Wednesday, 19 October 1983 The PRESIDENT (Senator the Hon. Douglas McCelland) took the chair at 10 a.m., and read prayers. The Clerk-Petitions have been lodged for presentation as follows: Mr Mart Niklus 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 communications rights. (3) That the Australian Government give its support to any initiatives in this case by Amnesty International which has adopted Mr Mart Niklus. Amnesty International believes he has committed no real crime and has never used or advocated the use of violence. (4) That we urge the Australian Government to make representations to the Government of the Soviet Union to promptly release Mr Mart Niklus and grant him a passport exit visa. (5) That in its representation 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 78 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: That the Sex Discrimination Bill 1983 contains provisions inconsistent with principles of justice and equality which could be used to: Undermine civil liberties and religious freedoms; Entrench abortion funding and render liable to action Hospitals, Doctors and Nurses, who conscientiously refuse to become involved in morally objectionable operations; Deny to parents their rights to insist that the school ''community'' provide an environment conducive to the development, including moral development of their children. Your petitioners humbly pray that the Senate, in Parliament assembled should amend the Bill so as to prevent the possibility of its use in the manner stated above and urge, because of the importance to society of all principles involved, that a conscience vote on the Bill be permitted to all Members of Parliament. And your petitioners as in duty bound will ever pray. by Senators Dame Margaret Guilfoyle (from 13 citizens), Harradine (from 127 citizens), Townley (from 221 citizens), Walters (from 336 citizens) and Watson ( from 153 citizens). The humble petition of residents of the State of Victoria respectfully showeth: (1) that temporary salaried and full-time sessional teachers working for Adult Migrant Education Services are disadvantaged in status and security by lack of permanency and (2) that this disadvantage is reflected in its effect on and implications for multicutural education. (3) Victoria is particulary disadvantaged as with 30 per cent of national Adult Migrant Education program it has only one permanent member of staff. Your petitioners therefore pray that: (1) This imbalance be redressed by providing realistic funding for permanency. (2) Funding should be used to balance the present inequity of permanent positions throughout Australia. And your petitioners as in duty bound will ever pray. by Senator Chipp (from 12 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That Australian Rules Football followers in the Northern Territory are deprived of their ability to view their National Sport (Australian Rules) by the Australian Broadcasting Commission's decision to withdraw the Television Program 'The Winners' from Territory and other viewers. We therefore protest the Australian Broadcasting Commission's action. Your petitioners most humbly pray that the Senate will request the Australian Broadcasting Commission to reinstate this program 'The Winners' as a matter of urgency And your petitioners as in duty bound will ever pray. by Senator Kilgariff (from 525 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That the Ukrainian nation has suffered a genocidal act at the hands of the Kremlin when 7 million Ukrainians perished of starvation in 1932-33 in a deliberately planned famine. Ukrainian Australian deplore the fact that the Kremlin has never been called upon by the free world to give a public account of this tragic event. Russian Great Power Chauvinism which caused this Famine survives to this day. The Ukrainian Helsinki Monitoring Group, in the forefront of the opposition to the Russification and Ukrainian cultural destruction has been ruthlessly eliminated and protests by the West on its behalf ignored. As the only founding member of the United Nations with no western diplomatic presence, Ukraine's political isolation allows Moscow to move unimpeded towards its goal of the complete elimination of the Ukrainian nation. Your petitioners humbly pray that: 1. The Australian Government denounce the Famine of 1932-33 in Ukraine as a genocidal act by the Kremlin against the Ukrainian nation. 2. The tragic events of the Ukrainian Famine Holocaust be highlighted during a day set aside by the Australian Government to honour victims of genocidal acts and imperialistic aggression. 3. The Australian Government immediately implement the recommendation of the Joint Committee of Foreign Affairs and Defence to convene a Standing Committee to monitor the adherence to the Universal Declaration of Human Rights of all signatories, in particular, the U.S.S.R. 4. The Australian Government immediately take steps to expand official government representation to include all member states of the United Nations. And your petitioners as in duty bound will ever pray. by Senator Chipp (from 316 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That your petitioners are concerned about foreign owned military bases on Australian territory and the entry into Australian waters and territory of foreign warships and aircraft carrying nuclear weaponry. And that the Australian Government should take an active and constructive role in the promotion of a nuclear-free world. Your petitioners most humbly pray that the Senate in Parliament assembled should: 1. Promote the expression of Australian sovereignty by legislating to bring foreign military bases on Australian territory under the control of the Australian Government. 2. Make it compulsory that the disclosure of weaponry carried by foreign warships and aircraft be given in confidence to the Australian Government prior to a request for entry. And that foreign warships and aircraft that carry nuclear weaponry be banned from Australian waters and territory. 3. Legislate for the cessation of all uranium mining in Australia and its subsequent export. 4. Urge the Government of the Commonwealth of Australia to pose to the Governments of the United States and the Soviet Union that both countries agree to immediately halt the testing, production and further deployment of all nuclear weapons, missiles and delivery systems in a way that can be checked and verified by both sides. And your petitioners as in duty bound will ever pray. by Senator Macklin (from 289 citizens). To the Honourable the President and members of the Senate in Parliament House assembled. The petition of the undersigned respectfully showeth: We urge the Government to declare a moratorium on uranium mining and treatment in Australia; We urge the Government to repudiate any commitment of a non-Labor Government to the mining, processing or export of Australia's uranium; We urge the Government to not permit the mining, processing or export of uranium mining pursuant to agreements entered into contrary to ALP policy; and We urge the Government to discontinue the Roxby uranium mine development. And your petitioners as in duty bound will ever pray for peace, disarmament and a nuclear free future. by Senator Chipp (from 132 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: That the Commonwealth Sex Discrimination Bill 1983 could be used to support the provision by the Commonwealth Government of funding, counselling, etc. for deliberately procured abortions. Your petitioners humbly pray that the Senate, in Parliament assembled: should amend the Sex Discrimination Bill so as to prevent it from being used in support of deliberately procured abortions. And your petitioners as in duty bound will ever pray. by Senators Chaney (from 503 citizens), Giles (from 118 citizens), Hamer (from 795 citizens), Harradine (from 72 citizens) and Walters (from 241 citizens). To the Honourable the President and Senators of the Senate in Parliament assembled. The petition of certain citizens of Tasmania shows: That the Sex Discrimination Bill 1983 contains provisions which will be detrimental to women's golf in that- A There will be interference with the rights of men and women to conduct separate competitions. B Associate (women) golfers are handicapped differently to men golfers and use different tees and participation in the same competition under the same conditions would be detrimental to women. C Associates now enjoy a lower membership fee and many would be unable to play golf if they had to pay the higher men's fee. Your petitioners therefore pray that there will be no intervention in the existing arrangements for women's golf. And your petitioners as in duty bound will ever pray. by Senator Archer (from 42 citizens). Senator JONES(Queensland) —by leave-I present the following petition from 129 citizens of Australia which is not in conformity with the Standing Orders: We, the undersigned, support Senator Chipp's Notice of Motion to establish a Senate Select Committee ''to enquire into and report upon the question of animal welfare in Australia'' and urge you as a member of the Senate to support this motion on behalf of concerned people throughout Australia. And your petitioners as in duty bound will ever pray. Petition received. Senator HARRADINE(Tasmania) —by leave-I present the following petition from 39 associates of the Ulverstone Golf Club Inc. which is not in conformity with the Standing Orders: Having given the most careful consideration to the declared intention of the Government of Australia to legislate on the Sex Discrimination Act, it is the opinion of the following Associates of the Ulverstone Golf Club Inc. that the legislation should not proceed. ''Ambitious self seeking women consumed with their own desires, do not represent the mature moderate aspirations of the majority of Australian women''. And your petitioners as in duty bound will ever pray. Petition received. Senator HARRADINE(Tasmania) —by leave-I present the following petition from 74 associate members of The North West Tasmanian Ladies' Golf District which is not in conformity with the Standing Orders: Having been given the declared intention of the Federal Government to legislate on, ''Sex Discrimination Act'', it is the opinion of the following Associate Members of the North West Tasmanian Ladies' Golf District, that this legislation should be opposed, as, in its present form, it would be detrimental to all facets of the game of golf. And your petitioners as in duty bound will ever pray. Petition received. Petitions received. Senator BUTTON(Victoria-Leader of the Government in the Senate) —I inform the Senate that the Minister for Education and Youth Affairs (Senator Ryan) is leaving Australia today to attend the General Conference of the United Nations Educational, Scientific and Cultural Organisation in Paris from 24 to 28 October and to hold discussions in other European capitals on education and youth policy issues. Senator Ryan will return to Australia on 6 November, and in her absence I will act as Minister for Education and Youth Affairs and Minister Assisting the Prime Minister for the Status of Women. Senator JONES(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) condemns the Queensland Government's policy of secrecy in relation to the blatant sellout of 3.6m hectares of prime rural land to alien interests in that State by refusing to establish a register of foreign-owned land; (b) notes with concern that more than 10 per cent of available agricultural and pastoral land there is already foreign-owned and foreign-controlled; (c) calls on the Queensland Premier, Mr Bjelke-Petersen, to publicly disclose any personal financial involvement in Japanese and South Korean companies that are being given such favourable treatment in tendering and investment opportunities to the detriment of competing Queensland companies; and (d) demands that the Queensland Premier explain to the electors of that State precisely how and where the standard of living of ordinary Queenslanders has improved as a result of alleged progress, growth and development when 60 per cent of resource industries alone are foreign-owned and their profits are pouring out of the country faster than you can say 'multinational'. Senator COLLARD(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) congratulates the Queensland Government on its positive job creation policies which enabled it to decrease jobless numbers and go against the national trend of increased unemployment rates; (b) acknowledges that this is a direct result of strong confidence in Queensland's economy and the implementation of wage pause program money-more than any other State; (c) points out, that in Queensland young people have better opportunity of finding a job than in any other State; and (d) notices that the unrelenting attack on the Queensland economy by certain Federal Government parliamentarians and the Queensland Branch of the Australian Labor Party has been to no avail in view of the upswing in employed persons. Senator BOSWELL(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) recognises that the Queensland Government is the lowest taxed State; (b) deplores the introduction of increased State taxes and charges in Western Australia despite election promises by the Western Australian Labor Party that there would be no immediate rises; (c) regrets that the increased taxes and charges will cost $4 for every man, woman and child in Western Australia; and (d) points that the new direction of Labor Parties in all mainland States has led to higher State taxes and charges. Senator BOSWELL(Queensland) —by leave-I give notice that, on the next day of sitting, I shall move: That the Senate- (a) Congratulates the Queensland Government on its public sector building approvals which, according to the latest ABS figures, are the highest of any State, standing at 25.3 per cent of the national average compared to the New South Wales figure of 23.2 per cent; (b) Notices that public sector building approvals in terms of value are above the national average; (c) Observes that the total public and private sector approvals exceed the per capita ratio of any other State-Queensland, with 16 per cent of the nation's population, accounted for 21 per cent of all dwellings approved in August, whereas New South Wales, with 35 per cent had 28 per cent of dwellings approved; and (d) Condemns Federal Labor Ministers and the Queensland branch of the Labor Party for unwarranted and mischievous attacks on Queensland's building industry. CONSTITUTION ALTERATION (ELECTORS' INITIATIVE) BILL 1982 [1983] Motion (by Senator Mason) agreed to: That the second reading of the Constitution Alteration (Electors' Initiative) Bill 1982 [1983] be restored to the Notice Paper and be made an order of the day for the next day of sitting. [COGNATE BILL: REPATRIATION LEGISLATIONAMENDMENT BILL 1983] Debate resumed from 18 October 1983, on motion by Senator Button: That the Bill be now read a second time. Senator GRIMES(Tasmania-Minister for Social Security) —Mr President, may I suggest that it would be appropriate that this Bill be debated cognately with the Repatriation Legislation Amendment Bill 1983? The PRESIDENT —Is that course of action agreed to? There being no objection, it is so ordered. Senator MESSNER(South Australia)(10.11) —Last night just before dinner I was addressing my remarks on the Social Security Legislation Amendment Bill to issues relating to the assets test and in particular to the questionnaire that was produced some three months ago by the Government in regard to the income test. This questionnaire was sent out to those persons over 70 who, by the Government's decision, would be made subject to the income test. I drew the attention of the Senate to the fact that a statement at the foot of the questionnaire required that an authorisation be given by the pensioner concerned in order that details of that pensioner's financial affairs be made available to the Government by banks, building societies and other institutions of that kind for the purposes of assessing eligibility for the pension. I was making the point that I could not see the need for that authority to be given in light of the general legislative authority which the Government has which enables it to seek out information of that kind. I wanted to draw that matter to the Government's attention, because it has been mentioned in the community as a significant and major source of discontent with the Government's actions in regard to the imposition of the income test on the over 70s. People cannot see the need for it. Certainly if there are deficiencies in the Government's legal authority in this regard it ought to amend the law and do it properly rather than take the kind of action which it has in this respect. I refer to the matter of having people authorise the Government to inquire into their financial affairs in the way in which it sought to do. I make that point because the questionnaire, while it was allegedly designed to obtain information about the income of people over 70 for the purposes of assessment for the income test, looked very much as though it was designed to obtain other information. We all now know that is true. The required information related to people's assets. As a result, no doubt the Government was preparing the way for the introduction of the assets test, which was subsequently announced in the Budget of August of this year. I believe that it was really something of a deception on the part of the Government to seek to have people authorise, if you like, the Government to obtain information of a very private kind about their financial affairs under the guise of seeking information for the purposes of assessment for the income test, while in reality it was seeking information about assets and at the same time denying that it was contemplating introducing any assets test. I think that that point needs to be drawn to the attention of the Government as being one of very significant concern among the community and one which has been mentioned very extensively by my contacts around the place. One or two other matters in regard to the legislation which I think are worthy of note are the moves by the Government apparently in regard to the McLeay report on accommodation and home care for the aged. This does seem to indicate that the Government is moving towards the introduction, again in a piecemeal way , of part of the recommendations of that report. The Opposition does not deny that there are many very significant advantages in some of the recommendations of that report. We support generally the thrust of the Government's intentions in that regard in this legislation. There are other issues which the Government has acknowledged need to be examined in this regard and, no doubt, it is undertaking a very comprehensive review of those points at present. I return very briefly to the major point of the Opposition's position in regard to this legislation-that is, in connection with the payment of unemployment benefit to workers who have been stood down as a result of industrial action outside the work place in which they are engaged. I reiterate the Opposition's position. We will oppose the relevant clauses in the Committee stage of this debate. I understand from public statements this morning that the Australian Democrats intend to support that position also. No doubt the Government has a view as to whether it is prepared to accept that, but we believe that the reasons we will be taking that line of action are cogent. They are rational in terms of the policies of the former Government with regard to industrial relations. I refer in particular to the industrial law amendments which were undertaken by the Fraser Government in October 1979. They sought to introduce more individual responsibility into union affairs so as to ensure that industrial action was a collective responsibility of all union members rather than that of only a section. For that reason, we have opposed the Government's action in this regard in limiting the responsibility of a union in regard to strike action to only a limited number of people so that that greater number of people can be exempt from the effects of their actions. If people are members of trade unions, they should bear equally and collectively the responsibility of their actions. That remains the fundamental principle to which we adhere and it is the reason why we will oppose that clause. During the latter stages of the debate and in the Committee stage, I will be speaking at greater length on that matter. Senator ZAKHAROV(Victoria)(10.17) — The Social Security Legislation Amendment Bill implements most of the Budget's initiatives in the area of social security and reflects the high priority given to social welfare, using that term in its broadest sense, in the Labor Party's election policy and campaign. During that campaign I found widespread concern that more be done for those in the community disadvantaged by age, illness or economic circumstances, often exacerbated by the policies of the previous Government. After six months in Parliament I can understand how honourable senators tend to become isolated from the realities of life for large numbers of Australians who are living in poverty or in other forms of need. We need consciously to fight against that isolation and keep in touch with the real world in which many people spend much of their lives without the security of an adequate income and the things which that income can buy. Opposition senators talk, for example, about freedom to choose a school or a doctor. Large numbers of Australians cannot afford that choice. This Bill aims to make life more bearable for some of the most disadvantaged of those people. I refer to some of the provisions of the Bill which reduce disadvantage and remove discrimination. Firstly, I refer to clause 13 of the Bill which deals with the spouse carer's pension. This clause removes previously existing discrimination. A wife caring for an aged or disabled husband could receive additional pension for his care, but a husband caring for his wife could not. The criteria are now the same for both sexes. The person being cared for must be severely handicapped , an aged or invalid pensioner or a recipient of a rehabilitation allowance who was previously an invalid pensioner and must be cared for under constant care at home. It surprises me that this anomaly persisted until 1983. I am glad that it has now been removed, giving community recognition to the fact that men as well as women can be responsible for the care of others. Part III of the Bill refers in part to hostel care. An anomaly has existed whereby the Government has provided a substantial subsidy for patients in nursing homes but this subsidy has not been available to those in hostel accommodation, many of whom through age or disablement need personal care, for example, help with dressing and bathing. This Bill introduces a subsidy of $10 a week for each person requiring hostel care and an additional $40 a week for each person needing personal care. Apart from the obvious direct benefit of this change, it may relieve the pressure on nursing homes which presently accommodate some patients who might be more appropriately accommodated in hostels. This Bill makes a number of provisions relating to the unemployment benefit. It was a significant acknowledgement of the high priority given to reducing unemployment and its attendant hardships that the first Bill passed by this Senate increased the rate of unemployment benefit for single adults. This was in line with our commitment to reduce progressively the difference between the unemployment benefit and the standard pension rate. The next step in this progression is the provision in this Bill of a further increase, bringing the single rate to $73.60-half the married rate plus $2. This Bill also provides a much needed increase in the unemployment benefit for those aged 16 to 18 years. It has seemed to me that the decision makers on these matters have been out of touch with the real situation of many of the young people who are expected to live on a much lower income than someone a year or even a few months older. Senator Collard —I raise a point of order, Mr Acting Deputy President. I draw your attention to the same standing order that you invoked last night, that is, standing order 406. The honourable senator seems to be reading her speech without even any attempt to use it as copious notes. The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! I point out that I did not invoke any standing order last night; I was not in the chair. I have been watching Senator Zakharov very closely and she is referring to notes. I invite her to continue. Senator Walters —She has to make a pretence of not reading it. The ACTING DEPUTY PRESIDENT — Order! Senator ZAKHAROV —Would the honourable senator like to see my notes? She would see that they are in my handwriting and, as I do not have good handwriting, I have to concentrate on them. Some members of the Opposition have said that they believe 16-year-olds to 18-year-olds should still be supported by their families . The fact is that, for various reasons, many young people of that age are on their own and need an income to survive. Sixteen-year-olds eat as much as 18- year-olds; many parents would say they eat more. A 16-year-old has the same fares, clothing and shelter needs as an 18-year-old. At the same time, 16-year- olds are less likely to have adequate support systems in the community. They do not normally have friends, for example, who have accommodation of their own to offer in an emergency, and older people are more likely to know how to seek help from community organisations. We cannot ignore the poverty of young people and at the same time piously deplore the petty thieving and juvenile prostitution which are its corollaries. In this Bill the benefit for 16-year-olds to 18-year- olds has been increased by $5 a week, and I hope we will be able to increase the unemployment benefit for that age group to a realistic level during this term of Parliament while concurrently seeking an alternative range of services and income support schemes for young people. I share Senator Messner's disquiet about the gap between the unemployment benefit and the tertiary education assistance scheme. I assure him that the Government has not forgotten its commitment to people dependent on TEAS but it is a matter of priorities. I remind him that this Government has done more for students in relation to both the level of the TEAS allowance and its means test than the previous Government did in recent years. I refer now to a couple of matters which do not affect many people but which are very important to the people whom they do affect. Under the amendment to section 6B of the Act, the family allowance will now be payable for the six weeks after students leave school and before they become eligible for the unemployment benefit. This removes the anomaly whereby school leavers cannot claim the benefit and are thus still dependent on their parents but on the other hand their parents are no longer able to receive the family allowance. Clause 9 redefines income to overcome the anomaly which received a lot of prominence earlier this year whereby the receipt of other forms of assistance, such as emergency relief after a bushfire or flood or insurance payments and compensation for loss of property, was regarded as income for the purpose of determining eligibility for benefits. Those sorts of payments will no longer be regarded as such. Senator Walters —Mr Acting Deputy President, I take a point of order. Last night , you took a point of order because someone was reading a speech. I think the honourable senator is making no attempt not to read her speech. Indeed, she is holding it up in front of her and very obviously reading it. Mr Acting Deputy President, as you took a similar point of order last night, I would imagine that you would view this action with a bit of concern. Senator Grimes —Mr Acting Deputy President, I ask you to take into account that what we are seeing here is a deliberate attempt to obstruct the honourable senator from making a speech. This is a omnibus Bill which contains many clauses referring to different parts of the legislation. The honourable senator has obviously prepared her speech carefully, which is more than one can say for the honourable senator who took the point of order. In fact, Senator Zakharov is reading from notes she prepared herself. I think it ill becomes a senator like Senator Collard, who reads speeches prepared by mining companies, and Senator Walters, who would not make a speech without referring to the Medical Benefits Fund of Australia Ltd to see what she could say, to try to obstruct another senator making a speech. Senator Giles —I take a point of order. The ACTING DEPUTY PRESIDENT —I will make a ruling at this stage. Senator Giles —I have been waiting for the opportunity to say this for a very long time. Standing order 406, to which we are referring, states: No Senator shall read his speech. I submit that this rule has no relevance whatsoever to the women who now grace this chamber and I ask you to rule accordingly, Mr Acting Deputy President. Senator Walters —Mr Acting Deputy President, may I also make some statements? The ACTING DEPUTY PRESIDENT —No. I intend to make a ruling on Senator Giles' point of order first. In view of the equality of senators in this place, there is no point of order in respect of the application of the standing order to women. I have already ruled on a similar point of order to that of Senator Walters. I have been watching Senator Zakharov carefully. She has copious notes to which she is referring. I rule that she is not reading a speech. If Senator Walters had been here last night she would have heard what the President said when I raised a similar point of order. I invite her to read his comments if she has not already done so. I call Senator Zakharov. Senator Zakharov —Perhaps in answer to the point of order I might make a personal point. The ACTING DEPUTY PRESIDENT —I ask the honourable senator to continue. Senator ZAKHAROV —This Bill also provides assistance for staff salaries, meals and accommodation for homeless persons. This is an area of urgent need because traditionally the homeless person has usually been in the elderly category. Now there are large numbers of young people who are also homeless and needing help. Clause 35 of the Bill allows for the payment of pension directly into a bank account, a credit union or a building society. This will lessen the opportunity for fraud or theft. A few years ago a student of mine aged then about 13 years, but looking much younger, managed to cash four pension cheques that she found in letterboxes on her way home from school. If shops apparently without question can cash cheques presented by a child it must be very easy for adults to cash other people's cheques. Payment to accounts would remove this possibility, thus saving government money, but more importantly obviating the delay and difficulty for the lawful recipient of the cheque who now has to get a replacement. I come now to the rule introduced by the previous Government which denies unemployment benefit to a trade unionist stood down because of a strike of members of his or her union in another place of employment. We had a situation in Victoria a few years ago in which large numbers of unionists were unable to work because of a strike at a power-station complex. Thanks to the provisions of that discriminatory rule, every relief organisation in Melbourne was drained to provide for the families of unionists whose only reason for disqualification from benefit was that they belonged to a union whose members were on strike in another part of the State. Since I know that many non-unionists are ignorant of what happens during a strike, it needs to be noted that the unionists themselves will receive neither wages nor unemployment benefit. Their families will be supported in the traditional way in which unionists have always supported their mates. But members of unions not on strike at the same place of work and those stood down in other places will be entitled to the unemployment benefit. Therefore, I am strongly opposed to Senator Messner's proposed amendment. I can understand the Opposition coalition parties opposing this clause. They have a long history of union bashing and opposition to the organisation of workers, because it threatens the interests of the people they represent, or those who are the basis of their support, but I am genuinely surprised that it is reported that the Australian Democrats also are reported to oppose the clause , because the existing rules go against what I understood the Democrats to hold dear. The rules introduced by the Fraser Government are undemocratic and unjust, discriminating against whole families because one of their members has exercised his or her democratic right-I would say duty-to belong to a trade union. I referred a moment ago to a particular dispute in Victoria, where the operation of this disqualification caused a great deal of hardship. At that time even Liberal supporters in my work place donated money to help those in need. Surely, the Democrats do not wish to see children suffer because their father or mother belongs to an organisation whose members in another place altogether are on strike. Do the minders really mind what happens to innocent people? This Bill provides real assistance to many of those in greatest need. I hope, as economic circumstances allow, that our Government can move further in the direction of a co-ordinated equitable policy of income support and other services for all those who have much less than a fair share of this country's wealth. Senator COLLARD(Queensland) —by leave-I wish to make a personal explanation. During the discussion which we had in the last few minutes, the Minister for Social Security (Senator Grimes) mentioned that I had come into the Senate with prepared speeches by mining companies. I take exception to that. I think Hansard would probably wish that my speeches were better prepared or prepared by somebody other than me. I think the last time I could claim to have had a prepared speech was for my maiden speech, for which I was given the indulgence of this House, the same as everbody else is. I completely reject the allegations by Senator Grimes. Senator WALTERS(Tasmania)(10.33) -Mr Acting Deputy President-- Senator Grimes —Stop reading. Senator WALTERS —Senator Grimes can never pull that one on me. The Opposition does not oppose the majority of the various provisions that the Government has brought down. Indeed, the Opposition applauds many of the aspects of the Government's omnibus Bill, as the Minister for Social Security (Senator Grimes) rightly calls it. It is indeed an omnibus Bill. It is consistent with the piecemeal approach of this Government. I believe the Government should rethink the whole of the social security area. It has gone into areas where angels fear to tread and taken off certain aspects of social welfare-I will come to them later-and added others. It has thereby created tremendous anomalies in social welfare. The Government does not have an original thought in its mind; it has absolutely no innovative thoughts at all. The Government which preceded the Labor Government, the Liberal Party Government, brought in a family allowance. We automatically tied the level of age pensions to the consumer price index. Original thought had been given to those areas. But the present Government cannot do more than take off, put on and touch up around the edges. This creates tremendous anomalies, as I have said already. I will deal with some of those anomalies. Let us look at what the Government has done to the over-70s. Even though this legislation does not include matters relating to the over-70s, it certainly reflects the tenor of the Government's social security legislation. The over-70s have certainly taken a bashing. The Government introduced an assets test that was discriminatory from the very beginning. It allows people who have invested their money in certain areas to get away with those large amounts of investment. But it has created problems for the person who has not invested large sums of money in areas such as art, jewellery and other comforts like yachts, homes and caravans. There really are grave anomalies in this legislation. It has attacked the under-70s who have just bought their own homes and perhaps a small holiday home. It is these people whom the Government has said are not entitled to these meagre things. Of course, the Government has not come to any firm decision about the assets test. The over-70s have lost their non-income test related benefits. Altogether the assets test is creating tremendous problems for the elderly. As I said before, I have gone around units and spoken to people in their 80s. They said they will now have to change their accommodation arrangements because the Government has taken away the paltry amount that they were receiving free of the incomes test. Senator Crowley —Paltry? Senator WALTERS —Senator Crowley does not understand the situation when she says 'paltry?'. The amount was very small. It was just over $50 a week, but it was important to those people who had arranged their finances for the rest of their lives. They had arranged their finances for accommodation and had arranged to spend that small amount of money on food. Now that has been taken away from them they will have to move from their accommodation into lesser forms of accommodation. That is a very traumatic experience to be forced on those people at 80 years of age. The Opposition applauds the Government for some measures in this legislation. I was delighted to see the unemployment benefit increased for both the under-18s and the over-18s. We have to look, of course, at what the Government has done about the tertiary education assistance scheme. The gap between it and the unemployment benefit is widening considerably. It is creating great hardship for students who receive TEAS. Senator Tate —I raise a point of order, Mr Acting Deputy President. I believe that the honourable senator is digressing from the subject matter of the Bills before the chamber and ought to be called to relevance. The ACTING DEPUTY PRESIDENT(Senator Lewis) —I understand that this is a cognate debate. I do not see that what Senator Walters is debating at present is out of the range of the Social Security Legislation Amendment Bill and the Repatriation Legislation Amendment Bill. There is no point of order. I call Senator Walters. (Quorum formed) Before I call Senator Walters, may I say that I recognise that Senator Walters is one of the best debaters in the chamber and well able to care for herself in exchanges across the floor. Nevertheless, the Senate must be orderly and she is entitled to the protection of the Chair. I call Senator Walters. Senator WALTERS —Thank you very much, Mr Acting Deputy President. I appreciate those remarks. As I have rather flimsy notes, I am not quite sure where I was up to before the quorum was called. Perhaps I will just go back to the assets test and the fact that those people who are in the later years of life are to be disadvantaged. I think I have covered that aspect fairly well but it is a situation where the Government has a general philosophy of not treating all people equally. It seems to me that many people in their eighties who have paid their taxes all their lives- Senator Tate —All of your friends. Senator WALTERS —Well, they certainly have. All my friends who have paid their taxes all their lives have decided now that they should be entitled, as I said earlier, to that small amount that the Government was giving them, but the continuity of that payment has been destroyed by the present Government. The tertiary education assistance scheme is again an area in which there is great discrimination because we now have a situation where people who are over 18 years of age and who are single and with no dependants at all receive $73.50 unemployment benefit each week. I do not think that that is too large an amount by any manner of means; but, if we compare that to the TEAS allowance, we will see where the anomalies exist. The area with which the Opposition has the greatest concern is section 107 of the Social Security Legislation Amendment Bill that amends the principal Act. I will read it because it deals with unemployment benefits for those who are on strike or associated in some way with a striking union. Proposed new section 107 (4A) states: Sub-section (4) does not, by reason of paragraph (4) (b), disqualify a person from receiving unemployment benefit in respect of a period if the Director- General is satisfied that the place or places at which the relevant industrial action occurred was not or were not a place or places at which the person, if he had not been unemployed- (a) would, throughout or for a substantial part of that period, have carried on his employment or work; or (b) would, throughout that period, have regularly attended for the purpose of being organized in his employment or work. All that means-as mentioned in the second reading speech of the Minister for Industry and Commerce (Senator Button) who delivered that speech on behalf of the Minister for Social Security (Senator Grimes)-is that direct participants in a strike will indeed not qualify for the unemployment benefit. Members of a striking union at the establishment at which a strike takes place will also not qualify. So, if a person is working in an area in which the rest of the trade unionists are on strike, that person, if he were stood down, would not be entitled to the unemployment benefit. However as the law stands now, if that person's union is on strike, if he is perhaps employed in the industry, in the company next door, and if he has voted for the strike and is stood down because there is no work available because some of his members are on strike, he can collect unemployment benefit. This will change under the Government's amendment. People who are stood down through lack of work and who are not members of the union at the establishment at which the strike takes place and who are not themselves on strike will qualify for unemployment benefit. This is an area that is of great concern to the Opposition. Indeed, if we go back a few years, we will find that it was also of great concern to the Australia Labor Party. Indeed, Mr Chifley-and I doubt whether the people opposite me today would be critical of that leader; he was a respected Labor Leader of the time and he certainly was not a pro-Moscow leader-when he was in government in 1947 said that a person who was a direct participant in a strike was not paid unemployment benefit. If he was not a direct participant but was a member of a participating union, and employed at the place of industrial action he was not entitled to receive unemployment benefit. If he was a member of the participating union he was not paid unemployment benefit even though he was not directly participating and was not employed at the place of the industrial strikes. The law at that stage was far stricter than the law is at the moment. It said that if a person was a member of a non-participating union which did not disown the strike, in other words, if he was a member of another union, that union had to disown the strike. If it did not do so, then he, too, was not entitled to unemployment benefit. So the law as it stands now is far less strict than the law which applied in 1947. I believe that this points very clearly to the road that this Government is taking. It started off by saying that it would govern with union accord. It told the Australian people that it would legislate in the area of the economy of this country only after the unionist had agreed exactly with it, but it will not agree to do anything that the unions do not agree to. Consequently we had, at the earliest opportunity, the downgrading of this legislation that now insists upon the taxpayer coming to the party where industrial action takes place. It seems to me to be an incredible situation that if a union, for one reason or another, wants to go on strike, the taxpayer has to foot the bill for the unemployment benefit for which those people can apply. I believe that the sophistication of the present method of strikes makes this legislation quite a farce. We have areas in which very few people are taken out on strike but which cause considerable disruption all over the country. A small group of people will go on strike and other people can be stood down because there is no work available for them. Under this new amendment they will be entitled to unemployment benefit. There will be no need for them to pressure their union or their mates into going back to work so that their families can be looked after. Their wives can collect unemployment benefit if their husbands are on strike. The husbands who are stood down, of course, can also get unemployment benefit. The Opposition is concerned about the Government's decision in this area. Senator Messner has already said that the Opposition proposes to move an amendment. We will discuss the amendment at the Committee stage. I am delighted to know that the Australian Democrats are considering supporting the Opposition' s amendment. I will talk further about it at the Committee stage. Senator HAINES(South Australia)(11.50) —I think I will be setting a precedent in this debate by paying some attention in the first few moments of my speech to the Repatriation Legislation Amendment Bill 1983. We have been conducting, allegedly, a cognate debate on this Bill and the Social Security Legislation Amendment Bill 1983 but, as far as I am aware, very few comments have been made about the Repatriation Legislation Amendment Bill. The Australian Democrats congratulate the Government on fulfilling a significant range of election promises which were made to repatriation benefit recipients in this country. In particular, income limits for fringe benefits eligibility are to be indexed and, in periods of high inflation, of course, that is something devoutly to be wished . The other major amendment is the ending of an anomaly in that women have been able to qualify for a service pension if they have been providing constant care and attention to a severely handicapped male service pensioner but the reverse has not been the case. This legislation now corrects that anomaly, and I am pleased to see it. Senator Walters seemed to spend most of her time debating a piece of legislation which not only has not been introduced into this place but also, if the signs are an accurate indication, may never be introduced into this place. I am referring to the Government's proposed incomes and asset test legislation. I am not quite sure whether Senator Walters did that because she did not have a great deal to say about the omnibus Bill which is before us today or because she had prepared a speech for distribution in Tasmania and was trying to hide the fact that the Liberal Opposition has indicated that it intends to support the income and assets test legislation if and when it is introduced into this place. Anybody who believes that the Opposition will repeal it, if and when it ever gets into government, will believe anything. I also point out that people over 70 years of age, who used to be able to benefit from the frozen means test, are suffering simply because the Liberal Opposition supported the Government's legislation in May and June of this year, and without the excuse, I might add, that it was a Budget Bill. Anyone concerned about the problems that are facing the people over 70 because of a means test on their pension can blame the Liberal Opposition as much as they blame the Labor Government. Senator Messner —Did you vote against it? Senator HAINES —I spoke against it very strongly, Senator Messner. I remind you that whenever we call a division on something in which you are in cahoots with the Government-- The ACTING DEPUTY PRESIDENT(Senator Lewis) —Order! I ask Senator Haines to direct her remarks through the Chair. Senator HAINES —Certainly, Mr Acting Deputy President. I point out to you, sir, that whenever the Australian Democrats call a division on something in which the Liberal Opposition is in cahoots with the Labor Government, as it was with regard to the over-70 means test, the Opposition accuses us of grandstanding. It cannot have it both ways. This particular legislation is also predominantely aimed at increasing assistance to the needy and the disadvantaged. It does it in two major ways. The first is by increasing levels of payment. For example, the rate of benefit to unemployed single adults with no dependants has been increased by $4.95 a week, bringing it to $73.60, which is just slightly over half the married rate. I, of course, agree with everything Senator Messner said yesterday with regard to people having to be given adequate levels of financial support when they are needy, disadvantaged, unemployed or elderly, but I wonder why he and his party did not take this point of view during the seven years they were in government. We could, of course, argue forever about what the levels should be. These levels are at least an improvement on what they have been and are an acknowledgement by this Government that we have a responsibility adequately to support those people who are affected by economic and other problems in Australia. The second way in which this legislation aims to provide additional assistance to those in need is by extending a range of benefits. These include the introduction of a zone allowance, which I point out has been a part of Australian Democrat policy for a long time. The legislation extends the mother's and guardian's allowance to a married pensioner with a child or with children in the case where the spouse of the person lives apart because of illness or infirmity. Again, this is a long overdue removal of an unnecessary anomally. This brings me to that section of the legislation for which I have no support, that is, sub-clauses (2) and (3) of clause 30. According to the second reading speech: This Bill also provides for the modification of the existing rule that disqualifies a trade unionist who is not himself on strike from receiving unemployment benefit if his unemployment is due to other members of his trade union being on strike. The second reading speech goes on to say: With the introduction of this amendment, the rules governing qualification for unemployment benefit in strike situations will be as follows- (1) direct participants in a strike will not be qualified for benefit- I add that, of course, neither should they be- (2) members of a striking union at the establishment at which a strike takes place will not be qualified for benefit- again, neither should they be- (3) members of other unions at the establishment at which a strike takes place who are not themselves on strike will be qualified for benefit- That is acceptable enough since, presumably, members of other unions can have no control over what a separate union or its members do. The second reading speech continues: (4) persons stood down at other establishments as a result of a strike will be qualified for benefit, irrespective of their union membership. It is about that section that I have considerable misgivings. It seems to me that in allowing a member of the union who is stood down at a particular plant or site, because of action taken by his union at another plant or site, to receive the unemployment benefit or to be subsidised in some way by the taxpayer is removing the last remaining restraint on some unionists to force them to act with some sort of social responsibility. These people do have some say in what the members of their union do or they should have some say in what they do. Therefore, any action which their fellow union members take which affects them is as much their responsibility as their brother unionists' responsibility. They must accept responsibility for that and any problems that arise from such action . Senator Zakharov made the point that if members of a union are out on strike ' their mates' come in and help them with some form of donation. If they are concerned in that way, they can extend that action to members of their union who are stood down at other sites. I point out, of course, that legislation still exists in this country which says that the wife of a striker is entitled to make a claim for unemployment benefits. That legislation still stands. It applies in this case. If the spouse is working, of course, the unionist who is on strike or who is stood down will not be able to qualify for unemployment benefits. So in effect the removal of this clause will have an impact almost entirely on single unionists. Even if it did not, I would hold to the original principle that I stated: All members of a union must be held responsible and must be prepared to accept the responsibility for actions of other members of that union. Senator Crowley —Even from different States? Senator HAINES —If they are members of the same union, they must, I reiterate, accept responsibility for the behaviour of their fellow unionists. If they are not members of the same union, they do not have to do so. Senator Crowley —That is not quite how the real world is. Senator HAINES —Then perhaps they ought to think a little before they act irresponsibly and anti-socially. The Minister says that this is a case of discrimination against trade unionists. I suggest that it is perhaps retribution against trade unionists who choose to act irresponsibly and with no real thought for the results of their actions either on society generally or on other members of their union at different sites. That remains true whether they are within the same State or within the same city. I cannot see a great deal of point in worrying about distance. It is, therefore, the intention of the Australian Democrats to support the amendment to delete clauses 30 (2) and 30 (3), lines 30 to 43. Unlike other senators on this side of the House, I do not feel moved to repeat at the Committee stage what I have said in my second reading speech. Senator JESSOP(South Australia)(11.01) —We are dealing with a significant amount of money as far as the Budget is concerned. Probably about 30 per cent of the Budget is devoted to social welfare and related matters. First, I should like to refer to the repatriation part of this cognate debate and to indicate my interest in the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam. It is currently being conducted into the possible effects of agent orange on the health of Vietnam veterans and their families. I am interested in this matter because the Senate Standing Committee on Science, Technology and the Environment made an inquiry into exactly the same subject and I presented that report to the Senate last year. The Minister for Veterans' Affairs at the time, Senator Messner, showed great interest in that report. The Committee believed that we went into the matter in great detail. Significant witnesses came before us, including people of the calibre of Dr McBride, the physician who became world famous for his work on thalidomide and the mutogenic effects it had with respect to deformity of the foetus. Several representatives of the Vietnam Veterans Association and their scientific advisers gave evidence. We thought that we came up with quite sensible conclusions based on scientific fact. For example, we said that there was no possibility that the wife of a Vietnam veteran who had been exposed possibly to agent orange in Vietnam 15 years ago could produce a deformed child because of such exposure, simply because in order to produce a deformed child as a result of exposure to a toxic chemical of that type the female has to be exposed to it during the first 12 weeks or so of pregnancy. So we tried to alleviate the concern of the wives of Vietnam veterans in that way. However, in that report we said that we had concern about the possible carcinogenic effects of anti-malarial drugs. We said that we had concern about the use of pesticides for the removal of mosquitoes and the prevention of malaria, and so on. We said that more work needed to be done on those matters to satisfy us that the health of Vietnam veterans and their families had not suffered as a result of such things. We also pointed to the fact that we could not make a conclusive report simply because two scientific studies were being conducted-they are still being conducted-one of them dealing with the mortality rate amongst Vietnam veterans. Of course, one has to look at this matter having regard to the epidemiological evidence throughout the community as a whole. One must look at the age group of soldiers who did not go to Vietnam and at citizens throughout the community in a similar age group to form some sort of statistical pattern, and see whether evidence presented could indicate that perhaps Vietnam veterans are suffering more or are dying earlier than other people in the community of a similar age group. We were also anxiously awaiting the production of a report on morbidity. I understand that that has been changed to a psychiatric study. Both of these reports will not be available until about the end of next year, to the best of my knowledge, so that the Royal Commission will inevitably come to the same conclusions. It will be looking at the same people and the same evidence. The Opposition of the day seemed to claim that royal commissions had some great overriding powers and authority way above those which existed for the Senate committee. That is a lot of nonsense, because at least a Senate committee has an opportunity to present a report and then follow it up by asking the Govenrment what has been done about that report. A royal commission presents a report, but quite frequently such reports are shelved and gather dust over the years, without any action at all being taken. What concerns me is that the current Royal Commission with respect to Vietnam veterans' health is costing this year $3.7m. If it drags on for a year or two in order to examine the reports to which I have referred, which are not due to be presented until next year, it will cost another $3m or $4m. That is the sort of cockeyed approach of the Government today. That $7m or $8m, or whatever it costs , could well be employed in providing a little more financial benefit to Vietnam veterans and others through the Repatriation Act. It is interesting to observe that the inquiry conducted by the Senate committee cost about $100,000 to $150, 000. So here is this Government, uncertain of many aspects of its responsibilities, handing matters over to royal commissions willy-nilly to give it some sort of breathing space, and at tremendous cost to the taxpayers of Australia. I am anxiously awaiting the report of that royal commission. I hope that the Minister for Social Security (Senator Grimes) will ask his colleague to accelerate the process so that we can examine the royal commissioner's report and compare it with the report of the Senate Standing Committee. I suggest that there will not be much difference. The then Minister, Senator Messner, recognising what we had to say about Vietnam veterans, took action as a result of some of our recommendations. He anticipated some of the things that we were going to say because of the evidence presented to us. I commend him for that. He extended the counselling facilities available to Vietnam veterans. He made changes to the Act to assist them more than they had been assisted before. I compliment him on recognising the value of the Committee report by taking those steps. I would like to talk a little about the Opposition's concern with respect to the payment of unemployment benefits to unionists who are not involved in a strike. As Senator Grimes mentioned in his second reading speech: This Bill also provides for the modification of the existing rule that disqualifies a trade unionist who is not himself on strike from receiving unemployment benefit if his unemployment is due to other members of his trade union being on strike. The existing rule was introduced in October 1979 and has the effect of discriminating against trade unionists. Under the proposed amendment, a trade unionist will not be disqualified for the purposes of unemployment benefit if the industrial action did not occur at the place where he was employed. I am very worried about that because, in my opinion and in the opinion of many others in the community, this country has to do all it can to prevent strikes. I think this measure will encourage strikes. I will be very concerned if we pay unemployment benefits to people who are not directly involved in a strike. What will happen, for example, if the Australian Council of Trade Unions in its drive for a 38-hour week perhaps goes to the extreme of creating a national strike? That would mean that all the trade unionists throughout Australia would have to be paid an unemployment benefit at a tremendous cost to the community. What we ought to do, of course, is strengthen our industrial relations laws so that we can discourage strikes, if that is possible. I have raised the question of demarcation disputes in previous debates. What do demarcation disputes really have to do with the Government? I think a demarcation dispute should be argued before a disputes council of the ACTU. Its members are the experts. They can judge whether a seaman's work has to be carried out in this way or that way or whether a member of the Merchant Service Guild of Australia has to do certain types of work. I think that decisions on the question of demarcation in those areas should be and ought to be the responsibility of the ACTU. It disturbs me that because of those sorts of disputes the goods of Australia have been held up on the waterfronts, for up to three months in many instances, to the detriment of our overseas trading credibility. I believe that the ACTU happens to be the authority to deal with those sorts of disputes. If that could be done strikes would become fewer and fewer and our credibility as a trading partner overseas would be restored. I refer again to the matter of an unemployed person who went to Adelaide recently to demonstrate against the development of uranium. The Government is paying an unemployed benefit to that person who came from Sydney. He was over there trying to prevent uranium development at Olympic Dam, which would provide about 10,000 jobs for people in South Australia and in other parts of Australia who want to work if that project goes ahead. Let me comment on that matter. During the last election campaign I was in Port Augusta introducing a Liberal Party Senate team colleague to the people in the business area. I was walking along Commercial Road and I came upon two young men; one was very casually, but neatly dressed. He came over to me and said: 'Senator Jessop, what will you do for me on Saturday at the election?' I said: 'What do you want me to do?' He said: 'I want a job'. He said that he was anxious that mining in that part of South Australia should commence because that was the sort of work he wanted to do. His friend sauntered over to me and said: 'I'm going to vote Labor because Labor will increase the dole. It will give me more dole'. Those were the attitudes of two young men. One wanted to work; the other was quite satisfied to receive an additional dole payment in order to remain unemployed. I was so impressed with the first young man that I succeeded in getting him an interview with a company in that area and opened up the possibility of a job opportunity for him. That story illustrates the attitude amongst some people in Australia. Some people anxiously want to work and I believe that they represent the majority of those who are unemployed at the moment. There are others who simply just do not want to work at all. In my opinion the amendment which will be brought up in the Committee stage and which has been laid on the table now by Senator Messner is worthy of support because it removes an incentive for people to go on strike. I think it is bad to pay people when they go on strike. By accepting this amendment I think we will go part of the way to encourage responsible trade unionists to attend their meetings in order to speak against unreasonable strikes. If they did that there would be a lot less trouble in the community. We would have a lot fewer strikes and a lot less disruption to the workers not involved directly in any strike which is contemplated. Senator TOWNLEY(Tasmania)(11.17) —I wish to mention two matters in relation to the Social Security Legislation Amendment Bill. First of all, I am pleased to see that the Government has brought in a zone allowance increase for pensioners- all those who are in receipt of a pension benefit or sheltered employment or rehabilitation allowances. For a single person that will mean an increase of $7 a week, for a couple $12 a week and for a child $3.50 a week. That is something which I suggested very long ago when I first came to this House and I am glad to see that some action has been taken in that regard. The second area relating to pensions on which I wish to speak is along the same lines. The other day I read an article-I think its title was 'Solar Energy, the Energy of the Rich?'-and the point brought out in that article was that it costs a considerable amount of money to heat houses in many of the areas of this country. The article also said that some people could not afford to heat their houses to the degree that they should be heated. I believe that the houses in which pensioners live often fall into that category. Many pensioners cannot afford to place in the ceilings and walls of their premises the insulation they need for efficient heating of a house. I would like to suggest that at some stage the Government look at considering a way of adding an increment, something along the line of the increment that has been added for expensive living zones, towards the cost of a pensioner's heating. Obviously somebody who lives in Cairns does not need to pay as much towards heating a house, whether it be by way of wood, oil or electricity, as somebody who lives in Canberra or in other colder areas of this country. Senator Messner —Hobart? Senator TOWNLEY —I will not mention Tasmania because I must repeat here and now that Tasmania is not nearly as cold as many people think. It is certainly not as cold during the winter as this city is. If we accept that living is more expensive in some areas of the country and that we need to add to the pensioner zone allowance, I think that the Government , when the country can afford it, should look at some way of adding a heating allowance to pensions. I have mentioned this matter also on other occasions with regard to pensions. I turn now to the union situation. Senator Zakharov said that the Liberal Party and the coalition had a long history of union bashing; I think those were her words. I do not think that is true. Many people who vote for the Liberal Party are unionists. I know very many of them who are in the Liberal Party organisation. It would not be to the coalition's advantage to take a line of union bashing. A major aspect of this legislation that concerns the Opposition is the provision for the payment of unemployment benefit to people who are out of work because of strike action. I think that most people in this country would say: 'Why on earth should the taxpayer be expected to help finance a strike?'