Wednesday, 21 September 1983 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Clerk-Petitions have been lodged for presentation as follows: Nuclear Disarmament 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. You 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 Commonealth 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 66 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 method of application and collection. And your petitioners as in duty bound will ever pray. by Senators Lewis (from 131 citizens) and Messner (from 223 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 initiative 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 137 citizens). Petitions received. Senator TATE(Tasmania) —by leave-I make this personal explanation as Chairman of the Senate Standing Committee for the Scrutiny of Bills. Last night on the PM and Nationwide programs on the Australian Broadcasting Corporation, Mrs Babette Francis, in the course of a vigorous exchange on the Sex Discrimination Bill, used the report of the Scrutiny of Bills Committee on that Bill as part of her argument. Naturally, neither I nor the Committee have any objection to that. In fact, we are pleased when any such report is used to foster community discussion of legislative proposals which are before this Parliament. But I think the report has been construed to do more than it set out to do. I should like to offer some clarification. The first thing for clarification ought to be the composition of the Committee. Mrs Francis said that the Committee had a majority of Australian Labor Party members, at least to her belief. In fact, it does not have a majority of Labor members. It is, as is appropriate to its function, comprised in a way which does not allow any particular party to have a majority. In fact, the composition of the Committee at the time of the preparation of the report on the Sex Discrimination Bill was Senator Tate as Chairman, Senator Alan Missen as Deputy Chairman, Senator Nick Bolkus, Senator Rosemary Crowley, Senator the Hon. Peter Durack and Senator Janine Haines. A true appreciation of the function of the Committee and an examination of its report on the Sex Discrimination Bill would not entitle one to say, as Mrs Francis said, that the Committee referred to this Bill as a threat to civil liberties. The Committee's role or task is to alert senators to particular clauses in any Bill coming into this chamber for debate where arguably there might be some clash between a particular provision and certain civil liberties criteria. Several such clauses of the Sex Discrimination Bill were identified by the Committee. Using language appropriate to alerting senators to the possibility of a clash, we outlined some misgivings. No definitive conclusion or recommendation concerning any of these particular clauses was made. Certainly it would be quite wrong to draw any inference as to the Committee's assessment of the Bill as a whole. Any thorough-going condemnation or commendation of a Bill would be quite alien to our purpose. Unlike some Bills which are given hasty passage through the Parliament, this Bill has been exposed for public comment over several months. It was in that spirit that the Scrutiny of Bills Committee offered its comments and expects a response from the Minister for Education and Youth Affairs and Minister Assisting the Prime Minister for the Status of Women (Senator Ryan). Motions (by Senator Gareth Evans) agreed to: That leave be given to introduce a Bill for an Act to alter the Constitution so as to ensure that Senate elections and House of Representatives elections are held at the same time. That leave be given to introduce a Bill for an Act to alter the Constitution to extend the duration of the House of Representatives and the terms of service of senators. Bills presented. Motion (by Senator Gareth Evans) 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 Committee of the Whole. Bills read a first time. Standing Orders suspended. Second Readings Senator GARETH EVANS(Victoria-Attorney-General)(10.06) —I move: That the Bills be now read a second time. INTRODUCTION These two Bills will give effect to proposed changes to the Constitution endorsed by the Australian Constitutional Convention at its meeting in Adelaide earlier this year. The first will alter the Constitution to provide for the holding of simultaneous elections for the House of Representatives and half the Senate. The second provides for four-year terms for the House of Representatives . They are proposed in substitution for the Constitution Alteration (Fixed Term Parliaments) Bill which I introduced into the Senate on 12 May 1983. Since that Bill was introduced, the Government has given further consideration to the package of referendum proposals designed to streamline and modernise the machinery of the Australian Government which it believes should be put to referendum early in 1984. Without resiling in any way from the view that the fixed term Parliament proposal would have important benefits as an acceptable solution to some of our more intransigent constitutional problems, the Government has come to the view that it is preferable that the proposals relating to parliamentary terms which were endorsed at the Adelaide meeting of the Constitutional Convention should be put to the people. There has been no consensus in favour of the fixed term proposal but, by contrast, the proposals for simultaneous elections and four-year terms have both previously attracted strong support from the present Opposition. The most unequivocal recent declaration of that support was the announcement by the former Prime Minister, Mr Fraser, on 7 February that, if re-elected, his Government would itself put both of them to referendum as soon as possible. Although the two proposals are more modest in their concept and scope than the fixed term proposal, they would significantly improve the operation of government by creating the conditions for fewer elections, better long term planning and a more rational political climate generally. There is no doubt that the present electoral arrangements have resulted in Australia being plagued with too frequent elections. The average term of Parliaments post-war has been two years five months, and in the 14-year period from 1963 to 1977 there were no fewer than 10 separate national elections. There has been increasing community dissatisfaction about the lack of sufficient continuity and stability in government, with a resultant atmosphere of uncertainty and controversy and strong pressure on governments to adopt short term expedient policies to ensure electoral success. There has been greater recognition of the need for governments to have sufficient time betwen elections to develop new policy proposals, to put them into operation and to assess their results. Particularly in the area of economic management, measures can take several years to develop and to implement fully. Moreover, governments which must face frequent elections are at a disadvantage when proper economic management calls for the implementation of initially unpopular measures, the beneficial result of which may take some time to emerge. Frequent elections not only have an adverse effect upon government planning; they also adversely affect private sector planning and business confidence, which would benefit from stability of government and more continuity in government programs. And, not least, there would be less cost and less inconvenience to the electorate if there were fewer elections. Both of the measures now proposed will contribute to the desirable aim of a more rational system of national government. The simultaneous holding of elections for the House of Representatives and half the Senate will avoid the need for separate elections. Apart from the special circumstances of the double dissolutions in 1974 and 1975, elections for the Senate and the House of Representatives have been out of phase for the greater part of the last 20 years. They are again out of phase following the double dissolution election earlier this year. The move to simultaneous elections will ensure that the composition of the Senate at any given time more accurately reflects the current wishes of the people. It will also provide greater accountability of the Senate to the extent that senators themselves will have to face the people if the Senate forces a premature House of Representatives election. But the proposal does not otherwise affect the powers of the Senate, which will retain all of its present power to review, amend or reject legislation. The lengthening of the term of the House of Representatives to four years is consistent with the terms of the lower Houses in New South Wales, Tasmania and the Northern Territory and with developments in other States. Two Bills, one Government sponsored and one Opposition sponsored, providing for four year terms are now before the Victorian Parliament. It is also in line with international standards. A study made in 1974 by the Inter- Parliamentary Union of the duration of the lower Houses in 56 countries showed that in 24 there was a five-year term, in 25 a four-year term, with Australia being one of only four countries with a three-year term. The four-year term proposal will preserve the existing discretion of the Prime Minister to call an earlier election. Nevertheless, the change will provide greater continuity and stability in the electoral cycle, since the average length of parliaments may be expected to increase substantially. The present three-year election cycle, in which-for governments of any colour-the first year tends to be taken up with planning and with implementing immediate election promises and the third year with electioneering, does not allow sufficient room for the development and implementation of programs. Increasingly, new programs call for capital expenditure, particularly in the installation of equipment such as computers, which cannot be accomplished quickly, and more time is required for this to be put in place and the program to be operating for its benefits to be assessed by the electorate at the next election. Although both the simultaneous elections and the four-year term proposals are directed to eliminating the undue frequency of elections the Government believes that the electorate should be given an opportunity to vote separately on each of the proposals. For that reason we put them forward as separate proposals, but we do of course believe that adoption of both proposals is desirable. I turn now to consider each of the proposals in more detail. SIMULTANEOUS ELECTIONS BILL This Bill provides for half-Senate elections to be held at the same time as elections for the House of Representatives whenever those elections may occur. The proposal in the Bill is substantially the same as the one submitted to referendum by the Whitlam Government in 1974 and by the Fraser Government in 1977. In 1977 the proposal only narrowly failed to obtain the required support, when it achieved fully 62.2 per cent of the national vote. It was clearly passed in New South Wales, Victoria and South Australia and was supported by 48.5 per cent of the voters in Western Australia and 47.5 per cent in Queensland. Senator Harradine —How many in Tasmania? Senator GARETH EVANS —I readily concede, Senator Harradine, there were not all that many in Tasmania. No doubt you will have another opportunity to demonstrate that once again. The Bill proposes a re-writing of section 13 of the Constitution to provide for senators to hold office normally for two terms of the House of Representatives instead of for six years as at present. This will, of course, be subject to any earlier double dissolution of both Houses that might take place under section 57 of the Constitution. An incidental, but significant, feature of the proposed new section 13 is the provision which it makes for determining which senators should be long term and which should be short term following a double dissolution. It will establish and entrench the principle, based on the existing procedure, that the terms allotted to senators should accord with the relative order of their success at the double dissolution election. This accords with the unanimous opinion of the Constitutional Convention at its Adelaide meeting and a recommendation by the Joint Select Committee on Electoral Reform in its report tabled last week. The precise means by which the relative success of senators at the double dissolution election is to be established will be a matter for the Parliament or , in the absence of legislation on the matter, for the Senate. The proposals in the Bill would allow the Parliament to adopt the particular procedure recommended by the Joint Select Committee on Electoral Reform. Proposed new section 13 also deals with the case where a senator dies, resigns or becomes disqualified before the division of senators into two classes takes place. The point is expressly covered by a specific provision requiring the division to be made as if the place of the senator had not become vacant. The new section 13 contains transitional provisions relating to senators holding office at the time when the amendments take effect. Subject to any double dissolution which might take place, the effect of these provisions will be as follows: Senators whose terms are due to expire on 30 June 1985 will hold office until the first expiry or dissolution of the House of Representatives after the commencement of the amendment; Senators whose terms are due to expire on 30 June 1988 will hold office until the second expiry or dissolution of the House of Representatives after the amendment takes effect. There are a number of other incidental and consequential matters covered by the Bill. Section 9 of the Constitution will be amended to empower this Parliament, rather than the State parliaments, to make laws determining the times and places of electing senators. This is the logical consequence of bringing elections for both Houses of the Parliament together. The Bill will also make two other consequential changes, one to section 12 of the Constitution and the other to section 57 of the Constitution. Section 12 of the Constitution, as it now exists, provides for State Governors to cause writs to be issued for the election of State senators. Where the election follows a double dissolution, the writs must be issued within 10 days after the proclamation of the dissolution. The proposed new section 12 will place a like obligation on a State Governor to cause a writ to be issued for the election of senators at a half-Senate election within 10 days of the expiry of the term of the retiring senators. The amendment to section 57 will expressly provide for an election of senators to be held on the same day as the general election of members of the House of Representatives next following a double dissolution. This will remove one ground of criticism of the 1977 Simultaneous Elections Bill, namely, that whatever may have been its intent it did not in fact require simultaneous elections to be held. PARLIAMENTARY TERMS BILL This Bill proposes to amend the Constitution first by extending from 3 years to 4 years the maximum term of the House of Representatives and, secondly, by increasing the fixed terms of senators from 6 years to 8 years. Where a double dissolution occurs, the terms of all senators holding office at the time of the double dissolution would be cut short and, following the ensuing election, half of the senators for States would have terms of 4 years while the remainder of the State senators would have 8 year terms. In the event that the simultaneous elections proposal is also passed, so that senators' terms coincide with those of members of the House of Representatives, the amendment is written in such a way that the fixed 8-year Senate term becomes a maximum 8-year term. The proposals will not affect the terms of office of the present members of the House of Representatives or, accordingly, the term of office of the present Government. Those elected at the first election of the House of Representatives following the commencement of the amendments will be elected for 4-year terms instead of 3-year terms. The first senators to be elected for an 8-year term will be those elected at the first Senate election occurring after the commencement of the amendments. Special provision is made for senators holding office at the commencement of the amendments. Those senators elected on 5 March 1983 and whose terms of office now expire on 30 June 1985 will have their terms extended to 30 June 1986. Those long-term senators, also elected on 5 March 1983 but whose terms now expire on 30 June 1988, will have their terms extended to 30 June 1990. In each case, the extension is subject to any earlier double dissolution of the Senate. These provisions are necessary to maintain the Senate rotation system of a half-Senate election every 4 years and to bring the half-Senate elections reasonably into phase with the expected House of Representatives elections. Otherwise, a half- Senate election would be due before the middle of 1985 whereas the next House of Representatives election is not due until the first half of 1986. In the absence of provisions of this kind, even the holding of an early House of Representatives election in late 1984 or early 1985 would not serve to keep the House of Representatives and Senate elections in phase without either an indefinite number of subsequent early elections, which would entirely defeat the purpose of the 4-year term proposal, or else frequent national elections with half-Senate elections taking place between successive House of Representatives elections. The proposed transitional provision, at the cost of a modest extension of the terms of the present senators, makes possible the synchronisation of elections for the two Houses for the foreseeable future. Of course, the difficulty does not arise if the simultaneous elections proposal is accepted. In that case, the transitional provisions relating to existing senators will not come into effect. This will be achieved by clause 5 of the Parliamentary Terms Bill. CONCLUSION The Government intends to withdraw the fixed term proposal but proceed with the three other measures now before the Senate, namely, the amendments to provide for interchange of powers between the Commonwealth and the States, the giving of advisory opinions by the High Court and the removal of obsolete and expended provisions from the Constitution. These three measures, together with the two which I am now introducing, will provide a package comprising all of the machinery of government proposals which have received either unanimous or strong majority cross-party support at the Australian Constitutional Convention. They should, if consistency counts for anything in politics, continue to attract cross-party support. None of the proposals involves the Commonwealth in any attempt to acquire new powers at the expense of the States. Indeed, the proposal for interchange of powers should provide for better co-operative arrangements between the Commonwealth and the States. The decision of the High Court of Australia in the recent Victorian Pipelines case has emphasised the inflexibility of some of the existing provisions of the Constitution in financial matters and the desirability, accordingly, of adopting the interchange of powers proposal as a basis for negotiations on these and other matters. It is the Government's intention that all five constitutional change proposals now before the Parliament be debated and passed by both Houses this session, and put to referendum on 25 February 1984. I commend the Bills to the Senate. Debate (on motion by Senator Durack) adjourned. Discharge of Order of the Day Senator GARETH EVANS(Victoria-Attorney-General) —by leave-I move: That Government Business, Order of the Day No. 32, Constitution Alteration ( Fixed Term Parliaments) Bill 1983, be discharged from the Notice Paper. I do so more in sorrow than in anger. Senator MISSEN(Victoria)(10.22) —I do not oppose this motion, because if the Government desires to change its course in mid-stream, to go elsewhere and make foolish errors, we cannot stop it from doing so, but I think some comment should be made about what is being done. Senator Evans has told us this morning that what he is putting forward is a second-best proposal rather than the fixed term proposal of which he was an advocate, of which I was and continue to be an advocate and which I regard as the best solution. I know that he has been overborne in his Caucus by the pragmatists of his Party, those apparatchiks who have now managed to persuade the Australian Labor Party that what it needs is not to remove the Prime Minister's prerogative of having elections when he wants to, which is the very thing we need to get out of this Constitution, but to have a four-year term, which leaves the Prime Minister with that iniquitous right. There were always alternatives. In 1977 we endeavoured to get something like this. I agree that the proposal being put forward now is better and picks up one or two things that were used against the concept in 1977. I warn him against putting his faith in princes-the people who went to the Australian Constitutional Convention and who there said that they would support these proposals. I wonder how many of them, when they went home, had already decided that they would oppose these Bills. I think he will still have a difficult course. I certainly recognise this as a second-best proposal but a proposal which I support. I campaigned for it vigorously in 1977, and I will campaign for it vigorously again. It is not the best solution. The Labor Party will have ultimately to come around to the view that it must get back to fixed terms. That should have been number one off the ranks and now it will obviously be number two off the ranks. Senator Chipp —Well, why not vote against this motion? Senator MISSEN —We cannot stop this proposal going forward if this is what the Government wants to do. If it is not willing to continue with the fixed terms which the many of us have supported I am afraid that it has to take the carriage of this matter. It certainly would be an improvement, but it is only one part of the package. The most important part of the package should have come first. I say to the apparatchiks who have succeeded in this matter: I hope they now get their State organisations to get behind the proposal and do not once again dump the Attorney-General (Senator Gareth Evans) and others by sabotaging these proposals. I see that I have not exactly offended the Attorney-General, with whom I know my words will strike some sympathetic chord. Nonetheless, I just want to warn him not to take for his assurance that he will have the sort of support that was necessarily given in the Constitutional Convention but that his second best and more modest proposal, though it may have the support of those who supported his less modest proposal, is one that he will still have to fight for. I will not oppose the motion. Senator MACKLIN(Queensland)(10.25) — The Australian Democrats will oppose the motion to discharge the Constitution Alteration (Fixed Term Parliaments) Bill 1983 from the Notice Paper. This fixed term proposal legislation is a major constitutional reform. I think it is one of the most important pieces of constitutional legislation to come forward in this Parliament for quite some time. The so-called substitutes that the Attorney-General (Senator Gareth Evans) has talked about merely tinker again with the system. May I quote the authority that the Attorney-General quoted. Mr Fraser suggested that we ought to hold the two referenda that the Attorney-General has now introduced. A newspaper article dated 8 February 1983 stated: But Mr Fraser acknowledged yesterday that his referendum would in no way prevent the Prime Minister calling an early election whenever he wanted. Indeed, the referendum will facilitate this Prime Ministerial power because it removes any subsequent difficulties in the form of a half-Senate election. That is a very interesting admission about the authority upon which the Attorney -General now relies. According to the article, the present Attorney-General made the following statement at the time the previous Prime Minister made his announcement: 'There is no question of Labor supporting a four-year simultaneous election referendum unless it also provides for fixed terms. 'Under this proposal elections could still be held at two-yearly intervals.' The article continued: Senator Evans said a basic flaw in the present system was the capacity of Prime Ministers to call elections whenever they wanted. Yet now we have precisely a situation in which we have dropped the major reform to try to get the simultaneous election proposal that the present Attorney- General championed here while in opposition. Now, in government, unfortunately this reform is to be jettisoned and we are to have it replaced by two referenda proposed by what another Minister here has called the discredited previous Liberal Prime Minister. Indeed, I think today is a sorry day for constitutional reform. I will support the other two proposals. However, I must admit that I am not at all enthusiastic about them-I cannot see them doing terribly much-but at least they might go some way, particularly the simultaneous elections proposal, to rectifying the situation. I suggest we have lost an opportunity to put to the people, not to this House-the proposals would have passed this House and the other place-a proposition of fixed terms to remove that prime ministerial power. I think that in a democracy the people have the prerogative to make a deliberation on a major proposal that has been floated now for some years, whether or not the proposal was supported by the Constitutional Convention. As I said, I think this is a sorry day for constitutional reform. I hope that at some stage in the future a government will be willing to bite the bullet on this issue and go to the people and ask them for their deliberation on this extremely important question. Senator LEWIS(Victoria)(10.29) —I support the motion. I note that when this legislation was last before the Senate I did not get the chance to finish what I was saying on that occasion. I will not endeavour to do so at this stage. I must say that this is not a sorry day for those who have taken any interest at all in this constitutional proposal. I congratulate those members of the Australian Labor Party who have finally applied their minds to the Constitution Alteration (Fixed Term Parliaments) Bill as it was presented to the Parliament. The Bill did not create fixed terms. Because the words 'fixed terms' were in the title, everyone seemed to believe that this Bill in some way or other created a fixed term. It did no such thing. It determined that every three years there would be an election on a particular day, in addition to any other elections which might be called by the House of Representatives prior to that election. In effect, all it did was to take away from the Senate and the Governor-General the present controlling provisions and place the calling of elections totally in the hands of the House of Representatives which, of course, meant totally in control of the government of the day. How that could be described as a constitutional reform by those who applied their minds to this subject is totally beyond me. I thoroughly support the motion. Senator DURACK(Western Australia)(10.31) —The Opposition will, of course, support this motion. I note that Senator Missen strongly supports a view contrary to the official Opposition view on this matter. I am very pleased indeed, as is Senator Lewis, to see the demise of this proposal. It is one which has always greatly troubled me. We opposed it when it was first put forward by Senator Evans when he was in opposition and we were in government. We have continued to oppose it. I put down the Opposition's view on this measure when it was introduced by the Attorney-General (Senator Gareth Evans) in May. I do not propose to re-open that debate. I adopt the view taken by Senator Lewis this morning on this issue. But I also wish to say that the proposal was put forward by Senator Evans and the present Government in two guises. It was put forward as their solution to what they perceived to be the problems of 1975. They saw it as an indirect way of weakening the power of the Senate. I always had great doubts about whether it would have worked that way, but that was what it was designed to do. Its merits were very hard to detect except that, clearly for the purposes of the last election campaign, it was seen to have some political merit at the time because of the feeling in the community that there were too many elections. It was presented as a fixed term proposal to attract support from people in the electorate who were worried about the frequency of federal elections. That is now proved to have been a cynical exercise by the Prime Minister (Mr Hawke) and the Government at the time of the election. The Government traded on that concern. After being in government for only a short time, it has abandoned the Bill. Although I thoroughly support that decision, and indeed am very thankful for it , nevertheless I cannot avoid commenting on the way in which the Government has handled this matter. It is not only a very great rebuff for the Attorney-General , who had made such a major issue of this proposal when in opposition, in the election campaign and again in government, but also it is a very sorry day for the Goverment and for the political process in this country when a proposal of this kind can be put forward in an election campaign as one of the high flying policies of that party when in opposition, as the Australian Labor Party then was during the election campaign, and then be abandoned so shortly afterwards in such a very public and dramatic way. Nevertheless, as I have said, this proposal was never put forward openly and honestly as a genuine fixed term proposal. It was put forward for other reasons. It was a purely academic solution which took no account, or very little account, of the way in which the parliamentary democracy in this country operates. It would not, as Senator Lewis clearly indicated, have provided a fixed term. In fact the result of the legislation probably would have been more elections rather than fewer elections. As I said, I do not want to redebate the matter now . I simply express my great satisfaction in the fact that the proposal, which would have been quite unworkable, has been withdrawn. Senator CHIPP(Victoria-Leader of the Australian Democrats)(10.35) —The Senate is debating a motion moved by the Attorney-General (Senator Gareth Evans) which gives moment to the decision of the Government to change its decision to allow the people to vote at a referendum. The question that the Government originally proposed was that the decision to hold early elections would be taken out of the hands of politicians who would do it for pure party political purposes and would give the people some rights for a change, namely, that the terms of parliament should be fixed. Senator Missen —The poll showed about 75 per cent were for it too. Senator CHIPP —I thank Senator Missen for his interjection. It was a commendable view. I commend the Attorney-General for his courage and the strength with which he fought for so many years-he fought for it also in Cabinet-for this constitutional reform. I score no points off Senator Gareth Evans this morning because he has been a credit to constitutional reform. He has been a credit to his party in trying to bring about this reform. The Australian Democrats will vote against this motion because we believe at the very least that the people ought to have a chance to vote. For the moment let us assume that what Senator Durack and what Senator Lewis of the Liberal Party have said has some logic in it. Senator Hamer —That is a very wild assumption. Senator CHIPP —That helpful interjection will be recorded in Hansard and I point out that it was made by an honourable senator from the Opposition. I will not embarrass the honourable senator who said it but he suggested that my comment about assuming that there was some logic in what Senator Lewis said was a very wild assumption. I put that to one side for the moment. Given that there is logic in the argument put forward by Senator Lewis, he is saying: 'No. We will not allow the people of Australia to express an opinion on this subject'. That is what he is saying. He is not arguing about the substantive matter. He is saying: 'I, Senator Lewis, think it is stupid. We in the Liberal Party think it is stupid and, therefore, it is not worth while giving the people of Australia a chance to vote on it'. That is what this vote is all about. It is not about the substantive issue. Let us look at the record. Senator Durack made what I regard as one of the most extraordinary statements I have heard in this place for a long while when he said: 'A Bill bringing in fixed terms will mean that there are more elections'. That is the sort of logic which confounds me. It may be that to my simple mind those sorts of fundamental truths are too difficult to grasp. If the Constitution is amended so that there will be fixed terms to take away from political leaders the right to go to the people for an election when it suits them, and thus throw the whole economy into instability over a period, it confounds me as to how that might cause more elections. Under the present system , if my counting is correct, in the last 11 years this country has been plunged into six Federal elections-it could be argued that only the 1975 election was caused by reasons other than the whim of the then Prime Minister-by Prime Ministers who decided that for party political purposes the country should go to the polls prematurely. I do not have the exact figures with me but since Federation this country has had an election on average every two years and one month. Every 25 months, or something like that, this country has been plunged into an election because some petty politician who happened to lead a political party at that time said: 'Now is a good time for me to grasp power again. I will go to the people a year early'. Senator Walsh —After what happened to Fraser, they will think twice. Senator CHIPP —That was a goof. Maybe it will teach future Prime Ministers not to treat the people with so much contempt. One could argue that it also happened to a former distinguished Premier of South Australia of a different political persuasion who treated the people with contempt by going over a year early for his own political purposes. Senator Withers —And in Tasmania. Senator CHIPP —And indeed Tasmania. I thank Senator Withers. One might ask whether this is good for the country. I would have thought that a 3-year parliament any term gives a political party that wins government precious little time to rectify the mess in which a previous government might have got the country. In the first year of office, a government tries to rectify some of the basic problems. In the second year it continues on that path. In the third year, the government is in an election year and there is a massive temptation to give an election Budget. That has been the history of political parties which have been in power in this country. In election year the government puts down a give- away, tempting, electioneering Budget which is irresponsible and puts the economy into an upward spiral of inflation. When the government is re-elected, in the first year it brings down a horror Budget in May, causing further instability. The second year is the only year in which political parties have been able to govern responsibly. After the second year, the government is in an election year again. It produces an electioneering Budget and the whole yo-yo concept of this thinking hits the business and social community of Australia. The Australian Democrats took some hope that this allegedly reformist Government, with certainly a reformist Attorney-General, might have taken us to this reform of fixed term parliaments, but apparently the pragmatists in the Australian Labor Party said to the Prime Minister (Mr Hawke): 'Look, Malcolm Fraser and Bob Menzies did this for years to suit their own political purposes. Don't be a mug and give away this opportunity of going to the people'. Human nature being what it is, I suppose it was a pretty strong argument to put to a Prime Minister, but it is not a right argument, it is not an argument to which he should have acquiesced. We believe it would be very rare to find Democrats opposing the right of the people to vote in any referendum. Leaving aside the merits or demerits of this question, I argue that the vote which we are about to make in this place concerns the fact that the Liberals and the Labor Party are saying: 'No, the Australian people should not be trusted to have a say on whether they want fixed term parliaments'. Because that is the vote before the Senate, the Democrats will vigorously oppose it. Senator WITHERS(Western Australia)(10.43) —I rise but briefly. The Leader of the Australian Democrats, Senator Chipp, has been prating on for some time about the democratic rights of people to vote in a referendum. If he carries that argument to its normal, political and logical conclusion, the more elections the better, because people ought to be able continually to decide which government they want. They cannot have it both ways. Senator Chipp —That is rubbish. It is not worthy of you. You are normally much better than that. Senator WITHERS —The honourable senator should not get excited just because he has been found out. I did not rise to gloat over the Attorney-General (Senator Gareth Evans). I think what has happened to the Government is that the reality of government has caught up with the euphoria of opposition. That is always a very good thing. I rose to ask a couple of simple questions: Firstly, if one takes the assumption-to use Senator Hamer's words, a very wild assumption-that fixed term parliaments really meant fixed terms absolutely, with nothing in between, how can one go from being an ardent supporter of fixed terms to now being an ardent supporter of simultaneous elections? That to me is an even greater jump in consistency than that which I made between 1974 and 1977 on the same question. It is an even greater jump than Senator Evans is making here today on allegedly fixed terms. Surely the argument for allegedly absolutely fixed terms was that there would be no elections at all between the fixed election dates. Senator Gareth Evans —There are always exceptions. Senator WITHERS —No, it was propounded as though there would be no exceptions; that is why they call them fixed terms. To go from that to simultaneous elections, which means that there is no discipline at all in having a Senate and House of Representatives election separately, means that there would be more and more temptation to have more and more elections. I can understand one who is opposed to fixed terms desiring simultaneous elections. I understand an ardent supporter of simultaneous elections being totally opposed to fixed term parliaments. For the life of me I cannot understand how one can support both propositions. Perhaps the Attorney-General, when he replies, will be kind enough to explain to me how one can jump from one to the other. That would be a bigger 180-degree turn than I made between 1974 and 1977. Senator HAMER(Victoria)(10.47) —I suppose this debate is not a very rewarding one because the decision to withdraw the Constitution Alteration (Fixed Term Parliaments) Bill 1983 is in the Government's power. I agree with that decision. I regret it, but I do not think, referring to the remarks made by Senator Chipp, that there is any great merit in putting a proposal to the people which will be opposed by a substantial party organisation. Historically, such a referendum is doomed to failure. I think it is a pity. Opinion is by no means unanimous. It is not really a party issue at all. The South Australian Liberal Party, only a few days ago, resolved in favour of fixed terms. It is not an issue on which the Liberal Party has a firm view because it is a pragmatic issue. It is a question of how parliament could work better. There is nothing in Liberal philosophy either for or against this proposal. It is a pragmatic issue of whether it would work better or not. I have intervened in this debate because there seemed to be a couple of misunderstandings worth clarifying in case, and I hope it will, this proposition comes up again. I do not think that the proposal which the Government intends to put forward of simultaneous elections and four-year parliaments is the answer or the end of the road on this matter. I think we have to look at more significant changes to our system. The comments I would like to make refer to Senator Chipp' s remarks. He seemed to imply that the provision of fixed-term parliaments would have avoided the election held in March. In fact, fixed term parliaments-I have pointed out several times that that is an unfortunate term because the terms were never fixed-would remove the discretionary power which a Prime Minister effectively has to call an election the moment he thinks it fits his political advantage. He sometimes gets it wrong, but he has that power to use it if he wants to use it. Nevertheless, Senator Evans's Bill and any fixed term, if I can use that expression, parliament Bill must have exceptions because there are circumstances in which parliament could not continue. The two circumstances which were provided for in his Bill were, firstly, if a double dissolution or the deadlocked procedure applied. That was the procedure that brought about the election last March. That was provided for in the Attorney-General's Bill and would have to be included in any Bill on fixed terms. The second provision, although I disagree with the Attorney-General that this provision would be more frequently used, would be if a government which had the confidence of the lower House could not be formed. There must be some provision then for some form of election. By the way, that situation has not occurred in our 83 years of constitutional history and it is not very likely to happen. I think it is highly improbable that using that provision would result in more elections. In my view it would certainly result in less frequent elections. The one area that has not been solved by any of the proposals put before us is the difficulty of the abuse by all governments of the double dissolution power. This deadlock provision was put in at the Constitutional Convention to deal with a particular problem. A piece of legislation to which obviously the Government attached importance was rejected in a formal way by the upper House. The idea of the constitutional authors was that that piece of legislation would have to be resolved. One thing they looked at was putting it to referendum, which was very popular in the 1890s. Ultimately they decided on the double dissolution, possibly followed by a joint sitting. But this provision was designed to deal with a particular urgent, critical piece of legislation. In fact, as we all know , it has been used in a quite different way to serve up a piece of unacceptable legislation early in a Parliament to provide a trigger, a means whereby the Government can have a double dissolution whenever it wants. This seems to me to be a great abuse of this power and one for which there is no place in our constitutional system. I will propose in due course-I do not know whether it would get through but I think that we should look at it-a constitutional amendment which would bring this particular provision under control. I do not accept that the purpose of the provision in the Constitution is to allow the Government to get rid of the Senate whenever it chooses by taking the whole Senate out whenever it likes to have a House of Representatives election. I think we should look very carefully at having an arrangement whereby, if the rejection of a particular piece of legislation gives the Government the power to call an election, a double dissolution, and the Government does not exercise that power within three months of gaining it, the piece of legislation can no longer be considered urgent and the power lapses. I will be making proposals to this end in due course. Senator HARRADINE(Tasmania)(10.52) — I support the proposal to discharge from the Notice Paper Government Business order of the day No. 32 relating to the Constitutional Alteration (Fixed Term Parliaments) Bill 1983. The reason for my so doing is that the title of the Bill is both false and misleading. It is incumbent upon members of parliament to ensure that the public is properly represented and that Bills which pass this legislature, particularly those which go to the people in the form of constitutional referendums, are properly represented to the people. As has been stated, by earlier speakers in this debate, the underlying assumption which our constituents could justly make in regard to a constitutional alteration referendum on fixed term parliaments is that the terms of the parliaments would be fixed and that these parliaments would be up for election once every, as it was, three years on a particular day of a particular month. That was not the case, in the Bill. Certainly those elections would take place but they would be in addition to any other elections which might be necessary as a result of decisions taken in the Parliament itself. So in fact the title of the referendum would have been misleading and false. Therefore, I think it is commendable that the Government has seen fit to discharge this Bill from the Notice Paper. I hold the view, as was held at the previous referendum in 1977 and the one before it in 1974, that the simultaneous election proposals are also misleading. The Constitutional Alteration (Simultaneous Election) Bill is also a misleading and false title. But we are not debating that at this point. I am glad that the Government has seen fit to propose the discharge of the fixed term parliaments Bill. I would hope that wiser counsels may prevail and that in a couple of months the Government might be proposing to discharge the Bills which have now been placed before the Senate. Senator GARETH EVANS(Victoria-Attorney-General)(10.55) —in reply-The only question before the Senate is whether the Constitution Alteration (Fixed Term Parliaments) Bill ought to be further debated by this Parliament and therefore remain on the Notice Paper. I indicate that I do not believe it is appropriate to debate the intrinsic merits of that legislation or, indeed, of any other constitutional reform proposal, despite the invitation from Senator Withers and others to do so, an invitation which I have a lot of difficulty resisting but this is not the time. Let me simply say this: I understand the public spiritedness of the Australian Democrats in opposing the motion to discharge the fixed term parliaments Bill. They want to see the Bill debated and put to referendum and indeed, as several speakers have noted in the course of this debate, I have a certain sneaking affection for the proposal myself. But I indicate to the Senate that the gesture of the Democrats-and regrettably this is not a unique occasion in this respect-has a certain quixotic quality about it because it is simply not the Government's intention, even should the matter remain on the Notice Paper, to bring the Bill on for debate, the reason being that we are substituting for this proposal one that we believe will be less divisive and have a better chance of succeeding at referendum. We believe that even the cynicism so often demonstrated by the Liberal and National parties would not extend to their voting to bring the matter on for debate in order then to defeat it, and we believe, as a result, that it is a thoroughly empty gesture to be opposing the discharge motion. Might I indicate that there has been no cynicism whatsoever in the Government's own approach to this legislation. We still believe, as a party, that there are real advantages and real merits in the fixed term proposal, and it may be that it would be appropriate to reconsider that proposal at some time in the future. But it is clear that opinion on this issue as between the major parties is hopelessly divided at this point, notwithstanding the spirit of compromise with which the proposal was originally brought forward. Given the history of referendums on constitutional matters in this country, it does make it extremely implausible that the proposal would attract the necessary majority support were it to go ahead in that particular environment. The other proposals now brought before the Parliament will, we hope, as I indicated before, if consistency means anything, attract the genuine support of the major Opposition parties and as a result have a much better chance, second-best proposals though they may be in many people's eyes, of attracting widespread community support. I simply hope that after the high moral tone that my opposite number, Senator Durack, has adopted in this debate, the Opposition will show its willingness to behave in a consistent, principled and public spirited fashion in the course of this debate and add its weight to improving the quality of democracy in this country by ensuring the ultimate passage of the four-year and simultaneous election proposals. I commend the discharge motion to the Senate. Question put: That the motion (Senator Gareth Evans's) be agreed to. The Senate divided. (The President-Senator theHon. Douglas McClelland) Ayes . . . . . . . . . . . 51 Noes . . . . . . . . . . . 5 —— Majority . . . . . . . . . 46 —— Archer, B. R. Jones, G. N. Baume, Peter Kilgariff, B. F. (Teller)Bjelke-Petersen, F. I. Lajovic, M. E. Bolkus, N. Lewis, A. W. R. Boswell, R. L. D. McClelland, DouglasCarrick, Sir John Maguire, G. R. Childs, B. K. Martin, K. J. Coates, J. Messner, A. J. Coleman, R. N. Missen, A. J. Colston, M. A. Rae, PeterCook, P. F. S. Ray, RobertCrichton-Browne, N. A. Reid, M. E. Crowley, R. A. Reynolds, M. Durack, P. D. Richardson, G. F. 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. Harradine, B. Withers, R. G. Hill, R. Zakharov, A. O. Jessop, D. S. Chipp, D. L. Macklin, M. J. (Teller)Evans, Jack Mason, C. V. J. Haines, J. Question so resolved in the affirmative. Senator Kilgariff —Mr Deputy President, the two leaders, Senator Chaney and Senator Button, were absent from the chamber but wish to indicate that they supported the motion. 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 Walsh) read a first time. Senator WALSH(Western Australia-Minister for Resources and Energy)(11.08) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill will provide legislative authority for the entry into force of new comprehensive double taxation agreements with Ireland, the Republic of Italy, the Republic of Korea and the Kingdom of Norway. A revised comprehensive double taxation agreement with the United States of America is another important element of the Bill which also includes a limited airline profits agreement with the Republic of India. The agreements were all signed between May 1982 and May of this year. Details of the agreements were announced when the agreements were signed, and copies of them were made available to the public at that time. The comprehensive agreements deal with all forms of income flowing between Australia and the other countries concerned. As implied in the title, the Airline Profits Agreement with India is restricted to the taxation of profits derived from international air transport. Australia and India are to exempt from their respective income taxes profits derived from such transport by the other country's international airline. The practical effect of the agreement is that Australia will have the sole right to tax Indian source profits from the international airline operations of Qantas and India will have the same right with respect to Australian source profits from international operations of Air India. Although this agreement with India is restricted to international airline profits, India is included in the current negotiating program for comprehensive double taxation agreements and negotiations for such an agreement will be commenced at the earliest mutually convenient time. I now turn to the comprehensive agreements contained in this Bill. In general, comprehensive double taxation agreements have two primary objects- the elimination of international double taxation and the prevention of fiscal evasion. The first of these objects is achieved by the contracting countries agreeing to the allocation of taxing rights between them. There are various ways by which this is done, depending upon the nature of the income involved. For example, some types of income will be taxed only in the country of residence while other income may be taxed only in the country in which it has its source. A third category is comprised of income which may be taxed in both countries, with the country of source generally agreeing to limit its tax, and the country of residence of the taxpayer agreeing to allow a credit against its tax on such income for the tax paid in the other country. The comprehensive agreements contained in this Bill accord in all essential respects with the position that Australian governments have taken over the years in relation to double taxation agreements. The agreements provide for the country of source to limit its tax on dividends, interest and royalties. Generally, the country of source is to limit its tax to 15 per cent of the gross income concerned in the case of dividends and 10 per cent for both interest and royalties flowing to the other country. In the agreement with Korea, the limit is 15 per cent for dividends, interest and royalties. For its part, Australia will reduce the rate of withholding tax on dividends flowing to the other country from the normal 30 per cent rate to the 15 per cent rate specified in the particular agreement. As the rate of withholding tax on interest under Australia's domestic law is 10 per cent, this will not be affected by the limits on source country tax on interest provided for in these agreements. In Australia, royalties paid to non-residents are taxed by the ordinary assessment basis on the net amount, after deduction of expenses and, accordingly , the limits specified by the agreements by reference to gross royalties will not affect the amount of Australian tax on royalties unless the tax which would otherwise be assessed on the net royalties is greater than the limit expressed in the agreements. For its part, each of the other countries will reciprocally apply a 15 per cent rate on dividends flowing to Australia and 10 per cent in the case of interest and royalties, except of course that the Korean rate on interest and royalties will be 15 per cent. Korea may, however, in some cases, in accordance with its industry incentive legislation, wholly or partially exempt from Korean tax certain interest and royalty payments made to Australian residents. If nothing were done to avoid the situation, the tax so forgone by Korea would simply result in a corresponding reduction in the credit to be allowed by Australia against its tax on the relevant interest and royalty payments. In other words, the Australian revenue would pick up the tax forgone by Korea, thus nullifying the incentive. To avoid that result, provision is made in the agreement for Australia, as a ' tax sparing' measure, to allow a credit against its tax for tax forgone by Korea under agreed Korean incentive. Legislation, as if notional tax equal to 10 per cent of the interest or royalty income had been paid to the Republic of Korea. The comprehensive agreements contain measures for the formal relief of double taxation of income that may be taxed in both countries, with the country of residence of the taxpayer affording the necessary relief by the allowance of a credit against its tax for tax paid to the country of source. So far as Australian residents are concerned, income in respect of which a limit is imposed by the agreements on the tax of the country of source-dividends , interest and royalties-will generally be taxed here with credit being allowed for the tax of the country of source. However, because of the general rebate on inter-company distributions, there is effectively no tax on dividends received from foreign sources by Australian resident companies. The Bill does not disturb the position that other income that is taxed in full in the country of source is exempt from Australian tax. So far as the object of preventing fiscal evasion is concerned, provisions are made in each agreement for the exchange of information and for consultation between the tax administrations of the contracting countries. Apart from the provisions I have mentioned, the agreements also contain usual provisions of a kind common to double taxation agreements relating to the taxation of business profits, professional services, employees, public entertainers, students, pensioners and so on. The comprehensive agreements with Ireland, Italy, Korea and Norway are all important additions to Australia's growing network of such agreements. Apart from achieving the primary objects of avoiding double taxation and assisting in the prevention of fiscal evasion, the agreements are an expression of accord between our governments and reflect the many ties that Australia has with these countries. In that and other respects the revised agreement with the United States is particularly significant. It replaces an existing agreement which was signed in 1953 and has become very much out of date. The existing agreement became inadequate in a number of respects over the years , largely as a result of amendments to the taxation laws of Australia and the United States and, also, of the ever increasing complexities of international commercial transactions. The revised agreement with the United States, as mentioned earlier, accords in all essential respects with Australia's double taxation agreement policies. It improves our position in dealing with visiting entertainers. It introduces articles providing for source country tax of no more than 10 per cent of gross payments in respect of interest and royalties. The old agreement had no interest article, and only a very limited royalties provision. The 10 per cent limit contrasts, I note, with the United States domestic rate of 30 per cent that has applied until now. The new agreement does contain an article entitled 'non-discrimination' which is not to be found in any of our other agreements. This article, which will not be given the force of law in Australia by this Bill, expresses each country's best intention that, in enacting taxation measures, it will not treat citizens or residents of the other country, and enterprises or companies owned wholly or partly by them, in a less favourable way than it treats its own citizens or residents, enterprises or companies. An important feature of this non-discrimination article is that it will not affect, in any way, the operation of existing provisions of the Australian income tax law, or any similar provisions enacted since signature of the agreement on 6 August 1982, or provisions designed to prevent avoidance or evasion of taxes. Beyond that, the non-discrimination article does no more than call for consultation between the Governments of both countries when any taxation measure is considered to be contrary to the principles of the article. It will not be able to be called in aid by a taxpayer in an objection against a taxation assessment. The agreements contained in this Bill cannot enter into force until all necessary constitutional processes are completed both by Australia and the other countries. For Australia, this Bill will, when assented to, complete the processes required of us. Details of the provisions of the Bill are contained in an explanatory memorandum being circulated to honourable senators. I commend the Bill to the Senate. Debate (on motion by Senator Peter Baume) adjourned. Debate resumed from 20 September 1983, on motion by Senator Grimes: That the Bill be now read a second time. Senator PETER BAUME(New South Wales)(11.09) —At the end of my speech yesterday I moved an amendment with respect to the omnibus Bill, the Health Legislation Amendment Bill. I believe it may have been taken to have been with respect to another Bill. I therefore seek leave to withdraw the amendment with respect to the Medicare Levy Bill and have the amendment placed correctly with respect to the omnibus Bill, the Health Legislation Amendment Bill. Amendment-by leave-withdrawn. Senator PETER BAUME —I now move my amendment with respect to the Health Legislation Amendment Bill: Leave out all words after 'That', insert: 'the Senate declines to give the Bill a second reading as it is of the opinion that the Australian system of health care delivery and financing should be based on- (a) the private professional practice of doctors and other health professionals charging a fee for service supported by a private sector insurance system, and sympathetic government assistance to the aged and the disadvantaged; and (b) public and private provision of hospital and other institutional facilities and community health care, accessible to private practitioners for the treatment of their patients, supported by a private sector insurance system, and sympathetic government assistance to the aged and the disadvantaged'. Senator CROWLEY(South Australia)(11.10) —I wish to complete my remarks on the Medicare legislation. I do not remember what comma I was at last night- Senator Georges —Start all over again. Senator CROWLEY —Thank you, Senator Georges. There are a few points that I want to add to my remarks. One claim that the Opposition has brought before us and which has been publicised is that by the voluntary health funds which wish to be agents for Medicare. I draw the Senate's attention to the fact that these same funds in 1975 refused to run Medibank and so the Health Insurance Commission was given the task, and very well it did it too. We have little reason to suspect that the Health Insurance Commission will not again manage as well as it did that previous time, but we do have considerable doubt about how the health funds would function, particularly in light of their history of refusal and non-co- operation. They complain also about the potential loss of jobs, as also has Senator Haines; it is right and proper to complain about any potential loss of jobs. But in passing I would like to ask the Senate to recall who complained when Medibank was wound down about not only the loss of jobs to the people working in the Health Insurance Commission but also the enormous cost to the taxpayers of Australia. It is also important to note that the Minister for Health, Dr Blewett, has made it quite clear that employee preference will be given to anybody from the private health funds who may be displaced from work in that area. As the private health funds will have an ability to take up the insurance for private hospitals and extras and to extend their insurance coverages to other areas besides health, the potential loss of jobs may be less than they anticipated in the first place. Senator Haines is also quoted in the Age as saying that it was illogical for the Government to spend more than $50m and put 2,000 people out of work to 'just satisfy socialist ideology'. I simply remind the honourable senator that it is not just simply socialist ideology that provokes the Labor Government to ask the Health Insurance Commission to administer Medicare. It is because under the Health Insurance Commission the system will be well administered with one data collection centre leading to proper data for epidemiological and research matters and for the pursuit of medifraud and overservicing. There will be a faster turn around time for patients; therefore, it will be cheaper. For all of those reasons I think the Government can be unashamedly proud of placing Medicare under the Health Insurance Commission. I ask Senator Haines whether she would care to comment later on what impressions she has of a Minister for Health who is on one occasion Attila the Hun and on another occasion a spoilt brat- peculiar assessments, I think, of our current Minister. The Opposition claims that it is suspicious that there will be an increase in medical fraud under Medicare. I simply remind it that currently, under the scheme it introduced, $100m is a conservative estimate of the extent of medical fraud in 1982-83. It would seem to be remarkable that it would be worried about medical fraud when it clearly cannot under its own scheme cope with it. Medicare has not been planned in ignorance of this fact. In fact, it has provisions in it to deal with medical fraud to make it more likely and more readily able to follow up any potential for fraud. In addition, the Health Insurance Commission' s plans for Medicare have been made with a view to cost containment. It is no accident that there is no gap insurance or that private practice and public facilities will now need to be a contractual arrangement between the private practitioner and the public facility. In summary, the Liberal Opposition criticises the Government principally with Senator Baume's argument that the Health Insurance Commission will be a monopoly . This leads me once again to say that the honourable senator misunderstands what the Health Insurance Commission and Medicare is about. It will simply provide basic health care insurance. The private funds will continue to offer private hospital and extras insurance to the many Australians who choose to exercise that option. It is not a monopoly. It is a provision for basic health care cover for all Australians. The funds are not complaining. Indeed, they are appreciative, but the Opposition is bleating. It has given us five health schemes in seven years. It dismantled Medibank at great cost to the taxpayer. It ignored the jobs lost in that process. It has left two million Australians uninsured for health costs. It charges people on $300 a week exactly the same as people on $1,000 a week. It produces evidence by the bucket of its incompetence and inadequacy, evidence from its time in government. It has no coherent alternative to Medicare; in fact, it has no alternative. Worse still, it is no alternative. There is considerable division in the Opposition's ranks. I will not quote to the Senate what Mr Carlton and Mr Peacock disagree on. It was reported the other day that the Opposition has even come up with a compromise sex Bill; we always know that compromising sex is not a satisfactory outcome. If that is the best solution it can offer in that area, it is probably a solution of equal value that it offers for Medicare. In the face of Liberal nothingness the Government stands proud. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Senator LEWIS(Victoria)(11.15) —The Senate is currently debating the Government 's legislation to introduce Medicare. Four Bills are being debated cognately. Senator Crowley has just finished her remarks by making a statement about what Medicare is. Let me refute her statement. Medicare is certainly not about improving Australia's health care system. It is about paying for our health care and the creation of a monopoly. The Medicare legislation now before the Senate highlights the difference between our parties. The parties on this side of the chamber-the Liberal Party of Australia and the National Party of Australia- believe that if people do not pay something for their medical services they do not appreciate the cost of those services and that difficulties are created in controlling such services. The Australian Labor Party believes that the way to control the cost of Medicare services is to introduce some police state methods. I refer here to the use of computers which will be able to check up on how much medical care a person has and how much medical care a doctor delivers. By applying averages across the nation it will be determined that a patient is receiving too much medical care and that a doctor is providing too much of that care. But among the ALP's number there are fortunately one or two who recognise the merits of our argument. I refer to something said on 14 September by Dr Klugman, the ALP member for Prospect in the House of Representatives. I refer to page 745 of the House of Representatives Hansard of that date, on which he is reported as saying : . . . I accept the argument to some extent, that there has to be some payment by the patient so as to restrict unscrupulous patients and unscrupulous doctors from overusing medical services. The only way one can restrict that is by having some sort of patient moiety. In other words, the patient pays a very small amount, but nonetheless an amount, towards the cost so that at least he has an account rendered to him, which he has to pay. I know that many people on my side of the House disagree with that, but I think it would be a restraining influence . Senator Peter Baume —Who said that? Senator LEWIS —Dr Klugman, the ALP member for Prospect said that. Dr Klugman is, of course, a medical doctor, not a doctor of deception like his Minister in the other place, the Minister for Health (Dr Blewett). Senator Colston —I raise a point of order, Madam Acting Deputy President. I think the relevant standing order is standing order 418. That was certainly an imputation against a member of the Parliament and I ask you to request the speaker to withdraw it. Senator LEWIS —I withdraw the allegation, but I shall go on to prove that this legislation deceives the people of Australia. The people of Australia can draw their own conclusions as to whether my allegation is true. We are not talking about the socially disadvantaged. Let us make that clear. They are already receiving free care under the existing system. I add that they used to receive free care when we had the honorary system. Before Medibank was introduced they used to receive excellent free care under the honorary system. That was destroyed by Medibank. They now receive free care and will continue to receive such care under this proposal. They will not receive any better care. They cannot receive any better care. They will not be better catered for under this proposal; they will just continue to receive the care that they have been receiving in the past. We are not talking about socially disadvantaged people. We are talking about the payment for the medical care of the rest of the community, that is, the people of Australia who can afford to pay for their medical services. What is proposed here by the ALP is that instead of people paying for medical care out of their pockets, by insurance or some other way, they will have to pay for it out of their taxes. That means that, in effect, they will not know how much they are being charged and, what is more, because of the monopoly situation, they will be deprived of the freedom of choice which they have under the existing system. For philosophical reasons only the Australian Labor Party has introduced this socialist measure. I repeat, Madam Acting Deputy President: There in no improvement in the quality of health care in any way in this proposal. All it does is increase costs to the nation by $1.7 billion and in fact hide the costs from the people of Australia. I seek leave to incorporate in Hansard a statement of the full year costing of Medicare in 1983-84 values, which I gave to the Government Whip earlier and he approved my having it incorporated. Senator Crowley —Who did these figures-Mr Carlton, before the last election? Senator LEWIS —These figures in fact were contained in a Press release by the Minister for Health issued on 25 August 1983. Leave granted. The statement read as follows- FULL YEAR COSTING OF MEDICARE (1983-84 VALUES) $m Additional expenditure- Medical benefits 900 Hospital payments to States 709 Increase in private hospital subsidy 47 Community health services 20 Administration 66 1,742 Additional revenue- Levy 1% taxable income 1,050 Health insurance rebate 550 Reinsurance pool 80 1,680 Net outlay 62 Senator LEWIS —I now quote what Mr Carlton said about these figures in the other House: What is important here is not that the thoroughly misleading balancing figure of $62m- which is what the Minister published these figures for- but the additional expenditures of $1,742m, offset only by the saving in $80m on the reinsurance trust fund. Thus there is a net additional expenditure of $1, 662m-nearly $1.7 billion-requiring an increase in taxes of $1,662m to pay for it . Now that is the additional cost of Medicare for a full year. This Government now misleads the people of Australia as to the cost of the scheme with a shonky levy . We heard Senator Crowley say that the people will be paying for Medicare through the levy. What a lot of absolute nonsense, because the reality is that the cost of medical care in Australia is $8 billion. The amount intended to be raised by this levy is $1 billion. So people will receive their tax assessments which will show the words: 'Medicare levy, one per cent'. People will then believe that that is all it is costing them for their medical care whereas in fact the seven-eighths of their medical costs will be hidden in the tax assessment above that statement. So the real cost of medical care will be hidden from the people of Australia. By this means, the cost will be totally obscured. It is inevitable that the people will come to realise that it is not a free service. Unfortunately it will take some years before that fact dawns upon them. Every time I use the word 'free' in this speech I almost feel like asking Hansard to put it in quotation marks because, believe it or not, 'free' surgery visits and 'free' public hospital beds will in fact disguise the true costs to the consumer. The people of Australia know these services will not be free. Of course they recognise that they cannot go to a hospital or a doctor, have X-rays or have medical care without the services costing someone in the country a lot of money. What will they do? Thanks to this Government's misleading of the people, thanks to this Minister's statements which mislead the people, many people will drop their private hospital cover, trusting that Medicare is comprehensive, but in fact it is not. Medicare covers only 85 per cent of doctors' fees with no choice of doctor in public hospitals. Medicare provides no cover in private hospitals and it attacks private health provisions. It aims to make doctors totally dependent on government, reduces the competitive position of the private hospitals and the Government says it will solve all of our problems by doubling computer surveillance equipment, in other words, adopting police state methods to deal with the possibilities of overservicing. In fact a significant section of the Australian population will be spending so much more for a lot less. As I have mentioned, the current costs Australia-wide of our health care is $8 billion. The levy will raise $1 billion. From where will the difference come? Is there something up in the sky that will pour $7 billion into the coffers of the people who are providing these services? Of course not. Inevitably the people of Australia will have to pay the difference. Of course increasing demands will be put on specialist services because they appear to be 'free'. There will also be increasing demands on casualty and ancillary services. People will want physiotherapy that they may not have wanted in the past because they believe that the service will be provided free. That inevitably means there will be much greater queueing in public hospitals as people queue up to get these services. But we all know that some people will receive privileged services. For example, does Senator Crowley believe that, when she goes to a public hospital to get some sort of service, the medical profession will make her, a fellow doctor, wait in the queue until her turn is reached? Of course not. She will be moved to the front of the queue and she will receive privileged treatment. She will become one of the privileged minority. Of course there will be people in this country who will receive privileges because they know the doctor. Senator Messner —If you are part of the union, you will be all right. Senator LEWIS —She is part of the union and she will be all right. All the doctors are part of the union and of course they will expect to treat their colleagues before they treat the rest of the patients. What will inevitably happen is that those people in this country who do not have the ability to be in a privileged position will end up at the bottom of the queue. It is very much the same as the position in the Soviet Union, where the party officials always get priority. They get the hospital treatment and the good food and everyone else has to queue. This is the sort of nonsense that is being introduced by the Australian Labour Party. This will be the inevitable consequence of these proposals. This is what happened under Medibank. If honourable senators talk to any hospital officials, the people in casualty sections, the people providing the ancillary services and the medicos they will be told that every day the queues got longer and longer. That was the inevitable result of providing so- called free services. Let me make it perfectly clear, Madam Acting Deputy President, that I make no criticism of doctors for overservicing. I believe that many doctors, out of the kindness of their hearts, try to provide the best service that they possible can for their patients. It frequently appears that they may be overservicing. But many patients go to their doctors for reassurance that there is nothing seriously wrong with them. They may have some sort of pain and they want reassurance from the doctors that they have not got a cancer or an ulcer or that they are not dying. They need this reassurance. So they expect their doctors to provide them with every possible service that they can in order to reassure them that they are not suffering some fatal illness. With modern technology and the belief that health care is 'free', it is inevitable that overservicing will occur, as patients will want the latest technology to check up on their health to make sure that they do not have some fatal disease. A good example of this is the new multimillion dollar CAT scanner . Who decides when it is to be used? Who is going to make this decision? Surely even members of the Australian Labor Party would recognise that there must be some rationing of these services. How do they propose to do it? They are going to do it with a computer. It would be so much better if these services were paid for out of a person's pocket so that the person could understand what the service costs. The Labor Party is going to try to control the use of a CAT scanner with a computer. How on earth can it do so? What a lot of nonsense! I make the prediction now that in due course this Government will in fact ration health services to the people of Australia. I will tell the Senate how it will do so. It will do so by refusing to increase funds sufficiently to provide the money that is needed for these services. That is how it will squeeze the people of Australia in terms of health care. The people of Australia will not get a better service as a result of the monopoly that will be created by this legislation. The people of Australia will in fact end up being squeezed in regard to their services because the Government cannot go on providing funds endlessly. There must be a bottom in the bucket somewhere. Senator Messner —Senator Crowley will always be at the head of the queue. Senator LEWIS —As my friend Senator Messner says, of course Senator Crowley will always be at the head of the queue because she is part of the club. She will receive the privileged treatment. I openly acknowledge that probably I will receive some privileged treatment as will probably every other senator and member of the House of Representatives and other people who know the doctors who care for them. What about the little people of this country? What about the people we should be concerned about? How are they going to get their names up before a doctor? It is inevitable that they will have to wait at the bottom of the queue. People will have to sit in a surgery for six or eight hours before they can see a doctor. This will happen because this Government, for philosophical reasons, thinks it would be a good idea to change the current system. The Government claims that the new system will be simpler. It will not be simpler for those who have to take out extra health care cover at another place. They will be shopping in two places. They will have to pay a levy for basic Medicare cover. Those who apply their minds to the provision of extra health care will then go to the private funds to get more insurance. In any event, is simplicity some sort of a virtue that we ought to look at? Of course, the Government claims that there will be greater equity under Medicare. I will admit that the scheme will alleviate the plight of the uninsured which was always of concern to us and which the coalition parties had proposals to overcome. Instead of overcoming that simple problem, what the Government proposes to do is to create an absolute monopoly around this nation and to create major difficulties for doctors in the provision of decent medical services to the people of this country. The Government talks about the equity of the scheme. Let me make a couple of points about that. Two-income families will be paying twice for health care. Single people will pay the full levy. I am not unhappy about all that because I, as a member of a single income family, will come out on top. I will be paying the levy only once. However, the Australian Labor Party Federal Government ought to face up to one basic fact, and that is that people who are higher income earners, having paid higher taxes anyway, will now have to pay higher rates for health care. Let me talk about the costs. Of course there will be some winners and losers. I have always indicated that Senator Crowley and I will undoubtedly be winners out of this system. On the other hand, there will be losers in this system. At least one-third of those existing insured will be paying more for a comparable cover. How on earth can these payment provisions in any way make medical services in this country cheaper? At the moment medical services in this country cost $8, 000m a year. Putting in a big computer in the Medicare offices will not reduce the cost of medical services in any way. No matter how big the computer is and no matter how much it is able to check up on so-called overservicing, the cost of medical care will not be reduced in any way. Senator Georges —It won't take away jobs. Senator LEWIS —What in fact it will do-and Senator Georges has reminded me of this-is put 5,000 people out of work at a time when unemployment ought to be a matter of major concern to the Government. This Government is proposing to put 5 ,000 people out of employment. Of course, we all know that in any event this Government in its Budget abandoned the unemployed. It has totally abandoned the unemployed people of this nation with a Budget which is going to create savage problems for those people. This so-called free public hospitals treatment will mean that private hospital insurance will be less attractive and, of course, the result inevitably must be that greater pressure will be put on public hospitals to the detriment of the private hospitals. In due course many private hospitals will fold. That, of course, is another inevitable consequence. What is that going to mean? It will mean that the taxpayers of this country will have to find capital sums to increase the size of the public hospitals because of demand on public hospitals. Meanwhile, the private hospitals facilities will collapse. The people who run private hospitals will go broke. They will have to sell their hospitals which will then be used as office space or whatever. Meanwhile, this Government will spend thousands of millions of dollars on building new hospitals to cope with the increasing pressure on public hospitals. The people of Australia are not stupid. They know that this will be an inevitable result of the sort of crass stupidity which is being introduced in this legislation. As I have said, 5,000 people will lose their jobs, there will be a massive increase in the demand for public hospital services, private hospitals will be underutilised and underused and inevitably many will go broke and be forced out of the health care system. All of this will happen because of some stupid philosophical nonsense about a desire to nationalise medical services. We have seen the result of such a change in Great Britain and Canada. We saw what happened between 1973 and 1975 under a Labor Party government. Yet the Labor Party is still unable to realise what an absolute disaster such a system will be to the people of Australia. May I say in conclusion that Medicare is a great backward step in removing responsible decision-making from patients and doctors who provide services. What we are doing with this legislation is placing those decisions more in the hands of public servants and politicians. I guarantee that when we stand up and remind honourable senators opposite that we told them in 1983 that this Government would ration health services by squeezing the amount of money which ought to be provided for those services they will try to find some other excuse in order to explain away the disaster for this country that Medicare will bring about. Senator COLSTON(Queensland)(11.39) —It would be remiss of me if I did not make some comments in relation to Senator Lewis's speech. For the last 20 minutes or so we were entertained by rhetoric which I imagine Senator Lewis used in days past when he addressed a jury. 'Never mind the facts', Senator Lewis probably thinks, 'but let me win the case'. We had a classic example of 'never mind the facts'. Let me remind him that he will not win the case. I would like to make just a couple of other points about Senator Lewis's speech. Early in his speech he used words to the effect that the different approaches of the two major parties to medical care in Australia highlight the difference between the two major parties. If that is the fact, I say: 'Thank goodness for that'. Two other matters need special attention. One is the fear technique that is being used. I am not sure whether it will be used by all members of the Opposition but I deprecate the fear technique too of saying that this Government will introduce a police state. Senator Lewis said that it is necessary to have some mechanism to ensure that overservicing does not take place. The mechanism to be used by this Government is similar to the one that was used by the previous Government. To talk about a police state is not worthy of those Opposition senators. Finally, in remarking on the speech that we have just heard , I wish to make some comment about the ultimate irony that was expressed in it. Senator Lewis started to complain about a certain loss of jobs, and about unemployment. I came to the Parliament in 1975 when we had just been told by the caretaker Prime Minister who became the Prime Minister after the election that year, that he would provide jobs for everybody who wanted to work. We expected to see a dramatic drop in the unemployment rate. But every year for the seven years that I sat in opposition from 1975 onwards, the unemployment rate increased until we had such record unemployment that that Government was thrown out. Today we have had the ultimate irony of someone from the Opposition talking about those of us on this side of the chamber creating unemployment. I leave Senator Lewis's speech at that stage. I wish to make some remarks about what happened in the past with Medibank, what is happening at the moment with Medicare and what will probably happen in the future once Medicare is introduced next year. Medibank was introduced about mid- 1975, not between 1973 and 1975, as Senator Lewis said. Between 1973 and 1975 there was a great deal of discussion in the community and in the Parliament about the introduction of Medibank. But it was not actually introduced until mid -1975. Of course, we all know that within six months the Government that introduced it was no longer in power. But although Medibank legislation was in operation for only a short period when the Australian Labor Party was the government, it was one of the most significant pieces of social legislation that had ever passed through the Parliament. Its passage through the Parliament was not without trauma. At that time, there was a concerted campaign against it by the then Opposition and a concerted campaign against it by the medical profession. If at that time one went into a private medical practitioner's surgery, one saw anti-Medibank posters on the wall. If one did not feel sick before visiting the doctor, one certainly felt sick as soon as one got into the surgery and saw the smear technique being used there. When legislation came before the Parliament for the original Medibank-I am talking about the previous scheme now-the then Liberal-National Country Party Opposition voted against it. It voted against it not once, but twice, to make it one of the 1974 double dissolution Bills. The legislation had to be passed by a joint sitting but, even after it was passed by a joint sitting, the Senate, which was not in control of the Government at the time, would not give approval for the levy. The scheme had to be funded from taxation revenue. With the opposition that we have at this stage to the Medicare legislation- opposition from some of the people on the opposite side of this chamber-it is almost as if history is repeating itself. I mention the fact that we are even facing the same sort of thing at the moment, with newspaper articles, provided by the medical profession, which distort the facts, to put it mildly, or actually contain false information. I refer to an article that I happened to read in the Sunday Sun, a Brisbane newspaper, last weekend. The heading is 'Mums -to-be face a Medicare slug'. The article starts off: The AMA has warned mums-to-be they may have to pay up to $1000 in hospital delivery fees under the new Medicare system. I could go on and read the rest of that article. It is in the Sunday Sun of last weekend. But it is arrant nonsense. What the Australian Medical Association is saying could happen after Medicare is introduced is exactly the same as what happens now. If a person wants to have a private hospital facility, he must have health cover of some sort. If he does, he will not pay that $1,000 that the AMA is saying he would have to pay. The situation in that respect is exactly the same now as it will be after February next year. This is the sort of misleading information that is being given. Even though this misleading information is being given, we know what happened with Medibank. Medibank became operational, and so will Medicare early next year. Although the old Medibank was in operation for less than six months when the 1975 election was held, it was already well accepted by the public. It was so well accepted by the public that the then caretaker Prime Minister, Mr Fraser, claimed in his 1975 election speech that he and his Government would retain Medibank. I remember watching the telecast of that speech by Mr Fraser. I certainly watched Mr Fraser's telecasts, recalling the old saying: 'One needs to know one's enemy'. I remember watching that telecast and I remember the resounding cheer that his supporters gave him when he said that he would retain Medibank. But the claim proved to be a hollow one. The years of the Fraser Government which followed were characterised in the health field by a series of costly, confusing health care changes. I could spell out in detail what happened over those years but the details would be of no assistance to us now. But I must say that during the period from 1975 to 1982 I saw every year, with only one exception, a major change introduced by the Fraser Government to health fund proposals. In fact it became something of a ritual for us to come in here once a year and to hear what the new changes were. The changes were costly and, perhaps more importantly to the consumers, they were confusing. How can we have one health care system, change it to another next year and another the year after and at the same time give the consumers, the people who want some consistency in health care funding, some understanding of what is going on? Public understanding certainly was not the case with the previous Government. Although Mr Fraser said that he would retain Medibank, all that remained was the name, and that name was associated with a private health fund. I move now to the legislation before us. Fortunately for the health care consumers of this nation, there was a change of government in March this year. The swing towards Labor was partly due to the proposals that we put forward for health care insurance. These health care proposals had been set out in detail to the public well over 12 months before the election. Policies such as our Medicare proposals which Labor put before the people for so long before the election do not just happen. There was a realisation in our Party that the original Medibank provided Australians with a sound health scheme. There was a realisation that if that scheme could be improved in the light of experience that improved scheme could service Australia well. However, there was also a realisation, not only by Labor members of the Federal Parliament but also by a majority of Australians, that the Fraser Government could not provide an equitable answer to health cover. As I have said, our proposals did not just happen; they were worked out and refined during countless committee meetings and Party room discussions. All of that-the planning, the failure of our opponents to deliver the goods and the public acceptance of our Medicare proposals-brings us to this point when the legislation is before this chamber. There will be detailed debate about minute aspects of the legislation at the Committee stage. Thus I shall mention only some broad aspects of what will occur when this legislation is passed. From the first day of February next year Medicare will be operating. Every person in Australia will have medical cover. The scheme will be financed by a one per cent levy on income and I expect that that figure will be held over time. Below certain income thresholds no levy is payable; $128.80 for a single person; $214.25 for a married couple and $21.15 for every dependent child. Of course, some irresponsible statements have been made about the one per cent levy. These statements have been made by irresponsible people such as the former Minister for Health in Queensland, Mr Austin, who claimed only recently that the levy would soon increase to 2 per cent. Last night we heard in this chamber the same scare tactics that I mentioned earlier in my speech, from the Opposition health spokesman. He said that the one per cent levy will not hold. I will quote that statement at the time of the next election and we will see whether that one per cent levy is holding. This Government intends to honour its promise by keeping that one per cent levy. People such as Austin in Queensland and his fellow travelling knockers should know that the Medicare scheme and the levy will stand the test of time. If there were not an election in Queensland this year, and if Mr Austin were not fighting to retain his seat in the State Parliament, it is doubtful whether he would have found fault with the Medicare proposals. But politics being what they are he has dragged Medicare into the politics of the Queensland election. Medicare benefits will be payable to every person in Australia at the rate of 85 per cent of the schedule fee for a medical service with a maximum payment of $10 for any one item. Medicare benefits will cover the full range of doctors' services, including treatment by specialists, surgery and diagnostic services such as radiology and pathology. A short time ago I mentioned Queensland and there was some rumbling about Queensland from members on the other side which I cannot quite understand. Under those circumstances I feel somewhat comforted when I think of my lack of proper hearing. Queensland was referred to and it does deserve a special mention. For many years in Queensland-the State that I represent-we have had a free hospital system. This free hospital system was introduced when the Hospitals Benefits Agreement Act was enacted in 1945 by the Cooper Labor Government. However, by the time the free hospital system was set up, Hanlon was the Premier and it was the Hanlon Labor Government that generally gets the credit for introducing the system. That free hospital system has been maintained at great cost by successive governments ever since. There would be few Queenslanders who have lived in that State for all of their lives who have not used the free hospital system at some stage. I was thankful for the system when, as a young person, I was involved in a serious road accident and needed long-term medical attention. I obtained excellent attention in the free hospital system at that stage. That would also be the case for many people throughout Queensland. However, because of Queensland's free hospital system and because this is an election year in Queensland, a great deal of debate has occurred over the introduction of Medicare in that State. For Queenslanders who currently have no private health insurance, automatic medical cover for visits to their general practitioner will be provided, as will cover for a doctor's home visit and specialist and diagnostic services, including optometry, pathology and radiology. Of course, after the introduction of Medicare if a doctor direct bills patients they will not have to pay anything. One could ask the question: Why have this cover when a free hospital service exists? I mention these facts: Many people in Queensland live a long way from a free hospital facility. Even people in some suburbs of Brisbane live a long way from a free hospital facility. If a young mother living in the suburb in which I live or a surrounding suburb wanted to take her child who had some illness to the free hospital system, they would have to travel for one and a half hours on public transport to get there and one and a half hours to get back. That is three hours dead time. As well as that, the mother would have to pay fares for herself and perhaps for the child if it were at an age at which a fare had to be paid. Such people will benefit greatly from being able to go to the local general practitioner, which may be as much as a quarter of an hour's walk from home, rather than travelling by public transport for an hour and a half to a free hospital facility. Some people in the country are in this situation but I expect that the greatest immediate advantage will be to people, such as the person I have mentioned, who will be able to afford to go to a local general practitioner rather than to the free hospital system which is so far away. What will be the position of some people who are not well enough to get to a hospital but who are probably not ill enough to be an inpatient at a hospital? They will be able to get the doctor to come to them rather than travel a long distance to a free hospital. This is one of the reasons why we need this system in Queensland as well as in other parts of Australia. It should be remembered if we are talking about Queensland that through Medicare there will be a boost to the funds which will be made available to the Queensland hospital system. In 1982-83, under the Fraser Government, $93m was paid to Queensland in what could be identified as health grants. In the first Hawke Budget, $131m was paid which is a 41 per cent increase. Following the first full year of Medicare operating, the figure will be $173m, an 86 per cent increase over the funds allocated by the former Federal Government to Queensland's public hospitals. Look into the future of Medicare. I see Medicare being widely accepted by the Australian community. No political leader in the future, despite what is being said by some honourable senators opposite at the moment, will dare suggest that Medicare will not be maintained. But, even more importantly, no political leader will dare dismantle Medicare in the way that the previous Prime Minister dismantled Medibank. The health of every person in Australia is precious. It is to this Government's credit that it is ensuring that every person in Australia will be able to afford health care. When the original Medibank scheme was introduced it was, to a large extent, due to the tireless work of the current Minister for Foreign Affairs, Bill Hayden. I often think that Mr Hayden did not receive the credit that he justly deserved for bringing Medibank to fruition. This scheme, Medicare, owes a great deal to the hard work and tenacity of the Minister for Health, Dr Neal Blewett. He deserves credit for having brought Medicare this far. I am sure he will deserve further credit when Medicare is up and running on 1 February next year. Senator HAINES(South Australia)(12.01) —Before saying anything else about the package of Bills before us, I too would like to refer to a number of comments made by Senator Lewis. On behalf of the members of the Australian Medical Association, the Doctors Reform Society, the General Practitioners Society in Australia, the Australian Association of Surgeons and any other associations of medical practitioners, I would like to take umbrage at the gratuitous insult that Senator Lewis offered to members of the medical profession in insisting that the majority of them, if not all of them, offer special treatment either to members of their own profession or to people in influential positions. I do not believe they do. Before Senator Lewis came into this place he practised as a lawyer. It may well be that it is the practice of some lawyers-it may even have been the practice of Senator Lewis, I do not know-to offer this sort of preferential treatment. I do not believe that the majority of medical practitioners in this country would put people of wealth, influence or those in specific professions before other people in need, simply because of their status . Senator Lewis also said that he believed Medicare was not about improving health care; it was about paying for health care. I suggest that while I am not 100 per cent satisfied with this legislation I realise that in fact the principle behind the legislation before us today is to improve the payment of health care. Senator Lewis said that we were not talking about disadvantaged people. He referred to the three million pensioners, unemployed people and other beneficiaries-I presume that is who he was referring to-who are already entitled to free medical treatment in public hospitals and for whom most doctors will bulk bill. He carefully avoided mentioning another several million people who are in the twilight zone-that is, between those who qualify for pensioner health benefit cards or disadvantaged persons' cards and those who are well enough off to be able to fund themselves. The previous Government's disadvantaged persons' card, with its absolute cut off limit, did not help a significant number of low income earners who will be assisted by this legislation because the levy applies to taxable income with certain ceilings applicable according to marital status, the number of dependants and so on. The group of people who fall into that twilight area, if one likes, and who were not catered for under the previous Government's health provision will now be catered for. The intention of the package of Bills before us today is to introduce a universal basic health insurance scheme funded by a one per cent levy on taxable income. It will take into account a number of criteria, as I said, relating to the number of dependants and so on. The hysterical assertions expressed by Senator Lewis and by some other members of his Party would be more believable if they had tried to do something about their concerns relating to this legislation in the past three months instead of simply limiting themselves to scaremongering tactics and inflammatory statements relating to what sort of dismantling job they will do if they get back into power. There is no question that the Government promised the Medicare legislation to the people of Australia both before and during the election campaign. If this Government has a mandate for anything at all, it has a mandate to introduce a universal basic health insurance scheme funded by a one per cent levy. I find it rather strange that a previous speaker in this debate launched into such a vitriolic attack on the levy scheme and on its size when in fact a previous Liberal government, in one of its many messings about with the health care of this country, introduced its own 2 1/2 per cent levy scheme. A previous Liberal Prime Minister was not at all averse to appropriating a social security levy into Consolidated Revenue by some sort of sleight of hand. I find these convenient lapses in memory by some members of the Liberal Party rather extraordinary. Not only does the Government have a mandate for this legislation which was expressed on 5 March but also the latest opinion polls show that the majority of Australians in all States favour this scheme. It has one other element that relates particularly to me, and that is that part of the Australian Democrats' health policy called for universality as far as basic health insurance is concerned. One of the problems that have existed in the past is that the young and the healthy have been able to opt out, thereby placing an unnecessary burden on those people who either are responsible in their attitude to health insurance or need it for some reason or anticipate that they will need it. Universality is an essential element in this area, particularly as it relates to basic health care. Therefore, because it is part of our platform, because the Government has a mandate and because the majority of Australians approve of a universal basic health insurance scheme we have always said that we would support the Government's legislation in this area. I repeat that commitment now. That does not, of course, mean that we have no reservations about the way in which the Government is approaching the administration of the scheme. While we support the universality element and applaud this Government's attempt to take into account ability to pay as far as health insurance is concerned, we are concerned about a number of areas. We would prefer-indeed our health platform indicates this-that people have a choice of either taking basic health insurance through the levy or going to the fund of their choice. Nevertheless, I repeat that the Government proposed a mandatory levy which was approved by the people of Australia. Should a succeeding Liberal government choose to go back to the alternative scheme, I am quite sure that the Australian Democrats will look sympathetically at that area. We were concerned too about the original plan for Medibank Private to be given sole agency rights. In a very short time that would have destroyed the existence of the other private health insurance funds. Senator Crowley said in her speech that the funds are not complaining at the moment. I am not entirely sure that I or the funds would agree. At the moment their complaints are muted. Certainly, they are not complaining in the way in which they complained in the early 1970s; neither, of course, is the Australian Medical Association or any other responsible, reasonable organisation. However, that is largely due to the fact that, over the last three months, the funds, the AMA, the private hospitals and the Australian Democrats have engaged in very extensive negotiations with the Government. In doing that, we have achieved a number of concessions, some of which are written into the legislation and some of which are matters for ministerial direction, which we believe have mitigated the most dangerous elements of the Medibank Private monopoly. These concessions include the deregulation of the funds so that the private health insurance funds can diversify and go beyond simply supplying health insurance to providing other sorts of insurance and engaging in other activities if their entrepreneurial skills and desires should move them in that direction. Certain constraints are applied to Medibank Private, for example, regarding its advertising principles. It has been agreed by the Minister for Health (Dr Blewett) that Medibank Private will not piggyback with Medicare in its advertisements. For that reason I must say that I am a little concerned at reports that I have received in the last 24 hours that a Western Australian newspaper has been carrying an advertisement for Medicare which has contained also an advertisement for Medibank Private. I have not seen a copy of that advertisement, but I have been told that it exists. I would appreciate it if the Minister could make some sort of investigation into that matter and repeat his assurance that he will be directing that Medibank Private advertising and Medicare advertising do not take place in any combined form. In addition, constraints have been placed on Medibank Private with regard to blending its running costs with those of Medicare, with sharing the sites of around 86 new Medicare offices and some others that will prevent Medibank Private from being given an unnecessary advantage over the other private health insurance funds. The Government has agreed to eliminate to a very large extent the two-stop shopping inconvenience by making available Medicare forms at the offices of the other private funds so that these can be used as a sort of post box element. The Government agreed also to take on board-in fact, it has introduced a very complicated amendment to this effect-some form of gap cover for those people who are chronically ill or whose health bills for a specific reason become excessive in any financial year. At this point I wish to refer again to something that Senator Lewis said, namely, that he believes-in fact, his comments were that the Liberal Party believes-that if people do not pay something for their medical services they do not appreciate them. Presumably the Liberal Party as a bloc-certainly Senator Lewis believes that the Liberal Party as a bloc-is opposed to gap insurance. Since it believes that paying this 15 per cent means that people will appreciate the medical services which they receive presumably, therefore, they will not be tempted to treat themselves to some patient induced overservicing. While I am dealing with Senator Lewis's speech, I must say that I agree with him about assertions relating to overservicing induced by medical practitioners. Before I became a member of the Senate, I had some involvement with the field of mathematics. I learnt very quickly that conclusions drawn only from raw statistical data frequently miss the point by a mile. I would suggest that something other than computer listings of various doctors' treatment habits should be used before overservicing is determined. During the recess three weeks ago, the Government agreed to place limits on Medibank Private's contributor numbers in each State and to make easier the amalgamations of the funds. As I said a moment ago, some of these provisions are enshrined in the legislation, others are matters of ministerial direction. I would like an assurance repeated in this place, if possible, from the Government that those areas which have not required legislation and which are not covered in the legislation will still apply, as the Minister indicated during the negotiation discussions that they would. The concessions that have been arrived at by negotiations with the AMA, the Voluntary Health Insurance Association of Australian, the private hospital organisations and the Democrats have, I believe , produced a Bill which avoids the worst problems inherent in the British and Canadian systems. I admit that it is not entirely problem free; but, then, what legislation is? I understand that it is something of a truism that any piece of legislation that contains more than 50 words contains at least one loophole. So one is then left to wonder what number of loopholes there are applying to a piece of legislation the size of this omnibus package. Some of the other concerns which I and my Party have relate to some inconsistencies in the Bill regarding parliamentary scrutiny of government directions, guidelines and so on and the removal of consultation with the Australian Medical Association from the Medical Benefits Advisory Committee or, as it is soon to be known, the Medicare Benefits Advisory Committee. We believe that an organisation which represents a profession which has not only its own interests to look after but also the interests of its patients, ought at least to be consulted when it comes to the MBAC. We are concerned at the definition of a bed day as being 12 hours when it comes to the qualification of a hospital for receipt of a bed day subsidy. We believe that the period ought to be eight hours . A period of twelve hours causes enormous problems for people such as those on dialysis machines and those who go into hospital for an operation which requires a general anaesthetic but which does not require an overnight stay. If the Government insists on retaining the 12-hour rule, I believe it will lead to unnecessary extensions of overnight stays. In the case of minor operations on children or on the mothers of children, it will cause unnecessary problems in families. I have raised these matters with the Minister. I hope that he has given them some thought and consideration. The Liberal Opposition has indicated that it has prepared some amendments in this area. If they cover all the concerns which we have raised, we will certainly be looking at supporting them. If they have not raised amendments relating to the AMA's consultative role and the 12-hour rule, we shall move in that direction. Senator Peter Baume —They are included, Senator. Senator HAINES —I thank Senator Baume. However, I must state at this point that support for some or all of the Opposition's amendments relating to some inconsistencies in the legislation, consultation with the medical profession and the 12-hour rule are contingent on this legislation being passed by the Parliament this week. Most people are aware that a piece of legislation has to pass both Houses of Parliament in identical form before it can be enacted. If any member of the Opposition chooses to filibuster through this legislation so that it drags beyond the stipulated time-heaven knows, it was debated in full in the House of Representatives- we will be forced to move the amendments that we consider necessary to improve this legislation by way of private members legislation instead of supporting the Opposition's amendments. I trust, however, that members of the Opposition in this chamber are sufficiently responsible, as was indicated by their lead speaker, Senator Baume, not to conduct some sort of ambush activity on this matter. I pay Senator Baume a compliment for restricting his speech to 20 minutes. I applaud him for that. There are a number of other issues that we would like to raise. I will raise them in the second reading debate instead of during the Committee stage in order to limit as much as possible debate at that stage. Those concerns related particularly to the categorisation of private hospitals and the rigidity or otherwise of the guidelines that apply. I am thinking, in particular, of bush nursing hospitals, psychiatric hospitals and other hospitals which may be in isolated areas where people have no opportunity to get to a public hospital or which, for one reason or another, have a high staff-patient ratio. I am concerned also at the provisions relating to the role of visiting medical officers in public hospitals which do not restrict specialist activities to sessional work. I would be interested to know what the contractual arrangements are, how flexible they are likely to be and who is likely to be party to determining them, as well as what will happen to existing contracts. I do not think it is going too far to say that there has not been a great deal of logic and sweet reason in some parts of the debate on Medicare which has taken place over the last few months. That has been true of people on both sides of the debate. There have also been some unfortunate and not very subtle hints at revenge for things that happened in the early 1970s. There have been some suggestions of blackmail, some outright bloody-mindedness and the intrusion of certain vested interests, all for their own sakes rather than for any commitment to the greatest good for the greatest number. Thanks to the reasonableness of most people who participated in the negotiations that took place over the last few months I believe that the damage that could have been done has been kept to an absolute minimum. The legislation that is before us today is a necessary social reform. That it is not without some likely problems is, of course, inevitable. I believe that some of the problems that may occur should be correctable if the Government is prepared to look at them as they arise and take immediate action. It has been asserted that strains will be placed on the public hospital system due to the fact that, under Medicare, basic health care can be provided only at a public hospital. At the moment, people who take up basic health insurance with a private health insurance fund are entitled to go to a private hospital if they so choose. By moving everybody into the public sector and with no means test on the occupancy of a bed, I believe that it could significantly disadvantage pensioners and other disadvantaged people who have been the traditional users of the public health care system. However, this should be patently apparent in a fairly short time. If the Government has any desire to be re-elected I suggest that it move fairly quickly to prevent any excess in that area. I doubt whether the rather bland and hopeful assertion by the Minister for Health that most doctors will bulk bill will come about. I do not see why the medical profession should be pushed into the position of having to forgo some of its income simply to satisfy some ideology on the part of the present Government . I object to it, in particular, in that I do not think the accounting criteria on which the Government's arguments are based are all that accurate. It simply maintains that some general practitioners will have to lose 15 per cent of their income. When one is on the extraordinarily high incomes that the Government asserts most medical practitioners are on, it says they can well afford that. I suggest, respectfully, that the $11, $12 or $13 or whatever is charged by a medical practitioner for a standard consultation is not all profit or not all the cost of the doctor's time but takes into account, of course, an assortment of overheads. So by lopping off 15 per cent, even allowing for the tidier accounting process that doctors will then use, I think it is dealing some sections of the medical profession a blow heavier than is necessary. I repeat: This is a socially necessary reform. It is something that the Australian Democrats support for a variety of reasons. We hope that the debate today will allow us to support some, or all, of the Liberal Opposition's amendments relating to consultations with the AMA, relating to the number of hours a bed has to be used before the patient or the hospital qualifies for the Government subsidy and so on. We will not, of course, support the Opposition's amendment to the second reading motion since, of course, we will be supporting the second reading of the Bill. This is not to say we do not believe that there is a role for private health care in this country. We do. I believe that, thanks to the negotiations taken part in by the AMA, the private health insurance funds and the private hospital sector over the past three months, a social reform in which there is a real and long term role for private health care in this country has been achieved. That means a role for private medical practice, the private hospital system and the private health insurance funds. I believe that it will be done with the least confusion to members of the general public and with maximum benefit to the consumers of health care in Australia. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(12.27) —The Government believes that the health insurance legislation which is before the Senate is designed to overcome a great deal of the confusion and difficulties that have taken place since the original Medibank legislation was passed by the Parliament in 1974. There has been a great deal of change, we believe, in the attitude of both the Parliament and the Australian community, including the medical profession, because of the changes that came about as a result of the early introduction of Medibank and the subsequent moves made by the Liberal and National Country Party Government in the following seven years. Those changes have brought about a desire, on the part of the Australian people, to have a comprehensive and understandable health scheme which this legislation seeks to provide. The changes in public opinion, therefore, have arisen as a result of the community's experience. I think the mere fact that the federal branch of the Australian Medical Association has indicated its desire to co-operate with the Government's legislation is a radical departure from the attitude that it took almost a decade ago. I think the fact that the Australian Labor Party, by announcing, through Mr Hayden and Dr Blewett, its Medicare proposals more than a year ago, enabled the Australian people to make a value judgment about the improvements in the scheme. We now have a refined and improved Medibank scheme. It obviously found acceptance in the minds of the Australian people. I believe, therefore, that it is a socially important piece of legislation. It is an innovative piece of legislation and its universality has won wide acceptance amongst the Australian people. I believe it will stand the test of time. It is not a piece of legislation which will be changed capriciously by governments as previous legislation was changed from 1975 to 1983. The main purpose of my entering the debate is to relate the legislation to that section of the Australian community for which I have parliamentary responsibility. I am pleased that the Bills introduced into the Senate today implementing the Government's health insurance scheme make special provision for repatriation beneficiaries. First of all, it should be stressed that repatriation beneficiaries, as Australian citizens, will have access to the benefits of Medicare on an equal footing with other members of the population. However, they will also continue to receive the full range of treatments to which they are presently entitled under existing repatriation arrangements. I have had correspondence and resolutions from ex-service organisations expressing some concern in relation to the immature way in which Opposition spokesmen have attempted to portray the Government's motivations and intentions in this legislation. I want to assure the veterans' organisations that no veteran currently able to receive repatriation benefits in their totality will be affected by the legislation. The repatriation treatment service will not be changed by the Medicare arrangements. All veterans now entitled to free treatment for all disabilities- that is, personal treatment entitlement card holders, including war widows, ex- prisoners of war, World War I veterans, veterans receiving disability pensions at the 100 per cent rate and above, Second World War veterans with 50 per cent disability pensions and any service pensioners with fringe benefits-will, under this legislation, continue to receive free treatment through the Department of Veterans' Affairs. Those veterans who are covered for specific service-related disabilities will also continue to receive treatment for their conditions. It is obvious that the Opposition parties are in disarray about the Sex Discrimination Bill, are in disarray about their wages policy and are in disarray in respect of this legislation. Consequently, the point has to be made that the Government has not only a mandate but also a responsibility to put an end to the confusion that has been developed by some rebel doctors and by those on the Opposition benches who see this legislation as some form of discrimination against the medical profession. Let me return to the influence and the effect that this legislation will have upon my Department. Holders of Department of Veterans' Affairs personal treatment entitlement cards with no dependants will be completely exempted from paying the levy. However, if they have dependants and their taxable income is above the threshold levels included in the legislation, they will pay only half the normal levy. Those veterans probably now have private health insurance to cover their dependants, and as has been indicated by the Government speakers both in the House of Representatives and in the Senate, those people will find that the levy payable will be less than the amount now being paid either to Medibank Private or to one of the private insurance organisations. I think it is pleasing that the Government amended the Bill in the House of Representatives to recognise de facto relationships on the same basis as married relationships. I think that is an important recognition of changing community standards and values. De facto relationships have long been recognised by repatriation legislation, and similarly social security legislation has recognised those relationships for many years. It would not have been equitable to ignore those relationships under the provisions of this Bill. The Bill recognises the special position of veterans and the Government's commitment to the care of veterans who have suffered disabilities in the service of their country. The Government's commitment to veterans has been further strengthened in the recent Budget, which provided significant funds for the upgrading of facilities and equipment in repatriation hospitals. Contrary to Senator Lewis's assertion that there would be no improvements under Medicare in medical care or hospital care generally, the passage of this legislation will extend to veterans a greater freedom of choice in terms of their requirements than under existing provisions which require them to go to repatriation hospitals in order to enjoy the benefits from the Department. They will now, of course, have a wider choice and be able to go to other hospitals, perhaps closer to their places of residence, and have more suitable alternatives to those which currently exist. We are used to hearing Senator Lewis and his rhetoric, and obviously we will hear more of that from Senator Walters, who will follow me in this debate. But the improvements to be made in the care of persons will be recognised and will be obvious to those who will benefit as a result of the passage of this legislation by the Senate. It is worth reminding the Senate of what happened on the last occasion when Medibank was introduced to the Senate and how the Senate took advantage of its majority in those days to remove the levy. Of course we see a rerun of that attitude in the way in which Opposition speakers are committed today. As we read the debate which took place in the House of Representatives, a debate which is echoed in this place, we gladly recognise the philosophical differences. We gladly accept that such differences exist between the Opposition parties and the Australian Labor Party. Their objection to the levy comes largely from the more conservative and reactionary forces in the Opposition. The wets and the dries cannot make up their minds what legislation they should support from time to time but it is known, of course, that many Liberals not only in the community but also in the Parliament accept the advantages of universality that this legislation will provide and that payment for such health services will be according to means. That very principle is embodied in the Medicare legislation- a principle that was not part of the Liberal Party health schemes which, as previous speakers on the Government side have indicated, changed many times in the seven years from 1976 to 1983. We see, from time to time, evidence of a conservative obsession with private sector spending rather than public sector spending. It is claimed that Medicare will add $1.7 billion to government outlays. But what does it matter whether that money comes from a single government fund rather than the 65 private funds? It still comes out of the pocket. Government revenue comes out of the pockets of citizens, and it is much better and much more rational to place it in one single fund than to have the present multiplicity arrangement. In essence, of course, it makes absolutely no diference to Australia's overall health expenditure. I think in the final analysis it will be found to be much more rational and much more economic. The dries claim that the one per cent levy will increase taxes by $1 billion. It does not matter that that is an income related tax rather than a flat rate tax which is paid to the health funds. At least the Medicare levy is income related. Therefore, it is affordable, whereas basic private insurance, which is the only way in which citizens can look after their health expenses, costs them at least $14 a week. Of course that cannot be afforded by many of those on low and middle incomes. Let us just look at the figures: Currently a family on $200 a week pays 7 per cent of its income for basic health care, whereas a family on $50,000 a year pays only 1.4 per cent of its income. Where is the equity in that? The inequity of that situation is why some two million Australians have no health cover either through the private funds or the Commonwealth cover for pensioners, the unemployed and low income groups. Of course, we see an attempt by many people to abuse the pension system because they want to get the fringe benefits. The attempt by these people to get around legislation and to arrange their affairs in such a way as to get themselves out of their tax responsibilities is designed also to get them into the fringe benefit areas for hospital and medical care. So , that enticement that has hitherto existed will be overcome as a result of this legislation and the strict means test that previously applied will lose its relevance to many of our citizens. The Opposition claims that the one per cent levy is a political ploy unrelated to health costs. However, the private health insurance funds are not able to stand on their own feet without Government assistance. They are propped up with subsidies to the tune of $420 per annum, which the Commonwealth pays in doctors' bills for the privately insured; $100m went to the private funds in reinsurance subsidies to reduce the effect of heavy drawers on the level of premiums; and $ 550m was provided by the Commonwealth as a tax rebate on basic insurance premiums. So in fact the Commonwealth is paying out that money. It is losing revenue to about the same extent as it will collect revenue as a result of the one per cent levy. It is absurd for the Opposition to take the view that it has, because in my belief and in the belief of the Government the Commonwealth is already subsidising that industry very heavily. As part of Medicare we have restructured these subsidies to ensure that the greatest benefit from that money goes to those in the greatest need. That should be the basis of all welfare systems, and of course is the basis of this legislation. We are using that money as well as the income from the one per cent levy to provide affordable health cover for all Australians. Contrary to what has been said by Opposition speakers, there is no evidence that patients are involved in any of the Medibank frauds. In fact, if there has been any overservicing at all it has been carried out by a few medical people. It is a few medicos who have been found to be involved in the process of overservicing. It is not the citizens. I believe, as the Government believes, that the average citizen of this country plays his part-plays the game in respect of these matters-and will be very happy to see the implementation of this legislation which will restore some sanity to the whole medical and hospital requirements of the Australian people. We have no doubt that once this legislation is passed-in February of 1984 the processes will be effected which will provide universal treatment to all citizens of Australia regardless of who they are and where they are-it will be accepted by the Australian people. That will enable this legislation to be regarded as an important step forward in the health care of Australian citizens and one which I think will endure for all time. Debate interrupted. Sitting suspended from 12.44 to 2 p.m. Senator KILGARIFF —My question is directed to the Minister for Resources and Energy and concerns what Senator Coleman yesterday described as the Government's prevarication on the uranium mining issue. I ask: For what specific reasons has the Government so far refused to allow the mining of uranium at Jabiluka and Koongarra? In particular, is it a fact that the Government has been forced by those Government members opposed to uranium mining not to proceed, or does the Minister believe there is either an insufficient demand for Australia's uranium or insufficient prices for uranium for mining to be economically viable? Senator WALSH —I cannot remember which party Senator Kilgariff is in at the moment. I know he changes around from time to time. Mr Anthony, who is the leader of the party to which Senator Kilgariff once belonged, in December knocked back a draft contract between the Jabiluka partners and the Central Electricity Generating Board of the United Kingdom because the pricing arrangements were not satisfactory. I made that point yesterday and have made it many times before. That is one of the factors that the present Government takes into consideration, as did the previous Government. As has been said countless times in the Senate, general uranium policy is subject to a comprehensive review and is currently scheduled for Cabinet decision next month. Senator ROBERTSON —Has the Attorney- General seen the new Northern Territory Criminal Code? Is he aware of the strong objections which have been raised to the Code? I ask: What action does he propose to take regarding those objections? Senator GARETH EVANS —I have seen a copy of the new Code which was recently rushed through the Northern Territory Legislative Assembly, although it had been preceded by some months of earlier gestation. My attention and that of the Minister for Aboriginal Affairs has been drawn to the strong objections to it being voiced by a number of groups apart from the Australian Labor Party Opposition in the Northern Territory. I refer particularly to the Northern Territory Law Society and legal aid and welfare groups concerned with the rights of Aboriginals. On a preliminary examination certainly a number of provisions in the Code concern me as raising really quite fundamental issues of criminal law and procedure and civil liberties. In conjunction with the Minister for Aboriginal Affairs I am having the Code fully examined and analysed. As part of that review process I am also considering what, if any, action might be appropriate for the Commonwealth to take. While it is of course the case that the Commonwealth retains full constitutional powers as far as the Northern Territory is concerned, the self- governing status of the Territory, equally obviously, imposes practical limitations on what the Commonwealth can do on matters like this. It may be that redress for any excesses in this legislation will have to await the enactment of national human rights legislation of general application. But certainly the matter is being considered and is under review because it raises very alarming questions about the sensitivity to civil liberty considerations of the present Government in the Northern Territory and has quite profound implications for many citizens of that Territory, not least Aborigines and others who are disadvantaged. Senator MESSNER —I direct my question to the Minister for Social Security. I refer to the new Disability Advisory Council which the Government has set up to replace the National Advisory Council for the Handicapped. In view of the Minister's statement at the time of establishing the Council that the Government will be looking to disabled people themselves for advice on Government policy affecting them, is he able to inform the Senate why there is no representative of adult people with psychiatric disabilities and emotional disturbances? Will the Minister assure the Senate that he will have immediate discussions with groups like the Psychiatric Rehabilitation Association with a view to providing these people with a voice on the new Council? Senator GRIMES —The new Disability Advisory Council of Australia was, as Senator Messner says, established by the Government to replace the National Advisory Council for the Handicapped. I point out that most of the members of the new Council are, in fact, disabled people. They represent a broad spectrum of disabilities, unlike the previous National Advisory Council for the Handicapped. In drawing up the membership of the Council, after consultation with people from various States and organisations, I tried to strike a balance between a broad representation across the States, representation of both males and females and representation of as many disabilities as possible. It is quite obvious that there is no way a Council of 14 members could have a representative of every form of disability. Therefore, we made the representation as broad as possible. We appointed half the Council for two years and the other half for three years, so that in the future we will be able to change the membership. We will be able to rotate it so that eventually every broad group of disabilities will be represented. To establish a Council containing a representative of every form of disability in this country would involve making that Council far too large to be an effective representational or consultative body. For that reason we took the action we did. Of course, some groups are not represented-the deaf, for instance . I have had representations from many groups asking why they were not represented. The answer is that in future they will be represented as much as possible. In fact, they will be consulted by their fellow sufferers in future so that we get a much better standard of advice and advice which is much closer to the real feelings of the disabled. Senator MESSNER —Mr President, I ask a supplementary question. I thank the Minister for his answer. I wonder whether he would agree that the problems of the psychiatric disabled are unique and distinct from those of many other groups and therefore demand special consideration. Senator GRIMES —I do not deny what Senator Messner says, but I think the same thing could be said about the deaf and many other disabled people. The simple practicalities of the matter are that to try to get representation right across the board is very difficult. In the future we will attempt to have such groups represented. Senator TATE —My question is directed to the Minister representing the Minister for Health. Has the Government received representations from medical practitioners concerning undue delay in the processing of accounts rendered under bulk billing arrangements? Does the Government concede that such inordinate delay, sometimes amounting to many months, does occur and is likely to dissuade many doctors from jeopardising the cash flow of their practices by using the scheme when Medicare is introduced on 1 February 1984? What assurance can the Government offer that bureaucratic difficulties will be overcome to the benefit of a co-operative relationship between doctors and the Medicare scheme? Senator GRIMES —As Senator Tate says, the Government, and I am sure all honourable senators, have received representations from medical practitioners throughout Australia concerned at the delays caused by the eligibility checking procedures on bulk billing claims which were introduced by the previous Government. I point out that this problem is due entirely to the current complex and discriminatory insurance scheme and the incompetent management in this area by previous Ministers. The previous Government introduced a system of eligibility checking earlier this year which increased the number of claims being rejected from 5.5 per cent to 14 per cent and therefore increased the number of claims requiring double handling in this area by over 150 per cent. So what we have is a bureaucratic maze of cross checking, between the number on the assignment voucher and the social security entitlement records, which is unacceptable to this Government and, I think, should be unacceptable to any government. The Minister for Health informs me that he has recently approved the employment of an additional 111 temporary staff to help reduce this backlog of bulk billing claims. As long as we remain with the present insurance system, it will be difficult to provide an acceptable turnaround on those claims. With the implementation of Medicare on 1 February 1984, I believe these problems will be eliminated because the same rate of benefits will be provided to all Australians and therefore the need for eligibility checking will be removed. Combined with the modern on-line processing systems of the Health Insurance Commission, we believe that the delay will be reduced to one or two weeks and this will satisfy the medical profession, the Government and the patients. Senator CHANEY —My question is directed to the Leader of the Government in the Senate. I ask him: Has his attention been drawn to reports in various sections of the print media claiming that on last Friday he, Senator Button, told a Press conference that he believed a capital gains tax should be introduced, and further, that he would put the case for the introduction of a capital gains tax to the Government? Are the reports to that effect correct? If they are, when does the Minister expect to put that case to the Government? Does he propose to put the case to the Economic Planning Advisory Council and to seek its support for that view? Would the introduction of the tax advocated by him constitute a clear breach of the election promise given by his party in the recent campaign? If it would, what explanation does he give for advocating a clear breach of yet another election promise made in recent months? Will the introduction of a capital gains tax add a further imposition or difficulty to the accumulation of capital for investment in the development of small business and, therefore, a further impediment to increased private sector employment? Senator BUTTON —I am asked whether I have read reports in the newspapers that at a Press conference last Friday I spoke with favour of the introduction of a capital gains tax. Yes, I have read the Press reports and the Press reports, I am happy to say, are correct. I did so advocate that. It is my view that there should be a capital gains tax in Australia and I will continue to advocate it both publicly and within the Government. I am then asked when I will put that case to the Government. I will put it to the Government at every opportunity that I get, and I will continue to do so. Whether I am successful remains to be seen. The question of the introduction of a capital gains tax is a matter for government determination and that determination will be made at the appropriate time. I have no doubt there will be a number of different views within the Government about that issue, in respect of which my view is only one. I am asked further whether I will put the case to EPAC. I do not see it as being my function, as a Minister in the Government, to put cases to EPAC. I am reasonably confident that EPAC will examine this issue and may in turn, at an appropriate time, put a case to the Government about it, one way or the other. The function of EPAC is to advise the Government about those matters. No doubt it will put a case. Of course both EPAC and I are entitled to our views about this and will put our respective cases at the appropriate time. I am asked further whether the introduction of a capital gains tax would be a clear breach of the undertaking given by the Government prior to the last election. I invite Opposition senators to possess their souls in patience, to see whether a capital gains tax is introduced and what form it will take, before they leap to conclusions about that question. I am also asked whether the introduction of a capital gains tax, as advocated by me, would be a further imposition on industry and business and would constitute a further disability to those sectors of the economy. I think it goes without saying that, if I thought that that was so, I would not be advocating a capital gains tax. I do not happen to think that is so at all. One of the disasters this country has suffered over many years is the direction of capital into the wrong areas in the economy. It has been a grave disability to the growth and development of the Australian economy that that has been allowed to go on for so long. Senator CHANEY —Mr President, I have a supplementary question. The implication in the answer is that Senator Button might from time to time, in a desultory way , put his views to the Government if the occasion arises. I ask him: Does he in fact intend to put a case to the Government in favour of the introduction of a capital gains tax, or is he merely going to deal with this matter in the offhand and casual way in which he has just answered my question? Senator BUTTON —With the greatest of respect, Mr President, that is not really a supplementary question. The first part of the question was directed towards my state of mind on a particular issue. The second part of the so-called supplementary question was directed towards my style which I find in a sense somewhat offensive. I am asked: Will I adopt a desultory approach to the pursuit of this question or will I adopt the sort of vigorous approach which one sees on the other side of the Senate-honourable senators leaping up every day with relevant questions, driving the Government almost mad with their persistence about particular issues? Will that be my style or will I be desultory about it? I indicated in the earlier part of the question that at the appropriate time, when these matters arose for discussion by the Government, I would put that position. Senator Chaney —You will put your bib in; you will put your little word in. The PRESIDENT —Order! The Leader of the Opposition has had a supplementary question. Senator BUTTON —Senator Chaney keeps on interjecting. He says that I will put my little bib in. What are his interjections all about-putting his little bib in. I imagine that Senator Chaney knows full well that I am not going to rush out of Question Time, pen a case for a capital gains tax and rush around to the Cabinet room with it-of course not. I will do that at the appropriate time. Senator Chaney —Why not? What are you going to do, talk big to the media? Why don't you do something? Senator BUTTON —Senator Chaney seems perilously offended by the answer I am giving him. He has a mind like a laser on this issue, if I might say so-bright but very narrow. I have given an answer to the question. If he wants to pursue it further, let him ask me another question. Senator Chaney —Are you going to do anything or not? Senator BUTTON —The honourable senator could ask that about anything in government. If he keeps on asking, we will give him answers. Senator GILES —My question is directed to the Minister for Veterans' Affairs. I ask him whether he has seen an article by Graham Williams on page 1 of the Sydney Morning Herald today entitled 'Now a quarter of Australia survives on welfare . . .' Will he tell the Senate whether the Sydney Morning Herald was correct in including service pensioners in its list of 4,016,470 Australians dependent on Commonwealth benefits as their prime source of income, but in excluding disability pensioners? If not, how much higher should that figure be? Senator GIETZELT —Yes, I have seen the article that Senator Giles has referred to , which I think was a very useful article about the changes in the economic scene in Australia in the last decade. The newspaper article indicates a very considerable proportion-one in four-of persons now dependent upon cash payments from the Commonwealth on a regular basis. However, the table does in fact exclude the 410,473 war disability pensioners and their dependants as at June 1983. The Sydney Morning Herald's decision to exclude those persons from the calculation is basically correct because the payments of disability and other related pensions are substantially means-test-free. This means, in effect, that recipients either supplement their disability pensions with adequate and independent sources of income or are eligible for other benefits such as the age or service pension. So most of this latter group would be counted elsewhere in the table. It, of course, shows that there has been a dramatic change in economic conditions so that the Federal Government now has to support a very large proportion of the Australian people. We should bear in mind, of course, that something approaching 800,000 people are in receipt of the unemployment benefit. However, this question about the disability pension brings me to an important point. There is a great deal of unjustified confusion amongst veterans in particular, which unfortunately I find some honourable senators opposite have deliberately fanned, about the impact of the foreshadowed assets test on disability pensions. I reiterate, as I have done on a number of occasions, in the strongest possible terms that the Government regards such pensions as compensatory payments for disability suffered during service in war and not as a welfare-related measure. I again assure the Senate that the Government will not be applying any income or assets test to such disability pensions. Senator CHIPP —I ask the Minister representing the Minister for Foreign Affairs the following question which is divided into three parts: Firstly, does the Government regard Pine Gap, Nurrungar and North West Cape as being in the category of prime nuclear targets in the event of an outbreak of a superpower war? Secondly, if so, does this mean that these areas of Australia have nuclear weapons aimed at them from Soviet bases? Is it the view of the Government that Darwin and Perth, because of their links with nuclear arsenals, and Canberra, because of its strategic significance, are also prime nuclear targets? Senator Chaney —We can only hope so. Senator CHIPP —I want no help in my question from the intellectuals of the Liberal Party from Western Australia or Tasmania. The PRESIDENT —Order! Will the honourable senator ask his question. Senator CHIPP —I acknowledge that is a contradiction in terms, Mr President. The PRESIDENT —Will the honourable senator continue with his question. Senator CHIPP —Finally, so that a logical and reasoned debate on this issue can take place among Australians, does the Government agree or disagree with the recent view of the Joint Parliamentary Committee on Foreign Affairs and Defence, which I understand was unanimous, that if United States bases and military presence were removed from Australia the possibility of Australia being a nuclear target would be very unlikely? Senator GARETH EVANS —The Government addressed these matters recently in the statement by the Minister for Foreign Affairs on the outcome of the review of ANZUS. The view that has been taken about the first of the matters that Senator Chipp raised is this: The contingency of global nuclear war, despite the horrors associated with that, is, for the moment anyway, one that continues to be assessed as remote on the basis that mutual deterrence between the superpowers continues to be an enormously powerful constraint. In the event of global nuclear war the Government, of course, recognises that there would be a risk of the joint Australian-United States defence facilities being under attack. However, the degree of likelihood or the likely priority of such attacks on the joint defence facilities could be only a matter for speculation. Senator Chipp —But what is the Government's view? I am asking that. Senator GARETH EVANS —I am telling the honourable senator what the Government's view is. Darwin and Perth are not linked with nuclear arsenals any more than are any other ports in Australia that are visited by foreign warships. Such port calls are usually for periods of less than a week and are for rest and recreation purposes. Peacetime visits of this nature are not assessed by the Government as presenting significant risks of attack on the ports concerned; nor is Canberra taken as having the kind of strategic significance that is implied in the question. The B52 aircraft which use the facilities at Darwin are engaged only in sea surveillance and navigation training operations. These aircraft are unarmed and carry no bombs. There is no United States military presence in the sense of combat units stationed in Australia. If the question seeks to hypothesise a situation in which there were no joint defence facilities in Australia and no United States military units, either ships or aircraft, visiting Australia, there would have to be weighed in the balance, in answering the question that Senator Chipp finished with, the loss of the contribution that would thus be made to the overall deterrence of nuclear war which those joint facilities make and the weakening which that would represent of the co-operation in defence matters which is taken as supporting Australia's security. The general view of the Government on this matter remains as summarised by the Minister for Foreign Affairs in his statement on 15 September. I finish by quoting him: . . . the contribution made by the . . . facilities to the deterrence of nuclear war fully justifies any risk that might be seen as arising from our having those facilities in Australia. Senator CHIPP —I ask a supplementary question. It was because I had carefully read the Minister's statement of 15 September that I asked this question. The Minister's statement of 15 September gives no answers as to whether any points in Australia are regarded by either the Government-by that, I mean the Australian Labor Party-or the Foreign Affairs Department as a nuclear target. Is not a major known function of the North West Cape base communications with United States Navy's nuclear powered and nuclear armed submarines which carry 5, 000 nuclear warheads? Is not the North West Cape one of only three such bases in the world and the most powerful of all three? In view of that, does or does not the Government list North West Cape as a prime nuclear target in the event of an outbreak of a nuclear war between the two superpowers? Senator GARETH EVANS —I repeat what I said as to Perth, Darwin and Canberra. The answer is no, they are not assessed to be nuclear targets in the sense in which Senator Chipp asked his question. As to the joint United States-Australia defence facilities to which he referred again in his supplementary question, the assessment is that there would be a risk of attack in the event of a nuclear war situation. Where we would rank in the scale of potential targets around the globe is something which has to be a matter for speculation and on which the Government has no clearer information than that which I have already indicated. Senator CROWLEY —My question is directed to the Minister for Social Security. Recent submissions to me have voiced concern about how the allocation in the Budget for women's shelters will be distributed. The worry is that much of the money will be used to help States or Territories that have lagged behind in providing shelters in their States or Territories, to the detriment of those States or Territories which have been more forward in such provisions. Could the Minister give details of how the allocations will be distributed across Australia? Senator GRIMES —Like Senator Crowley, I have had various submissions put to me about how we may or may not distribute the extra money which was provided in the Budget for women's shelters. Honourable senators will know that at the moment funds for women's shelters are in fact distributed by the States through the community health grant. In this Budget we allocated an extra $4m which was in fact in addition to the money which was already spent by the States through Federal Government funds on women's refuges. We are establishing in the Department of Social Security a section to deal with women's emergency services. It is through this section that the $4m will in fact be distributed. At the moment neither I nor the Government has made any decision as to the exact distribution of these funds. One would imagine that it would probably have to be distributed in the way it is being distributed at the moment while we are negotiating with the State governments as to the future of this program. One would imagine that the money would be distributed on the basis of the number of existing shelters or population, or on a combination of both. As I say, no decision has in fact been made. We hope that the money will go to improve the working conditions and the general conditions in women's shelters, which are a very good example of the sort of exploitation of those people who provide the services. This should be corrected in the future and will be corrected as the women's emergency services program develops. I cannot give Senator Crowley an exact answer on how that money will be distributed State by State but at the moment there is no intention, as far as I am aware, to distribute the money in the way she suggested. Senator PETER RAE —Does the Minister for Industry and Commerce recall telling the Senate on 10 May this year that a review by his Department of the system of tariff preferences for developing countries 'ought to be completed, possibly by the end of this month but certainly by early next month'? Is it a fact that more than four months later that review has not yet reached finality? What are the reasons for such an inordinate delay in an area which has such serious ramifications for the jobs of many Australians, as the case of the Korean wire manufacturers mentioned yesterday so graphically illustrates? Is this delay just another example of the argument on protection policy which has become so evident in recent days and has included an apparent leadership war involving the Prime Minister, Mr Hawke, supporting the former Leader, Mr Hayden, against the Deputy Leader and Minister for Trade, Mr Bowen, and the Leader of the Government in the Senate and Minister for Industry and Commerce, Senator Button, with Dr Theophanous as Chairman of the Caucus Industry Committee involving himself in a way which is not as yet quite so specific? Senator BUTTON —I recall saying something to the Senate about this issue of the Australian system of tariff preferences and I accept Senator Rae's implied view that it was on 10 May. I certainly said that I hoped the review would be completed shortly. The answer is that it has not been completed as shortly as I would wish because a number of complications have arisen in relation to that view, including questions of our bilateral trade relations with certain countries and so on which are very complex issues. I can only repeat what I said on 10 May, I hope with more precision: I hope that that review one way or another will be completed very shortly and an announcement made about it. I am asked whether this is in any sense a by-product of the argument which agitates the Opposition about protection policy, an argument which seems to have been carried on in the media between certain Ministers in the Government and in respect of which I hoped Senator Rae would have been charitable enough to suggest that I played a mediating role. I hope Senator Rae understands that it is not an aspect of that argument. A number of other factors are involved. Although that argument has broad relevance, it is not something which has delayed the review of the Australian system of tariff preferences. It is desirable that in a community which is very much divided on issues of this kind there should be debate about the importance of those issues. It does not seem to me to be important that it should be carried on by Ministers in a government even, provided it is done in a constructive way. It is far more important to have a public debate and far less sordid to have a public debate about protection than about sex. Senator ROBERT RAY —I ask whether the Minister for Education and Youth Affairs recalls making the following statement on 18 May this year in relation to teaching facilities at a relocated Queen Victoria Medical Centre in Clayton: We support the need for these facilities to move with the relocation of the Hospital to Clayton and I will be sympathetically considering the recommendation on funding from the TEC. In light of this statement, when can we expect the final go-ahead for the project? Senator RYAN —I am aware of the concerns expressed by people who support the relocation of medical teaching facilities in the new Queen Victoria Medical Centre in the Federal electorate of Bruce. Recognising these, we have sought further advice from the Tertiary Education Commission as to how soon and at what cost these facilities can be supported by the Commonwealth. As the honourable senator would be aware, there is an enormous range of demands on the budget available to the TEC for the next year and I think the question of a special provision for the Monash University Medical School will be dealt with in the next triennial report of the TEC, which will be published next year. Senator PETER BAUME —My question of the Minister representing the Treasurer is in two parts. Will new imposts announced last night in New South Wales, for example on the cost of petrol or cigarettes, add to the consumer price index? If so, what allowances were provided in the forecast Australian annual inflation rate of 7.5 per cent for price rises arising from State government Budgets? Senator WALSH —The answer to the first part of the question is that of course such increases in State taxes, unless they are absorbed somewhere else, will be reflected in the consumer price index. Petrol will have far less impact in the short term than cigarettes for the same amount of tax revenue because cigarettes feed 100 per cent and immediately into the CPI; about half the petrol which is consumed is not covered directly by the CPI. Although it can be argued that there will be second and third round and nth round effects which will ultimately add to the total expenditure on items included in the CPI an amount equal to the tax, in the case of petrol that impact will be significantly delayed. In summary , if one is to compare different types of taxes, whether imposed by State or Federal governments, and evaluate their effect on the CPI in the short term, and if one believes that any tax which increases the CPI is undesirable, increases in sales tax on cigarettes are probably the worst in that respect. An increase on petrol is only about half as bad. In regard to the second part of the question, I do not know what allowances, if any, were made by Treasury when estimating the 7 1/2 per cent year on year increase in the consumer price index. I will refer that to the Treasurer to see whether any information can be obtained. Senator REYNOLDS —Is the Minister representing the Minister for Finance aware that the expense of caption television decoding equipment is out of the economic reach of many deaf people? At present the commercial television networks are supporting the captioning venture but, if the deaf and hard of hearing are prevented from having access to this service for economic reasons, television stations could be in a position to use poor decoder sales as an excuse to withdraw from sponsorship of the sub-titling service. Therefore, can the Minister have investigated sales tax exemption on decoding equipment, which would help to alleviate the present situation? Furthermore, can the Minister undertake to investigate a complete review of sales tax on all technical aids used by handicapped persons in their homes? Senator WALSH —I am not familiar with the matters which Senator Reynolds raised. All that I can do in response is to say that I will refer the question to the Minister for his views and to see whether he will consider the review as she suggested. Senator TEAGUE —Does the Minister for Education and Youth Affairs approve of today's announcement that there will be behind the scenes adjustments of this year's matriculation examination results which will give artificially improved outcomes for girls only in the Australian Capital Territory year 12 school assessments? Is this affirmative action for girls? Does this positive discrimination in favour of girls in the Australian Capital Territory only possess any integrity? Is it unfair to other year 12 students in Australia? Even if last year it was found 'that girls were not scoring as well as boys in the matriculation results', is that justification for now rigging next year's results to favour girls, or should it not lead to considering improved teaching resources for girls? Finally, does the Minister approve the assessment of school performance on the basis of merit or on the basis of affirmative action with a sex bias? Senator RYAN —The Australian Capital Territory Schools Authority, which is the body responsible for assessment procedures at the end of secondary schooling in the Australian Capital Territory, has made a decision with regard to those assessment procedures which has nothing to do with affirmative action. The decision was not intended to create any advantage for girls but to remove a disadvantage which had been identified as a result of research into the operation of the Australian scholastic aptitude test in the Australian Capital Territory. I do not have available to me here the details of the particular bias that has been established, but it was established by very authoritative education researchers. Ways in which scores were assessed and the loadings for different subjects were found objectively to be discriminatory against girls. The bias is being removed and in this year's ASAT assessment procedures there will be no bias against girls or against boys. Because of that the merit principle will be unviolated by the procedures. Senator TEAGUE —Mr President, I ask a supplementary question. Will the Minister again give consideration to the final parts of my question, with more time, so that members of the public may understand and have confidence in the important matriculation assessments that have effect not only in the Australian Capital Territory but also in the Australian Capital Territory vis-a-vis all other matriculation and so that they will understand that there is an objective assessment of merit in school performance? Senator RYAN —I will certainly undertake to make a public statement to the effect that there will be an objective test of merit of students completing their secondary schooling in the Australian Capital Territory. I do not think any concern is justified on this score. The particular kind of assessment that we have in secondary schooling in the Australian Capital Territory has proved very successful. The success can be measured in terms of the success that students coming out of the secondary school system here have had in securing places in a whole range of subjects in universities throughout Australia. All tertiary institutions throughout Australia accept assessment procedures in the Australian Capital Territory, including the ASAT test, and I am sure that they will continue to do so. Senator ELSTOB —My question, which is directed to the Attorney-General, refers to the ever increasing popularity of commercial video movies for use within the home. Is the Attorney-General aware that although most video movies bear a basic classification code, actual censorship practised in the home is often extremely neglectful of these guidelines, particularly where children and young people are concerned? As an adjunct to the proposed legislation in this area, will the Attorney-General consider instigating an educational campaign, firstly, to explain film classification codes and their application and, secondly, to promote community awareness of the proven detrimental effects on children and young people of watching violent and pornographic films? Senator GARETH EVANS —As Senator Elstob's question implies, the Government is proceeding with legislation to get some rationality into the system governing video movies for home use. A new uniform system of censorship classification was agreed to at a meeting in Brisbane in July by Commonwealth and State Ministers responsible for censorship matters. The principle underlying the agreement was essentially to ensure maximum freedom for adults to view what they want to in the privacy of their own homes, but at the same time to give guidance to consumers at the point of sale as to what they are buying or hiring and placing some limits on what can be openly displayed or sold to children. The particular legislative model that emerged from that meeting is in process now of implementation with a system of classification, accompanied by appropriate point of sale controls. At the Commonwealth level, regulations are being prepared at the moment to put the system into place. They will be promulgated, hopefully, around November, with an appropriate time lapse to enable vendors and hirers to gear up. We imagine that the system will be in place, at least so far as the Australian Capital Territory is concerned, by February next year. One element in that proposed legislative system is for classification labels to be applied to video tapes for sale or hire running parallel with those now applied in the cinema, namely, the classifications G, NRC, M and R, but with a further category X to be added for stronger material which would be refused cinema showing but is nonetheless appropriate for private consumption, in accordance with the principles I have just indicated. Some categories of material will be refused classification altogether. They include child pornography and other very extreme material of that order of offensiveness. Continuing attention is being paid to what the guidelines should be that are appropriate for each one of those layers of classification. Attention is also being given to clarify some of those labels because there is consumer uncertainty about them. In particular, there is uncertainty about what precisely are the connotations in the familiar cinema classification NRC. A proposal is being considered by the Ministers for both cinemas and video tapes which would replace the classification NRC with the expression more familiar to television viewers, parental guidance, PG, or parental guidance recommended, PGR . I hope that that will serve some of the objectives to which Senator Elstob's question was directed. Whether the Government should go further than that and mount some kind of educational campaign designed to draw the attention of consumers-adults who have charge presumably of these video tapes in the home environment-to the possible dangers associated with particular kinds of material is something to which the Government will have to give further consideration. Certainly there has been no consideration of that at the moment, but it is something that I will ensure is put on the agenda for a subsequent meeting of the Ministers concerned with these matters. Such a meeting is scheduled to be held later this year. Senator Dame MARGARET GUILFOYLE — I direct a question to the Leader of the Government in the Senate. I have noted reports to the effect that the Victorian Government is considering a 25 per cent public interest in the Alcoa development at Portland. Has the Commonwealth Government given any undertaking to assist Victoria in the financing of an investment of this nature? Senator BUTTON —I think the Commonwealth Government has been kept informed of the negotiations between the Victorian Government and Alcoa by both parties. However , as I understand it no undertakings have been given by the Commonwealth Government. Senator COLSTON —Can the Minister representing the Minister for Finance advise the Senate whether Dr Shrian Oskar owes money to the Commonwealth? If so, has the Commonwealth been able to recover any of the money? Can the Minister advise whether any other governments are owed money by Dr Oskar or whether the same gentleman has tried to dupe other governments? Senator WALSH —The answer to the first part of the question is yes. The Commonwealth has not yet recovered any of the $2m awarded in its favour against Dr Oskar by the Supreme Court of Western Australia in April. The circumstances behind that are that Dr Oskar had personally guaranteed a $2m Commonwealth loan to establish an oil seeds plant at Bunbury in Western Australia. The State Government had also guaranteed loans of, I think, $4m or $5m. The Commonwealth lent the money on the personal guarantee of Dr Oskar, having first checked with reputable banks that he did, in fact, have funds of that magnitude. That was done by the previous Government. I say that not in a political sense but just for the record. When Dr Oskar's personal guarantee was called on because the company had failed, Dr Oskar denied that it was his signature on the document of guarantee. That was the matter which was contested in court. The court found that it was Dr Oskar's signature and that he was, therefore, personally responsible for the repayment of the $2m Commonwealth loan. On the day that the Supreme Court decision was handed down in Western Australia, Dr Oskar was staying in a suite at the Parmelia Hilton International. He disappeared that night and has not been heard of since, to the best of my knowledge, although until recently some negotiations were still under way for the repurchase, on behalf of Dr Oskar, of the assets of the oil-seed processing company which had failed in Western Australia. In the second part of his question Senator Colston asked whether Dr Oskar had gypped or swindled any other governments. The answer to that is also yes. He left behind a string of similar deals in Fiji, Dubai, Ireland and New Zealand before he came to Western Australia. After he had set up the deal in Western Australia he moved to Queensland where the Queensland Premier approved a $6m loan guarantee, in spite of strong resistance by the then Treasurer and Liberal Party leader, Dr Edwards, and resistance also from the Queensland Graingrowers Association, a body with which normally one would expect the Queensland Premier and his Party to have a very close association. Very luckily, quite fortuitously , the proposal did not proceed. Had it proceeded, presumably the Queensland taxpayers would have been left whistling for $6m for a loan guarantee, just as the Commonwealth is now whistling for the $2m it has not been able to recover from Dr Shrian Oskar. I do not know whether, as some people might believe, the Queensland Premier also considered appointing Dr Oskar as the director for industrial development, along with Milan Brych as the director of health and Stephen Horvarth as the Minister for nuclear development, or whether the extraordinary lengths to which the Queensland Premier went, riding roughshod over his coalition partner, over industrial groups with direct interest-- Senator Chaney —I raise a point of order. The whole object of this exercise is quite clear. Mr President, you made a couple of motions towards the Minister as he spoke. I suggest that he is outside the Standing Orders. This has nothing to do with his portfolio responsibilities and he should be called to order. The PRESIDENT —I have listened to the Minister closely. I think he is still answering the question that was asked by Senator Colston. I ask him to confine his answer to that question. Senator WALSH —Certainly, Mr President. As I said, this particular crook, this international con man with a record in Fiji, Dubai, Ireland, New Zealand and Western Australia of gypping governments, was then adopted by the Queensland Premier in spite of the resistance of his coalition partner-I suppose that never did count for very much in Queensland-and in spite of the strenuous opposition of the industrial group with a direct interest in this matter, the Queensland Graingrowers Association. I do not know whether, as some say, the Premier's propensity to sponsor Dr Oskar and insist on approving a guarantee for a $6m loan has any relationship to the Bjelke-Petersen Foundation and whatever Dr Oskar may have done for that. That may be so but I do not intend to speculate on it. Senator Peter Rae —I raise a point of order. Pursuant to Standing Order 363 I seek to have laid before the Senate the document from which the Minister was quoting in answering this question. The PRESIDENT —Does the Minister choose to table that document? Senator WALSH —There is no document. There is a sheet of handwritten notes which include notes relevant to another question. The PRESIDENT —Is the Minister tabling the document? Senator WALSH —I am quite happy to table it. Senator DURACK —My question is directed to the Attorney-General. I ask whether his attention has been drawn to some recent published statements in Australia by a Mr Victor Marchetti, a former officer of the Central Intelligence Agency, who is still in Australia, as far as I know. His statements have been critical of evidence given by officers of the Australian Security Intelligence Organisation and, I think, the Director-General of ASIO before the Hope Royal Commission on Australia's Security and Intelligence Agencies. Are not some of these statements about matters which are directly at issue before the Royal Commission? If so, has the Attorney-General taken any action in regard to these statements or has he instructed government counsel to do so? Senator GARETH EVANS —The Government has a commitment to robust free speech in matters generally and also so far as the Hope Royal Commission is concerned, which is just as well, given the extent to which that right has been exercised by not only Victor Marchetti but also all sorts of other people during the tenure of the Commission. I have not had specifically drawn to my attention any remarks which could constitute formal contempt of the Commission. Certainly the Commission itself has not drawn anything to my attention as justifying examination along those lines. I certainly have not instructed counsel to take any course of action in relation to those remarks, whatever they may have been. Senator GEORGES —I direct a question to the Attorney-General. Yesterday I received a copy of an open letter to the Attorney-General from Ray O'Shannassy, who is at present in the Goulburn Gaol as a result of conflict between himself and a magistrate in the Australian Capital Territory. On reading the letter it seems to me that Mr O'Shannassy has a case against the magistrate. On a previous occasion the magistrate was forced by direction of a Supreme Court Judge to stand down from the case. The situation now is that since 5 September Mr O' Shannassy has been in the Goulburn Gaol. The possibility is that he will continue to be in the gaol for some time. What action can the Attorney-General take to see that Mr O'Shannassy is given reasonable justice and is immediately freed from the circumstance in which he finds himself? Senator GARETH EVANS —I did receive what purports to be an open letter to me from Mr O'Shannassy dated 14 September. Furthermore, a member of my staff did have a discussion with a delegation putting Mr O'Shannassy's case. I am familiar with the circumstances of the matter to which Senator Georges referred. The situation briefly is this: Mr O'Shannassy has been arrested on various charges, including refusing to leave Commonwealth premises when directed to do so by a police officer, malicious damage to Commonwealth property, loitering and some other charges as well. In his letter he refers to his appearance before the Canberra Court of Petty Sessions on 5 September before the Chief Magistrate. I understand he refused then to indicate whether he was seeking bail. He was remanded in custody, as Senator Georges said, in Goulburn Gaol. On 6 September he was offered bail of $250 on certain conditions, including a condition that he not go on to the grounds of Havelock House, which is the area where the disputation had arisen. He declined bail on those conditions and was returned to Goulburn Gaol to await his hearing in January. In his letter he says that he objects to the condition because he needs access to Havelock House for the police freedom of information centre which is located there and to work with the homeless action organisations. He also alleged, as Senator Georges said, ineptitude, bias and various other defaults on the part of the Canberra magistracy and the Chief Magistrate in particular. I believe that the administration of justice in the courts should not be interfered with by the Attorney-General except for very good cause indeed where something fundamental seems to have gone astray. I have taken steps to monitor the situation and satisfy myself that nothing has gone fundamentally astray in this particular case. There have been further developments in the case as follows: Yesterday, Mr O'Shannassy was before Mr Dainer, SM, on another matter. It will be appreciated that Mr O'Shannassy is a fairly regular visitor to the Canberra courts. Mr Dainer received the papers in question relating to Mr O' Shannassy's present incarceration. Mr Dainer offered Mr O'Shannassy amended bail conditions to allow him to go to Havelock House if he had the permission of its occupiers. But Mr O'Shannassy refused, saying that he would be letting down his fellow homeless action organisers. Furthermore, yesterday-this is important in the light of the matter that Senator Georges raised and which I mentioned about his appearance date being next January, unless it is amended-the hearing was brought forward to 29 September, at considerable inconvenience, I might add, to other defendants who arguably have an equal right to be heard. Senator Georges —They were not in gaol, though. Senator GARETH EVANS —No, but it would appear to be the case that the system has done as much as it could be reasonably expected to do to accommodate the demands being made upon it by Mr O'Shannassy. I will continue to monitor the situation to ensure that, so far as I can determine, there is no fundamental miscarriage of justice involved in this case. But it would appear that Mr O'Shannassy is not going out of his way to alleviate the situation in which he finds himself. Senator WATSON —My question is directed to the Minister representing the Minister for Science and Technology. Is not the Government being hypocritical in its support for high technology when, in the Department of Defence, 80 people will be taken out of the Defence Science and Technology Organisation because of a lack of funding in that area? Senator BUTTON —It appears that the question is directed to me. Senator Peter Rae —Don't you know that you look after Barry? Senator BUTTON —I am grateful to the Opposition for constructive interjections. I was asked whether the Government is being hypocritical. That is an outrageous suggestion which I refute. With regard to the more specific point in the question about the transfer of personnel of the Department of Defence, I will ask the Minister for advice. Senator Watson is concerned about 80 personnel. I will find out about them and give him an answer. Discussion of Matter of Public Importance The PRESIDENT —I have received a letter from Senator Jack Evans proposing that a matter of public importance be submitted to the Senate for discussion, namely: The Government's abdication of its responsibilities to the people in small businesses, resulting in the exacerbation of an already perilous situation for many employers and employees in this vital sector of the economy. 