will not wait until the 1983-84 budget to commence this recovery program. Immediate action will be taken to stimulate activity in key sections. What did Labor say before the election? Again I quote from the Australian Labor Party policy speech, which stated: Recovery can only be achieved and sustained by a change to national economic policies which lift and sustain demand. 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. What a wonderful quote when Labor has already done so much to lift out many dollars from the weekly pay packet of Australian taxpayers and when it has already lifted money from the pensioner's cheque! What has come about is a complete reversal, in rhetoric, at least, but also in those actions which have taken place and further in what was promised to the Australian people-a policy of expansion. I will not again go through all of the quotes from the statement of the Treasurer (Mr Keating) which bear this out. I simply remind the Senate of the sorts of actions which have been taken.We have a government which suddenly is deeply conscious of the deficit-I will talk more about that a little later-yet it is a government which said that it would throw away the calculators. We have a government which is pursuing tighter monetary targets and yet it is a government which abused us, when it was in opposition, for a fetish about monetarism. We have a government which is taking away the purchasing power of the Australian people by the loss of the tax concession on health benefits, which affects 70 per cent of our families, and by the loss of the tax deduction for housing interest which again affects many millions of Australians. We have the complete reversal of form. That is the most serious allegation which can be made of this Government: It has turned on its head the central promise that it made to the Australian people. If one looks in detail at what was done by the Government-I will do so very quickly-the broken promises become readily apparent. The Prime Minister promised 'immediate reductions in income tax'. We know that instead there have been increases. He promised to 'retain the tax rebate for home loan payments'. That, of course, has gone. He promised to introduce a first home ownership assistance scheme as 'an option to the existing deposit assistance scheme, which will be retained'. He promised not to increase tax on lump sum superannuation. We know what has happened there. He promised not to take 'money out of the weekly pay packet'. We know what has happened on that matter. He promised not to take money out of 'the pensioner's cheque' and we know what has happened there. He promised not to abandon the Alice Springs-Darwin railway and we know what has happened to that promise. He promised to continue the Government's major airport development program, including the upgrading of airport facilities in Brisbane, and we know what has happened there. He promised to reduce the price of petrol by 3c litre and, after the price of oil had dropped $5 a barrel, he gave one half of what he had promised and effectively ignored the change in the world price of $5. We know what has happened there. He promised to move to achieve fixed term four-year parliaments but he gave that away and decided he would have a flutter with three-year fixed term parliaments. Now he has backed off that proposal. He promised to retain the health insurance rebate until the introduction of Medicare and that promise has been broken too. That is as sorry a litany as one could imagine after a short three months in government. Labor has completely overturned what it promised the electorate both in detail and in the broad thrust of what it is doing. Let us look at why this has occurred. It has occurred for two reasons: One is a stated reason and one is an unstated reason. The stated reason is a budgetary problem that the Government-surprise, surprise-discovered for itself when it was elected to government and the unstated reason is that Government senators and the Labor Party were so desperate to get into government that they were prepared to promise anything that would achieve that end. I will deal with that after I have looked at the question of the Budget deficit. When Labor come to government Mr Hawke very quickly made the position clear. He said in the Governor-General's Speech: My new Government has inherited a budgetary deficit problem of an unprecedented magnitude. A comprehensive review of budgetary commitments, both in terms of outlays and taxation expenditures, has been set in train. So on the first day of this new Parliament, Mr Hawke's professed horror at the size of next year's deficit was to become the standard excuse for the wholesale breaking of promises. We are now told that a party which before the election put no discernible limit on Budget deficits finds that a prospective deficit of roughly $10 billion is simply not on. With a weary regularity, particularly in this chamber, we have heard over the last month the mythical $9.6 billion figure trotted out. Of course, we know that one honourable senator opposite at least thought that that was the figure for this financial year-a nice comment on the degree of knowledge that exists on the Government benches. But what is the truth behind that figure? That claim, I believe, is clearly and publicly now quite discredited. The fact is that Labor did not care when it made its promises whether it could afford them or not and it made them before there was any public estimate of the deficit on the part of the then Government. But having won office by promising what it had no intention of ever providing, the Government had to find an excuse, and it had to find that excuse both for the electorate and for its own back bench which had gone to the election on the basis of expansionist policies. As the Sydney Morning Herald's economic editor wrote on 24 March: I've always believed that the $9.6 billion estimate is exaggerated and misleading . . . it is based on an excessively pessimistic forecast for the level of economic activity and employment growth in 1983-84. He added that Mr Hawke himself had already said that the Labor Government's 10 per cent devaluation would alone reduce the deficit by up to $500m. But if the figure was out of date by March it was certainly destroyed by April when the National Economic Summit Conference documents indicated that a more realistic projection would be around $8.5 billion because economic growth was likely to be around 2.7 per cent rather than the 0.5 per cent that Mr Hawke had told journalists was the basis of the discredited $9.6 billion. Since then this phoney figure has been further discredited, along with those who continue to pretend that it means something. It is worth recalling that the former Treasurer, Mr Howard, at all times has rejected the $9.6 billion figure on the same basis as the Sydney Morning Herald- that growth figures were far too low. It was only after persistent questioning, and that questioning was met with the usual tirade of personal abuse that we get , that this economic genius, Senator Walsh, who has been parading himself in that guise for so long, admitted yesterday that the deficit figure he deceptively misused was something less than the $9.6 billion. This very reluctant admission from the now discredited Minister for Resources and Energy ( Senator Walsh) was nevertheless accompanied by an attempt again to mislead the Senate about the growth and deficit figures. His desperation to maintain his phoney excuse for breaking his promises and rejecting his own party's big spending programs led him to yesterday's farce over the document he tabled at Question Time. That document, which was tabled at Senator Messner's request, was in Senator Walsh's own handwriting. He cannot claim, like Senator Evans, that it just came off an automatic typewriter. He cannot pretend that he did not understand it. That document revealed that Senator Walsh deliberately misled the House when he denigrated the former Treasurer's claim that there had been a major increase in economic growth forecasts affecting the deficit from the 0.5 per cent gross domestic product rise on which the superseded $9.6 billion figure was based. Senator Walsh said the figure should have been only 1.5 per cent and tried to suggest that the deficit had been cut only by about $200m by the recently improved growth forecasts. That is another attempt to confuse. Senator Walsh's tabled document clearly shows that the 1.5 per cent relates only to non-farm gross domestic product. He was trying to hide a further cut in the size of next year's forecast deficit of about $500m-that is, of course, if the analysis of the Economic Summit documents are to be believed, and they certainly have more credibility than Senator Walsh. So, the simple fact of the matter is that the Government has been trying to maintain a fiction in this Parliament. Frankly, we do not know for certain exactly how wrong the $9.6 billion estimate is because the Government has not yet done the Parliament the courtesy of telling us the figures that it has been prepared to reveal in background briefings to the media. What we do know is that it is wrong by a very considerable amount, probably by about $1.5 billion. Not even the campaign which the Government has run has been able to hide that from the Australian people. Indeed, most leading journalists have exposed the deception. The Australian pointed out last week that if the Treasurer admitted that the new forecasts were for greater economic growth, then he would have to admit the big deficit being touted by the Government was just so rubbery as to be unbelievable. The Australian Financial Review talked of the 'myth' of the $9.6 billion deficit and said that after the revised growth figures it is now inoperative. The National Times said: . . . it is now largely an irrelevant figure . . . the improved outlook for growth in 1983-84 could reduce the size of the prospective deficit by up to $1 1 /2 billion. The Sydney Morning Herald said that the new economic growth projections are casting doubt on the validity of the $9.6 billion that is Mr Hawke's justification for breaking his promises. The article stated: . . . it is dying as a political justification . . . improved growth estimates must mean a lower deficit. So the Press has seen through these phoney measures and I believe the Australian people have seen through them. The question remaining to be answered is this: Why did this Government set out to make promises which it knows cannot be kept and then set about so freely breaking them in the first quarter of Government, following the pattern established so ably by Mr Cain, Mr Bannon and Mr Burke? Now that this Government is in office it says it cannot afford to carry out any of the promises it so glibly made to the Australian people. I believe there is a quite simple explanation as to why these extravagant promises were made and why they have been broken as, of course, they had to be broken-it was because the Australian Labor Party was desperate to win office. The simple truth is in what was said by Senator Button in an interview which was reported in the Weekend Australian of 16 April. Senator Button was trying to explain his part in deposing the Labor leader, Mr Hayden. He was trying to explain how it came about that the Labor leader could be brought down so mercilessly by the Labor Party. The article in the Weekend Australian states: Button rationalises his motives in terms of his past. 'Late last year, there was a feeling of total hopelessness around this place. It's hard to understand now. I had the feeling we just had to win the next election. If we didn't, the party would split and we'd have 25 years in opposition.' This sorry mess is because of the desperation of the Labor Party to get into government. The fact is that the party will split anyway because of its total failure to stick to the principles it has put before the Australian people and by its total failure to behave in an honourable way since it came into government. I believe this Government in its first quarter is in its sorriest state that Australia has ever seen in the early years of a government. Senator GRIMES(Tasmania-Minister for Social Security)(10.28) —When we arrived this morning and read the matter of public importance which had been sent to the President we wondered just what the Opposition was about. We are concerned, of course, as everyone should be, because democracy requires that there be a strong , active, thoughtful and constructive Opposition. This Opposition is none of those things. That is demonstrated by the fact that it brings down a matter of public importance today at a time when, although things are improving, unemployment is at a record level, inflation is too high, and the economy is still not expanding as much as any of us would like as a result of the previous Government's policies. Yet all that Opposition members raise is a nit-picking, nonsensical matter of public importance like this. To lead the debate we had the Leader of the Opposition (Senator Chaney) who, I must say, is not much of an opening bowler. I think he is probably best described the way Geoffrey Boycott described an English opening bowler yesterday : 'He runs in like Dennis Lillee and he delivers with the pace of Denis Thatcher '. What sort of a performance is it in a time of economic stress like this when all Senator Chaney can do is to come into this place, and raise a matter of public importance dealing with broken promises. All we have had from the likes of Senator Chaney and honourable senators opposite is talk of broken promises. Senator Chaney commenced his speech by complaining about the way we got into government, the way we gained office. I remind honourable senators opposite that we gained office at an election at a time picked by the previous Prime Minister and on issues picked by the previous Prime Minister. At an election that was called early because the Prime Minister thought it was the best time to go there was an overwhelming vote against the former Government and for this Government. Senator Walters —Not in Tasmania. Senator GRIMES —That is how we came to power, and that is why Senator Walters is sitting where she is. I think she will have to get used to it. Honourable senators opposite will have to put a few constructive ideas before the people of this country before they get back into power. I suggest that they will have to do much better than Senator Chaney has done today. Senator Chaney's main problem seems to have been the economic statement of 19 May. According to Senator Chaney, it seems that we were not radical enough. It seems to me that Senator Chaney is concerned that we had some concern for the Budget deficit in this country. I think anyone who is responsible should be concerned about the Budget deficit. I remind Senator Chaney that, when that statement was brought down, it was greeted well by the Press. It was considered to be a responsible statement. The measures contained in it were considered to be responsible by the vast majority of economic commentators in this country, the leaders of industry and particularly the superannuation and insurance industries that were directly affected. On 24 May 1979 another economic statement or mini-Budget was brought down which caused quite a different reaction in this country and in this place. It was at that time that Senator McLaren came into this chamber with the famous newspaper headline, 'Lies, Lies, Lies'. The mini-Budget was described in the Illawarra Mercury and in every other newspaper in this country as a savage mini-Budget which broke two promises on income tax and announced big cuts in government expenditure. It was condemned all over the country because it broke promises and because it was a contractionary document. It received a much different response from the Press than that which was received by our economic statement. If the previous Government had attempted at any time to enforce the standards of honour which are implied in this matter of public importance by Senator Chaney it would not have lasted in its first week, and Senator Chaney knows it. The former Government was led by a person whom I realise Senator Chaney admires very greatly because every time anyone mentions his name in this place Senator Chaney jumps to his feet to defend him. It was led by a Prime Minister who had previously stabbed in the back two leaders of the Liberal Party. It was led by a Prime Minister who achieved power by conniving with a Governor-General and others at the time. For seven shameful years it was led by a leader who said: When you go into an election with a commitment in 1980 I think it is nonsense to suggest that a commitment made in 1975 on the same subject overrides the one made five years later. This was a man who changed his commitments, changed his promises and broke his promises all the time. The Liberals never intended to keep the promises they made in election campaigns. They never kept to the principles they espoused either in opposition or in government. Who will ever forget the Malcolm Fraser line on the unemployment benefit when he was a shadow Minister in 1974? He said then that, as unemployment increased so should the level of the unemployment benefit so that it would, after prolonged unemployment, reach the minimum wage. That was the policy and the promise of the former Prime Minister who reduced the unemployment benefit, inflicted on the single unemployed a reduction in the unemployment benefit through non-indexation and considerably reduced the standard of living of under 18-year-old unemployed persons by not increasing their unemployment benefit at all from 1975 to 1982. This was the Liberal leader , the leader whom the present Opposition so slavishly followed. This was the Liberal leader who said that a Labor government should have resigned because unemployment in this country had reached 190,000, yet who, in government, oversaw an increase in unemployment to 700,000 on any estimate. Probably, if we consider hidden unemployment, it had reached about one million at the end of his Government's time. But he would never have resigned. What he did was blame the unemployed, their parents, the educational system, the trade unions. He probably would have blamed anyone within this country, within this world, or within this universe if he could have. For all of that time the present Opposition senators continued to sit obediently behind him, to applaud everything he did, to applaud his policies, in particular his promise in 1975 that there would be jobs for all who needed them; yet, at the same time, they oversaw this great increase in unemployment. I think that we should look quickly at some of the things that were promised. I am sure that Senator Richardson, who will be speaking on this matter for our side, will look at some others. But we have to remember that the previous Prime Minister, Malcolm Fraser, promised to bring down taxes, not to increase them. In fact, he ended up leading the Government which was the highest taxing government in the history of Australia. The previous Government's taxation measures in its last seven Budgets took $203 billion from the pockets of Australian taxpayers; that is, as much tax was collected in seven years under the Fraser Government as the combined total of all taxes that were collected in the previous 75 years since Federation. In 1977, during the election campaign speech of Mr Fraser, the present Leader of the Opposition sat on the platform and clapped while his leader said: 'We have ended the big tax rip-off'. Now the Senate is kept here day after day protecting the very people responsible for exploring every tiny loophole in the law, who have ripped-off the community by the infamous bottom-of-the-harbour and other schemes, making the low income earners cough up and pay for that tax evasion and avoidance. To keep the tax evasion industry in luxury, in 1976 the Fraser Government introduced legislation which imposed a discriminatory tax on the children and spouses of the unemployed, people whose standard of living is miserable, who should have been protected by the Fraser Government's Ministers for Social Security and who should have been protected by those who were in the Fraser Government who in fact expressed concern for groups such as this. But in fact what happened was that taxation of their benefits was introduced while the income tax evasion industry continued to expand. As I say, we sit here day after day with members of the Opposition trying to stop legislation which will end, once and for all, the tax avoidance and tax evasion industry and will have people repay to the taxpayers and to the Government of this country some of the ill-gotten gains that they have received over recent years. Yet no more clear promise and no more clear mandate was given to any government than our mandate to introduce this legislation and to carry through with this recoupment of the taxation which was evaded and avoided over all this time. Senator Peter Baume —If that were what it was you would get it through. Senator GRIMES —We cannot get it through because a quite clear promise has been made that Senator Peter Baume and his colleagues, who are so concerned about these people, will hold up its passage and, if possible, defeat it. I believe that we should now look at what has happened since we came to government. We should remind the Opposition just what this legislation is all about. We came to government with a very large win in the election. We came to government with a series of promises, but in particular with promises to do something about unemployment, to do something about the deplorable standard of living of those who were suffering from unemployment, to do something about the redistribution of the wealth of this community to those who in fact needed assistance. We realised that all this would not be easy to do quickly and that the next Budget would be a difficult one. But we also quickly realised that something had to be done before the next Budget; hence the economic statement from Mr Keating; hence the new policy proposals which were introduced by Mr Keating at that stage. Within three days of our being sworn in, before that economic statement, and before anything else was done, we increased the unemployment benefit for single unemployed people which had fallen way below the poverty line and which is still way below the poverty line despite the increase. Prior to the increase, the benefit for single people was less than half the married rate. We did that very quickly because it was an election promise and because the unemployed are a disadvantaged group in the community. In the economic statement we introduced measures to increase employment through the Community Works Program and the housing program, to increase the expenditure on public housing and to increase the assistance to first home owners to create a stimulus in the housing industry . All these measures were welcomed by the housing industry, builders, building societies and every right thinking person in this country. Those measures are condemned only by the nitpickers in the Opposition. We took our first step in the budgetary process to reform the superannuation industry and the treatment of superannuation payments in this country which had been advocated in 1979 by the previous Treasurer, which had been talked about in 1981 by the previous Minister for Social Security and which had been recommended by the Hancock National Superannuation Committee of Inquiry and the Asprey Taxation Review Committee. We did all those things and they were welcomed by the insurance companies in the community and by reasonable and moderate economic writers. I commend to Senator Peter Baume and others here the article by Yvonne Preston in the Sydney Morning Herald yesterday which pointed out the unfortunate nature of the debate in this area. Of course, the measures were opposed by a few people who saw their privileged positions and their vested interests affected. But in fact the vast majority of sensible people in the community welcomed those moves. In the next Budget we will have to review certain areas of expenditure as we have had to review certain areas of the previous Government's expenditure. Yesterday we had a series of notices of motion in this place on the Bicentennial Water Resources Program from honourable senators allegedly representing the interests of the various States. There is no one in the community, and in fact no honest person in the Opposition, who does not admit that that Bicentennial Water Resources Program was in fact dreamt up as a gimmick. No one-not even Senator Sir John Carrick if he is at all honest-can deny that the Fraser Government went to the bottom drawer and dragged out every water resources program that had ever been suggested, including some that were not approved by the States involved. The then Government then stuck them all in something called the Water Resources Program and put it up as an election gimmick. Yet the Prime Minister of the day and the Treasurer of the day knew quite well that the projected Budget deficit was such that the Government would have to cut expenditure considerably and that that program would be the first expenditure that it would cut. It was a phoney program and the Opposition knows it. Yet yesterday we had a parade of people from each State saying that we should restore to the economic program all those fairy tales that had been introduced by the previous Government. Senator Chaney came in here today suggesting-Senator Martin suggested it yesterday and today-that the new construction and changes to Brisbane Airport have been halted and will not proceed and that Brisbane will not get its new airport. Senator Martin, in her usual sensitive way, will doubtless now seek to make a personal explanation. That is clearly the implication of what she was saying yet she knows, and Senator Chaney knows, that the Brisbane Airport will proceed-the order of works will change, but certainly it will be completed. Phoney water programs were introduced by the previous Government, with no intention of ever carrying them out. The present Government realised that it had to review programs such as those. We realised the sort of political capital that honourable senators opposite would attempt to make of the review that we had to do, but we had to do it. We did it because it was necessary for the economic development of, and sensible budgeting in this country, and we will continue to do it. I do not think anyone in this community envies the role of the Government in having to take over the sort of deficit problem that we have taken over, having to take over the country at a time of record unemployment, having to take over at a time of high inflation and record interest rates in the community and having to take over at a time when the world economic situation was such a problem to us. But we are facing the problems that confront this country. We are facing the budgetary problems with courage, common sense and sound economic management, and we will continue to do so. One would have thought that, in all the nonsense that has been going on here in regard to the three matters of public importance introduced this week, there would have been just one positive suggestion from the previous Government-the present Opposition-but there has been none. Every move taken by the present Government, as set out in the economic statement, every single thing that has been done, has been opposed by the Opposition, which has made not one positive contribution. I ask the Opposition, as I did the other day: If it believes every one of the moves set out in that economic statement has been wrong, what would it have done? The alternative was to let the Budget deficit blow out to $10 billion. Senator Chaney —You said: 'Throw away the calculators'. Senator GRIMES —I do not think even Senator Chaney would believe that we should let the Budget deficit blow out to that extent. Senator Chaney —Senator, you said: 'Throw away the calculators'. Senator GRIMES —The honourable senator ought surely to make at least one suggestion. His party has just been defeated. He was recently a senior Minister, in the former Government, but he has no suggestions at all as to what should be done in this country. Senator Chaney —You said: 'Throw away the calculators'. Senator GRIMES —Nobody said: 'Throw away the calculators'. We said: 'You need some economic management'. I hope that Senator Peter Baume will now get up and, rather than engage in nit-picking, shouting and rhetoric, say in what respect our economic policy is wrong and, as the Opposition has opposed the Government's every economic move, what alternatives he would propose. Until the Opposition does that it will not be a credible Opposition, and until it is, it will remain in Opposition for a long, long time. Senator PETER BAUME(New South Wales)(10.48) —To the public there is no more important matter than the performance of its national Government, and there can be no more relevant time for the performance of its national Government to be examined than at the end of a parliamentary session. That is an appropriate time to look at what the Government has or has not achieved. It is entirely appropriate that we should attempt to make some judgment as to what this new Government has and has not done during its first three months in office. If Senator Grimes wants us to show how the country should be run, he has only to offer to resign. We will gladly take over and show how government can be conducted with competence, honesty and a certain amount of dignity. This Government, like all governments, is accountable for all its actions. One of the proper tasks of any Opposition is to set in train that process of accountability. The matter of public importance proposed today is part of that process and enables us to set out some of the failures of the Government in its first three months in office. It is no good Senator Grimes coming in here and holding up newspaper headlines of two years ago. We are talking about the defence and record of this Government, the Government elected this year on this year's promises. It is clear that the Labor Government, which has now been in office for almost three months-almost 90 days-has not displayed competence, any coherence, any cohesiveness in its own ranks, and is not consequential; that is to say, it does not look ahead to what will be the consequences of the things that it proposes I am really forced to the conclusion that many of the broken promises, gaffes, and embarrassments heaped upon embarrassments, are because this Government simply cannot do any better at this stage. It is going down the road of embarrassment and incompetence because it does not know how to do anything else. I hope for the sake of the country that it starts learning, because Australia deserves a national government that is competent, coherent, cohesive and consequential. The Australian Labor Party and its Government must look at the Government's record of the last three months. They must learn from the lessons and from what they have not done. In three short months-when the Government should have been enjoying its honeymoon and getting nothing but good Press for anything it said or did-we have seen the most amazing series of foul-ups instituted by the Government and done by the Government to itself. It is having difficulty in extricating itself from these problems. We have seen the National Economic Summit Conference with whole sections of the Australian community ignored. We have seen the furtive spy flights over Tasmania. We have seen vicious and unwarranted personal attacks upon the Chairman of the Australian Broadcasting Commission. We have seen the Star Chamber treatment handed out to a former national secretary of the Australian Labor Party, Mr David Combe. We have seen a Minister leaking national security information. We have seen referendums proposed and then called off again. We have seen a tax recoupment Bill that not only will be unfair in its extent, but also will cost jobs for Australians at a time when jobs are needed. It is difficult to conceive that a party that has been in office just three months could have achieved such a level of mismanagement; that it could have been involved in such a breach of faith with so many sections of the Australian electorate that gave it its mandate and their trust. It has abandoned the people who put it in office in the expectation of a better chance and a better life. After three months, the party which went to the electorate with rhetorical statements about stable, honest, effective and responsible government-that is how it saw itself-stands condemned not only in this Parliament, but also in the community at large. It stands condemned in the Press and, most interestingly, it is the butt of every cartoonist across the country. The events outlined earlier by my colleague Senator Chaney, the economic mismanagement and the various scandals-this is not some time warp taking us back to the Whitlam era-represent a faithful account of what the Hawke Government has done in just three months, from its first day in office. The Government has moved from sham to shamble. The Economic Summit, from which so much was expected and which had so much promise, failed the expectations of even Labor's supporters. It was grand in conception and heady in rhetoric, but defective in delivery. What was Labor's idea of bringing Australia together? It was to call a conference of big business , big unions and government. It was a meeting of the haves, who sat down together, at the expense of the have nots, the people the Labor Party purported to represent. That Economic Conference, so grand in its design, failed to take any difficult decisions. The so-called consensus which was reached was only a recognition and statement of problems; it was not an agreement on what the solutions could or should be. The Summit failed to endorse the wages freeze, the one thing which has shown promise of restoring jobs in Australia. Of the options available, it chose the wrong one. It chose the option which, by Treasury's own figuring, would not bring about a return of jobs. Let us move on from the euphoria of the Summit to the real business of Government which followed, when this Government, which had good will for the start of its term as the elected government of Australia, came to the Parliament and its Ministers began their real work in administering the country. What have we seen since then? We have seen the rough-shod and unnecessary treatment of Tasmania. Leaving the merits of the dam aside, the Labor Party has shown a flagrant disregard for the rights of that State and I think it will show the same disregard for the rights of every other state. I refer to the decision not to proceed with an aircraft carrier capable of taking fixed wing aircraft and the decision on the Fleet Air Arm. Again, leaving the merits of the decisions aside, on each occasion the Government failed to consult with those most concerned; that is, officers of the Royal Australian Navy. It is possible to forgive some of these things. We can put them down to incompetence, naivete, inexperience or ignorance of proper procedures, but the Government's first three months have exposed much more than sheer naivete. It has been pointed out already that the Prime Minister (Mr Hawke) has had to carpet several of his Ministers: Senator Gareth Evans over the spy flights; Mr Young over the breach of security; Mr West over his statements on wages policy; Mr John Brown-I think one of the cartoons I enjoyed most shows a couple of koalas saying that they would not like to be politicians, either-and Mr Lionel Bowen, who put forward his extraordinary proposal that we should put troops in South East Asia as some kind of peacekeeping force, no doubt a new kind of far- eastern co-prosperity sphere. The ALP should recall that the Government that preceded it had very strict standards in this kind of case. My very good friends and colleagues Mr MacKellar and Mr Moore, over a very trivial matter, stood aside as Ministers. There is no doubt in our minds that Mr Young, for the breach of national security of which he was guilty, and which is admitted, should have stood down as a Minister. In the action he took he breached the standards which are required of a Minister. He breached them in a matter of national security. Let us look at the areas of incompetence. The spy flights need not have occurred. We were told that they seemed like a good idea at the time. The pursuit of Tasmania that has taken place need not have occurred. Ministers have been unable to cope in Parliament. In Question Time, in the Senate at least, we have the spectacle of Minister after Minister refusing to answer questions. That need not happen. We had Senator Evans this week refusing to endorse the parliamentary statement by his former leader, Mr Hayden. That need not have occurred. We have the injustice and the leaks concerning Mr Combe. They need not have taken place. We have his total destruction by Government edict. We have the Government forced, unwillingly, to set up a royal commission to try to restore some semblance of decency to a man who has been destroyed by the Government without trial. We have the events which occurred in relation the Australian Broadcasting Commission following a gratuitous off-the-cuff remark in the Senate , which need not have occurred. We have the refusal of the Minister concerned to back up those allegations in the Parliament. What contempt for the place where he is answerable! We have the on-again, off-again referenda. We had Senator Evans's amazing statement this week that he is not responsible for the content of a letter which misled a constituent, simply because it was produced by a word processor. The honourable senator said: 'Do not hold me responsible for what I sign; it came off a word processor'. Incompetence is one thing, broken promises are another matter. In three months the Government has achieved an impressive record! It has no intention of supporting the arrangements and proposals which came out of the National Economic Summit Conference. What about the average Australian who has been looking forward to job protection and the tax cuts which were promised? Let us talk about tax cuts. I can remember the covering paragraph in the election speech of the Prime Minister regarding taxation. He said: I believe the Australian people have had enough of election promises made only to be broken. I offer no fistful of dollars to be snatched back after the election. A few days later he was already reneging. Three days after the election he said: We will have to reconsider the whole of our program. What do we have now? The Government has introduced a mini-Budget which taxes Australian families an extra $10 a week. We have had broken promises in the areas of petrol pricing, tyre retreading, fixed wing aircraft, superannuation, education and many others. Some of the promises were broken no doubt because money is tight. But we told the then Opposition that money was tight when it made its promises. We told the then Opposition that it could not fund its promises but it chose not to listen. Perhaps some of the promises have been broken because they were never meant to be kept. Some of them have been broken, we think, just out of spite or incompetence. The Government's punitive measures do not stop there. The Government decided in its mini-Budget to take away rebates available for health insurance nine months before it needed to do so. The Government has decided to hurt Australian families. It is taking action now which will harm jobs and job creation and which will diminish our prosperity rather than increase it. The Minister for Education and Youth Affairs, Senator Susan Ryan, put the situation eloquently in a speech she gave last weekend. Lest the Australian people forget, she said: Our Government is a Democratic Socialist Government: That means that within Australia we are committed to the redistribution of wealth and power. The Government is going about it. The cartoonists have said it all. A cartoon by Pryor which appeared in the Canberra Times not very long ago depicted a row of unhappy looking Labor Government Ministers, each with a shoe fixed firmly in his mouth and the Prime Minister standing uncomfortably in front and saying: 'Yes, we do have a few teething problems'. Pryor was kind enough to put Mr Hawke's shoe in his pocket ready to go into his mouth when it was needed. The streaker's defence will not do for the kind of things which this Government has done. To declare 'it seemed like a good idea at the time' is not good enough. Let us hope the Government performs better next session because the country needs it. The Courier-Mail described the Government as: a government lurching around in search of direction, showing clear signs of amateurism. That is what it is doing. It is maladroit, clumsy, incompetent and non- consequential. Sadly for Australia, Government members seem to be slow learners. The Government, in its first session of parliament, has done poorly; perhaps it still has its 'L' plates up. For the sake of the nation it has to do better. Australians who voted for the Labor Government might be forgiven for saying that 'it seemed like a good idea at the time'. Senator RICHARDSON(New South Wales)(11.3) —This morning the Government Whip, Senator Robertson, asked me to speak on this matter of public importance. He read out the terms of it to me and I smiled. I went into a meeting of the Senate Standing Committee on Regulations and Ordinances and read out the terms of the matter of public importance. Members of the Committee laughed. I think that was because this matter of public importance can best be described as a joke. If it is not a joke, it is the greatest display of hypocrisy this chamber has ever seen. The Government has been in office for 11 weeks. We have had one parliamentary sitting. Already the Hawke Government has introduced the Income Tax Assessment Amendment Bill and associated Bills for which we had a clear mandate on 5 March to try to get back some hundreds of millions, indeed billions , of dollars which had been ripped off the Australian community by the crooks and cheats who sent all those companies to the bottom of the harbour. Already we have witnessed the spectacle of Opposition senator after senator defending those people and trying to ensure that they keep their ill-gotten gains. They have tried to ensure that the average Australian who has had to pay all of that extra tax will have to keep paying and indeed pay more if the Opposition succeeds in defeating the legislation. We have introduced the world heritage legislation to try to stop the construction of the dam on the Franklin and Gordon Rivers. The Opposition will be damned forever for trying to ensure that that dam is built. I note Senator Peter Baume's comment: 'The merits of the dam aside'. How can we put aside the merits of the dam? This project would ensure the destruction of the last great area of Australian wilderness. He said that we should put the merits aside. The Hawke Government will not put aside the merits of any issue. It will proclaim those wilderness areas and the construction of that dam will be stopped. We have introduced legislation to revamp the Australian Broadcasting Commission to make it a corporation. This will prevent the strangulation of the ABC that has occurred over the last seven years and will give it a chance to compete reasonably with the commercial networks for the listening and watching ears and eyes of Australia. We will introduce Medicare in order to have an understandable system which will allow our citizens to live in some dignity and which will provide them with some decent health care. We will not change the system with the seasons every few months to reflect the change on the trees. Each new Minister for Health in the Fraser Government-even one Minister three of four times-changed the health scheme so that now health care in Australia is something that no one can understand, with fewer and fewer people having access to it. There will be a return to a centralised wage fixing system so that ordinary working Australians will have some rationality in their lives. In the economic statement announced a few days ago, tremendous assistance is provided to first home buyers. The home building industry is pivotal to any economic recovery. I note that even the National Australia Bank, in its last media release, welcomed the recent announcement by the Federal Government of a change in methods of assisting first home buyers. Most importantly, the Government has announced that hundreds of millions of dollars will be provided for job creation schemes to try to get people working again. Let no one on the other side of the chamber forget that unemployment was the rock upon which the Fraser ship of state foundered and sunk to the depths. I suggest that no government has attempted to keep so many of its promises in such a short time. But the biggest promise of all, the campaign theme of 'bringing Australia together' led the way to the National Economic Summit Conference which was held only a few weeks ago. Why has the Opposition screamed about big business and big unions getting together? Big business, for so long the exclusive preserve of the Liberal-National Party coalition, is a constituency that is being taken away from it, because even big business-the heartland of the Liberal Party- is sick and tired of ineptitude, sick and tired of seeing its profits dwindling, and sick and tired of seeing colleagues and friends go to the wall as business after business closed. That Economic Summit was called to look at, and try to come to some consensus on, Australia's problems. What problems were faced by the new Hawke Government? My colleague the Minister for Resources and Energy, Senator Walsh, has so often reminded the Senate in the last few days that the great problem on coming to office was that we found we had inherited an expected deficit of $9.6 billion instead of the $6 billion which we had been told again and again, at least during the last few weeks before the election, was the real deficit. I am indebted to Senator Walsh for his contribution to economic parlance. As well as the GDP and the GNP we now have the DFT-the discredited former Treasurer. This term has passed into our parlance and will remain there forever. Mr Howard's first attempt at trying to explain away the big lie of $9.6 billion was to say that it consisted of departmental first bids. I am happy to say that this defence petered out for lack of substance. It lasted only a few days. The admission by silence from Mr Howard was deafening to us all. What did Mr Fraser have to say? I would still like to know. It is hard to find him these days. I think most Australians would prefer to forget his period in office, as would most members on the other side who very rarely mention his name , let alone recall the things that he had to say. I hope I will have the opportunity in a few minutes to recall some of the things that he said. I am reminded, when speaking of Mr Howard, of the comments made by the current Treasurer, Paul Keating, when he first became the shadow Treasurer only a few months ago. He stated that John Howard had been reduced to the role of a commentator on the economy, unable to introduce any initiatives to fix it and only able to chronicle how badly the economy was going. Labor's economic promises on tax cuts and stimulating the economy were based on the belief of what Fraser and Howard had to say. If we can be criticised, I suppose that we should be criticised for ever believing anything that they had to say, because their record on broken promises is unparalleled in Australian political history. Right up to Friday, 4 March the $6 billion claim was maintained, although I suppose I have to concede that the then Government had never been too concerned to stick to the figure; it had never been too hard and fast. We should all be reminded that it reviewed that figure on the deficit four times in the six months from when the Budget was announced in August. We started off with $2.5 billion or $2.7 billion, and each estimate took the figure up and up. Why was that? It was because, as our then shadow Minister, Bob Hawke, now the Prime Minister, had said on Budget night, the figures on unemployment were rubbery, and the books had been cooked. Within weeks Howard had to acknowledge that that was true. Within weeks he had to acknowledge that the estimates for unemployment were wrong, and that the deficit would blow out because more and more Australians would be in dole queues and more and more Australians would not be able to have taxes collected from them. If we are to look at the record of those who are now trying to lambast the Labor Government for breaking promises, we should first look at what was said by Malcolm Fraser on 1 May 1981. He said: When you go into an election with a commitment in 1980 I think it's nonsense to suggest that a commitment made in 1975 on the same subject overrides the one made five years later. In other words, if one does not keep a promise for five years, one does not have to keep it at all. That was the very basis on which the Fraser Government worked . I should like to go through just some of the areas. As regards Aboriginal affairs, the 1975 Liberal election speech said: We will introduce land rights legislation based on justice for all. As soon as it gained office, the Fraser Government took back land from the Gurindji people at Wattie Creek that had been given to them by the Labor Government. Land rights legislation under Fraser concentrated on justice for land developers, for miners and for the Queensland and Northern Territory governments, which stand damned for their paternalistic attitude to Aboriginals unfortunate enough to live within their borders. Senator Peter Baume —That is absolute rubbish. Senator RICHARDSON —As regards health, the Liberals' 1975 election speech said: We will maintain Medibank and ensure that the standard of health services in this country do not decline. Is that rubbish? In 1975 health cover for a family on average weekly earnings amounted to 1.1 per cent of income. Today the cost for equivalent cover amounts to over 6 per cent, and it is still rising-that is, until, in the August session , the Medicare legislation of the Labor Party passes through the Parliament. Under Fraser, the only people who benefited from medical health care were doctors, health funds and private hospitals. The principle that the sick had to pay was certainly one that the Fraser Government relied on. I turn to inflation. For seven years we were told that we were fighting inflation first. On 12 September 1978 Mr Fraser said: Inflation at an annual rate of 5 per cent is within our reach by mid-1979. It will go on falling under the policies of this Government. In June 1978 the inflation rate was 8.8 per cent. By mid-1979 it was 10.7 per cent, and it continued to rise. As regards interest rates, who could forget the December 1977 election promise: A 2 per cent reduction in interest rates in the next 12 months is a target that can and will be achieved. Also, from the 1977 campaign speech of Mr Fraser: Interest rates have begun to fall-and they will keep on falling. On 6 December 1977 Mr Fraser said: Once the election is over, we will start to move to the consumation of a 2 per cent reduction in interest rates. At the end of 1977 new housing loan mortgages from savings banks were at interest rates of 9.25 per cent to 10.5 per cent; now the rates are over 13 per cent. Such was the record of the Fraser Government. When one looks at the MPI-I should not concentrate solely on broken promises but divert for a moment-one sees that it mentions maladministration. I will quote one election promise made by Malcolm Fraser. He said: There will be no more jobs for the boys. The boys did pretty well. The boys soon realised that if they were about to be sacked or if their incompetence had grown so great that they would have to resign, the world was their oyster. The political dead of the Liberal Party were buried in the best cemeteries in the world. If one goes through the list-Dr Forbes, Gordon Freeth, Sir Robert Cotton, Peter Coleman, who came and went and came again, Jim Webster, Harry Miller and John Kerr-one sees that, by God, the boys did well. On the same point, consider some of these boys. If maladministration is to be the yardstick by which any administration is to be judged, let us look at the sackings and the resignations. The names include Don Chipp, Garland, Lynch, Sheil, Ellicott, Cotton, Robinson, Withers, Robinson again, Sinclair, Staley, Webster, Robinson for the third time, Adermann, McLeay, Garland, Groom, Peacock, Moore and MacKellar. The list goes on and on. In all, there were 22 separate resignations, sackings and suspensions from the Fraser Ministry in 6 1/2 years. Then there is tax avoidance. Senator Chipp —We ought to form a club. Senator RICHARDSON —The honourable senator would have plenty of members. In 1977 Mr Fraser said: We will move to close loopholes which permit tax avoidance. We are clamping down on tax avoidance. I will quote from the Interim Report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union of 1981 which reported on tax avoidance. It states: This industry has developed in Australia, particularly over the last five years , at a rate far in excess of any other industry and has brought with it profits comparable only to the heady days of the Victorian gold rush . . . The amounts involved are very large indeed, amounting to many hundreds of millions of dollars per year or more. The impact on the community has been very serious. I turn to waste and extravagance, of which there was much in the last period of the Fraser Government. The Liberal election policy speech of 1975 stated: There will be no international safaris by members of Parliament. Australia does not need a tourist as Prime Minister. Mr Fraser made 28 overseas trips. He made more overseas trips than the five previous Australian Prime Ministers-Holt, McEwen, Gorton, McMahon and Whitlam- put together. Who can forget the yacht races at Newport, the fishing in Scotland or the diversion to Rome to have lunch with his sister? If they are not examples of maladministration I really do not know what would be. I turn to unemployment. While Mr Fraser complained that under Mr Whitlam unemployment had gone to 400, 000, it rose to 700,000 and was still rising when the Australian people kicked Mr Fraser out of office on 5 March. I would need an extension of time for an hour to go through all the broken promises of the Fraser Government. But that will not be necessary. The Australian people gave their verdict when they booted out that Government so unceremoniously only a few weeks ago. Senator COATES(Tasmania) —On behalf of the Standing Committee on Finance and Government Operations, I present a report dated June 1983 on certain annual reports. Ordered that the report be printed. Senator COATES —I seek leave to make a statement relating to the report and to move that the Senate take note of the report. Leave granted. Senator COATES —The Senate Standing Committee on Finance and Government Operations has presented seven major reports to date. The Committee's third and sixth reports included case studies of authorities' annual reports which have been examined by the Committee. This report presents case studies of nine authorities' annual reports and another matter involving payments by two authorities to a public relations firm. These matters were initially referred in the Thirty-second Parliament. The Committee has also considered annual reports referred to it on 22 April 1983 and reports that there were no unreasonable delays in the presentation of those reports, considering the fact that Parliament was not sitting between 16 December 1982 and 21 April 1983. Certain of these reports contained Auditor-General's qualifications. However the Committee decided merely to note that fact on this occasion and to take particular note of these authorities' reports next year to check on whether the matters leading to qualifications have been overcome. Certain other reports tabled between 22 April 1983 and 26 May 1983 also contained Auditor-General's qualifications-a disturbing proportion of those reports, if I may say so. Again, the Committee will take particular note when these authorities next report. I want briefly to draw the Senate's attention to the Committee's conclusions regarding the 10 matters raised in this report. In relation to the Australian Maritime College's annual reports of 1980 and 1981, the Committee trusts that in future the preparation of the College's financial statements will be in accord with accepted accounting practice and the printing of the annual report will be achieved in a much shorter period. With regard to the Fishing Industry Research Committee's annual report 1980-81, we recommend that the FIRC make the necessary administrative arrangements to ensure that its annual report for 1982-83 is prepared and tabled within six months. In relation to the Canberra Showground Trust's annual report 1980-81, the Committee expresses its concern that the treatment of the grant of $1,003,417 to the Trust was not fully considered at the time the grant was made. We are also concerned at the amount of time that passed before the matter was resolved and at the ability of the then Department of the Capital Territory to deal with the numerous reports it is required to edit. In relation to the Australian War Memorial's annual report 1980-81, the Committee has noted the steps taken to resolve accounting problems associated with its establishment as an independent statutory authority. As far as the National Health and Medical Research Council's medical research projects annual report is concerned, we recommend that the report be prepared in two parts-the first providing audited financial statements, and the second containing details of research grants made. With regard to the Australian Capital Territory Schools Authority, the Committee examined concurrently the two annual reports referred to it for 1979- 80 and 1980-81 and concluded that the delays in presentation caused by a changeover in accounting methods will not occur again. We look forward to the timely presentation of this Authority's annual report in future. The Australian Canned Fruits Corporation's annual report 1981 was delayed due to the time taken in concluding the audit of the Corporation's accounts and the fact that the report was presented to the Minister early in the winter recess and could not be tabled until the Budget session. The Committee makes a general recommendation regarding reports deemed to have been tabled during recess periods in the introduction of this report. Having examined the Australian Wheat Board's 1980-81 annual report we have concluded that it will be necessary to maintain our scrutiny of the financial affairs of the Board. The Committee considered the Canberra Commercial Development Authority's annual report 1980-81. This is another example of an authority which the Committee has had under its scrutiny in the past. The Committee finds it unacceptable that the Authority and the Minister for Finance (Mr Dawkins) have not yet resolved the dispute over the treatment of depreciation. We have recommended that the Minister give immediate consideration to this report and that he direct the Authority to ensure that its financial statements reflect the format approved by the Minister for Finance and the Auditor-General. The other matter dealt with by the Committee in this report is that of payments by Australian National Railways and Trans Australia Airlines to the firm known as Pieter Huveneers Corporate Positioning and Identification. We did not attempt to evaluate the necessity or justification for the expenditure as we are not convinced that a realistic cost-benefit analysis of such programs by trading corporations, whether private or public, can be made. This view appears to be borne out by the optimistic, though general, evaluation made by ANR and the frank comment made by TAA. We regard it as an unsatisfactory situation that sums of money of the magnitude spent by ANR and TAA may be expended without an effective means of measuring the cost-benefit of the investment being available. The Committee recommends that authorities consider carefully such expenditure before embarking on such programs. The Committee draws attention to two developments in government administration which should greatly assist authorities in the preparation and timely presentation of annual reports: Firstly, the tabling in the Parliament on 11 November 1982 of Guidelines for the Preparation of Annual Reports and on 17 May 1983 of Department of Finance Guidelines for the Form and Standards of Financial Statements for Commonwealth Undertakings; and secondly, a Bill which has been agreed to by both Houses, the Statute Law (Miscellaneous Provisions) Bill (No. 1 ) 1983 which, by amending the Acts Interpretation Act and certain other Acts, imposes an obligation on statutory authorities to furnish to the Parliament annual reports of their activities within six months of the end of the reporting period unless the Act specifies another limit. Ministers must table reports in the Parliament within 15 sitting days of their receipt. When reports are not tabled in the six-month period a written explanation is required and an extension of time to report is to be sought. Both the letter of explanation and the reasons for seeking an extension of time to report are to be tabled in the Parliament. The Attorney-General (Senator Gareth Evans) has stated that these requirements are to be adopted as an interim measure pending further consideration of this Committee's recommendations. The Committee welcomes this development and looks forward to further action by the Government on early tabling of non-business authorities' reports and for presentation of reports to the Presiding Officers during parliamentary recesses being deemed to be tabled. I am pleased to say that with this report all but two of the long list of references to the Committee are removed from the Notice Paper. I commend this report to the Senate. I move: That the Senate take note of the report. Question resolved in the affirmative. Report Senator MISSEN(Victoria) —by leave-For the information of honourable senators and on behalf of the delegation, I present the official report of the Australian Parliamentary Delegation to Hungary and Bulgaria. Motion (by Senator Crowley)-by leave-agreed to: That consideration of the Commonwealth Employment Service annual report 1981-82 and the Commonwealth Ombudsman annual report 1981-82 tabled on Tuesday, 31 May 1983, be made Orders of the Day, pursuant to the provisions of the Sessional Order, for the next Thursday on which General Business is called on. Report and Ministerial Statement Senator GARETH EVANS(Victoria-Attorney-General) —I table the report of an inquiry concerning the Deputy Crown Solicitor's Office in Perth and seek leave to make a ministerial statement and to move a motion in connection with the report. Leave granted. Senator GARETH EVANS —On Tuesday, 19 April 1983, I released publicly the report of inquiry concerning the Deputy Crown Solicitor's Office, Perth. As released, there had been deleted from the report some relatively short passages that identified certain members of the public and certain officers of the Public Service. I indicated at that time that I would be tabling the report in the Parliament. The report tabled today is in the same form as that released in April. I have concluded that no public interest would be served by including in the report as tabled the passages that were deleted from the report as it was released in April. Insofar as the deleted passages identify members of the general public whose affairs had been referred to the Deputy Crown Solicitor's Office in respect of matters that have not been in the public arena, it would be an unwarranted invasion of their privacy now to publish the passages that identify them. As to the deleted passages that identify certain officers of the Public Service, it is relevant that one has already been subject to much publicity and all have been subject to administrative action. The public interest does not, in my judgment, require that these passages be published. As I said in a public statement when I released the report, which it is unnecessary to repeat in detail here, most of the recommendations that directly affect the efficiency of the Office have been implemented; other recommendations are being considered for implemention in the context of the proposal for a Directorate of Public Prosecutions. I move: That the Senate take note of the paper and the statement. Senator DURACK(Western Australia)(11.29) —I wish to speak briefly to this statement and this report. The report was released just prior to the sittings of the Parliament. I do not quite know why it was not tabled then with a statement being made in the Parliament at that stage. Senator Gareth Evans —To get it out as soon as possible. That is why. Senator DURACK —The Attorney-General released it only two days before the Parliament sat, but that is by the way. I noted from the previous statement which the Attorney-General made when he released the report on 19 April that a certain number of recommendations about improving the efficiency of the Crown Solicitor's Office and so on had been implemented, and I am pleased to find that that is so. However, there is one very major problem which he has not addressed, either in the statement of 19 April or today; that is, the permanent appointment of a Deputy Crown Solicitor for the Perth Office. This seems to me to be becoming a matter of very great urgency because the Deputy Crown Solicitor, Mr Massie, was, of course, disciplined as a result of the inquiries into the allegations made by Mr Costigan and was transferred to another position. Nobody has occupied that office since in any permanent capacity. The Deputy Crown Solicitor's Office in Perth has become notorious because of what was revealed by Mr Smith's report and by the way it handled a particular tax file. There are real problems in the administration and efficiency of that Office and the adequate delivery of legal services provided by it. Mr Smith's report raises very serious questions about the future of that Office. There is no way that Office can be put back into reasonable shape while there is merely an Acting Deputy Crown Solicitor, no matter how competent he or she may be. I think that what is required is a very new approach to Public Service appointments, particularly in the legal professional area. I believe that it is necessary that somebody be attracted to take on that position on a contractual basis for a reasonably short term; somebody who has some standing in the legal profession in Perth because the Office has to deal with the Perth legal profession and with clients in Perth. I think that the only way the standing of that Office can be restored is if a person of some standing can be attracted from private practice. The only way that can be achieved is by a special contractual arrangement. Unfortunately, there seems to be a reluctance on the part of young career officers in the Crown Solicitor's Office to go to Perth and take on that responsibility, even for a reasonably short period. If somebody of that calibre could be persuaded to go there that might be an alternative. I would like to know what the Attorney-General has in mind for this Office. I am deeply concerned that something be done very quickly to give leadership to that Office because there will never be a solution to the problem there until that is done. Question resolved in the affirmative. Senator GARETH EVANS(Victoria-Attorney-General) —by leave-The report of the Senate Standing Committee on Constitutional and Legal Affairs entitled 'The Burden of Proof in Criminal Proceedings' was tabled in November 1982. The complex issues raised by the report, involving the delicate balancing of the sometimes competing interests of society in the administration of justice and the rights of the individual, have been the subject of detailed examination within both my own Department and other departments vitally concerned in the administration of the criminal law of the Commonwealth. I have also sought the views of other persons with a special interest and expertise in this area. I wish the Government to have the benefit of these views before a decision is reached on the possible implementation of the recommendations contained in the report. A full response to the report will be made early in the Budget session. I move: That the Senate take note of the statement. Question resolved in the affirmative. Motion (by Senator Robertson) agreed to: That the following matter be referred to the Senate Standing Committee on National Resources: The exploitation of the natural resources of the Australian Antarctic Territory with particular reference to: (a) the extent of the natural resources of the Australian Antarctic Territory; (b) the technical, economic and environmental restraints on the exploitation of the natural resources of the Australian Antarctic Territory; and (c) the Commonwealth's role. Motion (by Senator Gareth Evans for Senator Button) proposed: (1) That, unless otherwise ordered, the Senate meet on Friday, 3 June 1983 from 9.30 a.m. to 1.00 p.m., 2.15 p.m. to 6.30 p.m. and 8.00 p.m. to 10.00 p.m. (2) That the sessional order relating to the adjournment of the Senate have effect at 10.00 p.m. on that day. (3) That, notwithstanding anything contained in the Standing Orders and unless otherwise ordered, the Senate, on that day, shall proceed with its ordinary business in the following routine: (a) Petitions (b) Notices (c) Formal Motions (d) Postponement of Business (e) Motions and Orders of the Day, or vice versa, as set down on the Notice Paper (f) At 12 o'clock midday, Questions (g) Further Motions and Orders of the Day, or vice versa, as set down on the Notice Paper. Senator CHIPP(Victoria-Leader of the Australian Democrats) —by leave-The Australian Democrats support this motion. I record, in passing, that it is our understanding that the Government intends to sit from 9.30 a.m. to 10 p.m. tomorrow, Friday, and does not wish to return next week. It is on that understanding that we support the motion. Question resolved in the affirmative. Motion (by Senator Gareth Evans) agreed to: That leave be given to introduce a Bill for an Act to amend the Freedom of Information Act 1982, and for related purposes. Motion (by Senator Gareth Evans) agreed to: That leave be given to introduce a Bill for an Act relating to the preservation and use of archival resources, and for related purposes. Motion (by Senator Gareth Evans) agreed to: That leave be given to introduce a Bill for an Act to amend the Copyright Act 1968. Motion (by Senator Ryan) agreed to: That leave be given to introduce a Bill for an Act relating to discrimination on the ground of sex, marital status or pregnancy, and to sexual harassment. Motion (by Senator Jones) agreed to: That the Standing Committee on Science and the Environment be renamed the Standing Committee on Science, Technology and the Environment. Motion (by Senator Jack Evans) agreed to: That leave be given to introduce a Bill for an Act to amend the Sales Tax ( Exemptions and Classifications) Act 1935 to provide exemption from sales tax of retreaded and recapped tyres. Bill presented by Senator Jack Evans, and read a first time. Senator JACK EVANS(Western Australia)(11.40) —by leave-I move: That the Bill be now read a second time. I seek leave to incorporate my second reading speech in Hansard. Leave granted. The speech read as follows- This Bill has a simple objective that of ensuring that promises made by both the former Government and the present Government to exempt retreaded tyres from the imposition of sales tax, provided those tyres are retreaded in Australia are kept. The Bill aims to amend the principal Act-the Sales Tax (Exemptions and Classifications) Act of 1935 first schedule. The terms of retreading or re- capping are not defined in this amendment as they are already covered in the Act under the first schedule item 113F (1) (b). The situation with this tax is that the Tax Office was instructed to commence collection of this tax from the 1st June 1983. Notice of this Bill was given on that date precludes that action by the commissioner. This sales tax has an unfortunate history. It originated as a result of a change in administrative policy under the Liberal Government and was initially to apply from the first of January this year. This was then postponed to the first of March this year following representations from the industry. It was agreed during the election campaign by both the Labor Party and the Liberal Party, that the tax would not be introduced. The then Treasurer, speaking on behalf of the Liberal Party in a Press release on the 11th February, 1983, made this assurance and then opposition spokesperson for economic development and tax, writing on behalf of the Australian Labor Party to the Executive Director of Commercial Vehicle Industry Association in Australia on the 21st of February 1983, gave a similar assurance. Despite this assurance, during the week of the 6th April, 1983, the new Government issued instructions to the Tax Office to collect that tax from the 1st June 1983. A 1931 Sydney magistrates decision that retreading does not constitute manufacture for purpose of sales tax law has been accepted by the tax commissioner for many years, but it seems that the interpretation has now been changed by the commissioner. My concern stems from the fact that we already have a sales tax on new tyres. A retreaded or re-capped tyre contains a comparatively small proportion of untaxed material. The base of the retreaded tyre having already been taxed, should not be taxed again when the process of repairing has been undergone. If this principle was to be extended, then we would find taxes on repaired machinery, re -conditioned motor, and a great number of other items added to the tax schedules . It is estimated that the cost to consumers of this additional tax imposition would be to increase passenger vehicle tyres by appropriately #4 and to increase commercial vehicle tyres by $15-$30. This would have the effect of making re- treaded tyres and re-capped tyres comparatively uncompetitive with new imported tyres and would give a substantial advantage to over-seas suppliers over local re-treading firms. These firms employ over 8,000 employees, many of whose jobs would be in jeopardy if the tax was to be imposed. I make one other comment which supports the proposal to exempt retreaded and re -capped tyres from sales tax, and that is that there are less oil based products used in retreading than in the manufacture of new tyres which provides a substantial energy and environmental plus for the preference to re-capped or retreaded tyres. Whilst this proposal may give initial benefits to those involved in the retreading industry, it provides substantial flow-on benefits to consumers not only of tyres, but of all merchandise which is transported by road. I recommend the Bill to the Senate. Debate (on motion by Senator Robertson) adjourned. Debate resumed from 1 June, on motion by Senator Gietzelt: That the Bills be now read a second time. Senator MACKLIN(Queensland) —I seek leave to move an amendment to the motion for the second reading of the Bills which I inadvertently missed out last night when I spoke. Leave granted. Senator MACKLIN —I move: Leave out all words after 'That', insert: 'these Bills be referred to the Standing Committee on Finance and Government Operations'. Senator JESSOP(South Australia)(11.42) —Last night I commenced speaking on the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 and I made the point that I have always agreed that governments have a responsibility to collect moneys that have been evaded, moneys that had they been paid into revenue would have resulted in relieving the general public of unnecessarily high taxation. I have also made the point over and over again that I am against retrospectivity when it comes to taxation matters. I recall that some time ago several schemes were identified, among them the Curran scheme, and I certainly supported the Government's action at the time to recoup tax evaded by these schemes. Even with respect to the Curran scheme I took a stand and voted against the retrospective element in that measure. The so-called bottom-of-the-harbour scheme is, of course, the famous one that we are dealing with now. It worried me because it was first identified, to my knowledge, in 1973 when Senator Murphy was the Attorney-General in the Whitlam Government. But despite the fact that laws such as the Income Tax Assessment Act , sections of the companies Act and the Crimes Act, were in existence, no action was taken by the Whitlam Government at that time. I am glad that the Australian Labor Party now has a new found interest in recouping tax which has been evaded in this way. Of course, the Fraser Government also neglected to act under the existing legislation that was available. Last year it introduced a measure which had a retrospective element in it; it went back 10 years. At that time I made the point, together with several of my colleagues in the House of Representatives and the Senate that we objected to the retrospective element as it affected innocent people and many of them were unwittingly caught up with this scheme perhaps on the advice of their accountants and lawyers. Perhaps they had inherited shares from deceased relatives. They would have had no idea that the company in which they had an interest had contemplated this tax evasion method. I am being quite consistent in my attitude with respect to retrospectivity and I am glad to see that the Liberal Opposition is taking that stand now. I hope that it will continue to adopt that principle that is enshrined in our platform. It might be interesting if I read what the Liberal Party platform has to say about taxation. I refer to page 37 of the document which was approved by the Federal Council of the Liberal Party in May 1982. Under the heading 'Taxation', the document states: The key function of the tax system is to provide revenue to finance Government expenditure, but it also plays a significant role in relation to economic management. Overall, taxes should be kept at the lowest possible level compatible with responsible economic management and community needs. The system should be easy to understand, simple and inexpensive to administer, fair in appearance and in practice, and subject to continuing review. The achievement of these objectives requires a tax system in which: Taxation as between taxpayers in a similar position is equitable. Initiative and enterprise are encouraged. The tax responsibility of individuals has regard for their ability to pay. Incentives are provided for individuals by ensuring personal income tax is not excessive and adjustment is made periodically for the effects of inflation. Taxation is based on principles which protect the interests of taxpayers in low income groups particularly those with family responsibilities. The rights of the taxpayer are safeguarded by minimising discretionary powers; assuring taxpayers of a fair hearing before judicial and administrative bodies; maintaining confidentiality of information; ensuring that taxation adjustments do not have retrospective effect. I think that 'retrospective' is the operative word as far as I am concerned at the moment- Taxation adjustments undertaken for general economic purposes take full account of the effects of resource allocation and income distribution. There is continuity in application as it affects industry and commerce, to maintain stability and permit effective forward planning. As far as possible there is neutrality in relation to investment and consumption decisions. Both artificial schemes to avoid tax and tax evasion are serious offences against the whole Australian community and are, as far as possible, eliminated. The legislation has caused a lot of public concern. I have received many letters and telegrams about this matter. In fact, I cannot remember an occasion on which I have received more. I would like to read a letter which I received today because it sums up the feelings of many people throughout the community: I learned only last Friday of the precise provisions of the amendments the present Government is seeking to obtain to the Recoupment Tax Legislation introduced by the previous Government, and was appalled to learn that it had passed the Lower House. That is the reason for this letter. I am a vendor shareholder of a target company under the above legislation who is being pilloried unjustly and unfairly by the politicians, bureaucrats and the media through being ''lumped'' into the category of ''Bottom of the Harbour'' operators, who blatantly and possibly illegally, dumped their companies. I am not in this category. I acted totally within the existing laws at the time . The company I sold exists to-day and complies with all legal and statutory requirements. I have an unblemished record as: 1. An officer of the N.S.W. Department of Government Transport from 1941 to 1957. 