Friday, 19 April 1985 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 9 a.m., and read prayers. The Clerk-Petitions have been lodged for presentation as follows: National Flag To the Honourable the President and members of the Senate in Parliament assembled. The Petition of certain citizens of South Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and its future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they so wish to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with the consent of the people in a referendum. And your petitioners as in duty bound will ever pray. by Senator Messner (from 44 citizens). To the Honourable the President and the members of the Senate in Parliament assembled. The humble petition of citizens of Australia shows- That the people of New Zealand and the New Zealand Government have given an example to the World in their efforts to achieve a Nuclear Free South Pacific, and such Decision being endorsed by the people at a General Election. Your Petitioners therefore pray that the Australian Government support the principled Stand taken by the New Zealand Government and urges it to condemn any efforts by the United States Government to impose economic or other sanctions on New Zealand in retaliation for their stand on Nuclear Vessels. We further urge the Australian Government to urgently implement its Policy to promote the development of Zones of Peace and Nuclear Free Zones in the Indian and Pacific Oceans. And your petitioners as in duty bound will ever pray. by Senator McKiernan (from 46 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: The financial plight of grape producers, their families and their respective local communities. Your Petitioners therefore humbly pray that the Government act now during the 1985-86 Budget considerations to: Remove the sales tax impost on all Australian produced wine Make funds available for the establishment of an institution to administer the restructuring of the grape producing industry. Place revenue raising imposts on all imported wine and wine spirit. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 27 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: Introduction of any additional capital gains taxes, wealth taxes or death duties is opposed on the grounds that: They adversely affect the small and medium size businesses in Australia, destroying incentive and discouraging investment in this important area of the economy; The Australian economy, and employment in particular, is heavily reliant on growth in small businesses; Any capital gains that might result when owners of small businesses finally sell the business are not 'windfall gains' but the result of many hard years of work and sacrifice, with very little being taken out of the business by way of salaries so that the maximum amount of money can be ploughed back into the business to create growth and jobs; The owners of small businesses often depend on a capital gain-which are simply deferred salaries-when they eventually sell their business to sustain them in retirement; Your petitioners request that the Senate, in Parliament assembled, will protect the rights of private enterprise and reject any inequitable additional taxes. And your petitioners as in duty bound will ever pray. by Senator Brownhill(from 66 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: 1. That the present Federal tax system is not equitable, readily understandable or manageable. It is making a material contribution to the decline in ethical standards in Australia, and in the opinion of many eminent Australians it is a tax system that basically makes us into a nation of cheats. 2. Some classes of taxpayers are more heavily taxed than others and two groups, wage and salary earners and small businesses, through the impact of inflation on the progressive rate structure, have suffered disproportionately in recent years. 3. A great many people see cheating the tax system as a necessary response to what they regard as cheating by Governments. 4. Through excessive marginal income tax rates, the spirit of free enterprise and hard work is being stifled. The groups in the community who generate savings are being discouraged from investing those savings in capital for business. 5. Any reform of the taxation system needs to be comprehensive and not piecemeal. Further, it requires an unimpeachable commitment from all political parties and parliamentarians to adopt a totally bi-partisan approach in debating tax reform proposals and legislation. Your petitioners humbly pray that the Federal Government will use the forthcoming Taxation Summit meeting as the occasion to announce the formation of one or more working parties committed to the development of a taxation system that will ensure that the necessary Government revenue is raised in the most equitable and efficient manner possible and that such working party (parties) be provided with adequate resources so as to permit the tabling of their recommendations in the Parliament not later than 30 June 1986. Further, your petitioners believe that one of the most significant ways this country could celebrate its Bi-Centenary is through the introduction, by 1988, of legislation that will give the people a fair and equitable taxing system. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 52 citizens). Petitions received. Senator JONES(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) expresses its concern that the Premier of Queensland Sir Johannes Bjelke-Petersen will not meet with the Federal Government and the Australian Council of Trade Unions in an attempt to resolve or find some settlement to the dispute in Queensland; and (b) notes the Premier's lack of concern with: (i) the effect on the Queensland and Australian economies; (ii) the hardship being suffered by the 800 sacked electricity workers, their wives and children; and (iii) the effect on business and the consumer in Queensland. Senator TATE(Tasmania)(9.04) —I move: That the following matter be referred to the Standing Committee on Constitutional and Legal Affairs for inquiry and report as soon as possible: The desirability, feasibility and possible content of a national Bill of Rights for Australia. I emphasise to honourable senators that this proposed reference is to be undertaken in the spirit of a genuine inquiry with the most fundamental questions concerning a Bill of Rights to be reported on. There are no presumptions or prejudices on the part of honourable senators in regard to this exercise. As I said, the most fundamental and basic questions concerning the Bill of Rights proposal will be open to examination. In fact the whole question of whether some such enterprise should be legislated into our legal framework needs to be addressed; also whether ordinary legislation should be used or whether some form of constitutional entrenchment should be attempted and, if so, whether that should be immediately or after some experience of ordinary legislation in this field. Indeed, the whole question of the proper relationship between the elected representatives of the people and the non-elected bench of judges needs to be considered because one needs to give serious thought to the problems of handing something to a bench of judges who are ultimately responsible to no-one and who take their positions by patronage. There is a real question of whether we as elected representatives, ultimately answerable every three years in the electorate, should hand over to them the interpretation of broadly phrased provisions in a Bill of Rights. This relationship between the legislature and the judiciary is a very real one that needs to be examined in a very fundamental sense if this enterprise is to be embarked upon. Clearly, the fact that such a Bill of Rights would have to operate in a Federal system requires a most