. In his second reading speech, the Minister for Industry and Commerce (Senator Button) stated: This Bill also provides for the modification of the existing rule that disqualifies a trade unionist who is not himself on strike from receiving unemployment benefit if his unemployment is due to other members of his trade union being on strike. The existing rule was introduced in October 1979 and has the effect of discriminating against trade unionists. Under the proposed amendment, a trade unionist will not be disqualified for the purposes of unemployment benefit if the industrial action did not occur at the place where he was employed. In that second reading speech, he continued: With the introduction of this amendment, the rules governing qualification for unemployment benefit in strike situations will be as follows- (1) direct participants in a strike will not be qualified for benefit I think that rule is quite reasonable. He continued: (2) members of a striking union at the establishment at which a strike takes place will not be qualified for benefit (3) members of other unions at the establishment at which a strike takes place who are not themselves on strike will be qualified for benefit The Opposition takes exception to the final rule, which is: (4) persons stood down at other establishments as a result of a strike will be qualified for benefit, irrespective of their union membership. Currently, a trade unionist who is stood down or loses his job permanently because of industrial action by members of his union, no matter where, is disqualified from receiving unemployment benefit. The effect of the Government's amendment will be that a trade unionist will not be disqualified from receiving unemployment benefit if the industrial action did not occur at the place where he was employed. The current rule was inserted by the previous Government in October 1979 on the grounds that responsibility for sponsorship or support of a strike by a trade union must be accepted equally by all members of that union. I do not think that many people in the country would take exception to that rule. The essential point is that this was an industrial relations measure and not a social welfare one. The purpose was to enforce a sense of responsibility on militant unions and to make them more aware of the effects of their actions. In addition, the displeasure of fellow trade unionists stood down and denied unemployment benefit provided a useful tool for moderate union leaders seeking to bring a branch that is out of line back into line. It is likely that, in enforcing this rule, innocent trade union members and their families might be penalised, but the action of their fellow union members is the reason for their being disadvantaged, not the social security system. If the prime purpose of section 107 is to impose responsibility on trade unions and provide a further means of settling industrial disputes, I believe that the Government's proposed amendment should be opposed for all the reasons that have been given here today, including those given a moment ago by Senator Jessop. I believe there is a need to ensure responsibility and accountability of unionists to the community. They have to acknowledge collective responsibility. I do not think that unemployment benefit should be used to finance union actions . When the Fraser Government brought in the legislation of 1979, it sought to formally encapsulate in the Social Security Act principles which had first been enunciated and laid down by the Chifley Labor Government. These principles were laid down a fair while ago, I admit, but let me tell honourable senators what was said in a letter from T. H. Kewley in Australian Social Security Today. In quoting a letter from Senator McKenna, who was Minister for Social Services, to the Director-General of his Department, he said: All unions represented at the conference with me in Sydney on 23 April accepted the principle that the Commonwealth could not permit unemployment benefit to be used for financing strikes. For the life of me, I cannot see why that principle is now being changed. In Queensland, on 25 February 1948, Prime Minister Chifley said: In connection with the payment of unemployment benefit to persons involved in or affected by the present Queensland industrial dispute, the Social Services Consolidation Act provides that benefit is not payable to an applicant whose unemployment is due to him being a direct participant in a strike. In relation to other persons involved in or affected by an industrial dispute, the Minister for Social Services has issued instructions which are being observed by the Department of Social Services in Queensland at present and throughout the Commonwealth. These instructions are the outcome of a full consideration of the relevant parts of the Act of a Cabinet sub-committee in early 1947. In brief, the instructions embody the following principles: In respect of unions on strike and unions sponsoring a strike of its members in key positions, members of these unions whether directly participating in the strike, or unemployed as a direct or indirect consequence of the strike are not to be regarded as eligible to receive unemployment benefits. In respect of unions not on strike, or apparently having no members on strike members of these unions are to be regarded as eligible to receive unemployment benefits. Finally, he said: A person is not to be disqualified for unemployment benefit by reason only of his refusal to undertake work available through a strike or lockout. I do not think those principles have been disputed by Federal Labor Governments until now. I think it was in 1979 that Senator Grimes then in opposition said: I am not in favour of paying unemployment benefits to people who are on strike. At the same time, Senator Cavanagh stated: The Opposition has never supported the payment of unemployment benefits to strikers . . . We are getting to that stage. My philosophy is that strikes should not be financed directly or indirectly by money allotted for social security benefits. We have to remember that it is taxpayers' money. If we have any money to spare, let it go to the truly needy, not those who choose to make themselves needy. Senator WATSON(Tasmania)(11.29) —I wish to speak but briefly on some aspects of the Social Security Legislation Amendment Bill. From the outset, I acknowledge that certain parts of the Bill are commendable, but I think it is the role of the Opposition to point out to the Government and to the people at large those features which raise community problems. It is on those areas that I propose to address my remarks. Before doing so, I wish to correct a number of inaccuracies in the remarks of a previous speaker, a member of the Australian Democrats. As late as yesterday, the Canberra Times reported remarks by the Leader of the Opposition, Andrew Peacock, when opening the campaign for the Liberal Party in relation to the by-election for the Queensland seat of Moreton. Despite Senator Haines's assertion, Mr Peacock is reported as having quite categorically said: A Federal Liberal Government would reverse the Labor Government's decisions to increase tax on superannuation lump-sum payouts and- here are the important words- to impose an asset test on pensions . . . I think that completely refutes Senator Haines's assertion; we would overturn those two measures on return to government. My problems in relation to this Bill arise from the amendments to section 107 of the Social Security Act. These relate to the payment of the unemployment benefit to certain categories of people who are on strike and who have been affected by strikes. I think the silent majority in the community needs to be satisfied by the answer to this question: Are we creating a situation which will tend to enable strikes to take place a lot easier, with the consequence to the community where a lot of people financially get hurt? Unfortunately, it is often those other people in the community who are mainly disadvantaged by strike action. In other words, I believe that some union leaders lead their members into strike action for sometimes trivial and unjustifiable causes. Traditionally the strike has been regarded as a weapon of last resort. Unfortunately, a minority of union leaders tend to use their powers and responsibilities recklessly, at great cost to the community. Given this environment in 1979 the Fraser Government introduced a legislation package designed to deal with what we regarded as a growing sophistication, with some sections of the trade union movement arranging strikes and work bans tending to bring about a maximum disruption with minimum of pay loss. I think the emphasis must be on the minimum pay loss. So often the community at large could see little justification in relation to the action by some of these reckless trade union leaders. Quite often that action was contrary to the tenor or consensus of a union's own members, but the members felt obliged to go along with a philosphy of 'follow the leader'. The community must have a measure of protection; it must have mechanisms which reduce the capacity to strike, particularly for unjustifiable reasons. What the Government is seeking to do now is to reduce the pressure that can be applied by members of other unions who would be affected within that same establishment and by the same members of the striking union in other establishments. I think we do require mechanisms for applying pressure to minimise strike action because the community can no longer afford the cost of problems associated with strikes. The cost to the community is very great. One of the great problems that Australia is facing at this moment is the problem of competition from overseas. We are becoming less competitive than our neighbours. One could well ask what economic activity will sustain the wealth of this community in the future, maintain our high standard of living, if we allow cost increases to permeate throughout the community. We all know, through the system of centralised wage fixing in Australia, that what is achieved by one group of militant unionists spreads across the community into other industries. We all acknowledge that not all industries have the same ability to pay. Regrettably, what is happening is that the disparity between the industries that have that ability to pay and those that do not is growing at an alarming rate, with the result that there is growing unemployment. It is growing at such a rate because the industries affected are the labour intensive industries and small business. Every cost increase disproportionately harms the small business more than it does the large business, unless that large business is a labour intensive one. Therefore, I repeat: We do need these sorts of mechanisms so that strikers within the same establishment or strikers in the same union but outside that establishment can exert pressure, particularly when they feel that the strike is unjustifiable, to try to bring reason to bear in such circumstances. I mentioned earlier that our whole standard of living is at peril. We have to have the maximum number in the work force to be able to support a growing standard of living. If we are not careful we will see Asian standards rising and in the not too distant future we will see a decline in the standard of living that we have come to enjoy and expect. We have to be concerned about cost competitiveness; we have to be concerned about keeping maximum numbers in employment. I believe that action such as that proposed by the insertion of this provision in the Social Security Legislation Amendment Bill must ultimately work to the general disadvantage of the community at large. True, some people would have been disadvantaged by the previous legislation but that group has a responsibility to the community at large, and I must say to themselves so far as their future continuity of employment is concerned because we have to recognise that wage increases can be sustained only by increased productivity. Unfortunately, over the years we have tended to lose sight of this important guideline. Despite the fact that there is hardship, we have to recognise that wives can still receive social security assistance. The overriding point is that the unemployment benefit must not be used to finance union action or to subsidise certainly unjustifiable strike action. My colleague, Senator Townley, quoted members of the Australian Labor Party. When the Labor Party was in opposition, a highly recognised former senator of this place, Senator Cavanagh, said: The Opposition has never supported the payment of unemployment benefits to strikers . . . Our colleague across the way, Senator Grimes, said in the same debate: I am not in favour of paying unemployment benefits to people who are on strike. So there has been a change in philosophy by some members of the Labor Party. I believe that this change is a retrograde step and the amendments will bring about changes in employment and loss of competitiveness which will be detrimental to the Australian community at a time when it can least afford these changes. Senator GRIMES(Tasmania-Minister for Social Security)(11.39) —I thank honourable senators from both sides of the Senate who have taken part in this debate. I am pleased that, in the main, they support this social security legislation. The Budget was put together in very difficult economic circumstances and in a time of very great economic restraint. The Government applied to itself disciplines as to the amount of expenditure that could be taken into account in budgetary considerations. Of course, Social Security, being the largest individual expenditure department, had to accept severe restrictions on what we as a party and what we as a government would have liked to do. I therefore think it is of some compliment to us that in fact most people who spoke in this debate did not speak about the legislation at all-I presume because they agree with most of it-but spent inordinate amounts of time talking about matters which are not dealt with in this legislation. For instance, I suppose the best example of that is Senator Walters, who spent most of her time talking about the assets test, which has not been finalised, which has not been introduced into this Parliament yet and which has not been passed by this Parliament. She also spoke about the over-70s income test which was introduced and passed in the May and June session of Parliament, as Senator Haines said, without opposition from the Liberal-National party coalition. Certain matters were raised and it is important that we deal with them. In particular it is important that I deal with the matter concerning unemployment benefits paid to unionists, and I will do that shortly. But as I have said, this omnibus legislation deals with many changes which the Government thought were important. It does not go as far as we would have liked to go. But, as I said, we were acting under considerable constraint. In particular, we are pleased with those sections of the legislation which make a start, but only a start, towards restoring justice to those who are unemployed through no fault of their own. I was interested to hear so many Opposition speakers mention this, and mention it in a way that makes one presume that they have just discovered, now that they are in opposition, that there are large numbers of unemployed in this country who-and this applies particularly to single people-have in fact been treated unfairly in the past. I would like to remind the Senate that the present Opposition, when in government, cut off regular benefit increases to the single unemployed, who compose between 70 per cent and 75 per cent of the jobless in the community. During its term in office the single unemployment benefit in fact dropped from nearly 25 per cent of average weekly earnings after the 1978 changes to the legislation to as low as 17.4 per cent of average weekly earnings just a year ago. One of the first actions of this Government was to increase this benefit in May. In this legislation we are resuming cost of living increases to single unemployed for the first time in five and a half years. We are giving another $2 now and another $2 in May so that the unemployment benefit will reach at least just over 20 per cent of average weekly earnings. We will not allow the value of this benefit to erode. We will in fact continue to increase the benefit until we restore equality again. We, of course, would have liked to restore equity in one hit but in the economic situations which face us such a sudden increase in government expenditure is not possible, nor is it desirable. Similarly, we have increased the allowances to the children of pensioners, which have remained unchanged for two years despite inflation and despite the numerous reports that pensioner and beneficiary families with children are the most likely to be in poverty. We have made changes in this area. We would have liked to make greater changes, but this is the start of an increased restoration of justice to this group of people. The introduction of a spouse carer's allowance has been advocated by people on both sides of this Parliament who, as members of parliament, have had to face the unfortunate situation of men who are affected in this way. I have certainly raised this matter in the past and I have been supported in this regard by others. I was pleased to be the Minister who was able to introduce this change. Senator Townley mentioned the remote area allowance. Again, one would have liked to include people whose place of residence is in income tax zone B, and that will be the ultimate aim of this Government. However, we had to take into account the restraints about which I spoke. We have to face the fact that all the reports in the past have shown the increased burden of costs which has to be borne particularly by people in zone A. We thought it was important to make a start. I am sure we have done so to the satisfaction of those people who live in the outlying and difficult areas of Australia. In general, the payment to single parents needs to be increased. We, like the previous Government, knew that single parents in receipt of unemployment benefits were in deeper poverty even than supporting parents. But nothing was done. We have at least moved to give these people the $8 guardian's allowance, which represents an additional $400 a year. We are amending the legislation to allow adopting single parents to receive the supporting parent's benefit and to give the supporting parent's benefit to a parent who is in institutional care. I do not wish to go into the arguments about the assets test. That is for debate at another time in this place. I certainly point out to Senator Walters that the introduction of the over-70s income test still leaves that group with a considerably more generous income test than that which applies to other age pensioners. I believe that the hyperbole and rhetoric we heard from Senator Walters about people having to leave their units and accommodation is just not true and is typical of the sort of exaggeration in which she indulges. The thing that seems to have exercised the minds of those opposite more than anything else is the amendment in clause 30 to section 107 of the parent legislation which in fact seeks to reverse the situation which has arisen since the changes which were made by the previous Government in 1979 and which in fact were resisted by the then Opposition. Senator Watson suggested that what we are seeing is in fact a change in philosophy on this side of the House. In support of that, he quoted what Senator Cavanagh and I said at the time that those changes were made. I point out that our speeches at that time were made in opposition to the changes that were introduced in 1979. Our philosophy has not changed at all. We do not believe that those taking part in industrial action should directly get unemployment benefits. We said that then and we say that now . I point out that at times even that arrangement can be of some considerable difficulty and hardship for people on our side of the House. Senator Watson talked about justifiable and unjustifiable disputes. However, the legislation, if amended, would still exclude those groups which are taking part in industrial disputes whether that industrial action is justified or not. Clause 30 of this legislation seeks to modify the rule introduced in October 1979 which affects those on unemployment benefits. I repeat that benefits will still not be payable to workers who are on strike; they will still not be payable to workers in the same union who are laid off in the work place because of industrial action by that union in that work place. That was the situation before 1979; it is the situation we wish to reintroduce. This legislation proposes to change the iniquitous situation whereby workers who are indirectly laid off at a factory or a plant as a result of an industrial dispute in another plant which, I might point out, may be miles away or in another State, and who may have no knowledge of the dispute, let alone the cause of it, are refused unemployment benefit. I remind honourable senators that that was only part of the way that the previous Government wanted to go. It also wanted to deprive the wives and children of those who were taking part in industrial disputes of the unemployment benefit or special benefit, for which they would otherwise qualify. The then Government was prevented from doing so by the combined action of the Opposition parties in this place at that time. It is no good Senator Watson getting up and saying: 'Well, their wives will still be able to get unemployment benefits'. Senator Watson was part of a party which tried to deprive those wives of unemployment benefits. At present members of one union laid off are not paid during an industrial dispute. It may be that the primary dispute is in Sydney and, for Senator Watson 's benefit, the effects of that dispute may be felt in Launceston or in Perth, where the people laid off do not know anything about it; they do not even know that the dispute is on. They will not be paid; whereas their neighbours who are members of another union will be paid. In particular-this is what it is all about-those who are not in a union at all will be paid. It is this latter situation which is the nub of the whole problem. The provision in the Act is, in fact, a penalty for trade union membership. It turns trade union membership into a personal liability. As such it may be in keeping with the philosophy of those opposite, but it is certainly not in keeping with the philosophy of people on this side of the House . I point out that those who come into this place, as they have done in the past , and with crocodile tears heap praise on those brave and courageous members of the Polish union, Solidarity, and in doing so make pious speeches about the rights of workers to organise being an essential part of our democratic process will, by way of the legislation which they introduced in 1979, penalise those people who are members of trade unions for no other reason than that they are, in fact, members of trade unions. That is not a fair situation; it is not an equitable situation. What is more, it is a misuse of the Social Security Act. Senator Jessop in his speech correctly pointed out that what we need to do in this country is improve our system of industrial relations; what we need to do is improve industrial relations law. He said that we need to improve the situation so that we have fewer disputes in this community. I put it to the Senate, as I put it in 1979, 1981 and 1982 when we were dealing with legislation such as this, that the wrong way to go about that is to use the social security legislation, which is meant to assist people who are in need, through no fault of their own, as a blunt weapon in industrial relations policy. It is not a sensible use of that legislation. Not only members of the Government have said that in the past in situations in which the application of this Act has arisen. This situation largely arose out of the disputes which occurred in the Latrobe Valley in, I think, September and October 1977. As a result of a dispute there, a large number of unionists, including members of the unions involved in the Latrobe Valley and in a wide area outside the Latrobe Valley, were thrown out of work. It was at that stage that this sort of application of legislation was mooted. The Government at the time suggested that the unemployment benefit should be denied to all those people outside that area who were affected. I wish to read to honourable senators some of the comments of some of the people who were concerned at that time about the proposed action of the then Government. The first one to speak up was the then Victorian State Minister for Social Welfare, Mr Dixon. As honourable senators know, Mr Dixon was a Liberal member of parliament. He said: It's stupid to use unemployment benefits as a possible lever in an industrial dispute and such a move would be ill-advised and ill-considered. At the time the Age reported that Mr Peter Falconer, the then chairman of the former Federal Government's back bench industrial relations committee, had urged the Government to reconsider such proposals because they would affect a large number of rank and file members who would find their benefits cut. The same report stated that the honourable member for Boothby, Mr Steele Hall, had said that the Government was making the innocent do its dirty work for it and that the proposal was unjust. Those remarks were made by Liberal and conservative member of the Government at the time. The Melbourne Herald said: . . . it would be outrageous to deny sustenance to stood-down unionists and their families not involved in the dispute. The Government should take care that no substance exists for such stories in future. The Age said: Unemployment benefits should be regarded as a right for people jobless through no fault of their own. They are not a privilege and they most certainly are not a plaything for politicians. The Canberra Times called it: . . . a threat to the right of freedom of opinion, a denial of justice to taxpayers, and a perversion of the conventional definition of what constitutes unemployment. So it was not only the Opposition at the time, the Labor movement, which was concerned about this situation. Also the conservative members of the Government and supporters of the Government at the time were concerned. It must be remembered that at that time and shortly afterwards there was an unusual industrial situation, certainly in the Latrobe Valley. Equally, it must be remembered that when Mr Chifley and the then Labor Government in 1947 introduced the rules which it introduced we were in incredibly different times compared with present times. It was a time of unheralded industrial disputes. It was a time when certain unions were using key man tactics which they had not done in the past. Certainly, if the changes that the Australian Labor Party wants to introduce to this legislation resulted in the sorts of key man strikes that were in existence in 1947, the trade union movement, the Australian Council of Trade Unions and the Labor Government would recognise that modifications would have to be made. We would monitor the situation to make sure that that did not occur. But that situation does not arise now. What will continue to happen is that if we have an unusual situation, such as that which occurred in the Latrobe Valley, which was not a key man dispute situation, we will end up with the Government having to fund, through emergency relief funds, the various welfare agencies-wherever the dispute occurs and wherever the people are laid off-to a very great extent and in a far more efficient manner than one could provide assistance through the unemployment benefit. We would end up with the situation which existed during the Latrobe Valley dispute in which the Salvation Army in Victoria had to close its doors because it was no longer able to support people who were unable to support themselves through no fault of their own. That is not the sort of situation which we want to see in this community. It is the sort of situation which will arise if this sort of legislation persists. One should not use the social security legislation in this way. One should look towards improving industrial relations. If Senator Jessop really is fair dinkum about cutting down the number of demarcation disputes, which he talked about during his speech, he should support legislation to assist in the amalgamation of trade unions. That is something which he and his colleagues will never do whenever it is introduced. Let us have some consistency in the matter, but let us have the social security legislation in such a state that the Department of Social Security can provide assistance for those who need it without the hindrance of the philosophical and ideological hangups of those opposite. It is for this reason that I am surprised that Senator Haines and her colleagues are going along with this move. The sorts of people who will be affected are not the militant trade unionists about whom Senator Watson is worried. If one wants to make militant unionists more militant one uses tactics such as this. Senator Watson —What about the cost? Senator GRIMES —I will come to the costs in a moment. If one wants to make disadvantaged people who are already embittered with our society more embittered , one does things such as this. One deprives them of the sorts of benefits that they should be able to expect when they are out of work through no fault of their own. I think we should look at the results of a survey conducted by the Australian Bureau of Statistics concerning the disputes which have occurred in this country . The figures have been pretty consistent in recent years. The major cause of disputes is found to be the result of managerial policy and physical conditions. These are the important factors in the majority of disputes in this country. Almost 60 per cent of disputes were directly attributed to management and physical conditions, not to malice, frivolity and economic gain about which Senator Watson talked. In excess of 65 per cent of disputes in this country-the figure is now 67 per cent-are of a duration of fewer than two days. Only about 5 .9 per cent of disputes last longer than 10 days. One cannot get unemployment benefits until one has been unemployed for a week. Even then people do not go out and immediately apply for the unemployment benefit. We are talking about a very small number of people. This was exemplified when these changes were introduced in 1979 when the Government had no idea how much money would be saved . It admitted that the amount of money was miniscule in the overall Budget and certainly in the Social Security budget. We are talking about fairness. We are talking about, as the Age editorial said at the time, the rights of people who are out of work through no fault or action of their own to receive some support from our social security system. The sorts of people we are talking about are the people on low incomes. We are talking about people such as new migrants who have just arrived in this country, who, in some cases, are still getting in the region of $200 or less a week, who have been laid off in Adelaide or Melbourne as a result of some dispute in Sydney and who will find themselves without support and without any income. There are not many of them because there are not many disputes of this type. But the Opposition, because of its hang-up, will pick these people out. They are the sorts of people who work in the textile mills, I suggest in many cases, in the home town of Senator Watson and me. We will say to them: 'You must suffer in that situation not because of the Government but because the Opposition parties have the philosophical belief that, if you are a member of a trade union movement, whatever that trade union movement does anywhere in Australia, you are collectively responsible'. We think that is unfair and unjust. We are heartened by the fact that, at least in the past, we have been supported by conservative members of this Parliament and conservative newspapers of this country. I believe that members of the Opposition parties, including the Australian Democrats, should go away and think about this matter. We accept that the numbers in this place seem to be such that this amendment will get through, although I expect Senator Harradine, who is a trade unionist, will support the Government. We expect it will get through; we expect this legislation will be amended in this place. I merely state now that we will not do what the previous Government did. We will not stand up in this place and say: 'We will not accept your amendment and therefore the unemployment beneficiaries in this case and the children of pensioners in this case won't receive their increases'. We will accept the realities of the situation. We will ensure that the other parts of this legislation will get through in time for the very real benefits which are provided for people to be passed on to them in this Budget as they were promised . Senator Messner raised one other matter with which I will deal briefly. He raised some concern about the authority which is on the bottom of the income form which is used to review the situation of those over 70 years of age on the introduction of the over-70s means test. This authorisation states: I authorise the Department of Social Security to make such inquiries as may be necessary to establish my entitlement to the pension, benefit or allowance. I know Senator Messner is new to this area and has just discovered this authorisation, but he tried to draw from it that this was, somehow, some mysterious and sinister declaration on this income test form which had something to do with an assets test which had not been introduced then and has not been introduced now. I point out to him that this authorisation with very similar wording, depending on the nature of the benefit, has been on the bottom of these forms for years. It was on the bottom of the forms released by the previous Government. It is really needed to facilitate the information gathering of those who are assessing these people to facilitate oral inquiries about a person's circumstances and to establish an entitlement to a pension. This may be necessary during the interview stage. In fact, it has always been on the form in some form or another; it is there now. There is nothing sinister about it. It has nothing to do with the assets test. It is a standard part of the form. I think Senator Messner, before raising questions like this and before making suggestions that this authority has some sinister motive, really ought to check up and see what has gone on in the past, see how the Department of Social Security operates and see whether we cannot make sure that we do as little as we can not to disturb people, particularly those over 70, but all pensioners and beneficiaries in the country, as we make inevitable changes to the social security system if we are going to have a progressive, sensible and rational system. I realise I can do nothing about people like Senator Walters who wander around old people's homes and try to scare the hell out of people over the introduction of the assets test or the incomes test. That is the way she operates. Thank heavens that is not the way everyone in this place operates. Finally, it must be of considerable satisfaction to my colleague Senator Gietzelt that the only comments made about the Repatriation Legislation Amendment Bill were comments of praise. I gather that the Opposition parties will support that legislation. I briefly bring up the matter raised by Senator Jessop who, as did so many speakers in this debate, brought up matters which were not relevant to the debate at all. He complained about the royal commission which was established to inquire into the effects of herbicides and other chemicals on those who suffered in Vietnam. I point out to Senator Jessop and others that for years we, in opposition, advocated an independent judicial inquiry into what happened to Vietnam veterans and, in particular, as to whether they had been affected by the use of defoliants, herbicides and other chemicals in Vietnam. We did that for several reasons. The first reason was that there was a very real concern amongst Vietnam veterans that something had happened to them that may have affected them and that may affect their wives and the children that they produce in the future . Secondly, they were not satisfied with the way that not only the Government but also some ex-servicemen's organisations had ignored their plight for many years. They were anxious that they received justice through an injury which they saw as independent and as separate from government and an inquiry which provided , they hoped, whether it does or not, some of the answers which they and their colleagues had sought over many years. It was for these reasons that we promised such an inquiry. I think it is incredible that Senator Jessop should come in here one day and condemn us for all sorts of things that we were supposed to have promised and not done and then condemn us for conducting an inquiry that we said for years we would institute and to suggest to Vietnam veterans that the $5m or $7m that Senator Jessop thinks that inquiry will cost is not justified and is a waste of the taxpayers' money. Senator Jessop is a member of a party and was a member of the Parliament at the time that was willing to spend hundreds of millions of dollars on sending people to Vietnam, raining on that country bombs and napalm and everything else that was used, and sending people to that country who were conscripted into the armed Services. It is extraordinary for the honourable senator with that background to come into this place and state that we cannot spend $5m or $6m in an attempt to bring justice to and to ease the anxiety of those who served there. I thank the Senate for its prompt treatment of this legislation. I am sorry that the Opposition parties feel they cannot support the social security legislation in toto. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MESSNER(South Australia)(12.10) —I move: Page 17, clause 30, sub-clauses (2) and (3), lines 30 to 43, leave out the sub- clauses. Sub-clauses 30 (2) and (3) seek to amend section 107 of the Social Security Act . As has been discussed during this debate, the section that is now part of the legislation was first introduced by the Fraser Government, I think in October 1979. Its purpose was to establish the principle that unemployment benefit would not be paid to those persons stood down in the event of a strike occurring somewhere other than the work place of individuals, which position had not been covered in previous legislation. The principle is quite clear. The Government at that time did not see its role as that of paying strike benefits to those who chose by their own actions to take industrial action which led to the stand down of others. Consequently they were insulated from the effects of the industrial action as a whole. The principle which the Government at that time established was that members of a union, in a total situation such as those people found themselves in, ought be responsible for the actions of their colleagues. Consequently that clause became part of the law. I think Senator Watson, in the course of his remarks during the second reading debate, clearly set out the argument on behalf of the Opposition. I would just like to summarise that briefly. The situation is that in the last several years there has been a growing sophistication-I think as Senator Watson put it-on the part of the trade union movement to use its union muscle in respect of capital intensive-type industries. I think the Minister for Social Security (Senator Grimes) himself acknowledged the La Trobe Valley strike in 1977-78 as one of the key issues which had very significant effects in the community and, of course, on the economy but which were brought into being by virtue of the industrial action of a very few. I think the Minister's example of the La Trobe Valley strike is a most pertinent one insofar as it brings our attention to the actions of some, I think, 300 electricians in the power station at that time who brought to a dead halt virtually half of Victorian industry. As a result there were some very widespread stand downs throughout the whole industrial process. For that reason it was judged very important to ensure that there was collective responsibility on the part of the work force throughout the Victorian community for the actions of a very militant few. As a result the Government saw fit to take the action that it did. I think Senator Watson drew our attention very cogently to the point that this kind of action which flows through the centralised wage system does not just have its effect on that group of workers or even those who are indirectly affected by it but indeed right across the whole industrial structure. It is that which of course is our greatest concern, because those effects are ones which flow into the economy as a whole; which do lead to a lack of competitiveness in our industry; which do put firms, that are unable to pay the increased price of labour, out of business; which do lead to the destruction of jobs; and which do lower the possibility of people being re-employed. For those reasons we find it very rational on the part of the Opposition to pursue its amendment to these clauses and we intend to do so. We are very grateful for the support of the Australian Democrats, as they have announced publicly, I understand, in the last 24 hours that they will be supporting our amendment. It is an issue of very great concern. It is an issue of great depth of principle in terms of our understanding of the kind of industrial society in which we live. It is the sort of collective responsibility which we are seeking in this community rather than the selective responsibility which the Government, with its union supporters, is seeking. I think that distinction has to be drawn right home because it is obviously an attempt to face the political pressures within the trade union movement which from time to time inevitably surface within the Caucus and within the Government. The Minister, in his remarks, did quote some statements, I believe, from people such as Mr Peter Falconer, who was the member for Casey in Victoria and who was reported as being opposed to the amendments of the Fraser Government in 1977 and 1978. I think the Minister made the point that Mr Falconer had referred to the large numbers of rank and file people who would be affected by this legislation. The inference of course from that was that there would be hardship brought to bear on the part of those rank and file members who would be stood down in the event of industrial action and therefore not able to obtain unemployment benefit . I make the point that there is provision in the social security legislation as it stands, as it stood in 1977 and 1978 and before that time, for the provision of special benefits in the situation in which these people find themselves. I ask the Minister whether that legislation does apply and whether the guidelines presently do provide for the provision of benefits for people who find themselves in those extremely difficult circumstances. I hope that the law and the guidelines which did apply during the time of the Fraser Government have not been changed by this Government and that indeed they do still provide for that circumstance. I believe that quotations by my colleagues-I think Senator Townley and Senator Jessop-from remarks made by Mr Chifley as Prime Minister of Australia in 1947 opposing this kind of benefit for those stood down in the circumstances which we are addressing, are most pertinent. I will not seek to incorporate them in my speech, but I believe that they are highly relevant and I commend to people that they read those remarks by that very esteemed Labor Prime Minister. The other point that I think does need to be emphasised, which the Minister made some play of in his remarks, is the fact that 67 per cent of strikes these days are of less than two days' duration. He mentioned another figure which I cannot recall in respect of strikes of less than 10 days' duration. The point that he was seeking to make was that a very small number of strikes were of very lengthy duration. He speaks on the one hand of strikes, but he ignores the point about the effect of strikes on the rest of the economy. Even though there may be a shut down for a relatively short period, let us say in a capital intensive industry that may be producing electricity, the long term effect on the rest of industry would be magnified and multiplied as it goes down the production chain. I would just like to exemplify this case. Let us say that an electricity strike occurs for up to six or eight days. An industry, such as a motor vehicle manufacturing plant which depends upon that electricity for the operation of its production line, would be required almost immediately to stand down its workers but would find it needed to close down not only its production line but also its foundry, its smelters and other parts of its operation. So we would see an enormous lag in restarting that industry in the event of the immediate switch-on of electricity. It is that kind of lag effect, which has a very significant impact on industry, which the Minister totally ignored in the quotation, in a glib fashion, of mere statistics about numbers of strike days. We speak here not of the strikers themselves, but of the effect on industry and on Australians in their ordinary day to day circumstances of union activity and militant industrial action. For that reason, the Opposition will oppose the amendment to section 107. I commend the Opposition amendment to the Committee. Senator WATSON(Tasmania)(12.21) —I briefly support in particular the latter remarks made by my colleague Senator Messner, and I will concentrate particularly on his latter comments. The Minister for Social Security (Senator Grimes), in his summing-up of the second reading debate, made reference to statistics proposed by the Australian Bureau of Statistics on the duration of strike activity, which showed that by far the greater number of strikes are of relatively short duration. Therefore, because of the lag in the payment of unemployment benefit, the legislation would not normally affect people involved in these short term strikes. But what concerns me is the need for some sort of mechanism, particularly to curtail in the longer term strikes, which are a great cost to the whole community. True, there is a cost to the strikers themselves, which I acknowledge. There are different sorts of strikes. In some cases strike action must be regarded as last resort action. Some strikes are justifiable but there are many which are unjustifiable. There needs to be a collective responsibility within that union movement, certainly in the event of the long strikes, when there is a great cost to the community, and some internal mechanism or pressure to expedite the cessation of strike action. Australia is no longer in a position to be brought to its knees as a result of irresponsible action. Our competitiveness in industry is at stake. Our future standard of living is at stake. I believe that there is a responsibility to the community at large because it is the silent majority that pays the greatest price. Senator HARRADINE(Tasmania)(12.23) —Mr Chairman, I regret that I was unable to participate in the second reading debate. There are a number of things that I would have liked to mention, including matters relating to the spouse rebate and family allowances. I know that if I attempted to do so now, you would rule me out of order, quite justifiably. Having said that, I want to enter the debate at this stage. There appears to be concern expressed about the need for responsibility to be taken in respect of industrial dispute situations. That is a concern which I have had over 22 years, I suppose, and more particularly in the 18 years that I have been directly involved as a trade union official. As Secretary of the Tasmanian Trades and Labor Council I fought for and obtained, amongst the affiliates of the TTLC, an understanding and an undertaking with respect to the conduct and control of industrial disputes. Industrial disputes should be conducted not only in the interests of those particularly concerned but also in the general interests of the whole of the trade union movement of the community. That was the fundamental reason why there was a considerable dispute in the Tasmanian trade union movement over this very issue of the conduct and control of industrial disputes. Having said that, I believe it inappropriate to attempt to use the social security system to impose some sort of alleged responsibility on the conduct and control of industrial disputes, to take away from the persons who are affected by industrial disputes their rights under the social security legislation up until 1979 when, of course, the Government of that day, the Fraser Government, amended that legislation. I would have thought that those who oppose the current Government's move to delete the Fraser Government's provisions would have been able to point to examples of how the Fraser Government's amendments to the social security legislation have imposed some responsibility in the conduct and control of industrial disputes; how the withdrawal of unemployment benefit has been a factor in the resolution of disputes. Not one such example has been given by those who are opposing the Government's move to take out of the social security legislation the Fraser Government amendment. I believe that the opposition to this current government measure is based on an inadequate understanding of the structure of the trade union movement and an inadequate appreciation of the fact that in the last 30 years, since the Chifley era, the nature of Australian industry has changed. It has become more complex and more interwoven. To give an example, I believe that any person from the State of Tasmania should think twice about voting for the Opposition's amendment . I say that advisedly because we could have disputes-and very often they do occur-on the mainland, in Melbourne for example, which have dramatic effects on Tasmania. A branch of a particular union in Tasmania, the union which is involved in the dispute in Victoria, may be very much against that dispute and in general the Federal executive of that particular union may in fact have views diverse from those of the branch of the union in Victoria. Under the proposal by the Opposition, we will penalise those members of that union in Tasmania. I cannot see any reason to use the social security system to do that. We will not only penalise them but also penalise their wives and children. Very often this is the case. I think it is necessary to appreciate that. I sympathise with the attitudes that have been expressed by a number of members of the Opposition- Senator Townley, Senator Watson, and Senator Messner, leading for the Opposition -but I point out to them that it is not appropriate to use the provisions of the social security legislation to impose some sort of internal responsibility within the trade union movement. I think the thrust of the actions by the Prime Minister (Mr Hawke) is to face the trade union movement with the need to accept its responsibilities. I believe that the measure being undertaken by the Government is consistent with the Prime Minister's general thrust. I urge the Committee to adopt this measure and to reject the Opposition's amendment. If there is a failure at some future date and an undermining of the contract by certain elements within the trade union movement directed from outside the trade union movement, we should face that situation then. The Prime Minister may well have to face the situation at that stage. But, in the meantime, I believe that, consistent with the compact that has been entered into between the trade union movement and the Government, we ought to adopt the measure that is proposed by the Government and reject the amendment moved by the Opposition. Senator GRIMES(Tasmania-Minister for Social Security)(12.31) —I again state that I reject the Opposition's amendment. I now have a further reason for rejecting it, apart from the reasons that were given in the second reading speech and the reasons given quite clearly by Senator Harradine. Senator Messner -this became evident in his speech at the Committee stage-is clearly under a misapprehension. The legislation at the moment, as introduced in 1979, precludes from receiving unemployment benefit members of a union who are taking part in a dispute, members of the same union in the same establishment-we on this side of the chamber have no objection to that-and also, under section 107 (4) of the legislation, members of the same union who are laid off, wherever they are laid off, as a result of that dispute no matter how justified or unjustified that dispute is. Senator Harradine gave the same example I gave of a dispute in Melbourne or Sydney which results in people being laid off in Tasmania. Those people in Tasmania who are laid off, although they are members of the same union , know nothing about the dispute. Considering the way in which the trade union movement is organised, they may well disagree very strongly with that dispute. If Senator Messner looks at section 124 (2) of the Social Security Act-again, this was part of the 1979 provisions-he will find that it states: A special benefit is not payable to a person in respect of a period if the person is not qualified to receive an unemployment benefit in respect of that period by reason of sub-section 107 (4). They do not qualify for a special benefit and they are precluded even from receiving that benefit which has rigid and firm guidelines. That is a very severe penalty. That is using the Social Security Act to deprive people who, through no fault of their own, are out of work. They may be out of work by the actions of others, with whom they do not agree at all, on the grounds that they must have some collective responsibility throughout the whole of Australia. The principle I spoke about in 1979, 1980, 1981 and 1982 was essentially the same sort of thing that Senator Jessop and Senator Harradine spoke about today. There are ways to improve industrial relations in this country. There are ways to improve the behaviour of irresponsible unions in this country. I suggest that to use the Social Security Act to deprive people of benefits they would otherwise be entitled to is using a sledge hammer to get at this problem. No evidence has been produced since 1979 to demonstrate that this legislation had any action. The Government of the day was incapable of producing any figures to demonstrate what effect it thought it would have on the social security budget or the system of legislation that existed. I put it to the Opposition that by taking this action it will make militants more militant and it will make embittered people even more embittered. It will not help the industrial relation situation at all. I think it is most unfortunate that because of some philosophical and ideological hang up the Opposition parties are taking this attitude and that they are painting this Government as being the tool of the trade union movement, the tool of the Australian Council of Trade Unions or whatever one likes because of the actions it is taking. The Government is suggesting that there is a better approach and that probably the worst approach is to penalise innocent people. I remind the Opposition that the previous Government-I am sure against the wishes of many of its members-not only wanted to penalise this group of unionists but also attempted to penalise their wives and children. The previous Government was stopped from doing so only by the then Opposition in the Senate. I think that the Opposition parties should reconsider their position in this case. However, if they will not reconsider their position, quite clearly we will not let this Opposition prevent us from introducing other reforms in the legislation. We will proceed to take steps to make sure that that happens. I think that a rethinking of this attitude is needed by those who have taken this stand on this occasion. Question put: That the words proposed to be left out (Senator Messner's amendment) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 27 —— Majority . . . . . . . . . 2 —— Archer, B. R. Jessop, D. S. Baume, Peter Kilgariff, B. F. (Teller)Bjelke-Petersen, F. I. Lajovic, M. E. Boswell, R. L. D. Lewis, A. W. R. Carrick, Sir John Macklin, M. J. Chaney, F. M. Mason, C. V. J. Chipp, D. L. Messner, A. J. Collard, S. J. Missen, A. J. Crichtone-Brown, N. A. Reid, M. E. Durack, P. D. Teague, B. C. Evans, Jack Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Haines, J. Watson, J. O. W. Hamer, D. J. Withers, R. G. Hill, R. Bolkus, N. Hearn, J. M. Childs, B. K. Jones, G. N. (Teller)Coates, J. McClelland, DouglasColeman, R. N. Maguire, G. R. Colston, M. A. Primmer, C. G. Crowley, R. A. Ray, RobertElstob, R. C. Reynolds, M. Evans, Gareth Richardson, G. F. Foreman, D. J. Robertson E. A. Georges, G. Sibraa, K. W. Gietzelt, A. T. Tate, M. C. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Harradine, B. MacGibbon, D. J. McIntosh, G. D. Scott, D. B. Ryan, S. M. Rae, Peter Cook, P. F. S. Martin, K. J. Button, J. N. Question so resolved in the affirmative. Bill, as amended, agreed to. Bill reported with amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Debate resumed from 18 October 1983, on motion by Senator Gietzelt: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Social Security)(12.43) —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 seeks appropriations of the Consolidated Revenue Fund in 1983-84 totalling $2,860,169,000. Of this amount, $998,737,000 was authorised by the Supply Act (No. 2) 1983-84; the balance of $1,861,432,000 would be authorised by this Bill. The Bill provides for proposed expenditure on the construction of public works and buildings, the acquisition of sites and buildings, certain advances and loans, items of plant and equipment which are clearly definable as capital expenditure and expenditure on new policy initiatives for which legislation has not previously been provided. Provision is also made for grants to the States under section 96 of the Constitution and for payments to the Northern Territory. An amount of $120,000,000 is included under the advance to the Minister for Finance, the same as was provided in the Supply Act (No. 2) 1983-84 which this Bill, when enacted, will subsume. Details of the proposed expenditures are set out in Schedule 2 to the Bill and the main features were outlined in the Budget Speech. I commend the Bill to the Senate. Debate (on motion by Senator Messner) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Social Security)(12.46) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to appropriate moneys for the service of the Parliamentary Departments for the year ending 30 June 1984. The Bill seeks appropriations of the Consolidated Revenue Fund in 1983-84 totalling $35,062,000. Of this amount, $14,008,000 was authorised by the Supply (Parliamentary Departments) Act 1983-84, the balance of $21,054,000 being sought in this Bill. The then Government agreed in March 1982 to the provision of a separate Appropriation Bill for the Parliament which, consistent with the recommendations of the Senate Select Committee on the Parliament's Appropriations and Staffing, is not a Bill for the ordinary annual services of the Government. It was part of the agreement that detailed executive scrutiny of and control over expenditure estimates for the Parliament was not necessary and that the Government would limit its involvement to approval of the overall levels for recurrent and capital expenditure for the Parliamentary Departments. This has been done and the amounts included in the Bill. I commend the Bill to the Senate. Debate (on motion by Senator Messner) adjourned. Sitting suspended from 12.47 to 2 p.m. Senator MESSNER —I refer the Minister for Social Security to the recently announced review of the Government's programs of special services for the disabled. Is the Minister aware of the concern within the community that his proposed least restrictive alternative approach to providing services to the disabled may result in cuts in grants given to organisations presently providing worthwhile services and programs for these people? Is the Minister able to allay or confirm these fears? What response, in his experience, has the announcement of the review prompted? Senator GRIMES —Yes, the review which was announced by the Government has created considerable interest. I have not been informed by anybody that the view of this Government, which I believe is a continuation of the view of the previous Government, that it should be looking at the least restrictive alternative in providing services to the disabled has caused any problems for disabled people, particularly in regard to the reduction of funds for existing organisations. The announcement I made was that in the future organisations which applied for funds and organisations which had already applied for funds should look at their applications with a view to seeing whether they are providing for the least restrictive alternative for those whom they seek to serve. In other words they should provide an atmosphere in which disabled people can take part in our society within the limitations of their disabilities. The organisations should also provide services which would enable disabled people to play a full part in society. I do not think that approach is objected to by many people in this Parliament. I think it is an extension of the attitude of the previous Minister. I think advertisements about the review were put in the papers a few weeks ago. There has been a considerable response from organisations and individuals both in print and over the phone. I hope that as a result of those initial responses we will be able to clarify the situation and extend the terms of reference so that all people who feel that they have something to say about the matter can give their views to the Government and then the Government and this Parliament can decide where we will go in the future. Senator COLSTON —I direct a question to the Minister representing the Minister for Immigration and Ethnic Affairs because it relates to the Queensland Premier' s criticism of a statement made by the Minister for Immigration and Ethnic Affairs, Mr Stewart West. In his criticism the Premier chose to attack those senators and members who did not take an oath when elected. Does the Australian Constitution allow senators and members of the House of Representatives to choose whether they will take an oath or make an affirmation of allegiance after they are elected to the Federal Parliament? Is any person who criticises a senator or member for making an affirmation rather than taking an oath holding the Federal Parliament in contempt? If so, can the Premier of Queensland be summoned to this place to be asked to attempt to explain both his criticism of Mr West's statement and his contempt of this Parliament? The PRESIDENT —Order! I do not think that the last part of the honourable senator's question should be directed to the Minister, but I will allow the first part of the question. Senator GRIMES —I understand that the statement of the Premier of Queensland arises from a statement made by Mr West, the Minister for Immigration and Ethnic Affairs, whom I represent in this place. It concerned the possible changes to the Australian Citizenship Act which will be discussed in this Parliament next year although I believe the relevant legislation may be introduced this year so that people can review it. Amongst the suggestions was one that the oath of allegiance and the reference to citizens as British subjects be changed. I find it interesting that Mr Bjelke-Petersen and Mr Hodgman, the shadow Minister for Immigration and Ethnic Affairs, should have criticised this suggestion because the former Liberal- National Party Government realised that although citizenship applications had increased in recent years, in excess of one million people-about 1.2 million people, I believe-who were qualified to become citizens of this country still had not applied to do so. As a result, the previous Government took what I think was a reasonable attitude, an attitude that this Government takes for which it is sometimes criticised. The previous Government held a series of conventions or gatherings around the country to which people came to talk about citizenship, what should happen when one becomes a citizen and why one should become a citizen. Two important aspects which came up repeatedly at the citizenship conventions were the lack of Australian character in the oath of allegiance and the reference to Australians as British subjects. As a result, this Government, like the previous Government, will be looking at this matter in the future. As everyone in this place knows, people who become members of parliament or people who give evidence in a court have a choice of taking an oath or making an affirmation. People on both sides of this Parliament, in all parties in this Parliament- Senator Tate —And of all faiths. Senator GRIMES —And of all faiths, as Senator Tate says, variously take an oath or make an affirmation. I was a member of the Senate Standing Committee on Social Welfare. We had people of all religious denominations giving evidence before us. In fact ministers and priests of various religions have preferred to make an affirmation. I think, therefore, that Mr Bjelke-Petersen's attempt to criticise this effort to make the act of becoming a citizen of this country more relevant to all of those who live in this country, an effort to make sure that the oath taken or affirmation made at the time of citizenship is a meaningful one, has been done for political purposes which have been brought into operation because of the Queensland election. I think it is unfortunate. If we are to become a united country which has a proper sense of nationalism we have to get together and work out a situation whereby everyone who is a citizen in this country recognises what has happened. I do not know whether Mr Bjelke-Petersen can be called before this Parliament. Personally I do not think he should be, because I think we should recognise his acts as party political stunts indulged in during an election campaign. Senator CHANEY —Is the Minister representing the Treasurer aware of the revelation of the Minister for Finance, Mr Dawkins, that the Deputy Commissioner of Taxation in Western Australia has advised that it can be expected that Mr Dawkins's family's company, Coomel Pty Ltd, will be relieved of any recoupment tax liability arising from its shareholding in Metro Industries Ltd? Is the Minister aware that many Western Australian shareholders in public companies such as Metro Industries and Westwools Holdings Ltd have received notice of liability under the recoupment legislation? Can the Minister assure the Senate that no special treatment has been provided for the company in which Mr Dawkins has an interest and that all taxpayers in similar circumstances can expect the same treatment from the Australian Taxation Office? Senator WALSH —As I understand the situation-I will have this checked subsequently-the Coomel company had shares in Metro Industries. Metro Industries subsequently sank to the bottom of the harbour through the principal agency of Denis Horgan, the then chairman of the Liberal Party Finance Committee. Metro Industries incurred a tax liability under last year's unpaid company tax recoupment legislation. Therefore, those shareholders in Metro Industries incurred a portion of that tax liability unless either they gained, in the opinion of the Commissioner, no financial benefit from the sale-that is, their shares were not sold at prices above true market value and at prices which reflected the fact that it had always been intended that company tax due would be evaded-or the liability of the individual was below a threshold level. As I understand it, the Coomel company with which Mr Dawkins was associated does not qualify for liability on either of those grounds. Senator Chaney —Oh! Senator WALSH —Senator Chaney apparently does not accept that explanation, but that is my understanding of the situation. I will have it checked. Senator CHANEY —Mr President, I ask a supplementary question. I refer to the questions asked of the Minister which, as usual, he did not choose to answer. I ask him again whether he is aware that many Western Australian shareholders in public companies such as Metro Industries and Westwools have received notice of liability under the recoupment legislation. Can he assure the Senate-I would have thought this could be done without any difficulty if this were an honest Government-that no special treatment has been provided for the company in which Mr Dawkins has an interest and that all taxpayers in similar circumstances will get the same treatment from the Taxation Office? Senator WALSH —I am sorry if I did not answer that section of Senator Chaney's question. It was not my intention not to answer it. Of course I can give such an assurance. The Westwools shareholders who are contesting the action will not be responsible-provided they can demonstrate to the satisfaction of the Commissioner that they did not derive a financial benefit because the sale price that they received for their shares was not inflated by the tax which had been evaded and which it had been planned to evade. Those matters, of course, are ultimately matters for decision by the Commissioner. They are decided at the discretion of the Commissioner, not at the direction of the Treasurer. I am sure that Senator Chaney appreciates that the legislation is so worded. Senator HEARN —I address my question to the Minister representing the Minister for Communications. Northern Tasmania does not have a public broadcasting FM station. Proposals to establish an FM station have been lodged with the Department of Communications for five years. What progress is being made in the processing of these proposals? Why has there been such a long delay? Senator BUTTON —I do not have all the details of FM stations at my fingertips, but Senator Hearn was kind enough to indicate that she would be asking this question. The Department of Communications is aware of several groups in the northern parts of Tasmania which are interested in the establishment of public broadcasting stations. Two planning proposals for public broadcasting stations in Launceston have been received by the Department. The Launceston proposals have been subject to considerable delay in the past caused, in part, by the planning backlog in the Department, but due also to protracted negotiations involving parliamentary representatives for the area on the question of whether to proceed with the proposal for one or two stations. These proposals are now in the final stages of processing by the Department. It is expected that recommendations concerning the establishment of public broadcasting stations in Launceston will be put to the Minister very shortly. Interest in the establishment of stations to serve other areas in northern Tasmania has also been expressed recently. I add to that formal answer provided by the Minister the information, of which the honourable senator will no doubt be aware, that in the recent Budget the Government made an appropriation to the Department of Communications for the speeding up of the processing of the backlog of applications for licences. I believe that that is already having some effect. The PRESIDENT —I draw the attention of honourable senators to the presence in the President's gallery of my immediate predecessor, Sir Harold Young, and his wife, Margaret. On behalf of all honourable senators I convey to Sir Harold and Lady Young a warm and friendly welcome upon their return to Canberra. Honourable senators-Hear, hear! Senator CHIPP —I ask the Minister for Resources and Energy a question concerning uranium. I preface my question by quoting from page 134 of the 1982 platform of the Australian Labor Party: . . . a Labor government will: a declare a moratorium on uranium mining and treatment in Australia; b repudiate any commitment of a non-Labor Government to the mining . . . of . . . uranium; and c not permit the mining, processing or export of uranium pursuant to agreements entered into contrary to ALP policy. On page 135 of the platform, it states: . . . on becoming government- . . . our minimum position would be a total unequivocal commitment to phase out Australia's involvement in the uranium industry . . . In what manner does the Hawke Government intend to implement this policy? Senator WALSH —Senator Chipp used words from the Labor Party platform such as ' moratorium on mining' and 'repudiation of contracts'. He then quoted from the next page of the document. I do not have it in front of me now and I do not know it by heart, but I am reasonably familiar with it. There are, however, other sections in that platform-a fact of which I am sure Senator Chipp is well aware- which many people would see as being somewhat inconsistent with that section. There would be little dispute about that statement. I would be quite safe from criticism, even from within the Labor Party or outside it, in saying that there is significant scope for differing interpretations of what is written in the Labor Party platform on this matter. Senator Button —An understatement. Senator WALSH —Senator Button has suggested that I may have understated the degree of that scope for differing interpretations. Substantially because of that fact, the Government has spent considerable time in addressing itself to this question and in finally making a decision-within the parliamentary Labor Party, that is-as to precisely how that platform will be implemented. Senator Chipp would know, I think, that it was anticipated that the matter would be discussed by Cabinet this week. Unfortunately, that could not happen because of the illness of the Prime Minister. I now expect that it will be discussed by Cabinet next week and by the whole parliamentary Party in the next sitting week, which is the week after next. Senator CHIPP —Mr President, I ask a supplementary question. I thank the Minister for his answer and concede that there are, to use his term, contradictions in the policy. I anticipated his answer. On page 136 of the ALP platform there is the so-called Roxby Downs amendment which states that a Labor government will: consider applications for the export of uranium mined incidentally to the mining of other minerals . . . I rely on the Concise Oxford Dictionary which defines 'incidental' as 'casual', 'not essential', 'following as a subordinate event'. Is it not the case that the Roxby Downs venturers have made it clear that the uranium deposit-the single largest uranium deposit in the world-is absolutely essential to the viability of the Roxby Downs project? Is it not the case then that the Roxby Downs venture is in fact in contravention of stated and printed ALP policy? Senator WALSH —Senator Chipp's supplementary question probably began to canvass a new issue as well, but I will respond to it too. I do not mind that. The definition or application of the word 'incidental' in the platform is one of the many matters which, in the view of the Government, are open to differing degrees of interpretation. I cannot recall the definition which Senator Chipp gave from the Concise Oxford Dictionary. A possible view is that 'incidental' means anything less than half. That is a view that some people might hold. I do not know whether that is entirely consistent with the definition given in the Oxford Dictionary, but many definitions from that dictionary are quoted. For example, if I remember correctly 'nice' is defined as fastidious, which is somewhat at variance with the common usage of the word. So common usage and dictionary definitions are not infrequently at variance, and one defensible definition in my view of 'incidental' is anything that is less than half. That is the case with Roxby Downs at current mineral prices. Senator Chipp —Are you saying uranium is less than half of the Roxby Downs project? The PRESIDENT —Order! Senator Chipp, you have asked your supplementary question. Senator WALSH —With your indulgence, Mr President, I am willing to respond to the interjection. According to the draft mining proposal which the company submitted and the levels of production contained in that proposal, at present mineral prices about 40 per cent of the proposed value of production is uranium. I think that figure is somewhat greater as a percentage of the ore body in total but in the draft mining proposal which the company submitted it is significantly less than half. There is a very substantial quantitative difference between Roxby Downs and any other prospective uranium mine. Again I am quoting from memory and I do not want to be held rigidly to these figures, although they are reliable indicators of the order of magnitude of the minerals to be found at Roxby Downs. Although it is common for uranium to be found in association with other minerals with commercial value, in no other prospective uranium mine in Australia is the non-uranium content worth more than about 5 per cent of the value of the ore body or the value of the proposed output. If I remember the final part of Senator Chipp's question correctly, he asked whether I was saying that without the ability to sell the uranium component of the Roxby Downs ore body at something like the prices at which Australian uranium is presently being sold the project was likely to be non-viable. I understand that it is the case that at present prices for the other metals in the Roxby Downs ore body-copper, gold and silver-the project is likely to be non -viable unless the uranium component of the ore body can be sold at somewhere near the current price. Ultimately, that matter will not be a matter for judgment by the Government; the companies concerned will have to decide whether the project is to proceed and whether it is commercially viable with or without the sale of the uranium component of the ore body. In making such a judgment the companies will also be making judgments about the future level of prices for the other minerals contained in the ore body. Senator COLEMAN —My question is directed to the Minister representing the Treasurer. What liability, if any, under the Taxation (Unpaid Company Tax) Assessment Bill will be incurred by a person who has received an assessment under the 1982 unpaid company tax legislation? Senator WALSH —Bearing in mind the very minor possible threshold level of tax liability below which the Commissioner of Taxation will not issue an assessment, the answer to Senator Coleman's question is that everybody who received an assessment under last year's legislation will receive an assessment if the present Government's policy is enacted. Last year's legislation sought to recover from shareholders who benefited from the situation that previously existed. This has relevance to Senator Chaney's earlier question. Senator Chaney —Mr President, I raise a point of order. The question obviously relates to the legislation which is on the Notice Paper and which is to be discussed, we hope, later today. I believe that under standing order 99 the question is out of order. The PRESIDENT —Order! There is no point of order. The question was asked in respect of earlier legislation. Senator WALSH —Last year's legislation sought to recover from shareholders who benefited from it company and Division 7 tax evaded by the sale of companies or shares by what became known as wet Slutzkins or bottom of the harbour schemes. The Government's policy is that the personal tax evaded by the beneficiaries of those schemes, whether directly or indirectly, should also be recovered. Senator Chaney —Mr President, I again raise a point of order. According to the program, legislation will be discussed this afternoon which touches on the matters which are the subject of this question and which are now being dealt with by the Minister in his answer. Again I draw your attention to standing order 99, which says: Questions shall not anticipate discussion upon an Order of the Day or other matter which appears on the Notice Paper. The PRESIDENT —I think general practice is that questions of the type asked by Senator Coleman are allowed and provided a simple answer is given by the Minister to the question there is no difficulty about it. I urge the Minister to observe standing order 100 and not to consider debating the answer but to give a simple reply to the question asked by Senator Coleman. Senator WALSH —Thank you, Mr President. I was talking about wet Slutzkins. Wet Slutzkins are the schemes of which the former Prime Minister said last year: In a real sense, the recipients of those funds have in their hands stolen funds , whether you want to say stolen from the Commonwealth or stolen from other taxpayers it doesn't matter very much. He also said: I do not believe anyone could have taken part without knowing they were wrong. The PRESIDENT —Order! I think the Minister is still debating the matter. I suggest he confine his remarks to the simple question asked by Senator Coleman. Senator WALSH —I am endeavouring to do that, Mr President, and I am about to conclude. The former Prime Minister, in his reference to anyone taking part, was clearly referring to those directors who arranged for the sale of companies under schemes which ultimately were to become known as wet Slutzkin schemes. Senator Dame MARGARET GUILFOYLE — I direct a question to the Minister representing the Treasurer. It deals with the same subject as that raised by Senator Chaney. I ask: Can persons receiving notices of liability or assessments under the tax recoupment legislation expect the same immediate attention to their inquiries as was given to the liquidator of Coomel Pty Ltd, who wrote to the Commissioner of Taxation seeking advice on 17 October and received a written reply on the same day? Senator WALSH —I presume that in asking that question Senator Dame Margaret Guilfoyle has in mind the position of a colleague of hers, a fellow Opposition front bencher, Mr John Colinton Moore, who it was revealed last night had a vested interest in seeing the defeat of legislation which was before the Parliament last year and earlier this year, a vested interest which was not disclosed and was unknown to the public until last night. The public record shows that Mr Moore, along with Mr W. J. Wilde, now a member of the staff of Coopers and Lybrand, formerly-- Senator Chaney —Mr President, I raise a point of order. The Minister has been asked a perfectly straightforward and simple question about the equality of treatment of taxpayers. He is replying by canvassing matters which have nothing to do with the question. He is at least debating the question but in my view he is simply being abusive in his usual manner. I ask that you call him to order and ask that he either answer the question or say that he cannot. Senator Chipp —On the point of order, Mr President, I do not want to interfere with the substantive issues being raised by both the Liberal and Labor Parties about certain people allegedly in trouble but I say, with great respect to you and with great respect to Senator Chaney and Senator Dame Margaret Guilfoyle, that you have a duty to protect public servants in this matter. Some questions asked from both sides of the House today come very close to impugning the reputations of public servants, who are not in a position to defend themselves. I ask you to have regard to their reputations. The PRESIDENT —Order! It is the Chair's responsibility to see that the Standing Orders are adhered to. In that regard, the Chair is carrying out its responsibilities. I draw the attention of honourable senators, and particularly Ministers, to a statement that was made in the Senate in 1973 by the then President, Sir Magnus Cormack, who said: A Minister cannot be required to answer a question but if he does, the Minister should confine himself to points contained in the question with such explanation only as will render the answer intelligible. In all cases an answer must be relevant to the question. I draw that to the attention of the Minister in regard to his reply to the question asked by Senator Dame Margaret Guilfoyle. I call the Minister representing the Minister for Finance. Senator WALSH —Thank you, Mr President. The central purpose of the question related to the equality of treatment of taxpayers. Yes, I can guarantee that the present Minister for Finance will be treated with the same equality by the Commonwealth bureaucracy, at least to the extent that it is within the Government's ability to control the Commonwealth bureaucracy-and I say that because the Commissioner of Taxation has quite significant discretionary and statutory powers. Both the Minister for Finance and the shadow Minister for Finance will be treated the same. The financial affairs of the Minister for Finance have been a matter of some fascination to the Liberal Party, although there has been a misinterpretation of those financial affairs in recent days. I believe that in order to give a satisfactory answer- Senator Chaney —I take a point of order. Mr President, the question is not related to the Minister for Finance in the way that the answer is suggesting. It related to the treatment of other taxpayers who might receive assessments. I believe the answer is not relevant to the question. The PRESIDENT —There is no point of order. I call the Minister. Senator WALSH —I realise, Mr President, that I may not have the expertise in these matters that Senator Chaney has, Senator Chaney having been an active partner of the firm Northmore Hale Davy and Leake in 1973 at the time that that firm set up the first tax evasion scheme for Christo Moll. The PRESIDENT —Order! I ask the Minister to relate his remarks to Senator Dame Margaret Guilfoyle's question. Senator WALSH —I am about to do that, Mr President. The question of whether Senator Chaney was personally involved in devising the scheme is a matter for conjecture-- The PRESIDENT —Order! I ask the Minister to relate his remarks to Senator Dame Margaret Guilfoyle's question or I will have to ask him to resume his seat. Senator WALSH —Very well, Mr President. The question concerned equality of treatment of taxpayers by the Government. I can guarantee the Senate that if the shadow Minister for Finance seeks from the Commissioner or the Deputy Commissioner of Taxation a statement about his financial affairs, and bearing in mind that there are discretionary powers in the hands of the Commissioner and the Deputy Commissioner, the Government will do everything it possibly can to see that the shadow Minister receives the same attention as the Minister did. The affairs of the shadow Minister, so it was disclosed or partially disclosed in the House of Representatives last night, are those upon which an opinion from the Commissioner or Deputy Commissioner might well be sought. For example, on 31 March 1978, along with Mr W. J. Wilde, now of Coopers and Lybrand, who was then I understand Mr Moore's accountant-- The PRESIDENT —Order! I think the Minister is now going beyond standing order 100. I ask him to bring his remarks to a conclusion. Senator WALSH —I table documents and summaries of documents relating to the financial affairs of the shadow Minister for Finance and conclude my answer with that. Senator BOLKUS —Has the Minister for Industry and Commerce seen statements by the Queensland Minister for Primary Industries, Mr Ahern, dated 12 October 1983, alleging that the Federal Minister for Primary Industry, Mr Kerin, supported the recent draft report of the Industries Assistance Commission on the sugar industry? Did Mr Ahern's allegations accurately represent the Government's position on this matter or are they merely baseless political accusations calculated, without substance, to cause concern to the sugar industry in Queensland? Senator BUTTON —It was inevitable when the report of the Industries Assistance Commission on the sugar industry was released some weeks ago that it would become a matter of public comment in relation to the Queensland election. It is my understanding that Mr Ahern, the Minister for Primary Industries in Queensland and putative leader of the National Party in Queensland at some future time if events go according to some plans, did allege that the Minister for Primary Industry, Mr Kerin- Senator Chipp —Not a bad lad. Senator BUTTON —At least he is a lad, Senator Chipp. That is something he has going for him. Senator Haines —What is that supposed to mean? Senator BUTTON —Senator Chipp can answer his back bencher's question. But Mr Ahern certainly did make some allegations about Mr Kerin in relation to alleged support of the draft report of the IAC on the sugar industry. I have no doubt that this allegation was made in the context of the current election campaign in Queensland with a view to damaging the prospects of the Australian Labor Party. Mr Ahern knew that his allegations were false but he continued to make them. It is my responsibility, I suppose, to inform the Senate that Mr Ahern has finally agreed that he knew the allegations were false. He has been smitten with a bout of honesty. He has retracted the allegations he made against the Federal Mininister for Primary Industry, Mr Kerin. He has even taken the somewhat pathetic way out of saying that the allegations were attributable to his staff and not to him. Not only did Mr Ahern, as the Minster in Queensland, retract the remarks he had made about the Federal Minister but also he sent Mr Kerin a telegram on this matter. I would like to refer the Senate to the contents of that telegram from Mr Ahern to Mr Kerin. It stated: The statement which was issued was issued by my staff and was not personally seen by me prior to its release, although there is a standing instruction that all Press releases be vetted before release. I am aware that you have personally expressed views which are highly critical of the IAC report on the sugar industry and I regret that the statement which appeared in my name created a false impression of your attitude and I apologise for any embarrassment or inconvenience it may have caused you. That telegram is revealing of two things. First of all, it is revealing of a high degree of incompetence on behalf of the Queensland Minister if the statements made in the telegram are correct-that is to say, allegations of this kind are made and they are subsequently covered up by the Minister by saying they were made by his staff. Secondly, the allegation having been made, by whoever, Mr Ahern subsequently repeated it on a number of occasions. Senator Chaney —That is superior to putting unverified material before the Senate, is it? Senator BUTTON —I am answering a question regarding the Ministers for primary industry in the Federal Parliament and in the Queensland Parliament. The honourable senator will have his opportunity in regard to the other matter. Let me say that the behaviour of Mr Ahern in this matter is typical of some of the behaviour which has gone on in the context of the current Queensland election. Allegations have been made not only by senior Ministers in the Queensland Government but also by Senator Boswell in this Parliament that the Australian Labor Party Government in Canberra put pressure on the Australian Broadcasting Corporation in relation to programs being shown in Queensland during the current election campaign. It was only yesterday that the Minister for Communications discovered what the ABC had done in relation to this matter in consultation with the political parties in Queensland. That is an extraordinary allegation-on reflection, perhaps not so extraordinary-to be made by Queensland politicians; it is an extraordinary allegation to be made by senators in this Parliament without any substantiation whatsoever. Birds of a feather, it seems, flock together in relation to these issues in Queensland. Senator Boswell, Mr Ahern and Senator Chaney, if he were a Queenslander, would no doubt be in the same bag . Senator DURACK —My question, which is directed to the Minister representing the Treasurer, follows the question asked by Senator Chaney at Question Time today. Is the Minister aware that a number of small investors in Metro Industries Ltd, who have received notices of liability under the Taxation (Unpaid Company Tax) Amendment Act of 1982, have in many cases, as I understand it, paid the assessments in order to avoid the penalties that would otherwise be incurred without being aware of the interpretation placed on the discretion of the Commissioner of Taxation which has now been revealed in the letter that he has written to a liquidator of Coomel Pty Ltd? I ask whether any of those small investors are in the same position as Coomel. If they can establish that to be the case, will the Government refund the money that has been paid? Senator WALSH —I am not sure to what degree the Government has an ability to take action as suggested by Senator Durack, assuming that the facts as he outlined them stand up to scrutiny. I am not sure what scope the Government has under the legislation or whether the Commissioner has the power to do as suggested. As I recall the details of the legislation, on receipt of an assessment a taxpayer may either contest the assessment and accrue interest at the rate of 20 per cent a year or pay in full settlement. As far as I am aware, there is no provision in the legislation for a subsequent refund of a payment which has been made. There may be some discretion for the Commissioner, if convincing evidence can be produced that the shareholder in question did not derive from the sale of the shares in that company a financial benefit which was related to the fact that it had always been intended by the directors who sold that company that the company tax due either for the current financial year or for previous financial years be evaded. But I will check the details of that with the Treasurer. Senator CROWLEY —My question is ad- dressed to the Minister representing the Minister for Primary Industry. In the News in South Australia on Monday, 17 October, there was a report of economic recovery for Australia and, in particular, for South Australia, based on a report by the South Australian Chamber of Commerce and Industry. The recovery report was based on indicators from the housing sector and industry forecasts for sales and employment. There was a further reference to excellent prospects in the rural sector recovery. Can the Minister say whether these rural figures represent an increase on the predictions before the Budget, to what areas they refer, and to what extent they will affect the economic recovery in Australia? Senator WALSH —The most recent estimate from the Bureau of Agricultural Economics of the net value of rural production is that it will be some $4,450m. The pre- Budget estimate was $4,400m. That was not a great change on the pre-Budget estimate. The degree of this increase reflects mostly the fact that very good rains have continued to be received throughout the wheat growing areas of eastern Australia at least; therefore, a record wheat crop is expected. That is, of course, a very large increase on farm product for the previous year. Because of that enormous growth in farm product, it is expected that the rural sector will contribute about 2 per cent of the total of 7 per cent increase in real total gross domestic product which is anticipated in this financial year. A recent article in the National Farmer, in the issue dated 22 September, drew attention to the rural economy. Among other things, the article stated: Thousands of new jobs and millions more dollars will also be injected into the rural economy through the Federal Budget's big spending plans for construction and roads. That relates to the non-agricultural sector rather than the agricultural sector of the rural economy. The same issue of that paper reported: Some $23m will be spent over several years on projects in areas ranging from Alice Springs, Toowoomba, Longreach, Orange and Dubbo to Ballarat, the Spencer Gulf, Derby, Broome and Burnie. So, by reason of an upturn in agricultural output, which is mostly associated with the climate, and also because of the policies of the Government, a very significant improvement in the general state of the rural economy, both agricultural and non-agricultural, can be anticipated over the remainder of this financial year and beyond that into the future. Senator CHANEY —I refer again to the extremely favourable ruling given to Coomel Pty Ltd by the Deputy Commissioner of Taxation in Perth on 17 October. I ask the Minister representing the Treasurer: Will he ask the Commissioner of Taxation to inform the Parliament how many taxpayers have been assessed under the 1982 legislation and how many taxpayers have been afforded the same exceptionally favourable treatment? Senator WALSH —Was that taxpayers or tax evaders? Senator Chaney —Taxpayers. Senator WALSH —Taxpayers. Well, we are not talking about the Western Australian Branch of the Liberal Party, or half of it. If Senator Chaney wants to impugn the integrity of the Deputy Commissioner of Taxation, which I believe his question does, he is welcome to do so. I certainly will not join him in that exercise. As to the factual content of his question, as distinct from the innuendo which is clearly aimed at impugning the integrity of the Deputy Commissioner of Taxation in Western Australia, regarding how many people have received assessments and a number of subsidiary matters, I will endeavour to obtain an answer to that aspect as quickly as possible. Senator SIBRAA —Has the Minister representing the Minister for Foreign Affairs seen a report in the Age of 18 October claiming that the Internatonal Red Cross has been prevented from distributing aid in East Timor during the present Indonesian military offensive, and that the Australian Government is receiving misleading advice on the current situation in East Timor? Will the Minister inform the Senate whether there is any foundation for those claims? Senator GARETH EVANS —I have seen the report which appeared in the Age yesterday alleging that, according to cables received by the Department of Foreign Affairs , the International Red Cross is being prevented from providing aid in East Timor during the current Indonesian military offensive and suggesting that there has been some divergence between the advice that the Government has been receiving on the activities of the International Committee of the Red Cross in East Timor and what the Government has said publicly. I think Mr Hayden addressed this matter in a public statement yesterday, but it is appropriate, given the misreporting in the Age on this occasion, to put it on the parliamentary record. The information available to the Government was fully reflected in the answers given by me in this place on 7 and 11 October when I said, among other things, that the representative of the ICRC in Jakarta had denied media reports that the ICRC had been refused access to East Timor. The representative said that the ICRC still had access to the territory, although with significant restrictions of movement on the main island. He confirmed that relief operations on the main island had not yet resumed due to limitations imposed by the Indonesian authorities on the ICRC delegates. This explanation from the International Committee of the Red Cross is consistent with a statement made on 14 October by the Indonesian representative to the United Nations when he said: I can categorically state that the ICRC is continuing its various programs in East Timor and on Atauro Island, including programs on family reunion and repatriation, tracing and mailing. A temporary suspension is in force only with regard to relief operations on the mainland due to the recent security disturbances and here our concern is solely with the safety of ICRC personnel in the area where the earlier mentioned incident occurred- He was referring there to the killing of 15 Indonesian soldiers on 8 August. He continued: Negotiations, however, are continuing and we hope that on this aspect too a mutually satisfactory arrangement will soon be reached. It is the case that the suggestion in the Age that there has been some very significant difference between what the Government knows and what we have said publicly is quite without foundation. Senator CRICHTON-BROWNE —The Minister for Resources and Energy would be aware of the interdepartmental committee on uranium whose paper has been circulated to Caucus by the Prime Minister. Does the Minister accept the conclusion in paragraph 25 of that paper, namely, that the overall record of safeguards reflects the political influence of the system as a deterrent as well as the technical effectiveness of the safeguards themselves? Senator WALSH —I do not want to and I will not pass judgment, even a personal judgment, on one paragraph plucked in isolation out of an interdepartmental committee report. I would want to read it in context before I gave a personal opinion on it. Even if I were able to read in context-which would take a couple of minutes-a copy of the report, which I do not have with me, I believe it would be improper for me to pass judgment on it as an individual prior to the matter being considered by Cabinet and the parliamentary Party over the next couple of weeks. Senator REYNOLDS —My question is directed to the Minister for Veterans' Affairs and relates to the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam. Will the Minister advise what stage the Royal Commission has reached in its inquiries? What steps will the Royal Commission take to ensure that the views of Australians in regional areas, not just those in capital cities, are heard and considered by the Commission? Senator GIETZELT —The setting up of the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam has proved to be one of the popular decisions of the Government. It has had endorsement in editorial comments by most of the major newspapers in this country. Currently, I understand that the Commissioner has held one or two inquiries in Sydney and has invited written submissions. Consequent upon receipt of those submissions, it is the intention of the Commissioner to hold such inquiries not only in the capital cities but also in many of the provincial areas of Australia. The Commission will seek to establish whether there has been an unusual incidence of birth defects amongst veterans' children and will deal with the questions of morbidity and mortality rates amongst the Vietnam veterans themselves. The Commissioner will also give consideration to whether there is any consequent justification for changes to the repatriation legislation and system. The honourable senator asked me a further question about outlying areas. I indicate to the Senate that, unlike the previous Government, this Government is commited to taking services and facilities to outlying areas. The Commissioner has indicated that he will be travelling to many parts of Australia in order that those veterans-and there seems to be a large proportion residing in Queensland-will have the opportunity to consult him. As a result of a conscious decision by the Commissioner to visit that State, he will engage in consultation , through talk-back radio and other means of communications, with those who believe that they have some evidence to place before the Commission. Active steps will be taken to encourage veterans, and especially those in outlying areas, to participate in the deliberations. As I will be travelling to Townsville later this week to open a Vietnam Veterans' Counselling Services Office, it may be opportune for me to mention that Townsville is on the itinerary of the Commissioner because a considerable number of veterans live in that area. The Commissioner will be participating in the Government's overall commitment to extending facilities to people who live in regional areas and decentralising the delivery of services. Indeed, the Department of Social Security and the Department of Veterans' Affairs are determined to extend their range of facilities to those who live in the regional centres of Australia. Senator HAMER —I refer the Minister for Resources and Energy to a paper on uranium prepared by an interdepartmental committee on which his Department was represented. The report was circulated by the Prime Minister. Does the Minister agree with his Department that Australia's rejection of the nuclear fuel cycle, while possible, would be unlikely to improve its capacity to advance the cause of non-proliferation and, at best, might be seen abroad as a quixotic act? Does he further agree that such action would be counter-productive to the Government' s efforts in regard to disarmament and would have serious consequences for Australia's position as a supplier of other commodities? Senator WALSH —The document to which Senator Hamer referred and from which I think he quoted, although I am not quite certain, is the agreed view of a number of Commonwealth departments. There is a legitimate argument to be put for the views put by those departments as there is probably a legitimate argument to be put against most, if not all, of the points those departments raised. The point, however, is that Australia is not governed by that collection of departments or by the total 27 or 28 Commonwealth departments. Australia is governed by a government elected by the party which holds a majority of seats in the House of Representatives. Of course, that is the Australian Labor Party. I was elected by the entire parliamentary Labor Party as a member of that Government. The final decisions will be made by the Government, not by Commonwealth departments in part or in total. The views expressed by those departments will be taken into account when the Labor Party makes a final decision on this matter . Senator FOREMAN —My question, which is directed to the Minister for Industry and Commerce, concerns the proposal by the Vehicle Builders Employees Federation to establish a light commercial vehicle assembly plant at the General Motors-Holden 's Ltd Acacia Ridge, Queensland, plant. Does the Minister feel that the proposal , which would involve a consortium of the major car manufacturers, is a feasible proposition? What would be the major obstacles in establishing such a plant? Does the Minister agree that it would be a means of overcoming the present monopoly on light commercial vehicles held by Japanese manufacturers? Senator BUTTON —I have heard an outline of the proposals by the Vehicle Builders Employees Federation to use the Acacia Ridge plant of General Motors as a manufacturing area for light commercial vehicles in Australia. I have heard no details of the proposal by the Vehicle Builders Employees Federation. I am not sure that there are any. The proposal is, in a sense, a natural response to the news of the closure of that plant and the perceived need for the manufacture of such vehicles in Australia. I am unable to say whether the proposal put forward by the Vehicle Builders Employees Federation is feasible. The second part of the question related to the obstacles in the road of such a proposal being feasible. I suppose the principal answer is money and an agreement by the principal manufacturers on any such course of action which might, to them, seem desirable or otherwise. The question of the light commercial vehicle imports into Australia has been addressed to the Car Industry Council, the setting up of which I announced about a fortnight ago. Working parties of that Council are examining that matter. Senator Foreman also asked me whether the use of the Acacia Ridge plant would be an adequate means of dealing with the question of the Japanese monopoly on the manufacture of light commercial vehicles. Any manufacture in Australia of light commercial vehicles, particularly substitute passenger cars, would of course have some effect on the presence of a Japanese monopoly in that area. The question which has to be addressed is whether that is desirable, because I think there is very little doubt that insofar as those vehicles are concerned the Japanese have been very astute in tailoring their product to the needs of particular markets and that their vehicles are very well produced. But those are all questions which are in the province of discussion currently before the Car Industry Council. I do not in any sense dismiss any of the suggestions which have been made. I just say that there must be very serious qualifications about their implementation. The PRESIDENT —On 24 August 1983 Senator Jessop asked a question concerning the possibility of electronic surveillance of Senate committee rooms and senators' offices. The question was raised again at a hearing of Estimates Committee A on 12 September. I inform honourable senators that last night a physical and electronic inspection of the Senate committee rooms was carried out. In addition a check for possible radio transmissions from committee rooms was made while committees were meeting this morning. The inspection did not reveal any bugging devices or evidence of electronic surveillance. I advise honourable senators that I intend to have random checks carried out from time to time to minimise the potential for electronic surveillance in future. Senator GARETH EVANS —On 13 October Senator Kilgariff asked me a question concerning the resumption of aid to Vietnam. The Minister for Foreign Affairs has provided me with the following answer. During Mr Hayden's discussions in Hanoi on 19 and 28 June the Vietnamese Foreign Minister, Mr Tach, said that he was not about to ask for aid from Australia. Such a decision, he said, was a matter for Australian sovereignty. From Vietnam's point of view, he said, the most valuable aid was the support and sympathy of the Australian people and the continuation of the Government's initiative to facilitate the search for a solution to the Cambodian problem. The Government has made no decision to move in practical terms on the question of aid to Vietnam. In the same question Senator Kilgariff also asked about the future of the Royal Australian Air Force Squadron at Butterworth in Malaysia. The Minister for Defence has said in reply that the question of the longer term future of the Australian presence at Butterworth is currently under review by the Government. A decision regarding the remaining RAAF Mirage squadron has not yet been made. Consultations will be held with the Malaysian and Singaporean governments in due course. Senator GARETH EVANS —On 12 October Senator Durack asked me a supplementary question about the condition of the investigation by the Australian Federal Police into the drug matter arising out of which the investigation concerning Mr Rex Jackson was initiated. I am able to say in answer to Senator Durack's question that the investigation is current. It is not possible to comment at this stage as to when it might be concluded as it is the practice, which I am sure Senator Durack will appreciate, not to speculate on police operations currently in progress. No charges or drug seizures have resulted from the investigation so far. Discussion of Matter of Public Importance The PRESIDENT —I have received a letter from Senator Peter Baume proposing that a matter of public importance be submitted to the Senate for discussion, namely: The Labor Government's broken promises and dishonoured assurances to the education community. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator PETER BAUME(New South Wales)(3.04) —The Labor Government's record of broken promises and dishonoured assurances in education is a matter of national disgrace. In opening this discussion I want to mention first the fact that the Minister for Education and Youth Affairs, Senator Ryan, will not be present for this matter of public importance and to say that it is a matter of regret that that is so. It was the Opposition's intention to bring this matter on and have it discussed last Wednesday, when Senator Ryan was available and when she would have been able to answer it. We actually offered the matter for discussion last Wednesday, but the Australian Labor Party, in accordance with the Standing Orders and acting quite properly, pre-empted us and got in its own matter of public importance. It was our intention to bring this matter up for debate when the Minister was here to discuss it but as she is not here today I wish her well in her trip to Kilkenny. I regret that she is not here to answer to the education community and to the Senate for a shameful record of broken promises and dishonoured assurances. The message out of it is quite clear. It is that we cannot trust the Labor Party and we cannot trust Labor promises. Today's matter of public importance is about the extent to which the Labor Government has failed to honour quite specific pre-election promises and the extent to which it proceeded cynically to raise expectations in the education community and the extent to which that community has now soundly condemned the Minister and the Government and has expressed great disappointment at what has happened. Mr Acting Deputy President, just three days ago I attended a large meeting of Catholic parents held on a Sunday night in the western suburbs of Sydney. The meeting was to have been addressed by Senator Ryan. She had been invited and she had accepted. I have here a copy of her letter of acceptance to address that meeting. Senator Ryan decided close to the date of the meeting that she would not so attend. Senator Teague —She could not face it. Senator PETER BAUME —It is interesting. I do not believe Senator Ryan was willing to go before a group of Catholic parents and answer the criticisms they have. I attended a meeting recently in Albury of about 950 parents. Not only would the Minister not attend but she would not send any representative, saying that the matter was of great delicacy. I would like to put on record that at both these meetings motions were carried condemning the Minister for her failure to attend, for her failure to meet them and for her refusal to answer face to face some of the criticisms which they have. This failure to keep faith at meetings was a small thing compared with the broken promises and the dishonoured assurances to the whole education community that have marked the brief period of office of this Government. There are at least 15 broken promises and assurances, and this matter of public importance concerns those promises and those dishonoured assurances. We will discuss first the assurances which some people took to be statements which they could trust and which were given to them as specific statements before the election. The promises were in all areas of the education portfolio, but first let us consider the specific explicit assurances given to non-government schools before the election. The non-government authorities were fearful before the election of what the Labor Party might do, and as events have turned out they well might have been fearful. Labor's spokesman before the election undertook to speak to the non-government school representatives and to do so in such a way as to try to reassure them. The ALP sought to allay those fears and give those people some assurances. What were the assurances, Mr Acting Deputy President? In relation to non-government school funding, the Labor Party in writing, in a supplementary document issued in February 1983 during the election campaign, said: A period of time will be required to allow the Schools Commission to determine the community standard and to allow schools, in the light of that determination to make their decision. It went on to say in writing: Funding at present levels will be maintained during this period. There cannot be a more explicit and clearly stated promise than that. It is an assurance in writing and it is an assurance which has been dishonoured. Senator Ryan, after the election, in her haste to appease the teachers federations, did not give non-government schools the opportunity to conform to the community standard, as they had promised to do. She did not even wait until a community standard was developed. She did not wait even for the Commonwealth Schools Commission to go ahead and do what the Government had promised to do in writing. The promise that 'funding at present levels will be maintained during this period' went by the board at the first available opportunity. There is still no community standard which has been determined. We simply cannot trust the Labor Party. The Minister has dishonoured a specific commitment given on behalf of her party during an election campaign. The Minister for Finance, Mr Dawkins, when he was Labor's shadow Minister for Education, went to Western Australia, his own State, and for whatever reasons, gave a most surprising but quite explicit assurance there that if the Labor Party produced a hit list of schools, no Western Australian school would be on it. That might be good home town stuff but that assurance has been dishonoured. The hit list contains a school in Western Australia and the parents and students at the Presbyterian Ladies College at Peppermint Grove, while they may or may not have news about being on the list, are very much aware that they are on this list, in spite of a specific promise by the Minister for Finance, when he was in Opposition, that no Western Australian school would be included. They have been let down. We cannot trust the Labor Party. These assurances were central to the electorate's assessment of Labor's intentions and during an election campaign these intentions were what the people wanted to know. The people have been deceived badly. The Labor Government has sought, since its election, blatantly, in terms of its funding for schools, to divide Protestant from Catholic, to divide school from school, and Senator Ryan' s language in her speeches has been that of class struggle and class division. The ALP has taken a lot from some schools; it has given a little to some others. The amounts of money are modest but the matters of principle are not. They concern the basic grant and the percentage link which we have talked previously. The response to Labor's action has been vociferous and angry. What is interesting is that the condemnation of the policies of the Labor Party have come from those who have been the recipients of the largesse as well as from those who have been deprived. Let us look at some of the school and church leaders who have attacked the Labor Party for its broken promises. Archbishop Sir Frank Little, Archbishop of Melbourne, writing in his own archdiocese newspaper, said that the sectarianism that this had given rise to was as bad as he could recall and 'Is this Senator Ryan's gift to the nation?' The Central Committee of Catholic Bishops of Australia representing 45 bishops in the Catholic community condemned out of hand as wrong in principle what the Labor Party had done. On 9 October, just 10 days ago, there was read from every Catholic pulpit in Victoria a pastoral letter signed by all the Catholic bishops of Victoria. They condemned roundly what the Labor Party had done as being wrong in principle. Yesterday in Canberra , at the opening of extensions to St Edmund's College, Archbishop Francis Carroll made it clear that he objected in principle to what the Labor Party had done. Are these the responses of those who the Labor Party says it is helping? Are these the responses of people who, realising what has been given to them, are grateful? These are in fact the responses of people who see all too clearly that the Labor Party is proceeding wrongly in principle and wrongly for education. They do not think they can trust Labor. We do not think they can trust Labor. Senator Ryan should know that it is not just the non-government school sector which recognises that assistance for all schools is a matter of equity and educational justice. The people of Australia understand it too. A poll published last weekend in the Australian newspaper showed quite clearly that 71 per cent of those Australians whose children are at government schools support the continuation of state aid. So the community supports state aid and it supports a fair go. We cannot understand why this white-anting is going on. I would say very seriously that if the ALP ignores this groundswell of concern from the leaders of the Catholic Church and from the leaders of the Catholic education community it will do so at its own peril. Labor's broken promises go further. They go right across the education portfolio. The Government has failed to put into place promised programs for schools, promised programs for technical and further education, promised programs for universities, promised programs for colleges and promised support for students. Senator Robertson —Identify them. Senator PETER BAUME —My colleagues and I will set some of these out. Let me spend just a few moments on Labor's promises to support students and, of course, on its failure to deliver on these quite specific promises. The promise was clear and uniquivocal. I will read it. In relation to cash support for students, the Labor Party said: To increase TEAS- that is, the tertiary education assistance scheme- progressively until it equates with the unemployment benefit and then to maintain the nexus. It also promised: To increase the TEAS means test until it equates with the average weekly wage. What in fact has it done? It has failed to maintain TEAS in real terms. It has increased it in cash terms by 5 per cent when inflation has gone up more than that. We will almost certainly see a decline in the real living standards of our students who are depending on TEAS. Just this morning we were asked to agree to legislation which increased the unemployment benefit. This will widen the gap between the unemployment benefit and the assistance available to students. It increased the unemployment benefit but not the benefit for students. There is a promise to students waiting to be redeemed. Of course, because the means test which goes with that allowance was not increased enough, a smaller percentage of students will get access to the benefit. Let me illustrate that. At the Estimates Committee hearings we ascertained, by way of question, that the Government expects 10,000 more enrolments but at the same time it expects only 500 more people to get access to student assistance. Only 5 per cent of the numbers enrolled will be getting TEAS. In spite of waxing so lyrical about the need to increase participation in education and to improve access, in its first Budget Labor has widened the gap between unemployment benefit and student allowances. One only needs to recall the words which Senator Ryan herself used in this place when it suited her in Opposition. She said: While ever there is such a disparity between the level of payment available for unemployment benefit and the level of assistance for full time students, students from modest backgrounds will from time to time be forced out of universities and tertiary institutions and on to the dole. How the Government can possibly defend and maintain that system really defies rational understanding. Senator Ryan's own words, upon which she and her Government promised to act, now serve to condemn her. The Government's priorities are clearly directed less to the needs of education, retention and participation than its rhetoric before election would have us believe. Here was a chance to redeem a promise to students. The Government failed to do so. It is clear to tertiary students across Australia that they cannot trust Labor. Let us look at what else the Labor Party promised students. It promised to provide post-doctoral fellowships for 300 scholars to boost the national research effort. It has not honoured the promise. It promised to provide an emergency loan scheme to replace the student loan scheme which it had abandoned. It has not done so. It promised to assist student parents with the provision of child care on campus. It has not done so. Is it any wonder that across Australia , on campus after campus, the student newspapers are taking the Labor Government to task. The students know that they have been betrayed and they are saying so. Tharunka, the University of New South Wales newspaper, in its post-Budget issue, said: 'Government Stabs Students in the Back' and 'Record of Deceit'. That is what they say at the University of New South Wales. The Federation of Australian University Staff Associations, in the Journal of Advanced Education of September , makes it clear where the Government has failed to deliver. I must say that the Australian National University's own newspaper Woroni saw fit to put a photograph of the Prime Minister (Mr Hawke) on the back of that newspaper together with words which the Prime Minister himself uttered in another place last year about his predecessor, words which were clearly against the Standing Orders, words which imputed the worst kind of motive to his predecessor and which I do not care to read into this record. This was the opinion of students on campus at the ANU. Those students know that they cannot trust the Prime Minister, the Australian Labor Party and their promises on the never never. Right across Australia, people have been criticising this Government for the sham that is its Budget. Senator Gietzelt —You believe in smaller government. Senator PETER BAUME —Senator Gietzelt has been part of that sham. Mr Acting Deputy President, I go further. The $10m that has been provided to allow for 3, 000 extra student places might be all very well, but the Government has not provided the capital to make it a reality. Yesterday in this place the Commonwealth Tertiary Education Commission report was tabled. It actually took the Government to task for failing to provide the resources to make the redemption of its promise a reality; and so it goes on. There is no commitment to continued funding to make these extra places a reality. It is all in the report. The Commonwealth Tertiary Education Commission took the Government to task. Student organisations have taken the Government to task; and so it goes. I deal now with residential colleges for students. These are essential for people who live out of the metropolitan areas. Eighty per cent of country students use residential colleges and they will be paying more for their accommodation because there has been a 25 per cent cut in the funding subsidy. Of course, this has been done against the background that their tertiary education assistance allowance will be less in real terms. The Vice-President of the Australian Union of Students-scarcely a conservative organisation-Ms Gayle Sonsakda has stated: an effective decrease in the level of TEAS is an odd method of facilitating access for disadvantaged groups. These tertiary students know that they cannot trust the Labor Party. According to the headline in the August edition of the Teachers' Journal, Labor 's failure to deliver on its promise extends to schools as well. Labor promised to provide an extra $37m in its first year of government for recurrent resources in government schools. That was its promise. Van Davy, the President of the Australian Teachers Federation, in his report in Teachers' Journal wrote an article which was headed: $37 million still owing! That was another promise made by the Labor Party which was not kept. The schools cannot trust Labor either. What has emerged from the many promises is that those who trusted Labor in the education area have had their hopes dashed. More specific promises have been broken. I hope that my colleagues will refer to them . How they are redeemed is part of the test of credibility of the Minister and the Government and of their adherence to policy. The Labor Party's promises were clear. These promises were the bait used to attract voters, just as the Government has been trying to bait the hook for Queensland this week. When the votes came in, the promises were not honoured. They have been put aside to the disadvantage of education. It is a sorry story, Mr Acting Deputy President, of failure and deception. We cannot trust Labor to keep its promises. In education, as in other areas, that failure to deliver has been revealed. Its education program shows just how far the Labor Party in Government is prepared to go to dishonor and to set aside solemn and specific undertakings. I believe that education has suffered unfairly. I believe the education community will find it difficult to forgive the Labor Party for what it has done. Senator COLSTON(Queensland)(3.24) —I find it amazing that Senator Peter Baume would open his speech by making a trumped up charge against the Minister for Education and Youth Affairs (Senator Ryan), who is not here this afternoon to defend herself. Senator Giles has full details about the deceitful charges that Senator Peter Baume has made against Senator Ryan and she will provide the details to the Senate when she speaks. I also find it rather amazing that it is Senator Peter Baume who has brought on a debate about broken promises and dishonoured assurances to the education community. The discredited former Minister for Education certainly had his opportunity to bring about greater equity and social justice in Australian education. He did not take that opportunity. In fact, the Australian electorate showed that the Fraser Government not only in the education area but also in all areas could not be trusted. The previous Government did not have an education policy but rather a funding formula. The previous Government did not direct resources to those most in need. In short, the previous Government failed in the area of education. By comparison, the previous Labor Government has moved quickly to address inequities in the provision of education resources. We are not the first Labor Government to do this. I will mention the current Labor Government's initiatives shortly. Before doing so, I shall make some comments about former administrations. On coming to office, the Whitlam Labor Government of 1972-75 set about ending the decades of poverty and neglect experienced by many Australian schools under previous conservative governments. The needs principle was given effect when the Government accepted the recommendations of the Karmel report. The Schools Commission was established in the face of strong opposition by the conservative parties. Co-operation between government and non-government schools was fostered through the Schools Commission itself and by the funding of joint programs in which government and non-government schools participated. Funding according to need and special assistance to disadvantaged groups was established as the basis of the Federal role in school funding. In a display of extraordinary insensitivity, the Fraser Government systematically rekindled the divisions over state aid and pursued funding policies which manifestly failed to close the resource gaps with which it had professed to be concerned. Contrary to the notions of need or social justice, the Fraser Government increased Commonwealth grants to the highest resources category of non-government schools at twice the rate of its increase to the most needy category and it presided over a real decline in the Commonwealth contribution to government schools. Through its laissez-faire policies, the Fraser Government increased tension between government and non-government schools by failing to ensure that the impact of proposed new schools on existing schools was assessed and that resources were used efficiently. The Fraser Government presided over a real decline in participation rates by teenagers in post-compulsory education. The seriousness of this development could hardly be exaggerated. The loss of talented young people had a serious effect on participation in higher education and the ranks of unemployed teenagers were swelled at the very time when employment opportunities were shrinking. In responding to this development the Fraser Government failed on all counts. It destroyed the Commonwealth's capacity to assist change in secondary schools by dismantling the Curriculum Development Centre and the Education Research and Development Committee. Its economic polices placed greater and greater economic pressure on families. It reduced resources to government schools where the decline was concentrated. In its guidelines for the education