2. An RAAF pilot from 1943 to 1945. 3. A businessman engaged in various business ventures, employing at times in excess of 60 people, and averaging in excess of 30 people, from 1957 to the present day. My record is now being tarnished by the implications that I have acted wrongfully because of the provisions of legislation that did not exist when I sold my business. The bureaucrats of the Taxation Department have caused me great embarrassment, and considerable mental anguish to a very sick lady, by serving Taxation Assessment Notices on a former shareholder of my company who was in no way implicated, without the courtesy of enquiring into the facts, instead, in typical bureaucratic fashion, they acted on supposition and suspicion. Let me outline the facts surrounding the disposal of my business in 1980. In September 1979, I was approached by Pyrotek Incorporated, of Spokane, Washington, U.S.A. to purchase the business of my company, Glenco Products Pty Ltd, which was their distributor in this area. I attended their office in Spokane during December 1979 and a written offer to purchase was made. I accepted this offer subject to approval of McNally & Partners, who are my professional financial advisers. McNally and Partners rejected the offer as totally unacceptable. Acting upon their professional advice, and the professional advice of my legal advisers, I entered into the agreements for the disposal of my business and my shares in Glenco Products Pty Ltd, being assured and believing implicitly that my actions were completely legal and bona fide under the provisions of all existing legislation at that time. All facets of the above are documentarily substantiated. Had the provisions of the Retrospective Legislation applied then, I would not have entered into such an arrangement of sale. Instead, I would have either, 1. Negotiated a sale of the assets and Goodwill (Non taxable) or 2. Retained the Business and still own it. It seems most unjust that I can now be taxed retrospectively for a completely legal and bona fide transaction without having the same right to retrospectively adjust my affairs in light of the now applicable legislation. There are one or two other paragraphs, which I choose not to read. If any honourable senator wants to see the letter he is welcome to see it. This letter is typical of a large number of letters that I have received showing that people acting in good faith, legally at the time, have been caught up with this legislation. I certainly support the Opposition's attitude to this retrospective legislation, as I have always done in the past. Senator CRICHTON-BROWNE(Western Australia)(11.53) —We are debating a Bill for an Act to amend the Taxation (Unpaid Company Tax) Assessment Act 1982. One may be tempted to conclude from the title of this Bill that it is a Bill which seeks to vary slightly and amend the original Bill but, in fact, that is far from the truth. The proposals contained within the Bill are almost completely unrelated to the purpose and intent of the original legislation. The thrust and direction of the amendment now before us is quite separate, quite opposite, quite distinct and quite unrelated to last year's enactment. The most dishonest thing about the first section of the Bill is the title, because it refers to recoupment tax. It is not a recoupment tax, it is a new tax, it is a penal tax, it is a vicious tax and it is an unwarranted tax which seems to me to manifest all the anger, hatred and rage by some poor unfortunate people in the Australian Labor Party who think they are extracting their pound of flesh from the people who make this economy tick. We have before us proposed legislation which is intended to raise retrospectively and collect from innocent vendor-shareholders new and punitive taxes primarily of a capital gains nature at exorbitantly high levels. Firstly, the Bill extends and widens the scope of the 1982 legislation so that people who , under the present 1982 Act, are liable for payment of unpaid company tax will now be liable for personal income tax on the hypothetical basis that the net assets of the company, including goodwill and capital assets-capital reserves have been combined with revenue reserves-and have been liquidated and distributed to the individual shareholders as dividends. Included in that theoretic distribution and liquidation of the company are not only revenue items but capital revenue as well. If the companies had been liquidated, wound up and, under normal circumstances, sold, the capital component of the companies would not, under any circumstances under the present Act and the Acts that have prevailed for very many generations, be attaching to any form of taxation. The legislation now before us includes within its provisions liability for company tax and personal income tax by vendor shareholders of companies that were not bought by the purchasers for the purpose of fraudulently stripping the companies of their assets and thus rendering them unable to meet their taxation liabilities. The legislation further proposes to authorise the Commissioner of Taxation, in his annual report to be prepared for this Parliament, to name those people who have failed to pay an assessed recoupment tax liability in respect of unpaid company tax and unpaid personal income tax. That, of course, is an extension of section 14 of the present Income Tax Assessment Act which was designed, as I will demonstrate later, for quite different and separate reasons. The intention of that section was to report breaches of the Act and occasions where tax evasion took place. What are the major, insidiously camouflaged thrusts and the intention of this legislation need to be clearly understood. I refer to the 1982 Act to draw the distinction and the dichotomy between ' intention' and 'effect'. I remind honourable senators that that Act, which provided for the recoupment of taxation liability, was restricted to company taxation which had been fraudulently evaded by the purchasers of companies but from which the vendor shareholders unwittingly had received the majority of benefit. Of course, there is no suggestion that those vendor shareholders had the slightest idea of the intentions or the motives of the purchasers or that they had intended, by way of fraud, to strip the company of its capacity to pay its tax liability at the close of the full financial year as distinct from the artificial financial year that is imposed upon vendor shareholders by the 1982 Act and the proposed amendment. The amount of taxation to be recouped from the vendor shareholders under that Act was the current year company taxation liability struck at the normal rate of 46c in the dollar together with undistributed company profits tax, again struck at the normal rate of 50c in the dollar. However, under the 1982 Act, the option is given to vendor shareholders to pay undistributed company tax as personal income tax based on what personal income tax they would have paid because they had legally sold their companies prior to 30 June, at which time the distribution of the companies current year profits was not required. In fact, those profits are not required to be distributed until 10 months after the close of the normal financial year. That distribution is based pragmatically upon the need of the company at the time to retain funds for current and future operations. In addition, of course, some practical wisdom has to be applied by shareholders to the distribution of profits and what is likely to attract at least a modest amount of taxation. Had the 1982 legislation not been introduced, and had assessments been sent out in the normal course for current year company tax, undistributed company profit taxes, or Division 7 taxes and personal income taxes, if any, which were attracted by the distribution of company profits, the new buyers and not the vendors would have been legally responsible. But because they did not have the money, they did not receive primarily the benefit of the funds- Debate interrupted. Senator LAJOVIC —Will the Minister for Education and Youth Affairs inform the Senate to what particular instances she was referring in the Senate last week when, without provocation, she described Dame Leonie Kramer as an educational reactionary? Senator RYAN —I can answer that question. The comments attributed to Professor Leonie Kramer following the announcement that the Australian Education Council had decided not to proceed with a particular national assessments program, which was not proving of much use to anybody, were along the lines that the pursuit of standards for their own sake was of particular importance. But more specifically I was referring to her association with the Australian Council of Educational Standards which takes the view that the teaching methodology and curriculum of previous generations-the 1920s, I think, was the period that Professor Leonie Kramer mentioned-were much more successful than they are now. They were the kind of comments that I was alluding to. In my view, it is literally accurate to say that if one believes that the way people were taught to read and write in the 1920s is better than now, then that is a reactionary view. One is saying that something that happened previously was more successful than what is happening now. I would say that I find those views rather mystifying, since we have no standard data of literacy or numeracy achievements by children going through school in the 1920s. Certainly it is true , as Professor Kramer has been reported as saying, that some children left school at 13 or 14 years of age in the 1920s able to read and write. But it is also true that many children did not. The only longitudinal data that we have available to us over generational periods is that available from the Army. When young men went into the Army in those years they were tested, and they showed a very high degree of illiteracy. I am not aware of any data which shows that the teaching methodology or the curriculum of the 1920s, the 1930s, the 1940s or the 1950s for that matter produced a higher proportion of numerate and literate school leavers. I think it is not constructive to pretend that there was a golden age when we had no trouble in teaching all children how to read and write, having them all leave school at a high standard, when we have no evidence that that is true. It is very discouraging for teachers and educational planners who are trying to come to grips with the defects of our current education system to pretend that there was once a time when these problems did not exist and if we returned to those methodologies we would have no problems. It was in the context of the Government being very serious about assisting teachers and educators to find ways of achieving higher standards that I made the comment that Professor Leonie Kramer has adopted, according to media reports, a reactionary approach to this matter. Senator LAJOVIC —Mr President, I ask a supplementary question. The Minister has explained to us what she means by reactionary. Does she mean that anyone who was educated in the 1920s or the 1930s would automatically be reactionary? Would she classify the former Prime Minister, Mr Whitlam, as a reactionary because he was educated during that period? The PRESIDENT —I doubt that that is a supplementary question, but I will ask the Minister to respond, if she so desires. Senator RYAN —The answer to those several rather illogically connected questions is no. Senator CHILDS —Is the Minister representing the Minister for Foreign Affairs aware of the resolutions passed by the ninety-eighth plenary session of the United Nations General Assembly requesting member states to cease any cultural collaboration with South Africa and appealing to writers, artists, musicians and other personalities to boycott South Africa? Did the Australian Council of Trade Unions approach the previous Government last year to ban the sale of television programs to South Africa in accordance with UN policy? Is the Government aware that recently Swaziland has been buying Australian television programs? Will the Minister investigate whether such sales abrogate the UN decision? Senator GARETH EVANS —The United Nations, at its thirty-seventh session last year , passed several resolutions which refer to the role of writers, artists and sportsmen in opposing apartheid in South Africa. Resolution 37/69B on 'Concerted International Action for the Elimination of Apartheid', among other things, appealed to writers, artists, sportsmen and others 'To participate actively in the international campaign against apartheid in co-operation with the United Nations'. Resolution 37/69E on the 'Programme of Work of the Special Committee Against Apartheid' commended the Special Committee for giving special attention to a sports and cultural boycott against South Africa and to the participation by writers, artists, sportsmen, religious leaders and others in the international campaign against apartheid. Neither of these resolutions, however, specifically requests member states to cease any cultural collaboration with South Africa. I am instructed that the Australian delegation voted in favour of both resolutions. The Government would endorse those votes as being fully compatible with its position on apartheid. I do not have the facts to hand concerning any approach by the ACTU to the previous Government. I shall, however , ask the Minister for Foreign Affairs to look into this aspect of the question and to advise the honourable senator further accordingly. As to the question of sales of televison programs to Swaziland, we are aware that Australian television programs have been sold to Swaziland and, indeed, we are pleased that this is so. There is no reason whatsoever for concern at such sales in that Swaziland, which achieved independence in 1968, is a member of the Commonwealth and the United Nations and continues to enjoy cordial relations with Australia. Senator BJELKE-PETERSEN —I refer the Minister for Education and Youth Affairs to her answer to a question on 19 May when she told the Senate that she would be issuing guidelines to the Commonwealth Tertiary Education Commission to encourage the enrolment of more women in certain specialist tertiary courses such as physics or computing. I ask the Minister: Will the proposal be for women to enter these courses solely on academic merit or is she proposing special advantage for the women she seeks to assist? Senator RYAN —The Government will be issuing guidelines for the Tertiary Education Commission and the Schools Commission in early July, I expect. In the guidelines we will set out the Government's priorities in terms of the overall purpose of Commonwealth funding to education. It is certainly not for the Government to determine matters such as entry standards and to assess potential students for tertiary institutions. That is a matter for those institutions. But I think it is responsible of the Government to indicate where it would like to see changes and to start negotiations with individual institutions through the Tertiary Education Commission about certain areas of failure with regard to access by certain sections of the community. I consider that there would be no need to have any special kind of assessment or to lower any standards if some faculties, which have not been accessible to women, were to make themselves more accessible. It would improve the performance of the student body generally if university faculties, as a practice, took into account more factors than simply a tertiary education score. For example, the University of Newcastle medical school has a much broader way of assessing potential students than have traditional medical schools. For example, it has more mature age students. I do not know what the proportion of women is. But it has students from a wider range of backgrounds than can be found in any traditional medical school. I understand, because I have been interested in the development of this medical school, that the performance of the students is at least equal to that of students in traditional medical schools. It is certainly not my intention to ask faculties to lower their standards or to provide any special way of assessing women, but it is a matter for them to consider that we would like women to have more access to courses in the same way as we would like university faculties, for example, to give, over time, much greater access to Aboriginal students than they have managed to achieve till now . Senator COLEMAN —I refer the Minister for Veterans' Affairs to the report of the Australian Ionising Radiation Advisory Council on British nuclear tests in Australia, which found in part: No Australian present at the ranges is shown as having received a radiation dose in excess of that permissible under the then ICRP Recommendations . . . . The precuations taken to ensure that Aboriginals living in the area were not endangered by the nuclear tests were carefully planned and executed . . . . In the light of those claims will the Minister inform the Senate how the Government will now treat the claims of the Australian Nuclear Veterans Association and others for compensation for alleged ill effects as a result of exposure to radiation? Senator GIETZELT —The question raised by Senator Coleman about the British nuclear tests which were conducted in our country more than 20 years ago at Maralinga, Monte Bello and Emu is a matter which has been considered by the Government and which largely comes within the province of my colleague the Minister for Resources and Energy, although both the Minister for Aboriginal Affairs, the Honourable Clyde Holding, and I have more than a passing interest in this matter, which is the subject of a campaign which has been waged by British veterans as well as the Australian Nuclear Veterans Association. As the Minister for Veterans' Affairs, I am naturally involved in the claims that have been put forward by that organisation for a widening of the Repatriation Act to grant compensation to veterans as a result of what they believe-prima facie there is some evidence of this-has affected them in those atomic tests. The Government has not yet made a decision on the issue of radiation, although I can tell the Senate that a working party between our three departments is dealing with this matter. Obviously in our negotiations with the United Kingdom we have to find out just who is culpable in respect of this issue . The Australian Ionising Radiation Advisory Council's report, which has been presented to the Parliament, deals with only a part of that necessary investigation. When that report was tabled by the Minister for Home Affairs and Environment it was made clear that it was to be regarded as an interim report and that there would be need therefore for a further study to be commissioned by the Department of Health. The Minister for Health has already authorised that. I believe it will shed further light on this whole question of what took place in the 1950s. My colleague, who we have agreed should share the major responsibility for this matter-the Minister for Resources and Energy, Senator Walsh-may like to supplement what I have said, but I think I have answered the question sufficiently for Senator Coleman. Senator CHIPP —I ask the Minister for Social Security: Is the Government considering resurrecting the extraordinarily innovative and successful Australian Assistance Plan, the dismantling of which was one of the first acts of the Fraser Government in 1976? Is it true that the plan encouraged the real involvement of ordinary people in solving local health and social problems, improving their ability to handle their own lives and giving them access to a wide range of self-help and self-education measures? Is it also true that the Plan brought a feeling of hope and achievement within each community and that the voluntary unpaid contributions made to local community welfare significantly increased the gross national product of the nation at a minimal additional cost of the Plan? In light of this, will the Government contemplate initiating a pilot scheme in each State and Territory, extending the scope of the Plan to include the generation of realistic long term employment? Senator GRIMES —I am aware of the history of the Australian Assistance Plan. I am sure Senator Chipp is very much aware of it because this program, as he says, was introduced by the previous Labor Government and stopped without notice by the incoming Fraser Government. It caused considerable pain to Senator Chipp at the time, as he had been the shadow Minister for Social Security in the previous Liberal Opposition and had assured the people participating in the Australian Assistance Plan that nothing would be done to it without proper consultation. Senator Chipp —With the full backing of the caretaker Government. Senator GRIMES —With the full backing of the Government, as Senator Chipp says. The program was introduced to create an increase in community facilities, particularly in the welfare area, and especially to encourage local communities to have a say in the setting of priorities and the planning and administration of programs in their areas. If it demonstrated nothing else, it certainly demonstrated a willingness, capacity and desire in the community for people to use the skills they have to assist those who are less advantaged in our society. One of the problems, as Senator Chipp knows, is that because of the structure of the Australian Assistance Plan the development was much more rapid in the more articulate and, if one could use the term, more middle class areas where there was greater social cohesion and a greater ability to cope with bureaucracy and government. In some of the more deprived areas it was very difficult to get the Plan off the ground, but I think that was a problem of planning as much as anything. The Government is certainly considering community works programs; some statements on them have been made by my colleague the Minister for Employment and Industrial Relations. We are looking at proposals put forward by local government and by groups in the community which wish to assist in this way. It was also Government policy to foster community development through the development of community services which are essentially controlled, planned and administered at the local level. I have spoken in this place before about the possibility of having a department of services which would include community services. While I agree that there is this great scope for mobilising community resources, one of the problems with the Australian Assistance Plan was that it was introduced in a way which created rivalry between the different areas. It created an expectation in some areas that there would be a follow on of the flow of funds that originally came from the Australian Assistance Plan. One of the difficulties with introducing a pilot program such as that in certain areas is that perhaps all areas in the country would not accept that they were pilot programs. There would again be this expectation of expansion which may or may not be able to be fulfilled. Senator Missen —It could be upheld by the High Court, of course. Senator GRIMES —What I believe is that we should learn from the very valuable experience we gained from the Australian Assistance Plan, improve on its administration and learn particularly from those projects which started with the Australian Assistance Plan and are still going, despite the withdrawal of government funds and government support. Senator Peter Baume —Will you reintroduce it? Senator GRIMES —The economic statement makes it clear that the community works program and community development in general have a high priority for us. Although we have been in government only 11 weeks, Senator Baume persists in nitpicking and wanting to know why we have not done everything in that time. I suspect that at the end of 11 months many of our programs will be in place and the Opposition will have to look at something else to criticise. We are certainly not about to do what the previous Government did; that is, while in opposition claim that it would support a program such as the Australian Assistance Plan and have its shadow Minister say that it supported a program such as this and then, in government, have its Minister walk into a meeting in Darwin and announce to the State Ministers that as from that minute the whole show was over. That is the wrong way to go about it. We will plan and properly consult with the local community and develop a worthwhile program. Senator COOK —Has the Minister representing the Treasurer seen the article in the Business and Investment section of the 24 May issue of the Bulletin entitled 'The market's high, but it can go higher yet'? Is the Minister aware that the article reported an exceedingly optimistic view of the stock market by a number of Australia's leading brokers, a view epitomised by hopes of an international recovery, as well as and importantly, the view of Mr Ken Ayles of Potter Partners? It stated: Ayles believes that if the government maintains this confidence, the market will continue to rise through the remainder of 1983, subject to periods of consolidation, particularly pre-budget. Do these comments reflect a justifiable confidence in the economic management of the Hawke Government? Senator WALSH —The last part of Senator Cook's question asked: Does the state of the market reflect justifiable confidence in the Hawke Government? The answer to that is clearly yes. The people-if that is what they are-who sit opposite normally place great importance upon the state of the stock market, particularly the all ordinaries index. I do not want to place complete importance on those factors. The state of the stock market and the all ordinaries index are two of many indicators of the state of the economy and likely future movements. But the people opposite normally place great importance on that index. So it is interesting to note that on 1 February, before the turkey called the early Christmas, the all ordinaries index stood at 543. In the uncertainty of the election period it declined and it stood at 490 on 1 March. But by 4 March, by which time nobody seriously doubted that there would be a change of government and that the discredited former Prime Minister and his discredited Deputy Leader -who is still the Deputy Leader of his party-would be ignominiously swept from office, the index rose to 512. I am not sure just where it stands at the moment- I have not looked at it for a week or so-but last week's figure was above 600 and, as Senator Cook has suggested, it has probably gone somewhat higher than that. Senator Chaney —Mr President, I ask that the Minister table the paper from which he quoted. Senator Walsh —I table the document. Senator PETER BAUME —My question, which is directed to the Minister for Education and Youth Affairs, concerns the independent Commonwealth Tertiary Education Commission. What is the recent advice that the Minister has received from that Commission on the question of amalgamations of certain tertiary institutions? Senator RYAN —The advice I received from the Commonwealth Tertiary Education Commission on the question of amalgamations was probably very similar to the advice that Senator Baume received on that matter when he was Minister for Education. The advice was that the amalgamation of institutions would in the long term mean a more rational use of resources and provide a better range of courses to students. That advice is being considered by the Government in light of other advice from the institutions themselves and from people in the communities which the institutions serve. I expect to be making an announcement next week about the Government's final intentions with regard to the future development of the four institutions-the two in Armidale and the two in Newcastle-which have not yet been fully amalgamated. Senator PETER BAUME —Mr President, I ask a supplementary question, just to be quite clear. Did not the Commonwealth Tertiary Education Commission recommend in essence that the amalgamations should stand? Senator RYAN —I would say yes, the advice of the Tertiary Education Commission was that the reasons it gave for recommending the amalgamations in the first place still stood and it was still giving that advice. However, I might say that in my negotiations with the Tertiary Education Commission on this matter it did agree and acknowledge that the pace at which the previous Government enforced the amalgamations and the way in which it caused them to be handled had been very disruptive and had prevented the overall purpose-better planning and more rational use of resources-from being achieved as satisfactorily as could have been the case. In essence, yes, the Tertiary Education Commission is still of the view that the future of these institutions would be better served by a closer relationship than they currently have. Senator ROBERT RAY —My question is directed to the Minister representing the Treasurer. What is the current situation regarding the entry of foreign banks to the Australian market? Will any consideration be given by the Government, in the event of foreign banks being admitted to Australia, to selling licences for the right of entry? If that possibility is rejected, what alternative criteria would the Government intend to employ in granting entry to foreign banks? Senator WALSH —The Treasurer did announce, I think about three days ago, that this matter would be reviewed. I am afraid I do not have with me a briefing note on it and cannot recall the precise details. I believe that the options raised by Senator Ray were among those likely to be considered. However, I will seek a definitive answer from the Treasurer and supply it as soon as possible. For the benefit of Senator Chaney I say that I do not have anything written down here, but if he would like an autograph I would be quite happy to supply one. Senator MacGIBBON —I ask a question of the Minister for Education and Youth Affairs. When the Minister said, as was published in the Sydney Sun on 29 March this year, that public funding for certain schools should be less readily available, did this include schools which identify themselves as Christian, which she attacked so violently in the Senate last year? I refer her to page 3009 of the Senate Hansard of 1 December 1982. What I would like the Minister to do is explain to the Senate, very succinctly and explicitly, what tests as to the belief or philosophy of a properly registered non-government school she has in mind. Senator RYAN —In answer to the last part of the honourable senator's question, I would say none. I should explain the Government's approach to the funding of small independent schools, some of which are fundamentalist Christian. It is this: The registration of these schools is a matter for State authorities and, I expect, will remain so. There has been a long-standing concern that schools are being registered by some State authorities without proper investigation as to the educational standards, facilities and so forth that are available to children in them. In other words, there is really no way in which the State governments can guarantee that the educational opportunities of students attending such schools are being properly accommodated. Senator Jack Evans —Who is protecting the children's rights? Senator RYAN —I am pleased to hear Senator Jack Evans intervene in such a way. The attitude of the Commonwealth Government is that we are interested in the educational opportunities of children. We give a higher priority to that than to expressions of views which parents might have. We have a primary responsibility for the educational opportunities of children. The process of registration which the States have followed in recent years has not been such that the States are able to give the Commonwealth Government assurances about the educational standards of those schools. This has been a matter of concern to the State Education Ministers for some time. As Senator Baume, my predecessor in this portfolio, knows, the matter has been an agenda item of the Australian Education Council for some time. It was certainly an agenda item at the AEC meeting which I chaired recently. The reservations expressed by the Commonwealth about the near automatic registration of new schools was shared, I think, by all Ministers present. A working party is reviewing the registration procedures and it will report to the next AEC meeting which will be held in Adelaide. At that time the Commonwealth and the States will decide together whether those registration procedures are adequate in view of the Commonwealth's responsibility for the overall education of children. The other aspect about which I am concerned is that once schools are registered by States they are automatically entitled to receive Commonwealth funding at whatever level the Schools Commission determines they need. The Commonwealth is now funding to a very significant extent a number of schools throughout Australia about which it can say nothing in terms of their educational standards . I do not find that a satisfactory situation. I am discussing with my State colleagues-as I said, it will be an agenda item at the next AEC meeting-ways in which we can ensure, firstly, that funds are provided on a basis of need and, secondly, that schools which are funded by the Commonwealth have satisfactory educational standards. The other criterion in which I am interested is that there should be some guarantee of viability. A school with 20 or 25 children should not open, receive Commonwealth funds and then close a year later because the backup in terms of parent, community and professional support was not available. That is the way in which we are approaching the question of the very large number of small schools which have come on to the scene in recent years. Senator Peter Baume —But you would accept any beliefs? Senator RYAN —The question of any particular beliefs that are taught in a school is not one in which the Commonwealth should involve itself. Senator CROWLEY —My question is directed to the Minister representing the Minister for Employment and Industrial Relations. In light of the dramatic increase in the number of unemployed people over the last seven years, in particular during the last year, and the need for better matching of unemployed people to possible jobs, a proposal was made to establish a computer system to address this problem. Can the Minister advise what progress has been made in implementing the system known as Job Bank within the Commonwealth Employment Service? Is the system, which was expected to be introduced in Adelaide in its first phase earlier this year, proving successful? If not, what problems have occurred in implementing the system? Senator BUTTON —Senator Crowley's question referred to a computer system. I will answer the last part of the question first by saying that the only defects which have emerged in the scheme occurred in the computer. It is true that the Job Bank program was implemented in its first phase in South Australia in February this year. The foreshadowed program is to have the scheme operating in its first phase in all regions during 1983 and in its second phase during 1984. I am advised that the initial implementation of the scheme in South Australia is regarded as a success. It is popular both with the staff of the CES and with the users of the scheme, who might be described as clients. There have been some difficulties with equipment, but I understand that they have now been ironed out . The first phase of the scheme, as it is operating in South Australia, is regarded as a success. It is now being implemented in Victoria. Senator COLLARD —My question, which is directed to the Minister for Education and Youth Affairs, refers to an announced inquiry into the proposed Radford College. Why was the question of fee levels included in the terms of reference of the inquiry which the Minister set up recently to inquire into this new non- government school in the Australian Capital Territory? Does the Minister intend to change the right of non-government schools to determine for themselves the fees they need to charge? Senator RYAN —The Government does not intend to change the right of non- government schools to determine the fees they will charge. However, when the Schools Commission assesses the needs of schools and the priority of their claims for Commonwealth recurrent funds, obviously the fees that the schools are able to charge, and therefore the income that the schools will receive from those fees, will be taken into account by the Schools Commission. The reason the matter of fee levels was included in the inquiry into Radford College is that there has been something of a debate about what sort of families the new Radford College will serve. If Radford College is to be a high fee charging school, such as the Canberra Grammar School, obviously it will be serving a different section of the community from the one it will serve if it is able to or wishes to set fees at a much lower level, perhaps similar to the fees charged by Catholic systemic schools in the Australian Capital Territory. Senator Walters —Good heavens! You are limiting them. The PRESIDENT —Order! Senator Ryan is answering a question from Senator Collard. Senator RYAN —Quite clearly, the level of fees which the school is aiming at and that section of the community which it is aiming to serve will determine what subsequent level of Commonwealth support it is justified in claiming. I should repeat, for the benefit of honourable senators, that the present Government's policy is that funding of non-government schools is on the basis of need, and the need of a non-government school obviously is determined by many factors, including the capacity of the particular community which supports it to pay fees . This is not new. It is a system under which the Schools Commission has been making decisions about the level of funding. But the criterion of the need of the school is something which will be strengthened and made more significant in the determination by the Commission in future years of the access of a particular non-government school to Commonwealth funds. I hope that that clarifies the matter for the honourable senator. Senator COLLARD —Mr President, I ask a supplementary question. Why have the Minister and her Department bought into this subject through the inquiry? Is she not satisfied with the way in which the Schools Commission does its job? Senator RYAN —I do not presume that this Federal Government was elected to run everything in exactly the same fashion as it was previously run. The Senate will be aware that the present Commonwealth Government has very different priorities in the area of schooling from those of its predecessor. We are much more concerned than our predecessors were that all children will have access to the highest possible standard of education. We are much more concerned to see a fair and rational distribution of resources between the government and non-government sectors. In my view, the information available to the Schools Commission to make rational and fair decisions with regard to the allocation of funds has been inadequate. We are taking a number of steps which will mean that the Commission will have available to it much more extensive information about proposed new schools, what sort of effect they will have on existing schools in the area, and what sort of effect they will have on the overall educational offerings of an area. There are many matters on which, in my view, the Schools Commission needs better information if it is to make better and fairer decisions about the funding of all schools in Australia. Senator ROBERTSON —Can the Minister representing the Minister for Communications explain how the funding levels for the Special Broadcasting Service are arrived at, bearing in mind that for the 1982-83 financial year the Special Broadcasting Service was allocated over $400,000 for ethnic broadcasting but only $40,000 for Aboriginal broadcasting? Does the Minister agree that the disparity in these funding levels is exacerbated because of the wealth of the cultural resources that some what are called ethnic communities can draw upon, such as community language newspapers, community sponsorship, well established overseas networks, and so on? Senator BUTTON —The funding levels arrived at for the Special Broadcasting Service are determined by the same Estimates process as for other statutory authorities. Under the previous Government, subsidies for ethnic radio broadcasting were provided outside the normal budgetary allocations for the Special Broadcasting Service. In fact, last year $650,000 was provided in total for ethnic broadcasting on public broadcasting stations. My recollection is that some $4m was provided in respect of the two government run stations-2EA and 3EA. Of the $650,000, $48,000 was allocated to Aboriginal broadcasting. Those matters are determined by the SBS according to a formula-the secret of which I am not entirely familiar with-for allocating funds to particular interest groups in respect of broadcasting. It may be that the formula has some population component which provides a pro rata allocation of funds according to the size of particular ethnic communities and so on; I do not know. However, in relation to Aboriginal broadcasting and the amount allocated for Aboriginal broadcasting, I make the point that the Australian Broadcasting Commission, much to its credit, has done a considerable amount of work in the area of broadcasting and access broadcasting for Aboriginals, particularly in Alice Springs and north Queensland. That is to the great credit of the ABC. It is a marvellous function for that Commission to perform. I think that has to be taken into consideration in the course of answering the honourable senator's question. The other matter which I should mention and which is of relevance is that in the Budget context the Minister is reviewing the system of allocation of funds for ethnic broadcasting. Senator JACK EVANS —Is the Minister representing the Minister for Primary Industry aware that the Council of Egg Marketing Authorities of Australia is alleged to be preparing to support, co-ordinate or fund a public campaign against a group called Animal Liberation? Does the Government consider this to be an appropriate function of the egg marketing authorities? In view of the taxpayers' money which is used to assist the egg industry, will the Minister, by direction or other means, have the Council desist from organising or supporting campaigns which are not directly related to egg marketing? Senator WALSH —I was not aware of any such report. I will refer the question to the Minister for Primary Industry to see what is his response to it. However, I will make one comment at this stage. Although the thrust of Senator Evans's question is not disputed, I cannot recall any taxpayers' money actually going into the Council of Egg Marketing Authorities. It could certainly be argued that because of those marketing authorities', monopoly position in the market consumer prices are higher than they would otherwise be. But I do not believe that any taxpayers' funds per se are going into the Council. Senator RICHARDSON —My question is directed to the Minister for Industry and Commerce and Leader of the Government in the Senate. In view of the Prime Minister's speech to the Federated Ironworkers Association of Australia this week, can the Minister inform the Senate as to what plans the Government has to ensure the long term job security of steel workers in Port Kembla, Wollongong, Newcastle and Whyalla? Senator BUTTON —I suppose that the short answer to the honourable senator's question is no; that is to say, I cannot inform the Senate because I am not prepared to do so in great detail at this stage. But let me say that the Government is continuing to have a series of negotiations with the steel industry and particularly with the company, Broken Hill Proprietary Co. Ltd, in relation to the future of the industry in those specific towns or cities which were mentioned in the honourable senator's question. I simply make the point that between the middle of 1981 and March of this year 16,000 jobs were shed by BHP in those cities. That is having an enormous impact on the economies of those regions and there are enormous social impacts as a result. In the city of Wollongong, some 33 per cent of the population is directly dependent on the steel industry in respect of employment and, in the city of Newcastle, 12 per cent of the population is directly dependent on the steel industry in respect of employment. Since the Government began negotiations with BHP regarding this matter, I believe that we have been successful in persuading the company that there are to be no further retrenchments in this industry and that any job shedding which might take place should be accommodated by so-called voluntary retirement schemes. I say 'so-called' because they are not as voluntary as one might like them to be; but at least the impact of a voluntary retirement scheme is that the employee retires with a much higher benefit than if he or she is retrenched. Senator Dame Margaret Guilfoyle —You will take a super tax from such people. Senator BUTTON —No, Senator, you are quite wrong about that. Those benefits are specifically excluded. If I might continue, I believe the Government has also been successful in negotiations in resolving a very important issue which was not resolved until four weeks ago. That was the question of BHP's commitment to continuing in the steel industry in Australia. That commitment has now been made and it has alleviated a great deal of the anxiety which existed in those cities which Senator Richardson mentioned. As the Senate will be aware, the Industries Assistance Commission has presented a final report to the Government in relation to the steel industry. I am not able to comment in the Senate on the IAC's recommendations relating to that industry, but I say that the IAC report will be only one factor which is taken into account by the Government in consideration of an assistance package which might be offered to BHP. Prior to the election, the Government made a commitment to introduce a plan for the steel industry within 100 days of being elected to government. We might overshoot that by a few weeks. Senator Durack —Oh! Senator BUTTON —I suppose we will be accused of breaking a promise. The future of the steel industry is a very serious matter. Of course, Senator Durack, who interjects, should know that his colleague the shadow Minister for Industry and Commerce, who I notice is very shadowy at Question Time, said yesterday that he thought that it was a good approach by the Government not to stick with precision to that commitment which was made prior to the election. I am in a position to say that we believe that a plan for the steel industry which will ensure its future in those cities will be announced on or about 30 June. Senator WALTERS —I ask the Minister representing the Minister for Finance whether Medibank Private has confirmed the order for upgraded computer systems to enable it to implement the administration of Medicare from 1 February next year? If so, at what cost? Who will bear the cost if the Senate does not approve Medibank as the sole agent for the Government's arrangement and the computer system is not required? Senator WALSH —The answer as far as I am concerned is that I do not know whether that is the position. I will refer the question to the Minister for Finance. Senator WALTERS —Mr President, I wish to ask a supplementary question. Senator Tate —He said that he does not know. Senator WALTERS —Would the honourable senator allow me to ask my supplementary question? Seeing that the answer is just a telephone call away, I ask: Could we have the answer tomorrow? Senator WALSH —Senator Walters has never sat on the front bench and is never likely to do so, but she might know that there is no general telephone here. It is a telephone which goes to my office or to the offices of the various people who sit here. Although the original question asked whether I could confirm something and the answer was no, I think on reflection I could make a comment about the latter part of it in which Senator Walters forecast that the Liberal Party, at least in the Senate, would continue the obstructive role which it established for itself in the period of the last Labor Government. I understand, however, that there is a view around that in the particular matter to which Senator Walters referred the Senate will not get the opportunity to do so. Senator McINTOSH —Is the Minister representing the Minister for Foreign Affairs aware of a proposed visit to Australia by Professor Vidovic, a Croatian emigre, and the concern that this visit is causing to certain sections of the Australian community? Can the Minister explain to the Senate the actions of the Government in permitting this visit? Senator GARETH EVANS —I am aware that the proposed visit to Australia by Professor Vidovic, a Croatian emigre resident in France, has received some attention recently in the media. I am also aware that the prospect of this visit may well be distasteful to certain sections of the community. I wish to make it clear that the Government, by granting a visa to Professor Vidovic, in no way endorses the political views which he espouses. Approval for the issue of a visa to the gentleman in question was given to him as an individual and not as a representative of a particular organisation, as is the normal case in these matters. To the extent that Professor Vidovic or other individuals or organisations call for the dismemberment of the federal state of Yugoslavia, the Government considers such views to be abhorrent and dissociates itself completely from them. Australia has a long-standing and friendly relationship with Yugoslavia and the Government intends to pursue that relationship actively. However, we do not intend to deny individuals entry to Australia solely on the grounds that they are likely to express controversial views while they are here. My colleague the Minister for Foreign Affairs, whom I represent here, has discussed this matter with the Prime Minister, I am told, and their conviction, which I fully share, is that the strength of a democratic society derives from a willingness to allow the free expression of opinions provided that they observe the laws of Australia which, of course, prohibit incitement to violence, including violence directed against other countries. People such as Professor Vidovic accordingly may come to this country. The Government, of course, reserves the right to disagree categorically and publicly with them, as I now do . Senator HAMER —I ask the Attorney-General a question concerning the censorship of a film proposed to be shown at the Melbourne Film Festival. The film is called Genius Is Lying and was made at the Swinburne Institute of Technology, an institution renowned for the quality of the work by its film students. Are there separate provisions relating to the screening of Australian films and imported films at film festivals? Are there any inconsistencies in this policy? If so, does the Attorney-General plan to take any steps to resolve these anomalies? Senator GARETH EVANS —I appreciate Senator Hamer's interest in this matter because of his well-known and long-standing interest in film censorship, both as a senator and as Chairman of the Australian Film Institute, in which capacity he has demonstrated a continuing small 'l' liberal voice-and there are not too many of them left. Described as simply as possible, the situation is that films which are specially imported for approved film festivals are now, as a result of the recently promulgated regulations, exempted from screening by the Film Censorship Board and are automatically registered for limited screenings to subscription audiences at those festivals. Australian-made films are submitted for censorship to the Film Censorship Board which acts on behalf of the States and by arrangement with them. The States insist that no film may be advertised or screened unless it has been registered and classified by the Film Censorship Board. The so- called controversy that was reported last week by the National Times had its genesis as follows: In the first place, the film Genius is Lying was, I am advised, submitted for censorship by Swinburne Institute prior to Swinburne's annual screenings in December 1982. The Film Censorship Board refused to register the film until a particular scene was removed. Parliament being a family program, I shall not stop to describe the scene in question. In making this decision-- Senator Chipp —Are you censoring it? Senator GARETH EVANS —The only description I can offer is that-no, I will not. Apparently, it involved a portion of someone's anatomy described by one critic as demonstrating 'an appearance of vague interest'. But I will proceed. In making this decision, the Film Censorship Board was fulfilling the arrangement it has with the States for the censorship of Australian films. There is a right of appeal against the decision to the Films Board of Review in the case of any such decision by the Film Censorship Board. That right has not been exercised. It appears, for reasons I am not sure about, that Swinburne is reluctant to exercise that right of appeal. It appears in turn that this reluctance prompted the film maker to submit the film to the Melbourne Film Festival in the hope that the Festival would screen it uncut. The film was included on a list submitted for registration by the Film Festival, but now it appears that the Festival has not in any event decided to show the film, although that application has not been withdrawn. If the application is pursued, the film will be included on the list of films forwarded to the Victorian Government which are exempted by the Governor-in-Council from prior screening for the purpose of screening at the Festival without cuts. If this occurs it is then up to the Victorian Government-not the national Goverment-to decide whether it wishes to permit the film to be screened without any cuts. That is the situation with respect to that film. As to the larger policy issues raised by Senator Hamer and future action to resolve such anomalies and inconsistencies as can arise through this now essentially dual system, I think I can quickly say this: I propose to seek the views of the States as to the possibility of there being a consistent approach between imported films which are handled under Customs regulations and Australian-made films which are ultimately the responsibility of the States. I want to seek the Festival's own views on these matters. Having received these views, I think it would be an appropriate matter to pursue at one of the forthcoming meetings of Federal and State censorship Ministers so that, I hope, we can develop, in harmony with the States, a uniform and consistent system of film censorship, at least so far as the festivals are concerned. Senator COLSTON —I direct a question to the Minister representing the Minister for Territories and Local Government. My question relates to section 90 of the Commonwealth Functions (Statutes Review) Act 1981. This section deals with trading hours in the Australian Capital Territory. Has this section of the Act been proclaimed? If not, does the Government intend to proclaim it, to take no action on it or to repeal the legislation? Senator GIETZELT —I appreciate the interest of and the question from Senator Colston. He spent some time as a member of the Joint Committee on the Australian Capital Territory looking at the question of trading hours in the Australian Capital Territory. Section 90 of the Commonwealth Functions (Statutes Review) Act 1981 has not been proclaimed. At the moment it is not the Government's intention to do so. If it were proclaimed it would repeal the Australian Capital Territory trading hours ordinance. Of course, the Government's view on this was, I think, fairly well canvassed in the Senate in 1982. During the debate on that Act the previous Government agreed to refer the deregulation of trading hours in the Australian Capital Territory for inquiry and report by the Joint Committee on the Australian Capital Territory. That report was tabled in both Houses of Parliament on 21 October last year. Honorable senators probably remember that there were two minority reports as well as a majority report. As I recall, those reports did not favour complete deregulation as envisaged in the Review of Commonwealth Functions, which was the subject of a lot of controversy, both in the Australian Capital Territory and in the Parliament. An election undertaking was given by the Government to provide for a two-year moratorium on the deregulation of trading hours in the Australian Capital Territory so that we could determine the effect on the employees and small traders. I think our philosophical position is that we do not substantially favour deregulation. Whilst it probably is accepted by the Government that there are too many shops in the Australian Capital Territory, the Government does not believe that the problem would be resolved by extending hours because what is required if we are to get any sort of revival in the retail sector of the economy is to put more money in pay packets and not open up shops for longer periods to suit the requirements of the major retailers. That is why both the small shopkeepers and the employees have a common position on this matter. However, I am advised by the Minister for Territories and Local Government that the Government is considering the report of the Joint Committee. After it has had consultation with the appropriate authorities it will be reporting on the matter to Parliament. Senator WALSH(Western Australia-Minister for Resources and Energy) —by leave- Last night during the adjournment debate Senator Kilgariff incorporated a document which he had taken good care not to show me beforehand. The document in question was an adjournment speech by the Chief Minister of the Northern Territory which was delivered, I think, a couple of days ago. This Standing Order does not allow me to make a comprehensive critique of that document, but it contains one quite crucial error of fact. The Chief Minister described some facts given to the Senate by me as a slander and then said: . . . what was done in 1977 apparently in accordance with Sir Victor Garland's instructions was to divest himself of private interests after he was elected to the national Parliament and whatever steps were taken were perfectly in accord with the law. To set the record straight I wish it to be noted that Sir Victor Garland was elected to the Parliament in 1969 and became a Minister in 1971. Eight and six years after those respective events he divested himself of the assets to which my statement and the statement of the Chief Minister referred. The date given, 1977, is the correct date for the winding up of the companies. When read in context it is obviously the date which is intended. The argument put by the Chief Minister is spurious and the alibi he concocted falls to the ground. Senator KILGARIFF(Northern Territory) -by leave-The Minister for Resources and Energy, Senator Walsh, said that yesterday I deliberately did not show him a document which I incorporated during the adjournment debate. I think the Minister sees everything that is done as being done in a sinister way. What really did happen was that the Government Whip approached the Minister on duty in the Senate, Senator Walsh, and asked who would be the Minister on duty during the adjournment debate. The answer was that Senator Evans would be on duty. The Whip then took the document to Senator Evans as he was to be on duty during the adjournment debate. May I say that I would not do such a thing as Senator Walsh hinted at. If I wished to do something I would do it straight out. In this case that was the way it was done. Senator CHIPP(Victoria-Leader of the Australian Democrats) —I am in a dilemma. I want to seek leave to ask Senator Walsh a question as to what he meant by an answer he gave to Senator Walters at Question Time. If I am refused leave I will be forced to move to suspend Standing Orders. I am reminded that between one o' clock and two o'clock we are not supposed to raise anything controversial. I seek your guidance, Mr President. The PRESIDENT —I am in the Senate's hands. If you seek leave I will put that question to the Senate. Senator CHIPP —I seek leave to make a brief statement and to ask Senator Walsh a question. The PRESIDENT —Is leave granted? There being no objection, leave is granted. Senator CHIPP —I am sorry, I have not paid Senator Walsh or Senator Button the courtesy of informing them about this matter. It arose only a couple of moments ago. Senator Walsh gave an answer to a supplementary question by Senator Walters which bothers me, particularly as this is the second last day of the session. Tomorrow might be a truncated sitting day and Senator Walsh will have only the time between Question Time and the rising of the Parliament to answer my question. As I understand it, the inference of Senator Walters's question was: Why is the Government spending money on a computer for Medicare if the Senate might reject the centralisation of Medicare authorities in the Health Insurance Commission? Senator Walsh, on refletion, when answering a supplementary question , said that it may well be that the inference in Senator Walters's question might not come about because the Senate may not get an opportunity even to debate the matter. I, on behalf of the Australian Democrats, have expressed interest in the centralisation of authority. What concerns me-this is what I want amplified by Senator Walsh now-is: Is it the Government's intention during the coming parliamentary recess to spend as much of the money that it has-I think it is $ 43m-on facilities and machinery so as to make it an egg that cannot be unscrambled when the Budget Session commences? I would appreciate an answer from Senator Walsh on what he actually meant by that. Am I reading too much into it at this stage? Senator WALSH(Western Australia-Minister for Resources and Energy-by leave- Senator Chipp has asked several questions, one of which concerns the opportunity to debate the matter. I do not believe that I gave any indication that there would be no opportunity to debate this matter. If I gave that indication I certainly did not intend to. As to the last part of his question about whether the Government aims, in effect, to commit so much money to this project that it becomes irreversible, I do not believe that that is the Government's intention but I will check that with the Minister for Health (Dr Blewett) . On the other matter to which I referred-whether legislation would be required to do this-a legal view has come to me, not from government sources but from other sources, that this move may not require legislation. That is what I was referring to in that context. Senator Chipp —Legislation or regulations? Senator WALSH —I do not know about regulations. Debate