careful analysis of the appropriate, and not merely the constitutionally possible, exercise of paramount national powers by this Parliament. Merely finding a head of power which could sustain a Bill of Rights would not without more be enough in my view and certainly would not dictate its use. The co-operative use of the plentitude of powers between the Commonwealth and the States would also need to be looked at I believe the Senate is probably well placed at this stage in this long debate-there has been debate in the public domain for over a decade-to undertake such an inquiry. The Senate has set its own house in order, as it were, by establishing the very effective functioning of the Standing Committee for the Scrutiny of Bills. It is well known that that Committee operates in a way which has been very helpful in the passage of legislation through the Parliament by ensuring, for example, that legislation does not trespass unduly on personal rights and liberties. Indeed, the operation now, and the experience that we have had of the operation, of the Human Rights Commission and the bringing into law and the operation of the Sex Discrimination Act, give us material which we can examine from the point of view of seeing how these forays into the field have fared. I believe the Senate Standing Committee on Constitutional and Legal Affairs will be well placed to undertake this particular project. I emphasise that it is not the intention of the Committee to devote its attention to any particular model for a Bill of Rights. We do not have in mind any exclusive model as a definitive approach. We say that various possibilities may be put before us and we will consider them all on their merits. The list of rights must not be regarded as closed in any sense. I know from discussions even this morning over breakfast with my good friend Senator Ron Elstob of South Australia that there is the question of whether a Bill of Rights restricted to the traditional well known lists of civil and political rights may be too narrow an approach. As he pointed out, the rights to education, to health care and to work are all matters which we would need to consider if submissions were received on them. The fact is that there is no hint of subterfuge here. Though it is a most unusual step, I find no difficulty in agreeing with Senator Durack's proposed amendment, although I would like some further time to consider it in conjunction with other senators. I wish to emphasise that, certainly as Chairman of the Caucus Legal and Administrative Committee, I have no knowledge of any particular Bill proposed by the Government in this area and this is not a subterfuge to get the Committee to consider any particular model proposed by the Government. I emphasise once again that the object of the exercise is to have an open and unprejudiced approach to the whole project and that is the spirit in which it will be undertaken. In conclusion, I believe it is also very important to emphasise that the great merit of public hearings on this proposal will be to enable the community at large to make submissions, to join in the debate and to make an input into the deliberations of this House. I hope that in that spirit the reference will be acceded to by the Senate. Senator DURACK(Western Australia)(9.10) —The Opposition has no objection to the broad terms of the reference that it is proposed should be put to the Standing Committee on Constitutional and Legal Affairs by Senator Tate's motion; in other words, that the Committee should give consideration to the concept of a Bill of Rights. No doubt there are various models that can be looked at. Senator Tate has referred to the traditional model and to the views of his colleague Senator Elstob in regard to a very different model from the traditional one. No doubt that sort of matter would be appropriate for the Committee's consideration. There is also, of course, as far as Australia is concerned, the very real question of how such a Bill would fit into the federal system; whether it would be proposed that an amendment be made to the Constitution, whether it would apply only to the Federal powers or whether it should apply to State powers, and so on. So there is a wide range of matters for consideration and certainly a wide range of matters of controversy in relation to a Bill of Rights. The Opposition has, as I said, no objection to that matter being considered by the Committee in so far as it is on that plane and in so far as it is a matter for discussion about the broad nature of a Bill of Rights. The Opposition does not have any particular view as to whether in theory there should or should not be a Bill of Rights. It would not be contrary to our stance in relation to this subject for a Senate committee to look at the matter and come forward with various models. However, the Opposition is very firmly opposed to the introduction of a Bill of Rights in Australia by some back-door methods, which is precisely, of course, the way in which this Government has been considering the matter, and particularly the way in which the former Attorney-General, now the Minister for Resources and Energy (Senator Gareth Evans), has been pursuing this subject. Therefore, we are entitled, I think, to be suspicious as to the intentions of the Government in light of what the former Attorney-General said and did-or failed to do-over the course of the last two years. That problem has not been allayed by the present Attorney-General (Mr Lionel Bowen), who has talked about drawing up a Bill of Rights which he will presumably be proposing for consideration by this Parliament. I remind the Senate of the course of events during the year before last when the Government was first elected. One of the centrepieces of its law and justice policy as propounded by Senator Evans at that time was the introduction of a Bill of Rights and use of the external affairs power of the Commonwealth-which has now been so widely interpreted by the High Court in the Tasmanian dam case-to introduce a Bill of Rights which is not an Australian Bill of Rights, or a Bill of Rights which would address current Australian interests and concerns, but a Bill of Rights which would simply give effect to the International Covenant on Civil and Political Rights. That Covenant is expressed in very old and traditional terms and represents the preoccupations of a number of largely Third World member countries of the United Nations which have had very little rights at all, and was supported by countries such as the Soviet Union which has had no civil and political rights at all. Therefore, it was not a satisfactory model. I was interested to hear Senator Tate say that Senator Elstob's views are very different from those propounded by the International Covenant on Civil and Political Rights. The other main objection the Opposition had to the proposal was the use of the external affairs power so that this Parliament- Senator Elstob —It would be worth considering by the Committee, would it not? Senator DURACK —The Committee can consider all options under this reference. The proposal was to use the external affairs power so that this Parliament would be forcing on the States, contrary to ordinary federal principles and structure, that model. It was notorious that legislation along those lines was being drafted. Despite Senator Gareth Evans's adherence to the principles of freedom of information when he was in opposition we could never get him to unveil the Bill of Rights. It was always going to be introduced in a few months time, but it never was introduced. Up to the period of the election last year there had been no Government admission that such a Bill had been drafted and prepared to such an advanced stage. It then emerged that the Bill had reached a very advanced stage and had been considered