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 JACK EVANS(Western Australia)(3.02) —This may be an unusual subject to propose for discussion as a matter of public importance, although I am sure the topic is dear to the heart of practically every honourable senator in this chamber. The matter of public importance states: The Government's abdication of its responsibilities to the people in small businesses, resulting in the exacerbation of an already perilous situation for many employers and employees in this vital sector of the economy. The topic is unusual because this is neither an attack on the Government nor an attack on Her Majesty's Opposition but is, in fact, a plea to all parliamentarians on behalf of the deserted people in this country in small businesses who fall into the following categories: The self-help people, the individualistic people, the entrepreneurs of this country, the people with resilience and the people who put their lives and their livelihoods on the line. I might add that they include most farmers. In other words, I suggest this is a profile of a typical Australian trier. Let us just put this matter into context by looking at the value of small businesses to Australia. Economically alone, 92.9 per cent of Australian entrepreneurs employ fewer than 10 people. Far less capital is required to create each new job in small business than in any other field. It should be a very attractive field for any government to overcome its unemployment problem. Small businesses have a virtue which most Australians claim should be made a vital key to this Government and to all Australians, that is, the decentralisation of economic power. The decisions are made at the local level by the small employer, usually, frequently, in consultation with his or her employees and again, frequently, in consultation with his consumers, that is, in direct consultation with the people who are using his goods or services. There is value to this country from small businesses through the employment potential. Businesses which employ fewer than 100 people make up 61 per cent of the private sector employment field. I think that small businesses are the epitome of the nature of Australians. The whole ethos of Australians is represented in the individualism of small businesses-in the freedom to decide the future of those businesses, the freedom to choose which path each of those businesses will take, the freedom to innovate and to risk. This demonstrates one of the great potentials of small businesses, not just in providing jobs for the sake of jobs, which in itself is important, but in providing a long term benefit to Australia, because small businesses will provide the greatest potential for Australia in the new technology fields and in the sunrise industries where this innovation, this entrepreneurial skill and this willingness to take risks is used in this country probably far more than in any other country in the world. Our people have the ability, the skills and the willingness to gamble everything on establishing new businesses, new services and new ventures that will break new ground, not just for Australia and their own communities, but potentially for the whole world. Regrettably, small businesses, when debated in this Parliament, tend to become the motherhood issue, a bit like the issue that we have been debating over the last few days, namely, the family. Everybody is in favour of it. Everybody thinks it is great. Everybody thinks it is important. Of course, we cannot do without motherhood. We cannot do without the family. We cannot do without such things as the defence of Australia and we cannot do without that vital sector, small businesses. So we all support the concept in principle. Come election time , it is run to the top of every political party's mast. It is there flying for everybody to see as a vital factor of the policy statement of each political party. After the election it becomes one of the lowest priorities of the party in government, irrespective of which party that may be. Having a low priority-as we have seen already with this Government; certainly we saw it for the eight years of the previous Government-in effect means having no priority. It is as good as not even being recognised to have a low priority with a government, particularly a government which has a busy timetable. Let us look at how low a priority small businesses have. Before the election small businesses were feted, wooed and cajoled, not just for their votes but also because they were potential donors to political parties of all political persuasions. Let us look at what happened immediately after the election in comparison with a couple of other major industries. The car industry is a classic illustration of the treatment which was dished out very generously by the Fraser Government. Because the car industry was a big and powerful industry with a big and powerful lobby, the Fraser Government looked after it as best it was able and, in many cases, did so to the detriment of the small industries which were in far more desperate plights. Under the present Government we have a similar situation. Broken Hill Proprietary Co. Ltd suddenly ran into trouble. It walked up and knocked on the Government's door and was suddenly given millions of dollars-not just for this year; promises were made for ongoing years-the same millions that could rescue, that could help the survival of, small businesses. I suggest that this will be an interesting debate. It will be interesting because, as the one who introduced this matter of public importance, I do not intend to tear strips off the Government or the Opposition. I suggest that that will be the pattern of the debate after I resume my seat. Let me suggest some of the predictable criticisms that are likely to eventuate in this debate to prove that each party lets small businesses down. We will be introduced to criticisms of the Liberal and National parties when they were in government by the Australian Labor Party which is the present Government. According to Labor, the previous Government failed to stimulate the economy; it produced an effective negative economic growth in this country; and it created dramatic increases in unemployment. The present Government will criticise the previous Government because, in its first five years in office which were the good years, economically speaking, it more than doubled the rate of small business bankruptcies in this country. They increased from 1,252 in 1974-75 to over 2,500 in 1979-80. They were the good years; the rate only doubled in those five years. In the next two years it nearly doubled again. The bankruptcy rate of small business in this country climbed to 4,500 in 1981-82. Of course, one does not just take those simple numbers and say that that is the end of the problem, because the flow-on effect of every bankruptcy in this country is dramatic and traumatic for all who are in any way linked with that bankruptcy-whether they be the people in the business itself, its creditors, the relatives, the friends or all of those who try to rescue the business before it finally folds. Of course we do not have to consider only the rate of bankruptcies, but also the fact that another 10,000 small businesses closed their doors each year. That was a disastrous climate for any business and in particular for a small business where the whole livelihood of the owners, the entrepreneurs and the managers was at state. The Labor Party will undoubtedly also criticise the previous Government for its failed and broken promises. There were many. A typical promise made year after year by the previous Prime Minister was that there would be an option for private companies to be taxed as a partnership. That promise was broken year after year, leaving small businesses at a distinct disadvantage to every major business and to every partnership and sole proprietorship in Australia. The Labor Party may find something good to say about the previous Government. For instance, it may suggest that the increased proportion of profits which could be retained without incurring additional tax went from 50 per cent to 80 per cent under the previous Government. The Labor critics could say that if they were feeling generous. On the other hand this Government will be in for a serve from the Liberal and National parties. It, too, will be criticised. The method of introduction of the withholding tax has wreaked untold damage on small businesses. As a result, this Government will be criticised for not taking into consideration the dreadful harm that was done by that withholding tax, the prescribed payments tax. It will also be criticised, I suspect, by the coalition parties for the increase in petrol prices. The legislation will not just implement an increase now, it will institutionalise six-monthly increases. I am sure that the Government will be criticised by the Opposition parties for its sales tax policies, the full implications of which are not yet appreciated. It has introduced from out of the blue an excise on grape spirit. It has introduced a 20 per cent sales tax on oils, greases and lubricants. The way the Government botched its sales tax on air conditioning ducting resulted in the introduction of the sales tax being delayed a fortnight. That sales tax was introduced without adequate planning and without adequate care for the people in small businesses who would suffer. I am sure that the Liberal and National parties will criticise this Government for the way it botched the sales tax on fibreglass pools, not because the sales tax was introduced but because of the unjustness of putting a massive sales tax on fibreglass pools which are normally installed in the homes of moderate to average income earners. The Government placed no sales tax on concrete pools which are installed usually in more expensive homes. Fortunately the Government has gained some wisdom. It has reduced that tax from 20 per cent to 7 1/2 per cent as a result of the representations made by people who really cared about what is happening to small businesses. I guess the coalition parties will also criticise this Government for its failed and broken promises. It will be criticised for the unwillingness, inability or lack of priority so far being given to the establishment of a small businesses council. It will criticise the Government for its promise of an early introduction of a division of small business within the Department of Industry and Commerce which would upgrade the importance of small business. There has been no action on that yet. The Government, I am sure, will be criticised also by the coalition parties for its tax charges policy and for the fact that it promised to introduce means to allow small businesses to retain profits which would help those businesses to develop. The Government has introduced two Budgets, a mini-Budget and a maxi-Budget, and there has been no sign of that. There has been no sign yet of another promise, that is, the introduction of quarterly payments of provisional tax. There has been no sign yet of-another promise not yet kept-of providing for a time lag for the remittance of sales taxes to help small businesses. There has been no sign of changes to the charter of the Commonwealth Development Bank of Australia to allow it to have equity capital in small businesses. There has been no sign of a change to the Trade Practices Act to prohibit discrimination against small businesses by larger businesses, nor to prevent unfair pricing and franchising laws to protect small businesses. If the coalition parties are feeling generous, they may say that the Government has made some gestures towards small business and has introduced some encouraging measures towards high technology industry development. That does not apply just to small businesses. This is the pattern of both major parties. When there is a benefit that does advantage small businesses, they always seem to go along with similar benefits to the massive businesses, the internationals, the multinationals and the monopolies. This applies to the additional funding of the Australian Industry Development Corporation. The coalition parties may say: ' Good on you, Government, well done. That is an improvement'. Again, the benefit is to large and small businesses. Both major parties have broken promises to petrol retailers. Mr Deputy President, would you believe that only two weeks ago this Government had the opportunity to do what both parties are now promising in Queensland, that is to get the multinational oil producers out of petrol retailing? I think that both parties must be feeling very guilty about their policies on tyre retreads. At this moment hundreds of people are being retrenched because tyre retreads are being taxed for the first time as a result of both this Government's broken promise and the previous Treasurer's broken promise not to apply a sales tax to retreaded tyres. Two promises have been broken. As a result, tyre retreaders in this country are now in a very serious position. There are solutions. I suggest that 1984 be the year of small business encouragement. It could lead to a major recovery of this country's economy. It could be a small business led recovery. I suggest that it be launched with a small business summit conference, either Government sponsored or, if the Government is not willing or game to do it, an Australian Democrat sponsored conference along the lines of a mini-summit conference, to conclude with the creation of a mini-Economic Planning Advisory Council. I believe that there is a need for a Federal standing committee on small businesses, with representatives from Government and Opposition, from each State and Territory, to help resolve the inter-government problems which affect small businesses, for example, taxing problems such as payroll tax, which gets battered about between State and Federal governments, or death duties, which get thrown around between State governments as inducements to small businesses to move their place of business. We should provide for uniform business laws, for example, in leasing premises, in franchising and financing and help overcome the problems of overlapping powers. A Federal standing committee on small businesses should be established. We have so many small businesses, but they are ignored in this field. The objective of the year of small businesses should be the establishment of a suitable Australian environment to encourage the development and proliferation of small businesses. I repeat that this is not an attack on the Government. It is not an attack on Her Majesty's Opposition. It is an appeal to all parliamentarians, not just those in the Senate and in this Parliament but parliamentarians throughout Australia. I believe that we all want to help small businesses. I promise that if this Government moves in the directions indicated, all of us-Government members, Liberals, Nationals, Australian Democrats-will rush the legislation through to assist small businesses because we are all sympathetic to small businesses. I believe and the Australian Democrats believe that small businesses are in a position to revive this country's economy and, beyond that, to provide the desperately needed jobs for people in this country. Small businesses do not often cry out for help, but right now they are on their knees. I appeal to all parliamentarians to help them now while they are still breathing. Senator BUTTON(Victoria-Minister for Industry and Commerce)(3.23) —The Senate is debating a matter of public importance relating to small business. The first speaker, Senator Jack Evans, an Australian Democrat from Western Australia, indulged in a series of rhetorical flourishes about small business, many of which I agree with. I certainly agree with him about the importance of the small business sector and the priorities which should be attached to it. He said he was not here to attack the Government and the Opposition. I thought he did a pretty fair job in the circumstances. But I do not propose to be put in that framework which Senator Jack Evans would like to strap us all into, that strait- jacket, and conduct this debate in the way he prophesied it would be conducted. I do not propose to attack the Opposition. I do, however, propose to attack Senator Jack Evans, which is a different thing, in respect of some of the matters that he raised. Let me say right at the beginning that I am not unwilling to be generous to the previous Government in respect of its increasing to 80 per cent the amount of profits which could be retained by small business. I think that is highly desirable. On the other hand, I am disposed to be uncharitable to the previous Government in respect of small business policy in that it promised in the 1977 election to expand the charter of the Commonwealth Development Bank of Australia to enable it to take up equity capital in small business and it did not do that. I think Australian business and industry would be much better if some of those things had been done quite a number of years ago. What Senator Evans has done is to put together a sort of grab bag, a smorgasbord of everything that he thinks, as he would put it, is motherhood about small business. He has thrown everything together in a heap and tipped the bucket, as it were, on both the Fraser Government and the present Government with all the contents spilling out. I want to take him to task on a couple of things which he mentioned quite specifically. It is not correct to say that the venture capital proposals announced by the Government last week are directed towards large business as well as small business. If the honourable senator reads the guidelines for the provision of venture capital, he will see that they are quite specific. The companies which will be eligible are companies which employ fewer than 100 people. I think, in a sense, that is one of the many definitions of small business that have been offered in the myriad of definitions that exist for small business. I think it must be said in respect of many of the comments which have been made about various taxes imposed by the Government that sure, some of them bear on small business, some of them bear on big business, some of them bear on a vast variety of citizens. That is inevitable in the taxation process. We cannot single out any one particular sector of the economy and say that it will not be affected by any taxes imposed by the Government. Senator Evans concluded by advocating that 1984 be known as the year of small business and suggested a number of things that might happen in that year. I do not think that that is a bad idea. All I can say to him is that if he wants to run his matter of public importance again next year he probably will not have much to talk about in terms of the things he has talked about today, provided that he gives us the undertaking that he will pass any legislation that is introduced in the meantime, as he has already done. This Government recognises the importance of maintaining a strong, viable small business sector. We are very conscious of the role which small business plays in the Australian economy in generating investment, employment opportunities and, more particularly, entrepreneurial skills. One of the great tragedies of small business in Australia over many years has been that the moment a small business becomes a medium size business because of good entrepreneurial activity on behalf of that business it has normally been taken over and the entrepreneurial skills have gone out of the window. As Senator Evans said, 90 per cent of Australia's enterprises are small businesses. One out of every two people in private sector employment is employed by a small business. This Government's recognition of the importance of small business has been demonstrated in a number of ways to which I will refer in a minute. I itemise these matters in no particular order of priority. I remind Senator Evans that he is talking about a situation of small business that has accumulated over 10 years or so when these matters ought to have been attended to. I remind him that this Government has been in office six months and in terms of the things which are of fundamental importance, according to what he says, I want to make clear what has been done in that time. The first thing I mention is that the Government has established the Economic Planning Advisory Council, which will be an important body in providing an alternative source of advice to government. Small business is to be represented on that Council. But the thing of prime concern that we have to remember is the importance of macro-economic policies to the small business sector. The small business sector has suffered from disastrous economic policies. Low economic growth, high inflation, high interest rates have affected everyone but the burden of those things on small firms places them inevitably at greater risk and at greater disadvantage. I recall that only two or three weeks ago the honourable senator made a speech about the Budget in which he advocated a much more expansionary Budget as a solution to this country's problems. With respect, he cannot have it all ways. That is one of the difficulties the Australian Democrats have-seeking to be all things to all men and not having to deliver on any of the utterances which they make. A fortnight ago the honourable senator wanted a more expansionary Budget. He suggested that that would be a solution to many of the social problems which we have in the community. Senator Jack Evans —It would be a great boost to the small business sector. Senator BUTTON —That might be true. It might have been a solution to many of the social problems which we have in our community: it would not have been a solution to the problems of small business because nothing impacts on small business more than high interest rates and high rates of inflation which are the fundamental concerns of this Government in terms of its Budget which is less expansionary than Senator Evans and others might have advocated. So these things , in a sense, have to be seen in the context of the Government's overall economic policy. Its policy is designed to halt the disastrous economic slide of the last few years and small business will be the first and major beneficiary if we succeed. The growing implications of economic recovery are therefore very good news for small business, and good news particularly for industries like the housing industry in respect of which there is now a clear upturn. It is good news for the small business sector. The recent surveys of the Victorian Chamber of Manufactures, the Confederation of Australian Industry and the Westpac Banking Corporation all, in a sense, imply good news for small business because of those demand factors and the general improvement in economic anticipations which have come about in the six months that this Government has been in office. But in addition to that, of course, we came to office with commitments to provide the means for small business to take advantage of any recovery which occurred. I do not say we have acted with the sort of Speedy Gonzales approach advocated by Senator Evans to the exclusion of everything else, but let me refer to some of the things which have been done. The goal of the Government's program in relation to this is to enhance the entrepreneurial activities of small business, particularly. I will go through some of the key elements in that task. The key elements which are essential to the revival and growth of small business in Australia, which this Government very strongly advocates and seeks to enhance , are: Finance, taxation, education and training, information and research, competition, and government purchasing. If I might deal with those points one by one, access to finance has always been crucial, of critical importance, to small business. A number of recent studies have highlighted the problems faced by small business particularly with regard to access to equity and venture capital. I think all of us, in a sense, have moved to deepen our understanding of these problems and their possible solutions . The terms of reference of the review of the report of the Campbell Committee of Inquiry on the Australian Financial System, conducted by Mr Martin, as set out by the Treasurer (Mr Keating), contain specific mention of the need for an adequate supply of finance at reasonable cost for the small business sector. I do not wish to refer in detail to the terms of reference of that review; suffice to say that that specific term of reference is there. The Martin committee will report, I believe towards the end of this year, on that survey of the financial system with particular reference to that and other specific terms of reference that have been given to it. Senator Peter Rae —Will it look at the 100,000 differential? Senator BUTTON —I do not know whether it will. It is no good interjecting about what the Campbell Committee of Inquiry into the Australian Financial System did; I am talking about the Martin committee. The review will clear the way for the consideration of further initiatives in the small business finance area. I also make the point that there is a very real role for the Commonwealth Development Bank in the provision of finance to small business. That is a matter which has been recognised by a variety of governments. The Fraser Government recognised that in terms of its dishonoured 1977 election promise. Prior to the election it recognised the importance of that. The close relationship between the Commonwealth Development Bank and the banking system generally and the experience of that bank in handling development proposals for small business make it an ideal institution to take a broader role in the provision of small business finance. This Government has already freed the Commonwealth Development Bank from Loan Council control so that its borrowing entitlements can be widened more easily. We will be looking, and we are looking, in the context of the response of the Martin committee, at allowing the Commonwealth Development Bank to provide equity as well as debt finance. As a further move to increase the flow of equity finance to small businesses, we are investigating the establishment of an over the counter market in unlisted shares in small public companies. Another key initiative to which Senator Evans was charitable enough to refer is the Government's response to the report of the Espie High Technology Financing Committee, which stressed the importance of establishing a venture capital market in Australia. I again draw the Senate's attention to the fact that the Espie committee found that no country has been able to produce a climate for high-tech investment without government action of this kind. I think Senator Evans knows that insofar as growth high technology industries exist in Australia , they are basically in the small business areas. I draw Senator Evans's attention to the guidelines established by Espie in relation to the sorts of companies and the size of companies which should be eligible for assistance as venture capital companies under the Espie proposals. The Espie committee proposals and the Government response to them addressed two particular needs. First of all, they addressed the need for finance and, secondly, they addressed the need for management expertise in Australian companies. Both those issues are addressed and have been responded to by the Government. The venture capital proposals will be of great significance to small firms which play a major role in developing and diffusing new technologies and innovations into the economic environment generally. We have also made changes, as Senator Evans said, to the Australian Industry Development Corporation, increasing its statutory capital, making more capital available to it, providing fewer restrictions on its borrowings and investing, providing a government guarantee and specifying the priority areas which the AIDC should be directed towards. Much of this will be an important new means of finance for such important areas of small business as tourism and high technology. Both those areas are being specifically addressed. The next point I would like to make is that the growth and development of technology orientated small firms will also be enhanced by the support provided in the Budget for research and development, including technology transfer, productivity improvement and innovation. As Senator Evans conceded in his speech on the Budget, the increases made available for those areas were significant. It is also widely recognised that lack of management expertise is probably the single most important cause, other than the macroeconomic matters which I mentioned at the start of my remarks, of small business failure. We have acted in this Budget to enable an upgrading of proposals specifically directed towards small business management, education and training. Funds will be provided by my Department also to expand the range of small business publications, management training courses, films and audio-visual aids and to continue the highly successful small business awards program. We are consulting with the States and small business representatives on proposals to expand further extension services for small businesses. More and better information on the small business sector is essential for the identification of problems and the development of appropriate policies. We will act to upgrade the official statistics on small business and to encourage more research. All these things are in terms of getting an infrastructure, an environment, which is supportive of small business. These things cannot be done overnight. They take time and it is best that they are done well rather than by way of kneejerk reaction to specific pressures or comments. I concede the criticism of the honourable senator in such matters as the establishment of a small business council and a small business division within the Department of Industry and Commerce. Both those matters are well in hand. I venture to suggest that the honourable senator will not be able to bring forward a matter of public importance this year, given a reasonable time lapse, in which he will be able to mention those matters again, because they are well down the track. But such bodies cannot be established overnight; it is not even desirable to establish them overnight in view of the problems which are involved. The honourable senator mentioned trade practices legislation. I believe my colleague Senator Gareth Evans will shortly bring down a paper on suggested amendments to trade practices legislation, the implications of which will be helpful to small business. Another question which is being addressed is that of special small business preference in Commonwealth Government purchasing. I believe we will be able to make announcements about that matter in the very near future. I could go through a list of other matters that were specifically raised by the honourable senator, but I do not have time to address them at this time. The only point I wanted to make in conclusion is that I believe that most of the matters that have been raised as part of this matter of public importance by Senator Jack Evans in the somewhat scattergun approach he adopted are being addressed by the Government. Therefore, if the honourable senator is chiding us with slowness, I say to him only that a lot of things have been done. I am very sympathetic with the general attitudes that he expressed towards small business. Many of the things he chided us for have been done in the six months we have been in Government; they were not done in the previous seven or eight years. A number of other things about which he chided us will be dealt with in the very near future. We will no doubt take account of and deal with in due course any other constructive suggestions which flow from the lucid minds of the Australian Democrats. Senator HILL(South Australia)(3.42) —The nub of this debate is the Government's abdication of its responsibilities to the people involved in small business. The part played by small business in the economy is, I believe, at last beginning to be recognised. I was pleased to hear Senator Button this afternoon say that his Government recognises its role and responsibility. In fact, it is estimated that there are 400,000 small businesses throughout Australia, excluding primary producers. The Council of Small Business Organisations of Australia has estimated that small enterprises provide between 50 and 60 per cent of the total employment in the private sector. Its contribution to the gross national product is seen as about the same as that of big business. It plays a major economic role as specialist suppliers of parts, components and the like; as a source of innovation in product techniques and services; in providing competition, checking monopoly profits and the inefficiency of monopoly; and as a productive outlet for the energies of enterprising and independent people. Reports such as that of the United Kingdom Bolton Committee refer to the importance of small businesses in industries and trade in which the optimum size of the enterprise is small; its importance in providing products and services in a limited or specialised market, which a large firm would not find it worth while or economic to provide; as a breeding ground for new industries; and as a means of entry into business for new entrepreneurial talents. Small business also plays a major social role in its contribution to employment and in its potential to reduce unemployment. Each new job requires less capital in the form of fixed assets than in the case of big business. Also, the usually closer relationship between employer and employee is not to be underrated. It also offers the opportunity for equity ownership of the nation's resources and has the potential, therefore, for decentralisation of economic power. Given the importance of small business, one would have thought that the prosperity and expansion of small business would have been at the forefront of the Government's economic planning, particularly in the current climate of record high unemployment. But whether because it lacks direct political clout or for whatever other reason, the record of the Government so far has been one of abdication of its responsibilities. We heard the Minister for Industry and Commerce, Senator Button, today make claims about what the previous Government did not do in seven years. At times I was critical of the fact that we did not appear to be doing enough. But when changes occurred for the good I was the first to applaud. I refer, for example, to the relief obtained from improving the tax mix; the raising of thresholds; the accelerated depreciation allowances on plant; the partial relief given by changes made with regard to double taxation of dividends, which the Senate will recall; and the increase of the retention allowance which, I accept, was acknowledged by Senator Button. I in turn recognise the few positive contributions that the new Government has already made in relation to the Commonwealth Development Bank-at least, the announcements have been made-and the Australian Industry Development Corporation, but it is time-- Senator Peter Rae —They are just developments of what we did anyway, aren't they ? They are not new. Senator HILL —Yes, that is correct. The announcements are starting to come forth , but we have yet to see implementation of the proposals. It is a bit like the proposals for assistance for new technology. Some time next year, we understand, we might see some legislation. I suggest that it is time for this Government to cease to justify its failures and inactivity on the record of the previous Government. I accept that it is still only six months into its term, and I recognise what that means. But how long is it to continue to say: 'We are still early in government; you were in government for a long time'? That response will not be good enough for too long. It is time the Government started to look at its record in this field which, I submit to the Senate, could only fairly be described so far as one of bitter disappointment. In a speech I made on 19 May on this subject I criticised the Government for the marked neglect that it accorded to small business at the National Economic Summit Conference. Honourable senators will remember that that Conference, which was designed to look to future economic directions for this country, was dominated by big business, big government and big unions. Small business had but one direct representative. Senator Button —Two. Senator Peter Rae —Don Gibbons. Senator HILL —There is an argument as to whether it was one or two. Since then we have had the Budget. We have had the Economic Summit which was a bitter disappointment for small business and now we have had the Budget. In the short time I have for this speech I want to concentrate on how the Budget has failed small business. I want also to remind the Government of the many initiatives it promised small business before the last election. Whether the Government likes it or not it can reasonably expect to hear of those initiatives time and again from us. The hopes and aspirations of many a small businessman were raised on those initiatives. Until half an hour ago I thought that they appeared to be languishing in the Minister's bottom drawer. I understand that they are now out of the drawer and if we are patient we may see some positive developments in that regard. There are two aspects to a governments responsibility to small business. Again, Senator Button acknowledged the first, the macro-economic role of contributing to a healthy economy. The second is the positive encouragement and support which government can give. I refer, for example, to its power to remove the anomalies within our regulatory system which specifically prejudice small business at the expense of big business, the need for greater access to finance and contributions to overcome a lack of business ability, training and experience, all of which I expanded up on in greater detail in that former speech to which I referred. In bringing down its last Budget the Government was presented with a unique opportunity-because of the recent upturn in economic activity in the United States, the ending of the drought, non-farm stock rundown slowing as business prepared for new investment, and evidence of the success of the wage pause in easing wage pressures on production costs-to turn the somewhat fragile starts of economic recovery into a sustained economic upturn which would benefit small business. But to do so the Budget had to be so framed as to contribute to a lowering of inflation. Small business cannot be isolated from other sectors of the economy. In the same way, conditions in the Australian domestic economy cannot be isolated from the world economy. For a nation where trade amounts to 30 per cent of its gross domestic product an uncompetitive domestic price structure not only endangers the future of our already depressed export markets in minerals and energy resources but also prohibits us from securing additional export markets for an already depressed manufacturing sector. Only through a lower rate of inflation can Australia achieve the international competitiveness necessary for recovery. Whilst at first glance one would see a projected consumer price index increase of 7 1/2 per cent which would represent a welcome wind down in price rises, further investigation exposes an underlying rate of inflation expected to be closer to 11 per cent, as evidenced by the expected high gross domestic product deflater. That is, it shows a nominal GDP growth for the year 1983-84 of 14 per cent and a real GDP increase of 3 per cent. The difference to the price changes is 11 per cent. I remind the Senate that the expected average rate of inflation of our trading partners in the Organisation for Economic Co-operation and Development countries for 1983-84 is around 5 per cent. The Budget therefore holds little hope for Australia having a price structure that will return us to an internationally competitive position. In fact, as the Budget itself warned in Statement No. 2, at page 70: A further point of concern for a sustainable recovery relates to the current inflation outlook which, even given a favourable wages outcome, is likely to remain substantially above inflation levels of our immediate trading partner countries. The Budget therefore does no more than condemn us to continued international non -competitiveness. A more urgent warning was issued by the Australian Chamber of Commerce when it warned that the Government's present strategy will push inflation up even further. The Chamber President saw the entire Budget strategy as counterproductive to achieving greater international competitiveness. Mr Court said: The Government cannot hold to its present course without pushing Australia's cost structure further out of line with the competitor trading nations. It is no good, Madam Acting Deputy President, for the Government to say that it could do nothing about it. For example, there can be no doubt that Australia's wage structure will significantly contribute to determine whether we remain a high inflation, high cost and low growth competitor. Regrettably the Budget records a failure to build on the gains achieved by the previous Government's wage pause program. The Budget Speech of the Treasurer (Mr Keating) and the accompanying papers leave no doubt that the entire wage strategy of the Government rests on the prices and incomes accord. Even putting aside for the moment the obvious questions of Australia's economic future, if the accord disintegrates, even if the Australian Council of Trade Unions can deliver on the strictly limited claims promise as the quid pro quo full half yearly indexation, Australia's wage structure will still remain out of kilter with wage levels overseas. What if it does not hold? I do not have the time to deal with what is occurring but the Senate is aware of the Heinz wage settlement of $15 a week to $20 a week, the claim of 130,000 building industry workers for an extra $19 a week and the further ongoing pressures that are putting this wages accord very much in jeopardy. It looks, therefore, as if the Government's policy regarding wages will fail as a contribution to containing and reducing inflation. Another factor affecting inflation will be the effect of the Government's policy on interest rates. It must be noted that the net public sector borrowing requirement is expected to increase by around 2 percentage points of GDP to about 8 per cent. A borrowing requirement of that magnitude must place substantial pressure on interest rates, which in turn could flow through to domestic prices. The cause has in part been discretionary government spending decisions which place at great risk any hope for non-inflationary growth. Finally, tax policy will affect inflation. Here the trend is indicated by the Government's decision to index excise taxes, which has institutionalised a range of Government charges in the CPI. The result was summarised by the President of the Australian Chamber of Commerce who said: The Government cannot hold to its present course without pushing Australia's cost structure further out of line with competitor trading nations. It is therefore with regret that one must assess that the Budget has failed as an effort in addressing the scourge of inflation and our inability to internationally compete. What distressing news for business generally but for small business in particular. The Government has failed in its Budget and general economic management to help small business. Let us recall its specific pre-election promises, the promises that led to its election being greeted enthusiastically by such groups as the Council of Small Business Organisations of Australia. The Government promised a full division of small business in the Department of Industry and Commerce, a small business council which it claimed would be more effective than the present Small Business Advisory Council. It promised tax scale restructuring, including a raised threshold, full retention of profits where the funds are to be used in the business, quarterly payment of provisional tax, a full month for the remittance of sales tax, industrial research and development grants exempt from tax, accelerated depreciation provisions but with phased out investment allowances, an expanded charter for the Commonwealth Development Bank of Australia to allow it to provide equity finance or packages of equity and debt and direct advertising of the CDB as a source of small business finance. Furthermore, the Government promised to investigate an over-the-counter market in unlisted shares in small public companies, the conversion of the Australian Industry Development Corporation into the Australian Industry Development Bank with technical and financial capacity to provide support for small and medium enterprises, the administration of the monetary and banking system to avoid sharp increases in interest rates on trading bank overdrafts and the strengthening of the Trade Practices Act to prohibit discrimination by large against small and to prevent unfair pricing designed to eradicate rather than to prohibit competition. It has promised also to investigate the prohibition or mergers which are likely to lessen substantially competition without offsetting public benefits, the effective strengthening of the Trade Practices Commission so that it can effectively monitor unfair competition, the production of franchise laws to protect small business, the development of a co-ordinated national plan for small business training, the establishment of small enterprise counsellor training programs with the help of associations and other groups, the establishment of referral centres in each State and in country centres known as small business bureaus, the provision of grants to trade associations which develop specific management training programs and the establishment of marketing and promotional services through small business bureaus to advise on all such matters. These are the promises apparently filed under 'pre-election'. It is our hope that under 'post-election' action will ensure in the not too distant future . The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Senator MAGUIRE(South Australia)(3.57) —I cannot support the proposition that the Labor Government has abdicated its responsibility in the area of small business, but I do endorse the importance of that sector to the economy, and I wish to speak to that subject. The Australian Labor Party was the first party in Australia to develop comprehensive policies on small business. At the State and national levels, we have been formulating policies in this area for a number of years. We were the first to recognise the key role of small business in the economy. It now represents approximately 40 per cent to 50 per cent of the work force employed in the private sector in this country. However, there are real problems in determining that share because there is a vast lack of data on small business in Australia. I am sure that that is something the Government will be moving to remedy in the not too distant future. The small business sector in Australia really needs to be documented more fully to find out its general impact. But we can say with some certainty that small business does dominate the retailing sector, the services sector and it is significant in the building sector and other areas, including road transport. I am aware of key studies which have been carried out on small business, and particularly that pathfinding study by the Massachusetts Institute of Technology , which was a complete census of small business records in the United States of America. Over many years it looked at hundreds of thousands of small businesses, and studied their birth, their growth and their general history. The major finding of that census was that it was the birth of small business and its subsequent growth which was the major job creation mechanism in the American economy. Job creation in total had very little to do with large corporations. They were large employers but they did not add a great deal to pay rolls from year to year. In fact it was the birth and subsequent growth of small business which created most jobs in the American economy. We are certainly well aware of those sorts of conclusions. The ALP has specific policies in the small business area. We are committed to increase equity and loan funding at reasonable rates for small business, probably through the Commonwealth Development Bank of Australia. We endorse the concept of protection from price discrimination and other unfair trading practices in Australia. It is as well to note that on a per capita basis Australia probably has more restrictive trade agreements than any other country. Not so many years ago we had something like 10,000 documented restrictive trade agreements in Australia. We are committed to upgrading small business counselling, training and advisory services. Of course, a key part of that activity occurs at the State level. I am pleased to note that considerable work is being done in this area in my own State where the Small Business Corporation is about to be established. Our approach in respect of small business is substantially different from that of the coalition parties. They, over the years, have been all too eager listeners and supporters of big business and multinational corporations. I am afraid that to a large extent small businesses have come second over the years with the coalition partners. For years they did nothing to help small business. They watched as the economy became more concentrated, as more production was concentrated into fewer and fewer hands. They watched and did nothing as the economy became more and more overseas controlled and as small business was progressively shut out. It is very interesting to note the position under the previous Government in respect of bankruptcies. I do not propose to say very much on this subject. However, I have been reading the annual report of the Attorney-General's Department on the Bankruptcy Act. I found the report very illuminating because it pointed out that in 1975-76, which is basically the last financial year in which there was a Labor Government, there were 1,900 bankruptcies in Australia. The report went on to point out that there had been increases in every year since then in the total number of bankruptcies in Australia. In 1980-81 we had the disgraceful level of 5,154 bankruptcies in Australia under the previous Government-the Government that claimed it was a great supporter of business and business profitability. There was an increase of over 150 per cent in business bankruptcies under the previous Government. That quite disgraceful record resulted in heartbreak and dashed hopes for many people. Many jobs were lost as a result of business failures. In addition, over that period small business was crippled by the inexorable rise in interest rates. Small business viability and profitability were affected as interest rates rose progressively, particularly in regard to overdrafts of less than $100,000. In 1980, the interest rate for such overdrafts was 10.5 per cent. The interest rate rose to 14.5 per cent in 1982. There was a 4 per cent rise in overdraft rates in less than two years, which had a crippling effect on small business. It was no wonder that as a result of the record levels of bankruptcies and overdraft rates a record number of small business people supported Labor at the election this year. The Australian Labor Party's general policy is to provide maximum stimulus to the economy without generating inflationary pressures. To implement this we have introduced the prices and incomes policy which is designed to restrain costs and hold down inflationary pressures while boosting the economy. That accord will help improve the viability of small business by helping to restrain its cost structure. That is one of the major general policy initiatives we have taken this year to boost small business activity. I might note that we devalued the dollar soon after coming to office, and that certainly will improve the competitiveness of those small businesses which compete with overseas companies. Through the Budget we are stimulating the economy to the extent of some $2,600m more than last financial year. That is indicated by the structural Budget deficit. It is a tremendous boost to economic activity in Australia, and that in turn will benefit small business. It is estimated, comparing the June quarter of 1984 with the June quarter of this year , that there will be a 5 per cent growth in gross domestic product. This very large turnaround is a reversal from the horrific decline between June 1982 and June 1983 of 3.9 per cent in the gross domestic product. By turning the economy around in this way, small business in turn will benefit significantly. Small business will benefit from the growing economy. It will also benefit from falling inflation. It is forecast that there will be a fall from the double digit level of 11.2 per cent last financial year to rather less than 7 1/2 per cent this financial year. That certainly will help small business survive and should in turn allow further reductions in interest rates to occur. I am pleased to say that the increase in gross domestic product should be accompanied by a very substantial increase in business productivity. It is a normal process in any upswing in an economic cycle that, as activity picks up, labour productivity rises significantly. This Budget is based on the assumption of a 3 1/2 per cent increase in productivity this year. With cost restraint, that substantial rise in productivity will lift the profitability of small business significantly. It will help overcome the legacy left by the previous Government referred to in the Budget as 'a currently extremely depressed level of business profitability'. The Budget provides $15m in the form of a capital injection to the Commonwealth Development Bank of Australia. That in turn should enable the Bank to undertake a more active role in respect of small business financing. Another $12 1/2m has been added as a capital instalment to the Australian Industry Development Corporation, and in turn that will enable the Corporation to lend more money to businesses to expand their activities. Senator Button has referred to venture capital proposals which have been announced in the last week or so at a cost of $20m to the Budget to assist in reducing risk in such high risk areas as high technology. The Government is providing another $19m under the industrial research and development incentives program to encourage research and development in Australia. I am sad to say that our record in this area is almost the worst in the industrialised world, and any program to boost industrial research must be supported and must have benefits for small business. The building sector of the economy, which is dominated by small business, should do extremely well this financial year as a result of the stimulus in the Budget. For example, there is a 50 per cent boost in the funds allocated by the Commonwealth to public housing. There is the introduction of the first home buyers scheme involving grants of up to $7,000 for eligible couples, to try to remove the deposit gap which is the biggest impediment to home ownership in Australia. Those measures in turn should result in housing commencements being 22,000 higher this financial year than last financial year, and that will give a tremendous boost to the work load of small builders. We estimate that, as a result of that expansion of activity, some 30,000 extra jobs will be created this financial year in the building industry alone. Those programs come on top of the good news this week in respect of the housing sector in which, it has already been noted, significant improvements are under way. The Government has also indicated its recognition of the role played by small business in the tourism area. Small business dominates the tourism sector through motels, small tour operators and so forth. This financial year we are providing a 75 per cent boost in funds to the Australian Tourist Commission to try to enable it to assist development of the industry. We are allocating $17 1/ 2m this financial year compared with $10m provided last financial year by the previous Government. The road transport industry is yet another industry in which small business is highly significant. Many family trucking businesses tend to characterise the road transport sector which is a struggling area at the moment. Road transport is a very risky activity to be in at the moment and is characterised by an exceedingly high bankruptcy rate. In the last financial year there were over 600 bankruptcies in the transport and storage sector. Most of those were in road transport and I am sad to say that most of them would have been small businesses . They are struggling at the moment. I am particularly pleased that the Government has recently announced its comprehensive inquiry into the road transport industry-a long overdue inquiry that will look at the industry's problems, help get it back on its feet and help improve the viability of small business in that sector. The Labor Government recognises the significance of small business in the economy. It recognises that it has problems at the moment. The Government has devised appropriate policies to deal with those problems. We have already taken general measures such as those in the Budget which will boost the sector. We have announced specific policies for small business to aid its survival. We have announced specific policies to aid the recovery of small business and to bring about its growth. Senator WATSON(Tasmania)(4.11) —I welcome the opportunity to debate this matter of public