resumed from 11 May, on motion by Senator Button: That the Bills be now read a first time. Senator PRIMMER(Victoria)(1.8) —Last week in another place my colleague the Minister for Foreign Affairs (Mr Hayden), to use a well-known phrase, tipped a bucket over me; a matter not unnoticed by some of my other colleagues who have expressed some concern over his action. Be that as it may, it is not the first time that I have had a bucket tipped over me and probably it will not be the last. Quite frankly, I believe that Mr Hayden was very much misled by his Department of Foreign Affairs, indeed by some of the very men who I allege are guilty of serious crimes, in making the statement he made. Let me be perfectly frank. I have been a member of the Australian Labor Party since 1955 or 1956. I have been active in both this chamber and other chambers since that time. I repeat for the record that if I believe I have truth on my side I follow an argument to the bitter end, as I intend to do with my argument with the Department of Foreign Affairs over what started off as the Tehran embezzlement matter and has since grown to encompass further matters. This week I have placed on the Notice Paper more questions on what I believe could be Foreign Affairs corruption. My resolve to carry on does not arise only from my conscience but also because of the support I have received over the last 15 months from many people throughout the community on this issue. Only last Sunday, at the annual meeting of my Federal electoral assembly, this matter came up briefly for discussion and all delegates present urged me to hold my stance on it. On page 1043 of the House of Representatives Hansard Mr Hayden is reported to have said: I do not in any way impugn the character, nor indeed the motivation, of Senator Primmer. I am sure that his motivation, as is his character, is the best, but I do deplore his actions and his persistence with those actions in the light of an extensive explanation I have given to him about investigations which have been made into his complaints and the findings of those investigations. Let me be completely frank. The extensive explanation that Mr Hayden gave me lasted no longer than, at the outside, three minutes. During that time he explained that he had read two police reports and agreed with them. I informed him that I still intended to put questions on the Notice Paper and to follow up the issue. Honourable senators might ask me why I said that to him. Perhaps it was as a result of an experience I had some years ago in this place. I will quote from the House of Representatives Hansard of 8 March 1978 a letter to the then Minister for Primary Industry, Mr Sinclair, from Mr R. H. Gillespie, Acting Chief Superintendent, Officer in Charge, District of Victoria, Commonwealth Police. This letter relates back to the meat scandals which I had mentioned the previous day, 7 March 1978. The police report stated: To date, enquiries made and surveillance duties performed on suspect vehicles have failed to adduce sufficient evidence to warrant a prosecution. That is exactly what the two police reports thus far on corruption-as I claim it to be-in the Foreign Affairs Department have said. They have said that there is insufficient evidence. On this occasion I knew the evidence was there; other people knew the evidence was there. When the truth was out-unfortunately, it took a royal commission to bring it out-it was proved that the evidence was there as at the date the police signed the letter. I am very sceptical about the powers of the Australian Federal Police or our police forces in general to cope properly with white collar crime. It seems to me that all too often they do not have the necessary expertise, the techniques or the wherewithal. I must add that these two police reports referred to by Mr Hayden are apparently so super secret that very few people appear to have access to them-but more about that later. Mr Hayden, in his speech, went on to describe Messrs Henderson, Smith, Bowden, Loveday and Parkinson-all Foreign Affairs officers-as honourable, upright and proper people. I have challenged that assertion and continue to do so. I make no apology for placing on the Notice Paper the mass of questions that I have. Most of them have been on the Notice Paper, off it and on it again since last year. If the officers referred to earlier are honest and upright, why have these questions not been answered? Are they too hard or what? If my persistence is seriously damaging to these people answers to my questions may well get them off the hook. Why do they not give it a go? I do not want to have them socially embarrassed, but I believe the remedy is in their own hands. Mr Hayden has, as is his nature, expressed sympathy for these men and their families. My concern spreads also to those other officers of the Department who, along with their familes, on this issue have been kicked around for years. Some people get promotions, others get the boot. Is it a fact, as rumour has it , that Mr Bowden will be given a posting as Ambassador to the Netherlands? Other officers and families have been harassed by security officers and police and have been criticised under privilege by Mr Henderson. I understand that one of these officers even had his home searched by police at Mr Henderson's request. Mr Hayden, in his speech, sought to give the impression that only one Foreign Affairs officer, namely, Mr Witheford, has contributed to the widespread allegations and other misconduct. Anyone who has followed this saga through the Hansard would know that such is not the case. I have had and do have quite a number of sources both inside and outside the Department of Foreign Affairs both here in Canberra and elsewhere and only last weekend a new informant came to my notice. For the record again, sources have been available to at least one other senator, namely, my colleague Senator McIntosh, who received last September written information from Messrs Witheford and Henne and oral information from another source, but so far as I am aware no action has been taken on that either. This pretence that only one Foreign Affairs officer and one parliamentarian are involved is in my view a crude attempt to downgrade the force of the vast array of allegations that has built up over time. Last week I referred to the retirement of Sir Nicholas Parkinson and the way it was arranged so that it probably cost the taxpayers a quarter of a million dollars extra. This week I have had allegations of another such retirement. An officer who had apparently earnt the ire of the previous Prime Minister, Mr Fraser, and although as fit as a trout at the time according to medical officers , was subsequently retired on a cooked up medical report under pressure from Mr Henderson and Sir Nicholas Parkinson. If that is the case the recipe for Sir Nicholas Parkinson's lucrative departure was already there. Mr Hayden went on to talk of the impartiality, sense of propriety and justice of the Department of Finance report last year into the first instalment of Mr Bowden's activities while in Tehran. That, in my view, is rubbish. As it told the Senate last September, Mr Witheford and Mr Henne together with Mr R. E. Johns and another officer were critical of the Finance Department report which, I must add, was leaked to the Press before either Mr Johns or Mr Witheford was interviewed. I also made the following points: Firstly, several misleading draft records of interview with witnesses prepared by Finance were heavily biased in Mr Bowden's favour. Secondly, there was a total lack of investigation of the cover up. Thirdly, Mr Henderson refused to let honest officers involved have access to any Tehran documents. Fourthly, I referred to the loss by Foreign Affairs of important files including a letter received by Mr Alan Renouf from Mr Witheford in 1975. Fifthly, I believe these were obvious leads which the investigating team failed to follow. Sixthly, there were occasional instances of hostility by one of the team members apparently designed to daunt interviewees. That report was then forwarded to the police at Mr Henderson's request and subsequently the police produced their report which Mr Hayden has praised and wherein Mr Bowden was deemed cleared. The conduct of the police officers involved was such that three people-not just Mr Witheford-complained to the Commonwealth Ombudsman whose report we are still awaiting. Both Mr Witheford and Mr Henne have subsequently alleged that some, but by no means all, of the objectionable conduct is not on the police tapes held by the Ombudsman. I can say that some of the material on the tapes leaves something to be desired, to put it mildly. Mr Hayden told us that the second police report-again a secret one-has cleared Messrs Henderson, Bowden, Parkinson and Loveday and that according to that report there was no evidence of wrong doing. I know for a fact that several people with information to offer have not even been questioned. Mr Hayden went on further in his speech to mention the fact that Mr Witheford has under way a Public Service Board inquiry. The inference an outsider could get from that reference is that that inquiry has something to do with investigations into the question of what officers got away with what and where. The Public Service Board inquiry was initiated by Mr Street to try to measure the amount of damage done by Mr Henderson and others to the careers of both Mr Witheford and Mr Henne as a result of the Tehran affair. It is only marginal to the general case and my concerns. In his speech Mr Hayden laid quite some stress on the costs to the taxpayer of the past investigation of this issue. The amount is put as a six figure sum. That I cannot accept, because it infers that the officers conducting the investigation would not have been receiving their weekly salary were they not doing this particular job. In any event, the amounts that could and should be recouped from Messrs Parkinson and Bowden would more than cover the cost of the investigation. A claim is made in Mr Hayden's speech on page 1045 of Hansard that Mr Witheford appealed against all provisional departmental promotions to level 1 gazetted in August 1982 for the purpose of delaying the promotions of others and disrupting the Department. Whilst I note in the Canberra Times of 19 December last that there are thousands of appeals every year in the Department of Foreign Affairs, the fact is that Mr Witheford, unlike some others, did not appeal against all promotions at his level. I suggest to Mr Hayden that he might check the facts relating to these points and make some apology to Mr Witheford. In fact, because I understand that neither Mr Witheford nor any of the other honest officers have yet been able to meet with either Mr Hayden or his staff, such a meeting might well be arranged, and I hope it will bear fruit relative to this issue. Failing that it seems to me that, as with the meat industry, only a royal commission will get to the facts of the matter. Perhaps my Senate colleague the Attorney- General (Senator Gareth Evans), could plant that seed in his ministerial colleague's mind so that the matter can be, to use his words, 'fiercely and aggressively pursued'. I finish on this note: Despite all the inquiries held so far into the issue I have raised, I am not satisfied that the truth has come out and my conscience dictates that, in the interest of justice, I should continue to pursue the matter much further. If matters are not properly and vigorously pursued without delay I assure the Senate that I shall be in action on this subject when we convene after the winter recess. Senator WATSON(Tasmania)(1.22) —I cannot really allow this opportunity to pass, having listened to the previous speaker, Senator Primmer, without saying that the Opposition regrets the use of the forms and privileges of this place for character assassination of reputable public servants such as Mr Henderson. I believe that Mr Hayden's comments in the House of Representatives on 26 May summarise the situation. Mr Hayden said: . . . we are witnessing, effectively, trial by Hansard, conviction by innuendo and I believe, an inexcusable smudging of the character of the people to whom I have referred. In conclusion Mr Hayden said: It is a matter of great melancholy for me that people who are reputable servants of this community, who in my dealings have discharged their responsibilities to the community and government regardless of its political colour in a very proper and competent way, have been subjected to this unrelenting campaign. I will leave the matter at that. I now wish to pursue another matter. I was not able to speak during the debate last week on the annual report of the Australian National Gallery. Therefore, I wish to take a few minutes of the time of the Senate to make a plea that the design and character of major public buildings reflect the age or philosophy of the period in which their construction took place. Accompanying the report of the Australian National Gallery was an account of the ceremonial opening. Several speeches drew attention to the architecture of the new building. The Chairman of the Australian National Gallery, Mr Gordon Darling, referred to the building as 'a work of art; one which displays the might of design and the majesty of colour, and one whose sublime spaces and surprising corners take the visitor on a voyage of endless discovery'. On the other hand, the then Prime Minister, Mr Malcolm Fraser, agreed that whilst its entrance was imposing, 'some may judge that from certain angles, it is not the most beautiful building in the world, but when the trees already planted around it grow, the lines of concrete will soften'. In Canberra, the national capital, we are surrounded with many monuments and grandiose buildings. Some of those buildings are living monuments to their creators. Today I wish to make the observation that the architecture reflects the philosophy of the age in which the construction took place. After viewing many local structures I think that serious thought should be given to the image that we are projecting through architecture. We are living in an age when we are valuing size above beauty. As the then Prime Minister said at the opening: 'The building is big and has some harsh angles.' Many visitors to the national capital have their first view of the National Gallery from the Kings Avenue Bridge. I use that route to Parliament House. From that perspective in the morning, as one witnesses smoke billowing from a chimney, the National Gallery looks more like a factory than a National Gallery. It epitomises an age when big is beautiful and the only way to be influential is to be large. After passing through a quite imposing entrance one is overwhelmed by tall, stark walls. Many of the paintings look like postage stamps on the walls. Admittedly, upstairs, there is a greater feeling of it being a gallery. There does not appear to be very much grace about the place. I commend the attempt to assist the disabled to move easily around the building, but this has been achieved with a lack of subtlety and attention to detail. Somebody with a primary production background could say cynically that some of these corridors reflect an oversized sheep race. Similarly next door, to use the terminology of body language, the High Court of Australia gives the impression that it lords over all. It hints that it is very expensive in terms of litigation and resort to it is beyond the reach of most ordinary Australians, because of the architecture, the grand scale on which it is built. Again, its massive, exposed steel work exudes a feeling of coldness and lack of charity. While the Gallery aspires to greatness, its physical size is not matched by the size of its collection. Maybe the architects have tended to overbuild. On the other hand, I welcome the plan for the development of the Museum of Australia. The report of the interim council indicates that the building will not dominate the surroundings, that it will complement, not overwhelm, the contents and that the environment will be welcoming, rather than massive and daunting. In conclusion, I believe that we must ensure that by our architecture, particularly in this national capital, we do not further the criticism that we are a brash young country. Senator SIBRAA(New South Wales)(1.29) —I wish to make some remarks about the Government's decision to grant an additional $115m to Trans Australia Airlines and $60m to Qantas Airways Ltd. This financial commitment by the Australian Government proves to the Australian public, and to the world, our confidence in the future of these two great Australian institutions. Thee is no doubt that TAA and Qantas have received a battering over the last seven years not only because of the severe economic recession, but also because of the short sighted and unsympathetic policies of the previous Government. At last TAA and Qantas will have the opportunity to work out their economic difficulties. The grants being made available to TAA and Qantas are not being made in an attempt to prop up failing enterprises. The $60m capital will provide Qantas with a better debt-equity ratio. In the short term, the capital will help Qantas to remain competitive with foreign airlines which fly to Australia. The money to both organisations will be used as equity capital; that is, shareholders' funds. While Qantas and TAA will not have to pay interest on these amounts they will, it is hoped, provide a dividend to the Australian community-the shareholders. The grants are comparable to the provision of additional funds by shareholders in the private sector so that a company can expand or improve its research capabilities. The Government's decision must be seen in the light of the difficulties currently being experienced by the international airline industry. That industry has been experiencing the most severe financial and trading difficulties in its history, largely because of the world-wide economic recession which has led, in turn, to a marked decline in tourism and, consequently, in international air travel. The International Air Transport Association-IATA-has estimated the total losses of its member airlines as about $US2 billion in 1983. Qantas's losses on its airline operations are not as great as those experienced by many other international airlines. In a speech which I made to the Senate last year I read, from a then current Newsweek article, the statement that Pan Am had a total debt of over $US11 billion. The article also pointed out that Continental Airlines Inc. had a debt of between $US4 billion and $US5 billion. I mention these two airlines again today because both operate into Australia and both have to be looked at as possible failures in the future. Already we have seen Laker Airlines, which was championed by honourable senators opposite as the airline that brought about deregulation in the industry. It was said that it had opened a new era in world airline travel. We have seen that airline collapse. Also, last year, Braniff International Airlines collapsed. It was not, by any stretch of the imagination, a small airline. It had 10,000 employees and 50 aircraft operating throughout the world. It is also pertinent to note that a number of Qantas major rivals for passengers, including Singapore Airlines Ltd, British Airways and Air New Zealand Ltd have received from their governments more support than has Qantas from previous Australian governments. For instance, Singapore Airlines received a capital injection of $200m. Air New Zealand received $68m in 1982 and between 1975 and 1982 the British Government increased the capital base of British Airways by $265m. During the same period the capital injection provided to Qantas was a paltry $25m. The total paid up capital of Air New Zealand is $120m, which is $38 per head of the New Zealand population. Singapore Airlines has a capital base of $261m, which is equivalent to $107 per head of population. On the other hand, the capital base of Qantas is now $149.4m or only $10 per head of the Australian population. Furthermore, these airlines are equivalent to Qantas in size and areas served. It is also worthwhile to study Qantas losses on airline operations for the period 1981-82 in comparison with those of other large airlines. While Qantas reported a loss of $24m, Air New Zealand lost $67m, British Airways lost a massive $880m, Continental lost $45m and Pan Am lost $ 367m. The Government's decision will ensure that at last Qantas and TAA will have adequate working capital and thus the freedom to improve their services and provide innovative fare deals and air routes. Until these recent increases were granted TAA's capital had since 1960-61 remained unchanged. Tragically, the former Government allowed Qantas and TAA to depend too much on borrowings to finance operations. Both faced horrendous interest problems. Furthermore, both organisations were unable to be flexible, which is imperative for th efficient running of any large airline organisation. TAA's ability to operate as a viable and profit making organisation was also undermined by the previous Government's policies, which took 90 per cent of TAA' s net profits between 1975 and 1981. Not only was it not permitted to build up its reserves, it was also forced to operate uneconomical services which the private airlines would not touch. Any honourable senator from Queensland would realise that the majority of airline routes in north Queensland are uneconomical and no private airline would touch them. The policies undertaken by the former Government added to the uncertainty of TAA's future. It is not surprising that staff morale has been very low indeed. The previous government had vowed to sell off TAA; naturally, this Government has reversed the decision. It is worth noting that TAA was originally brought into existence to compete against private interests and prevent undesirable, economic and social effects which occur when any industry is controlled by a monopoly of private interests. On a number of occasions in the past TAA has initiated fare cuts. Through its links with the Government it has been able to push through these fare cuts. On occasions it has forced Ansett Airlines of Australia to follow suit. It should be pointed out that both TAA and Qantas have been taking drastic measures to improve their economic position. Qantas has sold a number of major properties, such as the Wentworth Hotel in Sydney, to build up its cash reserves . Qantas has reduced its work force through voluntary retirements with a total world-wide reduction of about 2,000. It has cut back services and rationalised remaining services where there has been a decline in demand, for example, in Europe and the United Kingdom, and it has increased services in growing markets such as Asia and the United States of America. TAA has also reduced staff numbers from 9,000 in 1980-81 to about 8,000 at present. It has rationalised services while introducing innovatory fares which have been successful in increasing its share of the domestic airline market. Further, TAA has rationalised its F27 services, withdrawn from the loss-making airport to city bus services and disposed of surplus assets including aircraft and property. TAA's serious financial position has been exacerbated by the decision in 1979 to acquire wide-bodied aircraft. Unfortunately, there has been a substantial downturn in traffic that was unforeseen in 1979 when the A300 aircraft came into service. But this position is not unique to TAA and will have to be faced by Ansett in the months ahead as it takes delivery of its new wide-bodied Boeing 767 aircraft. I am glad to say that this Government is ending the inefficiency shown towards TAA and Qantas by previous governments. Senator ARCHER(Tasmania)(1.37) —I take the opportunity provided by the first reading debate on the Customs Tariff Amendment Bill 1983 and associated Bills to raise a matter on which the Government clearly has made a bad decision. I refer to the deletion of the Wynyard Airport from the list of works to be undertaken. I am convinced that this arose as a result of incomplete advice, a lack of knowledge of the situation, inadequate representation and political inexperience . However, at this stage, I congratulate the Government on the way in which it has so readily changed the decisions that it has made when it has been shown to be wrong. It is on that basis that I now ask for similar treatment in this matter. The Prime Minister (Mr Hawke) said that he had no knowledge of the situation and the Minister for Aviation (Mr Beazley) said that he has never been to north-western Tasmania. So it is understandable that they would not really know the actual position upon which the decisions have been made. I have been involved in the Aerodrome Local Ownership Plan for about six years. I support the Government's view and my party's view on the Plan. Whilst the history of the Wynyard Airport is important I will not take time to cover it now . However, in December, after considerable negotiation had gone on for some years, an undertaking to manage the airport was obtained through the Burnie Marine Board. Agreement for funding was reached with the Commonwealth Government and the go-ahead was given. I will now state why the decision was so clearly wrong. I will number the points that I am about to make so that we can look at them individually. First, the original decision is totally in line with the Government's policy, as stated in the Australian Labor Party's transport policy document, a copy of which I have before me. Second, the arrangements were concluded about six months ago and considerable work and investment has already been undertaken. Third, this was a promise that was made at the election. Fourth, Wynyard Airport is the third major airport in Tasmania, both for the number of movements and the number of passengers. The air transport statistics that hit honourable senators' desks only a day or two ago show, for instance, that Wynyard had 80,000 passengers and 5,185 aircraft movements in the period to 30 June 1982. On the other hand, Devonport, which is the next biggest Tasmanian airport, had 77,500 passengers and 4,106 aircraft movements. On those statistics, Wynyard is thirteenth on the list of airports in Australia with the largest number of aircraft movements and twentieth on the list for passenger movements. Of course, the important thing is that both Wynyard Airport and Devonport Airport operate very closely together. Fifth, geographically, Wynyard serves the largest portion of Tasmania-larger than any of the other regular airports. Sixth, it serves that part of Tasmania which produces the largest part of its natural wealth in minerals, agriculture and timber products. Seventh, without upgrading, the development already carried out at Devonport will not be appropriately utilised. The airlines need both airports before that development can be profitably utilised. Eighth, the Federal Government's policy is to create employment. Better and more regular transport is vital to Tasmania for getting new jobs. Ninth, tourism is recognised as Tasmania's best potential development area, with the west coast mountains, rivers and so on as the centre of this increase. Of course, Wynyard is the point of entry for medium jets. Medium jets are essential to maximise that part of the development. Tenth, the airport's construction will involve on-site employment of about 110 people. If we add off-site employment as well, the figure would be between 150 and 180 for a period of 18 months with lesser numbers both before and after that period. In addition, 85 per cent of the entire money being spent on the development will be spent locally on equipment, labour and subcontracts. Eleventh, as a long term development I can think of only one more project in the capital line in Tasmania that could be more important than this. Twelfth, it came out in evidence taken recently that, in the Burnie employment region, unemployment has doubled in the last six months. In summary, to accept the deplorable advice before the Government would involve the loss of a most necessary, long term capital investment; curtailment of a work and capital oriented tourism development; actual probable contraction to this part of Tasmania; the loss of time and money already invested; a breakdown in the viability of the planned two-airport medium jet service to north-western Tasmania and the breaking of two promises-one made by this Government and one by the previous Government. I see the case as one in which there is a total lack of knowledge, inadequate advice and a failure to take an overview of all the social , industrial and developmental aspects of the decision that has been taken. I am accusing no one. I am not debating what anyone has, or has not, done. I just ask the Government to look at all the facts and to take the appropriate steps to go ahead with the airport as planned. The development of Wynyard Airport to medium jet standard is of great importance to Tasmania. Senator COLSTON(Queensland)(1.43) —As a Queensland senator I take this opportunity to bring to the attention of the Senate matters that pertain to one of the most controversial issues ever raised in my home State. The issue surrounds the Government tenders for the Stanwell powerhouse in central Queensland. As I said, the issue has become extremely controversial because of allegations suggesting that the assessment of the tenders was not carried out in a proper way. On information provided to me the chronological order of events is as follows: The Queensland State Government called separate tenders for the boilers and the turbo-generators at the proposed Stanwell powerhouse. International and Australian firms submitted tender prices. These tender prices were announced at the public opening on 29 September 1982. However, following release of those separate tender prices, secret negotiations took place between people associated with the Government and with the Japanese company, C. Itoh and Co. (Australia) Ltd. Following those negotiations, C. Itoh submitted a combined tender price for the boilers and generators. It is believed that C. Itoh's submission of the combined tender price was made at the request of a person or persons associated with the QEGB- that is, the Queensland Electricity Generating Board-or with the Government. It was made after it became known that both technical and commercial evaluations of the other tenders showed that CESO Canada would win the turbo- generator tender. It is also pertinent to mention that CESO became aware that C. Itoh had made a mistake in its boiler price, in that the boilers offered in its tender were too small in size. CESO subsequently drew this to the attention of the Queensland Electricity Generating Board assessors expecting that the tender of C. Itoh would then be rejected as a non-conforming tender. This, however, was not to be so. At some later date, in an apparent move to save C. Itoh, contact was made with C. Itoh by people associated with the Government and an invitation was extended to the company to submit re-bids or a second submission by 1 March, which allowed C. Itoh to offer a bigger boiler. C. Itoh subsequently did this at no additional cost. It should be pointed out that the offer to change the technical items was not made to all tenderers. C. Itoh not only changed the boiler size but it is believed that following further discussions with Government personnel it also offered a discounted combined tender price for both boilers and generators. It needs to be mentioned that this combined price offer was made only after C. Itoh knew the bids of all other tenderers. It is now evident that C. Itoh also agreed to a number of concessions concerning problem areas or problems that have arisen in relation to the Tarong power house. These problems apparently included the computer coal control system and simulators. These concessions were made during discussions held in Japan with people associated with the Government of the electricity industry. Secret discussions were also held with C. Itoh in which the company was warned that it needed to review the small size of its local content. It must be appreciated that one of the rules in Queensland is that special preference should be given to those companies that create employment for the State by ensuring that contracts contain a major local content. C. Itoh was advised also that Clyde-Riley Dodds Pty Ltd, an Australian firm, and CESO were offering 75 per cent local content. As a direct result of this special advice, C. Itoh lifted its local content to 62 per cent compared with the local content of 40 per cent which it had previously used in its involvement at Tarong and Callide B. The issue then extends further, and involves the Queensland Cabinet. The information submitted to Cabinet was rushed through in only 10 minutes even though the contracts were worth in the vicinity of $330m. Documents available show that in relation to the tender for the boilers by Clyde-Riley Dodds, Cabinet was informed that 'the tendered technical proposal from CRD is not technically acceptable'. No reasons were given for this unacceptability and the claim is believed to have been challenged by Clyde-Riley Dodds. I point out that Clyde-Riley Dodds, believing that it was being discriminated against and would lose the tender prior to the Cabinet decision, submitted a brief to a number of Queensland Ministers. A copy of that brief details the original read-out prices and other information as regards advantages of an Australian firm being awarded the tender. The document presented to Cabinet, to which I refer, in effect downgraded and criticised the Clyde-Riley Dodds tender. It also claimed that the C. Itoh boilers included $82.2m in components from Japan. This is now challenged, Mr Deputy President, and it is claimed that it would have been more like $90m in imported components. Naturally, the smaller apparent value of the imported components would make the C. Itoh tender appear more favourable. As honourable senators would therefore appreciate, the difference in figures was to the advantage of the C. Itoh contract and upgraded the contract in comparison with others. The information given to Cabinet also claimed that the Clyde-Riley Dodds offer included overseas components to the value of $62.8m 'mainly from Korea'. After the disaster with gates supplied by Korea for the Wivenhoe Dam, the suggestion of Korean components would have detracted from the Clyde-Riley Dodds tender. However, this information about Korean components is completely false. Firstly, the overseas components were to come mainly from Japan and from the United States of America and not from Korea as stated. But more importantly, the amount of those components was not $62.8m as claimed in the document but instead closer to $52m. This misleading information was given to Cabinet Ministers for one purpose and one purpose only. That purpose was to downgrade the Clyde-Riley Dodds tender and thus in comparison significantly upgrade the C. Itoh tender. In the read-out prices for the turbo-generators, the C. Itoh price was $113m while the lowest tender, from Mitsubishi Westinghouse, was of the order of $99, 880,326-a difference in excess of $13m. The information that was provided to Cabinet totally conflicts with that submitted by a tenderer-in this instance, the Australian company, Clyde-Riley Dodds. It needs to be remembered also that while private, secret negotiations or discussions were held with C. Itoh regarding any problems with its tender in relation to boiler size, neither Clyde -Riley Dodds nor Mitsubishi Westinghouse nor any other tenderer were told whether their tenders were or were not technically acceptable during any tender discussions. In contrast, a senior representative of Clyde-Riley Dodds was invited to come to Brisbane by the Minister for Mines and Energy, Mr Gibbs. When he arrived in Brisbane, he was handed a Press release showing that the Cabinet decision awarding the combined contract to C. Itoh had already been made. Secret discussions took place with C. Itoh not only in Australia but also in Japan. Some discussions took place in early May, particularly on 12 May, after all other tenderers were told that no such talks would be undertaken with any parties. It is clear from the information available that C. Itoh has been given special treatment by the Queensland Government or by persons associated with that Government. It is also clear that once the tender prices were known, the company C. Itoh was given the opportunity to change its price. It is believed that because the individual tenders would have gone to companies other than C. Itoh, the ploy was used to get the company to submit a combined tender price. It is possible as well that because even the combined tender price was not as low as it should be in comparison with other prices, and because of the desire to have Australian involvement, the company then not only gave a special discount on a combined price but also, secondly, gave concessions regarding problems that had arisen in Tarong in relation to the computer control system and simulators. The seriousness of false information going to Cabinet obviously cannot be resolved by Federal Parliament. It is clear that the Queensland Government wants to cover up and confuse this issue. The facts of the matter are that given the information available a company has been given special treatment. By whom? I am not in a position to say. But I believe that an investigation must be carried out to prove or disprove the points that have been made. Cabinet documents and other information also made known to me show that other tenders were eliminated and this was a carefully considered process to ensure that C. Itoh was awarded the contract. Answers must be given. I am aware from media reports that the Leader of the Opposition in Queensland, Mr Keith Wright, sent 25 questions to the Queensland Minister for Mines and Energy, Mr Gibbs, but Mr Gibbs has refused to answer those questions. If the Government has nothing to hide, why does it refuse to produce that facts and figures it holds? I also understand from media reports that Mr Wright has challenged Mr Gibbs to debate the issue publicly. Again that challenge has not been taken up. Answers must be given as to why, for instance, the non-conforming tender was accepted; why discussions were allowed to be held and deals to be negotiated after other tender prices were known; and why C. Itoh was given special advantages over all tenderers. I agree with Mr Wright's assertion that a judicial inquiry is needed into what could be described as the elimination process used to guarantee that C. Itoh would be successful and that all other tenderers would be eliminated. I also believe that an inquiry should be held into the role played by QEGB and Treasury officials or anyone else associated with the Government and this company. This inquiry should cover discussions which have been held in Japan as well as in Queensland. Moreover, the investigation ought to involve those persons involved in hospitality activities in Japan earlier this year. Mr Deputy President, the issue is a very important one and a highly controversial one in the State that I represent. The matter must be pursued and, as a Queensland senator, I now call on the Queensland Attorney-General to act responsibly on this matter, to have an immediate investigation carried out and also to initiate a judicial inquiry. Senator WALTERS(Tasmania)(1.58) —I take this opportunity to enter the debate that must take place in this place on the Articles of the United Nations Convention on the Elimination of all Forms of Discrimination Against Women, before the present Government moves to ratify this Convention. I ask the Attorney-General (Senator Gareth Evans) whether he will make sure that this chamber has the opportunity to debate the Convention, as I believe it is most important. The history is that the United Nations General Assembly adopted the Convention in 1979. Most of the countries present at that meeting in Copenhagen at that time later signed the Convention in principle. But since that time more than half of those countries, having had time to scrutinise it more closely, have not moved to ratify the Convention. Many of them have serious reservations and Australia, under the former Government, was amongst that group. I will read the list of countries that have failed to ratify the Convention. They are countries with which we have very close ties and with which we are closely identified. They are: The United States of America, the United Kingdom, New Zealand, the Netherlands, Japan, Greece, West Germany, France, Finland, Denmark and Belgium. Under the previous Government, Australia had grave reservations but this is not the case under this Government. To begin with, the Convention interferes with our Australian federation because not all the State Attorneys-General have agreed with it. They must agree because, according to the Convention, it must be introduced nationally. I believe the Convention is a formidable threat to the freedom of religion and the protection of women and the family in this country. On a quick reading of it, people would say: 'Well, there is not a great deal wrong with it'. But, as has happened with some of the countries who originally supported it, when one gives it closer scrutiny one begins to understand the dangers involved. We may well ask ourselves why so many of these countries with which we associate have not signed it. I believe that the fault lies in the various interpretations of the word 'discrimination'. Article 1 states: 'discrimination against women' shall mean any distinction, exclusion or restriction made on the basis of sex . . . Mr Deputy President, I am sure that you will agree with me that women are distinct from men as men are from women. As I have said, many countries have grave reservations, and have expressed those reservations, about the Convention. Countries which have ratified it have expressed their reservations. Many countries expressed reservations when they signed it originally. For instance, Austria has stated that it will not be forced to send its women into the armed forces as could be required under Article 7 (b). Austria has also said it will not be associated with Article 11 which states that women would not be protected in their work place. I believe that Egypt has made a complete farce of the whole Convention by saying that it will have nothing to do with the Convention if it involves any detrimental effect on the Islamic religious laws and customs of its country. India and other countries with the Islamic religion have stated likewise. This points out to Australian women more than anything else can do that, if countries with an Islamic religion can sign this Convention, really the whole Convention is a farce and must be considered so. Mexico has stated that it will not ratify the Convention if any of its legislation is at variance with the Convention. One can begin to understand how ludicrous it would be for us to sign the Convention. Article 2 (b) states that, if we ratify it, we must adopt appropriate legislation and other measures, including sanctions where appropriate, to prohibit all discrimination against women. Article 2 (f) states that we must take all appropriate measures including legislation to modify or abolish existing laws, regulations, customs and practices which constitute discrimination against women. This provision would interfere with our religious freedom. I mention two religions that are very popular in Australia-the Roman Catholic religion and the Jewish religion. The Roman Catholic church would be forced to take women into its heirarchy. Under the Jewish religion, women are required to sit at the back of the church. This Convention would insist that women sit up at the front of the church. Although I believe some synagogues allow this to happen, not all of them do. Article 3 states that there should be no discrimination in the economic or cultural fields. In the economic field, in Australia we have discrimination against men because women can retire at 60 and receive the age pension while men cannot do so until they are 65. Does this mean that we would alter our pension system so that women would not receive the pension until the age of 65? The Convention does not really state what will happen. Article 6 states that we must abolish prostitution and that is one with which I agree. Senator Chipp informed us in this place the other night that he does not agree with this provision. Mr Wran has also moved in that direction. Senator Georges —What do you mean? Senator WALTERS —He has suggested that he would think of legalising prostitution in New South Wales. Article 9 is a tricky one. Many of the countries, such as Jordan, France, Egypt, et cetera, have reservations about this Article which states that women will have equal rights with men in respect of the nationality of their children. I now turn to Article 10 (c) which disturbs a number of people. This is an area in which it eliminates any stereotyped concepts of the role of men and women at all levels and in all forms of education by encouraging co-education and other types of education which will help to achieve this aim and, in particular, by the revision of textbooks and school programs and the adaptation of teaching methods. What is wrong with primary school children's textbooks having a picture of a mother with a baby in her arms waving goodbye to the father who is going out to earn money for the security of that family? Must we abolish this concept and say that it is a stereotyped role that makes women distinct from men? Good heavens, women are distinct from men. Senator Gareth Evans[Some of them. Senator WALTERS —There is no way that the honourable senator-whether he would have it otherwise or not-could overcome that biological fact. This is a ludicrous interpretation that has been put upon discrimination against women. Article 11.2 (b) concerns maternity leave and states: To introduce maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowances; How can we maintain the seniority of a woman who leaves the workforce when she decides to have her children and stays out of it for perhaps four, five or six years? When she comes back do we say that over that time she would have reached such and such a stage, perhaps in the Public Service or elsewhere, and her new seniority must be maintained? Many of the countries have withdrawn from that article. They say it is too expensive for their particular form of government and it is an impractical way of running government. Article 14.2 (h) states that rural women must not be disadvantaged in any way. If honourable senators look at the reading of that they will see it states that the rural women must: . . . enjoy adequate living conditions, particularly in relation to housing, sanitation, electricity and water supply, transport and communications. Whilst I believe that is a wonderful objective for every country, it is not practical, particularly in a country the size of ours; it is a vast continent. Women in the outback realise that their sanitation, electricity, water supply, transport and communications are not always equivalent to those of their colleagues in the capital cities. The fact that it is suggested that we move to this immediately is really quite extraordinary. Many countries have also withdrawn from Article 16.1 (e), which states that women must have the same rights to have as many children as they like, with access to information and education as well as the means to enable them to exercise these rights. Whilst we have that in Australia, I wonder whether the article also includes abortion. It could well do so. Article 16.1 (g) is one from which Brazil, Jordan, France and other countries have moved since they have ratified it. That article states: The same personal rights as husband and wife, including the right to choose a family name . . . Mr President, we could have a situation in Australia where, if we departed from the traditional method of family names, we could have children in the same family with different family names. The first child could take the husband's family name and the second child could take the mother's family name. I believe that would really present all sorts of legal and social problems within the family structure. Article 29.1 enforces all countries to abide by the Convention . It states that should there be any dispute between countries, when one is not abiding by the articles and when others believe it should be, negotiations should be carried out for a special time. If those negotiations have not been successful within six months then one of the countries can take the other to the International Court of Justice. If we did not give our women the appropriate seniority in the work place after they had been at home for six or seven years, the Union of Soviet Socialist Republics, Cuba, Brazil or any other country which has ratified the Convention could take us to the International Court of Justice. I will read out the names of the countries which have withdrawn from this article because that will give the people of Australia a rough idea of which countries have ratified this Convention. I have already indicated the countries that have not ratified it and these are some that have: El Salvador, Ethiopia, Romania, China, Czechoslovakia, Hungary, Brazil, Bulgaria, the USSR, Mongolia, Egypt, France, the German Democratic Republic, Poland, India and the Ukraine. If Senator Evans ratifies this while the Parliament is in recess and denies us a proper debate in this place I, for one, will be extremely disappointed. As he is in the chamber I ask him again: Will he allow a full debate on the articles of the Convention, especially on the ones that this country-if he insists upon going ahead with the ratification-can move reservations against? So many petitions opposing the ratification have been brought into this chamber that I believe he should at least give us the opportunity of that debate. Senator GEORGES(Queensland)(2.12) —In the three minutes available to me I would have liked to come to the support of Senator Primmer, not so much for the subject that he raised but his right to raise it, but I will do that at another time. I am concerned with another matter regarding the Hope Royal Commission on Security and Intelligence Agencies. I wish quickly to refer to page 12 of the transcript and anticipate a question for the Attorney-General (Senator Gareth Evans) tomorrow. On that page Mr Barker made the following comments: Thank you, your Honour. So in all this, your Honour, there is this proposition that Mr Combe was secretly investigated and apparently found to be guilty in respect of a charge unformulated, for an offence undefined. Now, our problem is this . . . The Commissioner interrupted and said: Why do you say for an offence? Mr Barker said: I use the word . . . The Commissioner again interrupted and said: A person can be a security risk without having committed any offence. I will ask the Attorney-General tomorrow whether he agrees with that principle. Further, Mr Barker said: Yes. I use the word in a broad way. You see it is said that he did not commit any criminal offence. But he did something, he apparently offended against some principle. We do not know what it was. And this is the immediate problem that without knowing precisely what the accusation was . . . Again the Commissioner interrupted and said: I do not even know that you have to offend against a principle . . . Again I ask the Attorney-General whether he accepts that. What emerges from these two interruptions is whether the Commissioner is impartial enough to have the matter of Mr Combe before him. What chance has Mr Combe, or any other person -in view of these two interruptions-before such a commission? I seek leave to continue my remarks later. Leave granted; debate adjourned. Bill presented by Senator Gareth Evans, and read a first time. Standing Orders suspended. Senator GARETH EVANS(Victoria-Attorney-General)(2.16) —I move: That the Bill be now read a second time. I appreciate that this is a somewhat unusual course to follow for a Bill of major significance being introduced into the Parliament for the first time, but for reasons of time I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- Mr President, the Freedom of Information Act has now been in operation for 6 months. It commenced on 1 December 1982. Although that is a comparatively short period of operation within which to judge how the legislation is working, some things have become clear- The number of requests for access to documents which have been made under the Act is only a small fraction of the numbers feared by departments and authorities when the Bill was before the Senate Standing Committee on Constitutional and Legal Affairs; As was expected, most of the requests have been for documents related to the personal affairs of the applicant and have been made to the large client- oriented agencies such as the Department of Social Security, the Taxation Office and the Department of Veterans' Affairs; Most of the requests are being dealt with well within the 60 day time limit specified in section 19 of the Act, although there is no doubt that most departments and authorities might be described as still being in the learning stage in handling requests. The Government came to office with a commitment to review the Freedom of Information Act. The starting point for that review has been the recommendations of the Senate Standing Committee which were not taken up by the previous Government and which were moved unsuccessfully both in this place and in the House of Representatives during the debate on the Freedom of Information Act. It will be remembered that there were three principal areas of contention- First, the lack of substantial retrospectivity except in respect of documents relating to the personal affairs of the applicant, and even in that case only documents up to 5 years old at the date of commencement of the Act; Secondly, the power given to Ministers to issue conclusive certificates having the effect that claims to exemption might only be examined by a special tribunal to be set up for that purpose; Thirdly, the undue width of a number of exemptions due to the lack of a proper test of public interest in the release of the documents concerned. The present Bill tackles all three aspects. In the first place, it provides that the generality of records up to 5 years old at the date of commencement of the Freedom of Information Act will be subject to the legislation. That means that documents which came into the possession of Ministers and agencies on or after 1 December 1977 will be available for access subject, of course, to the exemption provisions of the Act. In the case of documents containing personal information about the application there will be no limit on the retrospectivity. I would add that a number of agencies are already dealing with requests for documents containing personal information on this basis. The retrospectivity thus given will cover most of the document which are the subject of current interest to applicants and will represent a very substantial expansion of the scope of the legislation. In addition, the legal protection given by sections 91 and 92 to the disclosure under the Act of non-exempt documents will be extended to the disclosure of non- exempt documents beyond the 5 year period. This will encourage agencies to give access to prior documents beyond the 5 year period. In the second place, the special Document Review Tribunal is to be abolished. Although the Government has considered it premature to take the further step of abolishing the system of conclusive certificates under the Act, it does not consider that there is any justification for retaining a special tribunal to deal with these matters. It believes that they can be adequately and properly considered by the presidential members of the Administrative Appeals Tribunal who, in the context of the other jurisdictions of the Tribunal, are building up a considerable body of expertise in the handling of administrative matters. All questions conerning claims of exemption where certificates have been issued will be dealt with by the Administrative Appeals Tribunal. That Tribunal, constituted by presidential members of the Tribunal, will be empowered to consider whether there are reasonable grounds for claiming that a document is exempt in any case where a certificate has been issued and to recommend accordingly. The Tribunal will be empowered, if it is not otherwise satisfied as to the nature of the document, to require a document which is the subject of a certificate to be produced to the Tribunal. Under the Act as it stands, the Administrative Appeals Tribunal is not permitted to examine for itself a document which is the subject of a certificate. This has proved to be a particular problem in the case where a document is claimed to be exempt as an internal working document and a certificate is given in respect of that document . Although the Administrative Appeals Tribunal is empowered to consider whether a document is one of a deliberative type, which would bring it within section 36 of the Act, it is not permitted to look at the document for that purpose where a certificate has been issued. It must determine the question without the benefit of seeing the document. This deficiency will be cured by the Bill. Furthermore, the Bill will amend the Act to require the relevant Minister, in a case where the Tribunal has found that there are no reasonable grounds for claiming that a document is exempt, positively to decide whether to revoke the certificate or not. If he decides not to do so, he will be required to give a statement of reasons for that decision so far as can be done consistently with not disclosing exempt matter, and to table that statement in the Parliament. In the third place, three of the exemption provisions of the Act will be made subject to an overriding public interest test. This will give effect to relevant recommendations of the Senate Standing Committee, particularly in the case of Commonwealth/State documents. The first of these exemptions concerns Commonwealth/State documents, that is, documents the disclosure of which may cause damage to Commonwealth/State relations or disclose information communicated in confidence by a State Government or authority to the Commonwealth. The Bill will provide, in a new section 33A to be inserted in the Freedom of Information Act, that a document will not be exempt on this ground if the disclosure of the document under the Act would, on balance, be in the public interest. That is, a document cannot be withheld under the Commonwealth/State exemption if the disclosure of the document would serve the public interest. Thus, for example, a document cannot be withheld merely because it contains information communicated in confidence by a State if there is a public interest in having access to that information. Since the Freedom of Information Act was enacted, at least one State has made a practice of designating most of its communications in writing with the Commonwealth as confidential, presumably to bring all of those documents within the scope of the Commonwealth/ State exemption. It was never intended that the exemption would operate in that way. The addition of the overriding public interest test will ensure that documents cannot be withheld where they ought to be released. The public interest test so expressed will operate somewhat differently to the public interest test in section 36 of the Act in respect of internal working documents. In that case, the question is whether the disclosure of a document containing advice, recommendation, opinion or other deliberative material would be contrary to the public interest. A document is not exempt on the basis of its content unless it can be shown that the disclosure of those contents would be contrary to the public interest. In the case of the Commonwealth/State documents , harm or likely harm to Commonwealth/State relations or the disclosure of a confidential communication will be sufficient to make a document exempt unless, as I have said, there is an overriding public interest in the disclosure of that document. In the area of Commonwealth/State documents the Bill also picks up two recommendations of the Senate Standing Committee which were rejected by the previous Government. They are, first, that a State should be entitled to be consulted before the release of a document which might fall within the Commonwealth/State exemption provisions. Secondly, a State having been so consulted, should be entitled to appeal to the Administrative Appeals Tribunal against a Commonwealth decision to release the document as one which is not exempt. The State concerned will be entitled to appeal to the Tribunal on the ground that the document would be exempt under the Commonwealth/State exemption provision. The Bill provides that these consultations would take place in accordance with arrangements to be entered into between the Commonwealth and the States. I should add that the Prime Minister has written to the State Premiers and to the Chief Minister of the Northern Territory to repeat assurances given by the previous Government that a State could be expected to be consulted before there is disclosure of a document the release of which might harm the interests of the State or the Northern Territory, as the case may be. I would also add that the provisions relating to States all apply equally to the Northern Territory. The exemptions contained in sections 39 and 40 of the Act are to be restricted in their scope by the addition of an overriding public interest test, of the kind I have already described in relation to Commonwealth/State documents. These two exemptions relate to documents the disclosure of which would adversely affect the financial or property interests of the Commonwealth or its agencies and documents the disclosure of which would prejudice certain agency operations. In addition, the latter exemption has been re-drafted to clarify its scope. The Bill contains a number of other measures to widen the scope of the Freedom of Information Act. First, the exemption for Cabinet and Executive Council documents has been narrowed to exclude from its scope documents of a purely factual character the disclosure of the Cabinet. This means that, after a Cabinet decision is announced, purely factual documents produced for submission to Cabinet in connection with that decision will no longer be subject to the Cabinet document exemption. Secondly, there is to be a progressive reduction in the 60 day period allowed by section 19 of the Act for dealing with requests under the Act. From 1 December 1984, the period will be reduced to 45 days. It will be further reduced to 30 days from 1 December 1986. This staged reduction of the response time corresponds to the recommendations of the Senate Standing Committee. It means that departments and authorities will have had 2 years' experience under the 60 day time limit before it is reduced to 45 days and 4 years' experience of the Act before the response time is reduced to 30 days. Thirdly, the Act will be amended to require a statement of reasons to be given under section 26 of the Act in respect of all decisions under the Act relating to a refusal of access. In particular, this means that reasons will have to be given for decisions to issue conclusive certificates and, as I have already explained, for a refusal to revoke a certificate to give effect to a recommendation of the Administrative Appeals Tribunal. This will avoid an applicant having to resort to the mechanism of the Administrative Decisions ( Judicial Review) Act to seek the reasons for decisions in such cases. The Administrative Appeals Tribunal is to be empowered to decide whether the statement of reasons given in a particular case is an adequate statement. Fourthly, where an applicant is refused access to documents in circumstances in which he would be entitled to complain to the Ombudsman about that refusal, the agency concerned will be required to inform the applicant of the right to complain to the Ombudsman. Fifthly, the Administrative Appeals Tribunal is to be empowered to recommend to the Attorney-General, in appropriate cases, that the costs of a successful applicant before the Tribunal be paid by the Commonwealth. Sixthly, the Bill makes two changes of significance to section 9 of the Act, which provides for the publication of departmental manuals and the like. In the first place, an updating of the list of manuals will be required, so far as practicable, to be made every three months, instead of every year as at present. In the second place, the dispensing power granted by the Act to the Attorney- General to modify the application of section 9 to an agency is to be limited to the special case of the Commissioner of Taxation for which it was originally intended. The Government believes that all these changes, widening in various ways the scope of the Act, will bring marked advantages to the public in the working of the legislation. There are some other changes of substance made by the Bill to clarify or improve the practical operation of the Act. The definition of the term 'official document of a Minister' will be amended to make clear the intention that it extends only to documents which a Minister has in his capacity as Minister and not to documents which he holds in his capacity as a member of the Parliament. This is regarded as implicit in the existing definition, but some doubts have been expressed. There are two changes relating to security matters. In the first place, it is to be made clear that references in section 33 of the Act to the security of the Commonwealth are to include measures taken outside the Commonwealth, particularly in relation to the security of overseas posts and of our communications network. Secondly, some anomalies have arisen by virtue of the fact that the intelligence agencies of the Commonwealth are excluded from the operation of the Act, but their documents in the hands of other agencies are not so excluded. Accordingly, section 7 of the Act is to be amended to remove these anomalies, by providing that documents received by an agency from an intelligence organisation will be excluded from the operation of the Act. Some problems in the application of the Act have arisen out of the changes in administrative arrangements made when the present Government came into office. New sub-sections (6) and (7) to be inserted in section 4 of the Act are intended to avoid these problems in the future. As well as providing for the staged reduction of response time under section 19 of the Act which I have already mentioned, clause 10 of the Bill provides for the addresses of agencies to which applications are to be sent to be specified in the future by notice in the Gazette rather than by regulation. This will make it administratively easier to notify changes of agency addresses in the future as they occur and so keep the list up to date. Obviously, the Bill cannot be passed through the Pariament during the present sittings. It is the Government's intention that it should remain over until the Budget sittings and this will give ample opportunity for public comment on it. The expectation is that the Bill will proceed through the Parliament during the Budget sittings and will be brought into force as soon as possible. As an interim measure, it will still be necessary to constitute the Document Review Tribunal to deal with a number of certificates which have already been given and with any others which might be given before the new arrangements come into force . The Document Review Tribunal will be set up as soon as practicable. In the second place, the Government has approved a policy of administering the Freedom of Information Act in accordance with the spirit of the amendments pending the enactments of those amendments and, in particular, a policy of not reviewing access to a document solely on the ground of it being a prior document except in accordance with the proposed amendment to section 12 of the Act. There will, however, be cases in which they may not be able to be given effect because the extended protection which will be afforded by the proposed amendments of sections 91 and 92 will not be available until the present Bill becomes law. Apart from the legislative changes there are some administrative matters which have been the subject of consideration by the Government. My Department engaged in a very considerable training program last year for officers of Commonwealth agencies and the staff of Ministers. That training program will need to be an ongoing one and my Department will be undertaking further training this year with the assistance of the Public Service Board to acquaint officers of agencies and the staff of Ministers with the proposed amendments to the Act. Much more publicity needs to be given to the rights conferred by the Freedom of Information Act and the brochure issued by my Department last year will be revised and reissued. It is also intended that that brochure should be issued in the principal ethnic languages. The Freedom of Information Memoranda issued last year will be continued and existing memoranda will be revised in the light of experience. It is still intended to issue a Freedom of Information handbook, but that is a long term project and work on it has been deferred pending the settlement of the proposed amendments to the Act. The Senate Committee recommended that, in the decision-making arrangements adopted by agencies for the handling of FOI requests, the general principles to be applied should be that authority to clear requests be delegated downward as far as realistically possible, while authority to deny requests should be confined to a small group of officers of at least Second Division status. All agencies have or should have made arrangements under section 23 of the Freedom of Information Act with regard to the delegation of decision-making powers. My Department has asked all agencies to provide it with details of these arrangements and they will be revised by my Department for consistency with the Senate Committee's recommendation. In addition, my Department will be drawing to the attention of agencies the recommendation by the Senate Committee that where practicable reading rooms to assist the public to peruse manuals, indexes and other information required to be made available should be provided where the number and nature of requests for this kind of material would justify the cost of establishing the reading rooms. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill presented by Senator Gareth Evans, and read a first time. Standing Orders suspended. Senator GARETH EVANS(Victoria-Attorney-General)(2.17) —I move: That the Bill be now read a second time. I seek leave to incorporate the second reading speech in Hansard. Leave granted. The speech read as follows- The current situation relating to the management of Commonwealth records can no longer be regarded as acceptable in today's political climate. The Australian Public Service is operating in an environment which is increasingly demanding and searching. Quality of Government and reform of administration are live issues. Processes of Government are under greater scrutiny than ever before, and management practices must be able to withstand public review. Concepts of openness, privacy and redress at law are permeating public administration. Records, and the information which they contain have a crucial part to play in enabling the agencies of Government to respond to these changes and to meet community expectations. The Government must therefore take appropriate action. As part of the general concern to achieve adequate management processes within the Public Service, there is scope for the development of a coherent policy in relation to the management of Commonwealth records. Such a policy must have clear objectives which can be explained, accounted for, and if necessary, reviewed. It must provide for arrangements to cover the whole of the Public Service and in relation to which agencies have defined roles and objectives as users and managers. Such a step can be justified on the grounds of furthering efficiency and effective use of resources. It is also necessary as a means of assisting the public towards an understanding of what can and, equally importantly, cannot be achieved in managing so vast and diverse a body of records. Openness about records as a commodity is an essential element in the growing degree of contact between the community and the agencies of Government. Furthermore, there must be an adequate system of public access to the records generated by departments and authorities. Such a system must provide a clear statement of rights and objectives both of agencies and the public. It must deal with all categories of Commonwealth records since their creation. The Bill currently before the House contributes substantially towards meeting these two objectives. The Bill institutes arrangements for the proper management and disposition of the vast body of records generated by Commonwealth agencies. While it breaks some new ground, it is chiefly designed to replace existing ad hoc decisions and conventions which have been relied upon for the last thirty years, with a coherent framework within which comprehensive and accountable arrangements can be made. It provides a statutory basis for the activities of the Australian Archives and confirms that organisation as the agency chiefly responsible for developing and implementing the broad management action which will be necessary. In relation to the management of records, the Bill provides for action in a number of key areas. For example, the Australian Archives is to gather for its own purposes and for use as appropriate by other Commonwealth agencies and the public, a wide variety of management information about Commonwealth records, including data about their identity, content, format, age, whereabouts, value and functional relationships with agencies past and present. This activity is particularly important in providing a basis for the effective physical management of records. In addition, it provides for an analysis of the effects of successive administrative changes on the responsibilities of agencies and for clarification of the distribution of related records from Federation to the present day. By doing these things it provides an essential basis for both the physical and intellectual management of the stock of Commonwealth records. Not all records, of course, can be or need to be kept. But while destruction of records can be justified quite properly, on the grounds of efficiency and economy, it is in the interests of the agencies and the public alike that decisions concerning destruction are made with the greatest care, are fully recorded and follow carefully designed and widely-known processes. Accordingly, the Bill establishes appropriate machinery with a central role for the Australian Archives. It also prohibits the disposal, destruction or transfer of custody or ownership of Commonwealth records unless these procedures meet certain criteria, with the proviso that there is no interference with the requirements of other laws and of the normal processes of administration. The Bill makes specific provisions covering the transfer, custody and storage of Commonwealth records. In essence, the records are to be transferred to bulk storage repositories as soon as they fall out of current use in agencies and in general no record more than 25 years old is to remain in the custody of the agency. The Australian Archives is empowered to establish and control the necessary repositories; however, where the Director-General considers it to be more effective or efficient or for other reasons appropriate to do so, the Archives may enter into arrangements for the storage of non current Commonwealth records in other repositories. The Australian Archives is empowered to provide advice and guidance on issues related to the management and use of Commonwealth records. This process will include assistance to agencies, either individually or as a whole, in developing policies and procedures which will improve their response to the new demands which are being made on their records resources. Information about the structure and working of Government, the allocation of functions and the distribution of related records, will be made available for public use as appropriate. Under proper guidance and instruction, this advice will be of the greatest practical assistance to members of the public in identifying which records of which agencies are relevant to their particular concerns. It will also help to develop a general awareness of the way in which the machinery of Government functions and its implications for records. Access to advice and guidance of this sort will help the public to approach the body of Commonwealth records with a greater hope of success, whatever the nature or period of their inquiry. Much of the Bill is concerned with a matter of special interest to the Government, that is, with the question of public access to Commonwealth records. The relevant provisions of the Archives Bill and the measures contained in Freedom of Information legislation have been carefully co-ordinated in order that together they constitute comprehensive arrangements covering the public accessibility of the widest range of Commonwealth documentation. Broadly speaking, freedom of information covers material which is thirty years old or less, while the arrangements under Archives legislation relate to records more than thirty years old. Access under Archives legislation is designed to meet the needs not only of those who wish to consult single, specific documents but also of those who wish to search through a large number of records in order to find the information which they desire. In other words, the arrangements are intended to meet the needs of comprehensive research and general inquiry, as well as to cater for those who already know which records they are looking for. It is expected that under these arrangements the great majority of Commonwealth records more than thirty years old will become available for such purposes. Under the proposed Archives legislation there is also provision for special access to and accelerated release of records less than thirty years old. Inevitably, however, in the interests of personal privacy, good government and security, some exemptions will have to be applied and these will be very similar in principle to those provided for under Freedom of Information legislation. However, it is expected that relatively fewer records will be withheld under Archives legislation because this deals, in the main, with older records. Particulars of records examined for the purpose of public release except in the case of exempt records in respect of which a certificate has been made, will be entered in the National Guide to Archival Material, an updated copy of which will be maintained in all Regional Offices of the Australian Archives. This will allow the public to ascertain which records are open for use and which have been closed. The Bill provides a right of appeal. Administrative decisions to close all or part of a record which is in the open access period, except material covered by a certificate or where it has been determined that access to a record would physically jeopardise that record, can be challenged by the public. This is to be done through an internal process of review or reconsideration and then, if necessary, by an appeal to the Administrative Appeals Tribunal. The application is to receive all reasonable assistance in identifying the record in question and the onus of establishing that the record is an exempt record lies with the party claiming the exemption. The body of records to which these measures apply is large, increasing in volume, varied in physical type and diverse in subject matter. Essentially it is the body of records which Commonwealth agencies have been generating since Federation in pursuit of their day by day business. A 'Commonwealth record' is defined as any record which is the property of the Commonwealth, but the term does not extend to such material in a collection maintained by the Australian War Memorial, the National Library of Australia or the Australian National Gallery. The Australian Archives will have the power to seek the deposit in its custody of other records closely associated with the origin, history and functioning of the Commonwealth Government and to take steps to ensure that such material is properly preserved. Special provision is made for certain Commonwealth records separate from those of the Public Service and associated Government agencies. The provisions of the legislation will apply to the records of the official establishment of the Governor-General, but not to his private or personal records. Records of both the Cabinet and the Executive Council are covered by the Bill except for the class of records known as 'Cabinet Notebooks', which contain notes of discussions or deliberations of Cabinet or a Cabinet committee. Special arrangements have been made in order that the provisions of the legislation can be applied to records of the Parliament and the courts by means of regulations, in terms consistent with the constitutional relationship between the Executive Government and the Parliament and the courts. While the general management provisions of the Bill apply to the intelligence organisations, these bodies have discretion in the matter of the extent to which their records shall be subject to the control of the Director-General of the Australian Archives. Communications received by the Commonwealth from State governments will be the subject of consultation where release of such material might reasonably be expected adversely to affect the interests of a State. Known financial costs arising directly from the Bill are those associated with the Advisory Council and some additional staff. While there are Service-wide staffing implications, as the Bill makes statutory provisions for the managements storage and disposal of records, it is difficult to assess this except in broad terms. For the Australian Archives the staffing needs estimated to be required to meet the provisions of the Bill, have been assessed as 9 staff Australia-wide. This number is in addition to those currently being sought from the Public Service Board to enable existing backlogs to be reduced, and existing levels of service to be improved. Quite clearly, the measures which I have outlined relating to the management and accessibility of Commonwealth records will have the effect of vastly improving the quality of what is being done by way of identifying, servicing and making available for research and general public use a valuable and unique aspect of our national heritage. However, the type of work which the Bill authorises the Australian Archives to undertake in relation to the management of records throughout the Public Service will do much more than benefit only those who professionally or from personal interest are concerned with what the Government and its machinery were doing 30 or 40 years ago. It will provide valuable and continuing support to the Service in coming to terms with the new circumstances in which all agencies, and not just the Australian Archives, now have significant responsibilities for identifying, describing and locating records; for arriving at access decisions about them and for making them physically available for public purposes. In this way it will benefit those members of the public who, for a variety of reasons, are concerned with today's records. The Bill does not establish the Australian Archives as a statutory authority; such action was not felt to be appropriate at this time. However, the office of Director-General is to be a statutory position, and the Australian Archives is to have the benefit of an Advisory Council whose members will include parliamentarians and representatives of users, both Commonwealth institutions and the public. The Council will be able to advise the Minister and the Director -General as requested, or on its own motion, on all matters relating to the functions of the Australian Archives. The Australian Archives has recently been the subject of a Joint Management Review, as a result of which its management practices and systems are being completely overhauled and modernised. Its capacity in relation to systems, automatic data processes and the development of policy have been greatly strengthened as an organisation. It is becoming increasingly capable of playing a central management role in a changing administrative and information environment. I commend the Bill to honourable senators. Debate (on motion by Senator Reid) adjourned. Bill presented by Senator Gareth Evans, and read a first time. Standing Orders suspended. Senator GARETH EVANS(Victoria-Attorney-General)(2.18) —I move: That the Bill be now read a second time. I seek leave to incorporate the second reading speech in Hansard. Leave granted. The speech read as follows- This Bill is consequential upon the Archives Bill 1983. Its purpose is to provide for the Australian Archives to be the depository of certain material under the Copyright Act. The Bill will amend the Copyright Act 1968 to enable broadcasting and television organisations to deposit with the Australian Archives the so-called ephemeral records which the Director-General of the Australian Archives certifies as being of exceptional documentary character. The present provisions of the Copyright Act provide for deposit of these records with the National Library. An ephemeral record is a record-whether videotape, cinematograph film or sound record-made by a radio or television broadcaster for the purposes of broadcasting a copyright work. The Copyright Act entitles a broadcaster, who has a licence to broadcast a copyright work, to make such a recording without further permission, so long as the record is either destroyed within twelve months, or such longer period as is agreed to, or delivered to the National Library for archival retention. The Berne Copyright Convention requires the destruction of such records unless they are preserved in official archives on the ground of their exceptional documentary character. Now that the Archives is to be established on a statutory basis, with rights of access to be defined, it is appropriate that the Archives, rather than the National Library, be entitled to receive this material, and that its Director-General be responsible for its certification as material of exceptional documentary character. Particulars of all ephemeral records received by the Archives will be kept, under the provisions of the Archives Bill, in the Australian National Register of Records established by that Bill. Records received from government-funded broadcasters will be kept as appropriate in one of the repositories maintained by the Archives around Australia. With the consent of the National Librarian, records received from private broadcasters will be lodged by the Archives, under the provisions of the Archives Bill, with the National Library of Australia where they will be kept together with like material deposited by non-government bodies. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill presented by Senator Ryan, and read a first time. Standing Orders suspended. Senator RYAN(Australian Capital Territory-Minister for Education and Youth Affairs)(2.19) —I move: That the Bill be now read a second time. Like my colleague Senator Gareth Evans, because of the restrictions of the timetable facing the Senate, I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- I am delighted that I am able to move the introduction of a major piece of legislation on a matter which so deeply affects the rights of women and men. The objects of the Bill are to give effect to certain provisions of the U.N. Convention on the Elimination of All Forms of Discrimination Against Women which the Government plans to ratify in the near future; to eliminate discrimination on the ground of sex, marital status or pregnancy in the areas of employment, education, accommodation, the provision of goods, facilities and services, the disposal of land, the activities of clubs and the administration of Commonwealth laws and programs, and discrimination involving sexual harassment in the work- place and in educational institutions; and to promote recognition and acceptance within the community of the principle of the equality of men and women. The Bill closely resembles the Sex Discrimination Bill 1981 which I introduced into the Senate as a private member's Bill in November 1981. Following introduction of that Bill I held extensive consultations on it. The present Bill incorporates a number of very useful suggestions made to me during these consultations. The need for such a law is now widely understood and accepted. Throughout Australia women experience discrimination on the basis of their sex and their marital status. In three States there are avenues for redress of infringements of women's rights. In other States and in the range of areas which are the responsibility of the Commonwealth there is no remedy. The result is economic and social disadvantage and a significant impediment to the exercise by Australians of fundamental rights and freedoms. The statistics give clear evidence of deeply embedded structural inequalities in our society: Unemployment rates amongst women, (11.2 per cent in February 1983) particularly young women (29.7 per cent), remain considerably higher than amongst men (9.9 per cent and 24.7 per cent). 87.6 per cent of discouraged workers are women (September 1982). Nearly two-thirds of women are employed in only three occupational groupings: Clerical; sales and services; sport and recreation. Even within occupations where women predominate they are seldom found in key decision-making positions. Occupations in which women are concentrated are amongst those most likely to contract with the introduction of new computer technology. Although the number of women in administrative, executive and a managerial positions increased by 40 per cent in the 10 years to 1980, women filled only 14 per cent of these positions in February 1983. 36 per cent of employed women work part-time. 78.4 per cent of part-time workers are women. Only 5 per cent of all apprentices are female; if hairdressing apprentices are excluded, young women comprise less than 2 per cent of apprentices. Average weekly full-time earnings for Australian women were 76.4 per cent of male earnings in 1981. Female average weekly earnings at December 1982 (latest available) were $283.30 . The corresponding male rate was $352.10. This Bill offers an opportunity to combat some of these inequalities. I turn now to a more detailed description of the Bill. The Bill will cover both direct and indirect discrimination on the ground of sex, marital status or pregnancy. Direct discrimination occurs when there is a specifically directed policy or action which treats one group less favourably than another. Indirect discrimination occurs when a policy or practice which on the face of it appears to be neutral or non-discriminatory, by its operations results in discrimination against one particular group of persons. The Bill is to apply throughout Australia and in this regard relies on all available and appropriate heads of Commonwealth constitutional power. Thus for example the provisions of the Bill prohibiting discrimination will apply to the Commonwealth and all its instrumentalities; to discrimination by a foreign corporation, or a trading or financial corporation formed within the limits of the Commonwealth; to discrimination in the carrying on of the business of banking, other than State banking not extending beyond the limits of the State concerned and insurance other than State insurance not extending beyond the limits of the State concerned; and to discrimination in the course of or in relation to trade and commerce inside Australia. The Bill is not to apply to persons employed by State Government instrumentalities; however, it will have some application to persons employed by universities, colleges of advanced education and other tertiary education institutions. In addition, certain provisions of the Bill have effect in relation to discrimination against women to the extent that they give effect to the Convention on the Elimination of All Forms of Discrimination Against Women. In the preparation of this Bill, as in the preparation of the 1981 Bill, the Government has been particularly conscious of State sex discrimination legislation and of the role played by State anti-discrimination machinery in eliminating discrimination. New South Wales, Victoria and South Australia all have laws prohibiting discrimination on the ground of sex or marital status, and the present Bill closely follows the substantive provisions of that State legislation. These Acts have clearly succeeded in establishing individual rights and remedies which are now readily understood within the community. For this reason the present Bill is designed to complement and preserve the concurrent operation of existing State legislation. In the preparation of the provisions preserving State legislation the Government has had before it the recent decision of the High Court in Viskauskas v. Niland. In that case the Court held that the provisions of the New South Wales Anti-Discrimination Act dealing with racial discrimination were inconsistent with the Commonwealth Racial Discrimination Act and accordingly were invalid by virtue of section 109 of the Constitution. Senators will be aware that in the Racial Discrimination Amendment Bill the Government has already moved to preserve State legislation dealing with racial discrimination. Provisions of the Sex Discrimination Bill being introduced today will operate to ensure the preservation of State sex discrimination legislation and enable that legislation to operate concurrently with the Commonwealth Sex Discrimination Act . I will now describe the areas in which the Bill proscribes discrimination on the ground of sex, marital status or pregnancy. Commonwealth and State experience has shown that most discrimination occurs in the area of employment. The Bill makes unlawful discrimination against applicants for jobs and employees generally and also against persons who are commission agents or contract workers . The Bill will extend to afford protection throughout Australia as far as is constitutionally possible and in this regard will provide protection not only to the Commonwealth's own employees or applicants but to employees of other institutions such as trading or financial corporations. Persons who propose to form or who have formed partnerships of 6 or more, licensing and qualifying bodies, trade unions and other organisations registered under the Conciliation and Arbitration Act and employment agencies are similarly prohibited from discriminating on the ground of sex, marital status or pregnancy . With regard to education, it will be unlawful for an educational authority to discriminate on the grounds of sex, marital status or pregnancy against a person applying for admission as a student or against a student. Single sex educational institutions are exempted from the legislation. The Bill also makes unlawful discrimination in the provision of goods and services, including services relating to banking, insurance and the provision of loans, credit or finance, and services of the kind provided by government authorities or local government bodies. The Bill makes it unlawful for a club, the committee of management of a club or a committee member to discriminate on the ground of sex, marital status or pregnancy in relation to members or applicants for membership. A club is defined as an association of not less than 30 persons which provides and maintains its facilities from its funds and which sells or supplies liquor for consumption on its premises. It will also be unlawful for a person who performs functions or exercises powers under Commonwealth laws or for the purposes of a Commonwealth program to discriminate on the ground of sex, marital status or pregnancy in carrying out such functions or powers. The Bill provides for a number of exemptions and in this regard closely follows the State sex discrimination legislation with respect to the provisions of exemptions from the legislation. I need mention only the exemption for acts done to achieve equal opportunities for persons of a particular sex or marital status with persons of the opposite sex or another marital status. An exemption which will be of particular interest to senators is that it is not to be unlawful for a person to discriminate against a woman on the ground of her sex in connection with employment, engagement in or appointment to the Defence Force in a position involving performance of combat or combat-related duties. Honourable senators should however know that a review is at present being undertaken of employment practices, with a view to opening more positions to women in the Defence Force. In respect to sport, the legislation covers sporting facilities. It will not apply to participation in sporting activities as such, although this is a matter on which the Government wishes to receive comment. Provision is also made for applications to the Human Rights Commission for a temporary exemption from the operation of the legislation. Exemptions will be able to be granted for periods not exceeding 5 years. The Bill specifically makes unlawful discrimination involving sexual harassment in employment by employers or by co-workers and in education by members of staff . The Commonwealth is the first jurisdiction to introduce such provisions, although I understand that Victoria, New South Wales and South Australia are considering similar provisions. The Bill does not attempt to deal with all forms of sexual harassment but only with sexual harassment which can be characterised as discriminatory in nature, in the sense that it is linked to a belief that a rejection of an unwelcome sexual advance, and unwelcome request for sexual favours or other unwelcome sexual conduct would disadvantage the person in relation to employment or educational studies. The Government will be considering how best to deal with other forms of sexual harassment and will be seeking the views of women's organisations on this matter. Administration of the Bill is vested in the Human Rights Commission. The functions of the Commission will include holding inquiries into and making determinations on complaints; hearing applications for exemption from the Act; undertaking research and educational programs; and examination of existing and proposed legislation to ensure its consistency with the provisions of this Act. The Bill establishes a Sex Discrimination Commissioner who is required to investigate and conciliate complaints of discrimination. The Commissioner will be empowered to obtain information and documents and to direct specified persons to attend a compulsory conference. Where the Commissioner is unable to resolve a complaint by conciliation, he or she will refer the matter to the Human Rights Commission. The Human Rights Commission is required to inquire into the complaint. To this end the Commission can summon people to appear before it and may take evidence and retain documents. Provision is made for counsel to appear at an inquiry to assist the Commission. Persons appearing before the Commission will be required to answer questions, but the Bill provides that no answer is admissible in evidence against the person in any civil or criminal proceeding before a court. After holding an inquiry, the Commissioner may either dismiss the complaint or, if it finds the complaint substantiated, make a determination, which may include a declaration that the respondent to the complaint should not continue or repeat the unlawful conduct; or that the respondent should redress any loss or damage suffered by the complainant; or that the respondent should pay to the complainant damages by way of compensation for any loss or damage suffered by the complainant as a result of the act of discrimination. While such determinations are not binding on the parties, on the basis of the experience with the State legislation, we anticipate that the majority of them will be accepted by the parties and acted upon in most instances. Where this does not happen the complainant or the Commision may seek an order from the Federal Court to enforce the Commission's determination. In order to ensure that complainants are not prevented from proceeding with complaints by reason of cost, the Bill makes provision for the Human Rights Commission to recommend to the Attorney-General that assistance be given to a person in respect of costs incurred in proceedings before the Commission. Application may also be made to the Attorney-General for assistance before the Federal Court. The Bill provides for the Commission to delegate all or any of its powers to a member of the Commission, a member of staff of the Commission or another person or body of persons. A similar power of delegation is conferred on the Sex Discrimination Commissioner in relation to inquiry into and conciliation of complaints. This delegation power will make it possible for the Government to work towards the establishment of co-operative arrangements with the existing anti-discrimination bodies in New South Wales, Victoria and South Australia and other States which enact suitable legislation. In all States we will ensure that advice is available about the range of rights and remedies so that every complainant will be able to make an informed choice about the course of action most appropriate to his or her circumstances. Honourable senators will be aware that a major part of my earlier private member's Bill-the Part concerning affirmative action-is not included here. The Government will issue a Green Paper setting out options for further legislation providing for the introduction and implementation of affirmative action programs in employment. Recognising the need for employers, employees, unions and the community generally to be better informed, the Government has decided that it is more appropriate to generate public discussion and understanding of its proposals and to have wide ranging consultations in advance of the introduction of legislation. The introduction of this Bill represents the initial step towards the fulfilment of the Government's major election commitment to women. The Bill will be debated early in the Budget sitting. Preliminary consultations with the ACTU and the National Labour Consultative Council have taken place and the Government hopes that trade unions, employer and women's organisations and other interested persons will use the time between now and the Budget sittings to familiarise themselves with its provisions. I commend the Bill to the Senate. Debate (on motion by Senator Peter Baume) adjourned. Debate resumed. Senator CRICHTON-BROWNE(Western Australia)(2.20) —Had not the 1982 taxation legislation been introduced and assessments sent out in the normal course of events for current year company tax, the new buyers and not the vendors would have been legally responsible for the undistributed company profits tax and personal income tax which may have been attracted as a result of those distributions. But because the buyers did not have the funds to pay their taxation, that assessment was visited upon the vendor shareholders. Any reasonable person would agree that if we were retrospectively to apply to vendor shareholders the responsibility for somebody else's unpaid company tax, it would not be at all unreasonable to allow that person the opportunity to arrange the theoretical financial affairs of the company that was taken from him by the sale . In other words, if the vendor has to pay somebody else's company bills he should, for the purposes of taxation, be reinstated with control of the financial arrangements of the company, inasmuch as everything is theoretic because the financial year was artificially set at the time of the sale. Otherwise, we are visiting upon the vendor the responsibilities and the liabilities of the company and none of the decision-making rights which ultimately led to the level of the assessment. If the vendor is to be visited retrospectively with a liability for the company which arose after he was legally responsible for that company, he should be entitled to a consideration as to how the affairs of the company theoretically would have been managed had it not passed from his hands. To that extent, the 1982 legislation allowed a notional distribution of current year profits by the vendor shareholder. That, of course, allowed him the opportunity to make a judgment as to what might have been commercially reasonable and responsible had he had the company to 30 June, the end of the financial year. However, the legislation now before us not only removes any perogative or discretion by the vendor, but also has the effect of demanding from the vendor shareholders current year company tax and assumes that a company's total net accumulated assets are liquidated and distributed in totality to the shareholders. Vendor-shareholders are then to be taxed individually at the personal income tax rate, ranging from 60c to 69.62c in the dollar, upon the deemed value of the deemed assets which have been deemed to have been distributed to the shareholders. Of course, almost without exception, no such dividend was ever received and was retained by the individual shareholders. As I said from the outset, the proposal contained in this Bill does not seek to recoup revenue that was lost to the Government by fraud, but seeks by special and punitive legislation to overturn retrospectively the laws of this land which have been confirmed by the High Court of Australia, the Full Bench of the High Court, as I recall. The vendor shareholders have in the past been asked to repay revenue previously lost to the Government, to pay current year company profits tax which was defrauded by those to whom the vendor-shareholders sold their companies. That is the only tax that has been lost to revenue of which the vendor-shareholders ultimately received the benefit. The fact of the matter is that the vendors sold their companies under existing laws. Chief Justice Barwick , in Slutzkin v. Commissioner of Taxation case, stated: It was no more than a realisation by them of the benefit of their shareholders in a way which would not attract tax. It may be granted that a purchaser of the shares could not have been found willing to pay the price in cash which in fact was agreed to be paid unless the company had made its assets liquid and itself free of debt, and that all the shareholders were willing to sell their shares. . . . But the choice of the former transaction by which a taxpayer obtains the benefit of his assets is a matter for him; he is quite entitled to choose that form of taxation which will not subject him to tax, or subject him only to less tax than some other form of transaction might do. Vendor-shareholders have sold their shares in a tax-free, legitimate fashion and now the Government seeks retrospectively to create a new and penal taxation. It is not a taxation previously lost to revenue which the Government seeks to recoup, but a new tax which is not only artificial and retrospective but also is of a capital gains nature. The revenue received by vendors for their shares was of a capital nature, as has been clearly demonstrated by the Slutzkin case to which I referred a moment ago. Yet now that capital gain is to be taxed at levels, as I have said, between 60c and 69.2c in the dollar. That is on top of the 46c in the dollar which has already been paid on the same money by way of company tax, and, presumably, Division 7 tax. I give the Senate a simple example to demonstrate the threatening position into which this legislation places many businesses in Australia. A company may have been operating for 20 years as a family concern. Over those years it may have acquired, net of tax, capital profits of, let us say, $200,000, together with revenue profits of $100,000. Under this iniquitous law proposed by the Labor Government, notwithstanding the fact that the company is still operating, the family will now find itself liable for a taxation bill of about $210,000. By way of example, I refer the Senate to a real case. A family in this position has said: We are currently paying taxes of $2,800,000. If this new piece of legislation is enacted, we will be faced with penalty taxes of $5,148,000. Irrespective of ' time to pay' concessions we cannot hope to raise this sum. Who could? $2,169,000 of this penalty relates to 'goodwill'-which has zero cash actuality and has never before been taxed-and is still not taxed in Australia or in any other country. That is what makes this legislation so vastly different from that which we have experienced in the past. Many of these companies in which the shares have been sold are old family companies. The purchasers who assumed responsibility for the shares were not interested in carrying on the business of the company but the family was. Accordingly, the business was sold to another company in which the family had ownership of the shares and the business continued on as it did prior to the sale. The only way in which the company could afford to buy the business back was to use the funds that were received from the sale of the original shares. Hence there was no cash surplus and, for all practical purposes, no cash profit. In fact, there was a net loss because promoter's fees and legal fees have had to be subtracted from the purchase price. The net result of all this is that a family business remained in the family but simply changed from one family company to another family company. In the meantime, thanks to this diabolical legislation, the transaction is likely to attract a capital gains tax of between 60c and 69.2c in the dollar. As I hypothesised earlier, a business worth $300,000 which changed from one family company to another without any real cash benefit will now, under the Labor Government's proposal, be liable for a tax bill of over $200,000 and a penalty rate of 20 per cent per annum if the family cannot afford to pay. That is a further provision of the legislation. As I have said, in such circumstances the company must become insolvent and go into bankruptcy. That, in stark terms, is the effect of the Labor Party's new capital gains tax. Let us take, for example, a man who bought a company for $100,000, traded it for 12 months without success , made a modest profit and sold it. Now he will find himself subject to this 60 per cent tax. He had a capital outlay in the first place of $100,000, he sold the company for approximately the same amount and he now finds as a result of that activity that he is left with 40 per cent of his original outlay. The Bill proposes, amongst other things, the omission from the principal Act of sub-section 3 (12), which has been described by some as the innocence clause. It is quite different from the innocence clause that I sought to have inserted in the legislation before us last year, which I ultimately voted against. It presently applies where, after a stripped company was sold to a promoter, it entered into a scheme which, though ultimately found to be unsuccessful, at the time it was entered into could reasonably have been expected to be effective for tax avoidance purposes. In that case, provided such a scheme was not connected with the arrangement which rendered the company unable to pay its tax, and the arrangement which had that effect had not been entered into for that purpose, liability to recoupment tax was ascertained as if the scheme had been affective in reducing or eliminating the amount of company tax payable. The object of this section in the principal Act of 1982 was to ensure that recoupment tax was collected only from those companies that had been sold, however innocently, to a promoter who, to use a colloquialism, put them at the bottom of the harbour, thereby extinguishing the company's capacity to pay its tax. In other words, where an arrangement was entered into between the vendor shareholders and the purchaser and where the purchaser upon acquiring the company used or sought to use a legal scheme for mitigating taxation, the vendor shareholder was not held liable for the company's tax. If the scheme is ultimately found to fail in its attempt to reduce the company's tax, the normal provision of the Income Tax Assessment Act will prevail and the receipt of the tax will be pursued by the Commissioner of Taxation in the normal course. Whatever tax is due and payable by the responsible company or shareholders will be recouped as best as possible within the provisions of the present Act. Let us not forget for a moment the role, the purpose and the intention of this recoupment taxation legislation. It is a special and unique piece of legislation designed to recoup from vendor shareholders taxation, a major part of the benefit of which they have ultimately received as a result of the fraudulent activities of those to whom they sold the shares in their company, notwithstanding the fact that the vendor-shareholders had no knowledge or could not have been expected to have any knowledge of the fraudulent activities of the buyers. The Government now intends that this Bill is to be widened to collect new taxes from people who acted completely within the law and who in no way have received the benefit of evaded taxation. Included in this Bill is provision for the Commissioner of Taxation to name in his annual report for presentation to Parliament those people who under this Bill fail to pay their recoupment tax. The words 'fail to pay' simply mean that those people do not pay. It does not matter whether they cannot pay or whether they have lodged an objection. It simply means that if they have not paid their taxation on the basis of the assessment that is sent out their name ignominiously will be entered into the report of the Commissioner of Taxation. That is an extension of the present section 14 of the the Income Tax Assessment Act, which provides: In the report the Commissioner shall- Shall, not may- draw attention to any breaches or evasions of this Act which have come under his notice. I ask honourable senators to note the words 'breaches or evasions'. The section makes no reference to those poor souls who simply cannot pay their bills. It is argued that at present, the Commissioner of Taxation uses certain guidelines. The fact of the matter is that section 14 says he 'shall'. There is no discretion. With respect, I ask: What is his yardstick? What are the guidelines he will use when he makes a determination, under the wording of this Act, in the event that people fail to pay their taxes, that their names shall be inserted in the report? There is no yardstick; the names of all those people will be included in the report. I must say that those people already receive publicity through the appropriate court actions when the Commissioner of Taxation files for bankruptcy or when he files the appropriate legal documents seeking to recover, through the courts, taxation which he believes is owing to the Crown. Those people receive all the publicity they need. I remind the Senate that when the 1982 legislation was being debated that clause was in the Bill originally. When the then Treasurer, John Howard, and officials of the Australian Taxation Office were asked to state clearly, unequivocally, unambiguously and categorically the object, intention and purpose of putting in that provision they made it quite clear that it was to intimidate people, to blackmail people, to force people out of fear of adverse and unfair community criticism and public exposure into not objecting and not using their democratic rights within the Income Tax Assessment Act; it was simply to force them to pay their bills whether they liked it or not, or suffer the ignominy of having their names dragged through this Parliament as if they were tax evaders or had been party to some sort of breach, which was the original intention of section 14 of the original Act. People will not draw a distinction between the two. In the moments left to me in this debate I wish to touch upon a couple of matters. What I find terribly evil about this legislation is that it matters not what the relationship is between the amount of failed company tax and the amount of assets of the company. A company could fail to pay a taxation assessment of $ 250, have assets of both a capital and a revenue nature of $1m and then find itself subject to a theoretic distribution of its assets. As a result of that company owing $250 in revenue to the Crown it would be liable to pay personal income tax on $1m. Let us remember that the accumulated profits of a company are nothing more than the net benefit, the net profits, of that company that has paid its taxation at the present rate of 46c in the dollar and 50c in the dollar for Division 7 tax. What is left over is the body of the company. If that is assessed at betwen 60 and 70 per cent there is no company. One cannot sell assets these days. One cannot sell plant and equipment. One cannot give them away. One could not raffle them in a backwater hotel in Fremantle. The Government is guaranteeing the bankruptcy of many employers and the destruction of many jobs. I turn to the other provision which is now included in this legislation; that is, the provision to reduce the number of former owners on whom the Commissioner of Taxation is required to serve copies of a stripped company's assessment notice. As I understand it, under the new provision the assessment is required to be sent only to the principal shareholder. I understand the rationale and the logic put forward by the Minister for Finance, Mr Dawkins, in that it makes for greater efficiency and prevents delays in collecting the money. I just ask the Government: What is more important-expediency or principle? We have a situation in which there is a new tax, in my view probably an illegal tax, a punitive tax- Senator Bolkus —How can you say that is illegal? Senator CRICHTON-BROWNE —We will establish that in due course. It may well be challenged in the High Court of Australia-I did say 'may well be'. Under this provision people are assessed, a penalty of 20 per cent, which they cannot afford to pay, is added, and an assessment is sent out to only one person. Fifty people could be involved. Under this legislation all of them are found culpable. All are subject to assessments. All of them are subject to legal action if they do not pay the tax. Under this provision they are not even allowed to know that they are responsible. A tax is imposed, of which notice is not given, and if those people do not pay the Government ensures that their names are put in a report which is presented to Parliament. To say the least, this is a diabolical piece of legislation. Without question it ought to be defeated. The ACTING DEPUTY PRESIDENT(Senator Collard) —Order! The honourable senator's time has expired. Senator BOLKUS(South Australia)(2.42) —There is a real need in this debate to return to the core of the issue. There is a real need to get away from some of the spurious technicalities that people, such as Senator Crichton-Browne, have put to this chamber. Senator Walsh —And faulty. Senator BOLKUS —And faulty representations. There is a real need to get away from the pleading humbug from the corporate crooks' friend from Western Australia. There is a real need to get back to the-- Senator Crichton-Browne —I beg your pardon! Say that again, slowly. Senator BOLKUS —My mind does not think slowly enough for Senator Crichton-Browne 's brain. There is a real need to get back to the basic issues of this campaign. There is a real need to get to the cancer that is basic to the system of revenue raising in this country. This Labor Government is intent on destroying the tax avoidance industry. These measures are an integral step towards the destruction of that industry. It is an industry which has been highlighted time and again in this Parliament by Labor spokespeople. But it is one that had not been brought to the attention of the previous Government sufficiently until the interim report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union which was presented approximately 12 months ago. It is worth going back to that time, to that report, to see what Royal Commissioner Costigan said. He talked of the one industry that blossomed under Fraserism; that is, the tax avoidance industry. He said: The industry has developed in Australia, particularly over the last five years, at a rate far in excess of any other industry and has brought with it profits comparable only to the heady days of the Victorian gold rush . . . In which the former Prime Minister's antecedents were involved. Royal Commissioner Costigan continued: the impact on the community has been very serious. That is the context in which we are looking at this debate and these measures. When one looks at official reports, reports which the previous Government was not prepared to recognise, one sees the magnitude of the problem. If one looks at the reports of the Commissioner of Taxation one will see that there has been an increase of over 2,500 per cent in identified participants in tax avoidance between the 1975-76 financial year and the financial year 1980-81. That is a massive increase. That was allowed to continue under the eyes of the Government of the current Opposition. It took absolutely no cognisance of it. What was the former Government's response? While tax avoidance was increasing and blossoming we had a rather scandalous situation in that the Fraser Government's response, through the implementation of the razor gang proposals, was actually to decrease the number of people working for government in implementing tax laws. When one looks at some of the sections of the current taxation Act one sees that because of a lack of resources some of the proposals have not been implemented. But it was not only the Costigan report which highlighted the problem. It had been in existence for some time and had been brought to the Government's attention for some time. The root of the problem also is related to one of the demagogues of the current Opposition-former Chief Justice Barwick. On 18 October 1982 David Solomon, in an article in the Australian Financial Review stated: Tax avoidance as an industry is a comparatively recent phenomenon. We agree with that statement. He goes on to sheet home the blame for the blossoming of the industry to Chief Justice Barwick. He stated: . . . and it was able to blossom- He is referring to the industry- because of the destruction of section 260 of the Act by the Barwick Court. The Barwick High Court during the 70s effectively put a time bomb under both the Australian taxation system and the Liberal Party. As we found out last year, this is very true. We saw the Liberal Party in this Parliament trying to act in some effective way to protect public revenue. It is interesting to note, when one looks at the performance of the Barwick High Court , some of the comments made by Chief Justice Barwick. In a rather amoral statement from the bench he stated: . . . the choice of the form of transaction by which a taxpayer obtains a benefit of his assets is a matter for him; he is quite entitled to choose that form of transaction which will not be subject to tax, or subject him only to less tax than some other form of transaction might do. That is a rather curious amoral statement from the bench of the High Court of Australia. Senator Crichton-Browne —Mr Acting Deputy President, I take a point of order. The honourable senator is not reflecting on ex-Chief Justice Barwick; he is reflecting, contrary to Standing Orders, on the entire bench of the High Court. The ACTING DEPUTY PRESIDENT(Senator Collard) —There is no point of order. Senator BOLKUS —I thank the honourable senator for giving me time to collect my thoughts. As I said, the problem has gone on for some time. Yet, despite public opposition, we still have a continuation of the cancer of tax avoidance. This week's financial Press contains the most recent advertisement from Peter Clyne, in which he states: Tax avoidance is alive and well in Australia!!! A complete four-cassette recording (6-hours) is now available of what was said at my recent tax survival congress. Hard-core, practical methods . . . One wonders what he is talking about. The advertisement continues: . . . how to delay your tax claims at least five years . . . how to salvage your assets in the meanwhile . . . Twelve new, proven, Hawke-proof ways to earn a tax -free income. How to kill a tax investigation. This advertisement shows the morality of the sorts of people we are talking about. It is the type of immorality that needs to be prevented by concrete and comprehensive government action. Professor Mathews is a person whom I have quoted a number of times in this place. I will do so once more for the benefit of people such as Senator Crichton-Browne. In a speech in 1980 he made a point which quite adequately summed up the Australian taxation system at the time. He stated: Personal income tax is a voluntary tax for the rich non-salary earner. That statement explains effectively the injustice that is being perpetrated at the moment. Those wage and salary earners who are in most need of financial assistance are the ones not being represented by the Opposition in this place. I have mentioned part of the previous Government's record. I will not refer to it much more, except to note that a report of the Commissioner for Taxation during the mid-1970s highlighted the problem. In May 1978 the Taxation Commissioner stated: I recommend that a new criminal offence be created to catch those involved in current year profit strips. In 1979, in his report to the Treasurer, he stated: The problem of straw companies, straw trust evasion, is already very serious and growing. It is my considered advice that the situation needs to be remedied urgently and with stern measures. Advice was always being given to the previous Government. It was never really acted on. That is the context of the problem we are facing today. The other part of that context is that we have been elected to government on the basis of one of the important parts of our policy-that is, to put an end to tax avoidance and to redistribute the tax cake fairly and equitably. These measures are important because they will raise $590m over the next couple of financial years. What is the principle of this legislation? What is the Government trying to do? It can be spelt out in very simple terms. The Government's intention is embodied in the Bills which we are discussing at the moment. The principle is that those 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. 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 which, if the companies had continued to operate as going concerns, would have been taxable dividends in their hands. There is nothing new about this principle. Essentially, we are asking this Parliament to endorse a system whereby tax avoided should now be paid. Let us look at what the former Liberal Prime Minister had to say about the sorts of mechanisms we are attacking at the moment. In a speech which the former Prime Minister delivered at a meeting during the Kingston election campaign- obviously, it was a very unsuccessful meeting, I am pleased to say, because we have had a change in representation of the Kingston electorate since the speech was made-on Monday 30 August 1982, he said: . . . special legislation will be introduced to recover the funds that would otherwise have been paid as tax over past years. That is not creating a new liability, it is collecting the funds that should have been paid in any case. In a real sense, the recipients of those funds have in their hands stolen funds, whether you want to say stolen from the Commonwealth or stolen from other taxpayers it doesn't matter very much. Today we are extending the ambit of the legislation put into effect by the previous Government. There is nothing radical in what we are doing. It is an extension to cover the field, rather than half the field. The Opposition in this place cannot at the moment cop the fact that mechanisms which it initiated in this place are being used by this Government to do the job that it did not do adequately. In implementing this sort of principle, we are inserting recoupment tax laws in the legislation. We fix the liability of former owners of stripped companies for personal income tax on accumulated profits received by them as part of the price received for the sale of their shares. This entails a mechanism providing that the former owner of a stripped company will pay income tax on the basis that that company had paid a dividend to the former owner at the time of the sale of the shares and that the amount of the imputed dividend will be that same proportion of the company's total after tax accumulated profits as a sale consideration received by the owner. It is not fair to say, as previous speakers from the Opposition have said, that it is a totally unbridled approach. There are concessions and safeguards. I am sure that the Minister for Resources and Energy (Senator Walsh) representing the Minister for Finance (Mr Dawkins) in summing up will adequately deal with those safeguards. Essentially, some of the safeguards provide that the amount to be collected allows for concessions for unpaid company tax which will be recouped under existing legislation. The amount will also provide that a dividend can be deemed to have been paid where the former owner is liable to make good unpaid company tax. These Bills will return to public revenue money that should have been there in the first place. That is one point of the argument to which the Opposition will not address itself. The Opposition has raised a number of points in opposing these Bills. It has claimed that no tax has been evaded because the persons involved would not have had to pay personal tax on the capital profits. That is a rather interesting argument. It is one which, in its simplicity, can be pursued with empty rhetoric . But the Opposition moves away from the basic facts involved in this sort of approach. The facts are that the companies involved were, in essence, ongoing concerns. The existing law provides that revenue and capital profits distributed by an ongoing company should be taxed in full. It is not a new initiative. The former Government last year did exactly the same sort of thing in respect of another area by inserting Part IVA into the current income tax legislation. The current Minister for Finance referring to the discredited former Treasurer and current Deputy Leader of the Opposition, Mr Howard, stated: He knew what he was doing when he introduced and successfully passed through this Parliament Part IVA of the current income tax law. He knew what he was doing then, and he knows full well that if any company went to the bottom-of-the -harbour after Part IVA was in operation exactly the same kind of taxes would be collected as are intended to be collected as a result of this legislation. He knows that Part IVA goes beyond the collection of unpaid company tax and goes to the point of collecting the unpaid income tax which would have been paid had the benefits been received by the shareholders in the form of dividends and been taxed in the normal way. Mr Dawkins goes on to say: On this occasion we are simply extending the principles that he-- That is, the previous Government- introduced quite properly in relation to Part IVA to the areas which he retrospectively acted against late last year. So much for the spurious humbug about radical socialist initiatives on the part of the Labor Government. What we are doing is extending provisions that were made in the Act by the current Deputy Leader of the Opposition. Another point that has been raised time and again relates to the rate of taxation. There is opposition to the imposition of taxation at marginal rates for the year of income in which the shares were sold. But one cannot escape the fact that this is so because it is taxation at that rate that has effectively been avoided. It is the rate of taxation which would have been levied had the money been transferred, both morally and legally, at the time of operation. It is the rate of taxation which this Government now seeks to collect. The third and final point is one that the Opposition has been harping on for quite some time in respect of this matter. I refer to retrospectivity. The Liberal Party has never been shy to use retrospectivity when it has wanted to do so. In 1950, in introducing the Communist Party Dissolution Bill, Mr Menzies had some comments to make about retrospectivity. He justified the use of retrospective legislation at that time by the enormity of the problem that he foresaw. He said: Our Communist enemies are known; they have been active at least since the selected date- Which was over two years beforehand. That Bill, with retrospective effect, labelled people as at least two years previous to its passage. I need only also turn to the Age of Monday 22 November 1982 and quote a comment from Mr Hunt, the Leader of the Liberal Party in the Upper House in Victoria. Let us see what he had to say about retrospective legislation and contrast it with the bleatings that we have been hearing over the last week or so from the Opposition. He said: If anyone tells me that it is not Liberal or contrary to principle, I say we don't belong to the same party. It is nonsense to create an overall principle where none exists. There is no principle that all retrospective legislation is contrary to the principles of the party. What has happened this time is that someone who did not like bottom-of-the-harbour legislation has sought to raise a principle and use it to criticise the then Government by innuendo. So much for the lie, then. The Bench also has recognised that retrospective legislation can be useful, and need not be illegal, as Senator Crichton-Browne has indicated. My colleague Senator Tate yesterday made a couple of references and cited a couple of cases. I need not do the same, but I shall refer to a statement by Mr Justice Adam who, as is recorded in 1960 Victorian Law Reports, in the case of D'Oro and the Victorian Railways Commissioner, said: The strength of the presumption against retrospectivity in any particular case, and accordingly the ease or difficulty with which it may be overcome, must, I would think, depend on the nature and degree of the injustice which would result from giving the statute a retrospective operation. He went on to say that if it was clearly required-- to rectify a manifest injustice to others, there would, on principle, seem little reason for giving much weight to the presumption. He was referring to the presumption against the operation of retrospective legislation. So we have to look at the detriment to the community. In doing so, we look at the magnitude of the problem, which I have mentioned earlier. It is not unreasonable to argue that $7,000m has been lost to revenue because of tax avoidance schemes. In the Parliament last week figures were given in another place that, in the last financial year, the payment of $2.7 billion could very well have been avoided by this sort of operation. It is the Government's responsibility to act firmly and responsibly, and in the way in which it is acting now. We have reached almost the end of the second reading debate. We are now coming fairly close to a vote on this matter. I should like to address my comments to the magnitude of the vote that we are about to take. The revenue to be gathered under this legislation amounts to about $590m-of previously avoided taxation liability. When Opposition senators, Australian Democrats, and individual senators make up their minds on the matter they need to ask themselves how, if this money is lost to revenue, that loss will be compensated? How will the Government be able to put into effect measures that have been promised, that have already been committed, if, because of Opposition action it cannot raise this revenue? Will the Government have to resort to the raising of indirect taxation? In answer to a question asked in this chamber yesterday, Senator Walsh gave a number of facts on the cost of defeating this sort of measure, the cost of lining the pockets of those who have avoided taxation liabilities in the past. The cost to the pockets of those who can least afford it could very well be over $100 for each Australian taxpayer. It could be a 7 per cent across the board increase in sales tax, whether on beer, cigarettes, or goods of necessity. Let me note here that the Democrats is one party that, over the last couple of years at least, has rejected the imposition of sales taxes on goods that have been labelled goods of necessity. Would it lead to an increase in the consumer price index? Let us look at some of the individual responsiblities that we, as senators, have to our own States. In respect of South Australia, would it lead to the imposition of a wine tax, a tax which our State has opposed time and again? What options does the Government have if this revenue is not available to it? As regards Tasmania, will the Government, because of the lack of revenue-and it is ironical in this case that the amounts are the same-be able sufficiently to compensate Tasmania if and when it loses the proceedings in the High Court? Tasmanian senators should think about that. In respect to some of the comments of Senator Kilgariff yesterday, it is curious to note that the cost of the Alice Springs-Darwin railway line would be about $570m to $590m. What sort of capacity will we then have to contribute the 60 per cent that we are prepared to give towards the building of that line? It is those sorts of measures that ought to be considered when we are talking of redistributing expected government revenue from the pockets of those that we as a parliament decide need it, to the pockets of those who have illegally and amorally misappropriated government revenue over the last 10 years. It is those sorts of responsibilities that we should be looking at. I, for one, do not want to see a wine tax imposed in South Australia, and I shall be fighting against that, but I hope that that sort of consideration is in the minds of South Australian senators, whether of the Australian Democrats party or of the Liberal Party. The other matter I should like to raise in closing this debate is in respect to the pressures that have been placed on members of parliament during it. Luckily, I suppose, I am one of those whose decision has been anticipated and I have received only about 100 telegrams. But it is curious to note, in respect of that , that when a matter affecting the rights of wage and salary earners arises for debate here, such people do not have the means and money to make that sort of lobbying effort against measures which may affect them detrimentally. But in this case people are sending telegrams from the Lakeside Hotel. In some cases, people are sending at least half a dozen telegrams from the same address. However, what is more scandalous is the matter that was raised by Senator Chipp a couple of days ago. I congratulate him for raising it publicly and courageously. Senator Chipp made public the offer of bribes to the Democrats in respect of this taxation vote. He said that several people had offered substantial contributions to the Democrats' finances if the five Democrats senators would vote against the legislation. Apart from its being a breach of privilege to my mind, I suggest that that sort of activity, in doing no good for the cause of those perpetrating it, also raises a problem which we have identified in the past. It is one that I would expect the Government to act on urgently. I refer to the need for a register of pecuniary interests. When matters of this sort of magnitude are involved, when billions of dollars are involved, when the decision rests on individual members, the public needs to know what sorts of considerations are being taken into account. In this respect I am not saying that anyone in this place has been influenced. I am glad to see that Senator Chipp and the Democrats have rejected that sort of bribery, as I believe would other senators. I need only turn to a comment made in November last year by former Senator Thomas from Western Australia. He said: Libs took evaders' cash . . . He went on to say that the amount involved was 'hundreds rather than thousands' of dollars. The former honourable senator made that statement and about 24 hours later he was forced to retract it. Senator Walsh —The preselection committee stood over him. Senator BOLKUS —As Senator Walsh says, preselection might have had something to do with it, but those sorts of pressures have been around for quite a considerable time. Until we do have legislation which will make public the interests of members of parliament we, as a parliament, and the community as a whole, will not have adequate protection against these sorts of pressures. I wish to say no more in respect of this legislation other than to reiterate that final point-that the cost to revenue of this legislation being defeated is immense. I hope sanity can prevail in the Senate. Senator MASON(New South Wales)(3.6) —In this debate we are talking about very large sums of money-over half a billion dollars-which the Government estimates are due to the national revenue as income tax from people who took part in the notorious bottom-of-the-harbour tax dodge schemes. To get the matter into some kind of proportion, it is interesting and important to notice that if that amount were lost to revenue through the failure to pass this legislation it would represent considerably more than the entire cost of the major job creation schemes recently announced by the Government as part of the so-called mini- Budget. I think that in itself is a matter of concern to the community of this country and especially to the young unemployed and their families. The use of money in societies like our own is a matter of priority and, as we in this place know, those priorities are very hard to establish. There are always cases everywhere for more money. I believe that in itself-to state a first principle- is an argument for as much government revenue as is reasonably, morally and legally due to be paid by the people who are due to pay it. The $570m at stake is, as I have said, very big money. It has also attracted a very heavy volume of lobbying from people. I must say that I share the comment of the last speaker, Senator Bolkus, that the lobbying seems to be coming from people who have big money. This is instanced by their ability to flood this place with enormous quantities of telegrams to the extent, I gather, that even the telegram service is complaining about some obstruction in some areas because of the sheer volume of this material. I refer to the large amounts of paper circulating and, of course, to these people's ability to buy full page advertisements in national newspapers. They do not come cheaply, as all honourable senators would know. I have tried to understand and read what these people are on about. I have spoken to a considerable number of them and as a result I have come to certain conclusions. But I fairly ought to add that I have also had numerous representations which have urged me to vote for the legislation. Many of those representations have come from people I know well and who are, indeed, very successful business men and women. I trust and respect their opinions. All those points in fact apply to a person from whose telegram to me I will now quote. That person stated: There is no more effective way of scotching the tax avoidance industry-as it is euphemistically referred to-than to establish the principle that tax evasion loopholes may be plugged retrospectively. Over many years dealing with several top accounting firms who proposed bottom of the harbour and other devices be used by them in dealing with my affairs, I can clearly state that they always made it known that such schemes were of questionable legality, and therefore I rejected them. I will repeat that statement because it is of great importance. I