Wednesday, 14 December 1983 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Clerk-Petitions have been lodged for presentation as follows: Plant Variety Rights To the Honourable the President and members of the Senate in Parliament assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth government: 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognize that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection , storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognise that any system giving ' property' or ownership rights over seeds to individuals, organisations or enterprises is inappropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programmes. (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners as in duty bound will ever pray. by Senator Coleman (from 33 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 Bjelke-Petersen (from 14 citizens), Kilgariff (from two citizens) and Sibraa (from 15 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of certain citizens of Tasmania shows: (a) We are shocked and disappointed at the Federal Government's decision not to upgrade the Wynyard Airport. (b) This decision will inevitably lead to downgrading and closure of the Wynyard Airport. (c) Closure of Wynyard Airport will cause grave hardship and inconvenience to the people of the North West and West Coast regions of Tasmania. (d) We urge the Federal Government to immediately reverse this disastrous decision. And your petitioners as in duty bound will ever pray. by Senator Archer (from 631 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That, with the exception of the Northern Territory, all State Parliaments have enacted chiropractic legislation. That chiropractors provide a safe, effective and economical health care service that is complementary to medicine. That the introduction of a Federally funded health care system restricted to the services provided almost exclusively by the medical profession restricts the freedom to select the health care practitioner of one's choice. That a financial disadvantage will be incurred by those citizens utilising chiropractic care, many of whom find that their health complaints do not respond satisfactorily to traditional approaches. Your petitioners therefore pray that the Senate in Parliament assembled ensures that chiropractic services are included in Medicare when it is introduced. And your petitioners as in duty bound will ever pray. by Senator Bjelke-Petersen (from 193 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That, with the exception of the Australian Capital Territory and the Northern Territory, all State Parliaments have enacted chiropractic legislation. That chiropractors provide a safe, effective and economical health care service that is complementary to medicine. That the introduction of a Federally funded health care system restricted to the services provided almost exclusively by the medical profession restricts the freedom to select the health care practitioner of one's choice. That a financial disadvantage will be incurred by those citizens utilising chiropractic care, many of whom find that their health complaints do not respond satisfactorily to traditional approaches. Your petitioners therefore pray that the Senate in Parliament assembled ensures that chiropractic services are included in Medicare when it is introduced. And your petitioners as in duty bound will ever pray. by Senator Hamer (from 42 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: Protest to the proposed change to the Oath of Allegiance in which recognition of God and the Queen would be deleted Your petitioners request that the Senate, in Parliament assembled should- Request that the Oath of Allegiance remain unchanged. And your petitioners as in duty bound will ever pray. by Senator Collard (from 50 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That the Government has announced that a gambling casino will be included in the planned new convention centre in Canberra without consulting the people of the ACT. In addition, the Government was aware that Casino proposals for the ACT were defeated in 1977, 1979 and 1981 after the then Government of the day received strong local community protest and objections from people in many parts of Australia. Your petitioners request that the Senate, in Parliament assembled, should- Delay any finalisation of the matter by Parliament pending the holding of a referendum in the ACT to determine the views of Canberra people on the issue. And your petitioners as in duty bound will ever pray. by Senator Chipp (from 18 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of certain elected representatives and officers of local governments in Australia shows that General revenue grants to local government under personal income tax sharing entitlements have increased by 8.2 per cent in 1983-84 over 1982-83, The inflation rate over the same period was 11.2 per cent, The increase in grants to State government over the same period was 11.8 per cent, Increased demands are being made on local government authorities to participate in Federal Government programs e.g. Community Employment Program, The Labor party made a pre-election commitment to allocate not less than the real value of the previous year's allocation in general revenue grants to local government. Your petitioners therefore pray that the Government will amend the Local Government (Personal Income Tax Sharing) Act of 1976, to provide a real term minimum guarantee to local government general revenue sharing arrangements in 1983-84, and in future years. And your petitioners as in duty bound will ever pray. by Senator Lewis (from 14 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens, teachers and parents working in and for the interests of the pupils in government schools and colleges throughout Australia respectfully showeth that: 1. We deplore the unprincipled and self-interested attacks being orchestrated by minority sects and groups against the policies and person of the Commonwealth Minister for Education and Youth Affairs, the Hon. Senator Susan Ryan. 2. We fully support the Federal Government's actions in reducing funds for the wealthiest private schools, and in breaking the nexus between government and non -government school costs. 3. We endorse the Federal Government's principled opposition to the provision of 'base grants' to all non-government schools, as a positive step towards fulfilling their commitment of primary obligation to Australia's government schools. 4. We call upon the Federal Government however to recognise that its failure to create an adequate general recurrent resource base for government schools through providing increased recurrent grants, will undermine its own special programs and thus frustrate its own stated educational objectives of greater equity and participation. 5. We support the Federal Government's stated policy of entering into direct negotiations for joint agreements on these grants with State/Territory Governments, to ensure a planned programme of improvements in government schools throughout the coming decade. And your petitioners as in duty bound will ever pray. by Senator Childs (from 15 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of undersigned citizens of Australia respectfully showeth: (a) U.S. military and intelligence bases which continue to operate on Australian soil pose a threat to our safety; (b) The installations which transmit messages to and from nuclear armed submarines operate with little or no Australian supervision; (c) These bases make us extremely vulnerable to attack and a prime target in the event of war. Your petitioners humbly pray that the Australian Parliament will, as a matter of urgency, commence negotiations for removal of the bases in the interests of the Australian people. And your petitioners as in duty bound will ever pray. by Senator Childs (from 806 citizens). Petitions received. Senator GRIMES(Tasmania-Minister for Social Security) —I give notice that, on the next day of sitting, I shall move: That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Upgrading of facilities for introduction of F28 aircraft, Wagga Wagga Airport, New South Wales. Senator GRIMES(Tasmania-Minister for Social Security) —I give notice that, on the next day of sitting, I shall move: That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Redevelopment of facilities at Darwin International Airport, Northern Territory. Senator HARRADINE(Tasmania) —I give notice that, on the next day of sitting, I shall move. That the Electoral and Referendum Regulations (Amendment) as contained in Statutory Rules 1983 No. 274 and made under the Commonwealth Electoral Act 1918 and the Referendum (Constitution Alteration) Act 1906, be disallowed. Senator HARRADINE(Tasmania) —I give notice that, on the next day of sitting, I shall move: That, unless otherwise ordered- (a) the hours of meeting of the Senate on Thursday, 15 December 1983, be 10 a.m . to 6.30 p.m. and 8 p.m. to 11 p.m.; and (b) the sessional order relating to the adjournment of the Senate have effect at the terminating time on that day. Motion (by Senator Jack Evans) agreed to: That leave be given to introduce a Bill for an Act relating to collective agreements regulating the terms and conditions of employment of employees of corporations, and for purposes connected therewith. Bill presented, and read a first time. Senator JACK EVANS(Western Australia) — by leave-I move: That the Bill be now read a second time. I seek leave to incorporate my second reading speech in Hansard. Leave granted. The speech read as follows- Industrial relations has grown over the past three decades to be of crucial importance, both within Australia and in other industrialised nations. For a host of economic and social reasons, it will continue to become increasingly important. Australia is on the verge of becoming the poor relation of Asia and of becoming a loser on the economic ladder of the world. Whether or not this happens will be the result of many differing factors: Not the least being the way in which we conduct our industrial relations. It is essential that we legislate now to provide safety valves for a system which is under massive pressures. A vital part of the current debate is discussion of the practice of collective bargaining. It has been debated by the academic and industrial communities for several decades. Much has been written and much has been said, but there has been little action. While some forms of collective bargaining already exist, there is no institutional mechanism for collective bargaining. It is also unlikely that such a mechanism would be able to develop without legislative action by the Australian Parliament. Collective bargaining already exists in Australia: Some forms of collective bargaining, particularly above-award bargaining, are commonplace. These agreements, however, would seem to be unenforceable at common law. If, however, some of the terms and conditions of such agreements are incorporated into individual contracts of employment, then those items could be enforced in the courts by individual employees. There are today legal and procedural difficulties impeding the effective enforcement of agreements that may be legally enforceable. For example, the doctrine of privity of contract, the restrictions on the granting of specific performance of employment contracts, the problems in determining the quantum of damages and the problems associated with particular provisions contained in the various State trade union Acts all act as effective impediments. Formal collective agreements reached through informal collective bargaining often relate to matters which could never be incorporated in either federal awards or in certified agreements. Agreements often cover matters such as the payment of health insurance for employees and their families, and consultation over the implementation and effects of technological change and various other ' managerial prerogatives' which have been held by the High Court to be beyond the jurisdiction of the Australian Conciliation and Arbitration Commission. Lastly, the lack of legal framework for collective bargaining has led to the threat or use of industrial action. There exists the situation where agreements are under stress during different phases of the economic cycle. In time of recession, trade unions are often reluctant to exercise industrial muscle in order to prevent the erosion of hard won gains which were achieved through informal collective bargaining. Conversely, in times of economic growth and expansion, employers may find that trade unions are reluctant to abide by concluded collective agreements. They may be forced to make concessions in order to prevent industrial unrest. Consequently, the only way of stabilizing collective bargaining is to institutionalise it through legislation. Collective bargaining already exists! This Bill will make agreements enforceable at law and will have a normative effect where and only where, they are entered into voluntarily! This Bill seeks to overcome four major defects in our systems of compulsory conciliation and arbitration. Firstly, as the Australian Parliament's power to enact conciliation and arbitration laws is limited to the prevention and settlement of industrial disputes, extending beyond the limits of any one State, it is impossible for there to be a single national mechanism of compulsory conciliation and arbitration. Employers and trade unions are both faced with a multiplicity of Federal and State labour laws, which are more complex and legalistic than are the labour laws of comparable federations such as Canada and the United States of America. Secondly, Federal and State awards prescribe minimum wage rates and work rules, parties are free to engage in above-award bargaining which is unenforceable at law, and which inevitably leads to instability. Thirdly, the Australian arbitral tribunals, by their very nature, operate the most centralised labour relations mechanism of all the western industrial democracies, with the exception of Austria. This centralisation prevents the establishment of mature negotiating skills at the work place. Finally, the limited scope of the industrial power in our Constitution together with the limited scope of the State labour relations laws, inhibits the development of formal industrial relations practices in relation to such matters as consultation between trade unions and employers over the introduction and the implementation of technological changes, redundancy schemes and other management prerogatives. This Bill is not designed to replace the mechanisms of conciliation and arbitration, but rather to institutionalise collective bargaining so that it operates in tandem with these mechanisms. This Bill acknowledges the major two characteristics of Australian industrial relations: A well developed union structure and the mechanisms of compulsory conciliation and arbitration. This Bill will provide a legal framework whereby any Federal or State trade union will be able, if it so wishes, to voluntarily enter into negotiations with a corporate employer, and conclude a binding collective agreement on behalf of its members who are employed by that employer. Where a corporate employer employs members of more than one trade union, provision is made to facilitate negotiations between the employer and a chief negotiating association of employees, as the representative of the various trade unions who have members employed by the corporate employer. This mechanism cuts across the grid of Federal and State arbitration laws, minimises demarcation disputes, and of most importance, promotes the growth of mature negotiating skills at the work plant. It is a voluntary mechanism which neither disrupts nor impinges upon Federal or State arbitral laws. Under this proposal, if trade unions and a corporate employer voluntarily conclude a binding collective agreement, then during the life of the collective agreement the various Federal and State arbitral tribunals will be deprived of jurisdiction (other than with respect to demarcation disputes) to settle any labour relations differences between such trade unions and that corporate employer. Once a collective agreement is signed, both parties will be expected to comply with it. Consequently, if during the duration of such a collective agreement, wage rates in a relevant award were increased, such an increase would not automatically flow on to employees under such a collective agreement. The contents of agreements concluded under this proposal would not necessarily be limited to the traditional range of industrial matters which are found in most Federal and State awards. Such agreements could include a wide range of terms and conditions of employment, and could embrace matters specifically relating to trade union and employer relations, such as technological change, redundancy arrangements and job security schemes. To enhance the making of such broad agreements, provision is made for the disclosure of information by the parties at the negotiating stage. The voluntary nature of this proposal is enhanced by the absence of punitive measures. However, there are provisions to ensure that parties conform to collective agreements which they have voluntarily entered into, and to deprive them from the benefits of this proposal should they fail to comply. If a party to a collective agreement, whether the employer or a trade union, breaches a collective agreement, other than in a matter relating to safety, health or the welfare of employees, then any of the other parties has the automatic right to immediately terminate the collective agreement. The proposal will require every collective agreement to contain a grievance procedure which must be availed of at first instance, to settle any differences which may arise between the parties . After the completion of such a procedure, the parties then have the option of gaining an interpretation of the agreement from the court. A collective agreement will be a civil contract between the parties. Parties will have recourse to the Federal Court to ensure compliance by other parties. They will be able to sue other recalcitrant parties and to obtain orders requiring the other parties to abide by the agreed terms and conditions of an agreement. This is the crux of this Bill: That collective agreements should be enforceable at law. This Bill provides a legal framework which will not impinge upon the Federal or State mechanisms of compulsory arbitration. In addition, it takes into account the trade union structure in Australia. In comparable federations such as Canada and the United States where collective bargaining is common, it is possible to operate mechanisms where a single trade union is the exclusive bargaining agent for every employee in a bargaining unit. However, in Australia trade unions are registered under the various conciliation and arbitration statutes and trade union acts. Consequently a system of collective bargaining must recognise this structure and must allow multi-union bargaining within each enterprise. This Bill does this by providing a framework which utilises the existing trade union structure at both Federal and State levels. By providing a legal framework for voluntary collective bargaining, this Bill acknowledges the realities of Australian industrial life: Firstly, that collective bargaining already exists and is being extensively practised. Secondly, that collective bargaining often relates to matters which can never be incorporated in either Federal or State awards. Thirdly, as the Australian economy recovers, it is likely that trade unions with a significant bargaining power will seek to engage in informal collective bargaining for wage rates and allowances over and above those provided for by the Conciliation and Arbitration Commission. It is crucial to the accord, that should such bargaining occur, that it happens within the framework of a legal mechanism and as a result does not provide pace-setter conditions for all those union members who are not parties to the bargain. This Bill will be a safety valve for the incomes accord. Over the next several years, it will be necessary for a legal framework such as this to exist if the accord is to be successful. The accord is a delicate balance of forces and the Conciliation and Arbitration Commission will not be able to maintain that balance without a safety valve such as this Bill. Without a legal framework such as this, the accord is destined to be open to a gradual erosion over the course of time. If the accord is to be successful in the long-term, then this Bill is vital in ensuring that success. The Australian Democrats are introducing this Bill in the expectation that it will stimulate a considered response not only from this chamber but from within industry and the trade union movement. The Australian Democrats are not presenting this Bill with a closed mind. It has evolved after discussion and consultation with many people. In particular, it has benefited from the advice and assistance of Graham Smith, lecturer in law at Riverina College of Advanced Education, and Ronald McCallum, senior lecturer in law at Monash University. A Bill such as this will promote consensus within industry, and it is fitting that its final form should be the result of consensus within this chamber. I therefore implore senators to carefully consider this Bill, to discuss it with those involved in industry and the trade unions, before returning to the Committee stage debate. We will be happy to consider amendments and improvements which are proposed during the Committee stage. If Australia is to avoid becoming a third rate industrial nation, then our industrial relations systems need to adapt and change to reflect the current realities of life. The Collective Agreements ( Corporations) Bill will advance Australia one step nearer to the goal of economic progress in a sound industrial relations environment. Debate (on motion by Senator Gietzelt) adjourned. Debate resumed from 13 December 1983, on motion by Senator Button: That the Bill be now read a second time. Senator CROWLEY(South Australia)(10.07) —Yesterday I talked about the Health Legislation Amendment Bill (No. 2) 1983 as it pertains to nursing homes. I suggested that the proposed changes in this legislation are in line with the Government's policy of encouraging and assisting elderly people if they make the decision to live out their lives in their homes or in halfway accommodation, for example, in hostels, rather than giving them only one option; that is full nursing home care. Yesterday I referred to the dramatic increase in nursing home appropriations between 1976-77 and 1982-83 for institutional care compared with a much smaller growth in appropriations for assistance for people who do not go into nursing homes. I think we need to be careful not to suggest that cost containment is the only reason for the amendments in the legislation relating to nursing homes. Sometimes it may not be a matter of cost savings but of this Government preferring what is most appropriate and desirable for people, particularly as they become older and may need assistance with ordinary every day living. As I said yesterday, nursing home care is an exercise in overkill when people need assistance only with getting leaves out of gutters or changing light bulbs. Many old people are not sick; they just need assistance to continue living in their homes. If that is their preference this Government is prepared to make money available and introduce legislation to enable that to happen. Further, I think we need to consider the assessment teams. In many places in this country they already exist and there are assessment teams which are in the process of being established. There has been some very stern criticism of the assessment teams by and large by the Opposition which preambles its criticism with comments such as: 'We do not really know what they are'. If the Opposition is to criticise things with strong words such as: 'They will coerce patients.', it needs to have a better understanding of what it is frightened about. The assessment teams do not coerce people at all. They are a grouping together of people who have an interest in and a professional understanding of the needs of elderly people. Instead of regarding elderly people as only a medical problem or only a problem of home management, assessment teams will try to bring together expertise in those areas to meet with the elderly person and his or her family or relatives to try to decide what is the best and most appropriate care for that person. The assessment team may well decide that some appropriate domiciliary assistance is what a person needs, rather than nursing home care. I suspect that the Opposition criticises this as being some kind of instrument of coercion- Senator Hill —We have a fear. Sentor CROWLEY-I will address myself to the Opposition's fear as distinct from its criticism. I think that the nature of the fear is that there will be a coercion to keep people out of nursing homes rather than to coerce them into homes. At least, as I understand it, that is how the Opposition's criticism has been running. I cannot imagine that coercion would be applied by the assessment teams to put people into nursing homes, when the seeming thrust of the proposal for changes is to encourage people to stay at home. So I presume that the fear is about a coercion to keep people out of nursing homes if they want to go into them. But as I say, I am not clear at all why people would regard this as some kind of coercion. In fact, the assessment team will serve a number of purposes. First of all, it will help people and their relatives determine the appropriate form of care. That is really quite a difficult assessment. As I said earlier, it may well be that some frail aged people need nothing more than assistance around the home. It is impossible for an elderly person to change a light bulb when it blows out. Such people need some kind of handyman assistance or a fit and friendly neighbour. Not everybody who is elderly has access to that kind of assistance. The assessment team will address problems seemingly as trite as that. But problems as small as that can make a critical difference to whether people stay on in their own home. The assessment team will also decide whether a person needs podiatrist care- that specialty has changed its name recently-or whether a person needs some assistance with small housework, if you can call it that, as distinct from the larger maintenance involved in home care. Much of the social or domestic arrangements will also be part of the consideration of the assessment team. As well, the assessment team will address itself to the need for physiotherapy, the need for exercises and perhaps even the need for treatment for loneliness. That is, a visitor may call. It may also address basic medical problems. A frail heart does not necessarily require a person to be in hospital. Most elderly people who have frail hearts live out their lives in the community. I guess that the thrust of the amendments is to try to assist people with the best kind of appreciation of what will make their lives most manageable in regard to where they choose to live. I also appreciate that some elderly people are not really able to make that choice. It may depend on relatives and wise assistance from relatives. I think that the assessment teams will be a buffer against relatives requiring elderly folk to be incarcerated in institutions, as has sometimes been the situation, and 'forgotten to death', as is sometimes said , or maintained at home so that relatives can collect a fostering allowance, a nursing home allowance or a home care allowance. The assessment team will provide that kind of care and buffer. As well as that, the assessment team will help guide people through the extensive network of assistance programs in the community. I do not know how many people in this chamber claim to know them all. I have certainly dealt with them for some time but still would like to be master of them all. So many bits and pieces of community facilities and assistance are available. The assessment team will also help elderly people cope with those services, to choose those that are most appropriate and most accessible. Senator Hill —How many assessment teams are envisaged? Senator CROWLEY —I will come to that in a moment. Finally, the assessment teams will also give us very important data, if you like, particularly data that will help us identify gaps in the provision of care for elderly people. I do not believe that we can put a hard figure on the number of assessment teams there will be. The efficiency of those already in existence is being assessed and evaluated. More are in the process of being established. Mostly the intention is to establish them in conjunction with what community facilities or services exist, but in some places they may well operate, for instance in rural areas, out of a community hospital or a regional based hospital. They will work very closely with the patient's general practitioner and/or specialists, as is necessary. As I have said, the specialists may include social work specialists, hygienists, podiatrists, and so on, as is necessary rather than as are listed. Again, the number of assessment teams will increase according to and in response to need over the next 12 to 18 months, by which time I think that the Government will be better placed to decide whether that is sufficient or whether more are needed, and the gaps that I mentioned earlier will be becoming clearer; that is, not only the gaps in services but gaps where assessment teams may be needed. The principal thrust of the assessment team and the changes in the nursing home legislation is about ensuring this Government's commitment to the care, but particularly the appropriate care, of patients and their support where, as much as possible and as much as is reasonable, it is needed to help people to live their lives according to choices that they make rather than choices or decsions that are made for them. That is what the Bill is about. It is a most appropriate set of amendments. Unlike the Opposition, I have no fears about the consequences of this Bill and the amendments contained therein. I commend it to the Senate. Senator HAINES(South Australia)(10.16) —The Health Legislation Amendment Bill ( No. 2) 1983 is, in the main, a fairly non-contentious Bill. It amends a number of Acts, and generally it does so for the better. The amendments contained in this Bill cover the Health Insurance Act 1973, the National Health Act 1953, the Nursing Homes Assistance Act 1974, and the Medical Research Endowment Act 1937. One of the tidying up amendments is an amendment concerning referral procedures relating to cleft lip or cleft palate conditions. The problems faced by patients suffering from these two conditions were first brought to my attention a couple of years ago when my long-suffering orthodontist was trying to straighten my teeth, which is no mean feat when they belong to someone in her mid-thirties. He pointed out that the requirement that patients certified as having one of these conditions be formally referred for treatment before service is rendered to them by an accredited dental practitioner before Commonwealth medical benefits could be attracted was an impediment to achieving the best form of treatment. He informed me that at the time a child is born and is diagnosed as having one of these conditions, speed is of the essence; and that particularly with babies born in the country the procedures that were laid down until recently have been an impediment, since the best time to operate on such children is within 24 hours of their birth. So it pleases me that the Government has reacted to the fact that experience has shown that the referral procedure is unnecessarily obstructive and has acted to ameliorate it. The major changes contained within this Bill are those involving amendments aimed at improving care of the aged, both in nursing homes and out of them; or rather, they are aimed at extending the range of options for aged care. Many of us in the community have been agitating for this for a long time. People's inclination to institutionalise the elderly or other disabled people has come under considerable fire in recent years as community opinion and expert opinion has moved away from the concept of institutionalised care towards the idea of home-based and day care, and with very good reason. The Minister for Health (Dr Blewett) said in his second reading speech: While Australia overall has very adequate provision of nursing home accommodation, its community care and domiciliary services are underdeveloped as are its facilities for hostel care. There are few people in the community, including those who run or are otherwise involved with nursing homes, who would disagree with the Minister's comment. Indeed, anyone who has read the Hansard record of public hearings held by the Senate Select Committee on Private Hospitals and Nursing Homes or who has attended any of the public hearings of that Committee will be aware of the fact that many nursing home proprietors and matrons have been critical of past practices and funding criteria. I am referring to the sort of thing that gives an additional benefit for extended care patients but seems to direct that funding at inappropriate patients on the grounds that extended care patients tend to be defined as those who are bed or chair fast and no allowance is made for the incredible amount of staff, time and care that is required, for instance , in relation to a patient suffering from senile dementia, a wanderer, a patient who is incontinent or who is in some other way a 'burden' on the staff but is not bed or chair fast. It has been pointed out too that there are many inappropriate admissions. People are being placed into nursing homes when really all they need is some sort of short term care that could adequately be provided for them in their own homes if the funds were made available for extended domiciliary care or if facilities were available for day care. What we need in Australia as far as the care of the aged is concerned-as I have already mentioned this should be extended to care of those people who are disabled at whatever age-is the most flexible system possible, one which caters for the needs of the people concerned, offers the maximum amount of independence and dignity to the elderly, is not price restrictive and is readily accessible as well as administratively viable. If this sounds a tall order I can only say that in fact it is a tall order. It is probably the reason why a great deal of talk has gone on about the need to diversify and extend care of the aged in recent years. But very little action has taken place in the past. I commend the Government for its action in this regard and I wish it well. There is certainly no place for politics, I believe, when it comes to an area such as this. I was pleased to hear, in speeches made prior to mine both here and in another place, that all parties represented in this Federal Parliament at the moment favour the direction in which this legislation appears to be moving, although I was a little saddened to read one or two slightly churlish comments from the Opposition spokesman in another place in this regard. I will not repeat them at this stage. I think he could have been a little more accommodating and a little more hopeful that the direction in which the Government is moving will bring the results that we all want. Amendments to the Medical Research Endowment Act are to be applauded in general by all parties represented in this place. These are aimed at bringing management of the fund into line with modern auditing and accounting practices. The second reading speech of the Minister for Health states: The current position is that the fund, and bequests to it, are maintained in Commonwealth Trading Bank accounts separate from the public account, administered by the Minister for Health, and subject to annual audit by the Commonwealth Auditor-General in accordance with the Act. However, in view of the magnitude of the Government's appropriation to the fund, it is considered appropriate to bring it within the public account and the concomitant audit and accounting provisions. There certainly will be no argument from me or my Party, as there was none from the Opposition parties, on this matter. One of the matters of concern in this Bill, however, at least as far as some sections of the community are concerned, relates to clause 53 of this omnibus Bill. Clause 53 repeals section 91 of the National Health Act. This clause, in repealing that section of the National Health Act, effectively removes the restrictions applying to a number of friendly society pharmacies in South Australia and Queensland-restrictions which previously prevented them from supplying pharmaceutical benefits to all members of the public regardless of whether they were members of the friendly society. Considerable concern has been expressed to me, and I believe to other senators and also to members of another place, by the Pharmacy Guild of Australia and individual pharmacists about the effect that the repeal of section 91 of the National Health Act will have. Although the Bill apparently affects only eight pharmacies, three of which are in Queensland and five of which are in South Australia, some very real fears are held that this will disadvantage other pharmacists, specifically in the short term those who have a business in the same district as those eight friendly society pharmacies, and in the long run could eventually lead to a worse problem if State governments allow a proliferation of friendly society pharmacies beyond present numbers. Of course, that is something over which the Federal Government has no control, despite comments by the Opposition's spokesman on health in another place. At this stage I will refer to just one of the more detailed letters that I received from a pharmacist in South Australia. It reads: Dear Senator Haines, I protest most strongly at the inclusion of clause 53 in the Health Legislation Amendment Bill and request that it be deleted from the Bill. My protest is based on a number of factors:- 1. there is no public demand for it. 2. the dispensaries concerned appear to offer some financial advantage in shop purchases to members by offering a discount, but the question is a discount on what? Very often the discounted price is higher than the going rate in the market place. 3. in South Australia, prescription benefits on non-N.H.S. prescriptions are available to the public through all Guild pharmacies to members of Mutual Health Medicine Benefits Fund and now Mutual Health/N.H.S.A. Ancillary Benefits. He then sets out a comparison on prescriptions for a particular drug which I will not go into at the moment. The letter continues: 4. service provided. I can only speak for myself but I know other Guild pharmacies offer similar services. Very free access to the pharmacist for discussion on medication-health insurance and other allied subjects, e.g. social services, nutrition, childhood illnesses etc. Willingness to come out in the middle of the night for urgent medication-not often these days-but I suggest you try that one on with F.S.M.A. Free delivery services to anyone but particularly to the aged and infirm-or mothers housebound with sick children. I suggest you try that one on too. 5. by freeing the F.S.M.A. dispensaries from present restrictions, the number of pharmacies will be increased despite the Health Department's claims of too many at present. 6. unfair competition because of taxation advantages will decrease profitability of small businesses and therefore decrease employment opportunities. Does the present Government support small business? So far I have not seen any evidence of that support. In the past F.S.M.A. has had the opportunity to open as many pharmacies as they wished-on a restricted franchise to service their own members but have not taken advantage of that opportunity and have never pioneered a new area as have so many Guild members, including myself . . . Service is a word unknown to them. In the light of the foregoing, I can see no public benefit in that portion of the legislation and therefore repeat my request to withdraw it. I am not in any position to make a comment on the accuracy of any or all of the assertions contained in that letter. Nevertheless, they have been repeated in various forms in letters and telegrams that I have received from other pharmacists so I believe that they should at least be given some consideration. The Opposition spokesperson on health said in his speech in another place on the second reading: I can understand the concern of community pharmacists in areas close to these eight dispensaries, as there would be a fear of loss of business. However normal businesses compete successfully with co-operatives in a number of areas of the economy, and it is therefore difficult to justify imposing trading restrictions on co-operatives in this particular area. The Opposition spokesman continued: Nonetheless I would like to warn the Government that the Opposition would vigorously oppose any further action by the Government to extend any special privileges to pharmacy co-operatives that would enable them to compete unfairly with independent private enterprise pharmacies. That is very fine sounding, but I fail to see how the Federal Opposition can do anything to prevent action being taken by a State government, for instance, to increase the number of friendly society outlets if the mood takes it and if the parliamentary numbers in that State allow it. Furthermore, I suspect that the happy competition between businesses and co-operatives to which he refers does not have to cope with the tax and other concessions friendly society pharmacists have and which the other pharmacists do not have. I wonder whether, perhaps, this whole thing is not a back door method for rather unfairly increasing competition between some pharmacies and others and, hence, reducing the total number of pharmacies in Australia. That is a commitment which, as far as I understand it, is shared by both political parties. My major criticism of the Bill does not, however, lie in that direction. It is a criticism which centres around what appears to be some fairly innocuous clauses, namely clause 2 (10) and the clauses referred to therein, that is, clauses 35 (1) and 62 (1). Clause 2 (10) states: Sub-sections 35 (1) and 62 (1) shall be deemed to have come into operation on 1 January 1975. The explanatory memorandum, in relation to clause 35 (1), states: This provision ensures that an approval-in-principle is (and was) effective regardless of whether the applicant is (or was) informed under either Act. It is intended to validate past administrative practice. It is intended to validate past administrative practice. I have been unable to find anywhere, either in the speeches during the second reading debate or in the explanatory memorandum, any reference at all to what practices are being validated and why they need to be made valid retrospectively to 1975. I have spoken privately to the Minister about this. He assured me, also privately, that there is nothing sinister about the retrospective validation and that it relates to procedures operating under one clause because of some misnumbering in an Act somewhere. I am prepared to accept that this is what the Minister has been told, although when I spoke to him we were rather rushed as it was on a day when the Senate bells were ringing fairly continually and he did not have the opportuntity then to give me any detail about what is involved in this retrospective validation back to 1975. I would, of course, appreciate it if the Minister for Social Security (Senator Grimes) who represents the Minister for Health could give me some more detailed explanation of just exactly what is involved. I am concerned about this not because I suspect anything sinister, underhand or illegal is going on in this validation, but because of a matter that was recently taken up with the Minister for Health by my colleague Senator Macklin who had drawn to his attention a practice known as the pay under scheme. This scheme works roughly this way: A patient is serviced by a medical practitioner. Senator Giles —Attended. Senator HAINES —A patient attended a medical practitioner for treatment. Because the treatment provided was not readily benefited under an item number, it was paid out under the item which came closest to that service. This practice leaves the way open to a number of fairly serious problems. Either a medical treatment is entitled to a medical benefit or it is not. If it is not a benefit should not be paid out under some other schedule item. Having been made aware of this classic piece of 'yes ministerism', Senator Macklin put the following questions on the Notice Paper on 21 September 1983: (6) Is the Department now paying benefits to doctors not covered by item numbers as was suggested in evidence provided to the Joint Parliamentary Committee of Public Accounts that there had been a number of changes to the medical benefit schedule; if so: (a) is this practice accepted in the Central Office; (b) is this practice known as the 'pay-under' item number; and (c) has there been any objections to this practice from health insurance funds. (7) Has any advice been received by the Department from the Deputy Crown Solicitor in relationship to the legality of this operation; if so: (a) has any recommendation been made to lay charges against senior public servants in relation to this matter; and (b) has the Minister for Health been informed of such advice; if so, what action has the Minister taken. After repeated requests for an answer, we were forced to resort to the semi- serious threat of holding up passage of clause 2 (10) of this Bill until we got an answer. Late on the day we made that threat the following response was received: Since the inception of the medical benefits scheme in 1953, it has been the practice that, where a patient receives a legitimate medical service not covered by a specific item in the Medical Benefits Schedule, the payment of benefit under the most appropriate existing item will be authorised by the Department. The answer to Senator Macklin's question as to whether this practice was known as the pay under item number was yes. The answer went on to say: The Department is not aware of any objections to 'pay under' items from health insurance funds . . . In giving advice on another matter, the Deputy Crown Solicitor in Perth referred to earlier advice by the Attorney-General's Department on the legality of 'pay under' items. Senator Cook —In Perth? Senator HAINES —I will refrain, Senator Cook, from making any comments at all about the reliability or otherwise of that sort of advice. The answer to Senator Macklin's question about whether any recommendations had or had not been made to lay charges against senior public servants in relation to this matter was no. In response to his question in regard to whether the Minister for Health had been informed of such advice, the answer was: Yes. I approved a mechanism for paying benefits for legitimate medical services not specifically listed in the Medical Benefits Schedule so that patients receiving such services are not financially disadvantaged. After consultation with the Attorney-General's Department, appropriate changes to the Medical Benefits Schedule were introduced on 1 November 1983. I presume that was done via a regulation. At no stage did that answer say whether in fact the practice was or was not illegal, and, if it was not illegal, why there was need for appropriate changes to be made to the MBS and, if it was illegal, why action was not taken. Senator Macklin will be taking up this matter in more detail during the Committee stage of this Bill, but I want to draw it to the attention of the Minister for Social Security now so that he and/or his advisers can prepare themselves for whatever onslaught Senator Macklin has up his sleeve. Neither he nor I find this answer particularly satisfactory. It was a half-hearted response which certainly did not tackle the spirit of the questions raised by Senator Macklin and, given the precedent set by this, I certainly would like an on the record explanation of the clauses that I have referred to and the reasons for there having to be validation of previous action retrospectively to 1975. In the main, however, I repeat that this Bill covers a number of areas which have been of concern to me, other members of other political parties, members of the community generally and professionals involved in health care, particularly the care of the aged, for some time. It goes some considerable way towards meeting the concerns of people such as those I have mentioned relating to appropriate and adequate care of the aged and of some medical treatments, and the Government is to be commended for this. I hope that it takes further steps in the very near future to bring some other aspects of our health care system into the twentieth century. I suggest, as a start, having a look at some other items that could be made rebatable; for instance, the accommodation charges for parents of hospitalised children. But in the main this Bill is fairly non- contentious. It heads off in the right direction and I join the Opposition and members of the Government in wishing it well. Senator GRIMES(Tasmania-Minister for Social Security)(10.41) —I thank honourable senators who have taken part in this debate on the Health Legislation Amendment Bill (No. 2) 1983 and who are not so far-despite Senator Haines's warnings-delaying the Bill untowardly. I will deal first with the problems raised by Senator Haines, as I think she raised more problems than any other honourable senator, in the hope of answering them now rather than in the Committee stage. I will deal first with the problem she raised concerning the retrospective provisions of the Bill, provisions which, I note, honourable senators were alerted to in the Scrutiny of Bills Alert Digest No. 14 in November, when the Senate Standing Committee for the Scrutiny of Bills drew attention to the fact that there is retrospective operation of clauses 35 (1), 62 (1) and 61 (1) of the Bill. I think the explanation is as Senator Haines outlined it. These are largely technical changes. They correct drafting errors in sections 4 (3) and 5 (2) of the Nursing Homes Assistance Act 1974. These provisions refer to difficulties which have arisen because there were incorrectly cited sub-sections in that legislation. The references concerned do not properly identify the correct provisions in the legislation under which applications are made, or the provisions empowering the permanent head of the Department to refuse applications. Clauses 35 (1) and 61 ( 1) correctly identify the provisions relating to refusal of applications as sections 40AA (3) of the National Health Act and 4 (3) of the Nursing Homes Assistance Act. Section 5 (2) of the Nursing Homes Assistance Act amended section 40AA of the National Health Act by reference. Clause 35 (1) of this Bill would insert in the National Health Act with the necessary corrections what is currently provided by reference in section 5 (2) of the Nursing Homes Assistance Act. It is not surprising that this sort of thing happens in complicated legislation such as this, particularly in the number of amendments we have had over the years. The section referred to, 5 (2), would therefore no longer be required and would subsequently be repealed by the relevant sub-clause in this Bill. I believe that the Minister for Health (Dr Blewett) has assured concerned members of the Parliament and members of the public that the proposed amendments will not affect in any way undertakings given by the Department of Health to proprietors or intending proprietors of nursing homes that applications for approval of premises as approved nursing homes would not be refused, subject of course to the other requirements of the legislation. So these amendments will correct technical drafting errors in the legislative provisions relating to what are termed approvals in principle of nursing homes for the purposes of Commonwealth benefits. They correct simple errors of citation and would certainly not trespass on any of the personal rights or liberties of any person in a retrospective way. It is also worth pointing out I think that the provisions which would be affected by the amendments in question will in fact be superseded by the new approvals-in-principle provisions in this Bill. These will be brought into effect by proclamation as soon as the proposed principles governing approvals-in-principle have been prepared and promulgated. That means that there is a guarantee that the retrospective provisions in fact will not affect the civil liberties or actions of anyone in the past and that in the future the new approvals-in-principle will cover it. Senator Haines raised the matter of the friendly societies and the friendly society pharmacies. In doing so she quite correctly read the letters of representation she has had from individual pharmacists and in fact the Pharmacy Guild of Australia, which became quite exercised about this matter after the legislation had been through the House of Representatives. First of all let me say that it is my advice, my belief and, I think, my knowledge that in fact the previous Government's changes to the taxation provisions as they affect friendly society pharmacies have resulted in there being no unfair competition, as far as taxation is concerned, between those friendly society pharmacies and community pharmacies or privately owned pharmacies. I believe they are now equal. I believe if the Pharmacy Guild has examples of what it believes are unfair tax advantages with the friendly societies, it should make a case to the Government about that. To my knowledge it has not. Senator Haines also raised the question that first of all this may be a back door way of increasing the number of friendly society pharmacies, and secondly a back door way, by unfair competition, of cutting down the number of pharmacies, which we all accept will inevitably happen in this country. I think that flies in the face of what has happened, quite apart from the fact that the registration, licensing or otherwise of friendly society pharmacies or other pharmacies is a State matter. In the past the maximum number of full approvals under the existing legislation of friendly society pharmacies has been considerably higher than the number of friendly society pharmacies which operate now. In fact apart from in the States of Queensland and South Australia the number of friendly society pharmacies in more than recent times, in the last 10 or 20 years, has dropped away. They have not increased. Under the existing legislation, and under the previous legislation before the tax changes were made , when they actually had an advantage, still the number of friendly society pharmacies decreased. I will give some examples of the number of full approvals under the existing legislation. For New South Wales it was 16, the current approvals are three; in Victoria it was 65, the current approvals, as at 6 December 1983, were 32; in Western Australia, the maximum number was 10 but there is now only one; in Tasmania there were three and there are still three, now; and similarly in Queensland and South Australia the numbers have not changed. So this legislation and the changes made to this legislation are not a back door way of allowing the friendly society pharmacies to boom in any way. In fact the changes sensibly correct an anomaly which exists in the legislation. Senator Haines also raised the matter of the problems of pay under items under the medical benefits system and how she and her colleague Senator Macklin have received unsatisfactory answers to this matter. I have been plaintively sitting here for the last four or five sessions of Question Time waiting for a question on this matter so I could give a very detailed and erudite answer, but no one asked me any questions on the matter. Perhaps I can take this opportunity to give everyone a little lecture on this problem and I may head off the onslaught that Senator Haines said we were going to get from Senator Macklin during the Committee stage. First of all, there is a matter of background. As Senator Haines said, where a medical procedure is not covered by a specific item in the medical benefits schedule, it has been long-standing departmental practice to advise the doctor of the nearest appropriate item number and benefits will be paid under that item . Senator Haines —But why? Why not just come up with another item number? Senator GRIMES —Just a minute; just calm down. We will go step by step or the honourable senator might get me confused. In a strictly legal sense, a prosecution for medical fraud, a charge that the doctor did not provide the services described by the item number, could in fact have been laid. A possible prosecution for fraud in Western Australia had to be dropped because of the use of the pay under item. In a strictly legal sense-- Senator Haines —Is that because the doctor was doing it, instead of the bureaucrat? Senator GRIMES —Yes. In a strictly legal sense, because the doctor is using an item number which does not properly describe the services rendered, it could be considered as fraud. This case and the potential case brought to the Department' s attention the distinction between pay under, which is the sanctioned use of an inappropriate item where there is only a small difference between the actual service rendered and that described by the schedule item, and 'fraud', which is the unsanctioned use of an inappropriate item number where there is a substantial difference between the actual service rendered and that described by the schedule item. Senator Peter Baume —It is a matter of judgment, is it, at the borderline? Senator GRIMES —It is, as it so often is. Advice was then received, as would be expected, from the Attorney-General's Department on 7 March 1983 that pay under was not in accordance with the provisions of the National Health Act. This led to the Crown Solicitor in Western Australia advising the Department not to proceed with a particular case of fraud. A remedy was found, as Senator Haines suggested, through the insertion of a specific item in the schedule to be used where a procedure is not adequately described by a particular schedule item. The Medical Benefits Advisory Committee then determines an appropriate schedule fee for the procedure to allow the benefits to be paid. From my reading of this matter, I think what in fact has happened is that the loose pay under procedure operated perfectly happily for years until two things happened. Firstly, the lawyers got wind of it and, as so often happens, declared it illegal. Senator Haines —But they cannot declare it illegal when it was not illegal-only governments can do that. Senator GRIMES —Well, in the strict legal sense it was illegal. The second thing that happened was, of course, that the procedure interfered with the prosecution of fraud cases. A solution was found through the insertion of this specific item in the schedule to overcome that difficulty. Pay under, although technically illegal, was not improper and was not untoward. The pay under item was used as a means of paying benefits for legitimate medical services which were just not covered by the list of scheduled fees. This situation will occur as it always has occurred from time to time. Pay under, I suppose, was an administrative response to a definite need and it had been used by governments for many years. It may be bad administrative practice as it led to the payment of benefits outside the National Health Act. However, in fact, it covered a need which I suggest is always going to exist when a fee for service payment system of this type exists. When the legal advice was received early this year, the Department of Health had a remedy in place within six months. One can only regret that poor administrative practice contributed to the dropping of a potential case of fraud . However, the Government is determined to make an all out effort against fraud. Therefore, it was important to make this correction. I believe that the result will be satisfactory until the lawyers find something wrong with it too. Senator Hill, who also spoke on the legislation, was concerned about the implications of the Government's view that the overall level of supply of nursing home beds in Australia was in fact adequate. He expressed reservations about how geriatric units will operate in practice in view of the often stated belief that one in five nursing home patients do not require nursing home care. Senator Crowley also spoke about the importance of assessment teams in this area . I think we all have a very real concern that we do not want elderly people unnecessarily in nursing homes, first of all, because it is inappropriate for old people who are not in need of the sort of attention that is and should be delivered in nursing homes and, secondly, because nursing homes are by far the most expensive form of accommodation for the aged or the frail aged. The Government's fundamental position is that the needs of aged people should be assessed by people skilled in carrying out such assessments and that they should be then guided to available services that best meet their needs. I want to impress on the Senate and the Parliament in general that that does not mean we believe that a group of technocrats, particularly medical technocrats, should make all the decisions on what is appropriate for frail aged people or should try to slot people into little boxes. We certainly need a better system than exists now because in some areas the number of people who are in nursing homes but who do not require nursing home care is considerably more than one in five. In fact it has been the practice in the past, particularly in the times when nursing homes were booming in this community in the post-war years, in the 1950s and 1960s, and when social changes were occurring wherever people were not keeping their elderly parents and relatives at home with them, that some unscrupulous people quite selectively picked only the fittest and best people to go into their nursing homes and therefore received the greatest benefit for the least outlay. I think the assessment units have that first function; they can direct people to the appropriate level of care. They can make sure that the community is providing a proper balance of care and they can assist also in identifying where there are gaps in service provisions. One of the things that bedevil welfare planning in this country is the lack of proper data, the lack of any idea of just what is going on and who should be where. At present there is an imbalance in the provision of government resources for aged care services. We believe that the nursing home sector receives a disproportionate support relative, for instance, to hostels and certainly relative to community services. There is a need to redress that imbalance if our aged people are to receive the care most appropriate to their needs. In most cases that care should be given in their own homes and certainly in their own community. This does not mean for a minute that there are not areas where additional nursing home accommodation is needed and will be approved. Of course there will be a continuing need for additional nursing home accommodation as the aged population increases. Senator Hill expressed his concern at the Government's failure to, as he called it, approve more nursing home accommodation and he spoke about how this was affecting communities that had raised money, et cetera. I suspect that he has a misconception and does not realise the difference between the approvals in principle which, at the moment, are given by the Department of Health and the approvals for funding, the capital funding approvals, which at the moment-I repeat 'at the moment'-are given by the Department of Social Security. Certainly since this Government has been in office, the Department of Health has not given any further approvals in principle. Certainly the Minister for Health has announced that additional staff will be provided to process applications for approvals in principle for additional nursing home accommodation. We have deferred further applications for approvals in principle since March 1983. The Minister is anxious that, in areas where additional accommodation is needed, the new procedures for granting approvals in principle provided in this Bill will be put into effect as quickly as practicable and we are seeking staff to do that. But approvals for funding, for those who have already received approvals in principle, are going on as normal. Last year the Government, from memory, approved a batch in November for funding for the year ahead, as has been normal procedure in recent years and it approved another batch in February. I had harsh things to say about a couple as they were approved in the period between the time the election was called and the time the election was held, which I question. At the moment I have before me another set of recommendations which will go to Cabinet for approval of funding of such homes in the next Budget, 12 months ahead, to give people the opportunity to get cracking if they have the funds available now. It is important to realise that those differences occur. It is important to realise that there is a difference between the two departments which make the approvals. That difference will not last very long as we are about to establish an office of aged care so that the various functions of caring for the frail aged which are at the moment split between the Department of Social Security and the Department of Health will be put together. I think then we will get a more satisfactory situation and, under those circumstances, people will not be confused by the difference between approvals in principle and the functions of the two departments. I thank the Senate for its expedition of this legislation. I am sure it will improve our health scheme. As I have said so many times in the past, it is not the last change we will have to make to make it satisfactory. Question resolved in the affirmative. Bill read a second time. The Bill. Senator MACKLIN(Queensland)(11.02) —I wish to address myself to clause 2 basically in which certain operations which were raised by the Senate Standing Committee for the Scrutiny of Bills are made retrospective to 1 January 1975 and 13 December 1974 respectively. The issue which has already been canvassed and replied to by the Minister for Social Security (Senator Grimes) seems to me to be of more concern than to be simply brushed under the table as his reply seemed to suggest. The knowledge of the illegality of the pay under system seems to go back quite some time. Indeed, the relevant legislation, the Health Insurance Act 1973, makes it an offence to present an incorrect account to the Com- monwealth. I have spent some considerable time to try to get from the Minister for Health (Dr Blewett) information preceding the advent of this Government. The earliest documentation I have been able to get is a memorandum from the Attorney-General' s Department dated 7 March 1983. To the question: 'Are the pay under arrangements described above authorised by the Act'? the answer is no. Reference is made to the memoranda which have been sent I presume under the designation of the Director-General of the Department of Health, on this whole affair. I believe that under the previous Government-possibly under both governments previous to this Government, the Whitlam Government, and the Fraser Government- considerable medical fraud may have resulted directly out of the decision of various members of the Public Service that what the Parliament had done was not correct and it was far better to do it some other way. This is not the only instance where we are likely to find this but in this instance there is serious concern. As I understand it, basically what happens now is that the pay under item could really leave open the entire field of fraud and overservicing, particularly its detection. Section 129 (3) of the Health Insurance Act makes it possible for a practitioner to argue that she or he could not reasonably have been expected to know that what she or he did was an offence under the legislation. The Minister referred to this matter. As I understand the way the legislation has worked, it is a defence for a practitioner to argue that the word of a departmental officer approving the use of an incorrect item number is a sufficient excuse. If that were the case, it is extremely difficult for the Federal Police, the health insurance fund personnel, the Crown Solicitor or anybody else actually to discover what is going on. The Minister referred to a