widely by everybody except members of this Parliament. As I said, I do not know what the state of play is in the Government in relation to the Bill. Certainly the present Attorney-General has expressed very publicly criticism of aspects of it. There are rumours that he is preparing his own Bill. So far this Parliament is no better informed about what the Government's present intentions are than we had been by Senator Evans for the last two years. This is a matter of very grave concern in regard to the future system of government of Australia. If a firm proposal of some sort is ever determined by the Government, it is the duty of the Government to introduce it into Parliament so that we can debate its principles and approach. We are very concerned that the reference to the Senate Standing Committee on Constitutional and Legal Affairs should not be yet another back-door method of making major changes to our Constitution in the form of the Government submitting to the Committee a draft Bill and endeavouring to get the Committee's support and, thereby, bipartisan support, for it ahead of full and public debate in this place and in the community about the divisions and approach of the Government's proposals, if any proposals are finally determined. I am entirely satisfied by what Senator Tate has said in introducing his proposal that that is not his intention or the intention of those who support this reference. As I said, the Opposition members of the Committee will certainly not be seeking to use this reference for that purpose at all. On the face of it, there would never have been any objection whatsoever by the Opposition to this motion going through at this stage in its present terms, even without debate. I imagine that there would be very great debate ultimately on any report the Committee brought in on such a controversial subject. However, in view of what has gone on in the last two years, the Opposition is very concerned to ensure that any proposals by the Government are not simply put to the Committee so as to test them out before the Committee ahead of their being introduced into this Parliament as a Bill and of proper consideration being given to them before the Committee would look at them. In order to ensure that, I move the following amendment: At end of motion add: ', but that the Committee, in the course of its inquiry, not consider the provisions of any Bill on this subject prepared by the Government unless such Bill has been introduced into the Senate and referred to the Committee by a further resolution'. In other words, I envisage that the Government would introduce its measure into this place. We would have a full second reading debate on it. If the Committee were still considering various other options no doubt the Senate would determine whether this Government's proposal should be considered by the Committee. As I have said, the Government may never introduce such legislation. It may wait until the Committee reports. I do not know what the Government will do. We have never been able to find out what the Government intends to do and that is what is concerning us. For two years the Government has been keeping secret what its proposals are despite the noises that it makes about its support for a Bill of Rights. We want to ensure that if the Government ever comes to any firm decision on this matter it will make its position known publicly so that it can be debated in this chamber and not in the deliberations of the Committee. The latter would be a totally unsatisfactory approach to a matter of this kind. As I have said, the Opposition is quite happy for the Committee to look at the subject of a Bill of Rights in very general terms but it demands that if the Government has its own proposal prepared and determined it should introduce it here first, and not to the Committee without giving the Senate or the Parliament an opportunity to debate it and determine whether it is a model which it will entertain or reject. Senator HARRADINE(Tasmania)(9.23) —I will support the motion. I am also attracted to the amendment. Senator Tate has outlined the reasons for the proposed reference to the Senate Standing Committee on Constitutional and Legal Affairs. He has outlined some of the matters that ought to be considered by the Committee. The very definition of what a right is could be another matter for consideration by the Committee. Questions are often raised as to whether or not there is any such thing as an inherent, absolute right; and why rights are asserted when interests are threatened in some way by the conflicting interests of others. Should rights be looked at as particular applications of some greater and higher principle and, if so, what are those principles? I wish the Committee every success in its consideration of those very important and fundamental issues. I expect that the report will come down in about 1990. Senator Puplick —Maybe in time for the tricentennial. Senator HARRADINE —Maybe. These are very serious matters and I think it is about time that they were logically addressed and in a bipartisan manner. I do, however, warn the members of the Committee, although they do not need warning because they are all experienced people, that it will be a quite difficult and time consuming task. The Committee is very brave to take on this reference. I believe it is a very important reference and I congratulate Senator Tate for bringing it before the Committee and those Committee members who have devised the reference motion for consideration by the Senate. Senator MISSEN(Victoria)(9.25) —I shall speak very briefly on this matter. I do not imagine that we will determine the question and vote on it today. I appreciate what Senator Harradine has said. This certainly is a difficult question which is fraught with problems in that it is highly political. Therefore, the suggestion has been made that a general discussion be held which would take into account the various possibilities that are available for the consideration of the issue of human rights in this country. It may not result in the introduction of a Bill of Rights at all. I rise to speak particularly because this debate has already led to some misconceptions on the part of the local Press, which I think sees the proposal as a manoeuvre connected with the internal problems of the Australian Labor Party. That is not the intention of the Standing Committee on Constitutional and Legal Affairs in taking on this reference. I will read into the record a statement which I have made, as Chairman of the Attorney-General's Committee of the Opposition parties' and which I released this morning. I said: I refer to an article by one Louise Dodson appearing in the Financial Review of the 18th April 1985. The article refers to certain internecine fighting between the Federal Attorney-General, Mr Lionel Bowen and certain members of the Caucus' Legal and Administration Committee. It concludes that the Attorney-General had suffered a set back from the Caucus committee's commitment ''to the introduction of a bill of rights which will now be referred to a bipartisan Senate Committee.'' This is apparently intended to refer to a decision by the all Party Constitutional and Legal Committee of the Senate which now proposes to investigate ''the desirability, feasibility and possible content of a Bill of Rights for Australia.'' As a member of that Committee I can assure the public that the Committee is prepared to discuss the general subject of a possible Bill of Rights but it is totally untrue to suggest that any form of such a Bill, whether proposed by Senator Evans, the previous Attorney or the present Attorney-General is the subject of such an inquiry. Any such proposal would be a separate matter for consideration by the Senate. As is well known, the Evans Bill of Rights was kept from the