commissions, the Hawke Labor Government has again sought to focus its efforts on the areas of greatest need. The guidelines statement signalled a return to Commonwealth policies for schools under which funds are directed to areas of need and priority and provide a firm basis for proper educational planning. In the guidelines, the Government's policy objectives as they relate to the programs of the Schools Commission were set out . Our objectives are: To assist schools to give a positive and effective education to all children and to make substantial progress towards the more equal distribution of other outcomes of education such as access to paid employment and higher education. To assist schools to respond effectively and appropriately to the diversity of Australian society; to assist and help shape economic recovery and development; and to give the community confidence in our determination to give all children access to properly staffed and equipped schools. Perhaps the most characteristic example of our approach is the participation and equity program, which will begin next year. The program is intended to encourage young people over the school leaving age to stay in the education system and to undertake useful and fulfilling education training. The program will be the centrepiece of the overall framework of youth policies which the Government is developing. As honourable senators will be aware, the Hawke Labor Government was elected on a platform which included specific commitments to improving public education. As a consequence, $71m has been allocated for the program for 1984; $39.6m will go to government schools, $4.5m will go to non- government schools, and $26.9m will go to technical and further education. The transition education program will be subsumed by the participation and equity program. An indication of the importance that we place on the new program is the fact that the total of $44m allocated to the schools sector is $20m more than the amount available under the transition education program this year. This additional amount will be used on activities which have a broad system impact, such as the examination of credentialling and assessment, curriculum reform, modification of teacher skills and attitudes to fit the new courses which will emerge, organisational reform, the targeting of support services and, very importantly, the improvement of school-community relations and community attitudes to both education and the outcomes of education. The program will work to break down the persistent patterns of disadvantage, in which educational outcomes have depended to an unacceptable extent on the socio- economic background, sex, ethnic background or geographical location of students . The major emphasis of the participation and equity program will be to increase the participation of young people in post-compulsory schooling, particularly Aboriginal people, working class youth, some migrant communities, rural youth and handicapped people. The Government has no intention of promoting artificial or contrived schemes for raising retention rates at particular schools at the expense of others. We seek an improvement in all schools. Apart from the program initiative there are a number of other areas in which the Government has already taken action. The Schools Commission has already established a national advisory committee on computers in schools and is examining issues related to the introduction of a national computer education program. Effective forward planning in this area is of the utmost importance if the program is to succeed, and that will be the primary function of the national advisory committee. We have allocated $18m for the triennium 1984-86, with government schools getting $4.8m and non-government schools getting $1.2m next year. The establishment of the computer education program recognises the need for students to have an understanding of the uses of new technologies and their social, environmental, industrial and economic effects. From the teachers' point of view there will need to be planning for the introduction of computers and computer-based programs to the curriculum and the professional development of teachers who will have to deal with the new technologies. Additional and appropriate professional development programs, including programs for parents, will be funded from this allocation. Another area in which the Government has acted quickly is that of capital expenditures on government schools. Next year will be the first time since 1977 that there has been a real increase in the government schools capital program. The 1984 allocation will be $150.5m, compared with $143.5m available this year. Within that $150m we have earmarked $20m for the upgrading of existing schools serving disadvantaged communities because of our concern that, as reported by the Schools Commission, far too many such schools are dilapidated or run-down. Another $5m has been earmarked for government schools serving predominantly Aboriginal communities. The Government has made clear its commitment to improving the educational opportunities of women and girls. We want to enhance the ability of schools to help girls gain the self-confidence and competence necessary for equal participation in society. There have always been girls who have succeeded. Many more have never reached their full potential because of the disadvantages they have faced in the education system at all levels and the consequences of that for employment opportunities. The Schools Commission is examining the particular educational needs of girls and ways of meeting those needs in both primary and secondary schools. The Government will provide funds in 1984, under the projects of national significance program of the Commission, specifically for projects related to the improvement of educational outcomes for girls. Perhaps more importantly, the Commission will be required to monitor all Commonwealth-funded programs to ensure that girls and boys have equal access to them. Senator Peter Baume —I take a point of order, Mr Acting Deputy President. I should like Senator Colston to assure us that he is not reading his speech. If he is not reading it, perhaps he could look up occasionally. The ACTING DEPUTY PRESIDENT(Senator Lewis) —I have observed that Senator Colston has been using copious notes. I do not intend to rule in favour of the point of order. Senator COLSTON —Thank you, Mr Acting Deputy President. The Government also intends to give priority to the development of arts education. All students should have the chance to know and benefit from their cultural heritage. We have established an education and arts task force to advise on ways of ensuring that a knowledge of and capacity to participate in the full range of visual, performing and creative arts can be made available in all schools. Funds for the project will be made available through the Commission's projects of national significance program. Senator Walters —I take a point of order, Mr Acting Deputy President. Could we ask Senator Colston who wrote the speech to which he is sticking so closely? The ACTING DEPUTY PRESIDENT —I have ruled against that point of order, Senator Walters. Please proceed, Senator Colston. Senator COLSTON —I should like to remind Senator Walters, through you, Mr Acting Deputy President, that I have a long memory. Senator Walters should be aware of that fact. Senator Walters —I take a point of order. Is that a threat? Senator COLSTON —No, it is a promise. Senator Walters —Senator Colston is obviously issuing a threat. I require an apology for the threat that he has made. The ACTING DEPUTY PRESIDENT —Senator Walters, you may take your point after Senator Colston has finished speaking. Senator Walters —I take a point of order, Mr Acting Deputy President. I draw your attention to the state of the House. Senator Gietzelt —I take a point of order, Mr Acting Deputy President. Are we to have complete disruption of an honourable senator's contribution by Senator Walters? Three times she has transgressed and challenged your ruling. I think she should be asked to maintain a little dignity in this chamber. The ACTING DEPUTY PRESIDENT —A quorum is not present. Ring the bells. (Quorum formed) Senator COLSTON —I inform those people who are listening to this debate today that calling for a quorum is a typical ploy which has been used by the Opposition in recent weeks. When the Opposition cannot accept the fact that the Government is working well and working for the Australian people, it tries to limit the amount of time available to Government speakers. I was talking about the initiatives of the Hawke Labor Government. Another of the Government's initiatives for 1984 has been to increase the funds available for the integration of handicapped children into regular schools. For this element of the special education program of the Schools Commission, funds for next year have been increased by 20 per cent for both Commonwealth and non-government schools to allow a more comprehensive development of the program and its services to children and parents. I wish to mention something about the youth policy of the present Government. The previous Government approached youth policy as if it were a problem to be fixed later. How often did we hear of the problems of youth? Under a Liberal- National Party government youth policy was ignored. The Labor Government has already undertaken a number of significant steps towards its objective of producing a more co-ordinated and comprehensive approach to the development of youth policies. Some of these steps are: establishment of a new Department of Education and Youth Affairs, and assignment to me- this refers to Senator Ryan- as Minister, of responsibility for the co-ordination of Commonwealth policies and programs for youth; creation of a Standing Inter-departmental Committee on Youth Policies . . . I could go on but because my time has been taken by useless points of order I will just mention this: The Minister for Education and Youth Affairs, Senator Ryan, will be investigating developments in youth policy in Scandinavian countries during a visit to Denmark, Norway and Sweden during the next few weeks . This Government has a definite commitment to youth. To sum up, the reports of the Commonwealth Schools Commission and the Commonwealth Tertiary Education Commission welcome the many positive initiatives announced by the Government. The commissions are particularly appreciative of the strong direction of the Government's policies in regard to greater social justice. For instance, the Commonwealth Schools Commission states: The Commission welcomes the emphasis in the Guidelines on the allocation of resources to schools on the basis of need. This emphasis is consistent with the Commission's charter. It also welcomes the introduction of the Participation and Equity Program, special support for Aboriginal Education and the initiatives in respect of capital funds for government and non-government schools, special education, arts education and the education of girls. The Schools Commission goes on further to welcome the initiatives of this Government: The Commission welcomes the introduction of the Computer Education Program for secondary schools and the decision to fund it on a triennial basis. Similarly we can have a look at statements of the Commonwealth Tertiary Education Commission which indicate how it welcomes the guidelines which were given to it. The only concern of both commissions is that not as much money was available as they would have liked. Whose fault was that? Senator Peter Baume, who spoke earlier, appears to forget that the Hawke Labor Government was elected for a three-year term. Whilst it would have liked to have fulfilled its election promises in its first Budget it still has two further Budgets before it goes to the polls again, or does the Opposition intend to do what it did in 1974 and 1975 and cut short the Government's term? If it is intent on doing that, it is bound to fail. This being so, it should remain patient. In addition, the Opposition must remember that if it had not left the cupboard bare the Hawke Labor Government would have had a greater opportunity to fulfil more of its promises in the present Budget. Who left a $9.6 billion deficit? Who restricted the Government's ability to fund education to the extent that it would like and to the extent that it needs-who, indeed, but the discredited former Government? Senator TEAGUE(South Australia)(3.44) —This afternoon in the Senate the Liberal and National parties have referred to uproar which has arisen around Australia as a result of the broken education promises of the Hawke Government. Sufficient promises have been broken in regard to schools alone that I will concentrate my remarks directly on them. Why is it that the Australian Labor Party has set out to alienate the one million Australian families who have made a deliberate choice for their children's education by opting to send them to independent schools? Why do the policies, the abandonment of the established principles by the present Hawke Government, set out to alienate one million Australian families? Earlier in his speech today Senator Peter Baume referred to the public opinion polls which showed that 70 per cent of Australians, even those not involved directly in independent schools, support governments giving independent schools state aid. Why is it that before the election the Labor Party sought to give assurances to these people that all would be well but now, following the election, there have been broken promises after broken promises? All those reassurances have been abandoned and those families are now angry, worried and concerned because the Labor Party is alienating them and is out to destroy the bases of the independent schools in Australia. During the period leading up to the election the ALP had difficulty with Mr Dawkins as its spokesman because he alienated so many families who were concerned about their children's education. So the ALP nominated as its spokesman on education a more moderate and sensible man, Chris Hurford, from my State of South Australia. For months Chris Hurford went around the country meeting with the Catholic schools representatives and with other independent schools representatives trying to discuss with them the actual wording of the assurances he would need to give so that the Labor Party could win back some of their votes in the election. All those reassurances have been abandoned. Let me remind the Senate that before the election Mr Hawke and his other spokesman from the ALP said that they would set out to provide unity in the field of education and that they would seek to lessen the divisiveness and bitterness of the anti-state aid debate. That was their promise. They said: 'We will build a climate in which that divisiveness, that bitterness, will be overcome'. But on gaining office they have abandoned the well-established principles on which that unity and cohesion within Australia was built. I will refer to five of these principles. The first is what I call the establishment of choice principle. It is true that the ALP says that people will have a choice, but it is not at the Government's expense. The establishment of choice is directly in jeopardy because the Government has now said: 'In establishing a new independent school you will have to meet not just the normal criteria of the past. There will be extra censorship and extra criteria that you will have to meet before we will allow some capital funds to go to you'. This was announced in late July of this year, but these new barriers were backdated to the day of the election, the day of disaster for Australia and the day of disaster for independent schools. These barriers were set up to abandon the principle that Australian parents can choose to establish an independent school in the local community and receive fair treatment and support in that school's establishment. There is no guarantee any more that in setting up a new independent school one will get even one dollar towards the capital establishment from this Government. The second principle I want to refer to is what I call 'the honesty principle'. It refers to the nexus, that principle which keeps a government honest. The amount of financial support for an independent school is indexed as a direct proportion of the money which goes towards maintaining a state school. That nexus has been abolished. We are on that slippery slope towards there being no guarantees that independent schools will receive recurrent funding from this Government. The third principle is what I have called the taxpayers' principle. It relates to the basic grant which over many years had been guaranteed to all Australian children in any school anywhere in the country. That principle of the basic grant has been abandoned by this Government. In the past, taxpayers have thought that at least some small part of the taxes they pay ought to be directed towards the cost of their children's education. But Senator Ryan has called that taxpayers' principle specious. She is quite happy that some taxpayers will receive no support whatsoever for their children's education from this Labor Government. A fourth principle is the representation principle. We have always thought-at least on this side of the chamber-that, to be fair, any statutory authority or group that is to make decisions affecting parts of Australia ought to be represented on the advisory committee that makes recommendations for government decisions. In the Commonwealth Schools Commission, the representation principle of the past-fair and dispersed representation, with all the interests that the School Commission deals with represented-has been abandoned. A fifth principle is the needs principle. The first four principles I have mentioned have been abandoned by appeal to this fifth principle which we, of course, also support. It is that children in schools with low educational resources, with greater direct needs for educational facilities, ought to receive some supplementary assistance to give them the opportunity or the means to overcome their present disadvantage. We reinforced that needs principle again and again in decisions in recent years. I am glad to see that the ALP Government has also embraced the needs principle. But it has so embraced it that it has become the basis of all its rhetoric. It has become the blinding light to which it appeals for abandoning all the other principles. I reject that. I will quote from the speech given at Hurstville by the Minister for Education and Youth Affairs, Senator Ryan. With a great deal of bravado in her opening statement to an assemblage of independent schools on 24 September this year, she said: In the financial guidelines to the education commissions for 1984, I announced a number of decisions which illustrates the Hawke Government's priorities. Of particular relevance to the schools sector were . . . the decision to begin reducing recurrent funding to a small number of schools,- That is the abolition of the basic grant, the abolition of the taxpayer principle to which I referred. The Minister continued: . . . the decision to break the nexus between recurrent grants for non- government schools and average government schools recurrent costs,- That is the abolition of the honesty principle to which I referred, in that no longer is there a guarantee that a recurrent grant from this Commonwealth Government to an independent school will, as inflation continues year by year, have the same real value. The Minister is here blatantly, with bravado, saying that a great achievement of the Hawke Government is that it has abandoned this principle. The third decision to which the Minister referred was: . . . the decision to revise the conditions upon which Commonwealth Government funds will be provided for new non-government schools. That is the abandonment of the establishment of choice principle that I mentioned in my earlier remarks. Under this Government, no new independent school in Australia is guaranteed any assistance in its establishment. The barriers have been put in place. It is not a question only of whether that school has a sound educational curriculum, sound educational principles or properly qualified staff. It is also a question of whether that school will take some students away from the government schools in that region, schools that parents, by choice, have decided that they do not wish their children to attend. Therefore, the abandonment of this principle by the Labor Government is only a cover for a straight-out opposition to the establishment of any kind of new independent school. I think that the ALP is in a direct bind because in its ranks it has hundreds, even thousands, of opponents to independent schools. They are directly committed persons, many of whom are genuine; I am not decrying them . It is a free country in which a party may attract those who are bitterly opposed to there being independent schools. Some people in Australia believe that because we have different sorts of schools this makes for a divided Australia or for a lack of basic coherence. I think that is a load of nonsense. Some people in Australia, perhaps because of unfortunate individual experiences at independent schools, are anti-religious. They are just opposed to what they regard as the superstition that is taught in independent schools. They are opposed to there being schools that have a religious foundation. They are not just secularists expressing a genuine belief, such as there have been in all the decades in Australia's history. Not only do they want to rest with their own expression of opinion; they also, in an illiberal way, seek to oppose the choice and conscientious beliefs and decisions of others. This group has got within the Labor Party and has forced it to formulate policies which are against independent schools which it has set out to undermine. How does it then seek to achieve its goals? It seeks first of all to stop any new independent school being established. Senator Ryan has taken up that approach, that strategy, on behalf of the present Government and made it very difficult for there to be any support given to the establishment of a new school. How does this group further stop such schools? It will stop indexed grants. It will abandon the nexus. Then it will cut down the tall poppies. It will make sure that those so-called rich schools will get no help at all from the taxpayers of Australia. This group within the Labor Party has bound the ALP to renege on and abandon the assurances given by the then spokesman on education, Mr Hurford, prior to the election and by the present Prime Minister, Mr Hawke. The re-assurances that they gave have been abandoned. Why is it that the Labor Party seeks to alienate by these broken promises, by this attack on independent schools and those in the community who support choice in education, one million Australian families involved in these schools? Why has it set out to go against the views expressed by 70 per cent of all Australians, as recent public opinion polls show? Let it be clear in this debate that the Liberal and National parties will stand by the right of Australian parents to have a full choice for their children's education. We will ensure that there is encouragement for the establishment of schools that are the choice of those parents, that there is a nexus and that there is an indexed grant that will give recurrent support to those families involved in Australian schools. We will not abandon the children of Australia whether in government or non-government schools. We reject the abandonment by the Labor Party of the promises it made to Australian schools. Senator GILES(Western Australia)(3.59) —I would like first to make some comments in rebuttal of the allegations that were made by Senator Baume, to the effect that the Minister for Education and Youth Affairs (Senator Ryan) was unwilling to meet with the New South Wales Catholic parents. The facts of the matter are that the Minister had agreed to meet with the parents, but her plans to go overseas to study education and youth policies in Europe were brought forward several days, a matter which was beyond her control. Giving two weeks notice, the Minister asked the Catholic parents of New South Wales whether the meeting could be delayed. They said no. Therefore, she asked the Chairman of the Commonwealth Schools Commission, Dr Tannock, to attend. This was acceptable to the Catholic parents and friends organisation and to the best of my knowledge the meeting proceeded. But a small and noisy group of obsessives has sought to whip up an insane vendetta against the Minister, apparently advised by the archetype misogynists from the New South Wales upper House. In attacking the Minister, these people have shown their ignorance of the way in which a Labor government determines its policies. The Minister has had extensive and constructive discussions during the seven months of this Government's existence with the National Catholic Education Commission, with which she has an excellent working relationship, and the State education authorities. However, there has been insufficient time in the lead-up to the Budget this year for the Government to consult the non-government school communities and other relevant authorities on developments of long term changes in funding policy, such as the development of a community standard of resources for schools and a more comprehensive way of measuring the needs of schools against community standards. This has still not been established. It is being worked upon but it was not the basis for the decisions made in this year's Budget. Consequently, the Government has had to make a number of interim decisions for 1984 and ask the Schools Commission to consult widely with non-government schools and other authorities on the option for longer term funding policies beyond 1984. For general recurrent funding in 1984 the Government decided that additional funds amounting to $7.2m-a real increase of 1.3 per cent on 1983- would be available for non-government schools. These additional funds will be provided on a needs basis. This was one of the principles alluded to by Senator Teague. He managed to invent a few other fetishes of his own, but the needs principle is one which, as he rightly said, the Labor Party has espoused for well over a decade and we do not retreat from it. Under general recurrent funding for 1984, per capita grants for the 41 schools whose private incomes alone total 95 per cent or more of government school standard costs is to be reduced-not wiped out completely as we might have been led to believe-by 25 per cent. The savings-something like $4m-are to be redirected to those most in need. It is a little bit of a redistribution, another principle which, I believe, has not been alluded to this afternoon. I think it is highly probable that the vast majority of the Australian electorate thoroughly supports the Australian Labor Party on that principle. Grants for other schools in group I, schools in the highest resource category, will be maintained in real terms. Grants for group II schools will be increased by one per cent in real terms. For schools in group III, the most needy and by far the greatest number of schools with the greatest number of pupils in the non -government sector, the grants will be increased by 3 per cent in real terms. These funding arrangements replaced those of the previous Government, under which increases in grants for all non-government schools were linked to increases in government school costs each year regardless of the fact that many low resource, non-government schools have far greater needs than other high resource, non-government schools. In fact, in recent years the gap between the low resource, non-government schools and government schools has widened. Had the previous Government's funding policy continued, the lowest resource non- government schools in group III would have received some $5m less than they will now receive in 1984. The Government recognises the right of parents to choose a non-government school for their children. However, it believes that its needs based funding policy will bring greatest benefit to the majority of Australian children over a period of time and eventually will substantially reduce the gap between the affluent schools and those with few resources. In addition to these changes, the Government took further funding decisions for 1984 which will benefit non-government schools. The 1983 level of capital grants was maintained in real terms, including the $9m provided in 1983 for new places. An amount of $4m will be provided for the upgrading of schools serving disadvantaged communities and $2m for capital facilities in schools serving Aboriginal communities. Provision of some $4.5m for non-government schools under the new participation and equity program has taken the place of the transition program which was introduced by the former coalition Government. An amount of $1 .2m has been allocated under a new initiative, the computer education program, and overall grants for non-government schools will increase by 1.5 per cent in real terms. We have reintroduced retrospective costs supplementation, providing greater certainty for education planning, and are planning to return to triennial funding. Amongst other initiatives, all of which are very welcome in the community, is the reactivation of the Curriculum Development Centre, which will benefit all schools. My interest in schools dates from the early 1960s when my first child started attending a primary school. My youngest child did not finish her state school education until 1977 and during these 17 years I must have been one of the most conscientious state school parents ever, becoming a vice president of what became the Western Australian Council of State Schools Organisations. My experience includes being an undergraduate student for three years at the University of Western Australia in the early 1970s and I have the added benefit of the experiences of my daughters as they have become tertiary students from 1971 onwards. I have had between one and four offspring in tertiary education at any one time ever since. As a result of those very personal experiences, I believe I am able to speak with some authority about the feelings of the vast majority of parents in Australia who, having little choice, send their children to local government schools. The 1960s saw the starving of the state school systems and the development towards the end of the decade of a concerted campaign by parents and teachers for more Federal funding for state schools. At that time we saw Federal funding going to private schools and a considerable amount of unrest in the community. By 1972, in the year running up to the Federal election, enormous public meetings of parents and teachers were being held all over Australia to discuss the inequites in the state school programs. One of the really important election issues of that year was the funding of government schools. In 1973 I was among the state school parents who saw with joy the introduction of the Schools Commission Bill. I was also among those parents who worked very hard to persuade the members of the then upper House that that Bill should be introduced to give legislative effect to two crucial principles, as against the fetishes which we have previously heard. Those principles were, firstly, that the Government's first responsibility-not its only responsibility, but its first responsibility-is the education of those who rely upon the public education system and, secondly, that Federal education funding should be allocated on the basis of need. The first report of the Karmel Interim Committee for the Australian Schools Commission categorised non-government schools according to their resources. Of course, this was hated by the independent schools in particular which did not want it widely known in the community just what their resources were. During the 1970s a great deal more emphasis was given to the needs of schools generally right across the board and some initiatives that even now have managed to survive the Fraser years. What we saw during those years has already been alluded to by Senator Colston-a deterioriation in the participation rate in tertiary education to the point where one report, by the Department of Immigration and Ethnic Affairs on demographic analysis, was able to state that we had seen the trend to tertiary education reversed. It had been reversed and that action seemed almost deliberate. Once again in 1982 surveys in the electorate began showing education as a sleeper issue. I believe that it was one of the important issues in the time prior to the last election when once again state school parents and very many private school parents became greatly politicised. This sort of thing happens in bursts. New generations and new cohorts of parents come forward and start to become very concerned about their children's education, their expectations and so forth. They become concerned about education funding. We had very large meetings in 1982-83. These provided the opportunity to remind many of these parents of what had happened during the 1960s and 1970s. Some parents with good long memories know perfectly well that it is the Australian Labor Party which has the real concern for the education of the ordinary people of this community. Those ordinary people to whom I referred before do not have a choice about where to send their children. Indeed, even some of those who do have a choice send their children to local government schools. I would suggest that the most predominant reason why people send their children to government schools is economic necessity. Often they do so though geographic necessity: There is no other school. If Government schools can be improved so that they offer a broader curriculum and more individual help and are more responsive to the wishes of parents, clearly the educational choices of the majority of Australians will be enhanced. This was my aim and the aim of parents like me who worked within parent participation organisations and those who are still working for those organisations within the government and non- government sectors. If all schools can provide a sound educational base for all their pupils so that they can go on to choose further learning or be well equipped to look for employment, the choices of those pupils are greatly improved. The Government's participation and equity program to which I previously referred is a significant contribution to enhancing the choices of many thousands of young people through offering them a richer curriculum and a better chance to gain work force skills through the technical and further education system. Similarly, emphasis in the guidelines on improving the resources of the most needy schools in the non- government sector is a specific contribution to enabling those schools to offer a richer curriculum containing more learning choices for the children who attend them. Mr Acting Deputy President-and parent I am sure-in conclusion I emphasise the fact that very many of the programs introduced by the Labor Government during 1972-75, some of which are being resurrected and some of which have been kept going over the years, are available not only to government schools but also to non-government schools. They have added an important extra dimension to the education of all young people in Australia regardless of which sector they attend for their education. Senator MACKLIN(Queensland)(4.13) —I believe that the matter of public importance concerning the Labor Party's education promises brought forward by Senator Peter Baume, the shadow Minister for Education and Youth Affairs, is an interesting exercise, not the least because of the election on Saturday in my own State of Queensland. Obviously this matter of public importance is aimed at that election. Of course, the practice of parties going to the electorate with promises is well known in Australia. In fact, it is so well known that discerning electors no longer bother to take any notice of what political parties say because they know that those promises are going to be broken afterwards. However, it is an interesting exercise, nevertheless, to look at the types of promises that political parties make for the cynical exercise, presumably, of winning votes because this illustrates, at least in some way, the types of ideas in which political parties believe people are interested. For that reason, I think it is useful to look at the promises that the Australian Labor Party made before the March election and to see how it has implemented or failed to implement those promises. The first area at which I would like to look is the very obvious one of private schools. I do not happen to agree with what the previous speaker, Senator Giles, said was the major reason why parents in Australia send their children to government schools. I happen to send my children to government schools because I believe they are better schools. However, that is a personal view that I have as a parent. Many people who send their children to private schools are concerned- and probably with some reason-about the Labor Party's attitude to private schools particularly in view of the labor Party's 1982 Platform, Constitution and Rules. The Labor Party conference document says that a Labor government would require the Schools Commission, in making its recommendations, to have regard to: The requirement that Commonwealth funds be available only to those non- government schools whose total private and public resources do not exceed the resources of comparable government schools. That type of idea, presumably, was expressed in greater detail in the main education document prior to the election entitled 'The Hayden Education Plan'. Item 12.4 of that document states: In government, Labor will take new initiatives to improve the resource levels of schools with little capacity to improve their level of resources. These initiatives will require discussion and agreement with the non-government school sector. During the period of these discussions Labor will maintain in real terms the existing levels of funding for all group 2 and group 3 schools and for those group 1 schools which choose to operate within the community standard. In other words, there were to be consultations and the opportunity was to be offered to private schools to come within those community standards. Mr Hawke's policy speech on 16 February of this year went even further. It stated that an Australian Labor Party government would reduce by only 5 per cent per year the direct Commonwealth grant going to a very small number of wealthy private schools endowed with resources far above those of any other schools. Quite obviously, what has occurred has been a blatant disregard of that promise. What we had in fact was a reduction of 25 per cent in the first year instead of 5 per cent per year. In other words, there has been a 500 per cent increase in the reduction mentioned in Mr Hawke's policy speech. Further, the Australian Labor Party promised to 'maintain in real terms the existing levels of funding for all group 2 and group 3 schools'. That promise has been broken in that group 2 primary schools will, in fact, be worse off in this financial year and a number of group 2 schools have, of course, been reclassified as group 1 schools. The Australian Democrats support the general thrust of what the Government is attempting to do in this area. Indeed, we were the only political party to go into the election making it quite clear that we supported the concept of funding of private schools on a needs basis. Having had the courage of our convictions, we were utterly outraged that the Government, during the election campaign, should deliberately weaken its policy on this matter presumably to try to attract a few votes and then, before it had time to warm the government benches, toss it aside. This in an exercise in cynicism of which I think the electorate has had quite sufficient. Indeed, that was the reason why the electorate tossed out the Liberal-National Party Government. After so many years of breaking so many promises, the electorate could not stomach it any more and the Labor Government looks like heading down exactly the same track. Item 12.6 of the Australian Labor Party's education document states: Labor's approach when in government will be to discuss and to seek agreements with the non-government sector about a set of resource objectives for their schools which are appropriate to contemporary circumstances and achievable within a reasonable time. That sounds perfectly acceptable. The document continues: Provided agreements can be reached with school authorities, Labor will increase its recurrent support for low resource non-government schools to assist with closing the gap between their current level of resources and the agreed objectives. In fact, the thrust of the entire 'Hayden Education Plan', as it was called at that stage when Mr Hayden was leading the Australian Labor Party, was this principle of consultation, a principle which the Labor Party has now made its hallmark in terms of dealing with a whole variety of issues, and more particularly, the economy. It is indeed a pity that in this most vital area of education the Labor Party has not seen fit to pursue detailed consultation. We had the excuse from the previous speaker, Senator Giles, that there was not enough time. There is always enough time to consult if one is on the government benches in as much as the decisions that are to be made are made at the behest of the Government. There was no pressure on members of the Government, except the one which they wished to create or accept themselves-of making any move in the Budget before they had time to draw up a detailed plan of how they wished to proceed with a needs base. I believe that that would have been much more equitable. I think it would have led to a lessening of the heat in this argument . Item 12.8 of the 'Hayden Education Plan' talked about the needs principle. It stated: . . . a Labor Government will assess needs on a more comprehensive basis taking into account the capacity of the community to contribute . . . I think no one would disagree with that item. What upsets the Australian Democrats is that the Government has not kept this commitment to seek a comprehensive basis for a needs program. It is a difficult matter. Presumably, some people, when thinking about institutions, tend to forget that they are populated by people. One of the major problems with the funding arrangements which we currently have-I believe that it is one which this Government is perpetuating and one which can never solve the acute education problems that exist in this country-is the continual operation of funding at an institutional level. By and large the only way to tackle the real problems of education, many of which stem directly from poverty, is to attack the social problem-not the institution-that underlies it. A particular institution may be excessively well endowed, but if the child who goes to that institution happens to come from a family of five or six and lives in a house with only two bedrooms-perhaps honourable senators do not believe it, but they do exist in Australia; I have taught quite a number of children who have been in that type of circumstance-his or her capacity to study at home is reduced to almost zero. Regardless of the resource level of the school, those children are still in a deprived educational environment. No matter what the school has to offer, that can be offset only by direct assistance to those families to enable them to get additional tuition for their children and to enable those children to undertake studies in an easier environment, particularly at the secondary school level. For some reason that escapes me entirely, in this country we insist on directing ourselves totally and solely at the institution and staying away from the real problem of the family disadvantages that are built into the very system itself. The Australian Democrats have spent a great deal of time with many people in the non-government sector discussing with them their problems. I have been quite critical in the past of many people in the non-government school sector for the way in which they have operated. I believe now that many people within that sector are willing to discuss education and are willing, in fact, to look at sensible compromises. I believe that now is the time to try to get people from all sectors in the education community to sit down together, away from media attention and those types of pressures where they cannot state their real feelings around a conference table, away from the situation in which they have to posture on behalf of their constituents, and get down to deal with what might be, and we hope would be, in the interests of them all; that is, to come up with some reasonable basic principles upon which those groups could agree as to how funding might proceed in the future. I do not believe that it is beyond the wit of reasonable people who have the interests of children in this community at heart actually to devise a system that would be acceptable not only to the teachers' union but also to the non- government school sector. I believe that it is possible. I believe that the fact that it has not occurred is due to the unwillingness of government to grasp that essential problem and to bring together those groups of people so that they can discuss the matter away from the glare of any publicity and away from the need to make their positions definitive. I would even go so far as to say that anybody who is allowed to take part in such a conference ought to agree not to divulge anything said at the conference table to any person who had not taken part in the conference, but only to agree to a final communique principle. Having spoken with so many groups around Australia, I believe that they are capable of solving the problem. They are not capable of doing it at public meetings at which people, for their own political ends, whip up further sectarian divisions within this community. It can be done only in such a congenial and low key environment. In the brief time which is left to me I turn to another item which is of extreme concern to the Australian Democrats, that is, the tertiary education assistance scheme. Item 2.2 of the 'Hayden Education Plan' maintained: Improvements to the Tertiary Education Assistance Scheme (TEAS), will . . . have three objectives: To provide allowance at a realistic level; to encourage more students to enrol in higher education; to encourage more students from less privileged backgrounds to enrol in higher education. That idea is laudable. The plan said that an ALP government would progressively increase TEAS; increase the maximum benefit to equate it with the single unemployment benefit; and liberalise the definition of 'independence'. What we have seen is, in fact, the exact opposite. We have seen a reduction in overall terms. We have seen the Government renege on each of those items. I believe the last item is the worst. The Government has failed to remove anomalies in the TEAS regulations or to liberalise the definition of independence, which it promised to do. The students are having as much difficulty now in getting TEAS as they were under the previous Liberal-National Party Government. I believe that that is to the detriment of tertiary education in this country and ultimately to the detriment of the entire country itself. Senator LEWIS(Victoria)(4.28) —Those people who had been listening to this debate earlier today would have heard both Senator Peter Baume and Senator Baden Teague brilliantly expose the subject of today's debate, which is: The Labor Government's broken promises and dishonoured assurances to the education community. Let me endeavour to summarise very quickly the 15 broken promises or dishonoured assurances of this Australian Labor Party Government under the Minister for Education and Youth Affairs (Senator Ryan). Firstly, in the realm of higher education, the Government promised post-doctoral fellowships for 300 scholars. That promise was not honoured. The Government promised to increase student assistance through the tertiary education assistance scheme until it equalled the single unemployment benefit and then to maintain the nexus. That promise was not honoured. The Government promised to raise the TEAS means test until it equalled average weekly earnings. That was not honoured. The Government promised to establish an emergency student loans scheme to replace the existing tertiary student loans scheme. That promise was not honoured. Let me divert there for a moment to mention the enormous pressure that was put on students by disinformation last year when the then Federal Liberal-National Party Government introduced a student loans scheme to assist students to get through their tertiary education. What happened was that the Australian Labor Party tried to-in fact, it did-persuade many of those students to believe that this was a first step in the taking away of their TEAS allowance. Of course, it was not, but this disinformation caused great hardship at university and tertiary campuses around Australia. We were subjected to a lot of pressure because of that disinformation. What happened was that the loans scheme was taken away from the students of Australia and not replaced with anything, notwithstanding the promise, as I have said, to establish an emergency student loans scheme to replace the then student loans scheme. In other words, the promise was not only not honoured but, in fact, the scheme was cancelled and the students are now in a worse position. The Government's promise to institute a new program for primary schools at a level of $9m per annum was not honoured. Its promise to provide an additional $ 37m in the first year of the Government for recurrent resources in government schools was not honoured. Its promise to provide an additional $16m in the first year of the program for needy non-government schools was not honoured. Its promise to provide $24m over three years for a computer education program was partly not honoured. Its promise to establish a revolving loan fund with an initial contribution of $5m to bring forward construction of planned new non- government schools was not honoured. Its promise for the funding of non- government schools was not honoured. I will come back to that. The Government's promise to provide a special triennial program in technical and further education to cost $30m to upgrade equipment and facilities for the latest technologies was not honoured. Its promise to provide an immediate boost of $15m in capital and recurrent funds to the States was not honoured. In migrant education, the Government's promise to provide $45m per capita grants for ethnic schools was not honoured. The promise to provide $3.68 per annum for transferring all eligible casual migrant teachers to permanent positions was not honoured. The people of Australia have been deceived by this Government and the Minister. They are now awakening to that problem, as is evident by the enormous number of complaints and meetings being conducted around this country. I refer specifically to the meeting of over a thousand people at Albury. They complained bitterly about the Government's broken promises on education. Senator Baume pointed out quite rightly that the people of Australia realise once again that they cannot trust the Labor Party. Let me refer to an address given by Senator Ryan to the annual meeting of the Queensland Teachers Union on 26 June this year. In my view she demonstrated, in this speech, her divisiveness, sexism and deep prejudices in relation to education. I will quote parts of the speech. She said: Public education is under attack. Public education is not under attack. It is not public education which is under attack; it is the non-government schools which are under attack. The only attack which might exist in regard to government schools would be from those parents who are opting out of the government school system to send their children to non -government schools at their own enormous expense. During previous speeches Senator Gietzelt kept interjecting that if people want to send their children to another school let them pay for it. The people of Australia are opting out of the government system and paying for it at great sacrifice. I shall come to that in due course. Senator Ryan said: Teachers and parents who are committed to public education need to reaffirm that commitment. That is sheer rabble rousing and divisiveness by the Minister. Why is there any need to reaffirm that commitment? Of course, the people of Australia are committed to public education. They are desperately concerned about public education. She continued: Public education is under attack from those who want to return to a golden age in which they believe schools produced students, one hundred per cent of whom were literate, numerate, obedient and employable. That is a fascinating statement by the Minister. She is critical of those people who want students to be 100 per cent literate and numerate. The people of Australia of course want their educational institutions to produce literate children. We want our children to be able to read and write, not just to be employed, which is what Senator Ryan seemed to be going on about. We want to open up the culture of our society and give people the opportunity to be able to read what this nation is all about, to read the history of this nation and of the world, to study our literature, to study what is going on in the world and to understand what it is all about. Senator Ryan criticises those of us who want our children to be literate and numerate and those of us who want our children to be able to add up a hundred and to do their tables. Is there something wrong with that? The Minister would have us believe that there is something wrong with that. Let me go on with her address to establish that further. In stating what she believed education to be all about, she said: . . . a capacity for creative thought and action, a capacity to live harmoniously in a multi-cultural, multi-racial society, a sense of self-esteem and identity sufficient to enable the individual to resist manipulation by the massive institutions of capitalism and to make autonomous decisions. Those are the fine points of what the Minister believes education should be all about. She believes education should create a body of people in this nation who are able to resist the manipulation by the massive institutions of capitalism and to make autonomous decisions. It is no good honourable senators interjecting and implying that she is not putting that at the top of her priority list, because she is. She has quite clearly dismissed literacy and numeracy and put at the top of her list that we should teach children to have a capacity for creative thought. Is there any suggestion by any Government senator that people who were educated and who became literate and numerate do not have the capacity for creative thought? Is that something that has to be taught in our schools? Of course she is living in an unreal academic world. She talks absolute nonsense. She continued in this great speech: The fact is, there is simply no evidence for the proposition that educational standards have fallen. Of course, on her standards, she is able to say that. Of course, if she believes in those things that I have just talked about, she is able to say that there is no evidence for the proposition that educational standards have fallen. But why does she not look at the evidence of what the parents of the children of Australia believe today? Why does she think that the government school system is in trouble? Of course, the government school system is in trouble. Not only do the parents recognise this but so many teachers also recognise it. I feel sorry for the teachers. Let me quote from an article in the Canberra Times on 9 May this year: The newly formed Professional Association of Classroom Teachers (PACT) . . . is one of many raised in recent years that have bemoaned the growing trend of anti- intellectualism in Australian education systems. This is another one of the many teacher organisations being established around this nation which are so desperately concerned about the education of their pupils. I remind the Senate that my education history was totally in the government school system. I am proud of my history within the government school system. I can look back to the teachers who taught me with pride and remember the dedication they had to their service and their attitude towards their job. To have this Minister criticising teachers who try to teach literacy and numeracy within a community is absolutely appalling in my book. I have little time left, but the Minister went on to say in her speech: Insofar as excellence in education has been traditionally available, it has been available to those who could pay for access to it and whose gender, social class and family wealth fitted them for its expectation. What a terrible criticism that is of the teachers in the government schools system. What a terrible criticism it is for the Minister to say that the only excellence in education has been available in those schools in which parents could pay for the education of their children. This Minister has divided this nation. Already she has created an elitist system. I turn now to a major question being considered around this country, that is, the question of state aid. Prior to the last election, Mr Hurford, the then shadow Minister for education, in travelling around this nation and endeavouring to seek the support of Catholics, other education authorities and various other people made all sorts of promises. In particular he said this: We reject unequivocally the anti-state aid position being advanced by some in the community. . . . . . . . we shall be responsible for ensuring that there is available to every Australian child a minimum level of resources for that child's education. . . . . We hope to rid our society of the wasteful and divisive state aid debate. Now, Mr Acting Deputy President, let me take up those words: 'We hope to rid our society of the wasteful and divisive State aid debate'. What it has in fact done is to raise the State aid debate. Let me quote from the Canberra Times of 13 October an article written by Monsignor John Kelly, which states: Some old sores had healed during the 1960s and 1970s . . . partly from pragmatic and political considerations, but partly from a maturing of society. While this was welcome to most Australians, it caused alarm to some small but influential groups-the DOGS (with access to surprisingly large funds), the Communist Party of Australia, the Socialist Left of the ALP (with influence in formulating ALP policy on education), the teachers' federations, sections of the educational bureaucracies and some academic circles. The persistence of these groups has now being to pay off in dividing society . . . A trend has appeared in a variety of developments, converging to form a concerted attack on the funding of non-government schools. There is the state aid debate, wide open. It was raised by Mr Santamaria of the National Civic Council in an article in the News Weekly in which he said: . . . powerful forces connected with the Socialist Left of the ALP using the machinery of the new Labor governments, are intent on weakening and ultimately destroying the independent sector in education. There is much more from Mr Santamaria which I could quote but I know that people on that side of the chamber will treat what he has to say with irrelevance so let me quote from the Canberra Times editorial of 8 October which states: notwithstanding assurances from the Minister for Education and Youth Affairs, Senator Ryan, that integration of government and non-government schools is not ALP policy and that the Government does not intend to proceed with the committee 's integration proposal, it has begun implementing policies that are both necessary and sufficient for integration. So it is clear that this Minister is determined, in my book, not only to destroy the non-government system so far as the wealthy schools are concerned but also to integrate the Catholic system ultimately into the present government system. The Archbishop of Canberra-Goulburn, the Most Reverend Francis Carroll, made that very clear yesterday when he called upon this Government to promise a basic grant for every child. The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! The honourable senator's time has expired. Senator ROBERTSON(Northern Territory)(4.43) —Like my colleagues, I find it incredible that the Opposition and Senator Peter Baume in particular should have brought on this matter of public importance for debate today. Senator Baume was a member of the Government that was renowned for breaking promises. It is the Government that perhaps will go down in history as the one which has broken the most promises in its seven years of office. It certainly broke more than it kept . Honourable senators will recall the stories about the Prime Minister of the day. Many of those circulated through the corridors. They were amusing and all were true. Certainly I will not bore honourable senators with them now but let me say that nobody would ask him what the time was, that is for sure. The Ministers of that Government did the same thing as their Prime Minister. I can recall when Minister after Minister came to the Northern Territory and offered us the railway line from Alice Springs to Darwin. That started in about 1972. Of course, nothing was done. That was just one more of those promises. This was the time-1976 to 1983-when the credibility of all politicians dropped to its lowest level ever. I am surprised that the Opposition brought this matter on when it was the Government that is responsible for the economic mess we are in at this time, the mess that it passed on to us when we were trying to do something about the situation in this country. Let me make a few comments on the various speakers in this debate. The shadow Minister for Education who opened the debate waited until the Minister for Education (Senator Ryan) had left the chamber so that he could make his vicious attack upon her. This shadow Minister who made statements about not being able to trust the Labor Government, in his first statement-I suppose we would call it a terminological inexactitude if we were on that side of the chamber-made the comment about the Minister not going to Sydney and not sending anyone in her place to a meeting. He then went on to make the most extraordinary comment that the present Government is one that is trying to divide school from school, system from system. If there is anything which characterises the shadow Minister at the present time, both in the chamber and outside it, it is that very element of divisiveness. He has obviously moved around the country trying to stir up trouble, certainly not the consensus that he talked about when he was in government. He was the one who used to call across the chamber: 'With a little understanding and a little consensus we will achieve our goals', but, of course, that meant doing what he wanted. He then went on to talk about the Catholics, with whom he seems to have formed some sort of liaison at present, and to say how much they did not like what the Minister is doing. I refer to the Hansard of 14 September. The Minister in this place read letters from various Catholics indicating that a good relationship exists. Let me read a couple of them. The Minister said this: First of all, I would like to read a telegram from the Reverend Father Doyle, the Director of the Catholic Education Office of Victoria, who telegrammed me immediately after the appearance of the guidelines and said this: Commend you and your Government on budgetary provisions for 1984 to meet needs of Australian children. Balance in guidelines between government and non- government schools should forestall divisive debate. It did not, of course. We have it from Senator Peter Baume. Senator Ryan then read from a letter from Archbishop James Carroll, who said: As already intimated to you, the many positive initiatives of the Guidelines have given great encouragement to all concerned with the quality of schools and with the particular needs of the present time. Mr Faulkner from the Catholic Education Office of Victoria said: I write to you personally and as a Schools Commissioner to commend you and your Government on the quality of the Commonwealth Schools Commission Guidelines for 1984. This is the group that Senator Baume says does not think much of what the Minister is doing. He went on to talk about the tertiary education assistance scheme. Let us look at the contribution Senator Baume made when he was in government. In 1978 there was no change in TEAS. In 1980-no change in TEAS; in 1982-no change in TEAS. This is the man who has the gall now to come in here- Senator Peter Baume —That is not true. Senator ROBERTSON —It is a fact. The honourable senator can read it from table 1 in the School Commission's report. He can get his table and have a look. Senator Peter Baume —That is not true; that is ridiculous. Senator ROBERTSON —I do not talk nonsense. It is that side that uses bad arguments. I am not talking about the Commission's report. He can look at it himself. That is what we are saying. Senator Baume also said there were no capital funds to support increased participation. The fact, of course, is that the Government has increased capital funding by $3.8m, an increase of 8 per cent in real terms, to universities and colleges. Senator Teague, after acknowledging at the beginning of his speech that the Minister for Finance, Mr Dawkins, and the Minister for Education had both had discussions with all groups, and commending them for this, then went on to talk about one or two select groups that he had spoken to. I suggest that he goes to as wide a group of people as did Mr Dawkins and the Minister. The honourable senator said that people cannot choose the school they want to go to. What a lot of nonsense this is. The Government acknowledges and accepts that parents exercise a choice in the education of their children but the extent to which that choice will be funded by the Government will be based on need, not on geographical location or on some proximity to any particular Minister's electorate. We will look at the important things. Senator Teague then spoke about the advisory committees and complained about its composition. I suppose Senator Teague would want us to do what his Government did when in government-that is to say that the right person to go on a committee, any committee at all, is a Liberal or perhaps even a National Party member, but certainly not a representative of the community. He then spoke about the nexus. I remind the shadow Minister what the Minister said in referring to the nexus. She said that the nexus is not a religious law or testament but rather a funding mechanism. The shadow Minister will know that the nexus discriminated against the poor and non-government schools under the Liberal Government. It will be replaced by a community standard that funds on the basis of need, and this is clearly what we have put forward. The Liberals do not have an education policy. They have never had an education policy. They have had a funding policy. They have no well articulated or other policy on education. Senator Teague then went on to talk about logic but I am afraid it is not his strong point. Honourable senators will remember that, in the debate last week, Senator Teague was saying that it is the ALP's fault that there is not enough room in tertiary institutions. He was suggesting that after seven months in office, we have not built enough tertiary institutions to cope with the needs of the people. I will remind Senator Peter Baume and Senator Teague that when they came into office the problem was that the tertiary institutions had to go out and look for students to fill them up. There was an excess capacity. After seven years of Liberal rule, Senator Teague is able to stand up in this place and say that there is not enough room in our tertiary institutions. Senator Macklin indicated that the debate was in some way connected with the Queensland elections. If that is the fact, perhaps we should just point out that Queensland, as a State, spends less on education per student than any other State in the Commonwealth. In 1980-81, while the national average expenditure per pupil at the primary level was $1,376, in Queensland it was $1,320, more than $50 less. At the secondary level, the gap was even greater. The national per pupil expenditure at secondary level was $2,232 while in Queensland it was only $1,928. But, that will change after Saturday and they will get a much better deal. The only comment I would make to Senator Lewis, because I was involved in something else, is to suggest that he have a look at the list. He said there were 15 areas that he would speak about. He only got to three and he did not do them very well. But let him look at the policies and the policy document and see what promises were made. Let us remind ourselves of the March Federal election. It was early, as usual, because the Prime Minister of the day thought that he would be able to get back. Before we talk about these broken promises and assurances, let us have a look at how the Labor Party forms its policies. Senator Messner —Humph! Senator ROBERTSON —All right, we will go on with something else, if that does not suit Senator Messner. Let us go back to the Prime Minister who thought that he would catch the Australian Labor Party on the hop. But of course he did not catch the Labor Party on the hop. He made two of those monumental mistakes that he was quite renowned for. The first one was to tell terminological inexactitudes and the second one was to make bad decisions. When the Labor Government came into office in March, it set its policies in train. It set the policies that will do so much for Australia, given some consensus and some assistance from the other side. But we need to hasten very slowly in these matters. The present Opposition had seven years in office and in that time it achieved very little of what it said it would achieve. We have had seven months. But let us say that we have more sense than to rush madly into the implementation of policies which might suit some of those select areas which the Opposition seems so keen about. If Senator Messner does not want me to talk about the way the Labor Party develops its policies, let us talk about the way that the Liberals developed theirs. These are the people who have never had policies. When Menzies was in power, of course, he did not have any policies at all. He just plucked them out of the air. Then, because the Labor Party had them, the Liberals were shamed into producing a document and so they produced a platform. The only reason for that, of course, was to keep the young Liberals from criticising the Prime Minister of the day over some years. If they did not have the policies to talk about, they would get on to the Prime Minister. Let me say quite clearly that the ALP policy was costed before the election. It was devised before the election. We work on our platform for years. Coming up to an election time-and this election was thrust on us 12 months early, as has been the case in the last four elections-we cost our proposals on the figures available to the people who will try to say: 'The education policy will cost this much,' or 'Within the framework that you have given us, that is what we can do.' But, of course, if the figures are wrong, if we are given the wrong figures or if somebody covers up the figures, some adjustment would have to be made. This is what the three speakers on the other side were not prepared to concede. If the money had been available, the policies would have gone forward exactly as they were articulated in the document that not one of the Opposition speakers has read. They have been making wild statements from outside the policy document . Quite clearly we can ask the question: What were the policies and were the figures accurate? If the figures were not accurate, what adjustments would have to be made? Let us look at the second question first. We all know the answer to the question: Were the figures accurate? Senator Walsh has provided us with this information time and time again to the obvious embarrassment of the people on the other side of this chamber. The Budget deficit was to be $6 billion and the hidden figure was $9.6 billion. The costing was done, quite clearly as it should have been done, on the accepted figure which means that when the correct figure came to light, after the election of course-a certain discredited former Treasurer kept it hidden so that the people would not do anything about it-we found that we would have to make some changes. These changes-and this is what the Opposition is not prepared to accept at the present time-are completely the result of the mess that we inherited from the former Government. Now Opposition members have the gall to come into this place and criticise us for trying to work within the Budget imposed on us by its handling of the economy. In other words, the promises that we are talking about are the things that we suggest in our platform, in our policy speech. Honourable senators opposite know very well that the policy speech which is presented is the one that is worked on. That has not been the one that has been quoted by the speakers who have spoken today. I would invite Senator Peter Baume who tells me he has read it and he probably has and then the other 'whydonchas?', the carping 'whydonchas?' on the other side of this chamber- to have a look at the policy document. It will be a novel experience for them. They have probably never before looked at documents that are actually followed. They look at a thing which is pretty on the outside but which is not followed when they get into government. I suggest that they stop searching waste paper bins, that they stop ferreting out clippings from various places, but look at the document and point out clearly where our policies have been enunciated and modified publicly and then say that we have not implemented them. I should like to look very quickly, because of limitations of time, at the Aboriginal affairs policy. This would be of special interest to Senator Peter Baume, as he has had some responsibility for it in the portfolios concerned with education and Aboriginal affairs. He might like to compare his record, have a look at it and see what he did in the areas of education and Aboriginal affairs in the time when he was in office and compare that with what is happening at the present time. We had a claim by Senator Sir John Carrick that he would leave behind in the Northern Territory the best education system in Australia, the one that would act as a model for all the others to follow. I have catalogued in this place before today his inability to do this; and I will not repeat it. It is fair that I say nothing more about Senator Peter Baume than that he simply did not arrest the slide backwards from the Whitlam era. The policy said that we will have 1,000 Aboriginal teachers by 1990. This will be done. This has been put in train. We said that we would expand the role of the National Aboriginal Education Committee. This has been done. I would contend that the proposition brought forward by the Opposition today is not only carping but also in itself dishonest. An attempt has been made to go beyond our policy document, which is the only document to which we can refer, to try to make some spurious case which would denigrate the wonderful work being done by an outstanding Minister for Education, Senator Ryan. I move: That the business of the day be brought on. Question resolved in the affirmative. Senator WALSH(Western Australia-Minister for Resources and Energy) —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. Australian Wool Corporation-Interim Annual Report 1982-83. 