memorandum from the Deputy Crown Solicitor on 21 September involving a case which could have had fairly wide ramifications-not a small amount of money-and which was really frustrated by the fact that what the doctor said he was doing was already being done by people within the Department. I question whether the illegality of this activity was not known to senior members of the Department earlier than 7 March. It is almost impossible to accept that that was the case. If it was, it suggests gross incompetence that they did not know that this was occurring or that the Commonwealth was being defrauded of moneys by this method. It is all very well to say, as the Minister has said, that it was an administrative necessity to do it this way. There may be all sorts of administrative necessities, but an administrative necessity which actually turns out to be illegal is not an administrative necessity at all . An illegality in these circumstances which is against the intent of the Parliament could have been reorganised in many other ways. It could have been addressed and solved simply by bringing to the Parliament a legislative amendment, as was suggested by the Attorney-General's Department quite a long time ago, or by actually scheduling numbers for which items could be paid. It seems that the Department, as part of its excuse in the past, has suggested a rather interesting notion of what 'relates to' means in the definition of ' professional service' in section 3 (1) of the Act. The idea that 'relates to' could in fact cover so much is knocked on the head by the Attorney-General's Department saying that it is in the sense of being covered by or corresponding to a particular item in the Act. It is not sufficient in the opinion of the Attorney-General's Department for a service to be merely compatible with an item in the table. I am quite sure that the Parliament had no intention of simply allowing anybody to come up with items which he felt were compatible with the Act. Rather, the Parliament intended that items raised specifically by this Parliament should be able to be paid-services rendered by medical practitioners to their clients and claimed for specifically under those items, with no legal claim possible for those which fell outside the table. That has now been belatedly accepted, at least by this Government. I do not want to be too harsh on the current Government. After all, it has moved with what one might consider great rapidity on this matter; it has taken only six months. The previous Government did nothing at all in seven years. It is almost impossible to get into this and actually to find out what went on, yet I expect that it has been known for a great period. It may have been the avenue by which a great deal of medical fraud was committed on the revenue. At least there is that possibility. We do not know what has occurred because it is impossible to get hold of information. We are unaware of what has gone on. I do not believe it can be brushed aside quite so easily. It is a serious matter. It ought to be dealt with as a serious matter. I do not like this type of legislation which, in the case I am referring to and in the case of the legislation before us, seeks simply by retrospective provisions to fix up some administrative practices. I believe that this type of legislation should never come before this House. If we condone or play down the seriousness of these types of activities on the part of the bureaucracy the Parliament is not carrying out its duty. The Joint Committee of Public Accounts, of course, has undertaken a thorough investigation into this matter. I am not satisfied that the information supplied to that Committee was necessarily always accurate. I do not intend to put this matter aside. I believe that it ought to have been dealt with much more frankly than it has been. The answers to questions which I have had on notice for some time were expertly drawn; I must admit that. They failed to answer any of the intent of my questions but answered technically every question I put to the Minister. That is a game that a couple of people can play. I certainly will be pursuing the matter . I believe that we need a full and frank disclosure of when first the pay under item was acknowledged by any senior member of the Department of Health to be illegal, who in the Department of Health knew that it was illegal, who condoned the continual operation of the pay-under system with the knowledge that it was illegal, and who failed to respond to either the previous or the current Minister for Health about the illegality of that activity? Senator Hill —Did you say that a claim should not have been made at all? Senator MACKLIN —I am not talking about the medical practitioners. I have no knowledge about the medical practitioners because it is not possible to know what the medical practitioners were doing. Indeed, I have just suggested that they probably had a very good reason and a very good escape clause for doing what they were doing. The Act allows them to do that. If the bureaucracy allowed them to claim under a particular item or suggested that they do so, a practitioner cannot be held at fault. Senator Haines —If an inadequacy is discovered in the schedule, surely the answer is to correct that anomaly. Senator MACKLIN —Any inadequacy in the Schedule could easily have been fixed up. The suggestion by the Attorney-General's Department was to do so by legislative amendment, which is a relatively painless operation. I do not believe that this House, when confronted with the problems that were said to be of administrative necessity, would have failed to pass such an amendment. I refer to the fact that the situation has been allowed to continue for so long and that something which was known to be illegal was still being done. That is what I am objecting to. Senator Hill —But if you say the doctors were entitled to make a claim, how could it be illegal? Senator MACKLIN —It was illegal activity on the part of the bureaucracy. They were paying under items under which they were not entitled to pay. This has been accepted; it has been the case, but I do not believe that a full understanding of that illegal activity has been given to this Parliament. Senator Watson —Is it illegal? Senator MACKLIN —I am sorry; I will read the question and answer again. To the question 'Are the pay under arrangements described above authorised by the Act?' , the Attorney-General's answer was 'No'. They are not authorised by the Act. It is a plain and simple answer. The problem as I see it is that it is very difficult for either committees of this Parliament or members of the Parliament itself, if we have such tremendous problems wading through the type of material we get back when we place questions on notice, to fulfil the duties that are imposed on us. We should get full, frank and detailed answers to the types of questions that are raised and the answers ought to be provided much more quickly than in this case, where the material requested was with the Department. I have now been able to get hold of that material, but not in a simple way. The fobbing off and the chasing around that go on in these matters are extraordinary. If a mistake is made I think it will be readily owned up to. I do not think anybody in this Parliament is interested in going on a witch hunt. I think we want to make sure in future, if any activity undertaken on behalf of anybody in the bureaucracy is discovered to be illegal, that prompt action is taken and that we do not wait for years to find out about it, and then find out only by the actions of a committee of this Parliament, such as the operations in terms of medical fraud of the Joint Committee of Public Accounts which turned up this type of problem. It seems to me that there is an obligation on the bureaucracy and on governments to act and to act rapidly in relation to any such matters. Senator GRIMES(Tasmania) —Minister for Social Security) (11.16)-I shall attempt to answer Senator Macklin again, ignoring the fact that the matter he raised has nothing to do with this legislation and is not mentioned in the legislation at all, but he still deserves a further answer. I really cannot help thinking that he is making a bit much of this matter. First of all, changes have been made because it was pointed out that the administrative practice of paying under was illegal. Senator Macklin —Was that known only on 7 March this year? Senator GRIMES —My information and knowledge is that that was known on 7 March this year. Senator Macklin may have some knowledge that people knew it was illegal before that. It was, as I said when I mentioned it previously, an administrative response by people in the Department of Health-admittedly, it was technically illegal-to a situation of definite need. I point out to Senator Macklin that if we have a system of fee for service whereby fees are paid to doctors or anybody else for a multitude of technical procedures laid down by the Parliament, and those technical procedures do not cover all the things that the doctors or the other technicians do, it is inevitable that there- Senator Peter Baume —Some administrative response is needed. Senator GRIMES —There has to be some administrative response to what happens. I will take the next step. Certainly the administrative response was bad administrative practice, certainly it was technically illegal, and certainly in one case it was partly responsible for dropping a case of fraud against a doctor . When that was pointed out to the Government and to the Department the situation was changed and a new item was put in the schedule. That is what happened. Nobody is questioning those facts. I do not think we can be more frank than that. I do not think anyone in the previous Government would have had any worries, once that matter was drawn to their attention, about pointing out that the reason for the practice was to fulfil a need. Maybe it was not a good thing. Sure, technically it did not follow the extact intent of the legislation put forward by the Parliament, but the real intent of the previous legislation was to ensure that doctors and patients were refunded money for all those various items on the schedule. If the Schedule was not complete and if the Department in its wisdom could not, as it cannot, cover every item, there was a need for some practice whereby people-not only doctors but also patients-could be covered under that schedule. The problem is that Senator Macklin sees a great evil conspiracy between members of the Departmen of Health and doctors. I do not know why else- Senator Macklin —Because it took so long to get the answer back. Senator GRIMES —I do not see why else he cannot accept the fact that what we said is true. An administrative practice was brought up to cover a need. The practice was not good; the practice was illegal. It had unfortunate results, and as soon as that was pointed out to this Government it was changed. What more can we do? Senator Macklin —I have accepted that. Senator GRIMES —I do not know what the honourable senator has not accepted, other than the fact that answers took a long time to come back. Senator Macklin —What I have not accepted is that 7 March was the first time anybody knew about it. Senator GRIMES —I will find out. The question is whether the Department knew that the practice was illegal, whether it had an opinion from the Attorney- General's Department or any- one else before 7 March. I will certainly find that out. Senator Macklin —Not an opinion; that they knew about it. It is in writing. I just have not a copy yet. Senator GRIMES —That they knew the practice was illegal? Senator Macklin —Yes. Senator GRIMES —But I put it that there are practices that are illegal and practices that are 'illegal', in inverted commas. For heaven's sake, one can say : 'Look, the practice that was followed to correct that need was wrong and inefficient'. That is fair enough. I believe that it has now been corrected. Senator Hill —I take it that there was no element of fraud involved in this practice? Senator GRIMES —The practice was, in fact, to cover that situation. I believe that there is no suggestion, even from Senator Macklin, that although the practice may have been inappropriate, it was improper, given that it was trying to cover a definite need. The senator seems to think that the new procedures should have been introduced much earlier. He may be right or wrong, but it is drawing a long bow then to look for a conspiracy between officers of the Department of Health and doctors who were indulging in fraud before that. I think that he needs more evidence before he comes forward with that sort of suggestion. I just remind him of the old saying around this place, that if you have a choice between a conspiracy and a muck-up you can bet your life it is a muck-up every time. That is probably what happened here. Senator WATSON(Tasmania)(11.22) —I wish to use the opportunity afforded by the wide-ranging debate and questioning that has been allowed on the Health Legislation Amendment Bill (No. 2) to raise a query. The CHAIRMAN —Order! Before the honourable senator goes any further, I say that this is a 56-page Bill and I was unable to determine whether Senator Macklin was out of order. It was suggested that his remarks were not relevant. If I think that the honourable senator is becoming wide-ranging, I will ask him to inform me of the clause of the Bill to which he is referring. Senator WATSON —As a member of the Joint Committee of Public Accounts who was involved in the inquiry into medical fraud and over-servicing, I support the protection of the revenue from unjustifiable claims on the part of a very small proportion of very unscrupulous medical practitioners, but I ask that some sensitivity be shown in the selection of the doctors investigated. I have in mind doctors who may never have been counselled, may never have been challenged, may never have been fined. I hope there will be a positive response to my question of the Minister. I ask: Has there been a direction by the Department of Health that investigators go unannounced and uninvited into doctors' surgeries and waiting rooms, armed with a stop watch, and time the duration of patients' consultations with doctors? Senator GRIMES(Tasmania-Minister for Social Security)(11.24) —I do know of suggestions of behaviour on the part of investigators such as Senator Watson referred to. My personal view of people who, in conducting inquiries, indulge in that sort of nonsense-sitting people in waiting rooms armed with stop watches and indulging in indiscriminate questioning of patients-is that it is disturbing . It has been brought to my attention and I am in the process of finding out just what has gone on. I brought it up yesterday. I know of cases such as have been referred to by Dr Watson-I mean Senator Watson-but I have Sherlock Holmes working on it and we will see what happens. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Debate resumed from 9 November 1983, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(11.26) —The Taxation (Unpaid Company Tax) Assessment Bill (No. 4) which is now before the Senate represents the third attempt to pass measures extending the bottom of the harbour legislation. It is anticipated raising under the provisions of this Bill an additional $40m, $20m of which would be received this year. As well, the Bill provides an escape clause for public company shareholders who received no benefit and were not involved in the management of the company. That clause is included at a cost to revenue of about $5m. The Opposition is opposed to this Bill with one exception, to which I will refer later. The Opposition is consistent in this approach to the legislation because it took these steps when legislation of this kind was introduced last year, in May and a few weeks ago, and we have the same view now. At the time the 1982 legislation was going through there were attempts to include amendments to which the then Government objected. Our view is quite consistent. I state quite shortly that the sole objective of the 1982 legislation was the recoupment of unpaid company tax, without penalty or discrimination, from those who had derived a financial benefit from its non-payment. It was fundamental to that legislation that if one did not benefit from the tax evasion one did not receive an assessment for taxation to be paid. According to the explanatory memorandum circulated with this legislation, the Bill seeks to repeat some provisions from earlier legislation which ensure that liability for recoupment tax will not be escaped by reason of an ultimately unsuccessful post-sale or pre-sale tax avoidance scheme. It authorises the Commissioner of Taxation to name in his annual report persons who fail to pay an assessed recoupment tax liability in respect of unpaid company tax. It purports to remove the text which requires that an arrangement which rendered a company unable to pay its tax must be identified before a recoupment tax liability can be established. It also provides relief from liability to vendors recoupment tax in certain anomalous public company cases. It varies the evidentiary provision to ensure the constitutional validity of the 1982 legislation and it corrects some minor technical defects. To make the position of the Opposition quite clear on this legislation, the Opposition will oppose all of the measures with the exception of one clause and we will seek to amend that clause. The clause we will be able to support provides relief from liability in certain public company cases. Our amendment will have the effect of seeking to apply that relief also to private company cases. We believe that the provisions now before us again are unnecessary, that they are discriminatory and that they are penal provisions. Of course, they are to be applied retrospectively, which has been our objection to the legislation in the form we have received it from the present Government on previous occasions. The matter brought forward in this legislation with regard to the evidentiary nature of the certificate of the Commissioner of Taxation we believe is not timely. This matter has been litigated before the High Court of Australia and the normal practice of the Parliament is not to anticipate court decisions. All parties would need to consider the situation if the High Court decided against the validity of the existing legislation. We believe that that is a consideration to be made some time in the future; it is not one to be made in relation to the Bill that is before us at present. It ought to be said that the tax avoidance industry was dead by the time the present Government came into office. The tax avoidance industry was affected by the new Part IVA, the general anti-avoidance provision, which was put into the Income Tax Assessment Act in May 1982. Tax avoidance was also affected by the Crimes (Taxation Offences) Act which was passed in 1980. It was those actions of the former Government and not the 1982 recoupment legislation that had the effect of stopping the tax avoidance industry in this country. The 1982 recoupment legislation was limited to the recoupment of about $600m of evaded company tax which was left unpaid as a result of arrangements which were the target of the Crimes (Taxation Offences) Act. The provision which we are able to support does ameliorate to some extent the legislation that was passed in 1982 by providing that some partial matters may come before the Commissioner of Taxation. Perhaps we can speak more about that matter at the Committee stage. I refer briefly to section 6 (18) of the legislation, which was a matter of some public discussion quite recently when the Minister for Finance, Mr Dawkins, made public the dispensation under this section. It ought to be said that in the opinion of the former Treasurer and certainly of the Opposition that was a proper use of the legislation. It was the intention of the legislation. However, hundreds of other public company shareholders must be in the same position as the Minister to whom I referred. They would expect to receive the same treatment and I would expect that the Commissioner would apply the same treatment to them. These dispensations made under the 1982 legislation do not stem from some action by the present Government. They extend from the legislation that was passed in 1982. That was the proper use and the intent of our recoupment legislation. It has been said each time the recoupment legislation has been brought forward that the rejection of its retrospective effects would force a rise in taxation levies of one kind or another. I think those claims have been dealt with on each occasion that the legislation has been before us. Rejection of the legislation that is before the Senate today would, according to the Minister's statement, cost about $60m in revenue if all the collections that were expected to be made did eventuate. That sort of reduction in collections has not worried the present Government in other cases, even in the present Budget. The changes that were made by the Government to its legislation cost revenue between $80m and $90m. At that time the Minister for Resources and Energy, Senator Walsh, said: 'What is $ 80m or $90m in a Budget of this size? It is nothing in the overall totality of things. It has no impact at all on the Government's economic strategy'. In 1981, when we were dealing with the sales tax legislation, Senator Gareth Evans, Senator Button and Senator Walsh all said: 'What is $135m in the overall collection of revenue in a Budget of something like $45 billion?' To place any emphasis on a collection of some $20m this year or $60m under the legislation means that it cannot be regarded as of serious financial consequence to the Government. Rather, it needs to be seen as legislation implementing objectives of the Government to collect revenue to that extent. On a number of occasions the Opposition has stated its opposition to the retrospective application of the Government's unpaid company tax legislation. We are consistent in those views, as I have already expressed. Our views on the various provisions within this legislation are well known and well stated. They have been recorded on a number of occasions. We have consistently felt the need to oppose this legislation. When dealing with this legislation at the Committee stage we will move an amendment which will have the effect of extending the amelioration provision to private companies. To simplify the Committee stage, I indicate that all other provisions will be opposed by us. I hope that this Bill can be dealt with at this stage of the sittings of the Senate in a fairly speedy manner. If it is expected that we need to consider every clause during the Committee stage, so be it as far as the Opposition is concerned. But I state in as brief a manner as I am able that the provisions that have previously been opposed by us will consistently be opposed by us. On this occasion, because we wish to move an amendment during the Committee stage, the Bill will be given a second reading. But that does not indicate our support for any of the provisions other than the one I have mentioned, to which we will move the amendment that has been circulated in my name. Senator TATE(Tasmania)(11.37) —Senator Dame Margaret Guilfoyle has spoken at yet another stage of this long saga of frustration and hindrance by the Opposition of measures which are absolutely essential to the carrying out of the mandate bestowed on the Labor Government on 5 March to deal with tax avoidance and evasion and its consequences within our society. On that day earlier this year the people of Australia elected a government with the will and the integrity to carry through an assault on tax avoidance. But time and time again- the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 (No. 4) is the third such Bill this year-the Opposition has spoken, sometimes accompanied by one or two Australian Democrats although not all by any means, in order to frustrate and impede the passage of legislation to deal with what is coloquially known as the bottom of the harbour scheme and its consequences. Perhaps that is a symbol of the general laxity of the administration of the tax laws under the former Government, which has led, as I say, to the situation which we are trying to attack, with the mandate of the Australian people. If the Opposition continually fails to acknowledge that mandate perhaps later next year we will have to go to the people and seek to have that mandate renewed. I think that debates such as this, and opposition such as we are experiencing today, will come back to haunt the Opposition. Not only do we have the mandate of the people generally but, as I am sure my colleague Senator Peter Cook from Western Australia will elaborate on, the accord with the unions in February this year also acknowledged that part of the understanding between the Labor Government and the representatives of organised workers throughout Australia embraced the notion that an assault on tax avoidance and evasion would take place using all the legislative and administrative measures open to us. In April, the National Economic Summit Conference was held. Once again I will read from the communique of that Conference: All parties believe that there is a special obligation in the current environment to ensure that artificial tax avoidance and tax evasion is removed, including in the cash economy, and for the further development of a general understanding to this effect. It goes on: The Summit agrees that action should be taken to improve the equity and efficiency of the Australian taxation system. Indeed, we see these paragraphs flowing backwards and forwards between each other. One objective cannot be achieved without the other. We cannot have an equitable taxation system without an assault on tax avoidance and evasion. This Bill is part of that assault by this Government. The fact is that the Bill is only a very modified, modest version of proposals that have been brought into this chamber from time to time this year. This Bill deals only with measures to strengthen and improve the recovery of evaded company tax. To that extent, as I say, it is a much more modest Bill. It will raise only a certain amount of revenue, in the tens of millions of dollars rather than hundreds of millions. Senator Dame Margaret Guilfoyle, in relation to that, says: 'You have forgone revenue in relation to other Budget announcements, and therefore, why can you not do it here? It is only a question of $20m this financial year and $60m overall'. The modifications made to certain Budget announcements which did have a cost to revenue were made in order to achieve equity, in order not to disrupt industry, with all the consequent ramifications for employment, when it was found that particular figuring led to very dire impacts and consequences. In other words, the forgoing of revenue in those instances was in order to achieve equity in the impact of the taxation system. Therefore, there is no analogy. This Bill is required in order to achieve equity within the taxation system, and yet the Opposition, as I say, refuses to countenance these measures. These measures are necessary because of the situtation that was displayed to the Australian people, in particular late last year. The ordinary honest Australian taxpayer, whether as an individual under the pay as your earn system or as a small firm or enterprise which took ethical legal and accounting advice, was really made out to be a mug, to be someone who was rather foolish in paying his proper contribution to the revenues of the Government so that it could carry out the programs for which it was elected. I say this in relation to a Liberal government or a Labor government. It is entitled to a fair contribution from every Australian person and enterprise in order to carry out its programs. Rather, we saw the perverting of the best legal and accounting brains in this country to serve the selfish ends of certain individuals, so that, as Professor Mathews, Australia's leading academic commentator on our taxation system was led to say, at a seminar at the Australian National University, the payment of taxes by the rich in Australia had become discretionary, and it was a matter of their judgment as to whether they felt that they might make some contribution to Australia's revenues for the purposes of government; whereas the ordinary taxpayer had to bear a greater burden than would otherwise have been the case. Time and again the taxation burden on ordinary Australians or Australian enterprises was greater than it would otherwise have been. Alternatively, Australian governments had to borrow more abroad or from the Australian people, and thereby increase the deficit, the debt to which we all have to contribute in the end in order to pay it off, or the programs of Australian governments had to be curtailed, frustrated, done away with, modified or not even put into place because of a lack of revenue. The programs of the democratically elected Government have been distorted and twisted in response to the very selfish perverting of the best legal and accounting brains in Australia to the selfish ends of the tax avoiders and evaders. As a government, we came into office with a very clear mandate, endorsed by the National Economic Summit Conference, to bring that to an end. The aiding and abetting of and the conniving at tax avoidance and evasion which were features of the previous Government are continuing with the continued opposition to tax reform today. When the Opposition was in government, that opposition to reform was well exemplified in the maladministration by the previous Attorney-General in relation to the activities of the Crown Solicitor's Division, which was brought to the light of day by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. The failure of those now opposite was not only in relation to the legislative program; the administration program was particularly shackled by the refusal to provide the Commissioner of Taxation with those sinews of war which he required to go into battle on behalf of the people. We have not only brought in legislation to deal with that but we have provided those sinews of war and we are winning the battle even though we are occasionally hindered and frustrated by the sort of opposition that has been evidenced in the chamber today. Senator Dame Margaret Guilfoyle once again raised the question of retrospectivity in general as a reason for not supporting this measure. Once again one must come into this chamber and say that whilst it is true that Australia is heir to a long tradition in the common law, deriving from English legal principles and the manner in which the Westminster system has operated in relation to retrospective laws, even that tradition has acknowledged that in relation to the taxation law, revenue law, one has to adopt a standard that is different from that adopted in relation to criminal or penal legislation. Senator Watson —Still a minority view. Senator TATE —It is not a minority view. It was taken into the tax legislation of the United Kingdom and was approved by the Master of the Rolls, Lord Greene, in 1946 in a key judgment-the Master of the Rolls, as you will know, Mr Acting Deputy President, is the custodian of the common law tradition in England-in which, in 1946, he said: The fact that the Section-- in the United Kingdom legislation- 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 contest. Surely that is what we have here, a contest between, as I said, those using legal and accounting devices to evade taxation and the just demands of the Australian Govenment for a contribution to revenue. Indeed, the Australian Financial Review in a comment on the rejection of a similar Bill earlier this year by the Opposition-the Australian Financial Review is not the most radical journal in Australia's political or financial life; in fact I would say that it is far from trendy-stated: . . . 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 than with respect to income tax law. That is precisely the stand that we, in Government, take. The Australian Financial Review acknowledged that, in relation to this whole matter of the tax system, considerations of equity and fairness between taxpayers are of a greater value than the absolute importance attached to retrospectivity by the Opposition . In particular, I emphasise that no penal consequences are attached to persons by this legislation. No criminal stigma is attached to those against whom this legislation will operate. In relation to the Bill itself to which I know you, Mr Acting Deputy President, would wish me to return in order to keep within Standing Orders and to be relevant, it is also the case that, within this legislation, anomalies relief is granted. This Bill makes sensible and sensitive concessions to those who might otherwise find themselves subject to the law. Indeed, a provision is to be inserted which will enable full or partial relief to be granted in cases where relief is not available under the existing law. This will particularly assist people in cases where their recoupment tax liability was traced through an interest in a public company, that is, where they are well removed from the actions giving rise to the recoupment tax liability in question. That is the technical expression. But the point I wish to make is that this Government is not about harassing people or unnecessarily subjecting them to undue hardship which is out of all proportion to society's interest in obtaining evaded money by virtue of this recoupment law. It was never intended to be harsh and oppressive. I know that this particular provision has general support in the community and even has support in the minds of some back benchers on the opposition benches. This provision, in other words, will relieve the taxpayer of liabilty in some situations. In other situations, of course, where a liability is not properly attached to the taxpayer but where, nevertheless, dire hardship would follow if the Commissioner of Taxation kept his demand in place, of course, section 265 of the Income Tax Act is available which will enable a taxpayer to be released from liability where it is demonstrated to an absolutely independent arbiter- independent of government-that hardship will be such that, if the liability is pressed to its absolute conclusion, the impact will be such that, as I say, society's interests will in no way be advanced by pressing that particular tax liability. In relation to that matter, an excellent provision is contained in the Bill which should have the support of the chamber. There are other changes. For example, it is proposed to reinsert in the recoupment tax legislation a provision removed by the previous Government which authorised the Commissioner of Taxation to report to this Parliament the names of persons who fail to meet their liability for vendors or promoters recoupment tax. The Commissioner is already empowered in his annual report to the Parliament to give details of names of those who have evaded or avoided their liability in a culpable way. We are merely extending that provision. I believe it is an important provision because public notoriety or scorn is an effective weapon in society's armoury to secure allegiance and adherence to the law. I well remember as a child reading about Robin Hood and so on, and about the stocks in the villages. I do not believe that being put in the stocks in the village square was so much a punishment as a public humiliation. People were exposed to public ridicule and contempt. I think this is a somewhat similar situation where the people ought to be pilloried and exposed to the public because what they are doing is not merely a matter of private negotiation between them as taxpayers and the Commissioner of Taxation; it has public consequences. It has social consequences for the carrying out of the programs of the democratically elected Government of Australia. As I have indicated, if these people do not pay their proper tax liability, other ordinary, decent Australians, will have to pay higher taxes or the deficit will have to be increased or the programs of government will have to be curtailed or distorted. In those ways as I said the evasion of taxation has public and social consequences, and the public or social naming of these people is part of the battle to bring them to a clearer sense of social responsibility. After all, the American War of Independence was fought on the slogan: 'No taxation without representation'. Some in our Australian society would go further and perhaps say : 'No representation without taxation'. What I am trying to do is at least to link the social and democratic responsibilities of these tax evaders with the simple question of their contribution to revenue. I think I have exposed to the chamber most of the desirable features of this Bill. As I have said, I believe it carries through the mandate which was given to the Australian Labor Party, led so ably and popularly, dare I say, by Bob Hawke. This mandate to rid Australia of the distortions and the unfairness within our tax system is a mandate which we will robustly and with integrity pursue. The fact that Opposition members wish to continue to aid, abet and connive in relation to the tax evasion practices of some within the community will, I believe, come back to haunt them if we need to renew that mandate late next year. The political consequences of their frustration of this legislation today will indeed come back to haunt them. Nevertheless, in speaking to the Australian Democrats, who I know do not take an absolute view on these matters but who are open to the persuasion of reasonable arguments such as have fallen from my lips, I ask them, on behalf of the Australian people, to support this Bill which deserves the commendation of the chamber. Senator MACKLIN(Queensland)(11.53) —We are discussing yet again a Bill relating to unpaid company tax. The Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 (No. 4) is a hybrid Bill which has arisen out of the history of previous Bills that we have had in this area. As I understand the processes that we are likely to go through with this Bill, we will have a Committee stage, unlike with the previous Bills, and therefore it would be appropriate at that time to make more detailed comments in relation to particular clauses. At this stage I simply want to reiterate briefly the points that I have made previously on behalf of myself, Senator Chipp and Senator Haines in terms of our opposition , which I must acknowledge is now a dwindling opposition in the Senate and in the House of Representatives. I think now, out of 180-odd people, we are down to nine who oppose the imposition of penalties retrospectively. Senator Jack Evans —Consistently. Senator MACKLIN —That is a consistent stance that we have taken. We took it to both of the previous Bills of the Labor Government and we took it to the Liberal Party's Bill. Senator Robert Ray —Are you taking it to this one? Senator MACKLIN —We are taking it to this one. Indeed, if one wishes to look at the Act, the proposal to omit section 3 (12) and the various other amendments that are likely to be made or sought to be made to section 5 of the principal Act has a clear retrospective penal effect. I will spell out where that would occur. In clause 3, for example, the redefinition of the promoters' recoupment tax and the vendors' recoupment tax provides for additional tax for failure to supply information to the Commissioner of Taxation. The principal Act does not permit the Commissioner to impose additional tax on a recoupment taxpayer under section 226. This new additional tax will be included in applicable recoupment tax assessments when they commence to issue. The penalty relates to the failure to give adequate information since the commencement of the principal Act in December 1982. Clearly there is a retrospective element in the inclusion of this proposed penalty. However, there are some other aspects to which I take objection and to which, in fact, I will raise those objections as we go along. Two principal elements are left in the Bill. There is an attempt to omit section 3 (12) from the principal Act and there is the intention on behalf of the Government to seek some type of amelioration of problems for public companies. both of these have difficulties. I will take the first element and concentrate purely on that. We are now confronted with the situation that certain taxpayers will find themselves in an anomalous position. Basically, I believe we are confronted with a travesty of justice. This retrospective law will apply only to a limited period. That limited period is circumscribed by the principal Act which this Bill amends and the Crimes (Taxation Offences) Act 1980. I believe that is the crux of the problem. The principal Act which this Bill amends contains relieving provisions relating to pre-sales and post-sales that have been entered into with a reasonable expectation. The current situation, of course, is that we are not quite sure whether that section will have an adverse effect. During the election campaign in March this year a leaked memorandum from the Deputy Commissioner of Taxation suggested that the section may cause considerable problems. Doubtless, the Government will be able to tell us a bit more clearly what the problems are when we discuss that section. However, it is a bit difficult to know. Senator Walsh —What action is that? Senator MACKLIN —The fact that we are going to omit section 3 (12). Senator Walsh —Are you referring to the pre-sales tax avoidance situation? Senator MACKLIN —Yes. I have been able to ascertain since that time that, as it has not been applied, it is very difficult to know what might happen. I believe the Government is banking on possibly 300 or 400 cases being caught up under this provision. I suggest that if anybody reads section 3 (12) he will be struck by how difficult it would be in court to do very much with it. I suggest that if somebody actually succeeded in court under section 3 (12) nobody in this chamber would believe that he ought to pay the tax. I suggest to Senator Tate that he read section 3 (12) and, from his own previous knowledge of the law as a lawyer, imagine mounting a case to the courts on that provision and try to work out what he would need by way of backing. If he is interested I can give him an example of a case. I have all the documents in relation to a case that I believe may very well be one which would succeed under this provision. These documents reveal that the company has real live directors and shareholders. It has a professional registered office. The affairs of the company have, at all times both prior to and subsequent to the sale of shares in the company, been conducted in accordance with the income tax legislation and the companies code. The company still exists and continues to compy with all relevant laws. I have the annual returns which are copies of the financial statements. If it is suggested that there may have been fraud, I point out that the present directors and shareholders have co-operated 100 per cent with the Australian Taxation Office, even to the extent of providing a separate office, copying facilities and access to all relevant files to senior taxation investigators over a period of more than 12 months. There is no mention of the company being dumped, and I am glad that Senator Tate did not actually use that term because we are not talking about that. It is a nice shorthand term but it does not refer to the types of companies and situations with which this Bill is really concerned. It is really concerned with real companies, real directors and shareholders, in real situations of trade. Unfortunately the media have used another shorthand term for these provisions, having called them innocence clauses. They are not innocence clauses; they were inserted in the principal Act for a variety of reasons and I do not intend to try to rehearse what might or might not have been in the minds of the various people concerned. However, if one looks at these provisions on an objective basis one will see that they make the standard of liability to tax under the principal Act the same as the standard of liability under the Crimes (Taxation Offences) Act of 1980. That seems to me to be a reasonable reason for their inclusion. I have heard all sorts of other reasons as to why they might have been included; other honourable senators might allude to those. I just do not know, but on the objective basis on which I stand in relation to these provisions, I believe that the concurrence between the principal Act to which this Bill is an amendment and the Crimes (Taxation Offences) Act of 1980 is a reasonable basis for their inclusion. The Crimes (Taxation Offences) Act applies to certain tax evasion practices entered into after 3 December 1980. The operation of the recoupment tax legislation is restricted to the period 1 January 1972 to 3 December 1980. Both of those dates are inclusive. The second reading speech of the Minister at the time stated that one of the main tax evasion practices that the Crimes (Taxation Offences) Act was directed towards was the stripping of companies of their assets before tax was due and payable. The legislation also related to tax which became due and payable on previously derived income. Therefore, a person is now guilty of an offence under that Act if he enters into an arrangement or transaction for the purpose of securing that the company will be unable to likely to be unable to pay income tax that is payable. Therefore, we have that offence of entering into those arrangements to secure the company's inability, basically, to pay future income tax. The relieving provisions of section 3 (12), which are the core reason for this amending Bill, only apply where, after the target company has been sold to a promoter, the company entered into a scheme which, though ultimately found to be unsuccessful, could at the time be thought to have been effective in its tax reduction purpose. However, the relieving provisions do not apply where a scheme was connected with an arrangement that rendered the company not liable to pay its tax. That is an important point. So section 3 (12) of the principal Act was inserted to ensure that a vendor-shareholder did not suffer liabilities under the principal Act of a standard harsher than those that applied and still apply under the Crimes (Taxation Offences) Act. It seems that that meshing together of liabilities, as it were, is appropriate; that persons ought not have significantly different penalties applied to them under similar Acts. But what the Government is proposing to do-that is, to remove these relieving sections in relation to those individuals-will provide for an infinitely greater tax impost for an identical transaction. That, I believe, is a bad principle of law. There are other difficulties with the Act but I believe that if the Government were able to secure the passage of this particular clause of the Bill, then it may be quite amenable in relation to others-for example, the reporting of the Commissioner of Taxation to Parliament and so on. Essentially, the money we are concerned about under this Bill has been estimated at approximately $40m. With a take-back, as it were, of approximately $5m, on the Government's estimates, by certain individuals who might find relief under the anomalies clause, we are looking at $35m in terms of this exercise. The overall proposition, I believe, must be and has to be seen as relatively simple. We are yet again attempting to perpetuate something in terms of legislation that I believe is unacceptable as a matter of principle. I do not accept, for whatever purpose, that we can declare a person guilty by legislation of a crime that he did not commit. That proposition is able to be supported because we are declaring people guilty yet again by legislative form without the ability for them to have recourse to the courts. Indeed, the principal provisions of the Bill seek to remove one of the relieving appeals to the courts . We are declaring them guilty of a crime they did not commit on the basis that what we are doing is engaging in retrospective legislation. At the time that they engaged in these activities there was no law which prevented them from doing so. As I have said on every other occasion, I do not defend the government of the day for its inactivity in relation to those provisions. Senator Cook —But you sanction it. Senator MACKLIN —I do not agree with the inactivity and I do not sanction that inactivity. I believe there was gross inactivity and negligence on the part of previous governments, including the Whitlam Government, because this inactivity goes back to 1972. Knowledge of what was going on was readily available within the community. Senator Tate, for the Government, has upheld the proposition that we knew what was going on in the community, and still no action was taken by the Parliament to correct it. I believe that what we seek to do now is to violate another principle in order to fix up inactivity by the Parliament. The fault lay here and not with those people who took advantage of the laws as they then existed. A person is entitled to take advantage of the law to minimise his tax. Any individual in the community takes that advantage. The honourable senator who interjected previously, I imagine, does the same in his tax return. Senator Cook —I pay all my due taxes. Senator MACKLIN —What Senator Cook does and what everybody in the community does is to make claims which are permissible under the law to relieve themselves of certain taxes that they have already paid. They seek to get a refund. The only way that they will get a refund, presumably, is to make claims under the law. They are legitimate and lawful claims. What these people were doing, and it is acknowledged by the Government that they were doing it, was making legitimate and lawful claims. I despise the morality of it, but the point is that under the law they were entitled to do so and they did. We now propose to say: 'We will change history'. I suppose that in 1984 we will rewrite the history books. Those people were not guilty of an unlawful act. If they were, there would be no need for this piece of legislation since the Commissioner has all the powers he needs to prosecute them through the courts. The Commissioner is still able to do that today if anything that those people did was in any way illegal. The Commissioner has the power to prosecute offences committed since 1972 and he still has that power. It is acknowledged, therefore, by the Government that there was no illegal activity. Upon that basis I will not be a party to prosecuting someone, and I will not give my vote to prosecute someone, who is not guilty of a crime; nor will I declare them, by legislative form, guilty of something they did not do. I want to make it very clear that I have urged constantly, even before I came into this House, that the laws ought to be changed to stop people doing what they were doing, and that is on the record going back a long way. Yet the inactivity on the part of this Parliament to come to grips with those problems, as was exemplified by the activities of the Deputy Crown Solicitor's Office in Perth, I think is well known within the community. I readily acknowledge that the Government has won the public relations exercise on this, but I do not believe that can in any way relieve me from what I consider to be a duty to oppose those principal sections of this Act which seek retrospectively to impose yet again a penal sanction on people for what was at the time a legal action. Senator COOK(Western Australia)(12.11) -We are discussing the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 (No. 4). In other words it is the third time that we have been discussing bottom of the harbour legislation because this legislation seeks to enact laws to prevent bottom of the harbour and other- Senator Macklin —It does nothing of the sort. Have a look at it. It has got nothing to do with those companies. Senator COOK —I have had a look at the legislation, Senator. This is a question dealing with tax avoidance and tax evasion and it seems to me that every time we have put forward legislation of this character to this chamber we have met objections from the Opposition, from some Australian Democrats and from Senator Harradine. This has meant that in equity, honest, decent Australians who pay their taxes and meet their obligations are not recognised as having a right to ensure that those who avoid and evade their obligations or do not meet them and who do not pay their taxes should be made to pay them. On the simple question of equity, which is a matter I will come to in a moment, I want to argue with the points that have been put up until now, but in terms of what we have brought forth this time it is indeed much more innocuous legislation than that introduced on the last two occasions. It is estimated that the legislation we have before us today will collect only $40m in a full year, whereas it was estimated that our original legislation would have collected over $270m. Therefore, because our original legislation has been defeated we do not necessarily regard this as the ideal expression of the type of legislation a Labor government would want to enact, nor is it the type of legislation for which we have a mandate. I say to my friends among the Democrats that if they have as a slogan 'Keep the bastards honest' they ought to recognise that we have a mandate to enact the original legislation put to the House of Representatives and in this chamber earlier this year, and they ought to help us to be kept honest by supporting that legislation because they cannot sustain the slogan ' Keep the bastards honest' when they prevent us implementing our mandate, but that is an argument which I will come to in a moment. The Government has been thwarted on previous occasions and it has been thwarted by the Liberal Party, by the National Party of Australia, by three of the Democrats and by Senator Harradine. One could perhaps understand the reluctance of the Liberal Party and the National Party in dealing with any tax avoidance legislation. Last year when the Fraser Government put forward the first piece of tax avoidance legislation it was met by major outcries and division within the Liberal Party, most notably the Western Australian Branch of the Liberal Party which repudiated the Federal Party and described Malcolm Fraser, whom many people would regard as the most right wing and authoritarian Prime Minister Australia has seen, as being left wing. But one can understand how the Liberal Party tears itself apart over tax avoidance. That is clear if one looks at the record. Therefore, the most critical arguments in this debate cannot be directed across the Senate to the Opposition. Rather, we must take into account the position taken in previous debates by the Australian Democrats and the sole independent in this chamber, Senator Harradine. On past performances it is likely this legislation will be defeated. If that happens, I think the Australian community is entitled to ask why. The Government has based this legislation on many important grounds. Fundamentally, one of the most important questions of concern to this Government is that there be equity in tax laws and that it be seen. There needs to be equity in general conduct on the economic front if we are to bring Australia from the depths of economic recession to the prosperity that is rightly the entitlement of all Australians. Let me take the first area. Most Australians have always paid their tax because as wage and salary earners the tax is removed from their pay packets before they get them. There is no question of avoidance, evasion or participation in sophisticated schemes to minimise tax on their part. Wage and salary earners pay and have always paid their tax. By comparison, only a small percentage of people engage in manipulation-those engaged in buying and selling companies and in the business area-and the large-scale avoidance and evasion that has occurred. These are matters of common understanding between everyone in this chamber. Therefore, as a matter of equity, the rights of all who pay tax honestly have to be stood against the rights of the minority who do not pay. Senator Macklin —The largest area of tax evasion is the cash economy. Senator COOK —The largest area is not the cash economy. The Government has moved to do something in this significant area. The largest loss to government revenue is caused by people who manipulate other areas. To make the point as forcefully as I can in this argument, I want to point to the dimensions of the problem in terms of the rights of the majority. There was a 110 per cent increase in pay as you earn taxes collected between 1975-76 and 1981-82. In the same period, the wages and salaries of this group of taxpayers increased by 72 per cent. Between 1975-76 and 1981-82 taxes paid by the non-PAYE bracket-people involved in business, property and all the rest-increased by 56 per cent and incomes increased by 94 per cent. Therefore, over that period PAYE incomes increased by 72 per cent but PAYE taxpayers paid 110 per cent more tax; non-PAYE incomes increased by 94 per cent but non-PAYE taxpayers paid 56 per cent more tax. I think those figures have to be recited so that the point can be made as to where the tax burden falls in this country. That burden falls on people who do not have the escape routes that others claim and seek. I believe that this legislation seeks to protect and support their rights. In 1975-76 PAYE taxpayers contributed 76 per cent of all taxes collected in Australia. In 1981-82 they contributed 82 per cent. Therefore, in terms of a pie chart the wedge representing non-PAYE contributions over that period has fallen from 24 per cent to 18 per cent. I think those points have to be clearly put on the record as inequity underpins the perceptions of the community at large in terms of what is fair and honest. Those who pay the burden are entitled to see that those who do not, or who in some senses avoid it, are made to meet their obligations. If they are not and if we allow the statute book to remain as it is without the legislation being in place to protect the majority, the majority will wreak electoral redress for that. They may have an earlier opportunity than perhaps would be comfortable for some of my friends on the other side of the chamber. I turn now to the equity question. Senator Macklin —You campaigned on this in March. Senator COOK —Yes, we did campaign on this in March. I will come a little later on to the quality of our mandate on this issue. The quality of our mandate and our obligations to discharge that mandate to the community are very important arguments in this whole issue. But let me not be diverted from making the points I want to make about equity because they are fundamental to a perception by the community of what is at stake here. If we go to the national accounts released last Friday we see in those accounts that, for the 12 months up to September, the total wage and salary bill fell by one per cent. We see that the gross operating surpluses of companies for that 12 months up to September rose by 37 per cent and the gross operating surpluses for other enterprises rose by 20 per cent. In other words, in the last 12 months there has been a massive redistribution away from wages and salaries to profit. That comment is not a comment original to me. If one wants to read the Age of last Friday one will see that that is also the comment of Ken Davidson, the economics editor of that paper. It may well be that the economic theory that there requires to be higher profits for more money to be re-invested for this economy to get moving again is correct although in the present climate the expectation may be as well that whatever surplus profits there are will be invested in speculation on real estate and not create any further employment. Be that as it may, what the figures reveal from the point of view of the equity argument in this case is that wage and salary earners, in terms of their total share of gross domestic product, were worse off at the end of September than they were before. In that context, where the company sector has become better off, let us look at this legislation and at the tax measures from the point of view of the overall necessity for there to be a perception of equality of sacrifice in order to get Australia back to high profitability, more employment and greater prosperity for all. What underpins the economic strategy for this Government is the prices and incomes accord. As Senator Tate made reference to it, quite well, I too want to make reference to it. The accord rests on a perception by everybody that the load will be borne equally. Wage and salary earners are required to accept that their incomes will move in a centralised way according to the movements in prices. So in real terms the value of their wages will remain constant. The effect of a wages policy, as every commentator will agree, is central to economic recovery. If there is a perception backed by a reality that avoidance, in terms of taxes, is still at a high level-- Senator Dame Margaret Guilfoyle —It is not. The Act has been changed. There is no way in the world that this Bill will change that. Senator COOK —I am going back to what was our original legislation. This is our third try to introduce legislation to improve the tax laws of this country. As I have said, because honourable senators opposite voted against our previous legislation we are trying now for the third time to get this legislation through . The perception is that there is still large scale avoidance of tax obligations and-- Senator Macklin —Who is spreading that? Senator COOK —That is the case. Senator Macklin —I hope you are not. Senator COOK —I am not spreading it, but the record shows that that is the case. In view of that, I point out to honourable senators opposite that the reality and the record should be corrected and this legislation should be passed as indeed our original legislation should have been passed. If it is not passed, we are contributing to the view that everyone should get in for his chop and do the best he can irrespective of the economic plight of this country; we are accepting the slogans 'The devil take the hindmost' and 'Buyer beware' and all the other slogans that attend the private enterprise mentality. I make those remarks about equity because they are fundamental to the public perception of this legislation. The second area to which I want to address a few remarks concerns mandate. I think it is indisputable that the Hawke Labor Government has a mandate for this legislation, as it had for the other items of legislation we put forward. I do not necessarily want to go through a recitation of how that mandate was clear in the public mind, but it certainly was clear when we were in opposition. It certainly was clear in the policy speech, in our platform, at the National Economic Summit Conference and in the communique following the Summit. The mandate is there. Senator Macklin —So was mine. Senator COOK —I am interested by the honourable senator's interjection. Senator Macklin —I opposed the Liberal one, don't forget. You were not here then . Senator COOK —The honourable senator ran in the last election on a slogan of keeping the bastards honest. If we are the bastards in this case-that is, the Government-elected with a clear mandate to reform taxes in this area, why do the Australian Democrats not vote with us and make sure we can deliver the promise on which the Australian people elected us into office? That is the challenge they should accept. If they run on a slogan of keeping us bastards honest and then act to thwart and frustrate our mandate, they are not being directly honest with the people who have elected them. Senator Macklin —I said I would not vote for retrospective legislation. To be honest I must vote against it. Senator COOK —All right. My understanding is that last year Senator Harradine voted for similar legislation by way of an amendment. I trust that he may do the same again. A question has been raised in terms of retrospectivity. Many things have been mentioned about it. I oppose as a general concept the use of retrospective legislation. But, like all generalities, if this concept is applied in every instance it can create anomalies which, in turn, create inequities and problems. While, as a generality, we operate on the basis of no retrospectivity, we cannot apply that mindlessly in every circumstance. Each case has to be held up against that principle and tested. If there is not a commitment by governments to legislate respectively in the taxation field, we invite slick lawyers and smart accountants to manipulate the system in order to avoid their obligations. If everyone in the community knows that as soon as those smart lawyers and slick accountants manipulate the system in order to avoid their obligations, a government will move retrospectively to wipe out their ill-gotten gains, the incentive for tax avoidance and evasion is removed. While I operate on the general standard that retrospective legislation is to be abhorred, there is a perfectly good reason why retrospective tax legislation should be used, and used in such a way that everyone can be sure that no one else is avoiding his obligations. If there is a feeling that people should get in for their chop and avoid their obligations, the whole system comes unstuck. The finest definition of free enterprise might be 'how to pervert the system and take from it what one can'. This legislation is essential. However, it is a pity that this our third attempt does not go as far as our first and second attempts. For that reason we are having to make do with legislation which is not up to the level of our mandate. That is not a responsibility we bear, because we have tried. It is a responsibility which those who have opposed us bear. I hope that if they get the chance to explain their actions to the Australian community they can do so, because I am damn sure that they cannot explain them to the Senate. I support the legislation. Senator JACK EVANS(Western Australia)(12.31) —Having heard the speakers on this subject now for the third time-it is pretty much the same topic being regurgitated for the third time-a few points need to be put into perspective. The first is that the Government of Australia stands indicted. It has been found guilty of inaction and gross dereliction of duty from 1972 to 1980 when tax avoiders and tax evaders, call them what one will, ran riot around this country, not just quietly underground but blatantly and openly ripping off the Australian taxpayers as a result of their activities. They did it with the help, the blessing and-one suspects the motives-the implicit support of a number of key people around Australia, people in government and people in places such as the High Court of Australia, which had ruled, for instance, that section 260 of the Income Tax Assessment Act was ineffective to bring tax avoiders under some sort of control so that they did not move into that darker, grey area of tax evasion. Once that ruling that the government and the Commissioner of Taxation had no powers under section 260 to collect taxes was given, it was open slather. The sad thing is that the innocent victims of that ruling and the government's subsequent inaction are the darn near 15 million Australians who over that period had to pay additional tax as a result of government negligence. I am probably one of the few people in this Senate in a position to claim innocence, because I was elected to the Senate in March this year when this damage had been done and when one could look back at government inaction as an observer of that previous inaction, as one of main people in the community who had become aware of the inaction and of the sort of activity taking place- blatant advertising of tax avoidance and evasion schemes which were rife around the community and which were being used by people to avoid their obligations, whether legal or moral, to pay their way for living in this country. The sad thing is that when ultimately a government decided to take action it had to start looking for scapegoats to ensure that not all the odium compounded upon it . The scapegoats it picked out, of course, were the Opposition parties. Ultimately the Australian Democrats and Senator Harradine became scapegoats. In some cases innocent shareholders as well as the guilty shareholders became scapegoats. On top of that a search for culprits commenced. Some of the guilty parties, some of the people who should have been picked up in this net, have undoubtedly been embraced in the provisions and are now being pursued by the Commissioner of Taxation. In some cases the search for culprits developed into a vendetta against some people. That was rather sad to see because, whether justified or not, I do not believe that the powers of that guilty government should have been used against people who, whether morally right or wrong, were legally acting within their rights. The interesting thing to have witnessed over that period was that it was not the lawyers or accountants, the people arranging these deals, nor even public servants or the legislators, who were highlighted as the culprits over this decade of inaction; it was the shareholders who copped all the blame for the negligence over this period. One would have thought that with the passage of the 1982 legislation by the Fraser Government the tax avoidance industry would have been killed but, regrettably, it is still alive and well. That is one of the reasons why this measure is being debated today. It is to tidy up a little more of the legislation. Tax avoidance is alive and well because our tax Acts still provide opportunities for people legally and legitimately to avoid what others would regard as their moral obligation to pay their way in this community. In all probability, tax evasion has gone either underground or off-shore. Certainly, as was indicated earlier by Senator Macklin, the big tax evasion area, the cash economy, has made its move underground, quite effectively I am told, and is still evading or avoiding-probably evading now that it has gone underground-its tax obligations. I am not suggesting for one moment that that is a result of bad or inappropriate legislation. I think that the legislation can go only so far at this early stage in picking up the withholding tax evaders. The arrival in 1982 of the Fraser bottom of the harbour legislation came complete with loopholes for friends. That was discussed around Australia. It was discussed within the Liberal Party and it was revealed in the media around Australia that there were problems with the legislation, that some people who would be picked up were influential within the Liberal Party and needed to be accommodated. So section 3 (12) was inserted into the legislation to provide that accommodation. The sad thing to me is that while the Fraser Government in 1982 was busy looking after friends, it provided inadequate safeguards for the genuinely innocent people who could prove that they had not benefited. It was for that reason that in 1983 the first Labor Government attempt was made to remedy the position and to increase the size of the tax evader or avoider share of the community to be netted in the bottom of the harbour legislation. It introduced its first Bill. Senator Mason and I, while we felt it was justified under the mandate that had been given to the Labor Party to clear up once and for all the tax avoidance and evasion industry, persuaded the Government that some modifications were needed not just for those caught up in the 1983 legislation but also for those who in 1982 had been denied natural justice. We persuaded the Government to go down that path with us; but, in the event, that Bill was lost at the second reading stage, so no firm arrangement was made to help the people who had been unjustly caught up in the 1982 legislation. However, the Government tried again to bring in a supplementary bottom of the harbour Bill-its second attempt. Senator Mason and I went once more to the Government and again achieved a further leap forward in the agreement for the creation of an anomalies tribunal, completely independent from the Taxation Commissioner, which would hear the appeals of individuals who had been caught up in the 1982 or the 1983 legislation and who did not deserve to be hit with additional tax either because they had not benefited from the bottom of the harbour activity or because they were completely innocent of any involvement as shareholders remote from the directors making those decisions and were totally unaware, and could prove that they were totally unaware, of the moves to put the company to the bottom of the harbour. Once again, the Government's legislation failed. It did not achieve a majority in the Senate and, therefore, once more the opportunity to provide justice for the people unjustly caught up in the 1982 legislation was denied. So, on behalf of the Australian Democrats, I introduced a private member's Bill which would create that anomalies tribunal-that tribunal of appeal-completely independent of the Taxation Commissioner, which would allow people the right to set out before the tribunal reasons why they should not be assessed-that is, reasons based on the fact either that they had not benefited in any way from the sinking of the company to the bottom of the harbour or that they were completely innocent and could prove their innocence in regard to the actions taken by others. That Bill is still before us; but, of course, it will be superseded by this third attempt by the Government-the Labor Government-to expand the effects of the bottom of the harbour legislation of 1982. This third attempt adopts the proposal that we put for the creation of the anomalies tribunal and at the same time removes the innocence clause-the loophole clause-inserted into the 1982 legislation by the Fraser Government. I believe that it will be necessary for the anomalies tribunal to hear not only from shareholders of public companies who have been unjustly dealt with in the 1982 legislation or this legislation but also from private companies. It is my understanding that there are shareholders of private companies-maybe comparatively few; there might be only several hundred; perhaps as many as several thousand, but in the overall context not a great proportion-who were caught up as a result of being remote, innocent and completely unaware shareholders whose companies were sent to the bottom of the harbour by their directors without their support for, knowledge of or agreement in any way to that action being taken. Those shareholders may have received absolutely no benefit from the action of their directors but still may be caught up in this net and, as a result, be quite unjustly dealt with. There needs to be that additional provision for those private company shareholders to be embraced in that anomalies tribunal provision. I should like briefly to go over the difficulties that we in the Australian Democrats and a lot of people around Australia are experiencing with this legislation as they did with previous legislation introduced on this matter. I have already indicated that I believe that most Australians feel that the Bill covers up government mismanagement and that, that mismanagement having been discovered, the problem is now being remedied retrospectively. