Tuesday, 12 June 1984 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. Senator HARRADINE(Tasmania) —by leave-I wish to announce to the Senate that I have today made application to the Australian Electoral Commission to have my name registered as a political party for the purposes of the Commonwealth Electoral Act. Because of the major alterations to future Senate ballot papers wrought by amendments to the Commonwealth Electoral Act, this action is necessary to ensure my re-election and the election of like-minded Independents, particularly from Tasmania. The registered name is Senator Brian HARRADINE Group and conforms with section 58G of the Commonwealth Electoral Legislation Amendment Act in that it does not comprise more than six words and is not, I assert, 'obscene'. I advise the Senate that I am its registered officer and parliamentary member. Announcements about its deputy leader and parliamentary Whip, of course, will have to wait until after the next election. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth. That Regulations and an Ordinance now before the Parliament amend the customs ( Prohibited Imports) Regulations and the Customs (Cinematograph Films) Regulations and supercede the A.C.T. Objectionable Publications Ordinance in such a manner as to be harmful to society by removing from existing Commonwealth Law The power to prevent the importation and sale of hard core pornography e.g. X rated videos and publications which consistently incite the use of hard drugs; The power to prevent the importation and sale of grossly obscene publications including those associated with blasphemy; The power to require videos for non-commercial use to be registered by the Films Censorship Board before release from Customs. Your petitioners humbly pray that the Senate in Parliament assembled should disallow the new Regulations and Ordinance and ensure: That the Attorney-General enforce existing laws; That the Censors more appropriately reflect reasonable and responsible community attitudes; That further measure be taken in association with the States to protect Australians, particularly women and children, from exploitation; That, because of the importance of this issue to the whole community, a conscience vote be permitted to all members of Parliament. And your petitioners as in duty bound will ever pray. by Senators Archer (from 16 citizens), Coleman (from 17 citizens), Harradine ( from 199 citizens), McIntosh (from 13 citizens) and Robertson (from 45 citizens) . To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that: 1. the Hawke Labor Government's retirement income policies are piece-meal, inconsistent and make no provision to encourage people to save towards their retirements; and 2. the Government's proposed assets test legislation is iniquitious and, if enacted, its effects would be discriminatory. Your petitioners humbly pray that the Senate, in Parliament assembled, urges the Government to: 1. scrap its proposed assets test legislation; 2. either institute a broad inquiry into Australia's retirement income and taxation systems or await the outcome of the Senate Standing Committee on Social Welfare's work in this matter; and 3. following the report of such a wide inquiry, institute a retirement income policy which is fair and equitable, that encourages self-provision and which will be non-discriminatory. And your petitioners as in duty bound will ever pray. by Senators Jessop (from 33 citizens) and Messner (from 27 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That in November 1978 more than sixty-two per cent of the voters of the Australian Capital Territory in a referendum rejected the introduction of Territorial Government or Local Government in the Australian Capital Territory. That until the findings of the Commonwealth Grants Commission Inquiry into Australian Capital Territory finances have been made public and there has been a referendum of the voters of the Australian Capital Territory as to their attitude to territorial or local government Your petitioners most humbly pray that the Government take no further action or legislation in respect of territorial or Local Government in the Australian Capital Territory. And your petitioners as in duty bound will ever pray. by Senators Archer (from 52 citizens), MacGibbon (from 35 citizens), Messner ( from 47 citizens), Reid (from 120 citizens) and Teague (from 70 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens of Australia: Concerned about the unprecedented threat to the survival of life on earth by the nuclear arms race, Concerned that $1 million per minute is spent on armaments while members of the human family suffer starvation and deprivation, Convinced that the peoples of all Nations wish to live in peace and brotherhood , Do humbly pray that the Federal Government, as a matter of urgency: 1. Submit to the United Nations a proposal for each Nation's funding for defence and armaments to be cut progressively by not less than 1 per cent initially, and by an increasing percentage yearly. 2. At least half of this saving be devoted to increased funding for international aid organisations developing self-sufficiency in the Third World. And your petitioners as in duty bound will ever pray. by Senator Hearn (from 44 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned teachers and students working and studying in TAFE colleges throughout Australia respectfully showeth that: 1. We assert that TAFE, with over 1 million students, requires greatly improved resources if it is to continue to train Australia's skilled workforce effectively. 2. We call upon the Commonwealth Government to provide greatly increased funds to ensure that TAFE is accessible to all Australians, unlike the present time when thousands of people are turned away from TAFE colleges each year. 3. We urge the Commonwealth Government to equip TAFE workshops with the advanced technology used in modern Australian industries, and to expand TAFE's capital works program so that sufficient quality accommodation is available for TAFE teachers and students. 4. We ask that the Commonwealth Government greatly increase TAFE's recurrent expenditure, so that TAFE can respond quickly and flexibly to industry, Government and community demands. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 356 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens of Australia, respectfully showeth that the Polish People's Republic authorities has not honoured its agreement to the Helsinki Convention (signed in 1975) and United Nations Human Rights Pact ( ratified in 1977), particularly with regard to the following issues: Freeing of all political prisoners; Respect for all citizens and human rights; The right to form free trade unions; Removal of censorship; Permission for Polish citizens to travel abroad especially to allow family reunions; We humbly request that Parliament of the Commonwealth of Australia, through proper diplomatic channels, raise in the United Nations Forum a strong request to the Polish People's Republic authorities that it honour its obligation agreed to the Helsinki Convention (1975) and Human Rights Pact (1977), And your petitioners as in duty bound will ever pray. by Senator Hamer (from 1,500 citizens). Petitions received. Senator TOWNLEY(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the Senate is of the opinion that the assets test proposed by the socialist Leader of the Government, Mr Hawke, will- (a) lead to an army of investigators with the power to examine all of a pensioner's assets, including rights to examine what a person has within his or her house; (b) result in social security officer entering many of a pensioner's details on a computer; and (c) be a gross invasion of privacy for people least able to defend themselves- and therefore should be dropped. Notice of Motion Senator GARETH EVANS(Victoria-Attorney-General) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to ensure that Senate elections and House of Representatives elections are always held on the same day , and to adjust the terms of senators accordingly. Notice of Motion Senator GARETH EVANS(Victoria-Attorney-General) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to enable the Commonwealth and the States voluntarily to refer powers to each other. Senator TOWNLEY(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the Senate is of the opinion that- (a) unless Australia supplies uranium to the world, there will be accelerated development of breeder reactors, which have as a by-product plutonium of almost weapons grade; (b) such development is much less likely if the countries that rely on uranium as a major source of power can be guaranteed a continuous supply of uranium; and (c) those people opposed to uranium mining are largely misinformed and are being manipulated by anti-groups for political reasons. Senator GRIMES(Tasmania-Minister for Social Security) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate I incorporate the list in Hansard. Leave granted. The list read as follows- 1. Committee of Inquiry into Labour Market Programs-Interim Report. 2. Advisory Council for Inter-government Relations-Annual Report for year ended 31 August 1983-Pursuant to Section 7 of the Advisory Council for Inter- government Relations Act 1976. 3. Services Canteens Trust Fund-Annual Report 1983-Royal Australian Navy Relief Trust Fund-Annual Report 1983-Australian Military Forces Relief Trust Fund- Annual Report-Pursuant to Section 34 and 35 of the Services Trust Fund Act 1947. 4. Special Purpose Flights by the Royal Australian Air Force-Schedules-Period 1 July 1983 to 31 December 1983. 5. Assessment of the Australian Road System 1984-Report by the Bureau of Transport Economics. 6. Committee to Review the Australian Overseas Aid Program-Report-Together with the text of a statement by the Minister for Foreign Affairs relating to the Report made in the House of Representatives 7 June 1984. 7. National Population Council-Text of a statement by the Minister for Immigration and Ethnic Affairs made in the House of Representatives 7 June 1984. 8. Recognition of Overseas Qualifications in Australia-Text of a statement by the Minister for Immigration and Ethnic Affairs made in the House of Representatives 7 June 1984. 9. Kangaroos-Text of a statement by the Minister for Home Affairs and Environment made in the House of Representatives 7 June 1984. 10. Industrial Relations Bureau-Annual Report 1982-83. 11. Looking Forward-Report on Consultations Concerning the Recommendations of the Committee of Review of the Australian Institute of Multicultural Affairs. 12. Department of Education and Youth Affairs-Annual Report 1983. 13. Legal Services in Australia-Report to the Attorney-General-together with a statement by the Attorney-General relating to the report. 14. Commonwealth Teaching Service Annual Report 1983-Pursuant to Section 52 of the Commonwealth Teaching Service Act 1972. 15. Operation of the Student Assistance Act in 1983-Report-Pursuant to Section 35 of the Student Assistance Act 1973. 16. Commonwealth Schools Commission-Program Guidelines 1984-Document. Senator CHANEY —My question is addressed to the Minister for Resources and Energy. I preface the question by saying that the Minister is having discussions with industry on the details of the proposed resource rent tax, although the details of those discussions are confidential. Will the Minister give a much- needed assurance that he proposes to reconsider the details of the fundamental elements of the resource rent tax, such as tax rate, threshold rate, and end of life adjustment? Does the Minister now accept that the details of the resource rent tax, as outlined in the Government's April paper, give rise to a real risk of diminished offshore exploration? Senator WALSH —I have told the industry that its views will be taken to Cabinet, although it should be noted that there is no such thing as a monolithic industry view. There is considerable divergence of opinion within the industry on the effects of particular tax rates on exploration activity, and on a number of other details of the tax. I have nothing to add to that at this stage. A submission is being prepared. I should like it to be considered by Cabinet next week, but it may be the week after next before it is considered. Senator CHANEY —I ask a supplementary question, Mr President. The Minister did not address that part of my question about whether he now accepts the details of the resource rent tax as outlined in the Government's April paper, that is, his paper of April, which gave a proposed rate for the tax and a proposed threshold for it and did not contain details of what would happen about end of life adjustments, give rise to a real risk of diminished offshore exploration. Senator WALSH —There are many factors which affect the level of exploration activity. For example, the Australian Petroleum Exploration Association had forecast at the end of January last year that there would be a decline of, I think, 75 per cent in seismic activity, and a decline-I should not like to be held to this figure because I am quoting from memory-of about 30 per cent in total exploration activity, before the Federal election was announced or before the prospect of the application of a resource rent tax was seriously considered. Those forecast declines did not take place, which emphasises that there are many factors affecting the level of exploration. Whether any particular tax rate will affect the level of exploration is a matter of judgment. As I indicated in my previous answer, the judgments made by different companies involved in the industries have varied on that question. What it finally hinges on, I think, are two major factors: The degree to which the abolition of the existing ad valorem royalty or the rate of rent tax is comparable, and seen to be comparable to that; and secondly, the degree to which companies which were exploring have always-I stress this-believed that, if highly profitable large oilfields were discovered offshore, any government would have made some changes to the taxation system. This Government's view is that it is better to establish the rules before that happens than to react in an ad hoc and arbitrary way after it happens. Senator COATES —I ask a question of the Minister representing the Minister for Home Affairs and Environment. I refer to the environmental impact study being conducted into the whole forestry industry in Tasmania. The group doing the study, which consists of industry representatives rather than representatives of all interests, sought submissions from environmental organisations about the guidelines but has not released them. Will the Minister ensure that the study group's decisions on the guidelines are released publicly so that everyone can judge the fairness and reasonableness of them and react accordingly? Further, can there be an independent assessment of such important basic factors as sustainable yields of Tasmania's forests? Senator RYAN —The Minister has provided me with some information on the subject matter of Senator Coates's question. Guidelines for the preparation of the environmental impact statement which has been directed on the future development of Tasmanian woodchip exports and associated forestry operations have been drawn up following discussion with Tasmanian departments and the companies concerned. During this process the environmental study group preparing the EIS sought comments on the scope of the EIS directly from conservation groups and by public advertisement. The guidelines for the EIS are available from the Department of Home Affairs and Environment in Canberra. The environmental assessment of the EIS will be carried out by the Department according to its requirements of the Environment Protection (Impact of Proposals) Act and the administrative procedures of the Act. The assessment will include considerations of sustainable yields. Senator MESSNER —My question is addressed to the Minister for Social Security. Is the Minister aware that many people have been misled to believe that they will be better off under the pensions income and assets test? Has the emphasis that has been placed upon the assets component overshadowed the fact that the income test will also be applied depending on which gives entitlement to the least amount of pension? Was this not given emphasis in Stuart Simson's article in the Business Review Weekly over the weekend, which refers to black holes in the assets test? What will the Minister do to explain fully the ramifications of the pensions income and assets test? Senator GRIMES —I would have thought that the statement by the Prime Minister and the report by Professor Gruen's Panel of Review of Proposed Income and Assets Test out of which evolved the presently proposed assets test explained clearly how the assets test and the income test would apply. The fact that both are to apply but not together has been in every statement put out by the Government to explain the assets test. The only problem about misrepresentation of the assets test comes from people like Senator Townley who, through notices of motion, propose to distort the issue. Senator Messner's statement that both the income test and the assets test will be applied and that which gives the lower result will be used is true. That has been in all the statements. Before the legislation is passed the Government will, as it is doing now, in discussions with pensioner organisations and on radio and television programs and what have you, explain how the assets test will apply. When the legislation is passed we will explain clearly to all members of the community the nature of the test, and every pensioner will receive a letter explaining the nature of the test. I accept, as I have always accepted, that when one introduces change like this, first of all one must explain it and, secondly, one must counteract the misrepresentations of those who oppose it for political and other reasons. I can assure the honourable senator that from the appropriate time our efforts to explain the test and to make everything clear to those who will or will not be affected will be unremitting. Senator MESSNER —I ask a supplementary question, Mr President. In the course of the Minister's reply he said that both these tests would apply, but then said that they would not be applied together. Can he please explain what that means? Senator GRIMES —That supplementary question is typical of the attempts by Senator Messner who knows quite clearly how the tests will apply. It is typical of Senator Messner in feigning ignorance in order to provide misrepresentation. The alternative is the suggestion of my colleague Senator Walsh that he is pretty thick. Both the incomes test-- Senator Chaney —Mr President, I raise a point of order. There is no standing order requiring any degree of courtesy in this place but that sort of throwing insults across the chamber, without any interjection being answered or anything else, is typical of what is wrong with this place. Mr President, I ask you to call the Minister to order. The PRESIDENT —Order! There is no point of order. I call Senator Grimes. Senator GRIMES —I suggest that that is an example of Satan condemning sin. The statement put out is perfectly clear. The incomes test and the assets test will be applied; whichever gives the lower result will be the one applied to the pensioner. That has been in every statement and Senator Messner knows it has been in every statement. He has put out statements about that himself. His question is a phoney. Senator REYNOLDS —I ask the Minister representing the Minister for Aboriginal Affairs whether she is aware that the National Party leader, Mr Sinclair, currently touring Queensland Aboriginal and Islander communities, is quoted as saying: There is only one way to find out what Aborigines and Torres Strait Islanders are seeking and that is to visit them. Does the Minister have any information which suggests that this fact finding tour indicates National Party dissatisfaction with the Queensland Premier's community services legislation in that State which has been overwhelmingly rejected by Queensland's Aborigines and Islanders? Furthermore, has the Minister been informed whether, in view of the National Party leader's change of heart, the heritage legislation will now have the support of the Opposition in this place? Senator RYAN —I am not sure whether my colleague Mr Holding, the Minister for Aboriginal Affairs, is aware of Mr Sinclair's activities in Queensland or of the statements he has been making, but I am sure that Mr Holding, as I am, will be pleased to hear that the National Party, at least on the face of it, is making some effort to meet with Aboriginal and Islander communities to find out their response. Of course, when the National Party does that, if indeed it is a genuine exercise on Mr Sinclair's part, it will find enormous dissatisfaction by Aboriginal and Islander communities in relation to the services legislation, for very good reason. I hope that Mr Sinclair is engaged on a genuine exercise. If he is, he may be able to persuade his colleague the Premier of Queensland, Mr Bjelke-Petersen, that the services legislation does not fulfil any of our undertakings to the Aboriginal and Islander communities with regard to security of land. Nor, indeed, does it secure any of the undertakings given by the coalition when in government. I hope the exercise will lead to an improved understanding of the issues on behalf of the National Party and their Liberal coalition partners. Senator MACKLIN —My question to the Minister representing the Minister for Defence concerns a response given by the Minister to my question of 30 May concerning the upgrading of the United States base at Nurrungar. Did the Minister not mislead the Senate by suggesting that my question would be answered by the Prime Minister's statement on United States bases, a statement which in fact contained not one shred of information concerning the upgrading of the Nurrungar base? Can the Minister now answer whether the United States, in keeping with a specific obligation, has informed the Australian Government of the $126m upgrading of Nurrungar? If so, has the Government accepted the upgrading and the implications that flow from it? If the United States has not informed Australia, why has it not? Senator GARETH EVANS —I am sorry if Senator Macklin feels he may have been misled by anything I said last week. Certainly there was no intention on my part to do so. To the extent that there was insufficient information in the Prime Minister' s statement about Nurrungar in particular to satisfy him I will endeavour to ensure both by what I say now and, more particularly, by taking the question on notice, that Senator Macklin does get a reply that will go some way to satisfying him. I am able to say, from the material in front of me at the moment , that on the basis of procedures now in place the Government receives timely information from the United States of all plans and proposals that would affect the joint facilities. The practice in the past has been that, if the Government approves the United States proposal for new works at any of the joint facilities , a statement is issued when tenders are called to carry out the work. The Government sees no reason to alter this practice. I am told that the Minister for Defence has written to the South Australian Premier informing him of these Commonwealth procedures relating to announcements of proposed changes to the joint facilities. That is all the information I have in front of me at the moment that bears upon Senator Macklin's question, but I will refer the question to the Minister for Defence, and to any other Minister who might have a role in this respect, including the Prime Minister, to see whether any supplementary information can be provided. Senator COLEMAN —Has the Minister for Social Security seen Press reports attributed to Mr Michael Hodgman, the member for Denison, that the value of gold fillings in teeth will be included in the assets test? Is there any justification for those statements or is this just another indication that the member for Denison is no longer capable of distinguishing fact from fantasy? Senator GRIMES —Yes, I did see a report in one or two newspapers that Mr Hodgman claimed that the value of gold in people's teeth would be counted in the assets test. That statement bears as much resemblance to the truth as do most statements by Mr Hodgman. It is aimed at causing division amongst pensioner groups, as his statements on immigration were aimed at causing division in our society generally. Mr Hodgman is quoted as saying that he received that information from a senior Minister. I assume that that senior Minister is me. Mr Hodgman came to my office and asked whether gold was included in the assets test . I asked: 'Do you mean collections of gold like ingots?' He said: 'Yes'. I said : 'I do not know what you are up to but you can have your little fun and games as long as you are not disturbing people'. Mr Hodgman then released a Press statement making this ludicrous suggestion. I am pleased to say that most newspapers and most members of the Press either ignored it or made a check with my office. I am sorry that some did not take that precaution before publishing such nonsense. Senator WALTERS —My question also is directed to the Minister for Social Security. I refer to the answer he gave to Senator Messner. As his answer points out, a pensioner couple with more assets can receive a lower income than a couple with fewer assets earning the same rate of return. Is this an example of how the application of either the income or assets test, depending upon which allows the least amount of pension, will discriminate against thrift and self- provision for retirement? On what equity grounds does the Minister endorse such a proposed system which can reduce pensioners' total income due to the higher taper imposed? Senator GRIMES —I believe it is generally accepted, except by some members of the Opposition, that to have a means test which does not include assets, which ignores the presence of assets, with the exception of the family home, is not a fair means test. I point out that there are actually members of the Liberal Party who believe this, such as Mr Elliott, the Treasurer of the Victorian branch, and Mr Alex Downer, who until fairly recently was a member of the staff of the Leader of the Opposition. I presume he was a member of the staff of the Leader of the Opposition when the Opposition believed in a needs-based pension system. If Senator Walters will take the trouble to read the report of Professor Gruen and the Panel of Review of Proposed Income and Assets Test, if Senator Walters will take some notice of those people on the conservative side of politics in this country, and chambers of commerce, I believe she will get a much clearer picture than she obviously has now. I remind Senator Walters that the levels of assets which pensioners may hold before their pensions will be affected are very considerable considering that the family home is exempted. Those owning their own home are allowed $100,000 and those who are renting a home are allowed $150,000 in assets; it is from those points that the pension starts to cut out. If Senator Walters considers that it is penalising thrift to include for the purpose of assessing pension eligibility the sort of assets that people are capable of realising on, I do not understand her logic. I assume from Senator Walters's logic that we would exclude from any sort of means test someone who had a couple of million dollars' worth of assets but we would include someone getting the sum of $35 a week or, in the case of a married couple, $55 or $60 a week. If there is any equity in that, I do not understand it and neither do most people in the community. I suggest that Senator Walters look at those reports and at the legislation when it comes forward and then get up and make her points about equity and penalising thrift. Senator WALTERS —Mr President, I ask a supplementary question. The Minister referred to the Gruen report. Does he acknowledge that Professor Gruen said in that report that the assets test, even though it excludes the family home, is iniquitous and would not be equitable at all? Senator GRIMES —I find it a great admission from Senator Walters that, if she has read the Gruen report, she does not understand it at all. Professor Gruen pointed out that it is very difficult to make a perfect test which includes assets in the same way as it is very difficult to make a perfect test which includes only income. But I do not accept that Professor Gruen said anywhere in his report that the introduction of an assets test is iniquitous or inequitable as Senator Walters said. If Senator Walters has problems with that I would be pleased if she were to speak to Professor Gruen or one of the other members of his Panel who wrote the report which all members of the Panel signed. Senator RICHARDSON —I draw the attention of the Minister representing the Treasurer to an article in last Friday's Australian Financial Review on the role of the Prices Surveillance Authority, as perceived by the Government, in petrol price fixing. As the cost of petrol, our primary energy source, is a national concern, is it envisaged that the PSA will now have complete jurisdiction over petrol price fixing? What are the likely effects on prices, considering that four of the State governments involved have offered conditional withdrawal from the petrol price fixing arena? Senator WALSH —The Prices Surveillance Authority is currently conducting a public inquiry into petroleum product prices. It is the Government's intention that that inquiry provide a basis for a move to a single, national system of price surveillance. As I think Senator Richardson indicated, four States have had State price controls of varying kinds in the past which have been, to varying degrees, inconsistent with the PSA's maximum prices. That is widely recognised as being unsatisfactory. I understand that the four States have made submissions to the PSA inquiry stating their willingness in principle to vacate the field of petroleum price regulation and to leave it to a national body. They have attached conditions to their support for that approach. The PSA has been asked to submit an interim report on motor spirit prices as soon as possible and a final report by 25 July. Senator Richardson asked what the likely effects on petroleum prices would be of the move towards a national regulatory authority. I think that will be difficult to answer, even in the longer term, because it is difficult to isolate one factor from all the other factors which affect the price of petrol in both the short term and the long term. But at least when the Government's policy is implemented there will be a uniformity in pricing which has been lacking in the past. The perception-indeed, I think it is a reality-that various groups in different parts of Australia, and not always the same groups in the same parts, have had from time to time that they are being overcharged in order to cross- subsidise some other consumer is less likely. Of course, one thing that we can be quite certain of is that under this Government's PSA pricing policy, and its general petroleum policy, including its petroleum taxation policy, petrol prices will be significantly lower than they would be if the Liberal Party were returned to government and Senator Chaney were allowed to implement his policy of imposing an increased excise on petrol instead of taxing the production of petroleum. Senator MISSEN —Did the Attorney-General read weekend accounts of the premature moving of Detective Sergeant Ross Dickson, Queensland's most successful policeman, with a clean-up rate of 84 per cent, from his post at Mareeba to Townsville? Is the Attorney-General aware of Sergeant Dickson's claim that he has proof that organised crime is involved in drug-related activities in his territory, and is it also known to the Government that substantial drug growers and dealers and fauna smugglers have transferred some of their operations from New South Wales to northern Queensland? What confidence does the Attorney- General have that the Queensland Government will allow Queensland to be a participating State in the National Crime Authority operations and, if it will not do so, will the Commonwealth use all its existing powers to ensure a vigorous onslaught on organised crime operations in north Queensland? Senator GARETH EVANS —I have seen some reference in the Press to the matters raised by Senator Missen. I am certainly not in a position to make any evaluation of the performance in this respect of either the Queensland Government or the Queensland police force. I am certainly not in a position, on the basis of tales told by Senator Missen or anybody else, to form any judgment that the Queensland Government or police force are inappropriate participants in the National Crime Authority structure that we are now setting in place. I have had reasons on occasion in the past to be critical of aspects of the operation of the Queensland police force regarding its conduct of investigations against suspects, and no doubt I will be in the future, but I have no basis whatsoever for accepting even at the remotest face value the kinds of assertions or innuendoes which underly Senator Missen's question. I express my full confidence, unless I get some very substantial proof to the contrary, in the capacity of the Queensland Government and its police force to be fully co-operating and fully effective members of the National Crime Authority. Certainly, as I understand it, the Queensland Government and its police force have co-operated very fully and thoroughly in the kinds of investigations that have been carried out hitherto into, particularly, areas of royal commission activity, even in the absence of explicit terms of reference or letters patent flowing from the Queensland Government. I have not heard any criticism flowing either from the reports of those royal commissioners or from informal communications from them to suggest there is any substance in the kind of suggestion which Senator Missen now makes. I will obviously follow up this matter with the Special Minister of State and see whether he has any further information that he feels is necessary or appropriate to put on the public record. But for the moment I certainly do not draw any of the conclusions that Senator Missen would have me draw. Senator ROBERT RAY —I ask the Minister for Veterans' Affairs: What measures have been taken in his Department for the implementation of the Government's policies of industrial democracy and fast consultation. Is the Minister satisfied with progress in this matter and have all the relevant unions been adequately consulted on this subject? Senator GIETZELT —I consider the implementation of policies relating to industrial democracy and joint consultation between management and labour to be one of the highest priorities in my Department. This is particularly so because in terms of staff it is the fourth largest department. It employs 12,000 persons in various institutions and administrative offices throughout Australia. When I was appointed Minister one of my first duties was to set in train a whole range of consultative mechanisms within the Department. Previously, the Department had some forms of consultation but they dealt largely with areas of safety. However, we have moved considerably towards establishing sufficient confidence on the part of the staff by establishing such consultative committees, which have proved to be very satisfactory. Already, the first national level consultation with a major organisation-the Administrative and Clerical Officers Association-has taken place, involving union delegates from all around Australia. From all accounts, both management and labour have expressed satisfaction with that exercise. It is hoped that that experience will be transferred to other relevant unions in the very near future. I might add that the Public Service Board has expressed the view that departments should begin the process of industrial democracy with some vigour, and other departments are already moving in that direction. Regarding the process of consultation, I can say that the Secretary to my Department has made arrangements to give union delegates adequate access to departmental facilities, including the provision and use of rooms for the conduct of union business. This might seem a small step, but it is an important step which, in my view, is long overdue. I believe the Government and also the public at large, whom we serve, will benefit in both the short and the long term if sufficient confidence is established between labour and management. Senator PETER BAUME —My question is directed to the Minister representing the Prime Minister. It relates to a cartoon or stylised drawing which accompanied a National Times article on the Middle East of 4 May, in which a figure which can only be described as a rabbi, with a beard and dressed in rabbinical vestments, with a cloven hoof, with a sword raised above his head, with a child severed in two nearby, with bombs falling on mosques and with a crescent moon dripping blood. I ask the Minister: Is this not an outrageous misrepresentation and a religious stereotype unworthy of the National Times or any other newspaper? Will he, on behalf of this Government, deplore the use of such imagery which might be more appropriate to the League of Rights and which can serve only to promote religious hatred and division in Australia? Senator BUTTON —I think that Senator Baume called it a cartoon. It was a sort of woodcut which appeared in the National Times of 4 May accompanying an article on the situation on the West Bank. The woodcut was drawn to my attention, although I have not read the contents of the article. I agree with the implication in Senator Baume's question that the cartoon of woodcut drawing seems to be in poor taste and I would have thought it would be contrary to the wishes of most members of this Parliament who voted for the racial discrimination legislation when it was introduced here. I think it is a source of great regret that a drawing of that kind should be published in a national journal which enjoys generally such good repute. I certainly associate myself, and I believe the Government, with criticism of the publication of a drawing of that kind. Senator HEARN —Has the Minister for Veterans' Affairs seen reports that the Commissioner of the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam has questioned the right of the Vietnam Veterans Association of Australia to appear before the Royal Commission? Will he comment on these reports? Senator GIETZELT —Yes, I have seen the reports, which seem to result from comments made by the Royal Commissioner in the public hearings which commenced at the beginning of the month. Apparently the Commissioner asked some very pointed questions about the legal status of the Vietnam Veterans Association of Australia. This resulted in my office being inundated with telegrams from VVAA Branches all over Australia suggesting that the Vietnam Veterans Association was the appropriate body to represent their interests before the current Royal Commission. I do not think there is any doubt that the Government supported that view, because that was the reason it acted very early in its life to establish the Royal Commission. At the request of and following from the responses from the Vietnam Veterans Association and other veterans groups, the Government agreed to establish the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam. I am pleased that the matter seems to have been settled. A press release was issued by the Royal Commissioner, the Hon . Justice Phillip Evatt, on Friday, 8 June, which stated: . . . there is absolutely no question of the leave previously granted to Counsel for the V.V.A.A. . . . to appear before the Royal Commission being withdrawn. To sum it up, I think it has been settled once and for all that the Vietnam Veterans' Association is the appropriate body to pursue the interests of veterans before the Royal Commission. Senator TOWNLEY —My question is directed to the Minister for Social Security. I refer to the Government's handout, headed 'Assets Test Information' of June 1984 , in which reference is made to the $10,000 threshold of assets, including household contents and personal effects, owned by pensioners above which they are required to submit a list of valuations of their assets. How will this requirement be enforced? Will inspectors anticipate which houses to examine in accordance with the statement in the Gruen report of the Panel of Review of Proposed Income and Assets Test that contents appear to be about 25 per cent of the value of a house? Will insurance policies be examined? Will the pensioners be subject to harassment or possible loss of pension in the event of non- compliance? How will the Government decide who to send the assets test forms to? It states in its handout that only a minority of pensioners will be sent forms requesting details of their assets. How often will assets need to be revalued? Will it be once yearly, as was suggested by the Gruen report? Senator GRIMES —As Senator Townley says, the figure of $10,000 is an arbitrary one. A few people, those who will be near the $70,000 or $100,000 cut out point, will wish to declare assets of less than $10,000. It is my view and that of the Department of Social Security that Professor Gruen's estimation that asset holdings in the house tend to be 25 per cent of the value of the house is exaggerated, particularly in States such as New South Wales or in cities such as Sydney, where the value of a house and land is much greater than in other States . The declaration of assets will be largely a matter of self-declaration. I have said in this place before that we believed the vast majority of pensioners in this country are honest and will make an honest declaration of their assets. Assets will be declared on their net market value and not on their insurance value, which is the replacement value and which would be an unfair basis on which to assess, as I am sure Senator Townley will agree. I impress on Senator Townley that in the vast majority of cases the value of people's assets on top of their houses and land will not be anywhere near $70,000 or $100,000 if they are married, so the matter of how much is declared will not come into account. Of course experienced valuers will be used, not the army of valuers that Senator Townley talked about. Initially there will be 80 in the whole country and later there will be fewer than that. There will be a capacity for people to make some judgment about whether a spot check should be done. Senator Townley asked who will get the forms. In the establishment stages of the assets test up to 50 per cent of pensioners who, quite clearly from the information we have now , have no extra assets will receive a letter asking them to declare any assets above the stated level and informing them that if they do not have such assets they need not get a form. In the first case that is how we will assess whether people need forms. There may be some slippage from the odd people who try to beat the system. But, as I have said, penalties exist now in the legislation which are not being added to or made more severe by the assets test. But most people do not need to be threatened with those penalties in order to be honest. They will in fact provide the information without any difficulty as they did before the assets test was removed in 1976. I do not believe the citizens of this country are much different now from what they were then. In general, assets will not have to be revalued every year. In most cases they may need to be revalued only every three years. But if people believe that the value of their assets has decreased to the extent that they will be eligible for a greater pension, they can redeclare them when they want to and not wait for any statutory period introduced in the legislation. Senator GILES —Has the Minister for Education and Youth Affairs and Minister Assisting the Prime Minister on the Status of Women read Press reports of the inclusion of Dame Leonie Kramer in the think tank constructed by the former Prime Minister? In view of Dame Leonie's well-known lack of knowledge of and sympathy with lack of opportunity for women in education and her recent denial of any structural disadvantages for women inherent in tertiary institutions, has the Minister any confidence in what, if anything, will be contributed by Dame Leonie to the Opposition's current threadbare policies for women and for education? Senator RYAN —I did read a report in Saturday morning's Sydney Morning Herald of remarks attributed to Dame Leonie Kramer and in particular remarks about the Government's affirmative action policy. I must express again my disappointment that one of the leading female academics in this country chooses to state publicly, if she was properly reported, that there is no structural discrimination against women within universities. If that is Dame Leonie's view, the implication of what she is saying is that the current situation whereby only about two per cent of Australian professors are women represents the full and real extent of the aspirations and abilities of Australian women scholars. I certainly do not share that view. I do not know of any other woman academic who shares that view. That view certainly could not be sustained by Professor Kramer were she to read some of the extensive documentation of the kind of discrimination, both direct and indirect, that has been operating against women scholars and teachers in universities for some time, such as the very excellent study called 'Why So Few', the authors of which included Bettina Cass and Sue Wills. Quite clearly, there have been a number of practices, direct and indirect, which have discouraged women academics first of all at the post-graduate level then at the post-doctoral level, in their aspirations to pursue an academic career within Australian universities. That is not to say that all those practices still persist. A lot of them have been changed; a lot have been changed voluntarily by people who are in decision-making positions within universities. Nonetheless, there still exists a very serious imbalance within Australian universities between male and female scholars, and it is an imbalance which our Government desires to overcome. In that desire, we are supported by major bodies such as the Australian Vice-Chancellors Committee, the various staff associations which represent academics throughout Australia and, of course, women's organisations. Indeed, we are supported in our desire to overcome that imbalance by the Opposition and in particular by its spokesperson on women's affairs, Ian Macphee, who is joining the Government's working party on affirmative action. So if Dame Leonie has been correctly reported in the Sydney Morning Herald she is certainly out of step both with the facts with regard to the position of women in Australian universities and the views generally held by people who have taken an interest in these matters. What Professor Kramer will contribute to Mr Fraser's think tank with regard to policies affecting women I suppose is only a matter of speculation. But it is quite clear that people in the Liberal Party and people who are involved in planning policies are very well aware of the fact that Australian women in recent years have changed their voting habits significantly and have expressed a great deal of electoral confidence in the Australian Labor Party and in the Labor Government. Indeed, statistics and analysis of women's voting behaviour show that there has been a very significant trend towards the Labor Government. I believe that that trend will continue and strengthen because of the outstanding record of the Hawke Labor Government in the area of women's policy. However, in concluding my answer to Senator Giles, I simply express the hope that Dame Leonie Kramer has been inaccurately reported in the Sydney Morning Herald and that she might take one of the many opportunities that are no doubt available to her to express her support for justice for women academics within Australian education institutions. Senator MARTIN —My question is directed to the Minister representing the Special Minister of State who, I believe, is the Attorney-General. When Cabinet was considering changing Australia's national colours from the previous unofficial blue and gold to our sporting colours of green and gold, what information did it seek about the cost of such a change? Will statutory authorities, such as the Australian Bicentennial Authority and the Australian Tourist Commission, which adopted blue and gold logos because they were our national colours, be required to change to green and gold logos? What was the cost of designing and registering the present logos of the Australian Bicentennial Authority and the Australian Tourist Commission? What will be the cost of changing these logos? Senator GARETH EVANS —I will refer those fascinating questions to the Special Minister of State in order that he can scour the archives and current government records and find, at the first appropriate opportunity, an answer to Senator Martin's question. Senator ZAKHAROV —Has the Minister representing the Minister for Employment and Industrial Relations seen a report of statements by the Victorian Treasurer, Rob Jolly, seeking the support of State and Federal parliamentarians in informing overseas businessmen of Australia's improved industrial relations record? Will the Minister inform the Senate about this improvement in industrial relations and the factors which have contributed to it? What steps has the Government taken to give publicity overseas to this improvement? Senator BUTTON —I have not seen Mr Jolly's statement, though I am pleased to see that he has undoubtedly benefited from observations made on his recent trip overseas. It is certainly true that for a number of years the industrial relations record in Australia was a source of considerable criticism from countries to which Australia exported a variety of products. I think it is most important that the attention of those countries, which still constitute substantial markets for Australian products, should be constantly drawn to the fact that there have been significant changes in the industrial relations performance in this country. If one looks back even two or three years, perhaps the greatest cause of trade malaise and industrial malaise was the fact that we had such a high level of industrial disputes. I think it is very important that the record be rectified at every opportunity. I just make the point, in answer to the honourable senator's question, that industrial- Senator Watson —What about all the unofficial strikes? Senator BUTTON —The honourable senator knows about unofficial strikes; he is on one half the time while sitting there. The fact of the matter is that the industrial relations performance of this country has improved dramatically- Senator Watson —Only by official statistics, not by the unofficial figures. Senator BUTTON —We compare like with like-official statistics with official statistics of years gone by when the parties opposite were in government. That is what I am about to do. If it makes the honourable senator uncomfortable, I am sorry. The time lost through industrial disputation in Australia in 1983 was at its lowest level for 16 years. In the 12 months to March 1984- Senator Chaney —Where was unemployment? Senator BUTTON —Senator Chaney says: 'Where was unemployment?' It is considerably better than it was in 1982. Let me go on. In the 12 months to March 1984 only 236 working days were lost per thousand employees compared with 313 in the previous 12 months, and that represented a fall of 25 per cent. In the 12 months to March 1982, 818 days were