2. Snowy Mountains Engineering Corporation-Annual Report 1982-83 pursuant to section 36 of the Snowy Mountains Engineering Corporation Act 1970. 3. Local Government Grants Commission of New South Wales on Financial Assistance for Local Government-Report 1982-83-Pursuant to section 10 of the Local Government (Personal Income Tax Sharing) Act 1976-together with a brief statement by the Minister for Territories and Local Government relating to the Report. 4. Temporary Assistance Authority-Annual Report 1982-83 pursuant to section 30K of the Industries Assistance Commission Act 1973-together with a statement outlining the action taken during the year on reports made to the Minister for Industry and Commerce* 5. Harvesting and Processing of Fish, Crustacea and Molluscs Industries Assistance Commission Report* Interim Annual Report 1982-83 Senator COLLARD(Queensland)(4.58) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Annual Report 1982-83 Senator MESSNER(South Australia)(4.59) —I move: That the Senate take note of the paper. This is, I think, the thirteenth annual report of the Snowy Mountains Engineering Corporation. As is well known to all honourable senators, this Corporation is one with a remarkable history and one which is performing a very worthwhile role in Australia's development. It is certainly doing a great job, I believe, in promoting Australia's image as a consultant engineer and promoting Australia's image as one of the leading technological nations and consequently offering income from overseas in that particular area as well. I think it is a little disappointing that the report reveals a very big change in the financial position of the Corporation in the last financial year. It shows that profit has dropped from a little over $2.5m in the last financial year to a sum of only $41,500 in this financial year. That is somewhat disappointing considering that the turnover for the year was $56m. That turnover apparently did not grow to any great degree above the turnover of the previous year. From a quick reading of the report I do not think clear reasons are given for the fall in the total revenue of the Corporation. At some stage I would like the Government to give some amplification of that point. On the other hand, the report is very clear in respect of the kinds of projects that are being undertaken, particularly overseas. Very clear reference is made to operations being undertaken in Bangladesh and the Yemen. There are 20 other assignments all over the world. Within Australia a number of works are being undertaken in the States. These include the largest project, the Wivenhoe pump storage scheme in Queensland which, through the power station of the same name, will improve power supplies throughout the whole State. I draw the attention of the Senate to the significant downturn in the operations of the Corporation in the last financial year. I think it is significant that this has occurred, although the report reveals that the Corporation has taken steps to redress the problems by retrenching staff and cutting overhead costs in a number of ways. That action certainly is to be welcomed. On the other hand, attention is drawn in the report also to the appointment of private consultants to investigate these questions. I wonder whether the report of those consultants will be made available to the Parliament in the same way as this very important report has been made available so that all honourable senators can get a further insight into the problems that have caused this downturn in the last financial year. Clearly, the Corporation is to be commended. Its operations and general management have been well known to honourable senators over the years. It has a grand history, one of which I believe all of us should be proud. I hope that its good work in developing Australia will continue. I hope that in future it will continue in its efforts to provide technological developments to the rest of the world. I seek leave to continue my remarks later. Leave granted; debate adjourned. Industries Assistance Commission Report Senator ARCHER(Tasmania)(5.04) —I move: That the Senate take note of the paper. I seek leave to continue my remarks at a later stage. Leave granted; debate adjourned. Assent to the following Bills reported: Sales Tax (Exemptions and Classifications) Amendment Bill 1983. Dairy Industry Legislation Amendment Bill 1983. Dairying Industry Research and Promotion Levy Amendment Bill 1983. Dairy Industry Stabilization Levy Amendment Bill 1983. Senator MAGUIRE(South Australia) —I present the 204th report of the Joint Parliamentary Committee of Public Accounts on expenditure from the Advance to the Minister for Finance. Ordered that the report be printed. Senator MAGUIRE —I seek leave to incorporate a tabling statement in Hansard. Leave granted. The statement read as follows- The 204th report of the Joint Parliamentary Committee of Public Accounts is an examination of the expenditure from the advance to the Minister for Finance ( Appropriation Acts 1981-82). The advance to the Minister for Finance is a provision authorised by the annual Appropriation Acts and made available to the Minister. In 1981/82 amounts of $ 125m and $100m were provided for this purpose in Appropriation Acts Nos 1 and 2 respectively. The only amounts which should remain a charge to the appropriations for the advance to the Minister for Finance at the end of the financial year are urgent and unforeseen expenditures which arise between the time of preparation of the additional Appropriation Bills Nos 3 and 4 and the close of the financial year. In its examination the Committee seeks to ascertain whether or not expenditure from the advance has been confined to urgent and unforeseeable requirements for which provision could not have been made in the original or additional estimates . The Committee has required Departments to submit explanations for all items of expenditure. As from 1982/83 copies of all Departmental applications for funds from the advance which will remain a final charge to the advance at 30 June are forwarded by the Department of Finance to the Committee as soon as possible after approval is granted. We expect to complete our examination of the use of the advance in 1982-83 before the House rises. For 1981/82 the commitee received 118 explanations for items included in the Minister's statement in August 1982. Supplementary written information was obtained in respect of eleven items and one item only, Government Printer-loss on operations, was selected for public inquiry. The operations of the Government Printing Office are funded from the Government Printer Trust Account. The committee found that: The financial statements on the Government Printer's operations are not required to be published and are not subject to Commonwealth Audit; A loss on operations of $312,989 was sustained because of A reduction in Parliamentary work Industrial disputes Quotes for certain jobs at lower than established rates Three national wage decisions instead of two as expected Insufficient work was directed to the Government Printer The Government Printer experiences considerable difficulty in matching capacity with workloads; The Printing Office is unable to operate in the way a commercial printer would; Some accounts rendered by the Government Printer on client Departments remained unpaid for over twelve months. The committee noted with concern that there were no formal written objectives for the Government Printing Office and that the charter of responsibilities being formulated over the last three years had not been completed. The committee also found difficulties with financial management and accountability of the Government Printer's Operations and aspects of its relations with client Departments. The Committee responded by recommending that The financial statements on the Government Printer's operations be made subject to Commonwealth audit as a matter of urgency. (I note that the Auditor-General tabled a report on the Government Printing Office on 6 September this Year). A review of the Financial Management Information Systems be conducted urgently. An urgent review be undertaken of the Government Printer's billing and accounts receivable systems and The requirements Departments must follow in procuring printing are to be stated in unequivocal terms. Inspection mechanisms should also be in place to ensure that the requirements are observed. In connection with the relationship between the Government Printer and its clients, the committee is extremely critical of delays in the payment of accounts by client Departments contribute to the inefficiency of the Government Printer's Operations. The committee again reminds all Departments of their obligations, as set out in finance regulations and directions, to pay accounts promptly. The Committee considers that in view of the important role played by the Government Printer in meeting the Parliament's Printing requirements, it is imperative that the Government Printer's viability be assured. A Permanent Head is responsible for the efficient management of his Department's resources and is therefore required to obtain the best value for money in meeting his printing requirements. The committee supports the examination of the funding options which aim to enhance the competitiveness of the Government Printer and thereby attract the necessary fill-in, non parliamentary work. Following an examination of supplementary information the committee is satisfied that in most cases the expenditure from the advance to the Minister for finance in 1981-82 was confined to urgent and unforeseeable requirements for which provision could not have been made in the appropriations acts. The Committee has also taken note of comments by the Auditor-General at paragraph 20.2 of his May 1983 report. The Auditor-General points to the possibiity that Departments avoid recourse to the advance by deferring payment of due amounts. The Committee would regard this action as totally unacceptable in that it could not only result in avoidance of proper Parliamentary scrutiny but also is contrary to finance directions. It is imperative that the Commonwealth is seen to be a prompt payer of its bills! I commend the report to honourable senators. Senator ROBERTSON(Northern Territory) —On behalf of Senator Tate, I present the tenth report of the Standing Committee for the Scrutiny of Bills concerning Appropriation Bill (No. 1) 1983-84, Bounty (Tractor Cabs) Bill 1983, Companies and Securities Legislation (Miscellaneous Amendments) Bill 1983, Sex Discrimination Bill 1983 and Social Security Legislation Amendment Bill 1983. Ordered that the report be printed. Senator FOREMAN(South Australia) —In accordance with the provisions of the Public Works Committee Act 1969, I present the report relating to the following proposed work: Garden Island, New South Wales. Modernisation Stage 2-surface preparation and preservation facility and oily bilge waste treatment plant. Ordered that the report be printed. Consideration resumed from 13 October 1983, on motion by Senator Coates: That the Senate take note of the report. Question resolved in the affirmative. Consideration resumed from 5 October 1983, on motion by Senator McIntosh: That the Senate take note of the report. upon which Senator Scott had moved by way of amendment: Add to the motion that the Senate take note of the report the following words: 'and express its agreement with the recommendations of the dissenting report'. Amendment negatived. Original question resolved in the affirmative. Consideration resumed from 12 October 1983, on motion by Senator Robert Ray: That the Senate take note of the report. Question resolved in the affirmative. Debate resumed from 14 September 1983, on motion by Senator Tate: That the Senate take note of the report. Senator HILL(South Australia)(5.08) —This report, to which I am pleased to have contributed and which is aptly titled 'Two Hundred Years Later', is an encouragement to take stock of what has occurred in the relationship between Aboriginal and non-Aboriginal Australians over the last 200 years and to look to the future in a positive and constructive way. The subject is incredibly complex and difficult although the concept of makarrata is in fact simple. The concept is a coming together, a recognition of the failings of the past but now a determination to make a new beginning, a new start. This has been the sentiment of most of those advocating a makarrata or a compact. They have said that there needs to be a settlement of the disputes and shortcomings of the past and agreement on what is necessary in the future to enable a new relationship to come into being. This is, however, when difficulties begin. There is much in the early history of white settlement which must be regretted but the concept of successors of the settlers or subsequent immigrants paying a price for wrong doings of previous generations is not easy to sell. In fact, in the concept of today's non-Aboriginal generation paying to today's Aboriginals compensation for failings of past generations, there is the seed for the very disunity and racial intolerance which a makarrata is designed to overcome. It is a delicate matter. Furthermore, time has marched on and it is not possible to go back 200 years and say: 'Let us start again and we'll do it differently'. Much Aboriginal land has been lost to settlement, to agriculture and to industry. Much of the culture, language and law has been lost. A great deal of integration of lifestyles has taken place. Two centuries of intermarriage and interrelationship have had a profound effect. Additionally, I see great danger in the concept of self-government advocated by some more radical Aboriginal groups-wrongly, I believe, but nevertheless advocated within the makarrata umbrella. I strongly believe in one nation and that Australia must remain so. We now all constitute one Australia. These difficulties exist even without looking to the content of the settlement. The answer of governments to these difficulties-and it has been the easy answer- has been to treat Aboriginals as another disadvantaged group in Australian society and attempt to improve their lot from that approach. The difficulty with that rationale is that the community then looks to Aboriginals receiving similar support to that received by other disadvantaged groups, and concepts such as the returning of land appear out of step and resentment builds. The kernel of the makarrata argument is, on the other hand, a recognition that the Aboriginal people have a legitimate right to claims, such as land, not as a disadvantaged group within the Australian community but as recognised prior owners of the Australian continent. In accordance with this recognition, certain consequences, set out in the terms of granting land rights and compensation and other rights to the descendants of those original owners of the land, would be seen to flow. The Senate has previously accepted the prior ownership argument. The call for compensation then follows, in the terms of the report, from: the absence of any negotiated agreement by Aboriginal people to the British occupation and settlement of Australia and the subsequent dispossession and ill- treatment of the Aboriginal people by the new settlers and their descendants. The British settlers, of course, saw no need to negotiate or come to agreement over the terms of their occupation, because it was regarded in law that the country was not conquered or ceded but peacefully settled-a concept that has served as the basis for the settled colony principle, whereby the law has regarded Australia at the time of white settlement as terra nullius or land belonging to no one. But there is now a growing appreciation of evidence that there was in existence at the time of white settlement an Aboriginal people with a complex system of social, cultural and religious networks and of land tenure. If this understanding existed at the time of settlement, the whole legal basis of the occupation and the rights of prior inhabitants may have been different. As a question of international law, the argument is now too late. But that does not alter the attitude that we as legislators should take, which presumably is based on our perception of what is right and proper; and on a moral basis it appears to me that the descendants of the original inhabitants have a good case for compensation or reparation as having been wrongly dispossessed. The form of such reparation is important because it must be consistent with the overall goal of building a strong, united, just Australia. Reparation is usually seen as-and I take two recommendations of the original Aboriginal Treaty Committee-the recognition and restoration of rights to land by applying, throughout Australia, the recommendations of the Woodward Aboriginal Land Rights Commission; and compensation to Aboriginal Australians for the loss of traditional lands and for damage to those lands and to their traditional way of life. But that is only part of the makarrata. There is the new attitude that is to follow, according to the makarrata concept. That is, a growing knowledge of and pride by both Australian Aboriginals and Australian non-Aboriginals in Aboriginal identity, law, language and culture. It appears to me that these goals can be achieved without a makarrata, and to varying degrees they are being so achieved. I have tended to firm in my view that the concept of makarrata is not a prerequisite to achieving such goals and in fact it involves so many extraneous difficulties that it might be counter-productive. I think that is the particularly constructive contribution of the Committee when it has looked to the legal and constitutional feasibility of the makarrata. It looked at the treaty proposal and found the problems of sovereignty, and if the goal is, as I have stated, a strong, unified Australia, in any event I would question the desirability of pursuing the concept of a treaty. The Committee considered the alternative of an agreement with constitutional backing either incorporated totally within the Constitution or in a general section giving the Commonwealth power to negotiate an agreement under various heads that would be binding on all. I for one have considerable reservations about expecting the Australian public to sanction an agreement the terms of which are not on the table; and I am concerned that a referendum campaign might in fact prove divisive when the very objective is to overcome division. An agreement with legislative backing has been suggested and examined. But I foresee difficulties in the State-Commonwealth relationship. One of the difficulties currently existing is that State governments are pursuing different policies in relation to what should really be a question of national principle. This leads to the fourth alternative of a simple agreement, and I suspect that a lack of status and also the problems of who would negotiate such an agreement indicate that it would not be the perfect alternative. Who would negotiate for the Aboriginals and, even more so, who would, on their behalf, be a party to such an agreement has remained a major obstacle. Therefore, in some ways I see the makarrata as looking for a simple answer to a difficult problem. I do not believe that we can simply say 200 years later that we will enter into an agreement and that relationships will be substantially changed for the better. The circumstances in light of 200 years history are not even comparable to the North American, New Zealand and Alaskan experiences that are often quoted to us. The difficulties are enormously more diversified and complicated. Really what is needed is a change of attitude. To some extent that is already occurring. Many Australian Aboriginals now live as owners of their own land. The Australian Law Reform Commission continues to work on the subject of the place of customary law in Australia's legal system. As I have mentioned, there has been a resurgence of pride on the part of many Aboriginals. We now have also Aboriginal diplomats, lawyers and educators. Soon Aboriginals will be seen in all roles of Australian life, and those who choose such goals should be encouraged. Others have sought traditional tribal life and many now have a better opportunity to achieve that aspiration. Whatever lifestyle is chosen, each should have pride in the achievements and culture of the Australian Aboriginal. As I said earlier, an essential ingredient in a new relationship is not only a resurgence of the Aboriginal's pride in his race and his heritage, but an education of non-Aboriginal Australians that they should also have pride in that heritage. Such an education, a change of attitude and awareness take time. They can be facilitated by the teaching of Aboriginal studies in the school system. I have considerable sympathy also with the concept of National Aboriginal Day being a national holiday-a day for recognition and respect of the unique part that Aboriginals play as the original inhabitants of this now multiracial and multicultural society. With a greater understanding of the history of white settlement, of the dispossession of the Aboriginal of his land, of his culture and the part that land plays in that culture, of the unique contribution that the Aboriginal can make in our society-the Australia of the future-there will come about the objectives of the makarrata, as they are already coming about, but in a way that will not be divisive but, as I have stated, as a contribution to a united and just Australia. Senator CRICHTON-BROWNE(Western Australia)(5.18) —It is probably inappropriate that I be conclusive in my observations because I was not on the Standing Committee on Constitutional and Legal Affairs for the duration, only for the part during which the majority of the evidence was gathered. The terms of reference do not refer to desirability, so that in itself relieved the Committee of having to make some important determinations. I say at the outset that even the word 'makarrata' was most unsuitable and, in my view, is most unsatisfactory as a name for an agreement of any type between the Commonwealth and Aboriginal Australians. I suspect that somehow it was not chosen by accident. As the report of the Committee shows, 'makarrata' is an Aboriginal word from north-east Arnhem Land, commonly describing the coming together after a struggle, a ceremony at which the aggrieved party almost invariably lets blood, death on some occasions occurring. I ought to point out that such a ceremony does not always signify the conclusion of the feuding. Very often the fued goes on. This demonstrates that the very title makarrata does not suggest a coming together with good will in a sense of co-operation but rather a blood sport or a retribution on the part of one party towards another. Senator Tate —That is why we gave it up. Senator CRICHTON-BROWNE —There are those who still seek to use the word. I notice that the report uses it more often than I would have thought appropriate. Other names have been put forward as a substitute. In my view the word 'compact' is unsatisfactory. I think Senator Gareth Evans suggested that. Senator Gareth Evans —By definition, it is unsatisfactory. Senator CRICHTON-BROWNE —Yes. Of course if one bothered to read the Bible- Senator Evans claims he does not: and that he has no knowledge of Christianity- one would know that most compacts in the Bible ultimately resulted in some sort of blood-letting also. So, the name may seem irrelevant and inconsequential. I notice that the word 'treaty' was given considerable currency for a period; however, the word in itself implies an internationally recognised agreement between two nations. The judges in the case of Coe v. the Commonwealth found that the Aboriginal people did not have Australia as a nation. Many matters are considered by some to be appropriate to be contained within the agreement. I refer to demands such as: return of tribal lands including sacred sites and freehold title-should be taken up . . . compensation in cash as percentage of GNP or percentage equivalent to Aboriginal proportion of total Australian population . . . compulsory employment of a fixed proportion of Aboriginal people in government bodies . . . substantial land and resource rights, including land 'vested in freehold title to the Aboriginal people' . . . extensive self-government in 'tribal territories' . . . five per cent of GNP for 195 years . . . extensive welfare services such as Aboriginal medical services, legal aid, schools; extensive tax exemptions. These are but a few of the items which are included in the proposals. In my view the essence and the heart of this inquiry is inextricably tied to land rights of an inalienable type. That of course raises the question of the legal position which, I notice, has been given some attention by the Committee in its conclusions. To this extent the terms 'invasion' and 'settlement' take on a particular significance, without going into it in great detail, under the doctrine of terra nullius, which means that land belonging to no one, or a piece of territory not under sovereignty of any State, is deemed to have been settled. That includes land which is occupied but in which there is no recognisable political, social or economic structure. On the basis of the British Government' s 1770 determination that no such structure existed, the country of Australia was deemed to have been settled. Of course, had that not been the case the land would have been deemed to have been occupied by invasion. The distinction is that land obtained through agreement or conquest was held to be already vested in its inhabitants and the British Government recognised their prior ownership. There has been much debate in recent times as to whether Australia was settled or invaded, for the reasons I have just outlined. If Australia is regarded as settled, Australian Aboriginals do not have a legal claim; if Australia is regarded as invaded then of course they do have a legal claim to Australia. That argument has been tested on more than one occasion, including the Blackburn case , in which it was found that Aboriginal Australians did not have legal title and that Australia came into the category of a settled or occupied colony. That matter was again subject to litigation in the case of Coe v. the Commonwealth. The plaintiff claimed to sue on behalf of the Aboriginal community . He claimed that Britain failed to recognise the existing sovereignty of the Aboriginal people. In addition it was claimed that Australia had been acquired by conquest. As we know, that case also failed. That being so, one is moved to ask: On what basis should land rights be granted? On what basis and on what premise should that provision be contained within an agreement between the Commonwealth and the Aboriginal people of Australia? The Committee calls, quite properly so in my view, for a better understanding between all Australians. That of course begs the question- Senator Chipp —Where would you put yourself in the political spectrum? Senator CRICHTON-BROWNE —I would probably occupy the middle ground. Is the law and the number of determinations in respect of original ownership wrong in principal or wrong morally, or was the British determination at the time of settlement wrong? Should land rights be granted to seek to preserve the traditional life style of some Aboriginals? Should land rights be given by way of compensation for past ill-treatment? Should land rights be created to provide a source of permanent on-going self-funding for Aboriginal groups? I believe that all those who are committed to land rights need to give this matter proper consideration and declare a proper public position so that this may be the subject of a sensible and logical debate. Of course one needs to ask the obvious questions. Where will Australia be in 50 to 100 years time in respect to the community as a whole? Will Aboriginals in some cases still retain their traditional life styles or will we have hundreds and perhaps thousands of inalienable acres of land held by absentee land owners? I found, during the period the Committee was taking evidence, that the greatest complaint of many elders was that they were unable to persuade the young people to maintain their traditional life styles; rather they wanted to gravitate towards the metropolitan areas. I believe that in order to have proper debate on and proper understanding of this question of land rights there ought to be a much more frank, open and honest contribution from those who support it. They should seek to explain on what premise, on what basis and on what principle they support land rights. I commend the Committee for its report. I think the first part of the report contains considerable subjective judgment. The Committee noted that people are now becoming aware and conscious of the type of nation that Australia was at the time of settlement and that it had a community with greater economic, social and cultural values than were recognised at that time. I think there is a type of unreality about that statement. I notice some reference was made to the Noonkanbah case, suggesting that a misunderstanding existed but, by and large, I think the Committee has done a very fine job. Question resolved in the affirmative. Motion (by Senator Robertson)-by leave-proposed: That the Senate take note of the report. Senator SIBRAA(New South Wales)(5.28) —Electoral reform is a subject in which I have been vitally interested for a number of years, both before and after being elected to the Senate. In 1979 and again in 1980 when the Australian Labor Party was in Opposition in the Senate I moved that a select committee of the Senate be appointed to inquire into and report upon a number of issues including all provisions of the Commonwealth Electoral Act, public disclosure of the sources and the amounts of donations to political parties and to candidates, and also the public funding of political parties and candidates. The Labor Party did not have the numbers at that stage and the Committee was never established. Therefore I am extremely pleased that one of the first acts of the Labor Government was to set up the Joint Select Committee on Electoral Reform, which is very similar to the select committee that I proposed in 1979 and again in 1980. It is also pleasing to have the Committee reporting to the Parliament only six months later. There had never been a complete overhaul of the Commonwealth Electoral Act and this report, therefore, is long overdue. Senator Withers and Senator Chaney are now in opposition in the Senate. When they were the Ministers concerned with the Electoral Act both promised a full review. Both Ministers publicly expressed dissatisfaction with the existing electoral laws. They in turn were followed as Minister for Administrative Services by Mr John McLeay who, in answer to a question in the House of Representatives, also said that our electoral system needed review. But what was done? Absolutely nothing! In 1976 in a speech in the Senate I pointed out that the electoral legislation concerning elections to the Senate-that is, the method of casting a formal vote and the method of counting votes-was introduced in 1948 and was badly in need of reform. In 1983 it is still badly in need of reform. I do not have time this evening to go into great detail concerning the method of counting votes for election to the Senate. But I point out that any procedure that involves a vote on 13 December one year, the result of which is not known until 6 February the next year, is urgently in need of review. That was the situation in 1975 in the election in New South Wales for the Senate. What a farcical sitution it would be if the government elected to the House of Representatives did not know for nearly two months who was going to control the Senate, especially if we compare this situation-one that could occur in Australia-with the situation that exists in the United States of America and Great Britain. In the United States the result of the election for the President, the Congress and the Senate is known within a matter of days. In Great Britain, with over 500 seats in the House of Commons, the result of an election is known within a matter of only two or three days. Any system in which a recount results in 10, 000 fewer formal votes than in the original count is in need of review. Any system in which the donkey vote decides seats and, therefore, ultimately who controls the Senate, is in need of review. It has been estimated that in New South Wales up to 25,000 votes are donkey votes if the Senate ballot paper is complicated. In New South Wales a few years ago we had a ludicrous state of affairs. The Liberal Party received 22,000 preference votes from the Socialist Workers Party, which was a Trotskyist group. In fact, the 25,000 donkey votes were not genuine votes that were meant to go to the Liberal Party- Senator Robert Ray —Probably a thousand were genuine. Senator SIBRAA —A thousand were probably genuine, but at least 22,000 of the 25, 000 donkey votes were votes that went straight to the Liberal Party. The Committee's report recommends a list system which will not make it compulsory to fill in every square of the ballot paper. This will certainly correct this sitation. The present system disadvantages the elderly, the infirm, Aborigines and migrants and one must wonder why the Liberal-National parties persistently discriminated against these people. Perhaps it was because they suspected that a large proportion of these people would vote for the Labor Party rather than for their parties. The situation that occurred in 1974 highlights the seriousness of this problem. Australian political history would have been changed if either the sixth ALP candidate in New South Wales or the fifth ALP candidate in Queensland- our colleague Senator Colston, who is now a member of the Senate-had been elected at that time. But those candidates were not elected. We have to ask ourselves why they were not. The reason was not because they did not attract enough votes, but because thousands of people who tried to vote for them made a simple mistake and cast an informal vote. Thousands of people conscientiously tried to vote formally. People with bad eyesight made mistakes transferring marks from the how-to-vote card when they had filled in 32 or 33 of the squares. Even though they had voted correctly to that stage, their vote was cast aside. Some people filled out the ballot paper completely and only missed one number, yet their vote was made informal along with hundreds of thousands of others throughout Australia. I am pleased to say that this situation will not occur in future if the Select Committee's report is adopted, as I am sure it will be. I now turn to the subject of public funding of elections. Why is the Opposition worried about the issue of public funding? Why have the Opposition members of this Parliament and the New South Wales Opposition called public funding corrupt , especially when it can be argued that the most democratic of countries have some form of public funding? I instance France, Holland, the United States, Sweden, Norway, Denmark, Belgium, Switzerland, West Germany, Italy and Canada, to name but a few. Public funding has been in existence for over a decade in a number of these countries. These countries have working parliamentary democracies at a time when the number of parliamentary democracies around the world are declining. In fact, it could be argued that public funding has made these countries more democratic. I believe that the reason this Opposition is terrified of public funding is that it would have to account for the money it receives for its election campaigns. We know that millions of dollars-$5m or $6m in the 1980 campaign, and certainly more in the 1983 election campaign-came to the Liberal and National Parties. That money was completely unaccounted for. We do not know where 1c of those millions of dollars came from. Public funding has already been an issue in an election in Australia. In New South Wales this issue was one of the Liberal- National Party coalition's main areas of criticism of the New South Wales State Labor Government. Full page advertisements in the Sydney Morning Herald costing $7,000 attacked the Labor Government's proposal for public funding. It did not hit the deck as an election issue and the Labor Government increased its majority. In 1962 President Kennedy in the United States said that some form of public funding was inevitible with the way that costs were rising in the United States. He proposed a commission on campaign costs. This proposal was not acted upon until after Watergate, which made public funding possible in the United States. In the last United States presidential campaign, President Reagan received $21m in public funding. Does the Opposition think that President Reagan is corrupt because he accepted this public funding? On 20 August 1981, during a debate in the Senate on public funding, Senator Baume said: To seek or to accept a public subsidy is a political party's admission of failure. That it should need to look to public funding is an admission that it cannot get support from those who should be attracted by the force of its ideas and its ideology. The need for public funding reflects a lack of confidence in the acceptability of the party's objectives, a lack of confidence in its policies, a lack of confidence in its performance and an unwillingness to make the necessary efforts to raise its own funds. It is an assertion by an unsuccessful and failed party . . . At that stage, of course, he way saying that the New South Wales Liberals would never accept public funding. The National Party in New South Wales was not that silly. It decided that it would accept public funding. After the money had been paid both to the Labor Party and to the National Party, the New South Wales Liberals announced that they would be taking part in public funding. Senator HAINES(South Australia)(5.37) —I speak to the report of the Joint Select Committee on Electoral Reform on one particular issue-public funding of elections. Every speaker who has taken part in this debate so far has mentioned public funding but has spoken about it as if we have never had public funding at a Federal level in this country before and that we do not have it now. That is a myth which I think needs to be extinguished once and for all. In Australia at the moment we do, in fact, have a very thriving public funding system for election campaigns. Not only is it thriving, it is also highly inequitable. It is a system which relates more to how much a particular candidate spends and to how much that particular candidate earns than to any electoral support that candidate might receive. It operates in this way: If a candidate for an election chooses to spend $20, 000 on his or her election campaign and retains all the receipts for that expenditure, at the end of that financial year that candidate can claim it as a tax deduction. The Government then generously returns, as part of his or her rebate, that proportion of the expenditure that related directly to how much that particular person earned in that financial year. The amount earned determines the marginal tax rate, which determines how much the candidate receives as a tax refund. Let us take as an example two candidates in two separate electorates, who both spend $10,000. Let us assume that one of those candidates earns $15,000 a year. We will leave aside the fact that on that amount of money he probably could not afford to spend 10 grand on an election campaign. The tax rate for the candidate earning $15,000 a year is 30c in the dollar. As a taxation refund he will get back one-third of that $10,000. So, the Government refunds him slightly more than $3,000. If the other candidate who spends $10,000 is earning, say, $50,000 a year, his marginal tax rate is 60c in the dollar and he gets back slightly in excess of $6,000 of the $10,000 he spent on his campaign. So, to say that we do not have public funding in this country overlooks the fact that the taxation system has been used for many years in order to fund a particular candidate's campaign expenses. Prior to a change by the Fraser Government a couple of years ago, there was a limit on the amount anybody could spend. In 1981, the Commonwealth Electoral Act was changed so that unlimited moneys can be claimed as a tax deduction, providing only that receipts are held to prove that the money was spent on that particular candidate's personal campaign and not as part of the Party campaign. I know that, when I was in Western Australia during the March election this year , it was fairly common knowlegde that one of the Liberal candidates was spending something in excess of $21,000 of his money on his own campaign. That of course overlooks, too, another inequity, that is, that the more one earns, the more one is able to spend on an election campaign. So, it is not merely a case of how much one gets back through the tax system; the mere fact that a person earns a large amount of money means that he is in a position to spend a large amount of money on his election campaign. The other method by which the public has been for many years funding political parties is a device by which companies which do not wish to have it made public that they have been donating money to a particular political party offer the political party of their choice the use of their advertising companies. Advertising for the political party is placed with an advertising agent who puts it on the advertising account of the particular company concerned, and that charge is then credited to that company so that it becomes, in itself, a tax deduction. A system in which a candidate and a political party are funded by the public only to the extent to which they receive public-that is, electoral- support at an election is a considerable improvement. It has been needed for many years and I sincerely hope that both sides of this chamber support it. Senator MISSEN(Victoria)(5.43) —I welcome this opportunity to make a short speech, which is all that time constraints will permit, in respect of the report of the Joint Select Committee on Electoral Reform. I say in the first place that that report, which was arrived at very quickly by the Committee, is a credit to all members of the Joint Committee because it covers a great number of matters that have been of concern to many people in the electoral area for many years and I think its general submissions and general solutions are, on the whole, very sensible. It received some 212 submissions from the public and from other sources. It has made 132 recommendations. When one considers that there has been only a little public debate about one or two items, it is important that people get the report and read it all because the report and the dissenting reports are most worthy of study. I propose to deal with only a few aspects of the report, as that is all that is possible in the short time available. I believe that there are two particular dangers in the report-two recommendations which are most unwise-and other recommendations which are most unpopular but I think wise. In the first place, the report proposes that redistributions be carried out by the Australian electoral commission. The setting up of the Australian electoral commission is an excellent idea; taking redistribution out of the hands of politicians and putting it into the hands of officials to whom representations can be made is important. One of the significant weaknesses in the proposal however is that a redistribution will not come before the Parliament; the Parliament will not have a chance to comment and make suggestions. I believe this is unwise. It should come back to the Parliament so that it can make suggestions, although of course it would leave all fundamental decisions to the electoral commission. I think, therefore, that this is an omission in the report. The second matter-some mention has been made of it today-is the proposed 'list' system for voting in the Senate. There are some excellent proposals as far as Senate voting is concerned, including the one whereby, if people make a mistake in marking a very long Senate ballot, the ballot will be counted up to the stage where the mistake is made. I think that is wise and will save a lot of votes being rejected as they have been in the past. But I find the 'list' system proposal highly unwise. Only a few moments ago Senator Sibraa spoke about how the Liberals, at some stage, got the accidental preferences of the socialist workers who were on top of the ballot and followed by the Liberals, and he found that somewhat extraordinary. Imagine what will happen if we have the 'list' system. A person will put a number in a square, indicating that he wants to vote for a particlar list, thereby implying preferences to all the people who make up that list. It means that there will be a great scramble to get to the top of the list. Organisations and parties will put up groups-probably bogus groups-or lists of individuals, hoping to win the ballot and get to the top of the list. Senator Robert Ray —Have you read the section relating to political parties? You need 500 members before you can put a political party in a list. Senator MISSEN —Yes, but the fact is that great benefit can be found in this. It means that by winning the top of the list a party can thereby direct voting across the ballot as it likes. Instead of being a matter of accident it will be a matter of design. I put it to the Senate that it certainly should avoid that system. Time does not allow me to go into detail on this aspect today but I believe that is one of the follies of the report. I turn to a proposal put forward in the report-no doubt it is unpopular in the public's eye-which relates to the size of Parliament, to the increasing of Parliament by 12 senators and 24 or 25 members of the House of Representatives. Of course it is very easy to take a populist view and say that it is never the time to increase the size of the Parliament. I refer to the interesting dissenting report by Senator Sir John Carrick, who does not think that this is the time. He very succinctly puts the case for an increase though he opposes it and he sets out questions that are raised. I will demonstrate my argument for this proposal by answering the questions that he poses. He points out that many arguments have been raised for an enlarged Parliament. Indeed there are, because we have one of the smallest national parliaments in the world. The Canadian House of Commons has 280 members, our House of Representatives has 120. To my mind, the salient reason for an increase is not just the fact that members are representing many more than they were and have much heavier tasks but also the fact that the executives of the parties in the Parliament have too great control. If we have nearly 30 ministers and a number of people who hope to be ministers, we have too big a predominance in the Houses of the Parliament, on both sides, of people who have ministerial positions or aspirations. I believe that this is one of the fundamental reasons for increasing Parliament's size. If we could get into the Parliament a number of members who have an interest in being effective parliamentarians and who do work, we will have achieved something. When these questions were raised, as I said, Sir John Carrick pointed out some facts. He asked: Is there justification for a larger Senate, whether to fulfil its evolving responsibilities or simply to enable the enlargement of the House of Representatives? I believe there is a strong case for a larger Senate; I believe that these days the Senate membership cannot cover the work of its own committees. If anything, there is a better case for an increased Senate than there is for an increased House of Representatives. Senator Sir John Carrick continues: Is a Senate of 72 members . . . inclined to deadlock? This is the fundamental point which he raises and for which I think there is a lot of argument. I will come back to that. He goes on to say: Would the public now support the breaking of the nexus . . . In that case, the size of one House could be increased without affecting the other House. I do not think that that matters very much, and I do not think that the public would carry such a proposal. As I say, I think there is a good case for increasing the size of the Senate. Coming back to the main point, if we increase the number of senators in each State from 10 to 12, with six senators going out at each election, it is quite correct that there will be deadlocks and probably no party will have a majority in the Senate at all. There will probably be a situation in which one or two senators will be able to dominate and control the Senate. I believe that is undesirable and it is not in any way 'practicable' to take steps that will do that. It is obvious that deadlocks will occur because it needs only 43 per cent of the vote to elect three senators in any State. With preferences, that result will be achievable by the major parties-the Labor Party and the coalition on this side of the House. However, a party would need 57 per cent of the vote for four of its candidates to be elected to six vacancies. That position will never be achieved. I do not think it has been achieved in recent times. So we can see a situation in which there will be deadlocks and a lack of a majority even for a popular government. Under such an arrangement, governments will have no opportunity to gain a majority in the Senate. Moreover, Senate elections conducted under this system would be uninteresting. There would be no point in the public getting very worried about an election because there would not be a fifth position. The extra postion would go to the candidate of one major party or the other. This will almost invariably mean that whoever the party selects will be elected. A candidate will be elected whether his is placed No. 1, No. 2 or No. 3 on the party ticket. So this proposal is one way of reducing the importance of the Senate. Unfortunately I cannot now refer to the good things that are in this report, which I would like to do. There is an easy solution to this problem I have raised, and that, at one election, is to elect five senators in three States and seven in the other three States. At the time of the next half Senate election three years later seven senators from the first three States and five from the other three would be elected. This proposal would preserve the importance of having uneven numbers and would solve the problem of deadlocks. Senator Macklin —That would be unconstitutional. Senator MISSEN —It would not be unconstitutional. Section 13 of the Constitution requires that after each election senators from a State shall be put into two different divisions-the first and second divisions-and they shall be, as far as practicable, equal in number. It does not say that they have to be equal in number. I say there is nothing practicable in the solution of having six senators elected at each election. Such a proposition is absolutely fundamentally hopeless. I think the public would gladly agree to a constitutional amendment to solve this matter if it were required. However, I do not believe that that would be necessary. It is my belief that this solution I have raised is easily achievable. The idea of increasing the size of the Parliament by having six senators elected from each State at each election would reduce the Senate to futility and could not be supported. I find the report very valuable. Marvellous things have been done in it. However, there are some things in it that need to be looked at still further. Senator TOWNLEY(Tasmania)(5.53) —I want to take a few minutes to deal with a couple of points with regard to the report of the Joint Select Committee on Electoral Reform. At the outset I would Like to draw the Senate's attention to the dissenting reports which, to a large extent, were written by Senator Sir John Carrick. I find I am very much in agreement with most of them. Of course, Senator Sir John Carrick has had a great deal of experience in electoral matters . I remember when I first met him many years ago in his office in Sydney he was Secretary of the New South Wales branch of the Liberal Party. I agree with nearly every recommendation that he made. I would like to suggest that people who are interested in electoral reform read the dissenting reports which are contained in the report of the Committee. I would like to mention a couple of matters, the first of which relates to public funding. Many reports and papers on this matter, particularly in the United States of America, have indicated that control just does not work. Recommendation 99 on page 217 of the report states: donations designated for Federal election purposes in excess of $200 to a candidate or constituency organisation and to a party in excess of $1,000 should be required to be disclosed and the donor identified. I think the important words are 'donations designated for Federal election'. Recommendation 101 states: donations made specifically for a State or Territory election or to a party maintenance or administrative expenditure fund should not be required to be disclosed . . . How on earth does one distinguish between donations that are made for election purposes and donations that are made to party organisations? Senator Robert Ray —There is a further recommendation that no part of the party' s maintenance fund can be spent on elections. Senator TOWNLEY —Senator Ray says that no part of a party's maintenance fund can be used for elections. If that is a fact, how does one determine whether a donation is being used unless one has total access to all parties' funds? Senator Robert Ray —Because there is also disclosure of expenditure. It does interlock. Senator TOWNLEY —I do not think it does. There is too much room for manoeuvring. I do not think it will work; it has been shown that it will not work. Loopholes have been found in the United States. I imagine that what will happen here is that we will not only end up with public funding, which I am against, but also we will have a system under which disclosures will not be able to be controlled properly. Therefore, parties will be getting money both ways and I do not like the idea of political parties getting their hand in the public till. Senator Robert Ray —It is already there and you know it. Senator TOWNLEY —The honourable senator may say it is already there-- Senator Robert Ray —What about VIP planes. You still get paid at election times- the whole lot. Senator TOWNLEY —Let me give my opinion. The honourable senator can hold his opinion. I want to talk now about the issue of writs. I cannot see why the enrolment for an election has to be cut off an arbitrary seven days before the issue of writs. Senator Missen —You agree it should be longer? Senator TOWNLEY —I am going to suggest something that will give the maximum number of people the opportunity to vote. Why on earth people who have a birthday on the Friday before an election and who want to vote should not be included-- Senator Macklin —That is taken care of. Senator TOWNLEY —I am glad it is. Why should they not be able to apply for a vote the next day and sign a document to the effect that they have had a birthday. Why does the roll have to be closed seven days before the issue of a writ? Senator Robert Ray —There is a proclamation day now. You are missing the point. Senator TOWNLEY —I am not missing the point. The honourable senator obviously has not thought of a few of the things that can be-- The PRESIDENT —The honourable senator will address the Chair. Senator TOWNLEY —I certainly will, Mr President. I also want to know why an individual who chooses to stand for the Senate should have to pay a higher deposit than someone who stands for the House of Representatives. I do not see any reason at all why candidates for the two Houses should not pay an equal amount. I think that recommendation 65 on page 212 of the report is very dangerous. At the moment an elector can vote in the subdivision in which his name is recorded. Such a subdivision may contain six polling booths. Senator Robert Ray —Or one. Senator TOWNLEY —Yes, but I am just taking six as an example. An elector could vote at each of those six polling booths. He could receive a ballot paper at each of the six polling booths. Each of his ballot papers would then we mixed with the rest of the ballot papers. In other words, he would have cast five votes which he was not entitled to cast. Under the Committee's recommendation an elector would be able to cast his vote at any polling booth in an electoral division. There might be 50 polling booths. Therefore he could vote 50 times in one day. Again, his votes would not be able to be distinguished from the other votes that were cast. Half a dozen people could go round the whole electorate-as was the situation in Wilmot a couple of years ago-voting a number of times. We could pick out who had done it, but it could well be that somebody used somebody else's name. For instance, I could use Senator Missen's name. He could then say: 'It wasn't me'. He could have an alibi because he was somewhere else. It is quite easy for somebody to rig an election in this way. To extend the situation to such a degree is quite dangerous. I am sure Senator