Wednesday, 14 September 1983 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. Senator DURACK(Western Australia) —by leave-Mr President, I wish to inform you and the Senate that Senator Chaney, Leader of the Opposition, will be absent during the day and I will be acting Leader of the Opposition for this day. 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 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 Senator Ryan (from 105 citizens) and Senator Walters (from 104 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. And your petitioners as in duty bound will ever pray. by Senator Teague (from 87 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That your petitioners are concerned about foreign owned military bases on Australian territory and the entry into Australian waters and territory of foreign warships and aircraft carrying nuclear weaponry. And that the Australian Government should take an active and constructive role in the promotion of a nuclear-free world. Your petitioners most humbly pray that the Senate in Parliament assembled should: 1. Promote the expression of Australian sovereignty by legislating to bring foreign military bases on Australian territory under the control of the Australian Government. 2. Make it compulsory that the disclosure of weaponry carried by foreign warships and aircraft be given in confidence to the Australian Government prior to a request for entry. And that foreign warships and aircraft that carry nuclear weaponry be banned from Australian waters and territory. 3. Legislate for the cessation of all uranium mining in Australia and its subsequent export. 4. Urge the Government of the Commonwealth of Australia to pose to the Governments of the United States and the Soviet Union that both countries agree to immediately halt the testing, production and further deployment of all nuclear weapons, missiles and delivery systems in a way that can be checked and verified by both sides. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 41 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia showeth that: The Universal Declaration of Human Rights affirms the principle of the inadmissibility of discrimination and proclaims that all human beings are born free and equal in dignity and rights and that everyone is entitled to all the rights and freedoms set forth therein, without distinction of any kind including distinction based on sex. However extensive discrimination against women continues to exist. It is an obstacle to the participation of women on equal terms with men, in the political , social, economic and cultural life of this country. It hampers the growth of the prosperity of society and the family and makes more difficult the full development of the potentialities of women in the service of this country and of humanity. Your petitioners therefore humbly pray that the Commonwealth Government will act to ratify the convention on the elimination of all forms of discrimination against women. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 193 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: (1) That we are deeply concerned for the well-being of Mr Mart Niklus, a leading Estonian and Baltic human rights activist who is in ill health and imprisoned in solitary confinement in Perm Labour Camp No. 389/36 in Siberia. (2) That Mr Mart Niklus has been imprisoned as a 'prisoner of conscience' for the non-violent exercise of his beliefs and is denied visiting and communication rights. (3) That the Australian Government give its support to any initiatives in this case by Amnesty International which has adopted Mr Mart Niklus. Amnesty International believes he has committed no real crime and has never used or advocated the use of violence. (4) That we urge the Australian Government to make representations to the Government of the Soviet Union to promptly release Mr Mart Niklus and grant him a passport and exit visa. (5) That in its representations to the Government of the Soviet Union advise that the Australian Government has approved the sponsored entry of Mr Mart Niklus into Australia. And your petitioners as in duty bound will ever pray. by Senator Reid (from 375 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully shows: We, the undersigned citizens of Australia, concerned with the cut in funding to the Brisbane Airport, concerned that this cut means loss of jobs, concerned that this cut could seriously affect the economy of Queensland: Humbly petition the Senate to request the Australian Government to: 1. Reverse its decision to cut funding to the Brisbane Airport. 2. Abide by the guarantee given by the Minister for Housing and Construction that the Airport would receive priority funding. 3. Assure the citizens of Queensland that the Brisbane Airport as the domestic and economic gateway to this State will be fully completed by 1987. And your petitioners as in duty bound will ever pray. by Senator MacGibbon (from 31 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth. That the 1983 Budget imposition of the excise on grape spirit used in fortifying wine places at risk the future of the fortified wine industry in Australia. That the requirement to pay the excise within 7 days of the fortification occurring is inequitable. That the excise will be reflected in increased costs to the consumers of fortified wines of up to 100 per cent and consumer choice will be restricted. That this will cause reduced fortified wine sales which will result in reduced intake of grapes from grapegrowers. Your petitioners therefore humbly pray that the Federal Government will reconsider their previous decision and either withdraw this tax or modify its methods of application and collection. And your petitioners as in duty bound will ever pray. by Senator Messner (from 2,600 citizens). Petitions received. Notice of Motion Senator GRIMES(Tasmania-Minister for Social Security) —On behalf of the Attorney -General (Senator Evans) I give notice that, on the next day of sitting, he will move: That leave given to introduce a Bill for an Act to amend the Family Law Act 1975 to provide for grants to the States and to the Northern Territory for legal aid to be made subject to conditions, to provide for payments for legal aid to be made subject to conditions and to provide for the making of regulations with respect to fees payable to legal practitioners by bodies providing legal aid. Motion (by Senator Grimes for Senator Button) agreed to: That notwithstanding anything contained in the Standing and Sessional Orders, and unless otherwise ordered, on Thursday, 15 September 1983, the Senate shall proceed with Questions after the giving of Notices. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Social Security)(10.05) —I move: That the Bill be now read a second time. I seek leave to have my second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to amend the Sales Tax (Exemptions and Classifications) Act to alter the sales tax classification of certain goods, principally to correct a number of anomalies and inconsistencies. The Sales Tax (Exemptions and Classifications) Act which this Bill amends not only classifies particular goods as exempt from sales tax, but also places other goods in one or other of the tax-rate categories. Goods not covered by the Act are taxable at 20 per cent. In all, there are some 26 changes. Before the election we undertook to review the rate structure and classification of goods under the sales tax law and this Bill, which responds to various representations, is a step in that direction. Some alterations are designed to remove competitive anomalies, that is, those which give some products a competitive advantage over other products. Other changes are designed to achieve uniformity in classification of various types of goods or to remove weaknesses or correct deficiencies which are proving costly to the revenue. Yet others are designed to refine aspects of measures in the 1981-82 Budget which have thrown up administrative difficulties for taxpayers or have not fully achieved their desired purpose. In doing all this we have necessarily had to keep an eye on revenue consequences. Accordingly, a number of the amendments will bring into the taxable field goods which are exempt, while others will move goods into a higher tax bracket. However, it is not in any sense a one-way street, and in some instances anomalies and inconsistencies are being removed by exempting goods that are at present taxable or by moving goods into a lower tax category. Speaking in more detail, several important changes have been made to the exemptions available to the agricultural industry. Our basic aim is not to curtail the industry's sales tax exemptions, but to specifically confine these exemptions to goods that are for use in that industry. At present certain specified units of agricultural machinery, implements and apparatus are exempt from sales tax whether or not the goods are for use in the agricultural industry. This was not the intention underlying the particular item and we propose to correct the situation by restricting the exemption for the particular goods so that it applies only when the goods are for use in the agricultural industry. In consequence of the changes that are being made, agricultural machinery, implements and apparatus not for use in the agricultural industry will now attract tax at the 20 per cent rate, but goods which are hand tools to which the 7.5 per cent rate generally applies will attract only that rate. A further alteration will affect equipment, preparations and materials for the checking or eradication of diseases or pests. The intention underlying the particular item is to exempt spraying equipment and materials used in the agricultural industry in controlling insect pests and other diseases. Due to deficiencies in the law, certain insecticides used in and around the home to control insect pests, for instance, have gained exemption. Other domestic insecticides are taxable at 20 per cent. We propose to correct this situation by restricting exemption under the item to relevant equipment and materials only when for use in the agricultural industry. As a result, insecticides, fungicides and herbicides used for domestic purposes will now attract tax at 20 per cent. Once again, it can be stressed that there is to be no narrowing of the exemption available for equipment, preparations and materials for use in the agricultural industry for the checking or eradication of diseases or pests. Before leaving the agricultural area, I mention a change that involves the exemption for tractors. In order to overcome problems that have arisen in recent years with this exemption, it is now to be varied. Exemption will continue for tractors for use in agricultural industry, tractors for use in the timber-getting industry in the hauling of log timber and tractors for use as aids to manufacture. However, exemption will no longer apply to tractors used in other circumstances unless overriding exemption provisions of the law, such as those which exempt goods for use by government departments, apply. Tractors for use in the building and construction industries, including construction of roads, dams and other works will qualify for the rate of 7.5 per cent that applies generally to construction equipment. A major effect of the decision to withdraw the general exemption for tractors will be to tax at 20 per cent certain models of ride-on mowers for lawn and grass mowing. Although designed for use principally as mowers these goods have the general appearance and features of a small conventional tractor. They have been marketed for use as general purpose tractors in order to gain sales tax exemption, but will now attract tax at 20 per cent in line with other mowers. Mr President, in moving to some of the other changes announced in the Budget that will result in increases in revenue, some amendments to the original Bill were made in the House of Representatives and I now say something about the two areas concerned. The first of the two areas concerns the exemption from sales tax for piping, tubing, channelling and guttering. Here, the basic change is to confine the existing specific exemption under item 18 for piping, tubing, channelling and guttering to that for use for irrigation, water supply, drainage or sewerage purposes. If it were left at that, as the original Bill largely did, a range of piping and tubing that the Government does not intend to tax would have to depend for exemption on certain other general exemptions the practical application of which may involve some difficulty and, in some instances, not go as far as required. Accordingly, it is now proposed that there be inserted in the sales tax law a new specific exemption item 82A that will maintain exemption for piping and tubing (and fittings therefor) of a kind used primarily and principally in the construction of buildings, fixtures, structures and other works. The package of measures in this area will mean that certain kinds of piping and tubing such as air conditioning duct work and piping and tubing of a kind used with beer drawing plant will no longer enjoy exemption from sales tax. Air conditioning plant of which duct work forms an integral part is already subject to sales tax, and apart from non-business air conditioning, all attracts income tax plant depreciation allowances. The new item is framed so as to tax other general purpose piping and tubing that is not of the kind used in the building and construction industries. The second area that has been reviewed concerns swimming pools. The measures introduced on Budget night involved introduction of tax of 20 per cent on pool filters and related equipment, on fibreglass and other pool liners and certain other pool components and on pool chemicals that, reverting to an earlier point, had previously unintentionally attracted exemption under an item to exempt chemicals used in agriculture. On review, the Government stands by the thrust of these changes but has been persuaded by industry representations that it would be inappropriate, in a context where ordinary building materials used in pool construction remain exempt, to introduce a tax of 20 per cent on pool liners and other components specifically designed for pools. Instead we propose a rate of 7.5 per cent. It is proposed to tax at 7.5 per cent, rather than 20 per cent, those liners and component parts for swimming pools that were tax exempt before the Budget, on the basis that the pools are fixtures. Broadly, pools in excess of 9,000 litre capacity are regarded as fixtures. Liners and component parts for swimming pools of less than 9,000 litres capacity, not being viewed as fixtures, will remain taxable at the pre-Budget rate of 20 per cent, and that rate will apply to filters, chemicals, pool ladders, hand skimmers, chlorine dispensers, salt, pool covers and hand leaf scoops and rakes for use with swimming pools of any capacity. I referred earlier to proposals designed to refine further the measures taken to correct certain anomalies in the 1981-82 Budget which have given rise to administrative difficulties for taxpayers or have not fully achieved their desired purpose. With this in mind, we propose to tax all oils and greases for use as lubricants at 20 per cent. The particular item was amended in the 1981-82 Budget to exclude from exemption oils and greases for use as lubricants of road vehicles. Exemption continued for some oils and greases but was conditional on their being for use for business or industrial purposes as lubricants of machinery, implements and apparatus, other than road vehicles. Oil companies and distributors have complained about the additional paperwork in obtaining certificates from people in business who seek exemption. Likewise purchasers have complained. Other problems arise where lubricants are purchased by persons or businesses which operate both road vehicles and other machinery for business purposes as in the agricultural, mining and construction industries. The administration of the exemption is difficult for all parties where a particular lubricant is for use both in road vehicles and in other equipment in exempt circumstances. Accordingly, all oils and greases for use as lubricants will now attract tax at 20 per cent. As announced in the Budget, the levy on matches is to be switched from an excise, to sales tax. The Bill includes the necessary sales tax measures. Mr President, I have commented on the more important alterations to sales tax classifications that will result in increases in revenue. There are others, such as the proposal to increase the rate of tax on blank video tapes and blank recording tapes and on most recorded video tapes to 32.5 per cent, but I think that I need not go into all of them in this speech. They are fully explained in the explanatory memorandum that is being circulated to honourable senators and I think that what I have said sufficiently illustrates the kinds of adjustments of this nature that are to be effected by the Bill. Still other alterations will result in the withdrawal of minor exemptions and the restriction of certain exemptions, to restore them to their originally intended scope. I indicated earlier that there are a number of measures in the Bill that will reduce sales tax revenue, and they also are covered in the explanatory memorandum and have been listed in Budget Papers. There are three particular reductions in sales tax that I would like to make some comment about at this stage. The first of them was announced recently by the Prime Minister (Mr Hawke) and involves exemption from sales tax of certain tourist vessels. In the 1981-82 Budget, certain ships and other vessels for use exclusively or principally for purposes of pleasure, sport or recreation by the owner or by other persons, whether or not for reward, became taxable at 20 per cent. Prior to 1981, vessels let out on hire on a 'bare boat' basis for pleasure, sport or recreational purposes were taxed at 20 per cent, the hirers being regarded as using the vessel for such purposes. However, pleasure craft that took paying passengers on pleasure, sport or recreational outgoings, and vessels hired out with a crew were exempt from sales tax. Vessels used as ferries for scheduled public passenger and freight transport services were exempt prior to the 1981-82 Budget and have remained exempt. Since the 1981 amendment, it has been represented that tourist vessels should not be taxable in a situation where buses, trains and planes used to transport tourists are exempt. The boat building industry has also complained of a significant reduction in orders. The Government has recognised the problems in this area and we propose to exempt from sales tax certain types of tourist vessels which are used essentially for transporting paying passengers on regular and scheduled tours. The Government has decided to back-date this exemption to 19 August 1981 so as not to disadvantage those who have purchased the particular vessels since that date. The Government has also decided to exempt videotex equipment, teletext decoding equipment and similar equipment for use by the profoundly deaf in adapting a television receiver. Videotex equipment enables the spoken word and information to be reproduced in visual form on screens of television receivers, or monitors designed for use with such equipment, without the need for sound. The benefit of such equipment to the deaf is obvious and I am sure members of the community will welcome the Government's decision. The Government also proposes to reduce the rate of tax on a range of household goods. Household goods in general, including glassware, crockery, sewing and knitting machines and furniture are already taxable at 7.5 per cent. However, because of alternative taxing provisions or the manner in which the particular provision relating to household goods has been framed, certain goods which are clearly household goods have not attracted the 7.5 per cent rate. With this in mind, the Government has decided to reduce the rate of tax on cut glassware from 20 per cent to 7.5 per cent, the same rate as for other household glassware; to reduce the rate of tax on articles of a material other than glass, but used for similar purposes to glassware, from 20 per cent to 7.5 per cent, the same rate as for household glassware and crockery; to reduce the rate of tax on household spinning wheels and weaving looms from 20 per cent to 7.5 per cent, the same rate as for household sewing and knitting machines; and to reduce the rate of tax on jardinieres and vases from 32.5 per cent to 7.5 per cent. It is customary for sales tax changes to come into operation on the day following the introduction of the amending Bill and the Bill therefore provides that the amendments are to be effective on and after 24 August 1983, the day following the introduction of the Bill. There is the exception that the amendment to exempt certain tourist vessels will be back-dated to 19 August 1981 and some changes arising out of the closer economic relations agreement with New Zealand will have effect after the amending Bill becomes law. I commend the Bill to the Senate. Debate (on motion by Senator Collard) adjourned. Bills received from the House of Representatives. Motion (by Senator Grimes) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the whole. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Grimes) read a first time. Second Readings Senator GRIMES(Tasmania-Minister for Social Security)(10.07) —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- FIRST HOME OWNERS BILL 1983 This Government was elected to office on 5 March 1983, with a commitment to boost the nation's economy, to provide a better deal for those in need and to give priority to reducing unemployment. Our housing policies are an essential element of our national recovery strategy . We have an ambitious and innovative program for action in housing. Our program is designed to achieve the dual objectives of ensuring that housing plays a key role in our economic recovery and ensuring that Australian families can gain access to adequate housing at a price they can afford. The main elements of our program are: to provide more effective assistance to low income families seeking to buy a first home-and to ensure an adequate supply of housing finance at affordable interest rates to generate additional activity in the housing industry in order to stimulate job creation and economic growth-to re-establish confidence in this vital industry and to increase the availability of public housing and other innovative forms of low cost housing for the large number of needy households in the community. We have made a significant start in just under 6 months. we consulted carefully with all areas of the housing and finance industries before we announced targets and programs arising from our careful assessment of the industry we set an activity target rate of 130,000-135,000 commencements by the second half of 1983-84. We will be working with the financial institutions to ensure sufficient finance is available to meet these targets we have rationalised existing home ownership schemes and designed a new more effective scheme to assist low income home buyers-the first home owners scheme. to get the housing industry moving without delay we removed the savings requirement from the existing home deposit assistance scheme. we have provided a 50 per cent increase in Commonwealth funding for public housing and have given the States strong financial concessions to increase their own spending in this area. But we are not resting on our laurels. There are other major areas of our program to be implemented. We have commenced work on the renegotiation of the Commonwealth State housing agreement. A key feature of the renegotiation will be a focus on more innovative approaches to the provision of public housing. We are reviewing the operation of the mortgage and rent relief scheme. As a result of this review it is likely that States will be given increased flexibility to introduce measures in co-operation with local government and community organisations to expand the range of low cost rental housing for people with an acute need for housing. Discussions will be held with the States and community groups on the need to increase the supply of low cost rental accommodation through programs to expand community housing. We have an important commitment to the introduction of a community housing expansion program. In all these ways we will be working with the industry, the States and the community to ensure housing is given the priority it requires and deserves. Mr President, the Government has a comprehensive housing package. The first home owners scheme is a major component of that package and the Bill before the House provides for a flexible beneficial scheme to assist low to moderate income earners into home ownership. In a full year, we believe that some 50,000 deserving households will be helped by our scheme and will receive all the social and economic benefits that flow from the security of home ownership. By stimulating housing activity, the scheme will also directly improve employment opportunities in housing and related industries. The Bill before the Senate provides for the Federal Government to assist financially people building or buying their first home on or after 1 October 1983. To be eligible for assistance applicants must satisfy an income test and must occupy, or have an intention to occupy, that dwelling as their principal place of residence. The scheme is a major departure from previous home ownership assistance programs. Earlier programs concentrated on providing a single grant linked to savings accumulated over a period. The greater the savings, the larger the grant . We consider this to be a discriminatory arrangement that did little to assist those potential home buyers most in need. We have therefore developed a scheme which provides for financial assistance over the first five years of home ownership. The spread of benefits is specifically designed to help people meet their loan repayments. Indeed because of the annual benefit, eligible applicants will be able to service a much larger loan than otherwise would be the case. The Bill recognises that potential home owners have different financial requirements. Some require assistance with their deposit, others require increased borrowing potential while others need help with their repayments. Because of this the scheme will provide for three options. For instance, applicants may opt for all of their entitlement to be paid over a five year period and so increase their borrowing potential to the maximum. Alternatively they may opt to commute some of their entitlement to a lump sum to be paid at the time of purchase. In this way they will have increased money available for the deposit on their dwelling. The scheme has been developed in close consultation with housing industry organisations and financial institutions. Their co-operative attitude has been most encouraging. The Minister for Housing and Construction (Mr Hurford) has placed on record his appreciation of their efforts. The scheme is designed to encourage first home owners to apply when they are arranging their finances. In this way the scheme will be of real benefit in meeting the specific needs of applicants at the right time. More importantly, it will also ensure that assistance is directed towards housing, rather than towards incidentals, as has been the case with past schemes. The Department of Housing and Construction will be making available explanatory material to those who are involved with first home buyers including lending institutions, real estate agents and builders, to help them assist home buyers who may be eligible. Brochures outlining details of the scheme will be widely circulated and special measures are in hand for the active promotion of the scheme to ensure that those in need are aware of their entitlements. Available assistance will in many cases be the very thing to enable low income families to buy their own home. Furthermore, the Department of Housing and Construction is setting up ground floor offices in the central areas of the capital cities to assist the public with their inquiries. We aim to have offices in outer suburbs of Sydney and Melbourne and there will also be regular promotions in country areas. Mr President, the Bill before the Senate sets the conditions for eligibility for assistance and provides the guidelines to be adopted in the administration of the scheme. The Bill also provides for the making of regulations which will cover the income test to be applied, the amount of benefit payable and the manner of payment. The regulations will also cover the circumstances in which assistance will be adjusted during the five year subsidy period. I would therefore now like to summarise the main features of the new scheme including the provisions which are to be included in the regulations to be made after the passage of this legislation. The first home must be acquired on or after 1 October 1983. The date of acquisition is the contract date for purchase or construction of the home, or in the case of an owner-builder, the date construction commenced. The dwelling can be new or established and be a house, home unit, flat or other type of self-contained fixed dwelling which meets local government standards. First home owner applicants may be single or married. Joint applications from individuals sharing a home are also acceptable. Ordinarily all parties to the home acquisition, and their spouses, will be required to join in the application . Exceptions will be made, where, for example, a parent joins in the contract simply as a guarantor to meet the lender's requirement and will not live in the dwelling. In the case of migrants, at least one applicant must hold the right to permanent residence in Australia before assistance can be paid. An income test will apply generally to income in the financial year before home acquisition. For those buying a home this financial year, the income test will be to the combined taxable income of husband and wife or other joint applicant for the financial year 1982-83. Full assistance will be payable where taxable income is $24,300 or less. Assistance will reduce for taxable incomes above that figure, reducing to zero at $27,900. The taxable income limits will be adjusted each year in accordance with movements in average weekly earnings. In the event of an applicant's current taxable income being less or likely to be less than for the year before home acquisition, because of unemployment, loss of overtime or cessation of work or other such circumstances, the Bill provides for the more recent income to be tested. Where an applicant was not resident in Australia for the whole of the financial year before acquiring their home, the income test will be applied to that applicant's income in the first full financial year as a resident. The amount of assistance will depend not only on income but also on the number of dependants. Applicants with income below $24,300 in 1982-83 and with two or more dependants, will be eligible for the maximum assistance of $7,000 payable over 5 years. With one dependant, the assistance will be $6,500 payable over 5 years. The Bill provides that children born or adopted up to 11 months after home acquisition will be included in the calculation. As I mentioned earlier, applicants will be able to convert part of the assistance to a lump sum. In the case of those entitled to maximum assistance, applicants with two or more dependants will have the choice of receiving $2,000 in a lump sum and $4, 500 over 5 years or $3,500 in a lump sum and $2,750 over 5 years. Those who choose a lump sum payment will have a reduced on-going subsidy because they will have the benefit of immediate access to a considerable portion of their entitlement. For those who are entitled to smaller levels of assistance, for instance those with one or no dependants, different lump sums will apply. Mr President, I incorporate in Hansard a table which sets out the various levels of entitlement for different family sizes. The table read as follows- BENEFITS TO FIRST HOME BUYERS-FIRST HOME OWNERS SCHEMEMAXIMUM BENEFITS OPTION (ii) OPTION (iii) OPTION (i) Lump sum plus Lump sum plus subsidy only subsidy reduced subsidy Home buyers without children- Year 1 1,800 1,500 1,000 2,500 550 2 1,400 800 450 3 1,000 600 350 4 600 400 250 5 200 200 150 Total 5,000 1,500 + 3,000 = 4,500 2,500 + 1,750 = 4,250 Home buyers with one child- Year 1 2,300 1,500 1,500 3,000 750 2 1,800 1,200 650 3 1,300 900 550 4 800 600 450 5 300 300 350 Total 6,500 1,500 + 4,500 = 6,000 3,000 + 2,750 = 5,750 Home buyers with two or more children- Year 1 2,400 2,000 1,500 3,500 750 2 1,900 1,200 650 3 1,400 900 550 4 900 600 450 5 400 300 350 Total 7,000 2,000 + 4,500 = 6,500 3,500 + 2,750 = 6,250 Mr President, I also incorporate in Hansard a table which shows the benefits payable for different income levels. The table read as follows- BENEFITS AVAILABLE UNDER THE FIRST HOME OWNERS' SCHEME (Total $ over five years) Option 1 Option 2 Option 3 Lump sum and reduced subsidy Lump sum and reduced subsidy Subsidy Reduced Reduced Income only Lump sum subsidy Lump sum subsidy $ $ $ $ $ Home buyers without children- 24,300 5,000 1,500 3,000 2,500 1,750 24,300 5,000 1,500 3,000 2,500 1,750 24 ,500 4,722 1,417 2,833 2,361 1,653 25,000 4,028 1,208 2,417 2,014 1,410 25, 500 3,333 1,000 2,000 1,667 1,167 26,000 2,639 792 1,583 1,320 924 26,500 1, 944 583 1,167 972 681 27,000 1,250 375 750 625 438 27,500 556 167 333 278 194 27,700 278 83 167 139 97 27,900 . . . . . . . . . . 27,900 . . . . . . . . . . Home buyers with one child- 24,300 6,500 1,500 4,500 3,000 2,750 24,300 6,500 1,500 4,500 3,000 2,750 24 ,500 6,139 1,417 4,250 2,833 2,597 25,000 5,236 1,208 3,625 2,417 2,215 25, 500 4,333 1,000 3,000 2,000 1,833 26,000 3,430 792 2,375 1,583 1,451 26,500 2,528 583 1,750 1,167 1,069 27,000 1,625 375 1,125 750 687 27,500 722 167 500 333 306 27,700 361 83 250 167 153 27,900 . . . . . . . . . . 27,900 . . . . . . . . . . Home buyers with two or more children- 24,300 7,000 2,000 4,500 3,500 2,750 24,300 7,000 2,000 4,500 3,500 2,750 24 ,500 6,611 1,889 4,250 3,306 2,597 25,000 5,639 1,611 3,625 2,819 2,215 25, 500 4,667 1,333 3,000 2,333 1,833 26,000 3,694 1,056 2,375 1,847 1,451 26,500 2,722 778 1,750 1,361 1,069 27,000 1,750 500 1,125 875 687 27,500 778 222 500 389 306 27,700 389 111 250 194 153 27,900 . . . . . . . . . . 27,900 . . . . . . . . . . The level of benefit for each option and for various numbers of dependents will be covered in the regulations. People will be encouraged to lodge their application as soon as they enter into a contract. The Department of Housing and Construction will then provide an approval advice setting out the entitlement under the three options and asking them to select an option and to provide payment directions. Lenders will be involved in this process to enable them to take the benefit into account when arranging the financial package. Income and the number of dependants will be tested only at the time the application is originally assessed. Changes in subsequent years will not affect the level of assistance. To obtain the assistance, each applicant must occupy or intend to occupy the dwelling as his or her principal place of residence. The scheme is to assist low to moderate income earners into home ownership and not to subsidise investment in housing for income or capital gain purposes. The assistance once approved will be paid monthly, generally to a nominated account in either a bank, building society or credit union. The subsidy will continue, for the five years, subject to continued ownership and occupancy of the home. The circumstances relating to cessation of the subsidy will be covered by the regulations. We propose that, if the home is sold or if an applicant no longer occupies and has no intention of ever again occupying that home as his or her principal place of residence, the subsidy will cease. In this way, the government will not be paying subsidies to those who no longer own a dwelling or where the dwelling is being used as an investment property. Regarding ownership and occupancy, the onus will be on those receiving the assistance to inform the Department if they permanently lease or sell the dwelling. If they do not, they will be liable for a severe penalty and will need to repay any benefit they obtained wrongly. Because the benefit will be paid over five years, our intention is that the regulation will include provision which will protect the rights of each applicant. For instance, where two or more people buy a home and one subsequently leaves permanently or sells his or her share of the home, payments due to the other applicants remaining in the home will not cease. There will also be instances where a married couple permanently separate or are divorced with one of the partners leaving the dwelling. To cover adequately the range of situations which will inevitably arise for some home owners during the first five years of home ownership we propose that the regulations will provide for each applicant to have an equal share of the assistance. In this way those who continue to own the dwelling and regard it as their principal place of residence will continue to receive their normal entitlement. The payment to the applicant who permanently leaves the dwelling will cease but will not automatically be lost completely. There will be cases where people sell their home or leave it to move to another location because of medical, employment or other reasons. We do not wish to disadvantage these people. We propose that the regulations will provide for the subsidy to recommence if an applicant buys another dwelling within 12 months of selling or permanently leaving the first. The subsidy will also recommence if an applicant re-occupies or re-establishes the intention to reside in the first dwelling as principal place of residence. Where any of these events occur, the applicant will not lose any of the remaining entitlement. The subsidy will continue from where it left off. Should a spouse in a joint application die during the period, the assistance will automatically be transferred to the remaining spouse. For a sole beneficiary, the assistance will cease. The assistance is tax free and non-repayable. It will also not count as income for means test purposes under the Social Security Act. Mr President, the First Home Owners Bill provides for significant assistance to those seeking to obtain their first home. Its objective is to encourage and assist persons to purchase or build their first home. One characteristic of the scheme is flexibility and it will be administered in a sympathetic way to provide maximum assistance consistant with this helpful legislation. Mr President, this Government is committed to home ownership. That is what this new scheme and this particular Bill are all about. Additionally, the scheme will provide significant stimulus to housing activity and employment in the building industry and elsewhere in the economy. The scheme has received overwhelming support from the industry and the community alike. I commend the Bill to the Senate. HOME DEPOSIT ASSISTANCE AMENDMENT BILL 1983 This Bill provides for amendments to the Home Deposit Assistance Act 1982 arising from the introduction of the first home owners scheme on 1 October 1983 and the removal of the savings provisions from 1 August 1983. Presently, the Act provides for eligible first home owners who acquire their dwelling on or after 18 March 1982 to receive a grant of up to $3,500, depending on their income, savings history and number of dependents. The First Home Owners Bill will apply to those who acquire their first dwelling from 1 October 1983. An amendment to the Home Deposit Assistance Act is therefore required to terminate assistance under that Act in respect of dwellings acquired after 30 September 1983. The Act currently provides for savings to be held in one or more of the approved forms for at least one year immediately before the date of the home contract. The grant is paid on the basis of one dollar for every dollar saved in an acceptable form with a maximum basic grant of $2,500 where there have been two or more complete years of savings. On 21 July 1983, the Minister for Housing and Construction announced that the Government would remove the savings provision to take effect from 1 August 1983. This amendment will mean that first home buyers contracting to buy or build a dwelling between 1 August 1983 and 30 September 1983 will no longer need to hold acceptable savings to qualify for a home deposit assistance grant. The amount of assistance will depend solely on their income. Those who purchased prior to 1 August 1983 will still need to meet the savings requirement. The Department of Housing and Construction is presently examining applications for assistance under this proposed amendment to enable those affected to be advised of their likely entitlement subject to the passage of this amendment. This will allow for speedy payment to those who will benefit from this amendment and who are arranging for their financial package with this in mind. The removal of the savings requirement is consistent with the Government's first home owners scheme under which savings will not be a prerequisite for assistance. Our aim is to help low to moderate income earners into home ownership, particularly those who have been unable to save. The response to this initiative has been considerable. It has already provided a stimulatory boost to the housing industry. There will be no arbitrary cut-off for applications under the Home Deposit Assistance Act. Considerable personal difficulty was caused by the previous government's decision to apply a short cut-off to the old home savings grant scheme and we will not repeat that mistake. Nevertheless we will be urging people who bought before 30 September 1983 to lodge their applications promptly. Mr President, the government in line with announced policies has also introduced a Bill to amend the Income Tax Assessment Act. The effect will be that there will be no new entrants to the First Home Buyers Loan Interest Rebate Scheme after 30 September 1983. That amendment will also extend eligibility under the Tax Rebate Scheme to cover those first home buyers who acquire their dwelling up to 30 September 1983 but who do not occupy it by that date. At present the Tax Rebate Scheme commences from the date of occupancy. Mr President, the provisions of the Home Deposit Assistance Act Amendment Bill are in keeping with our overall housing philosophy. I commend the Bill to the Senate. HOUSING LOANS INSURANCE AMENDMENT BILL 1983 This Bill provides for the repeal of legislation which authorised sale of the Housing Loans Insurance Corporation to the private sector. It also extends the Corporation's charter to allow it to insure commercial building loans. The previous government proposed to sell the Corporation to the private sector. This move was opposed by virtually all areas of industry associated with the encouragement of home ownership in Australia. Despite this, the previous government had introduced legislation, as part of the Commonwealth Functions ( Statutes Review) Bill, 1981, to provide for the sale of the Corporation. One of the first actions of the Hawke Labor Government was to announce it would not proceed with the proposed sale. This decision has been warmly welcomed by the finance and building industries. At the time of the announcement, the Minister for Housing and Construction indicated that in line with our election policy commitments, the government would be looking at ways of expanding HLIC's role, while at the same time ensuring there was no unfair competition with private sector ventures. The first stage in that process is to extend the Corporation's charter to provide for the insurance of commercial building loans. In addition to the insurance of normal home ownership loans, the Corporation is already empowered to insure loans for commercial housing projects, such as major flat and home unit developments, retirement villages and the like. Inclusion of commercial building loans is a natural extension of the Corporation's existing charter. By assisting the borrowing prospects of persons wanting to buy or build commercial property, this extension of the Corporation's Charter will lend support to the government's priority aims of stimulating the building and construction industries and generating employment opportunities. It is of course , also a practical demonstration of the government's commitment to constructive ways of assisting business, particularly the small business sector. The Bill will enable the Corporation to insure in respect of commercial buildings, a similar range of loans to those it can already insure for housing. It will provde for insurance of loans for the purchase, construction, alteration , improvement or extension of buildings and structures or the acquisition and development of land. The scope and direction of the Corporation's activity in this area can be controlled through existing powers given to the Minister for Housing and Construction under the legislation and the government will be looking to see that HLIC moves cautiously into this new field of business. It intends that at least in the early stages HLIC will concentrate on loans for small to medium scale projects. It should be clearly stated that this is expected to be a relatively minor part of the Corporation's total activities. HLIC will be expected to seek appropriate reinsurance cover on this new field of business from available commercial sources. At the second stage of ensuring that, as far as possible, HLIC competes on an equal footing with the private sector mortgage insurers, the government has decided that HLIC should pay to the Commonwealth an amount related to the reinsurance costs that private firms need to take out. The new annual payment will be introduced in 1983-84, and work is now proceeding to establish the basis for determining the payment. At a later stage, a further amendment will be introduced to provide a separate specific statutory provision for this new payment. Mr President, this Bill marks the end of a period of great uncertainty for the Corporation, its staff and clients. I would like to place on record our appreciation of the efforts of the directors and staff of the Corporation during what must have been a very difficult time. During this period the Corporation has continued to achieve a fine trading record with a profit every year. HLIC has been a real success story in housing. Its forward looking approach and competitiveness have assisted many Australian families into home ownership. We will be looking to further ways in which the Corporation can play a greater role in assisting with the Government's housing objectives. I commend the Bill to the Senate. Debate (on motion by Senator Collard) adjourned. Bills received from the House of Repre- sentatives. Motion (by Senator Grimes) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of the Bills being put in one motion at each stage and the consideration of such Bills together in the Committee of the Whole. Ordered that the Bills may be taken through all their stages without delay. First Readings Motion (by Senator Grimes) proposed: That the Bills be now read a first time. Debate (on motion by Senator Collard) adjourned. Senator GRIMES(Tasmania-Minister for Social Security)(10.09) —I move: That the resumption of the debate be made an order of the day for a later hour of this day. I point out that these Bills in fact are export inspection charge Bills. It was indicated in the Budget Papers that these Bills would increase export inspection charges and it is provided that these charges be in fact in place by 1 October 1983. To achieve this it is necessary to amend the maximum rates of charges in the Acts for which the amendment Bills are currently before the Senate. It is also necessary to bring down regulations concerning these export charges. A bare minimum of two to three weeks after the passage of the Bills is in fact required to bring down these regulations, gazette the notices and inform the exporters. It is for this reason that the Government considers it desirable for this legislation to go through the Senate in the next few weeks together with the package of housing Bills and the Medicare legislation. I believe it is a reasonable reason. Question resolved in the affirmative. Senator Durack-Before the Senate proceeds to the consideration of Government Business I wish to take a point of order in relation to a statement that was made in the Senate in the adjournment debate last night by Senator Georges regarding the sitting today of the Joint Committee of Public Accounts. Honorary senators will recall that in debate last night Senator Georges indicated that he intended to seek leave of the Senate for the Public Accounts Committee to sit today. He did not receive the call before the motion was put, but he spoke in the adjournment debate to the problem faced by the Public Accounts Committee in the consideration of business before it. He informed the Senate that the Committee had obtained an opinion last year from the Attorney-General's Department, which had been confirmed recently by the Attorney-General (Senator Gareth Evans), that it did not need to obtain leave of the Senate in order to sit. Those opinions were tabled in the Senate last night. He also informed the Senate that the Committee when it sat this morning at, I believe, 9 o'clock would consider whether it should continue to sit past 10 o'clock, in light of the business it had before it and of the opinions it had received. The point of order I raise relates to the Standing Orders of the Senate, particularly standing order 300. Mr President, I ask whether you would ascertain as a fact whether the Public Accounts Committee has decided to sit today without leave of the Senate. I believe that we need to determine that as a fact before any further step can be taken on the matter of which Senator Georges quite openly and frankly informed the Senate last night. The PRESIDENT —Standing order 300 states: A Select Committee may adjourn from time to time, and, by Order of the Senate, from place to place; and may sit on those days over which the Senate is adjourned; but no Select Committee may sit during the sittings of the Senate. I do not know whether the Public Accounts Committee is in fact sitting. I shall institute inquiries and advise Senator Durack accordingly when a report on that matter has been given to me. Debate resumed. Senator SCOTT(New South Wales-Leader of the National Party of Australia)(10.15) —I have had an opportunity to survey the First Home Owners Bill 1983, the Home Deposit Assistance Amendment Bill 1983 and the Housing Loans Insurance Amendment Bill 1983 only briefly but it seems to me that, to a very large measure, they are unnecessary, because they intrude into an area in which legislation introduced only last year by the previous Government is clearly producing an excellent result. Perhaps this legislation is before us today more or less as evidence of the Government wanting to be seen to be doing something in the area of housing, an area about which it has spoken a lot. Quite clearly-this is evident from some of the material in the Bills-the Government is attempting to identify itself more closely with socialist philosophies in relation to home building. There is no doubt that the Australian Labor Party, as a political entity, emphasises public housing very strongly. It does not take the view that the Opposition has basically taken and will continue to take that enormous importance has to be placed on the capacity of people to own their homes. Private home ownership is a very significant objective of the Liberal and National parties. Indeed, the difference in attitudes is borne out by the fact that in 1947 or 1948 the level of home ownership was some 58 per cent. In the following years to 1971, under Liberal-National Party government, the level of home ownership grew dramatically to 68 per cent. That figure rates very highly around the world in home ownership percentages. It is significant to note that in the three years of Labor administration in the 1970s-that short period from 1972 to 1975-the home ownership level fell by 2 per cent from 68 per cent to 66 per cent. By 1981 it had recovered to 68 per cent. The new schemes we are examining today really add nothing to the situation. I think it is profitable in a debate such as this to look at the value of the concept of home ownership. In the first place, in an economic sense it is far better for people to involve themselves in payments which will gain for them a real measure of equity in the house, the unit or whatever type of accommodation they choose to live in. Of course, the constant inroads of rent do nothing for them in this sense. Rent is a negative payment and a disastrous load. Of course, security is significant to the individual and is even more significant to families. If people are encouraged and are able to make payments which, in the longer term, enable them to own their homes that achieves a real measure of social security. They are establishing a real measure of equity. They are gaining security and the satisfaction that that security brings, a satisfaction that grows from the understanding, the knowledge and the feeling that that particular unit in which they are increasing their equity is one which they can operate, maintain and develop exactly as they seek. This is enormously important in the family life of this nation. Mr Deputy President, I think it is important also to recall something of the previous Government's assistance in the area of home loans and housing development. It was an assistance which was very significant indeed and was bearing considerable fruit when this Australian Labor Party Government came to power in March of this year. The two incentives in the home building and home ownership area introduced by the Liberal-National Party Government last year-the tax rebate scheme and the matching grant on a dollar for dollar basis of up to $ 3,500-represented a contribution to housing of some $550m in a full year. Those incentives were very considerable indeed and they were to be added to by a sum of $400m provided by the former Government for banking finance for home building projects. We are looking at a sum altogether which is very close to $1 billion. Indeed, as I said a few moments ago, these incentives and moves were having considerable effect in the building industry and in the home ownership area. They were proving to be popular and widely accepted. Regrettably, from the statement made on 19 May-now known as the mini-Budget-these operations fell away because a vacuum was established, which we hopefully will move out of by 1 October, when the legislation we are discussing this morning is due to come into effect. Of course, interest rates are the key to virtually all housing programs. Indeed , they are the key to a lot of programs. Fortunately at the moment there is a marginal reduction in interest rates in this country and that can be seen only as an advantage to people who are seeking to borrow money for purchasing or building houses of their own. The problem in the interest rate area is the longer term probability of socialist theory being implemented. One recognises that in the long term public expenditure, the financing of massive deficits and so forth, will almost without doubt bring a measure of competition into the finance market that will tend to drive these interest rates back up. One hopes that will not be the position but one must recognise that there is at least a probability that it will be the position. I seem to recall that the ALP, both during and before the actual 5 March election, undertook to retain the tax rebate scheme, but of course like quite a number of other promises, that one went by the board very rapidly. Indeed, it went by the board on 19 May, which was not much more than two months after the undertaking was given. I mentioned that from 19 May to 1 October a vacuum clearly appeared in the home building and home ownership area. Thousands of people were significantly disadvantaged by the occurrence of 19 May, which involved an increase in interest payment of between 1 per cent and 2 per cent or, expressed in other terms, of some $300 a year. I turn briefly to the first of the three Bills before us, the First Home Owners Bill, which comes into effect on 1 October. It seeks to provide a 5-year grant as a lump sum. That sum varies of course from $5,000 for persons with no dependent children to a maximum of $7,000 for persons who have two or more dependent children. The total taxable income of the two people involved at which the maximum grant may be obtained is $24,300. When combined taxable income exceeds $27,900 the grant is no longer available. It represents a replacement for the form of aid that was instituted by the previous Government, under which a grant of up to $3,500 was available on a dollar for dollar basis, it being necessary that the same sum be found by the purchaser or builder of the home in question. The second Bill, the Home Deposit Assistance Amendment Bill, eliminates the saving requirement to which I have just referred. From some points of view an argument can be mounted to support the abolition of the saving requirement yet, on balance, I believe that there are very good grounds for requiring a saving element; in other words, that a contribution be made by the person receiving the grant to the actual funding required. In the first place, it does not seem to be an unreasonable amount to be required to be saved and it does seem referable to developing responsibility in the community that it should be seen to be necessary to provide at least something of one's own when receiving a grant of taxpayers' money. That sort of responsibility is reasonable and proper. Indeed, from the point of view of developing character it has a great deal to support it . Mr Deputy President, the sudden turn around in activity that may occur overnight after 1 Oc- tober, because of the distinct vacuum that has obtained in the industry as the result of the failure to retain the circumstances which operated up to 19 May, presents the possibility that there will be a significant effect on costs. It may even be reflected in the price of houses that people will be seeking to own. One would hope that that would not be the case but certainly, as a result of the vaccuum that has occurred during the last four months, the probability of that happening is certainly present. I move to the final Bill of the three which are before us this morning, that is , the Housing Loans Insurance Amendment Bill. This Bill seeks to do two things. Firstly, it repeals the authority to sell the Housing Loans Insurance Corporation to private interests and, secondly, it extends the charter of the Corporation to involve itself with commercial buildings as well as houses, home units and various other developmental projects for which it had a charter to involve itself in previously. In other words, the powers of the Corporation have been significantly extended when it was the purpose of the previous Government to seek to sell the Housing Loans Insurance Corporation to private interests, the reason being, that the Corporation was seen as an unnecessary area of expenditure of taxpayers' funds. It was seen as an area where its purpose could best be served by creating a maximum degree of competition. Consequently that was the purpose of the previous Government. It is not surprising to find that a socialist government seeks to do exactly the opposite. The socialist government seeks to widen the charter of the Corporation. It seeks to enable it to become even more of a monopoly than it is today. As I understand it, the Corporation holds around 60 per cent of the business in its field. With a widening of its charter and with the various advantages which it has, such as the payment of contributions in the superannuation field from taxpayers' funds, it is quite possible that it will reach a virtual monopolistic situation. It is significantly possible also that that will not be ultimately to the advantage of people seeking to build houses, units or whatever. I believe that the intention of the Government in the Housing Loans Insurance Amendment Bill is purely to further its own basic socialist theory. I do not believe that would be to the advantage of the home builder in Australia. It has not been to the advantage of any country of which I am aware around the world. Talking of socialist theories, I point out that the nationalisation of the health scheme, which is about to happen in this country, still remains a disaster in the United Kingdom and an even greater disaster in Canada. Yet we are continually confronted by the legislative implementation of this philosophy. I can only say that the first two Bills carry considerable incentive to home builders. I do not believe that they carry the incentive that was already there in the legislation that the previous Government had in this area. They are not, of course, objectionable Bills. I believe there is an objection to the fact that there is no longer any incentive to save. There is no longer any incentive to provide at least part of the money required by the individual needing assistance . The final Bill in this package, the Housing Loans Insurance Amendment Bill, I believe, is an unfortunate piece of legislation. It merely takes that area of commerce into a more monopolistic proposal. I do not believe it has any contribution to make to the final capacity of young people and others to own their own homes. After all, that is the objective of this legislation. Senator Grimes —I raise a point of order. It has come to my attention, from listening to Senator Scott's speech, that it was agreed that these three Bills be debated with the Income Tax Assessment Amendment Bill (No. 3), as listed on the Notice Paper today. Senator Scott did not address that Bill. I believe that it is sensible that these four Bills be debated together. Certainly, if Senator Scott wants to speak to the fourth Bill at a later time, I will give him leave to do so. I believe that it is sensible that we discuss the four Bills together. The DEPUTY PRESIDENT —The four Bills are before the Chair. Senator ARCHER(Tasmania)(10.36) —My comments are directed to the First Home Owners Bill. I have read the various documents. I want to know whether the first home owners scheme is really what it appears to be. I have also looked at the statement of 19 May and the various Budget Papers. Primarily, it appears to me that $50m has been lost to housing this year. I cannot see that we are providing any extra funds at all. We are providing $50m less than was provided last year, and next year the amount could be considerably less than that. I am interested also in ascertaining who will be getting the benefits under the scheme and whether young working couples are being specifically excluded from the provisions of the scheme. The publicity indicates that they are the groups that are supposed to be getting assistance. I will take that matter a little further. An ordinary middle-range public servant working in Canberra whose spouse is a shop assistant could expect to get absolutely nothing out of the scheme. In fact, I cannot find any married couple in any type of work these days who would ever be eligible to get any money at all. On analysing the scheme, anybody who takes the first option of getting the subsidy over five years would have to depend on an increase in wages of at least $10 a week above the inflation rate. I am concerned whether this is in line with the prices and incomes accord, whether it is presumed that the prices and incomes accord will not hold or whether there is something else that we do not know anything about. I find it significant that that is what appears from the figures. The Minister for Social Security (Senator Grimes) could probably advise me on that later. Generally, housing is a very fundamental issue. It is a matter of converting a need and desire to a reality. There has to be a capacity to provide, firstly, the money, secondly, the labour and, thirdly, the materials that go with any increase in building activity. The introduction of a new scheme such as this or any other scheme has to be done with a great degree of caution that we do not