lost, and the latest result represents a fall of 71 per cent. A number of reasons for that have been suggested by way of interjection-reasons associated with levels of employment and so on. Senator Crichton-Browne —Levels of wages. Senator BUTTON —Reasons associated with levels of wages is a new view thrown in from the West, if I may so describe Senator Crichton-Browne. Perhaps this is unkind to other senators. The fact of the matter is that this Government in its 15 months in office had directed its attention towards stability in Australian industry. The unemployment situation has been steadily improved. Two hundred and twenty thousand-odd jobs have been created in the period of this Government. There is general wage stability and less industrial unrest as I mentioned in earlier figures, a marked improvement in industrial unrest in Australia as compared with the last few years of the Fraser Government and, as I said earlier , the best record for 16 years in 1983. Figures for industrial disputes in 1984 show a continuing improvement on the 1983 figures. That is something which Australians as a whole should be proud of. In answer to the honourable senator's question the point should frequently and persistently be made-in spite of Senator Watson trying to interject to stir up industrial trouble-to countries with which Australia does business. Not only is it important in terms of the general level of competitiveness of Australian industry and improved performance in that area but also it is very important because of changes which are rapidly taking place in industrial systems, particularly the ways in which inventories of stocks are now handled, compared with only a few years ago. As Australian industry modernises in respect of these matters the question of an improved industrial relations climate will also be vitally relevant in that process. So I commend the figures to the Senate for close attention. Many honourable senators, like Mr Jolly, will be travelling overseas in the forthcoming recess. It is important that they have the figures right. Senator JACK EVANS —My question is addressed to the Minister representing the Treasurer. In light of the present Government's public vows to combat tax avoidance and the personal crusade against the tax avoidance industry by the Minister representing the Treasurer in this House, Senator Walsh, can this Senate now assume that the failure of the Government to pass the latest tax avoidance Bill, which was passed by the Senate on 4 May, means that the Government has abandoned its own senators and gone soft on tax avoidance? As the Australian Democrats Bill, to which I refer, would put an immediate stop to tax avoidance through section 23F schemes-the so-called cherrypicker schemes-and as it had the unanimous support of this Senate, is the Government's failure a reflection on the Senate's role of responsible and responsive legislating or are recent Government actions to be seen as posturing before the community while simultaneously sheltering tax avoiders? Senator WALSH —I acknowledge that Senator Jack Evans's own record on anti-tax avoidance legislation is impeccable, as is Senator Mason's record. The record of the honourable senator's Democrat colleagues has been consistent. I do not agree with their conclusions but at least it has been consistent. The record of some members of the Liberal Party of Australia and some members of the National Party of Australia has also been consistent. They have also lined up to protect the tax avoiders and the tax evaders. The record of most members of the Liberal Party and the National Party has been inconsistent in that they vote for legislation to crack down on tax evasion when they are in government and they vote against it when they are in opposition. The record of Senator Harradine on this question is equally inconsistent in that he votes against tax evasion when his vote does not matter and he votes in favour of the tax avoiders when it does matter. Senator Evans's conclusion, however, is not correct. The Government is still reviewing the position. The Government, unlike half the members of this Senate, is not willing, at this stage anyway, to allow the notorious Kelly brothers-I believe that one is now deceased-in the case clearly documented and circulated to all honourable senators in regard to a cherry-picker scheme, to walk away with $1m which ought to have been paid in taxation but which will not be paid in taxation because of the actions of half the members of this Senate. Senator Coates —Shame. Senator WALSH —Shame indeed. I would like to make one comment in closing in respect of the Senate committee report on the cherrypickers scheme which is relevant to the Bill to which Senator Evans referred which was passed in the Senate. If one accepts Senator Withers's view, a view which has been supported, if I recall correctly, by a number of other honourable senators on the non-Labor side, that legislation is unnecessary. The basic argument put forward by Senator Withers is that the existing legislation provides the Commissioner of Taxation with adequate power to deal with cherry picker schemes and a number of other schemes. That is not consistent with the advice which has been given to the Government and it is not the Government's belief. In summary, the Government will keep the situation under review. However, it is reluctant, unlike half the members of the Senate, to allow people like the Kelly brothers-I cite the Kelly case because it has been documented in the courts in civil proceedings-who picked a million dollars worth of cherries out of the pockets of other taxpayers to walk away unchallenged. Senator JACK EVANS —I ask a supplementary question, Mr President. Whilst I admire the tenacity of the Government in chasing the Kelly brothers, I ask the Minister: Does the Government need all this extra time to consider a Bill which is absolutely identical to the Bill that the Government put through the House of Representatives with only one exception, that is, retrospectivity? Why does the Government require additional time to consider the legislation to chase all the other tax avoiders who are using the cherry picker scheme right at this moment to avoid their tax obligations? Senator WALSH —It is Senator Evans's judgment that the cherry picker scheme could still be exploited. I think it is possible that that is happening. Senator Walters —Why do you not stop it? Senator WALSH —Why does Senator Walters not vote to take the million dollars worth of cherries that the Kellys picked out of the pockets of honest taxpayers off the Kellys and give it back to those honest taxpayers? That is a far more relevant question to ask. There is a great deal of business before the Government. I will seek further information or advice from the Treasurer on this matter. The Government has a heavy Cabinet program and, as far as I know, there just has not been time to consider it. Senator COLSTON —I direct my question to the Minister for Education and Youth Affairs. It refers further to the article which appeared in the Sydney Morning Herald which was mentioned earlier by Senator Giles. I ask the Minister whether it is correct that, in that article, Dame Leonie Kramer was quoted as saying: The Opposition . . . does not come through very clearly at the moment. I don't get any sense there is enough clarity in their position on certain issues. If so, is it correct, as Professor Kramer says, in relation to her think tank activities, that she will be concentrating on education issues? Is this criticism of the Opposition's education policies and, in particular, the Opposition spokesperson on education justified? Senator RYAN —It seems that the article about Professor Kramer was quite thoroughly read by several of my colleagues. I seem to recall, in explaining why she was going into the Fraser think tank, if that term is not an oxymoron, that she was going to try to give some clarity and force to issues such as education which she says have not been coming through clearly. In contrast, I find myself in agreement with her remarks on affirmative action. Certainly there is no clear policy on education coming from the Opposition. There has been a real neglect of education policy issues over the last few months and an absolute preoccupation with some minor matters to do with funding of a few schools in Australia. If Professor Kramer, who knows quite a lot about the administration of universities and who has served on the Universities Council for some years, is going to make a contribution to Liberal thinking in these areas, perhaps we will see some serious attention paid by the Opposition to education policy and less harping on minor issues that are of concern to very few people. Senator CRICHTON-BROWNE —I direct my question to the Attorney-General. I noticed today that it is his intention to introduce a Bill to provide for a referendum on the question of simultaneous elections to be held at the next general election. I have also noticed in the past the Attorney-General's view that governments ought to be allowed to run their full term. Senator Jack Evans —Liberal governments only. Senator CRICHTON-BROWNE —Liberal governments only, is it? Will the Attorney- General give an undertaking to the Senate that the Federal Government will demonstrate its spirit of good intention in respect of his view of governments running their full term by holding an election on the latest day possible, which will still provide for simultaneous elections of the House of Representatives and half of the Senate, or has he, like the rest of this Government, looked at the real underlying economic indicators for 1985? Senator GARETH EVANS —The Senate will be well aware that questions of that kind are not for me to answer but for the Prime Minister. I make no pretence of giving any such undertaking or even addressing any such question about the timing of elections. I indicate, with more brevity than the occasion perhaps demands, the grotesque hypocrisy of that kind of question coming from the other side of this chamber and being asked by a member of a party which went to an early election in 1977-perhaps understandably, in order to bring the Houses back into line when they got out of kilter-and then went to another early election in 1983, with the effect, of course, of throwing out of alignment the House of Representatives and the Senate. The Opposition parties when in government acted in what can be described only as the crude and most opportunistic way, creating as a result a legacy of what can further only be described as a shambles in the functioning of our democratic political system. The reality, as I said, and as the Sydney Morning Herald inevitably misquoted over the weekend, is that in the 39 years since the Second World War there have been 20 Federal elections of one kind or another. So, far from the number of elections-with all the costs to the taxpayers that they imply, particularly half Senate elections, which cost these days over $17m each-becoming less frequent, they are in fact becoming more frequent. Over the last 20 years there have been 11 Federal elections. There have been three double dissolution elections, three elections for the House of Representatives alone and three for half the Senate alone. Only two have been the supposedly normal House of Representatives plus half Senate elections. That sort of situation, that kind of scenario-the previous Liberal Government and its predecessors contributed most of that result -has produced a situation in which there is no rational capacity in the private sector, or for that matter in the public sector, to engage in long term planning , with the prospect of elections constantly hanging over everybody's head. It is crucially important to re-establish a sane electoral cycle in this country. The simultaneous elections referendum proposal was, of course, vigorously supported by the Liberal Government in previous incarnations: In 1959 when it was first floated by the Joint Parliamentary Committee on Constitutional Review; in 1976 at the Hobart meeting of the Australian Constitutional Convention; in 1977 when it was put to referendum by the Liberal Government; and in the latter part of last year when this proposal was supported in debate in the Australian Parliament. It has been supported by the Liberal Party in the past because in its saner, less hypocritical and less opportunistic moments it has appreciated the plain common sense and the sound and sensible implications of this proposal for good government in this country. It is on that basis and no other that it is being supported on this occasion by this Government. Senator CRICHTON-BROWNE —Mr President, I ask a supplementary question. I thank the Attorney-General for his spurious views about simultaneous elections. I ask him to respond to the second part of my question: Does he still hold to the view that, as far as possible, governments ought to run their full term? Does he accept that the Government can run its full term as far as possible and have simultaneous elections by holding elections next May rather than in November or December of this year? Senator GARETH EVANS —I still accept the view that, so far as possible, governments should run their full time. It is a matter of judgment, of course, as to how far 'so far as possible' in fact extends. My views on that subject are of no conceivable interest to anybody, least of all Senator Crichton-Browne. Senator GARETH EVANS(Victoria-Attorney-General) —Mr President, I claim to have been misrepresented in a number of ways, but there is only one with which I will occupy the time of the Senate at the moment. I seek leave to make a personal explanation. Leave granted. Senator GARETH EVANS —My complaint relates to the front page story in the Australian this morning entitled 'Evans out to cut vice-regal power'. Would that I could but I made no such suggestion over the weekend in any speech that I made in announcing the Government's referendum proposals. I did say, along the way, that there are a number of vexed and difficult constitutional questions that remain to be resolved, including the question of the Senate's power and the position of the Governor-General, but that these are not matters that are presently proposed for referendum and need to be the subject of a lot more consultation and discussion, for example, in the context possibly of a longer term Green Paper which I will put out next year. I make that clear for anyone else who might be minded to engage in a vulgar beat-up of the kind that is engaged in here. There is one other mistake that does cut me to the quick in the same article and it reads as follows: Referring to constitutional reforms, Senator Evans said: ''Although it might be technical, boring and of marginal significance, it is fundamental to a freer, more rational and harmonious environment for all Australians.'' Mr President, I did not say that constitutional reform might be 'technical, boring and of marginal significance'; I said 'it might appear technical, boring and of marginal significance' and it will be appreciated how much of a misrepresentation I assert that to be. Senator CHANEY(Western Australia-Leader of the Opposition) —Mr President, I seek leave to make a personal explanation about one of the Government's persistent beat-ups. Leave granted. Senator CHANEY —Over the weekend I was reading some of the Government's statements and I found a statement by the Minister for Employment and Industrial Relations, the Hon. Ralph Willis, on the prices and incomes accord, second progress report. I found in that statement the following: Increases in unemployment benefits for single adults, which the previous government so callously left unchanged since 1978 . . . I then went to the report which Mr Willis had produced-'Prices and incomes Policy, The Second Progress Report on Government Initiatives'-and found the same statement repeated on page 61 of that report: This year single adults on an unemployment benefit and without dependants received their first increase since 1978, raising their benefit from $64.40 to $ 68.65 a week. That is not the first time that that assertion has been made by representatives of the Government and again I wish to point out that it is inaccurate. The fact of the matter is that from 1977 to 1978, under the Fraser Government, the unemployment benefit was adjusted for single adults along with other unemployed, on a regular half-yearly basis. Thereafter the Government did distinguish between rates payable to the single adults and those with dependants. In 1978 there was no change to the single rate whereas there were adjustments in 1979 and the same applied in 1980. Senator Tate —This is supposed to be a personal explanation. Senator CHANEY —Yes, it is a personal explanation. In 1980, under my predecessor , Senator Dame Margaret Guilfoyle, there was an adjustment to the rate of unemployment benefit paid to single adults. That was in 1980 which is since 1978 . In each of the years when I was the Minister for Social Security, in each of the Budgets, there was an adjustment to the single rate of unemployment benefit which brought it to half that of the married rate. So there were three adjustments to the rate of unemployment benefit paid to the single unemployed between 1978 and the election of the Hawke Government. It is a fact that there have been a number of occasions when the statement has been made that there was no adjustment for the single unemployed from 1978 until the election of the Hawke Government. That is untrue. There were three adjustments; in each case they were adjustments which aimed at Budget time to bring the rate payable to the single unemployed equal to half the married rate. Senator HARRADINE(Tasmania) —Mr President, pursuant to standing order 408, I too seek leave to make a short personal explanation. Leave granted. Senator HARRADINE —Mr President, I claim to have been misrepresented by Senator Walsh in an answer he gave to a question today. Senator Walsh indicated in his answer that my opposition to retrospective legislation is somehow inconsistent with my life long commitment to worker's rights. A major concern of mine is that if this Government is allowed to get away with retrospective legislation against taxpayers who have not acted illegally, another government may aim retrospective legislation against workers on a wide range of issues. My action with respect to the cherry picker scheme is consistent with my support of workers' rights. Indeed, I moved to have the Government consider utilising its insurance power to pursue the overriding need to redress any financial disadvantage suffered by workers for whose benefit the cherry picker superannuation schemes were ostensibly established. In other words, I wanted to see that the workers had the first bite of the cherry. In rejecting this move, Senator Walsh telegraphs the Government's intentions blindly to levy retrospective taxes at any price, including at the cost of workers' rights. Senator Walsh —You humbug. The PRESIDENT —Order! The Minister will withdraw that remark. Senator Walsh —I withdraw, Mr President. Notice of Motion Senator PETER RAE(Tasmania) —by leave-I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to alter the Constitution to provide for automatic and simultaneous dissolution of both Houses of the Parliament in the event of disagreement between the Houses in relation to the passing of proposed laws appropriating revenue or moneys for ordinary annual services of the Government, and for related purposes. Senator GEORGES(Queensland) —by leave-Mr President, I seek to raise with you a matter which may be a matter of privilege. Matters of privilege should be raised at the earliest opportunity. Since honourable senators have had no chance to consider the matter, I ask you for an opinion. The Senate appointed the Select Committee on the Conduct of a Judge. Because of the sensitivity of the subject, the Committee has met in private. But an article appeared in the National Times purporting to be deliberations of the Committee. Only the Committee could know how accurate that report may be and it is up to the Committee to determine whether it need take action. But when a newspaper publishes what purports to be the evidence of a committee of the Senate, it is my view-you may be able to reinforce me in this, Mr President-that it is in breach of the privileges of the Senate. If that is so, we would be derelict in our duty if we did not refer it to the Joint Select Committee on Parliamentary Privilege. Senator Peter Baume —Public evidence, Senator? Senator GEORGES —No. All the evidence of this Committee has been taken in private, which makes it even more necessary to protect the rights of those who appear before the Committee. We do not know whether what is reported in the article is actually what occurred before the Committee. What we do know is that the article purports to publish the evidence and deliberations of a Senate Select Committee before that Committee has reported to the Senate. My views may not be accurate. Nevertheless, I express my concern at this moment. If necessary , and if no one else does it at a later stage, I may move a substantive motion before the Senate. Senator Chipp —Mr President, I raise a point of order. Senator Georges has asked you, as I understand it, for an opinion. I hope that you do not give one forthwith, because the general thrust of what Senator Georges has said-although, I also express concern-was on a subject about which I have some very strong views. I believe that the media of this country sometimes behaves in a way in which we would not want it to behave, but I believe it is so constrained in what it can report that it is time we politicians looked at the constraints which we put on the media. I am always reminded that because of those constraints no Watergate could be exposed in Australia. Because of the importance of this issue , Mr President, I hope that you will not rule upon it immediately but will, perhaps, have a word with the party leaders. It is a subject upon which the Senate could hold a very useful debate about the so-called privileges of politicians. The PRESIDENT —On the point of order and in response to Senator Georges, honourable senators would know that it is not a matter for the President to rule as to whether there has been a breach of parliamentary privilege. It is for the Senate to determine, by way of motion, whether the Senate should refer the matter to the Senate's Privileges Committee for investigation and report. Having made that statement, I point out that it is open to any honourable senator to move that the matter go to the Privileges Committee, and then it is a matter for the Senate to make a determination on that subject. Senator GEORGES(Queensland) —by leave-I am surprised that Senator Chipp should extend what to me was a request for some understanding on the matter. As I clearly stated, one area of breach of privilege is a matter for the Senate Select Committee on the Conduct of a Judge itself to determine, and perhaps it has not had the opportunity to do so. But the other matter is a matter which is very clearly in breach of the privilege of the Senate-that a newspaper publishes what it purports to be the deliberations of a committee. In my experience, that would be a breach of privilege. I have not moved the substantive motion at this stage, because I thought that honourable senators ought to be aware of the problem. If I had moved that the matter be referred to the Privileges Committee, I would have hoped that we would have deliberated that, and that alone. But what Senator Chipp seems to foreshadow is that we shall then engage in a debate on what is happening in the Committee. That is not my purpose, and it ought not to be the Senate's purpose. What the Committee is doing in private it does in private until such time as it reports. I hope that Senator Chipp is not foreshadowing that if I should move that the matter be referred, on the basis I have explained, to the Privileges Committee, we shall have a wide-ranging debate in this place about the deliberations of the Committee. Senator Chipp —I did not say that at all. Senator GEORGES —Senator Chipp seemed to indicate that. He talked in terms of Watergate, and in terms of restraints upon the Press. The Press has certain responsibilities. Senator Chipp —We can say what we please about anybody, but let anyone say anything about us and we haul him up before the bar of the Senate. Senator GEORGES —Exactly. It seems to me that Senator Chipp has taken a position which shows a lack of understanding of the privileges of the Senate. If he has a lack of understanding of the privileges of the Senate, the sooner he understands them the better. I refer him to a report, which will come to the Senate at a later stage, from the Joint Select Committee on Parliamentary Privilege, which clearly answers some of the problems that he may have in mind. But at this stage , in regard to a debate about that Committee, which we appointed for a specific purpose on a very sensitive matter, and which is conducting hearings in private, the matter should remain in private until such time as the Committee completes its deliberations. But the other matter, of a newspaper purporting to usurp the privileges of the Senate, is something that we should not take lightly. The PRESIDENT —I inform the Senate that I have received the following letter, dated 12 June 1984, from Senator Chaney: Dear Mr President Pursuant to Standing Order 64, I give notice that today I propose to move- 'That, in the opinion of the Senate, the following is a matter of urgency: The need for the Senate to support the Prime Minister's view that the joint Australian-United States defence facilities in Australia directly contribute to Australia's security, that their operations in no way derogate from Australian sovereignty and that removal of the facilities would dash hopes of ordinary men and women for peace and disarmament because of the contribution of those facilities to stability in the strategic relationship between the super-powers.' Yours sincerely (FRED CHANEY) Senator for the State of Western Australia Is the motion supported? More than the number of senators required by the Standing Orders having risen in their places- Senator CHANEY(Western Australia-Leader of the Opposition) (3.24) I move: That in the opinion of the Senate the following is a matter of urgency: The need for the Senate to support the Prime Minister's view that the joint Australian-United States defence facilities in Australia directly contribute to Australia's security, that their operations in no way derogate from Australian sovereignty and that removal of the facilities would dash hopes of ordinary men and women for peace and disarmament because of the contribution of those facilities to stability in the strategic relationship between the superpowers. I wish to deal with why the Opposition regards this as a matter of urgency and why it brings it forward for debate today. It might have been thought last Wednesday when the Prime Minister (Mr Hawke) made his statement on a series of matters, including the question of United States of America-Australia joint defence facilities, that the matter could have been left to lie because at that point the Prime Minister embraced a series of propositions which have the support of the Opposition. There has long been argument in Australia on those propositions but the Opposition has consistently pursued them both in government and as an opposition, and of course in that sense we welcome the fact that the Prime Minister chose to step forward and embrace those propositions. The propositions go to the most important matter that we in this Parliament are called upon to consider; that is, Australia's defence and security in the world. We might have been able to end this session on the basis of agreement on a matter of great substance. We had an area of doubt, an area about which the Australian Labor Party had in the past attacked the Liberal and National Parties , but there now appeared to be clarification and a greater unity of view. I for one welcomed that and thought it was a useful thing for Australia. But, having got to the point where the Prime Minister endorsed a series of very significant Opposition viewpoints on the arrangements between Australia and the United States with respect to joint defence facilities, we find that there has been an immediate response from within the Prime Minister's own party. We see reports and public evidence that four of his Ministers, 28 of his members of parliament and two of his State branches have chosen to attack him for the statements he made less than a week ago. So within the ALP is a clear challenge to matters which we see as being of fundamental importance to Australia. On that basis we believe it is important that there should be a clear statement by the Parliament on Australia's dealings with its allies and the Senate should indicate its support for the propositions set out in the urgency motion. We see the need for the Senate to support the Prime Minister's view, in the terms of the urgency motion as follows: . . . that the joint Australian-United States defence facilities in Australia directly contribute to Australia's security, that their operations in no way derogate from Australian sovereignty and that removal of the facilities would dash hopes of ordinary men and women for peace and disarmament because of the contribution of those facilities to stability in the strategic relationship between the super-powers. There was some criticism of the Government by the Opposition when the statement was brought down. We certainly did not criticise that aspect of the statement but we did criticise the suggestion that in some way the Government was bringing to a waiting world a whole lot of new information. It is interesting to refer to the Prime Minister's statement and to find that he refers to the fact that the Labor Party's platform: . . . calls on the Government to make known to the public the general purpose and functions of the facilities and any change to these. I had a very careful look at the Prime Minister's statement, and found three paragraphs in which there was an attempt to put down some additional or new information. I quote those paragraphs to the Senate because I suppose they are seen by the Government as being central to why this statement had to be made. The Prime Minister said: The facilities are not military bases. There are no combat personnel or combat equipments there, no military stores or workshops, no plant or machinery or laboratories for research, development, production or maintenance of any weapons or combat systems of any type. Timely knowledge of developments that have military significance is very important and can be critical for the security of the United States of America and its allies, including Australia. Effective deterrence and hence avoidance of conflict depend on this. Similarly, effective measures for military restraint and for the control and reduction of armaments depend upon reliable assessments of military developments. Arms limitation arrangements between the United States of America and the Soviet Union specifically provide for verification. The general purpose of the facilities that we operate at Nurrungar and Pine Gap with the Americans is to contribute to all of these objectives. The Prime Minister goes on to say in the third paragraph: Among the functions performed are the provision of early warning by receiving from space satellites information about missile launches, and the provision of information about the occurrence of nuclear explosions, which assists in nuclear test ban monitoring and supports nuclear non-proliferation measures. The Prime Minister, in words which are very significant and which are a reminder of the sorts of statements often made by Liberal Party and National Party spokesmen in this area, went on: Disclosures of other technical functions of the classified facilities would involve damage to both United States and Australian interests and cannot be justified. The Prime Minister drew a veil over what in fact could be disclosed but used words, which I have repeated to the Senate, which purported to be a description of the general purpose and functions of the bases. I can only echo the words of Mr Peacock and say that anyone who has seen these bases as an issue and has been concerned about the role of the bases is unlikely to be surprised or particularly informed by the words which the Prime Minister has used. The fact is that the Prime Minister has added little if anything to the sum of public knowledge on these bases in Australia. I simply say to the Senate that our cynicism about the statement is that he has purported to describe it as something which it is not. I now quote with very real approval expressions of the Prime Minister about those facilities and the crucial role that they play. He said: Some people express concern about the possible risks to our security from these facilities. The Government takes the view that the joint facilities directly contribute to the security that we enjoy every day and that this tangible benefit outweighs the possibility that risks might arise at some future time from our hosting the facilities. In the same statement the Prime Minister said: . . . let me emphasise again that these facilities are jointly managed and operated by the Australian and American Governments. All functions and activities require, and have, the full knowledge and concurrence of the Australian Government. We monitor this and we are satisfied that the operations of the facilities in no way derogate from Australian sovereignty. Finally, again in the same statement, the Prime Minister said: Some Australian groups and individuals- I interpolate to say that this includes several State branches of the Australian Labor Party- call for the closing of the joint defence facilities. The Government recognises many of such calls as being sincerely made. We regard them as misguided but not hostile in intent. The Prime Minister continued: As I have indicated, the removal of the joint facilities would hinder United States efforts to maintain effective and stable deterrence and would damage the capacity of the United States for monitoring and verification, so striking a very serious blow at the prospect of arms control agreements between the super- powers. Such a development would dash the hopes of ordinary men and women around the world for peace and disarmament. They are statements of the Prime Minister with which the Opposition is in agreement. Those statements are reflected in the motion which we have brought before the Senate today. It is normally not necessary for the Opposition to take action to bring matters before the Senate when it is in agreement with the Government. However, the circumstances of this statement are not what we would regard as normal. The statement follows a long period of debate in which the Australian Labor Party has generally set itself against the position of the Liberal and National parties. We have had this welcome recantation by the Prime Minister and the taking of a stance which is consistent with the view we have put forward. If the matter had ended there I believe this debate would not have been necessary. However, we have the extraordinary situation of this Prime Minister immediately being greeted by the most obvious and concentrated opposition from within his own Party. That is not a matter involving a few branches or a matter involving one or two people. It is a matter involving members of the Government itself going to the Prime Minister to object. Senator Coleman —We are a democratic party. Senator CHANEY —I am glad to hear Senator Coleman's view that her Party is a democratic party. The question is where the democracy of that party will lead Australia, whether the Prime Minister can sustain the desirable position which he enunciated on Wednesday last or whether in fact those who seek to break down that situation, such as Senator Coleman, will be in a position to do so. We have been told that a number of Ministers, for instance, the Minister for Immigration and Ethnic Affairs (Mr West), the Minister for Territories and Local Government (Mr Uren), the Minister for Defence Support (Mr Howe) and the Minister for Veterans' Affairs (Senator Gietzelt), have all gone to the Prime Minister and complained about the statement. We are told that the Ministers have disputed Mr Hawke's contention that the facilities in Australia were not military bases and that the hosting of the bases involved a sacrifice of Australia's sovereignty. Senator Coleman —Now there is an assumption that that is what they went in there for. Senator CHANEY —Let them come in here and deny it. We have Senator Coleman saying that that is an assumption. Happily, of course, Senator Coleman is one of those members of parliament to whom I am about to refer and who have put their names to their views on this statement. But the fact is that four members of the Government have met with the Prime Minister to object to the statement which he has put down. Senator Coleman —You think that is what they said there. Senator CHANEY —Senator Coleman again interjects. I would welcome Senator Gietzelt's entry into this debate and his denial of the truth of what I have said. I would welcome Senator Gietzelt coming in here and saying: 'I support the moderate and positive views which have been put by the Prime Minister on this subject'. But I suspect that we will not hear from Senator Gietzelt in this debate, although perhaps at a later stage of the debate we will have a chance to have a vote on the matter and he will be able to express his view in that way. The response from the Labor Party, from the highest level, from the Ministry itself, has been to object. On the same day as the Prime Minister made the statement, we find that a whole group of members of the House of Representatives and of senators circulated a letter on which appear their signatures and in which they objected to substantial parts of the Prime Minister's statement. The Prime Minister's statement covered a great number of issues-uranium, disarmament and United States of America and Australian bases in Australia. I do not have the chance in 20 minutes to canvass what the Prime Minister covered in 42 minutes in his statement in the other place. But it is important to note that 17 members of the House of Representatives and 11 senators from this place wrote to the Prime Minister on the very day of his statement expressing their deep concern about the content, timing and manner in which this statement was made. They did not just object to the Prime Minister's statement on bases. They objected also to the very important statement which the Prime Minister made then , and has made in other places including at the University of Western Australia before Easter, in which he drew a very sharp distinction between nuclear weapons , which are abhorred by the Government, by the Opposition, by the people of Australia and indeed of the world, and nuclear energy for peaceful purposes which we support. The Government supports it, the Opposition supports it and I believe the people of Australia support it. What the members and senators who objected to the Prime Minister's action have said is that the existing party policy is challenged by this assertion. They deny the assertion of the Prime Minister in that part of his statement. Instead they assert: Labor believes the development of a nuclear weapons capability from civil nuclear programmes is the most distressing feature of nuclear power . . . I do not have time this afternoon to go into that aspect of the debate but I draw the Senate's attention, and the attention of the people of Australia, to the fact that these senators are also objecting to that part of what the Prime Minister had to say. On the second page of their letter they set out their objection to the Prime Minister's statement insofar as it touches on bases. They say: It is of great concern to us that the statement could have the effect of pre- empting the debate at National Conference . . . They also state: . . . the statement was at no stage considered by any Party forum whether inside or outside the Parliamentary Party. That is a matter which is for them. They also state: Party Platform calls on the government to ensure that the presence of foreign bases and facilities 'does not involve a derogation from Australian sovereignty' . The Platform also requires the government to 'make known to the Australian public the general purpose and functions of the bases and any changes to these'. We do not believe that the Prime Minister's statement adequately addresses these issues. The ALP Platform supports the Palme Report which states that 'nuclear deterrence cannot provide the long term basis for peace, stability, and equity in international society'. I seek leave to have incorporated in Hansard that letter which has had such wide circulation and which sets out the depth of objection from within the Labor Party to the Prime Minister's statement; as I have said, 17 members of the House of Representatives and 11 members of the Senate signed it, including Senator Childs, Senator Coleman, Senator McIntosh, Senator Coates, Senator Giles, Senator Bolkus, Senator Georges, Senator Hearn, Senator Primmer, Senator Zakharov and Senator Reynolds. The PRESIDENT —Is leave granted? Senator Gareth Evans —No. The PRESIDENT —Leave is not granted. Senator Gareth Evans —No. It is a private Caucus letter. Senator CHANEY —Well, it has been very widely circulated. Senator Gareth Evans —That is too bad. The PRESIDENT —Leave is not granted. Senator CHANEY —Well, I am sure that later in the debate we will have a chance to read the rest of the letter into the proceedings. I have only five minutes left but I will certainly take the opportunity to read it into the record at a later stage of today's proceedings, if nobody else does it. If it involved just a rump group of the Caucus who could be cheerfully corralled by Senator Richardson, none of this would matter and it might not have been necessary to bring it on for debate. But this is not an objection which has been laid down by only a small number of senators and members. It is an objection which has been picked up by two State branches of the ALP which have challenged the Prime Minister's position on this matter on which we believe it is in the national interest that there be unanimity. We find that, within a matter of days of the statement having been put down in the House of Representatives, the ALP State Convention in Adelaide has already overwhelmingly passed a motion calling for the shut-down of the bases. It rejected an attempt by one of the loyal Ministers-one of the Ministers who are trying to support the Prime Minister's position-to soften the motion. We find the clearest possible stance being taken by the South Australian branch, which is noted for its double think and which supports uranium mining in the biggest mine in Australia, at Roxby Downs, but which opposes uranium mining everywhere else, a level of double thinking which I find very hard to credit, even in a State branch of the ALP. But that State branch overwhelmingly passed a motion calling, not for further examination of the bases, but, indeed, for their complete shut-down. Of course, the South Australian branch is a small branch. It might be argued that what does it matter as only 11 senators, only 17 members of the House of Representatives and only one small State branch take this view about these important matters. But we find that on Saturday the President of the Victorian State Branch of the Australian Labor Party, Mr George Crawford, said that Victoria would back the South Australian stance at the July national conference and that for 10 years Victoria had supported a policy to remove the bases. Mr Crawford went on to say: The Victorian branch has consistently over the years been concerned with the bases, particularly because it believed they make a prime target. . . I think the view held is the risk of having a first-strike attack against Australia is too great a risk to compensate for any benefits. These matters go to the central issues of peace, the maintenance of peace and the defence of Australia. In the time I have left let me stress that the Opposition believes that there is a real risk to the world of thermo-nuclear war . But we agree with the Prime Minister on this occasion that we must pursue world peace and disarmament within a framework of strength and not a framework of weakness. Those members of the ALP who see a possibility in moving towards disarmament on a unilateral basis, those who see the world moving towards peace without the reality of deterrence are, in the view of the Opposition and clearly in the view of the Government itself, out of line with reality. There is no argument that Australia has a part to play with the nations of the free world to ensure that there is a maintenance of stable deterrence. That was asserted by the Opposition when it was in government and is asserted now it is in opposition. We believe that it is of great importance to Australia that the government of the day, the Labor Government of today, has moved to that position . We believe that the joint United States and Australian facilities within Australia are a key Australian contribution to the deterrence which has underpinned the long period of peace we have had between the super-powers. It may be an uneasy peace, but a peace it has been. We believe that without that deterrence the cause of peace would be weakened. We regard this matter as being of very considerable importance. We believe that it is a matter on which there should be a vote of this Senate so that the Government can see that there is overwhelming support within this Parliament for the stance which the Government laid down in this Parliament only last Wednesday with respect to the bases. I know that the initial response of Senator Chipp to the suggestion that I made that this should be done was that it was a political move and that he had doubts about it. But let me say that it was not the Opposition which politicised this issue and sought division upon it. It was the 11 senators sitting opposite us who signed that letter, the 17 members of the House of Representatives, the members of the Cabinet and the State branches which have actively gone out and campaigned against the Government's position that have raised doubts about the position of the Government in regard to this matter. We believe that those doubts are not in Australia's interests and that they should be put to bed by the passage of this motion by the Senate which we believe deserves its unanimous support. We are talking about matters which are fundamental to the security of Australia . We believe that the security of Australia is best served by a genuine alliance and partnership between the United States and Australia on these matters. We do not believe that we should have any truck with the antics of the left wing of the ALP and with those State branches of the ALP which would strike at the very roots of our defence and our world strategy. Senator GARETH EVANS(Victoria-Attorney-General)(3.45) —It is always nice to have bipartisan support for government policy, never more so and never more importantly than when matters of war and peace, and, as Senator Chaney says, the security of the nation, are in issue. Senator Chaney's motion on its face offers just that bipartisan support, and it is welcome for that. I ought to read it into the record because Senator Chaney was apparently a little coy to do so. He moved that the following is a matter of urgency: The need for the Senate to support the Prime Minister's view that the joint Australian-United States defence facilities in Australia directly contribute to Australia's security, that their operations in no way derogate from Australian sovereignty and that removal of the facilities would dash hopes of ordinary men and women for peace and disarmament because of the contribution of those facilities to stability in the strategic relationship between the super-powers. Welcome as that motion is, it does, I confess, come as something of a surprise when one compares it to the initial reaction last week of the Leader of the Opposition (Mr Peacock) to that very same statement. Speaking in the House of Representatives on 6 June, the Leader of the Opposition was very far from being flattering about the statement or anything in its content. He said that its sanctimonous platitudes and absence of substance were all too familiar. Referring to the Prime Minister (Mr Hawke), Mr Peacock went on to say: His statement today was not to inform the Australian community nor, of course, this Parliament. As with so much else of the Government's foreign policy activities, the statement was an attempt to manipulate and placate disaffected elements within the Australian Labor Party itself-- What has now happened is that, in a breathless display of political adroitness which the Peter Howsons of the Opposition will be diarising about now for decades, Senator Chaney has chosen to do three things: First, to repudiate directly his Leader's characterisation of the statement and his judgment of the political intent and effect of that statement. Secondly, Senator Chaney has done so with motives that are transparently crude, cynical, cheap and of the worst narrow party-political point-scoring kind. Thirdly, he is doing so in a way whereby he telegraphed his punches some 48 hours ago, before the main event, explaining to the Press waiting with bated breath that his motion was really all about an attempt to embarrass the Labor Party and cause divisions within its ranks. It appears that Gucci and the albatross have now been joined by the playground machiavelli-a would-be political hatchet man, a would-be political strong man, a would-be strategic genius who cannot even get his hypocrisy working professionally. Senator Chaney in his contribution to the debate speaks for a party which when it was in government told nobody anything about these facilities, and did nothing to explain the role of these facilities and their strategic utility, where they fitted into the larger global environment and how their existence might be justified. Senator Chaney speaks for a party which in government did nothing to secure or advance Australian sovereignty in relation to those facilities. His stance and that of his Party stand in very stark contrast to what the Prime Minister and the present Labor Government now put forward. In opposition, Senator Chaney comes forward with a motion which, although on the face of it is sane and helpful, is by design something very far from that. Senator Chipp, if he was quoted accurately in Saturday's Age, got it exactly right. While making clear his opposition and his Party's opposition to the content of the Prime Minister's statement, he said that the Democrats would not have any part of the Liberals' cheap politicking on this subject. If he was quoted correctly, he further went on to say: . . . it was ''sickening'' that the Liberals would try to score political points on a matter that affected the fate of all Australians. That puts the point beautifully. May it stand endorsed by someone in this chamber who is not enamoured of the Government's policy, as the Liberals are, on this matter. The statement made to the Parliament by the Prime Minister on 6 June was, by contrast, very far from being the cheap little exercise and political positioning that some commentators and cynics have claimed it to be, and which Senator Chaney, apparently with second thoughts, now claims it to be today. It was aimed at explaining Australia's and the Government's whole position on disarmament and arms control in general and our position on the facilities in particular, to the extent that it was possible and within our capacity to do so. The statement covering that territory was the most