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Senator Dame MARGARET GUILFOYLE — I direct a question to the Attorney-General, as Minister representing the Minister for Defence and the Minister for Foreign Affairs. I again refer the Attorney to the statement on yesterday's AM program by the Minister for Defence, Mr Scholes: But with regard to the Invincible, the British Government advised us that it would not be taking up the offer of docking in Sydney. I ask: Has the Attorney-General checked with Mr Scholes that he used these words and, if he has confirmed them, is the Attorney still somewhat surprised, as he said yesterday he would be, to learn that such an offer had been made? When was the offer put to the British Royal Navy, at what level was it put, what were its terms and conditions, and when and why did the British High Commissioner intervene? Finally, in view of Mr Scholes's further statement on AM that the matter had been under constant discussion with officials at the Department of Defence and Navy, will he table all relevant signals, correspondence or records of conversations so that the confusion can be cleared up? Senator GARETH EVANS —I have discussed the matter in question with the Minister for Defence, Mr Scholes, since yesterday. He advises me that although he cannot disagree with the tape recording and transcript of the AM program yesterday, which does indicate that he used the word 'offer'-'offer of docking in Sydney'- that was not the word he meant to employ, because a more appropriate word, although he readily concedes that it is not one he used on the occasion, was ' option'. 'Would not be taking up the option of docking' is really what he meant to say. There is nothing elsewhere in the text of his answer which suggests that there was anything in the nature of an offer and certainly Mr Scholes has consistently denied that any such description would be appropriate to the exchanges and discussions which did take place between Australian and British authorities. I will refer to the Minister the question as to what, if anything, he might be prepared to table so far as documentation relating to those discussions is concerned. I would be doubtful, given the nature of it, that it would be appropriate for him to do so, consistent with the kinds of freedom of information principles that have been so vigorously and noisily espoused by honourable senators opposite. Senator ROBERT RAY —I direct a question to the Minister representing the Minister for Employment and Industrial Relations. Would the Minister agree that the marked decline in days lost due to industrial disputes over the last year is in part due to the reintroduction of a centralised wage system? Does the decline in the level of industrial disputes suggest that the now abolished Industrial Relations Bureau contributed nothing to industrial harmony? Senator BUTTON —I have already noted in the Senate on several occasions the marked decline in the level of industrial disputation in Australia since the Hawke Government was elected. One of the remarkable features of that decline has been the fact that it has occurred in recent months, during a period of improvement in the employment situation. I think that is a worthwhile observation because it is unusual that such a circumstance should arise. I do not know whether I would be able, on behalf of the Minister, to pass judgment on the worth or otherwise of the Industrial Relations Bureau, or to comment on whether the level of industrial disputation had been adversely affected by the existence of such bodies. I just make the point that in the last few years there have been two basic approaches to industrial relations in this country. One was that demonstrated by the Fraser Government. It involved a virtual armoury of legislative provisions for dealing with the consequences of industrial relations , as former Prime Minister Fraser used to call it. I think in this Senate we passed more legislation dealing with industrial relations issues than we had hot breakfasts. But all that legislation never seemed to produce any result. A different approach is adopted by the Hawke Government which has, as its elements, the accord and the attitude adopted at the National Economic Summit Conference. It is a fairly realistic and hard-headed approach by the Goverment to the unions on a variety of issues, including the restructuring of industries and so on. I think maybe the Industrial Relations Bureau did not achieve very much. I do not know whether it would have been worse or better if the Industrial Relations Bureau had not existed in the period of the Fraser Government. I think the fundamental point to be made is that there is a difference of approach which this Government recognises has difficulties associated with it in terms of the provisions of the accord. But it is a calculated approach taken by the Goverment on the assumption that a successful industrial relations climate is integral to the economic well-being of this country. Senator HAMER —My question is directed to the Minister representing the Minister for Defence and Minister for Foreign Affairs. I preface my question by referring to the Attorney-General's statement yesterday that warships are required to disarm before the enter Australian dry docks. I presume the Minister meant to say 'de-ammunition', as disarming would require the removal of a vessel's guns and missile launchers. I assume that the Attorney was not suggesting that this was normal procedure. In any event, will the Minister agree that he has been badly misinformed on this matter, since I, for one, have many times been in ships in Captain Cook dry dock with all their ammunition on board? As the Minister has admitted that the refusal of the American and British navies to confirm or deny the presence of nuclear weapons on their ships is quite reasonable, why is he trying to change this policy by requiring de-ammunitioning in an Australian dockyard for display before people such as members of the Federated Ship Painters and Dockers Union? Can the Minister now answer my question of yesterday as to what the increased risk to people of Sydney would be from a hypothetical nuclear device if HMS Invincible were in Captain Cook dry dock rather than alongside Garden Island? Finally, is not all the Government's talk about de-ammunitioning a red herring? Is it not true that the real fear was that if the Invincible were docked the militant dockyard unions would not release her from the dock and the Government would be too feeble to do anything about such disgraceful international blackmail? Senator GARETH EVANS —I would not presume to enter into a dispute about naval terminology with the former admiral, rear admiral or whatever he was, which I cannot recall. I know Senator Hamer was much more important than a mere captain. My brief yesterday did not distinguish between de-ammunitioning and disarming, although I am led to understand from subsequent discussions that disarming can refer not only to cleaning the decks of major weapons systems but also to the disassembling of triggering devices and matters of this kind which have the effect of making unusable weaponry and explosives that might otherwise have a certain potential to blow up. In those circumstances my use of the expression ' disarm' was certainly meant to subsume primarily what Senator Hamer described as de-ammunitioning, together with, possibly, other forms of activity which would have the effect of neutralising the explosive potential of weaponry on board. Having resolved, I hope, that element of confusion, the second matter is that it is the case, as I understand, it, that not all ships going into dry dock are de-ammunitioned or disarmed, in the narrower sense I have mentioned. Again, I bow to Senator or Admiral Hamer's superior experience in this respect. I am led to understand that there are circumstances in which that normal practical requirement is in fact waived, depending on the case. As to the further questions Senator Hamer asked yesterday, in respect of which I sought answers, I am in a position to say this as to the increased dangers which would be involved in the ship being in dry dock as distinct from being alongside it at Garden Island: I am advised by the Minister for Defence that the main consideration involved is that if an accident occurred it would be more difficult to move a ship from dry dock than from a berth alongside a wharf. I am always surprised to see a commonsense proposition emerging from the Department of Defence. On this occasion, it is one that seems to have some plausibility and weight. I am also advised that vessels enter dock for repairs or maintenance-that appears to be so-and safety requirements point to the desirability of not having large quantities of explosives aboard a vessel in that situation. I am further advised, in a fine example of Defence Department prose which I put into the record for what Senator Hamer might be able to make of it, of the following: There are differing public perceptions of the relative safety of ammunition on ships in dry dock and that in ships elsewhere. Consideration also needs to be given to the possibility that industrial relations questions could arise if there were doubts about the risks entailed in having ammunition and other explosives on a ship being worked upon in dry dock. I hope that that answer will sufficiently demonstrate the sensitivity of the defence establishment to the matters that have been raised by Senator Hamer. Senator COOK —Has the Minister for Resources and Energy seen the article in yesterday's West Australian headlined 'Coal power cheaper than atomic-report' in which it was reported that the non-profit Washington based research group World- watch Institute has published a study showing that in nearly all countries nuclear generated power is more expensive than coal generated power? Does the Government concur with the study's findings? Does the Government have a policy of promoting the sale of Australian coal overseas in order to encourage other countries to take advantage of the cost savings reported? Senator WALSH —I have not seen the specific report to which Senator Cook referred in his question but I have seen similar reports of what I think is the same study, that is, a study by the United States World-watch Institute on the comparative costs of nuclear generated and thermal electricity, or indeed electricity from any source. Some time ago I asked that a copy of that study be obtained as quickly as possible, but as yet I have not received it. In the absence of receiving the study and the assumptions on which it is based it is not possible to make firm judgments about the conclusions drawn in the study because analyses of that type depend very much on the assumptions used, particularly in regard to matters such as interest rates, inflation and the prices of alternative energy inputs. I presume the study notes that these comparative costs vary considerably in different regions and in different countries. The cost of nuclear power stations has been increased because of high interest rates and the long lead times required for construction. As to the second part of Senator Cook's question, certainly the Government is interested in expanding the sale of Australian coal. When I visited Europe towards the end of last month one thing I noted particularly in northern Europe was a great deal of concern about the atmospheric pollution caused by burning high sulphur coal. The sulphur dioxide-it is called acid rain-is alleged to be destroying the Black Forest and doing a substantial amount of environmental damage in Europe and also to some extent in North America. I took the opportunity to impress upon those Europeans to whom I spoke that by world standards Australia had very low sulphur coals and that we would be very happy, to say the least, to supply greater quantities of low sulphur Australian coal to at least remove that source of pollution. Finally in regard to the comparative costs of nuclear and non-nuclear electricity, on 17 November I had incorporated in Hansard some relevant figures. However, they are fairly lengthy and I will not bother to try to summarise them now. Senator MASON —My question is addressed to the Minister representing the Minister for Defence. I ask: Is it a fact that the American Government does not send warships which are nuclear-armed into New York Harbour? If this is good enough for America's largest city, why is it not good enough for Australia's largest city? Is it a fact that the presence of allied warships at Garden Island at the outbreak of a global war would make early nuclear attack on Sydney much more likely? If such visiting ships were carrying nuclear weapons, would not the chain reaction from the destruction of those weapons enormously increase the number of deaths, the damage, and the residual radiation in the Sydney area? In the light of these matters, why is the Government actually expanding the Garden Island base? Will the Government now actively consider shifting that facility from the heart of Sydney to a location that could safely be used by the ships of any of our allies and which could be substantially financed by the sale of the very valuable real estate that Garden Island represents? Senator GARETH EVANS —As to the first point, with respect to the American Government's policies so far as New York is concerned the only information I have is contained in an answer by the then Minister for Foreign Affairs, Mr Street, which appears in the House of Representatives Hansard of 8 December 1982 . He said: I am informed that no cities in the United States of America deny access to their ports by United States Navy ships in the categories mentioned. However, some ports in the United States are not visited by conventional or nuclear- powered warships either because there is no operational requirement to do so or because of particular port characteristics such as channel depth, accessibility, port services, and so on. These requirements are assessed by national, not local authorities. The criteria employed by the United States authorities in deciding visits by United States Navy nuclear-powered ships to United States domestic ports are identical with those employed for visits to foreign ports. Accordingly, I am not in a position to deny the suggestions that have been made by Senator Mason, but certainly the Government appears to have no information which would confirm it. As to the question of nuclear attacks on Sydney being made more likely by the presence of allied warships, the Government's response is that it is our judgment that United States naval visits support important Australian strategic interests. The Government will continue to welcome United States ships to Australian ports, confident that the United States Navy will apply the same rigorous safety measures in Australia as it applies in United States ports. As to the third and fourth matters about the potential destructive capacity of nuclear weapons in these circumstances, I am advised that the Government considers that global nuclear war is a remote and most unlikely possibility. Indeed, I have stated that proposition on behalf of the Government on several occasions in recent months. The risks of utter devastation inherent in conflict on such a scale sustain the maintenance of deterrence and peace. If a period of tension were to ensue and the possibility of such conflict were in prospect, it would not be assumed, as the question appears to do, that there would be no change in the pattern of activities of warships in order to take account of the changing strategic circumstances. As to the final matter with respect to the relocation of the dry-docking facility where it might be less controversially utilised by allies, the Government's response is that, provided satisfactory safety standards are observed, the considerations raised by Senator Mason in this respect should not influence the balance of judgments which led previous examinations of the relocation of Garden Island Dockyard and fleet base to the conclusion that the large capital and social costs involved in moving from Garden Island were not justifiable and that development should continue on that site. Senator MASON —Mr President, I ask a supplementary question. I referred to the fact that the moving of Garden Island could be substantially financed by the sale of the very valuable real estate Garden Island represents, which I am told would probably realise close to the value of $1 billion. Was this taken into account when the survey was carried out? Senator GARETH EVANS —Certainly that point has been taken into consideration in the briefing I have received on this matter. I understand that there is still a substantial net cost involved in any transfer, even taking into account that return from such sale. Senator COLEMAN —Is the Minister representing the Minister for Health aware of a survey being conducted by a public relations consultant in relation to the introduction of Medicare? As the letter uses such phrases as 'in the national interest', it is conceivable that a number of people who received the questionnaire would believe that it has some official standing. Will the Minister advise whether this is so or whether, as I suspect, it is being done on behalf of private health insurance companies? Senator GRIMES —Yes, my attention has been drawn to an alleged survey being done by Ross M. Walker, who is allegedly a management and public relations consultant in Sydney, who claims to be surveying prominent national figures as to whether they will take up health cover after the introduction of Medicare or whether they will continue or discontinue private health insurance that they already have once Medicare has been introduced. First, let me assure the honourable senator that this is not an official survey. There is no indication on the letter as to who has commissioned the survey, but if one reads the letter and looks at the questionnaire one can have a fair idea of what it is all about. In conducting a survey such as this to find out the facts and, therefore, to publicise the facts, there are certain criteria that polling organisations use usually that this organisation is clearly not using. First, the survey and the answers for which it is asking are not anonymous. The respondent's name is required to be put on the letter. Secondly, I believe it is necessary that the results of the survey as taken should reflect the views of the people who are taking part in the survey. The second paragraph of the letter states: This is being done in the national interest with the purpose of establishing or otherwise the considered need by the majority of private health cover. One would wonder what a survey of only a select group of public figures has to do with the general needs of the community for private health cover. But the third paragraph states: Your co-operation in replying would be appreciated as a non-reply will be taken as an indication that you are maintaining your private health insurance. In a survey taken like this, in which people are asked to divulge private information, which many people may consider to be their own business, for an organisation then to say that a non-reply will be taken as an affirmative result and to incorporate this in the findings can result only in a false result and in a grossly distorted survey. It is interesting that the letter speaks of maintaining private insurance in one section, but then speaks of whether people will take out or continue private insurance; but the questions refer only to continuation of private insurance, as though everyone surveyed would automatically have had private insurance in the first place. In summing up and in looking at this, one can conclude that this is not a survey but a questionnaire designed to produce a phoney result, which will then be reproduced as a scientific survey in order to push one line, that line being that overwhelmingly the select group of private figures take out private health insurance. The survey is not honest. The results of such a survey cannot be honest. One can conclude that the public relations aspect of Mr Walker's business is the one that is predominant here and that he is acting on behalf of interested parties to produce a specific result, not in any scientific way. Senator SCOTT —I direct my question to the Attorney-General in his capacity representing the Minister for Defence and the Minister for Foreign Affairs. I draw the Attorney's attention to yet another quotation from the interview with Mr Scholes, the Minister for Defence, on yesterday's AM program, when Mr Scholes said in respect of what he told the British High Commissioner: I set out what were the Government's requirements, the Government's long- standing policies. I ask the Attorney whether one of these policies would be that outlined to the House of Representatives last Thursday, by the Minister, when he said: This Government has a very specific policy on nuclear ships and matters nuclear . We do not permit nuclear weapons on Australian soil. As HMS Invincible is not nuclear powered, does not the Minister's AM statement clearly refer to the possibility of Invincible carrying nuclear weapons? Does the Attorney concede that the Minister raised the nuclear arms issue knowing full well what response he could expect from the British High Commissioner and forcing him into the position of having to forgo use of the Sydney dry dock on the ground of 'operational reasons'? Senator GARETH EVANS —I do not know what matters Mr Scholes was referring to in his interview on AM yesterday to which Senator Scott referred. I do not know whether one of the matters the Minister for Defence was talking about then was the matter to which he referred in the House of Representatives the previous week. I will refer that aspect of the question to the Minister to see what further information he might care to provide. As to the Government's general policy on the question of access by nuclear or possibly nuclear armed or powered ships, I simply say that that matter was the subject of further consideration by the Cabinet this morning. A number of discussion points have been identified which will be the subject of quite detailed consultations with our allies in the period immediately ahead. Those consultations will clarify the guidelines as they have operated in this area in the past because there are some manifest difficulties and obscurities in anticipating all the different situations that may arise and, to some extent, did arise in this case. Until those consultations continue it is not appropriate to say anything more publicly about what is or is not the Government's present policy. I believe, however, Mr President, that this might be an appropriate time to put in context some further matters about the course of events leading to the decision of the British naval authorities not to dry dock the ship and perhaps in that respect to add to the answer which I gave to Senator Sir John Carrick yesterday and which I promised to expand further after consultation with the Minister. The further material that I have been supplied with by the Minister is to the following effect: The British decided that, for operational reasons, it would not be necessary to dry dock HMS Invincible during its visit to Sydney. We understand that the technical problems which Invincible was experiencing were not so serious that dry docking was essential at this time. It is, of course, for the British Government to decide whether and in what circumstances it might wish to dock its ships. Further, the Government has no reason to believe that the captain of Invincible had any cause for thinking that the maintenance and repairs of the ship would not be done expertly and speedily and the ship released in reasonable time to continue its journey. Senator Sir John Carrick sought further assurances about a third point. The question of giving assurances that the work would be performed effectively and speedily did not arise. As to the last matter on which Senator Sir John Carrick sought assurances-that is, whether the Government or the captain had any reason to believe that the work might not be performed speedily and effectively-the position is as follows: We have no reason to believe that the captain of Invincible entertained any doubts about the effectiveness and timeliness of the work which might have been performed in dry dock. All that goes to the question that was essentially at issue here, that is, the operational requirements of the Royal Navy and the fact that, having regard to those operational requirements, the question of dry docking was, after some discussion, not pursued. Senator SCOTT —I have a supplementary question. I ask the Attorney-General whether the early part of his answer, in particular, means that the Government as well as our allies are somewhat unclear as to the policy that controls the docking of naval ships in Australian dry docks? Senator GARETH EVANS —There has been no lack of clarity in the basic principles. They are those that have been articulated on other occasions by Mr Scholes in, for example, the parliamentary speech to which Senator Scott referred. There may be a degree of uncertainty as to the way in which those principles are to be applied in particular cases. That is something that remains to be explored in consultation with our allies to ensure that there is no possibility of misunderstanding occurring in the future. I make no concession that there was any misunderstanding or uncertainty on this occasion. I simply make the point on behalf of the Government that, in the light of all the controversy that has been generated by this matter, it is obviously desirable to reconsider the language in which those principles and guidelines are expressed and to consult with our allies in ensuring that everyone is in fact happy with the way they operate. Senator HEARN —I address my question to the Minister representing the Minister for Defence. Is he aware of an Australian Broadcasting Corporation news report of 12 December which stated that the Japanese Prime Minister, Mr Nakasone, said that Japan would apply to all ships its long standing policy of not allowing nuclear weapons into the country and that this would apply also to HMS Invincible? Is this the same criterion as the Australian Government will apply to ships wanting docking in Australian ports, including HMS Invincible? Senator GARETH EVANS —I understand that there have been Press reports that the Japanese would apply certain conditions before approving a port call by HMS Invincible. I am not able to comment on whether these reports reflect accurately the view of the Japanese Government. I do not have that much information available at the moment. We have not discussed with Japan its policy on port calls by warships which may be carrying nuclear weapons, nor are we aware of any discussions which Japan may have held recently with others, including the British, on this matter. Under the Japanese Government's three non-nuclear principles, which have been articulated publicly from time to time, the introduction of nuclear weapons into Japan, the possession of nuclear weapons by Japan and the manufacture of nuclear weapons in Japan, all are prohibited. How in practice those guidelines are applied is not something on which I am able to give the honourable senator any further information at the moment. As to the part of her question which relates to Australia's policy in these matters, my answer to that has to be the same as that which I just gave to Senator Scott. Senator HARRADINE —My question is addressed to the Attorney-General. What will the Government do about the Referendum (Constitution Alteration) Amendment Bill 1983 and the constitution alteration proposals? Senator GARETH EVANS —The Government decided this morning that, when this matter goes to the vote tomorrow, if the Opposition, the Australian Democrats and Senator Harradine continue to insist either that the Government can spend nothing on promoting the Yes case or that the Government must spend an equal amount on promoting the Yes and No cases-that is, over and above the $5m which the Government has already committed to spend on preparing and distributing the statutory even handed Yes-No pamphlet-the proposed referendums will not proceed on 25 February. The Government remains committed to pursue the proposed Constitution alterations which have attracted broad cross party and cross government support in both the Australian Parliament and the Australian Constitutional Convention. We will give further consideration in the New Year to the most appropriate timing for doing so. Let me just add that, if any responsibility is to be attached for these referendums not proceeding in the event that the Opposition, the Democrats and Senator Harradine persist with their present attitude, it should be clearly understood that that responsibility squarely lies with those whom I have mentioned-the Opposition and the Australian Democrats. Despite all the huffing and puffing we have heard from these parties about a commitment to constitutional reform, despite all that we have heard about the desirability of measures not going to referendum without cross party support, despite all the support that has been evident over the last 10 years for these proposals at the Australian Constitutional Convention, it is apparent that the real support for constructive constitutional change so far as the Liberal Party of Australia, the National Party of Australia and the Australian Democrats are concerned is about as great as the degree of commitment of Peter Clyne to pay his taxes. Senator ZAKHAROV —My question is directed to the Minister for Veterans' Affairs. I refer to the Minister's decision last April to overturn the razor gang decision of the previous Government to allow commercial manufacturers a share of the market in supplying artificial limbs to repatriation beneficiaries. I ask the Minister whether his decision to deny any new manufacturers access to the repatriation free limb scheme has resulted in a significant reduction in the share held by commercial manufacturers in that scheme. If not, what further steps does the Minister plan to take? Senator GIETZELT —It is probably not generally known that the Rehabilitation and Artificial Limb Appliance Centre which operates under the Department of Veterans ' Affairs supplies artificial limbs not only to veterans but also to all other disabled persons throughout Australia. The cost is borne by the Commonwealth Government. The decision of the Fraser Government to take advantage of the Review of Commonwealth Functions to enter a private enterprise content into the system created a greater destabilising effect upon that organisation than I expected. As Senator Zakharov suggested, my announcement earlier this year was in two parts. Firstly, I indicated that no new commercial manufacturers would be allowed into the system from the date of that announcement because their entrance into the system would increase by about 33 per cent the cost factor for the supply of the artificial limbs. Secondly, I indicated that I would act on recommendations from an independent consultant's report on the fees and the structure of the free limb scheme. Having had a chance to look thoroughly at the RALAC organisation since then, I have come to the conclusion that the razor gang decision almost destroyed the viability of the whole operation of that scheme, which has been functioning since World War I. It is quite clear to the Government that there is no place for the profit motive in the rehabilitation services, in particular the supplying of artificial limbs to disabled persons. I have now made three further decisions designed not merely to halt the decline which the razor gang set in motion but also to create some improvement in the scheme and to get the scheme back into efficient operation. The first decision I have had to make in recent times is to freeze the share of commercial enterprises in the free limb scheme as at 31 December 1983 to prevent any unauthorised change of ownership or corporate structure by participating companies and to require those companies to use award wages in their pricing calculations, thus limiting their ability to poach skilled RALAC staff, something which has been a very big problem for that organisation. The second decision is to improve the service provided by RALAC by extending its hours of operation, providing a RALAC visiting service to country centres, including the establishment of decentralised agencies and a mobile workshop, and expanding the marketing of our services, particularly in Victoria because something is radically wrong with the operation of the scheme in that State as it relates to the State hospital system. The third decision is to control the cost of the free limb scheme by introducing measures to reduce the scope for overservicing by private participating companies. I am confident that those three additional decisions will ensure a much more reliable, efficient and cost-effective RALAC service for those who participate in the free limb scheme. Senator DURACK —My question is directed to the Minister representing the Ministers for Defence and Foreign Affairs. I refer to the discussions which were initiated as a result of the phone call between Mr Hayden and United States Secretary of State Shultz yesterday and between the Department of Foreign Affairs and the United States Government which, I take it from earlier answers which Senator Evans has given today, are continuing as a result of a Cabinet discussion this morning. Is the Attorney-General aware that British defence officials are looking already for alternative ship repair facilities in the Asian region because of the Australian Government's attitude to the docking facilities for HMS Invincible? Is the Attorney-General in a position to assure the Senate, the Australian people and our allies that the Hawke Government will not deny access to Australian port and repair facilities for allied warships and that such access will not be just on the narrow basis of safety which he mentioned yesterday? Senator GARETH EVANS —I doubt that there is anything I can add in this respect to answers already given. I did make it perfectly clear yesterday that if ever there were any question of the safety of a ship or its crew being in issue, whether that ship be merchant marine or any kind of naval vessel, there would be no question but that assistance would be rendered, under those circumstances, in whatever form necessary. There are, obviously, very much larger public policy questions involved here. When one comes to the other criteria that might be applied as far as both docking and dry docking facilities for naval warships are concerned, as I have already indicated those matters-the particular criteria to be applied, the particular principles and the particular guidelines that are to operate in practice-were the subject of Cabinet discussion this morning and will be the subject of extensive consultation with all our relevant allies in the next few days. Senator DURACK —I ask the Minister representing the Ministers for Defence and Foreign Affairs a supplementary question. How does the Government possibly reconcile that wishy-washy response with the responsibilities that we have to our allies? The PRESIDENT —I call the Minister representing the Ministers for Defence and Foreign Affairs, if he regards the question as supplementary. Senator GARETH EVANS —I regard it as no more than a piece of windy rhetoric, Mr President, and I do not answer it further. Senator MAGUIRE —Can the Minister representing the Treasurer document the interest, or lack of it, in economic matters displayed by members of the Liberal and National Party Senate Opposition, as evidenced by their performance at Question Time in recent weeks? Is the number of questions asked on economic matters an indicator of an economy which is strengthening, contrary to claims made yesterday in the Age by the shadow Treasurer? Senator WALSH —I do have some figures on the analysis of questions asked by the Opposition during this session of Parliament. The Opposition asked no questions on economic growth and on interest rates the Opposition-at least the Liberal and Country parties; I am excluding the Australian Democrats-asked one. Members of the Opposition asked three questions on the Budget. They did ask 20 on incomes policies, presumably because they do not have an incomes policy of their own. On macroeconomic issues in general they asked a total of 45 questions, which was about 9 per cent of all the questions they asked. However, that is about 6 per cent higher than the figure for the Australian Democrats; approximately 3 per cent of their questions were on macroeconomics. The Liberal and Country parties, on the other hand, take a great interest in New South Wales. They asked 27 questions about New South Wales, compared with 25 questions on macroeconomic policy, excluding an incomes policy. I can, of course, understand. Most of the questions asked by the Liberal and Country parties were on frivolous or phoney matters. Senator Boswell —I raise a point of order, Mr President. The Minister is using the wrong title for the National Party. It is the National Party, and I bring that to his attention. The PRESIDENT —There is no point of order. Senator WALSH —I do not want to be misunderstood. If Senator Boswell insists on its being the National Party, so be it. It is, however, known in my State as the National Country Party. It is known by various names and aliases. Most of the questions asked by the official Opposition were on phoney and frivolous matters. Senator Chaney —Mr President, I take a point of order. The question in no way relates to the responsibilities of the Minister or of any Minister he represents in this place. The fact of the matter is that the Minister has done a great deal to sabotage Question Time by giving long lectures instead of answers. I ask you to keep him to the question and to ensure that he permits genuine questions to be asked in this place instead of farcical questions such as that asked by the senator from South Australia. The PRESIDENT —Order! I did listen closely to the question. It did involve government administration. I ask the Minister to relate his remarks to the question and not debate the issues involved. Senator WALSH —Very well, Mr President. I can understand the Opposition's reluctance to ask questions on economic issues. I have just noted its record on economic issues. The PRESIDENT —I ask the Minister to relate his remarks to the question. Senator WALSH —Yes, Mr President. Senator Maguire also asked me about an article in, I think, yesterday's Age. I had noticed yesterday's Age. I noticed that the discredited former Treasurer is not so reticent, or perhaps astute, as other members of the Opposition in this place, because in this article he is reported to have predicted that interest rates and unemployment would both go up in the next year. He is, of course, an expert on those matters because at the end of five years of his Treasurership unemployment and inflation were both above 10 per cent; unemployment at the highest level at which it had been for 50 years, and interest rates at the highest level they had ever been. So one can sympathise with the reluctance to discuss economic policy. One can sympathise with the Opposition in general for still having as its economic spokesman a former Treasurer who, after five years, produced those results as the end result of his policy. Senator KILGARIFF —I direct a question to the Minister representing both the Minister for Defence and the Minister for Foreign Affairs. Has he seen reports that about $15,000 worth of blocks were ordered by the Captain Cook drydock in Sydney in anticipation of their use by HMS Invincible? Can he give an accurate figure as to the cost of this preparatory work? Will the bill be footed by the dockyard itself or will responsibility for the expense be borne by the Department of Defence or, possibly, the Royal Australian Navy? Who will pay? Senator GARETH EVANS —I have no information on the matters to which the honourable senator referred but I will do my best to find out as soon as possible and let him know. Senator COLSTON —Is the Minister representing the Treasurer able to advise what use is made of data produced by the question on Australian census forms in relation to religion? Is it proposed that there will be no question in relation to religion in the next Australian census? If so, what is the reason for this decision? Senator WALSH —I have a note on this matter which tells me that in relation to the first part of the question, that is, what use is made of the data, the answer is rather complicated and the Australian Bureau of Statistics would prefer to supply to Senator Colston in time a written answer and a considered reply. The second part of the question, as to whether the non-obligatory question on religion is to be included on future census forms, is currently under review. It is expected that, by the time the Senate sits at the end of February next year, a definite decision will have been made on whether any question on religion is to be included on the next census form. Senator CHANEY —My question is addressed to the Attorney-General. I refer to the unique approach which has been adopted by the Government to referenda. I do not mean by that the on-again, off-again nature of the proposals which have been put forward by the Attorney over that time, but I refer firstly to the attempt made by the Attorney and the Government, without reference to this Parliament, to re- word the questions which were to be put to the Australian people; secondly, the failure of the Government to table the regulations in the normal way so that they could have been subject to parliamentary disallowance-an omission which the Attorney sought to rectify by putting the new questions into the legislation we have recently had before us; and thirdly, the unique proposal to fund an advertising campaign using taxpayers' funds for the Yes case only. Does the Attorney believe that he advances the cause of constitutional amendment by trying to present the people of Australia with a stacked deck? Senator GARETH EVANS —I will take those issues in turn. As to the re-wording of the questions on the ballot paper, it has long been the view of many people on both sides of politics that the practice which has prevailed, albeit only since 1967-before then the short title of the Bill was used in the question-of putting the long title of the Bill served only to make more unintelligible and inaccessible to the average voters what the subject matter was that they were being asked to pass upon than was appropriate for anyone committed to the sensible operation of the democratic process. The path taken was in fact to try to write the essence of the proposal going before the people in plain, concrete, non-abstract language. That effort was made in good faith, so much so that the wording of the first question added a reference to a variation of the terms of honourable senators, which is something dear to the hearts of the No case, which was not in fact there in the terms of the long title. Mr President, these matters have been debated amply in this place and I do not think this is the occasion to debate them again. I make the point though that the re-written language of the ballot paper was made the subject of a regulation which was of course able to be and was meant to be the subject of proper debate in this place should anyone have been minded to move a disallowance motion. There is no question of bypassing parliamentary scrutiny. As to the second matter of the tabling of that particular regulation, the circumstances in which there was a delay-I readily concede an unfortunate delay- which occurred as an administrative matter have already been explained. There was no intent to deceive in any way in this respect and, if Senator Chaney wants to make such an allegation under cover of privilege, well, that is his coward's entitlement and I welcome the opportunity to pursue-- The PRESIDENT —Order! Senator Chaney —Mr President! The PRESIDENT —Order! I suggest the honourable senator withdraw that remark. Senator GARETH EVANS —I withdraw, Mr President. I think the point is made. To the extent that-- Senator Walters —Mr President, I raise a point of order. The Attorney said: 'I withdraw, but the point has been made'. I do not consider that a full withdrawal . The PRESIDENT —I ask the Attorney-General to withdraw. Senator GARETH EVANS —I withdraw, Mr President. I believe the regulations were in fact tabled last week and, to the extent that it remains relevant for them to be further debated in the light of recent developments and the incorporation ultimately of the ballot paper questions into the legislation itself, that opportunity will of course arise and, I understand, has been created by a notice of motion from Senator Harradine today. I turn to the final matter which is the question of the Government's proposed financial support for the Yes case over and above the $5m that has already been provided even handedly under the statutory obligation which the Government readily continues to accept to put a pamphlet containing the No case as well as the Yes case into every letterbox in the country. As to this particular controversy, the reason of course, I repeat, why the Government chose to follow this path is that we believed there was cross-party support and indeed cross- government support for these particular referendum proposals, as demonstrated not only by the votes in this Parliament but also by the whole course of proceedings in the Australian Constitutional Convention over the last 10 years. We believed further that there was very strong evidence from past history that the No case in any referendum campaign, whatever its intrinsic irrationality, always starts with an advantage because of the apathy of the Australian electorate to these matters, the complexity of the issues on which they are obliged to pass and the natural response of people when confronted with conflict to adopt a cautious No approach. That is well established as a matter of political science research over the better part of this century. That is a fact of life that anyone running a referendum campaign has to cope with. To get the Yes case into the same perceptual field even as the No case does require a differential effort. The fact that such an effort has not been made in the past, the fact that no sophisticated campaigning involving expenditure of the kind that was contemplated by the Government has been conducted in the past, is one clear and obvious reason, I would suggest, why so many referendum campaigns in the past, whatever their merits and their degree of bipartisan support, have in fact failed. If there are any conventions, to quote Senator Macklin's contribution to the debate on radio this morning, governing the conduct of referendum campaigns, the only one I can think of is the convention that referendums in this country always fail, and that is a convention we were seeking to break-the convention we were seeking to turn around. We wanted to create the possibility where the Yes case would be fully appreciated, given the bipartisan support it commands, by the Australian people. The refusal of the Opposition parties, notionally committed to constitutional reform and notionally committed to these measures to come on board, the refusal of the Australian Democrats to accept the force of this proposal,which is of course given added weight by the notorious public fact that Mr Grey is proposing to spend taxpayers ' money in Tasmania on the No case and that Mr Bjelke-Petersen will do the same in all those matters there has been utter refusal to take them into account by honourable senators, if that is the proper description, for reasons of crude, political opportunistic advantage and for reasons having nothing to do with the high principles which they so hypocritically espouse. Senator CHANEY —I ask a supplementary question. How does the Attorney square that answer with the fact that the Fraser Government succeeded in three of its four referendums without recourse to taxpayers' funds in the way that he was proposing? Senator GARETH EVANS —The particular matter which was most important, and universally regarded as most important, in 1977 and on which the No case people campaigned most vigorously and most irrationally was the proposal that in fact went down notwithstanding that it won the support of 62 1/2 per cent-- Senator Harradine —What was that proposal? Senator GARETH EVANS —The simultaneous elections proposal. It went down, notwithstanding that it won the support of 62.5 per cent of the Australian electorate, because of a very carefully devised and tailored No case campaign which concentrated in three small States only in electorate terms-Tasmania, Queensland and Western Australia. It was possible by the expenditure of significant sums of money by the No case campaigners and the focusing of the campaign in that way to defeat what was manifestly a proposal that commanded widespread, popular and community support across the nation. Exactly those same logistics are potentially applicable in the context of this referendum campaign and it was, of course, for that reason, amongst others, that the Government thought it entirely appropriate, bearing in mind the supposedly consensual character of these proposals, to spend the extra money-really only a drop in the bucket compared with the basic cost of the referendum-in order to promote effectively and ensure that the Yes case would be understood effectively. Senator GILES —Has the attention of the Minister for Education and Youth Affairs been drawn to an article in West Australian Education News which states that parents and students in Western Australia have described secondary schools in that State as good, caring institutions with many satisfactory courses of study? Can the Minister comment on the suggestion that education decision makers, principals and teachers may take encouragement from this preliminary research into perceptions of public education in Western Australia? Senator RYAN —Yes, I have seen a newspaper report of the matter with which Senator Giles's question is concerned. It does not surprise me at all that a survey has shown a very high degree of satisfaction by parents who choose public education in Western Australia. Nor would it surprise me if surveys showed a similar high degree of satisfaction by parents using public education throughout Australia. Certainly, in the Australian Capital Territory-my own electorate-I am very well aware of a very high degree of parent satisfaction with government schooling. However, I think it is useful to have such evidence available because some of the claims that have been made in the current education debate suggest that government schooling is not satisfactory to the majority of parents who choose it. So I am pleased to see that there is some objective data backing up what I think anybody who moves around the education community would know, and that is that, generally speaking, our government schools meet the needs of parents, teachers and students. Senator JACK EVANS —I direct my question to the Minister representing the Minister for Transport. What action, if any, does the Government intend taking to reduce the potential for a relatively minor dispute in the railways system of one State of Australia from disrupting railways across Australia? Is the Commonwealth Government taking any steps to avoid another major strike which could take interstate trains off the system, disappointing thousands of trans- Australia passengers simply because of a demarcation dispute between two unions in Western Australia? Senator GIETZELT —Senator Jack Evans asks a question which primarily at this stage is still in the jurisdiction of the State Government of Western Australia. The resolution of that dispute lies in negotiations between the railway unions and the Western Australian Government. At this stage I am advised that there is very little that the Commonwealth Government can do in respect of that dispute. Even though I concede the honourable senator's interest and, for that matter, the Commonwealth's interest in averting any sort of national rail strike, I advise the honourable senator that the matter does not strictly come within my capacity as Minister representing the Minister for Transport. I suggest that the matter is more one for the Minister for Employment and Industrial Relations than the Minister for Transport. I do not know, therefore, whether my colleague the Minister representing the Minister for Employment and Industrial Relations is able to add anything further. My advice is that it would be inappropriate to make any further comments on the dispute at this stage, except to say that it is hoped that common sense will prevail and a national stoppage will not eventuate. Senator REYNOLDS —My question is addressed to the Minister representing the Minister for Employment and Industrial Relations. Has the Queensland Premier communicated with the Federal Government his intention to disrupt industrial stability by introducing repressive industrial laws modelled on Britain's anti- union employment act? Is this not in direct conflict with the Federal Government 's prices and incomes policy which is committed to review the manner in which Commonwealth-State industrial relations systems might be better interrelated? How can the Federal Government use its industrial wisdom to persuade the Queensland Premier that such authoritarian legislation will not be tolerated within the Australian union movement and that Queensland workers are Australian citizens and, therefore, are entitled to industrial justice? Senator BUTTON —As far as I am aware the Queensland Premier has not specifically communicated with the Federal Government to indicate that he has what a former aspirant to politics in Victoria once called 'a fresh approach' to industrial relations. He has, however, made a public announcement about this matter that he was clearly impressed, I gather from what he saw overseas and so on. He is intent apparently on embarking on more draconian industrial relations legislation. Senator Harradine —Seriously, I think you should send him a copy of the select committee's report. Senator BUTTON —He is intent on introducing more draconian anti-union legislation or industrial relations legislation than that State has previously had. I was asked a question earlier in Question Time today about the relationship between the Federal Government's industrial relations policies and the level of industrial unrest in Australia in the nine months that this Government has been in office. I commend the approach adopted by the Federal Government to the Premier of Queensland for a number of reasons: Firstly, it is very important that all aspects of government in Australia be brought into the latter half of the twentieth century as quickly as possible. That applies to Queensland as well as everywhere else. Secondly, I hope that the Premier heeds the view of what I would describe as moderate trade unions in Queensland, such as the Australian Workers Union, a powerful and influential union. It has made the point that the proposed legislation can do nothing but exacerbate bad industrial relations in Queensland. I take it that the Minister for Employment and Industrial Relations will convey to the Premier of Queensland the different approach which the Federal Government has in relation to industrial relations. By common agreement in the last sitting week of this Parliament we moved towards a more unified and co-ordinated approach to industrial relations in this country when we passed the Conciliation and Arbitration Amendment Bill (No. 2) 1983. It was universally supported that there was a need for greater co-ordination and unity in our approach to industrial relations issues throughout the Commonwealth. If the Premier of Queensland thinks that in 1983 he can embark on a different course successfully, the Federal Government does not agree with him and we will let him know, for the reasons I have indicated. Senator Bjelke-Petersen —What about the rail strike in Western Australia? Senator BUTTON —I suppose that Senator Bjelke-Petersen has a particular place of honour in this Senate in that she is able to communicate with two parliaments at once. Senator Bjelke-Petersen asked: 'What about the rail strike in Western Australia?'. The honourable senator can go on until she is black and blue in the face picking up isolated instances of unfortunate industrial relations behaviour around the Commonwealth, and they will occur. But it does not make a case for a change in a system of the kind which has been mooted by the Premier of Queensland. Senator Harradine asked by way of interjection why we do not send him a copy of the Harradine report, that is, the report of the Senate Select Committee on Industrial Relations Legislation. I am sure that if I provide the postage Senator Harradine will see that he gets a copy. I hope he reads it. Senator GRIMES(Tasmania-Minister for Social Security) —Yesterday in Question Time Senator Messner asked me a question relating to the employment of staff in the Department of Social Security in connection with the proposed assets and incomes test. I undertook to provide the answer. At this stage a total of 482 staff are currently employed on activities associated with the proposed assets test. They are employed as follows: One hundred and thirteen working on planning and development activities in State headquarters and the central office, 369 new recruits undertaking basic training or who are gaining on the job experience so that they can replace staff who will be required for further training prior to the implementation of the incomes and assets test. The staff are being paid from the principal salaries appropriation for the Department of Social Security which is division 560.1.01, salaries and allowances. Senator GRIMES(Tasmania-Minister for Social Security) —This morning during the debate on the Health Legislation Amendment Bill (No. 2) 1983, Senator Watson asked me a question about some activities of what was believed to be an officer of the Department of Health in Launceston. I undertook to obtain information for him. I have had the matter investigated by the Health Department. My information is as follows: Health Department officers have undertaken a number of investigations in Tasmania including Launceston in recent weeks. I understand these investigations have now ceased. These investigations are not to imply that any doctor has, of necessity, been found guilty or is involved in fraud or overservicing. In the course of these investigations I am informed that no Health Department officer has entered a doctor's surgery in any way or behaved in any way in the manner alleged, namely, that a female officer was sitting in a doctor's surgery with a stopwatch timing patients. I am further informed that no female investigator was involved in these departmental investigations at all. Senator RYAN(Australian Capital Territory-Minister for Education and Youth Affairs) —On 16 November I was asked a question without notice by Senator Jessop relating to the decision by the New South Wales Government to transfer nurse education from hospital based to college based training. In my reply I undertook to see what information the State Minister for Health would be prepared to make available to the Senate on the subject. The Minister has provided me with a lengthy summary of the main features of the transfer proposal. I ask leave to have this information incorporated in Hansard. Leave granted. The document read as follows- The main features of the proposal on the transfer are as follows: 1. All student nurses currently in training in hospital based schools of nursing will not be affected and will be able to complete their studies in hospital nurse training schools as hospital employees. 2. Hospitals will continue to train midwives, enrolled nurses and mothercraft nurses for the time being. 3. No students will be recruited by hospitals into programmes preparing nurses for general, psychiatric and mental retardation nursing registration after 1984. 4. Recruitment to hospital based programmes will continue in 1984. 5. Commencing in 1985, country and metropolitan colleges of advanced education in New South Wales will offer a total of about 3,000 student places a year into nursing programmes leading to the award of a diploma (UG2 level) in nursing. The student numbers enrolled in basic nursing programmes in colleges funded by Health by April 1987 is expected to be about 7,500. 6. Teachers of nursing employed in hospital based schools of nursing in New South Wales will be afforded job opportunities in colleges of advanced education , detailed arrangements for this will be developed in consultation with relevant industrial organisations and the higher education sector. 7. Courses will aim at preparing a safe and reliable first year registered nurse. All basic courses will include instruction in medical/surgical, psychiatric, paediatric, maternal and child health nursing and nursing care of the developmentally disabled and the aged. 8. A state planning group of senior officers from health, education and treasury has been established to develop a detailed plan to implement the proposal in consultation with the nursing profession, higher education sector and the health system as a whole. Much of the implementation will be effected at the local level by negotiations between colleges and health services in their geographical area. 9. Courses which propose a compulsory period of paid workforce experience as part of the course will not be agreed to for funding by the health department because of the difficulties this would create for hospitals as employers. However, some colleges may offer study by part-time mode as the question of employment is then unrelated to completion of the course. 10. Clinical teaching will be the financial responsibility of colleges. It is anticipated that a variety of arrangements will be made depending on local circumstances and the expertise available in both colleges, hospitals and health services generally. 