Sir John Carrick would agree that there have been times when people have voted more than once. I think we should think about this matter very seriously before we agree to any change being made. With regard to enlarged parliaments, here again we have an attempt to change the system to the detriment of the public purse. I could not go along with the recommendation at all. I do not believe the public of this country wants more politicians. I do not believe the public wants politicians to have any better facilities than they have now. I very much agree. Senator Sir John Carrick dealt with this on page 235 of the report. On page 243 then Senator Steele Hall stated : The public view is that there are politicians all over the place and one has only to attend public functions to find this to be often the situation. Taking all 788 politicians including members of the two Assemblies into the calculation, Australia has a Member to each 12,000 electors. The public would rightly be offended if the size of Federal Parliament was increased at a time when many businesses are reducing the number of their employees because of recession. An increase in Members would inevitably swell the bureaucracy and put a stamp of approval on its growth when much of Australia is asking for smaller government. My view does not hold that there should never be an increase. Population growth will make this desirable probably at the end of the century. In the meantime, Members of Federal Parliament and the public would be well served by an increase in electorate office staff. I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 20 September 1983, on motion by Senator Grimes: That the Bill be now read a second time. Senator ARCHER(Tasmania)(6.03) —Not only does the Opposition not oppose the Meat Inspection Bill; it welcomes it. It represents what many of us have been working for for a long time now. Briefly, the Bill covers the administrative arrangements for the undertaking of domestic meat inspection in New South Wales and in other States if they wish to join the service. It is the first step towards the development of a national integrated meat inspection service. The purpose of the legislation is to provide a sound legal base for the development of the inspection system. The Bill provides for the setting of inspection standards for meat intended for human consumption and meat intended for use as animal food within Australia. The Bill provides for authorised officers to enter premises, to seize and retain meat and to carry out a variety of other duties. The appointment of authorised officers will be made and they will be issued with identity cards as required. The Bill also provides that the owner of any premises be prohibited by law from supplying meat to any authorised officer unless he has special approval. This is dealt with in clause 35. It has been one of the matters that have created quite a lot of discussion and dissent over many years. The Bill also provides a whole range of penalties for contravention of the various provisions. As I have said, I am very pleased to see the Bill. I have given a lot of thought to it over some years. I go along with the thought behind it. The industry at large has seen some innovation recently, but it needs to undertake more work in breeding, handling and, in particular, feeding. Of course , that will go a long way towards standardising meat and making the job of inspectors much simpler as well as providing improved returns to the producers. The real difficulties lie in the question of authority and the Federal issues, such as who will be in charge, who will want to be in control, and who will give up some of the items which they now believe to be their own. There is also the question of duplication of cost and authority. These are the three areas that have created most of the problems. I was interested in the proposals to which the journal of the Cattlemen's Union of Australia referred on 26 September. The Cattlemen's Union conference outlined an alternative which I thought was quite interesting. I will read some of the points that it made on the question of overcoming the duplication of authority. Its conclusions were: (A) That export plants be staffed by Commonwealth inspectors an veterinary officers only. (B) That State plants be staffed by State inspectors and veterinary officers only. (C) That duties currently performed by State inspectors in export plants be performed by Commonwealth inspectors under agreement between the Commonwealth and State. (D) That no second fee be applied to meat coming from export plants into the domestic market. (E) That the states find some other method of funding their resultant shortfall of revenue. (F) That the Commonwealth be responsible for the establishment and operation of whatever services it needs to maintain the integrity of Australia's export meats . . . (G) Areas of common ground could surely be handled by reciprocal cooperation between states and Commonwealth. If we are unable to get one universal service, those recommendations would go a long way towards ironing out some of the difficulties that have existed in the past. In view of the fact that the meat inspection service has been a government responsibility, economics have not been a prime consideration. The costs are certainly extravagant. The whole system has become institutionalised. We have had advice from the Government that the Commonwealth system is under review and under development. I think all sections of the industry-the producers, the processors and the exporters-are looking for an approved and improved service. The cost involved now is quite unrealistic and it has to be contained. In the recent debate on the Live-stock Slaughter (Export Inspection Charge) Amendment Bill and other Bills I requested a breakdown of the arbitrary add-on cost of 50 per cent. I still have not received that advice. I hope that the responsible Minister will be able to inform me as to when I can expect to get details of just what is involved, because it is a very significant amount in the overall cost of meat inspection. I was pleased that the Minister for Primary Industry (Mr Kerin) in his statement on 24 August outlined the two principal objectives-a more efficient inspection service and a more cost effective inspection service. Australia depends very largely on its export industries. Of course, export meat is one of the main items on which we depend. This affects a considerable number of people and provides a lot of income to vastly diversified areas of Australia. We will always have difficulties with the General Agreement on Tariffs and Trade when it comes to export incentives, costs, payments to producers and so on. We take these matters very seriously in Australia. Of course, that prevents us from doing many of the things in which most of our trading partners openly indulge. Many countries are seeking ways of providing some assistance to their exporters. They depend on their export industries the same as we do. In our case such assistance could be provided to a very worthy industry. I fail to see why it has been decided that it is not good enough for us to do it in this case. Assistance with the export inspection charges would be an ideal way to do this. It would not be seen to conflict with the GATT arrangements. At present we need to take into account what is virtually an enormous tax that the present revaluation will produce on all our export industries including the meat industry. On top of these enormous increases in inspection charges and on top of trying to re-stock after the drought, the revaluation will make an enormous difference and set back all exporters and producers. The Minister for Resources and Energy (Senator Walsh) may recall that we raised the question of costs in the Estimates Committee hearings this year. I asked Mr Miller a question about costs and what was being done about them. I was pleased at the time because he said: I think if is fair to say that most of the ideas that we have about saving costs in the Service have come from within the Department . . . Later he said: . . . including such radical changes as passing over a substantial part of the responsibility to industry under a quality assurance program. That was what he said then. Much the same has been stated in what is generally known as the Kelly report, the report of the Committee of Inquiry to examine Commonwealth and State Meat Inspection Systems. The whole question of cost has to be dealt with more often. It has been dealt with, I think, on two occasions by the Industries Assistance Commission. It has been dealt with by just about every primary industry group. It has almost been a permanent fixture on agendas of the Australian Agricultural Council. All that is happening at the present time is that costs seem to be going up and up. It is worth recalling that in 1978 the Prices Justification Tribunal, in its assessment of beef marketing and processing, made a judgment in paragraph 6.22 of its report. It stated: The Tribunal was heartened to learn that the Australian Meat and Live-stock Corporation was already sponsoring research, at the Veterinary School of the University of Queensland, designed to examine the validity of Australian procedures of meat inspection. A progress report furnished to the Tribunal illustrates the nature of the problems at issue. The work to date strongly supports the view, not only that the scientific basis of current inspection methods should be objectively examined with a view to bringing them into line with contemporary veterinary knowledge and the present incidence of disease, but that substantial reductions in the costs of inspection could be achieved with insignificant hazard to the consuming public. That was stated in 1978. Regrettably everything but that has happened. We have certainly had no diminution of service but the costs have gone absolutely wild. I trust that the re-vamping of the Australian Meat and Live-stock Corporation will be beneficial. I only hope that it grips the problem firmly and that the Government accepts its recommendations when it deals with the problems and brings some respectibility back to the industry. There certainly needs to be more responsibility put on the processors. I think this would increase the quality and reduce the costs. By any standards, I think it is totally inappropriate to add 200 per cent to the costs of the scheme when the Government says that the program on which it is working is incomplete and that the decisions made in relation to it are not firm and are still changing. I was distrurbed to see that the Chairman of the Australian Meat Exporters Federal Council, Mr Bowtell, was reported in the Australian Financial Review of 14 October 1983, as saying: Whilst other governments in other countries with which Australia has to compete provide their industries with massive assistance to produce and market meat, our Government turns to its third largest export earner and imposes an inspection charge equal to almost a quarter of the total cost of processing meat. He said the meat exporters and meat processors may jack up and not pay the costs . I think it would be a disaster if there was this confrontation. But I think the Government ought to have another look at the costs it is charging so that we can avoid that sort of problem. The timing of it could not be worse. We have been battering our heads against the brick wall of the drought for the last four years. Markets are not good. The currency revaluation has not helped and we will shortly face a 200 per cent increase in costs. The Government has said, in various statements, that it predicts that there will be cost-savings. I want to know when people can expect these savings to become apparent and how much the Government believes will be involved. The inspection service that we have is highly professional. It is of paramount importance. There is no need for there to be any downgrading of the service. Hopefully, it will improve. The Bill, together with the revised AMLC and the fury that exists at present against the new rates, offers the opportunity for a thorough investigation and rationalisation of employment and conditions of employment. I think inspectors should be engaged by the Commonwealth either directly on wages or on contract as circumstances find appropriate. Processors should also be brought under that responsibility. Hopefully the opportunity to set a more streamlined, efficient and economic system will not be missed. I support the Bill. Senator WALSH(Western Australia-Minister for Resources and Energy)(6.17) —The Meat Inspection Bill makes provision for the extension of an objective which has been sought by the meat industry and, I think, by major political parties generally for some time. I did not hear the beginning of Senator Archer's speech but I gather the Opposition does not oppose the Bill. I shall not delay its passage to the next stage any longer. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MACKLIN(Queensland)(6.18) —by leave-I move: (1) Page 14, paragraph 25 (3) (b), after ''premises'', line 14, insert ''or board, enter, stop or detain any vehicle, ship or aircraft''. (2) Page 14, paragraphs 25 (3) (c) and (d), lines 15 and 16, leave out the paragraphs. (3) Page 14, paragraph 25 (3) (f), before ''break open'', line 18, insert '' with the consent of the occupier, master of a vessel or aircraft, or in pursuance of a warrant granted under sub-section (6)''. (4) Page 14, sub-clause 25 (5), line 29, leave out all words after ''to'', insert the following paragraphs: ''(a) enter any premises that are not prescribed premises; (b) stop, board, enter or detain any vehicle, ship or aircraft; or (c) break open any hold, compartment or any container or other receptacle ( including any place that could be used as a receptacle)''. My amendments are almost identical to an amendment that I moved in May last year to the Export Control Act 1982. I think the reasons for moving these amendments are set out fairly cogently in the report of the Senate Standing Committee for the Scrutiny of Bills. I have moved the amendments basically because of the extremely wide power of entry, search and seizure which is conferred upon inspectors. As I said last year, I do not believe that it is necessary to confer such a power. The methods which are available and are used under other Acts, I believe, are sufficient here. The various amendments that I have moved look at the notion not only of premises but also of vehicles, ships and aircraft. The problems of course, as I acknowledged last year in relation to this matter, are very large, but I believe that the principle that ought to be involved here is one that we should not overlook. I think there would be no difficulties involved if the amendments which I have suggested were passed. However, I imagine that the Committee will probably be of the same opinion as it was last year in relation to the similar amendments, but I felt it was necessary to move them to raise yet again this matter of what I believe are the unwarranted wide powers being conferred upon inspectors. Senator WALSH(Western Australia-Minister for Resources and Energy)(6.21) —Mr Temporary Chairman, I think it would be useful to divide the amendments into two groups. On superficial examination, the first two amendments simply seek to change the form in which the same powers and authorisations are presented. Let me detail the consequences which have been drawn to my attention if the amendments were to be accepted in the form that Senator Macklin has proposed. Sub-section (6) entails an application to a justice of the peace for, effectively, a warrant of search. Such an authorisation from a justice of the peace would have to be procured before an inspector could enter a vehicle, ship or aircraft or stop or detain any vehicle, ship or aircraft. By the time an inspector, who had reason to suspect that a ship or aircraft might be carrying, for example, mislabelled goods had met that requirement, the ship or aircraft might have moved out of the country. On those grounds, the Government finds those two amendments unacceptable. With respect to the remaining two amendments, whilst I recognise and understand the concern of Senator Macklin and his Party about strong powers of detention and search being granted to Commonwealth officers, the Government believes that the circumstances in this case are such that those powers are necessary. The effects of amendments (3) and (4) proposed by Senator Macklin are that, unless the occupier of the ship, building or whatever grants permission, a Commonwealth officer must obtain authorisation from a justice of the peace before making a compulsory entry or search. For example, a Commonwealth officer may have reason to believe that a container of meat which is labelled 'beef' might be stuffed full of kangaroo, donkey or some other meat. Senator Tate —Possum. Senator WALSH —Possum, yes; but mislabelled in some way or another. There are possible circumstances which could be outlined no doubt, but I cite this as an example. The Commonwealth officer would then be obliged firstly to ask the occupier of the premises or the person in charge of the transport vehicle whether the Commonwealth officer could open the container to see whether the goods were incorrectly described or mislabelled. Just suppose the goods were mislabelled, the occupier, owner or custodian would be unlikely, to say the least, to grant permission to such a Commonwealth officer. The Commowealth officer would then be obliged to go to a justice of the peace to obtain authorisation to do so. Although I recognise the genuine concerns which Senator Macklin has and particularly given the recent history of this industry where mislabelling, substitution and fraud are not just a matter of hypothetical speculation-it is a matter of history that those malpractices have occurred-the Government believes on balance that the provisions provided for in the Meat Inspection Bill in its original form are justified and therefore the easing of those provisions or the additional impediments, if I may put it that way, which Senator Macklin proposes are not acceptable to the Government. We will therefore not be accepting the amendments. Amendments negatived. Senator MACKLIN(Queensland)(6.26) —I comment on clause 36 of the Bill. I understand that the regulation-making power established by sub-clause (1) defines the limits of sub-clause (2). I seek advice from the Minister on whether that indeed is the case. I will elaborate on that while the Minister seeks some clarification. The situation, as I understand it, is that the purpose of sub- clauses (2) and (3) is to allow a process of legislation by reference by which the provisions of existing legislation, which presumably in this case is State legislation, will be incorporated by regulation into the legislation currently before the Committee. I do not believe that, if we remove sub-clauses (2) and (3 ), that action would in any way limit the regulating power of the Bill. I believe it would merely mean that the actual provisions, as distinct from the title, would have to be incorporated by regulation. In other words, the State Act that we wish to incorporate would have to be spelt out in some detail in the regulations. That seems to me to be a preferable manner than by actually doing it, for example, under sub-clause (3) which states: A power conferred by this Act to make modifications by regulation includes the power to omit any matter or add any new matter. This seems to me to be extraordinarily wide. It is the type of legislation which one sees going through the Queensland Parliament. However, if indeed it is the case that sub-clause (1) defines the limits of sub-clauses (2) and (3) I think I would be assured that there was not any undue attempt to make massive changes to this Act without reference to the Parliament. Senator WALSH(Western Australia-Minister for Resources and Energy)(6.28) —Very briefly, Mr Temporary Chairman, I am advised that the concern Senator Macklin has is covered in the Bill. Sub-clause (2)-I have been hastily advised on this and I trust I have it correct-does make provision for the powers of other Acts to be called up. But if the powers of those other Acts exceed the regulation- making powers in this Bill they may not exceed the regulation-making powers provided for in this Bill itself. Senator Macklin —That is in sub-clause (1). Senator WALSH —Yes, in sub-clause (1). Is that an adequate explanation? Senator Macklin —Yes. Question resolved in the affirmative. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Walsh) read a third time. Sitting suspended from 6.30 to 8 p.m. Debate resumed from 7 September 1983, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(8.00) —The Taxation (Unpaid Company Tax) Assessment Amendment Bill repeats many of the features in the Bill which was introduced in May of this year and which was rejected by the Senate. Some features of that Bill have not been contained in this Bill, but essentially the Opposition's attitude to the current legislation is similar to that which we described when dealing with the Bill which was introduced in May; that was, that it retrospectively created liabilities for tax that did not exist at the time at which it was described to relate. In this Bill there is the creation of a new tax liability for vendor-shareholders, and that liability is created retrospectively. As was stated by the shadow Treasurer in the other place when dealing with this legislation, the Opposition is opposed to it. I believe that there are about 12 speakers on the list, and I will not be making the lengthy explanation that could be made with regard to it. I do state our very solid objection to the features of the Bill. As I said, it has retrospective effect and creates a new tax that was not previously payable by those to whom it will apply. It is, in many senses, a vindictive piece of legislation. It is a discriminatory piece of legislation. It is penal in its approach. It creates double taxation in some circumstances, and it has abnormalities. I would think that with those features it is not surprising that it is a Bill that we feel we must object to and reject in this place. Senator Chipp —Other than all that, it is good legislation. Senator Dame MARGARET GUILFOYLE —Other than that, it may be able to be described as tax legislation, but those features make it quite unacceptable to the Opposition. I should say that this legislation is, coincidentally, brought before the Senate during the Budget session and, in some sense, there would be those who would describe it as Budget legislation. In general terms, I believe that it is accepted that a government is entitled to expect the passage of normal Budget and Budget-type legislation and other legislation that is an essential part of its financial program. However, there will be rare occasions when an opposition will feel compelled to reject or substantially amend such legislation, within the constitutional limitations of the Senate, where it is demonstrated to be capricious and arbitrary or vindictive legislation or where it creates new tax burdens of a retrospective kind. For the reasons that I mentioned earlier and as has been stated already in the House of Representatives and will be stated in the Senate tonight, the legislation clearly falls within all of those grounds of exception and the Opposition, we believe, would be failing in its public duty if it voted to pass this Bill. I therefore state quite unequivocally that it will be rejected by the members of the Opposition parties. I think it ought to be made clear precisely what occurs with this Bill. It will be recalled that in May 1983 the Government introduced legislation to amend the existing legislation by extending the recoupment tax to deem that the company distributed as a dividend all accumulated tax paid earnings and capital reserves since incorporation, and this was to be taxed at up to 69.6c in the dollar. That Bill, as I said, was rejected by the Senate. The new amendment Bill introduced during the Budget session of the current Parliament differs little from that legislation which was introduced last May, the only difference being that the legislation will exclude capital profits and after-tax retained earnings of the company where primary tax was paid in the normal manner. In essence, the amendment extends the scope of the original recoupment legislation by deeming that a dividend has been distributed by the company equal to the total after-tax retained earnings where tax has already been paid under the original recoupment legislation. This dividend will be subject to additional recoupment tax. This means that the Government makes the unrealistic assumption that if the company had continued in operation it would have made 100 per cent dividend distribution , with the total tax of the income being up to 82.5c in the dollar, depending on the year in which the company was sold. Many examples can be given of the punitive nature of the legislation that is before us. Senator Tate —It is not punitive. Senator Dame MARGARET GUILFOYLE — I would have to style the taxable rate that would be applied to those people who would be affected by the legislation as being punitive in the effect that it would have in the total tax rate that would be extracted from those people who were shareholders of the companies concerned. There are some other amendments to the 1982 recoupment legislation. I do not intend to speak at any great length on them. I said that it was discriminatory legislation, and I believe that it could also be classed as being unfair, because it is directed only at companies sold with a current year profit component. They were styled as being wet Slutzkin companies. Companies sold to the same promoters with only retained earnings, that is, those that were called dry Slutzkins, escaped this new tax, as also do companies which paid their primary company tax but failed to meet their Division 7 sufficient distribution requirements. However, it ought to be understood that when the vendor- shareholders have paid the primary company tax and Division 7 tax under the original recoupment legislation, the situation is no different from the dry Slutzkin scheme. Yet the Government proposes to place the new tax only on such shareholders. This is extraordinary, particularly as some of the statements that we can recall of the Ministers involved with this legislation, such as the Minister for Finance (Mr Dawkins), were to the effect that there is no question of retrospectivity being applied to schemes which were totally and absolutely dry. We wonder then how we can differentiate between the two schemes that could be called wet or dry when, after the primary company tax and Division 7 tax has been paid, they are in exactly the same position. It does seem that the rationale for the proposed amendment is the completely unrealistic assumption that after-tax retained earnings are distributed 100 per cent to shareholders. I think anyone who knows anything about company practice understands that that is a totally unrealistic assumption. It does not occur in fact, and the provisions in the amendments that are before us ignore the retention provisions of the Income Tax Assessment Act and ignore what is properly retained by companies in their businesses to provide working capital, to provide for development, to provide for a continuation of the company. It seems to me to be absurd that we have before us a Bill that completely ignores the existing provisions of the Income Tax Assessment Act with regard to sufficient distribution and the retention of profits in the company, when the Australian Labor Party went to the people with a policy that it would allow 100 per cent of profits to be retained by small companies. That policy of the present Government , which at the time of the election talked of the retention of 100 per cent of profits in the companies, ignores completely what has now been put before us. I could class it only as being a punitive form of legislation. Senator Chipp —The companies, of course, have already paid their proper primary tax. Senator Dame MARGARET GUILFOYLE —The companies have paid their proper primary tax, but the distribution of 100 per cent of their profits to shareholders is something that has never been required of companies, and the existing provisions of the Act enable them to retain some of their profits as retained earnings. To suggest that retrospectively one can now impute a distribution of 100 per cent of such earnings ignores completely the provisions of the Income Tax Assessment Act and proper business practice. For that reason the amendment is no more than a penalty tax. It can be clearly seen that in the 1980-81 year, for example, the rate of 78.4c in the dollar far exceeds the maximum personal tax rate of 60c in the dollar or the normal company plus Division 7 tax rate, which totals 54c in the dollar. The proposed amendment will increase the recoupment tax payable by approximately 45 per cent. If that is not punitive, I would like to know what sort of figure the Government regards as being punitive when we look at what will occur under this legislation if passed by the Senate. Senator Tate —They are exactly the same rates as if they had gone out as dividends. Senator Dame MARGARET GUILFOYLE —Yes, but they did not go out as dividends and that is a big difference. That is the whole point. It is imputing something that did not happen. It is penalising people for something that did not occur. I suggest that if honourable senators opposite were to look at the practice of companies they would find that this does not occur and it did not occur. These profits are not currently subject to a tax of the nature that is now proposed under this legislation. When vendors sold their shares the proceeds they received in respect of the sale were of a capital nature and non-taxable. That situation is in accordance with a decision of the High Court of Australia. The fact that the proceeds were of a capital non-taxable nature is recognised in the second reading speech and the explanatory memorandum. The examples that I know have been put before the Treasurer (Mr Keating) by many professional bodies should have alerted him to the provisions of the Bill and what they were seeking to do in assessing tax on imputed dividends which were not actually declared or paid, and which did not have to be declared or paid under the existing provisions of the Income Tax Assessment Act. I think it could be argued that the whole premise of the Bill is based on a fundamental misconception. The following passage appears in the second reading speech: Rather, those persons should also pay the tax that, as shareholders or other former owners they escaped through receipt in a non-taxable capital form of after-tax profits that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands. This is clearly a wrong assumption. If the companies had continued to operate as going concerns they would have been entitled to retain sufficient distribution and claim the exemptions that remain in the Income Tax Assessment Act. Those profits would never have been subjected to tax. All the tax that would have been payable, if the sale of shares had not taken place, has been imposed by the principal Act. The further liabilities to be imposed by the Bill are new, additional taxes which will apply retrospectively. I think I have given sufficient reasons for us to be able to say that we reject completely this form of legislation. The retention allowance in the Income Tax Assessment Act is a very important part of the provisions that enable companies to carry on business, to improve capital and in general, particularly in times of economic difficulty, to remain in business. But what I think is quite important is that the Bill creates a liability for the new tax even where a person has paid out his liability under the principal Act. Payments since 25 July 1982 are to be ignored for this purpose. The new and increased liability having been established, a credit is given for the payments made since 25 July 1982 and additional payments will no doubt be demanded. Had persons who made arrangements to make payments under the principal Act known that further payments might be sought, they may not have made the payments at all or they may have sought to bargain for less or to make arrangements that would mean that they could have some relief from what is proposed. Such person may not have the capacity now to raise the additional amount. I do not think it is any answer to say that such cases might be taken to the relief boards. I think it would be known by those who have practised in the taxation area that applications to the relief boards are rarely successful. There is a long delay in having such matters settled. The provisions that are to be applied and the nature of the liability that is to be created under them would be beyond the scope of many of the people who would be affected by this Act. Senator Messner —Bankruptcy is no defence either. Senator Dame MARGARET GUILFOYLE — Of course it is no defence. I think that what is important and what has arisen in the last day or two is the way in which the Commissioner of Taxation is dealing with some of the people who would have come within the scope of the Act. I refer to the matters that were raised by a number of honourable senators at Question Time today relating to the letter of the Deputy Commissioner of Taxation in Western Australia concerning Coomel Pty Ltd. The Deputy Commissioner gave reasons as to why he would exercise discretion to relieve Coomel Pty Ltd in liquidation of any recoupment liability arising out of its holding in December 1976 of 600 shares in Metro Industries Ltd. I raise this matter because it has caused considerable interest, particularly in Western Australia, because so many of the shareholders live in that State. Questions that were raised with regard to those people who have received notices of liability or assessment under the recoupment legislation are now confused with regard to the positions in which they find themselves and what appears to be a discretion that has been exercised in accordance with the Act by the Deputy Commissioner of Taxation in Western Australia. Questions raised sought information as to whether the shareholders in public companies who have received assessments or notices of liability under the recoupment legislation can be assured that they would have the same treatment for their circumstances as has been set out in a letter dated 17 October from the Deputy Commissioner of Taxation in Western Australia. It is apparent that throughout the Press in Western Australia this evening there is some concern with regard to the matters that have now been raised. One headline stated 'Thousands want Dawkins treatment'. The article stated that thousands of people wanted to be given the same treatment as Mr Dawkins in relation to their liabilities under the recoupment legislation. Another headline stated 'Many may claim tax exemption'. The article stated that many people may claim tax exemption under the Act. Legal companies and tax accountants have received letters from the Commissioner of Taxation. I have in front of me one such letter relating to Metro Industries Ltd and the Taxation (Unpaid Company Tax) Assessment Act. The letter states: . . . a copy of notice(s) of assessment and/or a copy of a copy of notice(s) of assessment, served on you as a preliminary step towards the raising of a Recoupment Tax assessment. Also enclosed is a list of all vendor shareholders and former owners to whom a copy of the notice(s) of assessment in respect of the above company is being sent. In this case it was a notice of assessment in respect of Treamog Pty Ltd. It mentioned the former name of White Way Sign and Lighting Co. Ltd. The letter goes on to explain objection rights and states: . . . that any former owner nominated by a majority of the former owners, who received the company notice or a copy of the company notice, is entitled to exercise the same rights of objection and appeal against the company's assessment as are available to the company itself. The letter goes on to state: Accordingly, if there is any dissatisfaction with the company assessment, the nominated former owner, may within 60 days after service of the company notice of assessment, post to or lodge with the Commissioner an objection in writing against the assessment stating fully and in detail the grounds relied upon. I think it is interesting that those who have come within the scope of the recoupment legislation now have that ruling of the Commissioner of Taxation in the letter dated 17 October, in which he clearly sets out this discretion under sub-section 6 (18): Where a secondary taxable amount exists or existed in relation to a person and- (a) the Commissioner, having regard to- (i) the circumstances by reason of which the secondary taxable amount exists or existed; and (ii) such other circumstances as the Commissioner considers relevant, considers it unreasonable that the secondary taxable amount should be taken to exist or to have existed in relation to the person; or (b) if the secondary taxable amount is less than $100- . . . The matters have been expressed in the Deputy Commissioner's letter. Set out clearly in sub-paragraph (c) on page 2 is the statement: that sale took place . . . and in circumstances which did not reflect any benefit in relation to that sale or in relation to circumstances connected with that sale and subsequent handling of Treamog's affairs- This led the Commissioner to relieve Coomel Pty Ltd of any recoupment liability. I think that what is exercising those in professional practice in Western Australia and those who are personally affected by the recoupment legislation is the question of whether the same discretion will be exercised by the Commissioner with regard to their assessments or their notices of liability, as has been set out in that letter. When seeking information about this matter in the Senate at Question Time today, we were acting on behalf of a number of inquiries, which have intensified throughout the day, with regard to the position of those people who are either receiving notices of liability or who are the representative shareholders who have been affected by the recoupment Acts. Senator Jack Evans —Are you suggesting, Senator, that the Commissioner is exercising his discretion partially? Senator Dame MARGARET GUILFOYLE — No, I think that what is described as being the effect of section 6 of the Act gives that discretion to the Commissioner. I think that the question we are now posing is whether those who have been advised of liability, who have received assessments or who have paid assessments will have an opportunity to have the same discretion exercised where, in particular, as the Deputy Commissioner has stated in this letter, there was no benefit derived by those shareholders. I think that that is what has exercised the people with regard to this matter today, particularly as we have had the public release of the ruling, through the Deputy Commissioner's letter of 17 October. I said at the outset that the Opposition will oppose this legislation. The way in which the retention allowance provisions of the Income Tax Assessment Act have been ignored and the punitive retrospective effect of the provisions have come before us have led us to believe that this is not a Bill which ought to be supported through the Parliament. It is a Bill which will have many far-reaching effects. It is a Bill which, I would think, in view of the ruling that has been given by the Commissioner, will be very difficult for him to administer impartially in a way in which he can determine, within a matter of a few hours, whether a firm or an individual had gained any benefit from the ownership of shares in one of the companies which is caught under the legislation. It is interesting that he had denied the company the possibility of electing to pay undistributed profits tax and has deemed that 100 per cent distribution of profits ought to be made in assessing a person under this new legislation. Other senators will follow me and perhaps give their own points of view. For the reasons I have stated, on behalf of the Opposition I leave the matter at that point. I hope that we shall have some information from the Commissioner or from his officers, or through the Treasurer or his representative in this place, that will set at rest what is occurring now, particularly in Western Australia, as the professionals are seeking information on behalf of their clients. I state on behalf of the Opposition that this Bill will be opposed at all its stages. Senator TATE(Tasmania)(8.24) —I support the Government in this enterprise in the Senate tonight. We are trying to convince the chamber that it ought to support the Government's attempt to replenish the revenues of this country with moneys which are in the hands or have passed through the hands of those who have benefited from the operation of bottom of the harbour tax avoidance schemes. Somewhere along the line, the people upon whom we seek to place a liability tonight benefited from those bottom of the harbour tax avoidance schemes. This legislation, which is very modest compared with the legislation brought into this chamber and rejected in May and June of this year, seeks to obtain for the Treasury some $60m this financial year, and $270m overall. It represents part of that overall attempt by this Government to ensure a degree of equity and fairness in the application of the tax laws of this country. We believe this should be done in fairness to the pay as you earn taxpayer, the ordinary employee, who has no way of avoiding the payment of tax by indulging in contrived and highly artificial schemes or in the perverting of the best legal and accounting brains of the country to the selfish ends of the taxpayer concerned. That is not possible for the great majority of Australian taxpayers. Where there is a clear instance of people benefiting from a highly artificial tax avoidance scheme, we believe that we ought to require of them that they repay to the Treasury those amounts of money avoided. Why are we dealing with this matter here again in the Budget session, when we already had before us a similar Bill in May, although, as I say, a much more complex and more far-reaching Bill? The Australian Financial Review, a conservative journal, had this to say in its editorial of 3 June about the defeat of that earlier legislation in this chamber: But the defeat of the bottom of the harbour tax recoupment legislation . . . is a victory for selfishness and a defeat for fair play and social equity. But one has to concede that there were in the chamber, and perhaps in the community at large, some misgivings about the operation of that legislation in relation to the possibility that its application would create severe unemployment in those firms and business enterprises into which it was said the moneys derived from bottom of the harbour schemes had been reinvested. On that, the Australian Financial Review had this to say: Senator Harradine and other critics of the proposed legislation have made much of possible but unprobable effects on unemployment. While our unemployment problem is indeed deserving of great concern it should not be used as an excuse to justify any form of anti-social behaviour. The argument is in fact a clever smokescreen albeit, apparently, an effective one. That was the view of the Australian Financial Review on the defeat of the similar legislation earlier this year. There was an air of hysteria around this place which I hope now, in the light of the considered response of financial commentators and their assessment of the true impact on employment is ' unprobable', as the Australian Financial Review said. In any case, in respect of the greater criterion of fairness and equity which ought to prevail, one could ask that that particular fear or misgiving not be the guiding criterion in decisions of honourable senators in relation to their support or otherwise for the Bill. In any case the argument is misguided, because one could well say that if the Federal Government does not have available to it the sorts of revenues which are required for its programs and for the stimulus of the economy-and despite all sorts of budgetary constraints, we have managed to put forward an expansionary Budget of some $8.5 billion-if money is not available for Government redistribution throughout the economy, many pockets of unemployment, in areas different from those which would be created by the application of this law, would continue or would be exacerbated. In any case, why should honest PAYE taxpayers and those firms which are prepared to receive and act on ethical accounting or legal advice, be penalised by a higher incidence of tax than would be the case were this legislation to be passed? This Government is not prepared recklessly or heedlessly to apply this law in a way which would cause undue hardship either to individuals or to businesses, which clearly might be put under immense strain if required to cough up the moneys which are sought overnight. I know that Senator Jack Evans would be very pleased with the present structure of the Bill in that plenty of facility for time to pay is provided within the legislation. In relation to the dividend recoupment tax liabilities, a person is allowed 12 months to pay by instalments, without any late penalty being inflicted or imposed upon the taxpayer. I emphasise that in relation to some remarks made by Senator Dame Margaret Guilfoyle. The fact is, as I say, that the 12-month period of payment by instalments, which was largely inserted at the request of Senator Jack Evans in June, is a feature of this legislation. It is also true that section 265 of the Act will still operate. Honourable senators will know that under that provision, where there is a case of extreme hardship, an appeal can be made to an utterly independent arbiter who will decide whether that tax liability ought to be pursued. But it may be that that would apply only in a very narrow range of cases. I concede that that might well be so. In relation to the great majority of cases hardship, dislocation and the impairing of present business arrangements need not occur on the devastating scale which it was suggested they might occur. This is because, as I say, the Government has built in this 12-month payment-by-instalment proposition, which should alleviate a lot of that hardship and therefore allay many of the fears of those who in June felt they could not support the then legislation. As I have said, this Bill has been modified in several ways, indeed to such an extent that the Government now expects to raise only $270m rather than the $570m which it said it would be able to raise under the June legislation. That indicates the extent to which this Government is prepared to go. I would concede that the Bill is probably better for the several months consideration over the winter recess, but the indication of the diminution of revenue is, I think, in itself a fair indication of the very large extent to which the Government has been prepared to go to meet the requests and concerns of some senators who felt unable to support the Bill last June. What the Bill does, of course, is carry into effect the Government's decision that the restitution expected of those persons who benefited from the sale of shares in companies that were stripped of pre-tax profits should not be limited to the primary company tax that ought to have been paid by the companies concerned, rather those persons should also pay the tax who as shareholders or former owners escaped from paying through receipt of a non-taxable capital form of after-tax profits; if the companies had continued to operate as current concerns these would have been taxable as dividends in their hands. Senator Dame Margaret Guilfoyle said: 'Well, of course, those moneys may have been retained in the company and never distributed as dividends'. That is not exactly the point. Had they been distributed as dividends, they would have attracted this marginal rate of tax. Senator Macklin —They were not. Senator TATE —Senator Macklin will not let me finish my paragraph. He should give me a fair go. I am saying that had the moneys been liberated in the form of dividends they would have been taxable at the marginal rate in the hands of the persons concerned. Under the arrangements entered into by these company shareholders, the moneys were liberated not in the form of dividends but in the form of the consideration in the sale of the company. So they were liberated in exactly the same way as they would have been had they been paid as dividends. As far as our company tax structure is concerned, whenever such retained moneys are liberated they are liable to taxation. The mere fact that the liberation was by way of sale consideration rather than through distribution by way of dividend is beside the point. Senator Macklin —Ha, ha! Senator TATE —That is the law. That is the company tax law which obviously the honourable senator is not prepared to accept. Senator Macklin —It is not the company tax law at all. That is why you are changing it. Don't be absurd. Senator TATE —I am advised that it is. Senator Macklin —If it were the company law you would not need this Bill. Don't be idiotic. Senator TATE —I do not think I am being idiotic. I am trying to state an argument in relation to-- Senator Macklin —You would not need the new law if you had a law. Senator TATE —There are all sorts of things one had to do in this chamber, because of the slackness of the administration of tax laws over the past seven years, in order to clarify what is the case. The taxation offences law is a very good example of such legislation. It was passed some two years ago. I think Mr Hurford spoke in another place in relation to the argument that the Bill seeks to impose a tax on retained profits which would not have borne tax had the company continued to operate. He indicated what nonsense that was by speaking of it in these terms: We are dealing with a quasi-liquidation situation. The people who sold the shares knew it was a quasi-liquidation situation. The fact of the matter is that profits were not retained in the companies concerned but were liberated to the vendor-shareholders in the form of the sale price of their shares reduced by the promoter's fee. The income tax law as it now stands and as it stood for the whole of the period from 1 January 1972 to 3 December 1980-the period in relation to which the recoupment tax law operates-requires that distributions of profits to shareholders by a company that is a going concern be taxed as dividends. That is the simple situation. Senator Macklin —Have you ever heard of retention? Senator TATE —But it was not retained. They sought-- Senator Macklin —You are making assumptions. Senator TATE —They sought to liberate the moneys by way of a sale consideration and they have been treated the same way as if they had done it through distribution by way of dividends. Senator Missen —As if they were idiots. Senator Macklin —As if they were idiots, yes. Senator TATE —No, they were not idiots; they were very slick operators who took advantage of perverting the best accounting and legal brains in the country to their own selfish ends, and now they are being caught up with. I have been a little repetitious on that fact, of necessity, given the interjections by Senator Macklin. I have had to be because of the distortions and the lurid pictures painted by the Opposition, which could quite mislead those unfortunate enough to pay attention to them in regard to this matter. As I have said, very considerable concessions have been made by the Government in relation to these Bills. We will no longer seek to recover personal tax on the total accumulated profits cashed up and the stripped company. The legislation will now be confined to the tax avoided only in relation to the after-tax revenue profits for the year in which the evasion of the primary company tax occurred. In other words, it will apply only to the current year profits. These are very considerable concessions and will meet a lot of the requests which were made in this chamber in May and June. It would be sheer bloodymindedness-if that word is permitted to be used in this chamber, Mr Acting Deputy President- The ACTING DEPUTY PRESIDENT(Senator Colston) —Marginally. Senator TATE —Of the senators concerned if they obdurately held to their objections to this Bill in the face of very considerable concessions which have been made by the Government. This is reflected in the diminution of revenue expected, from $570m to some $270m in the full operation of the Act. Some $60m is expected in this financial year. Nevertheless as a government senator I must not get carried away because of some zealous attack on those who have evaded their contribution to revenue. One is required to ask: Is this legislation penal and retrospective? If that were the case I would be the first to object to its operation and would feel that the abhorrence of our whole legal tradition should be brought to bear against it. I refute utterly the penal character of the Act, which was attributed to it by Senator Dame Margaret Guilfoyle. There are no penalties. I have already indicated that even in the case of late payment-the 12 -month instalment facility-no penalties are attached. Indeed, no extra penalties are built into the amending Bill at all; no additional taxes are imposed. The Bill simply seeks to recover tax that ought to have been paid years ago when companies were stripped of their assets. In no way does that Bill attach the stigma of criminality to those concerned. It does not impute to them any criminal intent. If they had had any criminal intent or if they were engaged on criminal tax evasion, the general law and the Crimes (Taxation Offences) Act in relation to post-1980 matters would apply. We are not saying that; we are not imputing criminal intent. There are no criminal penalties. We are simply asking that the moneys which were avoided be paid. We are not even asking for the moneys to be paid at a rate which takes into account inflation or the fact that most of these moneys would have been used in a profitable enterprise. The argument used back in May was that these moneys had been ploughed back into various firms and business enterprises and that to apply the legislation then would disrupt their operation and would cause bankruptcies and so on. We are not taking into account the fact that people who have had these moneys for five, seven or 10 years have been operating profitably with such money, perhaps in the capital gains area or at least in profitable business enterprises and certainly no doubt beating the effects of inflation. We are simply asking for the money back in money terms equivalent, and not taking into account any inflationary erosion of those moneys. It can hardly be said that these provisions bear any penal character at all. There is no criminal stigma attached and there is no extra amount built into the moneys sought to be recovered such as could lead to its being said that there was any penalty involved. Thus, these are not penal provisions. That allows me then to go-- Senator Missen —Oh! Senator TATE —The honourable senator can gasp in astonishment-- Senator Chipp —There is nothing penal about sending someone bankrupt; it is all in good, clean fun. Senator TATE —As the Australian Financial Review, which is a conservative journal and hardly the most radical, trendy, left wing journal of opinion in this country said, bankruptcy of some companies, if such were the case-the Review speaks of predictions of bankruptcy as being in the range of 'unprobable' which is a word it had to coin to deal with this particular assertion-is not the only consideration. There are other values and criteria at stake, such as fairness and equity. It is these values which appeal to some of Senator Chipp's Democrat colleagues. I am sorry to see that, despite all the concessions that the Government has apparently made in relation to this Bill, the honourable senator can still not find it in him to do what is fair and equitable according to every commentator who has made any assessment of these remarks. Senator Chipp —Argue for the Bill if you must, but do not say it is not penal. Senator TATE —I am saying it and I am asserting it. If the honourable senator is not convinced, I am sorry; but most Australians and most financial commentators are convinced. I am, therefore, free to deal with retrospectivity without it being considered as being of a penal character. I find that very important for myself, and I have explained why. It is part of our legal tradition that if we have retrospective penal laws we would find them so abhorrent that we would want to have no part of them. As I have pointed out in this chamber before in relation to retrospectivity, I find some reassurance in the words of Lord Greene who was the custodian of the common law tradition in England, the parliamentary and common law tradition which we seek to continue in our own traditions. He was Master of the Rolls in the 1940s. In a 1941 Court of Appeal decision, speaking for himself and Lord Justices Clauson and du Parcq in a taxation case-this is the Court of Appeal in the United Kingdom-the custodian of the common law tradition had this to say: The fact that the Section has to some extent a retrospective effect again appears to us of no importance when it is realised that the legislation is a move in a long and fiercely-contested battle with individuals who well understand the rigour of the content. Surely this is the case in this contest going on between the legislature and those involved in various tax avoidance schemes. The legal traditions to which we are heir realised and conceded that particular point in this narrow compass of tax laws, the to and fro between the tax avoiders and the legislature. Again, the Australian Financial Review on 17 August last year in relation to the Government's then retrospective legislation which was brought in by the then Treasurer, Mr John Howard, in another place and supported in this chamber by Opposition senators had this to say: . . . non-retrospectivity of the tax law is by no stretch of the imagination an absolute moral or political value. Clearly, retrospectivity is more a serious issue with respect to criminal law-- I interpolate penal law-- than with respect to income tax law. That is exactly my position. Senator Chipp —What a ridiculous point of view to put. Senator TATE —Of course, Senator Chipp always asserts that when he finds something is not to his liking. Senator Chipp —What gives the Australian Financial Review some sort of expertise in morality? Senator TATE —It certainly has more on this point than I find coming from certain elements within the Democrats. The article continues: In the case of the bottom of the harbour schemes the abuse of the tax system and the injustice is so gross that justice and fairness are on the side of retrospectivity. But the opponents of retrospectivity rightly warn of the dangers of taking it lightly. It should almost never be done. The general principle remains true as- Senator Archer —This is not bottom of the harbour. Senator TATE —Of course, we are moving on to those people who avoided paying tax on dividends by these particular arrangements. That largely deals with the considerations of the Bill as far as I want to raise them in the chamber tonight. The fact is that we are in a situation in which the passage of this legislation will enable the Government to gather several hundreds of millions of dollars which ought to be, and were expected to be, gathered had the previous Government taken a more vigorous and robust attitude towards the gathering of taxation over the past seven or so years. It is well known that the ordinary taxpayers of this country have had to bear the brunt for too long of the consequences of the maladministration and the refusal of the Liberal Party when in Government to give the Commissioner of Taxation the sinews of war. Year after year he pleaded for more staff in order to enable him to pursue tax avoiders; yet the Liberal Government adamantly refused to give him that staff. I was on the Senate Estimates committees when that refusal was made apparent year after year. In relation to the administration of the Deputy Crown Solicitor's Office which also gave rise to so much possibility for tax avoidance, the people on the benches opposite bear a grave responsibility. This Bill is merely in a much milder vehicle than was the case in May and June. As I say, that mildness, that modesty, in the proposal tonight is reflected in the diminution of revenue expected from $570m to $270m as the Bill takes effect. Senator Archer —It is still retrospective. Senator TATE —Of course it is still retrospective, but it is not penally retrospective. It is part of that continuing to and fro between tax avoidance and the legislature which the common law tradition of England has sanctioned in the decision of the Court of Appeal in England to which I have already made reference. The fact is that this Government came into office on 5 March with a general mandate to create a fairer tax system. This Bill is part of the fulfilment of that mandate. When we can get to a situation in which all Australians-whether wealthy enough to be able to employ the best legal and accounting brains to pervert their talents to their own selfish ends or whether ordinary Australians filling in their tax forms year after year at the end of the kitchen table or ordinary businessmen who take better ethical taxation advice from their accountants and lawyers-make their fair contribution to the revenue, this will be a much fairer and more decent society. That is what this Government is trying to create. That is what this Bill seeks to serve. Therefore , it deserves the support of this chamber. Senator MISSEN(Victoria)(8.47) —I rise to speak on the Taxation (Unpaid Company Tax) Assessment Amendment Bill and the Dividend Recoupment Tax Bill, the latest effort by the Government to pass through this chamber the legislation which, it claims, is connected with an expansion on previous tax avoidance or evasion legislation. We have heard that these Bills are modest Bills. Indeed, they are modest compared with the earlier one. To some extent, I suppose it might be said that the activities of Mussolini during the war compared with those of Hitler were modest. It does not necessarily mean that that modesty leads one to be supportive of it. I would think that, in this case, there is much for the Government to be modest about. I will trace very briefly the events that have led to this Bill. The legislation which the Fraser Government introduced last year was bitterly opposed. It was amended to some extent. It was legislation which might have come earlier. There might have been actions at an earlier stage but for the lack of realisation by people of the extent to which there was massive tax evasion. Moneys which had escaped the revenue should have been paid. In that year that legislation, based upon principles of equity and fairness which have been referred to tonight, was passed into law. People have since acted on that legislation and have paid moneys and taken certain actions. I supported that legislation and supported it strongly. Senator Tate —That was retrospective. Senator MISSEN —Yes, it was retrospective. If the honourable senator would like to check, he can read my speech of 24 November 1982, which can be found on page 2744 of Hansard. I stand by everything I said on that occasion. I said that the earlier legislation, which was necessarily retrospective, was needed in all the circumstances. I continue to support that legislation, realising that there are very doubtful reasons why and that very rare occasions exist when one should see retrospective legislation which alters the state of affairs. But, in this event, I thought those reasons existed. But the later legislation-the legislation in May-is an excrescence upon that earlier legislation. The Government has attempted to say that the present legislation is of the same nature as the previous legislation; but of course it is not. I will go into some detail as to the way in which it is different. Tracing as we were the history of the period, we realised the position of the Australian Labor Party, particularly through the voice of Senator Evans, who is now Attorney-General but who is not here tonight. He spoke so strongly about the legislation of the Fraser Government and after that proceeded to discuss what he and his Government would do. We have heard tonight of a mandate that should be exercised and of what the Labor Government is now entitled to do. I suppose part of that mandate is included in Senator Evans's statements as reported in the Law Institute Journal of 1 November. He said: The Labor Party would confine retrospective legislation, recoupment legislation against tax avoidance to schemes which are blatant . . . our legislation would not be penal in character, but simply seek to recover-like the Government's ' bottom of the harbour' legislation-the tax which was avoided. He said, even as late as April this year: it is our intention . . . to remove loopholes created by section 3 (12) (in the Act) . . . Beyond that we have no intention of proceeding on retrospective recoupment legislation in relation to any of the schemes which are already the subject of remedial action or legislation by the present Government. It is not surprising that Senator Evans did not speak on the legislation in May. He did not take part in the debate at all, and I see from the speakers list tonight that he is not taking part in this debate either. I am not surprised, because he is the one person opposite who has a conscience on these matters and obviously he is not prepared to be here. Senator Grimes —What an outrageous statement! You ought to be ashamed of yourself. Why don't you speak when there is legislation to deal with disadvantaged people? Senator MISSEN —I am afraid the honourable senator is a windbag who will interrupt anyone's speech. I will seek the protection of the Chair only if necessary; otherwise I will go ahead and make the speech which I intend to make. Neither the Minister nor the media of this country will stop me from doing so. I point out that one of the Labor Party's strongest supporters when this new Bill was introduced in May this year was a gentleman by the name of Tim Margetts, a strong Labor Party man. He had this to say in relation to that Bill, which was only a little different from this one: From my reading of the Bill and explanatory memorandum, it would seem that