detailed and eloquent statement on disarmament and arms control that has ever been made by an Australian Prime Minister. Referring to Palm Sunday, when some 250,000 Australians marched in our cities to support the cause of peace, disarmament and arms control, and the countless others who have marched recently in Western Europe and the United States, the Prime Minister said: The concern of the marchers for peace, the strength of their feelings, and the very weight of their numbers must be taken into account by all governments. While acknowledging that there are differences of view over the particular issue of uranium, Bob Hawke's statement made it quite clear that the Government identifies with the aspirations for peace of the Australian people. This is something which unites all members of the Australian Labor Party as well as very broad sections of Australian society as a whole. Our opposition to nuclear war is total. Our opposition to the arms race is total, as is our desire to avoid at all costs anything which could contribute to that fearful prospect. Since coming to power-- Senator Chipp —How can you be against nuclear weapons and sell the stuff that makes nuclear bombs? Senator GARETH EVANS —For the reasons that have been articulated with great vividness, capacity and intellectual strength by our present Ambassador for Disarmament, Richard Butler. Senator Sibraa —On the public record last Thursday here in Canberra. Senator GARETH EVANS —I will not stop to go through the reasons. They are, I think, entirely familiar. I believe later speakers in this debate will canvass them. Senator Chipp —I have never heard anything so disgraceful as that person on AM this morning. Senator GARETH EVANS —That is a matter for Senator Chipp's judgment. He is entitled to share that judgment with us when the time comes. It is not a judgment that is shared by the present Government. Since coming to power, the Government has given priority to arms control and disarmament issues in a way that has been unmatched by any of its predecessors. The Government has done this , as the Prime Minister indicated, because of our concern at the level of international tension in recent years, our appreciation of the difficulties bedevilling relations between the super-powers and our recognition of the very legitimate anxieties which these developments have aroused among the Australian people. As a member of every global disarmament body Australia is promoting treaties to end nuclear testing and to ban chemical weapons and measures to prevent an arms race in outer space. The Labor Government is doing everything it can to strengthen measures against the spread of nuclear weapons. The appointment of our first Ambassador for Disarmament, Richard Butler, has significantly improved our effectiveness and our standing in international efforts to achieve peace, as well as symbolising the very great importance which the Government gives to this issue. When the Prime Minister outlined the Government's policy and the framework on arms control he reiterated that the Labor Government categorically rejects any nuclear weapons option for Australia, despite the scandalous and dishonest suggestions in certain sections of the Press to the contrary. The nub and the substance of Senator Chaney's contribution, if it can be described as that, to this debate went not to the question of our general disarmament policy-although he skated over with glib facility the very significant measures that I have endeavoured to summarise in the last couple of minutes-but to the specific questions of United States facilities in Australia. The Prime Minister, in dealing with the question of facilities, was careful to place their role and our reaction to them squarely in the context of the global nuclear arms situation. It is in that situation and only in that context that their role can be understood. What the Prime Minister said was that a major purpose of our efforts in the multi-lateral disarmament field was to bring influence to bear on the United States and the Soviet Union to pursue seriously bilateral armament reduction agreements between them. He said that in the Government's view-and it is the Government's view-adequate and effective provision for verification was crucial in arms control negotiations and that the maintenance of effective and stable deterrence between the super-powers was a fundamental requirement to produce a climate of confidence between them. The statement which the Prime Minister went on to make on the general purpose, the functions, of the joint Australia-United States defence facilities on our soil is one that goes much further than any that has been made before. That has been acknowledged even by critics of the statement, even highly competent and expert well regarded critics of the statement such as Des Ball of the Australian National University. There has been a lot of speculative and deductive Press reporting in Australia, as elsewhere, about the functions and purposes of the facilities, but never previously has an authoritative government statement of this kind been made. It is very important that honourable senators should appreciate the distinction between general purposes and functions on the one hand and technical operations on the other. It is about the former which the Labor Party in opposition, and now in government, undertook to inform the people, and that is what we have now done. We take the view-I do not believe there is any dissent from this expressed by Senator Chaney, even in his more cynical moments-and there is no contest with the view, that the latter should not be disclosed by the Government; that is to say, the detailed technical operations of the facilities in question. Would that that position was universally acknowledged. One finds that some journalists and academics give the impression that they would not be happy unless the combination of every safe on the premises in question were published and the subject of public notoriety. That is not a position which is obviously sustainable and nor could we ever begin to advance it. The Government has revealed for the first time that Nurrungar and Pine Gap provide early warning by receiving from space satellites information about missile launches and provide information about the occurrence of nuclear explosions. They provide timely information about military developments which can be critical for the United States and its allies, including Australia. Effective deterrence, and hence the avoidance of conflict, depend on this. They also contribute to monitoring and verification which, as I have indicated already and as the Prime Minister made absolutely, centrally clear in his statement, are critical for arms limitation agreements, for test ban monitoring and for non-proliferation. Honourable senators will no doubt recognise-they should not have to have it drummed in-that early warning is critically important in preventing nuclear war. Bill Hayden made the point recently when he said: 'We don't want a nuclear Pearl Harbour'. Equally importantly, in an era of suspicion and difficulty between the super-powers, early warning is vitally important in providing extra time for a proper analysis of military developments such as missile launches and hence reducing the possibility of accidental nuclear war. That is another key feature that has to be appreciated of our response to these facilities. The North West Cape facility is, of course, different from Nurrungar and Pine Gap. This, too, is carefully explained in the Prime Minister's statement. It is a communications relay station for ships and submarines of the United States and Australian navies. Submarine launched ballistic missiles are not first strike weapons. They have a retaliatory purpose and therefore serve to deter nuclear attack. I draw the particular attention of honourable senators to what the Prime Minister's statement on the facilities had to say about the Government's strategic policy as a whole, because it is always crucially important to appreciate what is being said about these facilities in that context. I think it is significant that the United States Administration was aware that the Prime Minister intended to say this in connection with the bases: We do not believe there can be a winning side in a nuclear war. The notion of a nuclear first strike designed to disarm an adversary would be destabilising were it to gain credence. Nor can there be any assurance that nuclear conflict between the Super-powers could be limited. This Government's voice on such matters will be directed towards supporting doctrines which eschew moving beyond the requirements of stable deterrence towards postures more appropriate to waging nuclear war in some limited and controlled way. Finally, again on the general question of the strategic policy underlying our reaction to these facilities, the Prime Minister said: While we recognise that in present global circumstances a unilateral move away from a policy of maintaining stable deterrence is not a realistic option, the Australian Government is committed to working for measures to stabilise the strategic balance, on which stable deterrence depends, and to curb arms competition. Through equitable and verifiable measures for arms control and reduction, we seek to limit qualitative improvements in arms and to reduce the forces involved. This makes it absolutely clear why the Government rejects any war-fighting function for these facilities, contrary to what has been asserted in some sections of the Press. Even though it is terminology into which one constantly slips because it has become so familiar, it is a misnomer to describe these facilities as in any way being military bases. There are, as the Prime Minister said, no combat personnel, no combat equipment, no military stores or workshops, no plant or machinery and no laboratories for research, development, production of maintenance of any weapons or combat systems of any type. Senator Chipp —Are they capable of sending a pre-emptive strike signal? Senator GARETH EVANS —What they may or may not be capable of sending signals about is something that goes to their technical operations. To the extent that the honourable senator is talking about North West Cape and to the extent that he is talking about the transmission of signals to submarines launching ballistic missiles, I have said and I said a few seconds ago, and the Government has constantly repeated, that submarine-launched ballistic missiles are not pre- emptive first strike weapons. Nobody in the international arms community, the academic community or any other community that discusses these things construes them in that light. Their utility is that of retaliation. Their utility is that of in fact acting as a deterrent against first strike weaponry being launched elsewhere. So that is the particular context in which these facilities operate and the Australian Government supports them on those sorts of assumptions. I say, finally, that the existence of the facilities does, of course, imply a continued independent but co-operative relationship, a relationship of alliance between Australia and the United States. There is nothing unusual or unprecedented about that. There is nothing to justify the mock congratulations of the Opposition enshrined in the motion now before the chamber. It was, after all, a Labor government under John Curtin which established the alliance with the United States in the first place, and let that never be forgotten. It was, furthermore, a Labor government which in 1974 in the Barnard-Schlesinger agreement moved to put the bases in Australia on a joint footing. It is this Labor Government which has moved further to strengthen Australian sovereignty in the operation of the bases and which has now, for the first time, given an account of their general purpose and functions. The Hawke Labor Government should be commended for carrying out its platform obligation, for levelling with the Australian people in this way, for not seeking to disguise the risks which it believes, on balance, after close analysis, to be worth while, as well as, of course, for the very active and constructive approach it has brought to pursuing arms control, disarmament and peace. The contrast with the Liberal Opposition is immense, obvious and self- evident. As I said, the Liberal Opposition when in government told the Australian people nothing about the operation of these bases. The state of mind and approach to the business of government are repeated over and over again on matters of war and peace and acute sensitivity to the national security of this country, and Vietnam springs to light as the most obvious other example. We are talking about an opposition party coming in here today moralising sanctimoniously in circumstances where it in government could not care less about the advancement, promotion and achievement of Australian sovereignty in relation to these facilities. We are talking about an opposition which when it was in government did not have the courage to acknowledge the nature and functions of these bases or facilities, did not have the courage to acknowledge that there were risks associated with them and to explain-difficult detailed and controversial as that task might be-that risk to the Australian people and endeavour to persuade the Australian people that that risk was worth taking. What we have had here has been a shoddy little exercise on the part of the present Liberal Opposition which, if it goes on repeating exercises of this kind , will be playing out that role of opposition for a great many years yet to come . Senator CHIPP(Victoria-Leader of the Australian Democrats)(4.04) —One of the quaintest statements in the statement by the Prime Minister (Mr Hawke), now repeated by the Attorney-General, Senator Gareth Evans, who, I remind the Senate , represents the Minister for Defence (Mr Scholes) and the Minister for Foreign Affairs (Mr Hayden) in this chamber, is that none of these bases represents a military installation. In fact, in answer to my interjection the Attorney just said that even though North West Cape can transmit signals perchance to submarines in the Indian Ocean that can fire intercontinental ballistic missiles armed with nuclear warheads at the Soviet Union, it is not a military installation. I find it a very queer use of the English language to say that such a base is not a military installation. I remind the Attorney that several months ago I gave him notice of and asked the following question: Did the installation at North West Cape make Australia a prime nuclear target? He consulted with the Department of Foreign Affairs and the Minister and gave me the answer: Yes, it did make Australia a prime nuclear target but the risk was worth while. I find difficulty in reconciling those two attitudes of the Hawke Government. On one day I am told in the Senate that Australia is a prime nuclear target because it has United States installations sited on it; I am told today that these installations are not military installations and therefore there is no need to worry. This debate is an exercise that plays politics with the fate of Australians and their children. It concerns the greatest challenges of our time, yet it is being used for mean and expedient purposes. The Prime Minister's statement on arms control, disarmament and bases is to be welcomed for its delivery but is to be condemned for its content. The fact that an Australian Prime Minister saw fit to speak about these most urgent issues is to be welcomed. But in doing so, the fact that he hid behind the rhetoric of D-Day to avoid taking a position of strong moral leadership against the horrendous escalation of nuclear bombs is to be condemned as a pious fraud. I say again in this chamber: The Prime Minister's statement represents a pious fraud. The Australian Democrats will not support this urgency motion. We take that stance not because we want to see the bases removed holus-bolus forthwith but because we have some very serious doubts about what this and past governments have told Australians about the bases. We do not believe that the 'do nothing because everything will be all right' approach advocated by the Government and the Opposition on this issue is in any way appropriate for this crucial matter. That status-quo approach has left the world today with 50,000 nuclear bombs. No matter what the rhetoric of Labor Party and Liberal Party politicians is in this place, the fact is inescapable. This rhetoric by politicians over the past 20 or 30 years leaves us today with 50,000 nuclear bombs. We are between five and 25 minutes from global annihilation and total human extinction. Yet politicians in this place still try to score cheap political points off each other. The nuclear arms race is insane and so dangerous that it forces anyone concerned about tomorrow to investigate every aspect of it, to look for a way to bring it to an end. Surely it is proper for us to discuss all matters concerned with the survival of our children free from the prejudices of being labelled either pro-Soviet or pro-American. One would hope that on an issue that can affect the future of humanity one could question and query matters in debate without being called treasonous or traitorous. Therefore, let us admit that the United States bases in Australia play a role connected to the American nuclear weapons systems-systems that can and do give the Americans a nuclear first strike capacity. Surely that is incontestable. Surely logic screams that that is the position today. As Senator Chaney has said, at least the Liberals were fair dinkum about this. They said: 'This is the danger; this will give the Americans a first strike capacity; these are military installations'. One would have thought that equal honesty could have come from the Hawke Government. Logically, it must be conceded that Australia and the bases are now a high priority nuclear target. The Foreign Minister admits this. The Prime Minister's statement acknowledged that the bases have a direct connection with nuclear weapons because of their arms control and verification systems. How then can the Prime Minister, telling the whole truth, say: The facilities are not military bases. The most honest man in Australia, Robert Hawke, said last week: The facilities are not military bases. Given this deception alone, the Australian Democrats could not even consider supporting the Government's statement or the Opposition's politicking today. The Democrats do not doubt that the bases play an important role in arms control. As well, in our view, they contribute to an increase in nuclear danger. The failure of the Government's statement is that it does not consider the implications of these functions or even acknowledge some other potential roles. Today's exercise shows that the Opposition does not either. The major parties in this country believe they can get away with deliberately deceptive statements based not necessarily on untruths but on the manipulation of information. The fact that the Government's statement went further than any previous statement on this subject is not a matter for congratulation. It should be cause for indictment of previous governments and a demand for better from this Government. That demand has not yet been met. Thankfully there are competent journalists and academics who can and do demonstrate from information publicly available in the United States of America-for some extraordinary reason this is denied Australians by their own governments-that recent governments in this country have not told their own constituents the whole truth. Dr Desmond Ball, a recognised world authority on nuclear strategic issues, is head of the Strategic and Defence Studies Centre at the Australian National University. In the Age of 8 June he stated: The Prime Minister says the Government doesn't support any capability in the direction of a first strike, nor does it support any nuclear strategies which involve limited nuclear war. But he doesn't accept that some of the aspects of these facilities could well fall within these categories. Mr Andrew Mack, Senior Research Fellow on arms control and disarmament at the Australian National University, was quoted in the same article as saying: Pine Gap and Nurrungar provide vital information to fight a nuclear war. By hosting these facilities, Australia is collaborating with strategic doctrines which accelerate the arms race and increase the risk of nuclear war. We are not dealing here with views of peaceniks and dupes of the KGB. These are the views of intelligent people whose professional livelihood is devoted to researching these fundamental issues. That they should hold views that differ so markedly from those held by the major parties of this country should give us some cause for concern. The very least we should do as a result is to enable to develop a full, open and public debate on all the implications of the bases. Neither this Government nor the previous Government is doing that. The National Times, through journalist Bill Pinwill, has revealed that a great deal is known about these bases publicly in the United States. His articles of 25 May and 1 June have revealed that the Nurrungar base is likely to be upgraded at a cost of $126m and that such upgrading will enhance the potential for those bases to contribute to a nuclear war-fighting policy. I repeat, we have information of the upgrading of Nurrungar at a cost of $126m. This will enhance the potential for those bases to contribute to a nuclear war-fighting policy. We Australians are contributing to that, yet we are told by the Australian Labor Party that these are not military installations. Dr Ball is again quoted in one of those articles as saying: Satellite surveillance capabilities allow the U.S. to plan its strategic posture so as to be able to engage the Soviet Union in a nuclear war, thus making nuclear war more likely. What does the Labor Party say about that? The Australian people are entitled to know. I do not believe that there is any person in this Parliament who would accept the proposition that limited nuclear war, first strike or nuclear war- fighting are in any way realistic, let alone a stabilising influence that contributes to peace and disarmament, although I remind the Senate that there are some maniacs in the American military who, even today, hold the view of a winnable, limited nuclear war, and are talking about it. These issues are of fundamental importance to the future of humanity. They are very technical and often difficult to understand. There is one underlying concept that must be understood by this Government, this Opposition and the electorate at large; that is, deterrence. The word often appears in debates on this issue. The Attorney-General used it this afternoon. What does the word 'deterrence' really mean? Does anybody know? Is it a misnomer ? Is it a concept that promises peace, but makes nuclear war inevitable? It is a concept that in a world where nuclear weapons exist the way to deter an enemy is to threaten retaliation that would involve unacceptable damage. It is a concept with which everybody feels safe and one which previous governments have used devastatingly to justify the presence of the American bases. But while deterrence is a public relations catch cry, its defensive connotations are becoming totally invalid. As Leslie Gelb, a noted United States analyst, wrote in the New York Times of 4 March this year: Official language now stretches the meaning of deterrence to being prepared to fight, control and even win nuclear exchanges. It is a very fine line between deterrence and actual war-fighting in thought and deed, and the superpowers seem to be approaching that line. We in Australia are contributing to the super-powers approaching that ultimate in madness. When governments use the word 'deterrence' they could be meaning nuclear war-fighting. Let me give an example. Deterrence was satisfied in 1961 with about 1,000 nuclear bombs. The politicians then said: 'We have reached deterrence. There are 1,000 nuclear bombs in existence'. Why are governments not satisfied in 1984 with the 50,000 nuclear bombs that exist today, bombs which are more accurate and destructive? It clearly shows that the public has been conned and deluded by governments over 20 years. Under the mysterious meaning and mischievous character of deterrence the ordinary people of the world have been deliberately misled by politicians by being made to feel secure while the politicians have increased this destructive arsenal by 50 times over the last 20 years. If that is a correct concept and we could have deterrence in 1961 with 1, 000 nuclear bombs, why do we need 50,000 bombs in 1984? This Labor Government has to debate the implications of this situation. It did not debate that matter in last week's statement. The task ahead of us is to have a full public debate on the real roles of these bases. Australians have every right to demand that these bases on our soil are totally controlled by Australians. We must be able to demand that these bases do not undermine the real concept of deterrence by contributing to the preparation for, or fighting of, a nuclear war. I do not pretend that informed public debate will result in much loved consensus or agreement. Concern over nuclear was is not an issue that can be ameliorated by argument. When faced with a threat to human survival people are entitled to be unbending in their opposition to nuclear war and nuclear weapons. Everything must be done to end the nuclear arms race, to reduce stockpiles and to ensure Australia plays no role at all in waging or encouraging the major powers to a nuclear war. The Government's contribution last week was a hindrance to this effort. The country desperately needs moral leadership to save the world from nuclear annihilation. Those who look to the Hawke Government to give that leadership must today be sadly disappointed. Senator HAMER(Victoria)(4.19) —There is no such thing as a winnable nuclear war . I believe there is no such thing as a limited nuclear war because it will inevitably escalate into a global nuclear war. Such escalation will mean the destruction of civilisation and, quite possibly, the destruction of the human race itself. It is, therefore, both our duty and in our interests to do all that we can to prevent the outbreak of such a war. Whether we are an immediate target or not is basically irrelevant. We must do all we can to prevent the outbreak of such a war. I have great sympathy with the purposes of the 250,000 protesters who are campaigning against nuclear war. No one wants nuclear war. What I worry about though is their gullibility. The measures they were proposing, the banning of exports of uranium and the elimination of United States of America bases, facilities, or whatever they are called, in Australia would have an effect directly contrary to what they are attempting to achieve. Instead of making nuclear war less likely it would make it more likely. That is the importance of a bipartisan approach to the United States bases. The motion we are debating today is framed in these words: The need for the Senate to support the Prime Minister's view that the joint Australian-United States defence facilities in Australia directly contribute to Australia's security, that their operations in no way derogate from Australian sovereignty and that removal of the facilities would dash hopes of ordinary men and women for peace and disarmament because of the contribution of those facilities to stability in the strategic relationship between the super-powers. Until Senator Chipp spoke it might have appeared that the Senate was unanimous on this issue, despite the rather mindless vitriol with which the Attorney- General (Senator Gareth Evans) opened and closed his speech. I think I should correct one point that the Attorney-General made. He endeavoured to give the impression that the Leader of the Opposition, Mr Peacock, opposed the statement of the Prime Minister (Mr Hawke) on these fundamental issues. I would like to quote two short passages from page 2992 of the House of Representatives Hansard of 6 June. Mr Peacock then said: The Prime Minister, in that part of his statement on defence facilities, correctly emphasised their role in the preservation of peace between the nuclear powers by saying: 'This has for many years been dependent upon a situation of stable deterrence.' That is a view which the coalition has constantly held, both in government and in opposition. He went on to say: But I wish the Prime Minister well in his efforts to establish some degree of consistency in the policy of his Party towards the Western alliance, ANZUS and defence facilities. The opposition does not come from the Liberal Party of Australia or the National Party of Australia; it comes from within the Australian Labor Party itself. Twenty-eight members of parliament, including 11 senators, sent a message to their Caucus colleagues on 6 June. The senators were: Senators Childs, McIntosh, Coates, Giles, Coleman, Georges, Hearn, Primmer, Zakharov, Reynolds and Bolkus. In their letter they said, among other things: We wish to express our deep concern about the content, timing and manner in which the statement-- that is the statement of the Prime Minister-- was made. They said later: We do not believe that the Prime Minister's statement adequately addresses these issues. What are the issues? The first one I want to cover briefly because it is not really relevant to this debate is the export of uranium. The Ambassador for Disarmament, Mr Richard Butler, recently said: Australia had been urged to continue responsible uranium exports under nuclear non-proliferation safeguards. That was said by the Ambassador for Disarmament. He further said: . . . people who were against the export of uranium because it might end up in nuclear weapons were unaware that if Australia did not sell its uranium the market would open to other producers without the same safeguards. Senator Chipp said there are 50,000 nuclear weapons in the world now. If we export our uranium or leave it in the ground I do not believe it will make the slightest difference to the number of nuclear weapons in the world. But what we would lose is the chance to influence the proliferation of nuclear weapons. In my view it would be an act of supreme irresponsibility to take such a step. The main issue before us today is the United States bases or facilities. I do not argue on the words; it is just a matter of semantics. Three are relevant to the Prime Minister's statement. The only justification for our having them in this country is that by their activities they reduce the likelihood of a nuclear war. The North West Cape communications station, a very low frequency communications station designed to communicate with submerged submarines, is primarily intended to communicate with ballistic missile submarines which are second strike weapons designed by their existence and invulnerability to be able to inflict unacceptable damage on a country that launches a first strike. Their purpose is to deter-Senator Chipp raised the issue of deterrence-and to make it much less likely or even inconceivable that anyone would dare to launch a first strike. Their existence and the existence of the stations to communicate with them is a great contribution towards lessening the likelihood of a nuclear war. Pine Gap is primarily concerned with signals intelligence satellites. Nurrungar is concerned with DSP/647-- Senator Chipp —How do you know that? Senator HAMER —I know it. Nurrungar is concerned with early warning satellites. Senator Chipp —Did Bill Hayden have a word with you? Senator HAMER —No. I did not get that information from Bill Hayden. Senator Chipp —I don't know, and I can't find out. Senator HAMER —I am afraid that Senator Chipp does not know a great many things. I am trying to explain some of them to him. What these satellites do, among other things, is detect the launching of a first strike of Soviet missiles or any other country's missiles. By their existence they make it much less likely that anyone would attempt such a venture. They have rapid communications facilities to Washington, again with the effect of making a surprise first strike almost inconceivable. By their activities they are making a nuclear war much less likely and they are a contribution, therefore, to world peace. But as Senator Chipp said, with great vehemence, deterrence is not enough. We have been living now with a balance of terror for nearly 30 years. There is a continual danger of mistake, accident, or even madness. We must try to reduce the level of world armaments. Australia has a fairly limited leverage here. But again, the existence of American facilities in Australia gives us a chance to contribute to the objective we all have-the reduction of the level of terror in the world. Let us look at Pine Gap. The satellites at Pine Gap can monitor the telemetry of the test flights of missiles. This is very important in ensuring the continuation of the Strategic Arms Limitation Talks agreement, or the implementation of a new strategic arms agreement, for instance, the Strategic Arms Reduction Talks. Without verification an agreement is impossible. Pine Gap, by its existence, makes this verification possible. Therefore it is a major contribution towards the possibility of a future strategic arms limitation agreement. To destroy that, to wipe it away, again would be an act of irresponsible madness. Another area where these stations can contribute is in the verification and control of anti-ballistic missile systems. These can be monitored by satellites. The development of anti-ballistic missile systems without verification would destabilise the world balance and might do great harm. Finally, by their existence, the satellites can monitor a comprehensive test ban on the testing of nuclear weapons. This again is a contribution to mutual confidence, to the chance of getting verifiable agreements. Without these stations the chances of such verifiable agreements would be greatly reduced. I hope that those who long for a future free of nuclear war will open their minds to the facts and will realise that, for us to fail to make the contribution we can make to the prevention of the spread of nuclear weapons and the deterrence of global nuclear war, to fail to take the steps which are within our power, would be a crime not only against Australia but also against the rest of humanity. Senator SIBRAA(New South Wales)(4.29) —The Government supports the matter of urgency which reads: The need for the Senate to support the Prime Minister's view that the joint Australian-United States defence facilities in Australia directly contribute to Australia's security, that their operations in no way derogate from Australian sovereignty and that removal of the facilities would dash hopes of ordinary men and women for peace and disarmament because of the contribution of those facilities to stability in the strategic relationship between the super-powers. Today, the Leader of the Opposition, Senator Chaney, has been too smart by half hoping that, because people in the Australian Labor Party and the Australian community generally hold different views on the bases and the facilities, he could use this to score some cheap political points. I regard the urgency motion this afternoon as a political gimmick. The reason why the Australian people hold different views is that his Party, when in power, lied to the Australian people about the bases and their purposes. The editorial of the Australian Financial Review today says it extremely well. The editorial on the bases debate in this morning's Australian Financial Review states: The most important thing about the statement which the Prime Minister made last week about US communications bases is that it served, together with statements of the Foreign Affairs Minister, to bring the debate about Australia's role in the world power balance into some kind of perspective. The worst thing about the way in which the discussion about the bases has been conducted, and was conducted under the last Government, was that it permitted and encouraged the Government and the bureaucracy to lie to the Australian people. The last Government lied, by omission, about the bases; the bureaucracy has tried to continue this line even up to the present, and has prevented the Government from giving as clear an account of the role of the bases as could have been done. At another place, the editorial states: The real argument, then, is about the strategy of nuclear deterrence and whether Australia, by contributing to increasing the efficacy of the US communications and surveillance system, increases the effectiveness of deterrence and so decreases the likelihood of the use of nuclear weapons. The lies and duplicity of both our allies and our own defence establishment and governments in the past have served to prevent proper public debate about this central issue. I believe that that is why a great deal of confusion still exists. The Government of the day, the Liberal-National Party Government, said that North West Cape, for example, at the particular time, was used for communicating between surface ships, civil and military. There was no mention, at that stage, of its underwater role. The previous Government said that Pine Gap was a space research and communications base. What is the truth? North West Cape is a communications relay station for ships and submarines of the United States Navy and of the Royal Australian Navy and serves as a key element in a complex system of communications supporting the global balance. As indicated in the statement which the Minister for Defence (Mr Scholes) tabled in the Parliament on 3 November 1983, agreement was reached with the United States Government on new arrangements to ensure that the Australian Government would be able to make timely judgements about the significance for national interest of developments involving North West Cape. That is something that the Liberal-National Party Government, of course, never did. Those new arrangements are now in force. The Government is satisfied that Australia's sovereignty in the operation of the joint defence facility at North West Cape is now adequately protected. The Government has also revealed, for the first time, that Nurrungar and Pine Gap provide early warning by receiving from space satellites information about missile launches and provide information about the occurrence of nuclear explosions. They provide timely information about military developments which can be critical for the United States and its allies, including Australia. Effective deterrence and hence avoidance of conflict depend on this. They also contribute to monitoring and verification which is critical for arms limitation agreements, test ban monitoring and non-proliferation. Of course, the majority of the Australian people knew nothing about this whatsoever. The Opposition is often critical of the Labor Party and its attitude to the facilities. Let us examine the record. What does the Labor Party platform say about this at the moment? Paragraph 6 of the section on foreign affairs states: Co-operate with the people of the United States and New Zealand within the context of the Australia New Zealand United States (ANZUS) Treaty. In the section on disarmament and arms control, the platform states: Labor upholds the principles of disengagement and disarmament. Labor will work towards meaningful detente and effective measures of arms control. Labor will support and, where Australia can be a party, take initiatives in bilateral and multi-lateral negotiations for global and regional arrangements. To these ends, Labor will use Australia's influence as an ally of the United States. Labor will - Support moves to enhance the capacity of the UN Security Council to pre-empt conflicts and facilitate initiatives under Article 99 of the UN Charter. Support implementation of a program for disarmament based on the proposals contained in the Palme Report of the Independent Commission on Disarmament Security Issues entitled 'Common Security-a programme for disarmament.'. Further on in the section of our platform dealing with bases and facilities, the platform states: Labor will- Ensure that the presence in Australia of foreign or jointly owned, controlled or operated bases and facilities does not involve a derogation from Australian sovereignty. Those words are similar to the words used by Senator Chaney in his motion today. The platform also states: Labor will- . . . . Not oppose the use of Australian bases and facilities by allies in war-time, or in periods of international tension involving a threat to Australia, or in so far as they are involved with verification of treaties, agreements, and understandings on disarmament and arms control, such as the various SALT accords ; provided Australian authority and sovereignty are unimpaired; and provided that Australia is not involved in hostilities without Australia's consent. What a nerve for this Opposition to talk about peace and disarmament in the urgency motion today. Let us examine what the Labor Government's record is on this great issue. The appointment of Australia's first Ambassador for Disarmament, Richard Butler, has significantly improved Australia's effectiveness and standing in international efforts towards achieving peace as well as symbolising the great importance which the Government gives to this issue. As a member of every global disarmament body, Australia is promoting treaties to end nuclear testing and to ban chemical weapons and measures to prevent an arms race in outer space. The Labor Government is doing what it can to strengthen measures against the spread of nuclear weapons. In outlining the Government's policy and framework on arms control and disarmament, the Prime Minister (Mr Hawke) reiterated that the Labor Government categorically rejects any nuclear weapons option for Australia as has scandalously and dishonestly been suggested in certain sections of the Australian Press. In the policy framework which Cabinet laid down on 22 November 1983 it took the following decisions: To promote measures to halt and reverse the nuclear arms race; to uphold the international nuclear non-proliferation treaty; to promote a comprehensive and verifiable ban on nuclear testing; to develop the concept of a nuclear free zone in the South Pacific, a proposal which will be taken to the South Pacific Forum to be held in Tuvalu later this year: to support the achievement of an agreement to ban chemical weapons; to support the process of negotiation and the achievement of balanced and verifiable arms control agreements; to take an active role in pursuing arms control and disarmament measures wherever possible; and to affirm Australia's readiness to join a consensus to hold an international conference on the Indian Ocean zone of peace question. The Prime Minister, in his statement, identified the steps the Government had taken to strengthen Australia's public and private institutional capacity, to ensure that its commitment to peace and disarmament will be backed by a high degree of professional competence. We have upgraded that section to the Department of Foreign Affairs which deals with disarmament and arms control and which had been allowed to run down scandalously under the previous Government. In particular, he drew attention to the decision announced in March by Bill Hayden, the Minister for Foreign Affairs, to provide funds for the establishment of a peace research centre to be established at the Australian National University. All these measures are called for in our platform and all have been implemented. Of the many initiatives the Government has taken in the field of arms control, the Prime Minister drew particular attention to Labor's efforts on behalf of the non-proliferation treaty and a comprehensive test ban treaty. He stressed the significance which this Labor Government attaches to the non-proliferation treaty as the most important multilateral arms control agreement in existence today. The achievement of a comprehensive nuclear test ban treaty would outlaw all nuclear testing by all states in all environments for all time. As the Prime Minister pointed out, the conclusion of such a treaty would help to put strong pressure on France to cease its testing program in the Pacific. I ought to mention at this stage the work of Ambassador Butler who, I believe, was instrumental in getting the United States not to veto the discussion on the comprehensive nuclear test ban treaty so that it now appears on the agenda at the United Nations. The Prime Minister said that a major purpose of Labor's efforts in the multilateral disarmament field is to bring influence to bear on the United States and the Soviet Union to pursue serious bilateral disarmament reduction agreements between them. He said that, in the Government's view, adequate and effective provision for verification was crucial in arms control negotiations and that the maintenance of effective and stable deterrence between the super- powers was a fundamental requirement to produce a climate of confidence between them. It has been suggested that the Government's support for the principle of stable and effective deterrence is in conflict with the Labor platform on disarmament and arms control which states that Labor will support implementation of a program of disarmament based on the proposals contained in the Palme report under the issue entitled 'Common Security-A Program for Disarmament'. Critics of the Government's policy have pointed to the section of the report which reads: Nuclear deterrence cannot provide the long term basis for peace, stability and equity in international society. It must be replaced by the concept of common security. The Foreign Minister, Mr Hayden, has frequently made it clear that deterrence is , of course, a very uncomfortable system. But he has also pointed out-and I quote from his speech in January this year-that it is: 'the only effective nuclear restraint system at the moment.' However, the next sentences in the Palme report state: The conclusion is inevitable that nuclear weapons must be eliminated. We are fully aware that this can only be achieved through a gradual process, which must be initiated through concrete steps. The steps outlined by the Palme report include strengthening the nuclear Non- Proliferation Treaty, achieving a comprehensive test ban treaty, support for arms control negotiations between the superpowers, banning chemical weapons and safeguarding the nuclear fuel cycle; in other words, precisely the arms control and disarmament measures which the Government has undertaken and which I have described. In my view it is clear that there is no part of Labor's platform which has been more thoroughly implemented than that on disarmament and arms control. The Australian Ambassador for Disarmament, Mr Richard Butler, when appearing before a parliamentary committee in Canberra last week, stated that a nuclear war between the superpowers was unwinnable, that the planet would not survive, and that any attacks on the United States facilities in Australia would take place in that context. I did not quote him exactly, but that is approximately what he said. The bottom line of the argument, therefore-it is the Prime Minister's view and it is my view-is that closure of the bases would increase the risk of nuclear war by giving the advantage to one side. I believe that to close the bases would increase the risk of nuclear war by accident by removing the early warning system. I say to the Australian Democrats and to Senator Chipp that if they want to try to sell that argument to the Australian people at the next election, they are free to try. Senator Chipp quoted Des Ball. I will quote him in another context. I agree with Des Ball, an Australia expert who wrote a book on this issue entitled A Suitable Piece of Real Estate. He said last year to the national foreign affairs and defence committee of the Labor Party that, taking all these things into account-that is, all the things I have mentioned this afternoon-on balance, he supported the present ALP platform on the bases and facilities. Question resolved in the affirmative. Senator ROBERTSON(Northern Territory) —I move: That the Senate take note of the papers. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator HARRADINE(Tasmania) —Mr President, I seek leave to make a very brief statement concerning the report of the Committee to Review the Australian Overseas Aid Program. Leave granted. Senator HARRADINE —I thank the Senate. I shall be very brief. Because of the fact that the last debate folded prematurely, a number of honourable senators were not in the chamber when the report of the Committee to Review the Australian Overseas Aid Program was before the Chair. This document is one of the most important, valuable and, perhaps, even contentious documents on the question of aid to be brought before the Parliament. I hope that the Government will see its way clear to have the document opened for debate some time during this week. Senator Robertson —The paper has been tabled. Senator SIBRAA(New South Wales) —by leave-I will be very brief. The reason that there were no Government speakers on the report of the Jackson Committee to Review the Australian Overseas Aid Program was that time is short this week and we are trying to get through the program. Many Government members wanted to speak on it. It has been referred to a parliamentary committee and therefore we let the Whip move that the Senate take note of the paper. Senator MacGIBBON(Queensland)(4.45) — I move: That the Senate take note of the paper. I am not prepared to speak on this paper because it was only released at the end of last week and I have not had time to read it. It is an important paper. For some years we have had a committee called COPQ-the Committee on Overseas Professional Qualifications-which has examined in detail and enabled thousands of migrants to this country to have their qualifications at a professional level registered in Australia. COPQ has operated without any serious criticism being levelled at it. A new council is to take over the function of COPQ. My concern is that it may well have inherent in its structure the ability to debase the standards that previously have been demanded from Australians and migrants and which were recognised. My point of particular concern is that the new council has the Executive Secretary of COPQ-but not as a full board member-but the rest of the people, with the exception of the president of the council, appear to have very little in the way of academic qualifications. That does not mean, of course, that suitably qualified people cannot be appointed to it. I seek leave to continue my remarks at a later date. Leave granted; debate adjourned. Senator MARTIN(Queensland)(4.46) —I move: That the Senate take note of the paper. I do not intend to speak at length because the subject of the ministerial statement has been debated in the past. I only say on behalf of the Opposition that we welcome what is basically a very realistic statement. In the House of Representatives, when the Minister for Home Affairs and Environment (Mr Cohen) delivered the statement, the shadow Minister for the Environment, Mr David Connolly, pointed out that the Minister had substantially changed his views from the time when he was in opposition. We pride ourselves on some consistency. As a recipient of a number of letters from the United States of America, I am dismayed at the campaign of ignorance that is being conducted overseas; a campaign, of course, in which the film Goodbye Joey figured prominently. Extracts from that movie were shown on national television in the United States last year. Despite the fact that the extracts shown were subject to criticism, nevertheless well-meaning people in the United States have been taken in by a quite scurrilous and unworthy piece of what purports to be a documentary, the worst parts of which were either faked or misrepresented-notably the skinning of a young joey. There are a number of concerns, of course, about kangaroo shooting in Australia . The most widespread and best founded concern is the illegal shooting of kangaroos. Whilst many people have been quite pious on the subject of illegal shooting, at the same time supporting a legal culling, there has not been very much movement by authorities to monitor the illegal shooting of kangaroos. If the government quotas could be adhered to, we would all be heartened. It is the illegal shooting and the terrible acts undertaken by some of the barbarians who are involved in the illegal shooting that cause the concern. I, for one, would not subscribe to a view that the culling should be done by government shooters. Those who hunt kangaroos professionally-not the illegal shooters of kangaroos- have an interest in a clean kill, not in damaging or wounding the kangaroo, with attendant loss of value to the meat and the hide. If government were to take over this culling, all we would have would be the same shooters working for a government salary without a profit being involved. I, for one, do not see anything-- Senator Georges —I don't think you know what you are talking about now. Senator MARTIN —Actually, I know quite a bit about it. Senator Georges —You ought to see the results of kangaroo shooting at present. Senator MARTIN —I am sure Senator Georges in not referring to the licensed hunters of kangaroos who seek the meat and the hides of kangaroos which are permitted to be shot under government quotas. As I said a minute ago, those men have an interest in a clean kill. If there were not a kangaroo skin and meat industry, the kangaroos would still have to be culled, probably shot by the same people but be on the Government payroll. The logic of that escapes me. For those who campaign in the United States and Europe to stop the export of kangaroos products there is no willingness at all to face that reality; the fact that kangaroos in Australia still have to be culled. I congratulate the Minister on his move towards reasonableness and maturity in his views on the subject of kangaroos. I notice that Senator Peter Rae who has indicated to me his wish to speak on this statement is here now so I shall not seek leave to continue my remarks later but I may seek another opportunity to speak on this subject. Senator GEORGES(Queensland)(4.51) —The Senate has appointed the Senate Select Committee on Animal Welfare and one of its terms of reference happens to be wildlife which includes kangaroo harvesting. I do not intend to comment on what the Committee's deliberations will lead to except to say that because of the comments made by the Minister for Home Affairs and Environment (Mr Cohen) and people such as Senator Martin, the Committee has decided to give priority to that part of its reference concerned with kangaroo harvesting. It seems it is necessary, because of the debate taking place in Australia and overseas, that the Committee should consider the reference and call for evidence. Substantial evidence has already been received and some evidence has been heard in public. I suggest to those who are taking a position at this time to exercise some caution until the Senate Committee completes its investigation. I believe that kangaroo harvesting is of considerable concern to many sections of the community . It needs to be dealt with on the evidence before the Committee. It needs to be dealt with without confrontation, that is with one side aligned against the other. I think the Minister and Senator Martin have contributed to the confrontation debate and that ought not to be so. There appears to be evidence before the Committee that questions the methods used in killing kangaroos, that questions the estimates of the kangaroo population and certain doubts have been raised which need to be examined. For that reason I suggest that we ought not now have the Minister aligned against the animal welfare people. I believe it would have been wiser if the Minister had not made such a statement which many people consider to be provocative. I think that the Minister would have been wiser to have waited until the Committee had completed its considerations. The Committee can assure the Senate that it will give priority to this reference and, if necessary and if the Committee so desires, it will bring down a minority report on the subject. Senator BOSWELL(Queensland)(4.54) —I congratulate the Minister for Home Affairs and Environment (Mr Cohen) on his statement. It is a statement that everyone in the rural industry can live with. However, I must say that I am very disappointed with Senator Georges's comments. I believe that the Minister's statement on kangaroos which he made to Parliament indicates that he has had a very close look at the problem. He has laid down guidelines that I believe will ensure that the kangaroo industry has a future in Australia. This industry has been going for over 100 years and still there is an increasing number of kangaroos in Australia. I have heard estimates of the number being up to 38 million and as low as 19 million. Senator Missen —Ten million. Senator BOSWELL —It is certainly not that low. The point of the matter is that there are more kangaroos in Australia than there are people and no one would suggest that people are an endangered species in Australia. Therefore, I cannot see how anyone could suggest that kangaroos are an endangered species. Senator Georges —How about extending that a bit so I will understand what you are talking about. Senator BOSWELL —I will talk to you afterwards. Senator Georges —No, do it now. Senator BOSWELL —Senator, please let me have a go here. The PRESIDENT —Order! I suggest that Senator Boswell talk to the Chair. Senator BOSWELL —Mr President, this industry provides jobs for 3,000 registered kangaroo shooters in Australia and 2,200 are registered in my State of Queensland. It provides a real inducement to local communities. It lifts their economies. There are 30 or 40 kangaroo shooters in many main towns in Queensland . These people spend money on fuel and ammunition and they certainly lift the economies of those rural towns. Small businesses in those rural towns would be a lot harder to run without kangaroo shooters. People who are kangaroo shooters- Senator Georges should take note of them-would either work on the railways or the roads as there would not be any other jobs for them. Senator Georges —I am not questioning that. Senator BOSWELL —They have the right to employment and so I think they ought to be taken into consideration. The main problem that the kangaroo industry is facing is not the animal liberationists in Australia; it is not those types of people because I do not think they are making any inroads, certainly they are not making them to the Minister and to the people of Australia. However, they are eroding the kangaroo market overseas, in the United States of America and in the European Economic Community. They have proposed I suggest wrongly, to the EEC Parliament that it should put a complete ban on kangaroo products going into the EEC. The EEC takes 80 per cent of Australia's kangaroo products. If that market collapses the kangaroo industry collapses and then no recognised form of culling will be available. If people think that graziers and farmers will sit down and be eaten out of their farms because there is no culling, I suggest they are very much mistaken. They will use other forms of harvesting. Again I commend the Minister for his very real statement and congratulate him. Senator JACK EVANS(Western Australia)(4.58) —I am very disappointed at the tenor of this debate because all honourable senators would be aware of the Senate Select Committee on Animal Welfare which is sitting at the moment. I am very proud to be a member of that Committee which is chaired by Senator Georges. I think that Senator Georges's statement was rational and fair. It was not aimed , as other speakers have endeavoured to do, at dividing this nation and pre- empting the argument, the debate, that is taking place and which will take place over the next few weeks and months. This is not a matter on which honourable senators need to be anti-farmer, or need to be anti-kangaroo or need to be anti anything. They need to look in a balanced way at the future of the kangaroo population of Australia and at the future, the survival, of the farms that can be affected where culling of kangaroos is necessary. One of the fascinating things of which I have been aware for some little time and of which the Minister for Home Affairs and Environment (Mr Cohen) in his paper is obviously totally oblivious is that the animal welfare people are not anti-culling. I would like Senator Boswell to be aware of that because he is obviously oblivious to it. The animal welfare people are in favour of kangaroo culling where damage is being done to farms. I make that absolutely clear to the Senate, so that Senator Martin will have no reason in future to make speeches such as the one she made this afternoon. They are quite content for animal culling to take place. They may be concerned about the kangaroo export market which, whether or not there is a need for culling, seems to have the support of the National Party and the Liberal Party. In other words, that export market is at the expense of the kangaroo population. The Minister needs to address that matter instead of making stupid statements such as: 'If they attack me, I will attack them in kind, in public'. I think that we all agree that that was a pathetic thing for a Minister to say, particularly when he knows that a Senate committee is currently doing the job that he should have done some time ago; that is, to look in a balanced way at problems with the kangaroo population. The problems with the kangaroo population do not exist everywhere. In fact, I think it is fair to suggest that the great bulk of the kangaroo population is so many hundreds of kilometres away from farms that the farmers have absolutely no cause for concern at all. Senator Boswell —Absolute rot! Senator JACK EVANS —The figures are there to prove it. Again, if the honourable senator looks at those figures, he will find that that is absolutely right. I simply want to put some sort of balance into this debate so that the people who want to protect kangaroos in this country are not portrayed by the Liberal Party and the National Party as people who want to destroy farms. That is 100 per cent wrong as far as the people I talk to are concerned. I am talking now about farmers as well as the people who want to preserve wildlife in this country. I find it fascinating that when farmers, environmentalists and wilderness people are brought together to try to resolve this problem they are of one mind: Simply that where a problem exists created by excessive kangaroo populations, culling must proceed; where the problem does not exist and the kangaroos do not get into farming properties-in other words in the deserts and the back areas where there are no farms-the farmers are not all that keen to have this kangaroo export market proliferating to the point that it destroys the kangaroo population of Australia. Senator Boswell —You have not talked to the farmers in the rural areas. Senator JACK EVANS —You should talk to your farmers if you disagree with that statement. The PRESIDENT —Order! I suggest that the honourable senator address his remarks through the Chair. Senator JACK EVANS —I simply conclude by making once more an appeal to all honourable senators to wait patiently for the deliberations of the Animal Welfare Committee which the Senate appointed to look into this problem amongst a number of animal welfare problems. In my opinion, judging from the way the hearings of that Committee are being conducted and are going at present, all sides of this chamber will be very satisfied with the results and the recommendations that come down from that Committee. Senator MISSEN(Victoria)(5.03) —There has been some suggestion just now that all Liberal and National Party senators take the same view- Senator Jack Evans —I apologise. I exclude you. Senator MISSEN —The honourable senator should not exclude only me. If he reads the statement made by Mr David Connolly, the shadow Minister for Home Affairs and Environment, in the other House on Thursday, he will see the sensible view taken by the Opposition. Mr Connolly was critical of the Minister's statement in many respects as, indeed, am I. I agree entirely with what Senator Georges and Senator Evans have said about this being a very wrong time for a statement of a controversial nature to be put down in view of the fact that the Senate Select Committee on Animal Welfare is considering this matter. I have placed on notice, and have received answers to, a number of questions on the kangaroo situation. I have not received very satisfactory answers; I think some of the questions remain quite unanswered. I will certainly be taking further steps in this regard . The ministerial statement seemed to me to be a very sad one to make at this time. As the Minister for Home Affairs and Environment (Mr Cohen) admits, there is no doubt that the number of kangaroos in Australia are not properly known. Their population has not been adequately investigated. The Minister acknowledges that things have to be done. In fact, he has appointed a group to make further investigations in this regard. Serious questions have been raised about whether mistaken views have been given as to the extent to which kangaroos exist in Australia at present and the extent to which the numbers were depleted as a result of the drought. It is all right to say that last year we had a quota of three million and only two million were culled or killed and that this year the quota has been reduced to two million. But while only two million were killed last year, it may well be that the same number will be killed this year after a very severe drought which greatly reduced the population. I know there are considerable problems in the country and that many farmers hold very strong views, views which are different from those of the environmentalists. I think it unworthy of the Ministers to have abused the environmentalists as he did in his statement. He should at least have waited until the Committee has reported and more facts are known. He should have waited until his investigations were further advanced than they are at present. I do not regard this statement as a helpful one. It will only inflame controversy in this country. Therefore, I join with those other honourable senators who urge that there should be less of this pejorative argument by the Minister, less attempt to defend himself, to hit back, as he says, at people who hit him. Is that the responsibility of a Minister for Home Affairs and Environment? I do not believe it is. It is his job to get what facts he can and to listen to the evidence put before the Committee. I am not aware of the nature of that evidence or what the report will be, but certainly this is not the time for a Minister to make the statement that he made. I put on record my concern about him. Senator PETER RAE(Tasmania)(5.07) —I find myself in the position of wishing to support both what those who have supported the Senate Select Committee on Animal Welfare have said and also the fact that the Minister for Home Affairs and Environment (Mr Cohen) made the statement. I believe it was timely for there to be a ministerial statement, having been at the Council of Europe and at the European Parliament. Having seen some of the material which has been circulated to those bodies, having heard some of the debate and committee work taking place and what those bodies are being urged to do in relation to Australia and having seen the degree of total misrepresentation which has taken place in support of the campaign against Australia, I believe that that statement was timely. I do not necessarily agree with the terminology. I imagine that some people find some of the terminology offensive, but I believe it was timely for there to be on behalf of Australia a ministerial statement which is not wrongly anticipating the result of the Senate Committee inquiry. I believe that the Senate Committee inquiry, as Senator Georges and Senator Jack Evans have said, is important. I agree with that and I look forward to the result of its work. In the meantime, this nation has been lambasted around the world to such a degree that in one short period our embassy in Brussels received over 11,000 printed cards, mainly from school children, in relation to stopping the bloodthirsty killing of kangaroos in Australia. The sort of material that has been disseminated is false and I believe it is time for us to say: 'Look, we are a responsible country. We have rules about this. Maybe the rules are not perfect. We have a Committee looking at it. If there is need for changes, no doubt that Committee will make recommendations for the changes'. I believe that the questions are not really in dispute. The basic questions are not about whether there ought to be culling at all, but whether the culling is done by a method which is acceptable to modern society and whether it endangers the conservation of species. Those are questions which obviously can do with further examination. I look forward to that further examination. I go back to the initial point. I do not think that it is justifiable for the World Wildlife Fund to use absolutely misrepresentative material to justify a campaign which would paint Australians as some of the most inhumane, disgraceful people to live on this earth. It is highly desirable for us to defend ourselves against that accusation and show that we are acting responsibly, that we have a Committee, that we are expressing some concern and that we will do something about the matter if something is found to be necessary. Question resolved in the affirmative. The PRESIDENT —Before I call Senator Cook, I should point out that he will have only three minutes in this debate before the time for debate expires. Senator COOK(Western Australia)(5.10) —I move: That the Senate take note of the paper. In view of your statement, Mr President, I shall shortly be asking for leave to continue my remarks. The most significant thing that can be said about the sixth annual report of the Industrial Relations Bureau is that it is the last report of the IRB. The IRB was, mercifully, put out of operation last year by one of the first industrial relations Acts of this Government-legislation to transfer the functions of the IRB, not wholly but in part, in terms of the inspectorate, to a newly reconstituted arbitration inspectorate within the Department of Employment and Industrial Relations. Thus the end of the IRB was sounded. The IRB was established under the Fraser Government and it is identified with that sad period in Australian industrial relations history when confrontation was the main theme in industrial relations rather than trying to find a way of negotiating the settlement of disputes. It is important to note that despite the police-type role that the IRB had set out for itself under the Fraser Government , most of its activities were insubstantial in the end. If one peruses the list of those activities, one appreciates that the goals that the former Government boldly proclaimed for the Bureau were never realised. Thus it demonstrates that the police state mentality of industrial relations is a mentality that will never work. That mentality takes the view that one should deal with the effects of an industrial dispute rather than get to its cause. It believes that working men and women who argue or take action for a particular goal which, in sum, comes down to working out how the cake is fairly divided between contending forces, are if they do not comply with certain rules and regulations, acting as though they were criminals. It is important to note that at the time of this last report of the IRB the Hawke Labor Government, by the introduction of a prices and incomes accord, has set the macro-framework for industrial relations correctly. It has brought the cause of industrial disputes-matters that affect wages, prices, taxes and the social wage; that is, the sum of items that add up to living standards-within the framework of negotiation through the prices and incomes accord. That is at a macro-level. At a micro-level, the Government has taken steps through the National Labour Consultative Council to hasten the implementation of industrial democracy so that, on a plant by plant basis, workers who have genuine grievances and managements that have genuine concerns can be brought together in an area of some harmony and dispassion in order to work out what is the best course in those circumstances, each for the other. I seek leave to continue my remarks later. Leave granted; debate adjourned. The PRESIDENT —Order! The time for this debate having expired, I now call on the next business. Senator CHIPP(Victoria-Leader of the Australian Democrats) —by leave-I raise a point of order, Mr President. It follows on what Senator Harradine has had to say. Before the matter of urgency was discussed earlier today, the Whips put out a speaker list on which there were eight speakers. I was present during the speeches of the first five of them, but then I left the chamber temporarily to receive a phone call during the speech of the fifth speaker. The question was put forthwith. The last three speakers did not rise. Apparently there was some agreement between the Whips that those speakers would drop out. I am not alleging collusion, or whatever; I am just saying that I certainly would have called for a division on that question. Australian Democrats wanted to call for a division. Senator Harradine was disadvantaged. When we have a speakers list officially put out by Whips' offices, and suddenly three speakers do not appear, it would help the smooth running of this place if in future the Democrats and Senator Harradine could be informed of that fact so that we can adjust our schedule accordingly. I am not alleging any improper practice. It was just an unfortunate occurrence this afternoon. But I suggest that course for the future. The PRESIDENT —I should like to point out that Senator Chipp's point was not really a point of order; it was merely a statement. I think that anyone else who wishes to speak should obtain leave to do so. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I should like to clarify the position. During the debate I indicated to Senator Chipp that there would be discussions between the Whips, because the Opposition was quite prepared to see a shortening of the debate because of the great amount of Government Business which was there. I understand that there was a discussion between the Whips and it was agreed that the debate would, thereby, be shortened . It would have been the Opposition's preference, too, to see a vote on this matter. But the only way in which a vote could be taken now would be if the matter were recommitted for a vote. I am quite prepared to test the Senate by saying to the Government: 'All right, in keeping with past practice, let us recommit the motion and vote'. I seek leave for that to be done. The PRESIDENT —Is leave granted? Senator Grimes —No. Perhaps I may explain why and make another offer. Senator CHANEY —Perhaps I may finish my statement. The position was that there was a clear indication from the Government benches that Government senators supported the motion. I thought that the Attorney-General (Senator Gareth Evans) -in a rather churlish but otherwise straightforward way-indicated that he agreed with the substance of the motion. Senator Sibraa did the same. Senator Chipp made it very clear that he was opposed to it. Senator Chipp was not present, for reasons that he has outlined, when the division was called- Senator Chipp —No division was called. Senator CHANEY —Obviously, no member of the Opposition was going to vote no, nor was any member of the Government going to vote no, because it is clear that all members of the Government support the views contained in the motion. Senator GRIMES(Tasmania-Minister for Social Security) —by leave-I am aware that there was a discussion between the Government and the Opposition on this matter and that the debate was foreshortened, even though I was not part of it. I can understand Senator Chipp's concern about the matter; but if a division were to be called for, honourable senators should have been present to call for it. However, as I gather that the problem is that the Australian Democrats wanted to record their vote against the motion, as a simple and short way out of the difficulty we could give them leave to have their opposition to the motion recorded in the Journals of the Senate without causing a great fuss. Senator Chaney —I think that we should give such leave to anyone else who has opposition to the motion, by the same token. The PRESIDENT —Is leave granted for that course of action to be taken? Senator Chaney —Provided, Mr President, that it is a general provision which can be made available to all honourable senators. Senator Georges —Let us have the vote rather than fiddling around. The PRESIDENT —Order! There being no objection, leave is granted. Will you move the motion, Senator Grimes? Senator Grimes —I do not need so to move, Mr President. I just offered to give the Democrats leave to have their opposition recorded in the Journals of the Senate. The PRESIDENT —All right. Senator Chaney —I offered to give leave to members of the Government who have the same- The PRESIDENT —Order! I call Senator Chipp. Senator CHIPP(Victoria-Leader of the Australian Democrats) —In pursuance of leave being granted to me as Leader of the Australian Democrats to record in the Journals of the Senate the votes of my colleagues, I hereby record that Senators Chipp, Macklin, Jack Evans and Mason would like their votes recorded against the matter of urgency put forward earlier today. I thank the Senate for its indulgence. Senator GARETH EVANS(Victoria-Attorney-General) —I present an exposure report for the consideration of senators and members from the Joint Select Committee on Parliamentary Privilege, together with minutes of proceedings and the transcripts of evidence from 3 August 1982 to 10 November 1982. I seek leave to make a statement in connection with the report. Leave granted. Senator GARETH EVANS —The Committee has decided to present this exposure draft so that it may obtain the views of senators and members, and others, on the wide range of recommendations contained therein. The Committee will then be able to take such reactions on board before presenting a final report, which it hopes to do early in the Budget sittings. I seek leave to incorporate the remainder of my tabling statement in Hansard. Leave granted. The statement read as follows- I should however at this stage provide the Senate with some brief background to the exposure draft, and note some of the more significant recommendations. The inquiry was initiated to review and report whether changes were desirable in: The law and practice of parliamentary privilege, The procedures by which alleged breaches of parliamentary privilege may be raised, investigated and determined, and The penalties that may be imposed for breach of parliamentary privilege. The Committee received a wide range of submissions, and conducted a program of public hearings at which issues were discussed with interested persons. In addition, the Committee conducted a seminar attended by presiding officers and clerks of the State legislatures which enabled a good discussion to take place with persons well versed in the subject. The Committee also sought information from a representative cross section of overseas parliaments and some very useful material was obtained. The Committee, which had been originally appointed in the Thirty-second Parliament had not completed its inquiry at the dissolution of that Parliament and was re-appointed in the new Parliament. Mr Spender was invited to continue as Chairman, notwithstanding the change of Government, in order to maintain continuity in the Committee's operations. He has made a major contribution, along with the Secretary, Mr Bernard Wright, and other seconded Senate and House officers, for which the Committee is particularly grateful. I turn now to key recommendations of the exposure draft. Before doing so, I mention that many of these issues are very much a matter of weighing competing considerations, and that on some of them there are differing views within the Committee, which are noted in the draft report. The main recommendations of the exposure draft-on all of which the Committee would welcome responses within the next month-are: That the penal jurisdiction be retained in parliament. Senators will realise that there have been a number of suggestions that the capacity to deal with breaches of privilege and contempts should be transferred to the courts or some other tribunal. However after careful consideration the Committee believes that the arguments in favour of retaining the exercise of the penal jurisdiction within parliament outweigh the considerations for transfer. That the penal jurisdiction should be exercised as sparingly as possible and only when necessary to prevent substantial interference with the work of the Parliament, that is, it should never be exercised in connection with complaints of a trivial character. That the Houses adopt a set of guidelines which will indicate those matters which may be regarded as contempts. This action would serve to advise the community of Parliament's thinking but would not result in Parliament losing its capacity to take action against matters which may not fall under any particular heading. That the capacity for Parliament to take action against a person for what is known as a defamatory contempt should be abolished, or failing that defences, including that of truth, or an honest or reasonable belief in the truth of the statement, should be available. The exposure draft proposes: That complaints should be raised in writing with the Presiding Officer, instead of the present early public raising, with the Presiding Officer subsequently giving a decision in his House if a matter was to be accorded precedence. That hearings of the privileges committees, and the rights of parties involved in inquiries, should be reconstituted to meet requirements of natural justice, in particular, that there should be a right to full legal representation. That the Houses should, by statute, be given the powers to commit to prison for a period not exceeding six months and to impose fines. That, where it is proposed that a penalty be imposed, seven days notice be required. That the power to expel members be abolished. That where a person is committed, the resolution and the warrant should each state the grounds of the commitment, thus permitting a very limited involvement by the High Court which would ascertain whether there was, in fact, such a ground. The exposure draft proposes: An expanded definition of proceedings in Parliament, which would, inter alia, provide that letters from members to Ministers would enjoy absolute privilege. That there be a limited right of reply to non-members who believe that they have been subjected to unfair or groundless attack in Parliament. The proposal is that such persons could refer complaints to the privileges committee of the relevant House. There would be certain ground rules, for example, that the complaints should be confined to factual answer and not contain an attack on the member involved. The committees would be able to recommend that the rebuttal be incorporated in some form in the parliamentary record. That the laws of qualified privilege as they apply to reports of proceedings of the Parliament be modified to produce uniformity throughout Australia in the publication of fair and accurate reports of proceedings. That the practice of requiring leave to be granted for reference to be made to parliamentary records-usually Hansard-in court proceedings be abandoned and that , for the limited purpose only of enabling it to be proved as a fact that certain statements had been made, permission be given for reference to be made without leave, without in any way permitting Article 9 of the Bill of Rights to be infringed. The exposure draft proposes: That Parliament enact a witnesses protection Act, which would make it a statutory offence to threaten, punish or injure, or attempt to do so, a person on account of evidence given or to be given before a parliamentary committee. Witnesses would also be given a right to initiate civil proceedings for damages. That a detailed series of guidelines for the conduct of ordinary committee, that is, non-privilege, inquiries be adopted. These contain detailed proposals for the rights of witnesses, which, as senators will realise when they study them, are not very dissimilar to the practices already followed by the Senate. Mr President, there are other recommendations, however it is not appropriate to go into any further detail in this statement. I am sure you will agree, however, that there can be few subjects of greater importance to the Parliament generally and to individual senators and members. I conclude by again mentioning that in presenting this exposure draft, the Committee hopes that senators and members will find time to examine it and give the Committee the benefit of their views so that they can be taken into consideration in the preparation of a final report. Senator PETER RAE(Tasmania) —by leave-I simply wish to indicate that there will be circulated to all honourable senators from two of the members of the Joint Select Committee on Parliamentary Privilege who are from this chamber a memorandum raising a number of matters which are believed by Senator Jessop and me to be matters of importance in relation to the Senate and we invite honourable senators' attention to those matters when they are considering the report that the Attorney-General, Senator Gareth Evans, has just tabled. Senator GEORGES(Queensland) —I table additional information received by Estimates Committee F and seek leave for it to be incorporated in the Hansard record of the Committee's proceedings. Leave granted. Senator GEORGES —The extra information is that asked of the Department of Aviation. I made some comments about the delay in the provision of that material but I am glad to say that it has arrived and it is not necessary for Estimates Committee F to meet again. Motion (by Senator Gietzelt) agreed to: That in accordance with Section 5 of the Parliament Act 1974, the Senate approves the following proposals contained in the report of the Joint Standing Committee on the New Parliament House presented to the Senate on 7 June 1984, namely: The construction of formal seating at the Australian National Gallery amphitheatre. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Gietzelt) read a first time. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(5.25) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill is an omnibus Bill which amends seven Acts. The Acts are: The Social Security Act 1947; the Social Security Legislation Amendment Act 1983; the Repatriation Act 1920; the Aged or Disabled Persons Homes Act 1954; the Compensation (Commonwealth Government Employees) Act 1971; the Handicapped Persons Assistance Act 1974; and the Seamen's Compensation Act 1911. The main amendments to these Acts introduce important initiatives and correct significant anomalies in the legislation. A number of other amendments are of a law revision kind, up-dating and simplifying the legislation and removing minor anomalies and deficiencies. I will address the more important measures directly. Honourable senators have been provided with an explanatory memorandum dealing with those measures and the amendments of relatively less importance. SOCIAL SECURITY ACT 1947 The Bill overcomes several important anomalies in the Social Security Act which currently affect unemployment and sickness beneficiaries and others. First, the Bill removes the bar whereby supplementary-rent-allowance may not be paid to a sickness beneficiary without dependants who is hospitalised. Sickness beneficiaries renting privately are usually required to pay rent while in hospital to secure continued tenancy. The Government considers that ceasing to pay supplementary allowance to such sickness beneficiaries can cause hardship and may contribute to homelessness. The change will ensure equity with hospitalised pensioners in similar circumstances who currently receive rental assistance. Secondly, under current income test arrangements serious anomalies exist where both spouses of a married couple qualify for unemployment or sickness benefit in their own right, or one spouse is a beneficiary, and the other is a pensioner. In the first case, if their combined income is over the benefits income test ' free area', the combined income is taken into account twice. Where one spouse receives the combined married rate of benefit, however, the combined income is taken into account only once. The total benefit received where both qualify can consequently be significantly less than where only one spouse receives the combined rate of benefit. Similarly, in the second case, the rate paid to the person receiving unemployment or sickness benefit is calculated in such a way that the assistance that should be given to the couple by the less strict pension income test, is effectively cancelled. To remove these anomalies, the Bill provides that, in the case of a married beneficiary whose spouse is in receipt of a pension or benefit, only half of the combined income which would otherwise reduce the amount of benefit payable, will be taken into account. Half of the combined income will, of course, also be taken into account in determining the spouse's pension or benefit entitlement. This ensures that the income test operates fairly for all married beneficiaries, regardless of whether the spouse qualifies for benefit or pension in his or her own right. Thirdly, where a person is entitled to a lump sum payment upon termination of employment and the employer pays the person by instalments, rather than in a lump sum, each instalment is currently taken into account under the benefits income test. This significantly disadvantages the person compared with other former employees who receive a lump sum upon termination of their job. The entitlement of the latter people to unemployment or sickness benefit generally is not affected as the lump sum payment is usually made before or during the waiting period for benefit. Under the Bill, instalments of a lump sum due to a person upon termination of employment will be regarded as received by the person on the date the employment ceased. Those instalments will usually not be included as income for benefit purposes. Fourthly, payment of unemployment benefit may be postponed at present for a period of between six and 12 weeks if the applicant's own actions caused his unemployment and he did not have a good and sufficient reason for his actions; if his unemployment is due to his misconduct as a worker; or if he fails without good and sufficient reason to accept a suitable offer of employment. Situations have arisen where application of the compulsory six weeks postponement period has resulted in persons suffering undue hardship. For example, a man with a wife and three children who is dismissed by his employer for what might have been some minor misdemeanour, can suffer the double penalty of losing his job and losing his benefit for six weeks which, in effect, amounts to a fine of more than $1,000. The Bill will eliminate this compulsory minimum period. It will enable the Director-General of Social Security to apply an appropriate period of postponement, having regard to all relevant matters in an individual case. The 12 weeks maximum period will remain. Fifthly, the Bill will extend eligibility for widow's pension to any woman who is the innocent party to a bigamous marriage and is deserted by the other party. This change follows an unsuccessful appeal by a woman who was not entitled to a widow's pension in these circumstances. The Government responded to the particular case by approving an act of grace payment, and the woman is to receive payment equivalent to a class B widow's pension until she acquires a legal entitlement to a pension under the Bill. Sixthly, another anomaly concerns remote area allowance. This allowance, which came into effect on 1 May 1984, can be paid to residents of income tax zone A who are in receipt of a pension, benefit, sheltered employment or rehabilitation allowance. At present, where a married pensioner or beneficiary is temporarily absent from the remote area for more than eight weeks, remote area allowance ceases, but the allowance, together with additional allowance for any dependent children, continues to be payable to the person's spouse where the spouse is also a pensioner or beneficiary and remains in the remote area. However, in the case of a married unemployment or other beneficiary who receives additional benefit in respect of a spouse, no allowance is payable where the beneficiary is temporarily absent from the remote area for more than 8 weeks, although the spouse remains in the remote area. This is because the spouse in this situation is not paid the additional benefit in his or her own right. This anomaly is overcome under the Bill by entitling the married beneficiary to remote area allowance in respect of his or her spouse in those circumstances, thereby ensuring fairness with pensioners in this situation. The allowance will be paid at the single rate of $7 a week for a dependent spouse, together with additional allowance of $3.50 a week for each dependent child. The Bill makes similar provision for a married person receiving a sheltered employment or rehabilitation allowance, where the rate of that allowance includes an amount for a spouse, and the person is temporarily absent from the remote area for more than eight weeks but the spouse remains in the remote area. The Bill also removes the requirement that children be physically present and have their usual place of residence in the remote area, in order to attract payment of additional allowance. This change is made because parents in remote areas can still incur extra costs in respect of their children although the children are away from home. However, the children must still be in Australia before additional allowance can be paid. The Bill also clarifies that remote area allowance is payable during the first eight weeks of any temporary absence from the remote area, provided that it is the person's usual place of residence. Seventhly, the Bill will provide for the payment of supplementary-rent- assistance or allowance to pensioners and sickness beneficiaries who live in their own caravan or house-boat and pay for the right to use a site. This will be achieved by including the payment of such on-site costs in the definition of 'rent'. Eighthly, a number of changes are to be made to conform with the spirit of the Sex Discrimination Act 1984. For example, references to 'dependent female ' in the context of age, invalid, wives' and spouse carers' pensions, and unemployment, sickness and special benefits, are to be replaced by the neutral, non-discriminatory phrase 'de facto spouse'. Other changes are to be made in part because the existing provisions are discriminatory. One provision, section 22, preventing the grant of an age pension in circumstances reflecting concepts of matrimonial fault which have been of less significance since the Family Law Act, is to be removed. The Bill also will remove the provision whereby additional benefit may be paid to an unmarried male unemployment or sickness beneficiary in respect of a woman substantially dependent on him and keeping house for him and his children. The provision, which was introduced in 1947, became largely redundant when provisions enabling a de facto wife to be treated as the spouse of a beneficiary were introduced in 1974. The current provision is also discriminatory against beneficiaries who are women and have a male housekeeper. The existing entitlement of any beneficiaries who might be receiving additional benefit in these circumstances, will be preserved. Finally, the opportunity has been taken by means of this Bill to make a number of machinery amendments which will enhance the readability of the Social Security Act and will help to improve administration. One such measure I will mention deals with current provisions which assist people to qualify for pensions or family allowance on residency grounds. Those provisions rely on the definition of 'resident of Australia' in the Income Tax Assessment Act 1936. This in turn requires the Commissioner of Taxation to be satisfied about certain matters. It is administratively inefficient to seek the decision of the Commissioner in these cases, especially if much of the relevant information is held by the Department of Social Security. The Bill will incorporate relevant parts of the taxation definition in the Social Security Act, with the Director- General of Social Security having the power to make decisions. Some of the proposals in the Bill involve small costs, while others involve small savings. The net result is likely to be negligible additional costs. SOCIAL SECURITY LEGISLATION AMENDMENT ACT 1983 The Bill will make two minor changes: The Aged or Disabled Persons Homes Act was changed last year to provide hostel care and personal care subsidies, with effect from 1 January 1984. The amendment enables administrative arrangements made before that date to have legal effect. The effect of an amendment last year was to allow payment of family income supplement to the wife rather than to the husband, where both were eligible in respect of a child. However, the amendment was deficient in that payment could not be made to the wife until the commencement of a new six-monthly allowance period on or after 1 May 1984. The Bill will rectify this situation so that payment can be made to the wife from 1 May 1984. REPATRIATION ACT 1920 The Bill will amend the Repatriation Act to bring Provisions in that Act dealing with remote area allowance, Government rent, rent and supplementary assistance, into line with the changes made to the Social Security Act in the Bill. In relation to remote area allowance, the Bill also provides that: A married service pensioner and spouse will be treated as single people, with each of them able to receive the higher single rate of allowance, where they are unable to live together for an indefinite period as a result of an illness or infirmity and their living expenses are greater than they would otherwise be; and payment of the allowance in respect of the same child to more than one person, will be prevented. This brings those provisions into line with the existing provisions of the Social Security Act. The Bill will also change the definition of 'Benevolent home' in the Repatriation Act consequential upon the substitution of a new definition in the Social Security Act. The overall costs of these measures are estimated to be negligible. AGED OR DISABLED PERSONS HOMES ACT 1954 As part of the Government's proposals to improve the current imbalance between institutional and community care for the frail aged and disabled, our election policy included introducing incentives for the provision of suitable short-term respite accommodation for people being cared for in the community, so that their carers may have a break from the rigours of caring for them. The 1981 Australian Bureau of Statistics Survey of Handicapped Persons in Australia showed that more than three times as many severe to moderately handicapped people aged 65 or over lived at home as live institutions. Yet current community services for respite care are minimal. When care support is temporarily reduced or removed, the only alternative may be premature admission to institutional facilities or acute hospitalisation, often to costly private hospitals. The Government has decided to encourage the provision of respite care services in subsidised hostels, and the occupancy of such beds, by making a new subsidy available. Under the existing arrangements, a subsidy is provided to an organisation providing hostel care services or hostel care and personal care services to eligible persons at a relevant facility. The calculation of the subsidy is based upon the number of eligible persons receiving approved services at a facility on a prescribed date, which was 17 January 1984 and each twenty-eighth day thereafter. This Bill provides for the new subsidy as follows: $10 per week for each respite care bed occupied by an eligible person or persons for at least 1 day, but not more than 14 days, in any 4 week period ending on a prescribed date; $50 per week for each respite care bed occupied by an eligible person or persons for more than 14 days in any 4 week period ending on a prescribed date. The amendments will operate from a date specified by notice in the Gazette. This day will be a prescribed date. The Government considers this initiative will increase the options of frail aged and disabled people who wish to live in the community rather than go into hospitals and other institutions permanently, and assist in relieving the burden of community care which falls on relatives and friends. It is not possible to estimate accurately the likely number of respite care beds progressively becoming available, or the pattern of occupancy. The number of beds that will become available is expected to rise progressively over the next three years to an estimated 1,350 beds. The cost of this provision under present arrangements will also rise progressively, and by year 3, assuming a take-up at the present personal care subsidy rate, could cost some $3.5m in that year. However, the proposed measures are not expected to lead to the revision of anticipated Budget outlays in the current financial year. COMPENSATION (COMMONWEALTH GOVERNMENT EMPLOYEES) ACT 1971 The Bill will make a number of minor changes: Certain provisions are to be amended to bring them more into line with the spirit of the Sex Discrimination Act 1984. Dependants of a deceased employee and persons dependent upon an employee who is totally incapacitated for work, are to include fathers-in-law and certain de facto spouses of female employees. Under the present provisions, mothers-in-law and certain de facto spouses of male employees are included. The estimated cost of these changes is not expected to exceed $100,000 in a full year. Secrecy provisions are to be inserted designed to protect the confidentiality of the affairs of person to whom the Act relates. These provisions are based upon section 17 of the Social Security Act 1947. Penalties are provided for offences against these provisions. In relation to the provisions preventing double payments where there is an entitlement to compensation under the Act, and an employee recovers common law damages, a component of damages awarded which does not relate to the injury for which compensation is payable, is to be disregarded. Common examples of such components of damages awarded are damages for pain and suffering and for loss of amenities of life. The present provisions of the Act have a broader operation than this. It is not possible to estimate accurately the costs of this proposal, in part because of differing administrative treatment of the current provisions. The Commonwealth, in effect, will forgo some windfall receipts. The present bar on the payment of compensation under the Act is to be retained where there has been a payment of compensation under worker's compensation legislation of a State, Territory or another country. However, the bar is to be removed with other forms of compensation. That compensation will be treated in a similar manner to common law damages. Under the change, it will be possible for an employee to receive compensation under the Act as well as, for example, no fault motor accident compensation or criminal injuries compensation. Double payments are prevented where that other compensation relates to an injury to the employee for which compensation is payable under the Act. In practice, there are no costs as it ratifies current arrangements. HANDICAPPED PERSONS ASSISTANCE ACT 1974 Under current provisions, a subsidy is payable for maintenance of premises which are not rented, where they are used by an eligible organisation to provide a prescribed service, such as sheltered employment. The Act requires an approval of a maintenance project to be given in advance. The amendment enables a maintenance project to be approved after the project is undertaken. This brings maintenance subsidies into line with other forms of subsidy under the Act, such as capital and equipment grants. It means that maintenance required in an emergency can be undertaken and subsequently approved . In practice, there are no costs as the change validates current arrangements. SEAMEN'S COMPENSATION ACT 1911 The Bill makes a number of minor changes. Of these, I will refer only to amendments to certain provisions to bring them more into line with the spirit of the Sex Discrimination Act 1984. For example, the scope of the definition of a ' member of the family' is to be extended to include a father-in-law as well as a de facto spouse of a female seafarer. The costs of the amendments are estimated to be negligible. Mr President, this Bill provides for several important new developments, and for the correction of important anomalies which can cause hardship to certain groups in the community. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Gietzelt) read a first time. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(5.27) —I move: That the Bill be now read a second time. I seek leave to incorporate the second reading speech in Hansard. Leave granted. The speech read as follows- Mr President, this Bill continues the practice of introducing an omnibus Bill into each sittings of the Parliament to make a large number of non-contentious amendments. With the concurrence of the Senate I will incorporate in Hansard a supplementary statement explaining in detail many of the changes to the various Acts which are to be made by this Bill. Not every amendment being proposed by this Bill requires detailed reasons for the change; this will be self-evident from the provision itself, or the detailed explanatory memorandum circulated with the Bill. The supplementary statement, therefore, confines itself to addressing the more substantial amendments. I commend the Bill to the Senate. Supplement to Second Reading Speech ABORIGINAL LAND RIGHTS (NORTHERN TERRITORY) ACT 1976 The purpose of these amendments is to allow for the appointment of such additional Aboriginal Land Commissioners as are required to conduct the hearings into land claims made by Aboriginals pursuant to section 50 of the Act in the Northern Territory. The appointment of a second Aboriginal Land Commissioner, at this time would reduce the delays in the hearing of land claims and the submission of reports by a Commissioner. That will allow the Minister for Aboriginal Affairs to deal with matters contained in those reports sooner than under present arrangements. ADMINISTRATIVE APPEALS TRIBUNAL ACT 1975 The amendment of the Administrative Appeals Tribunal Act 1975 applies the Judges' Pensions Act 1968 to full-time presidential members of the Tribunal. The proposed new section 16 does not apply to presidential members who, before their appointment, were contributors to the Superannuation Fund 1976. However the section will allow such members to elect, within 3 months of their appointment, to cease being eligible to contribute under the Superannuation Act 1976, thereby bringing themselves within the operation of section 16. Where a presidential member makes an election under section 16 and no pension is payable to him or his dependants, section 16 provides that he is entitled to a lump sum benefit based upon his contributions to the Superannuation Fund. New section 16 prevents a person from receiving two pensions, or other benefits, as a result of that person having, before his appointment as a presidential member, been in government employment and entitled to a pension or retiring allowances in respect of that employment. AIRPORTS (BUSINESS CONCESSIONS) ACT 1959 The proposed amendment of section 15 of the Act will allow the Minister to delegate to a prescribed person the power to grant an authority under the Act for the supply or sale of alcoholic liquor. It is intended that the regulations made under the Act will prescribe only persons holding senior departmental positions. Applications to sell or supply liquor are frequent and the Minister depends on the regional staff of the Department to carry out investigations and make recommendations. The proposed delegation of powers to senior officers of the Department will allow for greater administrative convenience in processing the large number of applications. APPLE AND PEAR STABILIZATION ACT 1971 The purpose of the amendment to the Act is to enable money held in the Beurre Bosc Stabilization Fund to be paid to the Australian Apple and Pear Corporation- AAPC-and for such money to be held in trust for expenditure on research into the production and marketing of pears approved by the AAPC's Apple and Pear Research Foundation. Under the present provisions of the Act money in the Fund, amounting to some $ 18,600, should be paid to those growers who contributed to the Fund in the 1971 and 1972 seasons. However, it has not been possible to identify these growers and representative organisations in the pear industry have agreed to the transfer of the money to the AAPC for research purposes. AUSTRALIAN TOURIST COMMISSION ACT 1967 The Bill will increase the number of Commissioners on the Australian Tourist Commission from ten to twelve. The Government, aware of the economic, social, regional and employment potential of tourism, significantly increased the budgetary allocation of the Australian Tourist Commission, Australia's national tourism promotional agency, in 1983-84. The Commission's operations have, accordingly, expanded into promotional campaigns and operational activities, in both domestic and overseas markets, on a scale and complexity not previously possible. A broader range of expertise on its governing body is therefore appropriate and the proposed amendments will make it possible to make appointments from complementary commercial and professional sectors. AUSTRALIAN WINE AND BRANDY CORPORATION ACT 1980 The proposed amendment of section 14 of the Australian Wine and Brandy Corporation Act 1980 will permit the Minister to extend the present period of office of a member of the Corporation for a period not exceeding 2 years. There are a number of reforms proposed for membership of the Australian Wine and Brandy Corporation resulting from the review of the institutional arrangements of the wine industry. An extension of the term of office of existing members will avoid the need for the election and appointment of new members, to serve for only a short term until the proposed reforms are implemented. BROADCASTING AND TELEVISION ACT 1942 The amendments made by the Bill repeal certain provisions of the Broadcasting and Television Act which are obsolete, or have no application to broadcasting or television stations regulated under the Act. COMMONWEALTH INSCRIBED STOCK ACT 1911 The amendment of this Act removes the right to issue bearer securities in respect of new loan raisings. In addition, it will allow two further classes of investor, trustees and unincorporated bodies, to hold Commonwealth securities in inscribed form. There are several advantages in the proposed amendments. One is the substantial reduction in the administrative costs associated with the issue of bearer securities. Another is the concern that some investors choose to hold their inscribed stock in bearer form as a means of evading either income tax and/or the upper limit of $200,000 on holding by any one investor in Australian Savings Bonds. COMPLAINTS (AUSTRALIAN FEDERAL POLICE) ACT 1981 The purpose of the amendments proposed to the Complaints (Australian Federal Police) Act 1981 is to ensure the effectiveness and the consistency of confidentiality provisions under the Act, while providing scope for the disclosure of information in appropriate cases. The amendments extends the current restrictions on disclosure to all members of the Australian Federal Police and their support staff who may, in the normal course of their employment , become privy to the details of an investigation or inquiry under the Act. The amendments will also vest the Commissioner of Police with a discretion to disclose information about an investigation or inquiry to persons or the public. CORAL SEA ISLANDS ACT 1969 This Act defines the Coral Sea Islands Territory as comprising all islands within a given geographic area. That geographic area overlaps the maritime delimitation jurisdiction boundaries agreed with France under the Torres Strait Treaty and will also encroach upon similar boundaries arising from a proposed treaty with the Solomon Islands. The proposed amendments will re-define the boundaries of the geographic area used to define the Coral Sea Islands Territory so as to contain all the islands which comprise the Territory, whilst avoiding any overlap with current or proposed maritime jurisdiction delimitation boundaries. CUSTOMS ACT 1901 Of the several amendments of this Act that deserve specific mention one is the removal of references to ''Comptroller'' and its substitution with a reference to ''Collector''. This will have the effect of eliminating the need for a considerable number of delegations in respect of the determination of the value of imported goods for the purposes of the Customs Tariff Act 1982. New section 273GAA will provide for the notification of certain decisions taken by the Minister, the Comptroller or Collector, as the case may be, under a large number of provisions in the Act including the reasons for the decision and refer to evidence or material upon which the decision is based. New section 273GAB makes similar provisions for the notification of certain decision relating to depot licences. DEFENCE SERVICE HOMES ACT 1918 There are several amendments designed to clarify definitions in the Act which specify the classes of persons who are eligible for Defence Service Homes benefits. The amendment of section 50B will bring audit reporting requirements of the Act into line with legislation of other Commonwealth statutory authorities. DISTILLATION ACT 1901 The purpose of the amendments of this Act is to simplify and modernise a number of definitions in the legislation following a detailed review of legislation relating to wines and spirits undertaken jointly by the Food Standards Committee of the National Health and Medical Research Council and Commonwealth Government Departments. The amendments will bring the Distillation Act into harmony with the new National Health and Medical Research Council Standards for wines and spirits that are being adopted by State Governments. The changes are the first significant reform in this area since 1906 and the Government expects that the industry will be able to more readily comply with the modernised and simplified form. EXCISE ACT 1901 The purpose of the amendments of this Act is to insert new provisions relating to the making of regulations and departmental by-laws. The proposed provisions are similar to the regulation and by-law provisions of the Customs Act. Amongst other things the proposed provisions prohibit the making of a by-law imposing duty where the effect of the by-law is to retrospectively increase the rate of duty payable on goods entered for home consumption. At present the Prefatory Notes to the Schedule of the Excise Tariff Act 1921 includes a definition of 'Departmental By-law' to mean by-laws made by the Minister and published in the Gazette. Legal advice confirms that that definition is part of the Act however, it is considered desirable to place the Minister's power to make by-laws beyond question by including in the body of the Excise Act. FAMILY LAW ACT 1975 One category of proposed amendments to the Family Law Act arise out of the need to remedy the unsatisfactory situation of States of the United States of America being declared under the Regulations to be ''countries'' for the purpose of reciprocal maintenance enforcement. In the United States and Canada, the constituent States and Provinces, respectively, exercise legislative power in relation to family law. Reciprocal arrangements have been entered into with only some of these States and Provinces. Accordingly the word jurisdiction has been substituted for country. That word imports more clearly the notion of a geographical area subject to the authority of one legislature or one body of law . The amendments of paragraph 37A (1) (n) makes it clear that Rules of Court may prescribe certain relatively minor powers of the Family Court which may be exercised by Registrars of the Court. The amendments to section 44 restore the power of a Family Court of a State to nominate a suitable person, or organisation, to assist the parties of a marriage of less than 2 years duration who are contemplating divorce to consider reconciliation. That power was formerly contained in sub-section 14 (6) of the Act and was unintentionally deleted by the Family Law Amendment Act 1983. FEDERAL COURT OF AUSTRALIA ACT 1976 New sub-section 24 (1A) provides that an appeal does not lie to the Court from an interlocutory judgement except by leave of the Court or a Judge of the Court. At present an appeal lies to the Court as of right from an interlocutory judgment. Proposed new sub-section 25 (2) makes it clear that a single judge of the Court has power to determine an application for an extension of time within which an appeal to the Court may be instituted. At present the Act can be interpreted as requiring this to be determined as part of the Court's appellate jurisdiction by a Full Court. The amendments included in new section 35A will permit Registrars and Deputy Registrars of the Federal Court of Australia to exercise the powers of the Court relating to 'pre-trial' procedural matters and at the direction of the Court or a judge. The exercise of any of these powers would be subject to review by the Court. The effect of the proposed amendments will be to achieve a more effective use of judicial time by enabling judges to devote more time to substantial defended matters. JUDICIARY ACT 1903 Sub-section 39 (2) of the Act invests State courts with federal jurisdiction subject to certain conditions and restrictions. Paragraph 39 (2) (d) of the Act presently requires federal jurisdiction of State Courts of Summary Jurisdiction to be exercised by a Stipendiary or Police or Special Magistrate, or a Magistrate of the State who is specially authorised by the Governor-General to exercise such jurisdiction. The proposed amendment will extend the class of persons who may exercise the federal jurisdiction of a State Court of Summary Jurisdiction to include an arbitrator on whom the jurisdiction, or part of the jurisdiction of the Court has been conferred by a prescribed State law. The exercise of such jurisdiction will be limited to the jurisdiction that is conferred by State law. The proposed amendment of sub-section 44 (2) of the Act will enable the High Court to remit to the Federal Court matters arising under section 75 (iii) of the Constitution. MANAGEMENT AND INVESTMENT COMPANIES ACT 1983 There are 2 changes of substance to the Act made by the Bill. Under existing section 29 the Management and Investment Companies Licensing Board may certify a business entity as an eligible business entity provided the business entity fulfils certain criteria. There was doubt whether all the criteria specified had to be fulfilled by a business entity, or only a certain number had to be met. The original intention was that only 3 of the 5 criteria specified had to be satisfied by a business entity. The proposed definition of ''prescribed business entity'' clarifies the original intention. The proposed amendment of section 38 (5) will remove a potential conflict with the proposed amendments of the Income Tax Assessment Act. Under existing section 38 (5), it may be possible for a licensed Management Investment Company to issue shares for the full amount of its approved capital, but to issue these shares at a premium. However, under the proposed changes to the Income Tax Assessment Act there will be a tax deduction on the premium element for shares issued at a premium. As a result investors in Management Investment Companies may have been able to claim a tax concession for a larger amount than had been approved by the Management and Investment Companies Licensing Board. Proposed sub-section 38 (5) will provide that the amount of paid-up prescribed share capital and the amount in any share premium account of a Management Investment Company shall not exceed its approved capital. NATIONAL HEALTH ACT 1953 The Act is being amended to establish an internal review mechanism through which unsuccessful claimants under the Isolated Patients' Travel and Accommodation Assistance Scheme must pursue internal review before exercising their rights of appeal to the Administrative Appeals Tribunal (AAT). Under the internal review procedure a person dissatisfied with a decision may request the Permanent Head to review it. The Act is also being amended to remove the provision that Departmental officers be members of the Medical Services, Dental Services and Pharmaceutical Services Committees of Inquiry in each State. As investigations are undertaken by Departmental officers before members are referred to those Committees, it is considered inappropriate that officers also be members of the respective Committees. NAVIGATION ACT 1912 The amendments of the Navigation Act 1912 are intended to clarify certain provisions of the Act and to facilitate the administration of the Act. The amendments of section 392 and 394 of the Act are significant and result from an agreement reached by Commonwealth and State Transport Ministers to provide for penalties, in all Commonwealth, State and Territory Marine legislation, for a breach of the Convention on the International Regulations for Preventing Collisions at Sea. An element of the agreement is that offences will be dealt with summarily only. POSTAL SERVICES ACT 1975 The financial provisions of the Act are amended to place beyond doubt certain borrowing powers of the Australian Postal Commission. Legal advice is that although these powers already exist in law, there may be reasons to clarify these. A similar amendment was made to the Overseas Telecommunications Act 1946 in 1983. SPIRITS ACT 1906 The Spirits Act is being amended for the same reasons that I have outlined above in relation to the Distillation Act 1901. I should mention that these amendments do not alter the compulsory maturation requirements for rum. The Government has recently considered this matter and has decided to retain the compulsory maturation requirement for brandy, whisky or rum for the time being. However, the Government is to immediately examine this issue with a view to the abolition of these requirements in 3 to 4 years time. STUDENT ASSISTANCE ACT 1973 The amendments of the Student Assistance Act 1973, will partially implement the recommendations made by the Administrative Review Council (ARC) in its Report to the Attorney-General on the Student Assistance Review Tribunals. The principal effect of the amendments will be to enable a party to proceedings before a Student Assistance Review Tribunal (SART) to request a review of the SART's decision by the Administrative Appeals Tribunal (AAT). This in part implements the ARC's Recommendation 1. Recommended restrictions requiring leave to appeal have not be adopted. In accordance with the ARC's proposals, the right to a review by the AAT will be additional to, rather than in place of, the right to a review by a SART. While the AAT will, for the first time, have jurisdiction to review a decision made by another review body with full deliberative powers, the result will not differ in substance from the mechanism of internal reconsideration and review preceding a right of appeal to the AAT employed in other legislation. A number of amendments are proposed to improve the current procedures of SARTs in accordance with the ARC's other recommendations. In accordance with the ARC's Recommendation 2, it is proposed to amend section 28 of the Student Assistance Act to enable legal practitioners to appear before SARTs. Proposed sub-section 25 (1) implements Recommendation 3 by providing that a student who seeks a review by a SART should receive, before the hearing, copies of all material forwarded to the SART concerning the matter under review. This provision will be subject to proposed sub-section 25 (2), which provides that the Chairperson of a SART is not to release confidential material. Recommendation 5 proposed that the Minister's power under sub-section 6 (2) to make directions to authorized persons, i.e. to the original decision-makers, be clarified with regard to their application to the review body, i.e. to a SART. The Government's legal advice is that such directions do not bind a SART, and it is proposed to delete sub-section 6 (2). Recommendation 6 proposed that SARTs be given power to review a refusal of an authorized person to allow further time for the lodging of a request for reconsideration. Recommendation 7 proposed that authorized persons and SARTs be empowered to extend the time for an applicant to request a reference for review. A decision of an authorized person to refuse to extend the time limit for a request for reconsideration or review would be reviewable by a SART. The amendments implementing Recommendations 6 and 7 are confined to giving authorized persons discretion to accept a late request for review of a decision or a primary decision. There was no need to make special provision for a SART to extend time as recommended by the ARC as the Attorney-General's Department had advised that the Student Assistant Act already empowers SARTs to review refusals by authorized persons to extend the time limit for lodging requests for reconsideration. Recommendation 8 is implemented by proposed new section 22. This section will provide for the decision of an authorized person to be reconsidered by a senior authorized person. The Bill includes a definition of 'senior authorized person'. The amendments of the Student Assistant Act will not lead to any material increase in Government expenditure. There are currently some 200 SART cases a year and, on this basis, the number of additional AAT cases is expected to be about 15 annually. With Bills of this nature it is difficult to indicate what costs/savings are applicable overall and to quantify such costs/savings. There will be some saving associated with these amendments of the Commonwealth Inscribed Stock Act but it will not be very much. Debate (on motion by Senator Reid) adjourned. The following Bills were returned from the House of Representatives without amendment: National Crime Authority Bill 1984; National Crime Authority (Consequential Amendments) Bill 1984; and Copyright Amendment Bill 1984 Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate to this Bill. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(5.28) —I move: That in accordance with Section 5 of the Parliament Act 1974, the Senate approves the following proposals contained in the report of the Joint Standing Committee on the New Parliament House presented to the Senate on 7 June 1984, namely: The temporary enclosure of the verandahs at the main floor level of the Provisional Parliament House on the northern facade of the building. There is inexorable pressure on accommodation in this building and the temporary enclosure of the verandahs at the main floor level of Parliament House has been proposed as a cost effective and relatively straightforward way of providing some much needed additional office and Party room space. The work would be removed when Parliament vacates the building. The proposal envisages a simple alteration in which the verandahs would be enclosed by glass, recessed behind the existing masonry pillars in such a way that frames would not be visible from the exterior. The glass would be tinted so that the visual depth of the verandahs remains apparent, and to control sun penetration. The present external glass walls and doors between the verandahs and the adjoining rooms would be kept. A false ceiling would be constructed through which air conditioning and other services would be extended to the enclosed space. The floor would be carpeted but the existing step down to the balconies would remain. Dividing walls along the enclosed space would be erected but only behind the masonry pillars. The existing wrought iron balustrades would of course remain, and below the level of the balustrades, natural ventilation could be incorporated if necessary. During design, arrangements will be made to ensure that office furniture and materials are kept well behind the new glass wall and the view of the front facade from Parkes Place will not be adversely affected, either by the enclosure of the space or by the siting of furniture, fittings or activities within the offices. No poster or similar material would be permitted to be displayed on the glass. The estimated cost of the work is $90,000. The proposal is an aesthetically satisfactory and economic solution to a very difficult space problem. I therefore commend the motion to the Senate. Senator CHANEY(Western Australia-Leader of the Opposition)(5.32) —I move: Leave out all words after 'That', insert, 'the Senate refer the proposal contained in the report of the Joint Standing Committee on the new Parliament House presented to the Senate on 7 June 1984, namely: The temporary enclosure of the verandahs at the main floor level of the Provisional Parliament House on the northern facade of the building, back to the Joint Standing Committee for further consideration of the matters raised in the minority report of that Committee'. I move that amendment after discussion of the report in my party room today. We consider the matters raised in the dissenting report are worthy of some further consideration. We note that Senator Baden Teague, Senator Margaret Reid and Mr Phil Ruddock MP have raised a number of matters. I refer to paragraph 6 of the report which states: The alternative of providing additional Ministerial space elsewhere in the building or in the proposed temporary extension approved by the Committee does not appear to have been adequately considered. The report makes a number of suggestions, including the fact that the proposal has been hastily and inadequately prepared. There is no detailed breakdown of cost and no breakdown of materials used. Here we are dealing with a matter concerned with the facade of Parliament House. Whilst it is true that this is probably the greatest example of repairs and renovations in the history of the building-there have been endless changes and extensions to it, both to the facade and to the interior-there is concern that the glazing-in of the balconies on the front of the building may not be necessary and may deleteriously affect the appearance of the building. We would like to see this matter given some further consideration by the Joint Standing Committee. At this stage we do not wish to take outright opposition to the proposal but we certainly think it warrants another look. Senator MACKLIN(Queensland)(5.33) —On behalf of the Australian Democrats I indicate that we will not be supporting the Opposition's amendment. The problem that arises in such matters generally is one of aesthetic concern. Certainly we have problems in that regard with any changes that would take place to this building. However, if one reads through the entire report of the Joint Standing Committee on the New Parliament House one notices considerable discussion about what will happen to the provisional Parliament House upon the vacation of Parliament to the new Parliament House. A number of options in relation to this are rehearsed particularly with regard to how this building will be treated, whether it will be renovated or restored. The Committee came up with the recommendation that no decision be made at that point as to whether this building be renovated or restored, but that it be left to a professional group. Our only concern is that this addition proposed to be made at this time will be included as part of that consideration. We imagine that the addition to be made under this proposal will be removed. I do not think it will actually add anything to the building. I think it will detract considerably from its facade. However, when one sees that it is a temporary matter and that essentially Parliament House is for the operation of Parliament, not for viewing from the outside-indeed it is for use from the inside for the better workings of the Parliament-there do not seem to be many other ways, without considerable additional expense, that the gains that could be made by that small addition would be achieved. On that basis it is with regret that we cannot support the Opposition's amendment. If this goes ahead we hope it will be done in such a way that it will be as unobtrusive and fitting as possible. I think the renovations are best left to the professionals and not rehearsed by a series of amateurs in this place sitting as a committee. I am quite sure we would be able to turn the facade into some ghastly operation if we sat and deliberated on how it should be done. That might best be left to the professionals who could come up with an unobtrusive addition to the facade which might help us over the next few years. Senator REID(Australian Capital Territory)(5.35) —I am disappointed at the attitude the Australian Democrats have taken to this matter. It is not a question of the Joint Standing Committee on the new Parliament House sitting as a planning authority and determining exactly what should be done. If Senator Macklin had read the dissenting report of the Joint Standing Committee on the new Parliament House he would have found a number of disquieting aspects of the matter that ought to be looked into. One of these is the appearance of Parliament House. I am sure most honourable senators will remember the reaction in this Parliament and in the community last year when alterations were planned for the Australian War Memorial, which now, as a result of views expressed in the Parliament and in the community, have been abandoned because the appearance of the building is regarded as important. I rather suspect that when people find out what is planned for this building there may be a similar reaction of disappointment that the front of the building is to be altered in this way, for what I regard as very little improvement. Perhaps the most important aspect of the matter, and the real reason for suggesting that it should go back to the Committee for further consideration, is the question of costing. No costings were placed before the Committee giving a breakdown of the $90,000 which it was suggested the work would cost. It is more likely to cost something in the vicinity of $300,000. I think that we will find in time that the $90,000 is considerably less than what will be spent. The renovations will be demolished in the end so the building will be put back to its present state. It may well be more sensible to spend additional funds on the demountable building, which no doubt will also be approved, and which would be of some use in the end and not just be demolished. I think the Committee ought to be asked to look at the matter again from that point of view. The National Capital Development Commission was not able to tell the Committee what sort of glass would be used for the enclosure. There was some discussion as to the type of glass that might be used so that the lighting outside and the sun would not make the rooms unbearable. NCDC was not able to give that information at that time. I think that alone is one matter that ought to be reconsidered by the Committee. I am not suggesting that the renovations will not go ahead but I think we ought to know whether we are spending money wisely or whether in fact we are spending more than required. I believe there ought to be a false floor over the concrete to bring the floor level with the existing floors. That is not proposed. I suggest that the heating of those verandahs-with a cement floor merely covered by carpet-would be quite costly. I doubt that the air conditioning as it presently exists in the building -at least in my office-will be adequate to air condition those areas and keep them at an appropriate temperature, given the heat of the sun which will be on the glass, at least in summer. I think the cost of air conditioning required is something that ought to be looked into to balance off whether these enclosures are relevant or whether there ought to be on extension to the demountable building which would serve the purpose most adequately and not be a cost for a building that will have to be demolished in time. I do not think the air conditioning question has been analysed. At the meeting that took place on 6 June this year we were presented with a plan by the NCDC relating to the temporary enclosure of floor plan which shows the office now inhabited by Senator Martin as a passageway. That gives some indication of how out of date the plan really is. I understand that office was enclosed about 10 years ago. One wonders whether the rest of the plans which were taken into account when $90,000 was determined as the cost are actually accurate. The other very significant factor about this diagram is that it is a floor plan dated 5 June 1984. I am sure that over many years many honourable senators have been on committees with which the NCDC has been involved. I can assure honourable senators that the NCDC does not normally draw up plans on 5 June and present them to a committee on 6 June. I question how the costing of $ 90,000 was arrived at on that basis. For these reasons it is important that the Committee re-examine the costing to see whether money is being well spent. Cabinet has approved the demountable building. This is something which ought to have been considered at the same time as that, to see whether extensions should have been made to that area. I am told that it is because one Labor Minister wants more office space that this work needs to be done. He may well think that he needs more office space, but I question whether it is appropriate for Ministers to have in their Parliament House Offices as many members of their staff as they have. It is my view that the Parliament House Offices of Ministers ought to be used for servicing parliamentary duties. Ministers should have more staff in their departmental offices. But it seems that there is one Minister who is most anxious to extend- Senator Crichton-Browne —Who? Senator REID —I understand it is Mr Dawkins, who has come to an arrangement with the Minister for Territories and Local Government to take this $90,000 out of the NCDC budget. I would like to know, if perchance the extensions cost more than $90,000, where the extra money will come from and whether we will have an opportunity to consider whether that money should be spent. One of the senators on our side of the building wanted to be sure that, if the extensions went ahead, there would be access to fresh air. It was clear from what the NCDC said that it was intended to glass in the verandah totally. When it was suggested that it perhaps should be done in a way which would enable the windows to be opened, the NCDC said that it thought it could probably accommodate that. But whether that would cost an additional amount, I do not know. It was also suggested that furniture on the verandahs should be sufficiently away from the windows as not to be seen from the outside. We do not have an adequate undertaking that that will be the case. That was merely something that was mentioned. The look of the building could be somewhat distorted and destroyed. It is an important building. To fill in the verandahs and allow offices to be used in the way some offices are used would be a pity, even if it is for only a few years. I am not convinced of the need for it for that Minister's office, any more than for any other office in this building. If the Minister applied himself to his problems perhaps he could reorganise his staff in his office in a way that would give them adequate room here, with some of his staff in his Department office. I stress the point that I made initially; I believe the costing of this project is most inadequate. I believe the Committee ought to be asked to look at it again from a point of view of cost so that we know that we are spending money wisely. I am disappointed that the Australian Democrats are prepared to go along with this costing, not adequately presented, and are not prepared to refer it back to the Committee for such time as it would take to do the job properly. Senator TEAGUE(South Australia)(5.44) —The Joint Standing Committee on the New Parliament House, when it met on 6 June, had great difficulty with the discussion of this third matter on which we were to report to the Senate. The other two references of the Committee have already been fully reported to the Senate and to the House of Representatives. Briefly, I support very fully the remarks of my colleague Senator Reid. Senator Reid, Mr Ruddock from the other place and I put in a dissenting report on this matter of the enclosure of the verandahs at the front of Parliament House. We are opposed to that enclosure. We gave six reasons for not being able to agree with the recommendation that the verandahs be enclosed. Senator Reid has already gone over them. They relate to the hasty and inadequate way in which this proposal was brought before the Committee. It was referred to the National Capital Development Commission only one day before the NCDC came before the parliamentary Committee. No detail was given. It is not just a matter of the haste and inadequacy of this; my understanding is that when the greater extension in the House of Representatives garden was put before Cabinet for approval it was at a cost of more than $1.3m- Senator Crichton-Browne —$1.7m. Senator TEAGUE —I understand that Cabinet did not approve of that amount of $1. 7m and cut it back to $1.3m. In this chamber we are not privy to precise matters discussed in Cabinet, but one Minister present at the meeting, the Minister for Territories and Local Government, Mr Uren, and another Minister present, the Minister for Finance, Mr Dawkins, felt that they could find a way around that reduction, decided by the Cabinet on sound grounds-sound enough grounds to convince the Committee. They found a way around it by saying that it was within the power of the Minister for Territories and Local Government unilaterally to fund out of his Department's budget this $90,000 of expenditure on the front verandahs in order to help Mr Dawkins extend his offices on to the verandah. Then, on 5 June, Mr Uren hastily and inadequately proposed this enclosure of the verandahs to help out a fellow Cabinet Minister. Senator Crichton-Browne —$90,000 for one Minister. Senator TEAGUE —The amount of $90,000 was always put as assisting that Minister, Mr Dawkins. But, obviously, if we were to do that, we would need to have some sense of aesthetics and mess up not just one side of Parliament House. It would need to look symmetrical. If one half of Parliament House was to have the balconies glazed in to destroy the traditional view of the front of Parliament House for all our visitors, we would need to mess up the other half as well, so that there would be increased accommodation for the three Ministers on the Senate side of the building. The proposal was then hastily and inadequately presented to a joint committee of this Parliament. That was the reason for its being so hastily and inadequately prepared. I am not a senator who will take lightly a top of the head decision of a Minister. I felt it was my proper duty to speak frankly at that joint Committee and then to explain to the Senate as a whole why we put in that dissenting report. I appeal to the Australian Democrats in this chamber-Senator Jack Evans and Senator Macklin are here listening to this debate-to support the amendment before us, moved by the Opposition. With their support we will be able to retain the traditional aesthetic design of the verandahs at the front of Parliament House. I say to the Democrats: Is it not the case that for decades visitors coming to Parliament House have grown used to a certain traditional presentation of the front of Parliament House? Is that to be destroyed by glazing in the front of those verandahs? In what colour will it be done? Nobody knows whether it will be red, pink or blue, or how it will be presented. More seriously, we do not know whether a glass can be found which will handle the heating effects of full sunlight without curtains and blinds-the view is not to be messed up by curtains or blinds; in fact, even desks will not be able to be close to those proposed glass walls. So I appeal to the Democrats to agree with the Opposition that this kind of hasty, inadequate proposal, off the top of the head of one Minister, ought not to have the conscientious confirmation of this Parliament. If the public, upon seeing a spoiled Parliament, is critical of it, it will be the fault of the majority who approve this proposal in the chamber today. It certainly will not be the fault of members of the Opposition who have clearly set out the reasons why we believe this to be a matter which requires much more planning and detail before approval can even be contemplated. I genuinely appeal to the Democrats to support the Opposition in not agreeing to this recommendation. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(5.51) —I thank the Australian Democrats for their support for the Government's proposal and, of course, oppose the amendment moved by the Opposition. The proposal is a very rational, equitable and inexpensive approach to what every person clearly recognises is a totally inadequate accommodation situation for a great number of people in this place. The proposal is inexpensive because only $90,000 is involved in solving partially-at least for the next four years-some acute problems that exist in certain parts of the Parliament. We ask for support of the proposition because it is the Government's intention given the approval of the Senate, that this work go ahead, during the winter recess so that when we come back for the Budget session the work will be completed and we will partially have resolved some of the acute problems facing some sections of the Parliament. If, in fact, the work is delayed no work will proceed during the winter recess. I remind the Senate that if a department of labour and industry of the calibre of that which operates in New South Wales operated in the Australian Capital Territory, it would place a ban upon the completely intolerable working conditions under which members of parliament and their staff have to operate in this place. Some reference was made to the problems of the Minister for Finance (Mr Dawkins ). I have somewhat similar problems, as, indeed, does Senator Ryan. We have two staff members operating in a very small room. Such a situation is totally unacceptable to the Government. I applaud the efforts that have been made by the presiding officers to try to improve the working conditions and increase the amount of space that is currently available to members of parliament, Ministers and their staff. The Minister for Territories and Local Government Mr Uren, gave an undertaking to the House of Representatives during the debate about this matter a week or so ago-with the support, incidentally, of my Federal member, Mr Dobie, who departed from the Opposition's inept approach to this problem-that we are talking of temporary arrangements, which will be acceded to to meet the wishes of the Parliament, that is, we will eventually remove the temporary arrangements proposed in this legislation. I do not think there is anything more to be said. There should not be a prolonged debate on this matter. The Government hopes that the legislation will be approved with the support of the Democrats and the work commenced during the parliamentary recess. Amendment negatived. Original question resolved in the affirmative. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(5.53) —I move: That in accordance with Section 5 of the Parliament Act 1974, the Senate approves the following proposals contained in the report of the Joint Standing Committee on the New Parliament House presented to the Senate on 7 June 1984, namely: The construction of a two-storey prefabricated modular building in the House of Representatives' gardens linked to the existing building by a covered walkway at the first floor level. The passage of the Representation Act 1983 will result in the election of an additional 12 senators and 23 members at the next elections for the Senate and the House of Representatives. These expanded numbers will need to be accommodated while the Parliament continues to sit in the provisional Parliament House. Of course, as we well know, it is hoped that the new Parliament House will be constructed by 1988. It is the intention of the Presiding Officers that all senators and members in the enlarged Parliament should have their own rooms in an area adjacent to the present building. In response to the brief, accommodation must therefore be found for 35 members and senators in separate rooms each with a single staff member and the essential facilities and services needed to enable those parliamentarians and their staff to carry out their responsibilities effectively. Against that background, the proposal for construction of a two-storey, prefabricated modular building has been developed. It is sited in the House of Representatives garden and linked to the existing building by a covered walkway at first floor level. This new annexe will provide air-conditioned accommodation for 12 of the 17 members currently occupying offices on the Senate side of the House. The vacated rooms will then be available for allocation to the 12 additional senators. We are talking about a rearrangement which will assist the House of Representatives members to be on their side of the building and will also provide suitable alternative accommodation for the new senators due to take their place here in 1985. Twenty-four other members of the House of Representatives will be accommodated in the annexe building, as will support staff for the private members. There will also be facilities for the attendants, together with toilets and plant rooms. A ministerial suite will be lost in providing the link to the existing building. This will be replaced by re-allocating accommodation. The balance of the ministerial suite will provide offices for two members. The estimated cost of the proposed works referred to by Senator Teague is $1.3m. If the proposal is approved in the current period of sittings completion will be achieved by February 1985. That means, of course, Mr President, as you are well aware, that, depending upon whenever the next election is held at which the additional members of parliament will be elected, we will be in a position to provide them and their staff with, at least, minimum accommodation. When Parliament is relocated in the new Parliament House those prefabricated, demountable units will be removed and disposed of or re-used to the best advantage. I remind the Senate that it is very important that we take into account the fact that additional members of parliament will be elected whenever the election is held. It is obvious, knowing the cramped conditions under which current members operate in this place, that we should provide, in anticipation of that election, sufficient accommodation that will at least meet the sub- standard accommodation that is currently available for members of parliament. A number of us are aware of the acute accommodation problems in this Parliament . We know of and appreciate the work that you, Mr President, and your colleague in the other place, Mr Speaker, have endeavoured to do. You have succeeded to some extent in obtaining additional space since the election of the Hawke Labor Government. We are appreciative of the fact that every step has been taken to improve the accommodation and, therefore, the effectiveness of members of this Parliament. To deny this move by the Senate would be to put a time restraint on the construction of the temporary buildings that have been suggested. I think that this is the only sensible approach that we can take at this time, knowing full well that in 1988 we will have suitable accommodation for every member and his staff. That, of course, is an event to which we look forward with a great deal of interest. But in the meantime, we must take such temporary measures as are available to us to provide members with the basic, minimum accommodation which we all recognise is necessary in the Parliament whatever our political views may be, within the totally inadequate accommodation that is currently available. I therefore commend the motion to the House. Senator Dame MARGARET GUILFOYLE(Victoria)(6.00) —The Opposition does not oppose the motion that has been moved by Senator Gietzelt. As he has said, a practical solution is required to deal with the additional number of members and senators who will come here after the next election. We realise that they could not be adequately housed in the present building. We have just spoken about the inadequacies for Ministers and others caused by the present accommodation. To imagine that 35 additional people could have a practical solution to their accommodation requirements found without some decision being taken would ignore the realities. I take this opportunity to say that this is another instance of the untimely increase in the number of senators and members decided on in this Parliament in legislation that was before us not so very long ago, because it could have been realised at that time that the housing of the new members so they could work effectively in the building would create practical difficulties. We are proceeding to build an enlarged Parliament House. Maybe the opening of that Parliament House would have been a more appropriate time for the enlargement of the Parliament. However, that is something that is in the past and we do not wish to add to your burden, Mr President, or Mr Speaker's burden, in trying to find effective accommodation by delaying in any way the proposal for the $1.3m prefabricated annex that will be needed after the next election for the accommodation of the new senators and members when they take their place in the Parliament. For these reasons we agree with the motion that was moved by Senator Gietzelt and we hope when the building is completed it will adequately house those new members who will join us here. We thank you, Mr President, for the representations that you made on behalf of the incoming senators. Senator MACKLIN(Queensland)(6.02) —When we were discussing the Representation Bill, the Australian Democrats opposed the increase in the number of members of parliament for a whole host of reasons, not the least of which being that this building certainly does not have the capacity to hold them. However, the Government and the Opposition are now in agreement-- Senator Withers —Not the Opposition. Senator MACKLIN —The Opposition is not in agreement? Senator Withers —Not to the increase in members. Senator MACKLIN —I am talking about their being in agreement that the new members and senators should be housed. The Australian Democrats also agree with that. Seemingly, the only way that that can be done is by the construction of a prefabricated modular building in the House of Representatives gardens. I must admit that many people in Australia would much prefer that the $1.3m be spent on education and that the members of parliament be given some of the prefabricated buildings in which those people's children are educated. If that opportunity were available I think that many people in Australia would prefer that the money be spent in that way. It is inevitable that this proposal will be accepted. However, we do not as yet have before us the important consideration as to what will actually happen in this chamber and in the other chamber. I would have thought that how the members will be accommodated in these chambers would have been a matter of priority. Work will need to be done long beforehand to make sure that the chambers can operate in an effective manner. Another consideration that I put forward is that those people who voted for the increase in the number of members of parliament should offer to share their offices with at least one other member for the next couple of years. However, that does not seem to be the majority view in this place, although it may be the majority view of the senators who are currently present. It would have been reasonable to consider when the Bill was going through the Senate that we would not be spending $1.3m to accommodate the additional members for a couple of years. That could have been left until the new Parliament House was completed. The Minister for Veterans' Affairs (Senator Gietzelt) suggested optimistically that that will be in 1988. I have the distinct feeling that it might not be until about 2001. If it does happen in 1988 the prefabricated building will have lasted and provided accommodation for a grand total of four years. I hope that the design of that building is such that it will be able to be used again and will not be lost. If it is up to a reasonable standard it probably will be able to be used again in some manner. I hope it is not intended to shunt it off to be used for some poor kids. Senator Withers —Stick it on the new one. Senator MACKLIN —I hope it will not be shunted off and used for some poor kids' education when it is four years old and has been discarded by the Parliament. I hope also, as Senator Withers interjected, that it will not be shunted off and attached to the new Parliament House because the new Parliament House might be seen as being too small for the purposes for which it is being developed. That money should be expended in a way which will give us a reasonable prefabricated modular building that will have a life after it has completed its short sojourn here as an addition to the present Parliament House. I would have thought that those people who were concerned about the previous addition might have spoken on this matter, because if anything is likely to change the facade of the present Parliament House, I would have thought a little tunnel running out from the first storey across to the buildings on the side would certainly be intriguing to the visitors who are likely to visit this Parliament House for the next few years. I would imagine that anybody viewing this building would see it as probably one of the most interesting collections of additions that have ever been put together on any building used for public purposes anywhere in Australia. This building is already an interesting collection of additions. I hope that when we finally come to look at what to do with this place, it will continue and that the majority decision will be for a full restoration of the building to its 1927 aspect. Senator HAMER(Victoria)(6.08) —I wish to say a few words on this subject. There seems to be an impression that the only cost involved in this full operation is the $1.3m for this temporary extension to the present Parliament House. As I am sure you are aware, Mr President, I cannot say too much about the reckless stupidity of the decision to increase the number of members of this Parliament by 35 because that would be a reflection on a vote of this Senate which was taken some time ago. Suffice it to say that my Party strongly opposed as totally unnecessary this increase by 35 in the number of members of this Parliament. I would have liked to have seen, as Senator Macklin said-and I know, Mr President, that Senator Reid wrote to you on this subject-that the people who voted for this increase should be those who doubled up in their offices to accommodate the increase. But that, for reasons we understand those people do not agree with, will not be possible. I want to comment on the cost of what we are doing. The sum of $1.3m is to be spent on temporary accommodation. This Parliament House was built 57 years ago as temporary accommodation to last for not more than 25 years. It is still here after 57 years; apparently it will be here indefinitely. I would not be so sure about the temporary accommodation which will cost $1.3m. By the way, this Parliament House when it was built cost less than $1.3m. It has lasted for 57 years and will last indefinitely. I suspect that this temporary accommodation to be built beside the House of Representatives tennis courts will last as long. The point I want to make, apart from the total lack of any justification in the increase in the numbers of members of parliament, which my Party strongly opposed, relates to its cost. The new Parliament House will have to be extended at a cost of at least $5m. It will have to be bigger than it otherwise would have been because of the extra 35 members. The capital cost will be at least $5m . These 35 new members of parliament will have 105 staff members. The annual cost of this increase will be $5m. This is all reckless waste on which, without reflecting on the previous vote in the Senate, I am afraid I cannot elaborate. I wish the Senate had not done it. I wish this temporary wasteful extension was not necessary. Question resolved in the affirmative. Debate resumed from 7 June, on motion by Senator Gareth Evans: That the Bills be now read a second time. upon which Senator Dame Margaret Guilfoyle had moved by way of amendment: At end of motion, add 'but in relation to the Income Tax Assessment Bill (No. 3 ) 1984 the Senate- (a) deplores the Bill's attack on the retirement aspirations of hundreds of thousands of ordinary Australians; (b) notes the blatant breach of pre- and post-election commitments of the Prime Minister involved in the introduction of the Bill; (c) condemns the privileged status conferred upon trade unions in relation to deposit funds, and (d) regrets the Government's failure to produce a coherent approach to retirement security policy'. Senator MISSEN(Victoria)(6.11) —I rise to continue the debate on the Income Tax Assessment Bill (No. 3). Tonight I desire to speak on only one aspect of the Bill, which does a number of things of significance. There is one area with which I have had some association over the last year or two, that covered by friendly societies. For the first time, friendly societies in Australia are to be taxed. In all our income tax assessment Bills since 1915 there has been no provision for taxing friendly societies. Friendly societies operate very extensively throughout Australia. Generally they provide services for people in the community who are on lower incomes. They have operated on a mutual basis for many years and in both the State and Federal sphere they have been free of taxation. But under this Bill they will be taxed for the first time. This is not , I think, one of the things of great credit to the Government. Unfortunately, this will occur. The strenuous efforts of the friendly societies over the last year of two have succeeded to some extent in moderating the Government's earlier plans, but nonetheless taxation will be imposed on them for this financial year. I refer briefly to the description of the Bill. Clauses 28, 36 and 51 mainly impose this assessment of certain investment income of friendly societies and other organisations. The accompanying memorandum to the Bill described the provision in this way: The Bill will give effect to the proposal announced in the 19 May 1983 Economic Statement to impose income tax on the investment income of friendly societies from their life, disability and accident insurance business for the 1983-84 and later income years. The relevant taxable income is to be taxed at a rate of 20 per cent. Full details of the taxing arrangements were announced on 17 April 1984. That rate of 20 per cent is considerably less than what was first feared. Nonetheless, some important considerations should be taken into account. I raised objections when this statement was made on 19 May 1983. This matter came as a considerable surprise to the friendly societies. In the previous year when there was some discussion of other amendments to the law relating to friendly societies, the Secretary of the Friendly Societies of Australia Federal Council received a letter from the then Treasurer, Mr John Howard, dated 22 October 1982 which included the following statement: Should any such proposal-- he was referring to any proposal to amend the income tax law as it related to friendly societies-- come before the Government, you may be assured that the submission would be taken into account, and in that event you could expect your council to be given the opportunity to discuss the proposal. Of course, the Council did not receive that notice. These and other matters of criticism were raised by me on 20 October 1983 in a speech which I made on the Appropriation Bills last year. It will be noted that this matter has been hanging over the heads of the friendly societies since 19 May 1983, more than a year. I believe this in itself is very unsatisfactory. In the speech which I made in the Senate on 20 October 1983 I set out arguments-I will not repeat them -which I raised concerning what I believe was the unjustified decision to tax the friendly societies. Those arguments were based partially on a paper which I had prepared by the Economics and Commerce Group of the Legislative Research Service of this Parliament. It is current issues brief No. 10 of 1983 entitled ' Taxation Status of Friendly Societies'. That paper sets out the very many substantial arguments which were raised as to why the imposition of this taxation was unfair to the friendly societies and was likely to cause them considerable damage. Since that time there have been considerable negotiations between the friendly societies and the Government. In the ultimate, most of the friendly societies have apparently decided that discretion is the better part of valour. They have secured very considerable concessions on what was said in the original statement. Perhaps it would be best if I mentioned them because the are set out in the Press release of the Treasurer (Mr Keating) of 17 April this year . Mr Keating said: In settling details of the new arrangements, there has been extensive discussion and correspondence with representatives of the Societies-and that has necessarily taken considerable time. He referred to the details that were provided and said: It is not proposed that each and every provision of the income tax law which applies to Life offices should extend to Friendly societies. He mentioned a simpler system which was to prevail and went on to say: Tax will not apply to income from their sickness and funeral policy business. In calculating the taxable income of the societies, a deduction will be allowed for all expenditure that relates wholly to the earning of assessable income. Further, he pointed out: Other expenditure incurred in earning income (but which is not directly related to a specific income source) will be prorated between exempt and assessable income, and the part based on assessable income will be deductible. He referred to the 30-20 rule which would not apply to the friendly societies. He concluded by saying: That average-effective-rate of tax is well below the nominal rate of 46c in the $ applied to the taxable income of the Life offices. In setting the rate of tax, account has also been taken of other factors- including constraints which apply to investment policy of Friendly societies. In the light of the foregoing considerations, a tax rate of 20c in the $ will be applied to the taxable income of Friendly societies. I might say that that in itself will provide a considerable difficulty for the friendly societies. They are subject to a number of restrictions. Because they were created under State law they are restricted in the type of investments which they can enjoy. Consequently, their income is not as high as it would otherwise be. The friendly societies hope that the rate of taxation will not be increased. I think it is the duty of this Parliament to watch in the future to see that the rate is not increased and that further deprivations are not made on the income of friendly societies which would inhibit their ability to carry out the very worth while work which they do in this community. I refer to one other matter in connection with this proposal. This tax is to apply for this financial year. Therefore, the tax will be collected for the whole of the period up to 30 June 1984. On 6 June 1984 the Standing Committee for the Scrutiny of Bills issued a digest No. 7 of 1984 in which it made reference to the retrospectivity which will apply in respect of this and a number of other provisions in the Bill. Regarding clause 60, which deals with retrospectivity-the clause relates to a great number of provisions in the Bill- the Committee stated: This clause gives retrospective effect to a number of amendments made by this Bill. The Scrutiny of Bills Committee then referred to clause 6 which is not relevant to my argument. The Committee continued: Clause 60 also states that the changes made by various provisions of the Bill shall apply to assessable income for the year commencing 1 July 1983. Most of these changes were foreshadowed in the Government's Economic Statement of 19 May 1983 while others were announced on Budget night in August of 1983. Income tax on the various types of payments referred to in the relevant clauses is not assessable until the end of the financial year, thus these provisions may also be regarded as acceptable. Quite frankly I do not regard that as being fair so far as these friendly societies are concerned. It is true that they have received notice, because notice was given on 19 May 1983. It may well have been that this legislation might not have been passed. Where it not for the attitude which the friendly societies are taking, there are many in this chamber who I think would have felt inclined to resist this move. But to say that because of the notice these provisions may be acceptable, I do not regard as being necessarily so. The Scrutiny of Bills Committee finalised its comment by stating: The Committee continues to take the view that Senators should be alerted to retrospectivity in legislation and thus notes this clause in that it might be considered to trespass unduly on personal rights and liberties. I think that as Deputy Chairman of the Scrutiny of Bills Committee I should draw that to the attention of the Senate. I have not received any requests for any amendment or action to be taken, but I do consider that this is in some ways an unfair matter because the friendly societies have been operating throughout the year, and now they will be subject to taxation. Unquestionably this is a retrospective operation in relation to this and a number of other provisions. I merely want to say in conclusion that this provision of taxation is unique in the records of this Government-if it likes to be proud of this decision-and it is one which I hope will not damage unduly the excellent work which the friendly societies have done over many years. I trust that it will not be the forerunner of increases in attacks upon them but, in fact, that this matter will be watched very closely by the Senate and the Parliament to ensure that no further imposts are imposed. Senator MESSNER(South Australia)(6.22) —The Bill we are discussing tonight, the Income Tax Assessment Amendment Bill (No. 3) 1984, includes amongst its many matters chiefly the imposition of the new tax on superannuation lump sums. I will come to that matter a little later in my remarks, but firstly I would like to make some brief points about some of the other aspects of the Bill. First and foremost there are liberal sprinklings throughout the Bill. In particular I draw the Senate's attention to clauses 18, 19 and 20, which establish a very great number of new discretions in the hands of the Commissioner of Taxation. I think that is a very serious matter because it has been a growing trend in legislation , of a kind such as taxation legislation, for Parliament to abrogate its responsibilities in terms of setting down a precise form of the law and to provide the Commissioner of Taxation with powers whereby he can determine how much of a deduction is going to be allowed in particular circumstances, or how much income is going to be taken into account in assessing people's liability to taxation. I believe that is a very bad trend in our taxation law, as it is taking away from Parliament its right to determine specific laws in respect of taxation, which of course traces its history back to the earliest days of the establishment of Parliament and its rights over the management of money paid for and raised in taxes in the past by the autocrats. Leaving that aside, perhaps the most disturbing use of this new discretion, as set out in the Bill, is in respect of the proposed new clause 17 and in particular the clause which refers to the amendments to section 26 (a). These amendments are designed, as I understand it, to take account of the situations that have arisen in respect of profit making by sale and the interposition of trusts and companies in situations where tax avoidance can be practised. The point of this legislation is to overcome those difficulties and to make it easier for the Commissioner of Taxation to be able to assess taxation in those circumstances. I think none of us would defend or support the actions of those determined tax avoiders who have undertaken the kinds of complicated schemes which this clause is designed to attack. Nevertheless, the Bill does bring in a whole range of new discretions as to how the Commissioner of Taxation will determine the liability to tax, how he will determine the amount which will be taxed and in what circumstances those provisions can be decided upon, quite irrespective of the Parliament's determination of the law, as I believe we would be looking for in proper taxation law. In those respects I believe there are grounds for concern as to the gradual transfer of power to the hands of the Commissioner to determine the liability for taxation and, in fact, the amount of tax. Indeed, we all know of the practicalities of that situation once the Commissioner has got hold of that power because it then becomes a question of whether the taxpayer can demonstrate clearly his bona fides and whether he is capable of doing so without the most sophisticated advisers at his elbow to ensure that he does pay only that amount of taxation for which he is liable. I believe that point needs to be demonstrated clearly because not all taxpayers are equal when it comes to an understanding of the law, an understanding of accounting techniques and an understanding of the ways in which the Commissioner of Taxation operates. I believe that should be very clear in the minds of taxpayers and, indeed, in the minds of honourable senators when it comes to a vote on this Bill. I turn to the major point of legislation, which is the imposition of the new taxation on lump sum superannuation. The first question I would like to ask the Government is whether the urgency which is claimed at this stage for the legislation can be justified. Indeed, as is clear from the second reading speech of the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) in the House of Representatives, urgency has not been justified at all. The Government has gone to some length in its remarks to say, as clearly as it can, that the action that is being undertaken in this Bill is part and parcel of some major grand plan for the introduction of a retirement income program. It is clear from the confusion and blunders of the last 12 months, as the Government has staggered from one disaster to the next in the retirement income area, that this program as outlined in the Bill is another one of those ill thought out disasters which will come home to haunt it in due course. It will be my purpose, in the course of my remarks, to try to deal with some of the great fallacies that exist in the Minister's second reading speech, and to put some of those issues at rest. Because of the time, I would like to stress at this point only the question of urgency and whether the Government, having waited 13 months or so for the presentation of this legislation, really considers it necessary to push it through in the last days of this session without proper identification of the issues and without proper discussion of the real concerns that lie in this legislation about a new radical approach to the taxation of superannuation payments, which I believe requires the most deep examination. As an example of that I think we have to acknowledge-again bearing in mind my earlier remarks about the increase in the Commissioner's discretions in these areas-that it is clear that this Bill represents an attempt to try to set down a set of rules for the management of superannuation funds. I have to say that that being so, it is an incomplete set of rules and is done only as part of some other legislative package, which perhaps we will see in the Budget session, touching life assurance companies and the establishment of annuities and so on. But those matters I would like to address a little later in my remarks. Sitting suspended from 6.30 to 8 p.m. Senator MESSNER —Before the suspension of the sitting for dinner we were discussing the new tax to be imposed on lump sum superannuation under the Income Tax Assessment Amendment Bill (No. 3) 1984. I want to address myself now to some of the Opposition's criticisms of the principle upon which this new tax has been founded. First and foremost I believe there is one fundamental fallacy in the second reading speech that the Attorney-General (Senator Gareth Evans) put down in this place. That is the assumption that because a benefit has accrued to superannuitants by virtue of tax deductions available to employers, the non- taxation of the income of superannuation funds and, of course, tax benefits to employees as well, somehow some inequity has grown up as a result of that system having been institutionalised for many decades. The argument goes that payments out of superannuation funds such as annuities and pensions are taxed as though they were income whereas lump sums are taxed under the present tax regime at a very moderate level-that is, only 5 per cent of the lump sum is included in taxable income. That is fair enough because that is the present regime. But I want to make the point that that argument fails to acknowledge that the income generated from the investment of lump sum superannuation payments is then taxed in exactly the same way as are pensions, annuities and other payments from superannuation funds. I want to make that point very strongly because it is the fundamental fallacy of the argument laid down by the Government that lump sum superannuation is inequitable. Let us take the matter a bit further. Last year's Budget Papers included a statement from the Commissioner of Taxation that some $2.5 billion worth of tax is forgone by the Government as a result of benefits given to superannuation scheme contributors. The amount of tax forgone is made up of non-taxable amounts such as interest or the income of superannuation funds. Tax is also forgone in respect of the value of contributions made into superannuation funds for the benefit of employees. But the point that is ignored is that offsetting that $2, 500m is at least $1 billion worth of tax that is generated from the income arising from the investment of lump sums. That figure is simply not taken into account and as a result the amount of tax forgone needs to be substantially reduced. Secondly, people who receive lump sum superannuation payments are able to invest their money and thereby earn investment income to keep themselves alive. As a result they do not draw so much on the government pension and social welfare system. Obviously, the amount of money involved cannot be quantified but it is quite considerable. Thirdly, the Government makes savings because people are not taking advantage of the income limit system in respect of fringe benefits. Therefore, a very considerable amount of money is involved there as well. The fourth point I would like to mention is that superannuation funds, in order to maintain their exemption for superannuation tax purposes, must in fact have permanently 30 per cent of their assets invested in government bonds. As a result, the Government has a captive market for its bond issues and there are consequent savings for the Government. By totting up all those figures, and I admit we are in the areas of very wild estimations in many cases, we have to admit that the amount of savings to the Government is very considerable and probably of the order of one and a half billion dollars. If one then deducts that from the Government's estimate of the tax forgone, which is only a very partial estimate, of $2.5 billion, the net cost to revenue of superannuation schemes falls to around a $1,000m. I take the point that that may be too easy a method of doing the sums on this but I can point to evidence given in the Senate Standing Committee on Social Welfare. The Association of Superannuation Funds of Australia gave evidence that supports those figures in general terms. Taking that as the basic argument it is clear that the Government has been hoodwinking the people of Australia in arguing that, somehow, lump sum superannuation is inequitable in its taxation treatment because the amount of money involved is far less than it has led us to believe. Indeed, the amount of money which is being utilised by people from lump sums to keep themselves alive is a very significant feature in reducing the future cost of welfare in this country. I believe that that is one of the fundamental differences between this Party and the Government in their approaches to the cost of social welfare. I believe that it needs to be recognised that it is far cheaper in the long run for people to receive a lump sum for their superannuation benefit than to continue to receive pensions over long periods of their lives. That is a fact of life. Any actuary can prove that very easily. I only wish I had some example to put before the Senate to demonstrate that point. However, it is quite clear that if the Government wants to reduce the future draw-down on its social security costs it should adopt an approach whereby lump sums were the norm and indeed the Government encouraged lump sums so that people could invest them in their own names and put it out in the market place so as to reduce the future cost of social security payments. Having said that, and bearing in mind the limited time we have tonight, I move very quickly to two other areas. Firstly, the Bill sets out, in quite a lot of detail, aspects relating to the management, future control and regulation of superannuation funds. It seems that the Commissioner of Taxation is now to be appointed the commissioner of superannuation funds because he has been given duties under this Bill to control the destinies of superannuation funds to quite a considerable degree. I do not mind that. However, as we discussed earlier, there are very considerable discretions involved. I believe that the Commissioner will have to pay a great deal of attention to the details of those matters. The second matter in detail in the Bill that is of great concern to the Opposition is the fact that several groups or types of enterprises, such as banks, credit unions, building societies and so on, which are subject to prudential requirements and control through various Acts of parliament, both State and Federal, have been authorised by this legislation to become approved holders of deposit funds for the purposes of the portability requirements. In general, one would say that was a good thing. However, the group that stands out like a sore thumb that is not so controlled is the trade union movement, which is also given authority to take approved deposit funds. Trade unions are not subject to the same kind of prudential requirements as are the other organisations. Obviously they will be launching into a whole new area of investment management, with very little track record with regard to proven ability for management of funds. I believe that the Government will need to take a great deal of care in dealing with trade unions in that situation. In passing, we should make the observation that it is rather strange that trade unions are allowed to take approved deposits in this way, but employer organisations, especially self-employed organisations, are not. People, by virtue of being members of a particular profession, will not be able to have approved deposit funds under this legislation. The other aspects of that area that concern us are more detailed. I draw to the Senate's attention the apparent difference in treatment between life insurance companies and other bodies that will be entering into this new arrangement of approved deposit funds. The point is that within normal definitions of company law, as I am led to understand it, life insurance companies, if they adopt this practice, will be required to issue prospectuses in order to attract funds. That will also apply to banks and other bodies which are normally subject to Companies Act requirements. That means that some organisations will be subject to the very stringent requirements of the companies code and will be required to issue prospectuses-which, of course, in itself, is a time delaying aspect-as against bodies like trade unions and other organisations, which will not be subject to those requirements. I would like to know why it is that the Government sees fit to apply those principles in respect of bodies such as life insurance companies, but does not see the necessity to do so in respect of other organisations such as trade unions. I would like the Minister, in the course of his reply on this matter, to give us some undertaking that he will take up this matter with the National Companies and Securities Commission with a view to seeking exemption for life insurance companies for the particular situation in which they will find themselves. It is a most important matter, as it will deny life insurance companies the opportunity to enter fully the annuity business as is envisaged by this legislation. The only other matter that I want to mention very quickly is the problem of people receiving credit in respect of past service. The application of the new tax will divide the period of service in which the lump sum is calculated into two parts. In the course of ordinary business dealings, from time to time there are numbers of people who accept employment with one employer and then move on to another employer. As a result of negotiations with the second employer, they are given credit for past employment periods. It is not clear from the Minister' s second reading speech whether full credit would be given for such periods that have been credited in favour of people in that situation. I would like, again, to have the Minister's assurance that in that situation credit would be given in that the application of the tax would operate in exactly the same way as if the person had been employed by the one employer right throughout his working life. It seems to me to be an area that needs clarification. I hope the Minister will be able to give us a categorical assurance that the principle of the law as outlined in the Bill will be applied in those circumstances. I refer to one other factor, namely, the problem with invalidity of fund members who retire on terms which seem to be somewhat advantageous compared with those terms which are currently settled on most members of superannuation funds. It is obvious that there will be changes in this area as a result of pressure on present superannuation funds to introduce more advantageous invalidity requirements. As a result one can expect a great increase in the cost of administering superannuation funds. In fact, I am advised that the cost could rise by as much as 2 per cent of the value of salaries. The only other matter that I wanted to mention was the overall criticism of the principle. We in opposition believe that the Government is entirely on the wrong track. We do not believe that taxing lump sums in the way that is thought of at present is in any way different from the taxation of goodwill which is built up by people as a result of their labour, for example, by running a newsagency or a milk round or something like that. Under the present law goodwill is not taxable since it is a capital gain. This Bill taxes labour by ensuring that lump sums which are built up through the labour of people over their working lives are taxed at a rate of 30 per cent. We believe that is an entirely inconsistent approach from this Government. We do not believe that the legislation is headed in the right direction. It is obviously not part of any overall plan for a retirement income system, which the Government claims it is in the process of developing, but fails at every opportunity to explain to us in what way it is doing that. I enter just one plea. If the Government is to reconsider any part of this legislation it might well consider exempting those people who are already members of superannuation funds and entered into those funds in good faith. They will now find themselves taxed at a rate of 30 per cent of their lump sum without ever having been advised at the time they became members of funds that this would be the case. If the Government removed retrospectivity in that respect we on this side would be only too happy to accommodate that kind of approach. Perhaps the Government will not pursue that option since it is so ideologically committed to this legislation. Finally, we on this side fail to understand why the Government seeks to introduce this legislation. First, we have been told and assured by the Minister for Finance, Mr Dawkins, that only one per cent of superannuitants who receive lump sums receive more than $100,000. Three-quarters of people getting such funds get less than $5,000. That means that those people receiving only such a small sum as $5,000 will be taxed at a rate of 30 per cent on such a piddling amount of money. The option which the Government in the legislation has given those people to avoid that tax is to buy an annuity. If we consider people going out to buy an annuity with $5,000, having retired at age 65, we can judge just how silly this legislation is in that the amount of the annuity would be so small as to keep only flies alive. That is a direct result of such an ill thought out piece of legislation which has been put down by the Government in this place. It certainly does not have the Opposition's support. Senator HILL(South Australia)(8.19) —As we are pressed for time, I shall limit my contribution to addressing the parts of the Income Tax Assessment Amendment Bill (No. 3) 1984 and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1984 which deal with the increased tax on lump sum superannuation payouts. What the Government proposes to do is to increase the tax on the lump sum from 5 per cent to 30 per cent-a massive increase in anyone's language. There are some qualifications. Firstly, for lump sums received at the age of 50 or over, the first $50,000 will attract tax at 15 per cent, which is a small consolation which I concede. Secondly, that part of the lump sum which represents a post-tax contribution by the employee will not be taxed again-a very gracious concession by the Government. Thirdly, a proportion of the lump sum representing the pre-July 1983 years of work will continue to be taxed at the existing rate. It is claimed that that indicates that there is no element of retrospectivity in the proposed legislation, although it may be very difficult for an employee to vary his retirement planning without benefits having been previously vested. Why, then, this massive increase in tax on a selected sector of the community? Perhaps the key can be found if we analyse the sector against which it is directed. The Association of Superannuation Funds of Australia conducted a survey in 1980 which was published in 1981, which found that 83 per cent of the private funds covered by the survey normally paid benefits in lump sum form. In 65 per cent of the cases, the lump sum was not optional. This contrasts with the public sector, in which the availability of a lump sum is very limited and generally restricted to the extent of the member's accumulated contributions and sometimes earnings on those contributions. So, it is a massive tax increase on a retirement benefit paid primarily to the private sector employees. Furthermore, in the private sector it is generally a form of retirement saving of males rather than females, full time rather than part-time employees, professionals rather than tradesmen, and those on higher incomes rather than lower incomes. So the typical beneficiary is a middle income, private sector employee. He is the one who has been singled out to bear the burden of this new tax. There will be tall poppies included, to use the somewhat offensive terminology that has been adopted by this Government in relation to its asset test. But super payouts comprise a relatively smaller share of such people's retirement benefit because they have been able to save by other forms of investment. It is, therefore, the private sector intermediate income person, who will suffer the brunt of the penalty of this vastly increased tax. It will be said-it was said in the report of the Hancock National Superannuation Committee of Inquiry, in the Campbell Committee of Inquiry into the Australian Financial System and in the White Paper on occupational superannuation-that, all other things being equal, the tax regime for a lump sum scheme is more favourable than that for a superannuation pension or annuity. There is truth in that. Furthermore, it can be fairly said that the tax system should be neutral. I would not disagree with that as a statement. But what that fails to take into account, when we start from the premise that lump sum schemes are private sector schemes and pensions are public sector schemes, is that the employer-financed components of the Public Service pension are generally fixed to the consumer price index whereas private sector pensions are generally not indexed. That is what people fail to take into account in looking at the question of equity. In 82 per cent of private funds surveyed by the ASFA in the survey that I have mentioned, there were no guaranteed increases to pensions being paid to retired members. Thus the lump sum with minimal tax is the only chance that a private sector superannuitant has of coming anywhere near to keeping pace with the inflation-indexed pension of the retired public servant. The retired private sector employee is still faced with the challenge of investing that lump sum in a way that will reasonably protect his capital from the ravages of inflation and at the same time provide him with a reasonable retirement benefit. We have heard a lot about comparative wage justice. We should ask ourselves in this debate: What about comparative superannuation justice? The Government says that it will allow the private sector employee to roll over his lump sum into an annuity, in which case he will not be burdened with this penalty tax. But annuities, as we know them, do not have any inflation protection. Let us say that five years ago a reasonably well off private sector employee received a lump sum which could be rolled over into an annuity which paid about one quarter of his final year's salary. With inflation, he would now probably be receiving little in excess of one eighth of that salary. I think it can be fairly said that annual fixed sum superannuitants have suffered more from inflation than any other sector of the Australian population in recent years. That is the effect that this Government's proposal will have on more of Australia's private sector retirees. The Government says that it is a time of national burden sharing, that it believes the approach it has adopted to this matter is both equitable and reasonable. It is not. It is an exercise that has singled out a particular sector of the community, in this case the private sector superannuitant, and premised on the delusion that he is well off, will now push him into comparative poverty. He is already at other disadvantages. I mentioned in the example I gave a moment ago a lump sum may be based on a person's retiring income. That may be so in the public sector but generally that is not the case in private sector funds. Usually the sum will be based on an average of a person's last three years' income, and an upward income situation will therefore mean that it will be based on a figure lower than his last year's income. It appears also that he is struggling to build an adequate fund against the directions of the Commissioner of Taxation. As we know, the Government premises this Bill on the taxation benefits accruing to lump sums but I remind the Senate that it was reported in an article in the Age on 22 February 1980 that the Taxation Commissioner has a scale of maximum reasonable benefits which can be offered by superannuation funds without forfeiting their taxation advantages. It is important to note that the maximum multiple is seven times a designated final average salary. For example, when the benefits commenced in 1964 a person's salary may have been four times average weekly earnings. Now it is approximately only 1.3 times average weekly earnings. So the allowable lump is already lower in this regard but apparently that has not been perceived by this blinkered Government. On the other hand, it will not affect the Public Service retiree because, as I said earlier, his pension will be fixed and indexed to his retiring salary. The Government will say: 'Why doesn't the private sector employee enter a scheme comparative to that which operates in the public sector?' Of course it knows the answer to that question-neither the employer nor the employee can afford it. The Australian Government Actuary has calculated that the new entrant contribution rate for the Commonwealth Public Service scheme is 21.5 per cent of superannuable salaries; that is, the cost to the Commonwealth if the scheme were fully funded would be 21.5 per cent of the superannuation salaries of new contributors. The difference between the private and public schemes is that the former must be funded. Of course, few private sector employers could fund such a scheme. It is questionable of course whether the Government could fund such a scheme if it were imposed with that burden. With a growing population and an aging population that is a time bomb for the future. That is a debate for another day. What it means in this debate is that the indexation of Public Service retirement pensions paid from Consolidated Revenue is being paid in part by private sector employees struggling to build up lump sums for their retirement. Regrettably, those are the people slammed by this legislation. The Government's acknowledged dream is of course to force all employees into a national superannuation scheme. It is a logical part of the socialist philosophy to destroy any entrepreneurial dream left in the heart of the pending retiree. We all know of cases of pending retirees who perhaps plan to buy a small business with their lump sum, perhaps the first time in their lives that they have had any real capital. Senator Watson —That is so. Senator HILL —As Senator Watson said, that is so. However, according to this Government that is not in the retiree's best interest. Rather the retiree should pay a levy during his working life of, perhaps, some 10 per cent of his salary and the state will sustain him in his retirement while he plays bowls. Already, as we know, he is not allowed to plan and pay for his own health care. He pays a compulsory levy and the state takes care. Under this scheme he will not be able to plan and save for his own retirement. He will pay a levy and the state will do that for him. As we know, the next scheme in the ultimate plan concerns compulsory national compensation with another levy and another protection by the state deemed to be in his best interests. If the people of Australia believe that they are the subjects of the state they should wait until this Government's program of so-called reform really gets under way. This is just a small step in that process. The Government will destroy the freedom of choice of the medium size private sector retiree; or what this Government might call the intermediate poppies. What is so disappointing is the negative attitude of this Government. It thought that this sector was getting an advantage that another sector was not . The Government was blinded to the fact that for the other group non-indexed pensions hardly existed. Regrettably socialism is about the lowest common denominator. The Government says tax benefits to superannuitants are inequitable because only 45 per cent of the labour force are members of a scheme. The Government therefore believes that the benefits to that 45 per cent should be cut. A positive approach which we would have hoped from this Government would have been to see how we could encourage a lifting of the percentage of the population which is part of schemes . Why have we not got put to us a positive program to increase the number of women employees participating in superannuation schemes to plan for their future ? Similar considerations apply to the permanent part time work force. Why have we not got positive proposals to assist those people in their reasonable expectations in regard to superannuation benefits? Portability in a mobile work force is a major subject to which this Government should be addressing its endeavours. These are the useful types of questions in this area-there are many more-to which this Government could be addressing its resources rather than being preoccupied with the belief that someone might be getting an advantage that another is not. This is often illusory, as it is in this case. I am not attacking Public Service benefits but I am saying that people in the private sector should be entitled to something similar. At the moment they have it, although in the different form of minimal tax on lump sum superannuation payouts . That entitlement will be destroyed by this legislation. With it will be destroyed any equity which exists in superannuation benefits between the public and private sectors. I believe, for that, this Government should stand condemned . Senator JACK EVANS(Western Australia)(8.35) —The Income Tax Assessment Amendment Bill (No. 3) 1984 is a complicated piece of legislation. There are 16 amendments to the Income Tax Assessment Act. I think I am already well established on the record of the Senate as one who abhors band-aids placed on band-aids placed on band-aids on a tax Act which is already almost impossible to understand. Certainly, for the lay person, it is impossible to understand. For the professional, for the accountant, for the solicitor, unless working with it day after day, it is still impossible to understand. For the experts, it may be possible to understand, but it is almost impossible to get agreement on what it means. I believe that these amendments, coming through again in a rather ad hoc way, will complicate the tax Act even further. For that reason I understand people who condemn the Government for another complicated series of amendments, particularly those which may not be necessary for the function of government, for the function of revenue collection or for the function of the production of equity in the community. However, I think that some of the amendments are needed, and some are necessary right at this moment, to support Government initiatives. I will touch briefly on those that I believe the whole of the Senate should support. For instance, I refer to the amendments to provide for the management investment companies and to provide incentives for investment in these sunrise industry companies. I have no quarrel with that and the Australian Democrats wholeheartedly endorse the concept of this Government getting behind-in fact getting in front of and leading the way for-the introduction of management investment companies which in turn will not only encourage and foster new inventions, processes and industries but also give some incentives to the marketing of these new inventions, processes and industries and, in assisting the marketing, will ensure that they are viable industries and that they are given the chance of competing in a very difficult market, both within Australia but more particularly overseas, in sunrise industries. The amendment dealing with taxation of friendly societies has been controversial and, particularly over the past couple of years, has been quite apparently needed because of the fact that friendly societies have been competing in some areas quite unfairly with the life insurance companies. I believe, and I think I speak for all the Australian Democrats in saying this, that the tax rate of 20 per cent is as close to a fair and equitable tax rate as the Government could probably come up with. Certainly, the Government is winning no applause from the friendly societies because, obviously, they would rather it were lower. Similarly, the Government is winning no applause from the life insurance companies which think it should be higher. It is rather interesting to me that I received very strong representations from both friendly societies and insurance companies before that rate was set. Now the general attitude seems to be that we can all live with that rate of 20 per cent. That seems to indicate that the Government has hit the target pretty fairly; it may be a point or two out but only time will tell us whether it is a spot on figure or just a very close to spot on figure. As a member of the Senate Standing Committee on Finance and Government Operations, I applaud again-I have done this previously when earlier measures were taken-the Government's move to reduce further the paperwork for the prescribed payments tax system. As honourable senators will appreciate, the prescribed payments system was introduced to get at those people who were evading their tax obligations in the black cash areas. In those areas it was possible to get work done, pay under the counter for that work and avoid paying any tax whereas a competitor down the road, who may have had employees for whom he had to pay pay-as-you-earn tax, had to charge higher rates and was not getting work simply because he was acting legally and properly. The prescribed payments tax has, to a degree, put an end to that situation. It certainly has not ended it. Plenty of that sort of tax evasion is still taking place but at least it has made people aware of the fact that government officers are out there having a close look at them and the day may come when they have to cough up all the money of which they have robbed this country. I simply make the point that the more we can reduce the paper work for the prescribed payments tax system the more equitable it will be for all parties concerned who have to pay that way. The prescribed