11. It is anticipated that the nurses registration board will require about half of the course to be devoted to practical training in either a simulated or real clinical environment e.g. hospitals, community health. The courses will consist of about 6 semesters of 16 weeks full time study. 12. Health will fund the full equivalent full-time student (EFTS) costs of colleges for the conduct of these basic nursing programmes. 13. Hospital nurse training school facilities and equipment will be available for use by colleges if required. Colleges will gradually undertake responsibility for the maintainance costs of such facilities from their EFTS funds provided by the state health department. 14. State savings made as hospital based student numbers reduce will be allocated on a per capita basis for students commencing after 1984 in colleges of advanced education. Fourteen colleges are involved and the slight variation in costs between colleges, and the college places for state funded students will be monitored initially by the state planning group. Senator CHANEY(Western Australia-Leader of the Opposition)(3.09) —I have had a brief discussion with the Leader of the Government in the Senate and have told him I would be seeking leave to read into the Senate record a letter written by Mr J. E. Ryan of the Department of Foreign Affairs which relates to a number of debates we have had in the place led by Senator Primmer who made certain references to Mr Ryan. I seek leave to read that letter into the record. Leave granted. Senator CHANEY —I thank the Senate. Yesterday in the Sydney Morning Herald a letter appeared over the name of Mr J. E. Ryan, Department of Foreign Affairs, Parkes Place, Canberra, A.C.T. headed 'Ryan on Primmer', in the following terms: Sir: I refer to the attack made on me in the Senate on December 8 by Senator Primmer. While I do not even intend to deign to dignify the senator's assertions with a detailed refutation, I believe any fair-minded citizen would support my call to the senator that he repeat his extravagant claims outside the protection of parliamentary privilege. Those who know me are aware of the service I have given to this country, going back to 1946. I am confident that the Department of Foreign Affairs will independently establish that the senator's statements are totally without foundation. That is the end of the letter. I thought in fairness to Mr Ryan and in light of the sort of debate which had taken place that should be on our Senate record. Senator RYAN(Australian Capital Territory-Minister for Education and Youth Affairs) —Papers are tabled in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I ask that the list be incorporated in Hansard. Leave granted. The list read as follows- 1. International Labour Organisation Instruments Adopted by the 68th Session of the International Labour Conference Held in Geneva in June 1982-Convention No. 157-Maintenance of Social Security Rights 1982: Convention No. 158-Termination of Employment 1982: Recommendation No. 166-Termination of Employment 1982-and Protocol to the Plantations Convention, 1959 No. 110-together with the text of a statement by the Minister for Employment and Industrial Relations relating to the Instruments 2. Department of Defence Support-Annual Report 1982-83 3. Phosphate Mining Company of Christmas Island Limited-Annual Report 1982-83 4. National Exhibition Centre Trust-Annual Report 1982-83-pursuant to section 63H of the Audit Act 5. 1983 Session of the Committee on Disarmament Geneva-Report of the Australian Delegation 6. Department of Trade-Annual Report 1982-83 7. Australian Bicentennial Road Development Program-Annual Report 1982-83- pursuant to section 27 of the Australian Bicentennial Road Development Trust Fund Act 1982 8. Department of Immigration and Ethnic Affairs-Annual Report 1982-83-the report also includes the operations of the Adult Migrant Education Program which is required under the Immigration (Education) Act 1971 9. Child Migrant Education-Report 1982-83-pursuant to section 12 of the Immigration (Education) Act 1971 10. Participation and Equity in Australian Schools-Report by the Commonwealth Schools Commission (related to report No. 19) 11. The Law Reform Commission-Report No. 22-Privacy-Volume 1 Background-Volume 2 Proposals-together with the text of a statement by the Attorney-General relating to the Reports 12. General Administration and Operation of the Papua New Guinea Superannuation Scheme and the Contract Officer's Retirement Benefits Scheme for the Year Ended 30th June 1983-Report by the Commissioner for Superannuation 13. Operation of the Special Employment-Related Programs Act 1982-5th Report 14. Australian National Railways Commission-Annual Report 1982-83-pursuant to section 41 of the Australian National Railway Act 1971 15. Academic Salaries Tribunal Annual Report 1982-83-pursuant to section 12G of the Remuneration Tribunals Act 1973 16. Australian Institute of Criminology-Annual Report 1983-pursuant to section 33 of the Criminology Research Act 1971 17. Criminology Research Council-Annual Report 1983-pursuant to section 43 of the Criminology Research Act 1971 18. National Energy Research, Development and Demonstration Council-Annual Report 1982-83-pursuant to section 9 of the Coal Research Assistance Act 1977 19. Commonwealth Tertiary Education Commission-Recommendations for 1984- Supplementary Report on Participation and Equity Program (related to report No. 10) Instruments and Ministerial Statement Senator COOK(Western Australia)(3.10) —I move: That the Senate take note of the papers. This is a series of conventions adopted by the International Labour Organisation in June 1982. The conventions go to a number of matters and are accompanied by a text commenting on them by the Minister for Employment and Industrial Relations (Mr Willis). While it is true, as the Minister makes clear, that the Labor Government of Australia has not yet deliberated on its final attitude to recommending the adoption of these conventions, some of them are obviously appropriate for adoption in Australia and others are less appropriate. The International Labour Organisation, a sub-organisation of the United Nations, is a major and important organisation for industrial relations in Australia. This country has participated in the ILO all the way through. It has played an important role. It is respected. The Prime Minister of Australia (Mr Hawke) was a member of the governing body for many years and a leading participant in debates at the ILO. Last year he opened the session that later brought forth the documents the Senate has before it today. Australian delegations to the ILO, of which in the past I have been privileged to be a member, have played a significant role and are respected on the world stage for making significant contributions to international debate on industrial relations. Irrespective of the differences employers, unions and governments might have domestically, and while we form a tripartite delegation to attend the ILO, it is amazing how much accord and commonality of view can be found and jointly expressed in that world forum. While all those things are true, it is unfortunate that in the period of office of the last Government the Committee of Experts on the Application of Conventions and Recommendations of the ILO found, on application by the Administrative and Clerical Officers Association of Australia and the Australian Public Service Association, that the Commonwealth Employees (Employment Provisions) Act transgressed one of the conventions of the ILO. While Third World countries and countries with authoritarian and military regimes from time to time are held by the Committee of Experts to have broken ILO conventions, it is not expected that a developed country such as Australia, with a mature system of parliamentary democracy, should break a convention which it has adopted. Two significant conventions have been tabled today. One relates to social security and deals with the reciprocal exchange of benefits between countries. Because of Australia's wholly government-funded and government supplied social security system, as opposed to contributory systems in other countries, it is not as obvious that we should proceed in haste to adopt that convention. The other convention before us relates to termination of employment at the initiative of the employer. I participated in the ILO debate on this convention. It is unfortunately important in Australia today. One finds in any country suffering the throes of economic recession that workers are victimised in employment, that sexual harassment is rampant in the employment situation, and that workers have their employment terminated at the initiative of the employer without consultation because of automation, structural change or mere economic matters. This convention seeks to encode internationally a series of provisions which would ensure proper conduct in those circumstances. It is important to note that the Australian Government, in making submissions to the recently concluded job security case taken before the Australian Conciliation and Arbitration Commission by the Australian Council of Trade Unions, was backed by this convention in all of the submissions that it made. It is an important convention that Australia would do well to adopt. It is also significant that Australia, unlike a number of other European and, in this case, Asian countries, including Japan, has difficulties in effecting automation and changes in the economy. That is because we have a tradition of not consulting with the workers who will be affected by those changes. I conclude my remarks at that point. I commend the papers to the Senate. Question resolved in the affirmative. Annual Report 1982-83 Senator Sir JOHN CARRICK(New South Wales)(3.15) —I move: That the Senate take note of the paper. I wish to speak briefly on the question of the day, that is, the availability or otherwise of dry docking facilities through the Department of Defence Support. In recent days the Attorney-General (Senator Gareth Evans), speaking on behalf of the Government and the relevant Ministers, has added confusion to confusion and has refused to come to the nub of the matter. He is certain that HMS Invincible sought to have repairs done and that discussions took place intimating that the Government was willing to allow it to do so. I understand also that substantial preparatory measures were taken at Garden Island Dockyard to facilitate the docking of the vessel and that considerable expenditure was incurred in that regard. Then suddenly a number of things happened. The Minister for Defence, Mr Scholes, made a statement on the matter and after that Invincible decided that it would not proceed. There has been no explanation of this at all; just deliberate confusion. This took place after the debacle when Mr Cain, the Victorian Premier, sought to exclude nuclear powered ships from Port Phillip. It is important to know that Mr Hayden had to eat his words and to lay down certain principles. Those principles were laid down following a meeting on 22 June at which I understand Mr Scholes, the Minister for Defence, was present. These are important things for the public to realise. The Minister for Foreign Affairs, Mr Hayden, acknowledged that a failure to accept visits by nuclear armed warships would, in his words, 'effectively demolish' the ANZUS alliance. That is very much what has happened on this occasion although we are dealing with another ally. Mr Hayden went on to say: If we were to require a declaration that ships were nuclear-armed, it would make it virtually impossible for the Americans to operate in the context of ANZUS. He said further: Nothing I have said here would prevent the use of our ports for maintenance, essential repairs or refits, regular rest and recreation for crews and ships of allies or treaty partners. That was Mr Hayden's statement. Nevertheless, what he said would happen has not happened. The very reverse has happened. Contrary to what Mr Hayden said on 22 June, Mr Scholes intervened with something quite different. He said that we could not have nuclear armament ships being dry docked in Australia. Where was the basis for that statement? That was a deliberate rejection of what Mr Hayden had said in the past. More and more nonsense has been talked. The Attorney-General treats this Senate like a group of schoolboys. He gave a complete misrepresentation of nuclear armaments. He talked of them exploding as though those kinds of armaments would explode. As everybody knows, they are not triggered in their normal storage situation and there is no circumstance in which they will explode. He has added a schoolboy misstatement to the whole situation. I think the crux of what he said today when he was talking about the various factors was his statement that an industrial factor might be involved. Indeed, we have not heard enough about this situation. I do not believe that anything as serious as this has happened in recent years. Here is a threat to the defence security of Australia, the very rejection of our allies. We say to the British and the Americans: 'You cannot get repairs here for ships that are nuclear armed'. Something very drastic has happened. What has happened in the last few days is quite different from what Mr Hayden said on 22 June. The Australian people need to know why the statements of 22 June were not applied in this case. Was the Australian Government unwilling to ensure or incapable of ensuring that such a ship could be docked, repaired and released? What went on? That question is unanswered and should be answered. Senator MASON(New South Wales)(3.20) —I was a little distressed to hear Senator Sir John Carrick who, like myself, is a senator for New South Wales, raise this matter and canvass some important issues; but they are not the only important issues at stake. The Australian Democrats and I would be the last to denigrate the ANZUS alliance; we would be the last to say that we should not assist Britain whenever we can. We are very well aware of the historical background and the importance of these friendships and alliances. But I should have thought that the duty of a senator for a State is to think first for the people of that State. I cannot for the life of me see why we should tolerate or continue to tolerate a situation in which our largest population centre, Sydney, is being compelled by circumstances to be the place in which nuclear weapons are to be regularly located. That, after all, is what is being said by people who say that HMS Invincible should not have been denied dry docking in Sydney. The other side of the coin is to say that the people of Sydney must tolerate a situation in which, without notice or knowledge at any time, peacetime or wartime, they must have nuclear weapons in their midst. Let us remember that Garden Island is right in the middle of Sydney. It is a quarter of a mile from the Opera House. Sydney is our largest centre of population; approximately 25 per cent of Australians live there. I do not believe that anybody will bring in nuclear weapons with the idea of them exploding. But the history of the world has always depended on the odd chance. Although the risk of having these weapons in Sydney is a very small one-I acknowledge it to be small-the consequences could be absolutely appalling. Senator Sir John Carrick —But they do not explode. Senator MASON —They explode if somebody hits them with another missile. Senator Sir John Carrick —They do not. Senator MASON —Indeed they do. I suggest that Senator Sir John Carrick do some more reading. I can recommend some material to him. If a nuclear weapon were dropped over Garden Island and there were a ship in that place carrying nuclear weapons, of course those weapons would vapourise and their isotopes would be scattered over a wide area. Writers of the calibre of Jonathan Schell, the noted American who wrote the highly respected book, The Fate of the Earth, last year, have researched this matter and have set the consequences for a city. If a nuclear bomb or a nuclear reactor is exploded by a bomb, there would be approximately eight times the extent of damage as if the city were hit by a nuclear weapon without those things being in place. I recommend that honourable senators read that book and check on the research, as I have, because it is impeccable. The answer is not, of course, to deny our ANZUS allies facilities, nor is it to say that the people of Sydney should be put at risk. That is woolly thinking; it does not grasp the necessary nettle; it is irresponsible. We must look very carefully again at the means which we are to use to help our allies. As I have said in this place before, it is ridiculous that we should locate B52 bombers in a population centre, in Darwin. We have a large new airfield at Learmonth right on the Indian Ocean to which we have allocated a great deal of money. Why can that airport not be upgraded? Is it that rest and recreation are more important than the lives of our citizens? I have yet to hear any other reason for the absolute insistence that these dangerous weapons should be placed in our centres of population at the risk of our own people. Garden Island is an extremely large section of central Sydney in an area of very high property values. I put this point at Question Time to the Attorney- General (Senator Gareth Evans), who comes from Melbourne and not Sydney so I will forgive him. He does not appreciate the enormous value of the real estate on Garden Island which, after all, would be the equivalent, if it were half park and half high rise development, to that of Elizabeth Bay and areas of that kind. The opportunity exists for us to move Garden Island out of Sydney. It is a nettle we should grasp, and the sooner the better. Not to do so is simple, lazy irresponsibility bordering on the criminal. Question resolved in the affirmative. Senator CROWLEY(South Australia)(3.25) —I move: That the Senate take note of the paper. I am very interested to take note of the report of the 1983 session of the Committee on Disarmament in Geneva. In particular I find it of some real use to follow the agenda and the deliberations of such a committee. Those of us who have any concern at all about matters of disarmament know the continuing frustration of seeming to talk to an empty space, where neither the military- industrial complex nor the governments of the countries involved in the production and maintenance of nuclear weapons seem to heed or hear what people around the world say. So I find it quite interesting to read this report on the deliberations of the Committee. The Committee has not been established for any great length of time but it does seem in the short period since 1978 to have spent a lot of time discussing its agenda and what should be on it, rather than dealing with the agenda items themselves. The problem of what gets on to the agenda seems to have been the substance of much of the original meetings this year. I was interested to read too that the delegations that attended the conference operate informally in three political groups-a group of 21 non- aligned and neutral countries, a western group which includes Australia, and a socialist group, comprising the Soviet Union and its allies. I was also interested to note that China continued to stand aside, not joining any group, and that Romania consulted either the socialist group or the group of 21, according to the issues involved. The report notes that during the course of the deliberations the United States continued its broadly cautious approach to the nuclear test ban, prevention of nuclear war, outer space and protection of nuclear facilities issues. I am interested in the caution of the United States in discussions because I think that stands in contrast to its practice in the matter of production of nuclear arms. The Western states in general accorded a political emphasis to much of the discussion in 1983 and it is reported that this of course had to do with the increased tension between East and West and a sharpening up of the debates over the period when there was an increased distancing, I suppose one would say, of the relationships between the East and West sectors. But the group of 21 countries, it is reported, expressed new levels of impatience with both the procedural and substantive aspects of the Committee's work and 'pressed spiritedly for negotiations on all items on the agenda'. That line in particular strikes me as something about which we can be a little heartened. Certainly, there is no report that anything too dramatic has changed but some countries are beginning to argue rigorously for more to happen than merely further discussions on agenda items. The report also indicates that the Australian delegation devoted special attention to two items that Australia regards as having priority and on which we have the capability to make constructive contributions, in particular the nuclear test ban discussions and the chemical weapons convention. In both areas delegates from Australia were assisted by experts from the relevant departments. Throughout the work of the Committee the delegation took opportunities to put Australia's view on the broader issues of international security, prevention of nuclear war and non-proliferation. It would seem that Australia's view on these matters is well understood and well stated on our behalf. I seek leave to continue my remarks later. Leave granted; debate adjourned. Annual Report 1982-83 Senator MAGUIRE(South Australia)(3.29) —I move: That the Senate take note of the paper. The 1982-83 annual report of the Department of Trade indicates that in that financial year, following two disappointing years, Australia's exports grew by 13 per cent. The report confirms that in that year we had a positive balance of trade, after a deficit in the previous year. That is a very welcome development. It also indicates that the higher export values in the last financial year were due to higher contract prices for minerals and, very encouragingly, stronger growth in manufactured exports, something which is long overdue. It is very striking that in 1982-83 the share of rural products in Australia's exports fell to 36 per cent compared with a figure of in excess of 40 per cent in the previous year. That 36 per cent share of exports possibly is the lowest in Australia's history. Of course, in that financial year the figures reflected the drought which affected most States of Australia. Most of the farming community was affected. It also reflected the poor world prices for various Australian export commodities. It was said once that Australia rides on the sheep's back but I think the figures for 1982-83 give some suggestion that certainly in that year that was not the case. For example, last financial year 45 per cent of all Australia's exports came from minerals, fuels-for example, coal-and metal products, a figure now well in excess of the share of exports contributed by the rural sector. It is very striking that last financial year the exports in the minerals group grew by some 28 per cent, a very rapid growth indeed. In fact, in recent years the minerals group has been contributing most of Australia's export growth. It is very encouraging that in the last financial year exports to member countries of the Association of South East Asian Nations grew very rapidly and there was good growth in our exports to the People's Republic of China. The Senate Standing Committee on Industry and Trade is looking at that subject at the moment to try to encourage further growth in trade with China. One matter which concerns me greatly in relation to our balance of payments is the growing share of invisible items incurred by Australia. For example, in 1979 -80-three financial years ago-intangible items in the balance of payments cost Australia $4.7 billion. But in 1982-83 the intangible items-that is, royalties, copyright, property income and so forth-exceeded $6 billion for the first time, a very rapid growth in the intangible element of Australia's balance of payments . Those intangibles or invisibles now actually cost us in the order of 30 per cent of the total value of our exports. I think that matter really needs to be looked at. It is very striking that of that component of intangible items the one known as other property income-that does not include all property income-grew by 80 per cent in three financial years to a massive $3,400m. Over $3,000m each year is now being taken from Australia in the form of property income. Over that same period of three financial years the cost to Australia in respect of royalties and copyrights grew by over 50 per cent. I think it is time that those intangible items in our balance of payments were the subject of a comprehensive study to identify the trends at work, to try to establish what causes are at work and perhaps to identify areas where Australia and Australian firms could contribute more. Question resolved in the affirmative. Annual Report 1982-83 Senator REID(Australian Capital Territory)(3.34) —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 PETER BAUME(New South Wales)(3.35) —I move: That the Senate take note of the paper. This report includes a report on the operations of the adult migration education program as required under the Immigration (Education) Act 1971. I want to use the few moments available to me to set down a gross dereliction of an election promise by the Australian Labor Party Government in that it has failed to implement a specific promise to a group of teachers who operate within the adult migration education service. I received a copy of a letter dated 1 December from Carole Elvin of Newtown, Sydney, written to the Prime Minister (Mr Hawke) in which she states: Dear Mr Hawke, Early this year you stated 'Labor will create a permanent Adult Migrant Education Service to provide English instruction for all new arrivals who require it and to overcome the enormous backlog of need. All full-time casual teachers will be transfered to permanent service. We will provide $3.68 million during the first year of government to facilitate this transfer'. There cannot be a more specific promise than that-a promise that in Labor's first year of office $3.68m would be provided to establish a permanent adult migrant education service and that all full time permanent teachers would be transferred to that service. The letter from Ms Elvin goes on to make it clear that that promise has not been kept and that teachers in the adult migrant education service have not had extended to them the facility of full time employment that the Labor Government promised. If one looks at other reports from within the education community one finds that the same promise-publicly made and widely known-is being quoted and the Government is being called on to honour what it promised and what it has failed to provide. It promised an amount of money-$3.68m. It has not delivered that amount of money. In the Budget it provided merely $800,000, which is less than a quarter of the amount of money promised. The Government has not given to the teachers who operate in adult migrant education the certainty or the assurance which they want and require. Before the election Labor Party spokesmen went to the migrant education teachers and promised they would do better then the Government they sought to replace. They replaced that Government. Labor is now in government. The Minister for Immigration and Ethnic Affairs (Mr West) should have redeemed that promise. It was a specific promise to people who simply want to be able to have permanent employment in providing to migrants the kind of language teaching they require and deserve. They were entitled to believe that a promise for a certain amount of money in the first year was a promise Labor would redeem. But, along with so many other promises made as election bait before the people went to the polls, the promise has been set aside and has not been honoured. Senator Tate —Have you seen today's Bulletin? Senator PETER BAUME —Senator Tate, who interjects, was a member of the Party that made that promise. Senator Tate was party to that promise. Senator Tate is one person who has to explain why he and his colleagues made the promise when it suited them in going to an election and why they now have broken that promise. The honourable senator can sit there grinning from ear to ear because he got the votes of these people. He got the votes when the promise was made and he has failed to redeem the promise. We know that in the whole education area, not only adult migrant education, Labor's record so far has been characterised by the breaking of many promises. Those promises referred to what would be done in its first year. This is merely one more of them. When people write to the Prime Minister and beg him to redeem promises he made because they affect them, it is our duty to draw to the attention of the Parliament the deception which has been practised upon adult migrant education teachers in this country. I seek leave to continue my remarks later. Leave granted; debate adjourned. Annual Report 1982-83 Senator MAGUIRE(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Report and Ministerial Statement Senator TATE(Tasmania) —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 HARRADINE(Tasmania) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TATE(Tasmania) —I present the sixteenth report of the Standing Committee for the Scrutiny of Bills concerning the Australian National Railways Commission Bill 1983, the Bounty (High Alloy Steel Products) Bill 1983, the Bounty (Steel Mill Products) Bill 1983, the Live-stock Slaughter (Export Inspection Charge) Validation Bill 1983, the Management and Investment Companies Bill 1983, the Prices Surveillance Bill 1983, the Sex Discrimination Bill 1983 (No. 2), the Steel Industry Authority Bill 1983 and the Telecommunications (Interception) Amendment Bill 1983. Ordered that the report be printed. Senator TATE —I lay on the table Scrutiny of Bills Alert Digest No. 17, dated 14 December 1983. Senator MAGUIRE(South Australia) —I present the 220th report of the Joint Parliamentary Committee of Public Accounts. Ordered that the report be printed. Senator MAGUIRE —I seek leave to have a short statement on the report incorporated in Hansard. Leave granted. The statement read as follows- Report 220 of the Joint Parliamentary Committee of Public Accounts contains the Department of Finance Minute on the Committee's Report 193-Reports of the Auditor-General 1979-80 and March 1981. Report 193 was tabled in Parliament on 20 April 1982. The Finance Minute was forwarded to the Chairman of the Committee on 4 November 1983. The Department of Finance Minute is the formal mechanism used for responding to the Committee's recommendations. Examination of Reports of the Auditor-General is part of the Committee's prescribed activities. Report 193 presented the Committee's findings from several public hearings into matters raised by the Auditor-General's Reports for 1979-80 and March 1981. The matters included in Report 193 were: Department of Defence-HMAS Stirling Department of Transport-Payment of monies for the Second Hobart Bridge in advance of demonstrated need A.C.T. Schools Authority-Delays in the presentation of financial statements Department of Foreign Affairs-Accounting at overseas posts Department of Defence The Auditor-General raised a number of matters with the Department of Defence concerning the administration of the naval base HMAS Stirling in Western Australia. The Committee was pleased to note at the time of its Inquiry that the Department was in the process of rectifying the matters raised by the Auditor- General. The Committee is also pleased that the Department has adopted its recommendations to proceed with the purchase of two tug boats and to expand the range of stores held at HMAS Stirling. Department of Transport The Committee's inquiry into the Department of Transport arose from comments by the Auditor-General that a payment for the Second Hobart Bridge of $450 000 from the Department of Transport to the Tasmanian Department of Main Roads was made in advance of a demonstrated need for funds. The Committee concluded that the payment was made in good faith but that sufficient care was not taken to ensure that the necessary conditions for the payment of the grant were met. The Committee is pleased that the Department of Transport has instituted new arrangements which will prevent a recurrence of this problem. A.C.T. Schools Authority The Committee's Inquiry into the A.C.T. Schools Authority arose from comments by the Auditor-General concerning the delay in the submission for audit of the Authority's financial statements for 1976-77, 1977-78, 1978-79 and 1979-80. The delay was caused by a dispute between the Authority and the Department of Finance over the form of accounts and uncertainty as to how to account for non- government monies collected locally by schools. The Committee's major recommendations were that the Authority adopt accrual accounting and that its legislation be amended to allow greater accountability of non-Government monies. The Committee is pleased that the Authority has taken these actions. The Authority's financial statements for 1981-82 have been prepared on an accrual basis and the A.C.T. House of Assembly has agreed to amendments to the A.C.T. Schools Authority Ordinance 1976 to make monies raised locally monies of the Authority for auditing and financial reporting. However, the Committee is concerned at the length of time taken by the Authority to achieve a satisfactory response. Department of Foreign Affairs The Committee's inquiry into the Department of Foreign Affairs arose from comments by the Auditor-General regarding deficiencies in accounting and financial administration at overseas posts operated by the Department. The Department informed the Committee that it was aware of the problems and that a Joint Management Review was in progress. The Committee also suggested that the Department review the Finance (Overseas) Regulations and where necessary seek permission for special procedures. The Committee is pleased that the recommendations of the Joint Management Review and its other recommendations have been largely implemented. In conclusion, the Committee is generally pleased with the responses contained in the Finance Minute. However, it wishes to stress again the need for timely responses to its recommendations. I recommend this report to honourable senators. Senator WATSON(Tasmania) —I present the 221st report of the Joint Parliamentary Committee of Public Accounts. Ordered that the report be printed. Senator WATSON —I seek leave to have a short statement on the report incorporated in Hansard. Leave granted. The statement read as follows- The 221st Report of the Joint Parliamentary Committee of Public Accounts contains the Department of Finance Minute on the Committee's earlier report No. 196. The Committee's 196th Report which examined the curatorial and conservation functions of the Australian War Memorial and other aspects of the National Collection was tabled in Parliament on 27 April 1982. The Department of Finance Minute is the formal mechanism used by the Government for responding to the Committee's recommendations. The Auditor-General had reported in March 1981 on a number of weaknesses and inadequacies disclosed during a comprehensive audit of the Australian War Memorial. Broadly, the Auditor-General found: lack of formal written objectives in regard to curatorship, loans and conservation; inadequate control, security, stocktaking and assessment of the collection; gaps in catalogues and registers and no maintenance or restoration programs; inadequacies in the loans policies. In general the criticisms of the Auditor-General were conceded and the thrust of the Memorial's response was to blame lack of staff. In the area of conservation alone there was an estimated backlog of 450 manyears. Whilst focusing on the state of the War Memorial's Collection, the Committee examined other aspects of the national collection held by the National Library, National Gallery and Australian Archives and warned of the consequences of their neglect. The Committee described the National Collection as being at a 'crisis stage' as a result of years of neglect and a lack of recognition of its worth and value. Given the importance and value of the National Collection of which the War Memorial's Collection forms a significant proportion, the Committee saw a need for a review from the national viewpoint as to how much the National Collection is valued and what price the nation is prepared to pay to retain it. The Committee identified the need for a more equitable and coordinated allocation, improved management and expansion of resources for the care and conservation of the National Collection. The Committee is pleased to note that the main thrust of its recommendations have been accepted and implemented. In response to the Committee's inquiry the Public Service Board announced in 1982 the following changes at the Australian War Memorial: expansion of full-time staff ceiling by 10 to 124; approval for the position of Registrar of Collections; creation of permanent positions of Curator; approval for a senior officer responsible for writing the official history of the Vietnam War and the Malayan Emergency; secondment of an experienced officer to assist in the preparation of an ADP strategic plan for the War Memorial. The Committee's recommendations were addressed by an Interdepartmental Committee established on 23 July 1982. As a general response, the IDC considered that overall benefits could be gained if there were a formal co-ordinating body from which the Minister could receive advice, particularly on issues affecting more than one institution. The Advisory Committee on National Collections (ACNC) was established to provide an effective means of co-ordinating advice to the Government on all issues affecting the National Collections and of facilitating the sharing of resources and co-operation between the institutions concerned. ACNC is chaired by the Department of Home Affairs and Environment and includes the executive heads of the Australian Archives, the Australian National Gallery, the Australian War Memorial, the Museum of Australia and the National Library of Australia with representatives from the Public Service Board and the departments of Finance and the Prime Minister and Cabinet. The ACNC has been asked to produce major reports on resource sharing and funding; arrangements for improving the conservation and preservation of the National Collection; and cataloguing items both in the National Collection and held by Commonwealth departments and authorities. The 1982-83 budget for the National Library was increased by $12.6m for extensions which included a new and modern conservation facility. Also announced was an $11m modernisation and renovation building program for the Australian War Memorial to be completed in time for the 1988 Bicentenary. The Committee is pleased to note the interest generated by this Report and the recent media coverage concerning the preservation of historic and archival material vital to Australia's National Collection. I commend the report to honourable senators. Senator WATSON —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator WALSH(Western Australia-Minister for Resources and Energy) —by leave-On behalf of the Minister for Education and Youth Affairs (Senator Ryan) I seek leave to have the text of a statement regarding the report of the Commonwealth Schools Commission on participation and equity in Australian schools and the report on the Commonwealth Tertiary Education Commission recommendations for 1984, supplementary report on participation and equity programs-I understand Opposition honourable senators were given a copy of it some time ago- incorporated in Hansard. Leave granted. The statement read as follows- I wish to draw the attention of honourable senators to two significant reports concerned with the development of the Participation and Equity Program. These are the Commonwealth Schools Commission's Report ''Participation and Equity in Australian Schools'' and the Report of TAFE Council of the Commonwealth Tertiary Education Commission ''Recommendations for 1984-Supplementary Report on Participation and Equity Program''. Preparation of these papers was required in the funding guidelines to the Commonwealth Education Commissions which I issued on 28 July 1983. I indicated then the Government's wish to receive papers from the Commissions outlining proposed general principles and directions of development for the Program in 1984. For 1984 the Government has allocated $74 million ($71.6 million in estimated December 1982 prices) for the Participation and Equity Program (PEP). The new program subsumes the School to Work Transition Program under which $49.4 million was allocated in 1983 ($48.6 million in estimated December 1982 prices). The Government sees the PEP as the centre piece of the overall framework of youth policies which it is developing. The Schools Commission and the TAFE Council will administer the program with the Department of Education and Youth Affairs exercising a strong co-ordinating role to ensure that education, training, income support and employment policies are harmonised to the maximum possible extent. The approach has been endorsed by the Australian Education Council and by the historic first Youth Ministers Meeting held in November this year. The program will work towards the important national goal of all young Australians completing a full secondary education or other appropriate education or training. Participation of our young people in education and training lags significantly behind a number of comparable countires. It is the general standard of education of Australians which will sustain national progress. Policies which resulted in only about 30 per cent of our youth completing secondary education, compared with 90 per cent in many other OECD countries, must be changed. In addition the Government is concerned about the unacceptably high level of youth unemployment-currently 22 per cent for 15-19 year olds. The Participation and Equity Program places strong emphasis on equity. It will seek to develop education systems under which the less advantaged groups in the community can receive a fair share of the range of benefits education brings. The position of women and girls and other under-represented groups such as Aboriginals and some ethnic groups will be given particular attention under PEP. The Government hopes that PEP will provide a focus for involving people in creating a constructive consensus about education. Employers and unions, parents and the community generally have an important part to play in developing and supporting constructive policies for education and training provision in our schools and TAFE colleges. The Government expects that non-institutional initiatives will be taken under the program, particularly for the benefit of young people who would otherwise be unlikely to participate in education or training. PEP represents an important stage in the developing co-operation between the States and the Commonwealth in respect of schooling and TAFE. Ten years ago, in more abundant times, the Labor Government began its program of substantial support for education from which all schools and TAFE institutions benefited and in which the real needs of schools serving disadvantaged communities were first addressed. Now we must resume that important work. The success of PEP will depend, to a very large extent on the work of the large State education systems which, historically, developed because of a concern for equity-the need to deliver services to children in vastly differing geographical and social circumstances. The conditions of the 1980s present new challenges to these systems and also to the non-government school systems. The Commonwealth is confident that the partnership between the States and the Commonwealth will enable productive efforts to meet these challenges. The Commonwealth Government has had to exercise restraint in many important areas of public spending because of the difficult economic circumstances which it inherited. The increase in funds which it has committed over the next three years to PEP and in other areas of education training and support for young people shows our commitment to young people and a recognition of their significance in national recovery and reconstruction. The reports now presented by the two Commissions are important in the sequence of development of PEP. Since the Commonwealth's intentions were announced in general terms in July, the Commissions have consulted with State and non- government authorities about the program's development. Arrangements to ensure the orderly continuation of Transition Program activities consistent with the new program have been put into place. State and non-government authorities are currently developing their 1984 programs and some of these have been submitted to the Commonwealth. The Commissions' reports will be of particular significance for allocation of the additional funds to be made available in 1984. During that year significant progress will be made towards changes in schools enabling them to give all students and especially those from a disadvantaged background a rewarding and useful education. In TAFE new courses and activities will expand the possibilities for youth, particularly those currently unemployed. The Government expects that the needs of the severely disadvantaged will be given increased prominence in the provision of services. COMMONWEALTH SCHOOLS COMMISSION REPORT The Commonwealth Schools Commission's Report makes recommendations on the program covering its developmental nature during 1984, the targetting of effort appropriately amongst schools, and the allocation of funds between school-level and system level activities. I now outline the Government's response to these recommendations. The Commission recommends that 1984 should be a developmental year for schools during which the foundations are laid for the long term effort required for the achievement of the Program's goals. While it is essential for the Program to be phased in this way, I am concerned that positive and concrete steps are taken in 1984 to address the many issues confronting secondary education which the Schools Commission has outlined in its agenda for action. This agenda focusses on the following areas of major importance: curriculum assessment, accreditation and credentialling teacher/student/parent interaction teacher renewal and support school structure and organisation post-school links (especially with TAFE) groups with special needs public support for education Underpinning the Commission's recomendations is the principle of co-operation at all levels-among students, parents and teachers within the school, between school and community, among schools within a locality or region, between State and Commonwealth. The Program will build upon existing Commonwealth and State programs and activities in secondary education. The extra resources being made available for the Participation and Equity Program will provide the means of giving these initiatives and the co-operative principles I have referred to a significant impetus. I welcome the detailed examination and investigation of the educational implications of the two elements of the new Program, participation and equity, undertaken in the Schools Commission's paper. Its discussion of questions associated with the inequitable educational provisions for a number of important groups of young people in our society-Aborigines, those from working class backgrounds, migrants, girls-provides an important basis for specific recommendations on program administration. As a result of its analysis of the Program's two key concepts and to ensure that the funding provided will have the maximum possible impact, the Commission has recommended that a limited group of secondary schools be given priority for funding in 1984. The target group should total about 40 per cent of government and non-government schools in each State or system. Inclusion is to be determined on the basis of socio-economic, retention and participation data. I endorse the Commission's approach on this, but have also asked it to develop ways for all secondary schools progressively to become involved in and to benefit from the Program. The Commission has stressed the importance of change and development taking place in individual schools or groups of co-operating schools, and has recommended that the majority of funds for 1984 be devoted to school based projects and activities. The balance of funds will be available for systems to develop support services, to disseminate information and foster understanding, and to promote research and development activities. I believe this emphasis on individual schools is most important if effective reform is to occur, and I have therefore accepted the Commission's proposals. It will be most important that this approach is administered flexibly and that the Schools Commission provides opportunities for consultation with State and non- government authorities about its application in their individual circumstances. The Commission's Program Guidelines to be issued in January 1984 will set out ways in which these arrangements can be introduced. The Government regards this as a most important Commonwealth initiative, and the Commonwealth will be closely involved, not only through its membership of State Committees, but also in the development of national perspectives for the schools program. The Commonwealth Schools Commission will establish a committee to advise it on aspects of the implementation and development of the program, to assist with consultations, and advise on Projects of National Significance. TAFE COUNCIL REPORT The paper from the Technical and Further Education Council indicates the broad lines of activity under the Participation and Equity Program in TAFE in 1984. While the program is particularly concerned with 15-19 year olds, courses will be available to young adults up to the age of 24, many of whom now have limited access to appropriate education programs. The emphasis will be on the provision of places for the most disadvantaged groups. The Government acknowledges the important role being played by TAFE in improving the employment prospects of young people. TAFE authorities are proposing to structure PEP courses so that students can more readily enter the wide range of vocational programs in TAFE which many of them are well able to complete with success. We fully support this approach: PEP courses will help to provide them with the confidence, the vocational awareness and the motivation they need. Our high youth unemployment rate causes this Government the greatest concern. PEP will not itself create jobs: other measures of this Government directed towards economic recovery are helping in this task. But I commend the TAFE Council's views that the benefits of PEP should be measured in much broader terms. For those young people whose employment opportunities are limited, these courses can help to replace frustration and disappointment with useful skills and greater self-esteem. In 1984, our expectation is that nearly 17,000 young people will undertake PEP courses and an even larger number of school students will be involved in link programs between schools and TAFE colleges. The Government is anxious to encourage closer co-operation between the sectors, leading to much more extensive arrangements for cross-crediting. The Government does not support the user pays approach to the funding of Link Courses provided by TAFE for secondary school students as put forward in the TAFE Council's report. I am discussing this matter with State Education Ministers with a view to there being interim Link Course funding arrangements in 1984 pending their thorough review during the year. Since the TAFE Council completed its paper, detailed submissions for PEP in 1984 have been received from a number of States. These indicate a very positive reaction to the Government's Guidelines. I refer to some of the major initiatives. In accordance with Government emphasis on youth who are particularly disadvantaged, New South Wales is proposing to provide special courses for Aboriginals, students from various ethnic backgrounds and isolated students. The needs of women and girls are receiving special consideration in terms of courses which widen their suitability for, and awareness of, possible employment options. In South Australia, for example, course to introduce trades to young women and courses to enhance career awareness amongst rural young women will be introduced. Courses of a general rather than specific vocational kind have been available in TAFE in recent years and will be further developed. In Queensland, for example, such courses will embrace basic vocational skills, employment awareness and personal development. They will also provide ''survival skills'' to help young people to cope with difficult circumstances. Victoria has placed particular emphasis on complementary arrangements between the Schools and TAFE Sectors and with local and community projects. In South Australia, courses to integrate disabled young adults into mainstream vocational courses, a Foundation Program for the intellectually handicapped and courses for people in remote areas will be introduced. PEP courses will be tailored to meet local circumstances. TAFE Colleges will work closely with officers of the Commonwealth Employment Service in the selection of students and the development of courses. Proposals will be approved by the TAFE Council as they are received on a State by State basis. I will make announcements as they are approved, and States will be able to proceed with the new Program from the beginning of 1984. The Participation and Equity Program will help the TAFE Sector to contribute to the Government's objective of providing a comprehensive range of educational provisions for young people within the framework of an overall policy for youth. In particular, PEP will give an impetus to structural change within the TAFE sector and will assist States in targeting resources more efficiently to groups who, for various social and financial reasons, are under-represented both in education and employment. STATE COMMITTEES In the July 1983 funding guidelines to the Education Commissions I referred to the Government's intention that joint Commonwealth-State Committees should operate in each State to plan the implementation of the Program. After consideration of the Schools Commission's proposal on the structure of these Committees, the Government has concluded that State Committees should be established with the following membership, to plan the implementation of the government schools and TAFE programs: Chairperson (State) 1 Government Schools 1 Technical and Further Education 1 Equal Opportunities 1 Parents 1 Teachers 2 Students or Youth Organisations 2 State Labour Department 1 Commonwealth Department of Employment and Industrial Relations 1 Commonwealth Schools Commission 1 Commonwealth Tertiary Education Com- mission 1 Commonwealth Department of Education and Youth Affairs 1 - TOTAL 14 - The Commonwealth accepts the need for some flexibility in the Committee structure to meet the particular circumstances of State and Territories and I would be prepared to consider limited modification to the above structure at the request of State Ministers. I hope that State Ministers will be able to ensure that a reasonable balance in male and female membership can be achieved through official as well as non- official appointments. I would also hope that in their operations the State Committees would consult with groups representing Aboriginals, ethnic communities and the handicapped. Non-government committees should be constituted along broadly similar lines with representatives from both Catholic and other schools in the place of the State authorities. CONCLUSION I emphasise that the Government sees the Participation and Equity Program as of key importance in stimulating the changes needed in education to meet the aspirations and needs of our young people. The reports of the Education Commissions provide a basis for planning and development of appropriate action to proceed. I look forward to fruitful co-operation between the Commonwealth, the States and non-government school authorities, with the active participation of parents, teachers, young people themselves and the community, in the implementation of this important program. Senator PETER BAUME(New South Wales) —by leave-I move: That the Senate take note of the statement. The Opposition welcomes the report of the Commonwealth Schools Commission on Participation and Equity in Australian Schools and the report of the Commonwealth Tertiary Education Commission, and the statement by the Minister for Education and Youth Affairs (Senator Ryan) in relation to the reports. As was made clear in the debate last week on the States Grants (Education Assistance-Participation and Equity) Bill to establish the participation and equity program, the program has objectives which are shared by the Opposition. If the Government is able to build upon what was started in the school to work transition program and if the Government is able to achieve greater participation in more relevant courses it will enjoy the enthusiastic support of the Opposition in what it is seeking to do. In looking at the statement and then at the reports one is struck by the statements made in relation to tertiary education, by the compliments that are paid to the school to work transition program on which, of course, the participation and equity program is based. It is made clear in the report from the Tertiary Education Commission that the school to work transition program was achieving many of the objectives which are set down for this new program. In particular it was identifying certain groups which are disadvantaged, and the details of that are set out in the report. However, what pleases the Opposition is that from the school to work transition program we have a solid base on which this Government and this community can build in trying to increase participation and equity. I will speak for only a couple of moments and will concentrate on only one aspect in one of the reports which was drawn to my attention by the Minister's statement, and that is the section which deals with the subject of assessment, accreditation and credentialling. One of the real problems in Australian education has been that children can go through our education systems, State education systems generally, and can come out at the end of 10 years, 11 years or 12 years with not a single credential or a single qualification which they can take to an employer or which they can look at themselves to get some sense of achievement out of their educational experience. We have a system in which there tends to be one major hurdle for accreditation at the end of people's school training. It has seemed to me for a long time that the credentialling approach in Australia leaves a lot to be desired. I am attracted by moves which have been made recently in New South Wales to provide a more comprehensive means of credentialling. When I was in England earlier this year I had the opportunity to discuss credentialling with English education authorities. I learned, for example, that the Inner London Education Authority, which operates a system bigger than any we have in Australia, is examining credentialling in a very particular and positive way. It was put to me then by Mr Stubbs, the Chief Education Officer, that there is no reason why we cannot develop a portfolio approach to credentialling whereby pupils leaving an education system could carry with them a formal record of their achievements, whether or not they are able to pass the formal examination for university entrance. The difficulty we have had in this country is that the final qualification which provides generally the only useful credential for schooling is one which has been determined by tertiary institutions for their legitimate purposes and which leaves without a single qualification many students who cannot satisfy that credential. Mr Stubbs put to me earlier this year that an approach which might allow each student to develop a portfolio of achievement is one that might be looked at. I would commend that. If that is what the report is talking about, it is something which the Opposition would support. I endorse the other approach to achievement and credentialling which has been put to me. That approach recognises that pupils might move at different speeds according to their academic ability and prowess and that they might meet standards at their own speeds, rather than being required to satisfy the normative standards for their age or peer groups each year. It has been put to me that students studying for music examinations in Australia simply take each level when they are ready. They take each level as they are prepared for it. Having passed it, whenever they pass it, they go on to the next level. There seems to be considerable merit in looking at our schooling system and at the credentialling and accreditation systems within the schooling system from the same point of view. Why should it not be possible for a student at one time to be studying mathematics at year 11 level, English at year 9 level and history at year 8 level? There should be no reason whatsoever why that should not be possible. It would give to the student extra flexibility and a chance to succeed at a speed he or she could accept as being appropriate for himself or herself. Senator Jack Evans —In that specific area. Senator PETER BAUME —I accept Senator Jack Evans's interjection. At the moment we have a system of credentialling and of accreditation which is placing barriers in the way of students and contributing to the unsatisfactory experiences which many of our students have. I said that that was the only point I wished to talk about in detail. I wish to commend the Commonwealth Schools Commission and the Commonwealth Tertiary Education Commission for the way in which they are responding to the Government' s call in this program. I indicate to the Government that we will continue as an Opposition to look at the programs to see whether they are achieving their objectives. We wish those programs well. We wish them well on behalf of students throughout the Australian education system. We hope that the Government is able to achieve its aims of greater participation and greater flexibility. As I said at the outset, the Opposition will do all it can to help promote positive outcomes in education. Question resolved in the affirmative. Senator JACK EVANS(Western Australia)(3.52) —Prior to the suspension of the sitting for lunch I referred to the dilemma which this Government faces, a dilemma which the previous Government faced, which was the making of Australian governments and which came about as the result of the gross negligence of a series of governments in this country. That negligence was compounded by inaction in certain departments and was made far worse because of a ruling by Justice Barwick which let a great number of tax avoidance and evasion schemes through the net because there was no section 260 to pick up those tax avoiders and evaders and make them pay their just dues to this country. The Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 (No. 4), more commonly known as bottom of the harbour legislation, has arrived as the third instalment of this Government's endeavours to tidy up the 1982 legislation passed by the Fraser Government and to expand that legislation to embrace more tax avoiders and evaders. It is late. It is very late as a remedy for the problems that have been created and have built up over that 10-year period. I will not deal any more with the problems that this Government, the previous Government and their predecessors met in bringing down this legislation. The problems are not just those of the Government. They are problems that concern the Australian Democrats. This Bill, like its predecessors, contains the retrospective element. I know that I speak on behalf of all the Australian Democrats when I say that nobody denies the need to clean up tax evasion in this country. The Australian Democrats are united in their efforts and in their support for any government which moves to clean up tax evasion in this country. The question is how can it be done and, more importantly, how can it be done with justice, with fairness and with equity. This legislation contains the retrospective element. Its purpose is only to clear up loophole provisions which were contained in the 1982 legislation. Therefore, one could probably argue that it is not retrospective in terms of its ingredients in taxation assessments and that all it will do will ensure that everybody who should have been picked up in the 1982 legislation is picked up. Despite that, I appreciate and sympathise with those Australian Democrats who have been absolutely consistent in opposing any retrospective legislation, legislation which says: 'The things that a person did legally last year or five or ten years ago will now be deemed to be illegal'. I can understand that point of view. I repeat that the three Australian Democrats who in 1982 announced their opposition to retrospective legislation and who stood rigidly by that position should be respected and, I believe, are respected by most members of this Parliament. Colin Mason has consistently adopted a very principled stance that if a person robbed the taxpayers of Australia in 1975, 1977 or 1980 and the Commissioner of Taxation caught up with him in 1983, the Taxation Commissioner should hit him with a tax assessment. The fact is that that form of robbery was conducted by many people under the guise of phony tax avoidance schemes as distinct from blatant tax evasion schemes. Therefore, those people thought that they were going to get away with it forever. This creates a problem. The problem is one of principle because it means that to catch up with these people one must apply legislation retrospectively. Senator Mason and I have been consistent in our points of view. We believe the sins and the actions of those people were deliberately aimed at robbing the people of Australia, at avoiding and evading obligations, by allowing their companies to be committed to the bottom of the harbour so that the Taxation Commissioner could never catch up with their misdeeds and therefore discover whether they were legal or illegal. Senator Mason and I maintain that in those circumstances there should be an overriding principle of ensuring that justice is done to the whole of the people of Australia. One of the problems that the Democrats are experiencing difficulty with is that the system as it was in 1982 and as it will be under this legislation did not and will not allow for any appeal from shareholders who feel that they are being unjustly dealt with. As I indicated earlier, a Democrats' private member's Bill is currently before the Senate. It aims at giving the right of appeal to people who have not benefited from and who were unaware of the moves that were being taken by the directors of their companies to send their companies to the bottom of the harbour. It is my understanding that the Government agreed to that proposal each time we put it to the Government. I am delighted to see that that proposal is part of this new legislation. The repeal of section 3 (12), the original loopholes clause which was inserted in the 1982 legislation, is something for which this Government believes it has a mandate. As its objective is consistent and has been consistent right the way through, to ensure that everyone who sent a company to the bottom of the harbour and benefited from that should pay the tax, the repeal of section 3 (12) is an appropriate move. I should like to refer to a couple of minor anomalies. I hope to get the Government's response. One is that this new Bill gives the Commissioner of Taxation the right to refuse to disclose to shareholders who are to be assessed under this legislation information about the company's actions which were the cause of the assessment arriving. That is a harsh move to be taking in this legislation. Therefore, I appeal to the Government to withdraw clause 4 (c). I also suggest that it is harsh, and it is not normal practice, for late payers to be named by the Commissioner of Taxation. All sorts of people are named by the Commissioner, but under this legislation late payers will be named. That sets them apart from others. It is not a fair approach to tax legislation. Again, I ask the Minister to consider withdrawing clause 4 (a). My final appeal to the Government is to support the amendment which I shall be moving in Committee, which will become clause 13, which would give those shareholders caught up in this legislation the same right to 60 days in which to appeal as was given to those who were