start things rolling in a manner that will create shortages of labour and material and a considerably inflated price in the end article. On the other hand , I am certainly in favour of any scheme that will improve housing for the wide range of Australians. By nature, the building industry is a volatile and fluctuating industry. It will never be any different. We should remember that, by and large, the buying or building of a home is the biggest single investment that most people make in their lives. They do not do it willy-nilly or flippantly. They do not buy in times of uncertainty. They appear to buy in times of inflation; they do not buy when jobs and businesses are threatened by external or internal economic forces. I was associated with the housing market between 1947 and 1975. During that time I was involved with building, selling, valuing, arranging finance and generally advising people on housing. All I think I have learnt from so many years in that field is that I still have a lot to learn. The housing market changes so much from year to year and season to season. There have always been ups and downs in the market and there always will be. The fluctuation of the housing market is unfortunately probably the worst single problem in the industry and the economy generally. No government, of whatever political party, will ever stop that. We must agree that some degree of fluctuation will always be with us. The public servant or the member of parliament who could change that would certainly be able to live very comfortably anywhere in the world. He might even be able to get highly advantageous speaking engagements that would pay very well if he could discuss those sorts of subjects. Matters that affect the housing market include money flows, interest rates and the general feeling of security or insecurity not only in Australia but overseas as well. Since 1947 I have seen a considerable number of pump priming operations set up by State and Federal governments. I would say that they have all been basically good. They have all worked in their areas, and this scheme will work similarly. It will stimulate sections of the market, but I am not sure that it will not be at the expense of the main part of the market. We have to consider whether what we are doing is just a political exercise or whether in fact it will provide more houses for the people in the greatest need in the most difficult areas. We have done all sorts of things, as I say, but I believe that since 1947 the single most advantageous move was the first one, the introduction of mortgage insurance. Nothing else has been of as great assistance to the housing market in Australia and to the housing of people generally as has mortgage insurance. Last night I heard the honourable member for Melbourne (Mr Hand) in another place suggesting that mortgage insurance was the greatest thing that the Labor Party had ever introduced. I think I would be safe in saying that, had the Labor Party introduced it, it would have been a good thing; but even though it did not introduce it, it was nevertheless a good thing. Population surges also affect the market quite considerably. The Minister for Housing and Construction in his summing-up of the debate on these Bills in the other place last night tried to say that the evils of the last two or three years of the Liberal Government had been responsible for the problems in housing in the last year or two. I suggest that the credit squeeze of 1960-61, the worst since the war, had by far a greater influence on the housing situation of 1981- 1982 and 1983 than what the former Government did in its last two or three years . There was at that time a considerable credit squeeze, with unemployment, insecurity and low birth rates, and the effects of such factors have flowed on to the next generation. I also heard the Minister claim that wise management had brought about a half a percentage point drop in interest rates. I suggest to him that if wise management brought interest rates down, he should be prepared, accordingly, to accept that unwise management may cause them to go up again. I think I would be wise to caution the Government against extravagant claims on matters over which it has little or no control. If it takes credit for the best bits, it must also take the blame for the worst. Last night the honourable member for Melbourne just could not resist producing the Australian Labor Party's true position on housing. He came out beating the same old drums, damning all those in the private sector who provide houses for others and following that up by demanding that there should be great holdings of publicly owned rental housing. We all know that that is the Labor Party policy but the honourable member for Melbourne, contrary to what his Minister was trying to get across, insisted on having his say and making sure that his supporters knew that the Labor policy had not changed. Wherever I can I look at these changes in a fairly practical way. This morning when I was wondering about who would benefit from this legislation I decided to phone one of the prominent local building societies. The first question I asked was: What is the average loan now in Canberra? I was told that the average loan is $40,000. I then asked what would be the monthly repayment with the reduction in interest rates, and I was told that that is now $484, based on 30 per cent of the salary of the applicant. Thus an income of $18,500 a year is required in Canberra to secure a $40,000 loan on which the applicant pays $484 a month. The minimum level of $24,300, as specified in the list, at present entitles a borrower to a loan from the local building societies of $49,500 but if the full provisions of option one are taken into account, this will enable the borrower to raise $60,000. That is quite an advance for the people who fit into that category. But of course that calculation is based on the presumption that the applicant will fit into that category. It presumes that the family is not a two income family and that the breadwinner can cope with his other commitments, particularly if he is a family man. I barely call people with one or two children family these days, but anybody who had four or five children would find it extraordinarily difficult to meet his repayment commitments on a loan of $60, 000. I also asked what is the ratio of working couples to single income families who take out loans in Canberra. It is roughly two-thirds two income families to one- third one income families. So we can take it for a start that two-thirds of all applicants in Canberra automatically will be excluded and about a third of all the rest will be earning more than the limit set down. So really not many people in Canberra will benefit much from this proposal. The Bill provides that people require no deposit but that does not mean that the lending authorities provide for this. From the association I have had with lending authorities in the past, I think it is extraordinarily unlikely that any responsible lending authority would lend 100 per cent of the money to somebody who has no equity and no collateral involved in the proposition. People who have no equity in a venture do not have the same attitude towards trying to retain it as do those looking after their own investment. I think we can be reasonably assured that any responsible lender lending other people's money will require at least a 10 per cent investment by the applicant. Building societies are also involved in low start mortgages to cater in particular for people who are trying to build up their deposit. I see it very much as a danger that we need to draw the red line on them straight away. I think we have to be careful that lending authorities do not mix both the Government's grant scheme with low start mortgages. If that happens we will place people into an impossible situation by the time they get past the period of the five years involved. I should like to raise four problem areas about which the Minister may be able to give me some advice. The first question is that if the buyer gets the full grant and depends on a high wage increase to meet later commitments, what happens if the wage rise is lower than anticipated or if interest rates should rise? How will he meet the gap? The second point is that loan funds traditionally come from savings largely from future home buyers. If there is a deterrent to saving, where will the future lending funds come from? The third question relates to the amount of the grant. Will this be determined by the Government or by the purchaser, or will it in fact be determined by the lender? I believe we need to know exactly what people's chances are. The fourth question relates to the taxation problem. Many people are buying houses and have bought houses with the full intention of living in them. But in the search for employment, many people have had to let their houses and move to other areas. The Australian Taxation Office in Victoria is now starting to contest the losses involved in rental properties. This has become a very serious deterrent to people who are buying houses and/or units for their own personal occupation but who believe that later they may have to put them on the rental market because they cannot live in them. What action has the Government taken to ensure that people are not penalised by the Taxation Office for reasons which are outside their control? I will not delve into the other Bills at this stage. I am perfectly satisfied that this legislation will do some of the things that it says it will do. I am satisfied that it will do them at the expense of other things which I believe would help more people to a greater extent. I find it quite objectionable that it specifically militates against young couples trying to buy a house jointly. I believe that the legislation will need quite an amount of tidying up to be as effective as it should be. Senator JONES(Queensland)(10.53) —It is my intention to make a few remarks in relation to the First Home Owners Bill and the Home Deposit Assistance Amendment Bill. I note also that the Income Tax Assessment Amendment Bill (No. 3) and the Housing Loans Insurance Amendment Bill are included in this cognate debate. I was interested to note that Senator Archer clearly said that the Government's new legislation will make some difference to the housing problems facing young people in Australia. He agrees that the Government is going the right way to try to overcome some of the problems that now exist. My interest in this Bill goes back a long way because of the problems that I have encountered in the electorate of Queensland of young people trying to gain enough money to build a deposit in order to borrow money from a building society, bank or some other lending institute. I suppose one would have to say at this stage that the act by the Government after 1 October to remove the requirement, as the legislation now stands, for young people to have to save money over two years is a step in the right direction. I have found on recent occasions that young people who wish to sign contracts are often unable to do so because of the provision of the savings clause in the legislation. I refer to the case of a young person who recently wanted to sign a contract to buy a house. He could not raise enough money to meet the deposit required by the bank from which he was going to borrow the amount to purchase the house. The purchase price was $60,000. Because he was $2, 500 short of the amount required for the deposit, under the previous legislation he could not apply to receive that $2,500 because he had not, over two years, saved the required amount of money. Because he found that he was $2,500 short he was unable to continue with the negotiations and sign a contract with the builder and borrow from the lending society; in that way he was deprived of any opportunity to own a house. But now, because of the changes brought about by the Government, he will be able to negotiate with the builder and approach the building society or the bank from which he wants to borrow the money. He will find that he will have $2,500 available to him, if he signs a contract before the end of September or if he signs the contract after 1 October or finds the house of his choice after 1 October he will come into consideration for that further assistance that has been brought down under the first home owners legislation. I am talking about an electrician who earns less than the $24,300 which is the requirement of the Bill that is being brought in. He finds that he earns less than that amount and that he is $2,500 short on his deposit to borrow enough money to purchase the house that he wished to purchase. Now, because of the attitude of the Government, he will be able to purchase it. The Government has taken steps, under the legislation which will come into force after 1 October, to provide an opportunity for these young people who have a shortfall in their deposit to be able to have a grant under three options. I think it is worth pointing out the actual savings which should be held in relation to the grant that will be given. The current legislation provides for savings to be held in one or more of the approved forms for at least one year immediately before the date of the home contract. The grant is paid on a dollar for dollar basis, saved in the acceptable form for a maximum grant of $2,500, where there have been two or more complete years of saving. Under those provisions which were laid down by the previous Government it was impossible for people with a shortfall in their deposit to get any assistance from the Government and it required a particular amount of saving to take place over two years. A young person's circumstances could change. He may be unemployed for six months. He may be engaged but then finds that he has some problem with his fiancee and the engagement does not continue. Because of that his expenses might be higher. All of those things come into it. There would be no way that he could say to himself that he would save the required amount of money over a period of two years. However, because of the changes brought about by the Government, it is now easier for a young person wishing to purchase a home to save the required deposit and to receive some assistance from the Government. At the moment a person who seeks to enter into a contract with a builder to purchase a house for $60,000 may find that he is $2,000 or $3,000 short of the deposit required. Under the new scheme and the options laid down by the Government, he will be able to gain that extra money and enter into a contract to purchase the home that he desires to build prior, for example, to being married. The other point that I think is important is that the Government has provided for single persons as well as married couples to be eligible for assistance to purchase a house provided that that single person is going to live in the house to be purchased. I think that is a step in the right direction because this allows either a man or a woman to gain accommodation prior to entering into any sort of association with another person. I think it is worth noting that it is very easy for house purchasers without children such as single persons, to take advantage of some of the options laid down by the Government. I know of a young person who is, I think, $2,200 short of the amount that is required by the lending society concerned to enable him to buy the house he is looking at. He also earns a little less than the $24,000 maximum set by the Government. After 1 October, he will be eligible for the $2, 500 grant. By taking option 3, he will be eligible for a further payment of $550 for the first year, $450 for the second year, $350 for the third year, $250 for the fourth year and $150 for the fifth year. These payments amount to $1,750. Therefore, he will be eligible for a total grant of $4,250. This young person will have to strain every financial resource, including the grant given to him by the Government, to save the deposit so that he can purchase his house. Because he is in receipt of a low income he will receive some assistance each month to help him repay the money he has borrowed from the lending society. This in itself means that he will be a more acceptable borrower in the eyes of the lending society and will be better able to borrow more money on the home he is purchasing. There is not a great deal more that I can say, except to point out that the introduction of this legislation by the Government will certainly go a long way towards assisting the building industry because more people will be in the position of being able to purchase a home. The legislation will assist also in the creation of further employment within the building industry. It will certainly be of some assistance to the 26 allied trades that are tied to the building industry. It will help also to decrease the level of unemployment in other areas throughout the Commonwealth of Australia. Senator HAINES(South Australia)(11.04) —The Australian Democrats support this package of legislation as, indeed, we supported the previous Government's attempts to stimulate the economy and to encourage home ownership. I have said before-and I think we have all said before in this place over the years-that any assistance to the housing industry is stimulating to the economy. Building homes , commercial premises and so on is of tremendous assistance to the economy of this country simply because building activity is labour intensive. Indeed, the Australian Bureau of Statistics indicated recently that the construction industry directly employs about half a million people which represents some 8 per cent of the total employment in Australia. Clearly, any diminution in that area will severely affect spending power and general family economies. Of course , this will spread into the economy of the country generally. It is estimated that the jobs of a further 8 per cent to 10 per cent of people in this country are indirectly dependent upon the industry. This includes the jobs of people engaged in producing materials and parts as well as business, professional and transport services and so on. Altogether according to ABS figures, more than one million workers-almost one in every six of those in employment in Australia-are dependent on the construction industry and that, of course, includes the building of the average 12 square Australian home, something which has been traditionally dear to the hearts of all Australians and which most of us have no wish to see diminished in any way. It is therefore pleasing to note recent reports in the media of a drop in the interest rates charged on home loans. This, of course, means that more people will qualify for home loans as they will be able to afford the home loan repayments required. I do not think anyone in this chamber needs reminding of the problems that occurred during the last two years in which interest rates increased in some instances almost monthly, forcing many people out of their homes when they simply could not afford to keep up their mortgage repayments. Prior to them being forced into that situation, they had to cut corners in other areas such as clothing and food. They had to put off the purchase of white goods and so on for their homes. They did this so that they could meet the steadily increasing mortgage repayments that many of them were faced with in the past two years. So, it is pleasing to see that the financial institutions in this country are accepting the need to lower interest rates in this area. It is also pleasing to note that the present Government has picked up the previous Government's policy ideals relating to home ownership. These were expressed as recently as in the Department of Housing and Constructions' annual report for 1980-81. According to that report, the Liberal Government aimed to do the following: ensure that every family in Australia is able to obtain adequate housing within its capacity to pay encourage home ownership across the widest possible range of income groups . . . maintain and improve housing styles . . . ensure that there are economic conditions within which a stable and adequate building industry can assist us to achieve our social goals. I find it a little strange then to listen to some of the more carping criticisms that the present Liberal Opposition is making to the new Labor Government's scheme to help achieve just those goals. The package that is before us today aims to provide more effective assistance to low income families seeking to buy a first home and to ensure an adequate supply of housing finance at affordable interest rates. This is something which, of course, will be helped by the drop in interest rates that I mentioned a moment ago. According to the second reading speech of the Minister for Social Security ( Senator Grimes) the package is also aimed at generating additional activity in the housing industry in order to stimulate job creation and economic growth. The package is aimed at re-establishing confidence in this vital industry and to increase the availability of public housing and other innovative forms of low cost housing for the large number of needy households in the community. The Minister has made it quite clear that the path the Government is pursuing is a path that the previous Liberal Government indicated it too was interested in pursuing. I do not think that there is anything much to be gained by petty nitpicking and criticising. The first element of this package will provide assistance to people intending to build or buy their first home. The second part of the package will provide for a transitional piece of legislation to cover those people who had contracted to build or buy a home between 1 August and 1 October. From memory, this is something that no previous government has attempted to do. It has been one of the major problems that have arisen when any government has changed housing assistance schemes, whether the changes have been to a previous scheme of its own or to a scheme that was put into operation by a previous government. Following such introductions, calls were frequently made to the offices of all members and senators from people who had qualified or were about to qualify under one set of criteria only to discover that, because there was no transitional clause, they had to start all over again. It is good to see that the Minister has taken into account the need for the transitional period between 1 August and 1 October and has removed the savings requirement for those people who had contracted or were in the process of contracting to buy or build a home between those dates. The third element of the package relates to the role of the Housing Loans Insurance Corporation. The previous Government intended to sell that authority. This Government has removed the authority from sale and instead has extended the role of the HLIC to give it the right to provide insurance for commercial and non-residential buildings. We certainly have no objections to that. Indeed, the only problem that we can see which is of any magnitude and which is not covered by this legislation-the Minister admits that it is not covered-is that no assistance is provided to low income earners who are not buying their first home . That represents a very substantial group for whom we would all like to see assistance provided. Prior to the Labor Government bringing down its Budget, the Australian Democrats issued their package which indicated what we felt ought to be considered by the Government and the areas in which we felt assistance needed to be directed. In the main, they included families of all kinds, whether they be the sorts of families that Senator Archer referred to earlier as being families with only two children and therefore not really families, or words to that effect, or whether they be larger families, families on low incomes or whatever. One of the areas to which we directed our attention was the provision of special assistance to people on low incomes who are not buying their first home. We suggested an interest rate rebate of 30c in the dollar for loans up to $40,000 on interest above 10 per cent to all home buyers whose total family income was below $20,000. We suggested that the rebate could be reduced by 5c in the dollar for every further $1,000 of income, cutting out at a salary ceiling of $26,000. We thought that would cover the problem of families of whatever size on fairly low incomes. The Government at the moment has seemed unable to make legislative provision to cover that group of people. I repeat that we are pleased that the Government has amended the previous Government's legislation in order to provide additional assistance to people building their first home, that it has provided the transition period so that those who had qualified under one set of criteria are not disadvantaged, as has happened in the past, and that it has decided to extend the role of the HLIC. We support in its entirety the package of Bills. Senator COOK(Western Australia)(11.14) —I support the First Home Owners Bill 1983, the Home Deposit Assistance Amendment Bill 1983 and the Housing Loans Insurance Amendment Bill 1983. In doing so I make a couple of observations about the Government's purpose in this legislation. First, I am somewhat dismayed at the contributions from the Opposition-I exclude from these remarks the insightful contribution of Senator Haines a moment ago-because they really come down to two major strands. The first is to paint the Housing Loans Insurance Corporation as a socialist bogy. The second is to attack the honourable member for Melbourne (Mr Hand) for remarks he made last night in another place. If that is the sum total of the opposition to this legislation in argued reasoned debate in this chamber, we can expect a very smooth passage for these Bills. The truth is that the Govenment has a twofold purpose; there are two major benefits in the introduction of this legislation. Other speakers on the Government side have referred to them, but I will point them out again. Firstly, this package of legislation promotes economic growth which is labour intensive and which has a high multiplier effect in terms of the creation of employment in other sectors of the economy, notably the manufacturing and retail sectors. Secondly, this legislation helps to answer a desperate need for young or new first home buyers seeking to realise what is the unique Australian dream of home ownership. In terms of the Government's overall economic strategy, there is no better way to generate economic growth than to take the measures taken in these Bills which will be followed up by a consistent government program in the home building area. The legislation has that beneficial economic effect and the effect of answering a real need in the electorate. The first home owners legislation has the great advantage of being aimed at low and middle income earners. In order to qualify for the full $7,000 grant which can be taken in various forms-I will deal with that matter in a moment-families can be on a combined income of $24,300 per annum. The figures relate to taxable income in the year 1982-83. At $27,900 the benefit cuts out. The point I make is that 50 per cent of Australians are on incomes below those levels or on income levels that amount to 55 per cent of average weekly earnings. Those 50 per cent of Australians who wish to qualify for their first home can attract those benefits. That puts purchasing power in the hands of people who would not have had it without this government assistance. The other point that needs to be made about the area to which these benefits are directed is that in the past there has been a real problem for a number of people whose incomes were above the level to qualify for State housing commissions or housing trusts; that is, for what is known by the bad title of welfare housing. Senator Haines —Public housing. Senator COOK —I accept that correction-to qualify for public housing provisions. Their incomes were above that level but were not sufficient for them to be able to negotiate a loan with a bank in order to build their own home. That gap which these Bills cover means that a lot of people who were too well off to participate in the public housing scheme but were not well enough off to participate in direct home ownership will be slightly better off. A real need exists for a host of people. These Bills address that problem directly. Of course, another advantage is that 70 per cent of additional homes built are purchased by first home buyers. The Government is generating a massive number of jobs and it expects that 50,000 grants will be made in the first year. I think it is interesting to note the way in which the benefit can be passed on . Essentially, there are several options which include the payment of a subsidy of $7,000 over the repayment period up to five years. Persons will be able to receive a portion of the subsidy in a lump sum and the remainder of the subsidy can be allocated up to the first five years of the repayment of the loan. That helps low and middle income earners over the first obstacle of amassing the deposit and meeting the cost of the mortgage in the first stages of repayment. In that sense I think these Bills cater for a vital need in the community. Twenty-six trades work in association with the building industry. One only has to walk into a new home to see all the products purchased by new home buyers. They include carpets, furniture, white goods in the kitchen, bathroom facilities and light fittings. Items are purchased for every room to complement the home. As a result someone else in the community gains employment. The multiplier effect for new homes is estimated at between 4 and 4.5 per cent. It means that the jobs directly created by the passage of these Bills in the construction area will be supplemented by the multiplier effect on the whole of the community. With the reductions in home loan interest rates that are beginning to occur across the board we can look forward to a growth in employment in the construction industry and elsewhere. That is to be commended. It has been argued by an Opposition senator who spoke earlier in the debate that by adopting this reflationary measure there will be shortages of labour and shortages of material. I think the Government has pitched its stimulus at exactly the right level so that there will not be bottlenecks which artificially force up prices. People in the building industry have suffered tremendously from unemployment. Most building workers have been out of work at one time or another in the last several years. Some of them have found alternative jobs. My research has shown that qualified building tradesmen tend to be employed first if they are competing for jobs with semi-skilled or unskilled workers. Building tradesmen have tended to preclude semi-skilled and unskilled workers from the work that is available. The regrowth in the housing construction industry will attract those workers who have been forced out by depressed demand back into the trades and supporting industries. As tradesmen return to their trade the jobs they have been filling will become available for other workers. In my view there is certainly not a shortage of skilled labour. It was said that there was a shortage of materials. We have seen retrenchments, particularly in Western Australia, in the timber industry. We have seen the closure of a number of timber mills, retrenchments in the cement industry and the rationalisation of plant and equipment in that industry. There has been a massive downturn in the production of bricks and other household commodities. The factories and the warehouses are now emptying because of a decrease in home building. The important point is that the industrial capacity of the building materials sector was developed for a more buoyant housing industry than we are currently enjoying. Therefore, there is considerable spare capacity in that area of production. It is a matter of recruiting workers back into the industry to lift the production output to meet the demand these Bills will generate through stimulating the housing industry. I commend the Bills to the Senate. Senator MESSNER(South Australia)(11.26) —I rise to speak about several matters in relation to the First Home Owners Bill 1983, the Home Deposit Assistance Amendment Bill 1983, the Housing Loans Insurance Amendment Bill 1983 and the Income Tax Assessment Amendment Bill (No. 3) 1983. I will address my remarks to all four Bills. Firstly, I draw the Senate's attention to the fact that these Bills represent the breaking of a promise which the Hawke Labor Government made on coming to power in March 1983. It made the promise that it would continue the housing loan interest rebate taxation scheme. Clearly the Government has broken an undertaking it gave to the Australian people by introducing this legislation to repeal that particular benefit. The benefit was much sought after by the Australian community. If we check the record closely we will find that the Australian Labor Party, in opposition, was very supportive of that legislation. Now that it is in government its political thrust is different. I will come to that a little later and demonstrate that it really represents a major change in the Government's ideological attitude. Although this legislation is clouded in a whole lot of goodies being handed out to particular interest groups, we have to acknowledge that behind it is a very strong thrust towards the development of the Government 's fundamental socialist principles in relation to housing. I acknowledge the fact that there is a high percentage of home ownership in Australia. About 70 per cent to 71 per cent of people in Australia own their own homes. Clearly, home ownership has been a feature of Australian life for a long time. Long may it remain so. It is something that all honourable senators, in our private activities and in this place, have sought to strengthen and maintain as part of the development of the family. The fact is that the purchase of a house does provide a store of capital. It gives a sense of security because it means that we have a roof over our head, and it also provides some financial security. A home is a solid asset against which borrowings can be made for all kinds of purposes in the event of need. For that reason, home ownership represents a fundamental plank in this nation's development. It is certainly in the interests of the Australian people. Although the percentage of Australian home ownership is high, and it is true that the figure I cited is an Australia-wide figure, there is some unevenness between the States. There is unevenness also between income levels in the community. It is an unfortunate fact that housing in some States, for instance New South Wales-particularly in Sydney-is substantially more expensive than housing in other States, for example, my own State of South Australia. I think an analysis would show that the average selling price of a house in Sydney would be roughly double the cost of a house in Adelaide. From that point of view, it is very difficult to design policies which will assist the whole population of Australia. Bearing in mind the fact that the price of houses is different from State to State, we immediately have to recognise that classes of people who in one State may not be seen to be needy certainly would be regarded as needy in another State. It is clear that a person who has to spend $80,000 for an average house in Sydney would be in circumstances very much different from someone on the same wage who has to pay $40,000 for a house in Adelaide. For that reason all emphasis I think should be thrust towards developing policies on a macroeconomic level to ensure that house prices do not get away from the average family, that in fact there is a strong downward pressure on inflation, which of course would have its corresponding effects in producing downward pressures on interest rates. All those things are very significant in keeping people in their houses and in ensuring that the maximum number of Australians can enjoy home ownership. There are one or two matters in relation to the legislation which are of concern. First, we note that a new grants scheme abolishes the need for savings by individuals who qualify for grants. I think that point needs to be acknowledged as not necessarily being in the best interests of the community. I believe it is a very important factor in Australian life that people have learnt to contribute to their own welfare by ensuring that they save for a home. Indeed , I believe the system should be designed to encourage people to do that. The Government has moved somewhat hastily at this early stage of its life in another direction. No doubt, it has its ideological reasons for doing so, although it has to be acknowledged that possibly some people who qualify for this benefit would be the most needy in the community. But they may not have an opportunity to save a significant part of their deposit for a home as others may. That again draws me to the other point that I made earlier about the differing levels of need across the Australian community as they exist in different States . In the context of savings, I draw the attention of honourable senators to an editorial in the Sydney Morning Herald of 20 May following the Government's mini -Budget. It stated: The element of illusion in the housing package is simply the extent to which it will assist first-home buyers. Despite Mr Keating's assurances to the contrary, the additional demand for housing must, to some extent, push up home prices. Part of the benefit will go to existing home-owners. It is, of course, also absurd to regard anyone who is within striking distance of acquiring a home as being in urgent need of the taxpayer's assistance. They must, at least, have a job and a fair amount of money in their savings account to be able to take on a housing loan, even a heavily-subsidised housing loan. I believe, those words spell out the problems that the Government will face, it having embarked upon a path which will present future administrative difficulties for it in assessing need in the community generally. The first point of the editorial also drew our attention to another fact-that is, that subsidies of this kind will inevitably lead to rising prices. I heard Senator Cook a few minutes ago draw our attention to what he regarded as the very balanced package which the Government has brought down. I remains to be seen how balanced that is against events, particularly those events now occurring in the money markets. We know that the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) have been very keen to claim credit for drops in interest rates, which are a vital part of any government's policy in regard to housing. But at the same time they gave us no undertaking, nor are they apparently prepared to say, that they are going to reduce the interest rates which they are offering in respect of sales of Aussie Bonds. We will be waiting with bated breath to see what the Government does in this area because the fact is that its Budget presented a few weeks ago rides very heavily on the ability of the Government to be able to raise sufficient money to meet that huge deficit of $8.3 billion. We will know more in six or eight months time about the trend in interest rates. I certainly believe that if the Government is now prepared to claim credit for interest rate drops following its policy successes, it will equally bear the ignominy of the failure of that policy in six or eight months time as interest rates start to rise. Senator Chipp —Do you not think the business community needs confidence now, not knocking? Senator MESSNER —Of course it does. Senator Chipp —Then why not give it a bit? You do nothing but knock, you lot-all the time, knock, knock, knock. Senator MESSNER —Of course it does, but it is not going to be given confidence by false arguments presented by the Government in this place. I think there is another more deep seated problem with this housing package which really goes to the core of what this legislation is about and really displays this Government's policy in relation to housing. As the figures in the mini-Budget displayed, there was a very big boost of the order of $78m, if I remember correctly, in the amount of housing expenditure in this financial year. If we analyse the mini- Budget papers and the Budget Papers which were brought down the other day, as has already been acknowledged by the Treasurer, we find there is a significant saving to the Government of $420m in terms of revenues and expenditure in housing in the year 1984-85. It is claimed that that will continue in the years thereafter. The lesson to be drawn is that although there is a significant boost in expenditure this year, in forthcoming years there will be a very significant drop. There has been no stated government policy about that matter. Again, the Opposition is waiting with bated breath to see what the Government has to say about those things. Even by the most generous analysis of the Government's figures and allowing for the fact that it has boosted the amount of expenditure in welfare housing from $ 330m to $500m in this financial year, it has not committed itself to any welfare housing expenditure in the next financial year. After taking into account the increase that the Government expects this year and assuming, to be most generous , that that will continue next year, there is a net saving to the Government in housing of about $200m. In that event can the Government claim that it is really interested in boosting first home ownership for Australians? I think that is the issue arising in this legislation which the Government will not address itself to. Surely it has constructed a very clever piece of policy to pull the wool over people's eyes by trying to demonstrate that it is interested in that group of first home owners. Clearly the Government has set aside about $200m in savings in the next financial year, and in the years that follow that, for particular purposes which it has in mind but has not yet spelt out. It is fairly clear that the Government's policy in this area, bearing in mind its statement of policy before the election when in opposition, is that it is determined to increase the stock of public housing. There is no denial that there is a need in some areas for an increase in public housing. But coming on top of a significant expenditure increase this year, and with an obvious intention to build that up in future years, it looks very clearly like the implementation of a policy design to force people to be dependent upon the Government and to seek rental housing provided by the Government rather than to seek their own properties and capital stock. That is where the policy, we believe, is designed to take us into a different kind of Australia. It is a policy which we know will change the basis of home ownership in Australia. It was of course enunciated clearly by government supporters when they were in opposition-I refer in particular to such spokesman as Senator Gietzelt and Mr Uren in the House of Representatives-over a long period. That is the thrust of the legislation. It is designed with an ideological bent in mind. Clearly, it is a clever piece of legislation in the sense that it will deliver some goods to an interest group at a particular time. I refer especially to the building industry . It was very interesting to hear Senator Cook extol the virtues of that exercise but I remain unconvinced that one can create more jobs in the building industry by fostering other industries. If the Government is as interested in job creation as it leads us to believe, why does it not consider altering its thrust in regard to the community employment program with a view to the creation of both jobs and basic national assets in the same way as did the former Government's policies with regard to the bicentennial roads program, the water resources program and so on? I believe that the few points I have made are important in considering these issues. The Opposition has announced its position on the legislation. Certain of its shortcomings have been pointed to. Certainly, Senator Scott drew our attention to them earlier in the debate. The Opposition is in favour of the general thrust of the policy but draws attention to the points that I have enunciated. Senator GRIMES(Tasmania-Minister for Social Security)(11.42) —in reply-I appreciate the difficulties that are faced by Senator Messner and some honourable senators opposite who feel that they must oppose in some way all legislation put forward by this Government but do not know quite how to go about that task when legislation is accepted generally, and very well, in the community at large. Senator Messner uses the ploy he uses so often of saying: ' Yes, this is all right in parts but what are you going to do two, three, four or five years hence? Why not tell us that, because we suspect that this is part of some terrible plot to change the nature of our society and the way in which people are treated in it'? One thing about the Government is that its measures are part of a coherent program-in this case to assist low income earners in particular to get their first home. Other parts of our housing program seek to increase the stock of public housing. We have an overall design which seeks to ensure that people are adequately housed, in a way that they can afford. I suppose that the first thing one should do is point out that this legislation provides assistance to low income earners; that it removes some of the restrictions which hampered the previous Government's scheme; that it allows for the provision of funds for what might be called innovative housing purchase, such as is not possible under existing schemes; and that it provides for a smoothing over of the effects that will result from a changeover in schemes. Unfortunately, certain people took advantage of the scheme of the previous Government. It also provides that the Housing Loans Insurance Corporation is not to be sold but will have an extended role in protecting those who will purchase homes in the future. The most important thing to point out, in view of what Senator Haines has called the carping criticism by the Opposition, is that the first home owners assistance scheme, which was introduced by my colleague Mr Hurford, the Minister for Housing and Construction in another place, and is to be brought into effect by this package of legislation, has been greeted with enthusiasm by such organisations as the Real Estate Institute of Australia, the Housing Industry Association and the Master Builders Federation of Australia Incorporated, people who know the problem in the housing industry, who know that in recent years there has been a tragic downturn and that we have to do something to overcome it. In fact, it seems that these schemes have been greeted with enthusiasm by everyone except the Liberal-National Party Opposition. In their usual way its supporters have offered opposition in the form either of the carping, nitpicking criticism that we have heard from Senator Messner, and Senator Archer or, even more sadly, the tired arguments used by Senator Scott, who went on to describe the legislation as part of a socialist plot akin to what he has called the nationalisation of the health industry-an equally ridiculous statement. He described the legislation as part of a socialist plot to change in some way the nature of home ownership in this country-the term usually used being to eat at out moral fibre. Senator Scott said in passing that it was a pity that the disciplinary, moral and character building effects of the saving requirements in the existing legislation had been removed even though, as Senator Messner said later, the new legislation will provide assistance for those with the least incomes in the community, those who need it now and who, because of the parlous state of the industry will continue to need it. Senator Scott also spoke of what he described as a vacuum in the home ownership field that had existed since the May economic statement was made. But if one wants to look at what could more accurately be described as a vacuum one need only quote the figures for housing commencements under the previous Government. In the period prior to March 1982 commencements were at the pretty low level of 29,130. The Government then introduced new measures and in the June quarter commencements fell to 28,420. In the September quarter they were down to 26,620 and in the December quarter to 24,920. In the March quarter of 1983 they fell to 24,010. That is more indicative of the industry heading for a vacuum in this regard. It is the real crux of what has been happening in this country in recent years. It is the problem which has faced the Real Estate Institute, the Master Builders Federation and the Housing Industry Association in recent years. They realised that something reasonable had to be done to create capacity. Having looked at the package brought down by my colleague, they welcome it. A second part of Senator Scott's socialist plot theory involved the non-sale of the Housing Loans Insurance Corporation. I point out that the intention of the Government not to proceed with the sale was welcomed by the permanent building societies, by the Real Estate Institute and by the Housing Industry Association- hardly a group of socialists, hardly a group of people who would be described as supporting a socialist plot to take over the whole community. Senator Scott justified the previous Government's intention to sell the organisation on the ground that it was a public monopoly. Apparently it is quite all right to have private monopolies but quite wrong to have public monopolies. We had an organisation which carried out its function effectively and acted successfully. The previous Government followed the old conservative plot that, in those circumstances, it must sell it off at all costs because nothing in the public area can be seen to be effective. Senator Archer pointed out, quite correctly, that housing is fundamental, that the basic problem we have is to convert the needs and desires of the people to reality. The honourable senator summed up very well what I thought Mr Hurford's package was all about, but he said that the main problem in the building and housing industry is, in fact, the ups and downs in that industry, because that problem led to shortages of labour and of material and to increased prices. Many people would agree that the ups and downs in that industry are a very real problem. One of the aims of Mr Hurford's package is to lead to a situation where those ups and downs can be smoothed out. What happens in those ups and downs is that, as we get economic recovery, there is a shortage of labour and of materials and prices increase, although one would have expected that the price increases and the unreasonable prices now were more to do with high interest rates and the high cost of land because of the manipulation of land in this community. At the moment we do not have a shortage of labour. We have people unemployed all over the place in the building industry. We have not a shortage of materials , but an underutilisation of materials and the production capacity involved in the building materials industry. I think that Senator Archer ought to go back to Tasmania and talk to some of the people involved in the timber industry in that State to see what they have to say about the problems of shortages of material and labour. We have to overcome, to a certain extent, the ups and downs in the industry. Neither Mr Hurford nor I claim that this package will overcome those ups and downs; but it will certainly go some way towards smoothing out the capacity of young people, particularly low income people, to get into home ownership despite the vicissitudes of the economic conditions as they exist at the moment. Senator Archer is an advocate basically of what he calls the 'free market'. He is an advocate of those very ups and downs which he sees are essential in his theories to maintain a building industry. Although he complains about them, he is unwilling to take any steps, particularly by government, to even out those ups and downs. Senator Archer was followed by Senator Jones who pointed out in very specific cases the very real difficulties which are faced by young people and low income earners in gaining home ownership and in getting the proper assistance that they need through the various lending authorities in this country. He illustrated how the provisions of this legislation will assist them. It was a relief to hear Senator Haines say that she supported the Bills because , as she said, they do assist home owners. Also they will have the very important effect of generating employment because of the labour intensive nature of the building industry and because of the cumulative effect which an increase in the building industry has on increasing employment in other areas. She pointed out, quite rightly, that in this specific package there is no assistance for low income earners who are not buying their own homes; there is no assistance for those renting homes. But this is part of the whole package to enable a better distribution of funds; and there is nothing in the legislation that pretends to do that. The scheme does provide for young married couples, for singles and for two or more people who decide to purchase a house together to get assistance more easily to provide the finance to obtain accommodation. People earning up to $27, 900 a year will qualify for assistance. That represents approximately $540 a week or 155 per cent of average weekly earnings. One heard an almost plaintive complaint from the other side that this was not high enough. One has to realise that this package is aimed to assist low income earners. Within the capacities of the economy with which the Government has to cope at the moment I would have considered that that was a pretty reasonable cut-off point. Under the previous Government's package, income was tested on the previous year's income. Under this package, where the income falls because of, say, unemployment-that is, when one partner stops working-only the current year's income will be taken into account in assessing the income. I suggest that this is a benefit which should be welcomed by all honourable senators. The same income limits apply as applied under the previous scheme, but they are linked to the average weekly earnings to allow for the rise in incomes which will apply in the future. I think that the casting around by members of the Opposition in looking for arguments and points of criticism that they can make around the edges and trying to build those up into some plot to cause the downfall of our society does not stand them in good stead with the general public or the electorate in general. As Senator Messner said, this Government would like to see an increased stock of public housing. Of course we want to, because we have 100,000 families on the waiting list for such housing. These people have very low incomes. Of course we will be making provision, directly but particularly through the States, to increase that stock of public housing. I see no objection to that action. I doubt whether many people in this community would object to that. One of the ways to do that would be to take those low income people who seek to own their own homes off those waiting lists by providing them with an opportunity to obtain finance to get into home ownership, thus taking the burden off the waiting lists for rental and public accommodation. I thought this would have been an entirely laudable aim. I thought it would have been welcomed by people in the housing industry, as it has been, by the Government, as it has been, and by the Opposition. Instead, this proposal has provoked from the Opposition the sort of carping criticism which has come forth this morning. I remind people that the State governments in this country, both Labor and conservative governments, have been concerned for some years about these very large waiting lists and the lack of capacity of those governments to increase the stock of public housing. The States sought increased funds over the years when the previous Government was in power, but they were restricted in seeking those funds by the previous Government's tendency not to increase funds in this area and its bias against the provision of public housing for low income people. We are taking a multi-pronged approach to the very real problems of housing in this community. We do so because of the long waiting lists in public rental accommodation, the lack of capacity of the States to provide public accommodation, and the increasing inability, for all sorts of reasons, of young people to get sufficient finance to purchase their own homes. We take this action because of the fact that in these economic doldrums times stimulation of the housing industry is one of the most effective ways of increasing employment, and assisting in the economic recovery that we need. This is so not only in the building industry directly but also in those industries associated with the building industry, those which provide furnishings and white goods and those which process the building materials-the timbers, et cetera. This is a very effective way of assisting employment and the economic recovery that we so need. It is for that reason that I welcome the fact that, despite the Opposition's criticism, it will not oppose the Bills. I thank the Senate for the speedy passage of the Bills and its co-operation in this matter which, I believe, will be of great assistance to the community as a whole. Question resolved in the affirmative. Bills read a second time. FIRST HOME OWNERS BILL 1983 HOME DEPOSIT ASSISTANCE AMENDMENT BILL 1983 The Bills. Senator LEWIS(Victoria)(12.01) —I appreciate that it is very soon after the Minister for Finance (Mr Dawkins) made his statement on budgetary reform in the House of Representatives last week. He said: Another major reform involves the presentation of financial impact statements. In future all second reading speeches of Ministers will include a statement of the financial impact of the legislation. These statements will include estimates of any significant costs, revenue and savings arising directly from that legislation where such estimates can be calculated readily and reliably. He continued: Ministers will also attempt to assess the impact on industry and other sections of the community when formulating legislation. While such effects are often indirect and not easily quantifiable, Ministers will endeavour to include this information wherever possible. Is any of this information available to the Committee at this stage? Senator GRIMES(Tasmania-Minister for Social Security)(12.03) —Certainly, in future, the practice announced by the Minister for Finance (Mr Dawkins) will be followed in second reading speeches. The information requested by Senator Lewis is, in all cases, in the Budget Papers. I am sorry, I do not have them with me. I think that, in general, the impact on the housing industry will be what the Minister said it will be and what real estate institutes, the housing industry groups and the master builders groups said it will be. The impact on the budgetary process is, in fact, in the Budget Papers. I will obtain exact details . The outlay, in broad terms, for the first home owners scheme will be $77.7m. The outlay for the home deposit assistance scheme will be $43m in 1983-84. Senator LEWIS(Victoria)(12.05) —I thank the Minister for Social Security ( Senator Grimes) for that information. I am aware that the information relating to the cost to revenue of the legislation is in the Budget Papers. I thank the Minister for reminding me of that. The Minister knows that I have been pressing, for some considerable time, for governments to apply their minds to the impact of legislation of this kind on industry. The Minister indicated that the Government intends spending about $120m under the First Home Owners Bill and the Home Deposit Assistance Amendment Bill. That will have a very substantial impact on the industry. The housing industry will have to gear up to enable it to cope with that amount being spent in that area. I am concerned because we will have to say to home builders 'Not only is $120m to be spent this year but it is anticipated that that sort of expenditure will go on in the future'. People in the industry cannot enter into construction arrangements, employ staff, buy new equipment such as scaffolding and other things that must be organised for the industry to cope with an increase in government expenditure because builders who build homes for people on lower incomes are different from builders who build more expensive homes. The industry needs to take note of these matters. I recognise that although Senator Grimes is the Minister who introduced this legislation in this chamber he is not the Minister who is in charge of these Bills in the House of Representatives. I therefore ask Senator Grimes whether the Minister for Housing and Construction (Mr Hurford) or his Department made any attempt to assess the impact that these Bills would have on the industry and on other sections of the community when formulating the legislation. For example , there will be an impact on local government. It will be involved in the planning and setting aside of land for the construction of these homes. There are all sorts of consequences as a result of this legislation being passed. I think that the Government should have made some attempt to assess these matters before introducing the legislation. Senator ARCHER(Tasmania)(12.06) —At the risk of appearing to be carping on the subject, I ask: Does the Minister for Social Security (Senator Grimes) intend to answer the five questions which I raised? Senator GRIMES(Tasmania-Minister for Social Security)(12.07) —I have some difficulty in understanding why Senator Lewis has raised these matters at this stage in view of the situation in the building industry at the moment. The problems which he raised relate to the capacity of the industry to cope with an injection of $120m. I would have thought that one of the last things we should be concerned about at the moment is the capacity of the housing industry. Housing industry activity has been in a depressed condition. In fact, activity has been at its lowest level for about 20 years. In my response to the second reading debate I dealt with the decreasing level of building approvals. In fact, the Minister for Housing and Construction (Mr Hurford) has consulted with all sections of the building industry in the six months that he has been Minister. In fact, as a result of that consultation, there is a general approval of what the Government has done. I think everyone in this place knows about the very high level of unemployment in the building industry. Senator Archer and others know about the unused capacity and the low production levels in the associated industries such as the timber industry and the white goods industry. I do not think there has been any suggestion from industry experts or from anyone else that the industry does not have the capacity to cope with this situation. In fact, the construction industry has complained for years about the under-utilisation of its capacity and of its desire to assist in the economic recovery in this country by particularly assisting in an increase in building and, in particular, in housing construction. I turn the question back on Senator Lewis. Is Senator Lewis suggesting that the industry cannot cope? Is he suggesting, therefore, that we really cannot do something like the legislation suggests, that we must take a nihilistic attitude and say this is part of the economic cycle and we should do nothing about assisting young people to get into homes or that we should do nothing in this area at all? We need to overcome the very real problems facing low income earners in getting into their own homes not only because of their desire to do so or because of the desirability for the community that they do so but also to assist in taking the burden off the public housing area and off the public rental market. We need to assist the economy generally and, in particular, the building and construction industry and associated industries, which are working at undercapacity, have high employment levels and plenty of reserve capacity to cope with increased activity. For that reason we have introduced this legislative package which, I repeat, is welcomed by all areas of the building industry. For this reason, above all other reasons, it should not be criticised. I thought I answered some, if not all, of Senator Archer's questions. As I recall it, Senator Archer was concerned about what he considered to be the restrictive cut-off point for assistance-an income of $27,900. He made the point that in his view this would exclude two-thirds of people working in Canberra. We must first remember that average incomes in Canberra are higher than in the rest of the community. Secondly, what Senator Archer says does not accord with the information I have been given. In fact, something in excess of 50 per cent of people in Canberra will be assisted. We must have a cut-off point. We cannot have an unrestricted, open-ended scheme of the type I believe Senator Archer would like-that is, if he wants a program at all. We have introduced a system whereby couples will be tested on the current year's income rather than the previous year's income if for any reason one partner loses income or income falls. I think that measure will be of assistance. As I do not have my notes here to check the exact terms of the other questions asked by Senator Archer, I ask him to repeat them so that I can get information, and answer him now. Senator LEWIS(Victoria)(12.12) —The Committee will recognise that in fact the Minister for Social Security (Senator Grimes) clearly does not have the information to provide answers to the questions I have asked. I am endeavouring to seek reassurances for those people who enter into the building industry that the expenditure which the Government intends making under this legislation this year will continue. Announcements of this nature can induce people to enter into an industry. They make commitments; they borrow funds in order to get into that industry. If the Government then dumps them after a period they find themselves with burdens they are unable to cope with. That is why we are seeking some sort of reassurance that the Government has applied its mind to the impact of these measures on the industry and how assistance might continue. If the Minister can give such a reassurance, perhaps he can then tell me whether he or the Department has made any estimate as to how many people in my State of Victoria might be expected to receive assistance under either or both of these Bills within any period. Surely the Government has endeavoured to make some assessment of numbers. The Government has allocated $77.7m to the scheme that will operate under the First Home Owners Bill. It would be of concern if home buyers or builders in the next 12 months were unable to take up the benefit of that sum of money. The Minster for Housing and Construction (Mr Hurford) has prepared a table showing the benefits available, but those benefits seem to me to have some limitations with regard to income. For example, assistance to a home buyer without any children cuts out above an income level of $27,700; to a home buyer with two or more children, it cuts out above $27,700 also. In fact, it is not really of any great benefit to persons with an income above that figure. I wonder whether the Government has made as assessment of how many first home buyers with the allowable income level will be able to take advantage of this scheme perhaps over the next 12 months. Senator GRIMES(Tasmania-Minister for Social Security)(12.15) —The Government's commitment to continuing support for the housing industry is known. I believe it is respected by the building industry in general. We cannot ignore the fact that those organisations I mentioned earlier have welcomed the changes. I suspect that Senator Lewis is doing what Senator Messner did. He is asking for me to get up in this place and give a guarantee of exactly how much will be expended in this area next year and the years following that. I cannot, nor could any responsible person, do that; but I can draw an analogy. The worst situation that can affect people who enter the building industry is a sudden pulling-out of the rug from under it by removing government assistance. The best example of that happening was what happened after the 1975 election. In fact, assistance to the building industry was dramatically removed by the previous Government and the industry collapsed. It has continued to be in a state of collapse ever since. We want a program of assistance that is consistent, a program such as that embodied in these Bills. The legislation will continue to assist people and to even out those ups and downs which, as Senator Archer said, bedevil the industry . Of course they bedevil the industry; of course we want to overcome them. Senator Archer said that since 1947, when he became associated with the building industry, those ups and downs have existed and we have had to cop them. We do not think that the severity of the fluctuations to date has to be copped. Therefore, we are trying to do something about it. I am informed by officials that in 1982-83 under the existing scheme some 17,000 people in Victoria were assisted. It is estimated that in 1983-84 under a mixture of both schemes in excess of 20,000 people in Victoria will be assisted. Bills agreed to. HOUSING LOANS INSURANCE AMENDMENT BILL 1983 Clauses 1 to 3-by leave-taken together, and agreed to. Clauses 4 and 5-by leave-taken together. Senator ARCHER(Tasmania)(12.20) —It is the wish of the Opposition that these clauses be eliminated and we will move to have them deleted. Question put: That the clauses be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 24 —— Majority . . . . . . . . . 