the Government intends now to impose a further recoupment tax on the vendor- shareholders of these companies. This penal tax- I remind honourable senators that it is a penal tax- will operate on the assumption that as the companies now cease to exist, it will be assumed that their total assets should be treated as distributions back to the shareholders and then taxed as dividends in their hands. This assumption and consequently the operation of the Bill is in complete contradiction to our present system of taxation of companies and ignores all the tax laws concerning distributions on liquidation of the company itself. Of course it is penal legislation. The idiocy of the argument that Senator Tate tried to raise-that penal tax has to be a criminal tax; that is, there has to be a crime! This penal tax may send people into bankruptcy and may require them to pay 81 per cent tax. I have had plenty of examples given to me of that. They are penalties indeed, and this is penal legislation if it is anything. I voted against that Bill in June of this year. I also proceeded to take an interest in this Bill when it came up. I point out that what was said in the other House in May by the shadow Treasurer, John Howard, rather succinctly points out the difference between the legislation of May and this legislation as against the Fraser Government's legislation. He said, as reported in the Hansard record of that debate: This legislation goes far beyond the recoupment concept contained in last year' s legislation and it will not be supported by the Opposition parties in this place or elsewhere. The legislation is not a mere toughening up of the recoupment legislation that passed through the Parliament last year. It not only retrospectively imposes a capital gains tax but also seeks to collect a new tax which has never been the subject of an illegal evasion, which was the single distinguishing point about the legislation introduced by the former Government and supported by the then Labor Opposition last year. That is what the legislation was doing last year; it was collecting moneys which were due and which the ordinary taxpayers of the country should not have had to pay. Those who gained the benefit had to pay. There were some people in those areas who might well have been said to have been innocent. I am sure some of them who suffered were quite innocent. Many others were greedy; others were deliberate. I have no doubt that that legislation was justified on a completely different basis to this year's legislation, which is of a different character altogether. I came into this matter because certain scraps of news and scuttlebutt appeared in Australian Financial Review, the newspaper about which Senator Tate was so keen. Look at this headline: 'Lib senator wavers'. The paper described my attitude and said that if one Liberal senator changed his mind, it would make all the difference. Of course that led to dozens, even hundreds, of people writing to me. I have been filled with information since that time. Of course this, as we all know, was a deliberate attempt by some enemy of mine in Canberra to do me some harm by suggesting that there was a leakage from the Party room. The article states: The senator expressed his opposition to the Liberal-National Party's decision to vote against the legislation at a joint parties meeting in Canberra on Tuesday. I have already denied that. I made it very clear to the Age when it repeated that rubbish that that was untrue and that certainly I had not done that. The article continues: Several Opposition senators are also thought to have expressed reservations at private discussions about moving to block the legislation. I do not know exactly what that means, but the Australian Financial Review then mentioned my name in the next paragraph. This was on the front page of this estimable journal. The writer of the article rang me the next day and asked whether I wanted to reply to it, did I want to refute it. I said: 'Certainly not , you have presumed to take the stupidities which people put to you for obvious reasons; so you will have to wait to hear what I say in this debate'. So he can wait to hear what I say in this debate tonight. That goes for the other newspapers that have my pretty picture and various things about 'Liberal waverers', 'a rebel Liberal passing the Bill' and all that, all based on a lot on nonsense because we were talking about something else, perhaps of more importance, in the Party room when this matter was so greatly distorted. I come back to the fact that we are concerned about this legislation. I have taken an interest because people have written to me, and I am sure that many of them are people whom one should take with a grain of salt. Others have justifiable cases to put, and I have gained a great deal of information from the material I have read. So I come to the view I have formed on this Bill. I heard what Senator Dame Margaret Guilfoyle said about the nature of the Bill tonight. Yes, I agree with what she said. Of course the Bill has some minor alterations from the previous legislation, but they are not of any great consequence. Senator Grimes —Only about 200 million bucks worth; not much for people like you . Senator MISSEN —Well, it does not cover a number of years; it covers one year and it is doing one or two of these things. Basically, the whole structure of the Bill is the same and there is a new tax. In discussing this Bill on 7 September 1983 in the House of Representatives, Mr Howard had this to say: The fact is that we have nothing better from the Government than this scaled down but still objectionable version of the legislation, which was not really anti-tax avoidance legislation but in many parts retrospective capital gains tax legislation and which was rejected by the Parliament in May. So not only does the Opposition state here and now that it will oppose this legislation at all stages in both houses of parliament but also it states quite categorically that this is further evidence of the emptiness and bankruptcy of the claim made by the Labor Party in opposition that we have been soft on the tax avoidance industry. It is the Government which has demonstrated this by its inaction and its inability to act because there are no substantial sophisticated tax avoidance arrangements left to strike at. What in fact this legislation says is that certain people have been attacked and have had to pay moneys. These people are now the victims. We can squeeze them still further; we can destroy their companies. Nobody will come to their rescue; the Opposition will be blackmailed because its members will fear that they will be branded as supporters of tax avoiders or tax evaders. I have a good record in this regard to show that I have never supported these people. I never had any knowledge of or interest in this area when I was a practising lawyer. But the fact is that it is easy to get at these people. It is easy to drive them to the wall. This is all that the present Government has been able to come up with as new tax avoidance legislation in respect of the thousands of millions of dollars that it claims was being evaded. The fact is, of course, that it is a new tax and it has been formulated on a completely different basis. It is all right for Senator Tate to say: 'Oh, yes, we imposed it last year on those people whose companies went into liquidation into the bottom of the harbour and so forth, and now we will act as though that never happened, as though the companies still continued and we will tax them'. Senator Dame Margaret Guilfoyle has pointed out the absurdity that proceeds from that situation. It assumes, of course, that people who continued to operate their companies would have been subject to Division 7 tax. Is it not the limit for Division 7 tax that the Labor Party was going to abolish as one of its election promises? Senator Dame Margaret Guilfoyle —One hundred per cent retention. Senator MISSEN —Yes, 100 per cent retention. The Labor Party was going to make it absolute. But when it comes to the victims who have been 'fingered' by this legislation, of course the Government ignores the fact that they have a right to withhold some of their profits. No, the Government works on the basis that they are absolute economic idiots and would proceed, of course, to distribute all their profits and pay tax on them. This Bill is based on something that they would not have done. I have said, as Mr Howard has said, that this is a restrospective capital gains tax. I do not have a 100 per cent absolute objection to capital gains tax. Perhaps we will have to look at that subject some time or another in a rational way. I think that all parties will have to look at this tax as a way in which we can spread the tax burden. But this Bill creates a retrospective capital gains tax, imposed on a few selected people and companies. Of course the tax is penal. Of course it is vindictive; because it is deliberately designed to take the people who the Government thinks are least able to defend themselves. Of course it is going to send to the wall a number of companies that are still in existence and operating at a time when the Government is doing so little to overcome unemployment in this country. With all its promises, it proceeds, of course, to put many people into the position where they have no jobs. It is a personal tax on profits which would be lawfully retained and would not be taxable. I want to mention one or two things that have been said in material I have received from a number of sources in regard to this matter. All members of the Senate received a document from the Taxation Institute of Australia, an organisation which I think has a good general repute. On 9 September the Institute wrote to all members of this chamber and the other chamber pointing out various facts and giving examples of the way in which the legislation would work. The Institute in its document came to the following conclusions: Suppose in the year ended 30 June 1978 the company returned a profit of $120, 000 from trading activities alone, but the Commissioner disallowed portion of an investment allowance claim and increased this figure to $122,500. That is just an increase of $2,000. The Institute further stated: Suppose the company paid tax . . . of $55,200, lodged a notice of objection and left outstanding tax of $1,150 on the disputed $2,500. Of course, the result is that the company is really hit to leg later on when it is taxed. The example concluded with the following words: For the past justified non payment of $1,420, therefore, the vendor shareholders will be subjected to an additional $27,452.25 in tax or a shift in the tax rate from 56.8 per cent to 79.21 per cent. Not penal activities! Other examples show that the rate goes up in some cases to 81 per cent. They show that if somebody in a year just has not paid or that there has been some objection to some relatively small amount they come within the scope of the legislation and would be caught if the legislation went through the Parliament. I have also had an interesting memorandum from Mr R. K. O'Connor, a lawyer who has taken a very considerable interest in this matter. He pointed out: The Bill imposes a personal tax liability on profits lawfully retained within the company, and which are not currently subject to tax of the nature now proposed. Later in his document he comes to various conclusions and says: The whole premise of the Bill is based on a fundamental misconception. The following passage appears on page 3 of the Second Reading Speech- 'Rather, those persons should also pay the tax that, as shareholders or other former owners, they escaped through receipt in a non-taxable capital form of after-tax profits that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands'. He says: This is clearly wrong. 'If the companies had continued to operate as going concerns' they were entitled to retain $60,000 which would never have been subjected to tax. This Bill has been concocted in a flimsy way on things which never happened or which would be done only by lunatics in charge of companies and not by people with any business sense whatsoever. The legislation, of course, reaches into the past to deal with people in this way. It also imposes a new tax on people who have already paid under the 1982 legislation, people who had to make decisions in 1982 and also at the time lost their grounds for objection. They could have objected to the assessments if they had know that they were going to be liable for bigger and further imposts. They perhaps would not have paid and would have challenged the assessments. But, of course, this is another example of retrospectivity. Now we are telling them that the judgment that they made to pay was wrong and if this Bill goes through they will be ruined beyond redemption. Other people have written to me and raised other matters. McNally and Partners, a firm of chartered accountants, put it in this way. The new Bill highlights the compounding dangers of retrospectivity. Many people who may have had some right of objection against the existing legistation have forgone those rights because of the stigma created by the Government's propaganda and the incentive of obtaining twelve months interest free to pay. Had they known that there would be another 50 per cent of tax to pay they have not forgone their rights, however they now have no choice as after the sixty days have expired (which in their case has already expired) they have no further rights of objection. This reminds one, of course, of what Senator Dame Margaret Guilfoyle said about the Dawkins case and the particular benefits which he or the company with which he is associated is going to gain. People did not know they would have these rights. They were not told. Senator Dame Margaret Guilfoyle —They might have paid their assessments. Senator MISSEN —They paid their assessments and committed themselves. One is reminded of the well-known American statement of what the people wanted and what they formed was a government of laws and not a government of men-not a government that just provides for what powerful individuals will do but a government that will provide laws which are fair and just among people. I do not understand all of the ramifications of this extraordinarily complex legislation. But one can see that this is a piece of legislation which really could be said not to be the Evans or the Attorney-General's legislation but very much the Dawkins-Walsh type of Bill, very much the vindictive type of way of dealing with people who, it is believed, are down and can be ground into the earth. Senator Walsh —Like the people that your former Prime Minister identified as thieves. Senator MISSEN —I have always been something of an admirer of Senator Walsh. He has a good brain. He has an ability to speak and argue well. But he ruins it all the time by the vindictiveness with which he operates and the stupid and childish way in which he personally grinds victims he thinks he can destroy. I say that this is a case of trying to destroy. There are other aspects of this legislation which I will not go into, matters which, as has been pointed out, are being removed by the legislation. I believe two members of the Australian Democrats are putting up the idea of an anomalies commission. This is not the sort of Bill which an anomalies commission will do anything about. I say with the greatest respect to Senator Jack Evans and Senator Colin Mason that I believe they tend to damage their reputations by having anything at all to do with this legislation. They cannot clean up the legislation by way of an anomalies commission hoping that it will overcome the problem. What will this do to the people who will be destroyed by the legislation? If there are a few anomalies do they intend to overcome them? It is not a matter of anomalies. It is a vicious penal tax which is disguising the lack of other Government action. In conclusion, I want to make two other points. In this legislation there is reference to the 1982 legislation and to a constitutional challenge which has been made against it. I will not talk about the details of that because the matter is sub judice and has not yet been determined by the High Court of Australia. There is some concern about evidentiary provisions in the Bill which the Government is seeking to alter. They are extraneous to this new legislation, but they are there. It is argued that they may be necessary if, in fact, the High Court should find against the Government. I want to say this: I think it would be quite improper for this Parliament to interfere, when litigation is before the Court, to take away people's rights and therefore to alter the situation. If that defect, which is of a legal nature, were to upset the 1982 legislation, I for one and I hope my colleagues would be ready to vote for any remedial legislation that was necessary to repair that defect. It is not a matter which should be dealt with in this place or at this time. It is a matter which I am sure the Parliament would readily remedy so that the laws which were approved by this Parliament have effective operation. In the last case, I say this: We are seeking to remove what is fortuitously a Budget Bill. It just happens to be before us at the time of the Budget. Of course, the Bill, in a slightly different form, was before us in May. One cannot be mesmerised by something that is introduced in a Budget context. Tonight we heard the remarks which Senator Dame Margaret Guilfoyle made about the way in which an Opposition should face up to legislation and that there would be rare occasions, of course, when we would not pass normal Budget and Budget-type legislation. That is true. However, on those occasions we may feel disposed and compelled to reject legislation, as well as amend it, when it is demonstrated to be capricious, arbitrary or vindictive-those were Senator Dame Margaret Guilfoyle's words-and when it creates new tax burdens of a retrospective kind. The Australian Democrats and the Labor Party had a lot of difficulty in deciding whether they would vote against Government legislation. They jumped around last year and the year before in a very curious way. In the past I have criticised them for it. I will not go into it now. Regarding the criteria which were enunciated by Senator Dame Margaret Guilfoyle, these two Bills come within every description of them. They are penal, capricious, arbitrary, vindictive and they create new burdens of a retrospective kind. I believe, along with Senator Dame Margaret Guilfoyle and the Opposition-there has never been any reason to think that I would not-that it would be abhorrent to the public if we, in our duty as legislators, did not vote against the legislation. I will certainly, with great pleasure, vote to defeat these Bills in the belief that they are obnoxious to the Australian people. Senator MACKLIN(Queensland)(9.14) —I speak on behalf of not only myself but also Senator Chipp and Senator Haines. The basic proposition upon which we agree is that, since the Taxation (Unpaid Company Tax) Assessment Amendment Bill imposes a new penal retrospective tax, we will be opposing it when it comes to a vote in the Senate. Senator Chipp, Senator Haines and I are three of only nine members of the entire Parliament who have consistently voted against retrospectivity. I believe every citizen has a basic human right to know whether an activity is legal when the action itself is performed. Such a situation cannot be obtained if, at some later stage, that activity is retrospectively declared to be illegal. That essentially is the argument on retrospectivity. Further, I believe it is a requirement of any just democratic legal system that a person should not be declared guilty without a trial before jurors or peers. Guilt by legislation is, I believe, abhorrent to any democratic method of government. The fact that the actions of many who were caught by this legislation were lawful is beyond question. If they were not then new legislation would not be needed-only effective prosecution under existing legislation. This amending Bill undoubtedly imposes a new tax. It does not simply seek to reimpose existing tax in a new way. This amendment imposes a new personal tax liability on profits lawfully retained within a company and which are not currently, under legislation, subject to tax. It has been declared by the High Court of Australia that when shareholders sold their shares the proceeds they received in respect of the sale were of a capital nature. If the Government does not think that the people ought to be able to retain all of that capital then it can impose a capital gains tax. It has chosen not to do so. The capital nature of the proceeds is, of course, recognised by the Government, since this Bill would also have been unnecessary if the proceeds that people received had been otherwise assessable. I think those two elements are extremely important: It was lawful and it was capital. The Government, by introducing this legislation in these very terms, has said that this is so. If we take it from there, I think it is a very easy step to see why I believe honourable senators ought to oppose this legislation. The Bill seeks to assess tax on imputed dividends which were not actually decalared or paid. This Bill continues the fallacy of the May Bill which the Govermnent introduced, that tax was avoided in respect of retained allowances. The sale of a current year profit company would not have involved an obligation to pay out the retention allowance . This particular absurd notion suggests that the advice from the Department of the Treasury is out of touch with all company practice in Australia. Retained capital is a company. That is what a company is. It is often the major source of capital reinvestment in plant and equipment. The Attorney-General (Senator Gareth Evans) in his second reading speech, very interestingly, said: . . . Persons should also pay the tax that . . .they escaped through receipt in a non-taxable capital form . . .would have been taxable as dividends in their hands. This is simply false. There is no obligation in law to distribute the retention allowance. Goodness, that is, after all, what 'retention' means. One retains the money. One does not distribute it. Therefore the suggestion that the Government has made that a company would have distributed that which it retained must be the most absurd notion that has ever been introduced into this Parliament. No tax liability upon a company or its shareholders arises at the point of sale. That is another item that has been used not only in this Bill but also in the former Liberal-National Party Government's Bill. That does not occur. Therefore, to talk about a sale as somehow being relevant in this situation is another attempt to confuse an otherwise bemused public on this aspect. The assumption that the Government is making to get its Bill through is unrealistic, because it assumes thoroughly irresponsible actions on the part of management, actions for which management could be held to be accountable in law. When prudent managers plan the affairs of their company they do so in such a way as to minimise tax. I assume that most Government senators would do so in relation to their own personal affairs. Certainly, any prudent person in the community ought to do so. It is absurd, therefore, for the Government to suggest that if companies had continued in business they would have paid more than their lawful requirements. Managers and accountants have a legal duty to minimise tax. I refer to two recent cases to support this contention. In the recent case in the House of Lords-I quote that case although it is not now pertinent to Australian law but it is very interesting- Senator Archer —Senator Tate used it. Senator MACKLIN —He did indeed. The case was Inland Revenue Commissioners versus Burmah Oil. Lord Fraser held that not only was it perfectly honest and respectable for directors to act on professional advice but also it was the duty of directors to seek such advice. I quote from the judgment: It was the duty of Burmah's Directors to take such lawful steps as were open to them to minimise the impact of tax on the company's profits, and in carrying out this scheme they acted upon professional advice from reputable sources. The Bill proposes to increase the tax on persons who acted on legal advice which , if they were directors, they were duty bound to seek. Furthermore, the Full Court of South Australia on 18 May this year found an accountant guilty of negligence for failing to warn a client not to sell until the expiration of 12 months to avoid the provisions of section 26AAA of the Income Tax Assessment Act . We now have the extraordinary situation facing directors and accountants that directors could be subject to a claim for negligence if they failed to seek advice and accountants if they failed to give advice, yet in this area, the advice the accountants were legally bound to give and the directors to seek is directly contrary to the assumption of this Act. We now have the ultimate absurdity and destructiveness of retrospective legislation in that it creates contrary legal obligations on the same people for the same actions at the same time. That, essentially, is the heinousness of retrospective legislation. A person cannot fulfil two directly contrary legal obligations. Directors could have been prosecuted if they had followed the assumptions of this Bill. Indeed, if they had not sought to minimise their tax they could have been prosecuted. Accountants could have been prosecuted it they had failed to give that advice as we found out in May this year. Yet, now the Government is assuming for the purposes of this Act, that a person would have done otherwise. I reiterate-I do so only briefly as I want to cut down on the amount of time that we will spend on this legislation; we had a very lengthy debate on this matter earlier this year-that companies rarely distribute more than the prescribed sufficient distribution in order to maximise retained earnings. The Government, in running for office this year, as part of its small business policy-Senator Dame Margaret Guilfoyle has already alluded to this-put up a policy of 100 per cent retention allowance for small business, which the Australian Democrats supported wholeheartedly. Perhaps somebody should tell the Treasurer (Mr Keating) what the Prime Minister (Mr Hawke) has been promising so that we do not have people branded as crooks who are currently retaining 70 per cent of the allowance when the Government has promised that they could retain 100 per cent. If we are going to get into the business of making retrospective assumptions let us, at the very least make reasonable and logical ones and not assume that business followed absurd and improvident courses of action. There are a number of other anomalies in the Act, one of which, rather interestingly, was the subject of an amendment which I moved unsuccessfully to the Liberal-National Party Government legislation on evidence. The Government has now found that it should have accepted that amendment and the Opposition should have supported it in the first place. I refer to one other item in conclusion. The Commissioner of Taxation does not have discretion in applying the Taxation (Unpaid Company Tax) Assessment Amendment Bill. Companies which did not enter into any scheme at all may be caught up under this legislation. I quote the case which relates to the issue of an amended assessment during the years covered by this legislation. Amended assessments can be given for many reasons. I take for the purposes of an example an investment allowance on something which was sold within 12 months of acquisition. That is a fairly normal case in business where a person may buy machinery which he finds is inappropriate and therefore would need an amended assessment because he had claimed. So I take that as an example and I take, for ease, a rounded figure. For example, if 100 per cent of an investment allowance were disallowed, that would result in $46 of primary tax which would become due in that year. If, in the company we are talking about, there are retained profits of $100,000 the tax liability created by this Bill would be $67,000 instead of $46. I would be very interested to hear the Government's-- Senator Button —Instead of $46,000. Senator MACKLIN —No, $46, because of the way that the Act is structured. It catches up all companies which have an amended assessment during that period. No discretion is allowed to the Commissioner in applying the provisions of the Bill . It actually refers to amended assessments which are not to do with any scheme whatsoever. The order of the difference is absolutely staggering. I presume that is why the Leader of the Government in the Senate (Senator Button) questioned me whether the figure was $46,000. No, it is not under those circumstances that I have given. That is an anomaly which could be cleaned up by the Government amending its Bill. I believe that, if the Bill passes the second reading, the Government certainly needs to do so because there would be, I imagine, thousands of cases of people who would need to have amended assessments for legitimate reasons in the companies which are still continuing under the same shareholders who have not entered into any scheme. The only essence, of course, is that the company may have been sold. I believe then that this Bill reiterates the problem of retrospective legislation. I believe that the amendments that will be proposed by Senator Mason and Senator Jack Evans while certainly improving the Bill do not add sufficient weight to warrant my voting for this Bill on the basis that the Bill introduces anomalies. I, therefore, see it as inappropriate to establish a body to deal with anomalies that are being introduced by the very Bill for which one is voting. Senator JESSOP(South Australia)(9.28) —I rise on this occasion to talk about my difficulty with retrospective taxation. I am on record in this Parliament as criticising governments from the Whitlam era through to the present Government on the basis that we have not exploited the taxation legislation effectively, we have not exploited the companies legislation effectively and we have not exploited crimes legislation effectively to deal with these sorts of measures. My attention was drawn to a paper which is probably the only independent assessment that I have looked at from the Department of the Parliamentary Library dealing with this legislation. I am grateful for the fact that Senator Harradine called my attention to it. I draw the Senate's attention to these matters. Page 7 of the document states: 1. The amendment assumes that retained earnings are distributed 100 per cent to shareholders. In reality, companies rarely distribute more than a sufficient distribution in order to maximise retained earnings to fund working capital, stocks, debtors, etc. Under existing taxation law a large portion of current year trading profits can be retained within the company tax free. YEAR ENDED 30 JUNE 1980 Where a sufficient distribution is not made, additional tax (undistributed profits tax) is incurred. This Bill seeks to tax these retained profits and hence results in an additional tax liability over and above that which would have been incurred by vendor-shareholders had the company not been sold. The additional tax liability can be illustrated as follows. I do not want to read out all of that. I seek leave of the Senate to incorporate that table and the rest of the document in Hansard so that I will not delay the Senate unduly. Leave granted. The document read as follows- Normal Position private under company proposed situation amendments $ $ Trading Income 100 100 Company Tax A46 46 Income after tax 54 54 Retention allowance 70% 38 . . Dividend 16 54 Income Tax in hands of shareholders on: (i) normal dividend (60%) B10 (ii) deemed dividend (61.07%) 33 Total Tax A + B 56 79 Increase in tax 41 per cent. In practice, shareholders in private companies may decide not to make a sufficient distribution and simply pay undistributed profits tax at 50 per cent which is considerably lower than the maximum personal rate of tax. Thus under the circumstances the tax increase in the above example would be 46 per cent. The 'Principal Act' is effective in recouping the undistributed profits tax and hence all the tax that was payable by companies sold in ''bottom-of-the-harbour'' schemes. Further, because the Bill deems a dividend to be paid at the time of sale of the shares, personal tax at a higher rate will be imposed on the 'deemed dividend' than if the dividend had been paid in the normal manner, usually by 30 April of the following year. This is due to the gradual reduction in the maximum personal marginal rate of tax (69.62 cents to 60 cents in the dollar) during the period covered by the legislation. (2) Directed at companies sold with current year profit component (Wet Slutzkins). Companies sold to the same promoters with only retained earnings from past years (Dry Slutzkins) escape the new tax as do companies which paid their company tax but avoided their Division 7 undistributed profits tax. However, when the current year profit companies have paid their company tax and Division 7 tax under the 'Principal Act' they are no different to the Dry Slutzkin companies which have been excluded. (3) Retained profits of earlier years. Another implication of the Bill is that retained profits of earlier years can be caught by the proposed legislation and deemed to be paid as a dividend to vendor shareholders even where there was not an intended avoidance of company tax. This could arise where a company was sold with only the company tax liability of the year of sale outstanding but subsequently, for any reason, an amended assessment is issued in relation to an earlier year resulting in an increase in the company's ordinary tax liability for that year. (4) The Bill treats all companies in the same manner as if they had all been sent to the ''bottom-of-the-harbour'' given that the innocence clause contained in sub-section 3 (12) of the Taxation (Unpaid Company Tax) Assessment Act 1982 is to be abolished. Not all companies sold under these schemes were dumped. Some companies met all the requirements under existing tax and company law and it is the shareholders related to these companies who will be unduly penalised by the abolition of the innocence clause. (5) Investor confidence in the share market will be affected by the proposed legislation simply because of the potential liability which some companies might face. The proposed legislation also threatens the concept of limited liability. For further information, if required, contact: Economics and Commerce Group 4 October 1983 Legislative Research Service Senator JESSOP —I thank the Senate. I have three letters that I have shown to the Leader of the Government in the Senate (Senator Button). I think they demonstrate the problem that exists in the community and the questions that arise as a result of the- Senator Walsh —It demonstrates that there are a lot of shonky accountants in the country. Senator JESSOP —I object to that statement from the Minister for Resources and Energy (Senator Walsh) because I think it is an incredible indictment of the accounting profession that he should say that. At least he has agreed- Senator Walsh —I did not say the whole profession was shonky. I just said there were a lot of shonks in it, most of whom have a close association with the Liberal Party. Senator JESSOP —I think that is an incredible statement to make. Senator Walsh —It is incredibly accurate. Senator JESSOP —I think that what the Minister is saying is an indictment on the accounting profession and I object to it. I think that he should reconsider the interjections he has made. Senator Button —You should be more concerned with your own profession, senator; it is a very honourable one. Senator JESSOP —My profession is all right. I am not sure whether the legal profession is totally- Senator Button —Optometrist heal thyself. Senator JESSOP —I am long sighted; you are short sighted. The legislation deals with the matter of retrospective tax. I have always demonstrated my opposition to that because it means that if we introduce these measures a lot of innocent people will be affected. I said that when we were in government. I criticised the Fraser Government for introducing retrospective tax. I criticised it for not utilising the Taxation Act-there are two or three sections of the Act that ought to have been tested-the Companies Act and the Crimes Act. I suggest that it is quite unfair that people who go into arrangements as a result of the advice of their lawyers and their accountants should be penalised in a retrospective sense , and I have always opposed that. I seek leave to incorporate in Hansard four letters dealing with the subject. Leave granted. The letters read as follows- AQUANICCI PTY LIMITED 3 Princes Avenue, Vaucluse, 2030 Australia. Telephone: 337 3331 Dear Senator D. S. Jessop, TAXATION (UNPAID COMPANY TAX) ASSESSMENT AMENDMENT BILL 1983 DIVIDEND RECOUPMENT TAX ACT 1983 On the 31st May, 1983, we wrote to you about the taxation bill that was rejected by the Senate in June, 1983, thanks to your fair, open minded and judicial approach to the matter, however, the Government is now endeavouring to pass another Taxation Bill through the Parliament. Senator, as I stated in my previous letter to you, our Company is only a small Family Company and, at all times we have been Law abiding and, our Company Records are always kept in immaculate order. We have never attempted to utilize ''Bottom of the Harbour Schemes'' but to the contrary, our company has always obtained the proper professional advice in regard to all Accountancy, Tax Matters and all other relevant acts. Our Company, in the most profound sense of the word, was ''Innocent'' and, it seems extremely unfair and discriminatory that, at this late date, the Government has decided to pass a Bill through the House of Representatives and, endeavour to have the Bill ratified by the Senate, to retrospectively Penal tax a small minority of the Tax Paying Community. Sir, this new Bill retrospectively creates a liability for tax that has never previously existed which is contrary to statements made by Senator Gareth Evans on 1.11.82 inter alia: '' . . . Our legislation would not be penal in character, but simply seek to recover-like the Government's bottom of harbour legislation-the tax which was avoided.'' (Law Institute Journal Volume 57 No. 3 page 192). Furthermore, Mr Dawkins was reputed to have stated in the Australian Financial Review on 29.4.83, on page 8, that there is;- ''no question of retrospectivity being applied to schemes which were totally and absolutely dry''. Innocent Vendor Shareholders would, if this New Bill is passed, once again pay Tax on monies which were never received or credited. The Company has already paid the Tax that the Government claimed was owing, even though we conscientiously believe it was not owing, and, the payment of this Tax placed a great burden on the Company, as these monies were earmarked for Business Purposes. If this New Bill is passed it would create an impossible further burden on the Company and, has massive ramifications that would cause major financial disruption to us and cause unemployment of our staff. We reiterate, Senator, that the actions of our Company were always legal and, should not now be deemed illegal and, therefore, we respectfully appeal to you to reject this New Bill. Yours Sincerely, Sydney John Woods Letter from Borough and Partners BOROUGH & PARTNERS Public Accountants Bank of New Zealand House333 George Street Sydney 2000 TELEPHONE 29 8751 TELEX 70820 DX 232 SYDNEY 22nd September, 1983 Senator D. S. Jessop, C/o The Senate, Parliament House, Canberra, A.C.T. 2600 Dear Senator, TAXATION (UNPAID COMPANY TAX) ASSESSMENT AMENDMENT BILL 1983 DIVIDEND RECOUPMENT TAX BILL 1983 The existing legislation embodied in the Taxation (Unpaid Company Tax) Assessment Act 1982 seeks to recover from vendor shareholders: (i) The company tax applicable to profits earned by the company in the year its shares were sold; and (ii) The undistributed profits tax applicable to the after tax profits for the year or the tax applicable to the dividend which would have flowed to the vendor shareholders. These measures to collect tax which the present and the former Government considred to be a proper recovery of tax which was regarded as having been previously avoided have in the main where assessments have been raised been paid or are in the process of being paid. The proposed amendments introduced by the Treasuer at the August 1983 Budget seek to impose an additional retrospective levy upon the relevant shareholders which would not have been payable if the relevant companies had continued to operate as going concerns. The Treasuer in his second reading speech stated on page 3: ''Rather, those persons should also pay the tax that, as shareholders or other former owners, they escaped through receipt in a non-taxable capital form of after-tax profits that, if the companies had continued to operate as going concerns, would have been taxable as dividends in their hands.'' What the Treasurer states is covered by the existing legislation. The proposed Bills introduce an additional liability which would not have otherwise existed if the companies were not sold and hence displays the misleading nature of the Treasurer's statement. The following simple illustration exemplifies the position. (Assuming company sold in 1977 financial year): Existing recoupment Proposed legislation bills $ $ Company taxable income in year of sale 100 100 Company tax (A) 46 46 54 54 Retention allowance (60%) 33 33 Undistributed profits 21 21 Undistributed profits tax (B) 10 nil Additionl retrospective tax (C) . . 35 ( 65% of $54) Total tax-if company continued operating as a going concern (A) + (B ) 56 . . Total tax-under proposed Bills (A) + (C) . . 81 As evident from above the avoided tax which would have been payable by the vendor shareholders had the company not been sold is 56% of the company's profits. The proposed bills seek to impose an additional retrospective liability at a rate approximating 25% thereby making the overall rate of tax a flat 81% on the company's taxable income. Other aspects of the proposed bill which are completely unjust and inequitable are: No allowance is made to provide a tax credit for dividends received by vendor shareholders where the bill applies to income years prior to the year of sale. In these cases taxes would have been paid by the shareholders on the dividends and the profit from which those dividends derived will be subject to he further 'dividend recoupment tax' thereby resulting in 'double-taxing' of the dividend component of those profits over and above the normal company tax paid. The removal of section 3 (12) which provides that the recoupment legislation would be limited to those instances where illegal and fraudulent avoidance of tax is involved. The inclusion of a section requiring the Commissioner to disclose the identities of persons who may justifiably resist any improper assessment of vendors recoupment tax. Removal of the clause whereby vendor shareholders may require the Commissioner to provide details of the stripping arrangements utilised by promoters and which are in the Commissioner's possession or knowledge. The Government while espousing that the tax sought to be recovered is that which would have been payable had the company continued as a 'going concern' has in the drafting of the bill ignored the fact that the company would have been entitled to a 'retention allowance' if it continued as a going concern and that in the case of just about all private companies this retention allowance is not distributed to shareholders and hence not subject to tax. The proposed bills: 1. Have been presented to Parliament by the Government on misleading, unconscionable and reprehensible bases, which is borne out on an analysis of the complex verbiage of bills. 2. Retrospectively impose on vendor shareholders a punitive additional tax liability which would not have been payable had the companies not been sold. 3. In some instances impose a higher and harsher liability to tax than that of similar improper legislation defeated in the Senate in May 1983. 4. Seek to tax vendor shareholders on dividends never received. 5. Continue a dangerous precedence of restrospective taxation going back a decade and hence causing considerable harm to future commercial trade. For the foregoing reasons these bills must not be permitted to pass through the Senate. Should any further clarification or explanation be required on the matters raised the writer may be contacted at the address on this letterhead or by telephone. Yours faithfully, Borough and Partners BRIAN A. BARNETT BAB:AM Letter from McNally and Partners to the Treasurer McNALLY & PARTNERS CHARTERED ACCOUNTANTS Robert F. McNally, A.C.A.; John D. Green, A.C.A.; Richard W. Deveson, A.C.A.; Richard T. Arnold, A.C.A.; Leon R. Rosengren, A.C.A.; Dennis J. Klein, A.C.A., Frank Lord, A.C.A. McNally House, 367 Kent Street, Sydney 2000, Australia Phone (02) 29 5805 Telex National INTSY 0207110101 MACNAL, International INTSY AA10101 MACNAL 14th October 1983 The Treasurer The Honourable Paul Keating House of Representatives Parliament House Canberra 2600 Dear Mr Keating We refer to reply from your Assisting Minister to correspondence last May regarding the former Retrospective Penal Tax Bill. This reply was dated 23rd September and received on the 4th October. To some degree one can understand, that with the pressures of new Government it could take over four months to reply to this matter. It is inconceivable however that with all the advice available to your department neither your Assisting Minister, nor your Department, and therefore presumably the Government, understands the ramifications of the modified Bill. The reply states that the modified Bill will be: 'confined to such tax avoided in respect of the liberated after-tax profits'. Let there be no misunderstanding-there were no 'liberated after-tax profits'. The only cash 'liberated' was the promoters fee and the Bill does not even try to tax the promoter. Innocent vendor shareholders who are taxed under the Bill received no distribution of 'liberated after-tax profits', and in fact did not even receive any benefit, other than the benefit accruing to the Company for tax it would have paid, which is currently being paid under the previous Governments retrospective legislation. All other monies were reinvested in the same business and thereby in the continuing employment of Australians for the betterment of Australia. If there were cases where businesses ceased completely, then perhaps in those cases there could be 'liberated after-tax profits' but the Bill is not confined to such cases. Perhaps you might enquire from your colleague The Honourable Mr Dawkins as to the date and the amounts of distributions he received from ' liberated after-tax profits' from his involvement in such matters in order to justify the assertion, that the tax 'would be confined to such tax avoided in respect of liberated after-tax profits'. Incidentally this apparent misleading statement was also made in the second reading speech and is contained on page 3 of the explanatory memorandum accompanying the Bill. The last paragraph clearly demonstrates how out of touch your Department is with respect to this matter. It states- ''the Government believes that, with these changes, the legislation is now in a form which responds adequately to all reasonable criticisms of the original measures''. If this is so, why all the controversy in the press? and the current consideration by the Government of proposed amendments by Senators Colin Mason and Jack Evans?, to say nothing of the fact that even with such amendments the Bill faces defeat in the Senate. The Government will lose absolute credibility if it agrees to amendments which will exclude from the operation of the Bill a Government Minister but not others who did not receive any ''liberated after-tax profits''. In any case any amendment which excludes from the operation of the Bill Public Company shareholders who have sold their shares (and thus had a distribution in cash) but includes shareholders who received no cash or benefit but fully reinvested in their business and thereby the future of Australia and the employment of fellow Australians would be a travesty of justice and a blight on the Australian Parliament. Because of the apparent lack of understanding, the matter should be reconsidered by all members of Parliament. To do this properly a little history is needed. We suggest that it is too easy for the Parliament to seek to judge in accordance with 1983 community attitudes, actions which took place mainly in the period from 1972 to 1980. It should be remembered that the attitudes within the community, and apparently also within the Government at that time in relation to tax avoidance were somewhat different. By way of illustration of the attitudes of the Parliament, which were we believe a fair reflection of the attitudes of the community at the time, the decision of the High Court in Curran v FC of T ( 74 ATC4296) was handed down on 4th November 1974. The decision in effect '' approved'' an arrangement which could only be called a blatant tax avoidance arrangement. No law was introduced to overcome this situation by successive Labor and Liberal/Country Party Governments until 1978 when law was introduced affected from 16th August 1977. Through the same period tax avoidance arrangements, known as Section 36A and Section 36 schemes were well known in the business community for about two years before amending legislation was introduced to prevent them. It appears that both the Government and the Tax Office were aware of these schemes but it took two to three years from the time they became well known, to the time they were effectively outlawed. It was in this context that vendors sold their shares. Competitive pressures on industry were such that if a business persons competitor ''sold'' his Company and so avoided the payment of income tax for one year, the money so freed was used to gain a competitive advantage by increasing stocks and debtors, and possible by employing more people to increase production and thus lower selling prices. In these situations, and in the competitive business world, competitors were required by economic pressures to follow the same course of action in order to compete. The free enterprise system has survived as long as it has because of such reactions. These reactions are a normal and natural part of business survival and should not, we suggest, be punished harshly in accordance with different standards long after the event. Not only did the Government of the day and the community appear to condone these practices, but arguably the Australian Taxation Office did also. It has been suggested publicly by prominent Lawyers that the Taxation Office could have used several sections of the Income Tax Assessment Act to collect much of the income tax that the existing recoupment tax legislation now seeks to collect. To our knowledge the Australian Taxation Office did not take any of these steps. And in fact at one taxation seminar attended by the writer the Commissioner stated that a policy decision had been made within the department not to pursue such matters. We mention these matters not as recrimination but merely to remind you of the prevailing attitudes and the apparent reasons for them at the times that companies were sold. All taxes previously avoided are currently being collected from innocent vendor shareholders by existing retrospective legislation. If you have any doubt whatsoever about this statement seek the advice of any of the leading firms of Accountants and/or Lawyers or better still seek the advice of the various Professional Accounting and Legal bodies. The new Bill is penal as it seeks to increase the tax payable from that avoided , namely 54.1 per cent to an average of 81.1 per cent. It is too easy we suggest to say 'it serves them right', in view of the prevailing attitudes of the Government, the Tax Office, and the community, and commercial pressures of the times. The vendors acted within normal community attitudes and the fact that most of them have now paid their share of tax, or made arrangements to do so, should we suggest be sufficient. To go beyond that point appears to us to be extreme and likely to lead to severe financial hardship, possible more unemployment, as effective rates of tax will be in excess of 81 per cent remembering also that there has been a percentage of revenue paid to a promoter. We further suggest that the proposed removal of the so called 'innocence clauses' is inequitable and unjust. Normal prudent business people who sought proper advice in relation to these transactions were aware of possible Crimes Act and Companies Act problems as well as the Income Tax Assessment Act problems . Persons who sought proper advice in these matters received advice that they should sell their shares to a reputable purchaser who in the terms of those times, and in the context outlined earlier in this letter, sought out a suitable and apparently effective scheme (in most cases sanctioned by eminent Q.C.'s and even in some cases sanctioned by the High Court) to remove the profits from the company without incurring any income tax liability. We suggest that such vendors were acting to protect their businesses, and the jobs that those businesses provided, and that as they had taken proper advice and at all times, both before and after the sale, the companies were correctly maintained in relation to all statutory requirements and that moreover no offence was committed by any party against the Crimes (Taxation Offences) Act 1980 even if that Act had been in force at the relevant time, that they should not be penalised by this Bill. In any case whatever happened to your Governments policy of consensus and accord. Is it consensus and accord to impose retrospectively a new penal tax on one section of the community (whose innocence can no longer be doubted from Mr Dawkins' own experience) for economic or other reasons? Finally we would like to conclude with a quotation from the United Nations Universal Declaration of Human Rights- 'No one should be held guilty of an offence on account of any act or omission which did not constitute an offence at the time it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the offence was commited'. Perhaps Members of Parliament can satisfy their conscience in acting contrary to the United Nations Universal Declatation of Human Rights on the basis of fair shares of taxation. There are no conceivable circumstances to justify the imposition of a severe penal tax up to ten years after the happening of a perfectly legal transaction. In the name of justice the Bill should be withdrawn and not even debated. Surely it is time to forget about the past and any form of retrospective penal taxation which will only serve to divide the community and distract the Government from providing good and positive government to ensure that present and future generations of Australians enjoy all the benefits which this great country is capable of providing. With Compliments McNally & Partners R. F. McNally RFMcN:gl Copies of this letter have been forwarded to other members of Parliament. Letter from McNally and Partners to Senator Mason McNALLY & PARTNERS CHARTERED ACCOUNTANTS Robert McNally, A.C.A.; John D. Green, A.C.A.; Richard W. Deveson, A.C.A.; Richard T. Arnold, A.C.A.; Leon R. Rosengren, A.C.A.; Dennis J. Klein, A.C.A.; Frank Lord, A.C.A. McNally House, 367 Kent Street, Sydney 2000. Australia Phone (02) 29 5805 Telex National INTSY 0207110101 MACNAL, International INTSY AA10101 MACNAL 17th October 1983 Senator Colin Mason The Senate Parliament House Canberra 2600 Dear Senator Re: Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983; Dividend Recoupment Tax Act 1983 We understand that both yourself and Senator Evans have suggested certain changes to the above Bills primarily aimed at protecting vendor shareholders who were not aware of the circumstances surrounding the sale of their company. Whilst this proposed amendment is to be applauded we would respectfully draw your attention to possible inequitities which it could create. For example if a Public Company shareholder sold his shares on the market ( after the sale of a subsidiary of the public company to a promoter) being comletely unaware of the sale to the promoter, he would presumably receive the benefit of a better price for his shares brought about by the sale of the subsidiary at a price exceeding its true net worth (that is excluding its liability for tax). In such a case the shareholder may have received a real distribution of ''liberated after-tax profits'', such distribution being reflected in the sale price of his shares. Our understanding is that your proposed amendment would exclude such a shareholder from the operation of the Bill. On the other hand if a Private Company shareholder reinvests all monies in the same business (and thereby investing in the continuing employment of Australians for the betterment of Australia), and accordingly receives no distribution whatsoever of ''liberated after-tax profits'', he would nevertheless be caught by the imposition of additional penal tax under the Bill even after your proposed amendment. Surely such a situation would be a travesty of justice. This is not to suggest that either shareholder should be subject to the Bill as they are both Innocent Vendor Shareholders. If there has to be a retrospective Bill to tax ''liberated after-tax profits'' (Note ''liberated after-tax profits'' is the term used by the Minister in his second reading speech and on page 3 of the explanatory memorandum to define the income that the Bill taxes) surely an essential element should be that a '' benefit'' has been received and anyone whether a Public or Private Company shareholder, whether with or without knowledge of the sale to a promoter, who can demonstrate that he or she did not receive any ''liberated after-tax profits '' and/or any benefit, and in fact the business continued in an indentical fashion, must be excluded from the operation of the Bill. The Bill tabled in the Senate makes the completely unrealistic assumption that 100 per cent of retained earnings were ''liberated'' to shareholders. Let there be no misunderstanding-where the same businesses continued, there were no ''liberated after-tax profits'' and accordingly innocent vendor shareholders are being saddled with a penal tax not only never previously avoided, but based on income never received. The Bill is so immoral and unjust it should be withdrawn and not even debated. Enclosed is a copy of a letter written to the Treasurer (which is provided with the Treasurer's knowledge) which will assist with your consideration of the matter. We are conscious of the time restraints on you, but would very much appriate your consideration of the attached letter prior to the debate. With Compliments McNally & Partners R. F. McNally RFMcN:g1 Copies of this letter have been fowarded to other Members of Parliament. Senator JESSOP —I thank the Senate. I oppose the principle of what we are dealing with. I think retrospectivity is bad and should not be allowed to persist in Australia. I suggest that- Senator Townley —There should be a constitutional amendment. While we are running referendums there should be a referendum about this whole matter. Senator JESSOP —That is right. I think Senator Townley has a private member's Bill dealing with this subject. I think he should introduce it as soon as possible, and I will support it. Senator BOLKUS(South Australia)(9.35) —I also take the opportunity to speak on the Taxation (Unpaid Company Tax) Assessment Amendment Bill. I shall make my comments brief. The Bill entails measures which the Government has promised to implement. It received a mandate from the Australian electorate so to do when it went to the election at the start of this year. The proposals are also those that were put forward very clearly and explicitly by the Australian Labor Party when in opposition last year. They attempt to redress a situation which has been developing over recent years. We recognise the inequalities and the injustices in the tax system, and we recognise those who are paying tax and those who are evading tax. These measures are an attempt to work towards redressing that situation. The need is one which has been highlighted all the more so in reports tabled in this Parliament last year emanating from the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. The extent of the industry, the degree to which it was affecting Australian life, was highlighted in the interim report when the Commissioner said: The industry has developed in Australia, particularly over the last 5 years, at a rate far in excess of any other industry and has brought with it profits comparable only to the heady days of the Victorian goldrush . . . the impact on the community has been very serious. All Costigan did then was to highlight the complaints that the Commissioner of Taxation had been highlighting in his annual reports from approximately 1978 onwards. He highlighted a massive increase in tax evasion. He identified tax participants and the degree to which they had increased in the industry. He had in fact highlighted that in the last five full years of the Fraser Government there had been an increase of 2,500 per cent in the number of identified participants in tax avoidance. Costigan also did no more than to highlight the effect of the industry on the Australian taxpayer, as had been mentioned previously by Mr Eric Risstrom of the Australian Taxpayers Association. In numerous instances he mentioned that the tax avoidance industry was costing Australian taxpayers over $7 billion. In fact the more recent Costigan report, which was tabled last week, indicated the magnitude of the loss to revenue as a result of the tax avoidance industry. The industry has led to one of the most noted commentators on taxation and federalism in Australia, Professor Mathews, claiming in 1980 that personal income tax was now voluntary for the rich non-salary earner. That comment highlights the particular problem that any government had faced. Of course the scandals of last year highlighted the inactivity by, and inadequacy of the response of, the Liberal Party and the National Party of Australia in relation to the problem. Report after report highlighted the fact that over five years or so there was dithering between the Australian Taxation Office and the Attorney-General's department, with lost files and inactivity-4 1/2 years of culpable negligence. In a report the Commissioner of Taxation advised the then Treasurer as early as 1978 or 1979: . . . the problem of straw companies and straw trust evasion is already very serious and growing. It is my considered advice that the situation needs to be remedied urgently and with stern measures. So what we had during the duration of the Fraser Government and at the end thereof was inequality in massive magnitudes. We had wage and salary earners whose share of the income tax cake had increased by at least twice the amount of the increase in the company tax sector. Professor Mathews said in his speech that the: . . . taxation system has become a major instrument for redistributing incomes and wealth in favour of the rich. What has been highlighted by the Costigan reports and others is that it is very much the company structure that is at the heart of tax avoidance. It is very much that sort of company structure that has been attacked by this legislation. In Australia we have a situation in which it costs $2 or slightly more to set up a company from which massive profits can be made. No one has highlighted that better than the notorious Peter Clyne. It led of course to Mr Costigan saying that the effect of the company law was such that we had a situation where: . . . blue collar thuggery married to white collar crime by seemingly respectable celebrants. The McCabe-Lafranchi report highlighted the existence of 3,000 companies which were subject to investigation. The New South Wales Government's Corporate Affairs Commission in fact highlighted 4,000 companies involved in these activities in New South Wales-shonky companies and shonky activities leading to massive rip-offs of the taxpayer. As I said earlier, we had a mandate to bring this Bill before the Parliament and to pursue it. All these Bills do, and I go to the principle of them, is demand that those who benefited from the sale of shares in companies that were stripped of pre-tax profits should not be limited in their obligation only to tax that ought to have been paid by the companies concerned. Under this legislation they should also pay that tax that the shareholders or other former owners escaped through receipt in a non-taxable form of after-tax profits that, if those companies had continued to operate as going concerns, would have been taxable dividends in their hands. There is nothing novel in this approach. In fact, it is an extension of what the former Treasurer, Mr Howard, did last year in including Part IVA of the Income Tax Assessment Act. I need not go to any other authority to highlight the hypocrisy of the current Opposition than the former Prime Minister, Mr Malcolm Fraser, who in a speech in Adelaide on 30 August last year, in his attempt to retain the seat of Kingston said that the Government would pursue the promoters. He went on: special legislation will be introduced to recover the funds that would otherwise have been paid as tax over past years. That is not creating a new liability, it is collecting the funds that should have been paid in any case. He went on to say: In a real sense, the recipients of those funds have in their hands stolen funds , whether you want to say stolen from the Commonwealth of stolen from other taxpayers it doesn't matter very much. The former Prime Minister went on to say: I was delighted when the Federal Executive of the Liberal Party last Friday, unanimously issued a statement which supported what the Federal Government is doing in relation to these particular matters. In the light of some of the publicity out of Western Australia, that particular press statement ought to be noted and ought to be given maximum publicity. Of course, it has been forgotten now, but what has not been forgotten is the hypocrisy of the Opposition. Now not in government, now in opposition, it pursues a direction which is contrary to that of the former Prime