payments tax system was an inequity when it was first introduced simply because it imposed a massive amount of additional paper work at additional cost on those enterprises which came under its net. There was a lot of resistance to it at the outset. Members of the Standing Committee on Finance and Government Operations should feel justly proud of the fact that they were able to sit down with industry leaders and the Commissioner of Taxation and work out ways of reducing the paper work. Following that, the Commissioner of Taxation promised the Committee that he would pursue other ways of reducing the paper work that was considered unnecessary or could be subsequently proven to be unnecessary. This legislation is evidence of the fact that he is pursuing that objective and that we will have a further reduction in that paper work. Section 26(a) of the Income Tax Assessment Act, the fourth major area of amendment, is a form of capital gains tax because it provides that any person or organisation which purchases property with the objective of making a profit on the sale of that property within a reasonable period will pay an income tax. Obviously, there has been a loophole in that section of the Act. The amendment which is part of this Bill will, hopefully, close that loophole and prevent certain arrangements from continuing which, under the old legislation, could be made to evade or avoid tax obligations. So, that is again an item of tax legislation that the Australian Democrats applaud, that is, the tightening up of tax legislation to get at the tax avoiders or evaders. We are quite consistent in pursuing those who would avoid and evade their tax obligations. I want to spend the bulk of my time talking about the most controversial part of this legislation, the lump sum superannuation provisions. Those provisions are controversial partly because of the way in which the Government has handled them. I have spoken on this subject before. The Government will always draw flak if it gives notice of its intentions and allows the community to debate, criticise, analyse, lobby, to get on the bandwagons, soapboxes and the mass media and criticise, whether fairly or unfairly. If it does so it will always draw the sort of flak that it has drawn. I hope that it will continue to do just that, not so that it will destroy the Government's intentions but so that it gives the community the opportunity to get into the debate when it is to be affected in such a major way as this legislation will affect it. The modifications which have come out of that debate are, I believe, fruitful and beneficial. I for one compliment the Government on the amendments that have been made to the original proposal. In some areas the Government has not gone far enough. I will touch on those in a moment. I believe that in other areas it has gone a long way down the track towards resolving problems and towards overcoming some very important objections of principle and of equity. Those objections will be overcome in the way that the Government has modified this legislation. To put this lump sum superannuation legislation into context, one should recognise some of the reasoning and philosophy behind it. I think it is fair to say that the Australian Labor Party regards superannuation as funds to assist people in retirement. I hope I do not misrepresent the Party's position; I am trying to put it objectively and fairly-that superannuation funds are aimed at helping people in their retirement. If that is so, it is fair to suggest that the Labor Party does not see superannuation as a means of funding an enterprise or of re-establishing oneself in a new vocation. That may well be the objective some people had when they took out superannuation. I am not suggesting for one moment that that is not a valid, fair and just reason for taking out superannuation, but from the point of view of the Government, particularly from reading old debates, the whole objective of putting into place the superannuation fund system was to help people when they retired. Most people were then likely to retire at 65 or perhaps 70. The retirement objective then was to ensure that people who, through their working lives, were able to provide for their term of retirement could do so and would not call on the Government, whether it be through charitable institutions, pension funds or whatever, to look after them. That was a long time ago, but I think that is a fair assessment of the reasoning behind the establishment of superannuation funds. Things have changed over the years and most importantly it needs to be recognised that it probably has not been the governments that brought about those changes; in the main, it has probably been the life assurance companies. I do not say that in any criticism of the life assurance companies because I think they recognised that there was an opportunity not to help themselves but to help their clients, whether they be clients who wanted funds on retirement at 65 or who wanted funds at some time before their final retirement from five days a week working. The companies gave them an avenue of saving which coincidentally happened to have hefty support from the government of the day in that investors did not have to pay tax. This support did not come just from the government of the day; it came also from the people of Australia. People were allowed to put their savings into superannuation funds and they did not expect to pay tax. Similarly, employers were able to make the same sort of move and they did not have to pay tax on the money that was put into those funds. As a result of that change, over the years there has been an increased expectation and anticipation that the superannuation funds were absolutely untouchable by any government. Over those years that perception has never had the overt support of any government of which I am aware. That is a very important factor. Governments have not encouraged this attitude, because nobody in any government can promise that nothing will ever change in terms of imposing tax in the future. So nobody has ever been able to say, and as far as I am able to ascertain nobody has ever said: 'Your superannuation funds will remain unchanged forever. Nothing will ever happen to the tax system relating to those superannuation funds'. Despite that, the belief has grown in the community and has become quite well entrenched that superannuation funds were inviolate, that nothing could ever happen in regard to the taxation of those funds beyond the existing system of taxing 5 per cent of those funds at the time they were drawn or they became due for payment. Given all of that, one can understand the disappointment in the community when a government says: 'The coffers are in the process of being emptied. In the next 10 or 20 years we will have only one of two options: Either we will have to increase taxes massively to support the superannuation and pension funds of this country or we will have to change the whole superannuation and pension system so that people can no longer rely on it for their retirement'. There was a third alternative and that was to endeavour to have from here on a superannuation system which did provide for people to be able to save their funds through superannuation, pay a much lower rate of taxation when the funds were withdrawn and still, in the vast majority of cases, be able to draw some sort of pension. The Government's strategy in this matter is obviously to endeavour to persuade people in a variety of ways to convert lump sum superannuation to some form of annuity. This simply means that instead of drawing out one's lump sum superannuation in one payment one draws out one's superannuation progressively over a period. If it had been announced from day one many years ago when the superannuation funds were introduced and if people had repeated it from time to time, that the whole point of the exercise was not to allow superannuation to become a tax avoidance measure but to provide for people on their retirement at age 65, I do not think we would have had anything like the resistance to these moves that we have had over the last few weeks and months. It is the building up of an expectation in the community that has caused the problem. The Government has, I think quite responsibly, made changes to its assets testing system to remove the opportunity for double dipping. It is interesting that this legislation also contributes towards the removal of double dipping. It needs to be said that the Government could have paid the courtesy to a couple of ongoing committees of waiting just a little longer for their reports to come down. Very important deliberations are taking place right now on the whole future of occupational superannuation in particular. It is a pity that the report on that matter could not have come down before the legislation was brought forward. I recognise that the Government, having made a commitment to make changes before the next election, has very little time in which to implement those changes now that it has announced the aborted time span of this Parliament so that it can have an election later this year. This, in turn, has caused this legislation to be brought forward. I think that it would have been helpful if the Government had let the matter sit on the back burner for a little while to allow it to do the one thing that would make many people breathe much more easily; that is, to allow it to conclude its deliberations and consultations on the introduction of indexed bonds. Not only could indexed bonds make this system work better but also they would allow those people who are about to be forced to convert from lump sum superannuation entitlements to annuities to go into them knowing that they are not on a depreciating annuity. Let me describe briefly the effect of the existing system: If a person converts to an annuity from a lump sum settlement tomorrow, from tomorrow that annuity will have less value. Every time that person draws his annuity cheque, whether weekly, monthly, quarterly or annually, each succeeding annuity cheque will have less value. That will be the case until the day the Government, the life assurance companies and whoever else will be involved introduce the indexed bonds that this country needs. An indexed bond will allow people to convert their lump sum superannuation into an annuity based government bonds which are indexed to the consumer price index or some other similar measure. That means simply that if one's first annuity cheque comes out at the rate of $800 a month in 1984, the next cheque, in 1985, will come out at the rate of, let us say, $ 880 a month, if the CPI rises by 10 per cent, and subsequent cheques will be similarly increased to take into account the increased cost of living. People can then make a judgment, based on the day that they convert their superannuation lump sums to annuities, as to whether or nor they can live on that certain value of dollars, as at the date of their retirement, and from then on until they die. If they cannot, they may take alternative measures. If they feel they can comfortably live on that amount they will be encouraged, and I suggest by this legislation, enticed in a variety of ways, to convert to annuities. I stress the value of annuities simply because they are the alternative path to paying the new tax rates which are part of this legislation-the new tax rates of 15 per cent up to $50,000 and 30 per cent beyond $50,000 for that proportion of lump sum superannuation which is drawn from the date of this legislation. The proportion-and this is an important point-is a proportion of time, not money. The Minister, the Attorney-General (Senator Gareth Evans), has spelt that out quite clearly; that the time after the legislation is announced is one part of the equation, and the time before the legislation is announced is the other part of the equation. Those two proportions determine the amount which is going to be subject to taxation under this new legislation. The proportion which comes into the pre-legislative era will be at the old rate, that is, only 5 per cent of the amount will be taxed, and that will be at the marginal rate of taxation of the person receiving the sum. I would like to touch briefly on a couple of problems that I see coming out of this legislation. One of them is the problem of the whole thing being bundled together into the Income Tax Assessment Act. The Defence Force retirement and death benefits fund is an anomaly which simply does not belong in this legislation. I plead with the Government to introduce a special Act right now, as quickly as possible, to cover service people under the Defence Force retirement and death benefits fund. The Jess Committee on the Defence Forces Retirement Benefits Legislation made this comment: . . . the justification for the inclusion of the computation provision in the original DFRB legislation was that a serviceman often had a requirement for a capital sum on his retirement to assist in his resettlement and re-establishment in civilian life. That is not a retirement fund, it is a resettlement fund and it should be established in resettlement legislation. It should not be part of this superannuation legislation. I ask the Government please to look after the people to whom we have a responsibility as a parliament. It is not a large number of people, as only about 1,500 are eligible for that fund per year and only about 50 are not between 40 and 50 years of age. There are, nevertheless, important people in our community, people who have served this community in accordance with all of the provisions of the defence forces of this country and many of whom have suffered the handicaps of serving in the defence forces in this country with that knowledge and understanding that nobody would ever touch their fund. It is about to be touched. I think that the Government, when it recognises the injustice that it will do to these people, will follow the advice and the recommendation that I have put to it. The position is not quite the same in the case of airline pilots although there is an anomaly in respect of an airline pilot whose services are terminated on medical grounds. He loses all rights to employment and licences in that field. Special provision should be made in respect of the age and length of service of airline pilots who are in a quite different category from most of the rest of us . However, as I indicated earlier, they are not in the same category as members of the defence forces. I would like to conclude by asking the Government to accept some recommendations that I have put in good faith on behalf of the Australian Democrats. We have taken note of the amendment moved by Senator Dame Margaret Guilfoyle on behalf of the Opposition. That amendment is pathetic-there is no other word to describe it. The amendment deplores, it notes, it condemns and it regrets. But there is not a word of substance in the whole amendment. Therefore, I would like to add some backbone to that amendment so that the Government knows exactly what the Senate feels. I move: At end of amendment, add 'but the Senate- (1) calls on the Government, in its implementation of this legislation, to- (a) ensure that the threshold figure of $50,000 in the definition of 'residual amount' in clause 52 is indexed to the Consumer Price Index and adjusted annually; (b) provide that bodies which issue Approved Deposit Funds have uniform financial safeguards to protect Approved Deposit Fund investors; (c) amend the Social Security Act 1947 so that it is compatible with changes in this legislation to ensure that annuity holders are not disadvantaged through having capital repayments treated as income for pensions; and (2) calls on the Government not to proclaim this legislation until a system of indexed bonds has been introduced'. While allowing the legislation passage through the Senate this amendment is a clear guide to the Minister and the Government that the Senate is not satisfied with the content of the legislation as it stands, that there are a number of anomalies and that we believe that these anomalies need to be resolved. I hope the Opposition will support our amendment as we will support theirs. I ask for that support because the Opposition has let the side down by announcing in advance that it has no intention of opposing the Government's legislation or amendments to the Government legislation in the Senate. The Opposition has made it quite clear that it sees this as an opportunity for a cynical political exercise. It will let this legislation go through but announce to the electorate at large that if ever it gets elected to government again it will repeal the legislation knowing that it will not be elected at the next election. The Opposition expects the pensioners of this country to bleed for the next four years while they wait for the Opposition to get re-elected; it will then repeal the legislation. I find that quite cynical and hypocritical for an Opposition which, together with the Democrats, could make changes to this legislation. Senator WATSON(Tasmania)(9.05) —The Senate is debating cognately, with some time constraints, two Bills relating to income tax. The first is the Income Tax Assessment Amendment Bill (No. 3) 1984, which is the major Bill, and the second is the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1984. Ever since the Hawke Labor Government came to office it has attacked that section of the community that has saved or attempted to save money or has accumulated capital. The first on the hit list was the lump sum payment. The latest is the assets test on pensions. It is almost 13 months since the first announcements were made on the changes to taxation on lump sum payments when a person retires or terminates his employment. After a great deal of community debate and debate within the Australian Labor Party the Senate, at long last, has before it a Bill to amend the law. That Bill has been introduced in the dying hours of this parliamentary session. Under existing legislation only 5 per cent of lump sum payments received in a single amount attract tax. However, because the Government has treated this as a Budget Bill, the amendment before us tonight unfortunately will have to pass this Senate, despite the horrendous impact it will have on an estimated two million Australian workers and their families. I think we have to acknowledge that, in the past, approximately 80 per cent of people who have been involved in superannuation have opted to receive, or have been entitled to receive, a lump sum payment. The changes are going to be horrendous. In future it just will not be worth people taking a lump sum instead of an annuity. After July 1984, accumulations will be assessable to the extent, not of 5 per cent, but of 15 per cent on amounts up to $50,000 and 30 per cent on amounts above $50,000. This measure will literally force hundreds of thousands of ordinary Australian people to convert an otherwise lump sum payment into a pension or an annuity. I do not think the Government has looked at the cost to its revenue of this exercise because lump sum payments are far cheaper to the Government than are pensions. It is a tragedy. I believe that we should have been presented with an acturial comparison of the cost to government over a period of years of lump sums compared with pensions before this Bill was brought into this Parliament, as I said, in the dying hours of this parliamentary session and after the House of Representatives has risen. I believe that the Government has an ideological commitment to making an increasing number of people within this community dependent on pensions and therefore dependent on government. It is an attack on the independence of the individual. It is an attack on a person who wants to try to make his own way in life. The Government is trying to care for people from the cradle to the grave. It is taking away people's discretions, ambitions and rights to be different. In the past retirees have used their lump sums to buy, perhaps, a fishing shack or maybe a little holiday cottage at the beach or in the country. Perhaps they have used it to purchase a new motor car. It may be the first new car they have been able to purchase in their lives. Other people, who are more conscious of their needs in the home, may have used it to refurnish the house so that in their retirement years they can live in comfort. Others may have opted to use that money for travel-either interstate, to see a little of Australia, or overseas. One has only to look at the people travelling around Australia to see that a large number of them are retired people. Others may have used the lump sum to discharge a mortgage. They may have been buying a house all their lives, saving day after day and year after year. The lump sum provides them with the opportunity to pay off their house. The mortgage may not be large; they may have bought their house a few years ago. They are able to clear the mortgage so that in their twilight years they can say: 'Yes, this is completely mine. I owe nothing to the bank or the building society'. In other words, they wish to leave their families unencumbered when they pass on. It is unfortunate that the Government has taken this step and placed a great burden and a great tax on the future wage earners of this country. I believe that this measure has been sold to the electorate in the ideological belief that it is the Labor Party's responsibility to attack the wealthy. We hear the term ' the tall poppies'. This measure has been sold to the electorate on this belief of attacking the wealthy-the airline pilots and the naughty businessmen. But it is really no more than a tax slug on the middle and lower income earners in Australia. These are the people who will feel it most. I will give the Senate some figures. If one looks at figures derived from the report of the Commissioner of Taxation for 1982-83, one can calculate, electorate by electorate, an average after tax income. I will cite two examples from my home State of Tasmania, the divisions of Bass and Wilmot. The other divisions in the State are not far away. The net income, from the Commissioner's figures is approximately $10,000. I am referring to the middle and lower middle income earners. These are the people who will feel this tax slug because, after all, these are the wage earners and this is their income. They are not the guys who are ripping off society. They are the people who are paying their taxes day by day and year by year. They are looking forward when they retire to a lump sum payment, a nest egg, that will give them a little independence and discretion. I use this statistic to show you, Mr Acting Deputy President, my colleagues in the Senate and others who are listening to the radio, that the sorts of people who will really be affected by this Labor Party tax are the ordinary wage earners of Australia. The previous section introduced many years ago was referred to as section 26 D of the Income Tax Assessment Act. It was a simple, straightforward provision. But the changes proposed by this amendment run into many pages, with the result that the law is now more complex and less understood by ordinary people. We should be trying to simplify our laws and to make them more easily understood by the families who we in the Senate are supposed to represent. What are we doing? We are making life more complex, more costly and we are ripping off more tax from them. This amendment to increase substantially the tax on lump sum payments is also a clear repudiation of the electoral undertakings and undertakings that were given shortly after the election by this Government. In fact, one has only to look at the Australian of 22 April and the Australian Financial Review of 18 April to see those undertakings in black and white. This amendment is a clear repudiation of those undertakings. It is unfortunate. Mr Howard, the honourable member for Bennelong, in the other House referred to the 148-page explanatory memorandum on the proposed changes to what was the simple section 26 (a) of the Act. This came back to people's intentions if they acquired property and subsequently disposed of it. It is not really surprising that we have seen a great deal of wrath from lawyers and accountants at the manner in which these provisions have suddenly been rushed through this Parliament. A further provision in proposed new section 25A gives the Commissioner of Taxation a discretion far wider in impact than any other discretion he has in the Act. Many people think that it is not a good idea to give the Commissioner such widespread, sweeping powers of discretion. In the past it was generally the tradition that when the Commissioner exercised that discretion it tended to be in favour of the taxpayer. But that situation has now well and truly changed. Under this new provision, when he exercises a discretion he will be obliged to do so not in favour of the taxpayer but in favour of the revenue. That sub- section (3) of this new provision creates an enormous uncertainty. It is an essential feature of any taxation system that there be certainty before the law in taxation matters. What have we seen from this Labor Government? We have seen, first, attempts to introduce in this Parliament a tax retrospectively, one going back 10 years or more. This Senate has saved the day. There must be certainty before the law. The Government tried retrospectivity. What is it doing now? It is giving the Commissioner of Taxation very wide discretionary powers. Wide discretionary powers take away from the individual a certainty before the law in taxation matters. If this starts with taxation matters, it will inevitably creep into other legislation. Where does the individual in society fit in when he is faced with this sort of rule, this sort of bureaucracy and the sorts of laws enacted by this Government? I draw a further matter to the attention of the Senate. I believe we should take timely warning of a matter that was raised by Mr Connolly, the honourable member for Bradfield, who, I acknowledge, has taken a very close interest in superannuation. Of all parliamentarians, he is perhaps the most informed on retirement incomes. Mr Connolly warns of the powers that this Bill gives to the trade union movement through an involvement in superannuation. There is also no evidence to date, and certainly none in the amendments before us today, that trade union superannuation funds will have the same statutory controls and the same regulations, and be subject to the uniform provisions that apply to the life assurance companies and the like. There are differences. Life assurance companies are not treated in the same way as credit unions. In other words, there are different rules relating to banks, insurance offices and the like. It is a well known fact that presently the trade unions have only limited obligations to reveal their financial positions or their assets and liabilities. Where is the trap? I do not include all unions, but should unions such as the Builders Labourers Federation become involved in superannuation and have at their disposal for investment millions of dollars of superannuation funds which at their discretion they could invest in companies and so on? This could lead to a great deal of coercion, not only against employers, in the form of the take- over threats, but also against employees, to keep them within that organisation. I believe in portability, the right of a person to take his pension from one job to another. But I find it rather strange that these special provisions are suddenly granted to the trade union movement but are denied to the employer organisations. Why should that be so? Surely there should be uniform provisions. If one were cynical, one could suspect that this Government has made a bit of a trade off-'We will implement the 15 per cent and 30 per cent, but we will compensate the union movement by allowing it to move into the so-called lucrative superannuation funds'. There is also a further anomaly, which is unfortunate, in the treatment of recognised life assurance companies and building societies compared with the treatment of credit unions and so on, during the operation of what are known as the initial or roll-over provisions. In other words, we have tighter versus lighter requirements depending upon the organisation concerned. Surely this is unjust and inequitable. Surely it is not right. Why is this Government pandering to the trade unions in relation to these superannuation-type provisions? Why is there this unfortunate anomaly in the different types of treatment in relation to those sorts of organisations that can accept approved superannuation deposits ? The legislation before us is full of anomalies. Unfortunately, my time has expired. I say in conclusion that the community will live to regret the impost that this legislation will produce for the ordinary worker. Senator BOSWELL(Queensland)(9.24) —The Income Tax Assessment Amendment Bill (No . 3) and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1984 cover a lot of aspects of taxation law, but I want to address my remarks tonight to the aspects that cover small business, and I include graziers and farmers within that term. As I see it, the main trouble with the legislation is that it is perpetrated by people who just do not understand small business. I cannot see one honourable senator on the Government benches who has ever been in small business. Not having been in it they do not understand it. Senator Grimes, the Minister for Social Security, is a doctor and an academic. Senator Gareth Evans, the Attorney-General, is a lawyer and an academic. Therefore, it is hard for them to understand the aims and ambitions of small business. For the information of Senator Evans and Senator Grimes, small business, covering 754,000 small and medium sized businesses, employs 60 per cent of total private employment. It currently pays over half of all tax revenue , both State and Federal. Small business has problems associated with high interest rates, high taxation, the increasing cost of employing staff, raising finance and frustrations and delays with all levels of government. On top of this, there are penalty loadings and shift and annual leave loadings. As well as all that, the Government is now making it impossible for small business people to provide for their own retirement. I can tell members of the Government about this from personal experience. I spent 16 years running a small business employing 10 people and certainly one runs the gauntlet of all those difficulties that I mentioned. After battling for 20, 30 or 40 years one does want and expect the right to have some sort of retirement without relying on the Government. People in small business do not want to be made wards of the State. They have battled all their lives, have done their own thing and want to provide for their own retirement. This Government is taking that right away from them with this legislation. No one in his right mind will take out superannuation policies only to have them eroded by inflation and then on top of that eroded by the 30 per cent tax slug being introduced by the Government. Today I spoke to accountants about this. As a matter of fact, by chance I got two renewal notices from my life insurance company and my immediate reaction was to ask why I should pay them because I will lose 30 per cent. This was borne out after speaking to the accountants. They told me that very few people in small business are investing in superannuation policies. I understand that this legislation is supposed to stop people double dipping. Surely the assets test that the Government has brought in accommodates that problem. Why does the Government want to bring in two pieces of legislation to stop people investing income or assets that they earn out of superannuation? Lump sum payments are invested in either income-producing property or stocks and shares, and tax is paid on the dividends from those investments. Therefore the Government is already collecting tax on that income. Lump sum payments are the only way small business people can invest to maintain incomes in line with inflation. Small business cannot superannuate its employees on anything other than lump sum payments. The policies are not there to be offered. What happens to all those people in small business who have been superannuated on lump sums? I had five people work for me who had superannuation policies. What will happen to them? The value of those policies will be completely eroded; they will be useless. The Minister for Industry and Commerce, Senator Button, made certain commitments to small business before the last election. He has been running around setting up committees, such as the the Economic Planning Advisory Council which I notice still does not have any small business representatives on it. He is setting up various committees throughout Australia and while they probably do a lot of good for small business the basic thing that a person wants out of small business is to work hard, to produce a good income, to be self reliant and to be able to provide for his retirement. Once that is taken away, it does not matter what this Government does. It does not matter what committees this Government sets up once it has taken away that person's basic right. That person 's basic right after 40 years hard work has gone down the drain. He is now made a ward of the state. The Government has reduced everyone to the lowest common denominator. Everyone will get the pension, which is really what this Government is about. This Government wants a one class society with everyone reduced to the lowest common denominator. With this legislation the Government has been very successful in achieving this. The Government ought to be ashamed of itself. Senator BJELKE-PETERSEN(Queensland)(9.31) —I wish to speak tonight on the Income Tax Assessment Amendment Bill (No. 3) 1984 which is before the Senate, particularly as it relates to the proposed 30 per cent tax on superannuation lump sum payments. I register my protest at the tremendous increase in the tax on lump sum superannuation payments. Time restraints have been put on us this evening; so I will not say too much because a lot of Opposition senators have spoken very clearly and distinctly about this problem. Nobody in his wildest dreams would ever have imagined that taxation on lump sum superannuation payments would be so increased that the top level of taxation is now set at 30 per cent. Of course, I accept that the taxation rate is 15 per cent on sums up to $50,000. However, when we look at the 30 per cent tax we realise that almost a third of lump sum superannuation payments will go to the taxation man. What incentive will there be for people to put money into superannuation schemes to save for their retirement? I do not think there will be very much incentive at all. I think people will come to the stage of wondering why they should bother to work at all. We all know that the people most affected are the private sector superannuants. They are the people who will have this problem. People who are in the superannuation funds, who decided to take out superannuation during their working lives, look forward to retirement with a degree of comfort and security. These people now realise they are likely to be taxed to this extent on the money they put into superannuation and that is a real problem. Of course, if they invest the money they get from superannuation and receive income on that the taxation man will get a good fair share of that too. Such people probably wish they had spent up big so that they could now get a pension instead of losing so much of their superannuation. The Government has said that it wants to prevent people abusing the system by taking a lump sum superannuation payment, investing it in a non-producing way and then claiming the pension. I wonder why the remainder of people who are honest about their superannuation should be penalised in the way suggested by the Government. I believe that those who are abusing the system are spoiling it for the majority who are not. Certainly in this regard I feel that the Government is inconsistent. We see the Government cracking down on people who have worked hard and who have saved and put their money into superannuation funds while in so many cases there is no crackdown on people who abuse the social security system. Only the other day I received a letter detailing some abuses of the social security system. I wonder at whom the Government is aiming these changes to the lump sum superannuation scheme. It is really the people who have worked and saved to provide for themselves and their families. I feel that because of legislation such as this the Australian Labor Party and the Labor Government can really be called tax gatherers. They are tax gatherers not just federally. Even the State of Queensland has now been advised by the New South Wales and Victorian governments that they want Queensland to put a new tax on cigarettes and petroleum products. We have here too the repudiation of the Government's promise that it would not put a 30 per cent tax on lump sum superannuation payments. This will tax the people who are trying to look after themselves and who do not want to be a slug on the taxpayer. It seems to me, and no doubt to many Australians, particularly those who will have to pay the 30 per cent tax on their lump sum superannuation payments, that the Hawke Government has, to say the least, got its priorities wrong when it comes to taxing the productive sector of our economy and ignoring the unproductive sector. Of course, I realise that probably all the talk here this evening is futile because the Government has made up its mind. However, if we support the Australian Democrats amendment, together we may be able to make some changes to the legislation. But I want to take this opportunity to register my protest for I know that the 30 per cent tax on superannuation is a tax on those who have worked hard to help in the development of Australia. Senator WALTERS(Tasmania)(9.36) —I wish to speak for only a few minutes, on behalf of the Opposition, in protest at one more broken promise of the Hawke Government. The Prime Minister, Mr Hawke, made it very clear before the election that he would not touch superannuation payments. Indeed, we have been sent copies of letters that Mr Hawke sent to various groups promising that there would be no introduction of increased tax on lump sum superannuation payments, as had been rumoured prior to the election. But, of course, here we have a very clear broken promise. This is indeed retrospective legislation. It is no use the Government saying it is only from the night of announcement that this tax will be introduced; indeed it is. But people have planned for many years, not realising that a government, without any commitment before its election, would introduce legislation to tax their lump sum superannuation payments. People have planned for their retirement knowing that when the time came they would have a sum which they could use at their discretion. We have heard nothing from the Government, or indeed from the Australian Democrats, apart from a mention of tall poppies. We have had that description before. We heard it when the Minister for Social Security, Senator Grimes, was debating the assets test. He referred then to the tall poppies and the modified tall poppies. This Government, which is supposed to be bringing the people together, is making divisions with those sorts of statements. It does not seem to be a very telling way to say to the community: 'Let us all work together for the good of Australia'. We now hear of the tall poppies-that is, those with lump sum payments over $50,000-who will be taxed at 30 per cent. The modified tall poppies, those with lump sum payments under $50,000, will be taxed at 15 per cent. As Senator Watson indicated earlier, the average income of Australians after tax is, according to the figures I have before me, about $10,000 or $11,000. That is the average taxable income in many electorates, apart from those in the Australian Capital Territory, where we find that the average income after tax is a couple of thousand dollars more. It is quite an interesting group of figures that I have here. It indicates that salaries in the two electorates of Canberra and Fraser in the Australian Capital Territory are well above those of the rest of the electorates. They obviously represent a wealthier community, but they too will be hit by this legislation. Senator Jack Evans, when he was speaking tonight on behalf of the Australian Democrats, referred to airline pilots and people of that ilk, the tall poppies, who would be setting themselves up in some sort of business after having taken their lump sum superanuation payments. What absolute rot! It shows how much out of touch he is with the people of Australia. They are not setting themselves up with lump sums. Indeed, the majority of them use the lump sum to pay off their home mortgages, to enable them to retire with at least a degree of comfort and without a great debt hanging over their heads. But the Government, of course, is denying people the ability to do that. The Government would, indeed, destroy all incentive for the people of Australia to look after themselves in their retirement. People are willing to contribute to give themselves a little extra luxury in their retirement. But the Government, with its socialist policies, is naturally ideologically opposed to that sort of thing, socialism meaning everyone being on the same level and no tall poppies, or modified tall poppies as the Government calls them. This legislation is just part of the Government's philosophy. It is natural for this Government to be following such a course. We have made it clear as an opposition that when we return to government we will abolish this tax on lump sum superannuation payments. It is part of our philosophy that people be encouraged to look after themselves in their retirement, to put something away for that purpose. Indeed, incentive is what Australia is all about. If the Government continues to stop people preparing for their retirement, people will resort to using their savings prior to their retirement for the purpose of overseas trips and all the fripperies that have been suggested tonight. We have heard Senator Grimes talk about the assets test. We have seen already the destruction of all incentive by that legislation which is to come before us later. This evening we have before us legislation which will provide for the taxation of lump sum superannuation payments. I will not take up the time of the Senate any longer. As I say, I am just voicing a protest, a protest that falls in the wilderness because we have not the numbers on this side of the House to be able to do anything about it. The Bill is part of the Budget propositions of the Government and is a money Bill. Therefore, we will not be opposing it. It is a shame that the people of Australia were not aware and had not been given the information before the election that this is the sort of thing the Government intended to do. But perhaps the Government will have learned the lesson the hard way and will know what to expect after the next election when Mr Hawke goes to the people which will be, we presume, about December. Senator GRIMES(Tasmania-Minister for Social Security)(9.43) —I thank honourable senators for their contribution to the debate on the Income Tax Assessment Amendment Bill (No. 3) 1984 and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1984. I have listened to it only tonight. It seems to me that the only subject which really interests people is the proposed changes to lump sum superannuation taxation. I wish that many people here had done what Senator Jack Evans has done, that is, actually looked at the history of this legislation and seen what it is all about. Decades ago, legislation was introduced giving special treatment to lump sum superannuation payments and tax concessions on superannuation contributions. As Senator Evans said, the aim of that exercise was to encourage people in the community to prepare for their retirement by contributing to superannuation funds so that on retirement-and this was from both sides of the Parliament-they would, in fact, have a retirement income and would be less of a burden on the welfare budget. They would not require pensions and benefits. As Senator Jack Evans said, that situation has become distorted over the years, not necessarily by design of government but by the natural desire of certain groups in the community. By using the capacities of accountants, insurance companies, superannuation funds and others in such a way that the system has become distorted, all too often those privileges and advantages which were granted have been used for other purposes, and the people involved are still amongst the 78-odd per cent of the people in the community who on retirement draw the age pension. So the whole purpose for which the legislation was introduced and for which those benefits were introduced has been subverted. This evening we have had some rather strange arguments from people concentrating on the section of the legislation relating to lump sum superannuation. For instance, Senator Hill told us that this was all about the ideological approach of the Labor Government with which we were obsessed. He said we wished to discriminate against the middle and upper income groups, the professional groups and those in private insurance and superannuation schemes. He said such people would be affected by this legislation, and we should, and he was echoed by Senator Watson, be encouraging portability and greater participation in superannuation schemes because, as Senator Watson says, despite all the concessions which have been given for decades, only 45 per cent of the population has access to superannuation. Senator Hill said that the Government should be introducing measures to overcome discrimination against women in superannuation schemes. Senator Watson echoed much the same things although I must say that I do not think he mentioned discrimination against women. The simple fact of the matter is that for 29 of the last 32 years, until 1983, we have had conservative governments in this country. We have had Liberal- National Party governments in this country. We have had Liberal-National Party governments which did absolutely nothing in this regard. Yet representatives of those governments have the gall to get up here tonight and say: 'Why do you not do something about portability? Why do you not do something about the discrimination against women in superannuation legislation? Why do you not do all those things we did not do for all those 30 years?'