7 —— Bolkus, N. Haines, J. Button, J. N. Jones, G. N. Childs, B. K. Macklin, M. J. Chipp, D. L. Maguire, G. R. Coates, J. Mason, C. V. J. Coleman, R. N. Primmer, C. G. Colston, M. A. Ray, RobertCook, P. F. S. Reynolds, M. Crowley, R. A. Richardson, G. F. Elstob, R. C. Robertson, E. A. (Teller)Evans, Gareth Ryan, S. M. Evans, Jack Sibraa, K. W. Foreman, D. J. Tate, M. C. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Grimes, D. J. Archer, B. R. Lajovic, M. E. Baume, Peter Lewis, A. W. R. Bjelke-Petersen, F. I. Martin, K. J. Boswell, R. L. D. Messner, A. J. Carrick, Sir John Missen, A. J. Collard, S. J. (Teller) Rae, PeterCrichton-Browne, N. A. Reid, M. E. Durack, P. D. Scott, D. B. Guilfoyle, Dame Margaret Teague, B. C. Hamer, D. J. Townley, M. Hill, R. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Georges, G. Chaney, F. M. Hearn, J. M. Jessop, D. S. McClelland, Douglas MacGibbon, D. J. McIntosh, G. D. Withers, R. G. Question so resolved in the affirmative. Remainder of Bill-by leave-taken as a whole, and agreed to. Bills reported without amendment; report adopted. Bills (on motion by Senator Grimes) read a third time. The PRESIDENT —When the Senate met this morning Senator Durack, as Acting Leader of the Opposition, asked me to take steps to ascertain whether in fact the Joint Committee of Public Accounts was sitting while the Senate was sitting. I told him I would do so. I thereupon asked the Usher of the Black Rod to make such an inquiry. The Usher of the Black Rod has reported to me that at about 10.20 a.m., when he made such inquiry, the Public Accounts Committee was sitting. Senator DURACK(Western Australia) —by leave-In the light of precedents adopted in the Senate under the Standing Orders and the way they have been applied, this situation does raise a serious question for the Senate. I ask you, Mr President, to refer this matter to the Senate Standing Orders Committee, which I understand will meet quite shortly. That would seem to be the appropriate body to consider the situation which has arisen. I take that step only because obviously the Public Accounts Committee is relying on the legal opinions it has received, otherwise I would have thought that it was definitely and very clearly in contravention certainly of the practice of the Senate and of the Standing Orders of the Senate. That Committee has had a legal opinion that it is able to act in that way, and therefore I think it is proper that the matter be properly investigated by a committee of the Senate, at least at this stage. I suggest that the Standing Orders Committee might well consider getting an independent legal opinion. Senator WATSON(Tasmania) —by leave-Mr President, I wish to make a personal explanation on this matter. A few minutes ago you reported that the Joint Committee of Public Accounts was sitting this morning when the Senate was in session. However, I wish to remind the Senate that two members of that Committee from the Senate were not in attendance after 10 o'clock, when the proceedings of the Senate commenced. One member from the Government side and I absented ourselves from that Committee at that time because of the delicacy of a confrontation which is currently before the Senate. I believe that your explanation should have clarified the position and pointed out the two absentees . The PRESIDENT —Order! Senator Durack has asked me to refer the matter he has raised in the Senate to the Standing Orders Committee. I will accede to that request. For the information of the Senate, I point out that a meeting had already been convened for the Standing Orders Committee next Thursday, and this matter will be referred to that meeting. Consideration resumed. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Consideration resumed. Question resolved in the affirmative. Bills read a first time. Senator WALSH(Western Australia-Minister for Resources and Energy)(12.31) —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- LIVE-STOCK SLAUGHTER (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 The purpose of the Bill is to allow for an increase in maximum charge imposed on the slaughter of livestock in export establishments. This charge was first imposed on 1 July 1979 in order to recoup 50 per cent of the cost to the Commonwealth of inspecting meat for export. This Government has carefully reviewed the policy of charging for export inspection and has concluded that there are good grounds for re-endorsement and implementation of the existing policy. It is the Government's view that cost recovery principles should apply for commercial type activities, especially where major beneficiaries of export inspection services are overseas consumers. However, in setting a recovery rate of 50 per cent from industry for the provision of export inspection for all primary produce commodities, the Government has been mindful of the fact that further efficiencies in the delivery of these services are possible of being achieved and therefore considers that industry should not be expected to pay the full cost of operating the current service. The Government is aware that despite initiatives taken to date in the Meat Export Inspection Service which have enabled us in 1982-83 to increase productivity, there are still changes in policy that, subject to acceptance by overseas countries, may be made to improve efficiency and reduce costs. It has been decided that the cost of special training programs for inspection staff and other costs associated with achieving efficiencies in inspection practices will be excluded from the cost base on which the levy is determined. Since 1979 the fees charged have fallen far short of recovering half of the costs of export inspection due to inflation, to changes in the services provided and to reduced throughput. In 1983-84 it is now estimated that the current rate of charge based on $1.80 for adult cattle would recover only $13 million or 17 per cent of costs. Accordingly it has been decided to lift the effective rate for each class of livestock to the equivalent of $5.40 for adult cattle, which would recoup 50 per cent of costs in a full year. In fact because the new rate will apply for only part of the year the recovery will be in the order of $30.9 million representing 39 per cent of the costs of operating the meat inspection service. The current maximum rates of charge specified in the Live-stock Slaughter ( Export Inspection Charge) Act 1979 prevent operative rates of meat inspection charges being increased to a level which would allow 50 per cent recovery. Accordingly, it is proposed that the maximum rates of charge for slaughter of livestock for export be set as follows: Cattle, including buffalo - $10.80 per head Calves 40 to 90 kg dressed weight and pigs - $ 3.60 per head Bobby calves to 40 kg dressed weight, sheep, (lambs) and goats - $ 1.08 per head Other e.g. horses, donkeys and mules - $10.80 per head The maximums have been set at twice the operative rate. Operative rates will be established by amendments to the Live-stock Slaughter (Export Inspection Charge) Regulations, effective from 1 October 1983. This will allow for amendments from time to time of the amounts charged on the slaughter of livestock in export establishments in accordance with changes in the cost of service provided. I commend the Bill to honourable senators. GRAIN (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 This Bill is associated with other export charge bills just introduced. The purpose of this bill is to allow for an increase in the maximum charge imposed on the export inspection of wheat, oats, barley and sorghum. This charge was first imposed on 1 July 1979 in order to recover from exporters approximately half of the total export inspection costs of these products in 1979-80. This Government has carefully reviewed the policy of charging for export inspection and has concluded that there are good grounds for re-endorsement and implementation of the existing policy for 50 per cent recovery of costs. The fees currently charged for grain have remained unchanged since 1981 and would fall far short of meeting half the current costs of inspection due to inflation, to changes in the service provided and to changes in throughput. It is estimated that the current rates of charge would recover some $1.3 million or 32 per cent of costs. Accordingly it has been decided to lift the effective rate of charge for bulk and containerised grain, and reduce the rate for bagged grain in line with changes in the costs of inspection. Although the new rates of recovery will apply for only part of the year they will cover the large part of the crop and the recovery is expected to be in the order of $1.9 million or 48 per cent of the cost of providing the service. The current maximum rate specified in the Grain (Export Inspection Charge) Act 1979 would not allow the operative rate necessary to recoup 50 per cent of costs to be established in the Grain (Export Inspection Charge) Regulations. Accordingly it is proposed to amend the maximum rate in the Act. The proposed new operative rates to be established by regulation are: Grain shipped for export in bulk - 16.3 cents/tonne Grain shipped for export in bags - 19 cents/tonne Grain shipped for export in containers - 73 cents/tonne These compare with existing operative rates of 9.6 cents /tonne for bulk, 40 cents/tonne for bags and 40 cents /tonne for containerised grain. Currently the act specifies a maximum rate for all grain. In view of the disparity in the cost of inspecting grain shipped in bulk, in bags and in containers it is now proposed to set separate maximums for each mode of shipment . The maximums proposed are: Grain shipped for export in bulk - 33 cents/tonne Grain shipped for export in bags - 40 cents/tonne Grain shipped for export in containers - $1.46/tonne The maximums have been established at approximately twice the proposed operative rate. This will allow for regulatory amendments from time to time of the amounts to be charged for inspection in accordance with the changes in the costs of the service and other factors such as the volume of exports. The bill also provides for a definition of a container in order to ensure that the higher charges associated with inspection for this mode of transport apply only to what is commonly known as a re-usable container. I commend the Bill to honourable senators. EGGS (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 This Bill is associated with other Bills just introduced to amend certain export inspection charge Acts. Its purpose is to allow an increase in the maximum charge imposed on the inspection of eggs other than eggs in shell. The charge was first imposed on 1 January 1983 in order to recoup 50 per cent of the cost to the Commonwealth of inspection eggs for export. This Government has carefully reviewed the policy of charging for export inspection and has concluded that there are good grounds for re-endorsement and implementation of existing policy. It is the Government's view that cost recovery principles should apply for commercial type activities, especially where major beneficiaries of export inspection services are overseas consumers. However, in setting a recovery rate of 50 per cent from industry for the provision of export inspection for all primary produce commodities, the Government has been mindful of the fact that further efficiencies in the delivery of these services are possible of being achieved and therefore considers that the industry should not be expected to pay the full cost of operating the current service. On the basis of exports of eggs in 1983-84 the operative fees specified under the Eggs (Export Inspection Charge) Regulations would recover more than half the cost of inspecting shell eggs and less than half the costs of inspecting other eggs. Overall, it is estimated that the existing rates of charge would recover $ 97,000 or 33 per cent of costs. Accordingly it has been decided to lift the effective rate for eggs other than in the shell from $8 per tonne to $16.00 per tonne and reduce the effective rate for eggs in the shell from $11.00 per 1,000 dozen to $10.00 per 1,000 dozen. These new rates should recover half of the costs in a full year. Because the new rate will apply for only part of the year, the recovery will be in the order of $129,000 or 45 per cent of costs. The change in charges must be seen in the context of rapid changes in inspection procedures. These are being reviewed in conjuction with industry. It is hoped to commence trialling of revised procedures early in 1984. The objective is to achieve efficiency in the use of resources and to reduce costs. The current maximum rates of charge specified in the Eggs (Export Inspection Charge) Act 1982 prevent the operative rate for eggs other than eggs in the shell being increased to a level which would allow 50 per cent recovery. Accordingly, it is proposed that the maximum rate of charge for inspection of eggs for export, other than in shell be set at $33.00 per tonne. It will allow for amendments from time to time of the amounts charged for inspection in accordance with changes in the cost of the service provided. I commend this Bill to honourable senators. EDIBLE OILS (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 This Bill is associated with other export charge Bills just introduced. The purpose of this Bill is to allow for an increase in the maximum charge imposed on the export inspection of edible oils. The charge was first imposed on 1 January 1983 in order to recover from exporters approximately half of the total export inspection cost. This Government has carefully reviewed the policy of charging for export inspection and has concluded that there are good grounds for re-endorsement and implementation of the existing policy for 50 per cent recovery of costs. The fees currently charged for edible oils would fall far short of meeting half the current costs of inspection. It is estimated that the current rates of charge would recover some $5,000 or 15 per cent of costs. The unit cost of inspection for edible oils was initially underestimated due to the volume of throughput and the work effort involved. Frequent changes in unit export costs are common particularly where the product is minor in terms of effort and the volume varies with the season. The annual change in costs can of course be down as well as up, as is illustrated by bagged wheat export charges. Accordingly it has been decided to lift the effective rate of charge for edible oils from $1.00 per tonne to $3.30 per tonne. The new rate of recovery will apply for only part of the year and the recovery is expected to be in the order of $13,000 or 38 per cent of the cost of providing the service. The current maximum rate specified in the Edible Oils (Export Inspection Charge ) Act 1982 would not allow the operative rate necessary to recoup 50 per cent of costs to be established in the Edible Oils (Export Inspection Charge) Regulations. Accordingly, it is proposed to amend the maximum rate in the Act from the current rate of $2.00 per tonne. The proposed maximum rate for inspection of edible oils is $6.60 or twice the operative rate in order to allow for amendments from time to time of the amounts charged, in accordance with changes in the cost of the service provided, and other factors such as the volume of exports. I commend the Bill to honourable senators. Senator SCOTT(New South Wales-Leader of the National Party of Australia)(12.33) —I rise to refer to the four Bills before the Senate and advise that whilst we do not oppose them we intend to move an amendment. I foreshadow that amendment. We are confronted in these industries by quite massive increases in export charges and, to say the least, although there are grounds on which they can be justified, they are premature from a number of points of view. Indeed, they would bring some $18m or more from the producers, from the industries concerned, in export inspection charges at a time when the industries can ill afford it, but, more importantly, at a time when the facility of export inspection is far below that which is ultimately required. In other words, the ultimate development of a first class export inspection circumstance has yet to be achieved and the industry is virtually being asked to prop up, in the meantime, what may well be, relatively speaking, an inefficient system. There is certainly a measure of irony in the circumstance that whilst the export quality control arrangement received some $1.5m in the 1982-83 Budget, and that was an amount of money that was to be operated by the Australian Meat and Livestock Corporation in satisfying the requirements of quality control in the export industry and therefore of great importance, that money was to be followed in the 1983-84 Budget year by a further $1m. The almost incredible circumstance is that whilst the Government insists on $18m for export inspection to be taken from the industries when that inspection is not capable of being fully implemented at top level, the $1m for AMLC export quality control has apparently been denied to the industry. As I said earlier, this seems to be an extraordinary circumstance and one that we can hardly abide. I refer to the massive increases in charges that were floated by this legislation; the inspection charge would rise by some 200 per cent, from $1.80 per adult beast to $5.40. That is an extraordinary jump in one move. It was indeed Liberal- National Party policy that ultimately a level of 50 per cent of the cost of export inspection should and could be borne by the industry. It certainly was indicated by the previous Minister, Mr Nixon, and it was naturally the policy of the then Government, that this sort of contribution should be achieved over a period and clearly with relevance to the economic circumstances of that time and to the quality and capacity of the inspection service to be implemented. The export inspection service of itself has escalated, cost wise, enormously in recent years. In 1977-78 the amount involved was $33.6m and, only six years later, the estimate in 1983-84 has risen more than 100 per cent to an amount in excess of $70m. The industry is concerned also that the inspection services available are not properly decentralised. They are, on the contrary, tending to increase their staff numbers in Canberra, which is an extraordinary circumstance for an industry that stretches throughout Australia and certainly needs a real measure of decentralised managerial control in this inspection area . The Government is asking the industry to make a greater contribution in respect of containing cost although the inspection service remains costly and inefficient. This is a circumstance that seems to me to be intolerable. Indeed, it is very hard to understand why a government would insist on such an impost at this stage. Paragraph (A) of our amendment states: Rural industries, which are struggling to emerge from the worst drought in history, are not at this time able to bear the burden of such massive increases . . . That is true. Although fortunately Australia's seasonal circumstance has become very much better in recent months, only six months ago this country was still struggling as a result of the worst drought in terms of intensity and extent in its history. There is no simple or quick way of overcoming a drought of the proportions of the one we have just been through. The whole process of re- establishing involves purchase and breeding. Purchase is extremely expensive and breeding is relatively slow. The retarding effect of what has happened over the last year or two is not going to be overcome in a matter of weeks. Indeed, the circumstances of the last year or two mean that a high priority will have to be put on a very costly exercise in rural Australia to re-establish a significant fodder reserve which in the last year or two has diminished to a point where it is almost non-existent. This in itself will be a costly and time consuming operation. Of course, liquidity in the industry will take some time to eventuate . However, fortunately, if the harvest is as good as it appears it may be, this may not be such a problem. Paragraph (B) of the Opposition's amendments states: Industries should not be expected to contribute 50 per cent of the costs of Commonwealth inspection until the Export Inspection Service restructuring is completed and the Service is as efficient and cost-effective as possible. That is the very basis of our objection to this piece of legislation. It seems quite intolerable that a massive cost should be implemented for a service that virtually does not exist. The other matters that concern us greatly relate to the failure to consult properly with those significant and appropriate areas of the industry when determining the sort of inspection charge and capacity that needs to be developed. Consultation with the industry has been remarkable by its absence. Indeed, that is a matter that I trust the Government will take very seriously in the near future. One other area of concern to me, the industry and the Opposition is the virtual inference that the industry may ultimately have to meet 50 per cent and even 100 per cent of the cost of meat inspection. That has not been said in so many words but there is a very strong inference that that arrangement is being considered. If it were to eventuate, we would face the exact opposite of what applies in regard to virtually all of our competitors in the meat marketing field where the total cost of meat inspection is sustained by the government of the country concerned. With those few comments, I indicate that the Opposition believes that the inspection charge is acceptable in principle but totally unacceptable in terms of the manner and speed with which it is imposed and the way it is being developed. I move: At end of motion, add ', but the Senate is of the opinion that: (A) Rural industries, which are struggling to emerge from the worst drought in history, are not at this time able to bear the burden of such massive increases in charges; (B) Industries should not be expected to contribute 50 per cent of the costs of Commonwealth inspection until the Export Inspection Service restructuring is completed and the Service is as efficient and cost-effective as possible; (C) There is inadequate industry participation in inspection procedures; and (D) There has regrettably not been full consultation with industry on all aspects of development of the Export Inspection Service and inspection charges'. Sitting suspended from 12.46 to 2 p.m. Senator DURACK —I ask the Leader of the Government in the Senate: In view of the Prime Minister's plea to the Australian Council of Trade Unions Congress this week to observe the principles of the prices and incomes accord, and the Prime Minister's statement on the same occasion that the Government would not support any rises in allowances which amounted to a disguised wage increase, will the Government now firmly oppose the ratification of the building industry and the Heinz company wage settlement agreements which are before the Australian Conciliation and Arbitration Commission? Senator BUTTON —I have said in the Senate on a number of occasions that the Government would intervene in the building industry matter when it comes before the Conciliation and Arbitration Commission to be ratified. That is still the position. In fact, the Government has already intervened in those proceedings. When the formal matter comes before the Commission, the Government will announce its attitude to the building industry claim. With regard to the agreement in relation to Heinz, the Government has already indicated, and I have indicated here, that it will intervene in those proceedings and, consequent upon whatever decision is made by the Conciliation and Arbitration Commission in the national wage case, will advance its submission in those hearings. It is quite clear what the nature of that submission will be. The Government has opposed sectoral wage increases outside the broad framework of the accord. Senator DURACK —I ask a supplementary question of the Leader of the Government. Why will the Government not say-it has already told us that it will intervene- whether it will oppose these agreements? Senator BUTTON —I am asked why I will not say what the Government's attitude will be. I have indicated a number of times that the Government is opposed to sectoral wage claims outside the Conciliation and Arbitration Commission, although it has been said that certain aspects of the building industry agreement place it in a somewhat different category. However, the attitude to both those matters will be determined prior to the time when the Government puts its view to the Conciliation and Arbitration Commission. It has to be determined , as I am sure Senator Durack will know, in light of any decision by the Conciliation and Arbitration Commission in the national wage case. Senator CROWLEY —My question is directed to the Minister for Education and Youth Affairs. I have received submissions from a number of groups, including the Central Commission of the Catholic Bishops of Australia, which claim that the Government's decision to abolish the nexus between the cost of educating a child in a government school and the level of recurrent grants to non-government schools is potentially destructive to non-government schools. They further claim that reducing the basic recurrent grant to some students could endanger the right of all students to a share in educational funding. In the face of these claims and similar protestations from Senator Baume, could the Minister explain the implications for funding levels of non-government schools and for the right of choice in education of the Government's decision to abandon the percentage link formula so as to still the fearful beating of the protesters' hearts? Senator RYAN —I am aware that in some sectors of the non-government schools area there have been expressions of concern about the different way in which the Government decided to allocate funds to non-government schools. However, the kinds of fears to which Senator Crowley's question referred are quite unnecessary. There is no intention on the part of this Government to take any step which would be destructive of the non-government school sector nor is there any intention to take any step which would deny to any child an adequate level of resources for his or her education. The Government has made decisions on funding for 1984 which have directed the limited additional resources available to the neediest schools. For most schools in group one, per capita recurrent grants will be maintained at the 1983 level. Grants for group 2 schools will be increased by 1 per cent in real terms, and those in group 3-the vast majority of the non-government schools-will receive a 3 per cent increase in real terms. The Government abolished the percentage link formula for one very important reason. It did nothing to close the gap between low resource schools and those operating at high resource standards, whether government or non-government. The Government's needs-based funding policy will bring the greatest benefit to those schools in greatest need and over a period will close the gap. I am now in a position to say that the neediest schools would have received less subsidy under the percentage link formula than they will under the arrangements I announced on 28 July. The Commonwealth Schools Commission has informed me that government school standard costs for 1984 have increased by 2.6 per cent and 1.1 per cent at primary and secondary levels respectively. Had the percentage link mechanism been continued for 1984, group 3 schools would have received increases in per capita grants of $18 and $12 for primary and secondary students respectively, compared with the increases they will now receive of $20 and $32 respectively. As a result of our Government's initiative, the neediest schools-those in category 3-will receive $5m more than they would have under the percentage link formula. Senator Crowley's question also addressed the matter of the right of choice of those parents who choose non-government schools. Parents who choose non- government schools can be confident that this Government recognises their right to do so. As I have said on many occasions, this Government recognises the high standards that many non-government schools attain and values the contribution they have made and are continuing to make to the education of young Australians. However, we are a government which will concentrate its efforts on raising resource levels where they are lowest. Finally, I would like to point out that the Government plans to implement a new funding scheme in 1985 based on advise from the Schools Commission. Senator Archer —Will you read it more slowly? Senator RYAN —I will repeat that for Senator Archer as he seems to have some difficulty in hearing-- The PRESIDENT —Order! I suggest that the Minister ignore the interjections and give the answer to Senator Crowley. Senator Robertson —They are not interested anyway. Senator RYAN —I think it is the case that some honourable senators opposite are not interested in the Government's real actions or real intentions in this matter. They are much more interested in whipping up panic campaigns based on rumour and dishonesty. However, it is our intention in 1985 to have a different formula for the funding of non-government schools which will take better account of the various needs of those schools. As I have said before in this place-there are honourable senators here who do not want to hear it-in the development of that new formula, all sections of education will be involved. They are already involved. Consultations are already taking place with the various sections of the non-government sector. It will be a fair and equitable formula from which we will be able to continue to do what it is our policy to do; that is, to fund on a needs basis. Senator Durack —I ask Senator Ryan to table the paper from which she was reading . Senator RYAN —I table the paper. Senator Crowley having addressed a supplementary question to the Minister for Education and Youth Affairs- The PRESIDENT —Order! The question is out of order. Senator TEAGUE —Has the Minister for Industry and Commerce seen reports that up to 10,000 more jobs will be lost in the car industry? Does he agree with that prediction? If he does, were these losses in employment taken into account in assessing the levels of employment predicted in the Budget? If Senator Button does not accept the prediction, what changes, if any, does he expect in car industry employment levels? Senator BUTTON —I have seen reports in the newspapers that certain people have said that up to 10,000 more jobs will be lost in the car industry. I can say with a fair degree of certainty that it is the intention of General Motors- Holden's Ltd, for example, to reduce its work force by 1986. In terms of that company's policy, it will involve, presumably, a substantial further loss of jobs. Insofar as other car manufacturers are concerned, I doubt very much whether one could foresee at this stage any loss of jobs. One manufacturer is putting on new employees at a fairly regular rate. A second manufacturer has indicated to me in the course of the last week or so that it will be putting on more employees. Honourable senators will appreciate that I cannot foreshadow what might happen in terms of demand for motor cars two or three years hence, but it is quite possible that there will be job losses in certain companies and there will be increased employment in other companies. It is a very brave or perhaps foolish person who makes the prediction of a 10, 000 job loss with the confidence with which it has been made in some places. Because these projections for car industry employment are essentially made in respect of a substantial period, I do not think it is reasonable to say that the figure which Senator Teague cited was specifically taken into account in assessing employment implications of the recent Budget and the estimates in respect of unemployment which were predicated in the documents accompanying the Budget. A great variety of matters must be taken into account in assessing those employment figures, including the general level of demand in the economy. I think the figure which Senator Teague projected would be submerged in the context of those general calculations. Senator TEAGUE —I wish to ask a supplementary question. Is there not a further flow-on to component part manufacturers in increased unemployment? How does this confirmation by the Minister of increased and unexpected unemployment square with his statement last Wednesday that the alarming decline in employment seemed to have been halted? Senator BUTTON —Of course the components industry has been affected by the downturn in the car industry. There is now very much reduced utilisation of capacity in the components industry. But it does not follow that a reduction in the manufacturing work force of the car industry-that is to say, the people who are basically engaged in assembly operations in the manufacturing plants-of necessity has any relationship to employment in the components industry. I understood the second part of Senator Teague's question to ask how I rationalise , as it were, the comments I made about the car industry and the comments which I made last week when I expressed hope that there were signs of an upturn in the employment situation. The answer has already been given to the first part of Senator Teague's question; that is, a great variety of industries and a great variety of figures have to be taken into account in assessing any general trend in employment. The car industry is only one industry. Senator CHILDS —Can the Minister for Veterans' Affairs provide figures on the number of persons receiving each category of pension through his Department? What are the likely trends in these figures in the near future? Senator GIETZELT —The question of increases in the number of pensions was dealt with fairly substantially in the presentation of the Budget several weeks ago. In my Department a fairly substantial increase is clearly taking place in one area, that is, the service pension area. I am advised by my Department that currently some 733,000 pensions are being paid through the Department. That comes about largely because most World War II veterans have reached the age of 60 and, therefore, qualify for pensions. Some 341,000 people receive them. In reply to a question last week I indicated that potentially about another 190,000 people would become eligible when they reached 60 years of age. My Department expects that by this time next year the figure will have passed 800,000. Of course, by about 1986 there will be approximately one million pensions paid. Of the 733,000 pensions to which I have referred, 168,000 are disability pensions. It is interesting to note that that is the only section in which there is a noticeable decline in the number of applicants for the pension and the number of pensions being granted. The number of applicants declined in the last year by some 1,200. However, there is a growth in the number of people seeking a war widow's pension. I will check and let Senator Childs know the precise figures. Senator MASON —My question is directed to the Minister representing the Minister for Defence and concerns the purchase for the Royal Australian Air Force of 75 F18 fighter aircraft. What is the latest information on when these aircraft will be delivered? Is it a fact that due partly to the fall of the Australian dollar against the United States dollar the cost of the aircraft is escalating alarmingly and may well approach $4 billion based on this year's currency figures, with the potential for even higher cost growth, possibly as much as double the figure when the purchase was confirmed in late 1981? What limitation, if any, exists which would control the cost in future? In these circumstances and in the light of criticism of the F18 project, does the Government still regard these aircraft as a good purchase in comparison with others available? Finally, to what extent are we committed to the purchase? Are we indeed committed to the purchase of all 75 machines or can the number of aircraft provided for in the contract be reduced? Senator GARETH EVANS —The answer to the question as to when delivery of the aircraft is to take place is that the first two of Australia's 75 FA18 aircraft are due for delivery in the United States in October 1984. Subsequent aircraft are to be delivered from the Government Aircraft Factories at Avalon in Victoria from April 1985 through until May 1990. As to the second question about the suggested escalation in cost, the Government has agreed now to revise the total project cost estimate of $3,396m at December 1982 price levels and post- devaluation exchange rate. This represents a net increase of $969m on the original approval of $2,427m in August 1981 prices and is due entirely to the effects of inflation and exchange rate variations, offset by some real reductions in some items of the project. Despite some speculation recently, including that advanced by Senator Mason, in constant dollar terms-that is to say, real terms-project costing has not increased. Exchange rate variations, I should add, constitute the largest proportion of the increase and have affected other equipment purchases in a similar way. They need to be reflected in our outstanding liabilities to the United States and to other countries. This situation can, of course, be expected to change again over the years, hopefully in our favour. I understand that the Minister for Defence will be making a statement to Parliament later this session which will include full details of the increases. Senator Mason asked a further question about whether there was any possible way in which the cost burden could be limited. Every possible means to limit the burden of this very important and very costly project is being pursued and will continue to be pursued. As is usual in purchases of this kind through the United States Government under foreign military sales arrangements, the United States Government agencies involved in our program are required to develop contracts for Australia's requirements as favourable as for their own purchases. Arrangements are in place that will enable us to monitor these processes most carefully. Further, as is the case with any major defence project, the various elements of the FA18 project have been and will continue to be the subject of most thorough reviews to ensure that what is being acquired is the absolute minimum, consistent with sound defence planning. In the final part of the question I was asked whether we are committed to purchase all the aircraft we have ordered. We do in fact want to continue with the purchase and there is no resiling from that. The situation technically is that the Australian Government has executed with the United States Government formal letters of offer and acceptance under which 75 FA18 aircraft and associated supplies and services are to be provided. There are provisions under which the arrangements could be varied if that were desirable. Whilst those provisions are favourable to the Australian Government, there would still almost certainly be some cancellation penalty in the event of any reduction. As a result and for any of the reasons I have mentioned the Government has no intention to reduce the FA18 program. Senator COATES —I ask the Minister for Resources and Energy a question about the use of wind energy in Tasmania which I am keen to see supported. Is he yet able to say whether Commonwealth assistance can be made available for the proposal of the Australasian Wind Energy Association for a demonstration wind farm project in north-west Tasmania, either under the National Energy Research, Development and Demonstration Council or as part of the arrangements with Tasmania following the High Court decision on the Commonwealth's stopping construction of the Gordon below Franklin Dam? Does the Minister acknowledge the excellent test results on wind velocity already obtained in the area, the employment potential of the creation of a wind generator industry in Tasmania and the benefits of developing such an alternative energy source which is already widely used overseas, the generators for which can be installed to match demand closely? Finally, will it be necessary, if the energy is to be fed into the Tasmanian grid, for such a demonstration wind farm project to be undertaken in co- operation with the Hydro-Electric Commission? If so, is there yet any sign of agreement by the Tasmanian Government and the HEC to a joint study with the Commonwealth of Tasmania's energy needs, demand and supply? Senator WALSH —Regarding the very last point of Senator Coates's question, on the latest information I have, discussions on that joint study are still proceeding. In response to the major part of the question-whether there is any way that the Commonwealth could become financially involved in the proposal to establish the wind farm-the answer is yes, there is a way. I understand that an application for a total amount of something like $1m is currently before the relevant NERDDC committee. The provision of that amount would be spread over some two or three years. The NERDDC committee has not yet made a recommendation on that application but I have, as Senator Coates will know, taken considerable interest in the matter and made a number of inquiries. There is wind data from one site going back over a number of years. There is also wind data from another site which has had a significantly higher wind velocity for one year only, which I am advised is probably enough. But more importantly there is a clear need for reliable data over an extended period on variations in wind velocities at different heights above ground level. The importance of velocity must be stressed because the formula for calculating the potential electricity production includes wind velocity squared. In other words, the difference in electricity output between a wind velocity at 8 metres per second and a wind velocity at 9 metres per second is not 11 per cent, as one might think; it is in fact over 25 per cent. So wind velocity is extremely important. Yesterday I authorised the Department of Resources and Energy to seek discussions with the Hydro-Electric Commission with a view to funding, through NERDDC, to the extent of about $50,000 or $70,000 the collection of the required technical data on wind velocities at varying heights and sites and then to continue discussions with the HEC as to whether, probably 12 months hence, it would co-operate in a technical study for the integration into the Tasmanian grid of wind generated electricity in the north-west. I might add in closing that I also have tentative plans to study in Denmark, probably later this year, the commercial production of wind generated electricity. Senator LAJOVIC —I refer the Leader of the Government in the Senate to the answer he gave to Senator Chaney last Thursday when he was asked about Australian Bureau of Statistics figures showing a loss of 52,000 jobs during August and the lowest labour force participation rate in 20 years. The Minister said then that he had not examined the figures and preferred to rely instead on other information to justify a claim he had made during the Budget debate the previous night. Has Senator Button now analysed the ABS figures? Does he still maintain the view that he put to the Senate on the night of Wednesday, 8 September that: 'there is every sign that the alarming decline in employment has been halted'? Senator BUTTON —In the speech I made in relation to the Budget I said that there were a number of indications that what I referred to, I believe, as the alarming decline of employment of recent years, had been halted. In a subsequent question to me Senator Chaney raised the matter of the lower participation rates as revealed by the ABS figures published in relation to the month of August. First of all I think it is agreed that the decline in participation rates, as revealed in the August figures, is most alarming. Secondly, I think it is agreed by a wide range of commentators that the August figures have to be seen in conjunction with figures for the preceding months and later figures which will be revealed in September or October before any definite conclusions can be drawn from them. As I indicated to Senator Chaney in answering the question the other day, I think there must be a grave degree of uncertainty and disagreement, if the August figures are in fact correct, as to what is responsible for those figures. At this stage that can only be a matter of speculation. I see nothing inconsistent with what I said to Senator Chaney and what I am now saying. Senator LAJOVIC —Mr President, I ask a supplementary question. When Senator Button was replying to Senator Chaney, in his last sentence he said: I will undertake to examine the figures and give Senator Chaney a further answer in due course. When will we get those figures? Senator BUTTON —Senator Lajovic has in fact sought to ask a supplementary question based on Senator Chaney's question rather than his own. What I said in answer to Senator Lajovic's question just a minute ago was that it was very difficult to draw any conclusions on the basis of the lowered participation rate as revealed in the August figures. I think that implies to most people that I have examined the figures and I have drawn that conclusion; and that is the conclusion. The PRESIDENT —Before I call another honourable senator, I should mention that there have been six questions asked so far and four supplementary questions. This is creating difficulties in calling honourable senators. Senator ROBERTSON —Can the Minister representing the Treasurer advise the Senate whether any representations have been received from representatives of airline company employees about the tax deductibility of investments in primary production? If so, can he advise the Senate of his response to these representations? Senator WALSH —Yes, representations were received by me in respect of senior Qantas Airways Ltd personnel, which sought my assistance in securing an appointment with the Treasurer. The representations were conveyed through an accountant. The accountant, in a letter which I sent on to the Treasurer with a request that he consider the application for an interview, said that he was acting on behalf of 40 or more senior Qantas personnel-for reasons which will become obvious later they were clearly Qantas pilots-who were developing farms. They have been offsetting their primary production losses in the development of these farms as tax losses against the salary paid to them by Qantas. Of course, that is quite legitimate. They were also-and this was equally legal at the time- claiming a refund for tax losses incurred in their farm development investments not in the next financial year, as is normally done, but on a monthly basis, as an offset to their PAYE obligations. The accountant wrote that they were claiming, say, $2,500 a month and from 1 July would no longer be able to claim that deduction on a monthly basis. They would have to wait until the next financial year to get a refund as a result of their expenditure of, say, $30,000 over the full year by way of tax deductible investment in the farms they were developing. The point of the letter from the accountant acting on behalf of these Qantas pilots is that they want this appointment with the Treasurer to rectify the massive injustice which has been thrust upon them because they will have to wait until the next financial year to get the tax benefits from the, say , $30,000 tax deductible losses that they had incurred in developing their farms . So much for the letter. I wish to make a couple of further points. First, the clear implication is that these pilots have $30,000 of income surplus to their current needs which they can invest in their farms. Secondly, the rationale for their greedy demands for tax exemption of lump sum superannuation payments is the assertion that they need those payments tax free in order to establish themselves in business following their often involuntary early retirement. We now know that at least 40 of these people have in fact been setting up their alternative businesses for retirement from their bloated salaries in the years in which they have been employed. They now have the audacity to complain that they have to wait an average of six months in order to get the tax benefits which flow from their, say, $30,000 a year tax deductible investment in farm property. The final irony- and these are the sorts of people that the Opposition supports-is that their employer Qantas, which pays them these salaries which according to the evidence produced in the letter of the accountant acting on their behalf enables them to spend $30,000 a year on farm investment, was rescued from insolvency in the last financial year by large infusions of government cash. Senator ROBERTSON —I am sorry to incur your wrath, Mr President, but I must proceed with this matter a little further and ask a supplementary question. Does the Minister not believe that the development of farming properties is far preferable to the development of high rise luxury apartments, as is practised by some people? The PRESIDENT —I call the Minister representing the Treasurer to respond insofar as the question is supplementary. Senator WALSH —I think that there are some cases in which the development of both high rise residential or commercial buildings and agricultural properties is socially useful and defensible. Of course, there are other cases in which people become involved in them for no reason whatsoever other than to exploit the tax laws and escape their social obligation to make some contribution to the public welfare from their very large salaries. In such cases that sort of action is deplored by members of the Government. It is admired by members of the Opposition. Indeed, it was practised by some of them when they were in government. The PRESIDENT —Order! I ask the Minister not to go beyond the supplementary question. Senator WALSH —It is anti-social behaviour. Senator HARRADINE —My question is addressed to the Leader of the Government in the Senate. The Minister will have noted the broad interpretation of section 51 (xx) of the Constitution by Justices Murphy, Mason and Deane in the Tasmanian dam case. I ask whether the attention of the Minister has been drawn to these comments made by Mr Justice Murphy in Canberra on 5 September 1983 in a seminar on 'Changing Industrial Laws': The future course of federal industrial law will, I think, show a much greater reliance on the corporations and commerce powers than hitherto. Is this the view of the Government and, if so, how would award workers be protected from interference by this or future parliaments in matters concerning their wages and working conditions? Senator BUTTON —I take it that the question is addressed to me in my capacity as Minister representing the Minister for Employment and Industrial Relations. As Senator Harradine will be aware, the Minister has embarked on a number of initiatives in relation to both the current wage fixation system and the arbitration system generally. I had not been made aware of Mr Justice Murphy's remarks. I will see that they are drawn to the attention of the Minister and an answer obtained for Senator Harradine as promptly as possible. Senator TATE —I ask the Minister representing the Minister for Health whether the Government is aware of representations made by an organisation known as the APPM Council, which is concerned with the social well-being of the employees of the Associated Pulp and Paper Mills Ltd timber-based operations in Tasmania, particularly north-west Tasmania. In particular, is the Government aware of the excellent medical and hospital benefits fund, with a membership of some 3,000 persons, which has been operated for many years to the satisfaction of employees and with the support of the company? Will the Government make special arrangements to ensure minimum disruption to the present arrangements when Medicare is introduced on 1 February 1984? Senator GRIMES —As Senator Tate says, representations have been made to Government members and to the Minister for Health by APPM concerning its medical and hospital benefits fund, which is a closed fund for employees of that organisation. The fund has a very good record of providing health benefits for employees of APPM. That record has been important in cushioning the employees of the organisation against the various changes made by the previous Government to the health insurance scheme over the last seven years. Senator Tate, as a senator from that area, has been quite assiduous in making representations on behalf of the organisation to the Minister for Health. It should be remembered that in introducing the Medicare legislation the Government is not of a mind to extend to closed funds the agency arrangements which APPM would like, although it does not have a completely closed mind on the matter. The Government is aware also of the very real importance of this fund to the employees and of the fact that APPM subsidises the fund's operations by about $ 200,000 a year. I am sure that everyone hopes that after Medicare has been introduced the company will continue to expand the health services that are made available to its workers. The introduction of Medicare will relieve the company of some of the burden of providing basic medical and hospital benefits, thus freeing some of the resources of the company for use elsewhere. The Health Insurance Commission will take all necessary steps to ensure that the level and quality of services provided to APPM's workers in Burnie and on the north-west coast of Tasmania are not adversely affected by the introduction of Medicare. If any of the employees of the Council are affected by the introduction of Medicare they will be given preference of employment with that organisation. I am sure that the Minister for Health, with the assistance of Senator Tate, will be able to arrive at a satisfactory solution with the Health Insurance Commission and APPM in this matter. I am sure there will continue to be satisfactory co- operation between industry and government in the provision of benefits for workers which has existed for so long in the case of this company in the north- west of Tasmania. Senator CRICHTON-BROWNE —I direct my question to the Leader of the Government in the Senate. I remind him of his admission, in answer to a question by Senator Chaney yesterday, that higher unemployment would result if the unions did not stick to the prices and incomes accord. Is the Minister aware that the accord approves of wage rises outside its scope only in 'special and extraordinary circumstances'? What is Senator Button's and the Government's understanding of the meaning of those words? I ask what is the Minister's attitude to the view attributed by Geoffrey Barker in the Melbourne Age of 8 September to union officials, namely, 'everybody has a special and extraordinary circumstance, mate '. Senator BUTTON —The question relates to wage rises outside the scope of the accord. I remind Senator Crichton-Browne that in Australia wages are fixed by the Australian Conciliation and Arbitration Commission. The Government has embarked on a policy of a centralised wage fixation system and has urged the Commission, successfully, to deal with wages claims on the basis of a centralised wage fixation system. Whatever system one has in place, there are always, as I think some union official said in a pub, special circumstances which pertain to particular industries. Although Senator Crichton-Browne might be excited by this issue, it is clear that Senator Messner, who is yawning, is not. It has always been the practice of the Conciliation and Arbitration Commission in recent years to provide for a special procedure and anomalies provision, or something of that kind, in relation to wage fixation practices when there has been a centralised system in place. I illustrate that point by saying that, before the Fraser Government irresponsibly abandoned wage fixation in 1981, with disastrous results to the Australian economy, leading to a 22 per cent pay increase in some industries the following year, there was a de facto centralised wage fixation system in operation in Australia. Throughout the period for which that system existed, basically from 1976 until its irresponsible abandonment by the Fraser Government , there was an anomalies provision in place whereby special or extraordinary circumstances could be dealt with by a bench of the Conciliation and Arbitration Commission. I am confident that when the Commission shortly gives its decision in the national wage case-whatever that decision may be-it will similarly provide for special and extraordinary circumstances to be dealt with in the way in which they have been in the past. Senator CRICHTON-BROWNE —Mr President, I ask a supplementary question. I refer the Minister to the 'special and extraordinary circumstances' provision of the accord. I relate that to the expression that is conventional wisdom in the trade union movement that everybody has a special and extraordinary circumstance. I ask the Minister: Is it not the case that the trade union movement, irrespective of the Conciliation and Arbitration Commission, is able, for its own benefit, from its own interpretation of the accord, to find unique, special and extraordinary circumstances? The PRESIDENT —Order! If the Minister regards that as a supplementary question, he may answer it. Senator BUTTON —Everybody has subjective views about these matters. If special and extraordinary circumstances are seen by some unions in some industries to entitle them to make sectoral claims outside the accord, they can do so and see how they get on. Senator MAGUIRE —My question is directed to the Minister representing the Treasurer. How do approvals for new dwellings and the demand for housing finance so far this year compare with 1982 levels? What could be the effect on the level of activity in the housing industry of the recent half a per cent reduction in home loan interest rates? Senator WALSH —There were two parts to the question. One dealt with dwelling approvals and the other dealt with loan approvals. I am afraid that I do not have with me the figures pertaining to the second part of the question, but I do have some figures on the first part of the question. On a quarterly basis-of course figures derived on a quarterly basis are more reliable than monthly figures, as they are less subject to off-trend fluctuations-for the June quarter of 1983, as against the June quarter of 1982, new dwelling approvals were up by 5.4 per cent on average. This shows that in the housing industry the very deep