also repeat that it comes from a person who is very well qualified to know this and who is in contact with other people who would be well qualified to know this. I repeat that he said: . . . I can clearly state that they always made it known that such schemes were of questionable legality, and therefore I rejected them. He concluded by stating: Any hurt that would be done to true innocents by the legislation is minimal. I add that this statement comes from a person who I know to be of the highest integrity and who is not given to overstatement. I believe that his statement to me is honest and direct and that I can take it at its full face value. I commend that statement as such to honourable senators. The bottom-of-the-harbour schemes were simple, even crude, in their basic approach. As I understand them, a company with a tax liability was sold to persons who could not be traced-to criminals and the like who assumed false names-at a figure greater than the company was really worth when its tax liability was taken into account. The new owners simply disappeared, having sent all the company records-to use the picturesque phrase which I think has now become a part of the ethos of this country-to the bottom of the harbour, thereby allowing the old owners to avoid paying tax on the accumulated profits of the company disposed of. We are told that this is good clean fun, that it is definitely part of the rights of the citizen and that probably many people used such schemes not knowing that they were doing anything wrong. I simply cannot believe that. I cannot believe that people who used such a scheme did not know what they were doing. They must have been fully aware that they were depriving the state of revenue which would have to be replaced by higher taxation of their fellow citizens or, alternatively, not replaced at all, thereby placing a great hardship on the poor and vulnerable in this society who, heaven knows, are numerous enough and growing and whose problems are much greater with every day that passes. Indeed, it is a fact that because of the huge deficit we now face in this country and the general tightness of government funds, it is not possible to deal with and solve the problems of the poor and disadvantaged in this country in the way they should be. Every night in Sydney, which is part of my electorate, hundreds of people sleep in the open. I have seen people going through the shopping centres at lunch time , picking through garbage bins to get food to eat. A while ago I spoke to one of these people. He was a very cultured and educated man who had lost his job. These people are desperate. I cannot believe that the representations we have had over the last week about this legislation causing so-called hardship to people who indulge in the bottom-of-the-harbour schemes are in anywhere near the same class. Rather, I would say that those people who benefited from the bottom- of-the-harbour schemes cannot evade a clear share of the responsibility for such shameful occurrences in this country which is supposed to be an egalitarian country capable of providing a decent way of life and a decent means of survival for all its people. I take the old-fashioned view that those who share the protection and assets of the state, as we all do, have the strongest possible moral obligation to contribute to the cost of those things. Of course, this is the purpose of taxation. That is what it is about and what it has always been about. Whilst I can see that the desparately poor could have the incentives of poverty and deprivation to avoid this obligation, I cannot see that those who can well afford to pay should feel morally entitled not to pay. I do not believe they should come and seek sympathy from us and from the community on the basis that they have been hardly done by. This seems to me to be a symptom of a serious and very dangerous national disease. One would have thought, as was once the case in decent societies and democracies, that the successful and enterprising people-the leaders of the community in many respects-also would take a lead in supporting reasonable public morality, especially in public affairs. If we lose that we have lost a great deal. I feel we are in grave danger of losing it. Of course, that is basically what this legislation is all about. This is not merely an airy-fairy idealistic concept. It is one of the most basic practicalities. If enough people who can afford to pay instead elect to take and not to give, the national structure must become dangerously weakened. I would have thought that it would not be a matter of very great perception to see that. Of course it is true that tax dodging schemes have greatly weakened the national structure of this country . I believe it is a prime responsibility of honourable senators to correct that quickly and effectively and not to allow themselves to be dissuaded from that task. Last year the Liberal Government's legislation extracted unpaid company tax from people who used these bottom-of-the-harbour schemes. Much of the present lobbying against these Bills is based-we have heard this frequently in this debate in the Senate-on the fact that the call is for tax to be paid on money which has already been taxed. I find that a strange, hollow thing to be saying because there is nothing unusual about it. Any of us who have shares in a company-the Broken Hill Proprietary Co. Ltd or whatever-receive dividends on profits on which company tax has been paid. We know full well we also have to pay income tax on it. We cannot put it into another company and employ people without paying that income tax. We may not like it but that is the law. On what basis then do these bottom-of-the- harbour people claim exemption from this process that applies to all law abiding and responsible citizens? Of course , the bottom-of-the-harbour schemes are only some of a variety of schemes, all based on our rickety gimcrack income tax law which is a disgrace to our country and all of us in this place. It urgently needs reform and is wide open to abuse. It appears to have been left that way, for whatever reasons may be divined. Such law has guaranteed that schemes are brought forward regularly to ensure that the rich pay little or no tax while the poor and those on limited incomes, especially wage and salary earners, in effect subsidise them. This has been going on for years to the tune of millions, even billions, of dollars. Nobody denies it. It is important to consider the situation in which we can allow such a monstrous thing to happen and yet say there is some argument against doing anything about it. That brings me to the vital principle at stake in this debate-not so-called retrospectivity but tax equity. What use is any society, any democracy or any government if it cannot guarantee its citizens reasonable equity in the way they are taxed and burdened, especially one which can look with complacency at the people who are poor and less well off and say: 'No, we have to have a system where those who can afford to employ snide lawyers and accountants'-I use those words with malice aforethought-'can get away with murder and will not pay tax'? They batten on this community like leeches and it is time they understood that they are so regarded by the majority of the people of this society. Rightly so. To me, the gross injustice of this situation is of much greater weight than attacks on the so-called retrospective nature in this legislation. To sanctify the principle of non-retrospectivity is to give a licence to those people to go on milking the community to the tune of millions, even billions, of dollars and to give that licence to anyone who wants to set up any kind of discreditable, shonky, immoral scheme to get out of paying tax. As all honourable senators know , it is a fact that these schemes first have to be identified and that seems to take an unconscionable amount of time. They have to be isolated and the facts about them have to be established. Legislation has to be got together, introduced into this place and then debated and passed. We see now how long a process that can be. It can take a year, 18 months or even longer. We know that from experience. I repeat that the people who oppose this legislation and who would like to sanctify the principle of non-retrospectivity should clearly understand-I would be very glad to hear them controvert it-that they are sanctifying a principle that creates for tax avoiders an open season on the community at large into the indefinite future. To an enormous extent it would authorise these people to keep money which should propertly have been paid as tax and so ensure that other people have to pay more tax. How often in political affairs can one afford the luxury of the unqualified support of a single principle especially if it is in clear conflict with another principle, as it is certainly acknowledged this one is in conflict with the principle of tax equity. As an example I would say that we all respect the principle of civil liberties, yet we accept limitations to our civil liberties in that we abide by laws which are decided by parliaments to be in the common good. We would agree that it is reasonable to limit our civil liberties to the extent that we would not drive our cars on the right hand side of the road. On the other hand, we might feel it was an unjustifiable infringement of our rights if we had to report our movements to the police, in writing, once a week. These things are matters of judgment and degree, as indeed this matter is. When we look at history, it is sickening to see that probably most of the hardship, cruelty and suffering of this world has been due directly to making one principle or another a god applicable without reference to surrounding circumstances. It was on this basis that the Spanish Inquisition burned hundreds of people at the stake. Those who carried out those acts did so in the absolute belief that it was right and just, and even in the interests of the people actually burned. There are people now who happily and with good conscience allow their children to bleed to death because of principles in which they firmly believe. I am not canvassing either of those things; I merely make the point that there are dangers in espousing-as indeed the Liberal Party has done-opposition to this legislation simply on the grounds that it is retrospective and therefore it is bad. However, I can at least respect an honest and consistent conviction in this matter. Indeed, I respect that honest conviction by members of my party, and also from members of the Liberal Party who have held it for a long time. They have that view and I have no right to deride it. I can question it but I can at least respect it. I address these comments especially to the many members of the Liberal Party who apparently propose to vote differently from how they voted last year on this matter. Those people probably voted for the Fraser Government' s Bill for the very reasons I have outlined. By some strange process of mind all members of the conservative parties in the Senate seem to have gone through a process wherein now they will indeed make a god of the principle of retrospectivity. Senator Robert Ray —There isn't an election coming up. Senator MASON —In fact they have had a miraculous conversion. Such is their missionary zeal that they now propose to sacrifice the Australian people at the feet of that god. I ask them to examine their consciences and perhaps think more clearly about the effect of what they might be doing. Of course, the irony is that when we look at the legislation we find it is not retrospective at all. So the ground on which these people stand is revealed as even more shaky. Every company pays company tax and then distributes some of its profits as dividends to its shareholders and they pay income tax on that sum. Companies, so they can have reasonable liquidity of operating funds, and for other reasons, are allowed by the tax laws to retain some of their profits year after year. That is what this legislation is all about. This is the money that the Government proposes to tax. The law has always said that if this money is ever shared out in the form of dividends income tax must be paid on it. It does not matter whether these accumulated funds date back three years or 30 years; it is money on which tax has not been paid and accordingly should be paid. There is nothing retrospective about asking for this tax to be paid, particularly when one takes into account the immoral if not illegal circumstances under which bottom-of-the-harbour schemes and others like it were carried out. Two existing provisions in the Act state, firstly, that where those retained funds are distributed as dividends tax has to be paid on both major elements in them. Those major elements are, of course, accumulated profits and capital gains . Secondly, however, the Act also says that when a company is liquidated income tax is due only on the accumulated profits and not on the capital gains. I certainly believe that on the paper profits, which do not represent actual money or assets, there would be some justice in withdrawing the provisions of this legislation. I will deal with this in a little more detail later when I deal with my proposed amendment on the matter. Meanwhile I wish to talk briefly about the question of mandate. The Hawke Labor Government was elected less than three months ago with a mandate to do certain things. One, of which it gave clear notice, was to introduce legislation of the kind we are debating now. It can be presumed then that the Government has a mandate from the Australian people for these Bills. Indeed, I am in no doubt whatsoever that the majority of the Australian people approve of them. As I said, the proposal involves a great deal of money-more than half a billion dollars-accruing to the revenue at a time when we are as a nation very short of money and face a horrendous deficit in the next financial year. I would have thought a case could be made for the Government being given a reasonable chance to pursue its objectives. I do not necessarily say that all members of the Senate have to approve or subscribe to what it does. Surely that is the whole point of opposition. Many of us do not necessarily subscribe to the things a government does. If that means that at no time can the Government carry out its mandate this nation will collapse into a state of sheer anarchy. We will have no right of any reasonable or stable government at all. I do not think any good citizens want that. So I ask: Did the people give the Liberal Party or the Australian Democrats a mandate to go directly against the Government's mandate in this regard? I have examined my conscience on this matter and I suggest the only possible answer is that we have no such mandate. I am concerned at the effects of the Senate's treatment of this legislation on the Senate itself. That is a major point I would like to make to honourable senators. Over recent years, the Senate has demonstrated its usefulness to the Australian people in many ways-its committee system, which has been of enormous service to the country, its examination of legislation, and its delay of legislation of certain types. I think that difficult task has been acknowledged in the most eloquent way possible by the people to have been of value. I refer to the results of the May 1983 election in which, I think all honourable senators would agree, the Senate took a rather higher posture than certainly would have been the case 10 or 15 years ago. I believe there was considerable recognition by the Australian people of the potential values of the Senate. I believe that the Australian people require of the Senate not only wisdom and decisive action when it is needed, but also an impartiality and a viewing of matters with moderation and some restraint. I must say that I campaigned during the last election on the general statement that I did not believe that I, as one of five Democrats senators, had any mandate to run the country. I stated that I saw my mandate as being to obstruct, if necessary, legislation which breached election promises without good reason, such as genuinely altered circumstances, and to resist extremist or unduly confrontative legislation. Beyond that, I undertook-I think rightly, perhaps wrongly, I do not know; but at least I gave the undertaking-to support whichever government was elected to carry out its program for which it had a clear mandate from the people. I regard those undertakings as election promises and I have no intention of breaking them now. A great deal of intrigue and jockeying for position has gone on over these Bills in the last 48 hours. I want to speak briefly about that because I am a great believer in the facts being on the line in all respects. My colleague Senator Chipp and I share that view very strongly, and that is why I approve completely of his revelation in this place of attempts to pass money to the Democrats over this matter. It cuts all ways. I have been concerned about suggestions that Senator Jack Evans and I had heavied the Government over possible further amendments in this regard. I state absolutely clearly that the amendments which have been discussed in the media and which would remove the effects of these Bills on the capital gains element of the retained income due to be taxed were sponsored by me-I am sure that Senator Jack Evans can speak for himself-on the clearest possible understanding that the Government would accept them provided the Bill then had the numbers to pass the Senate. I require that to be put on the record. Indeed, the concern expressed by Senator Jack Evans and me to the Finance Minister, Mr Dawkins, at a meeting we had with him last Tuesday evening was over a proposed income tax on purely paper capital gains, book entries not actually represented by cash for assets, such as goodwill valuations, at completely unnatural levels. We believed then, and I still believe, that it is rather unjust that such illusory funds should attract tax. Accordingly, I foreshadow that, at the appropriate stage, I shall move the following amendment: At the end of motion, add: ', but in the opinion of the Senate the Bill should be amended to remove its effect on purely paper capital gains of affected companies and to provide for an effective anomalies organisation empowered to decide whether tax assessments arising from this legislation should be withdrawn or reduced in cases of demonstrable injustice.' I commend the Bill and the amendment to the Senate. Senator COOK(Western Australia)(3.28) —It is a pleasure to follow Senator Mason because many of the things he said in his address to the Senate this afternoon need to be emphasised and underlined. I reserve my comments on his amendment but the principles he enunciated are solid ones; and I think that deserves to be acknowledged. Because of the matter of public importance brought forward earlier today concerning the Government's alleged broken promises-a matter of public importance which was devastatingly defeated-it is appropriate that I commence my address by reasserting the mandate that the Government has for this legislation. I think that mandate is clear and unequovical. Last year, during the disclosures on tax avoidance, the Australian Labor Party published a document entitled 'A Fairer Taxation System-ALP Policy on Tax Avoidance'. For those who are interested in the year, it was August 1982. The commitment in that document stated: A Labor Government would: 1. Selectively introduce fully retrospective legislation against blatant tax avoidance schemes, so as to cancel their operation back to the time of first known use. That was in August last year-well before the election. In our policy speech leading up to the election the then Leader of the Opposition, now the Prime Minister (Mr Hawke), in the address at the Sydney Opera House, when speaking of tax relief and tax reforms, used these words: The present economic crisis cannot be separated from the operation of the tax system under the Fraser Government. As a foremost expert on taxation and Australian public finances, Professor Russell Mathews has pointed out, the system has become a major instrument for redistributing income from wages and salaries to other incomes, a major cause of budgetary problems, and a source of growing social business and economic instability. Later in that speech he said that he would commit an incoming Labor government to: . . . end the loss of untold millions of dollars through the tax evasion and avoidance industry. He said: We will wipe out the tax evasion and avoidance industry in this country. Under the Fraser Government it has become Australia's main growth industry. He then went on to quote from the Costigan report. I think that excerpt should be put on the Hansard record this afternoon. It reads: This industry has developed in Australia, particularly over the last five years , at a rate far in excess of any other industry and has brought with it profits comparable only to the heady days of the Victorian gold rush. Mr Hawke also said: And the blame lies not so much with individuals, but with the Government that allowed it to happen . . . The important point there is that, if governments allow this to happen, they cannot attack individuals; they are guilty of assisting massive tax avoidance and fraud. Lest anyone challenge the mandate, this Government has not been lacking in principles or courage. The Minister for Finance (Mr Dawkins), when talking to the assembled business and union community of Australia at the National Economic Summit Conference, said: In reforming the tax system the Government's approach will essentially be guided by its determination to restore equity to the system and redress the tax burden by applying the principle of ability to pay. In this context there can be no doubting our determination to stamp out tax avoidance and tax evasion. He went on to talk about the legislation that he would introduce. Many of the speakers at the National Economic Summit referred in their addresses to tax avoidance and evasion. So it was not surprising that item 29 of its communique, representing the views of the assembled State governments, the national Government, major employer organisations, trade unions and welfare organisations , concurred on this principle: All parties believe that there is a special obligation in the current environment to ensure that artificial tax avoidance and tax evasion is removed, including in the cash economy, and for the further development of a general understanding to this effect. I have taken time to quote exhaustively in order to establish clearly that well before the election the Labor Party had trumpeted its concern and its intention. In the policy speech which opened the election campaign we made a direct promise . After being returned to government we announced at the Summit, and had endorsed by the Summit, our move in this area. The conclusion is undeniably that a mandate exists for this Government to introduce this legislation. It is not merely a narrow political mandate; it is a mandate which has been endorsed by the National Economic Summit, the greatest gathering of the economic community in modern times. I think the question of a mandate, our right to proceed, cannot be challenged. However, these Bills go to the matter of unpaid bottom-of-the-harbour taxes. If we want to gauge the amount of tax avoidance that goes on and to try to put in perspective what these Bills are trying to do, we ought to look not so much at what politicians have said but at what a number of key figures in the Australian community have said. In the pubication I referred to earlier, the President of the Australian Society of Accountants, Mr John Miller, is quoted as saying the following words: The present position in Australia, where employed Australians are paying an increasing share of the tax revenue and the 'tax privileged' less, cannot be tolerated. Inflation, the present steps in the individual tax scale, and the flagrant breaches of desired objectives by permission of the present legislation and other practices, make tax justice a myth in contemporary Australia. The shrewd and well-advised build up wealth on a tax-deductible basis-and the rest pay their P.A.Y.E. taxes at increased rates! Of course, Mr Miller's is not a lone voice. We are familiar-it has been quoted many times in this forum-with the statement of Professor Russell Mathews who, in 1980, said: . . . tax authorities, governments and the Courts have allowed tax avoidance to flourish on such a scale as to make personal income tax a voluntary tax for the rich non-salary earner. We know as well that Eric Risstrom, of the Australian Taxpayers Association, has estimated that $7 billion has been lost to the economy by virtue of tax avoidance schemes, an amount which, when computed on a per head basis, comes down to $30 a week extra for the average Australian household to subsidise the tax cheating that goes on. The dimensions of the problem are undeniable. When confronted with such overt practices as bottom-of-the-harbour schemes-the most notorious tax avoidance instrument to come forward-no government can deal too softly or lightly with that matter or can risk any accusation that it is not strongly concerned about tax avoidance and evasion. No government, of whatever political stripe, can be seen to tolerate tax evasion. I think it is significant and important that this Bill incorporate the element of retrospectivity, because the greatest device that will prevent tax avoidance schemes-of whatever type-flourishing in the community in the future will be the sure knowledge by all those who might choose or wish to engage in tax avoidance that when their little tricks are discovered a government acting in the community interest will legislate retrospectively to ensure that proper taxation is recovered. If that fact is known, if it is understood that a government is prepared to act retrospectively, there is no profit in encouraging avoidance schemes. On that basis, since the election, the Australian Labor Party has committed itself, should further schemes be uncovered in the future, to legislate retrospectively and, in the case of the bottom-of-the-harbour schemes, to go back and legislate in that area as well. That is an essential element in dealing with the whole question of tax avoidance, because once it is known and understood that that is the firm intention of the Government, there will be no profit in the industry of tax avoidance. I turn to the other matter that I think underpins the whole debate; that of equity. At the National Economic Summit and since, we have heard much rhetoric and argument about the need for sacrifices to be made in the community to ensure that the economy re-emerges and becomes healthy again. In this place and in others we have had a general call for wage restraint. We have all the strong argument from the Opposition that real wages should fall. We have had a number of propositions devoted to reducing the take-home wages of ordinary wage and salary earners. All of those suggestions are made on the basis that sacrifices should be borne by wage and salary earners. But in terms of pursuing economic recovery, national reconciliation and reconstruction it needs to be clearly perceived by those who are asked to bear the brunt of the sacrifice that that sacrifice is across the board; it is not something that merely applies to them. It is not something that merely applies to those who happen to earn income in the form of wages and salaries every month or week. At the National Economic Summit this point was made quite clear by unions who committed themselves to a program of wage restraint on the understanding that there would be equity across the board. Speakers such as Cliff Dolan, Bill Kelty and Charles Fitzgibbon constantly referred to the need for governments to be clear in stamping out tax avoidance and ensuring that while workers are being asked to sacrifice wages and salaries in real terms tax cheats do not escape scot-free and to the principle of, 'whatever I can get away with I will get away with', which is enshrined in the community. If the business community sets the example, 'we can sponge, we can cheat and we can divert', it sets an example to wage and salary earners to try to do the same. In attempting to create growth through restraint we are setting an example. If the Senate is concerned to assist the plans of recovery it will be concerned to make sure that no allegation can be levelled that tax cheats are allowed to flourish and that tax avoidance is something that we tolerate. The union movement made that position clear to the Fraser Government last year and, indeed made it clear in August last year when it indicated it was prepared to recommend to its membership that higher levels of pay-as-you-earn taxes should be paid on the understanding that tax avoidance would be wiped out and that equity would be introduced in the Government's taxing arrangements, so that a jobs fund could be formed by the extra tax revenue gathered to create fuller employment and to mount job creation schemes. That seems to me to be quite a clear indication of a commitment by the union movement to try to assist recovery through restraint. We must match that as a Government. I believe that the business community must match it as a community in order to see that no finger can be wagged as to the absence of equity or the allegation which is made that our principle is, 'Don't do as we do, do as we say'. Naturally enough, it is not only the union movement that raised the matter. As I said in a more recent debate this week on the May economic statement, the spokesman who took the mantle of speaking on behalf of the unemployed was Bruce McKenzie of the Australian Council of Social Service. He had a lot to say at the National Economic Summit on the basis of what needs to be done to our taxing arrangements in order that the welfare dollar be stretched more to aid those who are in worse circumstances than those of us who have jobs, or those of us who are not welfare beneficiaries. To pick up his position, he said: At present the highest income groups can evade or avoid their tax responsibilities, while the stringent income test on the poor, means that an unemployed person with a part-time job can lose a dollar for every dollar earned . This is, effectively, a 100 per cent marginal tax rate. The clear imposition is that while the Government is imposing those stringencies it should also be careful to ensure that tax avoidance is stamped out so that those stringencies are perceived to be across the board and those who are in the worst situation in the economy are not left to foot the bill. The other point that I think ought to be made in this debate is that the Australian system of taxation heavily favours the gathering of tax through pay- as-you-earn income tax arrangements. We gather most of our tax dollar from that area. That situation has not remained static. From 1975-76 to 1980-81 total tax collections from wage and salary earners increased by 110 per cent while total wages and salaries grew by only 72 per cent. On the other hand, tax collections for non-PAYE taxpayers-those with business, property and dividend incomes-grew by less than 56 per cent over the same period, while their incomes rose by 94 per cent. Consequently, the share of the total personal income tax paid by wage and salary earners has considerably increased. In 1981-82 it was 82 per cent compared to 76 per cent in 1975-76. Not only do we gather a significant component of our taxes from pay-as-you-earn income tax but also the level of what we gather has been increasing. The number of companies targeted for this legislation was first thought to be around 5,600. The figure is now estimated more accurately at around 5,900. Those 5,900 companies that have avoided or evaded their taxes through bottom-of-the-harbour schemes have imposed a higher cost of about $30 a week on Australian families. The point is where does this end? Legislation such as this needs to be introduced in order to bring an end to this growing and burgeoning industry which is the biggest bonanza since the gold rush. Two major matters have been raised in opposition to this legislation. The first major question is that it is unfair to apply tax retrospectively now that events are in the past, particularly in view of the fact that the Fraser Government's tax laws went through last year. Given that we are talking about only approximately 6,000 companies, the argument about it being unfair to go back seems to be an argument about the alleged or fictional rights of those 6,000 companies. I want to ask this question: What about the rights of the 54,920 other private taxable companies? According to page 9 of the 1982-83 Budget Paper No. 11 there are 60,920 private taxable companies. If 6,000 bottom-of-the- harbour companies are deducted, the rights of 54,920 companies have to be considered. Those companies have properly met their tax obligations. If it were a question of conflict, the rights of those who have done the proper thing must always be predominant. The other thing, of course, is that if the Government is not stern and effective in this area it will invite the attitude that, because of laxity, anything goes. In terms of it being unfair to apply this legislation retrospectively, if we did not go back there would be an open invitation for anyone to engage in whatever scheme they wanted to engage in. That may well encourage a resurgence of the tax evasion industry. Some argue that the people concerned did not know what was happening. But, of course, as Senator Mason so adequately pointed out, it is beyond belief that most did not know what was happening and that most thought, for some reason or another, they were engaged in something that was shady and cavalier in terms of their tax obligation. But for those who say they did not know and that they were honestly making an error, in looking at their cases one finds, predictably, that they are small companies or that they are companies which have delegated their affairs to an agent and allowed their agent to make decisions on their behalf. If company affairs are delegated then one is bound by what the agents or representatives do. If the companies personally did not know, they were lax in their obligations to their own affairs in not discovering what the agent was doing on their behalf. Of course, even if they argue that they did not know, they were happy to pick up whatever windfall came their way because of the activities of that agent. If, suddenly, one of us found $50,000 thrust into our letterbox and we thought we could get away with it, but discovered later that the Government was taking it, we ought not complain. If we have a windfall or an advantage we should not complain when the Government takes its share. Many honourable senators opposite will have asserted constantly the old Milton Friedman saying that there is no such thing as a free lunch. If people benefit by getting an advantage they cannot claim that they were entitled to a free lunch when the rest of the community has met its obligation. It has been said that retrospectivity is unfair. This comes down to whether adequate notice has been given and time to pay is allowed. Amending provisions to this effect have been incorporated in the Bill as read a third time in the House of Representatives. The final major argument put is that there will be massive unemployment if this legislation goes through. I assert that many of the figures that have been put out about future job loss because of this legislation are nothing short of scare tactics designed to try to talk up a storm of protest. They are not factual and vary according to whom you speak. What must be remembered is that these Bills impose a tax not on companies but on the owners of companies. Those owners or shareholders will be called upon to pay the taxes now. They have ways and means of raising money if they cannot meet that bill which will not involve that company, if it is viable and effective, going out of business. So to pretend that owners faced with a tax bill will somehow or other seek not to maximise their position as owners but sell their company, or trade or do something else in order to meet that tax bill, and that that will create unemployment is mischievous. In conclusion, if we consider the amount of money being forgone by the Department of the Treasury due to tax avoidance and consider what is needed to generate jobs in this economy, it is quite clear that there would be massive re- employment if we were able to recover revenue that was lost to the Budget through tax avoidance. There could be massive re-employment. Those who argue that they are entitled to take the advantages of their shady dealings and get away with it have to answer this question: Why should they, in all equity, be allowed to do that when those funds not recovered could help the economy resurge through a job creation program? I commend the Bills to the Senate. Senator HARRADINE(Tasmania)(4.52) —I believe that two principles should govern the consideration of honourable senators in coming to a conclusion on whether or not this legislation is proper. Those two principles are certainty before the law and fair taxation shares. Honourable senators know that last year I supported the recoupment legislation. I did so in an attempt to apply those principles to that legislation. Let me deal first of all with what occured last year. Last year the former Government brought in legislation-it was eventually passed by the Parliament-which sought to recoup from vendor shareholders a taxation benefit which those vendor shareholders had derived from contrived arrangements in respect of their companies. Many of those shareholders, in fact most of those shareholders, were innocent. In fact, they were arms-length transactions. The tax avoided by those schemes was company tax and Division 7 tax on current year profits which had an accumulating liability. Clearly there was an accumulating liability. That was avoided by arrangements entered into. It was the purpose of last year's legislation to recoup that even from the majority of innocent vendor-shareholders who had, on the best advice available, entered into those arrangements. I say 'arm's length' because Senator Cook referred to shady dealers. We are not dealing with shady dealers; we are dealing with innocent vendor-shareholders. If we are talking about arm's length transactions by definition of the High Court of Australia in, for example, the Slutzkin case, they are innocent. Yet last year I was prepared to vote for a proposition which would recoup an accumulating liability in respect of current year profits. By what application? It was by the application of two principles-the principle of certainty before the law and fair shares. Honourable senators might say that I have failed. I know that a number of people who voted against the legislation last year might accuse me of failing in my test of application of certainty before the law. A legal act should not subsequently be clothed with illegality and consequent penalties. Let me remind the Senate that, as the Senate and the Government knew, there was the legal opinion of Brinsden Q.C. of 1974 which was that criminal or civil proceedings could be taken against purchasers who had stripped companies and thus left them in a position of not being able to pay their tax. This legislation does nothing against those promoters. It does nothing to attack the real problems. It does nothing to catch the real shady dealers. It does nothing to catch those purchasers who sent many of the companies to the bottom of the harbour. Let us get that clear. I believe that many of the speeches that have been made show that people do not have the matter clear. I believe that many members of the public do not have the matter clear because of the ill-informed attention that the matter has been given by the media by and large, with a few exceptions. I applied my mind to the next test; that is, of fair shares in taxation. I believe that on an application of that principle, if there were an accumulating liability and by virtue of an arrangement entered into for the sale of a particular company the vendor-shareholders had avoided paying that liability, in all fairness they ought to pay tax equivalent to company tax and Division 7 tax that was accumulating. I voted for that proposition. I know it has caused a great deal of embarrassment to innocent vendor-shareholders and I believe it has also caused a great deal of dislocation. Nevertheless, on the basis of fair shares, I believed at the time that that was how I should vote and I voted accordingly. However we now have in this legislation an attempt to impose retrospectively a further tax on those innocent vendor-shareholders in respect of a matter for which there was no accruing tax liability and in respect of some matters on which tax would never have been paid from here to the end of the world. I believe that this legislation is qualitatively different in principle from the legislation which was before us and which the Parliament adopted last year. The Government knows that because it is prepared to accept an amendment which takes out of the scope of the Taxation (Unpaid Company Tax) Assessment Amendment Bill accumulated capital reserves. Prior to the Government's willingness-I believe it was a contrived willingness- to exclude capital profits from this Bill, the Government had predicated the Bill on an assumption that there had been a distribution of tax. The logic of the situation now-if the Government agrees, as it has, to the exclusion of capital profits from the scope of this legislation-is that it predicates the Bill on the assumption that there has been a liquidation. It is quite clear. As every honourable senator should know, had there been a liquidation of any of these companies there would have been no tax liability on the part of the vendor -shareholders to the revenue in respect of their accumulated capital reserves. Senator Crichton-Browne —And the revenue reserves. Senator HARRADINE —Leave the revenue reserves aside for a minute. The vendor- shareholders know that; the Government knows that. Therefore this Bill is a charade. Let everybody understand that the Government says that it is collecting taxes which it has lost. It did not lose them because they would never have been payable. That is the logic of the situation. Taking that to its logical conclusion in respect of the revenue reserves, why does the Government, now it assumes that there has been a liquidation, not treat the revenue reserves in precisely the same way as liquidation in the real corporate world? Everybody knows that when companies are liquidated their revenue reserves are not realised in one year in respect of the imposition of taxes. They are, of course, distributed over a period of years. The logic of the Government's situation now, if it says that those reserves should go back into the tax barrel, is that it should tax them over the years that they were likely to have been taxed and in the same way as they would have been taxed had there been a liquidation. I speak not on my behalf but, I believe, on behalf of a large number of workers in this community and a very large number of Australian Labor Party back benchers and Labor Party members. From what I have heard of the debate thus far from the Government side, with the exception of one or two speakers, there is a total misunderstanding of what this legislation is likely to do. In order to enlighten people a little I want to read from a letter that has been sent to me by a person who has been a member of the Labor Party all his voting life who also happens to be a lecturer in taxation law at the Footscray Institute of Technology. He would, therefore, surely be in a position to know what he is talking about. I am prepared to table the letter that was sent to me by Mr Tim Margetts, together with the letter that he had sent to Mr Clyde Holding with a request that it be brought to the attention of Messrs Keating and Dawkins. The letter to Mr Clyde Holding states: Dear Clyde, re: Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 Further to our recent discussion on Sunday, 29th May, at the F.E.A. election for Melbourne Ports, I am writing to you to clarify my objections against the proposed amendments to the Taxation (Unpaid Company Tax) Assessment Act 1982, and would be pleased if you could ensure that these are brought to the personal attention of both Messrs. Keating and Dawkins as a concerned member of the A.L.P . As explained to you on Sunday, I currently lecture in taxation law at Footscray Institute of Technology and therefore believe I am not speaking from a completely uninformed position. From my understanding, the Taxation (Unpaid Company Tax) Assessment Act 1982 causes a primary tax liability to fall onto the vendor shareholders of the '' target company'' under a situation where there has been a current year profit earned by the target company (therefore a contingent company tax liability). However, due to the asset stripping of this company by a promoter, the company would have no assets to pay the tax bill or instead would be sent to the '' bottom of the harbour''. Consequently, the company tax and/or undistributed profits tax would remain unpaid. It is commonly accepted and applauded, especially by myself, that retrospective legislation should be introduced to recover such lost revenue. The justification for this retrospective legislation is abundantly clear, as the net result of this artificial scheme and many other similar schemes are to ''increase the load of tax on the great body of good citizens who do not desire or do not know how to adopt these manoeuvres''. Although the vendor shareholders commonly acted upon the advice of so-called ''legal and accounting'' experts, it was these people who made a tax saving less the substantial fees they were charged. For the record, I believe the Government should not hesitate in using retrospective legislation to counter any further discovered ''artificial and continued schemes''. However, I feel that the Labor Party must, through State Conference, adopt the same as a policy and accordingly let the deterrent effect of such a stated policy be established. This brings me back to the current proposed amendments which, of course, intends to go a lot further than the legislation last year. From my reading of the Bill and explanatory memorandum, it would seem that the Government intends now to impose a further recoupment tax on the vendor shareholders of these companies. This penal tax will operate on the assumption that as the companies now cease to exist, it will be assumed that their total assets should be treated as distributions back to the shareholders and then taxed as dividends in their hands. This assumption and consequently the operation of the Bill is in complete contradiction to our present system of taxation of companies and ignores all the tax laws concerning distributions on liquidation of the company itself. Of course it does- As a result of such fundamental misconceptions- He is talking about the Government- it ignores the reality that undistributed profits over past years and the current year may have both an income and capital character. So as the Bill imposes a tax on 'total assets' of the company, it might therefore also tax capital profits of the company. I need not remind you that our party policy is against a capital gains tax, although I personally believe this may need reassessment in the future. Yet it is for this reason that I now must strongly object to the proposed amendments as it can be argued the Bill will retrospectively tax receipts that would not have been income under the normal concepts of the Income Tax Assessment Act. The Bill will have a strong penal effect and to impose retrospective laws of this kind is both unjust and immoral. In this respect I quote what Senator Gareth Evans was reputed to say on 1 November last year; 'the Labor Party would confine retrospective legislation, recoupment legislation against tax avoidance to schemes which are blatant . . . our legislation would not be penal in character, but simply seek to recover-like the Government's ' bottom of the harbour' legislation-the tax which was avoided.' (Law Institute Journal, Vol. 57, No. 3, p. 192) For the purpose of completeness, I wish to point out a further remark made by Senator Evans in April this year; 'it is our intention . . . to remove loopholes created by S.3 (12) (in the Act) . . . Beyond that, we have no intention of proceeding on retrospective recoupment legislation in relation to any of the schemes which are already the subject of remedial action or legislation by the present Government.' (Law Institute Journal, Vol. 57, No. 4, p. 254) As a member of the Labor Party for nearly all my voting life and with a strong belief in the principals and ideals of the ALP, I find it very difficult to understand how the Government can justify such discriminatory legislation which will tax one group of the community differently from the rest. I hope that this is not so because of a belief that generally these people can afford to make such payments. In my opinion, the proposed laws are discriminatory and I firmly believe many other members of the ALP would be against such legislation if they recognised its discriminatory effect. It is for this reason that I hope that the Government will reassess the position of the proposed legislation and correct the blatant inconsistencies it presents. I hope that my expectations of a Government that I worked hard to obtain are not so quickly disappointed and look forward to an early reply. I feel that that raises the matter of a mandate. It has been suggested that because the Government has a mandate it can do what it likes. I do not think that just because a person has a mandate he can do what he likes. What is the Parliament for, if that is the case? We might as well be under a dictatorship. The previous speaker, Senator Cook, referred to the National Economic Summit Conference. He argued that the Government had a mandate because of what was said in the Summit communique. Senator Cook —I pointed to the policy speech first, Senator. Senator HARRADINE —Oh, good-I will come to the policy speech in a minute. Senator Cook —And to the previous year's statement on taxation by the party. Senator HARRADINE —I will come to that. Senator Cook —That is where the mandate comes from. Senator HARRADINE —I will come to that. But Senator Cook said that the Summit, as the highest body in the land-whatever that means-had given the Government this mandate. However, this is what was said in the Summit communique: All parties believe there is a special obligation in the current environment to ensure that artificial tax avoidance and tax evasion is removed, including in the cash economy, and for further development of a general understanding to this effect. The Summit agrees that action should be taken to improve the equity and efficiency of the Australian taxation system. I suppose we all agree with that. Last year Senator Walsh moved an amendment to the second reading motion of the Taxation (Unpaid Company Tax) Assessment Bill 1982. Time is on the wing, so let me very quickly read part of his amendment. At that time I sought to remove paragraphs (b), (c) and (d) of this amendment because I did not think that they quite fell within the principles that should have been applied to that legislation. Senator Walsh's amendment to the then Government's legislation states: At the end of motion, add ', but the Senate- (b) is of the opinion that the Bill is grossly inadequate in that: (i) it deals only with company and undistributed profits tax remaining unpaid on current and prior year profits and does not recoup personal income tax lost in relation to accumulated after-tax profits disposed of by vendor shareholders in the same transactions, Let the Minister for Resources and Energy (Senator Walsh) who represents the Minister for Finance (Mr Dawkins) tell the Senate where personal income tax has been lost. The legislation now is predicated on an assumption that there was a liquidation. When I say 'now' I mean after the Government agrees to its contrived policy. Let me say why it is contrived. I do not like doing these sorts of things. The discussions I have with Ministers and the like always remain confidential. I was appalled yesterday when I had discussed a particular matter with the Minister to go back to my office and, after about an hour of discussions with an official, to be confronted by the news media reporting that in the morning members of the Australian Labor Party got together and said: 'Get Harradine to move this amendment to whack out the capital tax side of it'. I do not appreciate that sort of reflection on me. The Labor Party knew the logic of the situation. It could not sustain a piece of legislation which would tax revenue which, in most normal circumstances, would never be taxed. Senator Walsh —Are you conceding that there are circumstances in which it would have been taxed? Senator HARRADINE —I have made it perfectly clear that there are ways and means of putting revenue reserves back in the tax barrel if that is what the Government wants to do and to have them taxed in a particular way. For example, revenue reserves may have been reinvested in a new corporate entity carrying on the same business by way of loans or share capital. In those circumstances, the revenue reserves would not be subject to taxation, but why not have a roll-over effect and deem those revenues to be accumulated reserves for the purpose of taxation in the new company? That is the logic of the situation now. That is the sort of thing the Government ought to be looking at if it is to adopt that sort of argument because that is logical. It is very difficult to deal with this matter adequately in half an hour but I will refer very briefly to a couple of matters. I would like to read one particular letter for the benefit of Labor Party senators but I do not have the time. Honourable senators are welcome to see it afterwards. It concerns a very old-time Labor personality from this Parliament who is not a shady character at all; he is well respected and well revered. Senator Tate —From South Australia? Senator HARRADINE —No, from New South Wales. His family will be absolutely destitute as a result of this legislation. The consequences of this legislation must be examined. I appeal to the Government to consider giving us an opportunity to examine the legislation. I have received plenty of representations, but I have so structured those representations as to ensure, by and large, that I see nobody and get them in writing. I have a stack. I am sure that on the basis of confidentiality the people concerned would welcome the opportunity to have those representations examined rigorously to see whether what they portend will occur. What the written documentation that I have and the advice that I have been given portend is that, this legislation will affect the employment of 26,000 people. I have been a trade union official all my life. I have heard employers scream when they get a log of claims; they scream blue murder. But we know they are not fair dinkum. I know they are very fair dinkum in regard to this legislation. I will not be put in a situation where I have the responsibility and the opprobrium of having to vote for this legislation so that when the first couple of thousand workers go off those workers and their unions blame me. There is a way around it. There is a way to put some of the revenue back into the barrel. But we will not get it this way. Honourable senators have the opportunity to support Senator Macklin's motion to send the legislation to the Senate Standing Committee on Finance and Government Operations. The Committee is chaired by a Government supporter, and the Government has the numbers. Why do honourable senators not agree to send this legislation to the Committee for it to examine the consequences? I believe that it is the responsibility of the Government to do so. I can understand the responsibility of the Minister for Finance-his responsibility is to tax everything that does not move and to get in the money. That is his responsibility and I respect it. The Government has a responsibility and that means that each and every Government honourable senator has a responsibility to consider the consequences of this legislation. The effect on Australian employment at this stage will be disastrous. I challenge the Minister to declare that there will be no substantial dislocation in employment and investment potential as a result of this legislation and as a result of the way the Government is going about it. My time has expired and I regret that. Senator JACK EVANS(Western Australia)(4.23) —I am motivated to speak in this debate, having heard the last speaker, Senator Harradine, and the explanations, justifications and rationalisations for the rejection of this legislation. Unfortunately, I do not think that the previous speaker has seen the legislation in its true perspective. Whilst I respect his point of view-I have had the good fortune to discuss many of the ramifications of the legislation with him over the last couple of days and with many other honourable senators, including the Minister for Finance (Mr Dawkins), and my Senate colleagues, the Australian Democrats-I think that it may help before the debate is wound up if we have a look at the overall effect of this legislation if it is passed. The first thing we need to recognise is the immediate burden that will be placed on some businesses, the immediate effect on the economy at large in some fields and the potential that there will be for bankruptcies, unemployment and uncertainty in the community. One of the effects will be that it will mean the end of tax avoidance. If this legislation is rejected, we give the tax avoiders a new lease of life. Another effect, obviously, is that it will add $570m to government revenue. But that has to be done legitimately. I respect the views of those who believe that we should not take the fast buck, even in government terms, to achieve that $570m gain. Let us look at the motivation of the Government in putting this legislation forward. Is it genuine concern about tax avoidance? Is it a genuine attempt at redistribution of wealth? Many people from Western Australia have asked me: 'Is this a personal vendetta? Or is it a means of assisting economic recovery?' It may well be a mixture of all those motives. I would just like to go over the attitudes of people with whom I have spoken who are caught up in these new tax provisions. I think it is fair to say that nearly all of them now accept the obligation to pay under the 1982 legislation. I think it is also fair to say that they were just as vociferous and as opposed to that legislation as they are to this. In fact, in my State they have appealed as strongly-certainly, even more loudly- as a result of a very co-ordinated and heavily financed campaign. It is also appropriate to tell the Senate that they now regard bottom-of-the-harbour legislation against wet Slutzkins as being generally acceptable. That was not their attitude in 1982. However, they feel that dry Slutzkins, which they maintain were approved by the High Court of Australia, should not be included in retrospective tax measures. That, of course , is the major effect of this legislation. Other attitudes include one of uncertainty: 'Where do we go from here? What is likely to happen in the future, not just as a result of this legislation but also as a result of the Pandora's box that it may open?'. They want a right to explain, a right to appeal, to an independent body. If the legislation is approved they want time to pay. Even if they are found to be guilty they want the right to be able to make that payment over a period without penalty, to allow their businesses to continue. They are upset at the selective application of a capital gains tax, which this Government does not have the courage to introduce on a broad basis for everybody in the community. They are concerned-I remind honourable senators that I am talking about the people who are caught up in these new provisions-at the taxing of paper profits which, regardless of whether a company had continued or was liquidated, would not have warranted any tax. Having heard all those points of view, all those submissions and from all of those people, some genuine, some obviously con men and their representatives, I have had to give a lot of consideration to my attitude. I am concerned at the potential damaging of innocent parties-sometimes shareholders, and potentially employees or creditors-if companies are suddenly liquidated and the flow-on effect in the form of bankruptcies and unemployment right throughout the economy . Other considerations against the legislation included the thought that some guilty parties may get off scot-free and be able to reinvest their proceeds or transfer their funds and themselves overseas. We might be well rid of them. Of course, the promoters and the advisers get off scot-free in any case. In considering why I should be against this legislation I am also concerned because there were some genuine sales of companies, at time of retirement of the owners, rather than the liquidation of those companies. The proceeds amounted often to genuine, non-taxable, capital appreciation; for instance, when the revaluation of farming properties occurred. In many instances the proceeds appear to me to have represented only paper gains. Frequently, it seems, all that happened was that there was a re-arrangement of affairs simply to help a changing family situation. I guess one might say, in summary that for me the considerations against this legislation include the fact that it seems to be a sneaky, selective application of a capital gains tax which applies to tax legislation the principle of retrospectivity, which so many of us are against. Therein lies the problem. There is the principle of retrospectivity as against the principle of robbing one's fellow Australians. When those two principles come into conflict one has to consider the other side of this question. I believe that there are justifiable reasons for this legislation, which I will summarise. Firstly, in some cases taxes were due and payable. Secondly, it is a blatant, evasion-style tax avoidance scheme which is blatant and is accepted by the whole community as immoral. It increases the burden on dinkum Australians and has done so for years. Are we to let these people get away with the money and run? In my opinion, this legislation, if passed, will stamp out tax avoidance for all time. We will never see another piece of retrospective tax legislation. I believe that this Government should muster its courage and announce immediately that it will introduce a tax on large capital gains. That would embrace most of the people in this group. When that happens it might become more justifiable to say: 'Right, let us have a look at this group'. But, again, to apply that retrospectively cuts across a principle about which a lot of people are concerned. I think we need to recognise also-this has been said many times-that this Government warned the voters, who elected them to govern. If this legislation is lost $500m-plus will be lost to the economy. The alternatives that the Government will obviously have to consider will include increased taxes on other people; increases in company tax, personal tax and sales tax. I say: Watch out for the whammy, Senator Harradine, and other honourable senators who wish to oppose this legislation. It is they who will be responsible for the new, increased taxes. Honourable senators should not blame Senator Colin Mason and Senator Jack Evans for that bludgeon, which will hit all of us. Honourable senators should look at the potential that then creates for increasing the Budget deficit, if the Government does not increase taxes that, in turn, would increase interest rates. Those who have been so concerned about people losing their houses because of increased interest rates will suddenly find that interest rates will indeed increase. A $500m increase in the Budget deficit will occur tomorrow morning if this legislation is lost. Senator Crichton-Browne —What about bankruptcies? Senator JACK EVANS —We should look also at the Government's potential to do what it wants to do to help those who are on welfare. That potential will be diminished dramatically. I put it to Senator Crichton-Browne, who has just interjected, and to others who are living very comfortably on this land that the potential for job creation programs is diminished overnight. Whose need is greatest-that of the tax avoiders, who would not be in these tax avoidance schemes if they did not have hundreds of thousands of dollars to gain thereby? Nobody who stood to gain less than that got into this system. Whose need is greatest-the need of those people, or the need of people on welfare, people who are unemployed, people who will suffer as a result of this legislation being blocked? We should face the fact that 90 per cent of the bottom-of-the-harbour cases which blatantly avoided tax and still benefit from the proceeds thereof will be able to continue their beautiful, luxuriant lives, write their letters from Vaucluse and live in the Lakeside International Hotel in the lap of luxury while the rest of the community suffers as a result of the blocking of this legislation. It is not as simple as Senator Crichton-Browne would have us believe. It is simple in his view because he has a number of friends in Western Australia who have made their millions and are frightened about losing them as a result of this legislation. Senator Crichton-Browne —Mr Deputy President, I raise a point of order. Senator Jack Evans has not been in this Senate very long so he probably does not know what standing orders are. But he does know the meaning of the word 'decency' and he was implying that the making of my decision on the legislation was simple because I have friends involved in tax avoidance. That is a reflection on me and I ask that he withdraw it. Senator Mason —Mr Deputy President, I wish to speak to the point of order. The DEPUTY PRESIDENT(Senator Hamer) —Order! I need no further assistance with the point of order, Senator Mason. Senator Jack Evans has just made an unwarranted reflection on Senator Crichton-Browne. He should withdraw it. Senator JACK EVANS —I withdraw the reflection on Senator Crichton-Browne. I simply point to the fact that a number of people in Western Australia who have been guilty of sinking their companies to the bottom of the harbour are very influential members of the Liberal Party in that State even if they are not friends of Senator Crichton-Browne. I think it might be appropriate for us to look again at the effects of the proposed changes that, in my understanding, have been agreed to by the Minister as a result of representations made by Senator Mason and me. We have asked for a right to appeal for relief for those who would suffer personal hardship as a result of this legislation and I believe that inherent in that appeal should be the right for those who will suffer from flow-on hardship-that is, where business would be liquidated and where employees would be affected. We have been assured by the Minister and the Commissioner of Taxation-I have that assurance in writing-that not only will those rights of appeal be granted but also that they will be heard quickly and that there will not be delays which could cause undue hardship and cause people to be very concerned as to whether their appeal would be heard and upheld. We have asked further for the Minister to provide in the legislation for people who cannot meet their commitments immediately without causing undue hardship. We have asked that they be given 12 months extra time to meet those commitments, a provision which was not in the original legislation and in fact was being taken out of the 1982 legislation. I give credit to the Minister that he has recognised the difficulties that this will create for people and he has included these proposed amendments in the legislation. We have asked that the pressure for instant cash as a result of this legislation be alleviated, that people be given the opportunity to rearrange their affairs and that they be given the right to be heard by an independent relief board. We have gone further than that today, but so far we have had total acquiescence from the Minister in those requests. We have asked also for support and, whilst this has not been guaranteed, I believe that we have had a more than sympathetic hearing from the Minister for a proposal that the capital gains sector of this legislation be withdrawn and that the tax on the capital gain proportion is no longer to apply to this legislation. I believe that if that amendment is passed in the Committee stage of the debate, it would completely remove the justification that many people have for opposing this Bill. Having heard the debate on this Bill, it would be recognised that more than half the debate, and I am talking about the real debate as distinct from the emotional debate, has been directed against the fact that the Government has selectively proposed legislation which would apply a capital gains tax to only one sector of the community. Many people agree with Senator Mason and me that that is unjust and that, if the Government wanted to introduce a capital gains tax, it should do so openly and non-selectively to the whole community. By all means it should set limits to the tax. We would certainly not support any legislation that imposed a capital gains tax on the sale of people's homes or on capital appreciation lower than, say, $200,000 and elements of that nature. But there is a belief right through the Senate that there is something wrong with a tax which is introduced under the guise of picking up the bottom-of-the-harbour escapees and hitting them with a tax which has never applied and could never have applied , whatever they did with their companies in the past, the present or the future. One cannot say that that provision can be applied to the rest of the Bill but I think the criterion I have just enunciated is applicable to capital gains and therefore is not acceptable to Senator Mason or me. I hope to have the opportunity to move that amendment in the Committee stage of the debate. I hope that honourable senators will give us the chance to move our amendments and give us all the opportunity to have another look at the legislation and its effects if that part of the legislation is removed. I think I should conclude by explaining the effects of the amendment of which Senator Mason gave notice. It would provide a right of appeal to an independent body, an anomalies organisation, to all those who believe that they have been unjustly caught in this net. Frankly, that leaves my conscience absolutely clear and I believe it should also salve Senator Harradine's conscience because, with all the representations that we have had, I do not feel capable of making judgments on individual cases. I have not had a tax return in relation to these cases put in front of me and I will guarantee that Senator Harradine had not had one put in front of him. I have not had a 100 per cent bona fide substantiated case put before me. I have heard a number of one-sided cases, with nobody putting the alternative point of view. But I recognise that there may be an injustice about to be done if this legislation goes through. Senator Mason's amendment states: . . . but in the opinion of the Senate the Bill should be amended to remove its effect on purely paper capital gains of affected companies and to provide for an effective anomalies organisation empowered to decide whether tax assessments arising from this legislation should be withdrawn or reduced in cases of demonstrable injustice. If this Bill goes through its second reading stage with that amendment, there could not be an honourable senator in this chamber who could object to the legislation because it covers every objection which has been raised. It has the effect of removing the discriminatory and potentially unjust tax on capital gains when