public prior to the 1984 election and has never been presented to this Parliament in any form. There is no proposal at present that the Senate Committee consider the terms of such a bill and the Liberal Senators have no intention of intervening in the squabble between the Labor factions over such a Bill. The inquiry will operate under a general charter that will enable the Committee to examine the whole subject of enforcement of human rights in this country. That statement supports the position which Senator Durack stated on behalf of the Opposition that, if a specific Bill is to be referred to, it should be referred to by this Senate. I think that is the position taken by members of the Committee who sit on this side of the chamber. As far as this whole question is concerned, I have no doubt that specific Bills will be looked at and that types and forms of a Bill of Rights will be considered. The shadow Attorney-General, Senator Durack, is right in saying that one should not see this inquiry as a means of referring, by a back-door method, a Bill which as yet has not actually been brought forward. I suppose that will be only one of the matters which will be considered by the Committee. I have made those remarks because I think there is some misconception on the part of the Press as to the purpose of the proposed inquiry. I am sure the Opposition members are not concerned in playing a part in any way in the discussions among the factions of the Labor Party, which are already quite adequate in number without any help from us. This proposed inquiry could do a lot of good because the whole question of human rights in this country has to be taken from the plane it has descended to and looked at by a committee of the Senate. I hope, therefore, that the motion and Senator Durack's amendment, in such form as it will subsequently be determined, will be passed so that we can get on with the job. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(9.30) —I contribute briefly to the debate since my own contribution to the development of human rights legislation in this country seems to be somewhat in the eye of the storm at the moment. I approach this debate with some diffidence but want to make a couple of brief points. The first is that I can understand the concern that beats in the breasts of the Opposition that it is not appropriate that a Senate Committee approach the task of analysing a particular piece of legislation without that piece of legislation or proposed legislation being squarely before it in its terms of reference. To that extent I would not object to the general thrust of the proposed amendment to the reference going to the Senate Standing Committee on Constitutional and Legal Affairs. I rise, however, to enter one caveat, and it is this: I would think it unfortunate if the terms of this amendment were construed by the Committee as precluding it from looking at the terms of particular models that have emerged, officially and unofficially, in the past for translating Bill of Rights aspirations into legislative reality. If I have learned anything from my participation in this debate on and off over the last 14 years or so, it is that the most enormous difficulty one has in getting sensible debate on the Bill of Rights issue is getting people to focus on the actual issues of detail involved, and to stop simply swapping high level and high-blown rhetoric about the general principles involved. The whole art of translating the kind of aspirations contained in the International Covenant on Civil and Political Rights, for example, into domestic Bill of Rights legislation is to get the drafting language right and to create rights that are capable of enforcement in a practical way by the courts or by whatever other institution is created or modified for the purpose of giving those rights reality on the ground. It is most important for the Committee to be able not just to focus on questions of general principle and the desirability or undesirability of Bills of Rights in the abstract; it should be possible for the Committee to address itself squarely to the kinds of practical difficulties involved in the drafting in legislative language of particular rights as well as simply identifying in general terms what rights might be appropriate for treatment in this way. Equally, it is also important for the Committee to be able to focus by reference to particular models that have emerged in the past, like the 1973 Murphy Bill or like other drafts that have been prepared around the place from time to time. One was introduced in New Zealand recently. That is another useful example. But equally there have been other drafting exercises conducted within government, including my own last year, which have addressed these problems and sought to resolve them. I make the point as forcefully as I can that, though I do not think the Committee should regard its task as being to report on any particular piece of putative legislation to recommend its adoption or otherwise, it should be able to have before it any model that has been prepared in any context whatever so that it can come to grips in a systematic and intelligent way with the problems of drafting a Bill of Rights, getting the substantive rights properly identified and getting procedures for their recognition, declaration and enforcement which are workable and not counter-productive. To come to grips with those sorts of issues demands willingness on the part of the Committee to come to grips not only with matters of generality but matters of detail. That will demand some attention to a variety of models that have been prepared. With those caveats, I support the proposal and the amendment which has been moved to it. Senator HAINES(South Australia)(9.35) —I indicate that my party, the Australian Democrats, and I have no particular objections to Senator Durack's amendment and we will be supporting it. On the other hand, I must say that I am not quite sure that it will achieve much, other than to ensure that an official government proposal does not go to the Senate Standing Committee on Constitutional and Legal Affairs until it has been introduced into the Senate. Since the current Attorney-General (Mr Lionel Bowen) is a member of the House of Representatives, I assume that means it will go into the House of Representatives and be passed there first; unless, of course, Mr Hawke does another one of his amazing Cabinet shuffles and we get back the old Attorney-General. Senator Hill —That would be amazing. Senator HAINES —We will not pursue that. Senator Gareth Evans —Why don't you move to correct 'Senate' to 'Parliament' to make it clear that procedural things of that kind ought not to be a barrier? There is no issue of principle involved there, is there, Senator Durack? Senator HAINES —I do not know. I am not planning to mess about with the motion before us today. It is just that I want to address some queries that I have about this. It certainly will not stop other political parties from putting forward a draft Bill to the Committee. It is not going to prevent any independent senator or member-I would suggest, with respect, that that includes the Attorney-General, the shadow Attorney-General, or some other member-from dreaming up a draft and shuffling that off to the Committee as an independent Bill. I presume that it does not include-Senator Gareth Evans has already alluded to this-the 1973 Murphy proposal. Senator Missen spoke earlier about back-door methods. I do not know if I can dream up more back-door methods than he can, but I would suggest that it is also possible for the Government to draft a Bill and send it off to one of the multitude of constitutional experts who seem to abound in the community, or to some political scientist, to append to a submission that will go to the Committee