Minister. Senator Missen —We have not changed. Senator BOLKUS —The trouble with the honourable senator's side is that some of them never change. I go on to the Bills and to tackle the complaint that has been mentioned by some members of the Opposition. I will conclude on this point. The point has been made that retrospectivity in legislation is something that is anathema to Liberal Party philosophy, that it is something that members of the Opposition cannot and would not contemplate. One only has to look at the history of the Liberal Party to see how selective and hypocritical it is when it comes to this sort of thing. It will attack the weak with retrospective legislation but it will not attack the vested interests that support it. We saw that this morning in its approach to the social security legislation. We also, however, see it from the start of the Liberal Party and from the founding father of the Liberal Party, Sir Robert Menzies. Let me remind the Senate of the Communist Party Dissolution Bill 1950 and let me quote, for the benefit of some honourable senators opposite, what Mr Menzies had to say: Not one of us in this House has any love for retrospective legislation. But quite clearly, as a matter of plain horse sense, if this bill dealt only with those who could be shown to be Communist party members on the date on which this bill becomes an act obviously there would then be no party members or officers to be affected by it and the legislation would be a complete futility. We are not prepared to facilitate a farce of that kind. He then went on to defend a Bill with retrospective application, a Bill which in fact intended to impart into the law of this country criminal sanctions. That was Sir Robert Menzies. Let me also quote a more recent figure of the Liberal Party-in fact, the recent leader of the Liberal Party in the Upper House of Victoria, Mr Hunt, who was quoted in the Melbourne Age of 22 November last year, less than 12 months ago, in an editorial which stated: . . . that in 21 years in Parliament he had supported more than 150 pieces of retrospective legislation with a clear conscience. It went on: 'If anyone tells me that it is not Liberal, or contrary to principle, I say we don't belong to the same party- It went on: 'There is no such principle that all retrospective legislation is contrary to the principles of the party. What has happened this time is that someone who didn't like bottom-of-the-harbour legislation has sought to raise a principle and use it to criticise the Government by innuendo.' We also have instances where the courts of Australia have sanctioned the use of retrospective legislation. In the case of D'oro v. Victorian Railways Commissioner in 1960, Mr Justice Adam said: The strength of the presumption against retrospectivity in any particular case, and accordingly the ease or difficulty with which it may be overcome, must, I would think, depend on the nature and degree of the injustice which would result from giving the statute a retrospective operation. He later said: On the other hand, where to give retrospective operation to a statute might be considered to work some injustice to one party, but is clearly required to rectify a manifest injustice to others, there would, on principle, seem little reason for giving much weight to the presumption. I think I have displayed very clearly that the magnitude of the problem is one that ought to be addressed by government. It is, in fact, a major national scandal. I have not claimed that by bland assertions. I have done it by quoting from official reports and statistics. In closing on this particular point, let me refer to the editorial in the Melbourne Age of only two years ago relating to a 1915 case. That editorial stated: . . . The High Court unambiguously determined the right of the Parliament to make actions criminal which were perfectly legal at the time they were done. It continued: In the 1980s, tax avoidance poses a threat to Australia, as did the somewhat more distant Kaiser Wilhelm in 1915. I can go on and quote all sorts of authorities in respect of retrospective taxation but I will not. The point I wish to make is that this measure, this Bill, is one that attempts to address a totally unjust situation. It is one that attempts to reallocate the burden on those who, over the years, have been able to escape that burden. It does so in a fair way and with safeguards. In fact, this Government has bent over backwards to placate the demands and the interests of those who have particular criticisms to make of this legislation. In doing so , it has decreased the expected revenue from these measures from $570m to $270m and it has incorporated four major safeguards which would protect individuals. These safeguards can be listed but I believe that Senator Walsh will go into them at a later time. The point that the Senate has to address itself to is whether it will attack the problem of tax evasion with any degree of equity and fairness at all. Will it continue to allow this sort of ripping-off, using the shell of company structures, using the tax evasion procedures that have been highlighted by commissioners such as Costigan or will it allow the intolerable taxation burden to continue to be met by the wage and salary earners of this community? My answer to that, of course, is that I would not tolerate that, and that is why I am supporting this legislation. Senator MASON(New South Wales)(9.48) —The Taxation (Unpaid Company Tax) Assessment Amendment Bill seeks ultimately to recoup $270m in unpaid income tax resulting from the notorious bottom of the harbour tax evasion schemes. I am in favour of that general objective and I shall, accordingly, vote for the Bill. The bottom of the harbour schemes were simple, even crude, in their basic approach to tax evasion. As I understand them, a company with a tax liability was sold, often to persons who could not be traced, criminals and the like who assumed false names, at a figure greater than the company was really worth when its tax liability was taken into account. Then the new owners simply disappeared , having sent the company records, to use that phrase which has now, I gather, become part of the language of this country, to the bottom of the harbour, thereby allowing the old owners to avoid paying tax on the accumulated profits of the company so disposed of. There are those who say that this is justifiable, good clean fun and that probably many people used such schemes not knowing or believing that they were doing anything wrong. That may well be so, although I find it difficult to believe that people who used such a scheme did not, on the whole, know what they were doing I think they must have been fairly aware that they were depriving the state of revenue which would have to be replaced by higher taxation of their fellow citizens or, alternatively, not replaced at all, thereby placing a great burden on the poor and vulnerable in the society, who, heaven knows, are numerous enough and becoming more numerous and who need every cent and dollar of government assistance that this country can afford to give them. Those problems are not improving with the passing of time. This year the country faces a huge deficit, the largest it has ever had in its history, and the general tightness of government funds is extreme. It is not possible to deal with and solve the problems of the poor and disadvantaged in the way they should be dealt with. I take the old fashioned view that those who share the protection and assets of the state, as we all do, have the strongest possible moral obligation to contribute to the cost of those things. It seems to me that a basic community morality is being abused in this case. It is being done in the name of legality. Many sins and crimes have been committed throughout history in the name of mere legality, as if legality in itself had any value in contrast with the sufferings and disadvantage of large sections of the community. That seems to me what this is about and what it always has been about. While I can see that desperately poor and disadvantaged people would have the incentives to escape their proverty and deprivation by avoiding that obligation, I cannot see that those who can well afford to pay should feel morally that they are entitled not to pay. I do not believe that people who take that view should come to this place and seek any kind of sympathy from us or from the community on the basis that they have been hardly done by. If they do that, it seems to me to be a symptom of a serious and very dangerous national moral disease. One would have thought, as was once the case in decent societies and democracies, that the successful and enterprising people-the leaders of the community in many respects-should also take a lead in supporting reasonable public morality, especially in public affairs. There was a time when that morality was regarded as very close to a person's honour in terms of financial dealings. If one went back far enough through history one would find, for instance, that Sir Walter Scott wrote himself into the grave rather than allow himself to become bankrupt because he knew that it was honourable to pay his debts. That no longer, of course, seems to be a view of society. Bottom of the harbour schemes merely seem to be an extension of that kind of situation. If we lose that morality I think we lose a great deal. Of course, if enough people who can afford to pay instead elect to find means to take and not to give, the national structure must become weakened. I am one of those who believe that tax evasion and tax dodging schemes generally have weakened this country substantially. That is one of the reasons why I believe those citizens of good intent-I think the majority of citizens in this country are of good intent-want this legislation to go ahead. They see it perhaps as difficult and dangerous medicine which, at times, is perhaps unfair to some citizens. What law, after all, is not unfair to some citizens? If we go back and look through the law we will find that there is very little law that has not, at some time or another, impinged unfairly or unjustly on some people. But that national malady has to be corrected. That brings me to what I consider is the vital principle at stake in this debate. There is a conflict between the two important principles of retrospectivity and tax equity. What use is any society, democracy or, if it comes to that, any government, which cannot guarantee its citizens reasonable equity in the way the tax burden is imposed. I do not think we should tolerate a situation in which we look at the poor and the people who cannot afford to employ lawyers and accountants and say that they are to be disadvantaged to the benefit of the people who can afford those things. I think that is battering of the community. From the feedback I have had from the community, it is regarded as such by the majority of Australians and, I think, rightly so. To me the gross injustice of this situation is of much greater weight than a tax of a so-called retrospective nature as in this legislation. How often in political affairs can one afford the luxury of unqualified support of a single principle, especially if it is in clear conflict with another principle as is certainly, I think, acknowledged in this matter. These things are matters of judgment and degree. Whilst I am not canvassing that aspect, I merely make the point that there are dangers in espousing, as the Liberal Party appears to have done, opposition to this legislation simply on the ground that it is retrospective and, therefore, bad. I think it is nonsense also to say that because a single piece of retrospective legislation might be passed for good reason the principle is thereby created and a great flood of retrospective legislation will follow. That is absolute nonsense. Matters are decided in this place and in the other place reasonably on the basis of the merits of the legislation. I would be the first to oppose punitive retrospective legislation which tried to introduce criminal penalties on a matter retrospectively. That would be completely different from this situation. It is evident that a number of people-perhaps not a very large number of people -are now being called on to pay tax resulting from the Fraser Government's 1982 legislation to recoup company tax. These people can reasonably claim that they did not know about the bottom of the harbour schemes. From the feedback I have been getting, it involves mostly small shareholders in public companies who might have held perhaps $1,000 worth of shares or less and who made little or no profit when they sold those shares. They had no way of knowing that the directors of the companies involved had been indulging in bottom of the harbour schemes nor did these people benefit. Now, of course, are they being assessed for large sums of money in taxation under that 1982 Fraser legislation dealing with company tax. I stress the point that this involves the earlier Act which is now law. I have received letters from people who have been hit by this legislation. That is what led Senator Jack Evans and me to conduct a series of very long and protracted negotiations with the Minister for Housing and Construction (Mr Hurford) assisting the Treasurer (Mr Keating) and senior officials of the Australian Taxation Office. The most recent meeting extended fairly late into last night. We brought forward the amendments which Senator Evans has circulated and which, I have no doubt, he will be discussing in more detail because I know he is following me in this debate. The amendments will provide for new functions for existing review boards to take on new guidelines and to provide, in effect, temporary anomalies commissions specifically to listen to and remedy the complaints of those people who are being unfairly taxed now! I wish to stress at this point, Mr Deputy President, that support for these amendments is contingent , I understand, on the Government's point of view-I must say that it has been very evasive on this matter-and on whether the Bill is passed at the second reading stage. Amendments can then be moved in Committee. I think it is important that these amendments are moved. They should be on the record. The Government's attitude towards the amendments should be tested at that stage. At later stages of the Bill honourable senators can take whatever steps they see fit to dispose of the Bill. I do not think it is unreasonable that these amendments should be considered because they are important. They are important to a large number of people, from whom honourable senators would have had representations just as Senator Jack Evans and I have. At this stage the Government does not seem to know what to do about these amendments. I gather that this is due to the illness of the Prime Minister (Mr Hawke) and the fact that Cabinet will not meet until tomorrow. I find it extraordinary that a relatively small matter like this, and one which is so obviously just, cannot be dealt with by his colleagues, especially those such as the Treasurer (Mr Keating) who are responsible for these matters in this area. I find it quite extraordinary that we are told that this is the situation. I would like the Government to make a plain statement on how it feels about these amendments for the benefit of all honourable senators and for those people who are being afflicted now by these assessments. Even if this Bill is defeated at the second reading stage-that, of course, would make it impossible for Senator Jack Evans to move our amendments-I hope that the Government will decide to adopt the idea of establishing the temporary anomalies commissions we have put forward to deal with those people who are being treated unjustly under the 1982 legislation. I am sure there are many honourable senators who would at least support that proposition. Regardless of the fate of this Bill, I think that the Government ought to take our view on board and consider it seriously simply because it is the right and just thing to do. Senator JACK EVANS(Western Australia)(9.58) —Anybody listening to this debate tonight out there in the real world must be wondering just what has happened in this chamber between 1982 and 1983. The same noises are coming from the same sides of the House but the people who last year supported retrospective tax tonight are opposing retrospective tax. I think that the public is entitled to ask the question: What is different in principle between a Liberal-National parties retrospective tax and an Australian Labor Party retrospective tax? I think that the only genuine group in this House which has been consistent right the way through is the Australian Democrats. I pay a tribute to my four Australian Democrat colleagues who-- Senator Hill —What about me? Senator JACK EVANS —I said that the only consistent group was the Australian Democrats. There are individuals who have been consistent. The Australian Democrats have maintained their consistency right the way through. The present Government has also maintained that stand. Later I shall explain why both of these retrospective tax Bills may be justified but also why both the 1982 Act and the 1983 Bill have been grossly unfair to some people. I take this opportunity to thank the many apparently innocent people who have written to me and demonstrated that democracy can work in this country and that people are willing and keen to air their views. I appreciate their advice and counsel and the expert advice that I have had from lawyers, accountants and tax experts. Most of the letters that I have received have been written to complain about the 1982 Fraser Government legislation, which indicates that both that legislation and the current legislation are undoubtedly scheduled, if this Bill is passed, to bump into some very heavy weather and to cause chaos in the community. The chaos has already commenced to become evident in Western Australia, my own State. When the 1982 Fraser Government retrospective tax legislation was introduced, it had my support. I agreed with tax evaders being taxed, even retrospectively, on the condition that they had benefited from the exercise and that the company had been sent to the bottom of the harbour. I think that those two conditions gave sufficient evidence to all of us that these people were tax evaders, even though they may have been wearing a tax avoidance label when they carried out that act. I was not a senator at the time, so I did not have the opportunity to vote on the 1982 Fraser legislation, but I felt that there should not be an innocence provision because that would provide loopholes for some guilty parties . However, I am now very conscious of the fact that there are genuinely innocent people-perhaps hundreds of them; perhaps even thousands-who have been caught up in the net of the 1982 legislation. I have had letters from pensioners, widows, low income earners, and even from unemployed people, who cannot afford even the few hundreds of dollars that they are being assessed by the Commissioner of Taxation and will have to pay as a result of that legislation. In most cases, these have been public company shareholders who had absolutely no knowledge of the action being taken by their company directors. As I understand it, there were even some private company shareholders who, for odd reasons, for unusual reasons, all also had no knowledge; for instance, employee shareholders who may have had no knowledge of the actions of the directors of their company. There were public and private company shareholders also whose tax assessments exceed any real or deed benefits . That is a gross injustice which needs to be remedied. Senator Dame Margaret Guilfoyle —They should look at the ruling that the Deputy Commissioner gave on 17 October. Senator JACK EVANS —Yes, indeed. It needs to be recognised that a number of people, not the least being Senator Mason and myself, have been endeavouring to persuade Senator Walsh who is the Minister representing the Treasurer, the Treasurer (Mr Keating) and the Commissioner of Taxation that these injustices need urgent rectification, not just in the months or the years ahead when we get down the track but to try to help people who are now suffering because they believe that they are just about to be put into court, in some cases, as a result of that legislation. Let us look at the 1983 Bill for which the Government claims to have a mandate. There may be a case for claiming further taxes from blatant tax cheats, even retrospectively. I am persuaded to the view that there is an argument that should allow the Government to carry out its mandate and to squeeze every last drop of illegally obtained money from tax evaders, even though that be retrospectively done. But it should be recognised that there is an argument that governments have been negligent down the years and that they have no right to redeem their negligence by claiming taxes which were at the time legally avoided by companies from people who held limited liaiblity shares in those companies. The Government should take heed of its decision to introduce this Bill, and the Government must bear the loss of confidence in Australian investments if this legislation is passed, because that will be an inevitable result of its passage. Senator Missen —The Government will not do it, will it? Senator JACK EVANS —We are all trying to advise the Government. I guess that we are trying to advise each other on this one, because it is not a simple piece of legislation. My concern is that not even one person should be unjustly caught in this net, either by the 1982 legislation or by the 1983 legislation. Surely the Australian Labor Party, the Liberal Party of Australia, the National Party of Australia and the Australian Democrats agree with that statement. It is a simple proposition. I suggest that there should not be one person unjustly caught in this retrospective tax net. I believe that all Australians would agree with that , even those who believe that we should really hit hard those people who illegally and deliberately evaded their tax at the time. That is the purpose of the endeavours that Senator Mason and I have engaged in over the last few weeks and which we shall put in the Committee stage tonight in the form of amendments to the Bill to endeavour to ensure that no one is unjustly caught in this net of either the 1982 legislation or the 1983 legislation. Senator Mason referred to the lengthy discussions that we have had with the Minister Assisting the Treasurer (Mr Hurford) and with the Commissioner of Taxation. I pay great tribute to the people concerned in those discussions for the honest, earnest and genuine endeavours to find ways of ensuring that people were not unjustly caught by the 1982 Act or the 1983 Bill. My tribute goes to them not just for their wisdom and advice but also for their compassion and their understanding of the objectives that Senator Mason and I were endeavouring to achieve to protect innocent people who were not involved in making hundreds of thousands of dollars, or millions of dollars, in this matter but perhaps were being penalised by only a few hundred dollars-those people to whom those few hundred dollars will mean a tremendous amount, particularly in retirement; irretrievable money once spent on this, gone forever. The purpose of our amendments is to give the right of appeal to an independent anomalies tribunal to all innocent shareholders who have received an unjust tax assessment under either the 1982 or the 1983 tax recoupment legislation. I cannot for the life of me believe that any senator would oppose those amendments . The Commissioner would have the ability to grant partial relief as well as total relief under our amendments. At present only total relief can be granted by the commissioners. Under our amendments it is not only the Commissioner who would have that ability; that flows on to the special anomalies tribunal, for which the amendments provide. It is an independant tribunal, not comprised of tax commissioners or tax department employees; it is a totally independent tribunal which hears the case. Incidentally, the Senate will be interested to know that it is to be made up of an ex-Taxation Office employee, who is no longer linked with the department, but also a nominee of the accounting profession and a nominee of the legal profession. So it is an independent tribunal. I ask a very pointed question. I request the speakers who follow in the debate to indicate to the chamber how they intend to vote on those amendments, because my position will be determined by the response to our proposed amendments. I wish to know the position of the Government and the Opposition on these proposed amendments. I intend to spell out my position. I will support this new legislation only if it includes the amendments being put forward by Senator Mason and by me tonight. I will vote for the Bill at the second reading stage to enable these amendments to be moved in the Committee stage. I believe that if the Bill passes it will enable justice to be meted out to everybody and the 1982 and 1983 legislation will be embraced by amendment. If the Bill fails to be passed it is my fervent hope that the Government will have compassion for the innocent people who have suffered serious injustice under the 1982 legislation and will provide appeal rights for those people to those in the amendments which we will be moving tonight, if we are given the opportunity. Senator HARRADINE(Tasmania)(10.11) —Mr Acting Deputy President, I wish to read something to the Senate. It is a letter which states: Dear Senator Harradine, Ours is not some shady operation which the media and some politicians would have the world believe the retrospective tax Bill is aimed at. Instead we run a long established manufacturing business in this regional centre employing 43 people at our factory including metal workers, crane driver, iron workers, storemen, electricians, transport workers and clerks. Plus 26 supporting subcontractors and suppliers. Our company has become involved in this mess because of shareholding problems involving a shareholder who eventually wanted us to buy his share out early in 1980. On the advice of our accountant, our solicitor and our bank manager, we sold the company and formed a restructured company to carry on the business as usual. We need not have done it that way, nor did we do it to avoid taxes. We did not receive any cash, or dividends or personal benefits from the transaction. What we did was perfectly legal and approved of by the High Court. Two years later we were shocked to hear that the purchaser of our company had rendered it unable to pay the current year tax and sent it to the 'bottom of the harbour'. This Bill does not go after this purchaser but rather penalises innocent vendor shareholders. Having conscientiously paid all our taxes every year, we were demoralised and embarrassed to receive a recoupment assessment for $38,000 under legislation you passed in Parliament last year. Despite the current difficult economic climate, we have willingly paid this to the Taxation Department. This is about the only aspect of the letter that I cannot believe. The letter continues: Although we never broke the law, we can understand the argument that we should pay the tax we should have paid had our original company not been sold. This new Retrospective Tax Bill is quite a different matter. It deems a dividend distribution to have taken place of our company's accumulated reserves. This is ridiculous as no such distribution took place, nor could it have because our continuing business relies for its working capital and very existence on these reserves. The new Retrospective Tax legislation would impose a massive penalty tax on the accumulated reserves of our company which have already been subject to tax and which would not have been subjected to further taxes in the normal course of events. The new tax will be levied at 60c in the dollar on our accumulated reserves represented by our factory, plant, goodwill, stock and debtors at 1980 values. We will have to pay $887, which represents almost the entire net assets of our company at 1983 values. As a result of a double dipping taxation approach, the Government now intends to strip the entire company assets built up over 26 years and already taxed once thus ending the company's life and the jobs of our employees. Even then the Government will not get what it demands because of losses on the forced sale of the factory at a price well below 1980 values assuming you could get a buyer, on stock rendered unusable, on debtors refusing to pay and on contract breaches and liquidators fees. Perhaps Senator the loss of our small family company will not be noticed except in this town. But our company is in the same situation as thousands of others and that must surely be economic dynamite for Australia's business community and the tens of thousands of wage earners which were hitherto employed by these companies. The situation we have described above is stark reality and not tinged with any element of flamboyant extravagant predictions. Mr Acting Deputy President, this is representative of the points made in the hundreds of letters that I have received in respect of the previous tax recoupment legislation which came before this chamber. I received others from aged people who had arranged their affairs or whose affairs were arranged for them sometimes by husbands or other people to prepare for retirement in a perfectly legal way at the time. These people would have been caught by the previous legislation and would have faced ruin. Senator Tate queried the aspect of loss of employment. I challenge him to question the people in Devonport and Burnie who would have been affected by the previous legislation and will be affected by this proposed legislation. I challenge him to ask them what their situation will be, because he will have a few unemployed people on his doorstep if this legislation is carried, as will Senator Grimes in Launceston. Honourable senators will remember that on the last occasion when this legislation was discussed the Federal Government refused to have the effects of retrospective tax legislation examined by a Senate standing committee. As I recall it, Senator Macklin moved that the Bill be referred to a Senate standing committee. Had that been successful, the previous measure would still be alive. The Minister was not prepared to let even one Government member vote for that proposition. The proposition for an investigation into the effects of the previous legislation was lost on a tied vote, 30 all. So much for open government! So great was the fear of the Government that what I and others were saying as to the effect of the legislation was correct, that it refused even to have an inquiry. Rather than have an inquiry, it preferred to engage in the tactics of bucket-tipping throughout Australia. That bucket-tipping and vilification were, by and large, directed at me. They were directed at me and at my State of Tasmania by the Minister for Finance, Mr Dawkins, and by Senator Walsh. I know that my speaking time tonight is limited and that the time for the debate is limited, but I have a number of quotes from both Ministers in the media. Those quotes amounted to economic blackmail of me and the State of Tasmania. Indeed, Senator Walsh suggested that because I had voted the way I had , the Federal Government might not be able to compensate Tasmania for the action that the Federal Government took to stop the work on the Gordon below Franklin Dam. This is all a matter of public record. Similar attempts at blackmail of me were used at the time the earlier Bill came before this chamber. Of course, I was aware of that situation. I will refer to it in a moment. I refused to be blackmailed. I voted against the measure because it was unfair and would have ruined thousands of innocent people, involved mainly in small family concerns. During the debate let us not forget that Senator Walsh was so afraid that the truth of these injustices would be exposed that he blocked moves to have the effects of the Bill examined by a Senate committee empowered to do so. I challenge him on this occasion to allow this Bill to go to a Senate select committee to investigate its effects. Instead, on the previous occasion he and some others prefered to reap in the fields of ignorance and prejudice. What a fertile field that was. I understand how people feel about this matter. When I voted against the previous retrospective tax legislation I did so contrary to my own ingrained prejudices. When this matter was first mooted by the Government I immediately thought, as one does when one hears of legislation: 'Beauty! We will be into that'. That was my initial reaction. As with other legislation that comes before us, we attempt to understand what it is all about. After many days of examination of what was foreign territory heretofore for me-that is, company taxation and company legislation-I formed the view, which I still have, that that legislation and this legislation were contrary not only to the principle of certainty before the law but also to the principle of fair taxation shares. My decision was, of course, unpopular with many people because they share my prejudices. They, like me, have an aversion to tax avoidance and tax evasion. Unlike some, I could not indulge my prejudices. In the key situation in which I found myself on the last occasion, I had to put aside these prejudices and study the facts and the principles to be applied, and the Bill's consequences. On the basis of principle I made my decision. No matter how unpopular, how misunderstood or how misrepresented I am, I intend to come to the same decision now because nothing that has been said to me during this debate or outside this chamber has convinced me otherwise. The previous legislation was justifiably described as immoral and unjust, even by elements within the Labor Party. Senator Walsh —Who? What elements? Senator HARRADINE —The lecturer in taxation law- Senator Walsh —That was because there was a capital component in the last Bill. That does not apply to this one. Senator HARRADINE —The Victorian lecturer in taxation law described the legislation as immoral and unjust. Senator Walsh —Because it had a capital component in it. Senator HARRADINE —So the Minister regards that as immoral and unjust. This is very interesting. The Minister now admits- Senator Walsh —No, you are misrepresenting his position if you are applying it to this Bill. Senator HARRADINE —No, I am not misrepresenting his position at all. He described the previous legislation as immoral and unjust. By the interjection that the Minister now makes he understands that the previous legislation, on the basis that it included the capital component, was immoral and unjust. Senator Walsh —No, that was the view of the member of the Labor Party to whom you are referring. This legislation does not contain a capital component. Senator HARRADINE —Exactly. Indeed, the Minister for Finance at the time regarded it as immoral and unjust. I can say now about the Minister for Finance something I have been wanting to say for a fair while. I entered into discussions with the Minister for Finance on the previous occasion in a bona fide fashion. Now I have been betrayed by the Minister for Finance. He has chosen to go throughout the country bucketing me because of my decision. Yet it was the Minister for Finance who, on the last occasion the legislation was debated in this place, presented me with an amendment which would have taken out the capital component. It was his amendment and not mine. I told him that if he wanted the amendment he should move it; I was not going to move it. As I said on that occasion-this is something that has not been picked up with respect to this matter-the majority of the shareholders who would have been affected by the earlier legislation and who will be affected by this legislation have not received anything personally. There has simply been a rollover situation in which those moneys are now the working capital of the ongoing enterprise. That certainly has not been picked up at all in this legislation. Ironically, this legislation does nothing to track down bottom-of-the-harbour promoters. Instead, it seeks to levy upon law abiding citizens confiscatory taxes which were never owing and therefore never lost to revenue. Let the Press understand that. It talks about the loss to revenue of $270m. How can an amount be lost to revenue when it was never owing? Senator Missen —It is just confiscation. Senator HARRADINE —Exactly, it is just confiscatory. Senator Walsh ought to know that the Minister Assisting the Treasurer (Mr Hurford), when Acting Treasurer, sought to have discussions with me about this Bill. I am happy to sit down in a bona fide fashion to have discussions with anybody, but I made it perfectly plain that I believed that discussions could not be bona fide when on the one hand a Minister, whom I regard with a great deal of respect, attempts to speak to me but his ministerial colleagues bucket me throughout the length and breadth of the country. I include in that Senator Walsh and his remarks to the Tangney electorate council on 12 June 1983. I think it would have been appropriate and in good faith for the Government to recognise that its previous legislation was unjust and immoral and to have the Ministers retract some of the statements that they had made about those of us who felt likewise and voted accordingly. The current Bill is basically the same as the previous Bill except that it has been modified to reflect changes in the recovery of personal income tax. Personal income tax is now to be assessed on the after-tax revenue, not capital profits, of those years of income in which primary company tax was avoided. What does that mean and how is that applied? Before I go to that, let me say this: The previous legislation and this legislation in fact impose a new tax retrospectively in a penal fashion. My view of the word 'penal' is not the limited litigant-type view adopted by Senator Tate. That litigant-type view enabled Hitler to start off his anti-Semitic purge in Germany prior to the war. In fact, if one reads from Keesing's Contemporary Archives of 1932, one finds: A Bill to confiscate the entire property of all East European Jews who entered Prusia since Aug. 1, 1914, has been passed by the Prussian Diet, after a session in which the Communists sided with the Hitlerites. The measure demands that within three weeks the confiscated property be converted into means for aiding the unemployed. That was not penal in the sense that Senator Tate was talking about but it was penal in the sense that I am talking about. The same explanation of 'penal' can be applied to the retrospective nature of this legislation. So this legislation is not basically different from the previous legislation. Furthermore, as has been pointed out, this legislation deems a 100 per cent dividend to have been declared when in fact it was never declared and would never, under any reasonable circumstances, be declared unless of course the accountant or the directors of the company were psychiatric cases. Senator Missen —Were out of their tiny minds. Senator HARRADINE —Yes, indeed. So the Government is saying that money that was lost to the revenue should be recouped on the basis of what it says would have happened had the company continued to operate. Of course, had the company continued to operate there would have been, as has been said, a retention allowance. Yet this legislation is attacking even that. That is discriminatory and does not fit with even the Government's definition of what ought to be recouped. I see that the time is passing us and I believe that the Minister for Resources and Energy (Senator Walsh) will want to reply to the debate, so I simply state that this Bill, as did its predecessor, fails on the application of the principles of certainty before the law and fair taxation shares, and I intend to vote against it. Senator WALSH(Western Australia-Minister for Resources and Energy)(10.37) —My first comment relates to the letter which Senator Harradine read in its entirety . Even if-I stress 'if'-all the financial details set out in that letter were correct, the underlying assertion which has been accepted by Senator Harradine is that there would be catastrophic employment consequences if the shareholders of that company were to become insolvent and the business had to be sold. Even if it were so that the shareholders were insolvent and the company had to be sold, it would not necessarily follow that the business would be closed down. The business could be purchased by somebody else, particularly at this time when the country is awash with money. I want to make one other comment on Senator Harradine's speech. He claimed that this legislation was opposed by sections of the Australian Labor Party. When I asked him by way of interjection to name those sections, he referred to Mr Tim Margetts, who I understand was, and probably still is, a member of the Australian Labor Party. I have a copy of Tim Margetts's letter which was read into Hansard by Senator Harradine on 2 June. In that letter Mr Margetts says- remember that this is in reference to the legislation which was introduced in the autumn session of the Parliament: . . . it ignores the reality that undistributed profits over past years and the current year may have both an income and capital character. So as the Bill imposes a tax on 'total assets' of the company, it might therefore also tax capital profits of the company. That was a reasonable assessment of the Bill that was presented in the autumn session of Parliament; it is not an accurate or reasonable assessment of the Bill which is currently before the Senate. There is no capital component. Senator Harradine has claimed that this Bill is opposed by sections of the Australian Labor Party. The only evidence he was able to produce to support that claim was to quote a letter from Mr Margetts which referred to a different Bill. Senator Missen invited us to examine his 1982 speech on the previous Government 's unpaid company tax or tax recoupment legislation. I have done that. I am happy to quote back to Senator Missen some of the things he said on that occasion. They include: The question of retrospectivity which has dominated this debate is one which I think should be faced. It is one by which non-lawyers are mesmerised. He went on to say: Therefore we heard the honourable Alan Hunt, for many years the leader of the Upper House in Victoria and a consciencious Liberal at that, saying that he had supported more than 150 pieces of retrospective legislation with a clear conscience. Senator Missen quoted Mr Hunt as saying: If anyone tells me it is not Liberal, or contrary to principle, I say we don't belong to the same party. It's nonsense to create an overall principle where none exists. Senator Missen continued: That was very well said by Alan Hunt and it is very true. Senator Missen went on to say: But where crooked people have got away with money for years and where we can deal with them only by using this sort of method, it must be used. Senator Missen said: Reference probably has been made already in this debate to Lord Greene, who in dealing with this matter said, among other things: And here Senator Missen is quoting Lord Greene- It would not shock us in the least to find that the legislature has determined to put an end to the struggle by imposing the severest of penalties. It scarcely lies in the mouths of the taxpayer who plays with fire to complain of burnt fingers. Senator Missen, in his remarks on 24 November 1982, also said: It is time the Western Australian Liberals and other Liberals in this country who hold the same view got down to putting the Western Australian branch of the Liberal Party back into the hands of people who supported the pay-as-you-earn taxpayer, the ordinary decent citizens of Australia. I add that I entirely concur with Senator Missen in those sentiments. I regret that it has not happened. Senator Jessop incorporated a number of letters in Hansard. I agreed to permit that incorporation. There are dozens, if not hundreds, of similar letters floating around, mostly from accountants who, it is apparent, have been involved in advising clients to indulge in bottom-of-the-harbour tax evasion operations. Senator Jack Evans —Not all of them. Senator WALSH —Not all, perhaps, but certainly in many cases-in most cases-they have done so. One of the letters which Senator Jessop incorporated from, I think , a Mr Woods, quotes my colleague the Minister for Finance (Mr Dawkins) as guaranteeing exemption for dry Slutzkin schemes from the ambit of the previous legislation introduced in the autumn session. He went on to imply that the guarantee of exemption for dry Slutzkins has not been maintained. That is completely false. Neither this legislation nor the legislation introduced in the autumn session had any effect on what is known as dry Slutzkins. Nor does this legislation have any effect on the dry component of wet Slutzkin schemes. This legislation applies only to the wet components of wet Slutzkin schemes. It might be illuminating for members of the Liberal Party to hear again what their former Prime Minister and their former Treasurer and current Deputy Leader said just over a year ago about wet Slutzkin schemes and the people who engineer and partake in wet Slutzkin shemes. On 30 August last year the former Liberal Party Prime Minister said: In a real sense, the recipients of those funds have in their hands stolen funds , whether you want to say stolen from the Commonwealth or stolen from other taxpayers, it doesn't matter very much. On 12 September the former Prime Minister said: I do not believe anyone could have taken part without knowing they were wrong. By taking part, of course, he clearly refers to those who were actively and actually involved in the sale of companies under those fraudulent circumstances. Less than a year ago-on 21 October last year-the former Treasurer said: the only tax to be recovered under the legislation is tax that was legally payable and the payment of which has been illegally evaded. The former Treasurer and present Deputy Leader of the Liberal Party said that that tax was illegally evaded. Granted, that was in reference to company tax. But the former Treasurer and present Deputy Leader of the Liberal Party described the actions of those who took part in wet Slutzkins as illegal actions . What the legislation passed by the Parliament last year with the unanimous support of the Australian Labor Party, the partial support of the Australian Democrats, if I recall correctly even of Senator Harradine and the partial support of the Liberal and National parties, did was to recover company tax evaded by wet Slutzkin schemes. Perhaps I should define what a wet Slutzkin scheme is. A wet Slutzkin, as the term is generally accepted, is a scheme under which an actual or contingent liability to pay company tax is evaded. It was evaded through the sale of companies by the directors who controlled them to other directors who ultimately passed on those companies to bogus directors who either did not exist at all or who did not have the assets to pay the company tax which was due either on the current year or, in some years, on a previous year or on previous years and sold those companies at a price clearly in excess of the market value of the companies if the contingent and/or actual tax liability had been provided for. What the May legislation introduced in the autumn session sought to recover was the personal taxation which would have been payable on all accumulated profits which may have been accumulated over 10 years or over a longer period on the capital profits. That legislation was rejected. The Government took on board the stated arguments and the stated reasons of a number of honourable senators for the rejection of that legislation-that is, that it was unfair and unjust that accumulated profits to the shareholders of the companies from years in which company tax had been paid and capital profits accumulated should not be taxed. That was a point of view. It was a point of view put forward by a number of honourable senators as the rationale for rejecting the legislation in the autumn session. What the present legislation seeks to recover is the personal tax evaded on the wet component of wet Slutzkin schemes or, in more common language, the personal tax evaded on the after-tax revenue income of companies in those years, and in those years only, in which company tax was evaded by the disposal of the companies in the way in which they were disposed. The spurious principal argument raised by opponents of this Bill is that the personal tax would not have been paid if the companies had continued in operation. There are two possible responses to that spurious argument. One is that they did, in fact, continue in operation, which seems to have been the point which Senator Harradine was making when he read out the letter. If that interpretation is accepted, it emphasises the essentially fraudulent nature of the transactions which took place where a purely nominal change of ownership was engineered for a business that continued in operation for the purpose of evading contingent and/or actual company tax liability. If that interpretation is accepted, it emphasises and acknowledges the essentially fraudulent nature of the transactions. The second possible interpretation is that the businesses did not continue, that the funds were paid out to shareholders in cash and were, therefore, a distribution of profits and ought quite properly to be taxable as personal income in the hands of the recipients of those profits. The argument put, principally by Senator Dame Margaret Guilfoyle, and reinforced by others, was that that did not happen. Senator Dame Margaret Guilfoyle and the others are quite wrong. The fact of the matter is that the after-tax profits of the companies concerned were actually liberated to the shareholders in the form of the sale consideration, in other words, the price paid for the companies in excess of the assets of the companies, if allowance had been made for the company tax which was due. Even if the profits were lent or invested in the new entity, they were converted from revenue profits to capital and the existing tax law subjects to income tax the conversion of revenue to capital-for example, if bonus shares are paid out of revenue reserves or a dividend is credited as a loan in the books of the new company. Under the 1982 legislation, the legislation rejected by the Senate in the autumn session and the legislation which is currently before the Senate, if the shareholders did not receive a benefit in the form of an excess price-excess, that is, to the after-tax value of the assets of the company so disposed of-the Commissioner of Taxation had a discretion not to impose the tax. I understand that that discretion has been utilised. Another provision in the Bill to which no speaker in Opposition has addressed himself or herself is the repeal of sub-clause 12 of clause 3 of last year's legislation. Perhaps Senator Dame Margaret Guilfoyle, who is trying to interject , addressed herself to it very early in her speech because I did not hear the beginning of it. That is a very curious clause. It was not included in the original legislation which was put up by the Fraser Government last year. Its effect is to exempt vendor-shareholders' liability to pay tax and shareholders who sold shares in companies which were later put into tax avoidance schemes which were disallowed by the Commissioner. In other words, that clause established the principle that the liability to pay or not to pay was determined by the actions of other people after the event of the sale and actions of which, according to those who put up that clause, necessarily the original vendor- shareholders had no knowledge. In other words, that clause sought to define or to impose liability or exempt from liability in a most capricious way. The possible effects of such a clause were set out in a letter dated 21 October 1982 from the Commissioner of Taxation to the then Treasurer in which he said, inter alia: The Bill has been changed, as you have requested- That request refers to the insertion of sub-clause (12) of clause 3. The letter continued: to exclude from its scope cases where there was- Senator Dame Margaret Guilfoyle —Who gave you that letter? Senator WALSH —Wilson Tuckey. The letter continued: a post-sale avoidance scheme which, though ultimately unsuccessful, was reasonably expected at the time to be effective. The Commissioner went on to say: I hope that I am wrong, but observe that this change must open up the possibility that some promoters will, even through backdating of documents and the like, now seek to establish that after their purchase of the shares they did in fact put the company into one of the ''reasonably expected to be successful'' avoidance schemes. It may not matter that in execution they botch it up, what will be important is that they can show that they tried. The previous Government was in receipt of that letter. In spite of that advice of the Commissioner, it proceeded to insert clause 3 (12) into the legislation which it had originally proposed. Nobody in opposition to this Bill has addressed the question of clause 3 (12) which this Bill seeks to remove from last year's legislation. The estimated cost last year to revenue of the insertion of clause 3 (12) was $40m. If the opponents of this Bill genuinely object to the other provisions, they will approve the motion for the second reading and then amend the Bill at the most extreme level to remove everything but the repeal of clause 3 (12). But, if they deny the second reading of the Bill, they are endorsing the fundamental absurdity and capricious injustice of the liability or non-liability to pay which is imposed by the insertion of clause 3 (12) in last year's Bill, subsequent to its original introduction. Mr President, I am sorry that I will not be able to conclude my remarks before 11 p.m. It is important to put these facts on the record. The Australian Democrats have proposed amendments to this Bill, the substance of which is that before the amendments proposed by the Democrats become operative there must be in some way a linkage between the vendor-shareholders and a public company. The linkage can be forward or it can be backward, but there must be a linkage with a public company. The amendments proposed by the Democrats also provide the potential for a refund, effectively a restrospectively operative refund, on assesments which may have been paid pursuant to the 1982 Act. Debate interrupted. The PRESIDENT —Order! It being 11 p.m., in accordance with the sessional order, I put the question: That the Senate do now adjourn. Question resolved in the negative. Debate resumed. Senator WALSH —The amendments proposed by the Australian Democrats provide for the possibility of a refund of assessments paid pursuant to the 1982 legislation . They extend the existing discretion of the Commissioner of Taxation to exempt entirely from liability shareholders who derived no financial benefit from the sale of the company, so that the Commissioner may exempt or make an assessment of the shareholder's liability commensurate with the financial benefit derived by the shareholder from the sale of the company at a price which clearly failed to take account of the contingent or actual tax liability of the company. The 1982 Act allowed the Commissioner discretion to provide time for payment without interest provided that no objection had been lodged by the taxpayer receiving the assessment. The 1983 Bill retains that provision but imposes a 12- month limit on it. In talking about the 1983 Bill I am talking about the Bill that is now before the Senate. The 1983 Bill, if it is passed, has the same provisions for accrual of personal income tax liability to be deferred or to have the payment spread over 12 months at the discretion of the Commisioner, again provided that no objection had been lodged. Senator Jack Evans-Have you said whether you will be supporting those amendments? Senator WALSH —I was about to come to that. The Government takes the view that the amendments are reasonable and will support them. The estimated cost to revenue of passing such amendments-I think it should be emphasised that such estimates must be regarded as very approximate-is around $20m which, if accurate , still leaves the amount to come to revenue at around $250m instead of the $ 270m which was originally proposed. The Government also believes that the proposed amendments are reasonable. Therefore, we will accept them. If the Bill is denied a second reading the loss to revenue will not be $20m, as it is estimated to be if the Democrats' amendments are accepted, but $27m. It follows inevitably that if there is a loss of revenue of any magnitude at all, let alone of $270m, there is a mixture of three possible ways in which that can be accomodated. It must be recovered from other taxpayers who have not indulged in or benefited from activities which are, by definition, essentially fraudulent and which were described by the previous Treasurer and present Deputy Leader of the Liberal Party as illegal. It must be recovered, if it is not recovered through the passage of this Bill with the Democrats' amendments, from other taxpayers who have not engaged in activities which Senator Harradine, by implication, described as essentially fraudulent and which the former Treasurer and present Deputy Leader of the Liberal Party described as illegal. There would have to be an extension of the deficit or there would have to be reduced payments to the unemployed, to pensioners, to the States or to whatever other recipient of government revenue one cares to name. In closing, there is one important point which should also be stressed. There has been a great deal of Press publicity recently regarding the Westwools company and a scare campaign stirred up by the representative clients of Westwools. I think they are five in number. They were approached by the Australian Taxation Office. They then, apparently, circulated everybody who held shares in Westwools at the time in a way which substantially misrepresented the facts concerning this legislation. I have in front of me a letter from a person. I will not name the person concerned but-- Senator Dame Margaret Guilfoyle-Why not? Senator WALSH —All right, I will. His name is Edward Henry McHugh of 54 William Road, Nedlands. He informed me that he is an age pensioner. He gave his social security number as well. He said that he is faced, so he has been informed, by Westwools with having to pay $87.63 under this legislation if it is passed. That is indicative of the degree to which the representative clients of that company have misled the shareholders of the company because, of course, if there is a liability of less than $100, irrespective of all other circumstances, nobody has to pay. Nobody has to pay a liability of less than $100. Finally, no assessments have been issued to companies which have had a lot of publicity. No assessments have been issued as yet to the shareholders in either Westwools or Metro Industries Ltd. The facts have been, at least in the case of Westwools-I do not know about Metro Industries-quite clearly substantially misrepresented to small shareholders in that company by people who are major shareholders, directors or controllers of that company for reasons which are not too difficult to identify. Senator HARRADINE(Tasmania) —by leave-Mr President, I claim to have been misrepresented. A moment ago the Minister for Resources and Energy (Senator Walsh) indicated that I implied that those who would be affected by this legislation had acted fraudulently. I said no such thing. In fact, I made it perfectly clear that, from the representative nature of the letters that I had received, the advice had been that what had been done was perfectly legal and, in fact, that this advice had been received by a person who is now a member of the High Court of Australia. Question put: That the Bill be now read a second time. The Senate divided. (The President-Senator theHon. Douglas McClelland) Ayes . . . . . . . . . . . 28 Noes . . . . . . . . . . . 28 —— Majority . . . . . . . . . 0 —— Bolkus, N. Grimes, D. J. Button, J. N. Hearn, J. M. Childs, B. K. Jones, G. N. Coates, J. McClelland, DouglasColeman, R. N. Maguire, G. R. Colston, M. A. Mason, C. V. J. Crowley, R. A. Primmer, C. G. Elstob, R. C. Ray, RobertEvans, Gareth Reynolds, M. Evans, Jack Robertson, E. A. (Teller)Foreman, D. J. Sibraa, K. W. Georges, G. Tate, M. C. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Archer, B. R. Hill, R. Baume, Peter Jessop, D. S. Bjelke-Petersen, F. I. Kilgariff, B. F. Boswell, R. L. D. Lajovic, M. E. Carrick, R. L. D. Lewis, A. W. R. Chaney, F. M. Macklin, M. J. Chipp, D. L. Messner, A. J. Collard, S. J. Missen, A. J. Crichton-Browne, N. A. Reid, M. E. (Teller)Durack, P. D. 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. Cook, P.F. S. MacGibbon, D. J. McIntosh, G. D. Martin, K. J. Richardson, G. F. Rae, PeterRyan, S. M. Scott, D. B. Question so resolved in the negative. Senator WALSH(Western Australia-Minister for Resources and Energy) —by leave-Mr President, as the Dividend Recoupment Tax Bill is now superfluous and redundant, I move: That the Bill be discharged from the Notice Paper. Question resolved in the affirmative. Senate adjourned at 11.15 p.m. The following answers to questions were circulated: Question No. 347 Senator Macklin asked the Minister for Veterans' Affairs, upon notice, on 14 September 1983: (1) Are there (a) long delays in processing claims for repatriation benefits; ( b) a large number of discouraged claimants who have withdrawn, and (c) a considerable backlog of claims awaiting review. (2) Will the Minister for Veterans' Affairs convene a conference of representatives from ex-Service organisations, the purpose of which would be to deal solely with the problems of the repatriation determining system. Senator Gietzelt —The answer to the honourable senator's question is as follows: (1) (a) There are delays which vary according to the sort of claim. A straightforward claim for one disability will be determined without much delay. More complex claims involving several disabilities, perhaps combined with an appeal and application for increase will take longer to resolve. In some cases, claims and appeals have been delayed for key appeal judgements to be given. There has also been a large increase in the number of claims and appeals lodged. (1) (b) It is the practice of my Department to register as a claim any letter or enquiry from a veteran which could be interpreted as a claim. In a number of cases, further investigation reveals that the veteran did not intend the enquiry to be treated as a claim and the registration is then deleted. For statistical purposes this case is recorded as 'withdrawn'. No statistical distinction is made between those claims withdrawn by veterans themselves and those withdrawn because of incorrect registration. However, my Department considers the number of claims withdrawn by applicants themselves is minimal. The large increases in new claims and claims for new disabilities and in applications for increase being lodged suggest that claimants are being encouraged, not discouraged. (1) (c) Following an increase of 29 per cent in the intake of claims for pension over the last year, there is a backlog of claims awaiting determination. Presently there are 2,051 claims for pension where departmental investigation has been completed and the cases are awaiting determination by repatriation boards. (2) I have stated publicly on a number of occasions that I am not satisfied with the times taken to decide claims for repatriation benefits. I have arranged for the appointment of a fifteenth repatriation board to handle claims and the appointment of four additional part time service members of boards. A 'fast lane' priority system has been introduced whereby claims and appeals likely to cause unreasonable hardship are speedily finalised. Officers with Commission delegations are being located in the processing areas of the branch offices to identify and act on straightforward claims, thus reducing the investigation workload and minimising the need for referral to boards. I have also authorised the setting up of a special departmental task force to examine ways of reducing the times taken to investigate, process and decide claims and appeals under the repatriation system. That task force has completed a review of the policies and procedures operating in all Branch Offices of my Department and will be providing a final report on suggested changes to the system (including possible new staffing levels) by the end of October 1983. The task force has held detailed discussions with a number of representatives of ex-service organisations and both I and my Department maintain close contacts with these organisations on matters affecting their members. At this stage I do not see a need to convene a formal conference with representatives of the ex- Service organisations. The Administrative Review Council, of which the National President of the Returned Services League is a member, has recently completed a long and detailed study of the repatriation determining system. The Attorney-General and I will study the report of the Council with a view to bringing forward recommendations to the Government for reforms to the existing system. Question No. 278 Senator Bolkus asked the Minister representing the Treasurer, upon notice, on 23 August 1983: (1) Has the Treasurer seen an article in the Melbourne Age on 4 June 1983 by Mr Christo Moll alleging that Federal Investigators are angry that attempts to prosecute have been repeatedly blocked by the Australian Taxation Office which refuses to make available confiscated records. (2) Is there truth in these allegations; if so, what action will the Minister now take to ensure expedition of proceedings or what action will the Minister now take to investigate the prior action by the Taxation Office in this matter. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) Yes. The Treasurer's attention has been drawn to the article. (2) No. The Commissioner of Taxation has advised that the records referred to in the newspaper report were merely copies of original documents seized and retained by the Australian Federal Police in October 1979. Some additional documents that might have some relevance to police inquiries were delivered to the West Australian branch of the Australian Federal Police by the Taxation Office, Perth, on 24 June 1983.