originally caught up in the 1982 legislation. It is only fair that these people, who were under the impression from the outset of the 1982 legislation that they were not caught in this net and therefore took no steps to make their appeal within the requisite 60 days, should be given that same right of appeal. My amendment would give them that right. I ask the Government to support it. Senator WALSH(Western Australia-Minister for Resources and Energy)(4.02) —Most of the contributions to the debate have been quite general in reference to tax avoidance and tax evasion. However, I should like to comment on a couple of matters. Senator Macklin, if I heard him correctly, claimed that he had a case which would be affected by section 3 (12) of the principal Act, backed up by documents. I found it a little hard to follow him here, but essentially he said that there had been no fraudulence, no deliberate tax evasion or no participation in an arrangement which was clearly designed to evade tax at some stage, and that the vendor-shareholders of a particular company had not been participants in that arrangement. If Senator Macklin has such documents, I should like him to tell us, at some time, whether he supplied those documents to the Australian Taxation Office. As far as I know, they have not been supplied to the Taxation Office or to the Government. While it would be improper for the Commissioner of Taxation to supply documents about a particular firm to the Government, it would certainly not be improper for Senator Macklin to do so, since presumably the alleged firm in question gave him the documents for that purpose. It is the Committee stage of this Bill that really matters. Senator Jack Evans raised a matter in support of the amendment proposed by Senator Dame Margaret Guilfoyle, to extend what has been known as the anomalies provision to private companies as well as to shareholders in public companies or shareholders in private companies in which public companies were stripped, which in turn had shareholdings in public companies which were stripped. Senator Jack Evans said, as an example in justifying that proposed extension, that he knew of individual shareholders in private companies who had no connection with the directors, the people who set up the tax evasion schemes, and received no financial benefit from the schemes. In those circumstances, the existing Act imposes no liability. If a vendor shareholder in a private company has derived no financial benefit in the form of an excessive price for the shares, a price which reflected a consideration for the tax which it was planned would be evaded, that shareholder does not receive an assessment under the existing Act. So, if that is his only reason for suggesting that that so-called anomalies provision be extended to private company shareholders where there was no evasion of tax by a public company, I suggest that he reconsider his attitude to that and, therefore, reconsider whether he will proceed in supporting the amendment proposed by Senator Dame Margaret Guilfoyle. Finally, I note that the Opposition has given notice that with the exception of clause 10, which it intends to seek to amend, and the first two clauses, which concern just the short title and the date of commencement and are purely formal clauses, it intends to oppose all the other clauses. I do not know what will be the attitude of the other six senators who are not members of the official Opposition or of the Government to the Opposition's stated intention of voting against clauses 3 to 9 and clauses 11 and 12. I just serve notice that, if those proposals to oppose all of those clauses receive sufficient support from other senators to produce a negative vote on the clauses, the Government will certainly not accept an emasculated Bill. In those circumstances, all that would be left in the Bill-assuming that Senator Dame Margaret Guilfoyle's amendment to clause 10 were carried-is a provision to extend the anomalies provision to shareholders in private companies which had no involvement with public companies . The effect of that would be to delay considerably the collection of a substantial amount of tax which ultimately would be payable. I note that the Opposition, at this stage anyway, has given no substantive reason for intending to pursue that course. As to the other amendment circulated by Senator Jack Evans, an amendment to allow a period of 60 days in which to appeal to certain classes of taxpayers who may already have made decisions related to section 3 (12) of the Act, the Government is advised that the Taxation Office is not aware of any case in which this would actually have practical relevance. Therefore, the effects on revenue would be either zero or negligible. Although we do not believe that the amendment is necessary and although it would write some additional complexity into the law-something which should be avoided as much as possible, particularly in taxation law-the Government is willing to accept it. We would prefer it, however, if Senator Evans did not proceed with it, because it just unnecessarily complicates the Bill. Question resolved in the affirmative. Bill read a second time. Clauses 1 and 2-by leave-taken together, and agreed to. Clause 3 (Interpretation). Senator Dame MARGARET GUILFOYLE(Victoria)(4.11) —The Opposition opposes clause 3. Clause 3 omits section 3 (12) of the principal Act. That section excludes a company from the scope of the legislation if its inability to pay tax is the result of an unsuccessful post-sales scheme to avoid tax. The Attorney-General ( Senator Gareth Evans), in his second reading speech, said that section 3 (12) defies logic and was inserted by the previous Government for reasons which are best known to it. The fact is that that section ensures that bottom of the harbour legislation does not apply to companies that have not been sent to the bottom of the harbour. It really does defy logic from our point of view for the Government to seek to apply the bottom of the harbour legislation to companies that are still alive. For this reason we oppose this clause. In any event, it is generally considered within the accounting profession that there are very few companies to which this so-called innocence provision could apply. The removal of the provision would have little or no impact upon revenue raising. As I said in my speech during the second reading debate, the Opposition will be opposing all clauses from clause 3 to clause 9. Senator WALSH(Western Australia-Minister for Resources and Energy)(4.12) — Senator Dame Margaret Guilfoyle has evaded paragraph (c) of clause 3 of the Bill . That paragraph refers to section 3 (12) of the original Act. She has failed to give any rational reason for doing so. I think the precise effects of section 3 (12) ought to be put on the record. It should also be put on the record that that section in the existing Act was not in the first Bill which was introduced by the previous Government last year. The later inclusion of section 3 (12) in the principal Act by the previous Government exempts from liability vendor shareholders in companies on which tax was evaded but which had been put into unsuccessful tax avoidance schemes after the sale by the original vendor- shareholders. Honourable senators should bear in mind that the legislation passed by the previous Government made the vendor-shareholders-we are talking only about private companies here-responsible for their proportion of the tax evaded, providing they had gained a price when selling their shares which reflected the tax which it was planned from the beginning was to be evaded. After the last Government inserted section 3 (12) the situation was that those vendor- shareholders who disposed of a company to a promoter-the promoter then sent it to the bottom of the harbour, to use the colloquial expression-would be responsible for the tax. Section 3 (12) provides that those vendor-shareholders who sold companies under exactly the same conditions to promoters and who post- sale put the companies into unsuccessful tax avoidance schemes will be exempt from their liability to pay their share of the tax evaded. In other words, the liability to pay or not to pay is to be determined, if the Opposition's view on this is accepted, by the actions of people over which the vendor-shareholders had no control and of which necessarily, if the rationale for the original Act is to be accepted-I will return to that in a minute-they had no knowledge. That is plainly absurd. That view was stated here last year. It has been stated on a number of occasions since and I state it again today. I invite the Opposition to come to grips with that fact and I defy the Opposition to provide a plausible rationale for it. The rationale for the existing Act-that is, the Bill introduced by the previous Government-depended very heavily, if not primarily, on the allegation that it would be too difficult to collect tax for what the then Prime Minister described as illegal transactions under existing law and, therefore, the recoupment tax was necessary. So much for paragraph (c) of clause 3. There are two other paragraphs in clause 3-paragraphs (a) and (b)-to which Senator Dame Margaret Guilfoyle did not address herself. They are provisions which apply interest on late payments for penalties on both promoters and vendor -shareholders. The existing legislation ensures that for the tax proper which has been assessed both the vendor-shareholders and promoters will pay interest if their payments are late. The amendments also incorporated in clause 3 impose the same interest charge on the late payment of penalties. We have heard a great deal from the Opposition, particularly during last year, on how the promoters should be punished and not the vendor-shareholders. Paragraph (a) of clause 3 provides that the promoters will pay interest on any penalty taxes which may be imposed if the promoters are late in making those payments. I invite members of the Opposition, who believed in punishing promoters last year so they told us, to explain why they now propose to exempt promoters from any interest liability on the late payment of penalty tax imposed upon them under the Act passed by the last Government. It appears that nobody else is going to speak in this debate; everybody had the opportunity. Therefore, I suggest, in order to clarify this matter, that the three separate questions in clause 3-paragraphs (a), (b) and (c)-be voted upon separately. The CHAIRMAN —Is it the wish of the Committee that clause 3 be taken in three separate parts? There being no objection, it is so ordered. Question put: That clause 3 (a) stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 23 —— Majority . . . . . . . . . 2 —— Bolkus, N. Grimes, D. J. Childs, B. K. Harradine, B. Coates, J. Hearn, J. M. Coleman, R. N. Jones, G. N. (Teller)Colston, M. A. Maguire, G. R. Cook, P. F. S. Mason, C. V. J. Crowley, R. A. Primmer, C. G. Evans, Gareth Reynolds, M. Evans, Jack Ryan, S. M. Foreman, D. J. Tate, M. C. Georges, G. Walsh, P. A. Gietzelt, A. T. Zakharov, A. O. Giles, P. J. Archer, B. R. Hill, R. Bjelke-Petersen, F. I. Kilgariff, B. F. (Teller)Boswell, R. L. D. Lajovic, M. E. Carrick, Sir John Macklin, M. J. Chaney, F. M. Messner, A. J. Chipp, D. L. Missen, A. J. Collard, S. J. Reid, M. E. Crichton-Browne, N. A. Scott, D. B. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Walters, M. S. Haines, J. Watson, J. O. W. Hamer, D. J. McIntosh, G. D. MacGibbon, D. J. Richardson, G. F. Withers, R. G. Sibraa, K. W. Jessop, D. S. Button, J. N. Teague, B. C. Ray, Robert Archer, B. R. McClelland, Douglas Rae, PeterElstob, R. C. Martin, K. J. Robertson, E. A. Lewis, A. W. R. Question so resolved in the affirmative. Question put: That clause 3 (b) stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 24 Noes . . . . . . . . . . . 24 —— Majority . . . . . . . . . 0 —— Bolkus, N. Giles, P. J. Childs, B. K. Grimes, D. JCoates, J. Hearn, J. M. Coleman, R. N. Jones, G. N. (Teller)Colston, M. A. Maguire, G. R. Cook, P. F. S. Mason, C. V. J. Crowley, R. A. Primmer, C. G. Evans, Gareth Reynolds, M. Evans, Jack Ryan, S. M. Foreman, D. J. Tate, M. C. Georges, G. Walsh, P. A. Gietzelt, A. T. Zakharov, A. O. Baume, Peter Harradine, B. Bjelke-Peterson, F. I. Hill, R. Boswell, R. L. D. Kilgariff, B. F. (Teller)Carrick, Sir John Lajovic, M. E. 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. Durack, P. D. Scott, D. B. Guilfoyle, Dame Margaret Townley, M. Haines, J. Walters, M. S. Hamer, D. J. Watson, J. O. W. McIntosh, G. D. MacGibbon, D. J. Richardson, G. F. Withers, R. G. Sibraa, K. W. Jessop, D. S. Button, J. N. Teague, B. C. Ray, Robert Archer, B. R. Robertson, E. A. Rae, PeterElstob, R. C. Martin, K. J. McClelland, Douglas Lewis, A. W. R. Question so resolved in the negative. Senator JACK EVANS(Western Australia)(4.27) —I just wish to speak briefly to clause 3 (c) because, as I understand it, this is the principal clause on which this Bill lives or dies. A lot of heart searching has been done on this clause because it effectively removes the loophole clause which was inserted in the 1982 legislation and, therefore, in the opinion of many people, it should be adopted by the Parliament. As I have said earlier, it embraces an element of retrospectivity and therefore, understandably, a number of people will vote against it. Together with Senator Mason, I have given a great deal of consideration to the justice of this Bill in weighing up whether the people who were allowed to escape their obligations through the inclusion of section 3 (12) of the Act, should be allowed to continue to escape their obligations when in this once only opportunity we can get an anomalies tribunal which will hear appeals from all of those shareholders who were unjustly dealt with by the 1982 legislation. In the event, Senator Mason and I have decided that for the good of and to give justice to those people who were unjustly dealt with, who were left no right of appeal under the 1982 legislation, they should be given that right to appeal and we believe that outweighs the retrospectivity principle which would apply if section 3 (12) were now repealed. It is for that reason that I now appeal to all honourable senators to allow section 3 (12) to be repealed; that is, to allow clause 3 (c), which will repeal it, to go through the Senate today. I think it is fair to suggest that, if it is not passed, the rest of the Bill virtually falls apart and therefore the people we are trying to protect and to whom we are trying to give this right of appeal will forever be denied that right of appeal. Senator WALSH(Western Australia-Minister for Resources and Energy)(4.30) —I think it is reasonably accurate to say, as Senator Evans put it, that this Bill lives or dies on this vote. That being so, I think I should repeat precisely what this clause does. This clause would restore the rules which applied when the previous Government introduced its original Bill last year. A few weeks after introduicing its original Bill last year, the previous Government added sub-clause (12) to clause 3 of what is now the principal Act. The effect of that addition was to determine the liability of vendor-shareholders to pay tax evaded , not by whether they received a cash benefit but by whether the target company on which current income tax was ultimately evaded had been sold. If that company had been put into an unsuccessful tax avoidance scheme the vendor-shareholders of that company were exempt from liability to pay tax even though they received cash benefits. In other words, the view of the previous Government, the present Opposition, was that the liability of vendor shareholders in those companies on which current income tax was evaded should be determined not by whether those vendor-shareholders received a financial benefit but by subsequent actions taken by other people over which the vendor-shareholders had no control and about which, it is asserted by the Opposition, they necessarily had no knowledge. I note that Senator Dame Margaret Guilfoyle did not respond to my invitation to explain why the Opposition took that view. That remains a mystery. She has had ample opportunity to do so. She has not also disputed the facts as I have presented them. Those who vote in the negative on this motion will be voting for this proposition: The liability of individual vendor-shareholders to pay tax should be determined by the actions of other people over which the vendor- shareholders had no control and about which they necessarily had no knowledge. That is the proposition before the Senate. Those who vote against this clause will endorse the liability to pay or not to pay as I have outlined. Question put: That clause 3 (c) stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 24 Noes . . . . . . . . . . . 24 —— Majority . . . . . . . . . 0 —— Bolkus, N. Grimes, D. JChilds, B. K. Hearn, J. M. Coates, J. Jones, G. N. (Teller)Coleman, R. N. Maguire, G. R. Colston, M. A. Mason, C. V. J. Cook, P. F. S. Primmer, C. G. Crowley, R. A. Ray, RobertEvans, Gareth Reynolds, M. Evans, Jack Ryan, S. M. Foreman, D. J. Tate, M. C. Gietzelt, A. T. Walsh, P. A. Giles, P. J. Zakharov, A. O. Baume, Peter Harradine, B. Bjelke-Peterson, F. I. Hill, R. Boswell, R. L. D. Kilgariff, B. F. (Teller)Carrick, Sir John Lajovic, M. E. 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. Durack, P. D. Scott, D. B. Guilfoyle, Dame Margaret Townley, M. Haines, J. Walters, M. S. Hamer, D. J. Watson, J. O. W. McIntosh, G. D. MacGibbon, D. J. Richardson, G. F. Withers, R. G. Georges, G. Jessop, D. S. Sibraa, K. W. Teague, B. C. Button, J. N. Archer, B. R. Robertson, E. A. Rae, PeterElstob, R. C. Martin, K. J. McClelland, Douglas Lewis, A. W. R. Question so resolved in the negative. Clause, as amended, agreed to. Clauses 4 to 9-by leave-taken together. Senator Dame MARGARET GUILFOYLE(Victoria)(4.37) —As I indicated earlier, the Opposition opposes all of these clauses. They cover a number of matters such as amendments to machinery provisions, identification of arrangements and things of that sort. We have stated throughout the many debates that we are unable to support the proposals by the Government with regard to retrospective taxation legislation. For instance, the amendments to clause 4 which authorise the Commissioner of Taxation to name in his annual report persons who fail to pay vendors or promoters recoupment tax and the omission of the provision that requires the Commissioner to disclose to a vendor or promoter all information held by him relating to the stripping scheme and clarification of the Commissioner's power to make refunds of company tax paid by a vendor or promoter in anticipation of an amendment under this legislation reveal the philosophy of the Government with regard to the legislation before us. I believe the proposed authority for the Commissioner to name persons is vindictive and discriminatory. Why should we single out those who are liable for tax under this legislation? It could apply equally to all taxpayers who do not pay or who have disputes with the tax authorities. Persons who object to ordinary assessments and who do not pay do not have their names publicised, and accordingly a provision of this kind must be viewed purely as an attempt to pressurise or blackmail taxpayers into paying rather than contesting their assessments. Those sorts of provisions in that clause do not find support from us. Similarly, in relation to clause 5 we argue that there could be no basis, other than that it is proving impossible to enforce the legislation, for the removal of the provisions in that section. It seems from all reports that the provision is not making the legislation difficult to enforce. Indeed, the accounting profession reports that in any event the legislation is being administered in such a way that no argument of innocence is ever entertained by the Commissioner and it is always assumed that the taxpayer had a fraudulent intent. A number of matters are covered in clauses 7, 8 and 9 with regard to the identification of a particular arrangement. For instance, clause 7 will remove the requirement that the particular stripping arrangement which rendered the company unable to pay its tax must be identified. Clauses 8 and 9 are consequential upon that clause, and again do not have our support. Clause 7 was included to ensure that before an innocent taxpayer faced an assessment it was certain that an arrangement had occurred. The Taxation Office says that it is merely an unnecessary hurdle being used by taxpayers to avoid assessments. If so, there is little evidence put forward by the Government to support this claim. As we have said on many occasions with regard to all of the provisions in clause 9 of the Bill, they do not have the support of the Opposition parties. Senator WALSH(Western Australia-Minister for Resources and Energy)(4.42) —Mr Chairman, I make some general comments on the clauses before the Committee. The last vote effectively sealed the fate of the Taxation (Unpaid Company Tax) Assessment Bill. The Government will not accept that amendment in the House of Representatives and I do not think that too much more time of the Committee should be taken up in dealing with it. I do want to make a couple of points which demonstrate how little interest the Opposition actually had in what this Bill would do. The Opposition was determined, for reasons which it still does not feel under any obligation to explain, to preserve section 3 (12) of the principal Act. That has been the determinant of the Opposition's policy in respect of this Bill. Clause 4 does provide for publication of the names of tax evaders, as Senator Dame Margaret Guilfoyle said, and it also allows the Commissioner of Taxation to refund, with interest, payments of assessments where an excess assessment has been issued. Clause 4 of this Bill, which the Opposition opposes, empowers the Commissioner to return to taxpayers tax for which they should not have been assessed in the first place, and to return it with interest. Senator Dame Margaret Guilfoyle reversed the meaning of that clause. I do not know why she did that, but it does reveal how little interest the Opposition actually has in the Bill. A simple inquiry to the office of the Treasurer (Mr Keating) or a direct inquiry to the Australian Taxation Office would have shown the Opposition that the latter part of clause 4, which it is going to oppose, does in fact do the opposite to that which Senator Dame Margaret Guilfoyle believes, or at least said, that it does. I could go on with explanations about the effects of a number of other clauses, but at this stage I do not think it is terribly important. However, I do believe it should be noted for the record that three Australian Democrat senators effectively voted against this Bill by voting against the deletion of section 3 (12) of the principal Act. Those three Democrats voted in similar fashion throughout last year and this year on the ground that they were absolutely opposed to retrospective legislaton. Whether or not one agrees with that view, it has been consistently held and they have voted accordingly. Of the other two Democrats who voted for section 3 (12), Senator Evans was not here last year but Senator Mason was and effectively he voted the same as he voted last year. He too has been consistent. Clearly, the great majority of the members of the official Opposition, however, have no objection in principle to retrospective legislation because they passed an Act with retrospective effect-the principal Act which we are seeking to amend now. They do not have that cop-out. They have not responded to my invitation to explain why they have supported the retention of section 3 (12) of the princpal Act. Senator Cook —They have no shame. Senator WALSH —No, they have no shame. Nor have they disputed the facts as I have presented them. Senator Harradine also voted to retain 3 (12). He also voted in favour of the proposition that the liability to pay tax will be determined by the actions of other people, over which the taxpayer has no control and of which necessarily he has no knowledge. That is the proposition for which Senator Harradine and all the members of the Opposition voted, and for which the three Democrats voted but for different reasons. But last year, when from opposition I moved the same amendment to delete 3 (12) from what is now the principal Act, Senator Harradine voted for that motion. As a result of that vote , the Commonwealth will lose approximately $15m in revenue this financial year and $40m ultimately. Senator Harradine voted today in the opposite way to the way he voted last year. Not only did he do that, but also he has clearly not felt obliged to give any explanation to the Committee or the electors of Tasmania as to why he did it. The facts show that Senator Harradine voted to delete section 3 (12) from what is not the principal Act at a time when his vote was not crucial, but 10 minutes ago, when his vote was crucial, he voted in the opposite direction. He voted for the tax evaders. He voted-bear in mind that he voted in the opposite way to the way he voted last year-for the proposition that the liability to pay or not pay tax will be determined not by the actions of the taxpayers or potential taxpayer but by the actions of other people over which the taxpayer has no control and of which necessarily the taxpayer has no knowledge. As a result of his voting in that way, in the opposite way to the way he voted last year, and without giving any explanation as to why he has reversed his vote, the revenue will lose $15m this year and $40m ultimately. Finally, Mr Chairman, I do not intend to call any more divisions on this legislation. The Government will formally vote in favour of the remaining clauses of the Bill and will oppose Senator Dame Margaret Guilfoyle's amendment. As the Attorney-General, Senator Gareth Evans, said 10 or 15 minutes ago, this Bill is now effectively dead because the Government in the House of Representatives will not accept the amendment which has just been passed. Senator HARRADINE(Tasmania)(4.48) — Mr Chairman, Senator Walsh cannot help himself. Senator Cook —He has got a good case. Senator HARRADINE —He has no case whatsoever. When the proposition was made last year in respect of section 3 (12) of the Taxation (Unpaid Company Tax) Assessment Act, I did vote for it. The reason I voted against it this time is simply that the omission of section 3 (12) has a retrospective effect in that taxpayers who would be entitled to relief under that sub-section and who have requested that it be applied by the Commissioner of Taxation will now have that right removed and face recoupment tax liability. The reason that I say that Senator Walsh cannot help himself, concerns the question of tax evaders. He said that I have voted for tax evaders. That shows that he does not understand the Bill that is before the chamber, because the Bill before the chamber, by definition, when it is dealing with vendor-shareholders does not deal with tax evaders. Tax evaders are those who have breached the law. We are not talking about people in this legislation who have breached the law. Senator Walsh owes an apology to this chamber for that reflection. If he continues to make those comments, which are not only ignorant but inane, I will remind him of what he said in a debate on 4 May 1982. It will be recalled that at that time Senator Walsh, as the Opposition spokesman on treasury matters in this place, moved an amendment which was designed, according to him, to overcome a loophole, to use his words, in the Income Tax Assessment Act. On page 1957 of Hansard he stated: . . . a loophole under which tax on short term profits from the purchase and sale of shares may be avoided if the company which nominally purchased the shares is sold rather than the shares being sold directly. Presumably that was a legitimate activity at that time. Senator Walsh was at pains to point out: The Opposition's amendments, if accepted, will ensure that the Bell group and the Bond Corporation pay the tax which they ought to have paid on those transactions. When the Australian Democrats and I, on a matter of principle-I do not know about the Democrats, but I do not know Mr Bond from a bar of soap-voted against that amendment, we were pilloried in this place by Senator Walsh as being supporters of tax evaders and tax avoiders. He quite unjustly called Mr Bond a tax evader and he called us, when we voted against it, friends of tax dodgers. Who in Australia was the greatest friend of Mr Bond when he won the America's Cup? Who calls him 'my mate Bondie'? Who turned up at the reception at the Lodge which was put on by the Prime Minister (Mr Hawke)? None other than the Minister for Finance, Mr Dawkins. The whole lot of them are friends of tax dodgers. I believe that Senator Walsh ought, firstly, to get his facts right and, secondly, desist from the nonsense with which he is carrying on, because all of this is absolute nonsense. The Government is not fair dinkum about these so- called bottom of the harbour proposals-this is not a bottom of the harbour proposal-and it is not fair dinkum about the so-called unpaid company tax proposals. Were it fair dinkum about them, it would have brought back the first Bill. But it did not. Senator Cook —Would you vote for it? Senator HARRADINE —Does the Government want me to move an amendment to amend this Bill in precisely the same terms as the first Bill? If it wants me to do so , I will test it out and I will do it, because I know several members of the Cabinet who would run a mile rather than vote for the first Bill. Furthermore, I say to Senator Cook, who interjected, that I know that none of the unions with which I am associated would be caught by this legislation. But I wonder whether he is sure about all of the unions. He had better start checking up on that. Senator Cook —I am absolutely certain, Senator, about what is the policy of the ACTU and the union movement, and that is to wipe out tax avoidance and evasion. Senator HARRADINE —I am talking about commercial operations. I asked that question because I do not regard those people who have operated within the law as being tax evaders. They are not by definition tax evaders. If the Government were fair dinkum about all of these things, it would have brought back the first piece of legislation; it did not. It brought back the Mark II Bill. The second reading speech of that Bill referred to the need that the Government saw to amend the Bill to take into account the matters that had been raised in this chamber. History will show-and any members of the Press or others who take an objective look at the legislation will know-that the Government did not do that. One aspect, of course, as an example, is that repeatedly the Government was warned of the roll over effect. Ongoing business enterprises would be affected, and if it wished to put back into the barrel the so-called avoided tax, it could do so by certain deeming provisions. None of that was picked up, but it was a very major problem. The Government was reminded about that by me on the last occasion that this measure was introduced. Now we have the Mark III Bill, which is totally different again. That shows that the Government is not fair dinkum about this measure, because the wiser heads in the Government know precisely what the effects will be. Also, the more mature persons in the Government realised that their attempt in this area was contrary to the principles of certainty before the law and, indeed, contrary to the principles of fairness. Mr Chairman, I do hope that that is the end of these stupid remarks that flow from Senator Walsh, but I am afraid that is a forlorn hope. I suppose we are now about to hear further from him. Senator WALSH(Western Australia-Minister for Resources and Energy)(5.01) — Senator Harradine will not be disappointed, Mr Chairman. When he was goaded to explain the reason why he reversed today the vote that he cast a year ago on exactly the same matter he resorted to false argument. His apologia for reversing the vote is to claim that if section 3 (12) were deleted from the principal Act at this stage it would impose retrospectively tax on those people who had already been exempted from their liability by section 3 (12). In fact section 8 of the Acts Interpretation Act provides that that could not be done. It preserves the right of those who have utilised section 3 (12) provided an assessment has already been issued. So the reason Senator Harradine gave for reversing his vote is no reason at all. Again, that is a fact which could have been checked, had he been at all interested in it, by a simple inquiry to the office of the Treasurer (Mr Keating) or the Australian Taxation Office. It reveals that, like the Opposition, he has had no real interest in determining the crucial facts of this matter. He has determined that section 3 (12) will not be repealed even though 12 months ago he voted for its deletion from the original Act. He has yet to give an explanation as to why he did that, and I do not believe he will. None of the other things he had to say had any relevance to the reversal of the vote he cast in 1982. He cannot claim, as the three Australian Democrats are able to claim legitimately, a complete and principled objection to the principle of retrospectivity. He had no total objection to that principle last year. He has changed his vote this year. The reason he has given is spurious. It is in fact simply not correct. Senator HARRADINE(Tasmania)(5.02) — Mr Chairman, let me deal first of all with that question. The reason that I gave is absolutely correct. First of all, it places those who would have been involved since 1980 and who would have fallen under the jurisdiction of the Crimes (Taxation Offences) Act are placed at an advantage compared with those who would be covered under this legislation. In fact if honourable senators analyse the legislation they will see that it imposes retrospectively a harsher penalty on those who undertook certain steps which were within the law between the years 1972 and 1980. It imposes upon them a greater penalty than is imposed upon persons who, deliberately and knowingly, since the introduction of the Crimes (Taxation Offences) Act, did virtually the same thing. I notice that Senator Walsh ignored the points that I made about his calls on friends of the tax dodgers. Senator Walsh —That has got nothing to do with section 3 (12). Senator HARRADINE —It had something to do with what the honourable senator said. He just said-- Senator Walsh —Senator Chipp said that the Democrats were offered half a million . How much would you take? The CHAIRMAN —Order! Senator Walsh, you will not interject any more. I call Senator Harradine. Senator HARRADINE —I did not quite hear that interjection but I hope that the Hansard reporter has got it down. Senator Walsh —I said that Senator Chipp said that he was offered half a million dollars. That had no influence on his vote. But you have not yet given a valid reason why your vote has been changed. The CHAIRMAN —Order! Senator Walsh, from the tone of your words there was a clear reflection on Senator Harradine and I ask you to withdraw. Senator Walsh —I withdraw, Mr Chairman. Senator HARRADINE —Mr Chairman, that statement is a reflection upon Senator Walsh. It is not the first time that he has made that sort of allegation. He made a similar type of allegation at the Tangney electorate council of the Australian Labor Party in Western Australia. That was a most serious allegation against Senator Chipp and a most serious allegation against me. Frankly, I believe that this is an indication of one of the reasons why Senator Walsh ought to resign from the Ministry or why Mr Keating ought to get somebody else to replace him as representing him in this chamber. Clauses agreed to. Clause 10. Senator Dame MARGARET GUILFOYLE(Victoria)(5.06) —I move: Page 6, clause 10, proposed new paragraph 19A (1) (d), lines 34 to 44, leave out the paragraph. Mr Chairman, clause 10 will provide partial relief to public company shareholders who did not benefit from the bottom of the harbour scheme. I have circulated this amendment in my name on behalf of the Opposition. The amendment will extend the exemption under this clause to private company shareholders. The Opposition welcomes the amendment that the Government has brought forward in this clause, but it is concerned that it will be restricted only to public company shareholders. The relief that is provided arises from a realisation that some unfairness exists in the legislation and that no form of appeal is presently provided, but we would ask: Why exclude private company shareholders from the relief that it is proposed to provide? The Commissioner of Taxation admits that the only reason for not extending the exemption is administrative inconvenience. We suggest that the Commissioner's fear, that taxpayers may seek to delay by claiming that they have received no benefit, is discriminatory if he can relate that only to public company shareholders and not to those who are in private companies. This amendment will have the effect of applying the relief also to private company shareholders. The Government already intends to provide such relief for public company shareholders. I commend the Opposition's amendment. Senator JACK EVANS(Western Australia)(5.08) —I believe I speak for all of the Australian Democrats in saying that we support this amendment. We believe that the anomalies which are revealed need to be corrected and, as I have said previously, the only way of correcting them, outside of moving a vast number of amendments to the taxation legislation as well as to this Bill, is to provide an opportunity for people to appeal to an independent tribunal. That provision should be there not only for public company shareholders but also for private company shareholders who have been dealt with unjustly. They should be allowed that same right. So the Democrats will support the Opposition's amendment. Amendment agreed to. Clause, as amended, agreed to. Clauses 11 and 12-by leave-taken together. Senator Dame MARGARET GUILFOYLE Victoria) (5.10)-Clauses 11 and 12 relate to evidence. Section 23 of the principal Act states that a certificate by the Commissioner of Taxation to the effect that company tax is due and payable but unpaid shall be conclusive proof of that fact, that is, that that certificate cannot be disputed. The provision in that section is under attack and has been litigated in the High Court of Australia on the basis that similar provisions have been previously deemed to be outside the Commonwealth's taxation power. The amendment will make the certificate merely prima facie evidence-that is, it may be argued. However, the onus of proof is upon the taxpayer. It would seem to us that the Government is anticipating a judgment from the High Court. We believe it is not timely to consider this point during the course of a hearing in the Court. It is for this reason that the Opposition opposes the clauses. The matter that is under consideration in the High Court would need to be considered if a judgment were given along the lines of the fears that are evident at this time in the minds of the Commissioner of Taxation or the Government. The Opposition and I do not believe it is appropriate to insert a provision in legislation while a decision is still being awaited from the High Court on that legislation. For this reason the Opposition will oppose clauses 11 and 12. Senator MACKLIN(Queensland)(5.12) —I wish briefly to refer to clauses 11 and 12 . It might be remembered, though probably by nobody except myself, that when the original legislation was before this chamber last year I moved an amendment in fact to delete the word 'conclusive' and to insert the words 'prima facie evidence'. I did so on the simple basis that it seemed to me very odd that any tendered document could be conclusive. I pointed out at that time that there could be problems in that an error could be made in the document, in good faith or otherwise, by someone who had charge over the document. There could be a typographical error, a misplaced word or a wrong amount entered. It seemed to me at the time that, in terms of the normal method by which these items are entered , prima facie evidence would be sufficient to carry the case for the purposes of the Bill. Although I believe that the Government has made a useful move in this regard I share some of the misgivings that were mentioned by Senator Dame Margaret Guilfoyle. I, too, think it is a bad principle for the Parliament to change legislation while court proceedings are in process in that a person appearing before the court could find himself without recourse in the middle of a case. However, on balance, I support the clauses because I believe they ought to have been in the Act in the first place. Clauses negatived. Senator JACK EVANS(Western Australia)(5.14) —As we go through this rather puerile exercise of injecting and rejecting clauses of this Bill knowing that its fate is doomed, I see no point in moving my amendment which applies to defeated clause 12. Title agreed to. Bill reported with amendments; report adopted. Senator WALSH(Western Australia-Minister for Resources and Energy)(5.15) —I move: That the Bill be now read a third time. As I indicated earlier, the Government in the House of Representatives will not accept this Bill as amended. However, in order to tidy up the procedural matters I have formally moved the third reading of the Bill. Question resolved in the affirmative. Bill read a third time. Debate resumed from 7 December 1983, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(5.16) —The Opposition does not oppose the Remuneration and Allowances Amendment Bill 1983 which relates to officers who are subject to the Remuneration Tribunals Act. Following the decision of the Australian Conciliation and Arbitration Commission in the national wage case the Government took the view that it would be appropriate to apply the 4.3 per cent salary increase to officers who are covered by this Act. It will be recognised that this follows the repeal of the Salaries and Wages Pause Act that had been introduced by the former Government and which related to Commonwealth public servants. As the Government has now taken the decision to apply that general wage and salary increase to those covered by the Remuneration Tribunals Act, the Opposition does not oppose the Bill and, at this stage of the session, I wish it a speedy passage. Senator MACKLIN(Queensland)(5.17) —I indicate that the Australian Democrats support this Bill on the basis that it seems to us to be a worthwhile method of coming to grips with what is basically a very difficult problem. We wish it a speedy passage. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(5.18) —The Government thanks the Opposition and the Australian Democrats for their support of the Bill. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Assent to the following Bills reported: Companies and Securities Legislation (Miscellaneous Amendments) Bill 1983 Representation Bill 1983 Bank Account Debit Tax Legislation Amendment Bill 1983 Public Accounts Committee Amendment Bill 1983 Migration Amendment Bill 1983 Director of Public Prosecutions Bill 1983 Director of Public Prosecutions (Consequential Amendments) Bill 1983 Debate resumed from 3 November 1983, on motion by Senator Walsh: That the Bill be now read a second time. Senator WATSON(Tasmania)(5.19) —The Opposition supports the Bounty (Room Air Conditioners) Amendment Bill 1983. On 17 August 1982 the Liberal Minister for Administrative Services, the Hon. Kevin Newman, forwarded a reference to the Temporary Assistance Authority concerning certain air-conditioning machines and parts for inquiry and report. This reference arose from representation by the major local manufacturer Kelvinator Australia Ltd. In conformity with its charter to enable quick action to be taken, the Temporary Assistance Authority was asked two questions: Firstly, whether it was necessary that urgent action be taken to provide assistance to that industry; and, secondly, if such action were necessary, the nature and extent of the assistance. The Authority found that urgent action was necessary to protect the industry producing certain air- conditioning machines and parts. It recommended that a bounty of up to $1.5m be paid for certain locally produced goods from the date of the Government's decision on the Authority's report until 30 June 1983. I think it should be said that legislation of this kind which provides a measure of protection, relief and assistance to manufacturers can, by its very nature of quick action and severity, impose certain high costs and losses on some importing companies which have paid for goods subject to order and import by what is known as an irrevocable letter of credit. I think it has to be recognised that, while on the one hand these are protective measures, on the other hand there are inevitable losses to the importers. There are two measures in this Bill, both of a temporary nature, which will assist local producers to sell their products in Australia despite intense competition from overseas. The Bill provides for $1,500,000 additional duty for 1983-84 for what are known as portable or fixed window-type designs for use without ducting, and having a nominally rated cooling capacity of 5.4 kilowatts or less. The second feature of this Bill is the introduction of a procedure of import restraint for 1983-84-a tariff quota limiting imports for that period to 55 per cent of the 1982-83 level because of the very high level of imported air- conditioning products and, consequently, the high level of stocks of these goods . This Bill is a manifestation of some of the many problems which are facing Australian manufacturers at present, particularly specialised manufacturers. These manufacturers must be in a position eventually to meet international competition on equal terms. I think the emphasis must be on the words 'equal terms'. The debate on protection has revolved around the costs which are imposed on the community by Australia's assistance structure. Exporters, farmers and consumers generally wish for a lower rate of protection because of the impact that that protection will have of adding to the costs of domestically produced goods. I do not think there were many problems with the White Paper that was produced in 1977. It was suggested in that White Paper that, as a long term objective, the community would be best served by a manufacturing industry with a structure that required minimum levels of government support. But any form of assistance, whether it be a subsidy, tax relief or a tariff, has the effect of redistributing income from one group to another in society. The real question is whether the benefits to one sector outweigh the costs to the other. Generally, all things being equal, it is acknowledged that a higher level of protection tends to diminish the rate of growth. Traditionally, the farming community in particular has complained the loudest about the disadvantages imposed upon it through various protective devices, in particular the tariff. We acknowledge that the costs to the community are both direct and indirect. For example, the direct cost of the recent tariff on imported harvesters essentially raises the cost to the farming community and for that reason it was opposed. The less obvious costs are the indirect costs. They tend to raise the cost of labour or they can have an impact on the appreciation of the exchange rate to the disadvantage of exporters. The protection argument is much more difficult to sustain in Australia in situations or environments where costs could be higher and productivity substantially lower than in competing countries enjoying similar living standards. However, I for one am not prepared to stand by and see Australian standards of living drop to what might be regarded as low Asian standards, while at the same time a few people enjoy very high incomes from what might be regarded as a total free trade approach. Whilst the export industries demand a free, unregulated approach except when commodity prices appear to be down, the manufacturing sector requires a measure of protection. I think a change is required by some trade union officials in their philosophy of adopting wage structures which are geared to the greatest good for the whole community; that is, the employed, the unemployed and those people seeking work. I think it is unfortunate that a minority of union leaders- this has not necessarily always been supported from the heart by the rank and file-have adopted an unfortunate policy of obtaining the highest wage possible for those privileged to work in what I might term sheltered employment. This form of employment can be sheltered through a number of factors. It can be sheltered through the inherent nature of the industry in which these people work or it can be sheltered through measures other than tax measures. It is unfortunate that the whole of the protection debate has essentially revolved around assistance to manufacturers. It is unfortunate that those people employed in the manufacturing industry have had to carry the brunt of the criticism of so -called inefficient operations in Australia, rather than all those workers employed in what I might term sheltered industries. I recognise that the Australian Government has a responsibility to intervene in the management of international trade. I think this is inevitable. We have to match similar policies of intervention which are adopted by countries such as Japan in assisting their industries. Australia is highly vulnerable to dumping of all sorts. Australia's small market tends to place limits on economies of scale in manufacturing operations. It is regrettable that there has been so little assistance in Australia through subsidies and other fiscal measures. Australia's protection is what is known as visible protection basically because Australia abides by the General Agreement on Tariffs and Trade, unlike most other competing countries. It is unfortunate that we hear criticisms from GATT officials directed towards Australia when so many other countries are offending in a much greater way. There is an inevitability of greater government intervention in world trade. We are already witnessing a very much greater share of trade from the centrally planned economies and the developing countries. Australia just cannot afford to stand apart from these sorts of developments. We have to recognise that great distortions are taking place through non-tariff measures. I repeat that great distortions are taking place through non-tariff measures. Protectionist techniques nowadays are becoming less transparent, therefore creating GATT problems. GATT really is not getting to grips with this problem, but it continues to attack the situation in Australia. According to the statistics something like 70 per cent of goods entering Australia come in either tariff free or with under 5 per cent duty in terms of value. We acknowledge that there are a few high flyers. The whole criticism seems to be taken out of kilter. It becomes biased and is directed towards these high flyers rather than towards the general level of imports that are coming in with under 5 per cent duty or no duty at all. World trade is increasingly becoming managed by a vast array of interventions. These include customs manipulations, quantitative restrictions and tariff resources. Countries frequently exploit non-tariff matters relating to health, quarantine and safety to limit trade. Across the Tasman we in Tasmania are experiencing a particular problem in relation to the export of our goats to New Zealand. The New Zealand Government is temporarily imposing health and quarantine restrictions on that item of import. Other countries provide budgetary assistance through tax holidays and tax incentives, such as generous depreciation rates, low interest rates and finance. The Industries Assistance Commission is unique in the Organisation for Economic Co-operation and Development countries. In Australia it has become the linchpin for evaluating and publicising levels of assistance and in advising government on the nature and extent of assistance. Naturally this Commission is viewed rather sceptically by business because of its free trade philosophy despite its independence from political processes. The preferential system for developing countries, which is a humanitarian scheme, I believe now requires some review as some of the listed countries in the schedule have reached a level of technical competence in production and marketing skills. But their products are now having adverse effects on local Australian employment. This is manifested in the air conditioning industry. The Bounty (Room Air-Conditioners) Amendment Bill we are debating today is a manifestation of one of the problems. The growth in the manufacturing sector supported a larger population with a growing standard of living. It supported a bureaucracy whose growth has outstripped the private sector. What we are seeing now is seriously declining manufacturing activity. In the last decade employment in manufacturing has declined dramatically. This has brought a decline in the standard of living of many hundreds of thousands of Australians. Much of Australian manufacturing industry commenced at a time of excess demand and limited supply and has subsequently grown up under a cloak of protection. If the Government wishes industry to invest in high technology, which appears to be the in thing at the moment, it must at the same time allow industry to have volume to recover its high fixed costs as a result of investment in that technology, otherwise there will be no incentive to invest. I believe government departments must be directed to source much more of their requirements from what is known as the growing or the new technology-type Australian companies. It is regrettable that all too often heads of departments, their assistants and their purchasing people opt for the large overseas supplier to the detriment of the young Australian owned and operated company so frequently in the high technology area. Less risk and less chance of criticism is involved. Unfortunately the IAC never reports on the social consequences or indicates where jobs are to be found for retrenched manufacturing employees. The manufacturing industry employs sixteen times as many people as the mining industry but it gets very little support. It employs three and a half times as many people as does the rural industry. Unfortunately, in Australia budgetary assistance is erratic and uncertain and involves problems of planning and financing. The Bounty (Room Air-Conditioners) Amendment Bill is but part of this scenario. It is providing assistance to the year 1983-84. There must be a long term plan. There must be a package of measures involving taxation as well as industrial measures to overcome the dilemma of manufacturing. On the other hand, society is increasingly becoming concerned about the extent of government intervention, because the more government intervention the higher the level of taxation. A survey was conducted this year by the American Enterprise Institute for Public Policy Research. It found that 70 per cent of the people surveyed felt that the regulation of business usually does more harm than good. This is a sobering thought. More debate is urgently required on this and associated protection measures in Australia. I believe we cannot afford to lose our manufacturing industry. A long term policy encouraging efficient export industries and employing Australian capital and Australians will certainly be to the long term benefit of this country. As I mentioned earlier, our high standards of living were built up on a growing manufacturing base. Unfortunately , that manufacturing base has been eroded at present. The end result has been high levels of unemployment and uncertainty about the future. I welcome this measure today as but one interim measure that is essential to try to overcome a malaise in manufacturing in this country. Senator FOREMAN(South Australia)(5.37) —I support the Bounty (Room Air- Conditioners) Amendment Bill 1983. The Bill provides for the continuation of the bounty assistance of $1.5m which applied in 1982-83 and, in addition, provides for the application of a tariff quota to restrain the level of imports. As a South Australian senator, I have taken a great deal of interest in the debate concerning protection measures for this part of the white goods industry. The industry is vitally important to the South Australian economy and the measures contained in this Bill will, no doubt, assist Kelvinator Australia Ltd in achieving a greater market share in 1983-84 than it did in 1982-83. At the time of the introduction of bounty assistance by the former Government, I expressed my concern that the bounty in itself would not provide sufficient protection for the industry. In the Senate on 18 November 1982 during a first reading debate I said: The way out chosen by the Government will not guarantee Kelvinator a reasonable market share. I am afraid that it will not guarantee the jobs of the workers. A bounty system in conjunction with a form of quota protection would have been a more sensible compromise in the circumstances. The way things have turned out it seems history has shown the former Government made a very grave mistake in not granting the quota protection I was advocating at the time. The latest Temporary Assistance Authority report on certain air conditioning machines states quite clearly that employment attributable to the production and sale of the Kelvinator range of room air conditioners declined sharply after the previous inquiry. In 1982 Email Ltd's employment attributable to the Kelvinator range stood at 458. In March 1983 it had fallen by 61 per cent to 177. If we look at the sales and production figures of Kelvinator room air conditioners we see that total sales for 1982-83 were about 28,500, a decline of 45 per cent over the previous year, and that total production was estimated to be 24,800 units, a fall of 58 per cent since 1981-82. The report goes on: The profitability of the Kelvinator room air conditioner operation decreased markedly during its financial year to 31 March 1983. Whereas in 1981-82 the operation achieved a return on funds employed of 12.4 per cent, a substantial loss was recorded in 1982-83. In other words, the previous Government's measures to deal with the problem of increasing imports was clearly inadequate. According to the report, imports from Japan increased their market share from 35 per cent in 1981-82 to about 50 per cent in the nine months to March 1983. In fact local production accounted for only 10 per cent of the total market supplies during 1982-83, compared with 23 per cent in 1981-82 and 42.5 per cent in 1979-80. Quite clearly the previous Government must accept some of the blame for the disastrous decline in sales and production levels during 1982-83 and the failure of the local company at least to maintain its 1981-82 market share. During my speech in the Senate last November I pointed out that until October a total of 160,000 imported room air conditioners had arrived in Australia for the 1982-83 financial year. If we look at the report we see that a further 34,000 room air conditioners came into the country between October 1982 and March 1983. Therefore, had some form of quota protection been applied immediately last November, Kelvinator's potential market share could have been increased substantially and some of those 281 jobs could have been saved. Instead, the previous Government blindly accepted the recommendations of the Temporary Assistance Authority, knowing full well what the possible consequences would be for the workers in Adelaide if the bounty measure alone proved insufficient. Obviously the previous Government's economic policies were also partly to blame for the drop in total sales of room air conditioners in 1982-83. With the prospect of a 12-months wages freeze many people just postponed their decision to buy costly items such as air conditioners. This, combined with a cooler than normal summer in Western Australia and New South Wales, meant that total levels of sales in 1982-83 were considerably less than expected. Nevertheless, whatever the level of sales last financial year, had quota protection been applied at the time we could have saved at least some of those jobs. Even the Temporary Assistance Authority has recognised that Kelvinator was badly affected by imports last year. Its latest report states: While the Authority recognises that the downturn in the local industry is due to a number of factors, it considers that the evidence demonstates that the Kelvinator operation was adversely affected by import competition in the nine months to March 1983. Of course, there is now a considerable build-up of excess stocks, many of which are imports. These high excess stock levels combined with a continuing high level of imports in 1983-84 would have led to a complete domination of the market by imports and a closing of the Adelaide operation. This is why I am pleased that the Government has seen fit to impose a quota on imports for the coming year. As the Minister for Industry and Commerce (Senator Button) pointed out during the second reading speech, the bounty itself may not have been adequate to assist Kelvinator to contain the competition from imports in 1983-84 . However, by limiting imports to 55 per cent of the 1982-83 level, the Government has effectively given Kelvinator greater scope to achieve a much larger market share in this financial year. As a senator for South Australia, I am very pleased with this decision because it will assist the company to become more viable and hopefully guarantee the jobs of the workers in the Adelaide plant. The company will certainly now have a much better chance of achieving these ends than under the previous arrangements introduced by the former Government. This Bill seeks to arrest in some way the enormous pressure being placed on our local manufacturing industry by imports. This situation of imports pouring into Australia and putting at risk thousands of jobs in our manufacturing industry is , of course, confined not only to the white goods industry. There have been far too many incidents of importers using unfair practices and dumping goods on to the Australian market to obtain what they consider to be a satisfactory market share. One such example is the motor vehicle industry where at present we have the problem concerning the importation of light commercial vehicles and the threat this is posing to thousands of jobs in the local car industry. In fact South Australia has been hit hardest by the tremendous increase in imports we have seen over the last three years. Thousands of manufacturing jobs have been lost in that period and we have had the unenviable reputation of being the State with the highest or the second highest unemployment rate in the country for several years. Therefore, I am heartened by the Government's decision to act to halt the flood of imports in this section of the white goods industry. It is a credit to this Government that it has decided to act in a more vigorous and decisive way than our predecessors. I, therefore, have much pleasure in supporting the Bill and commend it to the Senate. Senator BUTTON(Victoria-Minister for Industry and Commerce)(5.48) —I thank the two honourable senators who have contributed to the debate. The reasons for this legislation are explained in the second reading speech. Senator Foreman has canvassed the issue in some detail and Senator Watson, if I might use the analogy, painted on a much broader canvas a picture of the problems of manufacturing industry and changing attitudes to protection. I do not feel I need add any more to the debate at this stage. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 8 December 1983, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator Dame MARGARET GUILFOYLE(Victoria)(5.50) —The Prices Surveillance Bill has been described by the Government as a major commitment as part of the prices and incomes accord. The Treasurer (Mr Keating) in his second reading speech stated that the mandate to establish the Prices Surveillance Authority has been widely recognised in the community. He went on to describe how a working party had been established to provide advice to the Government. I noted that the working party included representatives of the trade union movement, business and State and local government and that they had been extensively consulted by the Government before bringing the Bill into the House of Representatives. The fact that it has been widely recognised by the community as something for which the Government had a mandate under its prices and incomes accord is perhaps not disputed, but the fact that it is recognised does not mean that it is accepted by the whole of the community in quite that spirit. In fact, the National Economic Summit Conference communique stated: The employers accept that the Government has a mandate to establish a price surveillance mechanism. Many employers believe this is unnecessary . . . There was consultation with the trade union movement prior to the introduction of the Bill. That leads me to say that it was evident that the Australian Council of Trade Unions was not satisfied with the Bill that had been introduced or with the statements that had been made by the Government with regard to the authority at the time of the introduction of the Bill. In fact, early in December the President of the ACTU stated that the trade union movement would take no part in co-operating with the proposed authority and that the authority should determine a firm set of price guidelines with general application to the community. I have noted with some interest today's Press, which has stated that the ACTU is happy with assurances that have been given by the Government on the prices watchdog, as the headline described it. I would be interested to hear from the Government as we proceed through this debate what assurances were given by the Government to the ACTU with regard to the Bill or the authority and its powers and application to change the views of the ACTU so markedly in the space of a week or two. If the trade union movement was part of the consultation process that preceded the Bill and it was previously not happy with the Bill, I would be interested to know what adjustments were made. Have some changes to the legislation or the vesting of some further powers in the authority led the ACTU now to be happy or satisfied with assurances that have been given? The Opposition is opposed to the establishment of the Prices Surveillance Authority. We believe that it would be an unwarranted interference in the operations of commercial enterprises at this time. There is a need for continued and increased competitiveness of Australian industry and, as is always said at times of government from industry, it is at enormous cost to industry that it needs to fulfil requirements of government through government authorities, government procedures, government charges and things of that sort. The Government says that it will give the authority a somewhat limited role. That was probably the concern of the ACTU. We would want to know more about how the Authority would use the powers provided in the Bill and the direction that the Minister concerned will give to the Authority. We think that at this time it would pose a further difficulty for business. I do not think that, despite the figures that were read out I believe by Senator Cook this morning, anyone would dispute that business profits are low, that businesses have difficulties and that the tentative signs of recovery in our economy are to be nurtured rather than impeded. It would have to be accepted by anyone who understands the application of business that price surveillance cannot reduce unemployment, which is at present so much of a difficulty in our economy. It was excessive wage increases, not price increases, which produced our high level of unemployment. When talking about prices, perhaps we ought to be looking at the price of labour as well as the price of goods, because the price of labour is of enormous consequence in our economy and in our competitiveness as we try to establish growth in our economy and the opportunity to do some of the things that we would wish to see achieved for this country. The Government has established its wages policy, a policy of full indexation. The prices and incomes accord will not survive wage increases and wage pressures as the economy gathers momentum if the recovery of which we see signs at present takes place. There have already been stresses on the wages side of the Government's wages and prices policy. The stresses that we have seen in the building industry unions in relation to the building agreement, the food preservers' case, the increase in salaries of New South Wales parliamentarians and so on lead us to see that there are pressures with regard to wage increases. The prices and incomes accord will continue to guarantee a high level of unemployment. The figures that were produced to the Economic Planning Advisory Council showed the difficulties that arose from the return to full wage indexation, projecting an 11 per cent plus unemployment rate for 1984-85 and a slightly lower rate for 1985-86. This is the climate in which we see the introduction of a Prices Surveillance Authority. It is in these sorts of circumstances that we find it somewhat illogical to talk about restraining prices or interfering with the profits of business. The tentative acceptance by employers at the time of the Summit was evident in the fact that, as I said earlier, many employers stated in the Summit communique that they felt it was unnecessary. The Government's argument is that if there is to be wage restraint it is reasonable also to expect that there should be price restraint. I do not believe that people would argue with that in terms of a simple statement but if we look at economic conditions we are looking at wage restraint, company profitability and the capacity to employ. If price restraint is to be imposed to the detriment of profitability and capacity to employ, I feel that another element is introduced into the economy which could present great difficulties. Business profitability in terms of the profits share over recent years has shown that there is an historical low in those figures. That, of course, is one of the accepted reasons for the difficulties in the economy and the decline in both our competitiveness and our ability to provide employment. We have seen that that difficulty is yet to be addressed. It is quite wrong to address that by the introduction of a Prices Surveillance Authority and the problem of job creation will certainly not be solved by the introduction of further detailed Government requirements of business through the application of this authority. The President of the ACTU, on 7 December, said: The Federal Government's Prices Surveillance Act in its present form poses the first serious threat to the prices and incomes accord. As I said earlier, that apparently has now resulted in some assurances being given by the Government. It will be of very great interest to see that we are informed of what those assurances were, and whether the present Act will be able to be used in the way in which the trade union movement finds acceptable. Mr Dolan said at that time that the ACTU and the trade union movement might have to reconsider the commitment in the wages area of the accord if the prices side were not adhered to, and that this legislation destroys the prices element in the prices and incomes accord. The talks that have been held since that statement of 7 December have not caused a great deal of public comment, with the exception of the article which I read today. It is of interest to us that the Bill does not apply to State authorities. The States, as I understand it, have rejected the idea of any surveillance over their authorities, although the Government says it will consult State authorities. The States, as I understand it, have rejected the idea of any surveillance over their authorities. If we are to look at costs and prices, the cost of power and other services that are provided by State authorities, the costs of State charges, State duties and State taxes are very important indeed in looking at prices that result from the manufacture of goods or from the provision of services by those in the commercial sector. The Treasurer said that this Bill incorporates legislative guidelines which will require the Authority to exercise its powers and perform its functions having regard to the need to maintain investment and employment. Of course we see that as an absolute prerequisite for any government dealing with the economy at this time. If there is to be any body that does not have to have regard to the need to maintain investment and employment it would seem to be an act of destruction rather than one that would give any assistance at all to the creation of employment or the maintenance of existing employment. The Treasurer also said that if necessary where it is clear that a company has taken all reasonable steps to resist a breach, that is, a breach of the wages system, a ministerial direction under section 20 will be issued to the Authority that the resulting cost increases should not be disallowed. I should like some information as to the criteria that will enable the Treasurer to conclude that a company has taken all reasonable steps to resist a breach. I think it would be of great importance to companies to know in what way they will need to deal with the requirements of that section. While removing restraints on union behaviour the Government is being asked by the unions to impose even more stringent controls over employers regarding prices than is mentioned in this legislation because there are the proposals, some of which have been put into effect by the Government in the name of the prices and incomes accord, with regard to a number of matters relating to industrial matters. I refer to such things as the abolition of the Industrial Relations Bureau, the legislation for which has been passed to enhance further the position of the trade unions in the Australian community; the repeal of the Commonwealth Employees (Employment Provisions) Act which was designed to protect the provision of essential services in the community, and the fact that the Government has indicated its intention to revoke section 45D of the Trade Practices Act, another step to put the trade unions beyond the laws which apply to the rest of the Australian community. Trade union power, it must be argued, can be as monopolistic and as restrictive as corporate power. When we are dealing with a body such as the Prices Surveillance Authority, which is designed to deal with corporate power, we need to remind ourselves of the other side of the coin, that is, the sorts of legislation and requirements of government regarding trade union movements and those who offer their labour, because the price of goods is related very much to the price of labour and to other costs endured by companies. It is of interest to us that claims have been made by professions and by small businesses that they have apprehension with regard to the establishment of a Prices Surveillance Authority. I think that some evidence from the Government of its intention with regard to the ACTU or the trade union movement assurances that have been given would be appropriate as we are dealing with a Bill of this nature. I have noted in particular the statements by the Treasurer with regard to the way in which he would use the Authority and his hope that the Authority will have some effect on prices. But as I said earlier, that statement and the introduction of this Bill were entirely rejected by the trade union movement which said it would put the prices and incomes accord under severe threat. I think at this time, when dealing with a Bill which, as I have stated, the Opposition will oppose, it would be very appropriate for us to hear a little more about the application of the Authority when it is established and what changes have been made from the time of the second reading speech, the introduction of the Bill and the passage of the Bill through the House of Representatives, to reach the sorts of statements that have been made today with regard to the trade union movement being happy with the assurances that have been given to it. I confine my remarks to those matters that I have mentioned and state again that the establishment of the Prices Surveillance Authority at this time is opposed by the Opposition. Senator COOK(Western Australia)(6.07) —I support the Prices Surveillance Bill 1983. I listened intently to the remarks of Senator Dame Margaret Guilfoyle. I wish not at this moment, but later in my remarks, to make some comment on some of the questions she put because I think there are very simple answers. If those questions dealing with undertakings, et cetera, are the main issue that the Opposition is concerned about, this Bill should have unanimous passage through the Senate. In February of this year at a national unions conference called by the Australian Council of Trade Unions in Melbourne the prices and incomes accord was adopted. I think it is important to begin my remarks on this legislation by quoting for the Senate record what is the undertaking between the Australian Labor Party and the Australian Council of Trade Unions on prices because the accord which sets out that undertaking can be seen as clarifying some of the issues raised by Senator Dame Margaret Guilfoyle. Under the heading 'Agreed Policy Details', with the sub-heading 'Prices', the accord reads: A pricing authority will be established which will be given legislative criteria by which it must asses the validity or otherwise of price rises sought by corporations and the public authorities within its justification. It is considered unnecessary to attempt to regulate prices of all corporations if the large corporations, which are generally the price-setters in their industry, are subject to public surveillance. The legislative criteria will be designed to ensure that enterprises do not earn profits beyond levels necessary for the maintenance and the expansion of the enterprise, that real wages of employees are protected, and that unnecessary cost increases are not reflected in higher prices. In this regard the amount by which wages may increase beyond that warranted by increases in prices and national productivity will not normally be allowable as the basis of a price rise. The pricing authority will operate in a less legalistic manner than the former PJT so that cost to the corporations concerned, and the time involved in processing price rise applications, will be less than those which previously applied. The Trade Practices Legislation will be strengthened to promote more effective competition and to reduce the possibility of excessive prices through stronger regulation of mergers, more effective outlawing of abuses of market power, tougher prosecutions against price agreements and additional protection for consumers against unfair practices. That is the provision in the accord. By setting out in those terms an accord which has been assented to by the union movement and the Government it is clearer, as distinct from the remarks made by the previous speaker, what this legislation is about. However, the accord is not the only formal reference that can be referred to when tracing the origins of the Prices Surveillance Bill. The Government, elected on a 'bringing Australia together' mandate called, as we know, one month after it was installed in office a National Economic Summit Conference. That Summit brought forth a communique, after meeting for four days in a quite historic economic parliament, as it was labled by the media. Several parts of the communique are relevant. Paragraphs 12 and 24 ought to be referred to but the key paragraph, in terms of price surveillance, is 26 which, to be consistent, should be quoted. The last speaker argued that there had been a considerable expression, on the part of industry, of lack of support for this legislation. Since it springs from the Summit communique, in terms of the tripartite government, industry and unions perspective, paragraph 26 of the communique is pertinent. It reads: 26. The employers accept that the Government has a mandate to establish a price surveillance mechanism. Many employers believe this is unnecessary but they are prepared, together with Government and unions, to be involved in an examination as to the most appropriate form and functioning of a prices surveillance mechanism. It is agreed that this examination will be conducted by a representative working committee. It is a matter of record that that committee has met and deliberated extensively and that a tangible result of its labours is the Bill before the Senate today. Senator Hill —How about small business representation? Senator COOK —A working party was set up after the Summit and it was drawn from the participants. I cannot recall, while I am on my feet, whether the small business community was represented on the working party but I can say that the Government, in all of its economic considerations, has been very concerned- Senator Hill —How many representatives on the working party were from small business? Senator COOK —Small business was represented at the Summit and it supported the communique. Therefore, one assumes that small business backed the processes that have been followed. The Government has been very concerned to consider and to protect the interests of the small business community. However, let me go on to speak of what I think is the outcome of all of those proceedings. The Government was elected on a mandate to bring Australia together. The steps that it has taken have done that. The legislation that we have before us is uncommonly supported across borders which are normally hostile to one another. That is a significant achievement and I think a case study in how a country should be managed by the co-operative effort of all of its major social partners. That is what this Government has achieved. I turn briefly to some of the philosophy behind the prices surveillance legislation. Of course, the key issue is that of achieving a level of economic recovery that will put people back in jobs, will make Australian industry profitable and will permit such development of the manufacturing and other industries as will ensure their long term viable future. Consistent with that aim, in terms of the Economic Summit communique and the philosophy of the Government, we have been concerned to see that there should be restraint in wages and prices. The commitment of the Summit was that restraint should be exercised on all sides; that we should all share the burdens necessary to bring about economic recovery. Wages-Senator Dame Margaret Guilfoyle made a remark about the subject-are of course regulated. The Australian Conciliation and Arbitration Commission is the regulatory authority. It accepted the arguments of the Australian Council of Trade Unions and the Government at the last national wage case hearing and brought in a centralised system of wage fixing which required that unions comply with certain undertakings in return for the 4.3 per cent increase. Nearly all unions have voluntarily gone before benches of the Commission, have given the undertakings required and have accepted the increase. Thus, they have given on the public record firm undertakings to abide by the centralised wage fixing system and to accept the level of increase that the Commission has awarded and not moved beyond it. That is the strongest agreement that one can have, in the sense not only of observing the Commission's decisions are properly observed. In regard to non-wage incomes, there is some concern but a number of indirect measures are available to the Government if it should prove necessary to adopt them. In order to balance the mosaic one needs to have in place a provisoin on prices so that people in the community, who are being asked to restrain their activities, can see that there is equality across the board, that it is not just wage earners who are being asked to exercise restraint-the approach adopted by the last Government. Thus prices, which until now have been substantially unregulated, are to come under the purview of the Prices Surveillance Authority. I believe that will ensure restraint on all sides and will be seen by all parties to the central commitment to be a genuine exercise in restaint. As is clear from all of the papers, the Prices Surveillance Authority will not regulate or control all prices. That is not its character; it is not that type of being. It will intervene where necessary against excessive prices and require , where they are prima facie excessive, that there be some accounting, investigation and review. Of course, if that investigation and review reveal that the prices sought are proper and reasonable those prices will apply. If it is found that they ought to be lower, or not increased at all, the public will know the basis upon which they have been shifted upwards and, will know of the evidence that has been adduced before the Authority. If the particular company, in regard to which the Government can exercise no direct constraint to compel it to observe the findings of the Authority, wishes to flout the heavy moral responsibility that it must bear, the public will have the ultimate sanction as consumers and will know how to treat the offender. The important element of the Prices Surveillance Authority is that it is not all-pervasive. It is not a central regulatory body. It will not control prices. It will recommend prices after a proper investigation, public accounting and examination of them. Then, if the company wishes to pursue them, the ultimate sanction will be that exercised by the community, which can choose not to support the company; but there is no provision in the Bill for the Government to compel the company to observe certain prices. One of the other essential aspects of the PSA, as it now is, is that it will be less legalistic and formal than was the Prices Justification Tribunal which, in my period before coming into this place, was colloquially known among a number of wage and salary earners as the prices bastardisation tribunal, simply because it seemed to run ahead of what were reasonable prices and provide a justification, that was really not merited, for increasing those prices. The PSA will play a vastly different role. It will be less legalistic or formal and therefore, I trust, more effective. Our approach in this field springs from the recognition and support by the Government of the fact that the Australian economy is essentially a mixed economy, that the private sector is the major sector and that it employs the majority of Australian workers. Therefore, there is a ready and willing recognition that companies need to be profitable in order to obtain income for capital reinvestment, and they must be able to attract investment themselves as undertakings. In our lexicon profit is not a dirty word. It is recognised as being an essential component of a healthy private sector. It is the intention of the legislation not to constrain profit levels so that employment-generating expansion of the private sector will not occur. We are not so silly; that is not our intention. We want to see a healthy, robust and constructive private sector. That might go also to a couple of remarks that were made by Senator Dame Margaret Guilfoyle earlier. She drew attention to a comment that I made in this morning's debate on the Taxation (Unpaid Company Tax) Assessment Amendment Bill. I referred to the latest set of economic indicators and emphasised that they showed a redistribution, in terms of gross domestic product, from wages and salaries to profits. That is a fact in terms of what those indicators show. I do not pretend that, therefore, automatically the private sector is excessively healthy and robust. In fact, I think the effect of price surveillance legislation will be not to involve too many prices under surveillance in practical terms. Those indicators do show a redistribution away from wages and salaries to profits. That was significant in terms of what I said in the debate on equity this morning. But to make a general comment that it can then be construed that everything in the garden of the private sector, after a year of record low profits last year, is rosy is not an accurate reflection. The other matter raised by Senator Dame Margaret Guilfoyle in her remarks was that the price of labour is a key price and that ought to be checked. I do not think that argument needs to be pursued because it is facile and superficial. As I have indicated, the cost of labour is set by arbitration commissions upon hearing argument from employers, unions and, if necessary in the public interest , governments. If it is held that those decisions are wrong it is not, as is normally the case for the Opposition, a matter of blaming unions. It is a matter of challenging the veracity of the umpire's decision and the fairness and fitness of it. The feeble attempt to try to indicate a breakout from the prices and incomes accord on the unions' side by citing the building trades agreement or the food preservers' case is, of course, not sustainable in any sense. In all honesty and with respect to the honourable senator I say that it was not sustained be her. Those cases were merely cited as examples without being employed in such a way as to justify the argument Senator Dame Margaret Guilfoyle was making. The facts are, however, that the building trades agreement has not resulted in widespread industrial disruption since it was rejected by the Commission and the building trades agreement parties are in close collaboration with one another to find some other way of expressing their mutual agreement which will meet the guidelines of the Conciliation and Arbitration Commission. In terms of the food preservers, one does not need to go too far into that argument to see that the food preservers represent no threat to the accord which has been remarkably successful. One, therefore, cannot be persuaded at all that those, I guess, feeble attempts which are really debating points and not serious argument should be considered. The other point Senator Dame Margaret Guilfoyle raised about Economic Planning Advisory Council projections is, I think, adequately put to sleep if her reading of the same newspaper from which she quoted about the Australian Labor Advisory Council meeting yesterday was to be extended to the projections of EPAC in terms of the economy. In fact, the latest figures posted last Thursday show that the earlier EPAC projections which were leaked and from which she sought to draw some comfort are now indicative of a general strand and are not accurate in the sense of the latest score in terms of the statistics. With those remarks, let me turn to what this Bill does do. This Bill provides a broad framework-not a detailed prescription-in which, selectively, key prices can be surveyed. The components of all prices will not necessarily be put through a detailed examination. The selectivity of it will depend upon the exercise of proper and due discretion by the Minister-in this case, the Treasurer (Mr Keating). Conditions for the selection of goods and services will relate to areas where effective competitive disciplines are not present and where prices or wage decisions have pervasive effects throughout the economy. The great majority of business will, therefore, not be subject to surveillance. Decisions on which industries need to be covered will be made by the Treasurer in consultation with the Surveillance Authority which, of course, can also consult, if necessary, the Trade Practices Commissioner. The Authority will be asked to observe a number of legislative guidelines. They are the need to maintain investment and employment, including the influence of profitability on investment and employment; the need to discourage a person who is in a position substantially to influence a market for goods or services from taking advantage of that power and setting prices; and the need to discourage cost increases arising from increases in wages and charges in conditions of employment inconsistent with the principles established by the relevant industrial tribunals. With those remarks I would like to turn to the major issue Senator Dame Margaret Guilfoyle raised. Indeed, I think it is a matter that requires some ventilation in the Senate Hansard record. On Thursday of last week a number of newspapers carried headlines to which I wish to refer. For example, the West Australian, said: 'Prices body inadequate, says the ACTU'. The Age had 'ACTU threat to pay accord' as its banner headline. The Australian Financial Review had as its headline: 'ACTU-Government prices collision'. I think the first thing that can be said about that range of headlines and the articles that followed those headlines is that they overstated the case quite considerably. Last Thursday in the House of Representatives, in answer to a question from the very celebrated honourable member for Port Adelaide, Mick Young, to the Treasurer, the Treasurer read into the House of Representatives Hansard a telex he had received that morning from the Secretary and the President of the ACTU concerning newspaper reports. Since I have the text of that telex in front of me now it is as well that it be read in this chamber too. The telex stated: Attention: R. J. L. Hawke-Prime Minister P. Keating 1. The ACTU has had extensive discussions with the Government on the question of the PSA. 2. The ACTU does not oppose the PSA legislation. There are no changes that we wish to make in regard to the legislation. The legislation has been discussed with the ACTU and we have accepted the legislation. 3. However, the legislative framework unequivocally puts the onus on the Treasurer to make the PSA an effective body. 4. In this context the Executive believes that a number of decisions, all of which are of an administrative nature, should be made. These are detailed in the resolution. 5. We believe that the ACTU Executive decision should be subject to further discussion. Those discussions have already commenced. We are satisfied that the Treasurer will genuinely consider each of the issues we raised. 6. The desire of the ACTU is to have an effective prices surveillance authority consistent with the prices and incomes accord. We do not want a repetition of the PJT with its emphasis on legalism and bureaucracy. It concludes with this one sentence: There is absolutely nothing in the ACTU resolution which detracts from that position. It is signed by Kelty and Dolan in their respective offices on behalf of the Australian Council of Trade Unions. If the honourable senator had kept up her reading of the House of Representatives Hansard she would have read that answer, and a number of the concerns she raised in her speech would not need to have been raised. Her main concern seemed to be the undertakings given yesterday at a meeting of the Australian Labor Advisory Council when, of course, last week on the record we had the satisfaction of the ACTU in telex form, signed by the President and the Secretary of that body, with the legislation we are dealing with and debating now. I turn again to what the telex said: There are no changes that we wish to make in regard to the legislation. The legislation has been discussed with the ACTU and we have accepted the legislation. On that basis, there is no substance in what Senator Dame Margaret Guilfoyle has argued. One of the areas of proper and genuine interest not only by the ACTU but also by a number of other people and organisations is what the administrative means of the PSA will be and how it will conduct its affairs. They are matters to be worked out with the Authority once it is constituted. I have a number of interests in that issue. Just to cite one of them, the old Prices Justification Tribunal worked on the basis of lawyers on one side arguing why a price should be as it was and often ACTU research officers on the other side arguing why it should not be. Sitting suspended from 6.30 to 8 p.m. Senator COOK —I had almost concluded my remarks when the sitting was suspended for dinner. The concluding point I want to make is that a number of procedures are yet to be worked out. However, what the Bill does provide is a broad legislative framework and that framework is such as to provide a basis for prices surveillance legislation which will ensure that the interests of all parties will be protected. Some of the procedures under that legislation are yet to be resolved, and I gave an example. I hope that the new body will avoid some of the mistakes made by the old Prices Justification Tribunal and that, rather than having the adversary style of inquiry which typified the PJT it will adopt a more inquisitorial style and get to the bottom of an issue without a great deal of legalism and undue formality. Senator Hill —Don't you think there could be legalism in an inquisitorial style? Senator COOK —If it adopted an inquisitorial style it would fulfil the reference to 'surveillance' in the title of the organisation in finding out what are the issues and the mechanisms involved. As I have said, the legislation has been agreed to by all of the major parties. They have worked hard and long since the National Economic Summit Conference to bring it to fruition. An earlier interjection asked whether the interests of small business had been taken care of. I can assure Senator Hill that not only were they taken care of in terms of participation in the Summit and therefore input into the communique- Senator Watson —How many small businessmen were there? They were taken care of outside. Senator COOK —I refer Senator Watson to the record of the National Economic Summit Conference. If he consults that document he will see that the Council of Small Business Organisations of Australia was a participant- Senator Watson —Only one, and 28 big businessmen. Senator COOK —If the honourable senator insists on that line of argument, I point out that only one union organisation was represented-the ACTU-and there are 387 unions in Australia. There was one organisation representing all of the small business organisations of Australia. It is their organisation and they were represented. I will not dally with those ineffectual and pathetic interjections. It is clear that the small business organisations participated in the Summit. The Council had its say, put its views on the record, and supported the communique. That might be uncomfortable for the Liberal Party but, irrespective of how uncomfortable it is, that is a fact and the record clearly demonstrates it. Mr Don Gibbons, the Chairman of the Council of Small Business Organisations of Australia, was part of the working party that turned its mind to the prices surveillance legislation. That working party which advised the Government had a major input into the legislation that is before us now. That is also another fact which may be, I concede, uncomfortable for the Opposition. Perhaps the criticism the Government has received for its decison to float the Australian dollar demonstrates the amount of support we have for that measure, which is about equal to the amount of support we have for this measure from the business community. I hope that the Opposition in this place will show confidence in this Government equal to what the business community has shown in supporting this legislation. I commend the legislation to the Senate. Senator HILL(South Australia)(8.05) —The Senate is debating the Prices Surveillance Bill 1983. The Bill seeks to establish a Prices Surveillance Authority, the charter of which will initially direct the Authority to provide prices surveillance over wholesale petroleum product pricing. In addition, we are advised by the Attorney-General (Senator Gareth Evans) in his second reading speech that major Commonwealth public authorities, where appropriate, will be subject to surveillance, whatever that may mean. 'Where appropriate' is just one of the matters on which we might have received some clarification from Senator Cook in his just completed contribution. We are still unsure what major public authorities the Government has in mind. The Authority is further empowered under this Bill, subject to ministerial approval, to inquire and report on prices set by prescribed industries and corporations. There are no guidelines in the Bill. Certainly vague criteria are mentioned in the Minister's speech. Senator Watson —That is one of the dangers. Senator HILL —As Senator Watson says, that is one of the dangers. The criteria were outlined in Senator Cook's speech. But I think that when he made reference to the industries we could have expected some guidance as to what industries the Government has in mind to bring within these provisions. Unfortunately, that was not so. Basically it will be entirely up to the Minister's discretion as to when to interfere, a discretion that appears to be total. Like its predecessors, the Prices Justification Tribunal and the Petroleum Products Pricing Authority, the new Authority will have at its disposal only the threat of public exposure and the power of moral persuasion in seeking to hold down price rises in prescribed sectors of the economy. Financial penalties will principally apply only where prescribed industries and corporations fail to comply with the procedures set out for the notification of price changes or where prices are increased pending an inquiry. In view of its intended structure and method of operation, it would appear that the Prices Surveillance Authority as set out in this Bill might turn out to be what some commentators have described as a toothless tiger. In fact, the Minister appeared to emphasise in his second reading speech that the Authority will indeed be benign. We are informed, for example, that the Government is concerned with prices surveillance and not price control. We are also told that although the Authority will be in the business of keeping watch on price movements in sensitive areas of economic activity, the disruption to corporations and industries will be kept to a minimum with price inquiries and required notification procedures being expeditious and not excessively legalistic. Whilst such assurances may be soothing for those who fear price control, it raises the question of what the contribution of the Prices Surveillance Authority will be to the fundamental economic issues facing the Government. Will it make a contribution to the promotion of economic growth and prosperity? Will its presence help the task of providing increased employment opportunities? Will the operation of such an authority be supportive to improved private sector confidence? Will it have a positive role to play in ensuring adequate profit and investment levels? Will it serve any role in helping to facilitate the necessary structural adjustments which must be made within the economy so that Australia can better compete in world export markets? Will a prices surveillance authority help bring about an expansion in the small and medium business sectors, which hold the greatest potential as employment generators? To all of those questions the answer is unfortunately no. Rather, the operation of this Authority will prove, on the face of the Bill and with the Minister's assurances, to be of little more than nuisance value to the private sector which has recently, of course, experience historically low profit levels and depressed investment activity. Why then introduce this benign animal? The answer, of course, is part payment for the privilege of having the prices and incomes accord-that much vaunted ticket to economic salvation. Although only 10 months old, the accord is already showing signs of proving a very dubious privilege. To date the accord has ensured that those lucky enough to have a job are to receive a wage increase of 4.3 per cent, and from now on they will be assured of wage rises every six months because of half-yearly indexation. Yet this 4.3 per cent is to be paid out by business which in 1983 is still trying to recover from the damage inflicted on its profit levels by the pay rounds of late 1981 and early 1982. But pay businesses must, because the accord is all important. It would appear, in fact, that the accord has been so raised in status by this Government that it must be protected and nurtured irrespective of the long term costs to the nation. So, in order that the accord is adhered to, the trade union movement must have its long held penchant for price control satisfied. What this means was set out in the Australian Financial Review, in its editorial, on 2 December, when it observed that: The union demand for prices control is stimulated by the desire to block price increases which tend to follow wage rises. It is, in other words, a demand for a mechanism to ratify and enforce transfer from business operating margins to real wages and to block any attempt by business to recover its cash flow position by subsequent increases in prices. So we are to have a Prices Surveillance Authority not for reasons of sound economic management, let alone that such an authority could play a positive role in promoting economic growth. We are to have a Prices Surveillance Authority to satisfy the trade unions-in particular, the Australian Council of Trade Unions. It is a further abdication of the Government's national responsibility in favour of a sectional interest group. As the Minister says in his second reading speech : The overwhelming majority of unions have undertaken to comply with the new wage indexation guidelines by undertaking to make no extra claims during the currency of the wage system. We are heartened by the development. However, there is also a need for a comparable supportive mechanism on the employers' side. A comparable supportive mechanism on the employers' side means profit restraint. But profits have been shattered in recent years. What this Government and the unions, in the longer term best interests of their members, should be encouraging is profit recovery, because it is only with increased profitability that business will be able to maintain employment numbers and maintain real wages. Yet the unions and this Government, regrettably-the Government inexcusably-remain blinded to this obvious economic reality. The real irony is that although this Bill is a sop to the unions, when the debate took place in the House of Representatives, as Senator Dame Margaret Guilfoyle has said, the ACTU warned the Government that the accord was in danger of disintegration because of this Bill. While the Government has claimed that it is essential to set up a Prices Surveillance Authority in order to reinforce its 10-month-old agreement with the trade union movement, the trade unions said that it was not good enough. Following a meeting of the ACTU Executive, its President , Mr Dolan, said that his organisation was concerned with a number of aspects of the prices surveillance legislation. In general terms, he said that the Bill did not go far enough and that unless increased surveillance powers were given to the Authority, the ACTU would consider the Government as having failed to live up to its side of the accord. Senator Cook —That is not true. Senator HILL —I am quoting from the report of Mr Dolan's Press conference. Senator Cook —Why don't you quote from his telex, in which he said the reverse? Senator HILL —Just be patient, Senator, and we will get to your explanation. Senator Cook —You can believe what you read in a paper, but why don't you quote from the original document? Senator HILL —This was reported by all the newspapers. I will give the honourable senator some quotations from the Australian and then from the Australian Financial Review. If he is serious in suggesting that all the newspapers misquoted Mr Dolan, he is fooling himself. Senator Cook —Don't quote from newspapers; quote Mr Dolan himself. Senator HILL —Ah! But that was the day after. The question is, what happened in the meantime? Senator Cook —There is a telex here. Senator HILL —What Mr Dolan said-and this was after the ACTU had reached its decisions; this was at his Press conference-was reported in the Australian on 8 December as follows: We have carried a resolution in relation to the wages question and we would certainly need to reconsider that if we are going to be put into a position where the other side, the prices side of the accord, is not being properly adhered to or monitored . . . Unless these questions are positively answered- That is, questions relating to the surveillance powers of the Authority- the ACTU will not accept the PSA as established as satisfying the basic conditions of the accord . . . In the Australian Financial Review on the same day he is reported as saying-- Senator Cook —Why don't you quote Mr Dolan? Senator HILL —This is what Senator Cook's leader, the leader of the ACTU, said at his Press conference after the organisation had reached its decision. Senator Cook will be interested to know what was reported in the Australian Financial Review of the same day. He said: . . . we're faced with legislation which is pretty useless . . . Also it is reported that he said it would be wasting a trade union official's time to be on the Authority of the type proposed. This is what he said at the conclusion of the meeting of the ACTU, not the following day. It is not surprising that the unions are unhappy. The Bill pays only lip service to the principle of price control. One can have an economic strategy of wage and price control. It might not have a good record where it has been tried elsewhere but, nevertheless, it is a legitimate, economic strategy. But wage control and price surveillance is a nothing. It is a nonsense. It is the product of this strategy of consensus, not an economic strategy but a political strategy. It is a political strategy premised on the belief that if one keeps all people happy all of the time one ensures one's political survival. That is not the responsibility of government. By the following day, as we were reminded by Senator Cook, Mr Dolan had gone to water. The telex we have heard about was sent. It was almost in total conflict to what he said immediately after his Press conference. Whether he was, in the meantime, convinced that the Prices Surveillance Authority would not be a toothless tiger is interesting to surmise. Perhaps the considerable indirect influence that the Government will be able to bring over a particular enterprise should not be underestimated. Was this brought to the attention of Mr Dolan? The Minister, for whatever reason, can require the Authority to hold an inquiry. As Senator Cook knows, for the term of the inquiry that freezes the prices imposed by the party being inquired into. It is indicated in the Minister's speech that such inquiries hopefully will be limited to periods of less than three months but, as we all know, these things tend to continue. Senator Cook —You got that bit right. Senator HILL —Thank you. What that means, of course, is that the Minister's decision to refer can, in certain circumstances, be strategically destructive of the company concerned. Therefore, the mechanisms may appear ineffective as a general price control but in the mechanism there is considerable power to influence the conduct of individual businesses. Before Senator Cook tells me that it is possible under the proposed Act to obtain an interim price increase from the Authority, I suggest to him that that would, of course, be difficult because the Authority certainly would not think that political manipulation was involved. We would not like to think that a government would use the powers of this proposed Act to influence changes in, say, industrial relations areas. The problem is the lack of guidelines in this Bill. While that lack of guidelines exists there is the potential for abuse. That is of great concern to honourable senators on this side of the chamber. Whilst the Government plays at keeping the unions happy and whilst we speculate as to how Mr Dolan was placated, the major economic challenges languish. Those challenges-improving employment prospects for those out of work, the need to reduce further our rate of inflation to a level comparable to rates experienced by our trading partners, the necessity for the business sector to recover from the unacceptably low profits of recent years , the need for improved private sector confidence and with that confidence increased investment activity-are issues which this Government should be addressing. Little purpose is served in valuable time and energy being used up in pursuit of a workable price surveillance mechanism. If the Government is so concerned with price control and surveillance, it should practise what it preaches and look at its own increasing taxes and charges despite, of course, promises to the contrary which no doubt Senator Cook also remembers. In reducing taxes, this Government would be taking a real step towards increased profitability and all the benefits that flow therefrom without the same need for increased prices. But for this Government to dissipate its energies on setting up yet another bureaucracy which will serve no worthwhile purpose, not even adequately meet its internal debts to the ACTU, is further evidence of its abdication of economic responsibility. This Bill is a disappointment to those genuinely interested in economic recovery. It will make no real contribution to that goal. Senator JACK EVANS(Western Australia)(8.22) —I was disappointed with the tenor of the speech that has just been made by Senator Hill because I felt that here was something on which all parties would have agreement; that this was the second part of a deal which gained the support of all segments of the National Economic Summit Conference. I do not know whether it is being suggested that only one side of the deal be implemented by the Government or whether in some way the Government renege on this promise and allow the wage earners of Australia to be under constraint with absolutely no constraints or restraints on the profitability or productive side of Australian commerce and industry. It has not been an easy existence but we have lived with the Prices Justification Tribunal with all of its faults. It at least gave some sort of semblance of balance towards the constraints on wages. When the wage freeze was introduced, in my opinion the sole reason that it was accepted was that some prices control mechanism was in operation at the time. This country would have exploded if there had not been some sort of control on prices, particularly in the vital area of petrol pricing. To suggest that the PJT and the Petroleum Products Pricing Authority go out the window and that nothing take their place would, I think, lead to anarchy. One thing that concerns me, and I think it concerns many Australians, is that the arguments that we have heard pro and con have been pro and con wage earners and pro and con business. I just wonder whether anybody is concerned with the third element in this equation, that is, the consumers-not just the consumers at the retail end but the consumers in small businesses. One thing that is not covered adequately with this legislation is the potential for large businesses to be ignored as a result of having done a sweetheart deal with the Government. A classic illustration of this may well be the Broken Hill Proprietary Co. Ltd, which undoubtedly controls the steel industry in this country, with or without the Government's approval. As a result of that it has an absolute stranglehold on the consumers of steel in this country. Under the legislation as it exists at the moment, if the government makes this sweetheart arrangement with BHP the consumers-be they buyers of refrigerators, bicycles or anything to go into a home, or be they small businesses such as engineering firms, the manufacturers of products that use steel-will have absolutely no redress because the only place to which they can appeal under the legislation is to the Treasurer. Of course the Treasurer is party to the sweetheart deal so there is no way that they will persuade him to reverse his decision, thus ensuring that the sweetheart deal with BHP holds fast. This is of great concern to me, to the Australian Democrats and, I suspect, to a lot of people, particularly those in small businesses who have no right of appeal, no alternative approach, because the only referral point in this legislation comes from the Treasurer. That is the big danger in the legislation. I will speak briefly about the major differences between the Prices Justification Tribunal which is being abandoned and the Prices Surveillance Authority, which is the new authority being set up to look after the interests of those who could suffer from monopolies or from pricing which is not considered fair or just. The Prices Justification Tribunal had specific criteria on its target; that was any business or any industry with greater than a $30m turnover. The Prices Justification Tribunal was encouraged to examine industries rather than individuals. The Prices Surveillance Authority has general criteria which do not drag in large numbers of companies but can target key companies and key areas. In fact it will be encouraged to examine areas in which there is little competition. It will be looking at monopolistic or oligopolistic industries and organisations. The scope of the PJT did not cover statutory bodies. I am delighted to see that Commonwealth Government statutory bodies will be covered. The PJT did not cover partnerships or co-operatives. Eventually, however, it included imported goods and services. Regrettably, because of our Constitution, there will be nothing that this new Authority can do to look at State authorities, statutory bodies which come under the aegis of State governments. I think is is fair to criticise the approach of the PJT. It initially squeezed profit margins at a time when profits were desperately needed in some areas for survival and recovery. I understand that, at one stage, former Prime Minister Whitlam intervened to lessen that squeeze. Nevertheless, there was that emphasis and it had a deleterious effect. The Prices Surveillance Authority will give regard to profitability, to investment and to employment. That is part of the guidelines written into this legislation. That is desirable. Profit is not a dirty word. Profitability is absolutely vital for the survival of the enterprise and for the continuity of jobs. There are some similarities between the old Prices Justification Tribunal and this new Prices Surveillance Authority. I think that is probably because they start with the same massive handicap, which is that neither of them has the constitutional power to absolutely control prices or to penalise businesses. That power is denied this Government. The only power left is the power of odious publicity and the force of public opinion. I believe that that may well prove to be an adequate power. It depends on how enthusiastically the Treasurer and the media grasp the inequities which occur and which are drawn to the public's attention by the Prices Surveillance Authority. I think that the climate is ripe for the media to take some cognisance of the arrangement or accord, which was reached at the National Economic Summit Conference between all parties, that there should be a degree of control over both wages and prices. The media will be endeavouring to keep all parties honest. They are working hard at keeping the wage earners honest and ensuring that there is no effective blowout of wages which would destroy the accord, and I think they will do the right thing on the other side of the ledger to try to keep the prices down as far as possible without interfering with the survival and base profitability of companies. The other bases which may be different include the primary objective of each of these two bodies. I think it is fair to suggest that the major aim of the Prices Justification Tribunal was to restrain inflation. It was put in quite deliberately to hold down inflationary trends; to stop the blowout. Unfortunately it operated as a rather lonely instrument and not as part of a co- ordinated process; nevertheless, it was a reasonably effective instrument in holding down inflation to a degree. This Prices Surveillance Authority does not have such an objective. It has a different aim; that is, to maintain the accord. It provides the second and complementary half of the process to balance wages restraint. I believe that the 15 million Australians out in the public arena, who are all very interested and concerned and certainly who will be affected by the public debate that took place at the National Economic Summit Conference, applauded the accord which was reached. So this legislation is absolutely vital to maintain that accord, and in turn that accord is vital to this country's economic survival and recovery. I suppose it would be possible to achieve a form of economic recovery with draconian legislative measures. I do not categorise this Bill in that way. I do not believe that it is draconian. I believe that it is modest and, in fact, that it may be too moderate in its approach. The Australian Democrats have distributed an amendment to add to the powers of the Authority itself so that there is an additional channel of referrals rather than solely via the Treasurer . I believe that the new authority will be good for Australia, that it will contribute to the maintenance of the accord and that it will provide a forum for the presentation of attitudes by various parties on what is happening in the prices area and, as a result, will act as a safe sounding board for the views, for the plans, for the disparate points of view of what is happening on that side of the formula for accord. I believe also that the Government probably sees it as a method by which it can influence, and to a degree direct, the business community of this country. I therefore on behalf of the Australian Democrats applaud the Government for introducing the Bill. I ask the Government to accept the amendment we will be moving in the Committee stage which will provide for the Prices Surveillance Authority to take into itself matters for consideration without the necessity of having those matters referred to it by the Treasurer who, under the legislation as it exists at the moment, is the only possible referral authority. Given that modification, this legislation, once passed by this Parliament, will achieve the purposes which the Government has set for it. Senator CRICHTON-BROWNE(Western Australia)(8.35) —We are debating the Prices Surveillance Bill 1983. I am well reminded that, in 1973, the Whitlam Government introduced a prices justification tribunal as part of its prices and incomes policy in an attempt to control inflation. During those years, the Australian economy suffered historically high inflation rates. The 1974 inflation rate reached a record 16.9 per cent. Not only did the Prices Justification Tribunal fail in its stated objective but also undoubtedly it contributed to the gloomy economic climate that dried up investment in those years. This Government, by its attempt to introduce the Prices Surveillance Authority, wishes to repeat that disastrous experiment. It is quite clear that the Government's motive in doing so has little to do with economics; rather, it is a transparent attempt to buy the goodwill of the trade unions. If the strike record under the last Labor Government is anything to go by, there is no evidence to suggest that that attempt will succeed. In introducing the Bill, the Treasurer, Mr Keating, announced: The Government is firmly committed to restoring economic prosperity in Australia and bringing about the sustained high rates of economic growth that are necessary to reduce the present high levels of unemployment. Yet the very prerequisite of high levels of economic growth is investment. People will not invest in business enterprises unless they receive a rate of return to compensate them for the risks they are taking. Whether a business can offer them an attractive return on their investment in turn depends upon its level of profitability. Company profits as a share of the gross domestic product have been steadily declining since 1970. In the financial year 1969-70, company profits represented 15.4 per cent of the gross domestic product. By the end of the last financial year, they had sunk to only 10.4 per cent of the gross domestic product. If anyone has any doubt where company profits have gone, they need only look at the share of the gross domestic product taken up by wages. In the financial year 1969-70, wages accounted for 52.6 per cent of the gross domestic product. The decline in profits is almost directly matched by the increase in wages. Their share of the gross domestic product in 1982-83 has risen by 4.2 per cent to 56.8 per cent. In the words of the Australian Industries Development Association; 'Wages growth has ripped into corporate returns'. When profits slide, so does investment. That is why we now have unemployment running at a rate in excess of 10 per cent. The loss of investment means that businesses are not only unable to expand and to create new jobs, but also forced to cut back their labour force and in some cases close down altogether. This Government has now proposed to tackle the problem by introducing a prices control body while leaving control of wages dependent upon the goodwill of the unions, a move which no doubt can only further reduce profitability. The Treasurer has told us that compliance with the decisions of the Prices Surveillance Authority will be voluntary. Its role will be one of price monitoring rather than price control. This may well be the Government's intent, but in practice under the proposals of this Bill the Authority will have the means to cause firms wishing to raise prices a great deal of inconvenience, to say the least, and make it very hard for a company not to abide by its decision. The Authority will have the power to declare any supplier of goods and services subject to the Act. Once so declared, a supplier must notify the Authority of its intention to raise a price. Failure to do so will incur a penalty of $10,000 . If the Authority objects to the price increase, it may choose to hold an inquiry. During the inquiry, the Authority may require a company to freeze the price in question. Again, if the company does not comply with the requirement it will be penalised with a penalty of $10,000. Although the Treasurer said that inquiries will generally last no longer than three months, there is no time limit incorporated in the legislation. Therefore the Authority will have the power to impose what will amount to a fine on a company by forcing it to freeze the price in question. Even if the inquiry finds that the price increase was justified there will be no recompense for the firm's loss of revenue during the inquiry. If the Authority finds that the price increase is not justified in its opinion it will be very difficult for a firm to ignore that decision. All the results of the Authority's work are to be made public and if a firm considered it necessary to increase a price despite an unfavourable decision by the Authority, it would have to contend not only with the weight of public opinion but also very likely it would have to face a threat of industrial action by unions who may come to see their role as the Authority's enforcement agency. How then is the Authority to decide what constitutes a justified price increase ? The Bill sets out some loose guidelines on this matter. These include: The need to maintain investment and employment including the influence of profitability upon investment and employment. Yet we have already seen that profitability is at historically low levels. Investment will not increase until firms are allowed to recapture some of the ground they have lost over the last decade. Maintaining present levels of profit will simply ensure that we also maintain present unemployment rates. Furthermore , the Authority may require companies to prove that investment income could not be obtained from other sources, such as share issues, as did the previous Prices Justification Tribunal, thereby interfering in company management decisions where it has no qualifications to do so. The Authority will effectively be in a position to decide what the level of a firm's profitability will be. Its decisions will therefore have far-reaching effects on the long term resource allocation in the economy-a matter best left to the free market to decide, not a government bureaucracy whose decisions will inevitably be politically rather than economically dictated. Undoubtedly it will concentrate its energies on prices that are to be included in the consumer price index. Of course, there are innumerable problems in deciding what constitutes a fair price and what level of profits a firm should be allowed to earn. How will the Authority judge factors such as varying degrees of managerial efficiency or the value of old assets? If a firm is able to cut costs by investing in new equipment, will it be allowed to reap the benefits of its investment? This Bill does not even attempt to begin to answer those questions. But one thing is certain, the very existence of such an Authority will create anxiety and uncertainty in the business community, and that alone will discourage investment . Mr Acting Deputy President, I now turn to what I believe to be perhaps the worst aspect of this Bill, and that is that it demonstrates this Government's commitment to a totally one-sided prices and incomes policy. Firms are to have their prices surveyed by a statutory body but the only restraint upon wages is the Government's statement of accord with the trade unions which relies on their co-operation for its continuity. As I have already mentioned, such co-operation was far from forthcoming under the last Labor Government. During 1974 alone in excess of six million man-days were lost because of industrial disputes. That figure is almost three times higher than that of 1982 when two million man-days were lost due to industrial disputes. Senator Button —What are you going on with all of this gobbledegook for? Senator CRICHTON-BROWNE —Well, it is terribly relevant because I put it to Senator Button, with respect, that what the Government is doing now is repeating history. I am sure the Australian Labor Party is not about to learn from the facts of the past, to enlighten it for the future, but it is worth recording in the vain hope that there may be sombody listening who has the slightest concern for historic facts. Even under the terms of the accord unions will be allowed substantial wage increases. The Government agreed to protect the purchasing power of wages with full cost of living indexation. It has agreed that over- award payments will be maintained. It has said that unions will be allowed to bargain for shorter hours and pay increases in line with productivity increases, the only proviso being that the conditions so obtained are not in excess of community standards. In fact the only wage increase that is not allowed would seem to be an outright demand for more money, which is not offset by any increase in productivity. Where then do we find the legislative provision to prevent such wage claims? It is found in this Bill now before us which states in clause 17 (3): In exercising its powers and performing its functions under this Act, the Authority shall . . . have particular regard to- . . . . (c) the need to discourage cost increases arising from increases in wages and changes in conditions of employment inconsistent with principles established by relevant industrial tribunals. This in effect will mean that if a union has sufficient industrial muscle to achieve a pay rise outside the accord the company involved will not be allowed to pass on the cost of the pay rise to the consumer in the form of increased prices. Mr Keating himself was obviously aware of the possibility of such a situation arising when in his second reading speech he stated: . . . where a company has clearly and strongly resisted attempts at breaching the wage system, it should not be subject to a second possible penalty, and in these circumstances it is not intended that the Authority disallow cost increases. It is not made clear, however, what the Authority will choose to regard as ' strong resistance'. It is left for the companies to toss up whether they would lose more money through a prolonged strike or by absorbing the cost of a wage increase themselves. Already wages are protected by being linked to the cost of living index. There is nothing to stop wages outside the accord being demanded and such claims being backed by industrial action. Wages will be able to rise beyond the consumer price index and productivity agreements. Profits, on the other hand, will be strictly controlled through the operation of the Prices Surveillance Authority. The only increase that they will be allowed in real terms will be through the share of productivity increases that companies are allowed to retain. This will do nothing to redress the imbalance that now exists between the share of gross domestic product being directed towards wages and the share going to profits. As I have already explained, the nexus between company profitability and the rate of unemployment is graphically illustrated by looking at the experience under the Whitlam Government which allowed a wage explosion while imposing controls on prices. Between 1973 and 1975 company profits fell by 2.7 per cent. In those same two years wages increased their share of the gross domestic product by 5 per cent. Unemployment in 1975 reached almost 5 per cent and continued to rise. Since that time, the only year that recorded a slight fall in the unemployment rate was 1980-81, the same year that saw a slight increase in company profitability. Mr Keating has told us that inflationary pressures need to be reduced. However, experience in the Australian economy and the economies of comparable countries has shown that there is a direct correlation between wages growth and inflation. If we once more look back to the 1970s we can see that in 1975, when the average weekly wage rose by an enormous 25 per cent, inflation reached the historically high level of 16.9 per cent. Turning to overseas countries, during 1982 the United Kingdom had an inflation rate of 5.4 per cent and a wages growth of 5.4 per cent. Japan had an inflation rate of 1.8 per cent. Last year the wages growth in that country was 3.9 per cent. In the United States of America, inflation during 1982 was running at around 3.9 per cent and wages increased by 5.1 per cent. Senator Robert Ray —That is the old chicken and the egg argument. Senator CRICHTON-BROWNE —With respect, it may be a chicken and egg argument to the honourable senator. But I think the honourable senator will agree that if we get wage demands down we will be able to get both inflation and interest rates down. In Australia, by comparison, wages increased by 14.5 per cent and the inflation rate was 10.7 per cent. As long as the Government allows wages to rise by linking them to the consumer price index and by allowing improvements in conditions such as shorter hours, all of which will have the effect of maintaining real wages; inflationary pressures will be built into the economy. While our competitors on the international markets are having success in moderating wage growth and achieving lower inflation rates, inflation in Australia remains high and is now at a rate more than twice that of our major trading partners. As the 1982-83 Budget statement put it: At present the Australian economy is not well positioned to improve its share of world trade. The same statement saw one of the main risks to sustained recovery in the Australian economy as the rate of inflation. The Treasury also pointed out what it regarded as the central factor in reducing inflation-wage restraint. Again I quote from the Government's Budget statement: The severity of the declines in both profitability and employment and the associated rise in unemployment during the downturn suggest that labour cost moderation must play a key role in any sustained reduction in inflation and any sustained improvement in competitiveness and in profitability investment and employment. Yet this Government was relying on the co-operation of the unions to restrain wages whilst attempting to introduce a statutory price control body. Although it is calling for a Prices Surveillance Authority its effect will be to control prices and this can only have the effect of further damaging company profitability. There can be no justification on economic grounds for the introduction of a Prices Surveillance Authority. The complexities of pricing decisions alone will make it inevitable that such a body will make some bad decisions and, in doing so, will unfairly discriminate against some firms. It has been estimated-I suspect by the Treasurer-that the yearly cost of such an authority will amount to something like $1.5m. Of course, that does not take into account the cost to firms of complying with its requirements and the diversion of company executives from their normal productive jobs into obeying notification procedures and dealing with inquiries. The effect of such a body on the economy will surely be to discourage investment and a further decline in company profitability and thus place at risk any recovery in the economy. The only way to ensure economic growth in my view is by encouraging investment. The last thing the economy needs is another government agency which will have exactly the opposite effect. Senator WALSH(Western Australia-Minister for Resources and Energy)(8.53) —I will be very brief. I have not heard all the debate, anyway. Like Senator Jack Evans, I was a little disappointed with Senator Hill's contribution to the debate as Senator Hill is one of those few members on the Opposition side who, in my view, seriously address their minds to matters of national significance. I think his speech could be summed up as being critical on the grounds that the Prices Surveillance Authority was just a bit of window dressing or, if you like, appeasement for the Australian Council of Trade Unions. Even if that were correct-I do not accept that it is correct-I submit that that is not an unworthy object in itself. If the experience from around the world over the last decade is worth anything it should have taught us that the countries that have maintained satisfactory rates of economic growth, high enough to keep unemployment at low levels and low rates of inflation, are those countries in which there is a social consensus on prices and incomes. Even if Senator Hill's rather cynical assessment of this Authority and the Prices Surveillance Bill were correct, if it achieves that objective it is very worth while. Senator Crichton-Browne, in somewhat more strident terms, attempted to make the same point. He said that this was an attempt to buy the goodwill of the ACTU. The same comments that I have made with respect to Senator Hill I think are relevant to Senator Crichton-Browne. But beyond that, Senator Crichton-Browne, of course, has been a prominent figure in the Western Australian Liberal Party for some time. I have been told-I find the story quite credible-that it is Senator Crichton-Browne's ambition to transform the Western Australian Liberal Party into a western version of the Queensland National Party. In one sense that has been achieved in that they both get about 39 per cent of the vote. The Western Australian Liberal Party used to get a percentage of the vote between the mid and high forties until it fell under the influence of people such as Senator Crichton-Browne. It is now down to the level of the National Party in Queensland; that is, a percentage level in the thirties instead of the forties. I do not think I need to say very much more about Senator Crichton-Browne or how the political views that he espouses are received in Western Australia. I should indicate now that the amendments which have been foreshadowed by the Australian Democrats, which I think will be moved by Senator Evans, are not acceptable to the Government, insofar as they provide in our view, for an abdication or a surrender of government authority to a non-elected body. The view of the Government is that that is not a course of action with which we can concur. Therefore the Government will oppose Senator Evans's amendment. I understand that the Bill, with or without Senator Evans's amendment, will be passed by the Senate. I do not intend to delay the passage of the Bill any further. Question resolved in the affirmative. Bill read a second time. The Bill. Senator JACK EVANS(Western Australia)(8.56) —by leave-I move: (1) Page 9, sub-section 17 (2), line 30, leave out '', with the approval of the Minister under section 18,''. (2) Page 9, after sub-section 17 (2), insert the following new sub-section: ''(2A) The Authority may, where it considers it appropriate to do so, hold an inquiry into and submit a report on whether the price at which a person who supplies or proposes to supply goods or services which are declared to be notified goods or services under paragraph 21 (1) (a) is justified and if the authority is of the opinion that the price is nor justified, what lower price for the supply by that person of goods and services of that description would be justified.''