anyway. I presume that if the Attorney-General's Department is making a submission to the Committee, and that is not unheard of, it could address all the principles and proposals of the official Government line, without actually putting those principles and proposals into formal draft Bill form. As I said, we have no objections to Senator Durack's amendment. I think he is probably right in saying that the Government is in a different position from everybody else and, therefore, any official Government position ought to be treated somewhat differently from other submissions and drafts. I guess this motion does prevent the Government from sending off one or more draft Bills just to stir the waters to see what comes to the top. To that extent, I think it is reasonable enough, but it is also a relatively harmless amendment that will not stop the Committee addressing itself to the real issues, as wide as they are, of human rights legislation and what should and should not be incorporated in it. Senator ELSTOB(South Australia)(9.38) —I congratulate Senator Tate on his initiative in moving to have this matter referred to the Senate Standing Committee on Constitutional and Legal Affairs. Many Australians feel that it is time for Australia to have a Bill of Rights. I have always felt that we should follow other Bills of Rights, such as the American Bill of Rights. I also believe that an Australian Bill of Rights should give people the right to medical services, the right to education and the right to work. I will make a submission to the Committee along those lines. That does not mean that all the other rights, the democratic rights that we hold very dear, are not important. It is time for Australia to look at the whole aspect of rights for its people. Perhaps this can be done through a committee, which adopts a bipartisan approach. The committees of this Senate have been successful in many areas. That may be a way of bringing together the public and the politicians of this country to put up sensible solutions and get some agreement on them. Perhaps this is the way to proceed. I think that this is an important issue. Once again, I congratulate Senator Tate for initiating this move. Senator HILL(South Australia)(9.40) —As the Deputy Chairman of the Senate Standing Committee on Constitutional and Legal Affairs I welcome the reference and the challenge it presents. We saw the question debated last year in what I think can be described as somewhat emotive circumstances, which were not helped, I believe, by the then secret Bill of the former Attorney-General (Senator Gareth Evans) and the selective leaking of that Bill towards the end of last year. As the Senate is aware, a great volume of material was floating around but it was not being accumulated in any central way. It was not being analysed correctly and properly in a way that a Senate committee can treat such material. Therefore, I believe that the best forum within this Parliament to debate in a sane, rational and unemotive way a question that is of major significance and major importance is a committee of the Senate such as this Committee. On that basis, senators on my side of the Senate welcome the reference. I support Senator Durack's amendment. It is a pity, I suppose, that it is necessary as one would think that the proper course of action would be for the Government first to introduce a Bill if it has a Bill in mind and, if it wishes to seek reference of the Bill to a committee, to do so. One might say we should not be suspicious on this side of the chamber. However, having read articles such as that which appeared in the Australian Financial Review yesterday, which alleged sniping between the former Attorney-General and the current Attorney-General (Mr Lionel Bowen) as to who had the better prospective Bill, and having heard the suggestion by some that the Government will attempt to use this Committee to legitimise one or other of those prospective Bills, I think that unfortunately an amendment of this kind is necessary to remind the Government of what we believe to be the correct course of action. Senator Haines has said that the amendment is not foolproof. Very few motions, parts of motions or pieces of legislation that pass through the Parliament are foolproof. However, the sentiment of the amendment is absolutely clear. It is clear to those of us on the Committee, as I am sure it is clear to senators at large. What the amendment is saying, in effect, is that if the Government is of a mind to introduce a Bill it should not take the back door road, it should not attempt to take a short cut and seek a legitimisation by the Committee outside of the Parliament; it should be open and frank, put down its Bill in the Parliament and then do what it wishes to do with it. As I said, I support the reference. I look forward to the challenge it will provide. I support the amendment to ensure that the Government is reminded of its proper responsibility in relation to these matters. Senator DURACK —(Western Australia)-by leave-As a result of discussion around the chamber in relation to the amendment-it is obvious that the principle of the amendment has been supported-it has been suggested that it would be more appropriate if the amendment, instead of referring to a Bill introduced into the Senate, referred to a Bill introduced into the Parliament. I think there has been general agreement about that. I would be happy to seek to amend my proposed amendment by substituting the word 'Parliament' for the word 'Senate'. The DEPUTY PRESIDENT —Is leave granted to amend the amendment? Leave granted. Senator DURACK —I am advised that there may be some technical difficulty. Perhaps Senator Haines has already foreshadowed it. I suggest we should adjourn the matter until later in the day so that it can be considered. Debate (on motion by Senator Grimes) adjourned. Debate resumed from 18 April, on motion by Senator Grimes: That the Bills be now read a second time. Senator ELSTOB(South Australia)(9.47) —We are discussing today the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1985 and the Dividend Recoupment Tax Bill 1985. Yesterday I was saying that the taxation system in this country is viewed by many people in the community as being very unfair. It is unfair when we see so many instances where people virtually can pay or not pay. In other words, they treat tax as optional, whereas the majority of wage earners are forced to pay their tax through pay-as-you-earn taxation system. If the laws are not recognised by the people as being fair and are not seen to be fair, there will be a tendency for people further to dodge their responsibilities. No country such as ours can afford to let that happen. I remind the Senate that this country is very large and our responsibilities for roads, communications and transport are immense. To build roads in this country and to provide services such as telephones, electricity and water are immense undertakings. We all like our quarter acre block of land and our cities are expanding. Taxation in this country will never be low because of the desires we have. It is only fair that people who live in isolated areas should get the same services as city people. Years ago there was a lot of danger because people in isolated areas had no communications-no telephones, radio or any other facilities. Today we are looking at the possibility of satellites bringing television and other necessities to people living in isolated areas. If we are to be a great nation and a nation that thinks something of its population, this is the way we must go. But all this costs money. While we allow our wealthy people not to pay their taxation, which provides the right services for our population, our task is almost impossible. Because of the lack of government direction in the past-by the Fraser