recession has begun to turn around. However, it was not a uniform improvement. For example, in Queensland dwelling approvals suggest that, along with the rest of the Queensland State economy, the housing industry is collapsing. During that June quarter, dwelling approvals in Queensland fell by almost 12 per cent as against a national increase of 5.4 per cent. The story in Senator Maguire's State is very much happier. South Australia had the highest rate of increase of all the States-a quite remarkable 27 per cent increase. I might add that Queensland, as one would expect, had the greatest fall of all the States in that 12-month period. The level of dwelling approvals is not only below average in Queensland, but also lower than in any other State. Regarding the one-half per cent reduction in interest rates, which has been announced generally over the last week or so, various estimates have been made as to the effect of that on demand for new housing. One estimate-one would expect it to be a reputable estimate-suggests that for every one-half per cent fall in interest rates, another 4,000 buyers will be brought into the market for housing. For those who already have loans, the effect of the one-half per cent reduction on a typical $30,000 bank loan over 20 years will be a reduction of around $10.50 in the monthly payments. As I said yesterday, the Government welcomes this downward movement in interest rates which has appeared over the last year or so. I note that not since August 1981-more than two years ago-has the standard savings bank rate for home buyers been below 12 1/2 per cent. It is now 12 per cent. Senator SCOTT —I ask a question of the Leader of the Government in the Senate. Does he agree with the reported concern expressed by Mr Willis that part of the building industry pay deal has a capacity to flow fairly widely to other industries? Does he agree that if that flow-on occurs it means that the prices and incomes accord has failed? What plans does the Government have to prevent the spread of this agreement, which one employer is reported as estimating is worth up to $50 a week to workers? Senator BUTTON —I have already answered questions about this matter which cover some of the ground which is dealt with in Senator Scott's question. I do agree with the Minister for Employment and Industrial Relations, Mr Willis, in expressing concern that there may be attempts to have flow on any agreement ratified by the Australian Conciliation and Arbitration Commission in respect of the building industry. The Government is concerned about that question. It is concerned with any implications which might follow from the ratification of any such agreement by the Conciliation and Arbitration Commission. I remind the honourable senator, however, that the matter has to go to the Conciliation and Arbitration Commission for ratification. I am not in any position to agree or disagree with the estimates which he quoted to me about what the building industry agreement in fact meant in terms of wages for particular employees. I think that sounded a somewhat extravagant estimate. As it was not sourced, I do not propose to comment on it. Senator REYNOLDS —Is the Minister representing the Minister for Aboriginal Affairs aware that the New South Wales Minister for Health announced yesterday that more Aborigines are to be appointed to hospital boards in that State in an effort to increase Aboriginal involvement in health management? Will the Minister indicate whether the Federal Government will encourage this important initiative so that it may be followed in other States, particularly in Queensland, where, to the best of my knowledge, Aborigines are not represented on hospital boards and where Aboriginal consultation in health policy and in other matters is not regarded as a priority? Senator RYAN —I had not read that the New South Wales Government had taken this very excellent and constructive step of encouraging the appointment of Aboriginals to hospital boards. Having heard of it, I believe that the New South Wales Government should be congratulated for taking such a step. I am sure that my colleague the Minister for Aboriginal Affairs, Mr Clyde Holding, would feel similarly, that such a step is in the interests of the development of appropriate health services in New South Wales and is an example that could well be encouraged throughout Australia and at a Commonwealth level, where appropriate. I point out that in my own area of responsibility, education, I have adopted a similar policy of involving Aboriginal people at the highest levels. I have made the first appointment of an Aboriginal to the Australian Schools Commission, Mr Paul Hughes, and the first appointment of an Aboriginal to the Tertiary Education Commission, Ms Pat O'Shane. I believe, and the Government believes, that participation by Aboriginal people ought to be not only at the level of their own communities and in their own organisations but also at the very highest level of policy formulation. Only in that way will we be able to develop policies which will compensate Aboriginals for the centuries of neglect and disadvantage that they have suffered, not only in the area of health, of course, but also in many other areas. Senator HILL —Has the Minister for Industry and Commerce seen the report in the 3-9 September issue of Business Review Weekly that a wide range of manufacturing industries will be severely hit by the 20 per cent tax on oils, greases and lubricants announced in the Budget? Is he aware of claims that orders for these products have already been cancelled because of the tax? Will he confirm that the added cost of rolling oil and rust preventive coating oils could add up to $ 4 to the cost of a tonne of steel, with resultant flow-through costs to the rest of industry? What effect on employment will this rise have? Senator BUTTON —I am aware of the effects that some announcements in the Budget might have on particular manufacturing industries, but I am certainly not aware of all the matters raised by Senator Hill in his question. I have not read the article in question. I will certainly endeavour, both in consultation with the Treasurer and with my own Department, to obtain an answer for Senator Hill about the details to which he referred. Senator RICHARDSON —My question is directed to the Minister for Social Security. Is it true that, under existing taxation laws, expenses incurred by disabled people in earning a living, such as motorised wheelchairs, are not tax deductible? If so, is the Minister aware that certain added expenses incurred by disabled persons are incurred in earning a living and that the present tax regulations are a major disincentive for disabled people participating in the labour force and making their contribution to society? Will the Government consider changing the present taxation regulations to allow disabled people to claim, as tax deductions, expenses incurred by them in earning a living? Senator GRIMES —Yes, I am aware, as Senator Richardson said, that extra costs incurred by disabled people who work are not generally tax deductible. Limited amounts of assistance are available to those who are disabled-largely the mobility allowance which is fairly restricted, and the sales tax deduction which is allowed on vehicles. Certainly, some aids for disabled people are available in a limited way under government programs. We have to face the fact that disability, in itself, is an expensive lifestyle, but a lifestyle not chosen by those who have it. I believe that many changes are needed to the system, not only affecting those disabled who are able to work but also those disabled who are unable to work. I think we need to look at the broad aspect as it affects disabled people. We have to look at the fact that there are tariffs on certain products that they use. One would expect that if one needs to protect such industries it would be better done by bounty and therefore carried by the rest of the community rather than by those who have to purchase the goods. We have to look at the matter of tax deductions. Whether tax deductibility is the best way to go about it, rather than try to quantify the cost of the disability and make a positive payment for that, I think is a matter to be decided. However, the matter raised by Senator Richardson is an important one. It is being considered by a working party in my Department which is looking at the general range of assistance available to disabled people. Not only will we look at that but also I will hand on Senator Richardson's suggestion to the Treasurer for his consideration. Senator TOWNLEY —I preface my question to the Minister representing the Minister for Health by saying that no doubt the Minister would be aware that in some head injury cases certain nerves can be damaged, leading to the person becoming cross -eyed. No doubt the Minister would also realise that overseas the purified extract of botulinum toxin can be used to paralyse the muscles that pull the eyes crossed so that, even though the person cannot move his eyes sideways, he can move them up and down. Why does the Government restrict the import of this toxin when its use has been proven overseas? Must we wait until some senator or member becomes cross-eyed or suffers severe head damage before the extract is allowed into Australia? Senator GRIMES —I am sorry to have to inform Senator Townley that, despite my extensive knowledge of medicine, I have never heard of the use of botulinum toxin to paralyse nerves in cases where people become cross-eyed as a result of head injuries or as a result of any other injury. I am afraid that I have no knowledge of restrictions on the importation of this purified toxin. I will refer that matter to the Minister for Health and seek his response. Senator GILES —Is the Minister Assisting the Prime Minister for the Status of Women aware of having been publicly described recently as the head feminist of the Australian Labor Party Government which is accused of making feminist appointments? Is there any substance in these allegations? If not, why not? Senator RYAN —I am happy to assure my colleague Senator Giles that there is some substance in the allegations in that I, as a member of the Government, support and encourage moves to improve the status of women and to allow the participation of women in all aspects of public life. I am supported in my endeavours by the Government to the extent that a number of outstanding appointments have been made which could, I suppose, be described as feminist appointments, if by feminist appointment is meant the appointment of very highly qualified, able and competent women to participate in very significant activities within government control. It has been a policy of the Government when making appointments to statutory bodies to aim at 50 per cent of the appointments being women. We have not yet achieved that in every case, but we are certainly moving towards that very quickly. I have a list of over 30 women of outstanding ability who have been appointed by the Hawke Labor Government to a number of very important bodies such as the Australian Broadcasting Corporation, the Tertiary Education Commission, the Universities Council, the Australian Film Commission, the Economic Planning Advisory Council and so on. I will not take up the time of the Senate now by reciting the appointments we have made, but I table the list of names. I affirm for the information of Senator Giles and all honourable senators that it is the intention of the Government to secure the participation in the community of competent, highly motivated women, of whom there are many thousands . I am happy to report progress in this matter and to say that we will continue doing this until we have achieved our objective of full participation of Australian women in public life. Senator PETER BAUME —My question is directed to the Minister for Education and Youth Affairs. I remind the Minister that, as a result of adjustments to the tertiary education assistance allowance and to unemployment benefit levels contained in the Budget, the gap between the two has worsened, causing further disincentives for further education. I ask the Minister how the widening gap between TEAS allowances and unemployment benefits will help to increase the participation of young Australians in tertiary education. Senator RYAN —It is true, as Senator Peter Baume said, that there is a gap between the level of unemployment benefits paid to single persons or to youth and the level of tertiary education assistance that is paid. It is a matter of concern and regret to the Government that we are unable, because of the economic chaos we inherited from the previous Administration, to take significant steps towards closing that gap at this stage. The Government had a number of options available to it. We decided that in time of economic stringency, and given the national crisis of youth unemployment and the long-standing unemployment of many young people in our community, our first priority had to be the improvement of the standard of living of the young unemployed. To that end my colleague Senator Grimes has now made two adjustments to the single unemployed benefit. We have now increased the junior unemployment benefit by several dollars a week. In neither instance has the Government arrived at a position about which it or the young unemployed are complacent. We acted because we recognised that those young people in our community were suffering most from poverty and homelessness. We made an adjustment to the tertiary education assistance scheme which is not a major adjustment. I will not pretend that it is major; but it will enable us the next time around to make a more significant adjustment because at least the tertiary education assistance scheme has not been slipping behind as it did in so many Budgets brought down by the Fraser Administration. I draw Senator Peter Baume's attention to another aspect of the Budget which has a direct bearing on our objective of encouraging participation of young people in tertiary education. I refer to the 20 per cent increase in the secondary allowance scheme. We will not make significant increases in participation in tertiary education unless we can overcome this appalling problem of low participation rates in secondary schooling. Senator Peter Baume should be aware of that. At this stage, on average only about one-third of young people in Australia complete secondary schooling. This figure is in contrast to countries such as Japan, Canada and Western European countries where up to 90 per cent of young people complete secondary schooling. Until we can get the majority of young people in a position to complete secondary education we will not be able to make very much progress in terms of increasing participation in tertiary education. In giving our first priority to the needs of the young unemployed and our second priority to those needy families who want to keep their children at school until their completion of secondary schooling, but who need assistance to do so, I think we have acted in good faith with regard to the overall commitments of Labor. I certainly assure Senator Peter Baume that it is the intention of the Government to make further improvements in the level of assistance to all students when budgetary conditions permit us to do so. Senator BUTTON —On 23 August Senator Peter Rae asked me a question without notice in which he referred to comments by Mr Townsend, the Federal Secretary of the Vehicle Builders Employees Federation. It related to the Victorian Government's offset arrangements with General Motors-Holden's Ltd. On that day Senator Peter Rae asked me whether I would agree with the suggestion by Mr Townsend that I, or the Australian Government, should follow the Victorian Government's action. I remind the honourable senator that the Australian Government has had an offset procurement program successfully in operation since 1970. In 14 years offsets valued at over $600m have been arranged. In the current year, offsets to a value of about $120m are available. State offset schemes are of comparatively recent introduction, Victoria last year being the first State to introduce such a scheme. In some ways it is similar to the Commonwealth program. I do not need to go into the details of the similarity at this stage. In regard to State procurement policies such as Victoria's, offset arrangements discriminate against suppliers in other States. In the case of the locomotive contract referred to by Mr Townsend, it is understood that the Victorian Government specified in the tender documents that the locomotives were to be built in that State even though Victoria did not have a locomotive manufacturing facility and there was capacity with locomotive producers in other States. I hardly need to remind honourable senators of the views which I have expressed as Minister, and which governments of both persuasions at the Federal level have expressed, in relation to State Government purchasing policies and unnecessarily moving jobs from one State to another and fragmenting the Australian manufacturing industry. Discussion of Matter of Public Importance The PRESIDENT —I have received a letter from Senator Peter Baume proposing that a matter of public importance be submitted to the Senate for discussion, namely: The united opposition from the whole of the non-government school sector to two central principles of Labor's non-government school funding policy. 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 PETER BAUME(New South Wales)(3.07) —On 1 September the Central Commission of the Catholic Bishops of Australia released an important statement in Canberra on its assessment of some aspects of the Australian Labor Party's education policies. The statement is not terribly long and I think it important to read it out. It states: The Central Commission of the Catholic Bishops of Australia in Canberra today vigorously re-affirmed the School Funding Policy of the Bishops as presented by their Catholic Education Commission in November 1982. The Central Commission expressed its very deep concern over two aspects of the funding guidelines recently given by the Government to the Commonwealth Schools Commission. The Government has decided to abolish the nexus between the cost of educating a child in a government school and the level of recurrent grants to non-government schools. This is against the Bishops' stated policy and is potentially destructive of non-government schooling. The removal of this automatic linking also minimises the capacity of non-government schools to plan. The Bishops expressed misgivings over the decision to reduce the basic recurrent grant to some students. The right of all students to share in educational funding would be endangered if this reduction were a move towards excluding any student from a basic grant. The Bishops re-affirmed the role of Government in relation to those in need. However, once again, they affirmed the right of every child to educational justice and the duty of Government to protect the right of parents to choose the kind of education that will be given to their children. That document was signed by Archbishop Francis Rush of Brisbane, Archbishop Sir Guilford Young of Hobart, Archbishop James Gleeson of Adelaide, Archbishop Sir Frank Little of Melbourne, Archbishop Edward Clancy of Sydney, Archbishop Francis Carroll of Canberra-Goulburn, Bishop Douglas Warren of Wilcannia-Forbes, and Bishop Patrick Dougherty, the then Secretary of the Episcopal Conference of Australian Bishops and now the Bishop-elect of Bathurst. These bishops in fact carry enormous authority. They speak for the 45 Catholic bishops in Australia. Through them they speak for the Catholic Church in Australia; they speak for Catholic education in Australia. Their statement is an immensely significant one and is properly a matter of public importance. May I say, Mr Deputy President, that we have confined our criticisms of the Government to some parts of its school guidelines. We have not criticised all the guidelines. Neither have the bishops. We do not reject all the initiatives the Government has taken; neither have the bishops. We have concentrated our attention, and so have they, upon two central features contained in the guidelines which are part of Labor's new school funding policy. Labor has abolished or abandoned two policies which underpinned funding for some time. The Government has a new policy for funding non-government schools. It has abolished the principle that there should be a universal basic grant for assistance with schooling for all children and, as set out in its policy, has announced that some grants are to be reduced progressively for some students. It has abolished the formula which indexed the level of grants to non-government schools-an indexation which allowed their value to be maintained as rising costs tended to take away the value of the dollar. It is comments on those parts of Labor's policy that we will highlight today. They are important areas of policy and the comments by the bishops are direct and important. The bishops are not the only ones who have spoken out about Labor's policies. Other people to add their voices include the Anglican Bishop of Tasmania, Bishop Newell, who, in giving the presidential address to the Anglican Synod in Launceston recently, made specific reference to the inadequacies of the guidelines in terms of educational justice. He said that the sizable reductions in grants now being made would result in a considerable number of parents not being able to exercise their freedom of choice, and he went on to state: Surely this is not the Government's intention, yet the trend is beginning to show. He urged the Government to look very carefully and dispassionately at the education funding guidelines and arrangements for 1985. So it is not only the authoritative voice of the Catholic bishops that we have heard on this matter; we have heard also the Anglican Bishop of Tasmania, Bishop Newell, in his presidential address. The National Catholic Education Commission, representing Catholic schools and Catholic education systems, has added its voice. The National Catholic Education Commission has issued its policy, and I understand it is about to re-affirm that policy. The policy is quite clear. The Catholic Education Commission says, inter alia: All children have a right to share equitably in the public expenditure on education. This derives from the principle of every citizen's right to freedom of choice in education. This right is guaranteed only if State and Federal governments ensure that all citizens, all children, have access to public funds for education, irrespective of the school chosen by parents. Senator Teague —Hear, hear! Senator PETER BAUME —I am grateful to my colleague for his interjection. In another part of the Commission's policy statement it lays on the line its acceptance of another principle-the principle of the importance of indexing the grants to allow for inflation. The Commission says it in these words: Since the level of resource usage in Australian schools is set by the decision of State Governments, these de facto establish the standard for resource usage in Australian schools generally. As long as this process continues, the level of grants to non-government schools should be based on this same standard: the average cost of educating a child in a government school. Such average cost should include all elements common to both systems, whether funded from State or Commonwealth sources. The National Catholic Education Commission has not departed from that point of view. The National Council of Independent Schools also lost no time in writing to the Minister for Education, Senator Ryan, after the guidelines had been announced to make her aware of its dismay and concern about the effects that the guidelines would have upon its schools. I have a copy of that letter of almost two pages. Senator Ryan will know it and I seek leave to have the text of that letter incorporated in Hansard to save the time of the Senate. Leave granted. The document read as follows- Senator Susan Ryan, Minister for Education and Youth Affairs, Parliament House, Canberra, A.C.T. 2600. Monday, 22nd August, 1983. Dear Senator Ryan, I am writing on behalf of NCIS to object to certain elements of the CSC Guidelines for 1984 and to request a delay in the implementation of these elements. We object to the replacement of the automatic nexus (% link) between government school standard costs and per capita subsidies to non-government schools ( Guideline 30, p. 15); the reduction in grants in respect of students attending certain non-government schools (Guidelines 35 and 36, p. 16); the removal of the automatic eligibility for Commonwealth recurrent grants when schools are registered by relevant State or Territory authorities (Guideline 37, p. 17). These changes to Commonwealth Government funding are regarded as arbitrary and discriminatory. The right of parents to choose the kind of formal schooling they wish for their children is restricted by these policies. Funding in respect of a child will be reduced or completely withheld because a parent chooses a particular school. The principle of the basic grant is destroyed through the removal of the automatic nexus. We do not believe that sufficient thought has been given to effects of these policy changes on children and their parents. The continual reference by you to schools cannot hide the fact that parents, who are already making great sacrifices to exercise their right of choice, will be forced to make even greater sacrifices when they should instead be receiving an equitable share, for their children, of the government funds available for education in Australia. Labor's Policy for Non-Government Schools (16th February, 1983) promised that ' 'funding at present levels will be maintained during'' the period of time '' required to allow the Schools Commission to determine the community standard and to allow schools, in the light of that determination, to make their decision''. (Section 5 (d), p. 6). This promise has been broken. It was also promised that ''adjustment assistance will be provided for at least two years to ensure that no disruption occurs to the learning programme and that the rights of employees are protected''. (Section 5 (c), p. 5). This promise has also been broken. The concepts of ''need'' and ''community standard'' have not yet been defined. The Government should wait until this has been done, the review has been completed and an agreed scheme developed, before making any changes. Not only do we object to the reduction in grants for the 41 schools, but also to the method by which these schools have been identified. The 1981 data used to measure private cash income is now out of date and was collected for a different purpose to the one for which it has now been used. We also believe that it is invalid to compare private cash income at non- government schools with expenditure at government schools because of the many discrepancies our research has revealed. We have grave doubts about the reliability of the Schools Recurrent Resources Index (SRRI) as a tool of measure . These factors add even more to our impression that this decision and the method used are arbitrary in the extreme. The result of these Guidelines, if implemented, will be a reduction in accessibility for the children of those parents who are already making great sacrifices. This is regarded as punitive, discriminatory and divisive. We believe that 1984 should be a year in which no change is made to funding until the review of the present scheme is completed and, if necessary, replaced by an agreed system of funding. Yours sincerely, P. E. Rhoden Chairman Senator PETER BAUME —I am grateful to the Senate. Senator Ryan, in answer to a dorothy dix question earlier today, made it clear that she thought she had an answer to the breaking of the nexus. She said that the Government abolished the nexus quite deliberately. The fact is that the bishops do not agree with her and the non-government school authorities do not agree with her. She says, of course , that some of the schools will be better off than they would have been under the existing formula. Is it not interesting that even in spite of an attempt, to use Aneurin Bevan's words when he talked about the doctors in 1945, 'to stuff their mouths with gold', they are determined to adhere to principle? They are not willing to abandon principle, in spite of the money which has been offered. Let me illustrate that argument. The Most Reverend John Kelly, the Roman Catholic Auxiliary Bishop of Melbourne, wrote recently to the Age newspaper. His letter said, inter alia: It has been announced that cuts will be made from the so called 'wealthy' independent schools. But, note the cunning inbuilt contradiction, the money from these cuts will not be given to indigent government schools, rather it will go to 'poorer' independent schools, i.e. mainly Catholic schools. In the face of that blatant sectarian tactic, I challenge any Catholic independent school to accept this Judas money. I am quoting a Catholic bishop talking about the money which has been offered to them by the Australian Labor Party under the guidelines and giving his opinion of what it is worth. He describes it as Judas money. I remind Senator Ryan, since we are canvassing some of the views of the non-government sector on these elements of the funding guidelines, that Father Williams, the Chairman of the National Catholic Education Commission and the person she saw fit not to re- appoint to the Commonwealth Schools Commission, had his say in a Press release which he issued after the guidelines had appeared. While praising some parts of the guidelines, he made it quite clear that he was concerned about the Government's action in removing the automatic linking of grants to the cost of educating children in government schools. Part of the Press release states: Father Williams said that parents and administrators in non-government schools would be concerned about the long term implications of this major policy. But this is not all. Archbishop Sir Frank Little, in writing in the Advocate Magazine on 8 September, added his voice: Recent government activities have shocked these independent schools. Funding to enable them to continue their present operations has been cut, with prospects of further loss. Is this the recognition of freedom? Is it the reward for initiative? Is it stifling a basic human right? An equitable share in the public purse is fair; recognition of needs certainly, but only after a receipt of a fair, basic grant by all. The way in which these cuts were published was also most unfortunate. People understood that a certain amount was made available by government to schools other than state schools and that Catholic schools would be given a greater share of the cake by depriving other independent schools of their expectations. It has been made to appear that Catholic schools have gained advantage by depriving their friends in independent schools. What has been the result? The Archbishop of Melbourne goes on to say what he thinks has been the result: We now have a bitter sectarianism running riot. It has been described to me as the worst in living memory. He concludes his article by asking: Am I now living in a fool's paradise? Is the honeymoon over? We cannot dismiss the views of people as significant in the community as these groups. But let us look again at what the Central Commission of Catholic Bishops actually said. First, the bishops vigorously reaffirmed the school funding policy presented by the National Catholic Education Commission. That is their position on behalf of the Catholic schools in Australia. They expressed very deep concern about the abandonment of the formula for indexing grants to rising costs. They expressed misgivings over decisions to reduce the basic grant to some students. They affirmed that the breaking of the nexus is against the bishops' stated policy. They declared that the breaking of the nexus is potentially destructive to non-government schooling, and they went on to declare that it minimised the capacity of schools to plan. They also expressed misgivings over the decision to reduce the basic current grant to some students, and they went on to reassert: The right of all students to share in educational funding would be endangered if this reduction were a move towards excluding any student from a basic grant. This is as important a group of community leaders as one could find. The archbishops and bishops on the Central Commission speak on behalf of all 45 Catholic bishops in Australia. They speak for the Catholic education system in Australia. They speak for six out of every seven children in non-government schools throughout Australia. Far from regarding the proposals as likely to help Catholic education, as Senator Ryan keeps trying to assert, they, the people who are the potential recipients of this 'help', are rejecting them. They see it in opposite terms. They see it as a threat. They see it as threatening the future of the systems for which they are responsible. They fear for their future. They are not willing to put aside the principles on which the welfare of non- government schooling has been built. Some people may wish to assert that among those who have objected are those who have a direct vested interest, those who may perhaps be parents of children at one of the 41 schools on the hit list. Their objections need to be looked at. Perhaps one could argue for a vested interest, but in the case of the bishops there is a statement of concern from a basis of principle. They have spoken out, in spite of the inducements offered to them in lieu of the guarantees which have existed under our policies and up to this time, on behalf of principle together with an Anglican bishop, other Catholic bishops and representatives of the non- government schools. The Australian Parents' Council has spoken out on behalf of parents of children in non-government schools in Australia, as has the Council of Independent Schools. I cannot find a non-government group of significance that has spoken out and applauded the breaking of the nexus or the reduction of the basic grant. The principles which we are seeking to examine today and about which there has been so much adverse public comment are the right of every child to some support from the Government and the necessity to index the grants so that as costs rise in the community so do the grants as a matter of course. The Australian Labor Party and the Minister would have us believe that all is well. The bishops, the non-government authorities, Catholic and Anglican, and the parents' groups do not agree. They do not believe that the short term advantage, 'stuffing their mouths with gold' which the Minister offers, justifies the abandonment of principle which has grown up over many years. Let me say again, we are not suggesting that everything in Labor's education package is bad. Of course it is not. We agree with much of Labor's education package. We agree with many of the programs. I recognise some of them as initiatives which I was developing; some of the others which are new initiatives we welcome because they will help education and will help children. On these two central matters of principle, I put it to the Minister that she and her Government are wrong. They have taken a wrong turning, and the views of significant groups in the community are properly matters of pubic importance. It is proper that when those views are put before the public we bring them here and as part of a discussion of a matter of public importance make them known to the wider community. This matter of public importance has mentioned two important principles. It mentions the support which has been attracted from groups in our community. Community concern is important, especially as important a set of concerns as those expressed so firmly by the people I have quoted today. Since some of them stood to gain in the short term, their rejection of what has been offered becomes more significant and more important. Any government seeking to develop education would want to take these expressions of concern to heart and consider them carefully. In the long term interests of children and education, in the interests of non-government schools and in the interests of equity, I invite the Government and the Minister to listen to what the bishops have had to say and to think again. Senator RYAN(Australian Capital Territory-Minister for Education and Youth Affairs)(3.27) —The Senate is debating a matter of public importance alleged to be so by Senator Peter Baume, who has brought it forward couched in the hyperbole for which he is notorious. I must say that what he has had to say has done nothing to change my view that his main interest in this matter is not in education, whether it be for the education of children in schools for which bishops are responsible or education in any other schools. His concern is to provoke and to whip up a spurious campaign of fear based in many cases on deliberate misunderstandings of what the Government's decisions have been and the principles on which they are based. Senator Teague —Have the bishops done this? Senator RYAN —I will address myself to the matters raised in the bishops' statement later on in this debate but undoubtedly, excluding the bishops, there are a number of people who have mischievously misinformed people, and Senator Peter Baume is one of them, about what has actually been decided and what the Government's intentions are. I should say also that the terms in which the matter of public importance is couched and the way in which Senator Peter Baume has presented it to us is another example of the poverty of thought and principle which has characterised the education policies of the Liberal Party, whether it has been in government or in opposition. The Liberals have never had an education policy. During the seven years they ran this country they did not have an education policy. They simply had a funding policy and, having heard from Senator Peter Baume today, it is clear that the Liberals still do not have anything that approaches an education policy. Senator Peter Baume said in passing that he and his colleagues are not critical of everything in the education guidelines. It is all very well to say that in passing, but I think the Australian public has a right to ask why it is that Senator Peter Baume and the Leader of the Opposition (Senator Chaney), when he chooses to speak on education, which is rare enough in itself, concern themselves solely with some funding arrangements which have affected, in a negative sense, only 41 schools in this country. Why do they not address themselves to the real and basic problems and issues that are facing educators, parents and teachers throughout this country. Why has Senator Peter Baume paid no attention at all to the major new initiative of the Hawke Labor Government, the participation and equity program which is designed to overcome the dreadful disadvantages that two-thirds of our young people in secondary schooling, whether they be in the government or non-government sector, are suffering from. Why has he not addressed himself to the initiative whereby we have earmarked capital funds for the upgrading and improvement of schools serving the poor populations in inner city areas, be they government or non-government schools. No concern has been expressed by Senator Peter Baume about this, and of course he took no initiative in that direction himself when he was in charge of this portfolio. Why do we not hear from Senator Peter Baume about the steps we have taken to assist the Catholic education system in its expansion, in its provision of schools in new areas, about the way in which we have incorporated the new places program into our capital program for non-government schools or about the way in which we have streamlined and improved planning procedures so that the planning of non-government schools in new areas throughout Australia can proceed in an orderly and equitable fashion? There was nothing of that from Senator Baume. Of course, there was nothing about special initiatives such as our initiatives to overcome the disadvantages suffered by girls in the school system. Most surprisingly, and perhaps most disappointingly, there was not one comment from Senator Baume over our major initiative in Aboriginal education. Senator Baume, as honourable senators may have good cause to have forgotten, was previously the Minister for Aboriginal Affairs, yet what account did he take then of the fact that, in parts of Australia, there is no secondary schooling available for Aboriginal students? In the whole of the Kimberleys region, in many parts of the Northern Territory and in the Torres Strait Islands, Aboriginal communities have no secondary schooling at all for their children. We have taken initiatives in the guidelines to overcome that. But there has been not a word on those aspects from the former Education Minister and the former Minister for Aboriginal Affairs. I think it is important to put into context the concern with which Senator Baume comes so hypocritically into the debate today. He has chosen to concentrate on the views of the non-government sector and he has chosen to say that there is united opposition to our educational program from the non- government sector. I would just like to refer to a few facts which refute that exaggerated and very mischievous claim. I should say first that, in making these claims, I am not merely relying on correspondence or public statements. I have spent many, many hours of every week in consultation with non-government schools authorities, including the National Catholic Education Commission, the Catholic education commissions of Victoria, New South Wales, Western Australia, Queensland and South Australia and, of course, with the Australian Parents Council, the independent schools Associations and other bodies representing Catholic schools. As Senator Baume has so assiduously ferreted out snippets of statements and so forth that seem to support his point of view, I would just like to balance the record with some of the statements which came directly to me from the non- government schools sector in response to our guidelines. First of all, I would like to read a telegram from the Reverend Father Doyle, the Director of the Catholic Education Office of Victoria, who telegramed me immediately after the appearance of the guidelines and said this: Commend you and your Government on budgetary provisions for 1984 to meet needs of Australian children. Balance in guidelines between government and non- government schools should forestall divisive debate. The telegram continued. Unfortunately Father Doyle's optimism must be undermined now by the efforts of Senator Baume who is intent on provoking a divisive debate . That is Father Doyle's point of view. Senator Martin —What about the bishops? Senator Peter Baume —Tell us about the bishops. Senator RYAN —I have the formal response from the Chairman of the New South Wales Catholic Education Commission, Archbishop James Carroll-I have the documents available for tabling; I do not have time to read them all but, they are available in toto to be perused-who writes: Dear Senator Ryan, . . . . As already intimated to you, the many positive initiatives of the Guidelines have given great encouragement to all concerned with the quality of schools and with the particular needs of the present time. In the specific comments attached to Archbishop Carroll's letter, we find this: The guidelines contain many initiatives which should redound to the benefit of education in both government and non-government schools. I congratulate the Archbishop on his concern for all children and not just children in one sector. Included in the specific guidelines is the following statement: Some of the thrusts of the Guidelines which are of significant importance in the future development of education are welcomed as evidence of long-range objectives. I draw Senator Baume's attention to that since he seemed to think there was a long-range problem. Further, the guidelines provide: A greater stability in the organisation and future planning of schools in assured by the introduction of triennial funding in some areas, forward commitment in others and the reintroduction of retrospective cost supplementation. The guidelines continue: It is noted with satisfaction that additional capital funds are being made available for government schools and that, in the case of non-government schools , the government will provide continuing capital and recurrent support for the establishment of new non-government schools. The following statement is made also in the guidelines: . . . it has been thought opportune to bring to the notice of the Minister and of the Schools Commission the deep concern felt by many parents that the rearrangements announced already have hidden implications and are but the prelude to such all-round reductions as would inhibit the present maintenance of non-government schools and the modest expansion which is being achieved. This Commission does not accept this view and it is clear that the Guidelines issued by the Minister should be sufficient to dispel such fears. The guidelines continue: I have available from Mr J. V. Faulkner from the Catholic Education Office of Victoria a letter which says: Dear Senator Ryan, I write to you personally and as a Schools Commissioner to commend you and your Government on the quality of the Commonwealth Schools Commission Guidelines for 1984. They represent a clear indication of your commitment to improved education for all Australian children and your particular concern for those most in need of additional resources for their education. It is my hope that a major achievement of the guidelines will be to forestall the divisive debates that have occurred in the education community over recent years. The reasonable balance of funding for government and non-government schools should ensure that result. It is very clear from those few statements that I have drawn to the Senate's attention today that there is no united opposition to the guidelines presented by the Government, that there is in fact a very sensitive, thoughtful and responsive support running right through the non-government sector for these guidelines, as indeed there should be. With respect to the bishops' statement, I am replying, of course, to the bishops collectively and individually. However, I should say this: When they made their statement they did not have available to them the information which I have given to the Senate today which shows that the new formula which we have devised gives $5m additional support in comparison with the percentage link to the schools in category 3. This is not, to use Senator Baume's ludicrous hyperbole 'a stuffing of mouths with gold'. This is a genuine act of redistribution by a government which is concerned to raise the level of those schools which are unable to provide satisfactory educational opportunities to their children. Senator Peter Baume —People don't believe you, Senator. They just don't believe it. Senator RYAN —Senator Baume chooses to try to mount a campaign to undermine that . But people who are running schools, people who are concerned for the education of children, know that there are very large gaps in the level of resources available to most children and the level of resources available to a few privileged children. They are concerned that these gaps be overcome and they know that the approach that we are taking will achieve that in the long run. Of course, the bishops' statement does not acknowledge the fact that there was never any certainty in advance of trends in standard costs and, therefore, no certainty about future levels of grants. I can understand the bishops having grown committed to the percentage link since that was all they were offered for the last seven years. I can understand that they took a measure of security from the fact that at least they had a certain percentage. But they had no security about what that would mean in terms of improving standards in their schools and they certainly could not look to any closing of gaps between the schools for which they are responsible and the schools whose standards we agree are adequate or more than adequate. The bishops, of course, form an independent body. They are, as Senator Baume says, an important part of our community. they are entitled to develop their own policies and to change those policies as circumstances change. But we, the Government, do not have our policies for education or anything else determined solely by one particular group. We have to develop policies that accommodate the needs of all children throughout Australia. We have done that. We take account of the views of the bishops, the teacher unions, the various parent organisations and so on throughout the community. I will certainly address myself to the matters the bishops raised. I will discuss these matters with them when an opportunity is arranged. But it is really quite remarkable that Senator Baume seems to suggest that the Government's entire education policy should be directed by the views of a group of people, important as they are, important in the provision of education services as they are, who, nonetheless, do not represent all of education in this country. I proceed to comment in some detail about something that still seems to elude the Opposition whether by accident or design. I wish to clarify what was involved in the percentage link policy and why we chose to develop a better and fairer formula for the funding of non-government schools. It must be stated clearly that the percentage link-that is, a formula whereby a certain amount of funding was allocated to non-government schools-is not in itself a moral principle, is not in itself a theological principle and is not in itself an educational objective. It is simply a formula which the previous Government developed to achieve certain objectives. On the other hand, the principles under which our formula is worked out and will be further refined, as I described to the Senate at Question Time today, is based on proper principles such as needs and equity. They are both principles from which our funding formulas will be developed. It would be a relief to everyone concerned and would contribute to informed education debates if we could talk about principles and not about certain mechanical formulas as if they had been handed down by some divine right. The problem with the percentage link was that it was a formula for funding schools which gave the same percentage increase to all non-government schools regardless of their different needs. Those non-government schools in group one with the highest resources got the same percentage increase as all other schools. The percentage link at best only perpetuated the gap between the recurent resources of the great bulk of non-government schools and those, on average, in government schools. After almost a decade of Commonwealth funding of non-government schools , that gap has not been reduced. In 1974 the gap between Catholic schools and government schools was 21 per cent at the primary level and 27 per cent at the secondary level. By 1981 the gap had in fact increased to 29 per cent at both levels. Is it any wonder that a government concerned with equity, needs and redistribution should find that that formula was not doing the job and should find, in consultation with the various interested parties, that it could develop a better formula? With respect to those 41 schools whose generous Commonwealth grant has been reduced very modestly, I wish to offer some clarification. The remarks of Senator Baume and some of his henchpersons would seem to suggest that the 41 schools will be thrown into absolute financial and administrative chaos because of the modest reductions. What were those reductions? Any of the 41 schools-lets us remember that we are talking about schools which operate well above the standards established as reasonable for all schools-would receive cuts of $84 per year per primary student and $134 per year per secondary student. Even if those schools felt that they had to adjust fees to recoup that lost revenue entirely-there is no evidence that they do, that they will do or that they cannot engage in some internal redistribution, which I know some of them do-by how much would they have to raise their fees? They would have to raise their fees by $2 per week per primary school and $3.35 per week per secondary school. I really do not believe that even Senator Baume could pretend that such a minor adjustment would throw the planning and administration of these schools into absolute chaos. Let us have some rationality and objectivity on what has become a very heated subject. I also point out that non-government schools receive a whole range of publicly funded educational support systems. Not only do they receive the recurrent grants, which have been the subject of my remarks today, and the capital assistance to which I have also referred though not in any detail, but also they have access to the joint programs of the Commonwealth Schools Commission and to the initiatives of the Hawke Labor Government. For example, under the new participation and equity program, non-government schools will receive a 20 per cent increase on the old transition program. In the computer education program, which is a new program, they will receive $1.2m. As I have said, they have received an overall increase of 1.3 per cent-that is, 3 per cent for the neediest non-government schools. That represents a total increase of $9.5m in those programs alone on last year. In addition, of course, there is the retrospective cost supplementation. Some of the criticisms of our policy have been concentrated on the problem of planning, and I am extremely sympathetic to those problems, as is the Government. For that reason we have taken the very important step of committing ourselves to retrospective cost supplementation which is the single most important contribution to rational and orderly planning that a government can make. We have also reactivated the National Curriculum Development Centre which, before it was cut off by the Fraser Government, was of great benefit to the non- government school system. That decision has been widely-I may even borrow a hyperbole from Senator Baume and say universally-endorsed by the non-government school sector. In addition, the Commonwealth provides grants for teacher training for non-government schools-a total of $16m in recurrent grants for 1984 . That amount is for teacher training colleges which train teachers specifically for non-government schools. Of course, as honourable senators will be aware, the vast majority of teachers teaching in non-government schools are trained at public expense in colleges of advanced education and universities, which are publicly funded. There is a vast range of ways in which public support is given to children in non-government schools. In conclusion, I wish to say that it is extremely disappointing to the Government that, at a time when we have some very real and fundamental crises and problems in education, at a time when we are trying as a nation to encourage the development of skills and education throughout the community so that we will not have the awful problem of a growing army of poor and unemployed, the best we can get from the Opposition is this constant harping about a few schools. We have no criticisms of those schools. They are operating at this stage at a level which did not justify in our view the very substantial Commonwealth funds that they were getting. The modest adjustment to those schools' arrangements has become the preoccupation of the Opposition so that all other education issues have been neglected. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator MACKLIN(Queensland)(3.47) —We are discussing today this matter of public importance raised by Senator Baume: The united opposition from the whole of the non-government school sector to two central principles of Labor's non-government school funding policy. I believe that, in any genuine debate in this area, to suggest that the whole of any particular sector is behind, either for or against, a particular policy is taking things to the extreme. Certainly this area is one which has caused an enormous amount of concern, worry and anxiety for as many years as one unfortunately cares to remember. It is a bit like the old western moves. We go round and round the same track year after year, and still we do not progress to a satisfactory position. With the change of government, we have seen some schools benefit and other schools lose some of their funding. If there were another change of government, the reverse would be the case, and so it would go on. Ultimately, I believe that the only way out is for all parties to consider what might be the fundamental principles necessary in funding school systems in Australia. The first principle that one has to accept is that there has to be a differentiation in funding for schools. The only way to achieve equity in a schooling system is to have differentiated funding. Some schools doubtless care for and look after many more children with problems than do other schools. If one wishes to give the children in those schools equal opportunity, the only way to do it is by giving those schools a different amount of funding to go about that task. Hence that first principle is incompatible with the notion of a basic grant for everyone. It is just not possible to pursue that first principle and to hold out that there ought to be equality of grants to all. That, of course, applies if one is looking at funding of schools. The alternative is to look at funding of children to undertake education. An unfortunate aspect of the education debate in Australia for many years has been the notion that schools can achieve social equality. The schooling system does not have and has never had that capacity. It is a fallacy which is perpetrated not only by people who have a vested interest in it but also by many people in the education sector. The schooling system does not have the capacity to bring about that social reform. The social inequalities which exist in our community must be dealt with by broad social policies. The thought that the manipulation of funding to schools will actually have a fundamental change on the inequalities which exist within our social structure is a pure myth but it is a nice comforting myth. To pursue the opposite is a much more difficult and probably almost impossible task. Therefore, there are vested interests in pursuing the myth that by concentrating on the schools we can fix up most of the problems from which our society suffers. It is a conservative policy, a conservative ideology of the worst kind, which suggests that the children will reform the society of which the parents and adults have made such a mess. There can be no more conservative type of ideology than that. If we are looking at funding the schools-this seems to be the settled way that this debate has gone on both sides of the House-we have probably passed up the possibility of raising the notion of the funding of children and individuals to pursue education in a very broad sense. It is disappointing that this debate is lacking in that sense. It could have enlivened this particular debate. I would like to concentrate on the area on which the previous speakers have concentrated -that is, on the funding of schooling systems themselves. I would like to point out that indeed we will never achieve a reasonable level of agreement while we continue with the notion that we have got two fundamentally separate schooling systems. We have at least three operational systems in this country to start off with. I want to suggest a classification which may point towards a solution in this area. The first classification which one has to accept-any honourable senator who knows anything about the way in which schools function will accept this point-is that of the private schools. They are referred to in many States as GPS schools-greater public schools. Some are called wealthy schools and some are called top private schools. There is a variety of classifications. They tend to be schools which are either grammar schools or schools developed by the Lutheran Church or the Church of England. Included in that group are some Catholic schools. Undoubtedly those schools have had the largest amount of recurrent expenditure and expenditure on capital equipment available to them for a considerable amount of time. The next group comprises the government schools. I am talking basically of the secondary school level because the short time allotted to me in this debate will not allow me to talk about the primary school level. Government schools are the next group of schools in terms of recurrent and capital expenditure. The third group covers the Catholic parochial system, the so-called systemic schools that are generally run by the Catholic Education Office in each State. Traditionally they have had the poorest capital and recurrent resources. As the Minister for Education and Youth Affairs (Senator Ryan) pointed out, that gap has really not changed very much over the years. In fact, under the previous Fraser Government that gap increased. That is a disappointment to those of us who believe that we ought to look forward to being able to give an education to every child at a level commensurate with the ability of the community to pay. As far as possible every child ought to have an equal opportunity to enter life in the community. The fact is that this has not occurred under the present structure, and it did not occur under the Fraser Government's structure. I do not believe it will occur under the present Government's structure, because all we see happening is a constant tinkering with the problems on the periphery. Ultimately, I believe that if we want to look forward and try to get away from the acrimonious debate of the past we will have to do two things. First, somehow or other we will have to convince the troglodytes who run the State education systems throughout Australia that they have to free the state school system, that the state school system must have more parental involvement and must be given the ability to control larger amounts of its own budget and the ability to make projections of capital expenditure and recurrent expenditure. Senator Peter Baume —Hiring and firing? Senator MACKLIN —Yes. Senator Peter Baume has raised the question of hiring and firing. I believe that we will have to look at the involvement of schools more in the employment and the dismissal of teachers. I have had discussions about this matter with the teachers' unions and I do not believe that great difficulties are necessarily faced in that regard. There are many ways in which the rights of teachers could be protected and rights could be given to the parents and schools-rights which do not currently exist. That is one area of development whereby the state school system could partake of the very real advantages experienced by the non-government school sector in relation to the length of time teachers remain in a particular school and the ability of the teachers and parents to have a more effective say not only in the buying and disposal of footballs and cricket bats but also in the day to day educational tasks of the school. On the other hand, I think that ultimately private schools will have to look at their basic principle. The basic principle to which private schools hold is choice. I support that principle. If one wants to analyse choice one has to be very careful if talking about public funds. The crux of the problem as I see it, from the point of view of public policy, is that if an institution is receiving the bulk of its recurrent funds from a public source there needs to be a fair amount of public accountability. That is already required of private schools. I believe that, with one or two changes that could be introduced effectively to the satisfaction of most people in the community. The other factor is the right to go into those schools and the rules governing who can be expelled from them. Essentially a publicly funded institution, as a matter of policy, should have public entrance and public exit rules. To allow private schools-we have many private schools in this country and I have visited many of them-that are funded in recurrent terms at a level in excess of 90 per cent the right to have total control over entry requirements cannot be squared with the basic principle of public policy. I do not believe-I am sure that people involved in the non-government sector would not say this publicly and I have had discussions about this matter with many groups in the private sector in the past 18 months-that ultimately they would back away from that hard choice. Let us examine what would happen if we did go down that road and look at having three categories of schools. Basically, private schools receive the bulk of their funds from their own sources, can look after themselves and do what they like. Government schools are totally funded publicly and must agree with the rules that are laid down by any particular State. I believe there is a third category. For want of a better term it could be called assisted schools. Assisted schools are those which are developed by various groups in the community to pursue certain ends. I fully support that concept. I do not support it only in the area of religion; I support it in the area of other educational philosophies. I believe it is a lack in the educational system of this country that we do not have a large variety of schools promoting different types of educational philosophies. Many private schools promote different religious beliefs and that is to the good of a community such as ours. I believe it ought to go further; there ought to be a wider range of choice. For example, if parents have a child who has particular mathematical attributes they could send that child to a school that had a particular interest in mathematics and computer education. I believe that would be to the benefit of this country and enable progress to be made that I think all honourable senators would wish the country to make. If that were able to be done, we would need to have assisted schools that abided by the state regulations in terms of their entrance and exit criteria. They would have to abide by all of those various regulations laid down by the state yet still be able to pursue their particular educational philosophies, whether that be of a purely educational kind or connected with a moral or a philosophical input from a religion or some other grouping. We need some debate for us to decide where we should go to bring both of our major systems together rather than constantly look back over our shoulders at the acrimony of the past. We should look ahead. For example we could have a summit of all the people in this area who I believe have the interests of the pupils at heart. If we could sit down as rational and reasonable adults and make a decision, surely this country would be far better off than continuing a debate that is divisive, which does not do anything for schools, which demoralises our education system and which, worst of all, finally has a very seriously detrimental effect upon the education of all children in Australia. Senator HARRADINE(Tasmania)(4.01) —I do not intend to deal with the points just made by the previous speaker, Senator Macklin. Suffice it to say that at a future time I would like to canvass some of the issues that he has raised. I do not agree with many of them, but it seemed to me that the conclusion to which he must inevitably come is not a bad one. When he was talking about a true freedom of choice for a student to be able to go to a school of the parents' choice, be it because that school specialises in advanced technology or some other such factor, he appeared to adopt the idea of a voucher system for parents. That is not a bad idea. Recently, Dr Peter Carnley, the Anglican Archbishop of Perth, made this comment: If we had a voucher system parents could cash the voucher at whichever school they wanted their children to attend. One of the advantages of this system would be to allow a choice among government schools, as well as between state and private schools. Senator Macklin —I canvassed that at the beginning of my speech. Senator HARRADINE —I am sorry, I did not know the honourable senator had. That certainly is an interesting concept and it may well ensure ultimately that the taxpayers' moneys are returned to them in some form. After all, we are talking about the taxpayers' money. We are not talking about public moneys but the moneys that have been paid by the parents of the students. I think that could be dealt with in a future debate. We are now considering a matter of public importance, namely: The united opposition from the whole of the non-government school sector to two central principles of Labor's non-government school funding policy. I believe this is an important debate, not just for the non-government school sector but also perhaps more importantly for the government school sector. If the end result of the guidelines is uncertainty in the non-government school sector we will see further pressures being placed on the government school sector by the transfer of students from the non-government school sector to the government school sector. Of course, that will eventually dawn upon the people who are pushing these new guidelines. Let me put certain facts on the record. The first is that parents have a prior right to send their children to the school of their choice. That is a right enshrined in the United Nations Universal Declaration of Human Rights. Secondly, when we are talking about public funding and guidelines for public funding we are talking about taxpayers' money. Parents who send their children to non-government schools have the privilege of paying twice for their children's education. The Australian schooling budget does not pick up the tab. In supporting this matter of public importance I do not suggest that the previous education system was absolutely perfect. Let me give honourable senators the figures. In 1981-82, 86.8 per cent of the Australian schooling budget was spent on government school children, who represented 76.1 per cent of all students. In contrast, 13.2 per cent of the Australian school budget was spent on students attending non-government schools and those students represented 23.9 per cent of the total student population. We are talking about a cake which already has diminished in size and we are talking about guidelines which are cutting a nexus of funding which is calculated according to a percentage of what it costs to educate a student at a goverment school. As the matter of public importance states, the non-government school sector is opposed to two central principles of the Australian Labor Party's non-government school funding policy. The two central principles are these: Firstly, to abolish the nexus between the cost of educating a child in a government school and the level of recurrent grants to non-government schools; and, secondly, the decision to reduce the basic recurrent grant to some students. There has been united opposition. The first time the parents were able to express themselves was here in Canberra, and what did they have to say? At a meeting of 700 people on 16 August in the Albert Hall and at a meeting of 900 people on 18 August the parents carried motions which included a demand for the Government to restore the nexus between per pupil grants for non-government school children and to re- establish a federal basis grant for all children attending non-government schools, and that this grant be tied to the cost of educating children at government schools. That is what the parents said. We have heard what a number of other people have said about it, including Bishop Newell and the Central Commission of the Catholic Bishops of Australia, who expressed very deep concern over these two apsects of the funding guidelines . They said that the abolition of the nexus was against the bishops stated policy and potentially destructive of non-government schooling, adding: the removal of this automatic linking also minimises the capacity of non- government schools to plan. Further aspects of the guidelines, which are relevant to this debate, appear in the commentary by the Minister for Education and Youth Affairs (Senator Ryan) entitled 'Participation and Equity-Funding Guidelines to the Commonwealth Education Commissions for 1984', which was issued on 28 July 1983. In the very first paragraph, the commentary states: These guidelines also reflect the Government's intention to shape policies in ways consistent with its social, educational and economic goals. Having regard to what the non-government schools sector is saying, is it a social goal of the Minister to reduce the role played by the non-government education sector? That is a question to which she should respond in this Parliament. That is the end result of applying a policy guideline such as that. Later, in paragraph 5 of the guidelines, reference is made to 'social equity' as a policy objective of the Government. What is equitable about a reduction in grants to 41 non-government schools and other moves to hamstring such schools? It has been suggested that certain schools, on a basis of need, require additional funding. Under current guidelines that can already be provided. Another objective of the new guidelines is claimed to be: 'to restore stability and predictability in funding arrangements for Government and non-government schools'. How does that tally with the statement of the Central Commission of the Catholic Bishops of Australia that: 'The removal of this automatic linking also minimises the capacity of non-government schools to plan'? What the Minister has expressed in her guidelines is quite contrary to what was indicated clearly by the then shadow Minister for Education, Mr Chris Hurford, just prior to the last election and accepted by so many of us. In the words of the New South Wales Teachers' Federation, she has taken the first anti-state aid step taken by any government over the last two decades. As I said during a previous debate, I believe that parents of children at some of the schools that will benefit temporarily will not wish to be drawn into the sectarian vortex that has now been created by Senator Ryan's guidelines. The sectarianism which previously surrounded the debate on so-called state aid has now raised its ugly head by reason solely of Senator Ryan's guidelines, which attempt to divide and conquer the non-government school system. Senator COLSTON(Queensland)(4.15) -This afternoon the Senate is debating the following matter of public importance submitted by Senator Peter Baume: The united opposition from the whole non-government school sector to two central principles of Labor's non-government school funding policy. The Minister for Education, Senator Susan Ryan, clearly outlined a little earlier the fact that the united opposition to which Senator Peter Baume has referred just does not exist. As well, Senator Macklin remarked that to say that all of one particular group is for or against a certain Government policy is to overstate the case. It was certainly overstated in the matter of public importance that was submitted to us. That being the case, should this matter be debated further? That question was raised at Question Time this afternoon by my colleague Senator Crowley. It certainly need not be debated further in order to indicate the fallacy of Senator Peter Baume's proposition. Nevertheless, this whole debate is well worth pursuing so that certain aspects of the Hawke Labor Government's forthright approach on education in Australia can be examined. It should be remembered by all honourable senators, and certainly is by most people in the education sector in Australia, that the largest boost to Commonwealth education occurred during the period of the previous Labor Government, 1972-75. Prior to that period certain funds were made available for education by governments but the boost given during that period really put the Commonwealth Government in a prominent position in relation to education in Australia. In general, recent governments have funded education in line with the community's expectations, as developed during the term of their predecessor the Labor Government. However, on attaining office the Hawke Government realised that, because of certain creeping effects of the seven years of Fraser Government education funding, some changes were necessary. I want first to address myself to the relative funding of government and non- government schools and, in particular, to look at the policies introduced in the period beginning in 1976, after the Fraser Government came to office, and ending some time earlier this year. Since 1976 there has been a substantial shift in Commonwealth funds from the government to the non-government sector. From 1976 to 1982 total grants for government schools decreased by 11 per cent, while total grants for non-government schools increased by 77 per cent. I seek leave to incorporate in Hansard a table indicating percentage changes in respect of particular programs during that period. Leave granted. The table read as follows- Percentage changes in Government and Non-government funding 1976-1982 Change Program 1976-1982 Per cent Government general recurrent -1.9 Non-government general recurrent +92 .6 Government capital -35.8 Non-government capital +10.3 Senator COLSTON —This table on percentage changes reveals some startling figures . During the period from 1976 to 1982, government general recurrent funding decreased by 1.9 per cent. Over the same period, non-government general funding increased by 92.6 per cent. Over that period government capital funding decreased by 35.8 per cent and non-government capital funding increased by 10.3 per cent. These are startling figures. Whilst the increase in recurrent grants to non-government schools could be justified in terms of need, several points must be made. Firstly, the most significant increases in grants were for the wealthiest non-government schools. For example, a level one primary school's percentage subsidy increased from 11 per cent to 20 per cent from 1976 to 1982. For a level six primary school, which is now a level three primary school, the percentage increased from 30 per cent to 38 per cent. That represents a proportionate increase of less than that of its wealthier counterpart. The second point which should be made is that, since 1976, Commonwealth general recurrent grants for government schools have declined slightly. The improvement in government resources since that year has thus been achieved by the States increasing their expenditure on such schools. As Commonwealth recurrent grants to non-government schools are based on government school running costs, the increased State expenditure has been directly reflected in increases in Commonwealth subsidies for non-government schools. Therefore, to some extent there is a circular progression favouring non-government schools. This circular progression is created by the current funding policies. Increased subsidies for non-government schools lead to increased enrolments in those schools and thus decreased enrolments in government schools. The decreased enrolment in government schools means there is an increased student expenditure in government schools which leads to increased subsidies for non-government schools and so on. With the background of imbalance between the two education sectors becoming so evident, the Minister for Education and Youth Affairs, Senator Susan Ryan, issued guidelines to the Commonwealth Schools Commission assuring the Commission that the Government would discontinue the nexus between government school standard costs and per capita subsidies in non-government schools. I will return to the nexus agreement shortly. It should be noted that at the same time as the Minister made this statement she announced also that additional funding would be made available for the non-government sector. In stressing that it was government policy to provide funds to those schools most in need, it was announced that the Government wished, as far as possible, that those non- government schools in group three-those most in need-would benefit from the additional recurrent resources. Amongst the increased funding for non-government schools in 1984 is an amount of $750,000 for a participation and equity program, which was mentioned a little while ago by the Minister. This program will encourage young people over the school leaving age to participate in useful and fulfilling education and training activities in schools and technical and further education centres. As well as that, I mention that an extra $1.2m is being made available for computer education in the non-government sector and $7.2m in general recurrent grants. Level two schools will have a percentage increase of one per cent in real terms and level three will have a 3 per cent real increase. The Minister expanded on both of those matters earlier. At this stage I wish to return to the decision that the Government made that there would be a discontinuation of the nexus between school standard costs and per capita subsidies to non-government schools. To discontinue the present nexus is not something that is new on the education horizon. It is not true, despite the inferences that were made, that the discontinuation of the nexus has been plucked out of the air by this Government. This is by no means the first time when this matter has been raised. The Schools Commission, in its report for the triennium 1982-84, remarked that it: . . . believes that the 'basket of services' approach provides a proper standard on which to base grants to non-government schools. It is to this standard that recurrent grants to non-government schools should be linked. The Schools Commission raised three basic arguments in favour of breaking the nexus. The first was based on the suggestion that non-government schools have a more homogeneous student population than government schools. This leads to fewer resources being required to cater effectively for non-government schools as are required in government schools. The second argument was that non-government schools need fewer resources because their industrial conditions are not and need not be the same as those in government schools. The third argument arose from the movement in enrolments from government to non-government schools. The Commission argued that, because of this movement, the basing of recurrent subsidies to non-government schools on average government school summary costs becomes increasingly untenable because of the growing diseconomies and economies of scale in the government and non-government sectors respectively. In mentioning those factors, I have given but a potted precis of the arguments for breaking the nexus. The arguments are outlined on page 54 of the Schools Commission report of March 1981. I mention that a further argument for breaking the nexus is also listed on page 55 of the report, and so too are three counter arguments. What is important is that this issue has been publicly debated before and the Schools Commission came down in favour of a different approach. Irrespective of what the Schools Commission said, the argument has been raised before. It was not the first time, when the Minister for Education and Youth Affairs brought down her guidelines, that the matter was raised. Finally, when debates ensue in this place in relation to education, almost invariably the discussion is about education funding. This is understandable because the Commonwealth has a direct responsibility for educational services in the Australian Capital Territory. Yet we must never lose sight of the fact that this funding is not an end itself but a means to a end, namely, the provision of sound educational opportunities, particularly for our future citizens. Like many honourable senators, I visit educational institutions when I have the opportunity to do so. When I see funds being spent with little or no regard to need I am appalled. This happens in my home State where, it is claimed by many, electoral boundaries can be drawn on a map of Queensland on the basis of the quality of schools and the resources within those schools. The schools in Labor- held electorates have been discriminated against in recent years. Put another way, the children attending those schools have been discriminated against because funding is made on a basis other than that of need. The Federal Labor Government has made no secret of the fact it will provide education funding on the basis of need. In correcting the imbalance that occurred during the term of office of the previous Government, it is obvious that some groups will object. However, equality of educational opportunity is too precious a principle to be set aside. I look forward to funding on a needs basis not necessarily from this Goverment which embraces that idea but on a needs basis being adopted in Queensland after the event that is to take place on 22 October of this year. Senator MARTIN(Queensland)(4.31) —The Senate is debating a matter of public importance. It deals with the basis of funding for education in Australia. The actual issue that we are debating is the united opposition of the whole of the non-government school sector to two central principles of the Australian Labor Party's non-government school funding policy. The word 'principle' has been thrown around fairly loosely by Government speakers today. These central principles involved were spelled out in a statement by the Catholic bishops when they expressed their concern about the abolition of the nexus between the cost of educating a child in a government school and the cost of educating a child in a non-government school, and the level of recurrent grants to non-government schools. The Minister for Education, Senator Ryan, in her reply to Senator Baume , the shadow Minister for Education, made heavy play on the use of the world ' principle'. She accused the Opposition of not having an education policy but only a funding policy. What we are really supposed to be debating today is the principle of linkage of funding for children in government and non-government schools and the principle of a certainty of base funding for a large sector of our educational system. It is a matter of principle that the Australian Government provide education for all Australian children. It is a matter of fact that Australia, over the years, has developed a large non-government school sector. It is a matter of principle in Australia that parents have a right of choice between government and non-government schools. It is a matter of fact that the parents of 23 per cent of our children attending schools choose non-government schools, despite the fact that the parents of those children are required to pay extra costs. Enrolments in non-government schools in recent years have increased relative to enrolments in government schools. Obviously that has been substantially because there has been a contribution to the cost of running the non-government schools. There was a time when there was no government contribution to non-government schools in Australia. In those days the fees for the education of children at non-government schools were prohibitive for most of the population, and it was virtually only the wealthy who could afford the non-government schools, with the exception of the Catholic sector. The Catholic Church poured huge amounts of resources into those schools to subsidise the costs. In more recent times and, one would hope, in more enlightened times governments in Australia have accepted that the non-government sector is an important educational sector. It is important as a matter of funding and as a matter of principle. It is important that parents have a right of choice, that there be some competition amongst educators to draw children to their schools. It has been important because, frankly, it has saved governments large sums of money to have a substantial percentage of our students that we do have in non-government schools. Every principle that a government implements ultimately has a price attached. The principles of education policy cost money. Eventually there is a cost for educating children. The two cannot be divided. The amount one is prepared to apply and the way in which one applies that amount is a reflection of the principles on which one proceeds. I reiterate that it is a matter of principle that all Australian children have access to education. It is now firmly established as a matter of principle that, in Australia, parents have a choice. That is what this debate is about. That is what the Catholic bishops' statement was about. Senator Ryan made a vitriolic attack on Senator Baume and on the Liberal Party' s education policies. She derided debate on the subject of funding. She derided debate on the amounts that are spent and the application of those amounts. In response to the bishops, Senator Ryan said that, of course, their statement was made on 1 September, and that was before her statement today stating that group 3 schools would get an extra $5m. Faced with the principles that the bishops expressed in their statement, Senator Ryan applied a $5m band-aid and said that money answers the principle. Very clearly, the bishops will not fall for that bait. Very clearly, those independent schools which are not, at this stage, disadvantaged will not be fooled by an additional $5m. That is not to say that an extra $5m is not welcome in our education system. However it does not meet the bishops' stated opposition and the stated opposition of many other people involved in the independent schools sector. Senator Ryan referred to a statement by Archbishop James Carroll. I have a copy of a letter written by Archbishop Carroll to the Minister, to which she referred . I will read a section of that letter which was not highlighted by Senator Ryan . Senator Peter Baume —A bit of selective quoting. Senator MARTIN —Selective quoting, indeed. Archbishop Carroll, in his letter to Senator Ryan, stated: The Commission-- that is, the Catholic Education Commission- has requested me to express the concern raised in the minds of many people by the reduction and possible eventual elimination of some recurrent grants and by the removal of the automatic percentage nexus with the standard government school costs for 1984. Senator Peter Baume —That is disgraceful. Senator MARTIN —Indeed, it is. Senator Teague —That is the one bishop she quoted. Senator MARTIN —The bishop whom Senator Ryan quoted as justification of her policy and her Government's policy, in other words, Archbishop James Carroll, expressed to Senator Ryan exactly the view that was expressed in the statement of the Catholic bishops of 1 September this year. Senator Peter Baume —We should scrutinise her stuff very closely. Senator MARTIN —Yes, it might be a good idea to scrutinise the other papers that have been tabled today. Senator Ryan seemed to think that it was some defence against the principles that were expressed by the Catholic bishops that, in her own words, only 41 schools were affected. Very clearly, the principle that is raised is that if 41 schools can be separated out now in a divide and conquer exercise, many would think, other schools not presently on the list could well be threatened. Very clearly, the independent schools sector feels that. Senator Ryan threw around loosely and with great sarcasm the word 'wealth' and referred to wealthy schools. I remind the Senate that the entire emphasis in Senator Ryan's speech was on an accusation that the Opposition talks about quantities of money and not principles. Her response to the principles that we have raised is to quantify and to say it is only 41 schools and to say that it is the wealthy schools or schools with a high level of assets. Senator Ryan is not replying on a basis of principle, the principle to which she says the education debate ought to be linked. I agree that the education debate is very much linked to some fundamental principles, some of which I have stated and some of which were stated by Senator Macklin, Senator Harradine and Senator Baume. Senator Ryan cannot have it both ways. She cannot say that when we talk about a sum of money we are not talking principle, and then herself talk about a 'small number' of schools and say she is talking principle. In the end, these principles are quantified. They are quantified in terms of cost and in terms of the number of schools, the number of children and the number of families that are affected. To then go on to say that the Hawke Government's policy is a better and fairer one sits very strangely indeed. We can debate whether some aspects of it might be better. I am sure that we will debate that at great length. Senator Ryan will not find that Opposition senators agree with her. But she cannot claim that the Hawke Government's policies are fairer. Its policies single out a group of schools and students at those schools for expressly unfair treatment as compared with students at other schools. By using terms that the Labor Party hopes are emotive and will appeal to some meaner streak in some members of the community-terms such as 'wealthy schools'- and by avoiding touching the Catholic systemic schools, Senator Ryan takes the debate right off any better or fairer basis. However we will meet her on that basis. We will meet her on the basis of principle-but if only she and her Government will come on to the point of principle. On what grounds does a government decide that there is a group of students in schools in Australia who are entitled to less than a base amount that is available to other students? I reiterate, it is only, after all, a percentage of the cost of education of students at government schools. The balance of the money is provided by parents or from other resources, notably so in the Catholic education system. The thrust of the Government's policy is very clear. Senator Ryan ought to explain to the Senate how the principles of the Hawke Government's education policy and her education policy sit with the principles enunciated in Labor's statement of policy on non-government schools of 16 February this year. It claimed that one result of adjustments should be 'a reduction in fees so that over time the parents would benefit from those reduced fees and that access to the schools by less well off parents would accordingly be increased'. In February the Labor Party's principle was that access to schools ought to be increased for those who are less well off. Senator Crowley —It still is. Senator MARTIN —If that is so, I ask the honourable senator to explain it, in view of the fact that the Labor Party in government has increased fees at some schools or reduced facilities. Senator Crowley and other Government senators, including Senator Ryan, would have received communications from a number of schools which have surveyed, for example, how many of the children in those schools have two parents in employment, how many of the mothers of those children have stated that their reason for being in employment is to meet the cost of sending their children to non-government schools, how many of those women's earnings are equivalent or nearly equivalent to the cost of the fees. It is a fact that that is a reason that a lot of the women work. Not that I am saying they have to use it as a justification, but it shows the choice those mothers make. They choose to go to work in order to pay that difference. The Labor Government's policy has made it even more difficult because one of the effects of its policy is to increase fees in precisely those schools which have up to 70 per cent of mothers of students in employment, well above the national average, to make it even more difficult, to give those women even less disposable income. Those are some of the human facts. The Labor Party says in its policy document that access to education is important. It says that it will pursue certain issues so that there is more access. In fact, it will make access even more difficult. At the commencement of her speech, Senator Ryan, in very strong terms, in a personal attack on Senator Peter Baume said that his main interest was to provoke a spurious campaign of fear based on a deliberate misunderstanding. There is no misunderstanding among those who are sending their children to school in Australia. They understand that the Labor Party is now embarked on a policy which, far from being based on principle, is based on discrimination and prejudice. Those who are importantly involved in providing a significant section of education in Australia today, namely the Central Commission of Catholic Bishops, have recognised that and have stated it. I doubt whether Senator Ryan's extra $5m will have any bearing at all on their assessment. The reason she could even think it might is that she herself cannot recognise the principles that they have raised. Senator REYNOLDS(Queensland)(4.45) —Senator Martin has asked on what grounds some schools are entitled to less funding. There has been a great deal of talk in this chamber this afternoon about choice, principles and, dare I say it, bishops. I also would like to comment on choice and principles. I make reference to a statement which was drawn up by the Anglican Social Responsibilities Commission, the Catholic Commission for Justice and Peace and Social Justice, the Uniting Church Commission on Social Responsibility, and the Australian Council of Churches. It is published with the approval of the Catholic Bishops Committee for Development and Peace. The statement, entitled 'Changing Australia ' urges that the 'share the wealth' call go out to all schools. The document states: The co-existence of wealth and poverty in a nation as rich as Australia affronts human dignity. It calls for far reaching alterations in Australia's social and political system . What has been stated in the education guidelines and by Senator Ryan and Senator Colston this afternoon is just the beginning of that 'share the wealth' call to which the Hawke Labor Government is committed. We do, in fact, have the support of the major churches of this country. The Opposition seems determined to resist the basic premises that were recognised by the Age education supplement on 16 August. First, under the guidelines the vast majority of private schools will be financially better off next year than they are in 1983. The non-government school sector itself is not under attack by the Labor administrations. Instead, the increased sums of money which will go to private schools are being partly redistibuted, and it is the Roman Catholic schools by and large which will benefit. I note that with all the comments that have been made here this afternoon no one has suggested that Catholic schools will not accept increased funding. Secondly, schools singled out for reduced subsidies are among the best equipped in Australia. They may not all be wealthy in the sense of having large reserves of capital, but even with reduced State aid they will still be able to operate at levels exceeding those of most public schools. I would have thought that was what equity was all about. In general, these schools have total incomes at the moment that are 60 per cent greater than those available to government schools. Each has a private cash income alone which is about equal to that required to run a State school of similar size. It is the quantity of private income derived from school fees, endowments, interest from investments and so on that the Commonwealth has used as the criterion in selecting schools for cuts in State aid in 1984. The reason why none of the most noted Catholic schools are on the list is simply that they employ many nuns and brothers as teachers. They are therefore able to charge lower fees than other independent schools and so do not have the same private income. The third and perhaps most important point that seems to have been overlooked by the Opposition this afternoon is that, despite claims to the contrary, the affected schools are exclusive. Although most do not discriminate against children in an obvious way, there is an inevitable selection process at work. The poor, the black, the handicapped and childen from migrant backgrounds are under-represented, if they are present at all, in these schools. I do not think choice is really a matter at issue when one considers that up to 75 per cent of Australian parents are not in a position to choose. On average, the annual family income of the parents of students who attend the elite private schools is estimated at about $40,500. That is an estimate made by the Age of 11 December 1982 after a survey of 76 private schools. That same survey showed that nearly 80 per cent of parents whose children attend the elite private schools are managers, professionals and farmers. Less than one per cent actually represent unskilled workers. Senator Martin mentioned that many mothers go out to work to help pay fees. This is not an argument for State aid. Many families which spend their disposable income on speed boats or holiday homes are no more entitled to public subsidies than those who decide to devote their income to their children's education. The schools themselves are also somewhat exclusive in their outlook. They are very much geared to preparing their students for further education in a university or college. Here I cite studies of university recruitment which show that Australian universities remain a bastion of the privileged, dominated by private school students. That was the finding of Professor Adnerson, of the Australian National University, as reported in the Sydney Morning Herald on 11 August this year. Furthermore, a study of entrants to Melbourne and Monash universities, by school, undertaken by A. Smurthwaite and published in Australian Universities in July 1974, shows that independent schools, having 8 per cent of all students, took up 30 per cent of all university places. Senator Martin —What is the date? Senator REYNOLDS —1974. Senator Martin —Nothing more up to date than that? Senator REYNOLDS —That is the date in the book I took the information from, and that situation has not changed. It is recognised that universities are the bastions of the elite. I think it is quite outrageous that we should be debating this matter this afternoon on behalf of the most privileged section in Australian society. With all the problems that are facing so many people in Australian society today, we are debating whether the parents of students in elite schools might have to pay a little extra. Senator Ryan —Two dollars a week. Senator REYNOLDS —The amount is $2 a week extra. Senator Baume has placed much attention on educational justice. In his comments he failed to represent the views of some 75 per cent of children who attend State schools. This in sharp contrast to his commitment to government schools as recently as 22 February 1983 , when he stated in a letter to those schools: I am sending the Liberal/National Party Government's policies on education direct to you. Education is an important issue for this Government and I hope you will see fit to pass this material on to your staff. The Government reaffirms its basic support for all children wherever they go to school and its willingness to embark, even in difficult economic times, on policies that will meet the special needs of young Australians. Our policies-more support for government schools . . . will help lead us towards a better educated society. In this letter, Senator Baume makes great play of how committed he is to the government school sector, yet this afternoon all he could do was talk about the parents of the students at those 41 elite schools who will have to pay, Senator Ryan says, $2 extra. How does this statement rest with his preoccupation with non-government schools today? How did he plan to incorporate those policies to meet the needs of all young Australians? Why are we not debating giving all young Australians a better opportunity rather than concentrating on those students in 41 elite schools? Despite Senator Baume's emotive talk about educational justice, he has failed to demonstrate how the Opposition would give greater equity of educational opportunity to all Australian children. I have not heard Senator Baume speak out about educational justice for the hundreds of disadvantaged schools throughout Australia. Are not Aborigines, girls, migrants, handicapped children and children in isolated areas entitled to educational justice? Is it educational justice for the children of some islands of the Torres Strait to be taught by unqualified staff in schools run by the Queensland Department of Aboriginal and Islander Affairs rather than in schools with standards set by the Department of Education? Senator Baume and Senator Martin did not mention any of these things. Is it educational justice for the child shown on the Four Corners program last Saturday to have the continual battle and frustration to communicate with her teacher on the School of the Air because of interference on the radio? Why do Senator Baume and the Opposition not talk about more funds to improve education in isolated areas? Senator Baume and Senator Martin are selective in their concern for educational justice. Senator Baume and his colleagues consider that the standard of Australian education is so generally high that we can afford a debate on a matter of public importance on whether it is appropriate for a handful of elite schools to have to tighten their belts in order that poorer schools may share scarce resources. Malcolm Fraser said that life was not meant to be easy, but it is easier if one is entitled to wear the right school tie. In conclusion, I quote some figures which indicate why it is not surprising that the Opposition is speaking out in defence of the elite schools. The figures I have indicate that an overwhelming number of Opposition members in this place and in the other place are in fact products of the elite private school system. Senator Peter Baume —If you do that, we will quote the Labor people from Scots College and Geelong Grammar. We will quote them back. Senator REYNOLDS —I will quote both. I refer to the shadow Ministry to start with. Of a total of 30 members, I could locate the records of only 26. Four came from state or Catholic schools and 22 came from elite private schools. Of the 27 members of the Ministry, I know of the education of 24 and, of those, 21 attended state or Catholic schools and only three attended elite schools. Senator Harradine —What about universities? Senator REYNOLDS —I do not happen to have those figures but I would be very happy to get them. The elite schools are being championed by members of the Opposition because they have a vested interest. Senator RYAN(Australian Capital Territory-Minister for Education and Youth Affairs) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. United Nations General Assembly-37th session 1982-Report of the Australian Delegation* 2. Certain Pigment Dyestuffs and Colour Lakes (Developing Country Preferences)- IAC Report 3. Department of Science and Technology-Annual Report 1982-83 4. Canberra Development Board-Annual Report 1981-82 5. Report of the Joint Foreign Affairs and Defence Committee on the Gulf and Australia-Text of a Ministerial Statement made in the House of Representatives by the Minister for Foreign Affairs on 8 September 1983 6. Report of the Joint Foreign Affairs and Defence Committee on Namibia-Text of a Ministerial Statement made in the House of Representatives on 8 September 1983 7. Australian National University-Interim Annual Report 1982* 8. Canberra College of Advanced Education-Report of Council 1982-pursuant to section 30 of the Canberra College of Advanced Education Act 1967* 9. Commonwealth Tertiary Education Commission-Annual Report 1982-together with the text of a statement relating to the report by the Minister for Education and Youth Affairs* 10. Australian Bureau of Statistics-Annual Report 1982-83 Australian Statistics Advisory Council-Annual Report 1982-83-pursuant to section 24 of the Australian Bureau of Statistics Act 1975 11. Department of Finance-Annual Report 1982-83 12. Report by the Commissioner for Superannuation on the General Administration and Operation of the Papua New Guinea Superannuation Scheme and the Contract Officers' Retirement Benefits Scheme-Annual Report 1981-82-pursuant to section 21 of the Papua New Guinea (Staffing Assistance) Act 1973 13. Lobbyist and the Australian Government and Parliament-A Discussion Paper 14. Australian Marine Sciences and Technologies Advisory Committee-Annual Report for the Period May 1981 to December 1982 15. Aboriginal Land Commissioner-Annual Report 1982-83-pursuant to section 61 of the Aboriginal Land Rights (Northern Territory) Act 1976 16. Trade Practices Commission-Annual Report 1982-83-pursuant to section 171 of the Trade Practices Act 1974* * made available during adjournment * will not be available prior to tabling Report of Australian Delegation Senator MASON(New South Wales)(5.00) —I move: That the Senate take note of the report. I should like to refer in particular to references to nuclear and disarmament issues, on page 13 of the report. I find this quite an alarming aspect. As honourable senators will recall, the United Nations General Assembly last year had a session which was to have sorted out the problems of disarmament and which in fact did not do so. The report, on Page 13, refers to the difficulties which arose subsequently. It states: The relative dearth of results at the Special Session inevitably affected both the atmosphere and the course of negotiations on nuclear and disarmament matters at the General Assembly itself. In particular, frustration among some key delegations at the inadequacies of the Special Session resulted in reduced willingness to seek consensus on drafts and an increased propensity for the non- aligned to use their superior voting strength to force resolutions through both the First Committee and the plenary. The report goes on to mention both the International Atomic Energy Agency and the Conference on the Peaceful Uses of Nuclear Energy. In the case of the first of these, the report states: . . . a previously negotiated text was amended from the floor to include language critical of Israel. A second set of amendments, introduced by Brazil and India, was designed to alter the thrust and balance of the resolution, especially in its non-proliferation aspects. This of course is the point which concerns me most. As far as the Conference on the Peaceful Uses of Nuclear Energy is concerned, the report states: . . . prolonged negotiations in pursuit of a consensus text proved fruitless and the non-aligned eventually tabled a draft which caused severe problems for both Western and Eastern bloc countries and which led the majority of these delegations to vote against the resolution in plenary. This clearly indicates a state of affairs in the international forum which is unsatisfactory and likely to become more so, and those of us who are concerned with the prospects of a proliferation of small, dirty, atomic bombs, made with the by-products of so-called peaceful purpose reactors, can find little comfort there. From time to time we hear from honourable senators in this place that all is well in the world nuclear situation because the International Atomic Energy Agency is on the job, it is a wise, universal and omnipotent authority that will ensure that nothing goes wrong in the nuclear industry and that especially plutonium, readily available as a by-product of electric power generation, will not be diverted to make atomic weapons. People who believe that are living in cloud cuckoo land. Nothing could be further from the truth. Not only are many of the nations now installing nuclear power plants not a party to the non- proliferation agreements but also they are strongly suspected of seeking to make nuclear weapons of the type I have described, roughly analagous to the atomic bombs which destroyed Hiroshima and Nagasaki. There is also strong and reasonable criticism about the effectiveness of the inspection apparatus of the international agency. I suggest to honourable senators that this is surely a disquieting situation for any reasonable person. Surely we are adopting a lemming-like, even a suicidal impulse, if as a nation we do not pursue and try to rectify this unsatisfactory situation. Ought we to accept willingly a Judas-like role of accepting our 30 pieces of silver for our uranium in the full knowledge that there are not proper safeguards to prevent it turning up in nuclear weapons which, quite possibly, we might be on the receiving end of. I urge the Government to look back, while there is still time, over all the contracts we have concerning the sale of uranium and abrogate these contracts if necessary where it is felt that there is not a decent and reasonable safeguard against proliferation. It is often said in this place that as a major potential supplier of uranium we hold considerable power to influence the development of the nuclear industry and to prevent the diversion to weapons of fissionable materials which can be either enriched uranium 235 or plutonium 239. There might be some argument for this if indeed there were iron-clad provisions against non-proliferation. But of course there are not, and the situation, far from getting better, is getting worse. Last year, President Reagan forecast that he would want to look to the civilian nuclear power industry for plutonium to make nuclear weapons, even though we already have more weapons than are needed to destroy the planet many times over. The Australian Democrats ask the Government, as a matter of urgency, to take a much more positive and stronger line in this matter. In particular, I should like the Government to look at the very weak and dangerous precedent set by the previous Government to allow reprocessing of our uranium in conditions where it could very easily end up in weapons. The warnings are clear enough and I think it is high time we took some notice of them. Senator TATE(Tasmania)(5.05) —I rise to speak on the same report, the report of the Australian Delegation to the Thirty-seventh Session of the United Nations General Assembly in 1982. Of course, it is the report of a delegation during the period of office of the previous Government. Since that time, of course, under the Minister for Foreign Affairs, Bill Hayden, I believe a much more active role , of course within the context of the general and historical alliances which have been established since the Second World War, has been undertaken. I believe that whilst we have differed with our allies in some areas as to emphases and perceived best means of achieving our common goal of international stability, those initiatives which Bill Hayden has taken have indeed been, as I say, within the context of our general historical alliances. In the very brief time available to me, I should like to comment upon two matters in the report. The first relates to the section headed 'Political and Security Issues' raised during that session. Under the heading 'Kampuchea' there is a quite extensive discussion of the effect of the continued occupation of that country by Vietnamese troops on the prospects for peace in South East Asia. I believe that it is right to take this opportunity to commend the Australian Foreign Minister, Mr Bill Hayden, for his persistent initiatives in this area. If ever a Foreign Minister of a middle power-and we have to be modest in any expectations of what influence we can bring to bear-has put his own credibility on the line in relation to this intractable problem, it is certainly Bill Hayden. The basis of his extensive travels throughout the region and in China has been not to try to fulfil the role of a mediator or arbitrator or negotiator but, rather, to seek to engage in discussions with the various groups in order to see whether it is possible to identify some common ground which would allow the groups to show a little more flexibility. As I say, we cannot overestimate our potential influence but at least, as I say, the Foreign Minister is to be commended. In particular, the key to any success remains China's attitude and the attitude of China must be a matter for continued concern. I commend this Government on its initiatives in that area. The other matter on which I should like to touch briefly has been noted by Senator Colin Mason of the Australian Democrats. It has to do with nuclear and disarmament issues. The fact is that this Government has taken many steps, some of a symbolic character but many concrete practical steps, and sometimes combining both in this regard. Mr Richard Butler has been appointed Ambassador for Disarmament. He has been given a mandate by the Foreign Minister in particular in relation to the Nuclear Non-Proliferation Treaty which Senator Mason rightly identified as a matter of prime concern for the international community. It is essential in particular that Article 6 of that Treaty be observed by the present identified possessors of nuclear arsenals. That is that they take proper steps to reduce those particular holdings of nuclear weapons. I would imagine that that would be a pre-condition of other countries continuing to adhere to the Nuclear Non-Proliferation Treaty. Insofar as some of them have refused to adhere to it, it is a matter of very real concern and the Australian Government, I know, is pressing for the further successful extension of that Treaty during its review year of 1985. The text also notes, at page 13, the work of the Australian and New Zealand governments in relation to the comprehensive test ban treaty. Once again two quite modest powers in the sense of political weight, Australia and New Zealand, have continually asked the international community to endorse a comprehensive nuclear test ban treaty and I believe that that particular initiative by our Government will continue. Finally, I want to refer to the great mass movement of hundreds of thousands of people through the streets of New York which accompanied the particular special session on disarmament. In the report on that event, Mr Tony Street, the then Minister for Foreign Affairs, exhibited a fear of mass movements in that they may be manipulated for ends which were inimical to those of Australia and the Western alliance. In fact, the Labor Government takes the completely different view that, without in any way being dictated to by these mass movements, we will encourage and support the expression democratically and non-violently of the very real fear and misgivings throughout the community as we are facing the imminent nuclear holocaust which we must bend our energies to avoid. Question resolved in the affirmative. Annual Report 1982-83 Senator CROWLEY(South Australia)(5.11) —I move: That the Senate take note of the paper. I was very interested to read the annual report of the Department of Science and Technology and to note in its introduction some of the Department's guidelines. I am particularly interested to note that amongst other things the Department is established to: Ensure that science and technology issues are considered in the development of government policies, particularly industry and economic policies; and also to: Improve the awareness of the benefits and disbenefits of science and technology . In particular, the report states: Success of a policy for a more selective approach depends on it being co- ordinated with other government policies. For example, the finance needs of new technology-based industries must be met and the education system must provide people with knowledge and skills appropriate to the current and future needs of a strong, competitive and innovative Australian industrial sector. At this point I began to feel the absence of any comments or recommendations about occupational safety and health in the Department's report. The report addresses itself to social implications of technological change and points out that the Department has completed a large study in this area. This study particularly looked at the effect of technological change on: Employment, skills, the nature of work and leisure, groups in the work-force, industrial relations, institutional systems (education, health, trade unions, politics) individuals and the community. But, again, no specific reference is made to matters of occupational safety and health. It is interesting, too, that many of the Department's programs and planning are designed to implement such things as improved management techniques. The report even contains an item referring to noise reduction. The Department has a function to look at the whole problem of noise. The report states: Excessive noise in industry is a considerable health hazard, particularly in metal manufacturing, and is an area of increasing compensation litigation. One would imagine from reading this report that it is a matter of compensation litigation rather than an emphasis of occupational health and safety for those people involved in areas where the noise level is very high which leads the Department to design less noisy machines. The Department rejects the band-aid approach of absorbing noise and is investigating the design of machines that will not make noise. However, the Department's emphasis again is not on occupational health and safety which I believe needs to be written into management design and technological planning from the beginning. The report makes reference to the completion of a departmentally-sponsored occupational safety and health pilot promotional campaign in 1981. But I would submit that a pilot promotional campaign is insufficient for an understanding of what real occupational health and safety is all about. This concept must be incorporated at the very beginning of any planning for the introduction of new technology and I submit it ought to be part of the functions of this Department. The report also makes reference to information about new technology and to the contribution that has been made to an understanding of the impact of microprocessor-based information systems on life styles and work activities. We are already well aware of the rapid repetitive injury syndrome and the enormous amount of compensation that is beginning to accrue in that area. However, once again, the Department makes no reference to planning or job design which incorporates the occupational health and safety dimension that would prevent these injuries occurring. This would not be because people will not work with word processors but because their job design is such that they will not have to work continually at these machines. The Department has an occupational and safety health committee in the Department. That committee met twice. The report states: The Department is implementing a recommendation of the committee to engage an occupational health consultant to survey safety and health in the Australian Government Analytical Laboratories. Again I would suggest that this is hardly a sufficient dimension for an understanding of occupational safety and health, particularly in this Department , and particularly as this Department is involved in areas of innovation. I appreciate that the Department has put out a paper about the pilot promotional campaign on occupational safety and health. I have acquired a copy of this very interesting document. But again it talks about the effects on perception and attitudes of a mass communication campaign. I think we need to move to a consideration of occupational safety and health that is actually built into jobs , built into departments and built into the thinking of people so that it is not an added on component. I might say in conclusion that I have taken this matter up with the Minister for Science and Technology (Mr Barry Jones) who is appreciative of this dimension, that is, the need of occupational health and safety planning at the very initial stage of any development. I will be interested to see what next year's annual report has to say. Senator MASON(New South Wales)(5.17) —My remarks on this report tend to be an extension of what Senator Crowley has said. I feel that a reading of the report makes plain the unsatisfactory nature of the Department of Science and Technology from the point of view of structure. It is not really a department of science and technology at all. Heaven knows, we need badly enough just that one thing-a properly constituted department of science and technology. Rather the report lists a ragtag of activities loosely associated with science and technology which certainly have values in themselves but are in no way comprehensive. It includes such things, of course, as the Patent, Trade Marks and Designs Office, the Bureau of Meteorology and the Antarctic Division of the Department. According to appendix D on page 80 of the report, the Department's expenditure for 1982-83 was some $215m. This certainly seems to me little enough for a nation with our problems, which must develop high technology industries and which must at all costs come to terms with modern developments in science and technology if we are not going to become, as has been freely forecast, the poor white trash of Asia in the next generation. When one considers that of that money only $60m is actually going to industrial research and development incentives, only $120,000 to assistance to inventors and some $22m to research grants, the situation emerges as being even more tacky than one would wish. In addition, about $5m in grants-in-aid was allocated to a large variety of organisations, none of which really received enough money to make a significant contribution. Vast steps are being taken throughout the world in the fields of alternative technology, especially the development of new forms of electric power generation which I hope will be keenly followed in Australia with the objective of establishing such new industries in this country. There is a direct relationship between power generation and the employment rate. While traditional industries are unable to employ all the people trained to work in them and who want work, it seems axiomatic to me that the way to get more people into jobs is through new and innovative industries. I refer here to the vast advances currently being made in Japan and the United States of America on solar technology, namely, the direct photoelectric effect through the use of photoelectric cells which are very much cheaper and easier to make than the cells which have been produced in the past. One such innovation is the use of amorphous cells which consist of a silicon deposit on a plastic or metal substrate. The stage is being reached in America where this technology is competitive with nuclear and fossil power plants for the generation of electricity. Australia ought to be in that. We should not be doing this in 10 year's time. It should be done now. The Department of Science and Technology should be the cutting edge in this respect. With our huge loss situation of reticulating from a large central electric power source to remote areas, surely we in Australia are a potential market for this kind of electricity which could be of enormous importance to us. Private enterprise in Western Australia is now, of course, getting into the wind energy manufacturing situation. Indeed, 55 kilowatt plants are being made in Perth for a promising market. Here again, government development has lagged dismally behind what private enterprise is attempting to do. Of course, in Australia as elsewhere, a proper conservational approach should be encouraged. The development of wind generation would be one way to do this. I think the Department of Science and Technology should be making a major study as soon as possible into the effects on employment of various kinds of new technology. This is an area of study which has not really been carried out in Australia with any kind of consultation with the community. A vital part of the way in which the Department could do so would be to try to determine through community consultation what the approach to this would be, if a neo-Luddite reaction is not to check this progress. By neo-Luddite I mean, of course, that people are afraid of new technology because it appears to be taking away their jobs-for the same reason that the Luddites broke up mill machinery in the past. That neo-Luddite reaction has already begun in Australia. It is urgent that it should be checked. The Government has a Minister for Science and Technology (Mr Barry Jones) who is much admired for his intelligence, vision and breadth of view. The Government should give him his head and let him create a real Department of Science and Technology