. (3) Page 10, paragraph 18 (1) (b), line 9, leave out the paragraph. (4) Page 10, after sub-section 18 (1), insert the following new sub-sections: ''(1A) Where the Authority has given notice under paragraph 19 (1) (a) that it is to hold an inquiry under sub-section 17 (2A), the Minister may, by instrument in writing delivered to the Chairman- (a) direct that the authority shall not proceed with that inquiry; or (b) vary the terms of any such inquiry. ''(1B) Where an instrument is issued under sub-section (1A), the Minister shall - (a) cause that instrument and the reasons for the decisions contained therein to be published in the Gazette; and (b) give to any person or persons whose interests are directly affected by the decision notification in writing of the making of the decision.''. (5) Page 11, sub-section 21 ()1, line 31, leave out ''with the approval of the Minister''. (6) Page 11, sub-section 21 (2), line 40, leave out ''with the approval of the Minister''. A lot of people will be disappointed at the last couple of sentences uttered by the Minister for Resources and Energy (Senator Walsh) on behalf of the Government because his suggestion that these amendments provide for the abdication of responsibility by the Government runs counter to practically everything it has said up to this point. The Government has stressed since it came into power that it is trying to govern this country with consensus, with general accord across the community, and with input from the community at large. The Minister then said that to allow that sort of input into the Prices Surveillance Authority, which is about to be given the power to review prices in Australia, would be an abdication of responsibility. I find it very difficult to accept that statement. I will quickly run through the one major shortcoming of this piece of legislation, that is, that consumers are ignored. With great respect, there has been very little recognition by this Government to date of the needs, of the desperate plight, of many consumers in this country. I do not know whether Government members are out in the market-place or at the food shops having a look at what is happening to prices, but if they have not done any shopping recently they should talk to their spouses. They would find out that prices are still sky-rocketing. Many consumer goods, apart from groceries, are going up at a very rapid rate despite a wage pause and a minimal wage increase as perceived by the unions. This is being exacerbated by massive increases in government charges. All I am suggesting to the Government is that the people of Australia, seeing the Prices Surveillance Authority come into being, want to have some opportunity to go beyond the Government, beyond the responsible Minister, the Treasurer, and have some access to this Authority to register their complaints. That is all that these amendments do. They simply give to the Prices Surveillance Authority the same power that has been held, I remind the Minister, by the Prices Justification Tribunal since its inception. In case the Minister is unaware of it, section 16 of the Prices Justification Act 1973 states: The functions of the Tribunal are to inquire and report to the Minister, in any case where the Tribunal is required to do so by the Minister- that is the same as the provision in the Prices Surveillance Bill- or the Tribunal considers that it is desirable to do so . . . It has the power of self-referral. All we are asking the Government to do is to give this new body the same power that the PJT had. That power, which would still be subject to veto by the Treasurer, would give the consumer, whether at the manufacturing level or the retail level, access to make representations to the Authority and to have those representations investigated by the Authority if it sees fit and if the Treasurer does not veto the referral. Under this amendment, if the Treasurer took it upon himself to veto the self-referral he would have to publish his reasons in the Commonwealth of Australia Gazette. Of course, that would make him maintain his honesty in the light of the publicity that he would get in the same way that the people who are manipulating prices will have to maintain their honesty as the result of the publicity which will be given to them if they misbehaved. That is all we are asking the Government to do. I appeal once more to the Minister to reconsider the Government's position and to allow this opportunity for self-referral so that the Authority will look after the interests of all parties, not just the Australian Council of Trade Unions and the employer groups but also those consumers who so frequently are ignored when it comes to making decisions which affect consumers. Senator Dame MARGARET GUILFOYLE(Victoria)(9.02) —The Opposition will not be supporting the amendments moved by the Australian Democrats. They would have the effect of freeing the proposed Prices Surveillance Authority from the need to obtain the approval of the Minister. In the Opposition's opinion that would not be a wise course to take. Senator Evans made some comment with regard to the Prices Justification Tribunal. I remind him that experience with the Prices Justification Tribunal led the previous Government, of which I was a member, to amend the Prices Justification Act in 1979 to provide that the Tribunal would conduct prices justification inquiries only at the direction of and with the approval of the Minister. The amendments would all have the same effect: This Authority would become a body that could have referrals without the approval or the direction of the Minister. The Opposition believes that would not be a wise course to take. Senator Evans described the matters that he thought could be referred to it under his proposed amendments. I am left with some horror at the thought of the effect on economic recovery if we had a body of the nature which he has just described. For those reasons there will be no support from the Opposition for Senator Evans's amendments. Senator WALSH(Western Australia-Minister for Resources and Energy)(9.03) —I do not want to suggest that the Government would go to the barricades, so to speak, on the question that Senator Evans has raised. On balance, the Government's view was that it would be better if the proposal he has put forward was not accepted. I draw his attention-- Senator Chipp —Can you give us an undertaking that it was considered in depth? Senator WALSH —The decision was made primarily by the Treasurer (Mr Keating) and not by me. It is his Bill, but I certainly consulted with him about it. The point to which I draw attention is that the Authority, even without the amendment, has the power to initiate an inquiry provided the Treasurer's approval is secured. It is not bereft of any capacity to initiate inquiries. Senator Evans said correctly that in a much more formal and heavy-handed way the Treasurer could still quash an inquiry initiated by the Authority at a later stage. The Government's view is that it would, on balance, be more satisfactory if the Authority operates in the way in which the Bill provides; that is, that it can initiate inquiries; it can make suggestions to the Treasurer and, providing the Treasurer's approval is secured at that early stage, it can proceed with those inquiries. The amendments proposed by Senator Jack Evans on behalf of the Australian Democrats would provide for the inquiry to be initiated , and if the Treasurer believed that that was not compatible with the broad objectives of Government policy, require him to take much more heavy-handed action at a later stage. Amendments negatived. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Walsh) read a third time. Senator CRICHTON-BROWNE(Western Australia) —Mr Deputy President, I seek leave to make a statement. I wish to put the record right. The ACTING DEPUTY PRESIDENT(Senator Colston) —You do not have leave yet. What do you want to do? Senator CRICHTON-BROWNE —I have not been misrepresented but I wish to make a statement in response to some lies that were told by Senator Walsh a moment ago. The ACTING DEPUTY PRESIDENT —To start with, Senator, you cannot use those words. Senator CRICHTON-BROWNE —I seek leave to make a statement. Leave granted. The ACTING DEPUTY PRESIDENT —Senator Crichton-Browne, before you start I am not sure whether the words that you used in reference to Senator Walsh are in the record, but I suggest that you withdraw them. Senator CRICHTON-BROWNE —I withdraw them, Mr Acting Deputy President. I sought leave in order to put right what was inaccurately put by Senator Walsh. Senator Walsh said, as I understand it-unfortunately, I do not take notice of what he says; it was only by accident that his remarks came wafting past my ears-that since I had taken control of the Liberal Party in Western Australia it had lost its traditional vote of 48 per cent, or whatever he said it was, that its vote was now down to 39 per cent and that that was as a result of my influence. I wish to put the record right. During the period that I was State President of the Liberal Party of Western Australia and had some modest influence on its direction, function and philosophical approach towards policy it had, on each occasion a Federal or State election was held, the highest vote ever recorded in that State. I further add-- Senator Walsh —It took them a while to wake up to you. Do not get too cheeky or I will table a few more cheques. Senator CRICHTON-BROWNE —Senator Walsh says that if I get too cheeky he will table a few more cheques. I do not to want shock Senator Walsh but I have a couple of cheques that will entirely embarrass his Government very shortly. I intend not only to table them but also to have the Australian Federal Police investigate them, so Senator Walsh should stop blushing. Senator Walsh —More of your Christo Moll cheques? Senator CRICHTON-BROWNE —They are Christo Moll cheques, yes, and they will greatly embarrass your Government and cause the same problems to other people that have been caused by one of your colleagues so far. So you be very careful, my friend. The ACTING DEPUTY PRESIDENT — Order! Senator Crichton-Browne, you should address your remarks through the Chair and confine your remarks to the area in which you say you have been misrepresented. Senator CRICHTON-BROWNE —I can understand why Senator Walsh needs your protection, Mr Acting Deputy President, and why I am to ignore his continuous pathetic, inaccurate interjections. To add to what I was saying previously, on the occasion I was elected to No. 3 on the Senate ticket Western Australia was the only State in Australia to elect three Liberal senators. I do not for a moment claim that to be a reflection on my capacity or my competence, but it is a reflection on the judgment of the people of Western Australia. I conclude by saying that on that occasion I was the only Liberal in Australia elected from No . 3 on the Senate ticket. Senator Walsh headed the Australian Labor Party ticket in Western Australia, and his Party had the worst vote in its history. Senator WALSH(Western Australia-Minister for Resources and Energy) —by leave-I wish to make a personal explanation to correct an error which was made in the last sentence Senator Crichton-Browne uttered. He was a candidate for the Senate election in 1980. I was not a candidate for the Senate election in 1980. His assertions about that matter are about as reliable as his assertions about everything else. Debate resumed from 29 November 1983, on motion by Senator Ryan: That the Bill be now read a second time. Senator COLLARD(Queensland)(9.12) — The Opposition will not oppose the second reading of the Postal and Telecommunications Amendment Bill but it has some amendments which it will pursue in the Committee stage. Postal services developed in Australia on a State by State basis until 1 March 1901 when the administration of all postal and telegraphic services passed to the Commonwealth . Amalgamation was found to be difficult, and the first royal commission into Australia's postal and telegraphic services was set up in 1908. There was a further committee of inquiry in 1961, and in 1974 the Vernon report was brought down. We then had the vesting of the two arms of the postal and telecommunications services-the formation of Australia Post and Telecom Australia in 1975. From that time on Australia Post has been out on its own. It started as a very poor cousin of Telecom and developed to its present stage. On vesting day it was told that it owed a notional sum of $100m to the Commonwealth. To its credit, it has paid back a large amount of that sum and currently owes $39.9m to the Commonwealth. On top of that, Australia Post does not rely on money from the taxpayers to pay its way. This has not been done easily. There was quite a deal of trouble in regard to raising postal rates and curtailing services in order to stand on its own feet. That matter has worried me particularly in regard to Queensland-undoubtedly it was a problem in a lot of rural areas in other States when the shift of population to the cities meant that daily postal services were cut back to weekly and sometimes fortnightly services. I commend Australia Post. It has tried to get back to two weekly services. Once again it is trying to meet its obligation to provide services throughout Australia. In 1982 the report of the Bradley Committee of Inquiry into the Monopoly Position of the Australian Postal Commission was brought down. This legislation is basically the result of the new Government coming to grips with the Bradly report and implementing some of its recommendations. As I will mention in the Committee stage, the Opposition believes that more of the recommendations should have been implemented and more notice should have been taken of them. Most of the committees of inquiry and royal commissions into Australia Post have examined the monopoly provisions governing its operation and I think there would be a broad agreement that it is entitled to them. If we expect it to provide mail services to all of Australia, including those parts that cannot be economically served, and can never be really, it is only fair that it should have an exclusive right to the services that are profitable. This allows cross- subsidisation so that, overall, it is able to meet all of its expenses and does not cost the taxpayer anything. I repeat, all the committees of inquiry, including the Bradley inquiry, have considered the monopoly provisions. The legislation retains them. It seeks also to restore the courier service, about which I will be speaking at the Committee stage. Moreover, it gives Australia Post the power to operate electronic mail services and to enter into agency agreements with the private sector. I think that is a first. Australia Post has always had the power to enter into agency agreements with the public sector. As an example, we all know that for many years, wherever there was a post office one found an agency of the Commonwealth Savings Bank. Non-official post offices, of course, are allowed to operate such agencies as well. The Opposition will not oppose the second reading of the Bill but will move certain amendments at the Committee stage. Senator BUTTON(Victoria-Minister for Industry and Commerce and Minister Assisting the Minister for Communications)(9.17) —I congratulate Senator Collard on his speech, which I feel encapsulated the essential points of the Opposition' s criticism of this legislation and, in passing, offered some thoughtful observations. The Government's view is largely as was expressed in the second reading speech and I need not add very much in that regard. The authorities in question have been through a long process of inquiry, from which much public discussion has arisen. The Government is concerned that some of the decisions arrived at as a result should be implemented as quickly as possible. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time. Clauses 1 and 2-by leave-taken together, and agreed to. Clauses 3 to 5-by leave-taken together. Senator COLLARD(Queensland)(9.20) —I seek leave to move the first three Opposition amendments together, Mr Temporary Chairman. If we handle them together it will save time. They all deal with the same subject. Leave granted. Senator COLLARD —I move: (1) Page 2, paragraph 3 (a), lines 4 and 5, leave out '', by courier service''. (2) Page 2, paragraph 3 (b), definition of ''postal article'', paragraph (b), line 10, leave out the paragraph. (3) Page 2, clause 5, proposed new section 10, lines 20 to 38, leave out the proposed section. The Opposition opposes granting to the Australian Postal Commission the rights to a courier system, not that we want to see Australia Post not operate a courier system, providing it operates on a fair and equal basis with the rest of the community. I refer to page 27 of the Bradley report of the Committee of Inquiry into the Monopoly Position of the Australian Postal Commission. The last sentence of paragraph 4.2.4, referring to this courier service, states: It is important, however, that in providing any competitive services the Commission should not have unfair advantage over its private sector competitors, and the Committee had careful regard to this consideration when developing recommendations for change to existing statutory provisions under which the Commission operates . . . Mr Bradley then refers to chapter 6. On page 66, in paragraph 6.9.2, points (a) and (b), he states: (a) that the Australian Postal Commission should include each year in its Annual Report separate accounts for: the standard article service; all other services . . . (b) that the Australian Postal Commission should aim each year to achieve a trading surplus which would permit the payment after interest and income tax of a return on total assets employed in the provision of: the standard article service; all other services . . . We believe that if Australia Post is to operate a courier service it should have the same restrictions, for want of a better term, as any other business which is operating-that is, it should have to provide a return on assets and to provide for the payment of tax. I think it would be acknowledged that Australia Post is operating under a fairly beneficial superannuation scheme which private operators cannot match. For those reasons I have moved the three amendments. We are basically opposing the courier service for the reasons I have outlined. Senator CHIPP(Victoria-Leader of the Australian Democrats)(9.22) —The Australian Democrats cannot support any of the amendments now moved or foreshadowed by the Opposition. Essentially we agree with the reasons given by the Minister for Communications (Mr Duffy) in the House of Representatives debate on the Postal and Telecommunications Amendment Bill. The amendments moved and to be moved by the Opposition in the Senate, as I understand it, are identical to the amendments moved in the House of Representatives. We could well have a fascinating, interesting and long debate on those amendments and the reasons for them. I just wonder whether, at this time of year and with the condition in which the Committee finds itself, that would be appropriate. All I say is that the Democrats have carefully studied the arguments put forward by Mr Lloyd, the Opposition spokesman for communications in the House of Representatives, and the replies of the Minister, Mr Duffy, and we concur with the Government's view on these amendments. Therefore, we will not be able to support the Opposition's amendments on this or the other matters raised. Senator BUTTON(Victoria-Minister for Industry and Commerce and Minister Assisting the Minister for Communications)(9.24) —The Government is not disposed to accept the amendments moved by Senator Collard. He raised one or two arguments about the operations of the Australian Postal Commission in support of the amendments which, in a sense, could have been canvassed in a much wider way. Senator Collard did not do that. Australia Post has certain advantages in terms of its competitive position with other organisations. It has certain other massive disadvantages too in terms of cross-subsidisation of its activities and things of that kind. As to the courier service specifically, Australia Post will be required to maintain accounting records of all revenue and expenditure items attributable to the courier service in order that its financial viability, standing on its own, as it were, may be monitored. This was done to some degree on a previous occasion when the courier service operated. However, it is being restored on the basis that it will be expected to pay its way and to make a positive return on its operations. It will not be cross-subsidised. If it does make a profitable return on its operations it ought to be highly welcomed by all concerned because it extends the capacity of the organisation generally in its financial arrangements to cross-subsidise where necessary. Those reasons have been advanced in greater detail in the House of Representatives, but I think that they represent a summation of why the Government will not accept these amendments. Amendments negatived. Clauses agreed to. Clause 6 (Commission may act as agent, et cetera). Senator COLLARD(Queensland)(9.26) — The Opposition opposes clause 6. Very briefly this clause allows Australia Post to take on agencies. We believe that if Australia Post has the time to take on agencies other than public agencies it is getting into a field which is not in its area of responsibility. That means it has a little fat that it should be able to pare off to help keep our postal charges at a reasonable level. For that very simple reason we are opposed to Australia Post branching out into agencies in the private sector. Senator CHIPP(Victoria-Leader of the Australian Democrats)(9.27) —The Australian Democrats cannot agree that this clause should be opposed. We are disappointed in the reasons advanced by the Opposition for opposing it. We would commend a Public Service department for being aggressive, getting into the market-place and keeping the private sector honest. This is a tremendous advance in thinking on behalf of the Government. If I were a member of the Opposition, and particularly a member of the National Party of Australia, I would be concerned about this scenario, and I would like the Minister for Industry and Commerce (Senator Button) to respond: A country town, not too big and not too small, has a post office which has an officer whose salary is paid by the Commonwealth. He is a public servant. In the same town a person runs the haberdashery shop, the newsagency, the hardware shop or whatever. There are thousands of towns like this around Australia. He supplements his income by agencies. I will refer to two private companies in the insurance industry, say, the Australian Mutual Provident Society and the Norwich Union Life Insurance Society . Let us assume that this mythical town which I describe has a post office and Australia Post decides to enter into arrangements with a private principal. The private principal may be the AMP Society. It says to Australia Post: 'We would like to make an arrangement with you to extend the number of agencies of the AMP Society in Australia by using the post offices in country towns as our agents'. I think that that is terrific. It is good for the post office; it is good for taxpayers; it is good for Consolidated Revenue; it is good for private enterprise and the AMP Society. In that country town the person who runs the small real estate agency and who has the agency for the Norwich Union insurance company is immediately disadvantaged because everybody goes to the post office once a week, twice a week or whatever. They do not necessarily go into the real estate agency which has the Norwich Union agency. I mention that in passing, being a champion of private enterprise and, indeed, of small business. I believe that this problem will level itself out. Some persons who own small real estate agencies or whatever in small country towns would be temporarily disadvantaged, but I believe that in the long run the national interest would be served in that Australia Post would have greater utilisation of its resources. Public revenue would be increased and private enterprise would be encouraged. So , while I sympathise with the thrust of the Opposition's proposal, I believe that it is argued for the wrong reasons. Therefore, the Australian Democrats cannot support it. Senator BUTTON(Victoria-Minister for Industry and Commerce and Minister Assisting the Minister for Communications)(9.32) —The proposal mentioned by Senator Collard is not acceptable to the Government. Senator Chipp asked me to respond to his view on why it should not be acceptable to the Government. His view, as I apprehend it and summarise it, is that in many country towns, for example, it might be desirable for Australia Post to provide agency services because, in a sense, they would be delivering services which might not otherwise be there. I just add that I think that in many communities a post office can become a very useful social focal point and that this process would encourage that. The other point that I think is important in terms of efficiency is that post offices by their very nature have to be staffed on the basis of the peaks of their business activity and their work in the provision of postal services. There are sometimes dead times, as it were, where, from the point of view of efficiency and the proper use of time, agency services can be provided, which are of benefit to the public and which are not to the detriment of Australia Post as an organisation. The sorts of agency services which Senator Chipp mentioned such as insurance agencies-Medibank, of course, is an obvious one- Senator Chipp —Lotteries. Senator BUTTON —Senator Chipp mentions lotteries. I do not embrace that idea myself. Senator Chipp —But they are taking that on. Senator BUTTON —Yes. Those sorts of things, I think, are potentially valuable services which will not intrude on genuine private enterprise activities in any way. They may indeed facilitate private enterprise activities in a particular community. I illustrate that in the following way. No one will establish agencies in particular areas in a community if they will not be profitable. But if they are part of an activity of an organisation such as Australia Post the question of profitability does not arise. It is a question of the delivery of services. So the Government does not accept the Opposition's proposition. Clause agreed to. Clauses 7 to 10-by leave-taken together, and agreed to. Clause 11 (Letters not to be carried for reward). Senator COLLARD(Queensland)(9.34) —by leave-I move: (4) Page 6, clause 11, after proposed new paragraph 85 (ab), add the following paragraphs: '(ac) the carriage or conveyance of a letter, regardless of the amount charged, in circumstances where the Minister determines that suspension of the monopoly is warranted because the Commission is unable to provide a service; '(ad) the carriage or conveyance of a letter between branches of an organisation and between an organisation and its wholly-owned subsidiaries; '(ae) the carriage or conveyance of a letter which forms the input to, or output from, electronic transmission facilities;'. (5) Page 6, clause 11, at end of clause, add the following paragraph: '(b) by omitting from paragraph (2) (c) ''the nearest'' and substituting ''any' ' '. Clause 11 deals with exemptions. The Government has inserted two exemptions, in paragraphs (aa) and (ab). We want to add paragraphs (ac), (ad) and (ae). These are just picking up recommendations of the Bradley Committee of Inquiry into the Monopoly Position of the Australian Postal Commission about exemptions. We believe that they are logical and good exemptions. The suggested paragraph (ac) would mean exemption for: the carriage or conveyance of a letter, regardless of the amount charged, in circumstances where the Minister determines that suspension of the monopoly is warranted because the Commission is unable to provide a service; Briefly, in the case of a strike, particularly if it is prolonged, and there are others willing to provide services, the Minister should have the power on those occasions to allow an exemption so that the mail service, or some sort of mail service, can be got going again and the communications services of this country can be put back on the rails, albeit temporarily, so that the people can get letters of some sort, albeit for a higher price, delivered by private entrepeneurs. As to the suggested paragraph (ad), we believe that there is an absurd restriction in not being able to carry letters between parts, branches or subsidiaries of a company where there is in-house mail and that that restriction should be lifted and people should be able to handle their own mail services. The third suggested amendment, paragraph (ae), relates to carriage or conveyance of a letter which forms the input to, or output from, electronic transmission facilities. Even though the term 'electronic transmission facilities' sounds really modern, such facilities are probably almost the oldest part of mail delivery in Australia; that is, the telegram service. Things have become far more sophisticated now, and the telegram service has largely disappeared with the advent of the telex and the facsimile machines. Telecom Australia, to its credit, operates a public telex and is also trying to operate a public facsimile service. Unfortunately, according to Bradley, until 1982 it was not getting that much of a reception from the public. We believe that if the carrying of mail to and from electronic centres could be opened up, it would provide a far greater service for the community and far greater usage of these electronic services. The last amendment is a common-sense amendment: (b) by omitting from paragraph (2) (c) 'the nearest' and substituting 'any'. I was not aware of it, but apparently it is in contravention of the Bill if one takes a letter to just any post office and not to the nearest one. As I understand it, there could be a prosecution. I should imagine that there never has been a prosecution. But perhaps the legislation could be amended so that it meant any post office rather than the nearest one. One might inadvertently, or even deliberately for the sake of convenience, carry mail past one post office to another that is more convenient. I understand that the Minister for Communications (Mr Duffy), when approached about this question, said that he would look into the matter. It is for those reasons that, on behalf of the Opposition, I have moved the amendments. Senator BUTTON(Victoria-Minister for Industry and Commerce and Minister Assisting the Minister for Communications)(9.39) —The amendments are not acceptable to the Government. In relation to the postal service, it is the Government's view that in a situation of industrial dispute, the first proposed amendment moved by Senator Collard would suggest that there should be open slather, as it were, in relation to the provision of postal services. We take the view that it would derogate from the capacity of Australia Post to deal with and solve an industrial dispute if that sort of situation were allowed to develop. It would create all sorts of tensions and that situation is not desirably enshrined in legislation. With regard to the question of input and output of electronic mail, that would be an obvious way to avoid the monopoly. Of course, the Government has made its position clear that, like many other governments in many parts of the world, it is concerned to preserve the postal services monopoly. The suggestion made is a very obvious way of ensuring that. I think Senator Collard was incorrect in fact when he referred to the last amendment. He raised a point about the change from the 'nearest' post office to 'any' post office. The clause refers to the carriage of articles for reward. That amendment also is not acceptable although I might say that the Minister for Communications (Mr Duffy) gave some consideration to it after it was raised by the Opposition in the lower House. Amendments negatived. Clause agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Button) read a third time. Senator TATE(Tasmania) —I present the seventeenth report of the Standing Committee for the Scrutiny of Bills concerning the Bounty (High Alloy Steel Products) Bill 1983, the Bounty (Steel Mill Products) Bill 1983 and the Steel Industry Authority Bill 1983. Ordered that the report be printed. Debate resumed from 2 December 1983, on motion by Senator Button: That the Bills be now read a second time. Senator HILL(South Australia)(9.43) —I rise to speak to this package of three Bills-the Industrial Research and Development Incentives Amendment Bill 1983, the Australian Industry Development Corporation Amendment Bill 1983 and the Management and Investment Companies Bill 1983. The Opposition will not be opposing any part of the package. In fact, for part of it the Oppositioon offers enthusiastic support. I have spoken previously of the need to restructure Australian industry, of the concept of a dynamic economy-an economy ever changing, able to seize new opportunities and also able to discard the old way that may no longer show sufficient community benefit. I have recognised the responsibility of government to guide the nation in its post-industrialisation progress. I have identified the key to such economic development in upgrading Australia's level of technological innovation and adoption. This is a lesson which should be learnt from those nations with the greatest increases in gross national product since the mid-1950s. Of developed Western societies, Switzerland, Sweden, Denmark and the Netherlands come to mind. Of the tremendous growth region of Asia, Japan, Taiwan, Singapore and now South Korea are examples. Certainly, lower labour costs may have helped them along the road but with wage increases they have been able to maintain their growth increases. No doubt the secret lies in the recognition that maximum competitiveness rests with the continual adoption of updated technology. I have mentioned before that Professor Slatyer, President of the Australian and New Zealand Association for the Advancement of Science Conference, had identified three areas contibuting to Australia's poor technological performance . The first was low levels of participation in education which raises the whole subject of skills development and an ever more sophisticated industrial environment. The second factor was low levels of industrial research and development, about which one of these Bills is concerned. The third factor was the lack of venture capital, about which another one of these Bills is concerned . I will deal with the subject of venture capital first. In May of this year I remember specifically dealing with the subject. In that regard I made reference to the report of the Espie High Technology Financing Committee which had been brought down earlier this year. It is worth remembering that it was the previous Government that asked the then President of the Australian Academy of Technological Sciences to inquire into ways of assisting particularly financing high technology industrial development. As a result, the High Technology Financing Committee of the Academy, headed by Sir Frank Espie, was given the task and it reported in April. As I then indicated, the Committee made recommendations in relation to the financial obstacles inhibiting the development of high technology industries in Australia. The one obstacle it recognised was that high technology enterprises have unreasonable difficulty in raising finance for the start up and the early growth phases of their enterprises. In the view of the Committee, government incentives were necessary to channel capital in such directions where the likelihood of reward is very difficult to assess. The Committee looked at a number of ways of doing this and recommended venture capital companies-small financial organisations which provided seed, start up and development capital and management guidance to new businesses. It took its example, of course, from experience in America. It recommended that incentives for funding the venture capital companies should be fully tax deductible for capital investments. It is worth noting in passing that the Espie recommendation was one of minimum government involvement in the decision making process. By this Bill, the Management Investment Companies Bill 1983, the Government is implementing in close detail the recommendations of Espie. The emphasis in the tests of the type of company that can benefit is good . I am very restricted in time tonight; so I will not go any further into that. However, I mention that we are surprised that mining technology is not included in clause 29 (6) (a) of the Bill and no doubt the Government will be able to give us an explanation for that. But speaking generally, the Government is putting into effect what the Fraser Government put in train and this is to be commended. I only regret that the complementary taxation legislation has not been included and therefore we can anticipate further delay in implementation. The second Bill I want to deal with is the Industrial Research and Development Incentives Amendment Bill 1983. As I indicated, Professor Slatyer also identified low levels of industrial research and development as contributing to our poor technological performance. Also included in this package is a Bill to amend the Industrial Research and Development Incentives Act of 1976. The scheme of the current legislation is well known. It comprises three elements: Commencement grants, project grants and public interest project contracts. There can be no doubt as was stated in the Industries Assistance Commission's discussion paper 'New Technology Industry Assistance' of July of this year: The development and implementation of new technology is one of the driving forces behind the process of economic growth. This has been recognised by governments in the past. The Minister correctly stated in his speech that since 1967 successful Commonwealth Governments have sought to encourage Australian industry to reduce dependence on imported technology, to increase indigenous innovation and to undertake associated industrial research and development. Again, I do not have time to outline the list of methods by which a government has so encouraged industrial research and development. They can be found in the 1982 IAC report 'Certain Budgetary Assistance to Industry', but the major method is, of course, grants under the Industrial Research and Development Incentives Act 1976. Regrettably, the results of that encouragement have been limited. The purpose of this Bill is to extend the scope and increase the effectiveness of the scheme, and it is intended to achieve that purpose in a number of ways. I suppose the most important are to give greater flexibility in grants to companies in the business of computer software development, to allow grants not only to manufacturers but also to agencies carrying out projects for corporate clients. It gives power to specify limits in the area of research and simplification of forward commitment provisions. Because of the importance of industrial research and development to our economic growth, it is worth reviewing our record briefly. The incentives grants scheme can then be placed in a proper perspective. The Australian Science and Technology Council produced a report in June this year entitled 'Incentives for Innovation in Australian Industry'. Firstly, it expressed concern that the level of industrial research and development performed in Australia as a proportion of gross domestic product is low when compared with that of other Organisation for Economic Co-operation and Development countries. It stated that only Greece, Italy, Turkey and Portugal were, in fact, lower. A perusal of the table to which it refers indicates that Canada might also be in that category. I think it would have been fairer to say that Australia is in the middle level of the table. Certainly, at approximately one per cent of gross national product it is much less than countries such as Switzerland with 2.4 per cent, the United States of America with 2.49 per cent, and Japan with 2.04 per cent. More dramatic, however , is that, in Australia, an unusually large part of national research expenditure is spent in government laboratories. The table of selected countries provided in the IAC's report 'Certain Budgetary Assistance to Industry' put only Portugal and Turkey ahead of Australia. In 1978-79, out of a total of 1.04 per cent of GNP spent on industrial research and development, industry provided only 0.22 per cent or, in other words, about a quarter of that of government. This is totally out of step with other OECD countries. Thirdly, ASTEC also expressed concern that the level of industrial research and development expenditure carried on by business has been declining in real terms for a number of years. The low quantum of such development by business must be a major element of this debate. Perhaps a corollary of the fact that our industrial research and development is dominated by government is that we spend much more of our funds on basic research and less on experimental development than other like countries. We publish a lot of papers but the results are not applied in Australia's industry. In fact, it is reported that we publish 1.6 per cent of the world's research papers and yet produce only 0.3 per cent of the world's patents. Another concern that one must have in looking at the Australian Industry Research and Development Incentives Board annual report 1980-81, is that there has been a decline in the number of those seeking grants with a significant export potential from 50 per cent in 1976-77 to 28 per cent in 1980-81. There are therefore a number of obvious concerns with respect to our industrial research and development performance. That leads to the question of how best government can encourage change for the better. As has been said by the IAC: ' What approach to government assistance is most consistent with the objective of facilitating growth and enhancing general community welfare?'. Despite what looks a reasonably disappointing record in relation to the incentives grants, the Government is clearly determined to continue in that direction, albeit with a slightly expanded scale and with an orientation towards sunrise industries. The IAC indicates that this in itself raises issues, such as whether there are gains to be made from assisting industries with good prospects, and in any case whether governments can identify those segments of industry with the greatest growth potential. Of course one who has been sceptical of the answer to that question is our shadow Minister, who has had the view that to produce indigenous new technology is important but it is more important, more practical, beneficial and effective certainly in the shorter term to adopt overseas state of the art technology in our manufacturing industries in order that they may be internationally competitive. That was the Japanese lesson, and still is to some extent. However, it was clearly also expressed in the ASTEC report that the assessment and adaption of technology developed overseas which will be a principal source of new technology for Australian industry in many areas also requires that local enterprises maintain a considerable industrial research and development effort. Therefore, whether our industrial future is directed towards sunrise industries or the updating of existing industries, it still appears that there is a need for increased practically orientated industrial research and development. That gets back to the question of whether the grant system that we have at the moment is the best approach available. ASTEC concluded that it has not been established whether the incentives scheme has been an effective mechanism for raising the level of IR and D among business in Australia, and it seemed to be relying on the conclusions of the IAC in reaching that conclusion. The IAC said: It is not clear to what extent the scheme has met its objectives of encouraging additional IR and D. Mr Deputy President, this Government could have chosen a number of other alternative methods which I would have liked to have detailed but because of the time constraints cannot. Let me simply say that it could have looked to tax concessions or to repayable loans conditional on the successful outcome of the project. Such a system of repayable loans certainly has the difficulty of determining a successful outcome but it is worth noting that it was recommended by the Committee of Inquiry into Technological Change in Australia in 1980 and is also in use in the United Kingdom in the form of the National Research Development Corporation. I for one would like to know why it was discarded by this Government. Similarly, taxation concessions are in operation in Canada, Japan, Sweden and Germany. ASTEC recommended a taxation incentives scheme as an addition to our current Australian industrial research and development incentives scheme as a more effective means of stimulating industrial research and development activity. Again, I would like to know why that alternative has been rejected by the Government. But the Government has decided that selective intervention should continue. That raises the question that the IAC found difficult to answer; that is, selective intervention is helpful if it can be successfully implemented but the $64 question is whether it can be sufficiently successfully implemented. There still seems to be considerable doubt as to whether the Government has chosen the best course, given the doubtful history of the effectiveness of grants and whether a further extension is an adequate response to the difficulties our country faces. Our past record has been to be import competitive rather than export oriented. That is another subject that must be looked at. In regard to tax incentives, perhaps we also ought to look at tax treatment for our investments which still does not facilitate rapid entry and departure from products and processes. Part of the answer might lie in the general macroeconomic climate in Australia to which the Government clearly must devote attention. All of these matters require Government attention. Our publication oriented rather than project oriented research has meant that although we might give away a lot of knowledge free of charge, in terms of receipts of payments for licences and patents we take in about ten times what we sell. That is clearly an unsatisfactory situation. We must therefore look to better integration between our research establishments and our industries. We must overcome what has become known as the research-innovation gap. There is obviously need for government encouragement in that regard. The third Bill which I will touch upon but briefly is the Australian Industry Development Corporation Amendment Bill. It makes a number of changes to the current Australian Industry Development Corporation. It increases the resources available to the Corporation by increasing its capital and gearing ratio for borrowings. Provision is made for its borrowings to be guaranteed by the Commonwealth. Its capacity to provide equity finance will be increased by relaxing restrictions on the investment of its capital. Whilst it will be able to invest in any industry, priority will be given to manufacturing and internationally tradeable services, including tourism and the development of new technology industry. It is worth noting that the Bill largely adopts the recommendations of the House of Representatives Standing Committee on Expenditure. As I indicated, the Opposition will support the Bill. It is recognised by the Opposition that the Corporation is serving a worthwhile purpose, particularly in helping the development of new industry and restructuring existing industry in circumstances where funds are not otherwise available. There were some other comments I wished to make on that Bill but because of the time problems I mentioned earlier they will have to be left. However, in conclusion and in summary, the Opposition will not oppose any of the three Bills. Certainly, we enthusiastically support the Bill which deals with venture capital. Senator COOK(Western Australia)(10.02) —In view of the hour, the date and the legislative program, as well as the support which has just been given by the Opposition to these three pieces of legislation, I will not take the time that I would normally have taken. We are debating cognately the Industrial Research and Development Incentives Amendment Bill, the Management and Investment Companies Bill and the Australian Industry Development Corporation Amendment Bill. I suppose that to the lay person what we are really talking about is sunrise legislation of legislation aimed at supporting and helping the development of new industry or the upgrading of existing industry in Australia. From that point of view it is exciting legislation because it looks to the future. All too often we have talked about how problems beset Australian industry. When we look at the manufacturing area, we talk about the lack of capital investment and the lack of research and development-two points that Senator Hill, in his address, which I found most interesting and absorbing, referred to in some detail, backed by statistical research. I do not want to go over that area. But while there may be a few stunning examples of innovation and enterprise in the manufacturing industry area, generally I think it can be said of Australia that we languish behind the field and if we do not do something dramatic about it we are likely to fall further behind. These Bills address that question directly. What we look for as a consequence of the passage of this legislation is the enthusiastic support of industry and a quantum leap into the future which will enable the economic growth that Australia requires to be realised and enable increasing employment to be found. In talking about what is necessary for the future, a number of areas are not addresed by this legislation; nor should they properly be addressed under the heading of this legislation. But, of course , we need to direct our attention towards increasing skills in the Australian community so that we can take advantage of innovations that come along and provide the skilled base which is necessary for there not to be any blockages in an upward graph of industrial growth. We need to smooth out the difficulties that our economy faces in terms of structural change. On other occasions I have spoken about Australia's resistance to structural change, mainly brought about, in my view, by the adversary system of industrial relations that we have in this country. I have argued for increasing industrial democracy in that area. We need to have aggressive development of new markets and to conduct greater research and development so that Australian ingenuity is properly realised. As in these Bills, we need to assist the business community to take risks, to be entrepreneurs, to grasp the nettle for the future development of the new industries that are necessary to provide an ongoing industrial base. In my view of the economic problems of Australia, it is not just a matter of getting on top of what we currently are beset by. It is answering the question of where are the jobs going to come from, not just now but in the future. If one takes that as the measure of what is the central problem one can see that, looking at the world stage, Australia needs to develop industries which, although almost by their definition are likely to be capital intensive, will provide jobs in a dynamic and technological future. If we do not have those industries, we do not have any possibility of any jobs. The question may later become one of how we share the available jobs among all those who seek employment. But that question cannot even arise if we do not create an industrial base upon which there can be employment opportunities. These three items of legislation that are before us tonight require some remarks. Firstly, the Industrial Research and Development Incentives Amendment Bill 1983 seeks to improve upon the previous legislation. The industrial research and development incentives scheme was introduced in 1976 in order to stimulate industrial research and development and so to increase the competitiveness of Australian industry in world markets. This Bill tonight extends the scope of the present Industrial Research and Development Incentives Act in order to increase the effectiveness of the original scheme. I could go into a great deal of detail about that, but I find that while that is an exciting piece of legislation, the more stimulating one of the package is perhaps the Management and Investment Companies Bill 1983 which seeks to enact the principal recommendations of the Espie report. This Bill is aimed at promoting the establishment and development of a private sector venture capital market in Australia. It supports the development and establishment of management and investment companies, which will be licensed by an independent management and investment companies licensing board. The aim is to improve access to equity finance for developing new industries. The investment is not limited to technology based enterprises but the scheme will provide critically needed funds for sunrise industries. The present problem is the unavailability of venture capital in Australia for those industries, and that unavailability is defined in the report as: . . . . the provision of funds, unsupported by collateral, in an enterprise whose future is itself subject to a high degree of risk. The Australian Government, pleasingly backed by the Opposition, tonight is prepared to provide those funds in order that the risk takers can do so, knowing that their endeavours are supported by the Government and the electorate. The Espie Committee, known by its proper title of the High Technology Financing Committee of the Australian Academy of Technological Sciences, chaired by Sir Frank Espie, found that: Australia is failing to generate new growth-oriented firms to replace those being lost in the older sectors. Australia is failing to grasp the opportunities offered by high technology industries for wealth creation and employment growth. It is important to note also that it found: No country has succeded in establishing a climate for investment in high-tech enterprises without the Government taking positive action. Obviously that is important in the sense that the free market, left to itself, is not enough. It requires some stimulus and this is a proper measured and responsible level of government recognition of that. I could go on but since the legislation is being supported there is no purpose in arguing all the details that would have made up the rest of my speech on that Bill. The Australian Industry Development Corporation Amendment Bill 1983 is the one that of course completes the trinity of the items of legislation before us tonight. Hopefully the three taken together will have the effect that we seek. That Bill aims to extend the role of the Australian Industries Development Corporation to enable it to allocate additional finance for the restructuring and revitalisation of industry and for high technology and other growth industries. The major reports on industry policy have noted the shortage of finance, particularly in the form of equity, for the development of industry. That was not only mentioned in the Espie report but also in the Crawford report. The AIDC will further complement and supplement other sources of finance for high technology and other industry areas. This Bill enables the AIDC to fulfil that role and increases the statutory capital by $50m to take its capital to $150m. The Corporation will be able to call upon this capital in amounts of up to $12.5m per annum. I commend the Bills to the Senate and I trust they will receive a smooth passage. I hope that we can start, by a combined approach and with the consensus that appears apparent in the chamber tonight, to help Australian industry develop to the end of this century and beyond so that jobs are available for Australians and Australia remains a competitive climate for new and sophisticated industries to compete with the world's best. Senator WATSON(Tasmania)(10.10) —The Opposition is co-operating with the Government to ensure the smooth passage of these three pieces of legislation-the Industrial Research and Development Incentives Amendment Bill 1983, the Australian Industry Development Corporation Amendment Bill 1983 and the Management and Investment Companies Bill 1983. These three Bills share a common aim-to promote development in Australia of high, new or advanced technology industries, particularly the so-called sunrise industries and the high risk industries. While the level of expenditure upon industrial research and development in Australia is unfortunately low, we believe that we cannot pursue scientific and technological developments in isolation from other economic determinants in any society. I think if this Government has a fault it is a fault to view high technology in isolation from the other economic determinants in society. Generally, the cost of the development of new products and processes in Australia has been very high. Combined with the relatively low profitability of business in Australia in the last few years this has contributed to the quite low level of industrial research and innovation that my colleague Senator Hill so vividly described earlier in this debate. I believe that attention, therefore , should be focused on real cost levels, the inflation rate, interest rates and other determinants and not just on computers and robots as I think the Minister for Science and Technology, Mr Jones, is prone to do. Australia, if it is not careful, may not in fact be able to catch up in the area of high technology innovation; it is unfortunate. What do we have to do? We have to determine those areas of specialisation which are most appropriate for Australia. There has been no discernible high technology growth in Australia, and this is regrettable. Australia is a high cost nation. While manufacturing is crucial if we are to avoid increasing unemployment, Australia has a declining manufacturing base with a decrease in employment in the manufacturing sector from 34 per cent right down to 18 per cent in the last decade. So Australia needs more than ever a balanced export orientated economy. The Government should be doing far more to aid existing industries such as mining and agriculture which provide the bulk of Australia's exports-some 85 per cent all told. There must be a recognition that, while promoting high technology as such, there tends to be a depreciation of the value of human participation and human motivation, and this is regrettable. There is involved in high technology a problem in the displacement of people. What are the social consequences of such a displacement? What research has been conducted by the Government in this area? Such research is lacking. It is a little like the Industries Assistance Commission making economic judgments without looking at the social consequences of those judgments. Previously there has been both application of capital and specialisation of labour. Modern high technology calls for and requires even higher degrees of specialisation with the resultant loss of jobs and greater levels of displacement of labour. The capability of high technology is such that people can be moved from jobs in a major way. One has only to look at the information communication industry. High technology has touched only 15 per cent of that industry. So the potential for the displacement of labour in that area is quite horrific. It is about time that the Government did a little bit more positive research into this matter. In the September quarter new capital investment fell by 9 per cent in real terms. This is a tragedy for the nation. While tonight we passed legislation for prices surveillance activity, this is tending more and more to dampen company profits, which means less investment, less motivation to invest and, if investment is not taking place, there is a problem that one is tending to go down the hill with lower and lower employment opportunities. This low level of capital investment tends to raise doubts in many people's minds about the long term strength of the so-called economic recovery that has been spoken about so freely by the Government in the last few days. Inflation in Australia is still far too high. I think the latest available figures indicate that it is about 9.2 per cent in Australia, compared with only 2.6 per cent in the United States of America, 2.9 per cent in West Germany and 4.6 per cent in the United Kingdom. Our competitiveness will not improve with the Government adopting a policy of full indexation of wages. It is often said that smaller businesses have a greater capability to adapt to change than have large corporations. I welcome the incentives and the initiatives in this legislation which are directed towards the small operation-the person with good ideas, with some get up and go and business acumen. Yet unfortunately it is the small businesses that are the more vulnerable of the two to cost increases. The greatest contribution high technology will make to Australia's economic future does not lie solely in the creation of new sunrise industries; it lies also in helping existing industries to become more profitable and much more productive. I remind the Senate that, while many countries find themselves experiencing a tremendous growth in what is known as the microtechnological areas, imports of these sorts of products into Australia have had such a disrupting impact that the local microelectronic industry is decreasing alarmingly, despite what is being said by the Minister for Science and Technology. It is regrettable that tonight we have not had presented to the Senate an integrated package of legislation. This legislation is a piecemeal approach, as has been adopted in the past. What is needed is a package of Bills. It is true that we have three Bills before us, but we need a package of, say, taxation Bills, complementary Bills, Bills covering bounty assistance, outlining government purchasing policies and preferences, and research and development. Let us look firstly at the need for simultaneous complementary taxation legislation, legislation that should have accompanied these Bills tonight. The consequences of the absence of such complementary legislation are that inevitably some smart people, aided by accountants and lawyers, will tend to exploit a concession, which must inevitably be given through the taxation Act later in the autumn Budget session, which will create a tax avoidance problem. It is unfortunate that we are not looking at this matter at the same time as we are looking at this legislation. Unfortunately, what will happen is that in the autumn session this Government will develop legislation-a taxation amendment Bill-to try to complement this legislation. It should have been brought into this chamber tonight. It should have been throught of as part of the package that has been presented tonight. In the past the Commissioner of Taxation has often been left out of the initial negotiations in the drafting of legislation. I hope this will not occur in the autumn session when the Income Tax Assessment Amendment Bill is brought forward. The Taxation Commissioner is required to maximise the revenue from all sources. Unfortunately, this policy can lead to some unintended consequences. A few years ago when I was in the industry I witnessed a similar situation which covered export incentives when it was not intended for the rebate to be taxable. When the tax legislation came up and the assessments were issued, the Commissioner brought forward this incentive as a taxable receipt which was never intended in the initial deliberations when the incentive measures were discussed with industry. We have to be aware of these two problems. Some people will be astute enough to discover loopholes, will exploit this incentive and use it as a tax avoidance measure rather than use it for its true purpose and intent, as complementary legislation to the three Bills that are being discussed tonight. I mention also the need for a package of measures involving taxation. So there is the question of complementary legislation and the problem of some people using the legislation as a tax avoidance measure. We also need an expression of attitude, manifested in a tax Bill, on the Government's approach to sales tax and sales tax rates. Will the Government encourage its depreciation policy on high technology industry by quick write-offs, discretionary depreciation rates, write-offs in the first year and accelerated rates over three years? What is the possibility? If the Government expects industry to make investment decisions now it has to have far more than what is presented to this Parliament tonight. The Government must be able to tell industry how it can write off its investment