importance on small business. Despite its contribution to employment and the economy, the dearth of small businessmen in the Parliament is a matter of profound concern. This lack of representation manifests itself in the few parliamentary debates on this subject. It is deplorable that the Australian Labor Party, before the last general election, made what appeared to be sincere promises to this sector, causing many small businessmen to seek comfort in the Labor Party's persuasive slogans, only to find that in both the mini-Budget and the August Budget the promises were almost totally ignored. Not one of the ALP's pre-election promises to small business was implemented in the Budget. It is true that pricks of conscience have occurred since then and there have been one or two changes. Labor promised to implement immediately an Australian small business program, to allow full retention of profits, to provide full quarterly provisional tax payments, to extend the time permitted to pay sales tax and to create real jobs in manufacturing. In fact in February, the Hon. John Dawkins, the then Opposition spokesman on finance, said that the Labor Government would make a commitment to revitalise small business with action, resources and legislation. But there has been no action in the Budget. The failure of members of the Government to do anything really points to the shallowness of the ALP promises. But, as I have said, their consciences have pricked them as a result of many representations since the Budget. In small business we all welcome the decision to enable tax deductibility of venture capital for high technology industries. Prime Minister Hawke wants consultation and information exchange. But the effective exclusion of the private sector from the pre-Budget consultation makes a mockery of Prime Minister Hawke's calls for consultation and consensus. Only one small business organisation, the Council of Small Business Organisations of Australia, COSBOA, was represented at the National Economic Summit Conference. Not one small businessman was invited in spite of the fact that 28 big businessmen were present. The Prime Minister obviously prefers the company of big business tycoons to that of representatives of the most dynamic sector of the Australian economy, the small businessmen. In the debate on the Economic Planning Advisory Council Bill, Senator Peter Rae moved an amendment to ensure small business representation on the Council. The Australian Democrats, who are now absent from the chamber despite their intense interest in the subject and having raised the matter here today through Senator Jack Evans, indicated that they would support the amendment. But later on in the debate Senator Haines said that she would not support the amendment. Where do the Australian Democrats stand in relation to small business? They are not even united on the subject. They should at least have supported that worthy amendment . When one considers the statistics, the rationale for the Australian Labor Party 's attitude to small business in the Budget is difficult to find. Small and medium businesses employ something like 46 per cent of the total work force and 61 per cent of the total private sector work force. Small and medium business enterprises earn about 60 per cent of the total private sector profits and therefore contribute more to income tax revenue than does the big business sector. But who are these people who we all say we represent? Individually, they have a very small share of a particular market. They are owners or part owners in a personalised way. They are independent in the sense that they are free from outside control. They operate in an incorporated or unincorporated form. They have many problems. They lack capital and generally lack formal post-school management qualifications, which unfortunately contribute to their high failure rate. The mobility of their managers tends to be low and they have problems of fast growth, dependence on borrowing and undercapitalisation. I will give an example of the situation in my State of Tasmania. About 900 firms start up each year and at least 600 fold. About 5,000 Tasmanians lose their jobs each year when small businesses fail. The social consequences, as well as the economic ones, are quite tragic. Nearly three-quarters of small firms fail within their first five years. Those figures take into account only failure as a result of bankruptcies and liquidations. The range of other reasons for failure is quite immense. But why do they fail? The reasons relate to problems of inflation, lack of sales, lack of expertise and training, lack of initial working capital and bad debts. It is unfortunate that there is such a lack of fundamental research in this area. Professor Meredith is one exception. In my community, Dr David Back has done much good work. But around the country there are very few statistical collections which monitor the health of this particular sector. Small business thrives in a stable economic climate. That is not what we are getting at the moment. It needs encouragement and more effective and fair competition. Its interests have been neglected traditionally because there has been no spokesman for small business. But the Liberal-National Party Opposition has appointed a spokesman for small business in Roger Shipton, the shadow Minister for small business and tourism. We are offering a constructive approach-a spokesman who will support this issue. Although I do not believe that governments consciously prejudice small business , small firms often suffer unintended disadvantages in policies which are often designed to be neutral but which have contrary effects. I appeal to the Government in its buying policies to recognise the existence of small business. So often the managers of government departments and quangos find it so much more comfortable and easy to deal with the large corporations. I appeal to them in their buying processes to consider the place of small businesses. The discrimination I mention is often quite unintentional and occurs in the three levels of government-State, local and Federal. In local government, it is often manifested in zoning and rezoning restrictions. Changing the directions of one- way streets can have a fundamental impact on a small shopkeeper. State governments require a wide range of approvals for development and expansion. Discrimination takes place at all levels of government. But in talking on this matter of public importance today, I want to concentrate on the Federal problems . We have this iniquitous prescribed payments tax. In fact one Second Commissioner of Taxation acknowledged that, as a result of that legislation, a business in the contruction industry might have enough paper to fill a small room to accompany its tax return. This reflects the ignorance of the Labor Government about how the private sector works. It fails to acknowledge the additional working capital costs that will be incurred as a result of this change to the legislation. It ignores the cash flow problems that will occur. At the same time the prescribed payments tax legislation will add considerably to the administrative costs of small businesses. What will the Budget do for small business? It will do nothing. The Hawke Government is seeking a so-called government led recovery. It is not an investment recovery; it is not a consumer recovery. How does this government led recovery assist small business? At present small business is facing one of its greatest challenges. On Friday the national wage case decision will be handed down. Two of the judges who will hand down that decision are also sitting on the Australian Council of Trade Unions job protection case. What a misnomer! That decision could have the effect of virtually wiping out a lot of small business and big business in Australia. The ACTU's job protection case in the Australian Conciliation and Arbitration Commission will have a mammoth effect. Jobs will be lost for ever because the claim provides for employers to give three months notice, four weeks pay plus another four weeks pay for each year of service, relocation expenses and the cost of retraining. We have an absurd situation at the extreme in which a 60-year-old employee with 40 years service would get a total payout of 198 weeks. All the State Labor governments and the Federal Labor Government have supported the ACTU's case. I think that is particularly relevant to today's debate. I will refer to some of the statistics which will follow if the job protection claim succeeds. An employee aged only 20, with less than one years service, will get three weeks additional pay. A 25-year old employee with five years service will get 18 weeks pay, a 35-year old employee with 15 years service will get 63 additional weeks pay and a 50-year old employee with 30 years service will get 148 weeks pay. Sir John Moore asked the ACTU advocates what would be the economic consequences of the two claims that the ACTU has before the Commission. They have not yet answered his question and it is doubtful whether they will answer it. These decisions have the possible consequence of closing down thousands of small businesses throughout Australia. We should understand what could happen if the ACTU claim in this job protection case is acknowledged by the Commission. Let us take the situation of a business that has been operating for, say, 10 years and which, because of an economic downturn, has to retrench some of its employees. Not only could this result in the loss of the jobs of those few people who are stood down but also because of the financial problems that that could cause, it could result in the closure of the whole business. In other words, what the claim is seeking to provide for is a contingent liability which has a retrospective effect. Here we come back to the old matter of retrospectivity and the problems that it will cause to the private sector. What the ACTU is doing, with the Labor Government's blessing, is camouflaging its strategy. It is against recovery and jobs will be lost if this claim is granted. Small businesses are the key to economic recovery; they are the backbone of the private enterprise system. They are labour intensive and they offer great potential for new jobs but they are not being helped at all. High technology and sunrise industries will surely come from this area. The characteristic qualities of small business are vigour, enterprise and ambition, characteristics which make small businessmen natural leaders. This spirit of independence is a strength to the nation. The sector is very viable but what is this Government doing to help it? It is placing small business in a dreadful position. In nine months time interest rates will go through the roof due to the funding of this massive Budget deficit. Small business is failing and it will be very difficult for it to exist with a continuation of Labor Party policies. Senator CHILDS(New South Wales)(4.25) —We are discussing a matter of public importance introduced by Senator Jack Evans. At the outset I indicate my complete rejection of the proposal he places before the Senate. In listening to the last speaker, Senator Watson, we heard epitomised the problem that the Liberal Party faces when it looks at the matter. Senator Watson talked about small business but it is clear from what he has just said that he can see only one side of the small business area. He has recorded the vast number of people in Australia who are employed in small business but he has talked only about the employers. He gratuitously insulted the Australian Conciliation and Arbitration Commission which is considering a job protection case. He implied that the Commission will not judge the matter on the facts that are placed before it. He also implied that it will make some decision that is not based on the facts. We have to look at all the people who are in small business, both the employees , who have been forgotten by Senator Watson, and the employers. The Australian Labor Party has given in its election program a great deal of emphasis to this problem. The Minister for Industry and Commerce, Senator Button, has indicated the plans that we have in this area. We have no apology to make to Senator Jack Evans who is not in the chamber or to the Liberal Party about the program that is under preparation for small business. We need to look at the total picture. No matter how much Senator Watson wishes to deal with the detail of the matter, he was part of a government that did more to destroy small business in this country than has occurred since the Depression of the 1930s. It is that macroeconomic atmosphere that Senator Watson has to be taken back to now. The Fraser Government was synonymous with confrontation and the characteristic of its seven years was that small business people had anarchy; they had no ability to plan their business. We all know that the Fraser Government's speciality was the 'next election', it was always agitating for the next election. There was no planning; there was no preparation. While all that was happening at an economic level, Ministers such as Mr Viner, the former Minister for Industrial Relations, were setting out to create an industrial relations climate that was continually disrupting industry. We had record alterations to the arbitration legislation, record threats to the trade unions and in the whole process we had industrial disputes which very often affected small business because in many cases it was in large enterprises that the industrial disputes developed but they carried through to and affected small business. We have moved away from the Fraser Government's ideological confrontation. We have now changed to a government that is seeking in a planned and proper way, to try to take on some of the problems, problems that we received as the epitaph of the Fraser Government. Small business people should be angry with the Fraser Government's record. I will deal with some of the aspects of it to remind Senator Hill and Senator Watson of the Government of which they were a part. That situation has now changed because we have a government that, instead of causing strife, is attempting, with the Australian Council of Trade Unions accord, to go back to a centralised wage system so that people will understand where they stand in relation to regular central wage adjustments. We have the prices and incomes accord. We will, as Senator Watson said, revitalise small business. A number of speakers in this debate have drawn attention to the way in which small business in particular has been affected by bankruptcy. In 1975, 1,200 bankruptcies occurred. This can be compared to the figure of 4,000 mentioned by Senator Jack Evans and the figure of 5,000 referred to by Senator Maguire. A tremendous increase has occurred in the number of bankruptcies. They occurred particularly in the commerce, building, construction, transport and storage industries. They are the particular areas in which small business has been affected. The Fraser Government was defeated in many ways because of its failures in that area. In Victoria, a similar position applied. A 60 per cent increase in bankruptcies in that State was typical under the previous Victorian Government. It fell and we now have the Cain Government in Victoria. Clearly this Government will be pleased to be judged by the economic climate that it creates. This Government expects, reasonably, to be given more than six months in which to try to rectify the crisis that is faced by small business in this country because of the activities of the Fraser Government. Let us examine what this Government is doing. This week the Minister for Transport (Mr Peter Morris) has instigated an inquiry in relation to the transport industry where a great number of bankruptices have occurred. The Premier in New South Wales outlined last night a major construction program for New South Wales which I am sure will be most successful. That is an example of the co-operation between the Hawke Labor Government and the Wran Government in trying to overcome the major difficulties that particularly affect small business. In the area of the construction and building industry to which my colleague Senator Maguire referred a major initiative of the Government-it is probably the centrepiece of the Government's activity-is the revival of that industry. The revival of that industry, more than any other industry, probably will allow small business people to be employed and to be prosperous again. Senator Jack Evans correctly said that there was a tremendously effective ratio between capital and labour in small business. The problems we have to face have resulted from the strategy of the previous Government. It is only now that we realise that the Liberal Party actually is in some way in support of small business. The reality is that while it was in government everything it did set the tone of the economic climate against small business and for big business. I ask honourable senators to examine the 1982 report of the Foreign Investment Review Board in which it is revealed that foreign investment in enterprises in Australia, as a proportion of net private investment, rose from 17.5 per cent in 1978 to 22.5 per cent in 1979, to 34.1 per cent in 1980 and to a staggering 44 per cent in 1982. A legacy of the Fraser Government was to allow foreign investment to increase dramatically in this country. In answer to what Senator Hill has said, I point out that if we look at what that investment represented we find that in the 1981-82 year out of 1,038 acquisitions only 40 were new businesses; 998 were acquisitions of existing Australian businesses. Therein lies the problem. Under the Fraser Government we had a situation in which businesses were being taken over and no effective incentive was given to Australian enterprises. In the same year, 1981-82, the Foreign Investment Review Board report showed that half of the total expected investment was attributable to 10 proposals. A large part was for the minerals processing and development sector. Half of the total investment concerned major enterprises which were being taken over in Australia. The significance of these figures has to be considered. I should like to illustrate my point by giving one example. In Queensland, with the encouragement of the Bjelke-Petersen Government, there was a proposal for a hypermarket in Queensland, to be owned effectively by the Pick-N-Pay South African organisation . The effect of such a hypermarket of course would be to threaten all the small businesses and enterprises in the vicinity of that particular organisation. That is the problem which small business has to face. A policy of the Fraser Government which the Opposition now wishes to forget is that it has favoured big business. For the first time honourable senators opposite, who are now in opposition, are talking about small business. The position of the Australian Labor Party, of course, is that we have changed the guidelines so that there has to be good reason for investment in Australia. There has to be new technology, new expertise and projects that will increase employment so that there is a direct benefit to the Australian people. What I am saying is that during the Fraser period of government there was a dramatic crowding out of finance for the small business sector. This Government recognises that the central role of the small business sector means that it has to get financial assistance. We recognise that one in every two persons in the private sector is employed in small business. Everything this Government does will assist that section of our economy. Senator Messner —How are you going to do that? Senator CHILDS —In relation to access to finance, I will reiterate what has been said by Senator Button for the benefit of Senator Messner. One of the problems is that banks and other institutions have often been overtly cautious and conservative in their assessments of whether or not small business should be financed. The Treasurer (Mr Keating) announced in May a review of the Committee of Inquiry into the Australian Financial System. It has, as one of its terms of reference, the need for an adequate supply of finance at reasonable cost for the small business sector. That is clearly the position of the Government. As Senator Button said, it is the overall infrastructure and environment that the Labor Party wants to create. Unfortunately, banks are also reluctant to provide debt finance to small business. They often lack the necessary technical expertise or inclination to assess the prospects of small business organisations . We believe that the close relationship of the Commonwealth Development Bank of Australia with the banking system and its experience in dealing with small business make it an ideal institution for a broader role in small business finance. I hope that small business will not have the same experience that it had with the Fraser Government. Many small business people were not aware of the resources of the banking system available to them. The Fraser Government effectively did not want to let small business know of the resources that were available to them. It was a constant complaint that people were not aware of the types of investment available to them. Senator Messner —That is rubbish. Senator Watson —Oh, rubbish. Senator CHILDS —Honourable senators opposite say that this is rubbish. The facts are that I represented the Opposition shadow spokesman on the Small Business Advisory Council in the last couple of years. Liberal Party appointees constantly complained about the fact that not enough advertising and not enough information was given about the facilities available to small business in this country. The Minister for Industry and Commerce and the ministry of science and technology have announced that action will be taken to encourage the development of a substantial venture capital market in Australia. An amount of $40m will be available for investment in higher risk industry ventures. This is something of which this Government can be very proud. It is one of the many initiatives that we are going to take. All I would say to Senator Jack Evans, who is not in the chamber, is that the next time he seeks to make small business a matter of public importance he will have further evidence of the Labor Government's determination and achievements in the small business area. The DEPUTY PRESIDENT —The discussion is concluded. Senator GIETZELT(New South Wales-Minister for Veterans' 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. Videotex in Australia: Interactive Information Services-ASTEC Report- pursuant to section 6 (2) of the Australian Science and Technology Council Act 1978. 2. Australian Development Assistance Bureau-Annual Review 1981-82. 3. Heavy Commercial Motor Vheicles, Parts and Accessories-Interim Report by the IAC. 4. Certain Thick Plywood-IAC Report. 5. The Observance of Human Rights at the Villawood Immigration Detention Centre -Human Rights Commission Report No. 6-pursuant to section 9 (1) (c)-Human Rights Commission Act 1981-together with a text of a statement made this day in the House of Representatives by the Minister for Immigration and Ethnic Affairs. Annual Review 1981-82 Senator KILGARIFF(Northern Territory)(4.41) —I move: That the Senate take note of the paper. I welcome the annual review for 1982-83 of the Australian Development Assistance Bureau. I believe that it reflects the responsibility which Australia is taking in the world context of giving aid to overseas countries. I believe that it is most important for Australia to participate in such functions in both assisting the developing nations and enhancing Australia's international standing. Looking at the record over the last three years, I see that development assistance in 1981-82 amounted to $657.8m and in 1982-83, $744.6m. For 1983-84 there is an estimate of $836.6m. I believe that the Australian Government is doing well in this regard. The amount in total represents 0.5 per cent of the gross national product. I understand that the target of the United Nations is 0.7 per cent. So Australia, I believe, is doing extremely well in this sphere. It is to be noted also that aid to Papua New Guinea in 1981-82 amounted to $252.8m. In 1982-83, it was $274.8m. In 1983-84, the amount is approximately $302.1m. There again, I believe that the aid that has been given in this area is warranted. It must be of considerable assistance to our neighbours to our north. I believe that we have to be very careful in the way in which we allocate this money. Some people in the community say that charity begins at home. I am not one of those people. I believe that Australia, despite its pressures, tensions, strains and so on, is still a lucky country. Many countries do not have the facilities or the way of life that we have in Australia. Therefore, I believe that we should give this assistance. I believe also that it should be done not just for the sake of giving. We should ensure that we and the recipients get value from the helping dollar. Therefore, I was very pleased to see that the Government, through the committee headed by the Minister for Foreign Affairs (Mr Hayden), intends to review assistance programs. I look forward to hearing the result. One hears allegations around the country-an allegation was made on the Four Corners television program on 27 August 1983-that money sent to the Philippines for road building was used for roads for the military. That is just an example. Perhaps it is harsh criticism; perhaps it is not. What I am saying is that we must be very careful that the funds that are sent from Australia to these countries are well spent. There is the suggestion also that money does not reach or benefit poor people. A survey which was conducted by the Institute of Philippine Culture into one area of the ADAB program found that, despite the provision of considerable funds, 91 per cent of farmers had not improved their yield or standard of living. Many of the farmers were dropping out because of the high costs involved. This is only one example. I suggest that the review of the assistance program should look at this area. It has been suggested in other countries that food is not getting through and that money is not being spent wisely. While I believe that perhaps there is some basis for these criticisms, I do not believe there are grounds to ease funding these Third World countries. What we must do is ensure, through this committee to review assistance, that the money is well spent. Because my time has almost expired, I leave my remarks at that, despite the fact that I would like to mention many other matters on this subject. Senator MASON(New South Wales)(4.46) —I want to follow up the points made by Senator Kilgariff. I agree with him that it is essential that whatever aid moneys we give are well and fairly spent. I think there are degrees of human misery which should have a first call on our appeals. Reading through the paper on the annual review of the Australian Development Assistance Bureau, I noted that Ethiopia has been allocated food aid to the value of about $5 1/2m, whereas no food aid at all, as far as I know, has been provided for Eritrea. I want to speak briefly on behalf of the Eritrean people. Although much of this northern province of Ethiopia is no longer under the control of the Ethiopian Government, there is a severe problem of malnutrition. I do not even like that word basically. The problem is one of starvation. I think that all members of parliament received a letter today from Mr Harry Martin who is the National Director of Community Aid Abroad. It was addressed to all members of this Parliament. The letter stated that 200,000 children in a population of 1 1/2 million Eritreans were confronted with starvation. That is a cold, naked fact of enormous importance. In other words, there are probably more children starving in that one place than there are children in a fair-sized Australian town. I think it is a fact that we cannot ignore. Mr Martin's letter went on: Dr Mike Toole of Community Aid Abroad has just returned with identifiable and reliable channel of aid for people who have been by-passed by international appeal. He mentioned that a letter had been sent to the Minister for Foreign Affairs (Mr Hayden) urging a response. He asked us to raise this matter in Parliament and to urge the Federal Government to do something about it. I must say that I have not had time today to check out this matter in detail, although we have had something of a talk with Dr Mike Toole. We understand there is a mechanism there which he can well justify. I plead with the Government to listen to him and to consider this matter with some seriousness. Here is an area of concern, an area of great need, that is, I believe, largely overlooked by the world. I understand that some assistance is coming from Scandinavia, but that a great deal more needs to be done. I know that a number of honourable senators, including Senator Michael Tate, who is present in the chamber, have been deeply concerned for some time with the fate of the Eritrean people. I say only that I am assured that there is a means of operation and that the areas in which people will be operating are now relatively peaceful. I say ' relatively peaceful', because I do not think anybody can make a final judgment of those matters. A fleet of vehicles is available which could be used. The competence is there. The country is prepared to allow this aid effort to proceed because I suppose it understands, as we ought to understand, the absolute enormity and appalling nature of the tragedy which is taking place in that country. Mr Deputy President, through you, I draw this matter to the renewed attention of honourable senators. Also I appeal to the Government to consider this matter most carefully and, if possible, to inform the Parliament of what action it proposes to take. Question resolved in the affirmative. Senator TATE(Tasmania) —I present the seventh report of the Standing Committee for the Scrutiny of Bills concerning: Australian Capital Territory Smoking and Tobacco Products Advertisements Prohibition Bill 1983 Health Legislation Amendment Bill 1983 Home Deposit Assistance Amendment Bill 1983 Meat Inspection 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. 9 dated 21 September 1983. Debate resumed. Senator WALTERS(Tasmania)(4.52) —This Medicare legislation sets the clock back eight years to the original Medibank and all of its associated problems. We know how health costs skyrocketed during that period. Indeed, evidence was given to the Joint Committee of Public Accounts, which held an inquiry into the payments of the Commonwealth medical benefit schedule fee, that when the Fraser Government came to office health costs in Australia had accelerated at their highest rate in Australia's history. There was a rise of 36 per cent per annum. By 1979 that rate had been reduced from 36 per cent to 10 per cent per annum. There is no doubt that what this Government is about is nationalising both the doctors and the health funds. That is an absolute statement of fact. The Minister for Health (Dr Blewett) said that he wants all doctors to be paid by the Government; that he wants all doctors to accept bulk billing. Once a whole profession is paid by the Government it is nationalised. No other statement about that can be made. The Minister said very clearly that he wants all doctors to be paid by the Government. Once that has been accepted, the profession is nationalised. The introduction of the new scheme will mean the death of the private health funds because the Government will take away 60 per cent of their business. Senator Gietzelt virtually admitted earlier today in his speech that this legislation would nationalise the health funds. What did the Prime Minister (Mr Hawke) say in his policy speech at election time? He said that nine out of 10 Australians would pay less for health needs for themselves and their families. There has been no attempt made at the truth at all. Indeed, he was just showing his contempt for the Australian people. He knew that under the present scheme 20 per cent of the population were paying no insurance at all. Yet, he had the hide to say that nine out of 10 Australians would pay less under the new scheme. There was no attempt made at the truth. He showed nothing but sheer contempt for the Australian people. What has the Minister said? The Minister tried to tone down the Prime Minister' s statement. He said that what the Prime Minister said was not quite true. The Minister has now said that of the remaining 80 per cent that do pay something, two-thirds will be better off. That is a little closer to the truth than the Prime Minister's statement. He was telling complete untruths in his policy speech. The Minister's statements are still far from the truth. I will come to that matter in a moment. At present 20 per cent of the population are holders of free health cards. They include pensioners, the unemployed and low income earners. A total of 16.1 per cent of Australian families live in Queensland. They already receive free hospitalisation and pay only the basic medical fee. They do not pay a basic hospital fee. A total of 16.1 per cent of Australian families do not pay basic hospital insurance. Of course, we have to consider also the 42.4 per cent of families which are two-income families because, let there be no doubt at all, every income earner who is paying tax will pay a levy. So 42 per cent of families in Australia will not be better off; both income earners will be paying a levy. They will not be paying a family contribution. Of course, 100,000 Defence Force personnel already receive free health care. They will not be better off. They should look at the levy that they will be paying. Sixty per cent of Australians take out private insurance for private hospitalisation. They will pay a one per cent levy which includes public hospitalisation as well as a contribution to a private health fund for private hospitalisation. They will pay double for their hospitalisation. Of course we must not forget, because Senator Tate tells us that it is not nationalisation, that all doctors will not be bulk billing. Their patients will have to pay 15 per cent of the fee out of their pockets because this Government says it is wrong for them to insure themselves. Since when has it been wrong for Australians to take out insurance which they consider necessary for any reason whatsoever? This Government, in its big brother attitude, says that it knows best what is right for the Australian people and it will tell them. It says to them: 'No, it is not good for you to take out gap insurance, you should pay out of your pocket. We know what is best for you'. These facts give the lie to both Mr Hawke's original statement and to the Minister's statement that two-thirds of the remaining 80 per cent of the Australian people paying for their health care will be better off. Let us look at the levy. It is supposed to cover 85 per cent of medical fees and a bed in a public hospital. The Minister said that that is the same as the basic hospital and medical table. Again, that is most untruthful. It covers 85 per cent of the medical fees, but it supplies only a bed in a public hospital and not the doctor of choice-only the resident who happens to be on duty at that time. It takes away a patient's choice about having his own doctor in a public hospital. If a patient wants a choice of doctor then that patient would have to pay additional private hospital insurance. People are not aware of this because the Minister has blatantly told them that the levy will be the same as basic hospital and medical insurance. That is not true because basic hospital and medical insurance at the moment covers 85 per cent of the medical fee and a bed in a public hospital with a doctor of choice-not a resident. Senator Messner —Is that our Dr Blewett? Senator WALTERS —That is Dr Blewett. He is not a doctor of medicine and I suppose we must forgive him for that. Senator Tate —No, not like your mates, ripping the system off. Senator WALTERS —Mr Deputy President, would you please ask Senator Tate to be in his place if he cares to interject. The present basic hospital insurance contributions can go towards a bed in a private hospital also. However, this levy will not give patients a penny towards beds in private hospitals, so Dr Blewett, this Minister for Health, is not telling the Australian population the truth. This one per cent levy is meant to cover the contributions that people are paying to the private funds. At present that rate differs in the various States. In my State, it is very low. It is $9.70 and if we take off the 30 per cent rebate it comes down to $6.79. In New South Wales it is $13.80 and with the 30 per cent rebate it is $9.80. Tasmanians pay 30 per cent less in their contribution rate for basic tables. Are Tasmanians to be given less of a levy? No, of course they will not. They will be subsidising the bigger States. At the moment, patients in Tasmania are advantaged because their doctors are not paid as much on the schedule fee as doctors in other States. I seek leave to incorporate the schedule in Hansard. Senator Tate —Are you telling me they all keep to the schedule fee? The DEPUTY PRESIDENT —Senator Tate, you are interjecting far too often. Senator Tate —I am being provoked. The DEPUTY PRESIDENT —Provocation is not a ground for interjection. Leave granted. The table read as follows- FEES AS AT 1ST NOVEMBER 1982 NSW Vic. Qld SA WA Tas. $ $ $ $ $ $ Item 5- G.P. standard consult. 13.20 12.40 11.60 11.60 11.60 12.40 Item 88- Specialist ref. 38.00 35.00 35.00 35.00 35.00 31.50 Item 110- Specialist phys. ref. 66.00 60.00 60.00 60.00 60.00 60.00 Item 207- Confinement- Spec. 255.00 215.00 192.00 215.00 192.00 192.00 G.P. 192.00 174.00 160.00 154.00 154.00 154.00 Appendectomy- Spec.4080 172.00 186.00 186.00 156.00 172.00 150.00 Health Insurance Contribution Rate. Basic Hospital and Medical cover. NSW $13.80 with 30c rebate-$6.79. Tas. $9.70 with 30c rebate-9.80. 30% less paid by Tas. Contributors. Senator WALTERS —This table indicates that doctors in Tasmania do not get paid as much on the schedule fee as doctors do in other States. Because of this, the Tasmanian patient is advantaged by lower contributions. I will ask the Minister in the Committee stage of the debate whether it is intended that this be carried through in the levy. We are asked by many people whether that one per cent will be increased. The Opposition parties have said yes. We expected the government to be honest. But there is no need for this Government to be honest and, indeed I do not believe it will be. It will keep the levy at one per cent. Anything else comes out of Consolidated Revenue anyway. Taxes are increasing as inflation rises. Any difference will be covered by Consolidated Revenue, so there is no need for the one per cent to be increased. Senator Haines today, in her typical fashion, because she understands little in this area, said that the universal health scheme will be funded by a one per cent levy. No one in this place, even the Minister, would say that. We know that the one per cent levy will raise $1 billion, according to the Minister's own figures. This is only one-eighth of the total amount because it is $8 billion that is presently paid by the Federal and State governments. That leaves out the contribution rate altogether. So Senator Haine's statement that it is a universal health scheme funded by a one per cent levy is a lot of rubbish and the people of Australia will not be hoodwinked by that. We also have a $14m computer bought by the taxpayers. We attempted to forestall that but we were unsuccessful. The Government went ahead and bought it and double banked on all the private funds. Mr Dawkins, on 7 September, assured us that in future there would be a financial impact statement with all ministerial second reading speeches. That is lovely, high-falutin stuff, but where on earth is it? We do not have that financial impact statement with the health Bill. I wonder why. It is because he is attempting to hide the real costs from the Australian people and he has no intention of putting the financial impact statement in even though, as I say, on 7 September, long before this legislation was introduced, we were promised a financial impact statement. It has not been forthcoming. We have been told that this scheme will involve only $62m in additional costs. That is very misleading. Once again it is not true. The Government says that the actual additional costs will be $1.742 billion. It then does a sleight of hand and says it will take the levy off that. It takes the levy off, then it also takes off the $550m which it stole from the people as their rebates and then it says that that is the actual cost. We have been told that the levy replaces the contribution rate. Now we are told that it is really just raising money to cover Medicare. It is a sleight of hand that is thoroughly dishonest. The real extra costs will be $1.742 billion-the only legitimate reduction of $80m is a saving on the reinsurance trust. That means that $1.662 billion is the additional cost of Medicare-not $62m. It really is a very deceitful situation. We come now to the effect that Medicare will have on the consumer price index. We find that it will lower the CPI by 2.6 per cent. People of Australia are not quite aware of this yet but because they will no longer pay the contribution out of their pockets but pay it in tax the contribution will be taken out of the consumer price index and the consumer price index will fall by 2.6 per cent. The pensioners will not be too happy when they realise what is happening. A single pensioner will lose $2.30 and a married couple $3.90. Pensioners do not pay for their health care at all at the moment but they will lose money because of the sleight of hand and because the contribution rate will not come out of their pockets but the tax will. Inflation will still go ahead. It is an artificial thing, but when a married couple get their cheque they will be $3.90 down. When Senator Peter Baume tried to indicate this to Senator Crowley, she completely misunderstood the situation. She did not have a clue about what was going on and said: 'If Senator Peter Baume could tell me how lowering inflation will hurt pensioners I would be most interested'. She does not understand, because she has not been in the Senate very long, that that inflation is artificial, that that CPI reduction is an artificial situation. Inflation will keep going on but the CPI will be artificially reduced and the pensioners will lose out all the way along the line-and the Prime Minister promised that he would not be touching the pensioner's cheque. It will be interesting to see what the wage earners do about that particular matter. What is to happen to the voluntary health organisations? Voluntary health organisations are, as the name implies, voluntary. They are run by voluntary boards. In the past they have been the cheapest. We are told that big is beautiful, that we will have one fund only and that will be much cheaper. Senator Gietzelt said that we will have one fund and nationalise the lot. I seek leave to incorporate in Hansard a table which points out that from 1978 to 1982 the voluntary health insurance organisations were able to administer their funds at a far cheaper rate than Medibank Private. Leave granted. The table read as follows- MANAGEMENT COSTS AS A PERCENTAGE OF CONTRIBUTION INCOME 1978 1979 1980 1981 1982 Medibank Private 14.0 12.0 17.0 16.4 11.7 Industry average 9.7 10.3 11.0 11.7 10.1 MANAGEMENT COSTS AS A PERCENTAGE OF TOTAL CLAIMS BENEFITS PAID OUT 1978 1979 1980 1981 1982 Medibank Private 13.8 13.7 13.4 13.5 10.1 Industry average 9.4 9.4 9.8 10.1 9. 5 Senator WALTERS —Thank you, Mr Deputy President. As I said a little earlier, the funds will be nationalised because 60 per cent of their business will be taken from them and given to Medibank Private, the Government organisation. Five thousand jobs will be lost. The Minister does not even argue with this figure. He says: 'Yes, of course the jobs will be lost, but the Government will pick up some of them'. He has offered to pick up 2,500 employees-half of them. That means we will have an additional 2,500 highly paid public servants and 5,000 fewer people in private industry. My goodness, that is a jolly good compromise! Senator Tate —That is not true. Senator WALTERS —That is exactly what the Minister for Health said-that the Government would pick up 2,500 highly paid public servants and get rid of 5,000 people out of the private funds. The private funds have been told that they can diversify. I will come back to that at the Committee stage because there is no guarantee that Medibank Private will be allowing them to diversify without its diversifying too. Perhaps we can have a little look at what Senator Haines has been up to. She has been blowing her own trumpet and telling us she has done a tremendous amount of negotiating while we sat back and did nothing. She said in effect: 'The Liberals seemed to have been sitting back for months taking things quietly. I don't know whether it was because they hadn't got their act together, because they weren't particularly concerned or because they were going to vote against the whole lot and weren't interested in helping anyone along the way'. I have spent the last three months negotiating with the Government, at times with acrimony but generally with courtesy on both sides and have finally come up with a considerable amount of co-operation, the result of which is that quite a number of concessions that will assist the funds, their employees and their contributors have been achieved. Let us have a look at what else Senator Haines has done. She has said she has made agencies. Dr Blewett has ridiculed that. Last Sunday week he said that he had really conned Senator Haines because all he has said is that other funds can act as a post box. Dr Blewett has said: 'Of course the Government will not pay the funds for this; anyone can post it off. Get your next-door neighbour to put a 27c stamp on an envelope and to act as a post box'. What advantage would that be to the private funds? Absolutely none! Indeed, the private funds will be down the drain because they will not be paid for it. What else did Senator Haines do for the private funds? She acted as a negotiator for three months while we all sat back. She came up with the suggestion that the private funds would be able to fill the $150 gap in insurance for the chronically ill. It is not to be paid by the private funds; it has not a thing to do with the private funds. It is just another couple of million dollars cost to the Government and the taxpayer. That is no help to the private funds. What has Senator Haines been doing in her three months of negotiation? She certainly has not helped the funds or those 5, 000 people in any way at all. She has done absolutely nothing and, as Dr Blewett indicated in his talk-back session last Sunday, he conned her. Boy, did he ever con her! Mr Deputy President, we come now to a matter of grave importance to Tasmania. Again, this Government cannot be trusted. I have before me quite a number of letters between Minister for Health Blewett and Minister for Health John Cleary in Tasmania. I seek leave to have these documents tabled. Leave granted. Senator WALTERS —The whole thing started on 15 April in Adelaide when Dr Blewett had a meeting. He specified then that Tasmania would have a choice of remaining in the cost sharing arrangements or taking up an alternative packet. That was on 15 April. Between 28 and 29 April the Health Ministers Conference was held in Hobart. He then said that all the detail will be arranged at a later meeting in Canberra. On 18 May Dr Blewett wrote to Mr Cleary in relation to the hospital cost sharing agreement and formally offered budgets he had approved under that agreement for the financial years 1981-82, 1982-83 and 1983-84. Mr Cleary wrote back and said that he would agree to the 1983-84 budget under the cost sharing agreement-note, 'under the cost sharing agreement'-subject to the inclusion of certain appropriate adjustments. On 15 June there was another meeting of the Health Ministers and there was no talk at all of the termination of the cost sharing agreement. A transcript of that meeting shows that Dr Blewett said: It has never been my intention that we should try to dictate to the States on these matters, but to try to get an arrangement which we can all live with satisfactorily. We then had the Premiers Conference and, following that, a communique. A draft report of that communique was queried by the Premier of Tasmania, and the Treasurer (Mr Keating) was told by the Premier that he could not agree with the draft communique. Mr Keating said: 'Don't worry, further detail has to be agreed to'. Because of Mr Keating's assurance the Premier of Tasmania made his biggest mistake ever. He took the word of the Treasurer and agreed to the communique. The biggest mistake the Premier could have made was to trust the Treasurer and take his word at that Premiers Conference. Senator Tate —That is certainly a very serious allegation. You had better be right. Senator WALTERS —It is an extremely serious allegation. The honourable senator has the letters; he can read the Premier's letter. On 13 July a letter and a telex were sent to Dr Blewett by the Tasmanian Minister for Health requesting some details and stating: Clarification is vital to Tasmania before any final decision can be made. On 14 July, Dr Blewett, at the Health Ministers Conference, said: . . . there will need to be officer to officer decisions with the two cost sharing States . . . So by 14 July, well after the Premiers Conference, Dr Blewett acknowledged that there would be officer to officer decisions with the two cost sharing States. There were still two cost sharing States; no other decision had been made. On 28 July Mr Cleary got a letter from Dr Blewett saying that it was accepted at the Premiers Conference that Tasmania would move away from the current cost sharing arrangements. What a double banger that statement is. All one has to do is read the transcripts. I turn now to 16 August and a letter to Dr Blewett from Mr Cleary, our Minister for Health, saying that Dr Blewett's assumption that Tasmania would terminate the cost sharing agreement was a misinterpretation of Tasmania's position. No more was done or said until the Budget came out and Tasmania realised that the Commonwealth Minister had no intention of discussing it any further, no intention of having officer to officer discussions or agreements but indeed had overidden the State once more. Senator Tate —You do not mean-- Senator WALTERS —Senator Tate should be sticking up for his State. He should at least read the letters. This is a disgrace. Immediately the Budget was announced Mr Cleary said: 'This is not the situation as indicated in my letter of 16 August'. We will come to this again because there were further letters right up to 14 September and 15 September when the Premier of Tasmania wrote to the Prime Minister, Mr Hawke, appealing to him to ask Keating, because Keating had promised him-- Senator Tate —Who is Keating? Senator WALTERS —The Treasurer had promised him at the Premiers Conference that there would be further talks about it. The deception has been colossal. I am appalled that the Premier of my State had trusted Mr Keating, the Treasurer of the Government, and had been let down so badly. We cannot take a man's word, when that Minister lets the Premier down as he has. We will come to that later in the Committee stage. I support all the amendments put by the Opposition. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator GILES(Western Australia)(5.22) —Contrary to Senator Walters's opening statement these Medicare Bills are a reminder of the fact that this is 1983. The shibboleths of 1973, 1974 and 1975 will not do. During some of the wilder allegations of the previous speaker I was strongly reminded of a pathetic advertisement that was run in all the Australian newspapers in 1974-75 of a rather appealing, I suppose, statement being made by a prospective patient who said: 'But darling, I do want my own doctor and my own hospital room'. We have a population now which is much better educated about health care, a medical profession which to a large degree has seen the light, a Government committed to preventative measures, and initiatives in community and occupational health, rehabilitation and domiciliary care. I would like to address some of the less wild allegations made by the previous speaker and will leave the more specific ones to those with a better knowledge of Tasmania. I believe that in all the discussion about unemployment of clerical assistants previously or currently employed by private insurance funds, there has been very little recognition of the fact that private funds have a very high rate of worker turnover. In any case, many funds have been computerising at a great rate over the last months and many of their workers have been made redundant. I hear very few complaints and see very few tears on behalf of those workers. In case any pensioners were listening this afternoon and became highly confused by the allegations that were made about the cost of Medicare I assure them that what we heard were hypotheses and wild guesses about the cost of living in 12 months time. Of course, pensioners will not pay the levy. In joining in debate on the Medicare Bills my purpose is to make an appeal on behalf of all those Australians who depend on this Government for a scheme of medical and hospital care which is equitable, easily understood and effective, and who voted overwhelmingly on 5 March for such a scheme. My appeal is to the members of the medical profession who by their co-operation can make Medicare work and work well. If doctors really have the welfare of their patients at heart they will abide by the spirit of the legislation and by the best traditions of their profession. There is no need, I know, for this sort of admonition to be made in the vast majority of cases; compassionate doctors of social integrity will continue to provide high quality care in a responsible manner. There may be some doctors who are convinced or confused by the irrational opposition of the New South Wales branch of the Australian Medical Association to direct billing, or bulk billing as it is commonly known. Direct billing is a characteristic which will undoubtedly enhance Medicare for consumers and which in my view holds great advantages for doctors and the practice of medicine generally. There are the obvious gains to practitioners of bulk billing of time and effort saved, the avoidance of bad debts and less complicated bookkeeping. Estimates of these cost savings have suggested that 15 per cent is on the conservative side, resulting in no economic disadvantage for the doctor. If the busy practitioner then finds that an accounts clerk is redundant or partly so, I suggest that the costs saved should be invested in improving the practice by, for example, employing a counsellor or a physiotherapist or, better still, someone to provide care for the children of patients or those children attending with their parents , a perennial need in suburban practices and a service which would be of enormous assistance to patients and practices alike. We still hear the monetarist myth that services must be paid for even with just a small amount if they are to be properly valued. Even if this were true, how could it be so and how could it be a justification for refusing to direct bill? For a start, most people will be paying one per cent of their income towards their health care and will be very well aware of the fact. They will be justifiably resentful, I believe, about the doctor who refuses to direct bill on that spurious ground. Does a doctor, unlike a professor of medicine or a school teacher, need to be continually reassured of the value of service given by having the patient reminded of its cash value? I believe we have had ample evidence over the past 10 years of potential for a greatly improved relationship between givers and receivers of medical services. We have a new generation of practitioners in all health disciplines who do not consider their qualifications as the equivalent of an open cheque on the public purse, who are prepared to co- operate with this Government, and who need no constant reminder of 15 per cent of their fees to bolster their sense of self-esteem. I turn now to the bogey of abuse and overuse referred to by the previous speaker and by a number of others during this debate. It is now clearly understood that apart from the patient's initial visit it is overwhelmingly the practitioner who determines the length and cost of treatment. As the percentage of total private hospital beds has risen from 1.04 per thousand population in 1971 to 1.34 per thousand population in 1981, which is a 27 per cent increase, the number of clients has tended to expand to occupy those beds. There are some demographical explanations-for example, a changing of the age structure of the population-and there have been changing expectations. But it is generally accepted that more doctors and more hospital beds mean more hospitalisation and more surgery, much of it of questionable necessity. If one looks at the published statistics of medical use per capita for the year 1975-76 and compares it with earlier and subsequent years, one sees that the number of medical services per head increased in 1975-76 to 5.50 compared with 5.39 for the previous year, an increase of only 2 per cent. Services per head in subsequent years were 5.70 for 1976-77, a 3.6 per cent increase and 6.58 for 1979-80, a 4.9 per cent increase. These figures have risen year by year in line with changes in the age structure of the population and a general increase in medical utilisation which, interestingly enough, rose by the largest percentage a year after Medibank. Irrespective of the insurance system in operation, medical utilisation has risen by an increasing percentage every year of the decade. Was there any massive abuse of the free public hospital care offered under Medibank in that fearful year? Again, the answer is no. The initial effect of universal entitlement to free public hospital care was to increase the proportion of public patient days by a little over 4 per cent, equivalent to about 3 per cent for all hospital patients. The subsequent movement was about one per cent a quarter. This varied from State to State, suggesting that factors other than cost were involved. Perhaps paradoxically private hospital use increased in the Medibank year of 1975-76. These are clearly crucial responsibilities for the medical profession to address, individually and collectively, but not by any test of what is fair and reasonable a justification for penalising victims by refusing to direct bill and thereby sabotage the scheme. The humane and responsible practitioner will now have the opportunity to build a thriving and popular practice amongst those on low incomes who have only briefly in the past 10 years had access to such low cost care outside the public hospital system-people of all ages seeking contraceptive advice, adolescents with their particular problems, families with young children and all of those whom this legislation seeks to assist. Medical practitioners in Australia are in a unique position. They are members of the only industry-I remind Senator Walters-whose right to private entrepreneurship is enshrined in the Constitution. They are educated at great expense and in some cases are prone to consider themselves thereby entitled to high rewards. Others, probably the majority, take their responsibilities very seriously. Let me repeat my initial plea to practitioners of good faith to be prepared to bulk bill, to do the decent thing by the people and by the Government which the people elected. Senator TOWNLEY(Tasmania)(5.31) —So far in this debate on the Medicare Levy Bill 1983 and cognate Bills, we have heard from several Tasmanians in the other House and from Senator Walters in this House. I think all of them have made very important points that do relate to this series of Bills, to which the Opposition has moved an amendment which points out the difference in its philosophy with regard to the different types of health schemes available. At the outset I say that I regard this legislation as truly socialistic. It certainly reveals this Hawke Government in its true colours. It is socialist manoeuvre introduced by Mr Hawke's socialist Government. This legislation will effectively nationalise a large part of the health services of this country. It will change the way health services are given to the people of Australia. I will mention in a few moments the particular effect it will have on an agreement between Tasmania and the Commonwealth. First of all, what are the essential features of this legislation? If I had to choose one, I think I would say it was the lack of choice. Anyone who has followed the debate either here or in the other House will have realised that we will have much less choice after Medicare comes into operation. Medicare will be run by a centralised bureaucracy that will be controlled in and from Canberra. Medical insurance will be limited and controlled. Doctors will be made to bulk bill. I think one will find that as the costs of this scheme go up, as they inevitably will, the doctors will be squeezed financially. That is certainly what has happened in other countries. Another group that will be adversely affected when the squeeze comes, when this monster gets out of control, is private hospitals. Just why it is that the Government does not like private hospitals, I do not know. But I am sure that a greater number of Government members and senators would not care one iota if the private hospitals failed completely and vanished entirely from the health scene in this country. I am worried a lot by this big brother attitude, by the attitude that Canberra knows best and by the entire philosophy that Canberra can operate something like this better than is presently being done. But perhaps I am worried most about the long term cost of Medicare. We saw today on the front page of the Sydney Morning Herald that a quarter of the people in this country now depend on Commonwealth benefits. The article contains a list showing the categories that were applying for and getting certain pensions and benefits in June 1973 and compared them with the figures as at June 1983. I realise that Senator Gietzelt did make a statement a little earlier stating that the figures were not entirely accurate, but I think it would be for the benefit of the Senate if I were to have that table incorporated in Hansard, and I seek leave to do so. Leave granted. The article read as follows- PEOPLE WHO DEPEND ON COMMONWEALTH BENEFITS June 1973 June 1983 Age pensions 950,459 1,417,218 Invalid pensions 171,519 277,300 Widow's pension 105,717 164,606 Supporting parent's benefit - 140,228 Service pensions 96,000 341,148 Sheltered employment 1,080 12,190 Total pensions 1,324,775 2, 352,690 Unemployment benefits 46,500 810,000 Sickness benefits 23,200 88,503 Special benefit 5,665 25,899 Total benefits 75,365 924,402 Children dependent on: pensioners 167,124 472,487 beneficiaries 30,850 266,910 Total children 197, 974 739,397 Grand total 1,598,114 4,016,470 Sources: Departments of Social Security and of Veterans' Affairs. Most of the pensioners and beneficiaries listed had the relevant benefit as their prime source of income. All had to submit to an income test, except for pensioners aged over 70, who could receive a part-pension-regardless of other income-in June 1983. The children listed were all dependents of pensioners and beneficiaries. Senator TOWNLEY —Thank you, Madam Acting Deputy President. That is one area in which the cost of running this country is getting out of control. There will be an increased tax bill of about $1.7 billion per annum just to run Medicare. That will cover additional government expenditure that was previously met by private insurance. Only one-eighth of the total cost of the health scheme will be covered by the one per cent levy. That one per cent is, of course, an arbitrary figure. So Medicare will give the illusion of free health care, but it will be hiding from the consumer the real cost. I believe that it will not improve health care or the economics of health care at all in this country. As well as the Commonwealth cost of $1.7 billion, the States will have to raise additional billions of dollars for the health care of their people. All of this has been well covered by other speakers, particularly Senator Peter Baume in his very sensible speech. I refer anyone wanting details of this matter to his speech, which was made yesterday. I now say something about the Canadian experience of health care because in many ways Canada and Australia are comparable. We have similar parliaments. Canada has provinces where we have States. The populations, although different, are certainly comparable, and the Canadian medical scheme is even called Medicare. Mediscare is what one doctor called it when I was talking to him last night. I think that will be the way this scheme will eventually end up. At the moment the Canadian budget is so squeezed that even little simple items in the wards of the hospitals are unavailable, I refer to items such as facial tissues. What is much worse, the patients are under care of doctors whose system training has desensitised them to such an extent that they function seemingly without compassion and, I am told, even without common courtesy. There is interaction in Canada between the Federal Government, the provincial governments, the medical fraternity and the taxpayer. Of course it is the taxpayer who, one way or another, has to pay the other three. In Canada, the Federal Government has tried to lay down the law for the provincial hospitals to follow. That is what is going to happen here. Not only State hospitals but also private ones will be under the control of this Canberra -run bureaucracy. The manner of payments to the provinces in Canada is linked to the gross national product. It is not linked at all to the cost of running the hospitals. As the economy has slumped in that country over the last few years so the Federal contribution to the hospitals has also fallen. The provinces had to increase their taxes, cut back on services or charge some patients directly for their services. That is what has caused the turmoil in the Canadian system at the moment. Is that what we want or what we want to head towards in this country? Is the Federal Government going to be able to keep finding the money necessary to feed this system? Why will it work in Australian when nearly every country that has tried to give every person the health services that he or she wants has found that the costs are prohibitive. I think Senator Lewis also mentioned Canada as well as the United Kingdom. Sweden is an example which is often mentioned by our socialist friends. That country's economy is in real trouble at the moment. I was talking to some Swedish people the other day and they said that if Sweden's deficit keeps increasing the way it does, which is largely due to its social services and so on, in the early 1990s its entire budget will go towards paying interest on the money it has had to borrow to sustain those services. Senator Grimes —Who is your authority for this? Senator TOWNLEY —I was talking to some members of the Swedish Parliament just a couple of days ago. Senator Grimes —What party? Senator TOWNLEY —I did not ask them to what party they belonged. I could find that out for the Minister, and I am willing to do so. It is largely hospital costs that run away. The activities of the medical fraternity and general practitioners do not really lead to an expansion of costs. However, try as one may, it is extremely difficult to keep hospital costs down. I do not think there will be the incentive under Medicare for hospitals to manage money as economically as they would under the present scheme. Of course, I am not saying for a moment that costs will increase the day after the introduction of Medicare . I think we will see a more gradual increase in costs. I can easily see the arbitrary levy of one per cent will be lifted as time goes by. Of course, what the levy does not cover will be paid for by general tax. This cost will either gradually increase our deficit or it will lead to increased taxation. I cannot believe that at the moment this country can afford to start spending on such a scheme. Our deficit is so huge that we are joining the league of large borrowing countries such as Mexico, Poland and Argentina. Although our quantity of debt may not be very high, our debt per head to the international banking community is very high. In fact, it is certainly higher than that of Argentina. The most recent figures I have are for last year. Since then, of course, we have budgeted to increase the debt per head from nearly $1,900 to something like $2, 300. Again, for the benefit of the Senate, I seek leave to incorporate in Hansard a small table which compares the position in Australia, Poland, Brazil and Argentina. Leave granted. The table read as follows- PER CAPITA LIABILITIES TO THE INTERNATIONAL BANKING COMMUNITY: SELECTED COUNTRIES: 1982 Per capita Country Liabilities Population liabilities $US $USm m $US/person Australia 27,924 *14.86 1,880 Poland 27,707 *35.23 790 Brazil 115,753 *121.55 950 Argentina 50,986 *28.09 1,820 * 1981 estimate. * 1979 estimate. Note: Per capita liabilities rounded to nearest $US10. Source: I. P. Sharp & Associates. Compiled at request by the Statistics Group of the Legislative Research Service . Senator TOWNLEY —Some people say that the recovery in this country that is going to help finance this system will follow the United States recovery. We do not always understand just how that happens. However, we get direct benefits from any increases in sales in America. For instance, Tasmanians sell a lot of zinc to the United States which is used in the manufacture of cars. So if car production goes up we make more sales. That is just one example. The question that is haunting people in the United States is whether or not the recovery will be sustained. The Federal Reserve Board in the United States has shown a determination to keep the growth of money supply in check in order to control inflation. That has tended to drain from the banking system any money that might otherwise be available. It reduces the supply of credit and so dries up interest rates. Interest rates in the United States have gone up by 2 per cent since May. Many people in that country feel that recovery is linked to interest rates. They argue that if interest rates are low one can get some good recovery; as interest rates go higher one gets less recovery; and if interest rates go high enough recovery can be stalled. As I say, at the moment recovery is continuing. However , it takes a while for the effect of interest rates to filter through the statistics of a country. The constant worry in the United States is the fact that there is little or no likelihood of any fall in interest rates, certainly not in the near foreseeable future. In fact, the real prospect in that country is that interest rates will go higher. One may ask: What effect does that have on us in Australia and why do I relate interest rates to Medicare? Many people in Australia are taking the United States recovery for granted. I believe that is a grave error, as is just waiting for the recovery in that country to affect us and sweep us along with it. As the United States interest rates go up we will find it harder to attract money to cover our deficit. I believe that our interest rates will have to increase even higher than they are now due to competition in the international markets for the available money. I would not be at all surprised to see our interest rates go up 2 per cent or 3 per cent in the next 12 months. I say this because the Government will have to try to cover the cost of our huge deficit in some way. It is my belief that anything that adds to our deficit, as will Medicare, is certainly at this stage of our country's life a very bad thing. Higher deficits make recovery from the present recession we are in quite difficult. The present recession is quite different from any recession we have seen since the war. We are not necessarily going to follow the United States pattern. Of course, I should mention that we are not the only country which is trying to get money to cover deficits. Many Third World countries are also in there bidding, making competition for that international money supply even more difficult for us. Therefore, as I think Senator Watson said this afternoon in another debate, it is even more likely that our interest rates will rise. What I am trying to emphasise is that this country cannot rely on outside help for its recovery. Australia has to recover by itself. So we need to control the deficit. We need to control expenditure on unnecessaries, and I believe the introduction of Medicare now is not necessary. Medicare could lead to a higher deficit and consequent higher interest rates which will affect everyone, which will stop any confidence in the country and which will tend to slow recovery. Medicare is a huge, unnecessary expense for the Government at this time, and I believe that it will become increasingly more expensive to operate as time goes on. While I am on the financial aspect of Medicare and its implications to the deficit, I would like to mention the Tasmanian situation. The Tasmanian and Federal governments have a formal cost-sharing agreement for public hospital services which is not due to expire until June 1985. The Federal Government has introduced legislation to revoke the agreement, even though the agreement could remain in force and would not in any way jeopardise the introduction of Medicare . The Tasmanian Minister for Health is of the opinion that the initiative taken by the Commonwealth in introducing this legislation into the Parliament to terminate the cost-sharing agreement is without any legal or constitutional foundation. He says in a letter dated-- Senator Coates —But with his agreement. Senator TOWNLEY —No, I am sorry. I do not think it is with his agreement. I will seek leave to incorporate the letter in a moment. It will show quite clearly that it is not with his agreement. In his letter he says: . . . it is a serious and indefensible breach of trust and is at considerable odds with normal relations between Governments. Perhaps for the benefit of the Senate I should seek leave to incorporate this 1 1/2-page letter from Mr Cleary, the Tasmanian Minister for Health, which is dated 16 September 1983. Leave granted. The document read as follows- Office of the Minister for Health Hobart, Tasmania 16th September, 1983. Open letter to all Tasmanian Members of Commonwealth Parliament and to all Senators Medicare LegislationCommonwealth/State Cost Sharing Agreement for Public Hospital Service It is with great concern that I write to you on a major matter of importance to the Tasmanian Government. The Commonwealth Government has introduced legislation into the Federal Parliament to revoke its cost sharing agreement with the Tasmanian Government for public hospital services. Our two Governments have a formal cost sharing agreement for public hospital services which is not due to expire until June 1985. It is possible for this agreement to remain in force, and not in any way jeopardize the introduction of Medicare. As evidence of this, I attach for your information, a formal exchange of letters between the Commonwealth Minister and myself (dated 17th May, 1983, and 23rd May, 1983 respectively) agreeing to a budget for 1983/84 under the agreement. However, notwithstanding this fact, the Tasmanian Government appreciates the desire of the Commonwealth Government to have a uniform set of financial arrangements with all States. To this end, on behalf of the Tasmanian Government , I have consistently conveyed to the Federal Minister for Health, the Hon. N. Blewett, M.P., a willingness to examine any proposals put forward for consideration to discontinue the Cost Sharing Agreement prior to its scheduled expiry date of 30 June, 1985. To date, the Tasmanian Government has not received a firm proposal from the Commonwealth Government for the Agreement to be discontinued and for a specific indication of the actual amount of any grant that would replace it. I would have thought that until such a proposal is received, considered and agreed to by the Tasmanian Government, the Cost Sharing Agreement would continue until its expiry date. In my understanding, to vary the agreement, which is ratified by reciprocal Commonwealth and State legislation, there needs to be agreement in writing between the two Heads of Government and subsequent enactment of legislation. Unless, and until, such an agreement is reached, the Tasmanian Government will continue to fulfil its obligations under the Cost Sharing Agreement. In my opinion, the initiative taken by the Commonwealth Government in introducing legislation into the Federal Parliament, to terminate the Cost Sharing Agreement, is without any legal or constitutional foundation. In my opinion, it is a serious and indefensible breach of trust and is at considerable odds with normal relations between Governments. I attach for your information copies of relevant correspondence and other documentation relevant to the negotiations which have taken place between the Commonwealth and Tasmanian Governments on both Medicare and the future of the Hospitals Cost Sharing Agreement between our two Governments. On behalf of the Tasmanian Government I would be pleased if you could take whatever steps are necessary in the Federal Parliament to delay or defer or veto the legislation soon to be considered in the Senate which will terminate the Tasmanian Cost Sharing Agreement. As I said earlier, this is a matter of considerable importance to the financial relations between Tasmanian and Commonwealth Governments. The Tasmanian Government would appreciate your support on this matter. Should you have any queries or wish to discuss this matter with me personally, please do not hesitate to contact me at the earliest opportunity. Yours sincerely, John Cleary Minister for Health Senator TOWNLEY —Let me conclude by saying that I believe that 'Mediscare' is the right name for this scheme. I hope I am wrong, but right now I am scared of the cost of this Canberra madness; I am scared of the big brother effect; I do not like the idea of identity cards that people will be required to carry; and I know we cannot afford such a scheme at this stage. I would have preferred to see a gradual improvement in the scheme that is presently working fairly well. Mr Whitlam learned that Australians do not like rapid change. I believe that Mr Hawke will regret the day that these Bills and ideas were brought into this Parliament. Senator COATES(Tasmania)(5.49) —I must say that I am pleased to be speaking immediately after Senator Townley and not Senator Walters, because at least my blood pressure has had a chance to go down since Senator Walters finished her speech. Her ranting and raving was stirring up honourable senators on this side of the chamber. That is not to say that Senator Townley did not also talk a lot of nonsense, but he did not present it in the same stirring way as did Senator Walters. Even Senator Townley talked about this scheme involving socialisation, echoing Senator Walters's accusations about nationalisation and that sort of nonsense. Certainly, this scheme emphasises the differences between the Government and the Opposition. But it is a bit much to say that bulk billing or direct billing of the Health Insurance Commission involves nationalisation. Medical practitioners will have a free choice in what they decide to do. If 100 per cent of them happen to bulk bill-I would be very surprised if they did-that is entirely their choice. It is stretching the word a bit to call that nationalisation. The other ignorance of Senator Walters that needs to be pointed out and put to rest-I will pick out some of the things that she referred to-was her claim that what the levy will cover is not the same as what basic hospital and medical insurance presently covers. She suggested that under the present scheme someone with just basic hospital insurance is not limited to being a patient in a public hospital. In fact, such a person is so limited. Senator Walters tried to suggest that a person with such basic insurance was covered for private medical costs as a public patient. Of course, that is just untrue. It is an example of the way in which she tried to mislead the Parliament and the public about the introduction of this scheme. At the height of her speech, if one may use that word, she also claimed that Medicare would not give a penny towards private hospital costs. Of course, as everyone knows and as Senator Peter Baume, who is in the chamber at the moment, will acknowledge, a subsidy will be paid from Medicare towards the costs of private hospital accommodation. Of course, on top of that, everyone will be covered for his medical costs in a private hospital. Those who take out private insurance to cover the additional costs not covered by the Medicare subsidy will , of course, be able to claim the expenses of the medical practioners who treat them in that private hospital, which will be of course, an additional charge on Medicare. I will refer briefly to the argument that has been manufactured in recent days by Mr Cleary, the Tasmanian Minister for Health, and some of the Tasmanian Opposition members of Parliament. Mr Cleary has suggested that he did not mean what he said when several months ago he agreed to the scheme. He is now apparently indulging in rearguard action on the matter and trying to generate a dispute where there was not one. Of course he agreed to the scheme. He knew it involved the ending of the previous cost sharing agreement. I understand that he will have further discussions with Dr Blewett tomorrow, when no doubt that will be made clear to him and he will be reminded of his previous agreement. I should point out parenthetically that the cost sharing agreement that is apparently being so definitely defended by the Opposition and by the present Tasmanian Government was, of course, a continuation of the agreement made by the previous Federal Labor Government and a former State Labor government under the original Medibank arrangements. It is a bit much for Mr Cleary to jump in and oppose the ending of the cost sharing agreement and its replacement with more uniform arrangements which are proposed under this scheme. One other point from Senator Walters that I need to answer relates to her being upset about there not being any gap insurance. She argued that everyone should have the right to insure for whatever he wants. May I point out that even the previous Government did not allow insurance for the gap between the 100 per cent schedule fee and whatever the medical practitioner happened to charge. Those who bothered to, or thought they could afford to, take out extras insurance and have included in that coverage the gap between 85 per cent and 100 per cent of the schedule fee, found themselves still having to pay a gap to the medical practitioner. It gave the profession, or some members of it, an opportunity to set their fees at higher than the schedule fee and still to argue that individuals should make a contribution towards their medical expenses because they were covered for gap insurance and that therefore doctors had to charge a higher fee. What the Government is doing in preventing gap insurance and limiting the maximum cover under Medicare is ensuring that there will be a much greater observance by the medical profession of the schedule fee. Of course, not all doctors will do that. Unfortunately, there is no obligation on them to do so. But at least there will be some indication to them that the so-called moiety that patients will be required to pay if the doctors do not bulk bill will not be covered. I remind the Senate that the Australian Medical Association insisted many years ago that there should be a patient contribution. Yet we have had Senator Walters getting upset about the abolition of the option of gap insurance . I wish to make a brief reference to what I though I heard Senator Lewis say earlier in the debate this morning. It seemed to me that the central point of his opposing the scheme was that, because everyone would be entitled to treatment in a public hospital, somehow or other there would be a ranking of the access of individuals to that treatment. He suggested that Senator Crowley, whom he followed, and other senators and medical practitioners would be able to queue jump in public hospitals. In my time of seeking treatment in public hospitals I have never sought, nor has the opportunity ever been offered to me, to jump the queue. If there had been any suggestion that I could, I would certainly not have accepted it. One takes one's place and accepts it. It seemed to me a quite empty objection by Senator Lewis to the scheme. I point out to him anyway that the change in the health insurance arrangements will not affect that sort of situation. Those who at present are entitled to treatment in public hospitals because they have at least basic health insurance will, of course, be entitled to it under Medicare. There will not be much change in public habits under this scheme. It has to be pointed out that, whether we like it or not, Medicare is not all that revolutionary a scheme. To hear some members of the Opposition one would think that the end of the world was at hand. But at least some of them are acknowledging that the scheme is a change in the way of paying for health care. It is a little different from the argument that we had to put up with during that period from about 1969 through 1975, during that runup to the introduction of Medibank in mid-1975, when there was no acknowledgement from anyone that this was really all it was. The Opposition suggested that it would make traumatic changes to the method of health care in Australia. One can see that the tune of the Opposition and of large chunks of the medical profession for that matter, have changed quite a bit. As I have said, whether or not one likes it this scheme does not change things very much at all. It does not change the general system of private practice, fee for service medicine. That is left unscathed. In fact, it is further propped up and underwritten by Medicare. What it does mean is that all Australians will be covered for their health insurance and they will pay for it in a fair way. At the moment people have to pay for a substitute for basic health insurance. It is the same amount regardless of income. When Medicare comes into operation people will pay according to their means as they pay for education, defence or any other essential service in this country. This debate is in a way a re-run of the Medibank debate of several years ago. However, one must acknowledge that at least this is a cooler debate. Of course, the numbers in the Senate are now different. There is general acknowledgement that the scheme will come into existence and that people's health insurance arrangements will be improved because of it. While one could say a lot more in this debate, especially in answer to some of the wilder accusations of the Opposition, I believe that the matter is urgent. This debate has been enough of a marathon as it is. I want the Minister for Health, Dr Blewett, to be able to celebrate the passage of this legislation tonight, or, at the latest, tomorrow. It will be the culmination of his months of hard work developing this scheme and doing the necessary negotiations and explanations. I certainly look forward to its introduction on 1 February. Senator CRICHTON-BROWNE(Western Australia)(6.03) —We are debating the Health Legislation Amendment Bill 1983 and associated Bills. The main features of the legislation are that it will increase dramatically the cost of health care in Australia and costs to a great many Australians. It will quickly lead to a much lower quality of health care than we presently have; it will destroy the traditional doctor-patient relationship; it will lead to overcrowding in hospitals and overservicing by doctors; private hospitals will be severely disadvantaged; the number of health funds will be significantly reduced and many will have to close their doors. The essence of the proposed legislation is a return to the tried and failed Whitlam Government Medibank scheme, except that on this occasion it is designed to destroy irretrievably private health fund insurance in Australia. Proponents of Medicare have argued, among other things, that by replacing a number of privately operated, non-profit health insurance organisations with a government run scheme, Medicare will be simpler than the present situation. For the vast majority of Australians this system will not be simple, suitable or cheap. For people who are satisfied with basic health insurance cover certainly there will be only one authorised insurer to operate in Australia, namely, Medicare. However, for those who seek to insure themselves for private accommodation, for a choice of doctor and for a variety of services, which will not be included in the Medicare schedule-for example, chiropractic consultations-the system is infinitely more complicated. Such people will have to go to Medicare for a refund of their basic expenses and to their private health fund for that portion of their expenses which exceeds the basic medical or hospital rate unless, of course, they are in Medibank Private. Once they could have obtained a full refund through the private fund with which they have chosen to insure themselves but now they will have to perform two separate operations to get exactly the same result. In the first place, two operations will be necessary for them to pay their premiums, a one per cent levy on income for Medicare and a further payment for what are termed ancillary benefits and gap insurance. If Members of the Labor Government regard that as a simplification of the present situation I really despair of their ability as administrators of our economy and our country . Proponents of Medicare also argue that the income levy is a fairer way of determining premiums than the present flat insurance premium. What they have chosen to ignore is that the disadvantaged in the community, such as elderly pensioners, the unemployed and the low income earners, are already provided with free medical and hospital care under the previous Government's arrangements. For them nothing will change by the introduction of Medicare, except, of course, for single pensioners who will lose $2.30 a week of their pension and for married couples who will lose $3.90 by what appears to be a sleight of hand, in that the Government has removed this expense from the consumer price index. The Labor Government is committed to tying pensions to indexation. Of course, with the CPI being artificially deflated pensions will, of course, go down. As far as this legislation is concerned, absolutely nothing will be achieved and pensioners will receive nothing except a lower pension. I admit that for those who are marginally above the low income cutoff point there are difficulties in meeting the full costs of insuring themselves. However , as my colleague the Minister for Health in the previous Government made clear on a number of occasions both prior to and after the 5 March election, plans were being drawn up to alleviate this problem. There is no need to make these dire and fundamental changes to the private health insurance system simply to overcome this defect. A sensitive Liberal Government was dealing with the problem without the overreaction of setting up a nationalised health insurance system. In any case, the levy is not as fair as its supporters claim. At present single and family rates are offered by the private funds, reflecting their understanding of the likely average utilisation of health facilities. Under Labor's levy system, a single person will pay the same as a married person who has the same income, despite the fact that a single person is likely to make much less use of health services than a family. Senator Coates —Will there be family rates for defence expenditure? Senator CRICHTON-BROWNE —We have the circumstance in which a married couple, without a family and who are both working, pay the levy twice. The Government's pay for use principle is being very selectively applied in this situation. There are many obnoxious features in this legislation. Perhaps one of the most unpleasant aspects of it is the Government's crude and blatant attempt not only to force doctors to bulk bill but also, in doing so, to force people out of their free choice of a private health fund. Why would the Government provide an opportunity for doctors, provided they bulk bill, to accept 85 per cent of the standard fee as full payment from Medicare and further legislate that in the event a doctor does not bulk bill, the patient must pay the balance and yet, at the same time, not allow the patient to take out insurance with a private fund to cover the 15 per cent difference? The answer is obvious. The intention is to destroy the private medical funds and to force doctors to bulk bill. At the same time the Australian Labor Party is increasing, by $4m, surveillance of overservicing. By the very nature of its enforced proposals it is encouraging doctors to overservice to make up the difference and is encouraging patients to overuse the facilities. By offering what the Government terms free basic cover it will also create a situation in which greater pressure will be placed upon the public hospitals to the point where perhaps some private hospitals will be forced out of business. It will be a sad day indeed in this country when much needed hospital capacity is sacrificed on the altar of socialist ideology. Perhaps the most important issue at stake here is the market efficiency of nationalised health insurance. I refer to the Campbell Committee of Inquiry into the Australian Financial System which commented on this matter in chapter 26 of its final report: Retention of government ownership of a financial institution is only justified from the point of view of efficiency of the financial system if both currently and on reasonably expectations for the future: (i) it fills a market 'gap'. . . (ii) the market gap would not be filled as effectively if the institution were privately owned; and (iii) it represents the most cost-effective method of dealing with the market gap. . . I put it to the Senate at this point that Medicare fulfils none of those criteria. With 39 privately owned funds, not including Medibank Private, open to public membership as well as 27 employer-operated funds, there is clearly no gap in health insurance which is required to be filled. There is already a sufficient number of funds. When the free medical and hospital arrangements for the disadvantaged are taken into account, the community is almost completely covered without Medicare. As I indicated earlier, in relation to the people marginally above the low income cut off point who were having difficulty meeting health insurance premiums, some adjustments were already being considered by the previous Government which would have ensured that coverage by the present scheme would have been universal. In terms of filling a market gap, Medicare is irrelevant. Let us examine the second criterion of the Campbell Committee. Medicare will not fulfil the market requirements as effectively as privately operated funds. I have already mentioned the two step operation which people who have insured themselves for more than the basic cover will have to perform to get their refund. The Government's new arrangements will not inconvenience a small minority in this respect because, in fact, the vast majority of members of the private funds currently insure themselves for more than the basic cover. Of the seven million Australians who have private medical insurance, 4.5 million or 64 per cent have taken out gap and ancillary cover with their funds. More than half of the people insured for medical benefits with private funds-I am excluding Medibank Private from these figures though the trend there is no doubt the same-have indicated their preference to take out more than simply basic medical cover. They will be inconvenienced considerably by Medicare if it comes into being. Similarly, in terms of hospital cover, 7.4 million Australians are insured by private funds and 3.5 million, or 47 per cent, of those insured have opted to take out more than the basic hospital care which Medicare will be offering. For those people, Medicare will also be a great inconvenience. Not only does Medicare fail the Campbell Committee's first criterion but it also fails the second criterion. In fulfilling the obvious preferences of health insurance consumers, Medicare will be less effective than the privately operated funds it is seeking to replace. The final judgment that the Campbell Committee made on government operated financial institutions concerned their cost effectiveness. In this respect, the clear experience of Medibank Private is that the government run scheme is markedly less cost effective than the privately run competitive scheme. Two indicators of economic efficiency in health funds are the ratio of management costs to contributions income and the ratio of management costs to benefits paid out by the funds. I have a brief table which compares the record of Medibank Private with the record of the private funds in the five years from 1978 to 1982. I seek leave to incorporate it in Hansard. Leave granted. The table read as follows- RATIO OF MANAGEMENT COSTS TO CONTRIBUTION INCOME 1978 1979 1980 1981 1982 Medibank (%) 14.0 12.0 17.0 16.4 11.7 Industry ave. 9.7 10.3 11.0 11.7 10.1 RATIO OF MANAGEMENT COSTS TO BENEFITS PAID OUT 1978 1979 1980 1981 1982 Medibank (%) 13.8 13.7 13.4 13.5 10.1 Industry ave. 9.4 9.4 9.8 10.1 9.5 Senator CRICHTON-BROWNE —This table demonstrates that in every year the management costs of Medibank Private compared to the contribution income and benefits paid out are substantially higher than the private funds. They are simple measures of economic efficiency and prove that a government run, nationalised health insurance scheme will be more costly to administer than the existing non-profit privately operated health funds. Senator Tate —But you keep on changing their rules year after year. Senator CRICHTON-BROWNE —No. This is irrelevant. Irrespective of any changes to the system that is the cost which will fall on the taxpayer either by eventually causing the Government to increase the levy from one per cent of taxable income to some higher figure or through transfer payments from Consolidated Revenue. Honourable senators may remember that in 1978 Medibank Private made a loss of something like $20m. It was then shored up by a government grant of $21m in November of that year to allow it to continue to be liquid. I can well envisage the same thing happening again if Medicare becomes established in this country. The Campbell Committee made several other comments about the operation of government financial institutions which are also relevant at this point. The Committee said that institutions such as Medicare 'should compete equally or reasonably equally with its private sector competitors'. In the past, as the $ 21m grant to which I have just referred proved, Medibank has not done that. There is no reason to expect that Medicare will be any more successful in the future. More importantly, the Government has required as a benchmark figure that the health insurance funds have reserves-in the case of the larger funds four weeks and, in the case of the smaller funds, eight weeks of contribution income- in order to meet unexpected high claims. While that requirement is not actually written into the National Health Act, it is understood and is observed by the private health funds. On the other hand, in 1981 Medibank Private held an average of 3.4 weeks of contributions in reserve. In 1980 it was 1.8 weeks and in 1979 it was 1.4 weeks. In other words, in a competitive environment, Medibank Private has not even been able to comply with the standards which the Government has seen as reasonable for the other funds. The point to be made is that the government run health insurance scheme has not fulfilled the Campbell Committee's criterion of competing equally with the private sector. Relative to the private funds, it has been operationally inefficient. Once again, there is no reason to expect that Medicare will be any different. To summarise this point, I refer again to the report of the Campbell Committee: . . . an established GFI- That is, a government financial institution- may demonstrate managerial, operational and innovative qualities of a high order and achieve an adequate rate of return but that alone would not necessarily justify continued public ownership unless it were filling a market gap in the most cost-effective way and there were reason to believe its performance would suffer under private ownership. What the Committee was saying is that even enterprises which are government owned already should be sold unless they are fulfilling those criteria and those commitments. How much more pertinent are those criteria when the Government is seeking to establish new public enterprises such as Medicare and when it is seeking to enter a field which, except for the unfortunate Medibank experience of the Whitlam era, has been traditionally left to the private sector? It is regrettable that the Government has decided to proceed with Medicare. It is particularly regrettable that it has chosen to do so at this time. The tender for computer equipment announced by the Minister for Health (Dr Blewett) in July was a simple case of spending $14m that would otherwise have been quite unnecessary on equipment which is already available. The Minister is seeking to get information which is already available to the private health funds. At a time when the Government pretends to preach budgetary restraint, it is inconsistent that it should be acquiring new functions which have been admirably filled by the private sector. The 5,000 employees who will lose their jobs with the private health funds, many of whom will not be able to find new jobs with Medicare, will no doubt be confused about the Government's rhetoric on unemployment and the priority it gives to job creation. The Government is well aware that in creating Medicare it is destroying 5,000 jobs in the private sector. These poor souls who have been thrown on the unemployment scrap heap by this Government which feigns compassion and promises employment know-the Government has failed to explain this-that Medicare begins in February but the private funds will not begin to retrench staff until some time after that date. In the meantime, of course, Medicare will be recruiting staff. The great majority of positions, particularly the senior positions, will have already been absorbed; so these people will not be able to find employment in Medicare. So far, this Government's record has been one of on-going job destruction. Medicare will be just another example of this policy. In fact, the Government's whole approach to the introduction of Medicare has, in my view, been very destructive. It has quite deliberately excluded the private funds from acting as agents for Medicare in the hope that many of these funds will not survive. The one per cent levy against Australian taxpayers is, in itself, a misleading figure. It represents approximately $1 billion additional taxes but that is not the cost of Medicare nor does it bear any relationship to the cost of health in Australia. The Government has calculated that in 1983-84 in a full year of costing Medicare will cost approximately $1.7 billion. That must be added, of course, to the $55m of further taxation that is now being paid by taxpayers as a result of the abolition of the health insurance rebate. The Government would have people believe that, by paying their one per cent levy, they are being made conscious of the health costs within the community. The truth of the matter is that the total cost of health care in Australia is approximately $8 billion which is paid for in further taxes. Despite the obvious simplicity of allowing the private funds to operate as Medicare agents-after all , they have all the facilities and branches in place already-the Government has decided to make the Health Insurance Commission, or Medibank Private as it is more commonly known, the sole agent. That is a clear indication that this Government's intention to create a nationalised health insurance scheme is based on socialised ideology and not on a desire to improve the existing situation. The Government is seeking to ensure that Medicare is a permanent edifice of the Government which, after all its weaknesses and shortcomings become obvious, cannot be dismantled because only a very small part of the present private health funds' structure would be left to take the responsibility back. It is the Government's hope that, unlike the post-Whitlam situation, Medicare will have to be retained through the lack of any viable alternative. The issue of sole agency , which has been argued mainly on the grounds of the immediate loss in employment, should therefore be seen as something else in relation to its longer term effects. In the bankruptcies, mergers and takeovers which will inevitably occur among the private health insurance funds, more jobs will be jeopardised than the 5,000 expected to be lost immediately. Senator Townley —They do not care who goes broke. Senator CRICHTON-BROWNE —No, the Government does not care who goes broke. However, Australia will also lose the wide choice of private insurance and the alternative system which has served us so well over several decades. By allowing Medibank Private to provide gap and ancillary cover, as well as being the sole agent for Medicare, it is being given an enormous, and in my view quite unfair, advantage over the privately operated funds. It is not difficult to foresee the Government coming back to the Parliament at some later date to lift the ceiling on the pretext, perhaps even for the genuine reason, that most people would naturally prefer to have all their health insurance cover under one roof. I am concerned at the loss of free choice that will occur if Medicare is set up knowingly and willingly by the Labor Government. I am concerned at the inherently higher costs of government-run organisations which will, in time, lead to a higher levy than the one per cent which is proposed at present and which will also entail budgetary assistance for Medicare. All Australians will become increasingly wary of the growing tendency of both State and Federal Labor governments using their legislative powers to impose a certain lifestyle and values on the community, which are sprung directly from the Australian Labor Party's own ideological commitment to socialism. In this place we should all be concerned that, in the likely event that Medicare will be as much a failure as Labor's previous experiment in nationalised health insurance, this Government is working to ensure that there is no alternative to fall back on in the event that it does collapse, as inevitably it will. Senator TATE(Tasmania)(6.23) —I rise to support the Medicare package of Bills which has been introduced by the Government. The package represents the culmination of many months of intense activity by the Labor Government to set in place the legislative and adminstrative structures necessary to support the Medicare program. Our eyes have always been firmly set on this objective as a necessary fulfilling of our mandate, a mandate bestowed on us by the Australian people in March this year. We will fulfil this promise despite the obstructionism of honourable senators opposite. The Minister for Health, Dr Blewett, in implementing this policy, to this point has behaved in an excellent manner in his negotiations with those who are prepared to negotiate genuinely. He is to be commended for that. The Medicare program represents a real attempt to fulfil a proper objective of a democratic socialist government that no one in Australia should be deprived of or denied adequate medical advice or hospital care because of his or her financial status or ability to pay premiums to health insurance funds. To put it another way, if somebody suffers a traumatic accident which has occurred on the road or within the place of work or suffers some severe prolonged or chronic illness, that should not lead to some crippling financial burden-either directly or by payment of health insurance premiums-being placed on that person or that person's family. Our objective is to ensure that, should some person be unfortunately placed in that position by way of accident or prolonged illness, crippling financial burdens ought not to be added to the task of healing and of getting better. That is our ideal and we put it forward unashamedly. To speak as if we are interested in nationalising medicine in Australia, which is of course, constitutionally impossible, is an absurd charge. To say that we are abolishing the freedom of doctor of choice is also quite misleading. Under our scheme any person in Australia can choose to have a consultation conducted by any doctor. A person can visit any general practitioner of his or her choice. Medicare will cover any referral by that GP to a specialist. Any radiology, pathology or other diagnostic service will be paid for by Medicare. People will receive free treatment in public hospitals by the hospital's doctors in a ward assessed by the hospital to be adequate to the task in hand. That is sufficient freedom of choice for most Australians. If they want to get a particular private doctor and if they want to stay in a private ward they are quite entitled to pay an extra premium to secure that. There is no abolishing of choice of doctor. There is certainly no attempt to nationalise medicine in Australia. That needs to be said quite firmly. This scheme is a practical and compassionate one. The cost to the community will be borne by the one per cent levy imposed on taxable incomes. People have said that that will be inadequate. To that I say that, with this Government's assault on tax avoidance and tax evasion, proving as effective as it is, this one per cent levy will provide sufficient funds. If the previous Government had been more robust perhaps in its attempt to stop tax avoidance and evasion it would have seen that this was possible. Members of the Opposition are making their judgments on the inadequacy of the levy on the basis of their own inadequate performance in the administration of our tax laws. It is important to note that the trade union movement has fully endorsed this proposal. The Australian Council of Trade Unions, in a release, stated: The smooth and successful introduction of Medicare on February 1 1984 is an intrinsic part of the prices and income accord between the Australian Government an the ACTU. The ACTU praised the proposal, as did the National Economic Summit Conference. The Conference communique stated: The Summit notes the announced health policies of the Government and believes that it is imperative that at the Commonwealth level a stable system should be introduced as a matter of urgency. The trade union movement and the National Economic Summit Conference endorsed the Government's plans in this regard. Yet honourable senators opposite refuse to go along with that endorsement. They make sniping and obstinate remarks which further confine them to the political wilderness in which they currently find themselves. Can we get any definite statement from Senator Messner who, I think, is the only shadow Minister present in the chamber? I ask whether he agrees with the Opposition shadow spokesman on health, Mr Jim Carlton, when on 22 July he said: 'If the Liberal Government is ever returned'-he was speaking very hypothetically-'it will be committed to dismantling Medicare'. Senator Messner —You know that was not his statement. Senator TATE —I have it in inverted commas, so it must be his statement. Senator Messner refuses to agree with or refute that statement. I take his silence to be somewhat acquiescent in that proposal by Mr Jim Carlton but, thank goodness, it will never come to pass. The obstructionist attitude of the Liberal and National parties in this matter has not been matched by that of the Australian Democrats whose spokesperson on health, Senator Haines, has proved to be a tougher yet more sensible advocate than was the case with the Liberal and National parties. I think that part of the Democrats' position on this is to be noted with, if not wholehearted approval, a due acknowledgment of the sensible role which they have played in this debate. I want to spend some time on the role of the Health Insurance Commission. The Commission has been given the exclusive administration of Medicare. As is well known, it has been operating Medibank Private in recent years and has been operating it in an extremely efficient fashion in latter times. It is true that it went through a bad period, but that was mainly because of the frustration and the hindering of it as well as the assault on it by the very senators who sit opposite. Sitting suspended from 6.30 to 8 p.m. Senator TATE —Before the suspension of the sitting for dinner I was about to expand on the role of the Health Insurance Commission which has been given the exclusive administration of Medicare. It is well known that that Commission has been operating Medibank Private in recent years. It is legitimate, I guess, to ask whether we, as parliamentarians, can have confidence in its ability to discharge its assigned functions, what is to be its relationship with existing funds and how it will affect them. In relation to the first question as to its ability to discharge the task assigned to it by the Government, I believe that the answer is that it can discharge those functions efficiently and well. Being a national organisation administering Medibank Private, it has a wide network of branches and cash payment centres which will be further expanded into a comprehensive Australia-wide accessible system. Page 8 of the interim ninth annual report of the Health Insurance Commission revealed: During its short but turbulent history, Medibank Private has achieved a growth rate well above that of the industry generally and now provides health insurance cover for more than 2 million Australians. A significant number of Australians already benefit from that organisation's ability to provide a service which has obviously attracted a good proportion of the Australian insured population. It is further revealed in that report that Medibank Private, despite some of the statements made by honourable senators opposite during the afternoon, is operated in a way which has ensured more than adequate reserves and a good trading surplus. Senator Crichton-Browne will be pleased to know that that interim ninth annual report, which obviously he had not had an opportunity to peruse, stated: At 30 June 1983 the net assets of Medibank Private stood at $58.5m . . . This is equivalent to 1.3 months of break-even contribution income . . . and exceeds the level of one month which has been indicated as acceptable for large organisations during the period leading up to Medicare. I quote that merely to demonstrate that, judged by the proper criteria of adequate reserves and good trading surpluses, Medibank Private is revealed as being an efficiently run organisation. It augurs well for the putting of Medicare into the hands of the Health Insurance Commission. Of course, the computer network which was also the subject of some comment by honourable senators opposite has indeed proved to be so good that that is what gives the Government such confidence in handing this task to the Health Insurance Commission. The abolition of Medibank Standard established an environment where Medibank Private had to develop its own computer facilities. In just over a year the world's largest on-line health insurance claims processing system was designed, developed, tested and implemented, and an entirely new computer network was planned, purchased and installed. That was a very impressive achievement. As I said, it augurs well for the future. I cannot overemphasise to the Commission and to the Government how essential it will be for the long term viability of Medicare within the life of Australian society that that computerised dealing with claims be as efficient as possible to process and deal with claims as speedily as possible. In a question I asked this afternoon, I referred to doctors, particularly the ordinary general practitioners-ordinary in the sense that they are the earliest medical practitioners to whom people turn if they are suffering from some illness-having every right at the moment to be utterly sceptical of the ability of the system to handle bulk billing of accounts in a totally efficient way. This affects the very viability of their practices, with delays of many months being experienced. I emphasise that the present system is not operated by the Health Insurance Commission. I was pleased to receive the assurance from the Minister representing the Minister for Health in this place, the Minister for Social Security (Senator Grimes), to the effect that the Health Insurance Commission had given an undertaking to the Government that such claims would be processed within a fortnight of their receipt. I think if doctors can be assured of a good cash flow in relation to their practices and the discharge of their functions in relation to those patients for whom they bulk bill, it will indeed encourage them to participate in the Medicare program in a way in which the Government wishes them to participate. In relation to the second part of my question which, as I said earlier, dealt with a legitimate concern, namely the relationship of Medicare with the existing private funds, much has been said about the very existence of the funds and the employment prospects of their employees. What we had from honourable senators opposite, I am afraid, was really quite outdated assertions which I traced back to a letter of 6 May 1983 from the Voluntary Health Insurance Association of Australia to the effect that 5,000 people in the private health funds will be put out of work upon the introduction of Medicare. That statement was made by the spokesman in this place, Senator Baume. It was made again today by Senator Austin Lewis. The figure of 5,000 being put out of work is being constantly reasserted. Even if that were true on 6 May 1983, Liberal-National Party senators need to take account of various alterations and concessions which have been made by the Government since 6 May 1983. Very significant arrangements have been made with the private funds which are not acknowledged by those opposite. I mention some. Firstly, 11 regional funds based outside capital cities have been offered agency relationships. Those funds employ some 600 people, generally in areas with a very high unemployment rate and with few alternative employment opportunities. Therefore, negotiations were undertaken. I can speak for the Tasmanian negotiations which were undertaken so ably by the Minister for Health. They were well conducted. I congratulate the Government on recognising that, in relation to those 11 regional funds, proper arrangements needed to be put in place. Indeed, I am hopeful of another fund coming to an arrangement also with the Government to ensure the employment prospects of employees within the present fund. Secondly, of course, a whole package of concessions was negotiated by the Minister with the health funds and offered to them on 22 July. To save time, I seek leave to have incorporated in Hansard the list of those six concessions which were offered by the Government to the private health funds on 22 July. Leave granted. The list read as follows- Details of Concessions Offered to the Private Funds by the Government Medibank Private would have a ceiling on membership numbers as at 31 January, 1984. Medibank Private not be allowed to locate in new Medicare Offices. Medibank Private contribution rates would include the industry average for administration costs and not undercut the rates of the other private funds. The Minister would minimise Government intervention and controls over private health insurance. Legislation would be adjusted to facilitate mergers between funds. The funds may diversify their activities using surplus reserves above a determined minimum. Senator TATE —I thank the Senate. Those concessions must ensure the viability of funds operating, as they will, with many new opportunities if they are aggressive and competent in the market-place which they say is their ideal. I believe that, in fact, many of us on the back bench on the Government side feel