which would be a spur for the new developments necessary for this country if it is to continue to be an advanced nation in the twenty-first century. Question resolved in the affirmative. Annual Report 1981-82 Senator REID(Australian Capital Territory)(5.21) —I move: That the Senate take note of the paper. I wish to refer to several aspects of the report and, firstly, to the Executive Director who is listed and named in the report as Mr Neville Whiffen. He has recently retired from the position that he held from the time that the Board was originally set up. I just wanted to refer to that and to thank him for all he did. He worked tirelessly to publicise Canberra and to let people in the business community know of the advantages of setting up business, industry or their headquarters in Canberra. In fact he was employed on a part time basis, but he contributed a great deal more of his time and effort than that would indicate. Success of the Board in bringing the number of businesses that it did to Canberra in that time is very largely due to his effort. We can be thankful to him for that. He is still associated with another activity that he set up; that is, the science school for students which will take place next January. I am glad that he is still involved in that activity. The report refers to the role of the Board with the National Capital Development Commission. Under the heading 'Functions' it states that one of the functions of the Board established in 1979 is to express its views to the National Capital Development Commission in relation to the Commission's statutory responsibility for the development of Canberra. At present, the Minister for Territories and Local Government (Mr Uren) has in his possession a report which is a review of the activities of the National Capital Development Commission. The Minister has had that report since July this year-some 10 weeks- but has not made it public or given people the opportunity to know what is in it . Of course, that presents a particular hardship for the employees of the NCDC who do not really know what the future holds for them. The Canberra Development Board has its problems because, as I have said, it has a responsibility to make its views known to the NCDC. It is necessary for the Board and the community to know what is in this report. Initially the Minister did not release it and our shadow Minister agreed with the Minister that to keep it to himself for a couple of weeks so that he could study it was reasonable. The Minister said that he would table it in the Parliament when Parliament resumed. That was as long ago as 23 August and still it has not been made available. I do not know what the mystery is or why the Minister is keeping it secret, but I suggest to him it is high time that he made public the report of the review of the NCDC so that the people of this town can know what is in it, what the future is and what recommendations ought to ought not be accepted. The other aspect of the Canberra Development Board's report that needs highlighting is that part of one of its initiated projects which it has entitled 'International Hotel, Convention Centre and Tivoli Gardens'. I will not go through it in detail, but it refers to the project that has become known as the White Industries Ltd development. It is envisaged to provide an international hotel and convention centre. Part of the project, which perhaps is of great significance, is the office block which is to be on the site and a part of the development. Honourable senators may recall that only Thursday of last week the Minister for Veterans' Affairs (Senator Gietzelt), in talking about the fact that he had not been able to open in Canberra a Vietnam Veterans' Counselling Service, stated that it was because of the lack of office space in Canberra. As far as I know, this is the only office block that looks like being available in the near future. It has not even begun to get off the ground. Rumor has it that the matter has gone back to Cabinet and for some reason has been held up. It is a project that should go ahead and needs to go ahead. I ask the Cabinet to get on with it and let it go ahead. We need the office space. We need the international hotel. We need the convention centre. The jobs that it will provide we most certainly need. Question resolved in the affirmative. Senator JONES(Queensland)(5.25) —I move: That the Senate take note of the papers. I seek leave to continue my remarks later. Leave granted. Motion (by Senator JONES)-by leave-agreed to: That the resumption of the debate be made an order of the day for Thursday, 22 September 1983, at General Business when Government papers are considered pursuant to sessional order. Question resolved in the affirmative. Interim Annual Report 1982 Senator REID(Australian Capital Territory)(5.27) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Report of Council 1982 Senator REID(Australian Capital Territory)(5.28) —I move: That the Senate take note of the paper. The Canberra College of Advanced Education fills a number of important roles in the Australian Capital Territory. In particular, it has been teaching in the area of computer science for some time. The Public Service relies fairly heavily on graduates from the CCAE. It has a high record of its graduates obtaining jobs . The College Council decided some time ago that its computer needed to be replaced. It needs a separate building in which a new computer could be housed in order for it to proceed with this important aspect of its teaching. I doubt that anyone would question that there should be such a facility in an institution of this kind. During 1984 it will continue to teach with the facilities it has, but it is imperative that new facilities be available in 1985 . As I understand it, the Council's recommendations are conveyed to the Advanced Education Council, which considers the priorities and then makes a recommendation to the Commonwealth Tertiary Education Commission which in turn makes recommendations to the Minister for Education and Youth Affairs (Senator Ryan). I say to the Minister: Please give the question of the computer facilities at the Canberra College of Advanced Education the very highest priority and urgent attention. One would normally expect that it would take about 18 months to construct the building necessary at the site. That really ought to be under way quite soon if it is to be available for the teaching year of 1985. The risk is that by 1985 the College will not be able to continue teaching these important subjects if that facility is not made available. As I have said, I ask the Minister for Education and Youth Affairs to give this a high priority and her urgent attention. Senator GEORGES(Queensland)(5.29) —I wish to make a few brief remarks on the Canberra College of Advanced Education. I support the remarks of Senator Reid, but I indicate that the college, because of its special nature and the special courses which it provides, has become somewhat different from the normal colleges of advanced education. Mr DEPUTY PRESIDENT —Order! The time allotted under the sessional order for the consideration of papers has now expired. Motion (by Senator Peter Baume)-by leave-agreed to: That resumption of the debate on items Nos 9 to 16 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. Senator TATE(Tasmania) —I present the sixth report of the Standing Committee for the Scrutiny of Bills concerning: Broadcasting Stations Licence Fees Amendment Bill 1983 Industrial Democracy Bill 1983 Liquid Fuel Emergency Bill 1983 Sales Tax (Exemptions and Classifications) Amendment Bill 1983 Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 Television Stations Licence Fees Amendment Bill 1983 Ordered that the report be printed. Senator TATE —On behalf of the Committee, I lay on the table scrutiny of Bills Alert Digest No. 8, dated 14 September 1983. Debate resumed from 13 September 1983, on motion by Senator Tate: That the Senate take note of the report. Senator MESSNER(South Australia)(5.33) —The issue before us is very important. It is a matter of very great concern to us that the conditions that have obtained in this country in relation to Aboriginals have in fact led to such a report as this being necessary. The report stimulates thinking along the lines of a makarrata. Of course, as is aknowledged by the Senate Standing Committee on Constitutional and Legal Affairs, the report does not touch on the principles behind the idea of a makarrata but rather introduces us to the issues and to some of the individual concerns of some of those who might be involved in preparing the way for such a document. I think it is terribly important to recognise that issue, as was pointed out by Senator Tate when he introduced the report yesterday, and to draw attention to the fact that unless there is wide community understanding of the nature, form and the real meaning of a makarrata it will be extremely difficult to establish Australian community acceptance which might lead to such a document eventuating. That being so, I think it is important that this document has come before us in such a way that it can be widely distributed in the Australian community and can lead to the widest possible community debate about the issues involved. There can be no doubt that an enormous gulf exists between some groups in the Australian community and the Aboriginal community as to the wishes, future aspirations, culture and the great achievements of the Aboriginal people. From that point of view, there needs to be a further development of understanding at all levels in Australian society. Although we have had only a brief time to look at it, the report sheds a lot of light on issues that will be the basis of future discussion. Consequently, the report should be widely distributed. I hope that all honourable senators will take the opportunity of talking to community groups and, of course, to our own party organisations on this very important matter so that we can get to the real essence of the problem, that is, an understanding of the nature of the problem of Aboriginality in this country. It should be acknowledged that a considerable amount of work has gone into this document. There is a very significant problem in recognising the nature of white settlement in this country since 1788 and the way in which Australia has developed since that time on the basis of European settlement. Clearly there is a very real problem in understanding the nature, in law, of European settlement. It has already been demonstrated in case law, I understand, that Australia was not necessarily settled by way of conquest over the Aboriginal people but indeed by way of settlement. The distinctions are difficult and the law would need to come to terms with them. It is certainly an issue which we will need to address in our future deliberations on this very important matter. I wish to reiterate the main point. I commend Senator Tate for his eloquence in choosing the right phraseology in this regard. I believe that he clearly pointed out that unless there is a wide understanding and agreement on this very important matter-that is, the nature and extent of a makarrata-there is very little likelihood that such an arrangement will succeed. I believe it is something to which we as members of the Australian Parliament should give our utmost attention. Senator MACKLIN(Queensland)(5.38) —The report of the Senate Standing Committee on Constitutional and legal Affairs entitled 'Two Hundred Years Later . . .' is extremely important and valuable at this time in Australia's history. The central question to which the Committee sought to address itself was of considerable importance-whether the Commonwealth Government actually has the constitutional power to enter into a makarrata was adequately and extensively discussed in the report. I thought that some very useful points were raised in the report. The difficulty with which we are confronted, of course, is essentially the notion of sovereignty and a sovereign nation. The report refers to similar situations around the world that have developed beyond the stage we have reached in this country. I refer particularly to the situation of the American Indian, which raises basically a question of domestic sovereignty. Of course, the lawyers have informed us that technicalities arise with the use of words in that regard. The application of a law within a territorial framework, as is applicable in the American situation, seems to me not to be beyond the possibilities in Australia. Certainly we will have to change the structure of our law and our Constitution to be able to accommodate that. I think the Committee has cleared up a lot of problems but it has presented us with a whole new batch. I believe that the new problems are weightier, more important, more cohesive and certainly much more coherent. The Commonwealth Parliament and the Commonwealth Government will be able to address those problems. The National Aboriginal Conference, on behalf of the Aboriginal people , will also be able to address itself to those problems. The Australian Democrats believe that the Commonwealth has to accept the inalienable right of the Aboriginal people not only to maintain their traditional cultures, customs and lifestyle but also to govern, manage and determine their own lives in the future. Essentially that might be seen as a definition in any reasonable sense of what sovereignty means in domestic law. I do not know whether one wants to make the definition sufficiently tight as to enable the jurisdiction of the International Court of Justice or some other international body to deliberate on problems that may arise between ourselves and the Aboriginals in pursuing this aim. That is probably outside the ken, and I think in many ways it is probably not a realistic or even a reasonable proposition. I believe we ought to establish within our own framework, traditions and history some way of dealing with this matter. But I would lend my strong support to the notion of a compact between ourselves and the Aboriginal people so that we can put down for negotiation all those very large and complex problems that still remain between us as peoples. If we are to do this I believe we have to acknowledge that the Aboriginal people never surrendered this land to the Europeans and the invasion that started in 1788 has not taken away the sovereignty of the Aboriginal people in relation to their own land. I have raised here on previous occasions the notion of Australians rewriting history for just a moment by putting ourselves in the same situation as the Aboriginal people. Let us suppose that the Japanese remained in control of Australia until 1983 once it was sucessfully invaded and occupied during the Second World War. I think that the Australians, and their children, who had been in that conflict would today still regard this as their land. In other words, for one or two generations, if that Japanese invasion scenario had occurred, I am sure that Australians would still assert that this was their land, despite the fact that the Japanese were occupying, running and controlling it. Likewise the Aboriginal people need look back only one or two generations in the same way to assert that this is their land. We are not going to settle the problem by the paternalistic policies of the past. The only possibility is to take a bold step forward, to be willing to acknowledge a radical departure from the policies which have been pursued in the past and to accept as the Aboriginal people accept, that this is their land. We must come to terms with that in a very real and concrete way. As I have said before, I am indebted to the Committee for raising the problems and in pursuing that line of investigation and work. I do not wish in any way to suggest that it might be easy. I will read from a small article in yesterday's edition of the Daily Sun about the Queensland Minister for Local Government, Main Roads and Racing opening the new Gold Coast district police headquarters. In his speech he referred to the Gold Coast's first police station which was opened at Tallebudgera in 1855. Mr Hinze is quoted as saying: . . . a constable at the time had complained to the . . . Office that 'the blacks were bad'. The Minister . . . then said: 'Well, they haven't changed, have they?' This, in 1983, from a Minister in a State Parliament, I think must give us enormous cause for concern. When we see how the compassionate, the sympathetic and the detailed attempt that the Committee has made stands in marked contrast to the degrading and disgusting remarks made by a Minister of the National Party of Australia in opening a police station, I think we all realise how much further we have to go in this country before we even have the chance of sitting down together and discussing our mutual problems. That I believe is what we ultimately must do. We must agree to sit down with the Aboriginals and discuss with them their land and our land so that together we can go forward. We cannot overturn the problems of the past. We cannot wipe them away. This is now the land of everybody who lives here, and to that end we must make sure that the injustices of the past are recognised, and we must seek to correct them so that we can all live in a country which will recognise each individual's right to self-determination within his or her own cultural traditions. I hope that by that time the types of remarks which are quoted as having been made yesterday by a Minister of the Crown may never again be made in this country by anybody in such a responsible position. Senator LEWIS(Victoria)(5.47) —Mr Deputy President: Our children die more frequently than yours, our life expectancy is less than yours, a higher percentage of our people are in gaol than yours. We have a lower income and more people unemployed than you. We have to meet racism and disadvantage, often hostile police and other threats to our people. That, Mr Deputy President, is part of a quotation from a submission to the Senate Standing Committee on Constitutional and Legal Affairs made on behalf of central Australian Aboriginal organisations. In effect the authors went on to say: You invaded our land, committed genocide on our people and despoiled our graves and sacred sites. They went on to say: For this and other crimes against our nation the settler state should negotiate restitution and compensation with the Aboriginal nation. I am sure that all Australians, black or white, would have understanding, sympathy and concern about this sort of statement and this sort of evidence. It was made perfectly clear to the committee throughout its extensive investigations of outback Australia that this evidence was not unusual. I believe we in this Parliament must have grave concern and sympathy for Aborigines. We must approach their problems with great sensitivity. In particular, what we need is understanding. I am afraid that no matter how much Australians, other than Aborigines, think about this problem, very frequently there is an almost total lack of understanding. In particular, I believe that parliamentarians must not be paternalistic and must not endeavour to impose a white man's solution on these people. Believe me, Mr Deputy President, the central Australian Aborigines put their views very firmly to the Committee when they met the Committee at Alice Springs. It is a submission which I must quote because it certainly puts one Aboriginal point of view-I do not say it is the only point of view-very firmly indeed. I now quote parts of what they said in the preamble: To the extent that the Makarrata or Treaty will cover Aboriginal people and the invaders- I draw attention to that word 'invaders'- it will amount to an agreement by Aboriginal people that a white law takes precedence over Aboriginal law. It is impossible for us as people who continue to exercise our law to agree to a white law taking precedence over it. It is also impossible for the two laws to be mixed as they are based upon completely different cultural premises. We are not a homogenous nation. We have different laws depending upon where you come from. Even if it was possible for one group to find a mixture with your law that would work it would then not work for anyone else. Similarly, no Aboriginal person can speak for the members of any other group. . . . Since 1788 our nation has been invaded by ever-increasing numbers of Europeans. . . . The Aboriginal people have never surrendered to the European invasion and assert that sovereignty over all of Australia lies with them. I am just taking extracts from the submission. As honourable senators will appreciate, I have a maximum of 10 minutes to speak on this subject. A further statement is: We reject and detest the view of the settler state regarding a treaty, compact or whatever as according us dignity and rights as an Aboriginal people. They are very strong words. That group went on to say to the Committee: . . . We have limited time, energy and resources and we must allocate them carefully and most effectively. To divert our efforts from our daily, local struggles to participate in the formation of a Makarrata or treaty would require a high level of confidence on our part; an assurance that such an exercise was going to result in something worth while-a meaningful advance of Aboriginal people towards self-management of our own affairs. Nothing in the current proposals for the Makarrata or treaty has given us reasons to have that confidence. In other words, this group of Aboriginal people was saying to the Committee: ' Look, we have been conned by the white man before. We do not want to be conned by the white man into wasting our time and energy on something which may not lead to any worthwhile solution. What we want to do is to make sure that the matters which cause us grave concern are dealt with and dealt with very quickly' . I do not say that that is the answer to all of the problems but it does raise very firmly before the Parliament the question as to what the Parliament should do for the Aborigine. Should we endeavour to continue to have them exercise their energies in some sort of negotiation or should we turn to perhaps some other solution of their problem? Perhaps there is a whole series of pieces of legislation which may be of assistance to them. I might say, Mr Deputy President , that the question of sovereignty was raised very clearly by the members of the Committee and Mr Forrester, the National Aboriginal Congress representative for NAC, gave evidence in which he said: To quote one fellow, he said: 'I want to be free like my grandfather and therefore if we want to be free like our grandfathers we have to get rid of the assimilation policy. We have to get rid of all those things which are detrimental to Aboriginal culture and ways by getting back all our traditions and protecting our sacred sites. He went on- This treaty-- If there is to be a treaty- must be able to protect us from assimilation. I cannot be a white man; I am a black fellow. I have black skin, my children are black and my grandchildren will be black. We do not want to be white Australians. We want to be Aboriginals from all around here. That is what we want to be. That is the sort of evidence which makes me say that we really must understand the Aboriginal point of view. I do not believe that there are very many non- Aboriginal Australians who do really understand that point of view but clearly it is becoming stronger as the Aboriginal people begin to realise their heritage , to be proud of it and to push their point of view. It is of course a grave problem for us because, as Senator Gareth Evans pointed out to these people, they are Australians whether they like it or not. I am running out of time but would like to compliment a number of witnesses. The evidence is really well worth while reading for anyone who is interested in our Aboriginal heritage. I thoroughly recommend the reading of the Hansard record. I would like to compliment Miss Margaret Valadian and Mrs McNamara of the Aboriginal Training and Cultural Institute of New South Wales- Senator Missen —Very impressive. Senator LEWIS —whose evidence struck me as very impressive, as Senator Missen says. Miss Valadian, in particular, said: . . . you may not need a treaty at all. You may in fact need a series of other strategies that guarantee the resources, work towards better understanding between the two communities and provide the personnel and whatever else is needed to resolve the problems that we are facing. She went on to talk about how to get through to the Aboriginal people. Finally, because I am down to my last minute, I wish simply to refer to one aspect of the Committee's recommendation, and that is that a broad enabling power be proposed, as a constitutional alteration. May I add that one paper put to the Committee said: The practical point may be made that an amendment of the Constitution which does not specify the content of the agreement might excite less opposition. In effect, that paper was saying that the way to get this through was not to allow the people of Australia to understand what the significance of the constitutional alteration would be. The Committee rejected that point of view totally. I thoroughly agree with that rejection. However, the Committee did end up saying that the way to go about it was to have a broad enabling power in the Constitution but that in regard to any such broad enabling power there must be a clear understanding by the Australian people of what was proposed, so that all Australians, black and white, could understand where the proposal would take the people of this country. Senator MISSEN(Victoria)(5.57) —I, too, rise to speak to the report of the Constitutional and Legal Affairs Committee entitled 'Two Hundred Years Later' . . . It is of course, a report on the feasibility of a compact, or makarrata, between the Commonwealth and Aboriginal people. I want first to thank the Chairman of the Committee who, since the change of government, is Senator Tate. The Committee is in very good hands. The honourable senator has supervised the bringing into existence of the report and its presentation. I had, as Chairman, most of the experience of taking evidence around Australia. That was indeed a fascinating and interesting experience and one that I hope will be of value. I thank Senator Tate for the gracious remarks that he made in his tabling statement about my chairmanship of the Committee over the last seven years. I am sure that the Committee will continue to do a lot of good work for the country and the Parliament on the issues that it has now before it. There are two or three things that I should say as the retiring Chairman of the Committee because I have felt that in a couple of ways we have not had the opportunity to complete work that might have been done had circumstances been different-if there had not been an early election at the beginning of this year and we had gone ahead in the normal way and completed our report. As we went around the country in the last 18 months seeing so many of the Aboriginal communities on their home ground and obtaining their opinion on matters of relevance to this report, on a number of occasions we expressed the hope and expectation that we should be able to return to the scene with perhaps a draft report and go into those matters with the members of the community. The making of decisions by Aboriginal communities is undoubtedly a slower process than is the making of decisions by many groups-companies and so forth. It is necessary for members of the community to understand, and to reach thorough agreement, before they can be expected to accept a recommendation. Unfortunately, revisiting them was not possible. Nor did it become possible for us to go to various other areas of Australia such as northern New South Wales and South Australia where we might well have had an opportunity to call more evidence and gain a clear picture of the situation throughout Australia. In some ways the relevance of this inquiry was not to ascertain what the various communities wanted in a makarrata. That was not the purpose of the inquiry. Its purpose was to look at the legal and other feasibility questions which arise in the making of an agreement, if that is the wish of the Australian people, that is, the black people of Australia and the white people of Australia . The Committee had such a facilitating purpose. It did not try to determine whether the people desired a makarrata or an agreement. The Committee's purpose was to determine the problems involved and to facilitate the passing through those problems if it is decided to go ahead with the project. From this point of view, I feel that the Committee, in its report, made some practical suggestions which will be useful. The basic part of the report dealt with the way in which such an agreement could be brought into force. In our recommendations we came down on the side of an idea that this could be achieved by something like a section 105A agreement in the Constitution which would empower the Commonwealth to enter into agreements and arrangements with the Aboriginal people. The details could be worked out in an agreement which would be signed later. Obviously the Committee thought that was the best option. It considered other options, such as putting all matters that were part of the agreement into the Constitution. That is a complex matter. With our well-known difficulties in carrying out constitutional change, it would be difficult to see that it would not run into trouble in passage. There are other ways, by legislative means, agreement and so forth, of dealing with the matter. That formed a very major part of the inquiry. During the inquiry, particularly from the studies that we undertook at the various communities, it became apparent that there was a great lack of knowledge about what a makaratta would mean. There was a certain amount of suspicion. Senator Lewis has referred to some quite cogent evidence about that. Certainly, there was no desire to waste the small amount of money and the small facilities of the Aboriginal people on something which might not turn out to be useful. I say this because as one went through the communities, particularly the communities in northern Australia, Western Australia and northern Queensland, one found very articulate leaders in those communities. They had very strong ideas on what would be needed if such an agreement came about. But to that date there had been very little information available to tell them what was involved in this process. As it appears from the Committee's report, this is not a matter of criticism in any way of the National Aboriginal Conference or any Aboriginal organisation. It concerns the mere logistics, the lack of facilities which Aboriginal people have and the inability of a small number of members of that Conference to get around to the vastly separated communities which they represent. Obviously there are other more urgent needs such as the inability to inform themselves and the members of the community. Consequently, when we went to visit the various communities, at first on arrival we did not ask them what their ideas of a makarrata or an agreement were ; we asked them what it was. There was basically no knowledge of it. When it was explained and when we got down to discussing the needs of the community, the people were most articulate. Both men and women in those communities, acting with great dignity and obviously with great support in their communities, were able to give us a lot of very valuable information. That information is set out in the evidence. As Senator Lewis has said, a reading of the evidence will be very valuable to people throughout Australia. That evidence is available. It is in Hansard form. I think that it will be very instructive to both government and others as to the way in which we proceed from now. To my mind, the setting up of the National Aboriginal Conference on some regular and independent legislative basis, with more staff and facilities to enable it to pursue inquiries about agreements with the white Australian people, is essential if the makarrata is to go ahead. Many of the witnesses who were most valuable to the Committee were those who were able to discuss these aspects , that is, the informing of white Australia and black Australia of the way in which such an agreement could operate, what it involved and the nature of the demands which each side makes. Overall, a clear feeling by the Aboriginal community came through to us regarding the loss through an invasion 200 years ago of the sovereignty which these people enjoyed. The necessity for the recovery of dignity by the Aboriginal people is among the most urgent priorities. Other matters concern their great interest and determination in land and land values. Their views on these matters are quite different from the white Australian view. Many other needs are evident also, but I think the need to restore the dignity of black Australia is important. The Committee hopes that in its report it has done something towards making that easier and making the task-if the makaratta goes ahead-a success. Therefore, I hope the report will be read by Australians with a sympathetic eye to achieving that end. Senator CRICHTON-BROWNE(Western Australia)(6.06) —The report of the Standing Committee on Constitutional and Legal Affairs was tabled yesterday afternoon. It took many months to collect the enormous amount of evidence on which the report is based. The Committee's reference was complex. The Committee learnt that the very title 'makarrata' was a most inappropriate expression of a compact of an agreement between Aboriginal people and white people. The Committee moved on to deal with the legalities which were evident in the case before Mr Justice Blackburn and other cases. They were complex matters. As Senator Austin Lewis has said, the lack of understanding between the Aboriginal people and the white people, the aspirations of the Aboriginals and the imposition of the view and the will of the white people were very complex matters. I will be sorry if this report is not debated at some length at some time in the future. Therefore, I seek leave to continue my remarks. Leave granted; debate adjourned. Debate resumed from 8 September 1983, on motion by Senator Scott: That the Senate take note of the report. Senator SCOTT(New South Wales-Leader of the National Party of Australia)(6.8) — I continue my remarks addressed to the report of the Standing Committee on Foreign Affairs and Defence concerning the human rights and conditions of the people of East Timor. First of all, I move: Add to the motion that the Senate take note of the report the following words: And expresses its agreement with the recommendations of the dissenting report. It was with considerable regret that, for the first time in many years as a member of this Committee, I and my colleagues in Opposition found it necessary to bring down a dissenting report. It is a circumstance that has not occurred in a great number of references that have been put before us, accepted, examined and reported upon. It is interesting to recall that this reference was considered by the Committee prior to the reference being directed to the Committee by the Senate. When the Committee considered this as a reference, it decided that on balance there was no useful purpose that could be served either to the Timorese or Australian-Indonesian relations by pursuing this sort of matter in the circumstances and conditions in which we would have had to pursue it. However, the reference was finally directed to the Committee by the Senate. It is enormously important to recall that, when the matter was directed to the Committee by the Senate, the then Leader of the Opposition, Senator Button, made a distinct point that it should not concern itself with diving into history and with looking at a political investigation of rights and wrongs of the past. He stated that the Committee should try desperately to concern itself with the present situation in East Timor. Regrettably, very little evidence that we received was post-1981 evidence. A great deal of it related to a period significantly before that. The Committee seemed to query, a great deal, the few witnesses who had been to East Timor in relatively recent times, some as recently as March 1982. Yet there was a determination to accept the circumstance and the evidence of those Timorese who were refugees and were clearly emotionally very disturbed and rightly so. They were Timorese who, in many cases , had not seen their country for a significant number of years. It seemed at least to the Opposition members of that Committee that, the Committee having finally failed to get permission to have a look at the East Timor situation on the ground, it was enormously important that in July-August of this year a parliamentary delegation was to be admitted to East Timor. As a current fact finding mission, it seemed that this would be of real significance to our final determination because the delegation was to have an opportunity to see for itself the sorts of circumstances that exist in East Timor today about which we needed to be aware. The Standing Committee, in its report, virtually refused-I do not think that is too strong a word-to take much, if any, cognisance of the determinations of the delegation. The delegation comprised three members of the Government and two members of the Opposition. I think it is important to recall also that the Standing Committee's report was basically a long record of the disasters of colonial rule over several hundred years, of civil war and finally of invasion. Indeed, it was the story of a people who were, after all those experiences, still 90 per cent illiterate and suffering from disease and famine to a very high degree compared with other places around the world. The question that we saw as being uppermost was the need to try desperately to find out whether the Timorese were better off or worse off today than they were before. One would be less than honest if one were to say that it was possible to be other than emotionally disturbed by some of the evidence that we received in the course of this investigation. On balance, we had to decide whether, in fact, in light of sometimes cold reality the present and future circumstances of the Timorese was likely to be better from the point of view of living standards, health, communications and, in fact, of family reunion than it had been in the past. There was no question that, in the past, it had not been good. For the Timorese and for Australian-Indonesian relations, we believed that it was better that investigations should come to the conclusions that we, as a minority in that Committee, came to. It should be recalled, in fairness, that Indonesia at no stage attempted to invade Timor during the several hundred years of Portugese dominance. I believe that it was only when the Portugese stepped aside from their responsibility that the Indonesians became really concerned. They were concerned because they were unsure of the attitude of the Fretilin people. They were unsure whether they had an unfriendly presence in their immediate vicinity. Perhaps their reaction was not totally unpredictable. Let me recall the dissenting report basically from a point of view of how its conclusions were reached. The information we believed was based directly or indirectly on the accounts of refugees whose unfortunate colonial experience- violent civil war and consequent invasion which had taken place over eight years -must have put some measure of doubt on its absolute accuracy. Indeed, despite our direction, the mass of the report dealt with the past. We found that, too, was contrary and certainly not helpful to the Timorese situation. There was sparse evidence, indeed, of the situation as it exists today. Indeed, the report of the Australian Parliamentary Delegation to Indonesia after its visit suggested, in the words of its leader, that there was no serious food shortage, that food production, health and education were improving faster than in most areas and that most Timorese consider they are comparitively well off. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator BOLKUS(South Australia)(6.17) —I speak to this report as a member of the Senate Standing Committee on Foreign Affairs and Defence which inquired into the situation in East Timor. One factor remains outstanding despite the rhetoric of the Opposition in this matter. Despite eight years of history, the situation in East Timor is not quiet and it will not go away. During the last week in this Parliament two reports have been tabled, one from this Committee and the other from the Australian Parliamentary Delegation to Indonesia. There is some conflict in those reports, but there are a number of aspects of the reports about which there is no conflict. There is no conflict about the fact that the East Timorese still do not enjoy the freedom to engage in political activities, they still do not enjoy freedom of speech, they still do not enjoy freedom of movement whether internally or externally and they do not enjoy the right to property. There is no organised structure of law and order which is acceptable. Reports as late as this morning indicate that there are summary executions and killings on East Timor. Our report indicates-it is not disputed by the parliamentary delegation-that there is still no total freedom of religious practice and that cultural life on East Timor has changed and is changing under the orchestration of the foreign dominators. The most basic thing that cannot be disputed because it is not a matter of subjective judgment, it is a matter of international law, is that no matter how long the situation on East Timor is continued, the East Timorese have not exercised a right to self-determination. They have had imposed on them a puppet local representative body, and the Indonesian Government maintains that there has been an exercise of the right of self-determination. That has not been accepted by international forums and nor should it be because, as I said earlier , it is not a subjective judgment, it is a matter of international law. International law decrees that that right has not, in fact, been exercised. There is no dispute also, although there may be some dispute about the degree, about the fact that there is still continuing resistance on East Timor. The resistance is evidenced by the fact that, to quote the Minister for Foreign Affairs (Mr Hayden) in answer to a question in yesterday's Hansard, there are 2, 800 detainees on the prison island of Atauro. Those detainees are fed by the Red Cross. If it was not for the Red Cross they would not be fed. There are no schools on the island even though 1,400 children live there. The families on the island are still barred from access to and communicaton with other relatives. The selection of people for Atauro is basically done on the premise that anyone with relatives still part of the resistance will find himself on the prison island. That leads me to talk about the resistance. There are conflicting reports as to the degree of resistance. Some Indonesian authority figures indicate that there could be 2,000 supporters of Fretilin still resisting, but those figures are under a cloud. However, what is not disputed is that it is taking 7,000 to 20, 000 Indonesian troops to control the inhabitants of East Timor. If there was no resistance why is there a need for such a great number of people to control the inhabitants? In the report of Mr Denis Richardson submitted to the Senate Commitee quite recently the situation of the people living on Atauro was detailed. What was also detailed was that even until about a year ago 200 people died because of the conflict there. Even in Press reports this morning emanating from Indonesia and East Timor there is an indication that, as a consequence of the death of 15 Indonesian soldiers in East Timor four or five weeks ago, 200 people in a nearby village were executed by Indonesian soldiers in reprisals. No matter how much Australia wants to forget the situation in East Timor, it will not go away. There is also some dispute as to whether the East Timorese are better off under Indonesian rule than they would have been under Fretilin or whatever sort of government might have evolved after the end of Portuguese domination. That may very well be in dispute, but it is not in dispute for those hundreds and thousands of East Timorese who have died. It is also not in dispute that, despite the spending of money on the building of schools and roads by Indonesians on East Timor, the local people are losing their culture. In fact, as has been evidenced by submissions to the Senate Committee, a large degree of graft and ripping off is going on, especially in the coffee trade on East Timor. I now turn very briefly to the report of the Parliamentary Delegation, because it needs to be addressed. The report was produced after a four-day visit to East Timor, yet if we look at the length of the report we find that it is full of copious information, information which was also available to the Senate Committee, which took two years to address itself to the vital issues. I submit that the report of the Delegation did not address itself adequately to vital issues as the Senate Committee did. Its priorities were based on the premise: The Indonesians certainly regard the Timor question as a critical test of Australian-Indonesian relations, indicating that if differences persist the whole relationship will suffer. Realpolitick was important in this regard. It was a matter of forgetting our moral values and our value systems and accepting that the Indonesian power represented the thinking that might is right. As a consequence, value systems have to be discarded in the interests of such a philosophy. The dissenters to the Committee's report based their disagreement on four grounds. They claimed that the majority report was based on emotional evidence, evidence which was frequently inaccurate. In response to this charge, I say that the evidence we found came not only from refugees from East Timor but also from sources such as Amnesty International, the Red Cross, Tapol and others. It was corroborated. It was evidence that may not stand up beyond reasonable doubt in court but to the extent that the witnesses were able to corroborate their own evidence from all parts of Australia it should be listened to. The Opposition in this place often places total credence in reports from refugees from the Soviet Union. Why do we draw a distinction between such instances and those involving Indonesian refugees? Another point made by the dissenters is that the report should have addressed itself solely to the current conditions in East Timor. But we cannot look at the rights and situation of East Timorese now without looking at the decimation of their system over the last eight years. The claim was also made that there was a lack of contemporary evidence. The dissenting members should know, as many or most of them were at most meetings of the Committee, that evidence was received up until a couple of months ago and was therefore as current as was possibly available. We received the evidence from all sorts of quarters, organisations and bodies within Australia and from outside. The information was current. The evidence, as distinct from that given to the Parliamentary Delegation, was evidence which was subject to the scrutiny of the whole Committee. A number of concerns arise from this Committee report. It is of concern that over the years, with respect to the refugee family reunion policy, Australia has been in essence taken for a ride. For five years now we have been promised that an agreed list would be completed. Time and again that list has been suspended. If it had been completed as had been agreed by the Indonesian Government in 1978 , we would not have had that carrot dangling before us over the last 12 months. There is also the matter of the Department of Foreign Affairs and its involvement with East Timor. I am not one of those who believe in the principle of agent of influence, but when one looks at the submission of the Department, analyses and assesses it in the light of the principles of agent of influence, as has been espoused by some people, it would not be an unfair assessment to say that in respect to the East Timorese question the appropriate desk in the Department is acting in such a way. Another concern is one that was expressed most recently-on 9 September in an editorial in the Australian. It states: The seizure of East Timor has established an alarming precedent for Indonesian expansion. It continues: Recent Australian governments have been anxious to do nothing which might affront Indonesia and cause it to refuse to accept our aid. But one of the difficulties of foreign relations is that one cannot always please everyone at the same time. However important Indonesia's good will may be, Australia will not be advantaged if, by accepting the fait accompli of East Timor, we place in jeopardy other nations in our region whose security is vital to our own. My time is running out, but I wish to say one more thing. I express this with regret: Information coming from the United Nations-- The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator MASON(New South Wales)(6.27) —The Australian Democrats oppose the amendment as proposed by Senator Scott since we believe from our observation that a human rights problem of considerable dimensions has existed and continues to exist in East Timor. But we note with interest the division of the Senate Standing Committee on Foreign Affairs and Defence on this matter, which is one which is reflected in the community. The Australian Democrats certainly believe that the East Timor issue presents both a moral and a practical set of problems to all Australians. I will deal first with the moral problems. The first basic point of importance is that Indonesia has at no time had any historical, cultural or ethnic rights to East Timor, a territory which she invaded and took purely by conquest. East Timor was never part of the Netherlands East Indies to which Indonesia had some sort of territorial claim, as indeed she did to West Irian. That situation remains. The second moral problem is that the Indonesian invasion has caused, according to United Nations figures, between 100,000 and 200,000 deaths of Timorese-people to whom the people of Australia owe a debt of honour since they or perhaps their parents sacrificed their lives in the interests of Australian soldiers who were escaping from the Japanese during World War II. The third moral point is that Indonesia does what it does in East Timor in secrecy. It does not allow the rest of the world to see whether justice or injustice is being done. The fourth moral problem for Australia-of course, this is the bottom line and the crunch one for us as a nation-is the question of whether one gives in to violence and injustice purely for the sake of expediency. Does one become an appeaser? Is it good enough for us as a nation to do that? On the practical side the first problem concerns the implications for Papua New Guinea. This has been reflected, since I first raised this matter publicly some two months ago, by very many people, especially those from Papua New Guinea, who have spoken to me about it. I am now aware that there is a great degree of concern in Papua New Guinea about Indonesia's possible interest in that territory and some knowledge there of the historic perception of Papua New Guinea by Indonesia as its territory. The second practical consideration is that East Timor could be a good small neighbour. It could become a part of the comity of Pacific nations, prosperous and autonomous, as could places such as Vanuatu. I think it is quite wrong for people to say that that is not he case. The DEPUTY PRESIDENT —Order! The time allotted under the sessional order for consideration of committee reports has expired. The DEPUTY PRESIDENT —I inform the Senate that the President has received a letter from the Leader of the Government in the Senate (Senator Button) relating to changes in membership to the Standing Committee on Social Welfare and Estimates Committee F. The letter reads as follows: Dear Mr President: Pursuant to Resolution of the Senate dated 13 September 1983, I hereby nominate Senator Cook to be a member of the Standing Committee on Social Welfare. I also advise that Senator Hearn wishes to be discharged from further attendance on Estimates Committee F. In accordance with Standing Order 36AB, I nominate Senator Robertson to be a member of the Committee. Yours sincerely, (JOHN BUTTON) Leader of the Government Motion (by Senator Walsh)-by leave-agreed to: (1) That Senator Cook, having been duly nominated in accordance with the Resolution of the Senate dated 13 September 1983, be appointed a member of the Standing Committee on Social Welfare. (2) That Senator Hearn be discharged from Estimates Committee F. (3) That Senator Robertson, having been duly nominated in accordance with standing order 36AB be appointed a member of Estimates Committee F. Debate resumed. Senator SCOTT(New South Wales-Leader of the National Party of Australia)(8.02) -Mr Deputy President, before the suspension of the sitting I was concluding my remarks on the Live-stock Slaughter (Export Inspection Charge) Amendment Bill and the associated Bills. In concluding my remarks now, I want to recall that I had indicated the very severe impost on the industry of a trebling of the export inspection charge as mirrored in the legislation. I had indicated the enormous toll of the drought, the intolerable design of imposing 50 per cent of the trebled charges at one blow-charges for an as yet imperfect and costly inspection system. I had also indicated the serious omission of proper consultation with industry prior to the establishment of this legislation and had emphasised the need for that sort of consultation in depth if the best result is to be achieved. I had a phone call during the afternoon from an export abattoir in the Central Tablelands of New South Wales, explaining once again its concern at the matters to which I had referred. This particular abattoir indicated that, with an 80 per cent kill for the local market, it is hounded by an export charge that puts it at an extraordinary disadvantage with so many of its local competitors. Mr Deputy President, I commend to the Senate the amendment that I moved at the beginning of my remarks. Senator PRIMMER(Victoria)(8.04) —The Senate is debating four Bills-the Live- stock Slaughter (Export Inspection Charge) Amendment Bill 1983, the Grain ( Export Inspection Charge) Amendment Bill 1983, the Eggs (Export Inspection Charge) Amendment Bill 1983 and the Edible Oils (Export Inspection Charge) Amendment Bill 1983. These charges were first imposed as from 1 July 1979 in order for the Government to recoup 50 per cent of the cost of carrying out the inspection of these commodities where they are about to enter the export market. In 1975 the Industries Assistance Commission recommended that, with the exception of meat, inspection costs should be transferred from the Commonwealth to the relevant industries. In its recent report on the abattoir and meat processing industry, the IAC said: The Commission can see no reason why inspection per se should be funded by the community as a whole. Due to increased costs for these inspection services, the industries are failing by far to contribute 50 per cent of the costs involved. The figures are roughly 17 per cent only for inspections in the meat industry, 32 per cent for grain, 33 per cent for eggs and a miniscule 15 per cent contribution by producers for the inspection costs involved in the export of edible oil. I certainly have always suspected that at least in part some of these increased charges will be passed back to the producers by way of a lower price for their commodity in the market place. However, one can cite the case of the meat industry where I believe much of the demand for more rigorous inspections came about as the result of particularly America and Japan using these increased inspections as a mechanism to protect their own producers. Rigorous inspections on meat have been followed by more rigorous inspections as a result of the findings of the royal commission into that industry. Of course, the need for that royal commission arose because crooks, con men or perhaps just smart-Alicks in the trade were out to make a fast buck, having absolutely no concern at all for the industry or for the thousands of honest people within that industry. On Monday, before Senate Estimates Committee C, Mr Miller, the Deputy Secretary to the Department of Primary Industry, had this to say in response to a question from Senator Archer: We could certainly concede that the Export Inspection Service has quite a lot of change yet to be brought about in it. Costs have been contained, only contained, at present. Most of the reasons for the increase this year is the taking over of the State Inspection Service in New South Wales. This has resulted in substantial savings and will result in more savings as we fully integrate those two services. A string of further changes are to be made in the organisation of the Export Inspection Service which are all under development and which will all be brought into a compact five-year corporate plan for the development of the Export Inspection Service. We expect that to be complete within the next month or so. Costs of all services are continually on the increase, for a variety of reasons, but I can only hope that those involved-I speak particularly of the meat industry-from the producers up will take more interest in these things so that we can never again get into the mess that occurred under previous Ministers for primary industry, which did enormous damage to our meat trade. Senator MACKLIN(Queensland)(8.08) -The Senate has before it a package of four Bills dealing with export inspection charges. Under the Live-stock Slaughter ( Export Inspection Charge) Amendment Bill, additional charges have been imposed for the export inspection services, the intention of which is to recoup some of the money being expended in providing those services. The Fraser Government made an announcement that it would seek to recover 50 per cent of those costs and I presume that that is still the policy of the Liberal and National parties. The Government in these Bills has moved towards the same position. I do not think that there can be much disagreement on the basis that there ought to be a recovery of costs in the area. I think the difficulty that a number of honourable senators are having and certainly the one that I have is that these costs should come on at such a high rate so rapidly at this time. I think a general phasing in of costs on any industry is vital for the stability of that industry and for its ability to adapt to those costs. Nowhere, of course, is it more apparent than in the cattle industry, which has gone through extremely bad times. At the moment, the average inspection cost per head of cattle would be about $1.80. The difficulty, of course, is that there are differentiating charges in relation to whether there are fewer than 100 cattle, but on average we are looking at $1.80. The current legislation provides for $2. 