. They did nothing about it. Senator Boswell —We did not take 30 per cent off the people. Senator GRIMES —I will come to Senator Boswell in a minute. His contribution was amazing. Previous governments did nothing about this issue for all those years and the only criticism honourable senators have tonight is the claim that we are apparently discriminating against a group of people. They say we should be taking a certain tack and that we should have done all the things they did not do for all that time. Had we done that, honourable senators opposite apparently would have approved it. Senator Watson, in his first breath, said that the Government wished to make the people in this community dependent on the age pensions, and that was the whole aim of our exercise. I suggest that what we want people to do is to enter into superannuation schemes which provide a retirement income for them which achieves the purpose for which the legislation was first introduced, namely, to enable them to have the benefits of that retirement income and not at the same time to get social security benefits when they do not need them. Senator Watson then described all the things that he said people do with their lump sums-they buy holiday shacks and go on trips overseas. When they have bought their holiday shacks, been on trips overseas, invested in business or done all the other things he mentioned, they then come and draw the pension and the fringe benefits . This is one of the distortions of the present system. Senator Boswell got up and condemned the Government because no one in the Government has apparently had anything to do with small business and does not understand it. Senator Boswell —That is right. Senator GRIMES —I think even Senator Boswell would agree that my colleague Senator Walsh who sits next to me was one of those farmers about whom he was talking. Senator Walsh, for all the time before he was elected to this Parliament was a wheat farmer, and I understood that he would come into the definition of 'small business' that Senator Boswell gave tonight. Senator Boswell —I will concede Senator Walsh. Senator GRIMES —Would the honourable senator concede those of us who have been in private practice and have employed 10 people? Senator Boswell —No, you are professionals. Senator GRIMES —I thank Senator Boswell for calling me an academic, but I would have thought that a person running a private general practice and employing 10 people, as Senator Boswell claimed to have employed, could have been classed as a small businessman also, as could some of the lawyers here who have run their own business, as could Mr Cohen, who happens to own a couple of clothing stores, and as Mr John Brown- Senator Boswell —I said 'in the Senate'. Senator GRIMES —So the honourable senator does not take any notice of our representative in the other place. Mr John Brown ran a meat processing business. Senator Gareth Evans —It is a big business actually. Senator GRIMES —It is a big business, actually. Let us face it, plenty of people on this side have run what would come under Senator Boswell's definition of ' small business'. We are well aware of Senator Boswell's claim that small businessmen are concerned about inflation. Of course they are. Of course they are concerned about the provision of a retirement income. They are certainly concerned about the effect of inflation on their income, as they would be concerned about the fact that Senator Boswell during his speech tonight managed to inflate the 30 per cent lump sum taxation to 33-1/3 per cent which was the greatest example of inflation that we have seen here tonight. The simple fact of the matter is that if we are to overcome the distortions which the previous Government made no attempt to overcome, if we are to move to a situation where the majority of the people in this community, rather than 45 per cent, have the opportunity to provide for their retirement income, we must take note of the Asprey Taxation Review Committee, the Hancock National Superannuation Committee of Inquiry and probably every committee that has looked at this matter in the last 20 or 30 years. Those committees have pointed out that as long as we have in the system distortions which are created by the situation where by people can receive tax deductions for their superannuation contributions, whereby the superannuation funds are not subject to tax and whereby only 5 per cent of the final lump sum is subject to tax, superannuation will not be available to all people in the community. To get to the substance of the legislation and some of the matters that were raised by honourable senators-I will try to cover most of them, if not all of them-the Opposition, through Senator Dame Margaret Guilfoyle and I think Senator Messner, expressed concern that the amendments to section 26 (a) proposed by clause 10 vest in the Commissioner of Taxation too wide a discretion as to the profit to be included in assessable income in situations where a taxpayer shall share an interest in a partnership or trust which effectively transfers ownership of underlying property acquired for the purpose of profit making by sale. That concern, as I understand it, is that the Commissioner could range free in determining the amount of assessable profit and, for example, might fail to make allowance for elements going to the value of the taxpayer's shares or interest from accumulated profits or reserves of the entity being sold. I think that I can immediately assure the Opposition that this is in fact not the case. As indicated in the second reading speech, the sole purpose of the amendments proposed by clause 10 is to rectify defects revealed by the courts over the years in the operation of section 26(a) which, to the extent relevant, includes in assessable income profits derived by a taxpayer from the sale of property acquired by the taxpayer for the purpose of profit making by sale. These amendments will have application only in circumstances where the property answering that description has been acquired but is effectively disposed of in a manner which avoids the clearly intended operation of section 26(a). Against that background, the measure to which the Opposition, and Senator Dame Margaret Guilfoyle in particular, has referred will ensure that the application of section 26(a) is not avoided in situations where a taxpayer uses, for example, a private company to purchase speculative property, underlying property, but instead of allowing the underlying property to be sold by the company after it has appreciated in value sells his or her controlling shares so as effectively to realise the profit. This measure is very similar to a provision enacted by the previous Government to ensure that section 26AAA, which operates to tax profits on short term property transactions, could not be avoided in an identical way. In those cases where the provision in question, that is new section 25A (2), does apply to deem the shares or interests sold by the taxpayer to have been acquired for resale at a profit, proposed new section 25A (9) will bring to account as assessable income any profit arising from that sale. For this purpose sub-section 25 A specified that the profit is to be so much, if any, of the amount of the proceeds of the sale as the Commissioner determines to be appropriate. In exercising this power, however, the Commissioner must have regard to the criteria specified in sub-section 25A (10). These make it abundantly clear that the amount of profit determined by the Commissioner, in accordance with sub- section 25A (9) cannot exceed that part of the sale proceeds which is attributable to the increase in value of the underlying property during the period in which the taxpayer held the relevant shares or other interest. The Government is satisfied that the measures I have outlined today, and which are contained in this Bill, are adequate to ensure that the Commissioner will not be at large in exercising his discretion to determine the amount of profit to be included in a taxpayer's assessable income in the circumstances to which Senator Dame Margaret Guilfoyle has referred. I can therefore assure the Opposition that there is no basis for the concern expressed by honourable senators on behalf of the Opposition in this matter. I add that any taxpayer who is dissatisfied with any determination by the Commissioner may have that determination reviewed by a taxation board of review which may substitute its determination for that of the Commissioner or the courts, which may review the exercise of discretion in question. Senator Dame Margaret Guilfoyle also expressed concern along similar lines about the discretions contained in the amendments proposed by clauses 18 to 20 of the Bill. As indicated also in the second reading speech, these amendments follow a decision of a taxation board of review which allowed a deduction for the whole of the cost of repairs to a car, although the car was used only partly for business purposes. That decision gives a result that is not in keeping with the previously understood and long standing principles that expenditure is deductible only to the extent that it is incurred for purposes of producing assessable income. In his administration of the provisions of the income tax law being amended by clauses 18 to 20 it has always been the practice of the Commissioner to give effect to this principle by limiting the quantum of deductions to reflect the extent of use in assessable income producing activities. The particular amendments are modelled closely on other provisions of the law-for example, section 61 relating to depreciation, which specifically authorises the Commissioner to reduce the amount of a deduction that might otherwise be allowable in circumstances where the property or item to which the deduction relates is not used wholly for the purpose of producing assessable income. The application of those provisions has not given rise to any difficulties over the years. The amendments proposed by clauses 18 to 20 will not alter in any way what has been a long standing and accepted practice of the Commissioner but will merely provide him with statutory authority to continue that practice. Of course the avenues for review of the exercise of the Commissioner's discretion outlined earlier are available also in these areas. Senator Messner asked for an undertaking that the Government will take up with the National Companies and Securities Commission the possibility of exempting life insurance companies in their capacity as trustees of approved deposit funds from the requirements of the companies code that provide for the issuing of prospectuses in relation to invitations to the public to deposit money with the corporation. I will refer that matter to the Treasurer (Mr Keating), who I am sure will take it up with the Attorney-General (Senator Gareth Evans) to see whether the prospectus required of company law would have an inappropriate effect in this case. As presently advised I am not at all sure that the difficulties foreseen by Senator Messner are of practical concern. Senator Messner also asked for an assurance that where a person has changed jobs, the total period of service will be taken into account in the application of the before and after formula. The assurance can be found in paragraph (a) of the definition of 'eligible service period' in section 27A of the new sub-division AA of the Income Tax Assessment Act, which is to provide that 'the period, or the aggregate of the periods, of the employment to which the relevant eligible termination payment relates' will be the period of employment that is adopted under the new taxing rules. Senator Messner —It still does not answer the point. Senator GRIMES —The honourable senator can have another go later. I will come to the amendments moved by the Opposition and by Senator Jack Evans for the Australian Democrats. Paragraph (1) (a) of Senator Evans's amendment calls on the Government in its implementation of this legislation to: ensure that the threshold figure of $50,000 in the definition of 'residual amounts' in clause 52 is indexed to the Consumer Price Index and adjusted annually; In reply to that part of the amendment, let me say that the first $50,000 of a lump sum received after a taxpayer reaches age 55 years is to be taxed at the concessional rate of 15 per cent. The Treasurer stated on 7 August 1983 that the $50,000 figure would be reviewed annually. Movements in the consumer price index would obviously be a major factor that the Government would take into account in such reviews. Other factors, however, bear on the appropriateness of the threshold figure. These include changes in the size of distribution of a lump sum after taking account of inflation, information on the forms in which superannuation benefits have been taken under the new arrangements, changes in the personal taxation rate scale applying to remuneration in the form of an income stream and, of course, budgetary considerations. Hence, the Government sees an annual review as the most appropriate mechanism for making adjustments to this figure. I have noted Senator Evans's comments concerning the question of imposing uniform safeguards over bodies that are eligible to set up approved deposit funds. He talks about this in paragraph (1) (b) of his amendment which calls on the Government to: provide that bodies which issue Approved Deposit Funds have uniform financial safeguards to protect Approved Deposit Fund investors; In formulating the relevant provisions, the Government took the view that it was important to ensure that there would be wide competition amongst the institutions that are eligible to establish approved deposit funds. I point out to Senator Watson that there are considerably more institutions which have that provision than the trade union movement groups which only he chose to mention. The arrangement means that those seeking approved deposit fund facilities will have a choice as to whether to place their lump sum with institutions which are subject to stringent regulations or those which are subject to less stringent control. This is, of course, the situation that applies to savings generally. In essence, it will be a matter for each individual to consider the kind of institution with which he or she wishes to place a lump sum and the terms and conditions on which approved deposit fund facilities are being offered. Given the range of regulated bodies that will be operating in the market, the Government does not believe that there is a need to widen the scope of regulation in the financial area to take account of the role to be performed by approved deposit funds. I add that while the legislation will impose certain minimum rules that will provide some safeguards to depositors, these rules will include the keeping of appropriate accounting records and the audit of compliance with those rules by a registered auditor. These rules apply without discrimination to all institutions which set up an approved deposit fund. Paragraph (1) (c) of Senator Evans's amendment calls on us to: Amend the Social Security Act 1947 so that it is compatible with changes in this legislation to ensure that annuity holders are not disadvantaged through having capital repayments treated as income for pensions; and The Government announced on 19 May 1983 a review of the current arrangements under which the return of capital component of the payment stream received by the holder of the annuity is taken into account in the income test used to determine eligibility for age pensions. The Government understands and recognises the concerns behind this amendment. As the Senate is aware, the Prime Minister (Mr Hawke) announced on 1 June 1984 a new assets test for pensions eligibility. The treatment of capital component of annuities is currently under consideration in the light of that test. On 4 June I undertook in answer to a question from Senator Evans to advise him of the Government's decision as soon at it had been made. Paragraph (2) of Senator Evans's amendment states that the Senate: calls on the Government not to proclaim this legislation until a system of indexed bonds has been introduced. The Treasurer has indicated that the Government sees indexed securities as having a potentially important role in the context of its policy on retirement incomes, particularly encouraging the development and use of fixed indexes annuities as a means of providing incomes for retirement. The Treasurer announced on 20 December 1983 that the Government had decided to issue indexed securities along the lines recommended by the Martin group. Discussions have now been held with market participants regarding the detailed forms of the security and consideration of these issues is continuing. Market participants have suggested that there would be merit in the initial issue of indexed bonds awaiting the passing of the March and June quarters in which the CPI is Medicare affected. There is really little logic in why the date of effect of the new measures should await the introduction of indexed bonds. There is already a range of mediums into which lump sums can be invested or rolled over. The Government expects that to flower gradually over time as the new arrangements take effect as, in fact, I might interpose, the market for annuities has increased over the years in other countries with similar systems. Because of the before-after transitional arrangements, the volume of lump sums subject to the new taxation arrangements will be modest in the initial years. The Government has made it abundantly clear that the new measures are to start from the beginning of the current financial year. Community expectations and all the administrative arrangements are geared to that. Senator Dame Margaret Guilfoyle, on behalf of the Opposition, also moved an amendment. Paragraph (a) deplores the Bill's attack on the retirement aspirations of hundreds of thousands of ordinary Australians. The major reason for the new taxation arrangements for lump sums is taxation inequity. Prior to these changes, a glaring inequity existed between people who received remuneration in the form of an income stream-that is, a pension or regular superannuation payments-and those who received it in the form of a lump sum payment. Income streams were, and are, fully subject to tax while lump sums were largely exempt from tax. Senator Messner —That is rubbish. Senator GRIMES —This differential tax treatment has been recognised as unfair and anomalous by a succession of committees of inquiry. There has been the Asprey Taxation Review Committee, the Hancock National Superannuation Committee of Inquiry and the Campbell Committee of Inquiry into the Australian Financial System. I would rather take their reviews on the matter than Senator Messner's. A line of thought common to all of them was that while taxpayers should retain the option of taking a lump sum on retirement, the taxation system should not provide an incentive for taking retirement benefits in that form rather than as a pension. In other words, the tax system should neither encourage nor discourage people from choosing a lump sum ahead of a pension. The Government's new proposals recognise this. The tax treatment of pensions is, of course, the same as that of any other forms of income, such as wages. It is the treatment of lump sums that has been out of step. Accordingly, the Government has decided to change the taxation arrangements relating to lump sum payments, both superannuation and other forms of lump sum payments. These changes to the tax law do not mean that the major tax concessions for superannuation are removed. In fact, superannuation remains a very attractive form of saving. What the changes do mean is that superannuation lump sums are treated in a way broadly similar to superannuation pensions and that tax avoidance, through the provision of remuneration in lump sum form, is restricted. The measures involve no element of retrospectivity. There is no diminution of any benefit relating to employment before 1 July 1983. Lump sums paid after 30 June 1983 will continue to attract the previous tax rules to the extent that they relate to service before the changeover date. Paragraph (c) of Senator Dame Margaret Guilfoyle's proposed amendment refers to the trade unions. It condemns the privileged status conferred upon trade unions in relation to deposit funds. Given the very wide range of institutions that will be eligible to offer approved deposit fund facilities and the diversity of standards applicable to those institutions, the Government does not accept that trade unions will be in a privileged position. It is clear that trade unions, along with other eligible institutions, will be facing considerable competition in this field. It is, of course, relevant that trade unions are already eligible to engage in activities that are not unlike the business of establishing approved deposit funds. In this context I mention that, under the existing provisions of the Life Insurance Act 1945, trade unions may provide life insurance benefits to their members. In addition, trade unions are involved in the operation of superannuation funds already. Paragraph (d) of the proposed amendment regrets the Government's failure to produce a coherent approach to retirement security policy. One may well question the validity of the Opposition making that remark. This Bill contains measures to tax more fairly superannuation benefits received in different forms, to make annuities more attractive methods of providing for retirement incomes, to introduce approved deposit funds, and new institutions for providing portability for superannuation benefits. These steps represent major improvements to retirement incomes policy. The legislation is part of a coherent scheme to bring security to old people of this country. The measures are being supplemented by other government initiatives. The Government will legislate to give effect to the new assets test. It has introduced an incomes test for pensioners aged over 70 to ensure that the provision of retirement income from the public purse is directed to those in need. This Bill will enhance the market for annuities by removing double taxation. In addition, the Government will shortly make the supply of annuities more attractive to life offices by changing the minimum valuation basis prescribed in the fourth schedule of the Life Insurance Act. This change to regulations will make possible an annuity that provides larger income payments to be purchased with a given lump sum. The Government has also announced its intention to issue indexed bonds which will facilitate the supply by financial institutions of indexed annuities and pensions. The Government places a high priority on developing a national retirement incomes package. There are three major elements to the package: Improvements in occupational superannuation; increases in the rate of age pension; and consideration of a national superannuation scheme. There are widely acknowledged deficiencies in existing arrangements for occupational superannuation. These include the extent of coverage, and thus the access to taxation benefits for retirement saving; the portability of superannuation benefits; and the conditions relating to the vesting of employer contributions. The Government has a good deal of work in hand relating to these issues. The area is complex. We do not pretend that there are easy answers but we are at least taking steps towards getting those answers. The Government is proceeding with an assessment of the report of the Commonwealth Task Force on Occupational Superannuation in the light of views received from the States, the superannuation and insurance industries and other interested parties. With regard to pensions, the Government has a commitment to raising the standard pension to 25 per cent of average male weekly earnings. We hope to be able to move further towards this target in the coming Budget. We also expect in the near future to receive a paper prepared by an interdepartmental committee canvassing options in relation to improvements in the provision of retirement incomes, including possible national superannuation alternatives. The Government will also give careful consideration to the views of the Senate Standing Committee on Social Welfare when it reports on its inquiry into the incomes system. This legislation, as I have pointed out, is part of an attempt to make the retirement income provisions in this country more comprehensive and more equitable, to remove only some of the anomalies which exist and which have been acknowledged to exist in the superannuation provisions in this country, by the Asprey Taxation Review Committee, the Hancock National Superannuation Committee of Inquiry and the Campbell Committee of Inquiry into the Australian Financial System. We believe that this is an important step as part of a wide reform of the superannuation system. We believe that the end result will be that all income earners in Australia will be able to prepare for their retirement in the certainty that when they retire they will be able to get a retirement income to which they have a right, and a retirement income which will not be put at risk by distortions in the system which now exist. I thank honourable senators for their contributions to the debate and commend the legislation to the Senate. Question put: That the words proposed to be added (Senator Jack Evans's amendment to Senator Dame Margaret Guilfoyle's proposed amendment) be added. The Senate divided. (The President-Senator The Hon.Douglas McClelland) Ayes . . . . . . . . . . . 5 Noes . . . . . . . . . . . 50 —— Majority . . . . . . . . . 45 —— Chipp, D. L. Macklin, M. J. (Teller)Evans, Jack Mason, C. V. J. Harradine, B. Baume, Peter Kilgariff, B. F. Bjelke-Petersen, F. I. Lajovic, M. E. Bolkus, N. McClelland, DouglasBoswell, R. L. D. MacGibbon, D. J. Carrick, Sir John McIntosh, G. D. Chaney, F. M. Maguire, G. R. Childs, B. K. Martin, K. J. Coates, J. Messner, A. J. Coleman, R. N. Missen, A. J. Colston, M. A. Primmer, C. G. Crichton-Browne, N. A. Ray, RobertCrowley, R. A. Reid, M. E. Durack, P. D. Reynolds, M. Elstob, R. C. Richardson, G. F. Evans, Gareth Robertson, E. A. (Teller)Foreman, D. J. Ryan, S. M. Georges, G. Scott, D. B. Gietzelt, A. T. Sibraa, K. W. Giles, P. J. Tate, M. C. Grimes, D. J. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Walters, M. S. Hearn, J. M. Watson, J. O. W. Hill, R. Withers, R. G. Jones, G. N. Zakharov, A. O. Question so resolved in the negative. Amendment negatived. Amendment (Senator Dame Margaret Guilfoyle's) negatived. Original question resolved in the affirmative. Bills read a second time. The Bills. Senator GEORGES(Queensland)(10.20) —Mr Chairman- Senator Grimes —Come on, George; we want to go home. Senator GEORGES —Yes, I know that, but I have a matter of privilege to raise. I tried to attract the President's attention, but he left the chair before I had the opportunity to do so. I refer you, Mr Temporary Chairman, to standing order 188, which concerns the privileges of the Senate and which states, among other things, that a matter of privilege should be raised at the earliest opportunity, otherwise it may be determined-- The TEMPORARY CHAIRMAN(Senator Townley) —I do not wish to interrupt you, Senator Georges, but the Committee of the Whole does not have power to deal with a matter such as this. Our only course would be to report progress and recall the President. If you feel that it is that important-- Senator GEORGES —The problem is that the Senate adjourns at 10.30 p.m. It is my view, under standing order 188, that this matter of privilege should be raised today and not allowed to go until tomorrow. The TEMPORARY CHAIRMAN —Senator Georges, as I said, you have to raise the matter with the Senate. You would have to get the Minister to move that the Committee report progress. The Committee has to make a decision. Senator Gareth Evans —Could it not wait for a few minutes? Senator GEORGES —Yes, I shall allow the Committee to proceed. I do not want to embarrass the Committee. Whether I shall raise the matter again depends on the time that the Bills take in Committee. The TEMPORARY CHAIRMAN —Thank you, Senator Georges. Senator MESSNER(South Australia)(10.23) —I should like to deal with clause 15 of the Income Tax Assessment Amendment Bill (No. 3) 1984. In winding up the second reading debate the Minister for Social Security, Senator Grimes, talked about the allocation of periods of service before and after 30 June 1983, the before and after provisions and how they would operate. That was in response to an earlier remark of mine in the second reading debate when I was seeking to find out from the Government whether the situation which I shall outline was covered by the legislation as drafted. The point I was trying to make was that in many instances when people change jobs and move from one employer to another, arrangements are made between the employer and the employee for a credit to be given for past service with a previous employer. The credit that is given in those arrangements may not necessarily be identified as a certain number of years. I should like an assurance from the Government that in those situations in which negotiated credits are given they will be treated as though the whole period of service before 30 June 1983 was taken into account as though it was a continuous period of employment. Senator GRIMES(Tasmania-Minister for Social Security)(10.25) —I certainly would like to assist Senator Messner but I am afraid that the advisers and I are not sure what he means. If a credit is not given as a certain number of years, what is it given as; how is it defined? Senator MESSNER(South Australia)(10.25) —It may be in terms of a number of years, which may be stated as a number, but which may not represent the exact number of previous years of service with the previous employer so that it may be a credit for some considerable period- say 10 years-whereas there was a period of service with the previous employer of, say, five years. I would like some kind of answer as to what might be taken into account in that formula. Senator GRIMES(Tasmania-Minister for Social Security)(10.26) —The advisers here and I have some difficulty understanding how the provision whereby a person who worked for, say, seven years and was given 10 years credit on a superannuation scheme could be allowed in the legislation in calculations of superannuation payments without opening the way for considerable exploitation in that area. I do not know the exact circumstances of the sorts of situations that Senator Messner is talking about, but I will certainly raise the matter with the Treasurer (Mr Keating). Off the top of my head, and I am sure off the top of the advisers' heads, it is hard to see how the allowance of that sort of thing would not be open to considerable exploitation in the future, which is something we want to avoid. If Senator Messner will accept that, I will certainly refer the matter to the Treasurer to see whether he can give us some examples which would be of benefit. Senator MESSNER(South Australia)(10.27) —I thank the Minister for that. I take it from the Minister's answer that the general principle will apply in all cases that full credit will be given for the number of years service in all circumstances where there is a split between two employers. Senator GRIMES(Tasmania-Minister for Social Security)(10.27) —I certainly give Senator Messner an assurance that full credit will be given for the period of employment. In paragraph (a) of the legislation, 'eligible service period', refers to where there is a payment which relates to that relevant eligible period of employment. I think that covers the matter. If there is an actual period of employment, yes, it will be counted. Senator HARRADINE(Tasmania)(10.28) —Mr Temporary Chairman, I want to raise two matters in the Committee stage of the debate on the Income Tax Assessment Amendment Bill (No. 3) and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill. I did not speak at the second reading stage because I think all of the matters I wished to raise were raised by other speakers. I now wish to raise two matters. One deals with the computation provisions in respect of the dependent spouse of a deceased superannuitant and the other deals with the amount of tax applied to lump sums which are rolled over into annuities. The first matter relates specifically to sub-section 27A of the Income Tax Assessment Amendment Bill (No. 3). On page 76 the explanatory memorandum states in regard to sub-section 27A (3): Sub-section (4) will ensure that eligible termination payments, in consequence of the termination of employment or from a superannuation fund or approved deposit fund, made after the taxpayer's death to the estate of the taxpayer will not be included in the assessable income of the estate by virtue of Subdivision AA and proposed sub-section 101A (3) to the extent that the Commissioner considers appropriate having regard to the extent to which the taxpayer's dependants (see the notes on the extended definition of 'dependant' in sub- section 27A (1)) are expected to benefit from the estate. Where a payment of these kinds is made direct by the employer or fund to a dependant, the terms of paragraphs (a), (b) and (c) and sub-section 27A (3) prevent the payment from being an eligible termination payment of either the dependant or the deceased. Consideration interrupted. The TEMPORARY CHAIRMAN(Senator Townley) —Order! It being 10.30 p.m., under sessional order I put the question: That the Temporary Chairman do now leave the chair and report to the Senate. Question resolved in the affirmative. The Temporary Chairman having reported accordingly- The PRESIDENT —It being 10.30 p.m. I put the question: That the Senate do now adjourn. Senator TATE(Tasmania)(10.31) —I rise on a matter of privilege and wish to indicate to the Senate a proposed course of action. In the National Times of 8- 14 June 1984 there is an article which purports to report evidence given before the Senate Select Committee on the Conduct of a Judge. The Committee has taken evidence in camera and has not published any of its evidence nor authorised any other person to do so. The publication of evidence taken in camera by a committee, or of documents submitted to a committee, without the authorisation of that committee is one of the well known categories of contempt. If the article accurately reports the evidence given before a committee, it would clearly be a contempt. If, on the other hand, the article is inaccurate in its report of evidence given to the committee it is also one of the established categories of contempt to publish false accounts of proceedings before either House or their committees. Therefore, whatever the accuracy of the article, there is a prima facie case of contempt in the publication of this report. I therefore wish to indicate to the Senate that tomorrow I propose to give notice of a motion to refer the matter to the Privileges Committee. Senator TOWNLEY(Tasmania)(10.32) —I wish to speak for a few moments on a matter concerning Medicare. It was brought to my attention once before by a lady who lives in Tasmania. She has again written to me concerning the subject of the gap between fees charged by doctors and the refund received from Medicare or some other medical benefits fund. The point is that once again she is complaining about not being able to insure for the gap between the refund received from a medical benefits fund or Medicare and what the doctor charges. This lady, who is a pensioner is in no way criticising the doctor. She realises that doctors are entitled to charge what they need to run their practice. She recognises too that at a time when costs are rising in every other area she should not expect to receive charity-as she puts it-from her doctor. She again takes up the issue with Dr Blewett who, when Medicare was introduced, indicated that no person would be disadvantaged under the scheme. Quite clearly this lady is disadvantaged and has been. Yet she wishes to keep going to her doctor. The matter I have briefly touched on is very well covered in the letter that she sent me. To save the time of the Senate I seek leave to have that letter incorporated in Hansard. Leave granted. The letter read as follows- 10th Floor A.M.P. Building 86 Collins Street Hobart, Tasmania 7000 Dear Senator Townley, Further to my correspondence re Medicare on the subject of ''the gap'' between fees charged and refund received. Due to complications arising from my wrist fracture it was necessary for me to visit my orthopaedic surgeon who is familiar with my health condition. I have had sympathetic dystrophy over the past 5 years or so, and it is therefore most important that I am referred to my own specialist. As he does not usually bulk- bill I paid the initial account, expecting to be refunded as previously. But '' the gap'' was $12 and being a holder of a P.H.B. card I queried the refund, and was told to explain my circumstances to my specialist. This brings us back to the promise of Dr Blewett when Medicare was introduced that no person would be disadvantaged under the scheme. Despite being in Medical Benefits and a pensioner I am committed to pay ''the gap'', unless I seek '' charity'' from my specialist, who would then feel obliged to accept a decrease in his fee from me and all his pensioner patients. This at a time when costs are rising in the medical field, and high wages being demanded by all and sundry. It appears that I will have no alternative but to keep on paying the excess from my pension, as like other pensioners in Tasmania we cannot accept that we must ask to get treatment on the cheap. We are quite prepared to insure for ''the gap'' but as you know this is not permitted by the Federal Government. Hoping you will be able to inform the Minister of Health, Dr Blewett, of the facts mentioned although he appears adamant that his scheme is the best for all. Thanking you, Senator GRIMES(Tasmania-Minister for Social Security)(10.35) —I will read the letter with interest tomorrow. I am always interested when this matter is raised by Senator Townley or other people in this place. I think Senator Townley realises that one of the reasons there is no gap insurance is that there would be no inhibition against doctors charging what they liked under the system. I remind Senator Townley that, when Medibank was introduced, it was the Australian Medical Association and the medical profession which violently opposed the introduction of gap insurance because at that stage they believed it was important to have a gap so that people would know what they were paying. It is what I call the gipsy principle; they believe that good medicine can be practised only when their palms are crossed with silver. However, I will read the details of the letter, refer it to the Minister for Health, Dr Blewett, and share with him the irony of someone defending the medical profession in a situation which only a few years ago it opposed. Question resolved in the affirmative. Senate adjourned at 10.36 p.m. Broadcasting and Television Act-Regulation-Statutory Rules 1984 No. 104 Defence Act-Determinations 1984- No. 20-Pay of Reserve Force Members No. 21-Higher Duties Allowance and others Postal Services Act-Regulations-Statutory Rules 1984 No. 105 Public Service Act- Determinations 1984-No. 10 Regulations-Statutory Rules 1984 No. 107 Seat of Government Act-Ordinances 1984- No. 17-Classification of Publications (Amendment) No. 18-Landlord and Tenant (Amendment) Telecommunications Act-Regulations-Statutory Rules 1984 No. 106 GOVERNOR-GENERAL'S MESSAGES-ASSENT TO LAWS: Messages from His Excellency the Governor-General were reported, informing the Senate that His Excellency had, in the name of Her Majesty, assented to the following laws: 8 June 1984-Messages- No. 74- Supply Act (No. 1) 1984-85 Supply Act (No. 2) 1984-85 Supply (Parliamentary Departments) Act 1984-85 Audit Amendment Act 1984 No. 75- Australian Bicentennial Road Development Trust Fund Amendment Act 1984 Roads Grants Amendment Act 1984 The following answers to questions were circulated: (Question No. 756) Senator Sibraa asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice, on 27 March 1984: On what date did Mr Owen Harries (a) apply for; and (b) receive Australian citizenship. Senator Grimes —The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable member's question: The date of a grant of citizenship is a matter of public record. Other information on an individual application for citizenship is regarded as a private matter. However, in this case Mr Harries has indicated his willingness to release information on the date of his application. The two dates involved are: (a) date of application: 22 August 1981 (b) date of grant of citizenship: 17 September 1981 (Question No. 802) Senator Foreman asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 3 April 1984: (1) How many community employment program (CEP) projects have been approved in the following South Australian Federal electorates: (a) Adelaide; (b) Barker; (c ) Bonython; (d) Hawker; (e) Hindmarsh; (f) Grey; (g) Boothby; (h) Kingston; (i) Port Adelaide; (j) Sturt; and (k) Wakefield. (2) What has been the total amount allocated to CEP projects in each electorate . (3) How many unemployed persons have been employed on CEP projects in each electorate. Senator Button —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: The following table shows statistics of approved projects under both Commonwealth and State/Territory components of CEP from each electorate as at 31 May 1984. The statistics for (3) show the number of jobs proposed in respect of approved projects as detailed placement data are not yet available. (2) (1) Total Number amounts (3) of allocated Number projects to of jobs approved projects proposed $m (a) Adelaide 165 7.22 703 (b) Barker 81 4.89 565 (c) Bonython 25 4.35 420 (d) Hawker 25 1.96 273 (e) Hindmarsh 38 1.96 255 (f) Grey 103 6.28 709 (g) Boothby 47 2.53 309 (h) Kingston 27 2.04 242 (i) Port Adelaide 52 2.85 297 (j ) Sturt 42 2.12 364 (k) Wakefield 95 3.92 505 (Question No. 804) Senator Reynolds asked the Minister representing the Minister for Communications, upon notice, on 4 April 1984: (1) Is there an on-going dissatisfaction with regard to countrywide calling as it affects rural subscribers, in particular, from the Rural Telephone Subscribers Association which regards the 32-kilometre limit for local calls as unrealistic in country areas. (2) Can the Minister for Communications indicate what steps are being undertaken by Telecom to overcome the anomalies, which apparently still exist for subscribers in extended zones. Senator Button —The Minister for Communications has provided the following answer to the honourable senator's question, based on advice from the Australian Telecommunications Commission: (1) Generally, the countrywide calling scheme is well accepted by customers in extended charging zones. However, Telecom is aware that the Rural Telephone Subscribers Association is expressing a continuing concern with regard to the 32 -kilometre limit on local call access from an automatic exchange. (2) All representations concerning countrywide calling are being considered by Telecom on their merits relative to the overall thrust of the scheme. A number of modifications have been made to the scheme since its introduction in response to concerns expressed by some of the customers affected by countrywide calling. However, Telecom indicated that no further major amendments to the scheme, which it considers brings many real benefits to its rural customers, are anticipated. (Question No. 827) Senator Bolkus asked the Minister representing the Minister for Defence, upon notice, on 2 May 1984: (1) Has the Minister for Defence seen the article in the National Times of 27 April to 3 May 1984, in which it is indicated that documents from the United States Air Force Space Command illustrate that Nurrungar is an entirely American operation with no vestige of Australian control. (2) Does the article state that the United States squadron has 'responsibility for monitoring performance of Australian civilians' at Nurrungar. (3) Is it still the Government's position that this base is under joint control ; if so, why. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) Yes. (2) Yes. (3) Yes. The author or the article is quite wrong in his claim that there is a lack of Australian control or participation in the joint defence space communications station at Nurrungar. Australian and United States personnel are fully integrated in the station's operations and management. This includes the operations room where standing procedures provide that there be at least one Australian service officer on each shift crew, and where in fact at the present time three of the four shift directors are Australian officers. The performance of Australian civilians at Nurrungar is monitored by their supervisors, be they United States Air Force personnel, Australian military personnel or Australian civilians. This is in accordance with normal management practice in any well conducted organisation. (Question No. 871) Senator Lajovic asked the Minister representing the Minister for Defence, upon notice, on 2 May 1984: (1) Could an analysis of flying time of the four Boeing 707 currently operated by the Royal Australian Air Force be made available. (2) Have the four Boeing 707 already been modified for the inflight refuelling. (See Hansard, 4 May 1983, page 156, 5 May 1983, page 261.) Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) The tables below show the flying time for the four RAAF Boeing 707 aircraft since procurement. The additional two aircraft procured in June 1983 required overhauling. One aircraft became fully operational in November 1983 and the second is expected to be available in November 1984. Analysis of the Flying Time of RAAF Boeing 707 Aircraft A20-624 A20-20-627 Total Per Aircraft serial number (hours) (hours) (hours) cent Initial aircraft-1 April 1979 to 30 April 1984 Defence Tasks 2,005.0 2,088.7 4,093.7 53 Training 1,019.0 1,190.6 2,209.6 28 Special Purpose 679.1 647.0 1,326.1 17 *National Commitment 38.0 84.5 122.5 2 Total 3,741.1 4,010.8 7,751.9 100 Additional aircraft-1 June 1983 to 30 April 1984 A20-623 A20-629 Total Per Aircraft serial number (hours) (hours) (hours) cent Defence Tasks 37.7 434.6 472.3 78 Training 18.9 71.5 90.4 15 Special Purpose . . . . . . . . *National Commitment . . . . . . . . **Ferry 22.2 20.4 42.6 7 Total 78.8 526.5 605.3 100 *Hours flown on 'National Commitment' are those flown for Government directed tasks, tasks for other government departments, search and rescue, medical evacuations and assistance to the civilian community. **Hours associated with ferry of aircraft from Canada to Australia following their purchase. (2) No. Whilst it is still planned for the four Boeing 707 aircraft to be modified for the air-to-air refuelling role, the timing of the modification is for later decision in the light of overall Defence priorities. (Question No. 896) Senator Peter Rae asked the Minister for Industry and Commerce, upon notice, on 29 May 1984: (1) Did ACN 84/96 advise that- (a) outboard motors have been exported from the United States at prices less than their normal values in the domestic market; (b) these exports are causing material injury to the Australian industry; (c) the Department of Industry and Commerce has decided not to impose securities at this stage; and (d) imports will be monitored and appropriate action taken in response to changes in import patterns to prevent material injury being caused during the period of the investigation. (2) Why have securities not been imposed, if the Department of Industry and Commerce is satisfied that dumping has occurred and that material injury has been caused. Senator Button —The answer to the honourable senator's question is as follows: (1) (a) (b) (c) (d) Yes. ACN 84/96 was a preliminary finding based on information submitted by interested parties. This information will be fully verified and tested in the ongoing investigations which in accordance with the newly established procedures will be completed within 120 days from the date of the preliminary finding. (2) In the administration of anti-dumping action the Government's rights and obligations are determined inter alia by the GATT anti-dumping code. Article 10 of that code provides that provisional measures shall not be applied until there is a preliminary finding of injury and unless the authorities concerned judge that they are necessary to prevent injury being caused during the period of investigation. The Department came to the view that on the basis of established trading patterns and known forward import orders, the imposition of securities was not justified. Provisional measures may be imposed at any time following the preliminary finding. Imports are being monitored and if necessary action will be taken in response to changes in import patterns to prevent material injury being caused pending finalisation of the investigation. Senator Walsh —On 3 April 1984 (Hansard, pages 1086-7) Senator Chipp asked me the following question without notice: Has the Minister forgotten-Senator Mason drew his attention to it last year- that the United States Energy Research and Development Administration officially confirmed on 4 August 1977 that the United States of America had constructed and exploded a nuclear bomb made from reactor grade plutonium. Will the Minister correct his statement which, although no doubt made in good faith, was a stark case of misleading the Senate? The answer to the honourable senator's question is as follows: I can assure the honourable senator that I have not misled the Senate on this matter. My original answer had concerned the production of weapons grade plutonium from power reactors. 'Weapons grade' plutonium is normally regarded as having a Pu-240 content of no more that 5 per cent, that is being derived from very low burn-up fuel. For weapons purposes, the Pu-240 content must be kept to a minimum as Pu-240 spontaneously fissions and thus can cause premature detonation. As I noted in my answer, spent fuel from the normal operation of a power reactor has a high burn-up. The Pu-240 content of such fuel would commonly be around 20-30 per cent. The honourable senator's question does not indicate any inconsistency with my earlier answer, but addresses a somewhat different point, namely, can an explosive device be produced from reactor grade plutonium. Although the Energy Research and Development Administration stated on 4 August 1977 that the US has detonated such a device (apparently in 1962), it is difficult to evaluate this claim as the isotopic composition of the plutonium used and the yield of the detonation have never been revealed. Below is set out an extract on this subject from briefing prepared by the United States Lawrence Livermore Laboratory in November 1976. While it appears feasible under certain circumstances, using highly sophisticated technology, to produce an explosion from reactor grade plutonium, I am advised that this is technically difficult and would not result in a practical weapon. Production of a weapon, as distinct from an explosion, involves factors such as reliability, size of yield, and deliverability. There are therefore sound practical reasons why those countries which have produced nuclear weapons have not used dedicated power reactors for this purpose . QUESTIONS AND ANSWERS ON THE NUCLEAR EVENT USING REACTOR GRADE PLUTONIUM 1. Q-When did the event occur and was it announced? A-In 1962. The event was not announced at that time. 2. Q-Did the device produce a nuclear yield? A-Yes. 3. Q-What was the yield? A-The yield was quite low; however, the actual number is classified. 4. Q-What laboratory conducted the test? A-The test was conducted by LASL at the Nevada Test Site. 4a. Q-What is reactor grade plutonium? A-Reactor grade Pu is defined as containing more that 8 per cent Pu-240. 4b. Q-How is reactor grade plutonium made? A-Reactor grade plutonium is extracted from spent reactor fuel by a complex chemical recovery process under highly controlled conditions because of the radiation hazards involved. 5. Q-What was the percentage of Pu-240 in the device? A-The exact isotopic composition is classified. 6. Q-Has there been more than one test of a device using reactor grade plutonium? A-This is the only test of this nature that has been conducted by the United States. 7. Q-Is reactor grade Pu used in any stockpile weapons? A-The isotopic composition of Pu used in a stockpile weapon is classified. 8. Q-Are additional tests using reactor grade plutonium planned? A-No additional tests are planned. WNP-33A: The fact that a nuclear test was conducted using reactor grade Pu and that it successfully produced a nuclear yield is unclassified. Senator Walsh —On 4 April 1984 (Hansard page 1188) Senator Jack Evans asked me, as Minister representing the Treasurer, a question without notice regarding interest rates and a supplementary question concerning the steps that the Government would take to protect home buyers from the effects of future possible increases in interest rates. The Treasurer has provided the following information in answer to the honourable senator's supplementary question: There has been a marked decline in home loan interest rates since the Government assumed office. This has provided significant relief to existing home buyers and has given a substantial boost to the housing industry. The Government would, of course, like to see further permanent reductions in the level of interest rates including those on home loans. Accordingly, the Government's economic policies will continue to be directed towards the achievement of sustained and stable economic growth in a context of declining inflation. Such a policy is the only realistic approach to encouraging long term interest rate reductions. No government can guarantee that interest rates will not rise-there are many factors involved in determining the level of interest rates and not all of these are amenable to direct influence by the authorities. However, the Government recognises the special importance of interest rates to home buyers and, as the honourable senator would be well aware, the Government has extended considerable direct assistance to home buyers. At the same time, the Government has moved to increase the ability of the banking system to attract more funds for lending to home buyers and for other purposes. The vast majority of Australians-including home buyers-will obtain very real benefits from these changes. Senator Walsh —On 4 May 1984 (Hansard, page 1607) Senator Robert Ray asked me, as Minister representing the Treasurer, a question without notice concerning the consumer price index (CPI). In the course of my answer I undertook to consult the Treasurer regarding certain points. The Treasurer has provided the following advice regarding those points: I am advised that the OECD has not expressed reservations regarding the way in which the Australian CPI is determined; and The construction of the CPI is the responsibility of the Australian Statistician. The CPI weights and regimen are reviewed regularly (once every four or five years) by the Statistician. The latest review was completed in mid- 1982 and the new (10th series) CPI was released with the publication, at the end of July 1982, of the June quarter 1982 CPI index numbers. The next review is due in 1986 and will be conducted with regard to the results of the 1984 household expenditure survey, currently under way. Senator Walsh —On 31 May 1984 (Hansard, page 2231) Senator Hearn asked me, as Minister representing the Treasurer, the following question without notice: In view of the nature of this important survey (the household expenditure survey), and the concern of constituents, I ask the Minister: Will he make a further statement of reassurance to members of the public as to the purpose of this survey? The Treasurer has provided the following supplementary information in answer to the honourable senator's question: The household expenditure survey is a major national survey of the income and spending patterns of private households throughout Australia. It is designed to show how households of different size, composition and income spend their money and on what types of goods and services. In particular, the survey will enable comparisons to be made between the income and expenditure patterns of special groups (for example, pensioners, single-parent families, et cetera) and those of the rest of the community. Statistics from the survey will also be used for a wide range of social welfare policy work and will provide up to date data for reviewing the weighting in the consumer price index. The survey itself is subject to stringent safeguards on confidentiality. Particulars relating to individual persons are seen only by authorised ABS officers who are required, under the Census and Statistics Act 1905, to observe strict secrecy in the handling of information supplied for statistical purposes. Only coded information, which does not include names and addresses, is entered into the computer records from which statistical aggregates are compiled.