Government from 1975 to the time when it was put out of office-this situation developed to such an extent that we estimate that $7 billion was lost to taxation. This means something like $30 a week in round figures for the average wage and salary earner. The level of taxation in this country is too high. This Government is trying to reduce that level. Yesterday Senator Watson said that it is bad for the economy to try to recover taxes. Senator Haines said that it was very unfair to use retrospective legislation. Is it unfair that laws should be seen to be just and equitable? I believe that the only way to stop taxation dodging, evasion and avoidance is to have retrospective legislation in this area. Go and ask the wage and salary earners- Senator Haines —What about other things you don't like? Senator ELSTOB —Senator Haines had her say yesterday. Ask the wage and salary earners whether they believe the wealthy and the privileged of this country should not pay their share. No one can substantiate an argument that wage and salary earners should foot the bill for these people. As I said when I was speaking in this debate yesterday, if this situation is allowed to continue, other people will be encouraged to do the same. If one is having a drink at a club and mixing with people who have been dodging or avoiding the payment of tax one is asked: 'What is wrong with you-are you a fool? Why don't you dodge tax?' Consequently people are encouraged to follow the leader and evade paying taxation by this sort of peer group attitude. We understand that taxation has to be paid if we are to enjoy the fruits of our labour. We have to pay taxation so that this country can be defended and feel secure. No one is going to complain about that. Australians have the right to live the way they want to. I would prefer that we did not spend large sums on defence. However, the reality of the situation is that most certainly people will try to take away from us what we have if we do not defend ourselves. That reality has been proven many times over. It is right and just that we provide a reasonable level of social security for our people. Australians who are ill or out of work are paid a sum. This type of arrangement does not exist in all countries. If we do not provide these services there would be a tendency for other ideologies that are foreign and unacceptable to us to be adopted in this country. There are all sorts of reasons why there is a need for a decent standard of living and some assurance that we will be protected. However, to do that we have to have a reasonable tax return. People have to be shown that it is in their interests to pay taxation. Yesterday Senator Haines cited the example of Adelaide Steamship Co. Ltd paying tax of 1.11c in the dollar. She also mentioned the amount of tax paid by some other companies. This sort of thing is a disgrace. Companies are deliberately employing virtually hundreds of tax consultants, lawyers or accountants to do nothing else but look for loopholes in the law so that the payment of tax can be avoided and evaded. How many wage and salary earners can afford to employ tax consultants, lawyers or accountants to look for these things? Is it morally right that this sort of thing should happen? In my opinion, it is unforgivable. If we cannot close off these loopholes with legislation, perhaps we should be setting down guidelines about people's responsibility to pay tax and saying to the Commissioner of Taxation: 'You will apply these'. In that case, we would have to give more discretionary power to the Commissioner. Many politicians with whom I have spoken say: 'That is not right'. As I have always said, either we should give more discretionary powers to the Commissioner or we should use the retrospective taxation laws to recover unpaid tax where people have tried to avoid or evade taxation. It is only legal loopholes that they are exploiting. Senator Hill —Why don't you get the laws right in the first place? Senator ELSTOB —It is probably impossible for parliaments anywhere in the world to legislate to close all loopholes in taxation laws. I honestly believe that. We, the law-makers of this land, should be looking at either using retrospective laws in regard to this matter or giving the Commissioner of Taxation more discretionary powers. The laws must be fair. If they are not fair, we encourage all sections of the community to break them, and that is unpalatable. Senator Hill —Who determines whether it is fair? Senator ELSTOB —The Parliament. We are elected as representatives of people of this nation, and it must be within our power to determine that. The tax laws are so important. In regard to general law, people say that Australia's laws are fair, and they are seen to be fair; but our taxation laws are not fair-and that is the great difference. It is about time we changed that situation. The Prime Minister (Mr Hawke), in his policy speech last year, promised the public that, once re-elected, the Government would re-introduce the twice rejected bottom of the harbour legislation, which would recoup only a few hundred million dollars from those who have sought to escape their taxation responsibilities. It is probably impossible to recoup the $7 billion which some people have avoided paying. This measure will bring back only a few hundred million dollars, but it is important as a warning to those who would, in the future, attempt to avoid and evade taxation responsibilities. Parliament should bring in these laws and penalties. They are only very small penalties; they do not involve the full loss that has occurred over 12 years or more. It is important for the Parliament to show that it is prepared to recover this money. This would serve as a warning to others who may attempt to avoid their responsibilities. That is the important point. If we are to have a united nation, which should be the principle behind every politician, no matter the particular party, that is important. But we are not doing that in this regard. The people who get up early in the morning, travel to work, take off their coats and do a job know that they are discriminated against. When one talks to them one hears the attitude: 'Why should I do this when I am paying the majority? Why can't the business people?' Senator Hill —That is a fault of the existing tax laws, which should be remedied. Why does the Government not concentrate on that? Senator ELSTOB —Why does Senator Hill continually oppose this? He will be speaking after my speech. Senator Hill will say what a terrible thing it is to recover this money. That is why those opposite were put out of office. When the Liberal Government appointed Frank Costigan to look at the Federated Ship Painters and Dockers Union, it did not do so with the idea of overcoming all the difficulties and the rottenness in that union, of which I am ashamed, as an ex-trade unionist. Business people in high places were using the crooked people in that union to assist them in their illegal operations. That is a disgrace. The majority of working people, small business people and everyone who contributes to this great nation were disgusted with what was happening. That is why the majority of business people are coming to Labor. They have deserted their traditional Party, the Liberal Party. One can see this. I see it in my office in Adelaide and many other politicians are seeing it, simply because the Opposition, as a political party, would not take the hard option. Those opposite are virtually saying to some of their friends in high places: 'We will let you avoid and evade taxation laws, but the working people, who really make this country, will pay'. That is a thorough disgrace. We do not have the numbers in the Senate to bring this legislation into effect. This legislation would be fair, and would show the people of this