40 as a maximum levy. The Government proposes to raise this levy to $10.80 per beast. As a maximum levy, that would be an extraordinary jump, but in his second reading speech, the Minister for Resources and Energy (Senator Walsh), makes clear that what the Government is looking at in this financial year is an increase to $5.40 per adult cattle. That would represent basically a recoupment of approximately 39 per cent of the cost of operating the meat inspection service. I do not intend tonight to dwell too long on the meat inspection service. It has been a matter of debate in this place for quite some time. But I do return again to the report of the Kelly Committee of Inquiry to Examine Commonwealth and State Meat Inspection Systems. Indeed, if that Committee's report had been taken up by the Government at the time, we might not now be facing the type of problems we are facing in the industry. I thought the report contained eminently sensible and reasonable suggestions, and it is gratifying to note that at least some movement is being made to unify the meat inspection service. The problems involved with this matter, of course, are not all on the part of the Commonwealth. The States have not been as co-operative as I think they ought to have been in this regard and hence it has been very difficult even to move towards the pace that has taken place to date. Nevertheless, what is happening now is that the costs involved in the industry from the meat inspection service are being visited on the producers at a time not only of depressed prices on the international market but also when the beef industry is coming out of an extremely severe drought. It seems to me, therefore, that one ought not look at the industry apart from the economic climate that now occurs here and the economic climate that our beef exporters have to compete with. Most of our major trading opponents in this area have the full cost of meat inspection met by the Government. This is not a problem which is unique to beef. It is a problem that bedevils all of our primary products on the export market. But I think we have to pay some attention to the fact that we are attempting to compete in an international market in which our opponents have an enormous advantage. Indeed, a reliable estimate by the Cattle Council of Australia has suggested that in the ensuing 12 months our particular industry will have a $40m disadvantage compared with competitors in relation to international meat sales. That is an extremely difficult leeway to pick up. Our own producers start behind scratch in trying to compete in the international market and it seems to me that it is reasonable to expect at this particular time that any increase in costs that the Government places on the meat inspection charges ought to be of a moderate kind, and not excessive. The proposal of $10.80 as a maximum charge obviously gives the Government a reasonable amount of leeway in terms of what it might propose to do in ensuing financial years with recovery costs. I believe that it is probably appropriate that that type of level that is being struck ought not be available in the legislation. I give notice that in the Committee stages of the debate on the Live-stock Slaughter (Export Inspection Charge) Amendment Bill I will seek to move a request that the amount be not $10.80 but rather $5.40. That will have the result of requiring the Government to return to the Parliament to debate the next increase. It will not, however, affect the revenue raising in the current financial year. I believe it is important that each of those charges be debated separately at this time because the industry is not one which has an endless possibility of recovery. It is in extremely difficult circumstances. We know that the cyclical legislation in the United States will probably suggest in the next year that the United States market for our beef will be decreasing. We know that the European Economic Community intends to lower its import of Australian beef and that the development of new markets, particularly in Asia, has not been as successful as we would have liked. It is an extremely competitive and difficult area in which to deal, and I think we have done reasonably well to date. But the only way we will be able to compete in the future is simply to have a keenly priced product in those markets. I think with these suggested maximum levels of $10.80 that such a possibility may very well elude our producers in Australia. The comments that I have made in relation to beef might well apply to the other Bills. However, there are specific problems in relation to edible oils and eggs in terms of inspection which I think make them less appropriate for the propositions that I intend to move in relation to beef. There are some peculiar problems that we do not have time really to debate here, particularly in relation to egg production in Australia. I hope that we get from the Minister, in his response, particularly in relation to beef charges, some more clarification as to the ultimate intention of the Government. Indeed, on one reading of the Minister's second reading speech, one might imagine that we were to move beyond the 50 per cent recovery. This may be the intention of the Government, or it may be something that the Government wishes to flag for future years. I think it would be of very keen interest to the producers to know what the program looks like in terms of these charges in the next two or three years. I think it would also be very interesting, and here I think there is support from all parties, to know of the Government's success in moving to retain costs in the inspection area and whether the Government has the possbility of closure in relation to a single meat inspection service in Australia- Senator Walsh —Has what? Senator MACKLIN —Has the ability to tell us when we might actually get there. I know we have moved a fair way. I know that the problems in some of the States, my own State of Queensland included, have been fairly difficult. I think it would be useful if we and the producers knew that relief will be forthcoming in the near future from the total costs of the ultimate inefficiencies which now exist in the system not only because of the duplication of meat inspection services but also because of some of the other aspects of the meat inspection services which were revealed by the Royal Commission into the Australian Meat Industry. I point to the problems that have raised by other speakers in relation to the differentiated charges that we discover when we look across the various States. We should be told why there should be such a disparity in charges between the States, particularly when we look at the volume of inspections in which the States are engaging. We can readily accept that an irreducible level of costs is necessary to maintain the service. But, if we make a comparison of cost between Queensland and New South Wales, I think it is very difficult to understand why that cost differential exists particularly when we look at the number of beasts slaughtered in those States. To my mind, there seems to be very little reason why the costs in New South Wales seemingly should be so much higher than the costs in Queensland. It may be that there is a reasonable explanation why the unit cost apparently should be so much higher in New South Wales than it is in Queensland. I think that these are the sorts of items which really ought to have been ventilated to some degree in the Minister's second reading speech. I believe that, when we increase costs significantly in not only the primary industry area but also in any industry it is useful for the Government to indicate its general plans for that area so that we can then respond in a reasonable way to the representations of producers and others in that industry as to what will be the final outcome of the escalating costs. Producers are often much more ready to accept a reasonable increase in charges if one can point to constructive action to be taken, if one can point to a containment of costs in the near future and if one can point to increased efficiencies which are likely in the area in the short and medium term. However, escalating costs are met with opposition in any industry and the amount of information that is then provided is generally pretty scanty. I would hope that the new Government might do something in this regard. I have seen some recent Press reports that something along these lines will be adopted. It is a pity that this practice was not applied to the legislation before us. I believe that all Bills that seek to increase costs should be accompanied by a general overview of the industry so that producers can more readily accept the increased charges. While in one sense it is certainly very easy to raise charges, in another sense it is easy to collect them. I think it is far better if a person knows why he has to pay. He should know that in meeting government charges he is not paying into a bottomless pit but that he is getting a return for every dollar that he has to pay to the Government by way of inspection charges and the like. I therefore indicate that the Australian Democrats will support the amendment which has been moved by Senator Scott to the second reading stage of this legislation. I think that the sentiments expressed in the amendment are moderate and should be accepted. I think it would probably have been preferable if the Government proceded along the lines set out in the amendment. I also indicate that, at the Committee stage, I will move an amendment to the Live-stock Slaughter (Export Inspection Charges) Amendment Bill to request the House of Representatives to lower the amount which the Government proposes to charge during this financial year. Senator ARCHER(Tasmania)(8.25) —I think that, before we start to consider the implications of the legislation, we need to remember that Australia is one of the freer trading countries of the world and that it depends very heavily on its exports. Secondary industry contributes very little to our export trade but our resource and primary products are very significant. As such, we need to consider how our competitors operate, particularly in the primary area. As we know, bulk food is very heavily traded throughout the world not only between the northern hemisphere and the southern hemisphere and between the developed countries but also between the developed and undeveloped countries. If necessary, some forms of assistance are regularly provided in these trading countries. One has only to consider the situation that exists with our trans- Tasman colleagues, the European Economic Community or Northern America to see the importance that other countries and other groups of countries place on keeping their primary products moving. We are all tied into the General Agreement on Tariffs and Trade system which Australia endeavours scrupulously to observe as do some other countries. But we should not overlook the importance of our export industries to the national economy. We should remember that the health and strength of these national industries really reflect the health and strength of the whole economy. Like most new charges, export inspection charges were imposed at a time of high prosperity in November 1973. There has never since been a similar occasion when the industry has been as prosperous. Of course, I note that in May 1979 the then Treasurer had another bite on the basis that the industry was doing quite well and could stand increased charges. However, the reverse position never seems to apply, that is, when the industry cannot stand these imposts the level of charges is wound back. I wish to quote a few passages from the Industries Assistance Commission interim report of 12 December 1975 entitled 'Financing Promotion of Rural Products (Export Inspection of Rural Products)'. The remarks in this report are as relevant today as they were at that time. The following comment is made at page 17 of the report: The figures in Table 4 show that the incidence of the Meat Export Charge on beef and mutton has increased significantly from November 1973 when the charge was introduced. The table illustrates the point that if the levy is retained as a long run policy, then whenever meat prices are low, the levy will impose a significant reduction in the gross incomes of meat producers, and an even larger percentage reduction in their net incomes. This charge was regarded as cream off the top when the scheme was started. It has become a major impost in times of low return. One of the results of that impost was set out on page 18 of the same report. The report states: In other words, because the payment of the export levy by the exporter rather than the Government results in lower returns from exports and thus lower domestic prices, local consumers benefit at the expense of local producers. The illustration also indicates that the burden on primary producers, if they were to meet the cost of export inspections by an export levy, would be about double this cost. That is what transpired in 1975, and I assure honourable senators that it is just as true today as it has been every year since then. As a direct charge against export productivity, governments have to decide whether the loss in productivity and the reduction of taxable income are reasonable offsets to the recovery of the dues. I will now read the first part of the conclusion of that same report because, as I have said, it is just as relevant today. We have ignored the advice that was given to us by the IAC in those days. It states: The levy was introduced at a time when the industry was enjoying buoyant market conditions and it was claimed that, in any case, a considerable part of the levy could be passed on to overseas consumers under those market conditions. However, the export charge results in the long run in a substantial loss in income to meat producers, the loss being much more than the cost of export inspections recouped by the Government. If the cost of export inspections were borne by the Government there would be a transfer of income from taxpayers and from domestic consumers to producers. Because meat production would become more profitable resources would be attracted to this activity. Since the transferred resources would come mainly from activities which are relatively higher cost than meat production, there would be a net economic gain to the whole community. That was what the IAC said in 1975. We are now in 1983 and we still have not learned that lesson. As the report states, as from the day of commencement of this system the costs have just climbed and climbed. Now that we have reached this ridiculous $10.80 per head, I think it is about time that we had a good look at the whole reason behind it, the value of charging it and what we are getting for it. While we have a system where the major contributors to it have no say in how it is run, there is no encouragement for any form of economy in how it is run. I believe that there should be no charge for export inspection. I am prepared to live with one provided that it is on an agreed and efficient system. Personally, I do not think there should be one, and I never have thought so. It has to be a reasonable charge in the export industry, if there is to be one. At present we have legislation before us when there is no finalised scheme, no established pattern and no evidence that we have tightened the efficiency in any way. Two days ago I asked questions on the Estimates Committee C. Senator Primmer has quoted a portion of the transcript. It clearly indicated that there is considerable hope that we will see an improvement in a program that may extend for five years. Even though there has been a considerable increase in the number of officers, I was somewhat horrified to find that most of them were employed on a permanent employee basis. We hoped that the employment of these officers would be on a temporary basis until we were able to tidy up and tighten up some of the ridiculous expenditure that is currently being charged to the producers. While this system prevails, the producers are paying. Clearly, the Government should be paying while it is tinkering with the scheme. It is a period of development and I do not believe that it is reasonable in any way, while this is going on, for the producer to have to pay as much as he will be asked to pay. To bring in these charges at a time that coincides with the drought conditions is most unfortunate and badly thought out. It is a most vicious increase, and we all feel sorry for the people who will suffer a 300 per cent increase in charges of this nature, with no undertaking that the system will be improved. The increase attacks the export earnings of all Australians as well as the producer and everyone down the production line. I do not think there can be any support for the method of arriving at the cost to be recovered because I cannot find that it represents the cost. I will seek approval to incorporate in Hansard a schedule which demonstrates the method of calculation. I would like the Minister for Veterans' Affairs ( Senator Gietzelt) in due course to explain whether this is still the method that is used in arriving at the cost of meat inspection. The document I wish to incorporate is a table that was provided in a letter dated 5 May 1982 from the Department of Primary Industry to the Australian Fishing Industry Council concerning fish export charges. Besides listing all the costs involved, it includes an item of on-cost provision based on 50 per cent of the salary component. I have never heard of any industry in the world that could add a 50 per cent on-cost component and reasonably charge it to the users. If this is the system, I would like to know. If it is not, I would like to know when we changed it and in what areas. When I read the Bill, nothing in it states that we are charging people a 50 per cent on-cost. When I read through the estimates for the Department of Primary Industry for 1983-84 there is nothing that states that we are charging a 50 per cent on-cost; nor does it state what that on-cost is meant to include. However, I understand that 27 per cent of it represents superannuation. For superannuation charges to be paid by casual users of a service of this sort is certainly a bit rich. Any organisation which believes that it can get away with a 50 per cent on-cost needs to be investigated very thoroughly. What an indictment of any government operation if it has to add 50 per cent. I believe that any of those who participate in the scheme, any of the users who are paying, should have a far greater say in how the system is run. In spite of the fact that in answers to questions we were advised that most of the suggestions for improvement had come from within the Department and not from the exporters, processors or producers, I am sure that not many of those people could run a business which showed the degree of laxity that has shown up in the meat inspection service in the last year or so and yet still charge a 50 per cent overrider on the costs. I believe that there are alternatives for far simpler and far better systems. I see no reason why we cannot work towards a system whereby there are enormous penalties for misdemeanours, where the packers are responsible for quality and where any misdemeanour should include not only an enormous fine but also a total loss of licence. We could clean up and speed up the system in many ways. While it is in the process of being tidied up, the Government should pay. It is not reasonable to have this expensive system at the expense of the producer who has no say in the running of it. It is not the processor who pays; it is the producer. In times like this when we are trying to struggle out of a drought, that is just too much to bear. Not enough action is being taken. While the producer is paying, the Government is not hastening its efforts to get the job through. I believe in the export inspection service. I believe it is absolutely and vitally important to Australia. I certainly give it my support. I expect that it should be more cost efficient and that it should be tidied up. I believe that it can be an excellent service. I ask the Government to reconsider the charges in line with the comments I have made. I seek leave to incorporate in Hansard the table which I mentioned earlier. Leave granted. The table read as follows- ESTIMATED TOTAL COSTS OF FISH EXPORT INSPECTION SERVICE 1981-82 AND 1982-83 Estimates as at 3 May 1982 1981-82 1982-83 Staff Staff average $ average* $ 1. Salaries- Science 3 2 50,142 2 50,142 Science 5 1 30,146 1 30,146 Fish Inspectors- Grade 1 37 666,162 40 698,160 Grade 2 13 251,940 14 271,320 Grade 3 5 104, 610 7 146,454 Total 58 1,103,000 64 1,196,222 2. Overtime- $ $ Expenditure 84,700 87,900 74,100 84,000 Net 10,600 3,900 3. Travel 200,000 220,000 4. Laundering* 9,000 9,000 5. On Cost Provision (based on 50% of salary com ponent) 551,500 598,110 Total 1,874,100 *2,027,232 50% Recovery would be: 937,050 1,013,616 Notes: * Staffing for 1982-83 is subject to the approval of the Public Service Board. Changes in the fish export inspection workload and expansion within the industry require the provision of an additional Grade II Inspector at Cairns and four additional Grade I Inspectors at various locations. Two Grade III Inspectors are required to staff the new Eastern Zone (centered on Sydney) and the Tasmanian Zone (centered on Hobart). * Provision for the laundering of inspectors' uniforms has been included as a separate amount, in addition to the 50% on-cost, as it is an extraordinary amount not provided for in the loading. * The estimated cost for 1982-83 (including on-cost provision) is a 8.1% increase over the latest estimate for 1981-82. Senator WATSON(Tasmania)(8.40) —The Senate is debating four Bills relating to export inspection charges. Tonight I propose to speak only to one of those Bills , the Live-stock Slaughter (Export Inspection Charge) Amendment Bill 1983. The purpose of this Bill is to increase the maximum charge on the slaughter of livestock in export establishments. I emphasise the words 'export establishments '. Honourable senators will appreciate that all stock which passes through such an export slaughter house, whether for export or not, must incur the high new charges imposed under this Bill. I agree with Senator Archer; there is a need for an explanation as to how these costs are arrived at, because those honourable senators who have been through slaughter houses and have seen what goes on will realise that a charge of $10.80 a beast is far too high. Primary industry in Australia is emerging from one of the worst droughts in its history. What has the Budget done to stimulate the competitiveness of Australian primary industry? It has done very little. Despite this, the Government expects this particular sector of the economy, the primary industry sector, to be one of its saviours and to provide that stimulus to economic growth on which much of the Budget strategy depends. In fact, in the Budget Papers is the statement that there is expected to be a strong rise in livestock prices. I wonder what attitude lamb producers take at the present time towards that forecast, because anybody who reads the newspapers at the moment will have seen that depressed prices are being paid for lamb and will know just how farcical this move is. In effect, I suggest this statement is very much a pipe dream. I believe that this measure, along with others, must really be examined not only in the light of the August 1983 Budget but also in relation to the May mini -Budget, which was very harsh on the primary producing sector of the economy. I think that those two documents have singled out primary industry for special treatment. In other words, primary industry has had to bear the brunt of a lot of the hard decisions that the Government believed were necessary. I believe it is quite unfair. Some of these charges will mean, in percentage terms, fairly astronomical increases in cost. For example, the increase in the livestock slaughter levy since 1978 approximates 600 per cent. Under this Bill meat inspection charges rise by about 200 per cent. Although we are talking about maximum figures, they are gigantic figures. The Government's policy to recoup 50 per cent of the cost of inspection services from the industry will mean that the charge for a cattle carcass will rise by $1.80 to $5.40. That is the cost to the industry itself. It is a 50 per cent recovery rate. The conclusion that we must reach from all this is that farmers themselves are being asked to pay for the mismanagement of the meat inspection service. Therefore, there is a need for a complete review, standardisation and a full explanation of how these costs are arrived at. Again, we find that decisions have been taken without consultation with the industry. That reflects another of the Government's broken promises. The tragedy of it all is that it is another broken promise. Honourable senators should be aware that practically all of Australia's major competitors have meat inspection services that are totally funded by their governments. The industry in Australia, therefore, is operating at a cost disadvantage to this extent. I believe this situation reaches the height of absurdity when we examine the pig industry. The amount spent in export inspection changes is more than the pig export market is worth. It is the height of absurdity when we reach that stage. There is something like a 300 per cent increase. The charges amount to $5.9m compared with an export value of the pig market of $4.9m. The pig industry, of course, is not an export orientated industry. With these sorts of costs and with the sort of inefficiency that is foist upon it, how can the Government ever expect it to emerge as an export industry? Producers believe that there is a need for a restructuring of the meat inspection service to ensure that the service is very much more efficient and cost effective. Therefore, I support the amendment moved by Senator Scott, which indicates that rural industries are struggling to emerge from one of our worst droughts. Firstly, it states that this is not the time for this sector of our economy to bear the burden of such massive increases in charges. Secondly, it states that the industry should not be expected to contribute 50 per cent of the costs of Commonwealth inspection until the export service restructuring is completed and the service is as efficient and cost effective as possible. Thirdly, it states that there is inadequate industry participation in inspection procedures. Fourthly, it states that we should recognise that regrettably there has not been full consultation with industry on all aspects of the development of the Export Inspection Service and export charges. This Bill reflects an attack on primary industry. Many in the industry-I think it is a forlorn hope-are trying to persuade the Government to include the Minister for Primary Industry, Mr John Kerin, in the Cabinet. They believe that if he were a member of Cabinet maybe the primary producers' voice could be heard much more effectively in the inner sanctums. The Minister for Primary Industry in the Labor Government, who we believe is one of the most important Ministers, is outside Cabinet. I ask honourable senators to contrast that situation with what occured when the Liberal and National parties were in government. The Minister for Primary Industry in that Government was a member of the inner Ministry. That was of benefit to primary industry. Primary industry is facing difficulties at the present time. I believe its hope is a forlorn hope, because whilst the Minister for Primary Industry is not a member of Cabinet he can sympathise with primary producers but cannot achieve their high expectations. At the same time, the Government is expecting export primary industries to lead the economic recovery of Australia. It will be difficult because, as I will mention later, there is a great deal of fragility in the structure of the 1982 Budget. I support the amendment proposed by Senator Scott. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(8.48) —The Government has a contribution to make to this debate. Having listened to a number of honourable senators who have spoken in this debate, one can only come to the conclusion that they are involved in a tactic of humbug and hypocrisy. Honourable senators opposite should bear in mind that the Government's propositions before the Senate are in fact a continuation of the policies begun by the previous Government and continued every year since 1979. The basis of those policies was that industry should pay some contribution towards the orderly marketing and processing arrangements that occur in rural industries. The Government, of course, is very supportive and very conscious of the need to have a virile and active rural sector. Consequently we have taken steps-contrary to what the amendment seeks to do-to consult with the various sectors of the rural industries about this legislation. It is true that consultation does not mean that the Government is abdicating its position, but I can assure honourable senators that, as Mr Kerin indicated in the House of Representatives debate, there has been adequate consultation from the Government's point of view. The Opposition does not seem to know where it is going in respect of a whole variety of policy issues. On the one hand we have representatives of the National Party of Australia criticising the Government for being a big spender in respect of the Budget. In this legislation, where we are seeking to recover 50 per cent of the costs involved in these industries-livestock, grain and edible oils-we are accused of imposing some levy on the industry which is now, as distinct from last year, in a position to carry that levy. Of course, if the levy is not carried by the rural sector it will have to be met from the Budget. That fact seems to escape the logic and understanding of those who want to make some cheap political capital out of this issue. We recognise that the rural sector has been through a very difficult time but surely no one can argue logically, in the current situation, that we are not anticipating, as all the economists associated with the rural sector have done, that there will be a big increase in the rural sector component of the gross national product. Consequently, in view of that upturn it is only properly and logically, as it has been in every Budget debate in recent years, the responsibility of the industry to bear some part of the cost in respect of the various matters that form part of these four Bills. As both the Minister for Primary Industry (Mr Kerin) in the other place and his representative in this place, the Minister for Resources and Energy, Senator Walsh have pointed out the Government is still heavily subsidising each of these sectors. For example, we will collect only 17 per cent of the costs involved in the livestock inspection industry. We will collect only 32 per cent of the costs involved in the grain industry and only 15 per cent in the edible oils industry. So already Budget, taxation revenue and the community generally are making more than a generous contribution towards these important industries. We recognise, of course, that that is a responsibility the Government must bear and is prepared to bear. In those circumstances one can say only that there has been a great deal of debate of very little substance that ought not to enjoy the support of the Senate. I think Senator Archer asked what the cost component was for 50 per cent of the meat inspection charge. I am advised that there is an accurate costing of all of the charges in the meat inspection industry. I appreciate that it is very important to have the meat inspection charges because they help us to meet our obligations to the export industry. There is no arbitrary addition to that cost structure except for the superannuation component which has been included as 20 per cent of wages and 25 per cent of long service leave. They are legitimate charges in carrying out these activities which, I remind honourable senators, protect the rural sector. They protect the producers who honourable senators have been speaking about at some length. The Government has no quarrel with the approach that we must accept our responsibilities to protect the producers. But surely they have some responsibility in this matter. That is to pay the levy which, I remind Senator Watson, was part of his Government's legislation. As he well recognises, the drought did not start on 4 February of this year. It has been with us in recent years. The legislation which was carried by the Senate last year was the former Government's legislation. It was of almost exactly the same content as the legislation that the Opposition is criticising tonight. When honourable senators read the debates that took place in the House of Representatives they will see the absolute cant and humbug of the National Party members. They did precious little in the seven years in which they had the capacity to do something as the long arm of the coalition Government. They were always twisting the arm of the Liberal Party and they told us they could get whatever concessions they wanted in these matters. But the plain facts are that we have had the same type of legislation since 1979. I am also advised that the staffing arrangements have remained static during the first half of this year and that the central office staff has increased from 94 to 117. Twenty-five of those persons are on short term transfer for developmental work and will return to regional offices when their current projects have been completed. The Public Service that has been providing these services has carried on without interference by the new Government the same sort of support policies which were characteristic of the previous Government. One can only repeat what Mr Kerin said in reply to the debate in the House of Representatives: It is about time the Opposition got its act together on a whole variety of issues, including those in the rural sector. Consequently, the Government opposes the amendment moved by Senator Scott. In regard to paragraph (A), we believe that the drought is over and that the rural sector is on the upturn. In paragraph (B) he said that industries should not be expected to contri- bute 50 per cent of the costs of Commonwealth inspection, but that has been his Party's policy since 1979. There has been consultation in respect of paragraphs (C) and (D) of his amendment. Accordingly, the Government opposes the amendment. Question put: That the words proposed to be added (Senator Scott's amendment) be added. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 3 —— Archer, B. R. Lajovic, M. E. Baume, Peter Lewis, A. W. R. Bjelke-Petersen, F. I. Macklin, M. J. Boswell, R. L. D. Martin, K. J. Carrick, Sir John Mason, C. V. J. Chipp, D. L. Messner, A. J.MCollard, S. J. Missen, A. J. Crichton-Browne, N. A. Rae, PeterDurack, P. D. Reid, M. E. Evans, Jack Scott, D. B. Guilfoyle, Dame Margaret Teague, B. C. Haines, J. Townley, M. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Kilgariff, B. F. (Teller) Withers, R. G. Bolkus, N. Jones, G. N. Button, J. N. McClelland, DouglasChilds, B. K. Maguire, G. R. Coates, J. Primmer, C. G. Coleman, R. N. Ray, RobertColston, M. A. Reynolds, M. Crowley, R. A. Richardson, G. F. Elstob, R. C. Robertson, E. A. (Teller)Evans, Gareth 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. Question so resolved in the affirmative. Original question, as amended, resolved in the affirmative. Bills read a second time. The CHAIRMAN —Senator Macklin indicated in his speech at the second reading stage that he proposed moving requests for amendments of the Live-stock Slaughter (Export Inspection Charge) Amendment Bill 1983. Is it the wish of the Committee that the Bills be dealt with separately and that this Bill be considered first? If there is no objection, that course will be followed. LIVE-STOCK SLAUGHTER (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 Senator MACKLIN(Queensland)(9.06) —by leave-I move: That the House of Representatives be requested to make the following amendments in the Bill: Page 1, clause 3, paragraph (a), line 14, leave out '' '$10.80' '', insert '' ' $5.40' ''. Page 1, clause 3, paragraph (b), line 16, leave out '' '$3.60' '', insert '' '$ 1.80' ''. Page 2, clause 3, paragraph (c), line 2, leave out '' '$1.08' '', insert '' ' 54c' ''. Page 2, clause 3, paragraph (d), line 4, leave out '' '$1.08' '', insert '' ' 54c' ''. Page 2, clause 3, paragraph (e), line 6, leave out '' '$3.60' '', insert '' '$1 .80' ''. Page 2, clause 3, paragraph (f), line 7, leave out '' '$10.80' '', insert '' '$ 5.49' ''. I indicated in my speech during the second reading debate the reasons for proposing these amendments. I believe that, if approved, they would place a bar on increases above the current 39 per cent in livestock slaughter export inspection charges and would require the Government, before subsequently raising the charge, to seek the approval of the Parliament Senator SCOTT(New South Wales-Leader of the National Party of Australia)(9.07) -I must indicate that the Opposition regards this as a Budget Bill and thus cannot support the proposed amendments. We have already indicated our extreme concern at the severity of applying a 50 per cent impost for an inspection service which, as has been made abundantly clear, is an incomplete and at this stage relatively inefficient service. But over and above these considerations, the $5.40 charge to which it is proposed that the $10.80 charge should be reduced, will in no way affect the charge on the industry in the current year. On that ground, as well as on other matters referable to the Budget context, the Opposition must oppose the amendments. Senator WALSH(Western Australia-Minister for Resources and Energy)(9.09) —The Government will oppose the amendments on the grounds that they seek to set in money terms the levy which will actually be operative in this year and therefore , if costs in total should subsequently rise, would preclude the policy of 50 per cent cost recovery operating without further amendment of the Act. Unless we believe that inflation will be held at zero it is almost inevitable that there will be increased costs. Probably there is significant scope for improving the efficiency of the service and the Minister for Primary Industry (Mr Kerin) has in hand proposals to that end. But it would not be realistic to believe that, for an indefinite period, the 50 per cent cost recovery policy could be put into effect and the money charge held at the level operative this year. Given that fact, at some time in the future the Parliament would be cluttered with further amending legislation, when that could be avoided by rejecting the proposed amendment. I might add that the amendments proposed tonight break new ground in the sense that in all comparable pieces of legislation, which I can recall, it has been customary to set in the legislation a maximum charge which is higher than that which is actually applied at that time. This has occurred for many years under both Labor and non-Labor governments. I cannot think of any piece of legislation in which that has not been the case. Senator Macklin's amendments propose to break new ground in that way. For all those reasons, the Government will oppose the amendments. Senator MASON(New South Wales)(9.11) —The Minister for Resources and Energy ( Senator Walsh) made a point about maximum charges. I would like him to explain why that has been the practice. I am interested why that procedure is carried out and why Senator Macklin's amendments are perhaps not as satisfactory because they do not do that. Senator WALSH(Western Australia-Minister for Resources and Energy)(9.11) —The basic reason why this is so is that for the last decade we have had an average rate of inflation of around 10 per cent. I would not like to be held rigidly to that figure. Even prior to that we had had inflation rates which in some years went as high as 4 per cent or 5 per cent and which were habitually at 2 per cent to 3 per cent. The procedure had been adopted that, in order to avoid amending legislation every year to maintain the real level of charges and levies, some scope was given in the legislation. A ceiling was imposed by the legislation but it was not immediately applied by way of a levy and could subsequently be varied to take account of inflation without entailing further amending legislation. That is the reason for the practice which has been followed in the past. The Government believes there is not a sufficiently valid case for departing from that policy. Senator ARCHER(Tasmania)(9.12) —I ask the Minister to incorporate in Hansard the breakdown of the costings of how the export inspection charges are made up and the various items that are included. One of the biggest problems that I have encountered is- Senator Walsh —Do you mean the table you showed me an hour ago? Senator ARCHER —No, it is a similar table. It is based on the Bills about which we are talking now and how the charges are made up. Senator CHIPP(Victoria-Leader of the Australian Democrats)(9.13) —The Australian Democrats are interested that the Opposition-the Liberal Party of Australia and the National Party of Australia-will not support our amendments. Notwithstanding the strong speeches made in the House of Representatives by the honourable member for Darling Downs, Mr McVeigh, and the strong speech made here by Senator Scott, they will not support our amendments because they will not interfere with or vote against a Budget measure. I just note that with interest. I pose the question that it puzzles me how they can adopt that stand on this Bill and yet give notice that they are resolutely opposed to other Budget Bills such as the Dividend Recoupment Tax Bill. I make that statement in a state of puzzlement. Senator WALSH(Western Australia-Minister for Resources and Energy)(9.14) — Senator Archer requested that I incorporate a table in Hansard. I do not have it with me. I am not even sure that one exists. I will ask the Minister for Primary Industry (Mr Kerin) whether there is such a table and, if there is, whether he is willing to make it available at some later time. I cannot incorporate it now because I do not have it. Question put: That the amendments (Senator Macklin's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 5 Noes . . . . . . . . . . . 50 —— Majority . . . . . . . . . 45 —— Chipp, D. L. Macklin, M. J. (Teller)Evans, Jack Mason, C. V. J. Haines, J. Baume, Peter Kilgariff, B. F. Bjelke-Petersen, F. I. Lajovic, M. E. Bolkus, N. Lewis, A. W. R. Boswell, R. L. D. McClelland, DouglasButton, J. N. Maguire, G. R. Carrick, Sir John Martin, K. J. Childs, B. K. Messner, A. J. Coates, J. Missen, A. J. Coleman, R. N. Rae, PeterCollard, S. J. (Teller) Ray, RobertColston, M. A. Reid, M. E. Crichton-Browne, N. A. Reynolds, M. Crowley, R. A. Richardson, G. F. Durack, P. D. Robertson, E. A. Elstob, R. C. Ryan, S. M. Evans, Gareth Scott, D. B. Foreman, D. J. Sibraa, K. W. Georges, G. Tate, M. C. Gietzelt, A. T. Teague, B. C. Giles, P. J. Townley, M. Grimes, D. J. Walsh, P. A. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Hill, R. Withers, R. G. Jones, G. N. Zakharov, A. O. Question so resolved in the negative. Bill agreed to without requests. GRAIN (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 EGGS (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 EDIBLE OILS (EXPORT INSPECTION CHARGE) AMENDMENT BILL 1983 The Bills. Senator MACKLIN(Queensland)(9.24) —It was my intention to discuss the possibilities of similar requests in relation to these Bills. Given the vote on the previous Bill, I will not delay the Committee by proceeding with the requests in relation to these Bills. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(9.25) —I thank the Australian Democrats for their co-operative attitude. Bills agreed to. Bills reported without requests; report adopted. Bills (on motion by Senator Gietzelt) read a third time. Debate resumed from 7 September 1983, on motion by Senator Button: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(9.26) —The Opposition does not oppose the Loan Bill (No. 2) 1983 which has been introduced by the Government for the purpose of making provision for the financing of the prospective 1983-84 deficit . It is the normal process to introduce a Bill of this kind. Of course, the Budget deficit in prospect for this year is $8.4 billion. The Bill will enable the funding of the deficit and authorise payments from the Loan Fund to meet defence and certain non-defence expenditures. As I said, it is a normal process of the Budget procedure to introduce a Bill of this kind. The Opposition does not oppose it. I take the opportunity to make one or two comments on the Budget which this Bill proposes to fund. Many remarks were made the morning after the Budget along the lines that it was a mild-mannered Budget. It was described by many commentators immediately following its release as one that gave some relief to those who might have expected, because of statements that had been made, a Budget that was predicted to be more harsh. I think it is fair to say now that there has been some change to that attitude. The Budget is seen more for what it is than what people had feared it might be. Rather than it being described as a mild-mannered Budget it has, on occasions, been described as a broken promises Budget. I think it is fair to observe that any Budget is a political document. It has political objectives. This Budget carries the political objectives of the new Government. In considering some of the broken promises-perhaps they are past history-one recalls that there were promises of tax cuts for about six million Australians, but there have been tax increases; there were to be changes to the tax scales, but there have been no changes in the tax scales; there were to be changes in the tax thresholds but that did not occur; there were to be increases for pensioners, tax thresholds, but that did not occur; and there were to be increases in spouse rebates. One could go through the whole catalogue of things that people were expecting from the policies that had been enunciated in the time leading up to the March election. There were promises of cheaper petrol whereas the Budget provides for dearer petrol. There were to be no devaluations whereas there was an almost immediate devaluation of the currency. There were no proposed changes to superannuation, whereas we have had the continuing saga of the increased tax on lump sum superannuation payments. There were to be increases in pensions as a proportion of average weekly earnings. We have found that that promise has not been put into effect. There were to be increases in fringe benefits; we find that pensions are now to be subject to a means test. All these promises were made. Benefits that one would have expected in the first Budget of a new government have not been introduced. In fact, I think we could sum up the Budget by saying that it is based on a theme of an inflation mentality. It has, as one of its primary objectives, a shift to the public sector wherever that is possible. Those who share the Government's philosophies would acknowledge that the Budget makes strong and immediate steps towards socialist objectives. One needs only to look very speedily at some aspects of the Budget to find the objective in relation to health insurance. The health program introduced by the Government should have been expected from the Government because of its policy. That policy , over the coming months and years, will need to be subjected to an analysis of the philosophy upon which it is based because it is based on a social system rather than on a health care system. It will be seen to be just that as the people of Australia experience the proposals contained in it. Earlier today we talked about housing. Here again we see the objective is to shift to the public sector the housing needs wherever that is possible. Despite all the promises for improvements to the unemployment situation, it could be said that the only real growth in jobs immediately evident in the Budget is in the public sector. It was pointed out by the Leader of the Opposition (Mr Peacock) in a speech a short time ago that there is a retreat from the full employment commitment to the people of Australia. We have had discussions in this place today with regard to the shifts, however slight at this stage, that have been made to public sector funding of education. The Government's education policy threatens the right of parents to choose the system of education they would like for their children. The Budget also shows the usual socialist approach of Labor and its hangup on capital held by Australians, however modest. We find that expressed in the proposals that have come forward since the Government was elected in respect of the tax on lump sum superannuation payments and the list of assets which now may be held by a pensioner without suffering a means test. In just those personal service areas of housing, health, education and social security, we find immediately an intrusion by government. It has come about in some instances by a shift into the public sector of things which were being properly handled by people themselves; in others through a threat to the right to choose. As I said earlier, such a policy is based on an inflation mentality. I think that is so because, if we look at the approach to the revenue side of the Budget , we will find that now enshrined in the Budget are indexed increases each six months in traditional excise rates. It has been found necessary to enshrine in the Budget a mechanism to account for the inflation that obviously is expected to occur. Yet on the other side we find no recognition of inflation and its effect on personal taxes. It is all right to index up excise but there is no recognition of the effect of inflation on personal taxes and the indexing of threshold levels so that people on even average weekly earnings will move quite quickly and sharply into higher tax brackets. There are to be increases of about $44m in a full year in sales taxes. They have been styled by the Government as just increases to adjust anomalies. Nevertheless, they are increases in indirect taxes. In the Budget as a whole we find an increase in outlays of 15.8 per cent and an increase in receipts of 8.6 per cent. What is more important is that the deficit of $8.4 billion represents 4.7 per cent of gross domestic product. This should be contrasted with last year's Budget deficit, which represented 2.8 per cent of gross domestic product. In that sense, this year's Budget is right on target for a big spending government because this is the largest deficit since 1975 in terms of percentage of gross domestic product. The other significant factor about the Budget which we will fund under this Loan Bill is that it is based precariously on the wages policy arising from the prices and incomes accord. The accord has been the subject of discussion and it will need continuing discussion. It is recognised by the Government, and certainly by those who are affected by it, that our inflation rate is dangerously above the average rate of the industrialised world. Australia is extremely uncompetitive in those areas where we may be able to assist in employment opportunities. It is fair to say that not many options were available to the Government, which promised an early return to a private sector recovery, because there are economic difficulties and the problem of rising unemployment. At best, a strategy which maximised the benefits that might have flowed from the United States recovery was something that we should have been looking for in this Budget. We should have been laying the ground work for the opportunity for private sector investment and employment to improve as a result of the recovery in the United States economy and the opportunities that would have given us. Instead, I believe that the Government in the Budget has chosen the wrong course . As I said earlier, the Budget was styled as being mild mannered, but doubts and concern are now being expressed about its economic integrity. This Budget needs to be looked at against a background of the wages policy because it has been said again and again that that is the linchpin on which the Budget has been devised. If the prices and incomes accord does not work, not only would the Budget's economic integrity be at risk, but also it would be seen as the wrong Budget for Australia in the present economic climate. I think it was fascinating that the deficit figure was decided on months before the Budget had been framed and the income and expenditure of the Budget had been subjected to the tests that need be made in looking at a government's responsibilities. It seemed that some figure had been agreed upon by groups of people in conjunction with Government presentation of the figure of approximately $8.5 billion as the right figure. But taking into account present economic circumstances and the growth that has occurred, the figure of $8.5 billion was quite the wrong sort of figure to have suggested. With the stimulus that will come if the growth that the Government predicts eventuates, we will find that the deficit figure to be funded by this Loan Bill is too high in such circumstances. As I said, the Budget is very strongly predicated upon the success of the prices and incomes accord. That accord must be subjected to the scrutiny that we would all require for the basis of such an important aspect of Government policy. I was interested in the answers of the Minister for Industry and Commerce ( Senator Button) today to questions in this place with regard to the Government's intervention in and approach to sectoral claims that are being made and the way in which it will intervene in such claims. His response gave us the impression that the Government opposed them, but he is not able to say in what way it will deal with them until such time as a decision has been made by the Australian Conciliation and Arbitration Commission as to whether it will uphold the 4.3 per cent increase in wage levels which the Government has supported. I do not think many people would suggest that it is sound economic judgment to have a Budget deficit of $8.4 billion and full indexation of wages in the present economic climate. I think that if there are to be the sorts of sectional wage adjustments that we have seen in the building, the food processing and oil industries, and the demands that seem to be heard from other industries the prices and incomes accord will not survive. If that is to be the outcome of the basis on which this Budget is constructed, I can foresee only that there will be many economic difficulties ahead of us in our endeavour to catch the wave of recovery that may come to us through the United States recovery. We need to be ready to set the climate for business confidence and investment to provide the real jobs. As I said earlier, the real growth in employment that can be firmly predicted is in the public sector. In some cases the jobs will be temporary; in others they will perhaps be jobs that are created by State governments as a result of the increased funding allotted to them. In yet other instances they will be recycled opportunities that do not lead to productive employment. If we are to have the stimulus necessary for industrial recovery and investment, we will need to see a very firm policy by the Government with regard to wages. I do not think there is any contention that the difficulties with employment relate to the level of profitability, the return on investment and the opportunity there is for increased business confidence to improve real opportunities for employment. These are the things which are of concern to us. I hope that, as we continue through the Budget debate and have the opportunity to discuss the economy and its prospects for the future, we deal seriously with opportunities for employment and consider our responsibility to work together in this difficult economic climate. I would like to think that the Government itself, in the submissions and interventions that it makes with regard to wages and its prices and incomes accord, will do its utmost to see that any increase in wages is not to the detriment of those in employment and not to the disadvantage of those who will be seeking employment in the future. It is with these comments on the Budget, which is to be funded by Loan Bill (No. 2), that I have tonight drawn attention to the concerns we have with regard to it, although I do indicate that the Loan Bill itself is not opposed by the Opposition. Senator COLSTON(Queensland)(9.41) —In speaking on the Loan Bill (No. 2) 1983 I take the opportunity to mention some aspects of the Budget that has just come before us. Initially, however, I would like to remind honourable senators that at this time 12 months ago we had just had presented in this place what was to become the last Fraser Budget. At about this time last year there was much speculation about whether there would be an early election. Early election speculation is probably one of the most useless exercises, but it occurs nonetheless. It occurred a number of times last year. Shortly after the Budget was introduced last year there was speculation that we might have an election in September. September passed, and then there was speculation about whether we would have an election in December. Some people said that we would have had an election in September, but the Prime Minister's nerve failed. Before the December option could be exercised, the Prime Minister's back failed; so we did not have an election then. Most of us expected to be back here about mid-February to start the 1983 year but before we could come back we were all told that the Parliament had been dissolved. On that occasion the only thing that failed was the Prime Minister's judgment because when the election finally came in March, the Fraser Government was defeated. The Hawke Government came into power and its job eventually was to bring down this Budget in August of this year. This Hawke Budget will be the first of many Labor Budgets brought down in this place, and it has put Australia on the road to recovery. I take this opportunity to mention some of the more specific aspects of the recent Budget. I would first like to congratulate the Prime Minister, Mr Hawke, the Treasurer, Mr Keating, the Minister for Finance, Mr Dawkins, and all of the Labor Ministry for the work they did in bringing this Budget before the Parliament. Like many members of the Australian Labor Party, both elected members and even those who at that stage had not been elected, I was present at Bob Hawke's opening of the election campaign in the Sydney Opera House. At that time we in the Labor Party felt confident about what was before us and what we could do if elected. We were elected to government but we found that the cupboard was bare. In fact, the country was heading for a $9 billion to $10 billion deficit. In these circumstances, bringing together a Budget to get Australia working again was a magnificent effort on the part of the Prime Minister and all of his Ministers. It required great application and severe discipline. The Budget, brought down a few weeks ago, has been widely accepted. I was somewhat surprised by some of the remarks made by Senator Dame Margaret Guilfoyle, but I suppose that an opposition is bound to oppose the Budget. Many things in this Budget will be excellent for the country in the situation that it is in, and in my opinion this Budget will bring Australia around again, back to the situation that such a resource rich country like ours should be in. I would like to mention some specific matters in the Budget which pleased me and, probably more significantly, are of importance to thousands of Queenslanders. What I shall mention may be of importance even to those beyond the boundaries of Queensland. I mention firstly two specific social security matters which were brought in with this Budget. These measures are very important for those who are involved. Like many other senators and members of the House of Representatives, from time to time I have been approached by men who have opted out of the work force so that they can care for permanently ill wives. If the roles were reversed and a woman cared for an ill or invalid husband, a pension or benefit would be payable to the couple. For instance, they would be able to receive a sickness benefit, payable both to the husband and the wife, or an invalid pension payable in the same way. However, when a man steps down from his working life to attend to an ill or invalid wife, he is not entitled to the same sort of benefit. All he is entitled to is a special benefit . We all know that a special benefit attracts a stringent means test and it does not carry any entitlement to fringe benefits. So quite often when a man realises that his wife is ill and needs constant care he cannot actually step down from his work because of the financial disadvantages attendant upon both the husband and the wife. However, to the Government's credit and especially to the credit of the Minister for Social Security, Senator Grimes, a spouse carer's pension has been introduced in this Budget. This spouse carer's pension will allow the husband of an age, service or invalid pensioner wife to receive assistance on the same basis as the wife would receive a pension. This will be available where the husband provides care and attention for an extended period on account of his wife's severe physical or mental disability. This will be of great benefit to many men in the community who want to stand down from the work force and look after their spouses. Although the total cost for a full year will be only about $10m-a small amount in the total budgetary context-this humane initiative will provide much needed relief to many men who otherwise would have received little, if any, benefit. Of course it will provide relief to a wife who will realise that under such circumstances she will be able to have her husband look after her. A further initiative which will assist many of my constituents is the assistance which will be given to pensioners who are living in remote areas. As I travel around Queensland-I am sure this happens not only to my fellow Queensland senators but also to senators in other States as well-I am often amazed at how high the cost of living is in remote areas. Those people who live in remote areas probably become used to the high cost of living but when one is moving from, say, a capital city or from a provincial city on the coast into a remote area, one realises the high cost of living in these out of the way places . This has severe implications for many people. It has severe implications for the wage earners in those places but, to some extent, the wage earners are buffered by the fact that they can receive a tax concession for being in a certain tax zone. It has severe implications for pensioners as well. In most cases, they cannot take advantage of the tax concessions or the zone allowances. They find it difficult to make the pension go as far as it should or go as far as it would in other places in the State in which they live. Many pensioners in this situation contemplate moving away from what are familiar surroundings for them and going to a place where the cost of living is lower. It is not fair that pensioners should have to do so. If they have worked and lived in an area for a long time they ought to be able to retire there and have a similar standard of living to their fellow pensioners in other parts of the State. They should not have to move away from their familiar surroundings and from the friends that they have had for 40 or 50 years. From May next year a special allowance will be payable to pensioners in taxation zone A to help buffer the high cost of living in those areas. A single pensioner living in taxation zone A will receive $7 per week extra. Married couples will receive an extra $12 per week. For those pensioners who are sickness beneficiaries or people such as those who have children, an extra $3.50 per week will be payable for each dependent child. Again, in the total context of the Budget, the cost is relatively small. The cost of this initiative will be about $16m in a full year. However, the benefits to those people in taxation zone A will be considerable. Taxation zone A, of course, exists in places other than Queensland, but much of western Queensland, almost all of Cape York Peninsula and the Torres Strait Islands are in taxation zone A. Pensioners in those areas will benefit from this initiative and have a pension which is more in line in purchasing power with the pension of, say, a person who lives in a capital city. I should like now to mention briefly some of the special parts of the Budget or some initiatives which were taken even before the Budget which will be of benefit to Queensland, to the State that I represent. Queensland will receive $ 41m for employment creation projects under the community employment program. This is of special importance to Queensland. Unfortunately, at the moment the unemployment rate in Queensland is at a rate higher than the national average. While this sum will not bring down the employment rate to a rate that we would like, it will certainly make a dent in the numbers of unemployed that we have at the moment. When fully operational, the amount that Queensland will receive under the community employment program will create 11,200 new jobs. This will be of great benefit to Queensland which now has an unemployment rate of over 10 per cent. Queensland will receive an extra $63m in public housing funds. In bald figures, an extra $63m probably does not mean too much. But it is a 52 per cent increase over what Queensland received last year and an indication of the amount of money that will be available for housing. More housing contracts will be concluded now that interest rates are declining; the more housing that is undertaken in Queensland, the better it will be for our economy. Housing has a great spin-off in the economy because of the other things which are associated with it. In the Budget there is an extra $2m for the 1983-84 financial year to subsidise Trans Australia Airlines F27 scheduled airline services to western Queensland communities. This is subject to a dollar for dollar matching contribution by the Queensland Government. I would outline that this is not a new initiative. This was something that was being carried out by the previous Government. I can remember going out into western Queensland with the then Minister for Transport who was a member of another political party. Because of his intervention, a subsidy along these lines was introduced. This subsidy will continue to be used for airline services in western Queensland. People who do not travel in that area would not realise the problems that people in those areas have. I notice Senator Collard on the other side of the chamber. He would be well aware of the transport problems that people in those areas have and the great reliance that there is on air transport in that general area. Unless we have a subsidy such as this, people in those areas will not receive the air transport services that they require. I should like to mention now especially something about north Queensland in relation to the Budget. I could mention many things in the Budget but I will choose just some of them and point out how Queensland will benefit from this Budget. In the Budget, over $500,000 has been set aside to begin setting up a second regional radio network of the Australian Broadcasting Corporation. As many as four million Australians in the north and in other places in the Commonwealth are now receiving only one ABC radio program. They will benefit from a second network. Some people in north Queensland and north-western Queensland receive only the one ABC radio program. They do not receive any commercial program. A similar problem exists in relation to television in some of the remote areas of Queensland. I can well remember going into one of the western Queensland towns and speaking with people about problems with television in those areas. One person indicated to me quite clearly that it was one of the few entertainments they had but they saw so many repeat programs because they had only one channel that they could almost recite the programs themselves without having to watch them. In addition to the money to be made available for radio, an amount of $7.5m has been set aside in this Budget for the upgrading and extension of the ABC network in country areas. This includes $1m for the commencement of work to convert certain national transmitting stations from dependence on terrestrial links to use of the national communications satellite system for the distribution of ABC radio and television programs in the future. An amount of $500,000 will be available for a scheme to provide ABC radio and television programs to remote and under- served communities which do not currently receive these services, due either to rugged terrain or because they are outside the present service areas. We will see a strong boost to road funding in Queensland because of the Budget; a total of $262m will be provided in the next financial year, a 40 per cent increase. Queensland will have the fastest growth in funding for national roads in the forthcoming financial year, a 39.5 per cent increase compared with 34.8 per cent for Australia as a whole. Two matters of a capital nature which I should like to mention which are of interest