and how its revenue will be taxed. This will be critical if the Government is expecting industry to invest, otherwise it is developing a package in isolation which the manufacturing industry will not pick up because it cannot see the value for its dollar, the manner in which it will be taxed and the profitability , et cetera. There is a need for some firm policy on government purchasing. As I have said before, all too often it is very much more comfortable for department heads to deal with large organisations. Last week I was with a high technology computer manufacturer and operator in Melbourne. He said: 'The big problem is that none of your departmental heads want to deal with us because we are too small'. Is that not an indictment of Australian society and Australian governments over the last few years? The Government prefers to deal with transnationals because they are large and the Government feels that they are dependable. We have some Australian innovators operating on the verge of new technological developments and they cannot get their share of business equipment sales to the Government. I think that there must be a reassessment of the Government's approach. I have been urged to cut short my contribution. I think that it is unfortunate that debate on industry matters takes up so little time in this Parliament. We are prepared to spend hours and hours on sex discrimination legislation and freedom of information legislation, but our time seems to be cut short on industrial matters. We have to look into the question of protection and what is most appropriate for new technology. There is a need for some sort of assistance . I believe that bounty assistance is much more appropriate to high technology industry than the tariff which tends to be rather ineffective and costly. We have some legislation concerning research and industrial development. There is a problem of a lack of involvement and a low profile. One of the problems is the high level of overseas ownership in Australian operations which means that industrial research is essentially carried out in the overseas laboratory and exported to Australia for which we pay pretty high service fees. Somehow there must be legislation or inducement to encourage those sorts of industries to undertake their own research and development in Australia. Such legislation as there is has been very sparse and has worked adversely against small companies because many small companies have not been able to prove that they can provide one full time operative in research and development. Again this legislation tends to help some of the small operators and companies. In this legislation there is a problem with regard to appropriate security. This is important. When working on the verge of high technology, one is sceptical when government inspectors snoop around, say 'Yes, it is very interesting', and then go on to the next factory. To what extent could a slip of the tongue be communicated and be of tremendous benefit to a competitor? We have to reassess our methods of auditing these high technology industries, because this problem of security of high technology details is important. There is a need for complementary legislation to give further encouragement to training and education. Our participation rates in higher education are deplorable. One of the reasons for the success of the Japanese is their very high retention rate of school leavers. Of course, there is a need for venture capital, which one of these Bills is providing in the form of 100 per cent tax write-off. I welcome that as well overdue. The Australian Industry Development Corporation Amendment Bill proposes to extend the role of the AIDC. One could well ask why this is necessary. For example, the report of the Campbell Committee of Inquiry into the Australian Financial System recommended selling the AIDC. Yet that recommendation has not been followed. We should very well ask the Minister for Social Security (Senator Grimes), who is at the table, why it has not been followed. Secondly, this Bill allows the Australian Industry Development Corporation to invest in any industry but to give priority to financing manufacturing and services, including tourism and the development of high technology industries-a welcome goal. Thirdly, there is to be an increase in the Corporation's statutory capital. Fourthly, the Commonwealth will guarantee all AIDC borrowings. The AIDC is supposed to be a commercially competitive body; but, if the Commonwealth guarantees all its borrowings, a commercial advantage will be given to it. For example, it may very well be able to gain lower interest rates than competing bodies. The AIDC is to pay the Commonwealth 50 per cent of its net profit after tax. But why does the AIDC not have to pay, for example, interest withholding tax? This is a real anomaly that should be examined. Other organisations in similar circumstances have to do this. In regard to its capital and reserves, the gearing ratio has been increased, yet the Campbell report recommended that the gearing ratio should not be a statutory imposition but should be established on individual cases within the AIDC. Restrictions on the investment of its capital will be relaxed and it is proposed that the AIDC be able to invest in any industry. If the AIDC is to operate as a commercial concern, why is it not required to earn a certain return on its investment, as any other private concern is? Finally, the Government can fund certain projects considered to be in the national interest. Such a term assumes that the national interest need not be purely a commercial interest. If this is so, why is there no provision for the two to be clearly separated in the AIDC accounts? I wish to pay tribute to the work of the shadow Minister for Science and Technology in the House of Representatives, Dr Harry Edwards-the famous Professor Harry Edwards-who acknowledged the origins of some of this legislation , and to the former Minister for Science and Technology, the Hon. David Thomson. In March 1981 the then Minister approached Sir Ian McLennan, the former President of the Australian Academy of Technological Sciences, asking him to institute steps to inquire into the ways of assisting, particularly financing high technology and industrial development. The High Technology Financing Committee of the Australian Academy of Technological Sciences was appointed and headed by Sir Frank Espie of Conzinc Riotinto of Australia Ltd. This measure implements in very close detail the recommendatoins of that report. I join with my colleague Dr Harry Edwards, in paying tribute to the former Minister, the Hon . David Thomson, who was a member of the previous Government. I commend the Bills to the Senate. Senator MASON(New South Wales)(10.31) —The Australian Democrats do not oppose the Industrial Research and Development Incentives Amendment Bill, the Australian Industry Development Corporation Amendment Bill or the Management and Investment Companies Bill, which I suppose reflect a laudable intention on the part of the Government to encourage new technology and sunrise industries. But as someone said at some time, the road to hell is paved with good intentions. These Bills are a fairly classic example of that. I wish to speak particularly to the two Bills emanating from the Department of Science and Technology. These Bills exhibit that same mild mediocrity that typifies the recent technology summit. The first one does things for software and provides better incentive systems for innovations. The second one has a very curious device which allows a new set of ill-defined organisations which are to get tax concessions in return for being a kind of ringmaster and father figure in a financial sense by providing risk capital in a surrogate fashion for select groups of enterprises. We are told that it is hoped that by their boldness and innovation these small groups of enterprises-or some of them-will establish viable new industries. The first point I want to make is that the Australian Democrats are concerned that the Management and Investment Companies Bill seems to have that particular aspect. It gives tax rebates of 100 per cent for investment in licensed management and investment companies, which is what these new organisations are called. These will then provide venture capital for Australian businesses which utilise innovative technology. However, there is no facility in this Bill for any tax rebate for direct investment in the companies utilising this technology. We suggest that this is a mistake and that we would have had a far better motivation and sense of responsibility if this had been done directly. I cannot yet see quite why this has to be done by another stage of business. It also seems a little sad that the Minster for Science and Technology, Mr Barry Jones, like so many people, is fascinated with computers. When he talks about new technology and sunrise industries he often seems to have his mind on this one specialised area. Let us face it; computers collect information, classify it and regurgitate it, often in large quantities in a rapid, efficient and, indeed, fascinating way. They also can cause horrifying problems, bottlenecks and opportunities for crime, according to the ability of the programmers and users. The Australian Democrats feel that the Government ought to look beyond this area to new areas of technology, solid new industries which will provide wealth for the nation in the future and permanent job opportunities . I know I started saying these things quite some months ago and that people such as Senator Button kept saying 'Yes, we will do this; give us time', but he has not done it yet. I see that he is getting flack from the Australian Council of Trade Unions too, because band-aid job opportunity measures that have been taken so far by the Government are no more than band-aids that provide three to six months work experience for some young people and then toss them on to the rubbish heap again after that. I suggest that this is not good enough. It is a basic view of the Australian Democrats that we must create a sustainable society in Australia, as indeed must be done and urgently everywhere else in the world. Eventually and inevitably everything we use must be renewable. It is high time governments, including the forward-looking, enterprising and future-orientated Labor Government, devoted themselves to that thought and not just paid lip service to it. It is in the energy field that a major opportunity exists for new industries to employ more people. We feel it is imperative that more funding should be provided for research into renewable energy resources. This is a matter of urgency as our fossil fuels are being consumed. The present glut of oil products is perhaps reassuring but I suggest it is artificial and will be short lived. Probably within two years we will see the end of it. But an increase of funding is not the only necessity if our dependence on non-renewable energy resources is to be broken. We must actively encourage all consumers in the use of renewable resources. That is a matter of publicity and propaganda that could be carried out quite efficiently on a government level because the community is receptive of it. It expects these things of government and it is probably wondering why they are not happening. The SolarCal Council in California, a technology guidance body formed for the special purpose that I mentioned, expects that by the end of this year there will be 200,000 solar heaters and 150,000 solar space conditioning installations in California, which is a society roughly comparable with Australia. New government buildings in California which have floor space exceeding 10,000 square feet are required by law to use solar hot water heaters. Existing government buildings are being converted to solar heating. By 1985 this program is expected to save 15 per cent of the oil and gas California would otherwise have had to import. I suggest that is a vital and significant figure. It is a 15 per cent saving of non-renewable resources. The other interesting point, and to us in Australia the vital one, is that by that time the industry will employ some 30,000 people at all levels of skill and experience, from skilled to unskilled, who would not otherwise have had jobs. Such a program could be introduced into Australia just as easily as in California if only the Government would get off its backside and make some inquiries. It does not even have to do any work; the situation is there; all the proof is available; all we have to do is go to California, seek its experience and bring it here. It will work in Australia just as it does there; there is no trouble about it at all. There is absolutely no risk and it will immediately put young people and others in Australia into employment. It would also have the valuable merit of starting the trend towards renewable energy which we know has to come. What is the trigger? It is a very simple one. The California Utility Commission did its homework on this matter and found that it was cheaper to subsidise to the tune of 55 per cent through State and Federal income tax the installation of new established technology solar hot water heaters than to provide the power through building new fossil and nuclear power stations. All the figures are there. All the Government has to do is to ask for them. I have a copy of the figures if the Government wants them. That proof has been established. In fact I was told by somebody that the Commission could virtually have given solar hot water heaters to people and it still would have been cheaper than building new fossil and nuclear power stations. According to the Petroleum Gazette, which is an industry paper, Australia's oil demand is predicted to be 120 million litres a day by 1990. Less than half that amount will come from known fields. By the year 2000 134 million litres a day will be used, on current projections, and only 27 million litres will be available from current fields. Self-sufficiency in oil will drop from 68 per cent now to 43 per cent in 1990, and to 20 per cent by the year 2000. We hope, of course, that major new finds of oil will be discovered, but it would be a foolish government which relied on that projection as a certainty. At some stage motor spirit will be a major problem to this country and we will have to look at alternative methods of producing it. Methanol and natural gas are obviously the best alternatives and should be investigated soon. I think the Government also ought to encourage the Commonwealth Scientific and Industrial Research Organisation to look at renewable energy resources in the solar and wind fields more extensively than it does. There has been some discussion of this matter in the Senate in recent weeks, and it has revealed the naked situation that the CSIRO is virtually doing nothing. The National Energy Research, Development and Demonstration Council is doing virtually nothing. We are unique in ignoring alternative energy resources. There again I think the Government will find it is running very much against community expectations. Solar I in the Mojave Desert near Los Angeles, which any honourable senator can see for himself, produces 12 1/2 megawatts of electricity. In the daytime Solar I can provide enough power for some 6,000 households. This is not a small operation; it is a large operation. It is obviously a sensible type of installation for decentralised use in Australian circumstances. At night-the peak period after dark when the requirement for power is still there and is increasing-Solar I's thermal storage unit retains surplus heat attracted during the day and enables the power station to go on producing seven megawatts of power, more than half its daytime capacity, for four hours. Of course, by four hours after dark the demand for power starts to fall off again. It is of interest that a second, similar power station, which is being built nearby by a private enterprise corporation, is so confident of results that it has already contracted to supply solar power to California's major power supply authority at a lower price than for power generated by burning fossil fuels or from nuclear power stations. That technology has been backed by another completely new industry involving a huge factory that will do nothing but manufacture mirrors for solar power houses. Here again, of course, is a new area of employment. I could continue to give dozens of examples and to edify the Senate in regard to many such matters-for example, wind energy and areas of solar technology- which I have no doubt would be informative to Senator Button. I will give him the benefit of knowing, or suspecting, that these things probably exist, that all the Government has to do is go out and find them. My point is that these are ideas and developments which are not being actively considered or promoted by the Australian Government. So much for encouraging enterprise and new technology! It is a hollow claim, one that is not good enough . I believe that the fault is basically organisational and lies with the Department of Science and Technology itself. It is not good enough to expect Australian business and capital to go into new, high risk areas without responsible and informed Government guidelines on what is and what is not likely to be viable. If business burns its fingers over new technology, the lesson will be not to play with new techology in the future. But I imagine that that is not the lesson that the Government wants learned. Therefore, the Government should get together, within the Department of Science and Technology, a task force consisting of businessmen of proven ability, academics and perhaps a few bureaucrats with a wide, freely ranging brief to search the world for a mix of sunrise industries that would suit Australia, doing so in constant consultation with Australian business and capital sources. It is becoming increasingly obvious that new high technology industries often complement and assist each other and that these need to be clearly identified and perceived. For instance, a modern, sophisticated solar power-house such as Solar I depends a great deal for its viability upon the most advanced computer technology, and probably also on robotisation in component manufacture. If we are to succeed in getting Australia into a competitive situation with the rest of the world the Government, and especially Mr Barry Jones, will have to get away from uttering mild abstractions and exhortations, and offering mild incentives of the kind we see in this Bill, which are unexceptionable but no better than that. The Government will have to do something about the problem. I ask, please, for Australia's sake, let that be as soon as possible. Senator BUTTON(Victoria-Minister for Industry and Commerce)(10.43) —in reply-I thank the Senate for what I interpret, from listening to the debate both outside and inside the chamber, as general support for these Bills. It has been a very wide ranging and interesting debate. I would like to refer to one or two points raised in the course of it. In certain circumstances the venture capital provisions would apply to mining technology because it would presumably be manufactured technology. If that was not the case, the Management and Investment Companies Licensing Board would of course have certain discretions in relation to these matters; so I think the general answer to the question raised is yes. Senator Watson raised a couple of stroppy questions about the Australian Industry Development Corporation, first in relation to withholding tax. The Government acted in June of this year to remove the exemption enjoyed by the AIDC in respect of withholding tax; it is now in exactly the same situation as is everybody else. Senator Watson also raised a question relating to accounting in respect of the national interest provisions of the AIDC legislation. Of course, those provisions have not yet been used but it is expected that they may profitably be used by an AIDC with an expanded charter and a much greater availability of capital than that organisation has ever had before. I think the history of the AIDC has been somewhat sad because previous governments have not quite worked out their relationship with that organisation. I should like to think we have, or are in the process of doing so. A number of provisions in the existing legislation provide for separate accounting in many instances. The Bill extends the separate accounting procedures to the national interest provisions. I think these are the appropriate answers in respect of those matters. The most stirring note of Senator Mason's speech was that the Government should get off its backside, and I leapt to my feet to reply to the second reading debate in response to his invitation. I do not want to remain on my feet for long. Senator Mason seemed to be promising a lot of overseas trips for members of the Department of Science and Technology. I will convey those views to the Minister for Science and Technology (Mr Barry Jones), and he can make appropriate arrangements if he can persuade the Treasurer (Mr Keating). I thank the Senate for its brief but considered attention to these Bills. I commend the second reading of the Bills to the Senate. Question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment or debate. Debate resumed from 8 December 1983, on motion by Senator Ryan: That the Bills be now read a second time. Senator CHANEY(Western Australia-Leader of the Opposition)(10.48) —The Senate is debating a series of Bills-the Steel Industry Authority Bill, the Bounty ( Steel Mill Products) Bill and the Bounty (High Alloy Steel Products) Bill-which relate to one of Australia's major basic industries. Our steel industry is, of course, based on Australia's great resources of both coal and iron ore. I preface what I want to say about these Bills by expressing my regret and the regret of the Opposition that Senator Peter Rae, who is the Opposition shadow Minister for Industry and Commerce and who is responsible for policy for the Opposition in this area, is not able to be in the Senate today because he is recuperating from an illness. For that reason I have the conduct of these Bills on his behalf. The Opposition will not oppose these Bills, but they raise a number of issues upon which I wish to touch. I do not suggest that at this stage of the session we will be able to have a full-blooded debate on the steel industry and the other issues which arise because time is too limited to permit that. Because the Opposition is not opposing these Bills I suppose that sort of debate is not absolutely necessary in any event. However, I wish to acknowledge the importance of the steel industry in the view of the Opposition. It is important to us for defence reasons; it is important to us because of its effect on other areas of manufacturing industry. Indeed the Opposition would say that decisions taken to protect the steel industry and decisions which affect the access of Australian industry to the various types of steel that they need and at the price that they have to pay are very important to those other areas of industry. We cannot look, from an industry viewpoint, simply at the welfare and health of the basic iron and steel industry. It is important for employment reasons. It is a major employer although I think that employment has dropped by some 10,000 over recent years because of the decline in demand for steel in Australia and the declining opportunities we have had for exporting steel. Of course it is of major regional economic importance particularly in the three main areas of Newcastle, Wollongong and Whyalla. I refer to the statement made by the Minister for Industry and Commerce ( Senator Button) who is in the chamber at the moment. He announced the steel industry plan on 11 August and made some comments in the early part of that statement with which the Opposition would certainly agree. He said that to regain its internationally competitive position the industry would have to reduce its relative production costs significantly. The Government on its own could not ensure the necessary cost reductions. He went on to say that all interested parties, including the industry, the unions and relevant State governments, had a role to play in achieving these reductions. I think those comments are apt. The Government was correct in seeking to involve all of those parties-the Government, the industry, unions and relevant State governments-in trying to achieve reductions in costs which were necessary for the long term health of the steel industry in Australia. I want to touch on the role which each of those areas has to play. I will mention some of the misgivings that the Opposition has about whether the package presents a complete solution to the problems which the steel industry has faced. I also want to touch on the question of fast track dealing with the possibility of dumping. I refer to it now because it is a discrete item in the package. Part of the steel industry package announced by the Minister for Industry and Commerce was that there would be fast track anti-dumping arrangements for the steel industry. Senator Peter Rae has on a number of occasions in questions and in debate raised with the Minister the precise arrangements which the Government has in mind. I refer to the answer which was recently provided by Senator Button to Senator Rae to question No. 340 where, in part, the Minister stated: There is no intention to announce the new 'fast track' anti-dumping procedures in relation to the steel industry. They will be activated by the Steel Industry Authority when it is appointed and following the introduction of the steel industry plan on 1 January 1984. There is some concern on the part of the Opposition that there is some cloudiness, some lack of detail available to us in what is involved in the fast track anti-dumping procedures. Obviously the whole question of anti-dumping activity is of some sensitivity and involves the General Agreement on Tariffs and Trade anti-dumping code. I raise that matter with the Minister as I believe the Government could be more forthcoming in helping us to understand precisely what it is doing with respect to the totality of the steel packages. I turn to the contributions which are being sought from the various participants under the steel package of the Government. I want to demonstrate why we think there are some elements of the package which lead us to say that it has some stop-gap elements about it. For example, it is apparent that the package does not guarantee that Australia would have an internationally competitive steel industry at the end of the plan. I say that because the plan includes some commitment for further investment with Broken Hill Proprietary Co. Ltd being committed to a firm capital investment of $500m and a further likely investment of $300m. This total of $800m is about a quarter of what BHP told the Industries Assistance Commission was necessary between 1985 and 1995. I realise that the plan does not run over that full 10-year period, it runs for only half of it. I simply say that we are left in the situation that whilst there may well be some very welcome further investment by BHP, it does, on the company's own assessment, appear to fall short of what the company thought was necessary to guarantee the sort of steel industry which Australia needs. As far as the unions are concerned, we find some real value in the package. Again, we do not in any sense argue with the Government's involving the trade unions in this very important area. I quote Senator Rae's initial response to the package. He said: The best thing that can be said for it is that the productivity undertakings represent, potentially, a major breakthrough. He went on to say: Although there is virtually no sanction, there has been a recognition by the trade union movement that, without productivity, protection by way of bounties, quotas, tariffs, and the like, can create a dangerous illusion, leading to the destruction of competitiveness of industry, and thereby its long-term existence, and the jobs which it provides. He went on to say: It is most encouraging to see that the trade union movement is recognising that the quid pro quo for protection must be productivity increases. I thoroughly adopt those words of Senator Rae and believe that that is a positive element of what the Government is seeking. The concern the Opposition has, however, is what is being offered by the unions and whether it is adequate. The Government has also put in the package a provision that the unions will receive wage increases in line with the community standard. It has sought to restrict the industry to that provision. But the fact is that that involves the 4.3 per cent wage increase for the first six months of this year and full wage indexation beyond. It appears to the Opposition that that has the potential to lock the steel industry into a current situation of unprofitability and lack of competitiveness. I understand the sort of reasons which have been argued by Senator Button often enough in this chamber as to why the Government believes that that is a minimum sort of arrangement which ought to be entered into. But the fact is that the world steel industry is in difficulty. In the United States , for example, steel workers have seen and accepted the need to accept a 9 per cent cut in wages because of the competitive position of their industry. I think that is fair enough. Senator Button —Twenty-five dollars a week. Senator CHANEY —I simply raise that as a comparable response to a similar real difficulty in the industry in another country. Steel workers in the United States have made other concessions which are certainly more substantial than those made by unions in Australia. Again, I do not think this is the debate in which to canvass these issues at length. I raise them because I think that generally they go to the question of whether we have a long term arrangement which will enable the Australian industry to become fully competitive. I touch now on the role of the States. We have heard some rather confusing statements in this chamber because the Government has suggested in its package that the States have an important role to play. The States are to make a contribution to the plan in relation to the containment of State charges and to otherwise ensure that they contribute to the health of this industry. On the information which is publicly available it appears that to date nothing has been forthcoming from either the New South Wales Government or the South Australian Government. The Minister is on record as saying that he considered the New South Wales contribution to be important yet in answer to a question in the Senate from Senator Peter Rae he said that the contribution was not significant. Indeed , I do not think that anything at all has been said about the contribution of South Australia. I think that during this debate we should ask in what sense are the States prepared to live up to their role in this arrangement and what contribution will they be making to the continued health of this industry when in fact they are imposing heavy charges on it. In the same way, this Government has increased its charges on the industry by increasing sales taxes and excises. Again, that seems rather inconsistent with the general thrust of the package. So in each of these areas, in the contribution of the industry and the level of investment which is to be made and the contribution of the unions and of the States, we see problems. They give rise to some doubt in the collective mind of the Opposition about the efficacy of the total package. Having said that, we do not oppose the legislation. We think that there are very positive elements in it . We hope that it will restore the health of the industry. It is our judgment, however, that the success of the package is very dependent upon general economic growth in Australia and a general improvement in the economic situation. Should there be any faltering in that area we would have some doubts that the objectives of the Government will be achieved by the legislation it has laid down. Debate interrupted. The DEPUTY PRESIDENT —Order! It being 11 p.m., I propose the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 11 p.m. The following answers to questions were circulated: Question No. 5 Senator Bolkus asked the Minister representing the Minister for Foreign Affairs , upon notice, on 21 April 1983: (1) Did the Royal Commission of Inquiry into Drug Trafficking issue an Interim Report No. 2 relating to passports in May 1982. (2) Did the Commission make 40 recommendations in respect of passports. (3) What is the current state of implementation of each of those recommendations. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's questions: (1) Yes. (2) Yes. (3) The Government's response to each of the recommendations was tabled in the House of Representatives on 8 December 1982 by the then Minister for Foreign Affairs. After further consideration the Government decided to reject Recommendations 32, 33 and 34 of the Stewart Royal Commission Interim Report. All the recommendations accepted by the Government have been implemented on schedule. Personal attendance has been introduced but will not become compulsory until 1 July 1984. Question No. 354 Senator Reid asked the Minister for Education and Youth Affairs, upon notice, on 13 September 1983: What was the average cost of educating a student in each of the following senior secondary colleges for each of the last three years: (a) Copland College; (b) Dickson College; (c) Erindale College; (d) Hawker College; (e) Narrabundah College; (f) Phillip College; (g) School Without Walls; and (h) Stirling College . Senator Ryan —The answer to the honourable senator's question is as follows: The Australian Capital Territory Schools Authority does not maintain records of costs associated with the operation of each individual school in a format from which specified data such as per capita cost at each of the listed colleges could be easily extracted. However, as far as costs for all colleges in the Australian Capital Territory are concerned, the current average per capita figure is $3,084 at June 1983 prices. Question No. 359 Senator Childs asked the Minister for Resources and Energy, upon notice, on 15 September 1983: (1) Is the Tasmanian iron ore pellet manufacturer, Savage River Mines, currently importing South African anthracite to be used in its iron ore pellet plant. (2) Was Mr Barry Swan, spokesperson for the Australian Coal and Shale Employees ' Federation, correct in stating in the Australian Financial Review of 8 September 1983, that similar grade coals to South African anthracite are available from a number of Australian mines, including CSR Ltd's Yarrabee mine in Queensland and Bayswater Collieries Pty Ltd's Hunter Valley mine. (3) Have 693 mineworkers lost their jobs in New South Wales since May 1982. (4) Is the Australian coal industry in a severe state of overproduction and did stockpiles in all districts stand at record levels on 1 January 1983. Senator Walsh —The answer to the honourable senator's question is as follows: (1) I am advised that Savage River Mines has imported anthracite from South Africa for use in its iron ore pelletisation project in Tasmania. Imports of all types of coal from South Africa into Tasmania in 1982-83 amounted to 26,241 tonnes. The company has a requirement for about 30,000 tonnes of anthracite in 1984. (2) I understand that for pollution abatement and metallurgical reasons the company requires anthracite or other low volatile coal of particular size and other physical specification. Savage River Mines have had discussions over a number of years with prospective Australian suppliers, including those referred to in the question, concerning their ability to provide a suitable product-so far without success. The company believes Australian sourcing of a technically suitable product should offer cost savings over imported anthracite and negotiations are continuing. (3) According to the Joint Coal Board figures, employment in the New South Wales Coal Industry in May 1982 was 21,091. As at August 1983, the latest published figure, employment was 19,460 persons. (4) Coal industry production is currently in excess of demand, particularly for coking coal. I am advised that the Queensland Coal Board does not publish data on stocks. Figures published by the Joint Coal Board indicate that New South Wales coal stocks reached record levels in January 1983, and have since increased to over 21 million tonnes in August. Question No. 361 Senator Bolkus asked the Minister representing the Minister for Foreign Affairs , upon notice, on 14 September 1983: (1) Did the United Nations in November 1982 request member countries to provide educational and humanitarian aid to Palestinians. (2) How much and what type of aid has each country granted as a response to this request. (3) Has Australia granted any aid, if not why not. (4) Will the Minister for Foreign Affairs review applicable guidelines to ensure aid is provided as a matter of emergency if Australia has not granted any aid and in view of the urgency of the situation of the Palestinians. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: (1) On 18 November 1983, the United Nations Relief and Works Agency, UNRWA, confirmed its international appeal of June 1982 for funds for its emergency relief programs for Palestinians and revised its financial targets, from $39m to $43m, for the 12 months to June 1983. (2) and (3) As of 30 June 1983, in response to the UNRWA appeal the following governments had contributed (US$): In kind and associated Contributor Cash cash Total Argentina . . 25,000 25,000 Australia 575,445 . . 575,445 Austria 34,818 . . 34,818 Canada 758,120 . . 758,120 China 20,000 . . 20,000 Denmark 1,032,041 . . 1,032,041 Egypt 50,000 . . 50,000 Finland 531,124 . . 531,124 France . . 407,056 407,056 Germany, Federal Republic of 392,157 . . 392,157 Greece 5,000 145,000 150,000 Iceland 18,200 . . 18,200 India 19,890 . . 19,890 Italy 335, 000 2,560,000 2,895,000 Netherlands 650,523 . . 650,523 New Zealand 17,984 . . 17,984 Norway 584,163 . . 584,163 Saudi Arabia 2,915,452 . . 2,915,452 Senegal 5,000 . . 5,000 Sweden 1,353,357 294,610 1,647,967 Switzerland 211,966 322, 067 534,033 Thailand 1,000 . . 1,000 United Kingdom of Great Britain and Northern Ireland . . 1,850,274 1,850,274 United States of America 16,500,000 . . 16,500,000 Yugoslavia . . 7,813 7,813 Subtotal 26,011,240 5,611,820 31,623,060 (Source: Report of the Commissioner-General, United Nations Relief and Works Agency, 1982-83) (4) The Government stands prepared to consider sympathetically requests for humanitarian assistance to Palestinians. In 1983-84, Australia will provide to the United Nations Relief and Works Agency 210 tonnes of canned meat valued at around $540,000 for humanitarian assistance for Palestinians. In addition Australia has provided a core budget contribution to UNRWA of $1.4m and has offered six scholarships for training in Australia. Question No. 390 Senator Childs asked the Minister for Resources and Energy, upon notice, on 5 October 1983: (1) Is the Minister for Resources and Energy aware that in the most recent environmental survey at the Lucas Heights Research Laboratories (Report AAEC/ E563), it was stated that traces of caesium 137 were found in milk, but that the source of this caesium could not be distinguished between weapons fallout and local caesium 137. (2) Are monitored readings of caesium 137 and noble gases taken at other points in Australia if the origin of caesium 137 could be fallout from the testing of nuclear weapons; if not, why not. (3) Where are these monitoring stations located, and do their readings compare with the findings obtained at Lucas Heights. (4) Who is responsible for monitoring general levels of radioactivity arising from weapons test fallout. Senator Walsh —The answer to the honourable senator's question is as follows: I am aware of the survey referred to in the honourable senator's question. However, as some of the matters raised involve activities of the Australian Radiation Laboratory ARL, I have obtained the following advice from the Minister for Health. (1) In Report AAEC/E563, concentrations of caesium 137 in milk collected by the Australian Atomic Energy Commission in their environmental survey are reported as being below their minimum level for quantitative measurement, 3 x 10-4 Bq/g of fresh milk. In 1978, which was the last year in which caesium 137 was routinely measured in milk in ARL's national fallout monitoring program, concentrations of caesium 137 in milk being processed for consumption in the eastern States varied between 0.75 and 1.5 x 10-4 Bq/g of fresh milk. (2) In the national fallout monitoring program carried out by ARL, caesium 137 is currently monitored in ground-level air only. It is collected on filters by large volume air samplers operating continuously at six locations throughout Australia, and the filters are forwarded to ARL every week for measurement. Monitoring for noble gases has never formed part of the national fallout monitoring program because health hazards associated with noble gases originating from atmospheric nuclear weapons tests up to the present time are negligible. Measurements of caesium 137 in milk ceased to form part of the national fallout monitoring program at the end of 1978 because: (a) concentrations had dropped to very low levels, (b) from our knowledge of the behaviour of caesium 137 in the environment, it was predicted that there would be no general rise in concentrations of caesium 137 in milk unless there was a resumption of nuclear weapons testing in the atmosphere of such magnitude and so located as to produce considerable quantities of radioactive fallout over Australia, (c) ground-level air would continue to be monitored for the presence of any radioactive fallout, and (d) caesium 137 is considered to be much less hazardous to health than strontium 90 with which it is associated in radioactive fallout. (3) Caesium 137 in ground-level air is continuously monitored at Perth Airport, Adelaide Airport, Laverton Air Base in Victoria, Richmond Air Base in New South Wales, Amberley Air Base in Queensland and Townsville Airport. The Australian Atomic Energy Commission publishes no data on caesium 137 in ground-level air with which comparison can be made. (4) ARL is responsible for monitoring general levels of radioactivity arising from weapons test fallout. Question No. 392 Senator Macklin asked the Minister representing the Minister for Health, upon notice, on 4 October 1983: (1) Is the Minister for Health aware of the health problems that have arisen from the prescription of diethylstilboestrol (DES) causing cancer, genital tract abnormalities and infertility in the effected offspring. (2) Will the Minister investigate the problems suffered by those affected. (3) Will the Government establish free medical treatment and screening in adequately staffed and equipped centres and establish an effective register and monitoring of patients. (4) Will the Government provide: (a) legal and financial help for victims to obtain compensation from the drug companies which manufactured and marketed DES and related drugs as a treatment for miscarriage; and (b) funding for a nation- wide publicity campaign to alert DES victims to the problems they may be facing, the need for specialised tests, and embark on consultation with and funding assistance of DES ACTION as the resource organisation representing DES affected people. (5) Will the Government investigate the effects of hormonal growth stimulants in animals and poultry which may exacerbate some DES-related conditions and thus further endanger the health of DES victims. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) Yes. (2) Although the problems of DES arose initially as an issue of drug safety, they are now primarily a matter of appropriate treatment of affected persons. When this problem was recognised in the early 1970's the matter was publicised by way of a statement issued to all doctors by the Australian Drug Evaluation Committee in 1972 and again in 1975. These were followed up with an editorial in the Medical Journal of Australia in 1981. The National Health and Medical Research Council has undertaken to keep the problem under review. (3) The provision of treatment facilities is primarily a State responsibility. In Victoria, largely as a result of the activities of DES ACTION, a conjoint project, organised in 1981 by the Victorian Government in collaboration with the Victorian Branch of the Royal Australian College of Obstetricians and Gynaecologists, led to the establishment of a referral clinic at the Royal Women 's Hospital, Melbourne. I understand that a similar clinic now operates at the King George V Memorial Hospital, Sydney. Action in other States has been less comprehensive. Colposcopic screening for women with a history of maternal exposure to oestrogen is included in the schedule of medical benefits. (4)- (a) The question of whether or not the Government will provide legal and financial help for victims to obtain compensation from the drug companies which manufactured and marketed DES and related drugs is a difficult one to answer. The Government has no legal responsibilities in this regard and would need to be presented with much more information than it currently has before any decision could be taken. (b) As part of the conjoint project in Victoria an excellent information booklet on this matter was issued to all Victorian medical practitioners. Following representations from DES ACTION consideration is being given to providing funds to that organisation as a national community health project. However, this needs to be examined in the light of other requests made to determine a level of priority for the provision of limited funds. (5) It is understood that legislation was introduced in all States in the early 1960's prohibiting the use of DES as a growth stimulant in animals and poultry. There does not appear to be any evidence which indicates that the use of such stimulants may exacerbate some DES-related conditions. However my Department will continue to monitor the literature in this regard and take whatever action may be appropriate in the light of information which comes to hand. Question No. 416 Senator Reid asked the Minister for Education and Youth Affairs, upon notice, on 6 October 1983: (1) Was the 1983 Australian Scholastic Aptitude Test (ASAT) checked for sex discimination by the Australian Council of Educational Research prior to its use in Canberra; if so, what was the result of such testing; and if not, on what grounds did the Australian Capital Territory Schools Authority decide that the ASAT discriminated against female students. (2) Is it possible that the test discriminates against most students (both male and female) who undertake studies in humanities subjects while advantaging most students in the science/mathematics areas. (3) Is it possible that an imbalance between the male and female scores could be caused by many potential high scoring girls leaving school at the end of Year 10, for example, to undertake secretarial or other courses, while the boys who leave school at this time are usually low achievers. (4) Does this imply that all girls are equally disadvantaged as female scores are to be raised uniformly. (5) Is it possible that some females handle this type of testing as well as males; and equally, is it not possible that some males handle this type of testing poorly. (6) Will students from predominantly male classes wishing to make careers in predominantly male occupations such as engineering, be disadvantaged when competing for places at interstate universities. (7) Will male scores be raised if female students outscore males in the ASAT. (8) Has any attempt be made to ascertain whether subsequent academic performance of Canberra students bears out the hypothesis that the ASAT test shows a bias against female students, and were tertiary and technical institutions contacted in this regard. (9) What would have been the effect in an all male subject group on Tertiary Entrance Scores of 240, 280 and 320, assuming that this proposal had been in operation in 1982, and what would have been the effect in an all female subject group on Tertiary Entrance Scores of 240, 280 and 320. (10) Would the Schools Authority proposal be legal under the proposed Sex Discrimination Bill in its present form. (11) Are other students who may be disadvantaged under the existing system to have the opportunity to have their ASAT scores increased, for example: (a) those students who suffer from chronic or major illnesses; (b) those students who come from homes where English is not normally spoken; (c) those students who come from deprived socio-economic backgrounds; and (d) those students who may have had some physical or emotional impairment to learning in their earlier school days and who have not had sufficient remedial help since that time; if so, how may such children apply for a mark increase. Senator Ryan —The answer to the honourable senator's question is as follows: (1) All items for the 1983 test were subjected to analysis for sex bias. Panels including Australian Council for Educational Research (ACER) researchers examined the items and removed all detectable biased items. The Australian Capital Territory Schools Authority was nonetheless concerned that there could be disadvantage to girls in Year 12 in 1983. It therefore established an independent panel to review the evidence available and to recommend an interim procedure for 1983. That panel was comprised of: Dr Beryl Rawson, Dean, Faculty of Arts, Australian National University. Professor Don Spearritt, Department of Education, Sydney University. Ms Helen Williams, Deputy Secretary, Commonwealth Department of Education and Youth Affairs. Mr Ian Knight, Assistant Principal, Narrabundah College. After considering all of the data the panel identified that there could be a number of possible causes for the difference including: There is a higher retention rate for girls in Year 12 and thus a wider spread of ability level. There are differences in subject choice patterns between boys and girls; more boys choose advanced maths and science subjects. There could be an inherent bias against girls in the questions used in the test . The panel concluded that there is a gender difference not related to retentivity that should be dealt with on an interim basis in 1983. It therefore recommended an adjustment of one third of the difference between the mean of the ASAT standardised total scores of females and males for 1983 only. In presenting its report the panel made it clear that there was a need for extra research to examine policies for the longer term. (2) Research conducted by the Australian Capital Territory Schools Accrediting Agency's Technical Advisory Committee suggested that such a subject choice, i.e. humanities subjects, accounted for 0.4 of the 6.8 difference in the 1982 ASAT mean scores. (3) Both the Australian Capital Territory Schools Accrediting Agency and ACER have undertaken research into the retention rates of males and females from Year 10 to Year 12. There is no evidence to support the view that the imbalance between the male and female scores was caused by high scoring girls leaving school at Year 10. (4) No. The standardising procedure to be employed will generate a tapering effect and thus the scores of the higher ranked girls will move less than the lower ranked. (5) Yes. But on average, boys score consistently better. (6) It is almost impossible to generalise on this point because one has not only to consider the mean ASAT of a group, but also the standard deviation. What can be said is that the TES scores are expected to go down slightly, on average, in single sex boys schools and stay approximately the same in co-educational schools. (7) The procedures will apply to the male ASAT scores should the 1983 candidate show a reverse in the trend. (8) There has been some work at the ANU, but the numbers involved have been statistically insignificant. (9) As I have already indicated it is not possible to be specific because of the impact of the standard deviations. (10) Yes. (11) The Australian Capital Territory Schools Accrediting Agency has procedures to ensure that students are treated fairly, for example: ASAT scores for students from a non-English speaking background are excluded from the calculation of the tertiary entrance score. provisions within each college allow the awareness of status or credit because of illness or misadventure. Question No. 476 Senator Jones asked the Minister for Resources and Energy, upon notice, on 8 November 1983: (1) Has the Minister for Resources and Energy's attention been drawn to reports by the United States Environmental Protection Agency and National Academy of Sciences that confirm the long-held belief that atmospheric concentrations of carbon dioxide from the burning of fossil fuels and compounded by the mass felling of forests is causing an alarming increase in temperatures around this planet, together with drastic alterations to weather patterns. (2) Is the Government concerned about the threat of this 'greenhouse effect' on the earth's climate and the contribution to it by our fossil fuel exports and consumption. (3) How much of the $14m that is expected to be spent on energy research and development projects in 1983-84 will be spent on coal and other fossil fuel sources of energy. (4) How much will be spent on solar energy research and development projects. (5) What alternative energy projects, other than solar, will be funded by the Government during 1983-84. Senator Walsh —The answer to the honourable senator's question is as follows: (1) I am aware of the two reports and that both conclude that a doubling of the pre-industrial carbon dioxide concentration resulting in a 2*C average increase in air temperature will probably occur by the third quarter of the 21st century. The computer models used in these studies are complex and uncertainties arise from lack of knowledge both of the physical processes involved in the formation of weather systems and of carbon exchange between atmosphere, oceans and biosphere. It is therefore at present not possible to draw firm conclusions as to the wider consequences of the 'greenhouse effect' on future climate and weather. Both reports stress the need to carry out additional monitoring and research, but do not recommend that any precipitate action be taken to curtail fossil fuel use. (2) The Government regards this as an important issue and will continue to monitor overseas information and, as considered necessary, will carry out relevant research in Australia. The National Energy Research, Development and Demonstration Program is currently supporting research by the Commonwealth Scientific and Industrial Research Organisation Division of Atmospheric Research into both the carbon cycle and the climatological aspects of increased carbon dioxide. Measurements made at the Baseline Air Pollution Station, Cape Grim, Tasmania, which is operated by the Department of Science and Technology, are providing an essential input to this research. In addition, from their own appropriation, the CSIRO Division of Water and Land Resources and the Division of Atmospheric Research are investigating the impact of possible climatological changes on crop productivity and the Division of Plant Industry is studying the direct response which plants and crops would have to changes in carbon dioxide concentration. The CSIRO has advised that the contribution of Australia's fossil fuel exports and consumption to the 'greenhouse effect' would be relatively small. It is estimated that carbon dioxide resulting from the combustion of fossil fuels in Australia would amount to only one per cent of the world total. (3) I refer to my press statement of 11 November 1983 in which I announced the approval of grants under the national energy research, development and demonstration program for 1983-84, totalling $16.3m. The total commitment from this amount for energy research, development and demonstration projects on coal and other fossil fuel sources of energy is $13.7m. (4) Of the $16.3m mentioned in (3), $1.4m is committed on solar energy research , development and demonstration projects. In addition, further funds will be made available for a number of commissioned studies on solar energy. (5) I will define alternative energy sources as any energy technology, based on renewable or non-renewable energy, which has not yet penetrated the market to any significant degree. Using this definition $4.0m of the $16.3m is committed to alternative energy projects. It should be noted that some of the non- renewable energy projects in this category, for example conversion of coal to oil, are also included under the category of coal and fossil fuel sources in (3) . Question No. 490 Senator Reynolds asked the Minister for Industry and Commerce, upon notice, on 9 November 1983: 1. What are the steps necessary for a provincial city port to be given capital city status in benefiting that area in regard to steel pricing. 2. Why has Launceston acquired that status but Townsville has not merited such declaration. Senator Button —The answer to the honourable senator's question is as follows: I understand that the policy of the major local steel producer is to offer a uniform price in all capital cities except Darwin. This price also applies in Newcastle, Port Kembla and Whyalla, the major steel producing centres. Steel is shipped to Tasmania via Bell Bay and accordingly it costs no more, or even less, to deliver steel to Launceston than it does to Hobart. For this reason the capital city price is offered in Launceston. Steel for Townsville is shipped to Brisbane and then sent on by rail. Question No. 547 Senator Mason asked the Minister for resources and Energy, upon notice, on 29 November 1983: (1) Is the Minister for Resources and Energy aware of recent studies of the cost of wind-generated electricity in suitable parts of Western Australia, South Australia and especially Tasmania by researchers at the University of New South Wales (Blakers and Outhred, School of Electrical Engineering), showing that the likely cost of this electricity would be approximately 2.5c/kWh, which is less than the cost of electricity generated by the Henty-Anthony hydro-scheme in Tasmania. (2) Is the Minister aware that the employment potential of a wind energy scheme is between two and three times that of an equivalent hydro scheme in Tasmania, and that there are excellent prospects for the establishment of a major industry based in Tasmania exporting wind generators. (3) Is the Minister aware that one utility in the United States of America alone, Pacific Gas and Electric, has contracted to install over 300 MW of wind energy generating capacity since 1980. (4) Is the Minister aware that Australia has one of the longest windy coastlines in the world. (5) Has wind energy enormous potential in the southern part of Australia as an electricity source in view of the above. Senator Walsh —The answer to the honourable senator's question is as follows: (1) I am aware of the 2.5c/kWh estimate made by researchers at the University of New South Wales, however it should be noted that this figure cannot be applied directly to other situations. The estimate is based on a comparison of the production of electricity from the Gordon-below-Franklin Hydro Scheme with electricity generated by wind energy. The 2.5c/kWh estimate also assumes a saving of oil of $193m that might have been needed to operate the Bell Bay Power Station while the Gordon-below-Franklin dam would have been under construction. This assumption, and its relevance is open to debate. More importantly, the estimate assumes a price for the wind generators which is substantially below current prices. A further factor that can very significantly affect the cost of wind generation is the average wind speed assumed in the calculations. For these reasons there is a danger in using specific estimates as an indication of what might be applicable in different situations and this is the case in comparing the likely cost of wind electricity generation in other Australian States. As I have previously indicated, I have approved the allocation of $70,000 under the national energy research, development and demonstration, NERD and D, program to a study of the technical and economic feasibility of wind electricity generation in Tasmania. This study will aim to provide a definitive estimate of the cost of wind generated electricity in Tasmania. To illustrate the dangers of applying an estimate from one State to another, I should mention that a recent preliminary study entitled 'Wind generation for Victoria', undertaken by the State Electricity Commission of Victoria, has indicated that the cost of wind generated electricity in that State would be in the region of 15-30c/kWh. (2) It has been claimed that wind energy offers high employment potential in Tasmania, but I am not aware of any conclusive evidence to this effect. It is possible that this question will be examined during the Tasmanian wind energy feasibility study under the NERD and D program. Prospects for the establishment of a wind energy industry in Tasmania will of course depend primarily on whether wind is an economically competitive option for power generation in that State. I might add that during my recent visit to Denmark I had the opportunity to see small wind turbines being manufactured and to discuss the economics of wind generated electricity. Regarding Senator Mason's view that there are excellent prospects for the establishment of a major industry based in Tasmania exporting wind generators, I note that the market is already well supplied by a number of existing European manufacturers. (3) Yes. Whilst overseas I observed that wind energy flourishes wherever good wind resources and generous tax concessions exist. (4) A broad survey by the Commonwealth Scientific and Industrial Research Organisation has indicated that Australia's wind energy resources are concentrated in coastal regions. Limited site-specific data have indicated that relatively high average windspeeds occur at several coastal locations in southern and western regions, but there can be large variations in average windspeeds even within a small area and the currently available data does not suggest that high windspeed sites are available in all coastal regions. (5) The potential contribution of wind to electricity supply in Australia will very much depend on whether it can be produced at a cost which is comparable with the cost of electricity from conventional energy resources. This question will be clarified for Tasmania by the feasibility study under the NERD and D program, in Western Australia by the investigations being undertaken by its State Energy Commission, and in Victoria by a further study to be undertaken by the Victorian Solar Energy Council in cooperation with the State Electricity Commission. Question No. 568 Senator Chipp asked the Minister representing the Minister for Foreign Affairs, upon notice, on 2 December 1983: (1) Has the present government of El Salvador's appalling human rights record been well documented by Amnesty International, the Inter-American Commission on Human Rights, and the Federation International de Droit de L'Homme. (2) Will the Government be following the spineless lead of past Australian governments who in 1981 and 1982 abstained from the United Nations General Assembly resolutions reaffirming the right of the El Salvadorean people to freely determine their political, economic and social future without interference from outside and in an atmosphere free from intimidation and terror from all parties. (3) Will the Minister for Foreign Affairs explain the reasons for the decision if Australia is not going to support this year's resolution, which will be sponsored by countries including France, Mexico and Sweden. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: (1) Yes). (2) and (3) On my instructions the Australian delegation voted in favour of the resolution on the human rights situation in El Salvador in the Third social and humanitarian committee of the United Nations General Assembly on 9 December. This vote will be repeated when the report of the Third Committee on the agenda item, The situation in Latin America, is considered in the plenary session of the General Assembly. Senator Grimes —On 22 April 1983 (Hansard, page 57), Senator Foreman asked me, as Minister representing the Minister for Employment and Industrial Relations, the following question without notice: I refer the Minister representing the Minister for Employment and Industrial Relations to recent Press items concerning private employment agencies which charge fees to job applicants. I refer particularly to two such employment agencies operating in South Australia, namely, Jobfinders and JAL. Can the Minister tell the Senate how many such private employment agencies are operating in Australia? Is the Minister aware that the two agencies I have just named are engaged in a massive rip-off of unemployed people and do not attempt actively to seek work for their clients? Is the Minister aware of any possible breaches of the Trade Practices Act concerning the operation of these agencies? What action can the Government take to stop these rather unscrupulous activities? The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: I have seen the references to alleged malpractices by certain private employment agencies not only in the South Australian Press but in the Press of other States. I am, naturally, most concerned about this matter. In the case of the two agencies in South Australia cited by the honourable senator in his question, I am advised that they have been the subject of investigation by the South Australian Department of Labour under the provisions of the (South Australian) Employees' Registry Offices Act 1915-1973 and that a prosecution has been initiated against the agency Jobfinders. I am also advised that legal action has been instigated against this agency by the New South Wales Department of Industrial Relations under the provisions of the (New South Wales) Industrial Arbitration Act 1940 (as amended). I am advised that the agency JAL has ceased operating. As far as the (Commonwealth) Trade Practices Act 1974 is concerned, I am advised that complaints were made to the Trade Practices Commission concerning the activities of Jobfinders, and that the Commission was of the view that its activities were outside the constitutional reach of the Act. As to what future action might be taken I can inform the honourable senator that the Government is currently reviewing the operations of the Trade Practices Act, including the possible strengthening of its provisions dealing with consumer protection, which apply, inter alia, to private employment agencies. In addition, Queensland has recently proclaimed its Private Employment Agencies Act 1983, while the Victorian Government recently introduced into State Parliament protective legislation dealing with the regulation of private employment agencies. I am also advised that the South Australian Government intends strengthening and widening the provisions of that State's Employees' Registry Offices Act. Senator Grimes —On 6 October 1983 (Hansard, page 1236), Senator Reynolds asked me, as the Acting Minister for Health, a question without notice concerning the possible harmful effects of the drug diethylstilboestrol. I undertook to find out details from the Department of Health on the matters raised by Senator Reynolds. The Minister for Health has provided the following information: The possible harmful effects of the drug diethylstilboestrol-DES-were publicised in 1972 and again in 1975 by way of statements issued to all doctors by the Australian Drug Evaluation Committee. The statement drew attention to the association between DES exposure in-utero and the subsequent development of adenocarcinoma of the vagina in adolescence and young adult life and warned against the use of the drug in pregnancy. These statements were followed up in 1981 with an editorial in the Medical Journal of Australia. I can assure the honourable senator that the Government will monotor the situation and in fact the National Health and Medical Research Council has undertaken to keep the matter under review. In Victoria, largely as a result of the activities of DES Action, a conjoint project, organised in 1981 by the Victorian Government in collaboration with the Victorian Branch of the Royal Australian College of Obstetricians and Gynaecologists, established a referral clinic at the Royal Women's Hospital, Melbourne, and issued an excellent information booklet to all Victorian medical practitioners. I understand that a similar clinic now operates at the King George V Memorial Hospital, Sydney.