these were only nominal or fictitious paper gains from which no real benefit was or would be derived. Overall, it has the effect of reducing the hardships for those directly and indirectly affected and sorts out the rip-off merchants from those less culpable. Senator WALSH(Western Australia-Minister for Resources and Energy)(4.43) —I think in view of the importance of the last vote, so to speak, it might be better if I deal with Senator Harradine's speech first. I start with this point: Senator Harradine was very concerned about innocent vendor-shareholders. Without going into the question of the degree of their innocence, all the shareholders caught by the legislation last year or this year, innocent or not, knowing or not, received the money. Last year they were subject to tax on that proportion of the evaded company and Division 7 tax which equalled their shareholding in the company. Senator Harradine supported the legislation last year. No shareholder will be liable to the taxes sought to be imposed by these Bills who was not also liable to receive a tax assessment in 1982. There could be some who received assessments in 1982, or as a result of the 1982 legislation, who will not receive assessments consequential upon this legislation. In other words, the shareholders, innocent or otherwise, who would be affected by this legislation are exclusively shareholders affected by last year's legislation, but not exhaustively. They would all be shareholders in companies involved in what has become colloquially known as a bottom-of-the-harbour disposal. Senator Harradine says the Government will accept the legislation as proposed to be amended by Senator Mason and/or Senator Jack Evans. That is correct. The Government, through the Minister for Finance (Mr Dawkins), indicated yesterday to a number of people that we would accept the legislation with an amendment which excluded the capital profits component of the liability but only in return for a guarantee that at least three people on the other side of the chamber would vote for the third reading of the Bill. Such a guarantee was not forthcoming from three people. After the Government had agreed to accept that amendment as a means of salvaging most-though far from all-of the Bill, people sought to impose further conditions which were unacceptable to the Government. That position still stands. The Government agreed to accept an amendment, as has been proposed by Senator Jack Evans and Senator Mason, solely because it would be better to get $350m than to get nothing, which was the likely alternative. In accepting that amendment, however, we would have been highly conscious of the fact that $220m of revenue would be lost and that that revenue would have to be recovered from some other source. Yesterday I gave some illustrative examples of the effects of recovering $200m- almost the same amount of money-from three other sources. One would involve a 7 per cent increase in present sales tax collections, which would also add one- quarter of a per cent to the consumer price index. Another would be to increase the income tax of average taxpayers by nearly $1 a week. A third one-which I think might particularly appeal to Senator Harradine-is that on the expenditure side that much money could be saved by withdrawing about one-third of the Commonwealth grant currently paid to Tasmania. They are options. The Government will not necessarily pursue any of those specific options or any mixture of them but that is the sort of position in which the Government will be placed if that area of potential is excluded. Senator Harradine —You are just going to throw 1,200 people out of work. Senator WALSH —I will come to that in a minute. Of course, if the whole Bill is defeated at the second reading-as I gather from the tenor of Senator Harradine's remarks it will be-$570m ultimately will be lost and $570m will have to be recovered from some other source. An illustrative example is that that is equal to a 20 per cent increase in sales tax collections and an increase in the consumer price index of the order of 0.7 per cent. Those are the options. That is the sort of impost which those who would defeat this Bill will throw upon the honest taxpayers and citizens of this country. Senator Harradine, in his speech, said that the Government has assumed a liquidation in the case of these companies. The Government has assumed no such thing. The rationale behind these Bills is not dependent upon an assumed liquidation. If Senator Harradine is suggesting that the right and proper thing to do in the treatment of these companies and their shareholders is to assume that a liquidation had taken place, the proper thing for him to do would be to vote for the second reading and then to vote for the amendment proposed by Senator Mason, because if the companies had been liquidated the revenue profits would have been subject to taxation in the hands of the shareholders. But the fact remains that they were not liquidated. They continued, in the great majority of cases-the overwhelming majority of, if not all, cases-in the hands of the same people who had operated them before. There was a de facto distribution as dividend to the shareholders of the company at the time they were sold to the parallel company owned by the same people. It is on that basis that logically these Bills are founded-on the fact that there was a de facto distribution as dividend of both the capital profits and the revenue profits of the companies concerned. Of course, they were not liquidated in the conventional way, firstly, because the people in control of those companies thought they could evade every conceivable tax liability and, secondly, because they could not have arranged the fraudulent transactions involved in this area if they had gone through liquidation processes. A fraudulent round robin of cheques was authorised under which the shareholders of these companies, either directly or through agents, received by way of distribution of the funds of the target company which then were passed around the circle to buy back the target company by the parallel company owned almost entirely and almost always, if not always, by the same people. It was a fraudulent activity. For that reason it is not appropriate to regard what happened as being analogous to a company liquidation. There have been a number of misunderstandings, misconceptions or whatever-one from Senator Harradine and some from others-regarding the way in which revenue profits would be taxed. Firstly, in a liquidation, revenue profits would be subject to taxation on distribution to the shareholder subject to personal tax. There is no provision-indeed it is an offence under section 47 of the Income Tax Assessment Act-to spread that liquidation in a discretionary way with the deliberate intention of spreading the dividend over a number of years. In the cases of large companies, and these would usually be public companies, the liquidation process entails interim payments which may or may not be spread over a period of years. But it is an offence under the existing law to contrive the liquidation process in an artificial way that spreads the dividends over a number of years. That is a rather important fact that I think should be cleaned up. Of course, applying that one exclusion or possibility in this case-that is, that the target companies were liquidated and the profit distribution spread over a period of years-it would not have been possible if the distribution had been spread over a period of years to arrange the round robin in the fraudulent way in which it was arranged. I am advised that I was not quite correct when I said that it was an offence under existing law to spread them in a discretionary way. It is simply not possible to do it. The distinction is a fine one but worth putting on the record. The essential point to remember with this legislation is that the trigger mechanism which activates these Bills is prior involvement in bottom-of-the- harbour activity, prior involvement in what has been described-by, among others, Senator Macklin and the former Prime Minister-as fraudulent activity and what was accepted as fraudulent activity last year by all but, I think, six of the Liberal Party senators presently here. I have already explained the essential mechanism employed in the fraudulent activities from which these Bills seek to recover tax avoided. Apart from trifling amounts of money, last year's legislation, with one exception which I will deal with in a minute, recovered from the vendor- shareholders, whether or not they were conscious participants in the fraudulent activity-the company tax which had been evaded. In terms of that provision, which I supported then and which I support now, whether they were conscious participants is not relevant. The point is that they raised the money to which they had no entitlement and it was absolutely just that they should have paid back that portion of the money to which they had no entitlement . The one exception, which was not in the legislation that was originally introduced in the House of Representatives by the previous Government, was clause 3 (12) in the Taxation (Unpaid Company Tax) Bill 1982. Clause 3 (12) exempted from liability vendor-shareholders of companies which, after the transfer of ownership from the vendor-shareholders to the promoters, were placed into a unsuccessful tax avoidance scheme. The clause then introduced a completely capricious and arbitrary test of liability, dependent upon the actions taken by people other than the vendor-shareholders and about which, necessarily, the vendor-shareholders were supposed to have had no knowledge. Vendor-shareholders were taken in or out of jeopardy by the actions of people over whom they had no control and of which, necessarily, so it was argued, they had no knowledge. Capricious law could scarcely have gone further than that. I am pleased to note that even Senator Harradine agreed with that assessment, when last year's legislation was before the Senate, and voted for my amendment to remove that clause from last year's legislation. We failed. Of course, the secrecy provisions of the Taxation Act, prevent Mr Dawkins, or anyone in the Government, from obtaining access to individual tax or company files. So we do not know, from taxation records, what companies benefited from the insertion of that capricious clause. We do, however, know from other sources -from the McCabe-Lafranchi report-that one major company put into a post-sale tax avoidance scheme was Treamog Ltd. It was flogged off at the end of 1976 with a then current year tax liability of $1.7m. It was owned directly and indirectly , to the extent of 70 per cent, by the then chairman of the Liberal Party finance committee, Mr Denis Horgan, who I always thought was a friend of Senator Crichton-Browne. But today, like St Peter as Christ was about to be crucified, he denied him thrice. This Bill achieves certain things-not in this descending order of monetary importances- Senator Walters —You would not say that of Senator Crichton-Browne if he were here to defend himself. Senator WALSH —He just left because he knew what was coming. Senator Walters —What absolute rubbish. Senator WALSH —He was not game to face it. Senator Walters —No one would sink to the depths of your mind- The PRESIDENT —Order! I suggest the Minister withdraw that remark. Senator WALSH —I withdraw, Mr President, in deference to you. I think Senator Walters ought to withdraw too. She accused me of saying it only because Senator Crichton-Browne was not here. Senator Walters —I would be only too happy to withdraw the statement that Senator Crichton-Browne could not sink to the depths of the Minister's mind, so long as he has withdrawn. The PRESIDENT —Order! The Minister has withdrawn. I ask Senator Walters to withdraw. Senator Walters —Then I withdraw. Senator WALSH —This Bill reverses the insertion of clause 3 (12) in the Bill finally passed last year. It recovers personal taxation on dividends distributed to original company shareholders on the accumulated and capital profits and some other relatively minor but administratively convenient matters. I have already dealt with the arguments against the Bills in replying to Senator Harradine. I have stressed that this legislation will not be triggered against any shareholder who was not a shareholder in a company sunk with current year profits. A number of factual errors were made in the speeches delivered by assorted members of the Opposition. I will correct some of them. Senator Crichton-Browne claimed that, under this Bill, it was possible for a company to be caught with a tax assessment of $1m even though it had a current year tax liability-that is vulnerable to last year's Bill-of only, I think this is the figure he used, $250 . That is not correct. The degree to which companies caught by last year's legislation are affected by this year's legislation is related to the fee paid to the promoter. I give two examples. A company with accumulated profits, revenue or capital, totalling $1m and therefore a tax liability of, at most, $600,000, which paid a promoter's fee of 2 per cent or, in other words, a promoter's fee of $20,000 -I am not aware of any specific case where the promoter's fee was as low as that- would have had to have more than $20,000 of current year profits before it became liable to the provisions of this legislation. If the 5 per cent promoter' s fee was used-that seems to have been the common fee-the same company could not have been caught or affected by this legislation unless it had current year profits of $60,000, as against a tax liability, in the hypothetical example Senator Crichton-Browne gave, of $600,000 on accumulated profits. Whether Senator Crichton-Browne deliberately misled the Senate in that instance or whether he was snowed by tax dodgers or influenced by organisations such as Arena Distributors or Hal Wallace or whatever, is a question about which I will not speculate at this time. Senator Crichton-Browne —Senator Walsh, you're at your best when you're in the gutter. Why don't you stay there? Senator WALSH —One of these days I might go down to the sewer and I will find the honourable senator there. The PRESIDENT —Order! I ask the Minister to withdraw. Senator WALSH —I withdraw, Mr President. The second factual error which was implicitly attributed to Senator Harradine in today's Australian Financial Review-and, I think, is confirmed by the speech that he made this afternoon-concerns the question of liquidation and the treatment of capital profits and the suggestion that it is possible, during a liquidation, in a purely discretionary way, to spread the distribution of capital profits over a period of years. No spreading is permitted under this legislation. The third factual error of some importance-there is perhaps genuine confusion about this-is the matter of various assertions that the tax rate applied under this legislation will be between 60 per cent and 69.62 per cent. That is the notional rate which can be applied to a company or a trust if the dividend payment has gone to a company or a trust. However, the taxpayers who are the ultimate owners of a company or trust have the discretion to accept the liability themselves rather than the company or trust. The dividend would therefore be taxed at the marginal rate applicable to their income. The maximum possible marginal rate, of course, is 60 per cent. Senator Dame Margaret Guilfoyle asserted that this Bill imposed a triple tax but failed to establish a case for that assertion, because there is, in fact, no case. She also castigated the Labor Party for allegedly breaking promises about capital gains taxation and tax laws which had retrospective collection effects. I find those remarks somewhat ironic because in this case this Government is doing precisely what it said it would do on many occasions in Opposition last year and during the election campaign. Senator Harradine read out the amendment which I moved in September or October of last year and which sought to achieve what these Bills seek to achieve. I find it doubly ironic that the Liberal Party , which alleges that there has been a plethora of promises broken by this Government, should now decide to take it upon itself to prevent this Government from doing what it explicity promised it would do when it was in Opposition. The issue of bankruptcies has been mentioned. I suppose that one would have to concede that in the area of bankruptcies the Liberals really have the expertise. In their first full year of Government there were 2,196 bankruptcies, and in their last there were 5,692. Under the last Liberal Government, the annual incidence of bankruptcies almost trebled. Therefore, I bow to the Liberals' expertise in the area of bankruptcies. However, I do not accept the other assertions that have been made. It has been alleged-there have been phoney bleeding hearts pestering the corridors of this establishment for the last few weeks-that if this measure proceeds there will be wholesale bankruptcies. Senator Harradine even quantified it by saying that 26,000 people would get the sack if this legislation were passed. I make one initial comment on this view. The same sorts of claims were being made last year and there is no record of any firm being bankrupted or put out of business because of the legislation passed last year. At the very least, there is a prima facie case of gross exaggeration in those claims. The companies which are currently operating are unlikely to get assessments because they have replaced the companies with liabilities which were sunk. The shareholders of some operating companies will no doubt receive assessments. They might have to sell to meet that liability: They might have to sell one of their units on the Gold Coast, some of their other real estate or one of their Rolls Royces. I suppose it is conceivable, although I believe it highly unlikely, that they may actually have to sell shares in the operating company to meet their taxation liability. In that case there is no reason why the company would necessarily cease to operate, because the shares would be purchased by someone else. If the person who has the liability has to accept a substantial capital loss, so be it. But even if all the shareholders were caught in such a way, it does not necessarily follow that a business would be closed down for two reasons: First, there is time to pay provided for in the Bill; and, secondly, the business can be taken over. I suggest that any business which is profitable and viable at this stage ought to be a very attractive target for takeover by anyone else for more normal periods. The logical extension of the argument that we cannot recover what the former Prime Minister called stolen money-85 per cent of his party did not publicly dissent from that description-is that if a person robbed a bank and then started a business quickly, not only would he not be put in gaol but also he would not even have to pay the money back. That is the logical conclusion to be drawn from that argument. In the few minutes remaining to me I will deal with the proposed amendments. An amendment has been moved to refer this Bill for study to the Senate Standing Committee on Finance and Government Operations. That amendment will be opposed by the Government for very good reasons. First, it is not possible for the Finance and Government Operations Committee, or any other committee, to establish the facts in individual cases because of the secrecy provisions of the Taxation Act, which I have already mentioned. Therefore, the exercise is futile. It is even worse than futile, because the Finance and Government Operations Committee will be in the position of having people come before it making assertions that may or may not be true and being unable either to verify or refute those allegations. In other words, there will be an open season. The Finance and Government Operations Committee will become a sanctuary for anybody who wants to tell any story, true or false. He will be secure in the knowledge that there will be no risk of exposure. The second reason that the Government will oppose this amendment-I suppose it is really fairly insignificant compared with the first reason, which was that such an inquiry by the Committee would be entirely fruitless-is that it would very substantially delay the final resolution of this legislation. For those who purport to be concerned about laws which have implications into the past, that ought to be a quite serious consideration in itself. The Government will not accept the other proposed amendment. I repeat my earlier remark. We will support in the Committee stage, if the Bill gets that far, the removal of the capital profits component but only if there is a firm guarantee from three senators or more that the Bill will pass the third reading. We will not accept any other second reading amendment and we will not accept any Committee amendments other than that relating to capital profits and forecasts by Senators Evans and/or Mason. Senator CRICHTON-BROWNE(Western Australia) —by leave-I wish to make a personal explanation. I would not normally rise, but I think it worth correcting the untrue things said from time to time by Senator Walsh. He said that fraudulent actions were accepted as such by all but six Liberal senators last year. The clear implication of that is that fraudulent actions are supported and condoned by those other six. I was one of the six who crossed the floor, for which I am still immensely pleased, and will do so again. But any implication or imputation that I condone or accept fraudulent actions is untrue, to say the least. Senator Walsh knows that and if he does not he is as bright as he looks. Senator WALSH(Western Australia-Minister for Resources and Energy) —by leave-I wish to make a personal explanation. Apparently Senator Crichton-Browne did not hear what I said. I said that the former Prime Minister described those actions as fraudulent. He described the financial and pecuniary gain received as a result of those actions as stolen money. I said that 85 per cent of the members of the Parliamentary Liberal Party did not publicly dissent from the Prime Minister's view. I said that the six Liberal senators who voted against it on the previous occasion are still here, and that is correct. Question put: That the words proposed to be left out (Senator Macklin's amendment) be left out. The Senate divided. (The President-Senator the Hon. DouglasMcClelland) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 30 —— Majority . . . . . . . . . 0 —— Archer, B. R. Jessop, D. S. Baume, Peter Kilgariff, B. F. (Teller)Bjelke-Petersen, F. I. Lajovic, M. E. Boswell, R. L. D. Lewis, A. W. R. Carrick, Sir John MacGibbon, D. J. Chaney, F. M. Macklin, M. J. Chipp, D. L. Martin, K. J. Collard, S. J. Missen, A. J. Crichton-Browne, N. A. Reid, M. E. Durack, P. D. Scott, D. B. Guilfoyle, Dame Margaret Teague, B. C. Haines, J. Townley, M. Hamer, D. J. Walters, M. S. Harradine, B. Watson, J. O. W. Hill, R. Withers, R. G. Bolkus, N. Hearn, J. M. Button, J. N. Jones, G. N. Childs, B. K. McClelland, DouglasCoates, J. McIntosh, G. D. (Teller)Coleman, R. N. Maguire, G. R. Colston, M. A. Mason, C. V. J. Cook, P. F. S. Primmer, C. G. Crowley, R. A. Ray, RobertElstob, R. C. Reynolds, M. Evans, Gareth Robertson, E. A. Evans, Jack Ryan, S. M. Foreman, D. J. Sibraa, K. W. Georges, G. Tate, M. C. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Grimes, D. J. Messner, A. J. Richardson, G. F. Rae, Peter Question so resolved in the negative. Senator MASON(New South Wales)(5.21) -I move: At end of motion, add: ', but in the opinion of the Senate the Bills should be amended to remove their effect on purely paper capital gains of affected companies and to provide for an effective anomalies organisation empowered to decide whether tax assessments arising from this legislation should be withdrawn or reduced in cases of demonstrable injustice.' Question put. The Senate divided. (The President-Senator the Hon. DouglasMcClelland) Ayes . . . . . . . . . . . 2 Noes . . . . . . . . . . . 58 —— Majority . . . . . . . . . 56 —— Evans, Jack Mason, C. V. J. (Teller) Bolkus, N. Tate, M. C. Button, J. N. Walsh, P. A. Childs, B. K. Zakharov, A. O. Chipp, D. L. Archer, B. R. Coates, J. Baume, PeterColeman, R. N. Bjelke-Petersen, F. I. Colston, M. A. Boswell, R. L. D. Cook, P. F. S. Carrick, Sir JohnCrowley, R. A. Chaney, F. M. Elstob, R. C. Collard, S. J. Evans, Gareth Crichton-Browne, N. A. Foreman, D. J. Durack, P. D. Georges, G. Guilfoyle, Dame MargaretGietzelt, A. T. Hamer, D. J. Giles, P. J. Hill, R. Haines, J. Jessop, D. S. Harradine, B. Kilgariff, B. F. Hearn, J. M. Lajovic, M. E. Jones, G. N. Lewis, A. W. R. McClelland, Douglas MacGibbon, D. J. McIntosh, G. D. Martin, K. J. Macklin, M. J. Missen, A. J. Maguire, G. R. Reid, M. E. Primmer, C. G. Scott, D. B. Ray, Robert Teague, B. C. Reynolds, M. Townley, M. Richardson, G. F. Walters, M. S. Robertson, E. A. (Teller) Watson, J. O. W. Ryan, S. M. Withers, R. G. Sibraa, K. W. Rae, PeterGrimes, D. J. Messner, A. J. Question so resolved in the negative. Question put: That the Bills be now read a second time. The Senate divided. (The President-Senator the Hon. DouglasMcClelland) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 30 —— Majority . . . . . . . . . 0 —— Bolkus, N. Hearn, J. M. Button, J. N. Jones, G. N. Childs, B. K. McClelland, DouglasCoaters, J. McIntosh, G. D. Coleman, R. N. Maguire, G. R. Colston, M. A. Mason, C. V. J. Cook, P. F. S. Primmer, C. G. Crowley, R. A. Ray, RobertElstob, R. C. Reynolds, M. Evans, Gareth Richardson, G. F. Evans, Jack Robertson, E. A. (Teller)Foreman, D. J. Ryan, S. M. Georges, G. Tate, M. C. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Archer, B. R. Jessop, D. S. Baume, Peter Kilgariff, B. F. (Teller)Bjelke-Peterson, F. I. Lajovic, M. E. Boswell, R. L. D. Lewis, A. W. R. Carrick, Sir John MacGibbon, D. J. Chaney, F. M. Macklin, M. J. Chipp, D. L. Martin, K. J. Collard, S. J. Missen, A. J. Crichton-Browne, N. A. Reid, M. E. Durack, P. D. Scott, D. B. Guilfoyle, Dame Margaret Teague, B. C. Haines, J. Townley, M. Hamer, D. J. Walters, M. S. Harradine, B. Watson, J. O. W. Hill, R. Withers, R. G. Questions so resolved in the negative. INCOME TAX ASSESSMENT AMENDMENT BILL 1983 [No. 2] Debate resumed from 31 May, on motion by Senator Gietzelt: That the Bills be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(5.31) —I understand that we are to have a cognate debate on these Bills and the Income Tax Assessment Amendment Bill (No. 2). Some of these Bills were measures of the former Government and were not passed prior to the dissolution of the Parliament. Some new measures arise from the economic statement of May. In general, there are a number of tax provisions. The Bill to which I want to address some remarks and to which I wish to move an amendment is the Income Tax Assessment Amendment Bill. I speak with regard to the deductions of tax at source. This proposal was enunciated by the former Government. The provisions that are now before us are different in some of their concepts from the ones which we had foreshadowed but which had not been developed into legislation. The new system provides that there will be a deduction of tax at source from persons and firms in the building and construction industry and in architectural , engineering, surveying and other technical building services. It will apply also to the joinery, road transport, motor vehicle repair and cleaning industries. We find in the Bills that under no circumstances will householders need to make deductions from the payments at source. These Bills relate to projects that cost over $10,000. That is a higher figure than the one we envisaged when we were dealing with this concept of tax last year. We looked at projects around the $3,000 mark as attracting this sort of withholding of tax. We looked also at perhaps a higher retention rate. The rate in the principal Bill is a level of 10 per cent of the gross payment. It is said that in most cases the rate set will be less than the tax that is payable on the work done. I think that is a desirable feature of the legislation. The rate that has been set will mean that there is not an unnecessary excess of withholding from the person who is providing the services. As I understand it, the Commissioner of Taxation may approve a lesser rate where he is satisfied that this would be justified on the previous history of the firm concerned. He may also issue certificates of exemption. When the Bill was before the House of Representatives we moved an amendment. We were concerned about the effect of this tax on sub-contractors. We felt that the Bill had inadequate provision to protect the independence and continued survival of subcontractors. We also believe that there ought to be some way in which we can monitor the effect of the provisions of the Bill because it is a new concept in taxation. We want to see whether some monitoring of it would reveal any unnecessary difficulties that might arise. We hope, in the spirit of passing legislation, that there can be some reporting back or monitoring by the Government and by others on the effect and administration of it. We are told that difficulties can be foreseen by bodies such as the Housing Industry Association and others who have put matters before us. It is for this reason that we believe that monitoring of the effect of the tax is an essential part of the introduction of a new tax of this kind. The provisions in some of the other Bills that are before us relate to industry incentives, changes to provisions made by the former Government with regard to depreciation. The Government's statement of 30 March referred to some of the changes, and there are others. The Opposition does not oppose these Bills. As I said earlier, some of them relate to provisions that we had in prospect, such as those relating to investment in Australian films, the tax payable with regard to non-residents and interest on overpayments becoming assessable income, particularly as they relate to the tax that will be distributed amongst the States. Certain other Bills in this batch are consequential upon things that arise in others. In general, a number of the tax procedures, whilst not always in the form that may have been brought forward by us, were foreshadowed by us as measures which we might encompass in future legislation. Others are worthy of support in their own right. The provisions that were announced in the economic statement which withdrew, changed or reduced some benefits, have had expression in other places and on other occasions. But we are concerned that the concessions that are to be terminated include such things as the two-year write off for the cost of converting oil-fired plant to an alternative energy source and the special 100 per cent depreciation for petrol storage facilities. The rate of depreciation on primary production plant is to be reduced from 33 1/3 per cent to 20 per cent on contracts signed after 19 May. Of course, we are very concerned about the discontinuation of the health insurance rebate prior to the introduction of the new Medicare program. We are also very concerned about the termination of the rebate for housing interest in excess of 10 per cent on loans of up to $60,000 and the interest withholding tax which is to be withdrawn from the general exemption. Those sorts of things are of concern to us. But at this stage of the parliamentary session and in view of the other expressions we have made on these matters, we do not propose to oppose the Bills. I wish them a speedy passage, subject to the comments that some of my colleagues wish to make on specific issues. I move the following amendment in respect of the Income Tax Assessment Amendment Bill 1983: At end of motion, add ', but the Senate is of the opinion that it contains inadequate provision to protect the independence and continued survival of sub- contractors'. Senator HAMER(Victoria)(5.39) —I will speak specifically about the change in the tax concessions available to individuals or companies which make films. The Australian film industry has been one of the great success stories of recent times. I do not think we all realise how much the image and awareness of Australia around the world has been changed by the dramatic success of Australian films. It has also been beneficial inside Australia. It has improved our self-image, our acceptance of ourselves as a major cultural force in the world. This dramatic success has come to fruition in the last 10 years. Senator Tate —What is cultural about Mad Max? Senator HAMER —Mad Max is a very well made film. Mad Max II, or The Road Warrior , as it is called in the United States of America, has had a dramatic impact around the world. The honourable senator might not like it; not everyone does. But it was a dramatic box-office and cultural success for Australia around the world. Mad Max II was perhaps more remarkable than Mad Max. For the first time people are being made aware of Australian culture in a major way. Sophisticated magazines such as the New Yorker have had six-page reviews of Australian films. A few years ago that would not, and could not, have happened. One of the remarks I read in a major overseas magazine referred to the 'maturity', 'intelligence' and 'clarity' of our Australian films. One English critic said, about an Australian film: 'exciting, subtle, beautifully made, beautifully photographed, superbly acted and extremely moving, I regard it as just about perfect'. James Mason, the English actor, once confessed that he was tremendously jealous of the Australian film industry. The only justification any government can have for subsidies or concessions for the film industry is that they will raise the level of Australian film culture and the output of high quality films. There can be no other justification. It was important that loopholes, through which Australian investments were being channelled into films which did nothing for the Australian film culture, were closed by the previous Government. But there were problems last year with film investment. The trouble was that investors became very wary about committing funds to films because of uncertainty about whether there would be a return on their investment. Investment is always a problem. Investment in films will always be speculative. When a film is completed, what does one have? One does not have a valuable capital asset, such as a block of land or a building. All that one has are some reels of film in a can which people may or may not want to see. People invest in an asset like that only because some revenue will be obtained from it. They are not part-owners in a capital item. There are very few feature films which make profits. Only about one in six Australian films returns a profit to its investors. By the way, one in ten films made overseas return a profit, even in Hollywood. We have been producing feature films in recent years at an erratic rate. I will run through the figures for the last few years so that the Senate will be aware of the fluctuation. In 1976, 19 feature films were produced; in 1977 there were 19 films; in 1978, 14 films; in 1979, 17 films; in 1980, 23 films; in 1981-82, 33 films; and in the financial year which is about to end, 21 feature films were produced. At one stage it was expected that only six to eight films would be made in this financial year because of the difficulties imposed by the tax concessions which will be amended tonight, and uncertainty about the future of the film industry. Nevertheless, the industry has picked up and 21 feature films will be made this year. Of course, there must be incentives for investors to invest. There are many competing interests for the investment dollar. A number of points must be made about the film industry. First of all, it is labour intensive. A feature film employs about 150 people, excluding actors, and probably about 3,000 people are directly employed in Australian film production, and many more on a part time basis. This is good for employment but it is expensive for the production of a film. Budgets have risen dramatically in recent years, partly because of competition for scarce resources and partly because more realistic returns have been given to those involved in the film industry. Any tax incentive scheme relies basically on two assumptions: Firstly, that Australian films will continue to be of high quality-there is no purpose in encouraging the making of low quality films-and secondly, that they will continue to be made economically. The system of tax concessions which is being replaced by this Bill, unfortunately, encouraged the production of too many low quality, high cost films. The problem of the so-called 12 month rule, which is in the legislation that we are amending, is that it forces film producers to mount, film, edit and release a film all within the same financial year, and usually, for investment reasons, in the second six months of the tax year. One did not lose one's tax deduction if the film was not completed in the financial year, but unless it was completed within the same financial year the tax deduction could not be claimed in the year of investment; it had to wait for the year of release. Most investors in films have wanted their tax deductions in the year in which they made their investments. That caused very serious bunching and the hasty making of films. The 12 months rule imposed a 12-month or, more usually, a six-month cycle on a process which normally would take about 16 to 20 months. It was unrealistic to expect quality films to be completed and on screen within 12 months. In addition to being squeezed in the making of films, the condition of the new Companies Act regarding prospectuses caused serious difficulty, and it caused a further cut in the available time for film making, down to as little, perhaps, as six months. That is an almost impossible time in which to achieve a film of any merit, and the result was too many tax quickies. Bunching also had a disastrous effect on costs. The competition for facilities and crews caused an unreasonable bidding up of their costs. Technicians, crews and casts, faced with a stop-go system whereby they had no work for six months followed by a period of intensive work, tended to claim high rates of pay to cover the full year. I welcome the amendments. They were promised by the previous Government, and they would have been in place by now but for the change of government. The amendments enable the costs of making a film to be spread over two years instead of one year. The advantages are obvious. The technical, financial and personnel resources will now be able to work at a steady rate throughout the year, and that will reduce the explosion of costs which has been one of the features of recent years. This will help to place the Australian film industry on a sound investment basis and it will also maintain the high quality of our best films and reduce the number of tax quickies. These amendments, foreshadowed by the former Treasurer, Mr Howard, earlier in the year, coupled as they have been with stringent safeguards, have raised very markedly the morale of the film industry. A period of stability and growth is now foreseeable, which, as I have said, is very important in this dramatically successful industry. But there is still one remaining problem to which I draw the attention of the Minister for Resources and Energy (Senator Walsh) who represents the Minister for Finance (Mr Dawkins). That is the requirement to issue a prospectus. Under the Companies Act, producers of films are required to issue a prospectus for potential investors. These prospectuses can take many months to produce and can inflate a film budget by up to $80,000. I am not saying that it is impossible to get by if one has to issue a prospectus. One example I can give is Barron Films, which put out the prospectus for a new Bush Christmas. It is the first Australian film to be completed after raising the finance through a prospectus. Barron Films put out the prospectus in October 1982, and it was fully subscribed in eight weeks. But selling a film through a prospectus-in exactly the same way as investors are invited to put money into any new company-is something with which the film industry and the film investing public are still finding it difficult to come to terms. This problem should be examined. The requirement for a prospectus came into effect in July last year. As I have said, it is time consuming and expensive. We should examine the possibility of exemptions from the requirement for a prospectus for large investors. Certainly, we should not allow money to be taken from small investors who do not have the resources to examine exactly what is going on without a prospectus. But many films are made with a relatively small number of large unit investments by sophisticated investors, and I think that if all investors put in $10,000 or more each, there should be an exemption from the requirement to issue a prospectus. It involves substantial cost. It raises the cost of our film making. It reduces the potential profits and, therefore, the attraction to investors of our film making. I urge the Government to look at the problem of the prospectus to see whether something can be done. I welcome what the Government has done with regard to these film making concessions. I cannot refrain from pointing out , of course, that it is implementing what we proposed to do, but I am glad that the Government has done it. I strongly support the Bill. Senator MARTIN(Queensland)(5.51) —I wish to speak on the Income Tax Assessment Amendment Bill which Senator Hamer dealt with. I shall endeavour not to repeat very much of his speech and to confine myself essentially to the nature of the tax concessions and to making a couple of comments on an associated subject. It was in 1977 that the Fraser Government decided that films should be written off over two years, 50 per cent in each successive year. Subsequent experience showed that, whilst it sounded a generous arrangement, this needed to be extended, and it was in late 1980 that the Fraser Government announced that it would provide a 150 per cent tax write-off plus a tax exemption on 50 per cent of the investment. At the time, the Government decided that there was to be a time limit. It was the limit referred to by Senator Hamer-12 months-which, in effect, has meant a bunching of film production in Australia, given that it takes about six months to know that one has the finance to make a film and then to organise it. At the time, the suggestion was made that this could lead to the production of low quality quickies. To some extent that has happened. Certainly not all the films made since that concession was introduced could be thus described, but there has been some element of that. The vigour of the Australian film industry in recent years-although not in this financial year-is certainly something that has been well reported and generally welcomed. But there have been those in the industry who have been concerned, and who were concerned at the time of that tax concession, that it could lead to a number of low standard films. In the event, that is what happened in a number of cases. It was on 13 January this year that the former Treasurer, Mr John Howard, announced that the period for the spreading of the tax concession would be extended from one year to two years. I note that the operation of this section of the Income Tax Assessment Act will date back to the announcement by Mr Howard in January, when he was still Treasurer. I am a little sorry that this legislation has not come forward earlier. I understand that the Government has wanted to put it all in one omnibus Bill, but it is not connected with a number of the other items that are in the Bill, and they have a different origin. The origin of this legislation goes back some months. There was some anxiety in the Australian film industry that delay in this legislation could lead to uncertainty and difficulty in the raising of money for the making of films in this financial year. As it transpires less than a month of the financial year will be left after the passage of the Bill. However, it was a little while ago that the new Government committed itself absolutely to carry out its promise to extend the concession over two years. I believe the Minister for Home Affairs and Environment (Mr Cohen) made that statement in late March after the election of the present Government. Therefore, as an aside I would like to take to task a headline on a story which appeared in the Sun- Herald of 22 May 1983. The article reported a statement by Sue Milliken, the President of the Film and Television Producers Association of Australia and a very intelligent and active woman, welcoming these tax concessions. The writer of that article, one Maeve O'Meara, put the statement into the context of the mini-Budget and said: While the Federal mini-Budget has had a devastating effect on several sections of the community, Australian film producers and investors couldn't be happier. In case anybody read that article and believed it I say that these tax concessions have absolutely nothing to do with the mini-Budget. Whilst I am sure she is right in the first half of her sentence, in saying that the Federal mini- Budget did have a devastating effect on several sections of the community, if Australian film producers and investors are happy, it is not because of the mini -Budget. In fact, they are probably as unhappy as is everybody else about the mini-Budget. I would like to raise one aspect of the legislation, the arrangements that have been entered into. Before I go on to do that I wonder whether the Minister for Social Security (Senator Grimes), who is in charge of the passage of the legislation at the moment, might take on board a request I would like to make. The Minister for Home Affairs and Environment in his speech in the House of Representatives on 25 May stated: In the United States of America the failure rate-- That is, the failure rate of films- Is one in 10. In Australia it is about one in five or one in six. Since 1970 some 29 films out of 139 made in Australia returned profit. I have not been able to identify 29 films produced since 1970 which have made a profit. I wonder whether the Minister could note my request that a list be provided to the Senate at some appropriate time before the end of this session tomorrow afternoon and have it incorporated in Hansard. The other aspect of the legislation that I want to take up is the matter of the deductions. Under the provisions of this legislation an Australian Film Industry Trust Fund, in which contributions will have to be deposited, is to be established. The Trust Fund is to be administered by the Department of Home Affairs and Environment. The detailed arrangements for the Trust Fund-as to payment of moneys, extraction of moneys, certification of what moneys are to be used for and so on-are really extremely complicated. I would like to suggest that the Government may well think that instead of involving the Department of Home Affairs and Environment in this extremely technical and quite difficult area of trust funds it might give consideration to looking at an alternative. I am not putting forward any amendments and I am not suggesting that it be done in this legislation, but I would request that in the next couple of months the Government look at an alternative suggestion to see whether it may not be a preferable way of handling that money. I suggest that the Government look at whether the Trust Fund might be administered by the Reserve Bank of Australia. The Reserve Bank has branches in every State. It is the Government's bank and it has had experience in commercial turnaround. There are some precedents for the Reserve Bank being used to administer funds, similar to this one, which were set up under the provisions of Commonwealth legislation. The accessibility of the bank is a factor. Whilst I appreciate that there is an office of the Department of Home Affairs and Environment in every capital city, to set up this sort of section within the Department in every capital city may not be the best way to use officers of the Department. I think it is quite likely that the Department might decide not to set up a section in every capital city. In every State of Australia there is today either a quite vigorous local film industry as a result of activities by State governments as well on this matter or there are attempts to set up vigorous local film industries. I appreciate that the industry is essentially centred in Sydney. Again I say that I do not necessarily expect the Minister to respond instantly to this question. Unless the suggestion is abhorrent, which I do not think it is, I would like him to take it on board and look at it. One other point about which I want to say a few words before I conclude relates to a copy of an Australian Associated Press article which came to my attention today. In the context of this legislation it raises a subject about which I have asked a question in the Senate on a previous occasion during this session. I would like to take this opportunity to say just a few more words about the matter. The statement is dated 1 June and reads: The producer of the cruelty to kangaroos film 'Goodbye Joey' today said the film was made for the pure business exercise of making money. Producer Peter Cunningham said investors who wanted to take advantage of tax concessions available for films, and to make a profit, had approached him. He said he hunted around for a subject which would gain free press and free publicity. His wife saw a magazine article by the RSPCA which highlighted cruelty to kangaroos, and they decided to make a film on that topic. The statement continues: . . . He said the film was designed to show cruelty took place and was widespread in the Australian community, not just the kangaroo industry. There were other things mentioned besides that. I just want to put on record in the Senate a little about Mr Cunningham and what he has been saying about himself and his film depending on which country he has been in. When the subject was raised in Australia he went on record as saying that he made the film to make money. In this case he says he was approached by people who wanted to take advantage of the tax concessions that we are debating tonight, who clearly did not have any motivation on the subject as clearly neither did he. They looked around for a subject which might make money and, interestingly, as he says, a subject which would gain free Press and free publicity. The reasons Mr Cunningham gave in the United States of America recently for making this film had nothing to do with making money. They had everything to do with the motivation that Mr Cunningham presented on national television in the United States-on a network program shown on several hundred different television stations at peak viewing time on a Saturday night. He said that he had a deep motivation to reveal to the world-to the United States, Japan and Europe-what was happening to kangaroos in Australia. He said how terribly important he felt it was that the export of kangaroo products to those countries be stopped. Clearly the way to do that was to show in those countries a film which he presented as the truth on the Australian kangaroo industry. Mr Cunningham is reported to have made yesterday-in Australia-the speech from which I have quoted. In Australia he talked about how he was taking advantage of tax concessions and about how, in order to make a profit, another important thing was free Press and free publicity. He has certainly got his free Press and free publicity. So far as I am aware, unless he made a lot of money out of the showing of six minutes of that film on the National Broadcasting Co. network, he still has not made a profit. It is an appalling film. I am aware that he arranged public showings of it in various parts of Australia and had but a handful of people turn up to see it. There was some controversy about the film being shown on our television networks. Mr Cunningham's sly statements imply that some sort of censorship was imposed on him by government agencies to stop this film being shown on our national television networks. I have discussed the film with the people in all the networks who made the decision that it was not to be shown. It was an individual decision made for sound commercial practices or because Mr Cunningham would not comply with viewing practices which are standard when television networks decide whether they will purchase a film. So it is Mr Cunningham's fault, and the fault of his film, that the film was not shown on national television. I notice that Senator Gietzelt looks a little startled. I will give one example . In an article printed in a Queensland newspaper, attacking the State Minister for Tourism, National Parks and the Arts, Mr Tony Elliott, Mr Cunningham said, in effect: 'If Mr Elliott felt that way, why wasn't he allowing it to be shown on television?' It was said as though the Queensland Minister was doing something to stop the showing of the film. I have seen all 90 minutes of this abomination and if it had been showing in my living room I would have got up and turned it off. But I had a duty to watch it and I did watch it. I am not surprised that nobody else wants to watch it, much less pay money to see it. The fraudulent nature of the worst parts of the film has been largely covered in the Press and I will not repeat it. The diabolical nature of Mr Cunningham is such that he presented himself in the United States as a person with a conscience and a care for kangaroos at a time when there was a legal move in the United States which would have taken the kangaroo off the threatened species list. There also was an attempt by a United States Congressman to put kangaroos back on the endangered species list, which would have stopped the import of all kangaroo products by the United States, that sparked the showing of this film in the United States. Mr Cunningham appeared there, saying that if people in the United States cared about cruelty to kangaroos then they would put the kangaroo back on the endangered species list. That was his story there. I am also aware that he appeared on a talk program, which was a publicity type lead up by NBC to the showing of the extract for which it had paid good money. A request was made to the NBC to have somebody else interviewed on that program who could put the Australian point of view. I am aware that Mr Cunningham went to every length possible to prevent someone who could put a contrary point of view appearing on the program with him. One could ask some questions about just how sound his motives were at either end. I hope he never gets the benefit of the film industry tax concessions for two reasons: Firstly, it is a woeful film anyway and a torture to watch. I do not just mean in relation to the cruelty to kangaroos; it is boring for most of the time and it is very badly put together. Secondly, it is virtually unintelligible unless one knows something about the kangaroo meat scandal. Another point I wish to make is that there is quite fraudulent misrepresentation in the film of the kangaroo meat scandal. Fortunately, no part of this misrepresentation was shown on national television in the United States. Flashes of news stories with headlines referring to the beef substitution scandal in Australia are interspersed with an interview with an official of the Australasian Meat Industry Employees Union. I have talked to this official since then, and I understand that he was talking about the risk of kangaroo meat being sold as pet meat in a certain way within Australia. He said that there were certain risks of contamination of meat and of it being thought to be different sorts of meat, but he was really referring to the method of presentation for sale. He at no stage suggested that the kangaroo meat substitution scandal was on-going. When I spoke to him he was quite emphatic that he did not say or mean to say anything to give that impression. By interspersing with these newspaper headlines cut pieces of his interview about risks with kangaroo meat appearing to be other meat, it looked as though the kangaroo meat substitution scandal in the export area is alive and well. It happens that I followed that scandal fairly closely because it very much affected my State of Queensland. I was able to recognise some of those newspaper headlines as headlines which appeared on stories which reported on evidence given to the Woodward Royal Commission of Inquiry into the Australian Meat Industry, which investigated the beef substitution scandal. That report of that Commission came into Parliament last year. The stories are well over 12 months old, some of them close to two years old. I watched this film in Mr Cunningham's presence and finally I realised the message I was supposed to be getting from this mish-mash of interviews and pictures of newspaper headlines. I said to him: 'Are you suggesting that kangaroo meat is still being substituted for beef for export to the United States?' and he said: 'I have been told that is so'. I said: 'Do you have any evidence for that?'-honourable senators should remember that the film was running on-and he said: 'I will discuss it with you later'. At the end of the film the Minister had to go to another appointment, which everybody in the room knew about. The film ran for a certain length of time and at 6.30 p.m. the Minister had to go to another appointment. At the end of the film the meeting broke up and Mr Cunningham made no explanation whatsoever. As I have said, I contacted that union official and he assured me that that was not his suggestion -so I take it that Cunningham did not get the suggestion from him-in which case this film is a gross misrepresentation of the Australian beef industry. For the sake of making profit and to get the benefit of some tax concessions, he does not care whether he torpedoes an industry that is worth hundreds of millions of dollars. He is hawking that movie around the world, trying to show it in the United States, Japan and Europe. This is not the sort of film I was referring to earlier when I said that poor films had been made to take advantage of the tax concession. I think it is an extraordinary film and Cunningham is an extraordinary individual, and I hope he goes broke for his trouble. Senator Gietzelt —Almost as extraordinary as the Opposition. Senator MARTIN —Well, he very clearly does not care whether he sends a lot of other people broke. I am not attempting here to canvas all the ins and outs of the kangaroo shooting industry and what the alternatives are. That is for another time. I am quite satisfied by the action, as I understand it, that the Minister has been taking on that subject. But it is people like Mr Cunningham who give tax concessions and film producers in this country a bad name and I am glad that he is not typical. In conclusion, I express the appreciation of the Opposition that this legislation has been introduced in this session in time for this financial year. I am sure film producers have expressed their appreciation of that too. This has been a topic on which eventually there was bipartisanship between the Government and the Opposition, including the time when we were in government and the present government was in opposition. I ask the Minister for Social Security to take on board my suggestion that the Treasurer look at the possibility of subsequently doing something about the arrangement for the trust fund for the moneys to which I have refered. Senator HAINES(South Australia)(6.13) —I wish to speak on the same matter. I do not know whether the Minister for Social Security (Senator Grimes) wants a cheerio call. The ACTING DEPUTY PRESIDENT(Senator Collard) —You are not on the speakers list, Senator. Senator HAINES —I am sorry. I could hold on to this until the Committee stage but it seems logical to get through it at the second reading stage. Then we can have a speedy passage of the Bills at the Committee stage. Senator Grimes —Hear, hear! Senator HAINES —The Minister agrees. As previous speakers have indicated, the Government is amending certain aspects of the Income Tax Assessment Act in respect of the Australian film industry. The amendments relate to deductions for capital investment in qualifying Australian films. I have received a letter requesting that another amendment be made to this Act in respect of the film industry. It relates to the educational and documentary film making sector. No doubt the entire Senate will be pleased to learn that I do not plan to move an amendment, since that would hold up the entire package. However, I think it is worthwhile to read part of a letter that was sent to me by Educational Media International. It makes the following point: Over 80 per cent of the educational and documentary films used in Australian schools and in adult education and industry are produced overseas. Teachers are crying out for more educational films with Australian content. While feature films and experimental films have enjoyed a measure of Government support over recent years, educational films have languished and received very little assistance at all. The writer goes on to say that there has been a reliance on Film Australia and other government organisations for the production of educational films, together with those sponsored by other government departments and large corporations. However, a few producers like those involved with this organisation have been struggling over the last few years to produce educational and documentary films on a thoroughly commercial, risk-taking basis, but because so few people are involved at present it has not achieved the government recognition which the feature film industry has had-as Senator Martin's speech would indicate, with some dire consequences on occasions. The writer requests that an app-ropriate amendment be made to the legislation when is it presented in the Senate, apparently unaware of the ramifications that this would have, and concludes by making the points that there is a desperate need for educational films with Australian content and that almost every important event and geographical area of Australia remains to be documented on film in a suitable form for use in Australian schools. It had been my intention, had the House of Representatives not gone on holiday, to move an amendment to insert after paragraph (b) of clause 44 a new paragraph: (ba) by omitting paragraph (e) of sub-section (5) and substituting the following paragraph: '(e) a training, public relations or documentary film the cost of production of which is not intended to be recovered by commercial dealing with the film.' Obviously I have no intention of now doing that, but I would like the Minister for Social Security (Senator Grimes) to see whether he can give on behalf of the Government some assurance that this aspect of film making in Australia will be considered with a view perhaps to an amendment to the Act in the near future, perhaps by some regulation or, for that matter, administrative fiat, so that this area, which is of importance to Australian schools, is considered. The second matter I would like to raise relates to clauses 56 to 65-the collection of tax at source from certain payments for work or services and associated amendments. It relates to road transport and associated industries, specifically to private contractors generally known as truckies. I understand that the transport workers are up in arms over this, maybe because there is some confusion or misunderstanding in the area. Page 5 of the explanatory memorandum says: The new measures provide that the Commissioner may issue a deduction exemption certificate on an application by a taxpayer who has carried on business from established premises for the immediately preceeding 3 years and can demonstrate that he has, in all respects, maintained a satisfactory record of compliance with the tax laws during that period. I have received at my office a number of phone calls asking what will happen to contractors with different employers, particularly with regard to road hauliers. I would like some clarification from the Minister with regard to that. For instance, will it be possible for an exemption certificate to be issued to each truck according to load? Just exactly what is the situation? Will the 10 per cent tax relate to annual turnover or just to profit? I am assured by some of them that they do not make a 10 per cent profit on their turnover anyhow and that this would be rather punitive. The only other point I want to make is that the Democrats are concerned that the Government within its first 10 weeks has broken an election promise with regard to the tax rebate for contributions to health insurance funds. It was foreshadowed in the election campaign that this would be eliminated when Medicare came into operation or on 1 January, presumably, whichever came first. The Government, in a money making exercise, has seen fit to abolish this rebate from 30 June. While we do not intend to oppose this legislation, I would like to express the party's concern over that. Senator CRICHTON-BROWNE(Western Australia)(6.20) —I shall be brief. I speak to the Income Tax Assessment Amendment Bill 1983 (No. 2). My comments relate to tax incentives for the Australian film industry. I am delighted that the Government has taken on board the proposals that were put forward by the previous Government. I am sure that the amendments will be of great benefit to the Australian film industry. They will enable, of course, the expenditure over two years instead of one year, which will prevent the bunching of low quality, rushed films which took place in the past. I am sure it is fair to say that Australia now produces some outstanding films-in my view of world standard. Of course, the current tax year, 1982-83, has been a most difficult one for Australia's film industry, particularly because of the uncertainty as to what would happen to the amendments to the Act which were proposed. Now, of course, investors no longer need to be wary and are able to commit funds in a very proper, responsible and sensible way. I noted the speech made by Mr Cohen, the responsible Minister in the House of Representatives, wherein he said quite sensibly that anybody who thought that the taxation provisions were too generous really did not have the slightest understanding of the film industry and had no idea what he was talking about. I am delighted that the Government has taken that new-found or reborn view because it was only on 14 May 1982 that Senator Walsh said: In October 1980 we received another instalment of fiscal irresponsibility straight out of the Prime Minister's head with the film tax rort. The rort is that expenditure on film production is immediately deductible from taxable income at a rate of 150 per cent and the first 50 per cent of the income derived from that film will be free of tax. In its original form the write-off, the 150 per cent tax deduction, was available as soon as the money was paid into the production account. He went on at some length. Senator Martin —Who was that? Senator CRICHTON-BROWNE —It was Senator Walsh. He called the Act, as it was, a rort. The provisions in it are now to be made more generous. It is now probably a double rort in Senator Walsh's mind. I am glad that he was chastised or summed up appropriately by Mr Cohen who said that he clearly had not the slightest idea what he was talking about and no understanding of the film industry. I commend the Government for its clearer thinking and its more precise understanding of the difficulties of private enterprise. It accepts that tax incentives are required in certain sectors to ensure that we have quality of production in the film industry. I congratulate it for recognising that and for accepting the previous Government's proposals. Senator GRIMES(Tasmania-Minister for Social Security)(6.23) —I thank the Opposition for not opposing this legislation. Of course, one did not expect it to do so because the legislation was foreshadowed by the previous Government. I think that was accepted by Senator Walsh in his second reading speech. I will endeavour to answer all the questions that have been put to the Government tonight with the exception of the final one from Senator Crichton-Browne. I have no intention at all of entering into the private warfare between Senator Crichton-Browne and Senator Walsh, except to say that I am surprised that Senator Crichton-Browne did not chastise Senator Martin. I thought Mr Cunningham 's efforts in making the kangaroo movie in the way that he did for a quid would have been considered highly praiseworthy by Senator Crichton-Browne. I accept that Senator Martin did not accept it. Senator Crichton-Browne —Why do you say that? Senator GRIMES —Because Senator Crichton-Browne seems to believe that anybody who makes a quid out of anything is doing the right thing and it does not matter much about the method. Senator Sir John Carrick —That's a roughie. Senator GRIMES —I am a very rough person. I think that could be applied to Senator Crichton-Browne even more. Senator Crichton-Browne —Come on! Be fair. I will be deeply hurt if you say that again! Senator GRIMES —I am sure the honourable senator will! The Government opposes the amendment to the motion for the second reading which has been moved by Senator Dame Margaret Guilfoyle. I make the following points: We believe the amendment is unnecessary because the new source deduction measures are quite separate and distinct from the pay-as-you-earn system. They are contained in a separate division of the Income Tax Assessment Act, the new Division 3A, to be inserted by clause 65 of the Income Tax Assessment Amendment Bill 1983. The measures do not in any circumstances imply the existence of an employer-employee relationship where a person is required to deduct tax at source from payments made to another person or otherwise affect the status of the recipient of the payment. This position was made abundantly clear by the Deputy Leader of the Opposition (Mr Howard) when, as Treasurer, he proposed these measures on behalf of the previous Government in various papers and speeches outlining the basis and the features of the then proposed legislation. The existing pay-as-you-earn provisions which extend to payments under a contract wholly or substantially for the labour of a payee not being an employee as such similarly do not affect the determination of a contractor's status under any other laws. Notwithstanding that situation, further amendments proposed by the Government included in clauses 58 and 65 of this Bill will in fact make it clear that the extended operation of the pay-as-you-earn system to payments for labour will not apply to payments that are prescribed for purposes of the new source deduction system. This will further distinguish the boundary between the two systems and allay the fears expressed, especially by building industry representatives, that the deduction of the tax at source will jeopardise the independent status of sub- contractors. Senator Haines —Do you understand any of that? Senator GRIMES —Yes, I understand it all, Senator. I read it better than you do, too. Senator Hamer made several comments on the film tax amendments. One comment related to the necessity for companies to put out a prospectus. I am advised that films with budgets of under $3m can apply to the National Companies and Securities Commission for exemption from the prospectus provisions, thus freeing them from the time delay and the cost of such provisions. I will refer Senator Hamer's concern about the people who obviously do not come into that area to the Minister for Finance (Mr Dawkins) and see whether I can get some reply. Similarly, I will endeavour to get the list of the 29 Australian movies that made a profit as requested by Senator Martin, before this session finishes. I would be as interested as she is to see it. As there seems to be more movie buffs per capita in this Parliament than anywhere else in the country I think many people would be interested. I share her comments about the gentleman named Cunningham who has, quite irresponsibly, probably done