nation that we are attempting to stop the rogues, the thieves and the vagabonds from not paying their tax. They will continue to get away with it, but the people of this nation will not forget it. The Opposition is being un-Australian in its attitude, by its opposition- Senator Peter Rae —Un-Australian by not having retrospective penal legislation? Senator ELSTOB —Yes, the Opposition is being un-Australian because for years everyone who has paid tax has been paying $30 a week too much. That is an outrage. The Opposition has given no warning to the tax dodgers. It has encouraged them to go on year after year in their avoidance and evasion. It has said to the people who really do the work in this country: 'You will pay'. Because of this the Opposition will never get back into power. Senator Peter Rae —You cannot exercise retrospective penalties in the way you want to. Senator ELSTOB —We need retrospective laws. How much can average working people take? They do not have the power or the money to employ people to look into taxation dodging. There is no doubt about it. The laws are meaningful but skilled lawyers and accountants find small holes in those laws so that the dodgers can be allowed not to pay their taxation. Do not tell me that that is fair or reasonable. The Opposition should ask the people outside if it thinks it is. That will not work. We all pay our taxation. There is no way we can get out of it. We are on a salary. There is very little anyone on a wage or salary can do, but those who can form another business are allowed to transfer money to that business, write that business off, sink it, collect the money and not pay taxation. Senator Hill —If you see that as a distortion, that is what you should be seeking to overcome. Senator ELSTOB —The honourable member will say that he opposes the legislation. He will never get back into government with that attitude. It is our duty to try to recover the money. It is important not only to get that money, but also to show the people that we are not prepared to allow the dodgers and the despicable people who do not pay their share to get away with it. That is what the Opposition is allowing them to do, and I think it is a disgrace. One can never condone it; it is totally unfair. It is just unbelievable that the Opposition persists in doing that and trying to make the taxation system in this country so unfair. That is the thing that will keep the Opposition out of office. We will continually bring in these Bills until we get the numbers in this place. People will see that unless we get the numbers we cannot implement the legislation that will make this society fair and equitable. That is what it is about. It comes back to numbers. One can have the best argument in the world, but unless one has the numbers it means nothing. That is what we are showing to the people outside and will show them continuously until they understand it. It is costing them a lot of money by not allowing us to have the numbers in the Senate so that we can bring fairness and equity into society. That situation has to come about. No government can survive unless that happens. I plead with honourable senators to reconsider their attitude to this proposition. I think that Australians should look to a better and a fairer society. Unless the Opposition indicates support for this, less and less trust will be placed in politicians by the general population. Senator HILL(South Australia)(10.07) —I again oppose the Government's attempts to introduce retrospective taxation laws into this country. I think it is the fifth time that we have debated attempts by the Government to tax Australians retrospectively. I might say, before I get to the substance of my contribution, that the goal that has just been put by Senator Elstob of fairness and justice within the taxation system is something in which we all obviously concur. Where we part is on whether retrospective taxation is a legitimate tool to achieve that goal. It seems to us on this side of the chamber that it is hard to imagine any act that is more unfair or unjust than to introduce taxation laws that impose a new taxation burden and backdate them. I am disappointed that that cannot be seen by Senator Elstob, because I accept the motive of his contribution. The view that he has put is that, if we impose retrospectivity in some cases, it will indicate to the Australian public that we want to achieve a system that is fair and just. But who makes the judgment in that instance? Where does it start and where does it end? Once one opens the door to retrospectivity as a legitimate means of taxation where does it end? I suppose the question can be asked: Why are we debating these Bills again and again? Why are we debating them for the fifth time when the Government knows that they will not pass the Senate, that the Senate does not hold the Government's views in relation to retrospective tax? The short answer is that the Bills were brought on suddenly yesterday because of the Government's failure to maintain a sensible legislative program. The Government simply ran out of business. That is not surprising when one looks at the fact that its economic program is in chaos. One wakes up each day and finds that the Australian dollar has collapsed yet again. Yesterday we were looking at 63c against the American dollar. This morning we found that overnight there had been a further slip of 2c. In only a few months the Australian dollar has fallen against that currency by about 20 per cent. We heard on the radio this morning that it now costs two Australian dollars to buy one pound sterling whereas a few months ago it was $A1.40 to buy a pound sterling. I submit that it is terrifying that the international assessment of the value of the Australian economy should be crashing in this way. It will be terrifying for every ordinary Australian, the type of person to whom Senator Elstob was referring. Such a person, who has perhaps saved for years for an overseas trip, will be terrified when later this year he finds how much more that trip will cost him. This situation will affect small business which, when it looks to purchase some overseas equipment, will find that in a few months the price has gone up by 20 per cent. It is terrifying when, under this Government's short-sighted wages policy, the cost of consumer items flows through to wages, costs and then inflation. The modest gains we have seen in the recovery to date will be wiped out by this Government's short-sighted and incorrect economic policies. It is not surprising that the Government has other things on its mind than the orderly conduct of its legislative program. But apart from its disorganisation, which we are witnessing, it is clear that we will debate these Bills again in any event in due course. In the longer term one has to ask why. The answer would appear to be two-fold. We heard it yesterday, particularly from Senator Richardson and Senator Elstob. Fortunately, Senator Elstob's contribution today was on a different plane. The reason is that these Bills provide a vehicle for the Australian Labor Party, the Labor Government, to continue the myth that the former Government, the Fraser Government, was associated with tax cheats and failed to address the tax avoidance industry. That might seem to the Labor Party to be good politics, especially when it is on the ropes, as appears to be the case at the moment, but it simply does not stand objective analysis. Artificial or contrived taxation avoidance schemes started as far back as the mid-1970s. I remind the Senate that the now Treasurer, Mr Keating, in fact acknowledged that. I refer to a broadcast of the 4BC talkback program on 10 September 1982 in which he said: When we were in Government between '73 and '75 the tax avoidance industry started to move into sophisticated contrived