that the concessions offered, particularly in the restriction of Medibank Private, are indeed too generous. Nevertheless they are there. Finally, one has to acknowledge that one of the means of achieving a basic health insurance system which will be cheaper to the Australian community will be to reduce the number of people involved in providing that insurance service. Some employees in some private health funds will not be able to be employed by those funds. Once again, the Government has said that they will be given preference in employment in the Medicare program. That should alleviate most of the distress. There is no way in which the scaremongering by the Liberal- National Party will come to pass. This Labor Government will not wantonly create unemployment in the community. I believe that the continually reiterated assertion that $5,000 people will be put out of work by the introduction of Medicare will be found to be utterly untrue. In 12 months time when we review the situation in this chamber I believe those honourable senators opposite, if they continue to assert so, will be found to be totally discredited. On the contrary, I believe that 12 months from now this Government will be able to take proper credit for the setting up of the Medicare program. As I said in my opening remarks, a practical expression of what is an ideal within the Labor Party and shared to a large extent, I am pleased to say, by the Australian Democrats is that no Australian or no Australian family ought to have crippling financial burdens added to the distress of some traumatic accident or some chronic or long-standing illness. In those situations, we believe that a properly administered and efficient scheme, with the funds to run it being provided by a one per cent levy on taxable incomes, will be a compassionate and justifiable response from the community to the need to ensure that no Australian has added to the task of getting well the need to provide funds, either through taking out loans, by eating into capital or in other ways adding to financial distress within the family. We believe that the Government is to be commended on bringing this legislation to pass and I believe that in 12 months time, when we review this scheme, we will have rightly earned the gratitude of the Australian people. Senator BJELKE-PETERSEN(Queensland)(8.11) —In speaking in the Medicare debate, I want to inform the Senate of the problems that will confront Queensland and Queenslanders because of the introduction of Medicare. Medicare in Queensland has actually occasioned the same havoc as a natural disaster. If it had been a cyclone, the State would have been eligible for equal assistance from the Commonwealth under the Commonwealth-State natural disaster scheme. But not so with Medicare. Queensland has to carry an unfair and unequal burden foisted on it by a Labor Government that does not like or recognise Queensland's free hospitals. I really do not know why, because the free hospital system was brought in by the Australian Labor Party in the 1940s. However, for the Senate I should like to spell out the problems in relation to the introduction of Medicare in Queensland. Under Medicare, free public hospital treatment, both in- patient and out-patient, will be restored in all States from February 1984. The Commonwealth will compensate States for revenues forgone. That is the crux of the matter-compensation. Queensland's public hospitals are free, so the State has very little by way of fees to forgo and thus we miss out on that compensation. Other States which were charging fees, that is all the States except Queensland, will receive $130 per patient day for public disadvantaged in -patients. In Queensland, the State does not charge public ward patients. The State receives nothing for these patients from the Commonwealth. For out- patients and other services other States charge. Queensland does not. Thus, the other States will receive substantial amounts from this area too while Queensland will receive only small amounts. As at July 1983, Queensland was to receive only $37m under Medicare for its public hospital system, compared with $ 233m for New South Wales and $175m for Victoria. Queensland's allocation of $37m was primarily for Commonwealth subsidy of private patients in public hospitals. Queensland, therefore, receives nothing under Medicare for its public patients and out-patients in public hospitals. I remind the Senate that all Queenslanders have to pay the health tax of one per cent. In other words, they have to pay now for what they could previously have for nothing-free doctors, public hospitals and free treatment as public ward patients. The relative figures at 1 July were: New South Wales was receiving $44.20 per head of population; Victoria, $44.70; Western Australia, $ 56.20; and Queensland, $15.10. In other words, the average figure for the rest of Australia was approximately $50 per head of population while Queensland was receiving only $15 per head. I think that this was grossly inequitable. I wonder why Queenslanders seem to be considered second class citizens. Queensland should have been receiving compensation similar to that received by other States. The Commonwealth should reconstruct the formula to allow Queensland to receive the same amount, on a per capita basis, as the other States. I consider that this would be simple enough to do. The Commonwealth merely had to work on the basis that the State applied fees. But of course that seemed to be too difficult. Queensland should have been receiving $103m but the State has been given a paltry $37m and, sad to say, only $15m was actually allocated in this year's Budget. I ask the Minister for Social Security (Senator Grimes): When will Queensland and the people who live there receive the further $22m due to them for 1983-84 to ensure equality with other States? Ironically, the Prime Minister (Mr Hawke) on 19 February in Brisbane promised a rescue grant that could be up to $100m. The $15m that has been allocated in the Budget falls far short of the $100m that was promised by the Prime Minister, which of course is another broken promise, although I suppose he will probably come to Queensland now when the election comes around and he will say that he will give Queensland the rest of it. The Queensland Government applied much political pressure at the Premiers Conference and as a result Queensland's allocation was lifted to $86.7m or $29 per capita, which is almost $22 less than the average received by the other States. As I said earlier, Canberra and the Labor Government treat Queenslanders like second class citizens. There is no logical reason why Queenslanders should receive less. They will pay the same health tax. The Queensland Government is seeking the further $22m for 1983-84 to ensure equality with other States. The Queensland Government is fighting to get a fair and equal deal for Queenslanders from a biased Commonwealth Government. I can assure the Senate that it will not give up the battle. What is more, I will be reminding Queensland electors during the next few weeks that they are receiving for health care only 40 per cent of, or $20 per person less than, that which is being received by other States. The introduction of Medicare on 1 February will not change anything from the present free hospital system. Patients will be entitled to free accommodation in a public ward only. They are actually covered for only 85 per cent of doctors' fees. One thing I certainly do not agree with is the fact that one cannot insure for the gap of 15 per cent. It is not everybody who wants to go into a public ward. Ninety-nine per cent of medical benefit fund contributors in Queensland have what they call basic hospital cover. Queenslanders covered by health insurance for basic hospital care were entitled to have a shared or intermediate ward to the value of $120 a day in either a public or a private hospital. It is wrong to say that Medicare will provide shared ward accommodation. It will not. Medicare will cover public beds only. Medicare is fraught with problems. For example, consider a confinement. If the mother-to-be wants her own doctor, in intermediate or private facilities she will have to be insured for a full nine months to be eligible for refunds. Under Medicare, if the mother-to-be has not insured before conception, she will have to pay a minimum of $500 for a normal birth and as much as $1,000 if it is a caesarian birth. Funding Medicare is a problem too. The health tax of one per cent will raise $1 billion of the $8 billion a year needed to fund the scheme. I wonder how the extra money is to be raised? Is it to be raised by a wealth tax, a death tax, or perhaps the capital gains tax that the Minister for Industry and Commerce (Senator Button) was telling us about today in the Senate? Most certainly the Federal Labor Government is not telling the people of Australia the straight facts. Medicare will cause job losses. Senator Tate told us that 5, 000 people would not lose their jobs. Five thousand low income clerks will be retrenched by the private health insurance companies simply because a government bureaucracy, with some 2,500 public servants, is to take over 60 per cent of their work. It certainly is clear to me that Labor is anti-private enterprise. In fact, Medicare is a major act of nationalisation. Labor talks about unemployment but its disastrous health policies will add to it. Medicare will take away freedom of choice from patients and doctors. The direct relationship between patient and doctor will be interfered with and doctors of course will be forced to submit to the bulk billing of patients at the rate of 85 per cent of the schedule charges. As I said before, one has to remember that one cannot take out insurance to cover that gap of 15 per cent. Pensioners who received free medical treatment under the system introduced by the Fraser Government will lose 2.6 per cent through the consumer price index adjustment, disadvantaging single pensioners- Senator Walsh —Mr Deputy President, I take a point of order. I draw your attention to standing order 406. Senator Bjelke-Petersen is clearly reading her speech and, moreover, it could have been written anywhere. The DEPUTY PRESIDENT —The question of senators reading speeches was extensively debated in the last session of Parliament. The opinion of the Senate was that it did not desire the Chair to be more rigorous in the enforcement of that standing order. The distinction between copious notes and reading speeches is a very difficult one to draw from the chair. It was really left to individual senators to obey the spirit of that standing order. I think, though, it would add to the confidence of the Senate if Senator Bjelke-Petersen looked up from her copious notes for longer periods and more often. I call Senator Bjelke-Petersen. Senator BJELKE-PETERSEN —Actually, Mr Deputy President, I just wanted to quote some figures that I have here. I would be very pleased if I could just read them into the record because apparently the Minister for Resources and Energy, Senator Walsh, does not like to hear the points I am making. I want to make quite sure that I have them correctly in Hansard. As I was saying, pensioners will lose 2.6 per cent through the CPI adjustment, disadvantaging single pensioners by $2.30 a week and pensioner couples by $3.90 a week. One must not forget that it was the Prime Minister's election promise not to take money out of pensioners' pockets. So much for Labor's promises. Actually, too, the Prime Minister in his policy speech promised that nine out of 10 people would pay less under Medicare. Dr Blewett says that two-thirds of Australians will pay less under Medicare. Under the Fraser Government, 20 per cent of Australians paid nothing at all; they received free health care. So if we take two-thirds of the 80 per cent that are left, that means that only 53 per cent of Australians will pay less for their health care. One other matter I want to raise in regard to this Bill is the proposal by this Government to issue children of 14 years of age with their own personal Medicare cards. I actually asked a question of the Minister about this not so long ago and I just want to put the matter on record. This provision will enable children to approach a medical practitioner for any reason at all, including a request for contraceptives, without parental permission. I believe the harm that might be caused by this is incalculable. It will encourage young people to deceive their parents and will certainly do nothing to help family life in this country. No 14-year-old has reached a level of discretion that would enable him or her to take responsibility for health matters. I feel the Government has learnt nothing from past mistakes, both in Australia and in Britain. Under Britain's national health scheme, the poor and disadvantaged wait at the end of long queues before they can receive their hospital treatment. I have a horrible feeling that the same thing could happen in Australia under Medicare. Mr Deputy President, Medicare is not a national health scheme but a national health disaster and it is certainly a disaster which Australians have to subsidise through this health tax of one per cent of our income. Regrettably, Queenslanders will have to pay for their health care whereas now, if they want to, they can get their health care in public hospitals in Queensland and not have to pay anything at all for it. Senator TEAGUE(South Australia)(8.25) —Mr Deputy President, the Senate is debating the four Bills that the Government has introduced to implement Medicare . It falls to me, I understand, to be the last speaker on the Opposition side before the Minister for Social Security (Senator Grimes) responds to the second reading speeches and we go on to the Committee stage. Medicare is not about improving health in Australia. There will be the same medical and hospital provisions that apply now, there will be the same doctor consultations and medical treatments will be the same. There will be the same hospitals, and hospital treatments will be the same. Medicare is not directly about improving health in Australia. What Medicare is about is the cost of health. Medicare proposes an enormous rearrangement of how the health resources of the nation are paid for. This rearrangment is best summarised as the introduction of a government monopoly, as institutionalising a single government bureaucracy. Put in another way, this rearrangement of costs of the nation's health is plainly the nationalisation of 60 per cent of what has until now been the private insurance arrangements of Australians. This is a socialist decision. It will remove individual choice and it will transfer decision about health from the individual and the family to a bureaucrat-Big Brother knows best; 1984 is the year of Medicare's introduction. As we know, bureaucratic monopolies lack competition, they generate costs easily and they are not efficient. So these cost rearrangements are in fact ultimately about health in that they lead to reduced access to health care for many Australians, as I will show in my speech. This arises from the queuing and congestion expected in a monolithic and bureaucratic system, and from the disincentives of the overall cost of health going up for a majority of Australians. Therefore, I want to concentrate my remarks tonight on the costs of Medicare. Whether or not the Government has set out to mislead the public, the public, with all the propaganda it has seen, has been led to believe that the cost of the new Medicare arrangements is only $1,000m; that is, the amount to be raised by the one per cent increase in everybody's income tax-the Medicare levy. But the national health bill for Australia is eight times that amount. The total bill is $8,000m and that money has come from taxpayers and consumers through the Commonwealth Government and through the States. The $1,000m Medicare levy is in fact a 3 per cent increase in the actual tax paid. Instead of 30c in the dollar being paid in tax, it will be 31c in the dollar-a 3 per cent increase in the actual tax paid. This is tantamount to raising income taxes by 1c in the dollar for everyone. I know that the increase is greater than that for some taxpayers on higher incomes but I speak here of the majority case. If we then interpret this one per cent surcharge on income tax, we see that despite the promises of the Labor Government there is this increase in income taxes for all Australians. In fact, the greatest part of the national health bill will come, as in the past, from general tax revenue. It will come not only from this quite direct tax levy but also indirectly from the extra $700m required to meet the net cost of introducing Medicare. It will also come from payments to health costs for the three million Australians who receive so-called free medical and hospital care. These three million people comprise, as is well known, two million pensioners and a further one million disadvantaged persons who generally are of low income. Both of these groups are not required to make any contribution to their health costs. As I said earlier, the nation's health bill is $8 billion. Of this, only $1 billion will come from the new health levy that is to begin in February 1984. Very much of the remainder will come, as now, from general government revenue raised by taxation. The net additional cost of Medicare's introduction will be $ 1,700m. Taxpayers will meet $1,000m via the tax levy and a further $600m will be directly gained by the Government abolishing the tax rebate that has been available in respect of taxpayers' contributions to private health insurance schemes. Of course, this tax rebate was abolished on 1 July this year, some seven months ahead of the time that the Government promised it would be taken away from Australians. This tax rebate, which has been extended to some 75 per cent of Australians, will make up the additional $600m or so needed to meet the net cost of Medicare. This year a family would pay a basic private health insurance of $650 in a whole year. For this payment the previous Government allowed a tax deduction of 30c in the dollar. Thus the $650 annual premium, or $ 13 a week, for a normal family package of private health insurance would gain about a $200 tax rebate. The net cost to that family under the present scheme would be not $650 in a year but $450. This direct tax deduction of some $200 has been abolished by the ALP Government. Accordingly, taxes will rise by not only the amount of the tax levy but also this forgone tax rebate. In addition to these direct tax imposts that will pay for the net additional cost of introducing Medicare, there are the additional billions of dollars already provided in earlier annual Budgets for the nation's health bill, especially to pay for fully subsidised health benefits for pensioners and the disadvantaged, to whom I have referred, and to make direct payments to the States in respect of hospitals, nursing homes and community health programs. How do these costs translate to the ordinary families of Australia? In the last election campaign, the Prime Minister, Mr Hawke, made this solemn promise in his policy speech: It will mean that nine out of ten Australians will pay less for the health needs of themselves and their families. That was Mr Hawke's promise in his policy speech in March. He said that nine out of 10 Australians would pay less for health. This promise has already been broken. Moreover, the promise is patently false. Already it is clear that three million Australians have free health. They have had it for many years. In a nation of 15 million, three in 15 or two out of every 10 cannot pay less because they cannot pay less than nothing. But now the Government itself admits that under Medicare-this is the up to date estimate-of the other eight out of 10, two -thirds will pay less and one-third will pay more. Two-thirds of 80 per cent is 53 per cent. From this calculation we see how quickly must the Government's figures be revised-only half, or five out of 10 Australians will be paying less for health care. I ask honourable senators to listen as I continue because the situation gets worse. I have to be frank and say that I do not accept even this estimate. If the Government now says that only five out of 10 Australians will be paying less for their health under Medicare, I suspect that because of the four or five other factors that I will go on to outline that this can be reduced even further to a quarter. What are my reasons for this further revision? First, it is everywhere apparent that the so-called one per cent levy to be introduced in February 1984-I call it the 3 per cent levy because it is a 3 per cent actual increase in taxes paid-will turn out to be insufficient. The ALP Government, I believe, will quite quickly find some pretext to increase the one per cent levy so as to cover the inevitably higher costs of Medicare's bureaucratic and unrestrained commitments. Secondly, in the short term it must be acknowledged that the majority of Australian families take up health insurance cover which provides a greater benefit than the basic and very limited package that Medicare allows. This will mean an additional-an add on-private health insurance premium which will be the only way a family can be sure of securing reasonable cover of the cost of even a shared ward in a private hospital. Medicare is, of course, geared to public hospitals. That additional premium will also secure for that family a choice of doctor. The Government's estimate that five out of 10 Australians will pay less under Medicare is based on the assumption that the cost of this add on private health insurance package-a minimal package, not the extravagant health insurance packages that may still be available-will be $5 a week. But is this a fair estimate? It is not. What will it actually cost? A more realistic estimate is that the cost will be $8 a week. We will only know the exact cost when the legislation is in place and the funds directly respond to the circumstances later this year. That $8 a week is for only the minimal package of the add on private health insurance. Going on the past preferences of most Australian families for a choice of doctor and access to the least costly level of private hospitals, I estimate that families will pay this $8 a week plus the Medicare taxation levy of 1c in the dollar of taxable income, which for the average family is estimated by the Government to be $7 a week. That comprises a total cost of $15 a week for the average family, instead of the $9 a week that is paid under the present scheme. The $9 figure is derived from the fact that the average family paid $13 a week for private health insurance and obtained a $4 a week tax rebate under the former Liberal-National Party Government. When the add on private additional cover is taken into account, families across Australia will find that the new Medicare arrangements are costing them more. If this is the broad picture of the costs under Medicare, which already shows that most families will not pay less, when Medicare is looked at in more detail there are still other areas for increased cost to the Australian family. For example, let us consider gap insurance. The gap arises because under both the old scheme and this new scheme basic cover provides for only 85 per cent of the medical fee due to a doctor. The remaining gap-that is the remaining 15 per cent -is paid for directly by the consumer up to a maximum of $10 for any one payment to meet this gap. Up to this point private health insurance has been allowed to provide gap insurance, that is, by a contributor paying the extra appropriate premium to a health insurance fund the fund would then pay all the gap costs up to the level of standard medical fees. Under Medicare there is a sharp change. The Government has banned gap insurance. This means that unexpectedly for many Australians they will not be able to provide in advance for this but will have to pay at least 15 per cent of all their medical bills. This is an additional cost to all that I have already indicated will be the increased costs under Medicare. The Government has a slick answer for this; and this is what is called bulk billing. The Australian Labor Party Government's approach is to put pressure on all doctors to charge a total fee to a patient, which amounts to only 85 per cent of the standard or approved medical fee. If a doctor sends all his bills in bulk for all his patients to the Medicare office and no bills at all to the patients, Medicare will pay the doctor 85 per cent of the standard fees, and that is all the doctor will receive. The Government's idea is to create a discount war between doctors. So, if a doctor is not satisfied with the 85 per cent only fee, there will be pressure upon his patients to move to another doctor who will. This is an arrogant way-this brow beating, threatening and bullying of the medical profession-in which the Government is seeking to overcome the void which it has created by banning gap insurance. To the extent that the Government's bullying tactics do not work, however, the consumers of Australia will pay for not just one gap but every gap for every medical bill that is incurred. The Opposition is opposed to this and believes that insurance to cover the gap should be an available option at whatever the market-place determines that insurance cost to be. The Australian Democrats are also rightly concerned about this aspect, and this has led to Dr Blewett's so-called concession to the Democrats. The concession appears to be that no one will be required to pay for these 15 per cent gaps once $150 has been expended on gaps in any one year. Dr Blewett in this matter is treating the Democrats with contempt and they are foolish to be crowing about this concession as some kind of triumph. This is so because gap insurance in any event could be offered for considerably less than $ 150 a year. Another example of additional cost arises from the need for most families-those families that will require the add-on private health insurance package-to have to deal with two organisations instead of one, as in the past. The Australian Labor Party Government has banished the private health insurance funds from any part in the basic Medicare health cover scheme. They are banned even from being agents for the scheme. Not only has this socialist Government nationalised the industry by grabbing 60 per cent of its work and giving it to the Medicare monolithic bureaucracy, but the private funds have been excluded from even being agents for the Medicare scheme. The nationalisation of the private health insurance industry will directly cause 5,000 employees to lose their jobs. The professional expertise of these men and women will be lost. The services they could have provided will be lost. Medicare's bureaucracy will be set up anew, duplicating many of the very resources thereby made redundant. For example, at least $14m alone has been spent on new computers. There will be 2,500 new Medicare jobs, but that still leaves a net loss of another 2,500 added to unemployment in Australia directly by the introduction of Medicare. These Medicare jobs will be exceedingly expensive because they are in the public sector, not in the private sector, with higher salary levels, extended superannuation and so on. To cap it all off I believe the service to the public will not be as good as before. For example there will not be as easy access because there will be fewer local outlets and increased bureaucracy in the procedures. I put it to the Minister that the answer in part could have been to allow the existing experts in the private health insurance industry to act as agents for Medicare. The Opposition strongly urged this. Even now we would use our numbers if the Democrats would join us to achieve this. But the Australian Labor Party Government has rejected this proposal with all the increased costs that the rejection entails. My point here is that part of the increased cost directly borne by consumers is that they will need to deal with two organisations for health cover instead of one. This two-stop shopping approach is opposed by the Opposition. It has also been raised by the Democrats and it has led to another Dr Blewett concession, but it is even with more contempt towards the Democrats that he makes it, for it turns out that the concession is his statement that after all anyone can pass on correspondence to Medicare by putting a 27c stamp on the envelope and posting it to the Medicare office. Yet another example of additional cost is what will be borne by the people of Queensland. Medicare will provide free hospitals, but Queensland already has free hospitals. As some of my colleagues in the coalition outlined earlier this evening, Queenslanders have to this point gained only $37m direct compensation from the Commonwealth Government for a provision that the State Government had already given to them anyway. The Australian Labor Party Government's response so far to Queenslanders has been to give them only this puny $37m to help the State Government. I believe that Queensland will be in all kinds of difficulty to get more adequate compensation. Medicare has brought special disadvantages for all Queenslanders. Yet another example of additional cost is that to be borne by two-income families. It may still surprise some families where a husband and wife have direct incomes that both incomes will attract the one per cent Medicare levy. When the levy on both incomes is added together, that family may well be surprised to find that it is paying more than it was before. I now turn to the case of Australia's two million pensioners. Pensioners may at first say: 'Well, these Medicare arrangements do not bother me very much because I have had free health care in the past and I will have free health care in the future'. There are losses for pensioners. First of all, from next year pensioners will not receive an increase in pensions to cope with their increased costs of living. This will happen because of what one could call the inflation fiddle, or the consumer price index fiddle, according to the definitions of statisticians. When statisticians are calculating the rate of inflation next year they will artificially reduce the CPI by 2.6 per cent as a direct result of the introduction of Medicare. All pensioners will be deprived of 2.6 per cent of their incomes next year and thereafter, even though they will receive no compensating advantage from Medicare whatsoever. This will amount to a cut in all pensions. It will rob single pensioners of $2.30 a week and married pensioner couples of $3.90 a week in 1984, the year of Big Brother. The Australian Labor Party Government knows that this is an artificial situation that will directly hurt all two million pensioners in Australia. The ALP Government has already hurt pensioners. In May it hit the over 70-year-olds with an incomes test. In May it hit superannuation lump sums for retirees with a 30c in the dollar tax. In August all age and service pensioners were hit with Senator Grimes's assets test. The situation is still confused, but an additional penalty has been placed on pensioners. In February all pensioners will suffer actual cuts in their direct income-$2.30 a week for all single pensioners and $3 .90 a week for all married pensioner couples. Is it any wonder that of all Australians, pensioners are crying out about the hurt from this Government. They have been cheated by the Labor Government. The hope and promise some thought they saw at the last election have been broken and shattered. There is an additional penalty for pensioners, and that is the congestion and the queuing and the extra pressure on public hospitals that the whole Medicare system will lead to. I have not even addressed one large final group that will certainly be paying much more as a result of the introduction of Medicare, and that is those people who are on above average incomes. Here the socialist Government shows no restraint at all. The socialist logic here is: 'You have higher than average incomes, you are rich and no matter how much has been taken from your income by direct income taxes, we are going to take another progressive tax on the national health plan'. As a Liberal, I am opposed to this socialist principle. My view is that if the ALP Government wants a higher contribution for health to be made by those on higher incomes, it should act appropriately and honestly by directly increasing income taxes. The Government should display its intentions plainly and honestly rather than under some cover of a health levy. In the face of Medicare's introduction, those Australians who pay more tax but for less benefit to themselves and to other Australians as a whole have one grand remedy, and that is to vote out the ALP Government at the next election. So, in summary, the package of Medicare legislation that is before the Senate does nothing to improve the quality of health care in Australia. It is a socialist decision. It represents a move away from individuals and families to bureaucrats and politicians. It will increase direct government costs by $1.7m. Taxation will be increased by $1.7 billion to cover the scheme. Medicare gives the illusion, however, of free health care, hiding the real cost to the consumer . Medicare threatens so much of the private health insurance funds, the private hospitals and even private medical practitioners. Medicare will not improve the delivery of health care, nor will it improve the economics of health care in Australia. Senator HARRADINE(Tasmania)(8.55) —Because of the constraints of time I will be very brief. I will not canvass at length matters that have already been raised by the long list of speakers who have participated in this debate. Some of the matters that have been raised are also of concern to me. I simply mention some of those matters in passing. I believe that the Government has, of course, been concerned about the need to redistribute the cost of medical and hospital services in the community. Of course, one is either blessed with good health or one is not. It is essential to realise that in some cases the cost of providing services to an ill person is too great for individuals and families to bear. I can understand the Government's desire to bring about a more equitable system than the present system of paying for health care in Australia. However, there is and will be a continuing concern in the community about the total cost to the community of health care and the method of ensuring that those costs are kept within reasonable bounds. Of course, this concern has exercised the minds of many speakers from both sides of the Senate today. I am concerned, as are a number of other people in this Parliament, about what we believe to be the needless cost in terms of job dislocation and disruption because of the Government's intention to centralise the delivery of health care benefits from one office, namely the Health Insurance Commission. I have made my views known to the Minister for Health (Dr Blewett) and publicly. For the life of me I cannot see even now that the argument that is advanced that Medicare will assist in an ordered and controlled delivery of health care outweighs the real problems that will arise in terms of the disruption and dislocation of the jobs of workers in the voluntary health insurance industry. I make specific reference to the fact that particular funds have been given agency roles, and I appreciate the Government's moves in that direction. I know that the Minister for Social Security (Senator Grimes), who is in charge of this legislation in the Senate, will be discussing with the APPM Council on 30 September the possibility of that fund operating as an agency. I hope that those discussions are fruitful. I believe that it would benefit not only the people concerned but also the system as a whole because Associated Pulp and Paper Mills Ltd will contribute quite a substantial amount towards that particular fund. If one can get a few bob out of industry, so much the better. I wish the Minister well in that, and also the representatives of the APPM Council. Concern has been expressed during the debate that the services of public hospitals will be overburdened as a result of this measure. I hope that the Government will monitor this very carefully because services in public hospitals are already burdened. One has only to speak to the unions-say, the Hospital Employees Federation-to know that they are always fighting attempts by hospital boards and the like to reduce staff and to curtail services. The pressure is on and it is suggested that the pressure will be considerably greater as a result of this legislation. Of course, this is at a time when quite costly facilities are available in the private and charitable hospital area. Again, I hope that the Government recognises this and that the Minister takes a very broad approach to the question of categorisation of these hospitals and bears in mind that there are a number of people, particularly those seriously and terminally ill, who desire to enter a hospital which has a particular character, which is consistent with the values that they have held over a number of years and where they can enjoy-if that is the right word-the medical services as well as the spiritual services that are available there. I hope that the Government will bear that in mind. I realise, now that the time for amendments has passed, that there is no opportunity to attempt to achieve that position. But I trust that the Government will bear that in mind when it makes its decision in respect of charitable and/or private hospitals. A couple of matters have not been dealt with and I want to deal briefly with them now. I cannot understand why the Labor Government does not view sympathetically the claims by chiropractors that their services should be included in Medicare. After all, it is suggested that chiropractors, skilled as they are, can provide services at probably half the cost of similar services provided by the medical profession who, in very many cases, are able to provide much better services. I wonder whether the Government and the Opposition have seriously considered their claims. The time will come when the many people who avail themselves of the services of chiropractors will ensure that their voices are heard. The final point which has not come up for discussion but which has been the subject of considerable correspondence to me, and probably to other members of the Senate and the House of Representatives, is the issuance of Medicare cards to children. A number of articles in the Press have expressed concern that from October children from the age of 14 will be able to seek their own medical advice on any health matter, including contraception, because they will be able to obtain a separate Medicare card. That is what the Press has stated. In fact, strictly speaking, that is not so. But under clause 67 of the Health Legislation Amendment Bill the functions of the Health Insurance Commission include the planning and establishment of the organisation, et cetera. If a child in fact goes to a doctor, the doctor can bulk bill. If the child is able to write the doctor would, of course, be required, as I understand it, to send in an application form for a Medicare card. With all the new computers which the Health Insurance Commission has told us that it has, which in any event I understand our Joint Committee of Public Accounts will keep an eye on, it can churn out a Medicare card and that will be sent to the child. At the appropriate time I propose to move an amendment to the effect that nothing in that particular provision would authorise the Commission to issue a Medicare card to a child. I believe that that is a matter which deserves appropriate consideration at the appropriate time, which will be in the Committee stage. In commencing this address, I said that I would not canvass at length all the matters that have been canvassed over the whole of the debate, which has ranged over most of today. But I ask the Government to give due consideration to the matters that have been raised and the particular matters that I have raised relating to charitable institutions, private hospitals, funds, chiropractors and the issuance of cards to children. Senator GRIMES(Tasmania-Minister for Social Security)(9.08) —As Senator Harradine said, it has been a long debate during most of today. For me it has been a much longer debate. I came into the Senate in 1974 and we have been debating health insurance and health schemes ever since. I find it incredible that the Opposition could express such righteous indignation and wax so eloquently about the Australian Labor Party's Medicare scheme-a scheme which has been put before the people for the last two or three years in great detail by the present Minister for Health (Dr Blewett), both in opposition and in government, and a scheme which was quite clearly spelled out to the people of this country before the last general election and for which, as Senator Haines said, we so obviously got a mandate if we got a mandate for anything. I am absolutely surprised at the gall of the Opposition to suggest that this scheme is confusing or is not understood when in fact the Opposition, when in government, presided over not one health insurance program but in fact five. As shadow Minister for Health during all those years, each year I debated the legislation which was introduced and each year, as I finished the debate, I said : 'I will see you here again next year. This will not work. It obviously cannot work. You will have to change it again'. Each year that very thing happened. I am also interested in some of the extraordinary arguments and contortions of logic that we have heard this afternoon. I will refer to one while it is my mind -that is, the argument which Senator Teague made at the end of his speech. Senator Teague made much, in a speech that went for half an hour, about the inequity and the unequal treatment of families. Senator Teague, as have other honourable senators on both sides of the chamber at various times, talked about the problems of single income families in this community. Yet in an extraordinary display of logic Senator Teague complained bitterly that a family of two taxpayers would have the levy placed on both taxpayers and that this was grossly inequitable and a terrible thing. What Senator Teague quite clearly is proposing is that a single income family with a taxable income of $20,000 should pay the one per cent levy on that $20,000 but a two income family with two incomes of $10,000 should pay the levy on only $10,000. Senator Teague —Madam Acting Deputy President, I raise a point of order. The Minister has totally misunderstood my argument. It is purely a question that they will be surprised that they have to pay, not that it is inequitable that they have to pay. The ACTING DEPUTY PRESIDENT(Senator Coleman) —There is no point of order. If Senator Teague is claiming that he was misrepresented he can make a personal explanation at the end of the Minister's speech. I call the Minister. Senator GRIMES —Senator Teague, by raising the point, quite clearly disagreed with the placing of the levy on those two incomes. If Senator Teague does not believe that the system whereby the levy is placed on each taxable income is fair-Senator Baume mentioned the same point-he should say what he would do in its place. If he wants to put an extra burden on single income families he should say that that is what he is proposing and that is what should be done. However, I do not intend to detail to the Senate exactly what the Medicare legislation does. That has been done in the second reading speech, it has been done in the other place and it has been done by the speakers on this side who have preceded me. However, I do wish to make a couple of general points and to reply to some of the specific points that have been made by various speakers. On the general points, I must agree with Senator Baume when he said that what this legislation is about is a basic difference in philosophy between the conservative coalition Opposition and the Labor Government. It is a basic difference in principle as to how we fund health insurance. Senator Baume made many points about the fact that this was the nationalisation of the health insurance industry and that it was akin to the nationalisation of the health industry as it exists in Britain. One can briefly say that it is an extraordinary scheme that can be labelled as nationalising the health scheme when it preserves the fee for service system, when it preserves the voluntary health system, when it preserves the private hospitals and when it allows people -doctors or patients-to opt out of the system completely if they want to and ignore the existence of the health scheme. That sort of hyperbole and exaggeration is the sort of thing that we must face in all debates in this place . However, there is a basic difference of principle. Senator Baume and his conservative colleagues believe that health care is best and most efficiently funded in this country through the principle of the free market. Senator Baume articulated that view well. He believes that people will buy health services, will shop around for the best prices, that their activity in this regard will result in competition between the providers of health care-in other words, the doctors-and hence what will result will be a low price, competition and a better system for the patient and the community. On the other hand, the Australian Labor Party believes that basic health cover, medical and hospital cover, is best funded and contributed to on the basis of the patient's ability to contribute as we consider that this is a community service. We retain private health insurance to supplement this for those who so choose it. I have been listening to Senator Baume and the followers of the beloved Adam Smith who sit opposite espousing the free market principle. It implies always choice, a knowledge of what is purchased and the existence of alternative sources of service or goods. If one applies the free market principle to the medical market, these factors just do not exist or they exist in a very limited way. The choice is rarely one for people. It is certainly not a choice of timing. They cannot decide when they will be sick; they cannot choose the type of illness to fit in with what they can afford at any particular time. In most suburbs and towns in this country they have a limited choice of doctors and these doctors almost invariably arrange, through their local organisations, to charge similar fees and provide similar services. Above all, all the knowledge is on one side; it is on the side of the provider, the doctor. Rare indeed is it that a patient can effectively question the service or make a judgment about alternative services and alternative treatments. There is no free market and there can be no free market with inequality of knowledge and inequality of bargaining power. It is a market which is loaded against the patient. It is a market which is particularly loaded against those with chronic illnesses, who have to go repeatedly, not by choice, to get the services and the care that they need. A second different principle which is so often espoused in this place-it has been espoused today by Senator Lewis, Senator Teague and Senator Baume-is beloved of all the conservatives in this place. It is what I call the gypsy principle. That principle is that only by covering the palm with silver does the patient appreciate the service that he or she is given, is the doctor-patient relationship preserved and can overuse be prevented. Of course, this principle is an insult to the medical profession. It is an insult to most doctors, asserting that they will operate effectively only if they are paid cash. These assertions are certainly not backed by the evidence. In surveys done in 1977, published in 1978 and presented in this Parliament, it was shown that the number of patient attendances to doctors who bulk billed was on average less than those who had charged this magic moiety. Senator Walters —Can you tell me who mentioned that in his speech? Senator GRIMES —I can tell the honourable senator; it was Senator Lewis, Senator Teague and Senator Baume. But we have another contortion of logic; we have the principle that it is terribly important that the patient pays this money, that he pays this cash so that he knows what it is about. Yet the same people complain that there is no gap insurance, that people should be able to insure against this gap-this precious moiety-which preserves all that is best in medicine in this country. Senator Crowley —And Queensland. Senator GRIMES —And they defend vigorously the situation in Queensland where no cash changes hands. Yet we have this extraordinary business that we must have a patient moiety. To discipline the patients and to preserve the doctor's ability to relate to his patients we must have the handing over of cash but when it really counts the gap must be covered. Medicare will cover basic health insurance free from the complexities and worries of the current private health insurance scheme. It will be fairer to all Australians; it will contribute to the nation's health costs according to a person's ability to pay. This is in stark contrast to the scheme whereby the flat contribution rate which applies means that couples with an income just above the health care card limit must pay 7.2 per cent of their total income towards basic health cover, whereas a couple on $50,000 a year pay only 1.4 per cent of their income for exactly the same cover. I fail to see the equity in that and I do not believe that anyone who thinks about it can see any equity in that. The usual red herrings were brought up by Senator Baume and others who referred to the national health service scheme as it exists in Britain. Senator Peter Baume quoted from some fairly obscure literature. I point out to the Senate that we are not introducing the British national health scheme. I point out to the Senate that what we are introducing in fact is a new system of health insurance in this country. Of course, the British health scheme has problems. If we are to give examples let us quote from some knowledgeable respectable journals in this country to get some clue about why the British health scheme is now in trouble. I will quote from the New England Journal of Medicine where the following comment appeared: Whether the so-called monetarist policy of the Thatcher Government is considered to be harsh or just realistic may depend on one's own political viewpoint but it has undoudtedly had a profound effect on the national health service, the universities and their medical schools and research activities. Even before the economic recession became serious, the NHS authorities were subject to rigid budgetary limits and because of the high rate of inflation many authorities have found that in real terms their budgets have been reduced. In short, this means that any difficulties being experienced by the national health service have in fact been the deliberate result of the British Government's decision to reduce allocations to the national health service in real terms. It is wrong to claim in the way that Senator Peter Baume did that the problems of the British national health scheme are in fact inherent in the system; they are the result of a system which is common throughout European countries but has been administered by a conservative government, a conservative government determined to bring it down. Senator Baume also referred to the significant new tax on income with the Medicare levy. He considers that the levy will rise as the inadequacy of funding emerges. I point out that this was introduced and debated as though the introduction of a levy were something new in this country. I remind the Senate- it should not be forgotten-that despite the fact that the attempt by the Labor Government in 1975 to introduce a levy was defeated by Senator Baume and his colleagues in this place, it was the Fraser Government which followed that Labor Government and which introduced a levy of 2.5 per cent. The reason the levy was so high was that the Fraser Government allowed at the same time opting out to private insurance in this country. A Medicare levy of one per cent of taxable income is a realistic levy in a universal scheme because all persons earning income above the threshold will be required to pay the levy. In addition, despite the frenzied effort of those honourable senators opposite to discredit the cost estimates of Medicare which have been available for a considerable time , they have not been able to find any specific area of criticism. I remind this House about the hidden tax the Fraser Government introduced in 1981 by replacing half tax indexation with the health insurance rebate which meant that only those who had expensive health insurance were eligible to obtain any tax advantage at that time. That is taxation by stealth; that is increasing the burden on people by stealth. We have also heard in various speeches, as is to be expected with an election coming up in Queensland, comments in respect of that State which particularly relate to the Medicare levy. Senator Baume said that Queenslanders would be paying the levy for something which they now receive at no cost at all. On this occasion, apparently Senator Baume believes in the free lunch after all. It is true that Queenslanders now have a free hospital system. It is free at the point of service. But as we have been reminded by those honourable senators opposite, someone has to pay. Quite clearly those who are paying are Queenslanders. This Government, in introducing the levy, has recognised that Queenslanders may be overlevied if there was no adjustment to Queensland other than the Medicare compensation granted to that State. We recognised this in negotiations with Queensland. Therefore, Queensland has been offered compensation of an amount of $35m in a full year in recognition of this problem. That matter has been debated in this place and another place at great length since those discussions took place. Senator Baume again had the gall to raise the spectre of the Government setting out to take something away from pensioners. Senator Teague, of course, shed crocodile tears on this point. I must say that only the Opposition could put forward an argument which would say that because prices generally fall particular groups in the community are worse off. Senator Peter Baume —Prices will not be falling. Senator GRIMES —Let me say that we heard nothing of this in relation to the health insurance changes in November 1978 which deflated the consumer price increases on which the November 1979 pension adjustment was based. We heard nothing about it at that time. Pensioners in this country need not be concerned that this Government will forget them in the way the previous Government forgot them at that time. In addition, the wages and salaries pause introduced by the Fraser Government with the sole objective of reducing pressure on prices, and therefore the CPI, also had a similar effect. I am sure that pensioners in fact will welcome the new arrangements which will reduce pressure on prices and remove the stigma of their having to produce a pensioner card to get medical and hospital services in the future. Senator Baume was then moved to raise a whole series of problems in relation to prevention and community health services. I point out to this Senate that, in contrast with the previous Government, this Government has made available to State health authorities an additional $20m in a full year for new and additional community health services. It will be a matter for the States to decide how this money might best be spent in accordance with their assessment of priorities. I hardly see the relevance of that argument to the introduction of the health insurance scheme. Senator Haines, however, made an excellent and more constructive contribution to this debate, as one would expect from someone who has in fact taken an active part in negotiations on behalf of various people in the last few months. Senator Haines has taken a constructive approach rather than the destructive approach of my colleague from Tasmania. Senator Haines, of all the speakers from the other side of the House, recognised that the Bill was concerned about the payment of health care, that it aimed to improve access to health services and that it particularly aimed to produce access to health services for those who could not get health insurance now because they could not afford it. Senator Haines pointed out that the Government does have a mandate for health insurance arrangements and the associated levy for what is called Medicare. She pointed out, just in case honourable senators opposite have forgotten, that, as evidenced by the last election and at polls since, Australians generally agree with the introduction of this levy. Senator Haines also referred to the extensive consultations which she and others have had with the Minister for Health (Dr Blewett). The Minister, in seeking consensus and in realising the sorts of problems of dislocation that were being raised by the Opposition, recognised that there was in fact a need to look at the difficulties faced by the people who would possibly be declared redundant, to look at the difficulties faced by some people in certain sections of the community and to look at the specific case of the closed funds and the special funds which exist in Tasmania, as all Tasmanians would know. In fact, it is as a result of that consultation right across the spectrum of people concerned with the provision of health care in this country that in fact this legislation is being introduced with the general acceptance of the whole community. Senator Haines made specific reference to a Medibank advertisement which she had been told about and which apparently occurred in Western Australia, contrary to the commitment of the Minister on this matter. I have not seen the advertisement nor have I been able to get hold of a copy of it. I am informed that certainly no such advertising has been authorised by Medibank management and that in accordance with the Minister's commitment no joint advertising of the type which is alleged to have occurred will occur in the future. Senator Walters made the usual contribution she makes to these sorts of debates . She did not add much that was new to what we have heard her say over the years in this place. But she did raise a matter of significance in relation to Tasmania and in so doing berated Senator Tate and any other Tasmanian senator from this side of the House who happened to be around at the time. The basis of her comments was highly selective quotes from letters from the Tasmanian Minister for Health, which basically come down to a shopping list of items in an attempt to blackmail the Commonwealth into increasing its already generous offer from 1 February 1984. It is the sort of approach that we have become used to from the Tasmanian Government at the moment. The most significant document which Senator Walters mentioned was the communique issued on behalf of the heads of Government, including the Tasmanian Premier, following the Premiers Conference which said: The Heads of Government agreed on the revised proposals for Medicare as outlined by the Minister for Health in the Premiers Conference, including the basis for compensation payments to each of the States as outlined by the Minister. The document referred to was entitled 'Medicare Program: Financial Proposals by the Commonwealth, 30.6.83', and it was circulated at the Premiers Conference. That document made specific references to South Australia and Tasmania as follows: South Australia and Tasmania to be reimbursed for both in-patient and out- patient revenue losses on the basis of the existing cost-sharing agreement arrangements being terminated and their replacement by identified health grants equal in value to the cost-sharing grants applicable at the 1st February 1984 plus revenue loss adjustment. Senator Walters —Now read a copy of the Premier's letter. Senator GRIMES —Senator Walters has the gall to tell us that the Premier agreed to this only because of some conversation he had with the Treasurer (Mr Keating) . I also inform Senator Walters that on 14 July there was a Health Ministers Conference about these arrangements and that the Tasmanian Minister for Health had nothing to say. Like his Premier, he had nothing to say until he got back to Tasmania, where, for local consumption, he started to berate. There can be no doubt on the part of anyone reading those documents that Tasmania accepted the Commonwealth proposals put forward at the Premiers Conference, as indicated in the final communique of that conference. I want to mention one other matter that Senator Walters raised. I think it is important to point out that in dealing with the facts she is somewhat careless at times. That was demonstrated by her quoting incorrectly the basic medical hospital contribution rates for the Medical Benefits Fund in Tasmania. She quoted them at $9.70 per family per week, rather than the actual cost of $11.92. It is that sort of carelessness with the facts that shows that she and her colleagues in the Tasmanian State Government are playing politics with what is, in essence, a very important matter for the people of Australia. Similarly, with jobs, Senator Teague, in great detail, claimed a 5,000 job loss to the voluntary health insurance funds. He was quoting figures which were preliminary figures before the negotiations with the voluntary health funds, before the Minister pointed out that they would be able to diversify, and before the Minister and the health funds got together about the preference for health insurance employees in the Health Insurance Commission. No health insurance organisation in this country at present would quote the outrageous figures that Senator Teague quoted. In fact, there will be a smooth changeover and a smooth introduction of this legislation. It will be smooth because of the care with which the Minister for Health has negotiated with the various organisations. Senator Haines raised the question of private hospital categorisation. It is worth while clarifying that for Senator Haines and others in this place. The three categories to be introduced are based on services provided and types of patients treated in those hospitals, and the Comonwealth subsidy of $20, $30 and $40 a day is according to category. The fund benefits of $80, $100, and $120 per day will be based on the same categories. Therefore, we have totals of $100, $ 130 and $160 a day available from the basic hospital table alone. The initial draft guidelines about which Senator Haines talked were guidelines only, circulated for comments by the private hospitals and the States, with which the Minister is bound to consult under the Act. Since then there have been discussions with both the private hospitals and the States, and the new criteria have been introduced. Suggestions by private hospitals have been sympathetically considered and will be further discussed at a meeting on 26 September. The revised guidelines will take into account the particular services provided by medical and psychiatric hospitals and the staffing levels that they provide. Regard will also be had to the level of maternity services provided at private hospitals, with rather less emphasis on surgery alone. The guidelines-this is important-will, of course, be tabled in the Senate and, therefore, they will be open for debate in this place. We believe that open government in this area and open discussion about the guidelines are important. Open discussion, we believe, will lead to a more rational and sensible system. Senator Harradine raised a couple of matters which I will deal with now. Perhaps we can deal with them in greater length at the Committee stage. We will be monitoring the effects of the introduction of Medicare on public hospitals. We will be looking at the numbers of patients which those hospitals have and the loads with which they have to deal. As a result of that we will endeavour to increase the standard of facilities in our public hospitals, standards which are already high. The problem of chiropractors, which was raised by Senator Harradine and Senator Harradine alone, has not been considered in the introduction of the health insurance scheme by this Government any more than it has been by previous governments. This scheme is about what one might call the traditional medical services. Rather than try to introduce a whole new element to the scheme, it was felt that it would be better to introduce the scheme initially for the traditional medical practitioners. One of the problems with chiropractors has always been-like everyone else in this place, I think, I have had discussions with them-in defining just what is a chiropractor and working out just who is and who is not accepted as a chiropractor in this community. I know that in some States there is registration; in others, there is not. What the chiropractors really need to do is get their act together in this regard. Senator Harradine's problem with the issuing of cards to 14-year-old girls in particular has been debated in this place and considered by an Estimates committee in recent times. The simple fact of the matter is that the provision of these cards will not be necessarily widespread. It will not interfere with the laws of the States. In some of the States, if not all of the States, a 14- year-old may receive medical attention on going to a medical practitioner, and get it quite legally. If that is the case, that person is entitled, like any other citizen, to have the benefits of the Medicare system. However, we can go into that in more detail at the Committee stage. I thank honourable senators for their contribution to the debate. I am sorry that those opposite cannot remove the blinkers from their eyes and cannot see that the introduction of a universal health insurance scheme, which is equitable to all and is based on people's ability to pay and not on people's wealth-a scheme which provides basic health care and access to health care for all citizens in this country who need it, whether they are chronically or acutely ill-is an important reform, a social reform which has been Australian Labor Party policy for as long as I and most of us have been members of the Labor Party. It was a reform introduced in 1974 and sabotaged in 1975. On this occasion, as we have not had the delay of a double dissolution and a joint sitting, it will be introduced, established, and I am sure accepted, by the whole community. I doubt whether we will hear much about the disbanding of Medicare in the Opposition's policy speech at the next election. I thank the Senate again. Let us proceed to the Committee stage. The DEPUTY PRESIDENT —Order! The Minister's time has expired. Senator TEAGUE(South Australia) —Mr Deputy President, I claim to have been misrepresented. The DEPUTY PRESIDENT —Does the honourable senator wish to make a personal explanation? Senator TEAGUE —Yes. I respond briefly to two matters which were raised at the beginning of the summing up speech by the Minister for Social Security (Senator Grimes). He alleged that I had argued in my speech that there was a particular inequity in both members of a two-income family paying the levy for Medicare. That was not my complaint. I did not complain about that whatsoever. Rather, I was drawing attention, when the costs of Medicare were being assessed, to the fact that many families with two incomes have been surprised to learn that both incomes will attract the levy. My concern was with the costs and the estimates of costs. Secondly, I did not in any way refer to a gypsy type of principle involving money by some magic passing from the palms of every individual to doctors in respect of the 15 per cent gap payment. Neither did I refer to such a principle, even in concept. My references to the gap-the 15 per cent of the medical fee to be paid-were made only with regard to the estimate of additional cost that would be incurred by those individuals and families in paying the gap. I saw no such magic in money passing across palms, as Senator Grimes alleged. Question put: That the words proposed to be left out (Senator Peter Baume's amendment) be left out. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 22 Noes . . . . . . . . . . . 29 —— Majority . . . . . . . . . 7 —— Archer, B. R. Kilgariff, B. F. (Teller)Baume, Peter Lajovic, M. E. Bjelke-Petersen, F. I. Lewis, A. W. R. Boswell, R. L. D. Messner, A. J. Carrick, Sir John Missen, A. J. Chaney, F. M. Rae, PeterCrichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Jessop, D. S. Withers, R. G. Bolkus, N. Jones, G. N. Childs, B. K. McClelland, DouglasChipp, D. L. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. 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. Georges, G. Tate, M. C. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Haines, J. McIntosh, G. D. MacGibbon, D. J. Hearn, J. M. Martin, K. J. Gietzelt, A. T. Collard, S. J. Question so resolved in the negative. Original question put: That the Bill be now read a second time. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 22 —— Majority . . . . . . . . . 7 —— Bolkus, N. Jones, G. N. (Teller)Childs, B. K. McClelland, DouglasChipp, D. L. Macklin, M. J. Coates, J. Maguire, G. R. Coleman, R. N. Mason, C. V. J. Colston, M. A. Ray, RobertCook, P. F. S. Reynolds, M. Crowley, R. A. Richardson, G. F. Elstob, R. C. Robertson, E. A. Evans, Gareth Ryan, S. M. Evans, Jack Sibraa, K. W. Georges, G. Tate, M. C. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Haines, J. Archer, B. R. Kilgariff, B. F. (Teller)Baume, Peter Lajovic, M. E. Bjelke-Petersen, F. I. Lewis, A. W. R. Boswell, R. L. D. Messner, A. J. Carrick Sir John Missen, A. J. Chaney, F. M. Rae, PeterCrichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Hamer, D. J. Watson, J. O. W. Jessop, D. S. Withers, R. G. McIntosh, G. D. MacGibbon, D. J. Hearn, J. M. Martin, K. J. Gietzelt, A. T. Collard, S. J. Question so resolved in the affirmative. Bill read a second time. Clauses 1 to 11-by leave-taken together. Senator PETER BAUME(New South Wales)(9.51) —This may be an appropriate occasion to state again the position which the Opposition has taken in its consideration of these Bills. We have opposed the second reading of the Health Legislation Amendment Bill and the Senate has now given that Bill a second reading. We have expressed our opposition to the principles of Medicare and that opposition remains. We have notified in another place, through our spokesman Mr Carlton, what our intentions would be in government in returning to a more appropriate system of health care delivery and financing. That has already been put on the record. At this stage in the debate, however, the Senate has the opportunity and the responsibility to exercise its review role in improving the legislation. It is our intention during the Committee stage to propose a number of amendments which we believe will be of assistance to the legislation and which will be important to be considered. We hope that honourable senators on all sides will take a reasonable view of the amendments which will be proposed. I indicate that I will probably say a few words on particular clauses of the Bill which we oppose because they implement the provisions of Medicare but, having divided on the amendment to the second reading and on the second reading, we will make our opposition known and will not seek to divide on every clause all the way through the Committee stage. Senator WALTERS(Tasmania)(9.53) —I think that this is the only occasion on which I can bring up the situation of the Victorian Bush Nursing Association, the costs incurred by that Association, and the disadvantage it will be put under by this legislation. I ask the Minister for Social Security (Senator Grimes) whether the Minister for Health (Dr Blewett) has now met with representatives of the Victorian Bush Nursing Association, which he had not done prior to 14 September. It appears that at the time this Bill was being debated in the House of Representatives, when Mr Carlton informed the Minister of the figures, the Minister was unware of the disadvantage under which the Victorian Bush Nursing Association would be operating. I ask the Minister whether his colleague in the other place has now identified the problem of the Association and whether he intends to do anything about it. Senator GRIMES(Tasmania-Minister for Social Security)(9.54) —I assure Senator Walters that my colleague the Minister for Health (Dr Blewett) was aware of the situation of the Victorian Bush Nursing Association. The matter had been brought up by our colleague the honourable member for Ballarat (Mr Mildren), among others. At the moment there is no categorisation of these hospitals. I am informed that discussion is proceeding at the moment concerning the guidelines as they will affect the bush nursing hospitals which are in this unusual situation. To my knowledge, those discussions are proceeding satisfactorily and we hope to have resolved any difficulties, perceived or real, in the near future . Senator Walters —Does that mean that the legislation will have to be altered? Senator GRIMES —I can see no reason why the legislation should be altered under these circumstances. It is my understanding that in fact meetings on this matter were held as recently as yesterday. These hospitals are in a different situation from other hospitals, but the matter is in hand. The matter is understood by the Government and always has been understood between the Government, and there is between now and February, of course, to resolve that problem. Senator WALTERS(Tasmania)(9.56) —If, as the Minister for Social Security has said, the problem has always been understood by the Government and the matter has been brought to the attention of the Minister for Health (Dr Blewett), why was the situation not gone into? Why did the meeting not take place before the legislation was brought down and before the Bill was debated in the House of Representatives? Why was the situation not fixed before the legislation was brought into the House of Representatives if the Minister knew right from the beginning that he was discriminating against this group of hospitals? Senator GRIMES(Tasmania-Minister for Social Security)(9.56) —I point out to Senator Walters that the categorisation of hospitals is continuing. The guidelines have not been finalised. When the guidelines are finalised they will be brought into this place and we will be able to discuss them at that time. The matter she talks about refers not only to the bush nursing hospitals but also to other hospitals which have yet to be categorised. It is part of the process of the introduction of Medicare that that should go ahead. The difference, of course, is that under this system we will be able to look at those guidelines and discuss them. The Director-General of Health yesterday had discussions with representatives of the bush nursing hospitals about this very matter. They are aware that the Government is considering the matter. People in those districts are aware that the Government is considering that matter. I hope that Senator Walters is now aware of it. Clauses agreed to. Clause 12 (Entitlement to medicare benefit). Senator PETER BAUME(New South Wales)(9.57) —The Opposition opposes clause 12. Clause 12 is the clause which extends the Government contribution to medical insurance in Australia from 30c in the dollar to 85c in the dollar when the schedule fee is charged. It is thus the clause of the Bill which shifts substantially the role of government in the intervention in health care delivery in Australia. We believe that it extends very substantially the intrusion of government into the payment for health services. This has really been the subject of much debate during the second reading stage but this is-- Senator Coates —I thought you said you accepted the second reading vote. Senator PETER BAUME —That will not stop us expressing our opposition. We are trying to take a reasonable and civilised approach to the debate and I think Senator Coates is not really assisting. I will make known our opposition at the appropriate places. If Senator Coates wishes us to start dividing, we will do so . At the moment it is not our intention to divide unnecessarily. As I say, this is one of the clauses which are central to the implementation of the Government' s Medicare scheme. It is one of the clauses which we oppose. I want to place that opposition on the record and indicate that the Opposition does not support this clause. Clause agreed to. Clauses 13 to 17-by leave-taken together, and agreed to. Clause 18 (Medicare benefit not payable in respect of certain medical expenses) . Senator PETER BAUME(New South Wales)(10.00) —To clause 18 the Opposition wishes to move the first of the amendments which have been circulated. I have received advice that amendments 5 and 6 may need to be redrawn slightly. We have had advice from parliamentary counsel. When those redrafts are available I will circulate them. It has been suggested that we could improve them. I move: (1) Page 11, clause 18, sub-clause (1), paragraph (b), after proposed new sub- section 17 (4), insert the following sub-section: ''(5) Sections 48 (other than paragraph (1) (a)), 49, 49A and 50 of the Acts Interpretation Act 1901 apply in relation to guidelines under paragraph (4) (c) as if in those sections references to regulations were references to guidelines and references to a regulation were references to a guideline.''. Clause 18 gives the Minister for Health the unfettered authority to alter or to cancel new or existing contracts governing the terms and conditions of employment between salaried or self-employed medical practitioners and recognised hospitals. It applies both to salaried doctors and recognised public hospitals and to private practising, self-employed medical practitioners and hospitals with whom they have some contractual arrangement. I understand that the Minister for Health (Dr Blewett) has on some occasions expressed his concern about the private practice arrangements of medical practitioners in hospitals. Those arrangements-I did not refer to this matter during the second reading stage-which exist between salaried doctors and the State employing authorities are matters of State jurisdiction; they are part of the State health delivery system. But insofar as those doctors seek to recover insurance benefits there is , of course, a Commonwealth interest. The Minister has stated that his concern related to the use of 'diagnostic and some therapeutic services . . . where there is not usually any direct doctor-patient contact, where there is substantial scope for generating additional revenue, and where there is a significant technical content to the service which is provided by the hospital rather than the doctor'. Some may find it difficult to follow exactly what the Minister was talking about. Those who are familiar with the operation of hospitals will know that the kind of services he was talking about relate mainly to diagnostic services, services such as radiology and pathology, and other services which are generated by the hospital. I agree with the Minister that there have been some elements of concern about the arrangements which have existed between doctors and the State hospitals which have employed them. I think it is appropriate that the matter be taken into consideration. It is appropriate that the public interest be looked at. But the Minister, on the ground that there is a problem, is now seeking the authority in this clause to make the payment of medical benefits by Medicare conditional upon his approval of the contract in each individual case entered into by the hospital and by the doctor. That may be all very well but there two points which concern us greatly. The first point is that the Minister's determinations are not to be subject to any scrutiny of parliament, as most subordinate legislation and regulations are. That is not to say that we deny the Minister his capacity, as part of the Federal Executive, to make administrative decisions. Nor do we deny the Minister the right-if that is the Government's wish-to examine contracts. All we say is that it is not appropriate that that should be the case when there is no capacity for the Parliament to examine, as we examine other Executive decisions, whether the decision should stand or be disallowed. The Opposition is concerned that that capacity is missing from the provision before us. We are also concerned, of course, that no right of appeal rests with the doctors if these decisions are made. The Opposition is concerned that the guidelines which are to be formulated by the Government in respect of the contracts are to be published in the Commonwealth of Australia Gazette but that there is no reference to any capacity for parliamentary disallowance. It is for this reason that the Opposition seeks to amend clause 18 in terms of the amendment which I have moved. I just observe, because we have several examples of where the Opposition will be seeking to have certain decisions of the Minister made subject to parliamentary scrutiny, that the clause as it stands cuts across the work of the Senate of recent years. Over recent years the Senate has worked to limit the growth of ministerial discretion not subject to some later review by the Parliament. We have worked towards protecting the rights of individuals to review and to appeal Government decisions. I am not saying that any decision by the Minister about a contract between doctor and hospital will be inappropriate. I have no reason to say that. All I am saying is that it is appropriate that there exist a mechanism by which the Parliament can maintain its capacity to examine and, if it wishes, to disallow a decision in relation to a contract. We are totally unconvinced by the response which the Minister for Health gave in another place. Dr Blewett attempted to explain away the interference by the Federal Government in the award conditions of these health professionals by saying that it was really just an agreement with State Health Ministers and that the State Health Ministers would be making the determinations in any case. I point out that we are talking about the payment of the Commonwealth medical benefit, which is a matter falling directly within the power and capacity of the Commonwealth. It is directly given to the Commonwealth as a constitutional responsibility. The payment of the Commonwealth medical benefit, which is a matter for the State, is a matter for direct determination by the Minister for Health. It is to be determined between the Minister for Health and the doctor concerned. It is entirely possible for a State to make an agreement with a doctor and for the Minister to determine that that particular contract will not be appropriate. It is not ultimately a matter for the State Health Ministers. It is very clearly a direct matter for the Commonwealth Minister, as it relates to the payment of the Commonwealth medical benefit. Because of that I believe it is appropriate that we move to accept the amendment I have moved. For those who heard the amendment and wondered why it was worded in the way it was, that is the standard kind of wording to bring these particular determinations within the provisions of the Acts Interpretation Act; that is, to bring them into a situation where they do become subject to scrutiny by the Parliament and disallowance by either House if so determined. Senator HAINES(South Australia)(10.08) —As I understand it, the Opposition is moving six amendments tonight of which the amendment the Committee is now debating is the first. The Australian Democrats will be voting as a bloc on five of those six amendments. So far as I understand it, after discussions with my colleagues, we are not voting as a bloc on this one. I have considerable sympathy, as a member of the Standing Committee for the Scrutiny of Bills, for the point of view that Senator Baume is putting, as indeed does at least one of my colleagues, and certainly I will be supporting it. I am not, therefore, speaking at the moment on behalf of my party as a whole. I understand that the guidelines formulated have been formulated following discussions with the States and I believe with certain visiting medical officers who are likely to be particularly affected-for instance, the radiologists. I understand also that the guidelines follow these sorts of lines: Visiting medical officers will be entitled to receive-the Minister can correct me if I get some of these figures wrong, but I think I have them right-up to 125 per cent of senior specialist salary without the hospital deducting anything for its facility fund. Between 125 and 150 per cent of senior specialist salary, I understand that the hospitals concerned will be deducting something like 20 per cent of the amount above 125 per cent and below 150 per cent for their facilities fund. Once the visiting medical officer is in receipt of 150 per cent or more of senior specialist salary the hospital will deduct 40 per cent of the amount above 150 per cent and 20 per cent of the amount between 125 and 150 per cent. Those guidelines seem perfectly reasonable to me. Nevertheless, it does not alter the fact, I believe, that Senator Baume has a perfectly legitimate point when he states that he believes that some sort of parliamentary scrutiny should apply to these guidelines. But one wonders why, when we are talking about a State and Federal government agreed set of guidelines we are not giving the States the right to disallow. It may well be that they, too, would like to have the power of veto. If we get into that sort of position we are approaching the ludicrous. I just repeat that I speak for myself and not for my Party in supporting Senator Baume's amendment. Senator HARRADINE(Tasmania)(10.12) —I apologise to the Committee that I have not been in the chamber or listening- Senator Peter Baume —It is our first amendment, Senator. Senator HARRADINE —I understand that; I have just been told. Whilst I have studied the matter- Senator Haines —We are having a conscience vote. Are you? Senator HARRADINE —Yes, I am. I have studied the matter previously. I apologise to the Committee for not having heard the debate on this clause as I would like to have done. I indicate that, consistent with my view of the audit and control functions of this Parliament, I will be supporting the proposition that has been put forward. Senator WALTERS(Tasmania)(10.13) — This position has arisen many times in this chamber over the years. I remember one occasion quite a long time ago when it arose just before the Senate went into recess some time in December. Indeed, at that stage Senator Cavanagh, who was one of the leading legal lights in the then Australian Labor Party Opposition, insisted that a Minister should not have powers that were not brought before the Parliament. It was not good enough for him then that decisions be gazetted. He said then-and we agreed with him; indeed the legislation was changed-that parliament should have the right to disallow any ministerial decision. This is something for which I have fought ever since I have been in this place. Senator Cavanagh certainly would not be allowing the Government to get away with just gazetting ministerial decisions. I know that he would be pushing for the right of parliament to disallow any ministerial decision. It is in agreement with this ideal that I believe the Government should be accepting the Opposition's amendment. Senator GRIMES(Tasmania-Minister for Social Security)(10.14) —The Government does not agree with the Opposition's amendment largely because we believe that it is unnecessary. I do not think Senator Walters even knows what it is about. The guidelines-not the contracts-which the Opposition seeks to have tabled in this place are drawn up by agreement after consultation between the Minister and the State governments. The guidelines will incorporate the practices which are approved by the States. It is an agreement between the Federal Minister and the State governments. The contracts will not be brought in here and laid on the table of the Senate; the guidelines will be. We would have some interesting situations in hospitals if the guidelines were approved by the State Ministers and the Federal Minister and someone for some reason or another moved for their disallowance in this place and then 15 sitting days later-which may be three months later, after the contracts have been drawn up-the guidelines were disapproved. However, if the Opposition in its desire to make sure that it looks at every speck of legislation, at every guideline and at every regulation which is brought forward by the Minister under the new Medicare system insists on that happening and has the numbers to do so I cannot do much about it, but I think it is an unnecessary impediment. On my reading of it, Senator Haines got her figures nearly right until she said that visiting medical officers will receive up to 125 per cent of salary without the hospital making any deductions for the facilities fund. But before that deductions are already made. I assume she is aware of that. Her figures are certainly right after that. She did not seem to have any trouble or worries with them so I will not go any further into them. We oppose the amendment because we do not see it as being necessary. We would have thought that in the States House co-operation between the Federal Minister and the Ministers of the States in establishing guidelines would probably have been enough. Senator WITHERS(Western Australia)(10.17) —I think that the proposition put up by the Minister for Social Security (Senator Grimes) is extraordinary if one believes that Parliament ought to be able to supervise the actions of the Executive. The Minister is saying that if a Minister of the Commonwealth and Ministers of the State governments get together they can therefore frustrate the parliaments of both the Commonwealth and the States to inquire into what those Ministers have done. I suppose that one of the problems of being here too long is that I can remember that when one of the first agreements on off-shore exploration was introduced into the parliament in 1966 or 1967 a Senate committee inquired into it for a number of years as a result of a motion put down by former Senator Wright. The worry of that committee was-I am not arguing health problems but philosophical ones-that because the Commonwealth and the States entered into mirror legislation concerning oil exploration off Australia the Ministers could enter into some agreement which was supervised by no one. Neither the Commonwealth Parliament nor the State parliaments had any discipline over the Ministers of either the Commonwealth or the States. This legislation is going down exactly the same track. Senator Tate —Precisely what you did with companies and securities, Senator. Senator WITHERS —I agree with the honourable senator. Merely because we were wrong is no excuse for the Government to be wrong. I am delighted that Senator Tate should interject and say that we were wrong over the securities legislation . I am one of those people who happen still to be a citizen rather than a politician. I am very wary of politicians getting together in some cosy agreement to frustrate the will of the citizen. As an aside, Mr Chairman, if you do not mind my diverting for a moment, that is why I worry about this interchange of powers without a referendum; where politicians can get together and plot to change the distribution of the powers between the Commonwealth and the States. I am old-fashioned enough to believe that if powers are to be changed I want to vote in a referendum. I do not like Commonwealth and State Ministers getting together to decide on the balance of powers in Australia. I want a vote. As long as I sit in this place, I am not terribly attracted to the idea that Commonwealth and State Ministers can get together and come to some cosy arrangement over which neither I nor the State parliaments have any power of disallowance. Those who sit opposite prate enormously about civil rights, a Bill of rights and the rights of the individual -all those sorts of fancy things. But they are prepared to put in legislation one of their propositions so as to get into some cosy arrangement into which the Parliament cannot even inquire. That is the only reason I intervene. I know nothing about the technicalities, but I think I know enough to say that Commonwealth and State Ministers ought not to be able to come to some cosy arrangement which suits them without either of their parliaments having a right to disallow. Senator GRIMES(Tasmania-Minister for Social Security)(10.21) —I am sorry that I awoke Senator Withers from his long slumber. I really am concerned! It is so long since I heard him make a speech that it is almost worth while. It was good stuff, but we are talking about guidelines concerning contracts between State hospitals and medical practitioners within those hospitals. We are talking about guidelines which are being discussed by State Ministers, by the Australian Medical Association and by the Minister for Health. We are not doing anything drastic such as the Jamison Commission of Inquiry into the Efficiency and Administration of Hospitals recommended by removing the right of private practice in hospitals. We are coming to an arrangement between the States and the Federal Government about the contracts for employment of specialists in those hospitals. If Senator Withers wants to make a great national and constitutional issue of this, fair enough. I just repeat: We do not support the amendment because we think it is unnecessary and believe it could in fact impede arriving at sensible contracts in this area. Senator PETER BAUME(New South Wales)(10.22) —I want to take only one moment to draw the attention of Senator Grimes to proposed new section 17 (4) (c) which contains the words which concern us at present. It simply says, in part: if the Minister has, by instrument in writing published in the Gazette, formulated guidelines with which agreements under this section are to comply . . . The explanatory memorandum, with respect to clause 18 of the Bill, states: . . . unless the practitioner has entered into an agreement in a form approved by the Minister for Health . . . The Minister for Social Security may be saying that agreements are made with the States. There is nothing in the legislation to say that they need to be made in that way. As the legislation is written and as the memorandum is presented, these are Executive acts entirely appropriate for the application of the disallowance power. When I was a government back bencher-Senator Walters will remember this-we had to go to our own Minister many times to try to make the same point and to insist that actions under this kind of legislation be made subject to parliamentary scrutiny. There is nothing in the legislation to require there to be an agreement between a State and the Commonwealth. There is nothing that would prevent a Minister simply making guidelines and publishing them in the Gazette. The Parliament would have no power to have any say about that. I think we should be supporting the principle of the Parliament having that reserve capacity. Senator WALTERS(Tasmania)(10.24) — May I add that it was with former Senator Cavanagh's support that Senator Peter Baume and I fought this battle over many years. I am sure that Senator Grimes would agree that he also was pleased with that fight at the time. The principle is as applicable today as it was then. Senator GRIMES(Tasmania-Minister for Social Security)(10.25) —I am not getting into a frenzy about this matter. The guidelines will be published in the Commonwealth of Australia Gazette. The effect of a Minister behaving in the way that Senator Peter Baume mentioned would be to empty hospitals in the States of their diagnostic specialists in this case. I just think it is making far too much of a conspiracy theory of a thin end of the wedge argument to go on in the way that we are. I repeat: We find it unnecessary; but, as I say, we are not going to the wall over it. Question put: That the words proposed to be inserted (Senator Peter Baume's amendment) be inserted. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 2 —— Archer, B. R. Lewis, A. W. R. Baume, Peter Macklin, M. J. Bjelke-Petersen, F. I. Messner, A. J. Boswell, R. L. D. Missen, A. J. Carrick, Sir John Rae, PeterCrichton-Browne, N. A. Reid, M. E. (Teller)Guilfoyle, Dame Margaret Scott, D. B. Haines, J. Teague, B. C. Hamer, D. J. Townley, M. Harradine, B. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. Lajovic, M. E. Bolkus, N. Jones, G. N. Childs, B. K. McClelland, DouglasChipp, D. L. Maguire, G. R. Coates, J. Mason, C. V. J. Coleman, R. N. Ray, RobertColston, M. A. Reynolds, M. Cook, P. F. S. Richardson, G. F. Crowley, R. A. Robertson, E. A. (Teller)Elstob, R. C. Ryan, S. M. Evans, Gareth Sibraa, K. W. Evans, Jack Tate, M. C. Georges, G. Walsh, P. A. Giles, P. J. Zakharov, A. O. Grimes, D. J. - McIntosh, G. D. MacGibbon, D. J. Hearn, J. M. Martin, K. J. Primmer, C. J. Durack, P. D. Foreman, D. J. Kilgariff, B. F. Gietzelt, A. T. Collard, S. J. Button, J. N. Chaney, F. M. Question so resolved in the negative. Clause agreed to. Clauses 19 to 23-by leave-taken together, and agreed to. Clauses 24 to 27-by leave-taken together. Senator PETER BAUME(New South Wales)(10.31) —These clauses are another part of the Bill which, in another place, was the subject of a division. It is another part of the Bill which we oppose. The Opposition's concern about these clauses of the health legislation is that they relate to the bulk billing provisions of Medicare. Also, one of the clauses relates to the decision to remove from private health insurance funds the right to offer to pensioners the payments of their benefits when doctors do not bulk bill. In those circumstances pensioners are required to recover 85 per cent of the schedule fee through a private insurance fund acting as an agent of the Government. We believe that both of the provisions which I have mentioned are undesirable. We think that they are not to the advantage of people. The sacking of the private health insurance funds from this function will not assist pensioners in those circumstances where their medical practitioners bill them directly. We reiterate our concern about some of the principles contained in these clauses which underpin the Medicare measure. I do not want to reiterate the arguments made during the second reading debate. But I say again that it is within these clauses that it is appropriate to mention our concern for the effects upon employment in the private health insurance funds which will follow the adoption of these clauses of the Bill. The Government professes its concern for the unemployed and preaches jobs, jobs, jobs. How can it take these measures which will result in a net loss in employment? We might argue about the numbers, but there will be a net loss in employment. Senator Tate —You did not argue last week. You said 5,000. Senator PETER BAUME —I do not mind whether one job is involved. Any net loss in employment is undesirable. These clauses are the appropriate place to state once again our opposition and our concern. Senator TEAGUE(South Australia)(10.34) —The Minister for Social Security ( Senator Grimes) referred in his summing up to the fact that the net loss in employment was somewhat less than 2,500, and he made such a particular point of being specific about figures. What is his information to the Committee as to the extent of the net loss in jobs as a result of this change? Senator GRIMES(Tasmania-Minister for Social Security)(10.35) —The net loss, as I think even Senator Teague will agree, is difficult to assess. It is certainly not the 2,500 that he talks about. Estimates from discussions between Dr Blewett and his colleagues and the voluntary health insurance organisations put it at a possible 1,500 at the most. The situation is that if one is introducing a centralised health insurance scheme which is in fact more efficient and is aimed at providing the access we are talking about, of course there will be a net loss of people. I remind honourable senators of the provisions that were made to assist the voluntary health insurance funds to diversify and therefore maintain staff and to assist the staff of health insurance organisations to get employment. During the second reading debate I argued vigorously with Senator Teague his claim of a total loss of 5,000, with which not even the voluntary health organisations agree, and the net loss. Senator WALTERS(Tasmania)(10.36) —I will speak only very briefly. This clause is the basis of the whole legislation. The Government is trying to push through nationalisation of both doctors and the funds. Senator Tate groans every time I say it, because every time I say it the people of Australia are going to realise that this is really the Government's intention. If it were not, Dr Blewett and other people in the other place would not be urging doctors to bulk bill. A profession is nationalised when its members are totally paid by the Government. Once doctors bulk bill they are nationalised. Once their salary or income is totally paid by the Government they are nationalised. There is no other way of putting it. Senator Gietzelt assured us today that the most economical way to run the system was to have one big fund. He said that the proliferation of funds at the moment should be done away with. If that is not nationalisation of the funds, I do not know what is. I proved today by my speech and the information I tabled that over the years Medibank Private has been unable to compete with the private funds and that its administrative costs have been greater than those of the private funds. This was the case from 1978 to 1982. Indeed, the administrative costs of Medibank Private are still greater than those of the private funds. Until this year, Victoria was the only State in which Medibank Private made any sort of a profit. Medibank Private still cannot compete in any of the States in which the private health funds are flourishing. This clause is nothing short of nationalisation. It is the basis of the whole Medicare health legislation. I draw the attention of the Committee and those listening to this debate to the fact that the Government has decided to nationalise the doctors and the private health funds. If this legislation passes tonight we will have nationalisation in this country. Senator GRIMES(Tasmania-Minister for Social Security)(10.39) —I do not wish to drag out this debate at great length. One must answer the tedious nonsense that Senator Walters has gone on with. Senator Withers —Give us some of your tedious nonsense. Senator GRIMES —I remind Senator Withers and Senator Walters that under this legislation and under the new Medicare proposals the doctor has the choice of whether or not to bulk bill. It is not anybody else's choice. It is absolute nonsense to equate that with nationalisation. It is the sort of nonsense that we have to put up with from Senator Walters, who airs her prejudices all over this place with great gusto every time she speaks. I answer again, as I did in the Estimates Committee hearing recently, Senator Walters's assertion that the management expenses of Medibank Private are higher than those of the other health insurance funds and that they have been rising. They have in fact been falling. Senator Walters —I did not say they have been rising; I said they are higher. Senator GRIMES —They are not higher. They were not higher last year and they are not higher this year. At the moment they are at 9.7 per cent. I think the good senator should go back to the Estimates Committee. If she does not believe the figures produced by the Department of Health in this place, the figures produced by the voluntary health funds, she should have questioned them at the Estimates Committee hearing. It was her duty to do so, but she did not. She sat mute. But she still parrots out this nonsense about the level of management expenses of Medibank Private. Briefly, what we have introduced is a system of health insurance which provides accessibility to everybody in the community. It provides that they pay on the basis of their ability to pay. It still leaves the doctors with the ability to bulk bill or not to bulk bill, as they choose. It still leaves the system of fee for service. It still leaves the voluntary health funds with a function in the community. It still leaves our private hospitals intact. If that is the honourable senator's definition of 'nationalisation' I think she ought to buy herself a new dictionary. Senator TATE(Tasmania)(10.42) —I rise to make very briefly just three points refuting the absurd claims of Senator Walters that this clause of the Bill, or any part of the Bill, attempts to nationalise the provision of medical services to Australians. Firstly, it was a Labor government in 1946 which introduced a referendum which had the explicit effect of preventing civil conscription. It was placed in the referendum as part of a general bipartisan understanding that in fact doctors would not ever be conscripted or nationalised in Australia. As I said, that was put to the Australian people by a Labor government in a bipartisan spirit, and it makes the nationalisation that Senator Walters speaks of constitutionally impossible. So let us put that to one side. Secondly, as Senator Grimes quite rightly put it, no doctor is compelled to bulk bill. As I said in my question at Question Time today, bulk billing will occur on a large scale only if it is made attractive enough to doctors in practice to do so, and to achieve that one will have to have a much more rapid response by the Health Insurance Commission to the payment of moneys to surgeries to keep the cash flow and proper remuneration coming to the doctors on a reasonable time span, not the some months of delay that occurs quite often these days. We received a reply that the Health Insurance Commission had given an undertaking to the Government that the turnaround would be within a fortnight of receipt of the bulk bills from the doctor's surgery. That is the way in which doctors will be attracted to make use of the bulk billing arrangements. Thirdly, and linked to the absurd charge that we are nationalising medicine, is the question of doctor of choice that is always parroted. The fact is that under Medicare any Australian will be able to go to any general practitioner of his or her choice and seek an initial consultation, which is usually quite adequate treatment for some sort of illness. If the general practitioner then refers that person to a specialist, Medicare will cover the payments to that specialist. If diagnostic services of radiologists or pathologists are required, Medicare will cover that. If the person goes to a public hospital, that hospital will make an arrangement for the hospital doctor to look after that person in a ward which the hospital doctor and the hospital assess as adequate for the care of the patient. If the patient then wishes to have a private doctor of choice in the hospital, of course the patient is perfectly free to do so. To cover the cost of doing so the patient may wish to enter into a private health insurance arrangement. There is no diminution of the right of doctor of choice under our proposals. The whole absurd allegation needs to be set at rest. Senator Grimes did it more than adequately. I simply felt compelled to rise to get my thoughts recorded in Hansard. Senator WALTERS(Tasmania)(10.45) —I now feel compelled to explain just where Senator Tate has gone wrong. Dr Blewett has said that the levy will provide the same cover as present basic hospital and medical contribution rates. That is not accurate. That is a distortion given to the people so that they think they will receive the same service. They will be covered for 85 per cent of the schedule fee; that is where the cover stops. They will be entitled to a bed in a public hospital-if, as has been suggested, they can get one. But they will only be able to be treated by the resident doctor on duty. They will not have the opportunity to choose a doctor, as they have at present. They will be treated only by the doctor on duty. It will not be the same situation as at present. At present, with basic hospital insurance, people can go into a public hospital and be treated by the doctor of their choice. It is the distortion that the Minister has tried to put across and that Senator Tate has now tried to back. The CHAIRMAN —The debate is running rather wide of what is in clauses 24 to 27. I would be grateful if further contributors to the debate stuck to the clauses. Senator CRICHTON-BROWNE(Western Australia)(10.47) —I take up the point made by Senator Tate and Senator Grimes. It is inevitable that the great majority of doctors will bulk bill. They will be forced by the legislation to do so. Senator Crowley —Choice, Senator. Senator CRICHTON-BROWNE —Come on. The average person follows his pocket. If one has a choice between- Senator Tate —Are you talking about the finance committee of the Western Australian branch of the Liberal Party? Senator CRICHTON-BROWNE —I am sorry, but I do not see the connection. If one has the choice of paying absolutely nothing or paying the 15 per cent difference, and one gets the same service, inevitably one will go to the doctor who bulk bills. As the process matures, and doctors who are bulk billing attract the great majority of patients, other doctors will be intimidated and forced by economic circumstances to follow suit and also bulk bill. Of course, the legislation is perfectly designed that way. It does not allow cover for the gap of 15 per cent. It is designed that way to ensure that the private funds suffer and that the doctors are forced to bulk bill. It may not be within the definition of what the Government understands to be nationalisation, but it heads very much in that direction. It will destroy the private funds and will remove the choice of a doctor to bulk bill because doctors who do not bulk bill will not get patients. Clauses agreed to. Clauses 28 to 30-by leave-taken together, and agreed to. Clauses 31 to 39-by leave-taken together. Senator PETER BAUME(New South Wales)(10.49) —These clauses provide very broadly for approval of the categorisation of private hospitals. I believe my colleague Senator Walters has referred already to the plight which faces the Bush Nursing Association. She was not sure whether these were the appropriate clauses. It is in fact covered under these clauses. The points which my colleague made about that Association and its concerns are very germane to the problems which may be faced by private hospitals in Australia. They represent a further development of Commonwealth bureaucratic control into the private hospital system. We are concerned about what the effects of some of this categorisation will be upon the viability of some of these hospitals. I simply say that the network of private hospitals is essential in some areas to pick up the inadequacies in the available public bed supply. If some of these hospitals, through inappropriate categorisation, are not able to continue in existence it just may be the public that suffers. So the Opposition has concerns about clauses 31 to 45. But in talking to clauses 31 to 39, I make those general points and indicate our concern and opposition to those clauses. Senator PETER RAE(Tasmania)(10.52) —I wish to speak to clause 38 and draw attention to its provisions. That clause is headed, 'Agreements with States and Northern Territory for provision of hospital services'. Clause 38 provides that: Section 30 of the Principal Act is repealed. Sub-clause (2) provides that: An agreement between the Commonwealth and South Australia or Tasmania that was in force immediately before 1 February 1984 under section 30 of the Principal Act ceases to have effect upon that date, except in so far as that agreement relates to the provision of hospital services before that date. The background to this has been referred to already by my colleague Senator Walters this afternoon. It arises out of provisions which were made in relation to tax sharing and health grants for the States and agreements with the State of Tasmania in particular. This is provided for in the States (Tax Sharing and Health Grants) 1981, section 23 of which is entitled, 'South Australia or Tasmania may elect to terminate cost sharing agreement'. Section 23 provides: If, at any time before 1 July 1985, the Premier of South Australia or the Premier of Tasmania elects, by writing under his hand furnished to the Prime Minister, that this section should apply to that State, the regulations may make provision- The section goes on to set out in detail the termination of an agreement referred to in section 30 of the principal Act. I hope that Senator Grimes might be able to follow this through because I think it is quite important that he does so. I wish to draw his attention to section 23 of the States (Tax Sharing and Health Grants) Act of 1981, which provides that if a State-South Australia or Tasmania-elects to terminate a cost sharing agreement it may do so by writing under the hand of the Premier of that State, furnished to the Prime Minister. That is the clear intention of how provisions such as the subject matter of clause 38 of the Health Legislation Amendment Bill would be dealt with. In relation to that clause I would like to quote from some of the correspondence which has already been tabled. I think it sets out the fact that certainly there has not been any writing under the hand of the Premier of Tasmania indicating that Tasmania elected to terminate the cost sharing agreement. Further than that , there is a state of total disagreement in relation to this matter. The first letter to which I wish to refer-and I will do so as briefly as I can-is a letter of 13 July 1983 from the Tasmanian Minister for Health to the Commonwealth Minister for Health. On page 3 of that letter the Minister in Tasmania says: Finally I must express my dissatisifaction at the lack of detail provided to date to enable this State to make an informed judgment as to whether or not it should remain under cost sharing arrangements and whether the compensatory grants under Medicare are adequate. Therefore I request that you give these matters your urgent attention. Clarification is vital to Tasmania before any final decision can be made. I emphasise the last few words: 'Clarification is vital to Tasmania before any final decision can be made'. Senator Grimes —What date is that letter? Senator PETER RAE —It is dated 13 July 1983. I have just read out the final two paragraphs of that letter. In particular I draw attention to the final sentence. The reply to that letter is dated 28 July and the first paragraph identifies the difference between the two Ministers. It states: Thank you for your telex . . . concerning various aspects of the Commonwealth's offer to the States on Medicare which was accepted at the Premiers' Conference. The Commonwealth Minister is saying that things were accepted at the Premiers Conference and the State Minister, in his letter, says that he wants further information before he can make a final decision in relation to Tasmania. There is a further letter of 16 August 1983 from the State Minister for Health, Mr Cleary, to the Federal Minister for Health, Dr Blewett. In the letter Mr Cleary states: I also believe that this error has occurred due to your assumption in reporting to the Premiers' Conference from the Special Health Ministers' Conference, that all States had agreed to the introduction of the Medicare arrangements, and that the two cost-shared States would move to the same arrangements as the other States. This assumption by yourself was, and still is, fundamentally incorrect. All that Tasmania has ever indicated has been a willingness to examine any proposals put forward for consideration, to discontinue the Cost-Sharing Agreement prior to its expiry date of 30th June, 1985. The concluding paragraph of that letter states: In conclusion, I would again confirm that Tasmania is looking to the Commonwealth Government to put forward a firm proposal for the Cost-Sharing Agreement to be discontinued- Again it is quite clear that when this letter was written there was no agreement . Tasmania is saying that it wants information. It is continuing to say that. It is also saying that there was certainly no agreement, that the Federal Minister has a fundamental misinterpretation. The reply to that letter-almost a month later; a rather crucial month-is dated 14 September 1983 and has received some continuing misconception. It states: First let me say that I am surprised and disappointed at the content of your letter. Until receipt of your letter, I was in no doubt that all States had accepted the Commonwealth's proposition to move to Medicare block grant funding from 1 February 1983. I do not know how the Federal Minister could have said that in the light of preceding correspondence including, in particular, the letter of 13 July from Mr Cleary to Dr Blewett which made it quite clear that on 13 July there was no agreement. The letter states: Clarification is vital to Tasmania before any final decision can be made. The final paragraph of the letter of 14 September by Dr Blewett to Mr Cleary goes on to state: I reiterate that, in the Commonwealth's view, a firm offer to move from cost sharing to the Medicare block grant funding arrangements has been made by the Commonwealth, and accepted by Tasmania. The Minister's assertion is that the offer has been accepted by Tasmania. At this stage I refer again to the requirements in the legislation that an election to terminate the agreement must be under the hand of the Premier of Tasmania. So let us see what the Premier of Tasmania said in a letter dated 15 September 1983 to the Prime Minister (Mr Hawke). In the second paragraph on page 2 the Premier states: The assumption that Tasmania has agreed to move to the same arrangements as the other States is not correct. All that Tasmania has ever indicated has been a willingness to examine any proposals put forward for consideration to discontinue the cost sharing agreement prior to its expiry date of 30th June, 1985. Up to the present time there has been no formal or specific proposal put forward by your Government to: (a) discontinue the cost sharing agreement; or (b) quantify the proposed amount of any grant to replace it. Rather, there has only been general discussion on the options. The letter goes on to state that the Tasmanian Government would: seek deferral of consideration of Clause 38 . . . and an early reply on the matters raised in our recent meeting in Hobart. The Premier is referring to the discussions which took place between the Prime Minister and the Premier in Hobart at the end of August. He also refers to the reason why he agreed to the communique. Senator Walters has already quoted from the communique and I do not propose to quote it again in detail. I simply say that the State Premier said that he received an assurance from the Treasurer, Mr Keating, as to what was the meaning of the communique. He reiterates that there has been no agreement. He concludes by saying: The Tasmanian Government has been co-operative in its discussions to facilitate the introduction of Medicare and feels it deserves a similar spirit of co- operation in return. Consideration interrupted. The CHAIRMAN —Order! It being 11 p.m., under sessional order I put the question: That the Chairman do now leave the chair and report to the Senate. Question put. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 24 —— Majority . . . . . . . . . 3 —— Archer, B. R. Lajovic, M. E. Baume, Peter Lewis, A. W. R. Bjelke-Petersen, F. I. Macklin, M. J. Carrick, Sir John Mason, C. V. J. Chaney, F. M. Missen, A. J. Chipp, D. L. Rae, PeterCrichton-Browne, N. A. Reid, M. E. (Teller)Durack, P. D. Scott, D. B. Evans, Jack Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Haines, J Walters, M. S. Hamer, D. J. Watson, J. O. W. Harradine, B. Withers, R. G. Hill, R. Bolkus, N. Jones, G. N. Button, J. N. McClelland, DouglasChilds, B. K. Maguire, G. R. Coates, J Ray, RobertColeman, R. N. Reynolds, M. Colston, M. A. Richardson, G. F. Cook, P. F. S. Robertson, E. A. (Teller)Crowley, R. A. Ryan, S. M. Elstob, R. C. Sibraa, K. W. Evans, Gareth Tate, M. C. Georges, G. Walsh, P. A. Giles, P. J. Zakharov, A. O. McIntosh, G. D. MacGibbon, D. J. Hearn, J. M. Martin, K. J. Primmer, C. G. Kilgariff, B. F. Foreman, D. J. Collard, S. J. Gietzelt, A. T. Messner, A. J. Button, J. N. Jessop, D. S. Question so resolved in the affirmative. The Chairman having reported accordingly- The PRESIDENT —It being after 11 p.m., under sessional order I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 11.06 p.m. The following paper was presented: Public Service Act-Appointment-Department of Administrative Services-Mr S. G. Murphy.