to the people of Queensland are Commonwealth office buildings which will be constructed in the north. A Commonwealth building will be constructed at Cairns at a cost of $5.5m. Another project that is of interest to me and many Queenslanders who go to the north of our State quite often is the Commonwealth building that is going to be built on Thursday Island. This undertaking will be of considerable benefit for all of the Commonwealth agencies that are on Thursday Island. I should imagine that my colleague the honourable member for Leichhardt, Mr John Gayler, will probably have an office in the new Commonwealth building on Thursday Island. The building will not be large because, after all, Thursday Island is not a large community. However, the building will service not only Thursday Island but all of the islands in Torres Strait. The total cost of the building will be $700,000. One of the major industries in Queensland-I usually regard it as the fourth biggest industry in Queensland although some people have quarrelled with me and said it is much more important than that-is the tourist industry. Tourism is a fast growing industry. It is an industry which provides a great deal of employment in Queensland. Any further boost to this industry will help pick up the unemployment problem. This year money has not been allocated especially to Queensland for the purpose of tourism. However, the Australian Tourist Commission itself will receive $17.5m in this financial year which is an increase of 75 per cent over the previous year's allocation. I am hopeful that the Commission will use a great deal of the extra money that has been provided to it to feature Queensland overseas so that when visitors come to Australia they will not just go to the Melbourne-Canberra-Sydney triangle but they will come into Queensland as well. People from overseas have no difficulty in travelling to Queensland because we have international airports in Brisbane and Townsville and an international airport facility will soon be available in Cairns. Of course, Queensland relies heavily on tourists from within the Commonwealth itself. However, the more tourists we can get from overseas the better it will be for the economy of Queensland. A special grant of $1m is being made available in one area. It will result in some significant benefits in tourism. An amount of $1m does not sound much. However, this special grant will be made available in the current financial year to subsidise diesel fuel costs to Great Barrier Reef island tourist resorts. Many of the resorts rely very heavily on water transport and this grant will help provide tourist facilities on the islands at a reasonable cost and as a result we will be able to keep attracting tourists to north Queensland. As I say , although $1m does not sound much, it will be of significant benefit to these islands. Finally, I wish to say something about the Burdekin Dam. Bert Kelly, the ' modest farmer' and a former member of the House of Representatives, used to tell the story that he could feel an election coming on when a dam project was in the wind. Bert Kelly told this story in a much more poetic way than I am able to tell it this evening. For years in Queensland we have been able to tell when an election was about to be called as the proposed Burdekin Dam was mentioned. The Burdekin Dam is to become a reality. I suppose there have been many driving forces behind the dam. In one way it is unfair to single out any special person. However, a member of the House of Representatives who was elected at the last election has been a driving force behind getting funding for the dam. That person is Mr Eamon Lindsay, the honourable member for Herbert. Eamon Lindsay, of course, was an alderman in the Townsville City Council. His special area of interest was water. For a long time he agitated to get funding for the Burdekin Dam. In the Budget the Federal Government will be providing to Queensland $13m in the current financial year 1983-84 for the full cost of the construction of the Burdekin Dam head works. The dam is not longer a pipe dream; it is going to be a reality. In speaking on the Loan Bill (No. 2) 1983 this evening, I have mentioned some broad aspects of the current Budget introduced a few weeks ago which are particularly pleasing to me. I have mentioned some aspects which will be very helpful to Queensland. It is pleasing to note that this is the first Labor Budget for some time. This is the first Labor Budget that has been brought down since I entered this Parliament in 1975. What is probably more pleasing is the fact that this Budget will get Australia moving again. As well as that, it is the first of many Labor Budgets that we are going to see in this place. Senator WATSON(Tasmania)(10.07) —I wish to use the debate on Loan Bill (No. 2) 1983 to point out many of the weaknesses of the Australian Labor Party's 1983 Federal Budget. The Government has used the constitutionality of this Loan Bill- its basic purpose is defence-as a means of circumventing the approval of the Australian Loan Council on the basis that some of the Budget measures apply to defence commitments. I think it is time that governments tidied up such an unsatisfactory approach to financing deficits in Australia. I think there is need for some innovative thinking so that we can get some up to date, efficient and streamlined procedures to finance appropriately our Federal Budget. In many respects the 1983 Federal Budget was a smart document because it aimed to direct attention away from annual federal Budgets. In the future I believe there will be less significance attached to Budgets because a lot of the effects will take place during the financial year rather than at Budget time itself. The Budget is directed at trying to solve immediate problems. I think we must also read this Budget in the context of the economic statement or the mini-Budget that was presented earlier because it is part of a strategy. I was amazed to see in the Budget an agreement by Australian Labor Party people to index indirect taxes by way of excise duties. I thought that the Labor Party had been pathologically opposed to suggestions of an increased reliance on indirect taxes . But what do we find? We find that a range of excise taxes has been indexed. What is the effect of this action? By indexing the excise taxes, costs are fed into the cost of living and they flow on ultimately into the price of labour. This is a further destabilising influence on the prices and incomes accord which is supposed to be the foundation of the 1983 Budget strategy. This leads me to suggest that there is a very high fragility in the whole of this Labor Party strategy. The high reliance on the prices and incomes accord is beginning to crumble. Let us look at some of the other features. Australia's inflation rate is still above the average of other countries of the industrialised world. This means that Australian industry is increasingly uncompetitive in world terms. A lot of credit has been claimed by the Government for bringing down certain interest rates. Interest rates have not fallen at the same rate as inflation has fallen; there is a significant gap. The fragility is further emphasised when we look as some of the statements accompanying the Budget. I refer to page 70 of the Budget Statements 1983-84 Budget Paper No. 1-which admits to certain problems which are not manifested in the Budget Speech. That document states that any upturn in the world economy stronger than what is currently foreseen by this Government would adversely damage the Australian economy. This is interesting when compared with statements by the Prime Minister, Mr Hawke. He has constantly asserted that Australia will share in the tremendous upturn which is currently taking place in the United States of America. In Budget Paper No. 2 we have a statement contradictory to that general assertion. In this Budget a lot of money is being spent on the unemployed as a means of solving what we all recognise as a tragic social problem. The Budget outlook acknowledges that there will still be higher levels of unemployment. I suggest that means the Labor Government is applying the wrong solutions to solve this social problem. The fact that the Government is applying the wrong sorts of remedies, or more precisely is not understanding the problems, is manifested in a number of areas. My colleague Senator Messner from South Australia pointed out the difficulties in relation to the excise on brandies, ports, et cetera. The tax is effectively to be pre-paid 5, 10 or 15 years before the product is sold. This reflects the complete lack of understanding of how this sector of industry works. It is a good example. We have seen a number of backdowns since Budget night. I suppose the most notorious related to the diesel fuels. The Government showed a complete failure to understand the full implications and ramifications of the taxes proposed in the Budget. In other words, it failed to analyse them and to do its homework. It said: 'Yes, this will do. It will raise so much revenue'. When the Government realised the full implications-the extra revenue above the Budget predictions and the fact that the taxes would have wiped out certain sectors of the transport industry and of the power industry-it wisely backed down. Despite that backdown, the cost to the transport industry will be horrendous. We are dependent on cheap economic transport. The nail has been put into the coffin of many operators. Many competing industries face major problems. There was a backdown on-I suppose, to be more polite there was an explanation of-sales tax on certain items which when one read the Schedule to the Budget were clearly intended to be taxable. I refer to sunburn creams. There was a backdown by way of an explanation. Again, that illustrates the lack of attention to detail in the Budget. I also refer to plumbing supplies. Last year the Labor Party attacked the Liberal-National Party coalition for its 2 1/2 per cent tax. What did it do in its Schedule? It put on an horrendous tax. After Budget night it said 'Oh no, that will not apply to all sorts of categories' which took the heat off. Again it demonstrates a lack of attention to detail and to the full implications. It could have been accused of hypocrisy. I now return to the prices and incomes accord. The Labor Party believes that the prices and incomes accord is an alternative to tighter monetary and fiscal policy. Those countries that have had a successful wage pause have used that wage pause in conjunction with tighter monetary and fiscal policy. This Government ignores the success of those governments which have applied wage pauses and says: 'No, we can do it as an alternative to the others'. How can Australia succeed when other countries have proved that this approach is wrong? Regrettably, we are seeing instance after instance of the wages accord breaking down. We have seen it in the building industry where the domination of strong unions has assured wage increases. We have seen it in the food industry particularly, for example, in the Heinz case. The oil industry is another example. The cost to the nation of the deficit is horrendous. I wish to point out that the cost in interest on money borrowed will be as much as the costs in the areas of health and education. We are putting a tremendous burden on future generations. It is easy to borrow money. It is a lot harder to pay it back. We are putting additional burdens on to our children. If we look at our cost burden , our indebtedness, compared with that of some of the Latin American countries, we do not come out particularly well. The only thing in our favour is that we have a greater ability at present to service that debt. For how long will that ability continue if the Government does not apply the right sorts of policies at the right time? The Government has indicated that this money will not be borrowed overseas. This means that in six to nine month's time there will be an increase in interest rates. It is this hesitancy which is frightening people away. Let us look at some of the broken promises. We were told that Tasmania would be adequately compensated for the loss of the dam. We are to be given a mere $30m, and there are haggles over that at present. We had promises of income tax cuts for six million workers. What is the reality? There have been no tax cuts but progressive hikes as incomes rise. I said that the Budget was a smart Budget. Most of the journalists in Australia were deceived. It took the Secretary of the Australian Taxpayers Association, Mr Eric Risstrom, nearly four hours to discover that the majority of average wage earners would be significantly worse off as a result of this Budget. What happened about petrol? We had a promise of cheaper petrol, but we have dearer petrol. A fundamental feature of this Budget is Medicare. Medicare will do nothing to improve health care delivery costs. The measures contained in the Medicare legislation threaten good health provision in the future. Medicare is a major act of nationalisation, changing the face of Australia. It adds $1.7 billion in taxes in a full year. It adds 2,500 expensive staff members to the public sector . On the other hand, what does it do to the private sector? It will have to sack 5,000 of its lower paid staff. Medicare obscures the real cost of health care. The one per cent levy which is talked about so much covers only $1 billion whereas Federal and State governments spend $8 billion on health costs. What is the significance of this fact? The one per cent levy is no more than a political levy which is completely unrelated to costs. Medicare will cause great problems for consumers. Pensioners with pensioner health benefit cards will pay no more under Medicare but the consumer price index reduction of 2.6 per cent in 1984 will cost single pensioners $2.30 a week and married couples $3.90 a week. I think the pensioners of Australia should be aware of this situation. What about local government, the third tier of government, which is democracy at its grass roots? The Australian Labor Party in its policy speech stated that it would allocate at least 2 per cent of Federal personal income tax as a general revenue grant to local government. That amount was set by the Liberal and National parties. The Labor Party went even further. It promised, as part of its policy, that the allocation in any year would not be less than the real value of the previous year's allocation. But what happened? Local government failed to get the full amount. In 1982-83 the consumer price index rose by 11.2 per cent and the local government share of personal income taxes rose by only 8. 2 per cent. This shortfall means that local government has been underpaid to the extend of $13m. What will the 839 local councils in Australia say in relation to this broken promise? What will the 10,500 elected councillors and their millions of constituents say about it? There is talk of an economic recovery. It will not be an investment recovery and it will not be a consumer-led recovery; it will be a Government-led recovery . This means that the Government will say to all of us: 'We know how to spend your taxes better than you do. We will spend more money but it will cost you more in taxes-both direct taxes and indirect taxes'. This is the situation, despite the fact that we all believed that the Australian Labor Party was pathologically against indirect increases in taxes. The Government indicated in the Budget Papers that there will be a 5 per cent rise in non-farm product. We all ask ourselves: Where will this come from? The Government even acknowledges that there will be a fall in private sector investment. What will all this extra spending achieve? How will it stimulate demand? The Budget has done very little for private sector growth and virtually nothing for small business. It is unfortunate that only at election time does small business seem to get any acknowledgement at all. It has not been granted anything in this Budget. Let us look at some of the problems that the Government will face. Currently the money supply is over the Budget target. What do we find, therefore? There is plenty of money but the only demand for it is from government. That does not augur well for the future. In relation to defence matters-I know you have a particular interest in such matters, Mr Deputy President-there must be a large fall in the number of trainees and apprentices to be recruited. What the Government is really doing is replacing the men in uniform with civilians. It has done nothing to enhance Australia's preparedness for defence. The morale of the reserve forces is quite low. What has the Budget done in this respect? The present exemption from income tax of the pay and allowances of part time members of the reserve defence forces is to be phased out over a certain time interval. The Government then said that it would conduct an investigation into the pay and allowances in the forces. I suggest that the appropriate course of action for the Government is to conduct an investigation and make changes later. This is another example of what this Government is doing. It acts first and conducts investigations later. This is another manifestation of the fact that the Government acts first and carries out investigations later. I turn now to the rural sector of Australia. The primary producers of Australia have been treated very shabbily in the May mini-Budget and in this Budget. This sector has been asked to pay more than its fair share of the burden in trying to get this country going again, despite the fact that it is emerging from one of the worst droughts on record and despite the fact that many primary producers are deeper in debt than they have ever been. This particular sector has been let down greatly. What else is contained in the Budget Speech? We find that off-road diesel excise will become payable for the first time. What effect will this have not only on farm costs-running tractors, headers and that sort of equipment-but also in getting the produce to and from the farm. The costs involved will be quite significant because of the long distances between places in Australia. What effect will it have on my island State of Tasmania? It will considerably increase the price of air travel and sea transport. There is no offsetting cost or increase in the freight equalisation scheme. What has the Government done in this respect? It has reduced the amount allocated to the freight equalisation scheme despite the fact that documents accompanying the Budget indicate that the Government has budgeted for an increase in volume. The Budget documents state that we have just had one of the worst years on record; yet the Government spends only $27m on freight equalisation. Although it is acknowledged that it was probably one of the worst years for business and transport and that an increased figure was sought, the amount allocated was only $23m. Again, that indicates the failure of the Government to come to grips with reality and its failure to recognise the real problems that people are having to face. What has this Budget done to increase Australia's international competitiveness in the primary industry sector? Earlier tonight I spoke about some of the problems and the increased costs associated with the new livestock slaughter levies. Let us look at some of the broken promises of this Government in relation to primary industry. The Government promised that it would allocate $ 28m for wool promotion. What did it allocate in the Budget? It allocated $20m. It broke a promise it had made to one of our major industries and reduced the promised amount by $8m. That is a significant amount. What about soil conservation? The Government promised that it would allocate $4m for soil conservation. It granted a mere $1m, despite widespread acknowledgement that soil conservation is vital in Australia. As I mentioned, the Budget does nothing to stimulate the rural sector. Between the economic statement or mini-Budget and this Budget the primary industries of Australia have lost a great deal. At the same time, the Labor Government expects primary industry to contribute significantly to economic recovery in Australia. Primary industry has lost another major tax deduction as a result of changes to section 75A of the Income Tax Assessment Act. This provision enabled primary producers involved in land clearing and preparation for pasture of previously virgin land to have a tax deductibility over a 10-year period. With one stroke of the pen on Budget night the Government wiped out completely the deductibility in relation to land clearing. I believe a positive approach would have been to offer an incentive to plant new trees. What did the Democrats have to offer when they attacked the Budget? They believe that there should have been extra spending; admittedly, they said it should have been selective. But this would have added substantially to the deficit. Despite their acknowledgement of the importance of small business, they are actually advocating a wealth tax and they chastise the Labor Government for not imposing a wealth tax. The Democrats-they call themselves the saviours of small business-are advocating a wealth tax which imposes a tax on many sectors that just have not the cash resources or the income to pay it. It is therefore an iniquitous tax. Those taxes which are most favoured in the community are related to a person's ability to pay from an income. I believe this Budget will prove to be an absolute disaster for Australia. It is certainly going to prove those journalists who felt that it was a good Budget entirely wrong. It has sought to do nothing with Australia's long term problems. I believe that history will show it as one of the worst Budgets that has ever been brought down in Australia's history. Senator MAGUIRE(South Australia)(10.31) —I support Loan Bill (No. 2) 1983. It is designed to supplement the Consolidated Revenue Fund if necessary and it is one means of financing the Budget for 1983-84. I draw the attention of honourable senators to this week's issue of the Bulletin which indicates that the 1983 Budget has been particularly well received and that only a relatively small group in the community, perhaps including the Opposition, thinks that it is not satisfactory. Among the features of the Budget this year are the historically high social security payments. Almost 30 per cent of outlays are devoted to social security. There is a very large increase in outlays for housing, a much needed increase. There is also a very big increase in spending on health. Unlike the two previous Budgets in 1981 and 1982, there is no significant increase in sales taxes. The trend towards higher sales taxes which was set in train in the 1981 Budget has been broken this year. The Budget has the lowest aggregate income tax collection rise for five years. The total increase nationally in income tax collections this financial year is expected to be less than 8 per cent. That is a very low post-war figure in Australia and a major departure from previous Budgets. That 8 per cent lift really does overstate the impact because there is an offsetting saving to many members of the community through the savings in respect of health care. That 8 per cent includes the Medicare levy. There are certainly excise increases in the Budget but the Government has made the decision that this is the area most appropriate to pay for its program. There is a large increase in the deficit. This financial year the Budget deficit is forecast to be 4.7 per cent of Australia's gross domestic product, compared with 2.8 per cent last financial year. I must say that the increase in the deficit this year is very much a planned increase, not the situation last financial year when we had a massive unplanned increase in the Budget deficit. I remind honourable senators that when the former Treasurer, Mr Howard, brought down his budget in August last year he planned a deficit of $1,600m. That was the amount he said would be the excess of government outlays over revenues for the financial year. When the year ended the community discovered that in fact the deficit was $4,400m. So this tremendous unplanned increase in the Budget deficit contrasted with a planned increase this financial year. I think the Government and the community should take with a grain of salt criticisms by the Opposition of this Budget, given its track record last financial year in particular when we saw the largest unplanned increase in government outlays in the history of this country. The Budget is part of a group of fiscal measures taken by the Government to try to turn the economy around. It started earlier this year, immediately upon election, by devaluing the Australian dollar to give some added protection to Australian manufacturing industry. It convened the National Economic Summit Conference. As honourable senators know, one of the key proposals to come from that Summit was the proposition that unemployment and inflation should be tackled simultaneously and the previous dogma-the so-called fighting inflation first-was dispensed with. The May economic statement was a housekeeping exercise designed to clean out a range of tax expenditures, which were concealed in the Budget, to provide scope for new initiatives by this Government this financial year. The incomes policy has been commenced. The prices and incomes accord with the Australian Council of Trade Unions was the first major element of that policy. Since then the Economic Planning Advisory Council has been appointed to provide more information and a means of consultation with the community about economic matters in this country. The prices surveillance authority is to be set up to monitor the prices charged by large corporations and some statutory authorities. Legislation concerning it is still to come. Work is proceeding on the advisory committee on professional incomes. The economic context of this Budget should be repeated here because it really gives a perspective of what is happening and what is needed to turn the economy around. In the last financial year we saw tremendous falls in employment and an increase of 270,000 in the unemployment figure-perhaps the biggest increase in unemployment in Australia in any one year under the Government which campaigned year after year on the basis that it was the Government of competent economic management and that all other parties were incompetent to manage the economy. The legacy was a 270,000 increase in the unemployment level in one financial year. Inflation was well into the double digit range-11 1/2 per cent. Even worse , it was double the average of the countries with which we trade; so our competitiveness was being eroded. We had very high interest rates indeed. The strategy of this Budget is to give a fiscal policy stimulus to boost activity, to give the maximum stimulus consistent with the Government's anti- inflation objectives. As I indicated earlier, the objectives are to fight inflation and unemployment simultaneously. It is the first Budget to begin turning the economy around. It will take time, but this is the first step. It is a Budget promoting fairness and equity in the community in order to begin the process of redistribution in the community. Some of the major features of the Budget should be examined tonight. I think the most important area of activity is housing. There is tremendous scope to boost activity in the economy by stimulating housing. I welcome the 50 per cent increase in funds allocated in this Budget for public housing. The important aspect about public housing is that the people who tend to be housed through the State housing commissions are among the neediest people in the community. This is a very equitable measure. There is also the very imaginative first home owners scheme which is designed to overcome the deposit gap which we all know is the biggest single obstacle to home ownership in Australia. The scheme provides for grants of up to $7,000 for eligible couples as a subsidy against repayments on home loans. The impact of that scheme will be to enable many people to borrow more in respect of a given income towards the price of a dwelling and so overcome the very difficult problem of trying to save a deposit out of restricted incomes. We estimate that the total impact on the housing sector of the public housing boost and the first home owners scheme will be the commencement of something like 22,000 extra dwellings this financial year. That is a significant increase in dwelling construction in Australia. The community employment program is designed to boost employment, particularly in areas where high unemployment rates prevail-those areas which will be left out as the economy picks up, those areas in which employment creation will not proceed as fast as the average for the country as a whole. The scheme involves outlays of $300m this financial year. I am pleased that in my own State of South Australia some 3,000 extra jobs will be created in this financial year as a result of the community employment scheme. Unemployment benefits have been increased for single people aged 18 years and over and people under the age of 18. Also, a liberalised income test is to be applied to encourage the unemployed to seek jobs. Very importantly, there are to be increased benefits for the children of pensioners and for persons receiving a family income supplement. This will enable families to enjoy more disposable income and represent important ways of tackling poverty, so much of which in Australia is family oriented. For country people there is to be a major boost as a result of the planning for the second Australian Broadcasting Corporation radio network, which will supplement existing ABC services in country areas. I am very pleased to note that Port Pirie in South Australia will be a major centre in the ABC radio network. Very large road grants are to be made to the States, the provision representing an increase of some 45 per cent this year. Also, the Australian Tourist Commission is to receive a boost. In regard to education, more funds are to be provided for needy schools. The first ever computer education program at a national level is to be instituted. The Government is budgeting some $18m over a period of three years to improve computer education in schools. In the area of data processing Australia is being left behind by so many countries that it is important our children should have access to computer education. I particularly welcome the scheme. Also, the participation and equity scheme is designed to help more children finish their secondary education. Australia has an appalling record in terms of the number of children who fail to finish their secondary education. This scheme represents an important beginning in encouraging more children to stay on at school. Provision is made for the introduction of Medicare, which is to begin on 1 February. It represents a major reform of Australia's health system and will be of tremendous benefit to lower income families. I am very pleased to note that in this Budget, for the first time, real resources have been provided to begin the crackdown on medical fraud. I believe that that practice represents a blight on the community and I am very pleased that resources are being budgeted for the provision of more Federal police and Health Department inspectors in order to begin cleaning up this area of abuse-medical fraud and medical overservicing- which, it is estimated by the parliamentary Public Accounts Committee, costs the nation $120m a year. I welcome this initiative and believe that a very large amount of money can be recovered for the taxpayers by cracking down in this field. The Budget also provides for very large increases in allocations for employment and training schemes to ensure that workers who have been retrenched can be retrained and participate more fully in the work force as the economy improves. Various schemes in the Budget devoted to employment training involve expenditure for increases of up to 35 per cent in trade and non-trade training. A specific scheme provides for those steel producing regions in which at the moment there is very serious unemployment. I trust that in the steel centre of Whyalla in my own State many people will be able to benefit from these steel industry retraining schemes. Overall, the employment that is generated in the economy by the Budget should be quite significant. In the housing area alone it can be estimated that some 20,000 to 30,000 extra jobs will be created as a result of the Government's housing initiatives. Steel industry assistance involving bounties of up to $30m annually to the Broken Hill Propriety Co. Ltd should save jobs in the steel industry. In addition, the Government's capital works program, which is designed to overcome years of neglect in regard to Commonwealth public works, should involve a significant expansion in employment. I am particularly pleased about the increase of 22 per cent in the funds budgeted for capital works expansion this financial year. That will certainly give a major boost to Australia's ailing construction industry and ensure that additional jobs are created there. I also welcome the Commonwealth's announcement of an office space program to ensure that more of its offices are located in its own premises. By building additional offices the Commonwealth will stimulate economic activity. Budget outlays are to increase by 15.8 per cent across the board, the areas of priority being those of health, housing and social security. Health outlays will increase by 25.4 per cent, which is well above the overall average of 15.8 per cent, indicating that it is seen as a high priority area. Housing outlays are to increase by 23.1 per cent and expenditure on social security and welfare by 19.3 per cent. As I indicated earlier, this Budget is characterised by very low growth in total income tax collections nationally. Indeed, it is one of the lowest rates of increase for many years. No change in income tax rates is to take place and the sales tax increases of previous years have been halted. Over the last two financial years we saw a 66 per cent boost in revenue derived from sales tax. In 1980-81, $2,100m was collected. By 1982-83 the figure had soared to $3,500m, representing an enormous increase in collections. That increase has now been halted. Excise has been increased in order to finance the Government's program, but its impact I am sure can be borne by the community. It amounts to only approximately 2c a litre of petrol, 3c a packet of cigarettes and 3c a bottle of beer. They are the sacrifices that the commuity is making to pay for the Government program . Elsewhere in the revenue program the Government has indicated that it will be cracking down further in respect of the application of section 26A of the Income Tax Assessment Act to ensure that tax now being avoided will be recovered. I am particularly pleased that for the first time profits derived from the sale of bonus shares and rights issues will be taxed. This area has been long neglected and it is timely that those who benefit in this way should be required to pay tax. I am also pleased to see that the bottom of the harbour legislation is being resubmitted to Parliament. Overall, total Budget outlays are up by 15.8 per cent, while revenues are to grow by barely half of that figure, or 8.6 per cent. As a matter of interest, under this particular Budget the proportion of receipts in relation to the level of gross domestic product is to decline. It is to be reduced from last year's figure of 27.7 per cent under the Fraser Government to 27 per cent this year-the lowest figure for several years. As is on record the overall deficit will be a record $8.4 billion, compared with the $4.4 billion unplanned deficit of last year. In analysing the impact of the Budget on the economy we should look at the domestic deficit because that is the one which actually affects the flow of income and expenditure in the local economy. As compared with an overall deficit of $8.4 billion, the domestic deficit this year is about $5.7 billion. That should involve quite significant stimulation of the Australian economy. I am very pleased that the Budget incorporates a number of redistributive items . The Budget begins the process of redistributing income and wealth in Australia and provides more assistance to needy schools. I am sure that the participation and equity scheme in education will help lower income families in particular. The Budget foreshadowed an assets test for wealthy pensioners. It increases the unemployment benefit. The Budget provides increased sickness and unemployment benefits payments to certain families with children. It provides a very large increase in public housing outlays. Quite significantly, the home ownership schemes provided by the Commonwealth Government are to be means tested. I am sure that will enable the funds to be focused more on the neediest families. The community employment program will focus on the longer term unemployed and also on areas of high unemployment. The Medicare package will ensure that more lower income families pay nothing for health care in Australia. On the revenue side, the share dividend rebate has been abolished. As I have indicated, bonus shares and rights issues will be taxed. That will certainly assist in redistributing income towards lower income people. Of course, one of the keys to redistribution in the modern economy is to get inflation down, because inflation is the greatest cause of maldistribution of resources. Because low income households tend to hold their savings in bank and building society deposits, they tend to be less protected against inflation than those who are more well-to-do who purchase property and other assets which tend to appreciate in price, thereby allowing them to benefit from inflation. It is very important in the modern community to have measures which wind down inflation, because that is the way one brings about a lasting redistribution. The impact of the Budget on the economy can be best examined by looking at the structural Budget deficit. This is the actual impact of the Budget on the economy as such rather than the reverse where we get feedback from the economy on the Budget which clouds the financial figures and makes it difficult to assess the impacts. Compared with 1982-83, the structural Budget deficit-that is , the actual impact of the Budget on the economy-is enormously more expansionary . It can be calculated that, compared with the last financial year, this Budget is adding something like $2,600m extra to the Australian economy. Therefore, it is much more expansionary. It is important to note that the structural deficit this year is actually adding to expenditure in the community. Last financial year it was actually detracting from economic activity. Between 1981-82 and 1982 -83 it was only $800m more expansionary, but this financial year the figure is some $2,600m, which is an enormously more expansionary Budget. It is important to observe that at page 56 of Budget Paper No. 1 the Department of the Treasury stated: There is no doubt that . . . the Budget for 1983-84 is very highly expansionary indeed. I would agree with that statement. It is a very highly expansionary Budget and one which is really needed at this time. The Budget forecast a growth of 5 per cent in real terms in non-farm domestic product from June 1983 to June 1984. That could be higher, of course, with improving farm conditions. I will be interested, as will most honourable senators, in the forthcoming revisions of the value of rural production by the Bureau of Agricultural Economics which, I am sure, will add significantly to the value of farm production. That in turn will add to the estimate for the gross domestic product. The Budget forecasts an increase in employment of 1.5 per cent from June this year to June next year. That is a contrast with the sharp decline which occurred last financial year. From June 1982 to June 1983, employment actually fell by 1.9 per cent in Australia. The Budget not only creates positive employment growth but also will probably result in employment growing by 1 1/2 per cent over the year. On the prices front, it can be estimated that the rate of inflation will be at the most 7 1/2 per cent this financial year. That is quite a departure from the double digit inflation which we experienced last financial year when we saw prices rise by an average of 11.2 per cent over the course of 1982-83. The fall in inflation this financial year will mean that prices in Australia will increase at a rate more in line with prices in the countries with which we compete. That should give some respite to Australia's manufacturing industries. I have been looking at Labor's first Budget in eight years. The Budget is our first step to boost employment in the community. It is the first instalment of the creation of 500,000 jobs which we promised over a three-year period. It is the first move to begin winding back unemployment in the community and it is the beginning of moves to increase fairness and equity in the community. I am sure that this is the first of many Budgets to be brought down by the Labor Government. Senator Sir JOHN CARRICK(New South Wales)(10.57) —Loan Bill (No. 2) is the traditional mechanism which is used each year for raising a loan to bridge the deficit. The deficit is the bottom line of the Budget, the result arising from the total expenditure and the total revenue. It is an indication of the nature of the Budget. Looking at the bottom line, one sees the whole Budget. This year the Budget has been in three instalments. I want to examine those three instalments. First of all, there was the National Economic Summit Conference. It has been said that the Summit was a consensus. The fact is that the Summit was no consensus at all. The Summit, in terms of its budgetary concept, was a determination by the Government and the Australian Council of Trade Unions that option A of the various options put forward by the Government would be adopted. Once the decision was made to use option A, even though the business and community leaders had recommended against it-they wanted to adopt option C or option D-a course was set in terms of the economics and the economy of this country which was quite different from any promise and anything that people believed. The Summit papers said quite clearly that, if a government were to embark upon option A, unemployment, far from falling over three years, would, at the end of three years, be significantly higher. I make that important point. Despite all of the rhetoric of the Budget and the rhetoric over the course of this year the fact is that the Government flew its flag from the mast of option A. Quite apart from the rhetoric, the Summit's own paper said that adopting option A would result in no fall in unemployment over the three years but, in fact, at the end of the three years unemployment would probably rise above the levels which exist now. The Summit was the start of the Budget. I go one step further and say that the next step was the mini-Budget. Those who today say that the latest Budget was a mild and mellow thing have very short memories, because their rhetoric is defeated by the nature of the mini-Budget. Debate interrupted. Teacher Promotion Procedure: Australian Capital Territory The PRESIDENT —Order! It being 11 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator PETER BAUME(New South Wales)(11.01) —Tonight I raise, fairly briefly, a matter concerning a teacher in the Australian Capital Territory who may have been subjected to a little unfairness in an assessment made recently for promotional purposes. I raise the matter tonight, not for any political reasons. There are political matters which I might argue at some other time. Tonight I ask the Minister for Education and Youth Affairs (Senator Ryan), through the Minister for Social Security (Senator Grimes) who is in the chamber, to look at the case and determine whether this government school teacher has received completely fair treatment. The teacher applied for promotion from what is called band one to band two within the Australian Capital Territory Schools Authority. For that promotion to take place an assessment procedure exists whereby the teacher is assessed by a panel of four colleagues. That panel makes its report. That report is required before the teacher can be available for promotion to band two. The difficulty is that this teacher has been active in his opposition to some of the policies of the Australian Teachers Federation. As I said, I could argue some other time the merit or otherwise of these matters. They are relevant tonight only insofar as they reflect upon this teacher's position. He has opposed some of the industrial actions proposed in the Australian Capital Territory. He has been vocal in that opposition and has been public and apparent . He was opposed to the picketing of Radford College; he was opposed to several stop work activities. Everyone in the Australian Capital Territory knows that he has taken this role. It was unfortunate that, when the peer assessment occurred, the panel of four appointed to review him included a person who was a President of the Australian Teachers Federation in the Australian Capital Territory and who is presently the Regional Moderator. That created a difficulty. I do not believe, for one moment, that anyone should automatically be expected to approve someone for promotion. On the other hand, given the background of this teacher's opposition to some of the activities of the Federation, to have this person assessing him immediately created a difficulty. The teacher was assessed. Of the four people who assessed him, three recommended him for promotion to band two; one did not recommend him. The person who did not recommend him for promotion to band two was the former President of the Australian Teachers Federation. He recommended that the teacher be not promoted. It is interesting to look at the promotional eligibility assessment report and see what they had to say about this teacher. The report comes under eight headings: Professional competence; teaching ability; professional relationships with students; professional relationships with staff-I will come back to that; professional relationships with parents and community; specialist contributions in education; organisation and administration; and leadership skills. That looks like a very thorough and proper assessment. I will not weary the Senate except to say that one should read those eight sections and look at the kinds of adjectives used about this teacher and his performance. There are words such as 'outstanding performance', 'active contribution', 'a major contribution to ideas', 'extensive publications', including an outstanding thesis which is used as a reference work, 'a capable teacher', 'an exceptional record of community involvement', 'outstanding in promotion of professional development of teachers' and 'highly suitable for promotion'. These are the kinds of remarks that appear in the assessment. At the end of the assessment three of the panel have recommended to the Chief Education Officer that the teacher be given eligibility to apply for promotion to positions requiring band two eligibility from 1 January 1984. One person does not so recommend. I will not name the teacher, but the person who did not recommend appointment, in giving his reasons, stated: Although Mr . . . possesses many of the qualities required of a Band two officer, questions have been raised during his assessment about his professional relationships with staff, and, as a consequence, his possession of leadership qualities at an acceptable level. I believe Mr . . . should not be granted Band two eligibility at this time. My decision is based on the evidence that has been provided by a significant number of Mr . . . colleagues of perceived inappropriate professional behaviour (referred to in Section 4 of the Promotional Eligibility Assessment), and from my consideration of that evidence alongside the level of performance in staff professional relations demanded of the other 1983 applicants for Band 2 eligibility across the Service who have been recommended for that eligibility. In view of that comment I went back to section 4 and read what the panel said. Was there any evidence there that would lead me to say that this person was not suitable for promotion? Under that part of the assessment a number of very positive things were said. I will not take the time of the Senate. I will make this document available to the Minister if she wishes. The only part that I wish to read states: It is in pursuing his interest in educational matters that Mr . . . at times, displays a degree of enthusiasm that is not always shared by some of his peers. In accordance with his open education philosophy he speaks on issues and presents information, often with a frequency and determination which some colleagues find irritating. They perceive his behaviour in these situations as inappropriate. Mr . . . has made a genuine effort to alter his actions in this regard. There has been a major improvement in this area, particularly in 1983, although some staff still maintain their past reservations. I find myself in some difficulty. A person has come to me because he is concerned that he may have been treated inappropriately during an assessment procedure. There are some features about the case that would give one cause for concern. One would not like to think that disagreements or bad blood which may have developed in the past between a union member and union officials could be carried over into an assessment procedure. On the surface, the assessment document seems to be that of an outstanding teacher. I know that if this were an application I received from someone seeking employment, I would have been highly impressed. It was written by members of the assessment panel, and each page was initialled by each one of them. So it was an agreed statement. I would not like to think that this teacher had been inappropriately treated, that a veto by one of the panel might affect his professional advancement or might cause him, as he goes through a review procedure, to lose the satisfaction of promotion for nine to 12 months and that he would have on his record this adverse assessment which may remain for all time. The difficulty is that I do not like ex parte judgments. Senator Grimes —Was he promoted? Senator PETER BAUME —He now has to go through a procedure to review this decision. No, he has not been promoted. Senator Grimes —So there was a three to one decision and he was not promoted. Senator PETER BAUME —There was a three to one decision in favour of his promotion and, as I understand it, he was not able to apply for eligibility. I say to the Minister that it is an ex parte situation. I have not heard the other side. There may be another side to the story. One has to be just. As I said, we could argue in another debate about his role qua the Australian Teachers Federation. That is not really important tonight. I am concerned that the Minister look carefully to this matter and determine for herself whether there seem to be sufficient grounds for this person to have had one adverse report or whether the circumstances might warrant the Minister taking a personal interest in the matter and perhaps seeing whether this teacher has had all the justice which every teacher in the Australian Capital Territory Schools Authority should have on a matter as important to them as eligibility to apply for a promotion. If the Minister for Social Security will undertake to have Senator Ryan look at this matter, I will be grateful to lend any assistance that I can. Senator GRIMES(Tasmania-Minister for Social Security)(11.10) —As Senator Peter Baume said, this is a matter which should be referred to the Minister for Education and Youth Affairs (Senator Ryan). In many cases like this one cannot make a judgment on hearing only one side of the case. I will certainly refer the matter to the Minister and ensure that a reply is given to Senator Baume as soon as possible. Question resolved in the affirmative. Senate adjourned at 11.10 p.m. The following answers to questions were circulated: Question No. 15 Senator Bolkus asked the Minister representing the Minister for Finance, upon notice, on 21 April 1983: (1) Has the Commissioner of Taxation in the United Kingdom recently been given power to: (a) enter and search premises where there are reasonable grounds for suspecting an offence involving tax fraud; (b) call for books, accounts and other documents either from the taxpayer or from certain other persons; and (c) require any tax accountant, who is convicted of certain tax offences after 30 July 1976, to produce documents which relate to any of his clients' affairs. (2) Will the Government investigate the need for such power to be given to the Australian Taxation Commissioner. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1)(a), (b) and (c). Yes. the powers were given to the Inland Revenue Commissioners in 1976. (2) The Commissioner of Taxation in Australia has corresponding powers and, indeed, revenue officials of the United Kingdom are known to have taken the Australian provisions into consideration in formulating laws and what would be appropriate in their country. In relation to the power described in (1)(a), section 263 of the Income Tax Assessment Act empowers the Commissioner or an authorised officer to have at all times full and free access to all buildings, places, books, documents and other papers for any of the purposes of the Act and , for that purpose, to make extracts from, or copies of, any such books, documents or papers. In addition to section 263, recourse may be had to section 10 of the Commonwealth Crimes Act which provides that a Justice of the Peace, upon being satisfied by information on oath that there are reasonable grounds for suspecting that there is in any place anything that will afford evidence as to the commission of any offence against the laws of the Commonwealth, may grant a search warrant authorising a constable of police to enter a place and search and seize any such thing. Section 10 is not limited to tax fraud but extends to all offences against the Commonwealth. In relation to the powers described in (1)(b) and (c), section 264 of the Income Tax Assessment Act empowers the Commissioner to require by notice in writing, any person, whether a taxpayer or not, inter alia, to attend and give evidence concerning his or any other person's income or assessment and to produce all books, documents and other papers relating thereto of which the person has custody or control. Question No. 125 Senator Jones asked the Minister for Education, upon notice, on 4 May 1983: Are full-time students eligible for sickness benefit in lieu of TEAS allowance if they suffer an extended illness during their course of study but return to, and complete, their studies in the same academic year; if not, what other means of support are available to students when illness causes temporary interruption to their studies. Senator Ryan —The answer to the honourable senator's question is as follows: Students who suffer illness during a year of study may continue to receive TEAS allowance provided that they are not obliged to discontinue their courses because of the length and severity of their illness. This is in keeping with the provisions of the Student Assistance Act which permits the payment of TEAS benefits only to full-time students. Sickness benefit is an income support payment which is essentially designed to assist members of the workforce who become too sick to work and thereby suffer a loss of wages or other earned income. Under the present provisions of the law it is not payable to a student who temporarily loses an education allowance because he or she becomes too sick to study. I am aware that as a result of these arrangements some people may find themselves without support from either scheme. The provision of appropriate support for people in these circumstances is currently being considered by my Department in conjunction with the Department of Social Security. Question No. 283 Senator Bolkus asked the Minister representing the Minister for Defence, upon notice, on 23 August 1983: Are any plans or arrangements being made to facilitate the landing of the USA B52 aeroplanes at Woomera in South Australia, if so, what are such plans and arrangements. Senator Evans —The Minister for Defence has provided the following answer to the honourable senator's question: No plans or arrangements are being made for US B52 aircraft to land at Woomera. Question No. 293 Senator Colston asked the Minister representing the Minister for Finance, upon notice, on 23 August 1983: Will payroll deductions remain available for hospital and medical benefits funds when Medicare is introduced; if so, will consideration be given at that stage to provide similar facilities for payments made to the Queensland Ambulance Transport Brigade (QATB). Senator Walsh —The Minister for Finance has provided the following answer to the honourable senator's question: No change is contemplated in the arrangements under which Commonwealth employees can have their contributions to health insurance organisations deducted from their pay. The introduction of Medicare has no bearing on the policy of payroll deductions. Under existing arrangements the groups or categories of groups granted access to Commonwealth Departmental Pay Systems for payroll deductions are limited. Health insurance organisations is a group which has traditionally enjoyed access while Ambulance Funds, such as the QATB, are excluded. The access policy has its origins, primarily, in the inability of manual and the initial ADP systems to acommodate a comprehensive range of groups. There have been significant developments in ADP technology in the intervening years and the Department of Finance is now undertaking a comprehensive review of the policy relating to payroll deductions. At this stage, it is too early to predict the outcome of that review and whether an expanded range of organisations ( including organisations such as QATB) might be permitted acess to payroll deductions from Commonwealth payrolls. If modification of the policy along such lines proves to be feasible, an appropriate circular would be issued to departments and authorities to advise them of the change. Senator Walsh —On 18 May 1983 (Hansard page 522) Senator Harradine asked the Minister representing the Treasurer, without notice: Is it not a fact that the Bank Account Debits Tax Administration Act exempts debits made to accounts in the name of non-profit schools but this exemption does not extend to support bodies associated with the schools? Is this not a tax on the efforts of such organisations as parents and friends organisations which are designed to provide educational aids for the schools which are exempt under the Act? If so, what does the Government intend to do about it? The Treasurer has provided the following answer to the honourable senator's question: Legislation governing the bank account debits tax provides exemptions for debits to accounts of certain organisations, including non-profit schools, colleges and universities. A debit to a cheque account operated by these bodies is exempt from the tax provided the debit relates to a transaction carried out wholly and exclusively in furtherance of the objects of the body. Debits made to a cheque account operated in the name of a support body of a school or college, such as a parents and citizens association or other parent body, do not come within the ambit of the exemption which the law currently provides. The Government has undertaken to review the operation of this tax, including the appropriateness or otherwise of the exemptions contained in the law, after it has been in operation for approximately 6 months. Many representations have been received from school support organisations and other non-profit bodies in the community seeking exemption from the tax and these will be carefully considered in the course of the review. Senator Gareth Evans —On 24 August 1983 (Hansard page 132) Senator Mason asked me, as Minister representing the Minister for Defence, without notice: I ask: Will the Government make an immediate approach to the Indonesian Government for an absolute guarantee that no items included in Australian military aid to Indonesia will be used against the people of East Timor? Will the Government, while still pressing for an act of self-determination in East Timor, seek as an interim measure a full and permanent amnesty for those Timorese who have opposed the Indonesian invasion? Will the Government seek, through the good offices of the United Nations and with the concurrence of the Indonesian and other interested governments, an open door for a comprehensive pattern of aid for East Timor in the form of both money and expertise that would enable it to become a prosperous and viable society? If that last objective could be achieved, and I believe it could, can that be on the basis of normal disclosure of events in East Timor being permitted by the Indonesian Government so that world opinon can be satisfied as to the intentions of Indonesia in regard to East Timor? The Minister for Foreign Affairs has provided the following answer to those parts of the honourable senator's question which fall within his area of responsibility: The Indonesian Government has been offering amnesty to Fretilin guerillas and their supporters since December 1977. The most recent offer was made in July of this year. The Indonesian authorities have emphasised that reprisals will not be taken against those who accept the amnesty offer. While precise information on the number of people who have availed themselves of the amnesty is not available , the policy has had some success in encouraging people to leave the mountains and return to a more normal way of life. The reduction in the number of Fretilin sympathisers detained on Atauro Island is similarly to be welcomed. At the end of April 1983, 2,800 detainees were still on Atauro-against an initial population of around 5,000. The bulk of these detainees have been resettled in their former villages or in other villages on the mainland. It is hoped that the remaining detainees on Atauro will be transferred to the mainland by the end of the year. The Australian Government welcomes the efforts at reconciliation that have been made in East Timor by Governor Mario Carrascalao. It is therefore with regret that the Government learned of the attack on 8 April on an Indonesian garrison near Dilor in which 12-15 Indonesian solders were killed. The Government believes that a resumption of military hostilities in East Timor would represent a step backwards in the search for a lasting peace. The Government therefore urges restraint so that the process of peaceful contact can be given a chance to succeed. As regards the establishment of an 'open door' policy for the provision of international aid to East Timor, it should be noted that the International Committee of the Red Cross, UNICEF, The U.S. Catholic Relief Services and the Australian Government have been providing aid to East Timor for many years. For example, Australian Government assistance since September 1975 amounts to $7.7m. The most recent contribution, amounting to $1.5m, was announced by the Prime Minister in June. While the Government sees advantages in Senator Mason's suggestion, the Indonesian authorities have to date preferred to initiate their own development budget of US$83m in 1982-83, and to limit outside assistance to support for humanitarian relief programs delivered through international relief agencies and some voluntary organisations. A number of recent visitors to East Timor, including an Australian Parliamentary Delegation, have attested to the considerable economic and social progress that has been achieved in recent years . The Government has welcomed the fact that in recent years the Indonesian authorities have permitted an increasing number of visitors to East Timor. While wishing to see this continue, the Government recognises that the question of access is ultimately one for the Indonesian authorities to decide. In this context, the Government welcomes the recent visit to East Timor of an Australian Parliamentary Delegation and the exellent arrangements that were made for the delegation to enable it to travel so widely in East Timor.