irreparable damage to the Australian film industry, to Australia's reputation in general, and also, potentially, to the Australian meat industry. This is a serious matter. I also note that Senator Martin mentioned that not all the films made under the tax provisions were good. I make the comment that last year, coming back from Europe, I travelled on a Qantas Airways Ltd aircraft which showed a series of Australian films many of which had been proudly advertised to be shown on that trip. One of those movies was called The Pirate Movie. I would never recommend anyone to see that movie, nor to have it used to advertise the Australian film industry. Senator Haines asked some questions about the possibility of extending provisions to Australian made documentaries and educational films. I will also take that matter up with the Minister. Senator Martin suggested that the trust fund in which film investments are to be held should be administered by the Reserve Bank, rather than the Department of Home Affairs and Environment. Questions exist about whether under the current legislation the Reserve Bank could operate such an account. Discussions are currently being held with the Australian Film Commission and other representatives to ensure that the arrangements proposed in the Bill work to everyone's satisfaction. However, I am assured that the Government will monitor its operations, as suggested by Senator Martin, to see whether such changes are necessary. I think I have covered all the questions that were raised, answered some of them, not answered others and given assurances that I will get answers to others . I thank the Opposition for its support for the legislation in general. As I say, for the reasons that I gave, the Government opposes the amendment. I will not read them again for Senator Haines's edification. I ask her to read them in Hansard to see whether she understands them any better. Amendment negatived. Original question resolved in the affirmative. Bills read a second time. Sitting suspended from 6.30 to 8 p.m. The Bills. Senator MASON(New South Wales)(8.0) —There is one point I wish to raise on the Income Tax Assessment Amendment Bill 1983 (No. 2). In the Australian Democrats' opinion an extraordinary situation has arisen. The Minister for Finance (Mr Dawkins) in his second reading speech said: 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. This gives me a terrible sense of deja vu. I thought that we had reached the stage in this country of genuinely appreciating that there will be an energy shortage in the future regardless of the present glut of petrol which is far more apparent than real. Any enlightened government of this country might at least consider this an important matter. In other words, the Government is putting the blinkers back on and saying that we will continue burning up our oil . This legislation will create a disincentive to people to convert to other forms of energy. Of course, by 1990, according to the Petroleum Gazette which is an industry paper, Australia's oil demand is predicted to be 120 million litres a day. Less than half of that will come from known fields. But by 2000-of course things that happen now will very easily affect things which happen in 2000; it is not that far away-134 million litres a day will be used, and only 27 million will be available from current fields. Self-sufficiency in oil will have dropped from about 68 per cent now to 43 per cent in 1990 and 20 per cent by 2000. If that is not sufficient I think the bare facts speak for themselves. The National Energy Advisory Committee, in its report 'Renewable Energy Resources in Australia 1981', states: In the longer term, Australia has the technical potential to exploit renewable energy by virtue of its large area and its climate. In the shorter term the high costs, particularly the high initial costs of many of the newer technologies, are the main barriers to their more extensive use. It would be desirable for the Commonwealth and State governments and their utilities to renew existing policies to ensure that they do not inadvertently discriminate against renewable energy forms. That is, of course, a very sensible statement. Even in its wildest dreams in this report, NEAC has not foreseen a situation where a government would knowingly discriminate against renewable energy forms. It merely says that we should be careful not to inadvertently do so. But this Government, which has come into office with great pretensions and which has said that it will reform the Australian community, has taken this step as one of its first acts in its first 3 months in office. I would be delighted to have some explanation from the Minister for Social Security (Senator Grimes) on why this non-progressive, economically stupid step in the long term has been taken. Senator GRIMES(Tasmania-Minister for Social Security)(8.4) —I think the best answer I can give the honourable senator is to refer him to the economic statement of May 1983 and add a bit to it. It states: The Government has decided to terminate the special depreciation arrangements for storage facilities for petroleum fuel and the taxation concessions available in respect of conversions or replacements of oil-fired and liquified petroleum gas-fired plant. These incentives were introduced to provide a short term boost to investment in these areas following the outbreak of the Iran-Iraq war in 1979 . That purpose has been achieved and the concessions will now be terminated. Nothing in this legislation and nothing as a result of that statement means that the normal depreciation and write-off provisions that exist already will be changed. Only the special provisions which were introduced for a special purpose will be changed because, in the judgment of the Government, that purpose has now been achieved. I can understand that the honourable senator, with his concern that we should get away from a reliance on oil to alternative sources, might view the legislation in the light that he has. I do not believe, and the Government certainly does not believe, that the removal of these concessions and special depreciation allowances will make a lot of difference to the present rate of conversion to different sources of fuel. I also point out to honourable senators that in any case, under the legislation, the concessions were due to terminate by 30 June next year. The economic condition of the country was one of the reasons why this measure was brought forward in this way. Senator MACKLIN(Queensland)(8.6) —I refer to the Income Tax Assessment Amendment Bill (No. 2) 1983, the same Bill that Senator Mason referred to, and specifically to clause 4 which relates to the proposed reduction in the 33 1/3 per cent depreciation rate applying to the storage of grain, hay and fodder in the course of carrying on the business of primary production. We are up against some rather interesting footwork on the part of the Government. I refer the Minister for Social Security (Senator Grimes) to a Press release by the Minister for Primary Industry, Mr Kerin. Unfortunately, this Press release was issued on 30 March 1983 and it contains a rather interesting statement about what the Government was going to do in the Bills it would put forward. The Minister said this: Under the new provisions, all new primary production plant will be depreciated over three years, instead of the previous five years. In other words, the Government proposed reducing all depreciation rates to three years instead of five years. Mr Kerin continued: In addition, on-farm storage facilities for hay, grain and fodder will qualify for the higher rate. What reasons did the Minister give for this? They were very good reasons. He stated: . . . the recent drought had seriously curtailed primary producers' investment in plant. However, he hoped the brighter future predicted for the rural sector and the confidence and recognition the Government had shown in the industry by proceeding with the tax incentives would encourage primary producers to invest in their property. That is an extremely well argued point. It is one which, I think, has been accepted by many people. We tried to press the previous Government on this issue but to no avail. If we wish to drought proof properties we must make sure that we provide attractive depreciation rates. The depreciation rate of 33 1/3 per cent is, I think, a relatively attractive one. We must make sure that primary producers put more of their resources into drought proofing their properties, in particular, into buildings used for storing grain, hay and fodder on which, under this Bill, the depreciation rate is to be reduced to 20 per cent. I take the Minister back to the debate we had in this place on the various measures that the previous Government introduced in relation to the drought of last year which has now broken. There was a lot of discussion in that debate about whether the measures that the Government was using in that time might support inefficient farmers as against efficient farmers. I made the point, in my contribution to the debate, that the astute primary producer would get a better return for his money if he invested it in a unit at the Gold Coast instead of investing it, as a prudent producer might, in storage on his farm or holdings. If a prudent farmer invested the money in storage for grain, hay and fodder the previous Government's emergency measures, which applied to fodder, would not have meant as much to him as to a person who was looking for higher depreciation rates, such as could be obtained by buying units on the Gold Coast or whatever other capital gain method he chose. The need for this Government to look at capital gains in some areas was one point raised in the previous debate. The point at issue here is that the Minister for Primary Industry, Mr Kerin, on 30 March recognised the important issue at stake. He recognised that it was important to give this boost to primary production and he therefore looked at depreciation rates. The National Farmers Federation, in a Press release of 20 May commenting on the mini-Budget, was particularly critical of the changed depreciation rates in relation to storage. It commented that the reduced depreciation rates were totally inconsistent with the report of the Working Group to Provide a Policy Discussion Paper on Agriculture-the Balderstone Committee-and the overall objectives of seeking much more flexible depreciation rates that that Committee suggested. Indeed, the Balderstone Committee suggested that a flexible arrangement should be looked at whereby the primary producer could choose the rate over which his plant was depreciated between three and ten years. It is appropriate in some areas to have a longer depreciation rate than a shorter one. The economic advantage is not always in depreciating over a shorter time. I believe that flexibility arrangements in relation to the various types of primary production would be extremely important. I would also like to draw attention to the Australian Labor Party's policy speech made prior to the election. Labor promised support 'for private sector investment, to encourage installation of new capacity which is likely to strengthen economic performance.' The speech also stated: This will be achieved by continuation of the recently introduced accelerated depreciation allowance . . . I repeat the words 'This will be achieved by continuation of the recently introduced accelerated depreciation allowance'. The first time we consider depreciation legislation, in fact the very opposite occurs. I wonder whether Senator Grimes would like to explain why it is that the Government has chosen to do this. Presumably it is not on the basis that the drought has broken because, if it is, what the Minister is committing the Government to is the very thing we were critical of the previous Government about-that is, short term measures for short term gain. Senator GRIMES(Tasmania-Minister for Social Security)(8.13) —As Senator Macklin has said, under the depreciation measures that were announced by the former Government on 19 July last year depreciation over five or three years is to be allowed in the general depreciation allowance area. As part of that package, it is true that the period of depreciation for certain primary production plant, including improvements for the storage for hay, grain, fodder and so on, was reduced from five to three years. In fact, we honoured that promise of the previous Government by allowing the extended depreciation announced on 19 July last year to operate until the day the economic statement was made. However, in the judgment of the Government, the reduction to three years in general goes beyond what is reasonable because that arrangement is clearly anomalous when it is compared with the deduction for capital expenditure allowed to other industries. So it was a decision of government, in the light of economic conditions and in the light of comparable conditions between different industries, that the deduction period is to revert to five years with the effect only for plant acquired under a contract entered into on or after 19 May and commenced to be constructed by the taxpayer after that time. Of course, it is a difficult economic decision to make. It is an unpopular decision in some quarters. But we believe that it is wrong to have these varying depreciation rates for the various industries. It is on that basis that the Government made the decision. Senator MACKLIN(Queensland)(8.16) —I wonder why it was that the Minister responsible on 30 June did not believe that it was anomalous. On 30 March, under this prospective legislation, honouring the pledge made in the economic statement presumably, he sought to say that all depreciation rates in primary production will be taken back to three years in acknowledgement of that particular problem with that industry. I ask: Why has the Government now chosen to take the entire lot over to the five-year period instead of following the suggestion of the Minister for Primary Industry (Mr Kerin) on 30 March and taking it back to a three-year period in keeping with the promise made before the last election? Senator GRIMES(Tasmania-Minister for Social Security)(8.17) —It is worth while pointing out that the economic statement-which I have not seen and do not have here-was in fact made before the Expenditure Review Committee had investigated the situation. It certainly referred to the package which was introduced for 19 July 1982. We still have a situation in which the allowances in this area are more generous than allowances in the other area. As a result of the Expenditure Review Committee's decisions as a result of economic decisions which have had to be made by the Government, this decision was made. I do not think any predictions of disaster in the industry by Senator Macklin or anyone else will be borne out in this area. Senator PETER RAE(Tasmania)(8.18) —Pursuing the question of the Government's decisions in this area, I wonder whether the Minister for Social Security ( Senator Grimes) will be in a position, either now or later, to provide some information as to what saving will be achieved by the removal of this particular policy, which has already been discussed. I do not wish to say any more than that about that aspect. One of the matters of very real concern, which this policy approaches but does nothing to solve, is that of energy costs and the provision of energy for primary industry, secondary industry and tertiary industry in Australia. What has happened is a result of the failure by governments around Australia to come to grips with the problem of financing statutory authorities which provide power , permitting them through the use of leverage leasing in effect to sell off some of the assets, and, through adopting policies of very low percentages of internally generated funds, being applied to capital expenditure, creating a situation of massive exposure to the vagaries of interest rates. Of course, interest rates are affected by international matters and are not limited to what we can control within this country. Where gearing ratios are so inordinately high, as they are now becoming in virtually every electricity energy producing authority in Australia, is this not just one more problem being created by the Government for the future of Australia and the utilisation of energy? On a more appropriate occasion I shall speak in more detail about that problem. Let me cite just one fact: The percentage of internally generated funds being used for capital expenditure purposes by the combination of all of the statutory authorities in charge of the development of electricity energy in Australia has dropped from 29 to 19 per cent. One of them in particular, the Hydro-Electric Commission in Tasmania, has averaged 12.02 per cent over the past five years. I would have thought that that was an alarming fact which would have been a matter of concern to the Government in dealing with this problem. Perhaps the Minister would care to comment on that matter as well as the particular question that I asked. Senator GRIMES(Tasmania-Minister for Social Security)(8.20) —I think I will have a crack at the first question the honourable senator asked but I might have to pass on the second one, although I have heard the honourable senator express his concern many times on the matters that he has raised, particularly with regard to statutory authorities. Although they are affected by this legislation I suggest that I am within reasonable grounds in saying that they are only indirectly affected. I will seek a proper answer from the responsible Minister, firstly because of the detail needed and, secondly, because of my admitted lack of expertise in this area. The figures showing the effect of extending from three years to five years the period over which primary producers can depreciate certain plant and equipment appears on page 57 of the economic statement of 19 May. The savings are estimated to be $9m in 1983-84, $44m in 1984-85 and $89m in 1985-86. I point out that those are pretty reasonable savings. They are the figures in the document. Bills agreed to. Bills reported without amendment or requests; report adopted. Bills (on motion by Senator Grimes) read a third time. Debate resumed from 24 May, on motion by Senator Button: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(8.22) —The Opposition does not oppose the States (Tax Sharing and Health Grants) Amendment Bill. It is a simple Bill and one that has our support. We wish it a speedy passage. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without admendment or debate. Debate resumed from 24 May, on motion by Senator Button: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(8.25) —The Opposition does not oppose this Bill. We have no further comments to make at this stage of the session. We wish the Bill a speedy passage. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 11 May, on motion by Senator Button: That the Bills be now read a first time. Question resolved in the affirmative. Bills read a first time. Senator BUTTON(Victoria-Minister for Industry and Commerce)(8.26) —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- CUSTOMS TARIFF AMENDMENT BILL 1983 The Customs Tariff Amendment Bill 1983 now before the House proposes amendments to the Customs Tariff Act 1982. Schedule 1 of the Bill operates from 1 January 1983 and enacts tariff changes which in the main were introduced into the Parliament during the 1982 Budget sittings as Customs Tariff Proposals Nos 16-26 (1982). The amendments initially introduced by these proposals gave effect to decisions taken in respect of reports by the Industries Assistance Commission and the Temporary Assistance Authority. The Proposals were not embodied in the Customs Tariff Act 1966 and have since been translated into a simplified format to meet the requirements of the Customs Tariff Act 1982, which has operated since 1 January 1983. To give legal effect to Customs Tariff Proposals Nos 16-26 (1982) from their date of operation to 31 December 1982 an amendment is included in this Bill to deem the repealed Customs Tariff Act 1966 as having been amended in accordance with the proposals. Schedule 1 to the Bill also includes a number of changes to ensure the correctness of the Customs Tariff Act 1982. Schedule 2 of the Bill operates from 1 January 1983 and sets out the rates of duty applying to New Zealand goods as a result of the closer economic relations trade agreement with that country. New Zealand goods not included in this schedule are accorded duty free entry into Australia. Schedule 3 of the Bill operates from 19 January 1983 and contains a further change to correct the Customs Tariff Act 1982. A summary of amendments contained in the Bill has been prepared and copies are available from the records and table office. I commend the Bill to the Senate. CUSTOMS TARIFF (COAL EXPORT DUTY) AMENDMENT BILL 1983 Coal export duty was introduced in the 1975-76 Budget with effect from 19 August 1975. The then Treasurer, Mr Hayden, indicated that coal prices and especially prices for high quality coking coal had risen dramatically in the two previous years, and that very large windfall profits were being earned by the export sector of the coal industry and that the Government considered it reasonable that part of the increased profits should be channelled to the community by means of an export duty. The level of duty was set at $6 per tonne on high quality coking coal with a carbon content above 85 per cent on a dry ash free basis and $2 per tonne in other cases. Amendments introduced between October 1975 and August 1981 exempted certain types of coal from duty and varied the rate of duty for other types. The purpose of this Bill is to ratify the exemption from coal export duty of all coals then dutiable at $1 per tonne effective from 29 July 1982 as notified in Commonwealth of Australia Gazette of 29 July 1982. As a consequence, the only coals that are still dutiable are high quality coking coals mined from open-cuts in production before 1 July 1980 and from depths not greater than 60 metres and these are dutiable at $3.50 per tonne. The exemption of 29 July followed consultation between the former Minister for Trade and Resources, the Rt Hon. J. D. Anthony, the Premiers of New South Wales and Queensland, the Australian Coal Association and the union movement. The exemption was part of a series of decisions reached by the then Government and the Governments of Queensland and New South Wales in July 1982 aimed at assisting the industry at a time when it was facing difficult marketing conditions with escalating cost pressures. At that time a clear need was seen to reinforce Australia's international reputation as a supplier of coal. While the exemption gave an immediate benefit to establised exporters, in the longer term the bulk of the benefits will accrue to new projects. This Government proposes to review the range of taxes and related charges currently imposed on the coal industry. The Minister for Resources and Energy (Senator Walsh) has already initiated action to convene a joint meeting with relevant Ministers from the exporting States and the Australian Coal Association, at which proposals aimed at rationalizing industry taxation may be put by all parties. I commend the Bill to the Senate. EXCISE TARIFF AMENDMENT BILL 1983 The purpose of this Bill is to amend the Excise Tariff Act 1921 to enact four excise tariff alterations that affected the rates of excise duty on stabilized crude petroleum oil, naturally occurring liquefied petroleum gas, beer, certain manufactured tobacco products and certain petroleum products. Excise Tariff Proposals No. 2 (1982) were introduced into the House on 17 August 1982 as a Budget measure. They increased, from 8 p.m. on that date, the excise duty on beer by 8 cents per litre, certain refined petroleum products by 1 cent per litre and certain manufactured tobacco products by between $2.48 and $4.95 per kilogram. Excise Tariff Proposals No. 3 (1982) were introduced into the House on 24 August 1982. They increased the excise duty on stabilized crude petroleum oil from $186.26 per kilolitre to $205.97 per kilolitre and the excise duty on naturally occurring liquefied petroleum gas from $20.46 per kilolitre to $25.93 per kilolitre, with effect from 1 July 1982. Excise Notice No. 2 (1982) was published in the Commonwealth of Australia Gazette on 30 December 1982. That notice further increased the excise duty on crude petroleum oil from $205.97 per kilolitre to $227.13 per kilolitre and naturally occurring liquefied petroleum gas from $25.93 per kilolitre to $36.63 per kilolitre, with effect from 1 January 1983. Those three alterations were made in accordance with the policies of the previous Government and while the double dissolution terminated the effect of those instruments, measures were taken to ensure the continued collection of the duties at the increased rates. However, consistent with statements made during the March election campaign the Government reduced the price of Australian produced crude oil by $1.79 per barrel with effect from 1 April 1983. This reduction recognised the cut in the official Saudi Arabian price for the marker crude Arab light of $US5.00 per barrel. The devaluation of the Australian dollar forced on the Government in the wake of the election campaign reduced the impact of the Saudi Arabian price cut on Australian prices. Nevertheless, a significant reduction was possible to the Australian price of crude oil. Consistent with this change in the import parity price it is necessary to set new rates of excise on crude oil effective from 1 April 1983. This alteration was effected by Excise Notice No. 2 (1983) which reduced the excise duty on stabilized crude petroleum oil from $227.13 per kilolitre to $216.11 per kilolitre. I commend the Bill to the Senate. Senator KILGARIFF(Northern Territory)(8.29) —These cognate Bills are now at the second reading stage. As Senator Peter Rae has said, they embrace a number of excise and Customs measures. I wish to speak briefly tonight on one of them, the Excise Tariff Amendment Bill. In particular I wish to concentrate on clause 4 of that Bill, as it relates to diesel fuel. Taken with the Diesel Fuel Tax Amendment Bill (No. 2) 1982, the Bill implements last year's Budget decision to abolish various exemptions from excise duty on diesel fuel for use on public roads and proposes to replace it with limited claim rebates of the duty on fuel used for, for instance, domestic purposes, in hospitals, nursing and convalescent homes, and in the agriculture, mining, fishing and forestry industries. It seems that when this measure was brought in last year the reasons for the change were threefold. Firstly, exemption arrangements had proved difficult to administer so as to prevent abuse. We saw some indication of the abuse but also a lot of innocent people suffered and continue to suffer. Secondly, by denying some users exempt status it was intended to reduce the usage of excise exempt diesel fuel for purposes for which other fuels are more appropriate. Thirdly, the changes were designed to broaden the tax base by increasing reliance on indirect taxation. But it seems that the Australian Labor Party is committed to reducing the incidence of indirect taxation. It seems to be part of its platform because at page 52, item 12, under taxation, it is stated that Labor will reduce the relative incidence of indirect taxation. Also, in the statement of accord between the Australian Labor Party and the Australian Council of Trade Unions-the so-called prices and incomes policy-it is stated at pages 12 and 13 that the Government will endeavour to reduce the relevant incidence of indirect taxation because of its regressive and inflationary nature. Indeed, Mr Hawke, in the Government's national recovery and reconstruction plans, stated that Labor's commitment to eschew increases in indirect taxes will set inflation on a downward trend. But what concerns me is that this Bill seeks to increase indirect taxation. I suggest that, if this is the policy, it makes a sham of those statements. But there have been many other problems associated with these new arrangements, especially for people in the Northern Territory. This is the point that I will speak on briefly tonight. Since those changes, some industries have had continued relief. But tonight I wish to mention particularly those people in the tourist industry who have been hit very severely by the excise duty. While people in the agricultural, mining and fishing industries have been exempt-at least exempt to some degree-those in the tourism industry have suffered. It may be hard for honourable senators, so far away from the pioneers in the outback in the Northern Territory, to believe that these small groups of people are suffering considerably. Their costs have increased and many businesses are being sent to the wall. There is danger of destroying the small operators in the tourist industry. Tourism is being developed in the outback areas of the Northern Territory-perhaps even further out than Ayers Rock. Pioneering-type people are breaking ground in the tourism field out in those areas. Eventually, tourism will increase in those areas. But while those small pioneering business people suffer all these various setbacks, losses and hardships, they are ultimately forgotten. I believe the time has come for a change. The previous Government indicated, when we made protests about these measures, that it would review the excise duty as it affects the tourist operator. On behalf of those people in the outback, I make the plea that they should be considered now. Tourism is worth some $12 billion in Australia. Many people do not realise that the travel industry is possibly larger than the mining industry and employs some 400,000 people. I make the plea to the Government that it review this decision. Once again I speak on behalf of those small people in the outback-I know plenty of them-who have given away the comforts of the cities, the convenience of the towns and have made their way out into these very isolated and remote places. The excise duty is proving to be such a handicap to them that I think in this next year or two, as I have said before, many will go under. I think of places like Daly Waters. People may remember it. Books have been written about this area-about that rather romantic and isolated place, the Daly Waters pub-Ross River and so many places. The people living there are pioneers. This legislation is hitting them very hard. I suggest that the Government should look at their situation and bring some relief to these small people. The amount of revenue that would come from these small people in the outback is extremely small. Relief from the excise would allow them and their families to live and so develop the tourist industry in the outback. Senator WATSON(Tasmania)(8.37) —I take this opportunity of speaking on but one of these Bills, the Customs Tariff (Anti-Dumping) Amendment Bill 1983, which will amend the Customs Tariff (Anti-Dumping) Act 1975. It is indeed a very brief Bill of slightly more than one page. All it does is add a couple of paragraphs to countervailing duties provisions. But it does give me an opportunity of reminding the Government that in this climate of economic uncertainty and vulnerability there is a need to monitor very closely what is happening in the manufacturing sector, the level of manufacturing activity and the extent to which local manufacturers are being affected by imports. Regrettably, as with all governments, the difference between this Government's perception of what is happening and industries' constant warnings of what they see is happening is indeed large. We have this gulf of difference. Sometimes this gulf is one of suspicion and lack of trust. I hope that over the years we may be able to lessen that gulf. In doing so I believe we will not only enhance the prospects of increasing manufacturing in Australia but also overcome some of our unemployment problems. In this time of international recession there is always a tendency for overseas companies and countries to try to dump their produce overseas. Australia is a particularly vulnerable market for such happenings. We hear of the European Economic Community countries dumping their surplus products not only on Australia but also on our markets overseas, such as Japan. Cheese is a typical example. We not only have the problem of the loss of overseas markets to contend with but also the protection of the home front in the first instance. Unfortunately we have found that attempts by government to try to shorten the interval between the threat of dumping, the time the goods arrive and remedial action is always far too long. What happens? Markets are jeopardised and in many cases it takes months for them to recover. Given the present vulnerability, jobs are lost, people have to stand down and pay packets are affected. I therefore welcome the announcement made by the Minister for Industry and Commerce, Senator John Button, who has called for an urgent review of all dumping matters. I hope that this review will be sufficiently thorough and widespread, covering all sectors of industry, large and small, because so often in these inquiries it is the intermediate business that misses out. Often the intermediate sized business is the most vulnerable. Possibly it does not have the expertise in handling dumping matters that larger businesses may have. This sector of the economy employs a very great number of people. Traditionally, manufacturers have complained about the length of time it takes to bring dumping cases to finality before a court. I applaud the actions of the Fraser Liberal Government last parliamentary session in adding to the staff of the Australian Customs Bureau and reducing some of the red tape. This overcame many of the problems that were raised by manufacturers and helped to ensure that dumping does not take place. I am not talking about protection; I am talking about dumping. Dumping is abhorrent. It puts goods into the export market at prices which are substantially below those of the goods being produced at home by local manufacturers. A lot of developing countries, unfortunately, are a little prone to dumping practices. Some of these countries, I believe, adopt such practices, probably unwittingly, to get foreign exchange. A lot of manufacturers in Australia complain about cheap goods coming in, with government assistance in some cases; they are underpriced, marginally costed, or the like. Places such as Korea, Taiwan, China, India, New Zealand and Russia are all frequently cited, but it does not stop there. Most members of this Senate would be aware of the concern that I, as a Tasmanian, have with the closer economic relations agreement with New Zealand. I applaud all the genuine efforts that have been made to minimise the problems. It has been thought that many of the problems between the two countries were insurmountable. Coming from Tasmania, I recognise that the produce of our two countries is very similar. Therefore, it was necessary to eliminate as quickly as possible some of the artificial measures of assistance that exporters from New Zealand have received in the form of market support schemes, export incentives and a number of other assistance measures. I acknowledge the amount of work that has been undertaken on both sides of the Tasman between primary producers of specialist products and manufacturers, but I still give the warning that, despite all the meetings and industry panels that are held, merchants who can see a quick buck can get under these voluntary agreements. If they can see something in it for themselves, they will trade goods at prices which adversely affect the markets of one country or the other. We will have to live with the problem of people seizing an opportunity to make a quick buck, despite all the goodwill among manufacturers, produce merchants and so on. That is the really weak link of voluntary agreements. We will have to constantly monitor such actions to ensure that industry on both sides of the Tasman is not harmed in this way. The present economic climate is not right for any reduction in tariffs . The job position is too vulnerable. Senator Crichton-Browne —Is that the only reason? Senator WATSON —No, of course it is not the only reason. Wages, productivity and inflation are all other reasons. Tonight I wanted to dwell merely on this one reason. I do not think that in every speech I make I have to give the whole gamut of problems that we are encountering. I think it is time that we focused attention on particular reasons, with goodwill and understanding among all parties, whether we have a free trade philosophy or not. We have to recognise that over recent years there has been a tremendous loss of employment in manufacturing. It happened in the heyday of the Whitlam Government with its 25 per cent across the board tariff cut. Industry has never really recovered. Action has never been taken on such a scale since that time to restore the competitive advantage of producing locally. This has fairly wide implications, particularly in the defence industry. Frigates may have to be sent back to the United States of America for repair to certain parts of their equipment simply because the expertise is now not available in Australia. This lack of ability of Australian manufacturing to cope with a wide range of areas in relation to defence matters is of concern. I am pleased that Senator Button is taking note of some of these comments. The other area which gives me concern is the setting of quota levels. Some of the current quota levels were set when trade was very much more buoyant than it is now. In some cases those quota have built-in growth factors which favour imports over local production. We can appreciate that when we have a declining market and when a quota has been set up with a built-in factor that favours imports the local manufacture is very much at a disadvantage. I venture to say that most of the textile manufacturing industry in Australia is in trouble at present. One of the reasons is the quota setting formula, which I would like to see amended as soon as possible. If we are not careful the small manufacturer and the business in Australia will become very much part of a dying race. As we know, this sector of the economy employs over 60 per cent of the work force. It appears that the only time it receives very much attention from any political party is election time when votes are being canvassed. I believe that Australia is a great country. But it worries me to see the decline in manufacturing because manufacturing provides an opportunity for a wide range of expertise and skills within the community. I believe that the attitudes and philosophies of a community are widened when skills are very divergent. If we are to tutor young people through universities and give them high degrees what are we going to follow up with? Will they just be surveyors for open cut mines which export the resultant product overseas? We have to try to increase the level of activity in Australia so that we can convert the raw material into its final form. It is therefore necessary that we employ the highest level of technology. I think it is important that we not only employ that high level of technology but also encourage research and development in Australia. Not only is it costly to import other people's technology but also the skills that are needed will be produced overseas. I believe that we have to create the widest sphere of opportunities for young graduates to be able to take their place in the Australian work force. We can do that only by broadening our manufacturing base. It is true that we might have to ensure that some traditional practices, including management practices, are changed, but in our attempt to create what is known as sunrise industries let us not neglect established industries. If we put a little more research and enterprise into those industries we can retain our labour force. It would be a lot cheaper to keep those people in employment than to introduce new industries and allow them to slide down. I take this opportunity, at the close of the session, to warn the Government not to fiddle too much with tariff reductions because I believe that could have severe consequences on our manufacturing industry and on employment. Senator Sir JOHN CARRICK(New South Wales)(8.50) —I rise to speak to the Excise Tariff Amendment Bill 1983. I do so because I want to make clear to the Senate and the public not only the extent of the broken promises of the Hawke Government but also the magnitude of its deception and, I add, the misleading statements on this matter by Ministers. I remind the Senate-although it needs no reminder-that over recent years the Australian Labor Party was continuously vocal against the price rises which occurred under the Fraser Government in relation to oil and petrol. Indeed, very clear statements were made by members of the Labor Party that they would never do such a thing. Let me make abundantly clear what their argument was. As late as 25 January this year the then Opposition spokesman on resources and energy, Senator Peter Walsh, made a statement in which he said: The Government's policy of world parity pricing is fraudulent . . . That is, the Fraser Government- It is a taxing policy disguised as a pricing policy. He went on to say that the Labor Party would not support in any way the use of petrol pricing-putting up the price or not putting it down-in order to gain or save revenue. Quite clearly, that policy was abhorrent to the Labor Party. If one wants a further example one can consider the words of the previous Opposition spokesman on minerals and energy, the person who is now the Treasurer . He said-- Senator Gietzelt —Tell us about all the times you put it up. Senator Sir JOHN CARRICK —We will come to that. It will be good for Senator Gietzelt's immortal soul to look at the deception that was involved in this matter. Mr Keating said: Mr Fraser's remarks only underline our view-- That is, the Labor Party's view- that the Government's oil pricing policy is not an energy policy but a taxing policy. Mr Keating said that was wrong. He continued: Mr Fraser is greedy for more tax revenue. His Government's Budget forecasts are in tatters . . . He went on to condemn the idea that anyone should so manipulate the price of petrol to save revenue for his deficit. He said: In these circumstances, Mr Fraser refuses to pass up the option to go on squeezing Australian motorists irrespective of any continued fall in international oil prices. Then he said: Government policy ties Australian petrol prices to the price of crude oil from Saudi Arabia. Any fall in the Saudi price must be passed on to Australian motorists in lower petrol prices. One thing was made clear-that a Labor government would never use a petrol pricing policy as a taxing policy. We know that if there is any fall in the price it must pass it on. But we can do better than that. We can refer to what was said by the then new Leader of the Opposition, Mr Hawke. As late as 9 February this year, in his election statements, he said certain things and it is very important for us to understand them. He said: Petrol prices will be immediately cut by about 3 cents per litre under a Federal Labor Government. I repeat: Three cents a litre. He continued: The $3.23 a barrel rise imposed by the Fraser Government on January 1 will be scrapped. As well as immediate benefits to motorists and business the petrol price cut will reduce the Consumer Price Index by about 0.5 per cent. The next sentence is of tremendous importance. He said: If the OPEC price falls further in the interim the price will be cut by that further margin. Quite clearly there were to be two cuts-firstly, a 3c cut and, secondly, if the price of the Organisation for Petroleum Exporting Countries was to fall further the price in Australia would fall by the further margin. Nothing could be clearer than that statement-no taxing policy must be adhered to. Along came the new Minister for Resources and Energy, who is interested in talking about the credit or otherwise of other people. In a Press statement on 16 March 1983 he attempted to suggest that he was paraphrasing what Mr Hawke had said. He stated: Before the Election we promised to cancel forthwith the January 1 $3.23 increase or,-- He did not say 'and'- if the OPEC fell by more than that, by the full amount of the OPEC cut. Honourable senators will see the absolute deception. Mr Hawke said: 'You will get two price cuts. You will get a 3c price cut and then, if the OPEC price falls, on top of that, you will get that price fall'. What happened? It was not very long before the present Government decided that the 3c price cut was wrong. The Labor Party in opposition said that the previous Government would put up the price. The Labor Government decided that the cut should be only 1.5c, so the first statement fell by the board. During January, when the previous Government and I, as Minister, increased the price, there was a tirade of abuse from the Australian Labor Party. The Labor Party said: 'What right has the Fraser Government to put up the price when OPEC prices have not risen?' It is true that freight prices have risen. It is true that devaluation has forced up the price of oil purchased overseas. The Labor Party said: 'We will not use devaluation as an argument. The price has not gone up and therefore the Fraser Government should not have put up the price of petrol at all'. In other words, the Labor Party was saying that the use of devaluation as an argument was absolutely wrong and the use of increased freight charges as an argument was absolutely wrong. So the Labor Party believes that those arguments should never be used in working out a taxing method in order to protect revenue. It believes that a government should always precisely follow the OPEC price and should never use movements in devaluation or freight charges. Indeed if the 3c price cut had been implemented and the OPEC price fell, that further fall in price should have been passed on. The fascinating thing was that when the new Minister for Resources and Energy, who is so solicitous about other people's credit, put out his Press statement, he was very careful to show movements in devaluation and freight rates. What did he do? He deliberately misled people about what Mr Hawke had promised. He knew that Mr Hawke had promised two things, in parallel with each other-a 3c fall and a further fall if the OPEC price fell. He put out a statement, as a Minister, not that it would happen as a supplement, but, I repeat: Before the Election we promised to cancel forthwith the January 1 $3.23 increase or, if the OPEC price fell by more than that, by the full amount of the OPEC cut. Of course, that is a completely misleading statement. What did the Government do ? It used the devaluation and increased freight rates argument to wipe out the $ 5 fall in oil prices. That is a strange argument because Senator Walsh had argued earlier that there had been a de facto fall before and that the previous Government should have passed it on. He then argued that that was no longer the case. The Government, instead of giving the 3c cut which it promised during the election campaign, gave a 1.5c cut. Instead of passing on the $5 fall, which would have cut the price of petrol by some 4c to 5c, it gave nothing. It blithely said: 'We are doing this because of devaluation and increased freight charges'. That was anathema to the Labor Party as an opposition. That was what Labor went to the people saying: 'We oppose the Fraser Government doing these things'. It is no good their arguing that they had to do this because they had a large deficit. Mr Keating and Senator Walsh had stated emphatically that one should never use an alteration in the price of oil or petrol as a tax measure. But in any case, what a fraud. When they did this, they knew that the $9.6 billion figure that they had pushed around was wrong; so much did they know it was wrong that they did not even use it at the National Economic Summit Conference. By the time that the Summit had come, they were using an entirely different figure. Yet when the Summit had come and they had had the discussions in another place, they were still fraudulently peddling here a figure of a deficit of $9.6 billion, knowing that option A and the Summit documents, which they said they preferred, had a growth in gross domestic product of 2.7 per cent, and knowing that option C had a growth of 3 per cent. Knowing those things and having used those things there, they went on peddling this deceit that they had to do these things in the name of a deficit which they knew did not exist. Senator Peter Rae —It never existed. Senator Sir JOHN CARRICK —It never existed. It was a fraud perpetuated in order to say: 'Look, we made some promises, but we shall not carry out any of them'. What we have now is not just the streaker; we have the emperor's robes. As we know from the story, the emperor's robes showed him naked, but in this case it is naked of any alibi or any defence. Let us allow that in other things the Government has been saying, 'We must do this; we must not implement this promise because it would alter the revenue'. What the Government has said emphatically about oil prices is that one must never use petrol pricing as a taxing measure, but that is precisely what it has done. So I repeat, we have had not just a broken promise, not just another one of the dozens of broken promises, but a deception, a misrepresentation as between two Press statements, a complete misleading of the people on this matter and a deception on the considerations. This Government said, when in opposition: 'We would never use devaluation and freight rates'. After all, that is what the January price increase was based upon-an alteration in freight rates and devaluation. But my goodness, no sooner had it got its hands in the till than, on 16 March, the man who now seeks to smear the credit of others in this place broke every single promise and committed every possible deception. The man who was most noisy about petrol pricing and how it was wicked to raise petrol prices , the man who said that one must never use that as a tax, the man who said that devaluation and freight rates should not be so used, the man whose party said: ' We will give you three cents plus the full value of the $5 otherwise', came along and, first made a misleading statement in his Press statement-it is here for all to see-and then, without any kind of blush, attached a schedule on how to do it, showing the use of devaluation and freight rates to do it. I hope that we shall never again hear in this chamber any lectures in ethics from that particular gentleman. This is Senator Walsh, who every day is more holy than thou, as honourable senators know. He talks about others being discredited. The fact is that not only is he in emperor's robes, but those robes are tattered and fall to the ground. I know of no greater series of deceptions than those that lie here. It is a very sad day indeed when perhaps the main issue that the Labor Party pursued for three years, that of petrol pricing, should be one of its most dastardly breaches of promise, one of its greatest deceptions. It is time that the public knew about it. The public has been led to believe that this is only a matter of getting 1.3c instead of 3c. That is not true at all. The promise was 3c plus the value of $5. The promise was, in fact, 7c altogether. If there is one Minister who should take note of this it is the Minister for Industry and Commerce (Senator Button), who is presently in the chamber, because nothing hits the people more than the price of petrol. One can look at the mini-Budget and see where the Government hit people. It hit the farmer with his avgas. The farmer is knocked to the ground at the moment from the effects of drought and flood. What did the Government do? It put up the price of avgas. It hit the ordinary traveller by raising the price of avtur, ordinary jet fuel. The Government is reducing freight equalisation for fuel in country areas. All these things have occurred against the background of what the Government has been saying for the last three years, the main thrust of which was that it was utterly wrong to alter petrol prices in any way as a taxing medium. I can say only that I hope we will never again hear any of those hypocritical statements. I wonder whether honourable senators remember their Shakespeare. I quote: Mark you this, Bassanio, The devil can cite scripture for his purpose. Senator PETER RAE(Tasmania)(9.6) —Having heard the speech Senator Sir John Carrick has just given in relation to one of the Bills with which we are dealing cognately-the Excise Tariff Amendment Bill-I can say only that it will be abundantly clear to anyone and everyone why I on behalf of the Opposition will now move an amendment to the motion for the second reading of this Bill. I move: At end of motion add: ', but the Senate notes that the Government has failed to honour its election commitment to reduce the price of petrol by 3 cents per litre and its pre- election undertaking to disregard currency fluctuations in setting the price of Australian produced crude oil'. I do not think I need to take the time of the Senate to add to the reasons why the Opposition believes that honourable senators should give this Bill a second reading cognisant of the fact that there has been a major, massive and extremely clear breach of undertaking. It is one of the numerous breaches which have been very clearly outlined by Senator Sir John Carrick, the former Minister for National Development and Energy. He is the person who is probably exclusively and exceptionally in a position to be able to outline the nature of that deception. The remainder of the matters dealt with by this Bill comprise excises on natural gas, beer and tobacco products. They are consequent upon the 1982 Budget of the former Government-that is, the Liberal-National Party coalition Government. With the exception of the duty on crude petroleum, to which Senator Sir John Carrick has referred, the matters arise from the 1982 Budget. The new Government is implementing the policy of the former Government. There is an understanding, which I believe ought to be referred to at the moment, and that is that when budgets are introduced they announce a variety of measures which require legislation later to implement them. But there is the accepted practice that from the time of announcement those rules will apply; that is, the new announced rules in relation to excise matters, tariff matters, tax matters and a variety of matters will apply from the date of announcement. I repeat that the new Government is implementing measures of the former Government. Naturally, the Opposition totally supports that happening. It is proper that that should happen . I do not wish to delay the Senate by talking for a long time in relation to each of these matters, which are supported by the Opposition, but I will deal very briefly with each of the Bills. I have just referred to the Excise Tariff Amendment Bill 1983. The next Bill is the Customs Amendment Bill 1983, which in a lot of ways is a fairly major Bill. It modifies the existing by-law system for granting tariff concessions. I refer to it relatively quickly, in the light that it is a decision of the previous Government which is being implemented by the new Government. It gives effect to certain changes recommended by the Industries Assistance Commission. Those recommendations resulted from a consideration of the way in which an important part of our total Customs tariff system operates. It is relevant to put on the record briefly that the sole and long-standing criterion for concessional by-law entry has been that suitably equivalent goods are not reasonably available from local production. That has been the basis upon which one could have admitted to Australia, without penalty, goods which could not be obtained here. The provision was designed to protect Australian industry. If Australian industry was not producing a certain product application could be made for exemption from what might otherwise mean the payment of an extra price penalty. That criterion caused considerable difficulties on economic, administrative and legal grounds. As a result, in April 1981 the commercial by- law system was referred by the former Government to the Industries Assistance Commission for review. That was to be the first complete review of the by-law system. The Industries Assistance Commission suggested something which causes me a slight degree of concern. I will refer to it later. It proposed that the new criterion to be applied to goods for which admission to Australia was sought on the ground that no suitable equivalent, or comparable, goods were manufactured here should be as follows: Commercial tariff concessions will be issued where the Minister is satisfied that no goods serving similar functions are produced or are capable of being produced in the normal course of business in Australia. The words used are important because they define what becomes at times a particularly contentious criterion which involves, for Australian individuals and companies, significant amounts of money. The key words in the new criterion are 'serving similar functions' and new section 269B (4) provides an interpretation of these. I am concerned because the new test will be the degree of 'cross-elasticity of demand' between the imported and the Australian produced goods. When we begin to import into legislation what amounts to jargon, we are starting to go down a track that we may one day regret taking. The term 'cross- elasticity of demand' may be of significance in economic debates between economists, or people who have the enthusiasm to pursue the jargon of economists . It is almost like returning to the practice of incorporating latin maxims in our legislation rather than expressing it in words which may be understood by the average citizen. I suppose that by and large Customs matters involve people who are specialists. The average person who will read the Customs Act, which we are amending, is likely to be reasonably expert and not an average member of the community. But when we use such terms as a criterion in legislation we certainly exclude a large section of the community from having any capacity to understand what the legislation might be all about. I do not wish to delay the Bill but I wanted to make that comment. Although the situation which has arisen may be unfortunate, I do not in any way blame the Government. As I said earlier, this Bill comes before the chamber on a completely bipartisan basis. It is a recommendation of the Industries Assistance Commission, accepted by the former Government and being implemented by the present Government. So I am making the comment only for the purpose of future reference. I hope that we will not have jargon introduced into legislation. Notwithstanding the criterion being met, proposed new section 269E provides that the Minister may refuse to grant a concession if he considers that such a concession would have a substantial adverse effect on the market available to goods produced in Australia or if it would not be in the national interest. The phrase 'not in the national interest' gives considerable flexibility to the Minister of the day. I do not wish to deal at great length with other matters, but let me sum up this piece of legislation by referring to one or two. There is quite an important requirement for advertising applications for new concessions in the Commonwealth Gazette which, it is believed, will make for better public scrutiny of the system which is operating, particularly by local manufacturers whose views will be taken into account prior to a decision being made on an application. It is important to refer to that fact when we are debating this legislation to ensure that people know that that opportunity will be there should they wish to avail themselves of it. Finally, the Senate Standing Committee for the Scrutiny of Bills said in relation to this Bill: The Committee reserves final comment on this aspect of the Bill until the completion of the examination by the Administrative Review Council of the current review of decisions under the Customs Act 1901. However, the Committee draws the clause to the attention of the Senate in that it might be regarded as making rights, liberties or obligations unduly dependent upon non-reviewable administrative decisions. That relates to clause 5 of the Bill. In view of the fact that the Scrutiny of Bills Committee, whose service to this chamber I think has been extremely valuable, has suggested that it ought to await completion of the examination by the Administrative Review Council, I do not think we should hold up the Bill. We should accept the advice of the Scrutiny of Bills Committee. Accordingly, I will conclude this part of my remarks by saying that the Opposition supports the Bill which is, after all, something which it initiated in the first place. The next Bill to which I wish to refer is the Customs Tariff (Anti-Dumping) Amendment Bill 1983 which makes amendments which are consequential upon amendments to the Customs Act 1901. Again these matters arise out of decisions taken by the former Government and are being implemented by the present Government. The Opposition supports it. There was some suggestion that an amendment would be moved. I do not wish to take away from anything which Senator Jack Evans may say in a moment, but the Opposition was concerned about the matter which was the cause of the amendment he proposed. In view of the fact that apparently he has obtained some undertakings which no doubt he will shortly outline to the Senate, the Opposition will not take the matter any further but supports what Senator Jack Evans was doing and the importance of getting some resolution of the matter of concern. I turn to the Customs Tariff (Coal Export Duty) Amendment Bill 1983 which provides for a decrease in the rate of coal export duty on certain coals. The present provision imposes a rate of duty of $3.50 per tonne. This amendment excludes the provision that coal other than high quality coking coal fetch a rate of duty of $1 per tonne and inserts a new section 7 to provide that coal other than high quality coking coal is exempt from export duty imposed by the Act. That amendment arises out of the 1982 Budget-that is, the Budget of the former Liberal-National Party coalition Government-and is being implemented again by the new Government pursuant to the proper mode of operating in such matters. I indicate that the Opposition will support that amendment, which was initiated by it in government. The final Bill to which I refer is the Customs Tariff Amendment Bill 1983, which is almost wholly the implementation of decisions of the previous Government. There is the implementation of the Industries Assistance Commission and Temporary Assistance Authority reports which were accepted by the former Government, together with the removal of the 2 per cent revenue duty on ships, Customs tariff changes resulting from increases in excise duties in the 1982 Budget, complementary provisions of duty-free admission for those ships eligible for payment of bounty when constructed in Australia, changes arising from Australia's commitment to the South Pacific Regional Trade and Economic Co- operation Agreement and an addition of goods to schedule A of the now superseded New Zealand-Australia Free Trade Agreement. Whilst I would love to talk about all of these subjects for quite some time, because they are matters about which I think there is a lot to be said, in view of the fact that they are bipartisan implementations I do not wish to hold up the Senate at this stage by referring to them in detail. Therefore, I indicate that the Opposition supports the amendment which I have already read and, with the exception contained in that amendment, supports the passage of the Bills. Senator BUTTON(Victoria-Minister for Industry and Commerce)(9.22) —I thank honourable senators for the warm comments they have made about this legislation. There are a couple of matters on which I should comment. I regret that Senator Kilgariff did not make his speech about diesel fuel excise last year. Perhaps he did; perhaps he was just making it again. All I want to say about that is that the Government is very conscious of some of the issues which he raised and which he alleged impose hardship on some sections of the community; certainly inequities or apparent inequities. The Government is examining those matters. I think I can safely say that it will have some response to them in the Budget context, or certainly during the Budget session of Parliament. I thank Senator Watson for his contribution to the debate. I wish we could have had it on another occasion-no doubt we will-when we could debate some of the issues he raised regarding protection policy generally. As Senator Watson well knows, the Government is committed to not reducing levels of protection in the current economic situation apart from those schemes which contain particular phasing provisions. It will maintain that commitment. Senator Watson also spoke at some length about dumping. I inform the senator-again as I believe he knows- that the Government has been concerned about dumping complaints and the effects of dumping. There have been substantial discussions about that issue with industries concerned about dumping and also those who are concerned about it for different reasons, such as the National Farmers Federation. I believe that this week the Department of Trade will be publishing a discussion paper on the question of dumping. I asked earlier if this paper had been published. It clearly has. That is good. I believe that paper will be the subject of considerable further discussion within the community in the next month or so and officers of the Department will be conducting seminars or discussions on that paper in the next few weeks. The Government is very concerned about the issues which Senator Watson spoke about in relation to dumping. The Government is taking all possible steps in relation to those matters. Senator Watson invited me to take note of his comments on a number of matters. I do. With regard to the comments made by Senator Sir John Carrick, I was surprised to find him so worked up about what he alleges to be deception and broken promises. I have been a senator since only a little before the Fraser Government was first elected. I suppose I grew up in that environment. If we are found guilty by the present Opposition, of course we have the same excuse or plea to make to the judge-the people of Australia-that is, that we grew up in a bad political environment in terms of broken promises and a failure to honour commitments to the people of Australia. Senator Walters —But you gave the streaker's defence. Senator BUTTON —I am always fascinated by Senator Walters's interjections. The difficulty is that I do not understand that one. I assume it was more intelligent than most. Senator Peter Rae —It was the former esteemed leader of your party, Arthur Calwell, who said that two Wongs don't make a white. Senator BUTTON —I do not know what the relevance of that comment is to a tariff debate, but I suppose Senator Peter Rae is suggesting that there should be a tariff in immigration matters as well. Senator Peter Rae —I was merely thinking that it wasn't much of an argument to say that, whatever mistakes we might have made in government, you were entitled to make mistakes too. Senator BUTTON —I agree. It is totally puerile. It is about the level of debate which took place in the Senate yesterday when we were supposed to be discussing industry policy. Senator Peter Rae —You are pretty sensitive. Senator BUTTON —Yes, I am very sensitive, Senator; and I will tell you why if you want to bring the debate on again. As far as Senator Sir John Carrick's comments are concerned, I make the point that the Government came to office at a time when the economy, as Potter Partners in a letter to companies about the share market situation commented, was in the worst condition it had been in for 50 years. We came to office confronted with the need for a devaluation as a result of the irresponsible comments by the Leader of the Opposition (Mr Peacock) speculating about currency movements. In that situation, the Government honoured its promise insofar as it took steps to reduce the price of petrol from 1 April 1983. But, in so doing, it , of course, was caught with the effects of the devaluation. In that sense, the comments made about the one and a half cents which were put to us are correct in terms of the ultimate effect. Of course, the Government has had to make a lot of difficult decisions about these matters and undoubtedly will continue to have to do so in the next few months. I do not think that we would be particularly respected by anybody if we shrank from the need to make difficult decisions about these matters. I really think it is of little point to refer to debates which took place in the Senate five and six years ago in support of an argument about a differential of one and a half cents per litre in the price of petrol in 1983. But, if that is important in the lexicon of Opposition weapons with which to beat this Government, of course, the Opposition will do so. But I am not sure how significant that action will be seen to be. I found it extraordinary that Senator Sir John Carrick chose to talk about the extent to which this Government, in the May economic statement, had allegedly acted in a way which was detrimental to the interests of farmers. The example that he chose was fascinating. He said that farmers would be very adversely affected by the increase in the price of avgas. I do not know what farmers he knows-I know a lot do have aeroplanes-but I would not have thought that an increase in the price of avgas would be a matter of general concern to the farming community. Senator Crichton-Browne —It must be to the pastoral industry. Senator BUTTON —I appreciate that and I appreciate there would be a concern about crop dusting. But I am talking about the general range of farmers in Australia. If the small increase in the price of avgas were all Senator Sir John Carrick had to rely on in terms of his criticism of this Government's attitudes to farmers as expressed by the mini-Budget, I find that an extraordinarily desperate allegation. I must say that it is not one we have heard from any of the farm organisations in discussions with them about the May economic statement . They know, as do most Australians apart from honourable senators opposite, that in terms of the May statement there was a need for some degree of sacrifice to be made by all sections of the Australian community. The farm organisations, as Senator Scott, who is nodding his head, wisely knows, are not particularly upset about an increase in the price of avgas. Senator Peter Rae —Senator Sir John Carrick mentioned that on top of another matter. Senator BUTTON —I understand the point. I thank Senator Peter Rae, who spoke on behalf of the Opposition, for his support of the Bills. I am filled with fellow feeling about his concern for the English language and jargon when he referred to 'cross-elasticity of demand'. There is, of course, an explanatory memorandum to the Bill which might in some way help in understanding that. But I do not perceive that to be Senator Peter Rae's real point. He is talking about the unfortunate consequences of jargon. I am trying to think of an example I struck the other day which is probably worse but I cannot remember it. I thank the Senate for its support of the Bills and I hope they can now have a speedy passage. I had a number of discussions with Senator Jack Evans, an Australian Democrat senator, in relation to a matter which concerned him and about which he came to see me. Perhaps I can short-cut what I have to say about this matter. Last year a question emerged in relation to dumping complaints concerning PVC. The real allegations were that dumping was occurring from Hungary and the United States of America. A number of steps have taken place and a number of discussions have been held since that complaint was first made, and I understand Senator Evans's position to be that it appeared that there had been unfortunate delay. I think it has been explained that many of those delays occurred because of the Department having to consult another department about what could be done about this matter. I want to say, in trying to expedite this question, that, as a result of the Department's consideration of the matter, discussions with the Attorney-General's Department and so on, I am able to give an undertaking that a reference will be made to the Industries Assistance Commission next week-I believe by Wednesday but I can certainly say next week-in relation to this matter. I think that satisfies Senator Evans's concern. I give that undertaking. Senator Peter Rae —What about me? Senator BUTTON —I did not know of the honourable senator's concern; I hope it satisfies his concern as well. I know that Senator Jack Evans had detailed discussions with the Department. I give that undertaking. Amendment agreed to. Senator BUTTON(Victoria-Minister for Industry and Commerce)(9.33) —I indicate, on behalf of the Government, that all Government senators would have voted against the amendment. I would like that recorded in Hansard. Original question resolved in the affirmative. Bills read a second time. The Bills. Senator PETER RAE(Tasmania)(9.34) —So that the record shows clearly what has just transpired I say that we have now agreed to the second reading of the Excise Tariff Amendment Bill 1983, with an amendment which states: , but the Senate notes that the Government has failed to honour its election commitment to reduce the price of petrol by 3c per litre and its pre-election undertaking to disregard currency fluctuations in setting the price of Australian produced crude oil. That motion was carried by a majority of the Senate. Senator Button made it clear that all Government senators would wish to vote against the amendment. That has been clarified. The PVC tariff inquiry has been standing over since 28 October 1982. This is a matter of very considerable concern to a number of Australian industry operators , both individuals and organisations. I thank the Minister for his indication that that reference will be now made to the Industries Assistance Commission so that the matter can be clarified. Dumping is a matter of concern. It is important that steps be taken reasonably expeditiously. Delay in dealing with dumping is as bad as no action at all. Very often delay is the very thing that those who wish to dump would wish to seek. That was the reason why Senator Jack Evans and I expressed a view of concern in relation to this matter. We are glad that the Government is acting in relation to it. I do not wish to pursue the matter any further. I simply say that I am glad that it is now about to be processed and clarified. Senator JACK EVANS(Western Australia)(9.37) —I wish to express my appreciation to the Minister for Industry and Commerce (Senator Button) for the assurance that he has given that the PVC referral to the Industries Assistance Commission will take place next week. I also indicate to the Minister that the amendment that I had proposed to move in the Committee stage reads as follows: Section 15 of the Principal Act is amended by inserting after 'he shall' in sub -section (4) 'within 60 days after he receives that request''. I would just like to explain the reason why I am not proceeding with that amendment. The CHAIRMAN —Senator Evans, you say you will not proceed with the amendment. It would not be appropriate in any case to proceed with the amendment because it is not relevant to the Bill before us. We are not pursuing that Bill at the moment. Senator JACK EVANS —Thank you. I might just complete my point. I want to express my appreciation of a matter which is covered by the Bills under consideration. The discussion paper on dumping does give the protection that I was seeking in the proposed amendment-that is that the whole matter of the potential for delays of referrals is now being taken on board by the Department of Industry and Commerce and obviously will be the subject of considerable discussion during the seminars that are to be held on that discussion paper. I repeat my gratitude to the Minister for his co-operation on that matter. Bills reported without requests; report adopted. Bills (on motion by Senator Button) read a third time. Debate resumed from 24 May, on motion by Senator Button: That the Bill be now read a second time. Senator PETER RAE(Tasmania)(9.41) —The Customs Amendment Bill has already been dealt with. Although the votes are being put separately, we took all the Bills in a cognate debate. I do not imagine there is any honourable senator in the chamber who now wishes to speak on any of these Bills separately. They can be processed because they were dealt with as if it were a total cognate debate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 24 May, on motion by Senator Button: That the Bill be now read a second time. Senator PETER RAE(Tasmania)(9.42) —The comments which I made in relation to the preceding Bill, the Customs Amendment Bill, apply equally to the Customs Tariff (Anti-Dumping) Amendment Bill; that is, they were debated cognately. I do not imagine that there is any honourable senator who wishes to say anything further in relation to the matter. Question resolved in the affirmative. Bill read a second time. The Bill. Senator JACK EVANS(Western Australia)(9.42) —I will not bore the Committee with the remarks that I made earlier, but simply wish to make it quite clear that the amendment to which I was referring applied to the Customs Tariff (Anti-Dumping) Amendment Bill. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Button) read a third time. Debate resumed from 24 May, on motion by Senator Button: That the Bill be now read a second time. Senator BUTTON(Victoria-Minister for Industry and Commerce) —I might offer some explanation to Senator Rae. The Industries Assistance Commission Amendment Bill was part of the same batch and did not appear on the business sheet. It is a Bill which is consequential upon the other Bills. Senator PETER RAE(Tasmania)(9.44) —I recall the Bill now that the Minister for Industry and Commerce (Senator Button) mentions it. I do not have my file with me because it was not on the business sheet, but having been reminded, I do not have a problem and regard it as one of the matters which were consequential upon the Bills which have been debated tonight. Therefore, the comments which I have already made in relation to certain other Bills apply; that is, that the Bills were considered cognately. The Opposition supports the introduction of this Bill . It is part of a package consequential upon decisions taken by the former Government. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 19 May, on motion by Senator Gietzelt: That the Bill be now read a first time. Senator Dame MARGARET GUILFOYLE(Victoria)(9.47) —Supply Bill (No. 1) 1983-84, Supply Bill (No. 2) 1983-84 and the Supply (Parliamentary Departments) Bill 1983 -84 have appeared on the Notice Paper on a number of occasions. As I understand it they have been dealt with in a cognate debate with the Appropriation Bills. The Opposition does not oppose the Bills. I understand that those who wished to make any comments on them have already done so as part of earlier debate. The Opposition wishes them a speedy passage. Question resolved in the affirmative. Bill read a first time. Senator BUTTON(Victoria-Minister for Industry and Commerce)(9.48) —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, together with its companion Bills, Supply Bill (No. 2) 1983-84 and Supply (Parliamentary Departments) Bill 1983-84, seeks interim appropriations for the services of the Government for the period 1 July 1983 to 30 November 1983, by which date it is expected that the Appropriation Bills (Nos 1 and 2) and the Appropriation Bill for Parliament, which will form part of the Budget for 1983-84, will have been enacted. Supply Bill (No. 1) seeks appropriations totalling some $5,741.3 million for the ordinary annual services of the Government. This is $925.3 million, or about 19.2 per cent greater than the equivalent amounts provided in the Supply Act (No . 1) 1982-83. A large part of the increase reflects higher staff ceilings approved by the previous Government after the 1982-83 Budget, salary and other cost increases and an extra payday which falls within the Supply period in 1983-84 as compared with 1982-83. I mention two specific provisions in the Bill. First, $21 million is included under the Australian Electoral Office for the purpose of the referendums on fixed term parliaments and other matters of constitutional reform, in repect of which the Attorney-General introduced Bills on 12 May. Secondly, $150 million is provided for the Advance to the Minister for Finance, $25 million more than in 1982-83. Apart from an adjustment made last year to bring the Supply Bill (No. 1) provision into line with that included in the Appropriation Bill (No. 1), this is the first increase in the amount provided in the (No. 1) Advance since 1979. The need for the increase reflects the growth in expenditures over this period and the pressure placed on the Advance in recent times. The need for the Government to seek urgent interim appropriations at the special sittings in April-including supplementation of the Advance in the Appropriation Act (No. 1) 1982-83-was a clear manifestation of the pressure. I wish to emphasise that this Bill does not anticipate decisions yet to be taken in the 1983-84 Budget context. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without requests or debate. Consideration resumed from 19 May, on motion by Senator Gietzelt: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Consideration resumed from 19 May, on motion by Senator Gietzelt: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or requests or debate. Consideration resumed from 19 May, on motion by Senator Gietzelt: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 24 May, on motion by Senator Button: That the Bill be now read a second time. Senator WALTERS(Tasmania)(9.54) -There is only one controversial section in the National Health Amendment Bill. That is the section which applies to the new pharmaceutical benefits declaration. The former Government, when extending the $ 2 pharmaceutical benefit to all pensioners and to disadvantaged persons who qualified under the guidelines for a health card, realised that there must be some method of stopping the abuse that was taking place in the system. The only people entitled to free medicine from the chemist were pensioners who held pensioner health benefit cards-by the simple fact of their pensioner number appearing on the top of the prescription form. We knew that there was considerable abuse of the system. Some people were telling doctors that they were pensioners, were giving fictitious numbers and then going along to the chemist and obtaining free medicine. Estimates were made of the extent of the abuse and the Government decided that, when the benefit was extended to a considerable number of people-indeed to all pensioners holding health care cards ; there was no means test-- Senator Tate —You are not defending the old form? Senator WALTERS —No, I am not. I am saying that the old form, where the pensioner number appeared at the top, was open to abuse and because of the abuse - Senator Tate —I am talking about Jim Carlton's form. Senator WALTERS —Senator Tate should listen. I have not reached that point yet. I just said that with the original prescription form, where the pensioner's number appeared at the top, there was certain abuse. Indeed, it was estimated that the cost of the abuse was in the area of $20m. Senator Childs —Much of it by doctors. Senator WALTERS —I can assure Senator Childs that there was no need for a doctor to abuse the system. That gave him no advantage, it advantaged his patient. A patient would say to the doctor, 'I am a pensioner. My number is such and such'. The doctor, in all good faith, would fill in that number at the top of the prescription form. The patient would take that prescription form along to the chemist and be entitled to free medicine. We know that there was some abuse of this system. I repeat, it was estimated to cost $20m. That is not chicken feed. It might be chicken feed to Government senators. Indeed, during the hearings of the Estimates committee, Senator Grimes said that there was not much abuse, that it was only an estimated figure and no one was sure of the amount. But it was $20m and that is a considerable amount of money. We found, when we did extend the benefit generously-so that the patient had to pay only $2 instead of $4-to all pensioners and disadvantaged people who held a health card, that something had to be done to stop any further abuse. The prescription form introduced by our Minister for Health at that time, Mr Carlton , was one that I admit, as he does, had become very complicated. Patients had, in filling in the form, to supply a deal of evidence to prove their identity and entitlement to the medicine and elderly patients, especially, found this difficult. There was a fair bit of objection to this- Government senators-A fair bit! Senator WALTERS —For once, I agree entirely with the Government senators. There was a fair bit of objection to this, to the extent that the Minister for Health said that he would review the procedure and introduce a Bankcard type system. The chemists and the Pharmacy Guild of Australia were very much in favour of that. They said that a Bankcard type of system would suit them fine; that it would be very simple system and would prevent a considerable amount of abuse. The Minister for Health said that he would bring in a simplified form. But that was not the view of the Opposition. At that time the Opposition, in the form of Senator Grimes, said that it would abolish it altogether. Debate interrupted. Australian Broadcasting Commission-Employment in Tasmania-Special Broadcasting Service-Human Rights in Chile-Annual Report of Commonwealth Ombudsman-Mineral Exploration: Taxation-Department of Foreign Affairs The PRESIDENT —Order! It being 10 p.m., under sessional order I put the question : That the Senate do now adjourn. Senator MARTIN(Queensland)(10.0) —I will speak very briefly. During a debate last week on the Australian Broadcasting Corporation Bill 1983 I made reference to some information I had received from a constituent. I mentioned at the time that, by virtue of the fact that we had negatived the adjournment question, I had not had time to check with that constituent some of the details of the information I was provided with, which I had expected by the next day. I did make an error in my speech, which I would like to correct now for the record. Some references I made to the program Nationwide should have been applied to the program Four Corners. Senator WALTERS(Tasmania)(10.1) —On 2 March this year-as everyone knows, that was three days before the election-Senator Button was reported in the Hobart Mercury as stating that a major American company was negotiating to establish a computer hardware manufacturing plant in Tasmania, and that this would employ 300 Tasmanians. He said that if his party was elected: . . . we would quickly encourage such a development and support it financially. He went on to say: The Federal Government would not be prepared to give the American company the full amount of money it was seeking. Then he refused to say how much that figure was. Indeed, no detail whatsoever was given, although he said: The matter is one of urgent negotiation and the company is taking into account Tasmania's labour market and expertise in wanting to come here. He said a lot of research had been done. This American company was willing to come down and employ 300 Tasmanians, and the inference was that we really should not be worried too much about the dam. He also stated that he had spoken to the company's interstate agents. That must sound pretty firm to honourable senators. He had spoken to this company's agents and he assured the Tasmanian people on 2 March that this company was indeed ready to negotiate and come down to Tasmania. Following Senator Button's election statement, the Tasmanian Government telexed him on 15 March, after he had become Minister for Industry and Commerce, and asked him for details of the negotiations with the American company. No reply was received from Senator Button. A second telex was sent to him on 8 April. On 21 April Senator Button telexed the Tasmanian Government advising it of the name of the company. But the company that he named as being very willing to go down to Tasmania was not an American company. It was a Melbourne firm. The Melbourne firm had approached the Tasmanian Government with some preliminary proposals. The firm is a marketing and distributing agent for an American manufacturing company which could be interested in setting up a plant in Tasmania. As our State Government was very anxious to encourage industrial development in Tasmania, it repeatedly telexed the American company seeking the details of its plans and requirements and advice about the way it could assist in the implementation of those plans. A telexed reply was received recently from the American company stating that it had no plans whatsoever to establish a computer hardware manufacturing facility either in Tasmania or, indeed, anywhere in Australia. Senator Button's statements in the Press report of 2 March have been proved to be completely without foundation. The honourable senator made claims about an American company's intention to build a large factory and create jobs in Tasmania. That company has stated that it has no such intentions. On 5 May the Tasmanian Government again telexed Senator Button and asked whether he could vouch for the bona fides of the alleged intentions of the American corporation to set up a plant in Tasmania. Senator Button did not reply to that telex. If honourable senators remember, I also asked Senator Button questions in this place about the matter and again he would not give any answer to me. It is very clear now why he did not answer me and why he did not reply to the Tasmanian Government: He had no direct knowlededge of the American company's plans or intentions. He had purely accepted hearsay reports in Australia from people who were interested in beating up a story on the eve of the Federal election for their own political purposes. He did no research whatsoever. He accepted the hearsay suggestions that the company could set up a plant and used them solely for his own political purposes several days before the 5 March election. The people from whom he accepted the hearsay reports were attempting to demonstrate to the Government that there were other things to look at apart from a dam. One of the Australian parties involved in making the computer plant in the Press statement of 2 March claims exactly that. The whole exercise was a cynical, irresponsible, baseless ploy by people opposed to the Gordon below Franklin project. They tried to create claims about alternative sources of employment in Tasmania and alternative uses of funds. But computers and computer parts do not make electricity. They will not meet Tasmania's power needs in the 1990s. The American company whose name was so wrongly and irresponsibly used in this affair has no current plans to set up in Australia. Senator Button has acted most unwisely in this affair once again. He gave endorsement to false claims about industrial expansion and job creation in Tasmania on the eve of the Federal election. In doing so, he has shown great insensitivity towards the plight of the unemployed in Tasmania where, over the last few years, the unemployed rate has been greater than in any other State. Senator Button has been party to the making of unsubstantiated claims, to the raising of false expectations and to much wasting of official time which would have been better spent seeking more genuine job creation proposals. His cynical, irresponsible attitude towards Tasmanian job creation has been matched by his Government's cynical, miserable, punitive actions towards Federal expenditure in Tasmania and by his leader's abolition of the Wynyard Airport scheme, the Craigbourne Dam scheme and the Warner Creek scheme. Again, those things surfaced only after the Federal election. It is clear that this self-styled Government of co-operation and consensus does not govern fairly and equitably for all Australians. It has no intention of doing so and it never did. Senator BUTTON(Victoria-Minister for Industry and Commerce)(10.10) —I am grateful to Senator Walters for alerting me to the fact that I was to be savagely attacked during the adjournment debate. Senator Walters —If you think that is savage, you wait. Senator BUTTON —I am waiting. Senator Crichton-Browne —You had better watch out. Senator BUTTON —I assure the honourable senator that I do watch out, and I will continue to do so. I am sure that the whole Senate is grateful to Senator Walters for telling us 'computers do not make electricity'. That is something which I have learnt tonight and which I am sure that Senator Crichton-Browne and others have learnt as well. It just illustrates the absurdity of the level of debate which has taken place about industry development in Tasmania. The art form now, I presume, is to make electricity; I do not know for what purpose. I hope that electricity will be generated in Tasmania for other purposes. Senator Walters —You are not treating it seriously. Senator BUTTON —I do not treat Senator Walters seriously. That is probably the pity, as she sees it. I clearly do not. Prior to the election campaign I was in Tasmania. In the course of a Press conference, in a lengthy discussion about industry in Tasmania, I referred to two matters. Senator Walters might like to take me up on the other matter at some future stage. One of the two matters to which I referred was the desirability of developing high technology industries in Tasmania, of which the computer industry was an example. I instanced the fact that there was a very high level of computer literacy in Tasmania because of the relative sophistication of the Tasmanian education system in relation to computers. As to the other matter I mentioned at that Press conference-Senator Walters might dig this one out too-I expressed the view that, if a national maritime museum were to be built in Australia, it ought to be sited in Hobart in order to attract more tourists to Tasmania and because of the peculiar history of Hobart as a port. I felt it appropriate that that matter should be considered by any government following the publication of a report which had been commissioned by the previous Government and was awaiting publication, which publication was interrupted by the calling of the elections. That is still my view. I expressed a view in respect of both those matters. I said that the sort of industry which one would like to see in Tasmania was a computer industry. I then told those present that I had been approached in Melbourne, as I was, by the agents of an American computer company who had expressed interest in siting a factory, or whatever one makes computers in, in Tasmania. That is all I said. That is true. Senator Walters says that I had not been approached by the American company. That is absolutely true. I never claimed that I had. I said that I had been approached by agents for the company. Of course, the proof of all that is that there has been correspondence with the Tasmanian Premier about that matter. Senator Walters referred later in her speech to 'much wasting of official time'. I will tell her where the wasting of official time was. It was in the Premier's office. Instead of passing my letter on to his Minister for Industry and Small Business, who I concede has been very diligent in sending me telexes about this matter, the Premier apparently dwelt on the mail, without passing it on. I have received telexes from the Minister for Industry and Small Business in Tasmania. I obtained a reply to the first telex which he sent me. I am endeavouring to obtain an informed reply to the second telex which he sent me. When I obtain an informed reply, I will respond to the appropriate person-the Minister for Industry and Small Business in Tasmania. I will not respond to Senator Walters in relation to a matter in respect of which I am in communication with the Minister for Industry and Small Business in Tasmania. I really do not want to say any more about the matter. I think that trying to make an issue out of this matter illustrates again a degree of desperation on her part. I expressed my view before the election in relation to industry in Tasmania, and I will express it again. If I can do anything to assist with the establishment of a computer company in Tasmania I will continue to do so. None of the efforts which I or the Minister for Industry in Tasmania have made has been assisted by Senator Walters barging into this issue. I regard it as an insult in the extreme, or I would from most people, to be described by Senator Walters as being unconcerned about the price that would apply to the unemployed in Tasmania. Senator Walters does not have a mortgage on virtue. She does not have a mortgage on attitudes to people in the electorate. She does not have a mortgage on virtue in relation to people who are suffering in this country. If she did and had explained it a bit more in the last seven years probably she would not be sitting where she is tonight. Senator REID(Australian Capital Territory)(10.16) —I want to ask a question of the Minister for Industry and Commerce, Senator Button, in his capacity as Minister representing the Minister for Communications. As the question has a somewhat longer preamble than would be appropriate in Question Time, I considered it appropriate to raise the matter now. The question arises from an answer which the Minister gave to an honourable senator's question yesterday regarding the Channel 0-28 network. Yesterday's Hansard states: The second part of the question related to the extension of Channel 0-28 to capital cities other than Sydney and Melbourne, which are the two capital cities which currently receive that service. I said last week in an answer to Senator Bolkus that that matter will be reviewed in the Budget context. I repeat that answer. The only thing I can add is that it is high in the priorities of the Government's communications policy to achieve that extension as quickly as possible. My concern relates to a commitment which the previous Government made to extend this service to the Canberra-Goulburn-Cooma region. That commitment was made on 25 July last year when it was announced that multicultural television would be extended via Channel 0-28 to another 10 Australian cities and country centres. This specifically included the Canberra-Goulburn-Cooma area under the timetable for 1982-83. The statement referred to the fact that Canberra had been chosen as the first city because of the line carrying multicultural programs to Melbourne which already passes through the national capital. The matter came up and caused some concern during the election campaign. On 22 February the Canberra Times referred to the Labor Government's statement that was interpreted as there being a possibility that this would not occur. The matter was referred to by the Age of 23 February. The article stated: The ALP announced this week that it would adapt or replace the SBS, which runs Channel 0-28 and radio stations 2EA and 3EA. I am mindful of the Labor Party's platform as printed at clause 18 on page 16. The policy provides: Subject to satisfactory alternate arrangements being made with ethnic communities for management of 2EA and 3EA, and for funding of ethnic broadcasting by alternative means, the abolition of the Special Broadcasting Service. The Ethnic Broadcasters Council and the Ethnic Communities Council of the ACT have been very active for a very long time in campaigning to have the 0-28 service brought to Canberra via the line that now goes through the national capital. As a result of the answer which Senator Button gave yesterday I wonder whether he can clarify the situation as to what we believe was the commitment that the service would come to this area this year. Senator BUTTON(Victoria-Minister for Industry and Commerce and Minister Assisting the Minister for Communications) —by leave-In my answer to a question from Senator Bolkus I said that the matter of the extension of Channel 0-28 would be considered in the Budget context. I am sure Senator Reid would expect that that is the time when we would deal with this matter. My recollection of the program of priorities enunciated by the previous Government, as Senator Reid said, is that Canberra was on the top of the list, followed by Adelaide, Wollongong and so on. I see no reason why the present Government would not follow that order of priorities. A decision will be made about this matter in the Budget context. My recollection of the cost of bringing Channel 0-28 to Canberra is that it would be in the order of $1m; I am not sure. Senator Reid also referred to the Australian Labor Party platform with regard to the Special Broadcasting Service. I did not apprehend that she had any concern about that matter in relation to bringing Channel 0-28 to Canberra. If she did, I can only answer it in this way: The Government, before the election, enunciated a very specific program about the future of the SBS. Perhaps the honourable senator could indicate whether she wants me to go into the matter now . I will certainly supply her with a copy of the election program which was announced. It foreshadowed some changes to the structure of the SBS, but not in a way which would affect the provision of multicultural television services. Senator McINTOSH(Western Australia)(10.22) —I should like to bring to the attention of honourable senators the appalling lack of basic human rights in Chile. In the ten years of Pinochet's dictatorship, agonising hardship and insecurity have been suffered by the Chilean people. Tens of thousands have been killed since the 1973 coup and approximately one million people have been exiled . Violation of human rights is a constant occurrence. Political repression, censorship and persecution are facts of life. All sectors of the Chilean community have been affected, including the church, which has come under attack for its defence of human rights. Torture is a blatant Government policy. Amnesty International recently made public its finding that Chilean political detainees are systematically tortured and sexually abused by Government security forces, with strong indications that Chilean Government medical personnel are actively participating in the torture. Amnesty International has documented cases of the most vile and hideous abuses against political prisoners in its 80 page report on human rights in Chile. The daily survival of the Chilean people is threatened by the disastrous economic policies and failures of the Pinochet regime. Unemployment is reportedly running at 40 per cent of the population and inflation at 30 per cent. There is an enormous shortage of housing and a large sector of the population does not receive basic nourishment. User pays policies in education have led to considerable under-enrolment in schools. These circumstances gave rise to a massive broad based demonstration against the Pinochet regime in Santiago on 11 May. The people on the streets called for jobs, food, justice and freedom. Pinochet replied with further repression, leaving two killed and hundreds injured. Media censorship was tightened and massive house searches took place in Santiago and other major cities. In night raids, hundreds of people were rounded up and held in a stadium. There are growing fears that those who have been detained may be subjected to torture and possible death-as have many who have gone before them. The Australian Government should use every possible international forum to protest against the widespread repression and denial of human rights to the millions of underprivileged people in Chile and in other Latin American countries which are dominated by repressive and corrupt military juntas. We should also be advocating to our so-called rich and powerful friends that they should not continue to prop up these regimes with generous credits and supplies of arms which are used against their own people to deny them basic democratic rights. Senator CROWLEY(South Australia)(10.25) —I want to comment briefly on one of the documents which were proposed to be discussed on Tuesday but which missed out. Fortunately, I have been able to have it listed for the August session. It is the fifth annual report of the Commonwealth Ombudsman. I note from some newspaper comments that the Ombudsman himself was disappointed that the report had missed comment and discussion in the Senate, so I thought that I would make a few comments tonight and hope that others will take up the matter further in the August session. The Ombudsman says in the report that, with some notable exceptions, his annual report to the Parliament has not engendered much comment from the floor of either the Senate or the House of Representatives; he had expected more. Perhaps I am simply trying to meet some of the Ombudsman's requests to the Senate. The report mentions a number of things which perhaps are known to other senators but which I find quite fascinating. It mentions that the first office was opened in Canberra in 1977 with an investigation staff of two and a backlog of 200 written complaints. Last year there were 2,500 written complaints and 9,000 oral complaints; so there is now a staff of 50 in seven offices around Australia, which is a considerable growth in five years. Many of the complaints that come to the Ombudsman are outside his jurisdiction. They are matters which concern State problems that have been raised by people, and the Ombudsman, of course, is required to point out that he cannot deal with those. Other complaints are outside the Ombudsman's jurisdiction. There has been a great increase in the number of complaints, as the figures I have mentioned show. The Ombudsman proposes that these are due to two factors, perhaps because there is much more involvement by the Government in people's lives. He cites as an example social security matters and the fact that in the last year, 1982-83, there were 1,700 complaints about social security matters, and 374 in the year 1977-78. This is directly paralleled by the number of people who are unemployed or in other ways dependent on social security pensions. He also suggests that another reason why there is an increased number of complaints is that there is a much better awareness among people of the Ombudsman and of their rights. Not only is this because the Department of Social Security is telling people of their rights but also because even our educational systems are giving people information about their redress if they are unhappy with decisions by departments. The Ombudsman also reports that a number of complaints received involve matters of great complexity and take considerable staff time to deal with. To list just a few examples, a number of complaints dealt with were official examples consequent upon allegations about the use and effects of herbicides in the Vietnam war, actions connected with the cancellation of pensions and sickness benefits following allegations of a widespread conspiracy to defraud the Commonwealth, investigations and prosecutions of doctors for alleged infringement of the National Health Act and the health insurance legislation, the effects of Commonwealth planning proposals on land affected or potentially affected by such proposals, the provision of wrong advice leading to claims of substantial losses by individuals relying on that advice and alleged unauthorised interception of telephone services. Those are simple examples that the Ombudsman cites as examples of the complex nature of some of the complaints that cannot be dealt with in a simple fashion. In many ways the Ombudsman is pleased with the response of various departments to any investigation that his organisation has had to conduct. However, he says that whereas there has been a lot of co-operation, in some cases there has been active defensiveness and obstruction, and some places have even created, it seems, specialists to deal with dealing with the Ombudsman. There has been some finessing of ways of dodging the appeals. He draws our attention to this and in various parts of the document he makes further reference to it. He is not too troubled by it because, he says, it is for him to determine whether he will investigate a matter, so clever footwork by people in various departments will not necessarily prevent him from following up any complaint that comes to him. Essentially, though, the Ombudsman is in praise of the departments and their co -operation with any investigations he has tried to institute or has instituted. He says that, interestingly enough, the effect of the Ombudsman has been to encourage departments to make decisions that take into account the possible need for accountability, so that in some ways the existence of the Ombudsman has encouraged departments to build an accountability factor into their departments. He says that this, in fact, in the long run has a cost-benefit effect. He mentions in particular the Australian Telecommunications Commission, which has gone to considerable lengths to put internal accountability mechanisms and complaints mechanisms into its organisation so that people can have most of their complaints dealt with within the organisation and do not have to seek the support of an ombudsman in dealing with any problems. In the report he states: Telecom is, of course, only one of a number of agencies that have seen the value of improving relations with clients and such developments in the long run must be seen as more cost-effective than responding to large numbers of inquiries from external review bodies. In the opening section he addresses himself briefly to complaints that were raised in the first place about an ombudsman perhaps being antagonistic to a Westminster parliamentary system. He says that all his experience over the last five years has shown that, far from eroding such traditional systems, the institution of ombudsman has reinforced and supported their functions. He says that, in fact, quite a number of parliamentarians or their constituents seek the Ombudsman's help in pursuing complaints; so members of parliament themselves have actually asked the Ombudsman for help. Again, the Ombudsman can sometimes decide that the parliamentary system may be a more appropriate way for people to follow up complaints or seek satisfactory solutions to problems they have. So he finds that the Ombudsman and the Westminster system work very nicely together. The Ombudsman also makes the point that he does not see his task as necessarily finishing with the resolution of a complaint but that, in fact, the complaint may lead to further investigations and recommendations to departments about changes in administrative practices or policies so that deficiencies leading to complaints do not continue to exist. In various places in the document he points out that insufficient staff means that that part of the Ombudsman's role is, by and large, not fulfilled at this stage, although this is something he would like to see happen. The final point I make tonight, which the Ombudsman raises in his report, concerns the fact that the ability of the Ombudsman to function independently of government depends not on the mode of the appointment of the Ombudsman but on the powers which the Parliament chooses to vest in him, together with a statutory guarantee of tenure. In these vital respects the Commonwealth Ombudsman's position is secure. This is a very brief outline of this document. I think it contains some most important material. I am glad that we will have the opportunity to deal with it more fully in August. Senator CRICHTON-BROWNE(Western Australia)(10.33) —I raise in the Senate a proposal that the Government, in its budgetary considerations, contemplate the prospect of allowing mineral exploration companies the advantage of offsetting their losses against profits derived from other areas of activity. I note that in an answer to a question asked yesterday the Minister for Resources and Energy , Senator Walsh, appeared to be advocating a consistent treatment for all mining revenues, irrespective of the mineral involved. That approach does not take into account all the varying degrees of difficulty attached to locating and extracting different minerals; nor does it take into account the economics of the wide range of mining projects in Australia today. Nevertheless, if this is a principle which the Government seeks to apply where there are revenue benefits to it-for evidence of this we need look no further than the introduction in the recent economic statement of a clamp down on the concessions which have been available until now for the goldmining industry-it is a principle that should apply equally when there are benefits to be received by the mining industry. I refer particularly to the discrepancy between section 124AH of the Income Tax Assessment Act relating to exploration expenses incurred in respect of petroleum and section 122J of the same Act which refers to expenses incurred in exploration for minerals. Many honourable senators may be aware that section 124AH was added to the Act following the previous Government' s 1976-77 Budget as an attempt to stimulate exploration in the oil and gas industry in Australia. Together with the parity pricing policy the previous Government's policy of providing a taxation incentive to explore for petroleum has been a notable success to say the least. In 1980 90 exploration wells and 27 development wells were drilled in Australia. In 1981 the figures were 149 and 55 respectively and in 1982, when there was a downturn in demand, 230 exploration wells and 93 development wells were drilled. The trends in the length of seismic surveys also demonstrate a high degree of activity in petroleum exploration, with 62,686 kilometres of seismics shot in 1980, rising to 87,295 kilometres in 1981 and 118 ,515 kilometres last year. In other words, within the parameters set by international conditions it is possible for a government to provide some encouragement through its Budget policies in the field of mineral exploration. Regrettably, while the point was proven in the oil and gas sector, the same advantages have not been extended to the many exploration companies searching exclusively for minerals other than petroleum. Of course, those companies are visited by section 122J, which allows a deduction of exploration expenses from revenues derived by the taxpayer either directly or indirectly through mining. Unlike the petroleum explorer, the mineral explorer must have an income derived from mining against which exploration costs may be offset. Petroleum explorers may offset their exploration costs against income from any other source on the simple proviso that they satisfy the Commissioner of Taxation that their business carried on activities that included exploration for petroleum within Australia by way of definition. These two provisions have a clear and discriminatory effect. Companies already deriving income from non-mining activity which diversify into petroleum exploration with the obvious intention of producing petroleum either by themselves or with joint venture partners receive a tax encouragement whereas similar companies diversifying into exploration for minerals other than petroleum are not similarly assisted. Looking at it perhaps from another angle, small petroleum exploration companies with an income derived from investing shareholders' funds receive this benefit, thereby allowing them to preserve their capital for longer and so engage in longer exploration programs. Small mineral exploration companies must meet not only their exploration costs from their revenues but also the full amount of the tax bill which arises as a result of their investments. The funds which shareholders invest in a small mineral exploration company are therefore much more quickly dissipated than those in a small petroleum exploration company, allowing for a much shorter exploration program before the mineral explorer is forced to return to the capital fund raising market. In the present economic climate this presents mineral exploration companies, as one can imagine, with considerable problems. The companies engaged solely in mineral exploration spend more on exploration than they make out of mineral production yet they cannot claim all or part of their exploration costs as a deduction whereas petroleum exploration companies can. It is not a matter of the mineral exploration companies doing so well at present that they do not need assistance. They certainly do. The Australian Mining Industry Council's 1982 survey covering all alumina, copper, lead, zinc and nickel producers in Australia, and most of our iron ore and coal producers, shows a sharp decline in after-tax return on assets in the mining and exploration industry over the past three years. In fact after-tax returns were 2.5 per cent in 1982, down from 5.5 per cent in 1981 and 10.6 per cent the year before that. Of course, the effective return on funds in the mining and exploration industry last year was 3 per cent, with profits that were less than one-third of the 1981 level. More than most other industries, the mining industry has been hard hit by the current recession but that does not mean that the need for exploration diminishes. As the world economy strengthens, demands for minerals will also grow again and when the capacity for existing mines is taken up there will be a need for new mines to be discovered and opened. It is essential that the initial exploration work be done now before that point is arrived at. The most prospective new areas must be identified and the preliminary studies must be undertaken well in advance of the recovery in demand because of the long lead times involved in opening new mines, often in remote parts of the country. I urge the Government to consider encouraging exploration for minerals by extending the deductions, which currently apply under section 124AH of the Income Tax Assessment Act to petroleum exploration, to all forms of mineral exploration. If the Government is really committed to a lasting recovery and to providing future secure employment for all Australians, if it is really concerned to ensure the development of export industries in order to redress our present adverse balance of trade, it will adopt policies which assist the mining industry rather than harm it. I will be most interested to hear the views of the Government. Senator GARETH EVANS(Victoria-Attorney-General)(10.42) —Senator McIntosh's account of the current deplorable human rights situation in Chile will have touched a responsive chord with all honourable senators concerned with the condition of liberty around the world. Of course, there is by and large bipartisan concern in this place about such matters as reflected, for example, in the substantial membership across all the parties of the Parliamentary Amnesty Group. I believe it is appropriate that Senator McIntosh should have drawn our attention to this matter tonight. As to the Government's attitude on this matter, I simply state that Australia has made clear on a number of occasions its concern at the human rights situation in Chile by supporting resolutions condemning it at meetings of the United Nations Commission on Human Rights and at the United Nations General Assembly. Australia's attitude in this respect is certainly known to the Chilean Government. I believe that the Commonwealth Ombudsman, Professor Richardson, and his staff would have been gratified at the extended consideration of the Ombudsman's report that was given here tonight by Senator Crowley. It is the case that the Ombudsman is doing a splendid job in helping to improve and maintain the quality of public administration in this country. It is further the case that the Ombudsman's report, as the Ombudsman himself has said and Senator Crowley has repeated, has had less than adequate attention in the Parliament each year in recent times. I believe it is again very appropriate that Senator Crowley should have taken the opportunity to give a more elaborate account of what was in that report than might otherwise have fallen upon the ears of honourable senators, let alone befallen their eyes. As far as the matters raised by Senator Crichton-Browne are concerned, I pretend to neither expertise nor information in the areas to which he addressed himself tonight. But I will ensure that his remarks are addressed to the Minister for Resources and Energy, Senator Walsh, in order that he might give consideration to them and reply as he thinks fit. I refer to just one other matter while I am on my feet. Senator Primmer took advantage today of the opportunities afforded by the first reading debate on a money Bill to repeat and to some extent to elaborate on a number of allegations that have now become familiar from him relating to the conduct of certain officers of the Department of Foreign Affairs and, indeed, the conduct of the whole Department itself. In this respect he was taking further matters that were the subject of debate on the adjournment on the evening of 25 May and also of replying to the ministerial statement by the Minister for Foreign Affairs, Mr Hayden, in the House of Representatives on 26 May. I simply say that I regard the raising again of these matters by Senator Primmer as unfortunate. Having now had the opportunity to read what Mr Hayden said in the other place on 26 May, I believe that although his remarks on that occasion were in some respects hard, they were in fact fair minded. I share Mr Hayden's hope that Senator Primmer, honestly and sincerely motivated as he may be, will perhaps refrain from further canvassing these matters in public, at least until the further reports on his allegations which are presently being compiled by the Public Service Board and the Ombudsman are in fact complete. I further hope that when these reports come into the public domain, or at least are completed, Senator Primmer will accept the conclusions of those reports, whatever they might be. Question resolved in the affirmative. Senate adjourned at 10.47 p.m. The following Papers were presented: States Grants (Petroleum Products) Act-Amendments of the Schedules to the subsidy schemes in relation to the States of New South Wales, Queensland and Western Australia, dated 15 May 1983. The following answers to questions were circulated: Question No. 112 Senator Bolkus asked the Minister representing the Minister for Defence, upon notice, on 3 May 1983: Has the attention of the Minister for Defence been drawn to an article in the May 1983 edition of Australian Penthouse by Dr Geoffrey E. Smith, entitled I Spy which makes certain claims about the Pine Gap space base, if so: (a) is the United States using a nuclear and/or testing a chemical laser weapon at Pine Gap as is claimed by the article; and (b) has Australia been informed by the United States of the existence of a nuclear reactor on Australian soil or the carrying of chemical laser weapon tests in this country. Senator Gareth Evans —The Minister for Defence, having seen the article, has provided the following answer to the honourable senator's question: (a) No. (b) The only nuclear reactor on Australian soil is that operated by the Australian Atomic Energy Commission at Lucas Heights. No chemical laser weapons tests are being conducted by the United States in Australia. Question No. 138 Senator Lewis asked the Minister representing the Minister for Defence, upon notice, on 12 May 1983: Has there been any case of confusion within the Defence forces in relation to the policy and procedures detailed in the DI(G) OPS 05-1 Policy and Procedures for Defence Force Assistance to the Civil Community and DI(G) OPS 01-2 'Defence Force Aid to the Civil Power' since the introduction of these policies and procedures. If so, what action was taken. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: The Defence Instructions in question were first issued in 1978 for the particular purpose of clarifying for Defence Force personnel, policy and procedures regarding Defence Force assistance to the civil community and aid to the civil power. They were issued to all Service units for reference and permanent retention. From time to time, since 1978, service units have indicated that they were uncertain as to the category of a particular request for assistance or aid and, in accord with referral arrangements built into the Defence Instructions themselves, have sought guidance from higher authority. Such requests were considered routine and to be expected, given the wide range and sometimes complex nature of individual requests. Subsequent to the recent case of the request from the Attorney-General's Department for Royal Australian Air Force photographic surveillance over South West Tasmania, the Department is reviewing the instructions to see whether changes are required. Question No. 139 Senator Lewis asked the Minister representing the Minister for Defence, upon notice, on 12 May 1983: (1) Were any of the Royal Australian Air Force aircraft engaged in photographic flights over South West Tasmania between 7 March 1983 and 12 April 1983 carrying any arms. (2) Was such action contrary to clause 19 of the Policies and Procedures Instructions Ref DI(G) OPS 01-2 'Defence Force Aid to the Civil Power'. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: Neither the Mirage nor the RF111 which photographed the Franklin Dam site on 7 and 8 April respectively was armed. Question No. 109 Senator Colston asked the Minister representing the Special Minister of State, upon notice, on 3 May 1983: (1) Under what circumstances are random samples of votes taken during the course of counting votes for a Senate election. (2) What instructions are given to divisional returning officers about the way in which they are to choose random samples. Senator Gareth Evans —The Special Minister of State has provided the following answers to the honourable senator's questions: (1) Section 135 of the Commonwealth Electoral Act sets out the procedures for conduct of the scrutiny in a Senate election. Sub-section (5) of that section sets out the procedures for the filling of the several vacancies and paragraph ( e) (v) of that sub-section sets out the requirement for each divisional returning officer to take ballot papers at random from the parcel containing the ballot papers of the elected candidate. Paragraphs (f), (g) and (h) of sub- section (5) also require that these procedures be followed in the successive distribution of surplus first preference votes. (2) That section of the divisional returning officers' Standard Election Procedure Manual dealing with the Senate scrutiny refers to section 135 (5) and provides- 'When selecting ballot papers at random the ballot papers from which the random sample is to be taken should be placed face down on the table so that the vote upon the ballot papers cannot be seen'. At the time of the 5 March 1983 Federal elections the Australian electoral officers for South Australia and Western Australia issued the following instructions to divisional returning officers in their respective States about the way they should choose random samples: 'When taking ballot papers at random the divisional returning officer should afford ballot papers an equal probability of continuing in the count and therefore there should be no selection criteria used in order to achieve this. The following steps should be taken: (a) All ballot papers must be faced downwards so that no markings are visible. (b) Take at random from within each and every bundle of ballot papers concerned a number of ballot papers in proportion to the number to be transferred to a continuing candidate as against the number arranged. (Rather than take complete bundles or even a consecutive number of ballot papers within each bundle.) Examples 1. 12,000 ballot papers to be transferred out of 24,000 (240 bundles) arranged. The proportion is 50 per cent. Therefore take 50 randomly from each of the 240 bundles. 2. 1,468 ballot papers to be transferred out of a total of 6,422 (65 bundles including one 'broken') arranged. The proportion is 22.85 per cent. Therefore take 23 out of most bundles and 22 out of others but ensure total take aggregates to 1,468. (c) Following the taking at random the elected candidates ballot papers will be separated into two groups: (i) the ballot papers which are to be transferred to each continuing candidate and remain in the count. (ii) the ballot papers which are to be put aside as finally dealt with. These must be re-assembled, counted into bundles of 100s and 1,000s, wrapped, labelled , sealed and removed from the count.' In Victoria the Australian Electoral Officer's instruction was as follows: 'At the fresh scrutiny band ballot papers in 100s and then 1,000s. At all times when selecting ballot papers at random they must be faced downwards so no markings are visible. Selection at random-break each bundle of 100 and select haphazardly from such bundle in proportion to the number of ballot papers to be transferred. Re-assemble ballot papers selected at random and band in 100s. Re-assemble ballot papers set aside in 100s. The banding of ballot papers in 100s and 1,000s is to be applied where practicable only.' The Australian Electoral Officer for Tasmania issued the following instructions to his divisional returning officers: 'After completion of the second recheck of Senate ballot papers which should at that stage still be in counting centre parcels, you should then proceed to the amalgamation of these counting centre parcels of ballot papers to candidates as first preference votes. Your progressive total sheet should be used to ensure that at the amalgamation of each successive counting centre parcel the progressive balance of each candidate's first preference votes agrees. At the time of this amalgamation or at any stage prior to this, under no circumstances should ballot papers in any candidate's parcels be blocked-that is to say sorted into parcels containing a straight ticket vote and parcels containing other than a straight ticket vote. The ballot papers should be allowed to mix freely throughout the total of the contents of that candidate's parcel of first preference votes. When taking random selections from any parcel of ballot papers such random samples should be taken from the total ballot papers contained in that parcel. Under no circumstances should ballot papers only be taken from a portion of any parcel. You should further ensure that some ballot papers are taken from each and every bundle of ballot papers in the parcel. When extracting a random sample of ballot papers all of the ballot papers from which the random sample is to be taken should be placed face down prior to the commencement of the taking of the random sample and all ballot papers both in relation to the random sample and those remaining should remain in this face down position until the completion of the taking of the random sample in order to ensure that at no stage can the votes on these ballot papers be seen and hence no suggestion made that the random sample has been in any way specifically selective. Upon completion of the taking of the random samples all ballot papers to be set aside should be immediately parcelled, sealed and labelled as to their contents. ' The Australian Electoral Officer in Queensland issued no particular instructions on the procedures for random sampling. In his general pre-election instructions he reminded the divisional returning officers of the provisions of section 135 (5) (e) (v) in the following terms- 'Each divisional returning officer must be aware of his responsibility under section 135 (5) (e) (v) of the Commonwealth Electoral Act in regard to his random selection of Senate ballot papers and ensure that his procedures stand up to the scrutiny of scrutineers and are not to be found wanting should there be a recount.' No instructions or reminders on random sampling were issued to the divisional returning officers in New South Wales or to the returning officers in the Australian Capital Territory and the Northern Territory. Question No. 3 Senator Bolkus asked the Minister representing the Special Minister of State, upon notice, on 22 April 1983: (1) How many persons are currently employed by the Australian Federal Police at Adelaide Airport. (2) Are some officers who are officially employed at Adelaide Airport working in the plain clothes section of the Australian Federal Police. (3) Is security strength at Adelaide Airport below strength because of this juggling of positions. (4) Has the above occurred because of the employment freeze imposed on the Australian Federal Police. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: (1) Twenty-six Australian Federal Police members are currently employed at Adelaide Airport. This is the authorised establishment. (2) Yes. Some members, officially stationed at the airport, work in plainclothes in other general duties areas to broaden their experience. (3) No. Replacement staff are provided from other areas so that staffing levels are kept at authorised establishment. (4) Not applicable. Question No. 29 Senator Bolkus asked the Minister representing the Minister for Health, upon notice, on 21 April 1983: (1) What applications have been made recently to have acupuncture recognised by the Commonwealth as a speciality item. (2) What decisions were taken in respect of such applications, and if these applications were rejected, what were the reasons for the rejection. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1 and 2) Acupuncture, when carried out by a registered medical practitioner, is covered by a specific item (Item 980) in the table of medical services contained in the schedule to the Health Insurance Act. Where a medical practitioner who is recognised as a specialist for the purposes of the Act provides acupuncture treatment, benefits are payable under the acupuncture item only (Item 980). Benefits are not payable under any specialist consultation item. No applications have been made to have acupuncture recognised as a specialty item. However, requests have been made to have the fee increased beyond that currently applying under Item 980, which is the equivalent to the fee for a standard surgery consultation by a general practitioner (6 to 25 minutes). These requests have mainly been received from specialists or their patients. No action has been taken on these requests for an increased fee as it has been considered that the current fee is reasonable. Question No. 30 Senator Bolkus asked the Minister representing the Minister for Health, upon notice, on 21 April 1983: (1) Which health funds have at any time in the past or at present covered treatments by acupuncturists. (2) How does such coverage operate. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) and (2) On 1 April 1981 the Government introduced Item 980 into the table of medical services in the schedule to the Health Insurance Act to cover the services of acupuncture when rendered by a legally qualified medical practitioner. All registered health insurance organisations providing medical benefits are required to pay benefits to insured persons for medical expenses incurred for acupuncture treatment rendered by legally qualified medical practitioners under Item 980. Prior to 1 April 1981, attendances at which acupuncture was performed by a legally qualified medical practitioner attracted benefits under the appropriate consultation item. For example an acupuncture service by a general practitioner during an attendance lasting 20 minutes at his rooms would attract the schedule fee for a standard surgery consultation item. Again, all registered medical benefits organisations were obliged to pay benefits. With regard to benefits for acupuncture services provided by non-medically qualified acupuncturists I am informed that there are nine registered health insurance funds which provide ancillary benefits towards the cost of such treatment, from supplementary/ancillary tables operated under the National Health Act. None of the other registered funds have offered such benefits in the past and subsequently deleted them. The names of the health funds concerned, and details of the benefits provided, are as follows: *Army Health Benefits Society (all States): A benefit of $6 per service by a registered acupuncturist in private practice with a limit of $50 per person per year. *Cheetham Hospital Benefits Fund (Victoria): Provides a benefit equal to 50 per cent of the fee charged by an acupuncturist. A limit of $400 per member per year applies to benefits paid for any ancillary services. *Government Employees Medical and Hospital Club (New South Wales): A benefit of up to $9 per service where treatment is rendered by a recognised acupuncturist. A limit of $300 per person per year applies to the aggregate of benefits paid in respect of treatment rendered by a recognised acupuncturist, physiotherapist, chiropractor, chiropodist or speech therapist. *Naval Health Benefits Society (all States): A benefit of $10 per service with an annual maximum of $100 per person. *Reserve Bank Health Society (all States): A benefit of $12 per visit with a maximum of $200 in any one year for acupuncture treatment when referred by a medical practitioner for a specific ailment requiring essential treatment. The Hospitals Contribution Fund of Australia (New South Wales): A benefit of up to $8 per service when rendered by a qualified acupuncturist accredited with the Acupuncture Ethics and Standards Organisation. No maximum ceiling in any one year. The Latrobe Valley Hospitals and Health Services Association (Victoria): A benefit of $8 per service. A limit of $250 per year applies to benefits paid for all ancillary services. The Manchester Unity Independent Order of Odd Fellows in Victoria: A benefit of $7 per service for acupuncture treatment when rendered by a registered chiropractor with an annual maximum of $100 for a single member and $200 for a family member. *Queensland Teachers' Union Health Society: A benefit up to $8 per service by an acupuncturist recognised by the Society with a limit of $100 per calendar year per person. *Restricted membership funds. Question No. 71 Senator Jones asked the Minister representing the Minister for Health, upon notice, on 21 April 1983: (1) Is it compulsory for cigarette manufacturers to display the warning ' smoking is a health hazard' in a prominent position on cigarette packets; if so, why is it not compulsory for the warning to be displayed on packages of cigarette tobacco as well. (2) Is it also compulsory to display information regarding the tar content in tobacco on cigarette packets and are batches of the products tested regularly to determine the authenticity of the tar content figures that some cigarette packets display, since they are claimed to be determined by Government method. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) Yes. During a period prior to 1973 legislation was introduced nationally and in all States and Territories requiring the statement 'Warning-smoking is a health hazard' to be placed prominently on cigarette packets. The dates of commencement ranged from 1 January 1973 to 1 July 1973. The statement is not required on packets of cigarette tobacco because a decision was taken at that time to concentrate on manufactured cigarettes, which account for approximately 90 per cent of tobacco sales. (2) It is not compulsory for tar and nicotine yields to appear on cigarette packets. This labelling is in accordance with the voluntary code in respect of CPM ('tar') and nicotine labelling on cigarette packaging, which was jointly agreed to by representatives of the tobacco industry and the former Federal Government. The voluntary code requires all primary cigarette packages manufactured or landed in Australia to have printed on one side panel the corrected particulate matter (CPM) (sometimes referred to as 'tar'), and nicotine yield per cigarette of the brand concerned. The code provides for a modified form of 'banding' of tar and nicotine yields, and for maximum yield limits for tar and nicotine of 18 mg and 1.6 mg respectively. Cigarette brands are routinely tested under the cigarette testing program to ensure that the tar and nicotine yields fall within the stated bands. This is a collaborative program between the Australian Government Analytical Laboratories (AGAL), which conducts the tests on behalf of my Department, and the tobacco industry. The testing method and the machines conform to the International Standards Organisation standard. There have been unavoidable delays in the testing program owing to technical problems in AGAL's cigarette testing laboratory. However, testing has resumed and the results are expected to be available at the end of 1983 or early 1984. Question No. 93 Senator Lewis asked the Minister representing the Minister for Defence, upon notice, on 22 April 1983: (1) Have any charges been brought against any cadets following recent allegations of mistreatment of cadets at the Royal Military College, Duntroon, during 1983; if so, how many cadets have been charged. (2) What staff were on duty at the times of the alleged offences by cadets. (3) Have any charges been brought against any staff arising from the actions of cadets; if so, how many staff have been charged. (4) Are the duty staff considered adequate to maintain good order and military discipline. (5) At what stage in their training are cadets instructed in military law and the differences between lawful and unlawful orders. (6) Were the cadets accused of misconduct present at the whole of the hearings into their alleged misconduct and was the evidence taken in writing. (7) Were the accused made aware of the provisions of section 141 (1) (a) of the Defence Force Discipline Act 1982 and given the opportunity to prepare their defence or choose a person to represent or advise them. (8) Has the treatment of the accused cadets been strictly in accordance with the Defence Force Discipline Act 1982 and has their treatment been used to cover up for members of the Defence Force who, by act or omission, have negligently performed a duty required by their office or appointment. (9) Will the Minister for Defence refer all these cases to the Defence Force Ombudsman for his consideration, before any cadet is discharged. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's questons: (1) to (9) I refer the honourable senator to my statement on 11 May 1983 in the House of Representatives (Hansard page 417). Question No. 101 Senator Colston asked the Minister representing the Minister for Defence Support, upon notice, on 4 May 1983: Was the information supplied to Senator Colston in answer to Question No. 2585 ( Hansard, 27 October 1982, page 1923) correct; namely, that no chain was purchased from overseas sources by the Department of Defence Support or the Department of Administrative Services during 1981-82 on behalf of the Navy, the Royal Australian Air Force and the Army; if not (a) was a contract to the value of $43,552 let on 3 November 1981 to a Korean firm to supply chain for the Australian Navy; (b) was the tender number for this contract 2137213U; and (c) what was the reason for incorrect information being provided. Senator Gareth Evans —The Minister for Defence Support has provided the following answer to the honourable senator's question: The answer to question No. 2585 was incorrect. (a) 1. No. 2. The value of the contract was $20,475. 3. Tenders for this requirement closed on 3 November 1981. 4. The contract was placed on 13 May 1982 by the Department of Administrative Services. 5. The contract was placed on Pitt Waddell Bennett Chains Ltd, Victoria, who are agents for a Korean manufacturer. (b) Yes. (c) The item was recorded incorrectly in the computer data base.