schemes. Schemes that were artificial devices to avoid tax. As was acknowledged by Treasurer Keating, this situation started to develop in the mid-1970s. The Fraser Government signalled the start of its fight against tax avoidance in a major way as far back as 1977 when the the Treasurer, the late Sir Phillip Lynch, as is recorded in Hansard, said: The Government is well aware of the activities of tax planners who, increasingly, are promoting tax avoidance schemes and arrangements throughout the business and professional community. We propose to crack down hard on such practices. That was what Treasurer Lynch said in 1977 and that was exactly what happened: The Government went on a major attack which continued during its term in office. I know figures can be a little tiresome, but I think they are worth repeating. I remind the Senate that in 1977 the former Government introduced 20 taxation Acts totalling 83 pages. Fourteen of those pages were related to taxation avoidance. In the following year there were a further 45 Acts totalling 308 pages, of which 149 pages were tax avoidance related legislation. In 1979, 26 Acts were introduced totalling 98 pages, of which 45 pages were related to taxation avoidance. In 1980 a further 21 Acts, including 96 pages of taxation avoidance legislation, were introduced. A total of 304 pages of the statutes were devoted to methods being adopted by the former Government to fight taxation avoidance. That is not acknowledged by the Government in office today. That was not acknowledged in the speeches that were made yesterday. What has further not been acknowledged is that the former Government was successful in its challenge to combat artificial and contrived taxation avoidance schemes. No lesser authority than the Taxation Commissioner reached that conclusion. I will read from a letter which was sent to the former Treasurer, Mr Howard, shortly before he left that position and which he incorporated in Hansard on 30 March 1984. The Taxation Commissioner said: The evidence available to this office suggests that the introduction on 27 May 1981 of part IVA (of the Taxation Act) with effect from that date effectively put a stop to the promotion of new tax avoidance schemes of a blatant, artificial or contrived nature. In other words, the Taxation Commissioner said that the action of the former Government was successful in stamping out these schemes. I respectfully adopt the words of Mr Howard in the debate I mentioned, when he said: There could be no more telling judgment on the quality and effectiveness of the action taken by the last Government on that issue than that judgment by the Commissioner of Taxation. As I have said, although honourable senators would not have believed it from yesterday's debate, the Liberal Government was successful in bringing to an end taxation avoidance measures of that nature. The Labor Government, unfortunately, continues to misrepresent that position to the Australian people, to mislead the Australian people in that way. It should accept the truth and the reality; that is, that no other government in Australia's history was so active in the fight against tax evasion. The other misrepresentation which the Government tends to use on these occasions and which seems to be part of the reason why it continually introduces Bills such as this to facilitate such debates is its generalisation of tax evasion under the emotive phrase 'bottom of the harbour', which, of course, conjures up visions of a fraudulent and particularly undesirable form of evasion, with companies simply being wiped out, shredded and dropped to the bottom of the harbour. As the honourable member for North Sydney (Mr Spender) said, I think aptly, when these Bills were being debated in the other place, it is becoming the new McCarthyist smear. We hear it time and again. These debates are used by the Government to lump the whole tax avoidance area within this particularly emotive and undesirable phrasing. Bottom of the harbour schemes in fact were responsible for a relatively small proportion of tax avoided during the 1970s, and the principals of such schemes are in the criminal courts where they should be. In no way has their conduct been condoned by the previous Government. Quite to the contrary, that Government condemned it. I need not again go through the whole history of the action that the former Government took to stamp it out. Furthermore, what is not said by the Labor Government is that not only did the Liberal and National parties in coalition knock out such schemes, but also the tax avoided during the period when the industry was in its so-called flourishing state is steadily being recovered. I remind the Senate that the Special Prosecutor, Roger Gyles, QC, who was appointed by the Fraser Government-that is worth repeating; he was appointed by the Fraser Government-in 1982, as at the last Budget had netted $330m and was seeking a further $257m. Now that the Commissioner of Taxation is raising assessments in relation to company stripping operations under section 260 of the Income Tax Assessment Act we can expect a lot more to be forthcoming. What has happened is that the schemes were knocked out by the former Government's action and, furthermore, tax that was avoided during the 1970s is being steadily recovered. The other reason for the legislation we are debating, apart from its being an attempt to win cheap political points through misrepresentation, is, it would appear, that it is a desperate lunge by the Government for further tax revenue. I guess that that is not surprising, because its Budget has blown out to a shortfall of perhaps some $10 billion. What a boast! We have the highest deficit in Australia's peacetime history from the highest taxing government in Australia's peacetime history and-I suppose it follows logically and it certainly is not surprising-the highest spending government in Australia's history. What a claim to fame by which this Government will be remembered. We will not endorse retrospective taxation as a means of raising further revenue for this Government. One of the cardinal certainties of our democratic system if it is to remain stable and strong-we heard Senator Elstob talk about the importance of unity, a point with which we agree-is for a government not to tax retrospectively. I know that this Government says that it will impose the tax retrospectively only in the event of artificial or contrived taxation schemes. But as I said earlier, who decides the ground rules? Who decides when schemes are artificially contrived? Of course, surprise, surprise, it is the Government. Thus we see legislation of this nature before us. Where does retrospectivity start and where does it end? I am pleased that I can say in this chamber that I have opposed retrospective taxation on every occasion such legislation has been introduced during my time here, including the one occasion when retrospective taxation legislation was introduced by my own side. This is more than any member of the Australian Labor Party can claim because we know, of course, if that were their view and they were prepared to stand on their principles they would be expelled from the Party. However, that is another debate. I remember calling for the previous Government, my Government, to exhaust existing remedies. That is what I do again today to this Government. I said that by way of interjection to Senator Elstob. It was pleasing last year to hear Special Prosecutor Gyles, to whom I have referred, say that he could not understand why, for example, section 231 of the Income Tax Assessment Act was not being used to hit at artificial schemes. This is a better way to go than to introduce retrospective taxation laws. This shows that we can achieve the same goal-the goal Senator Elstob was seeking to achieve-by the better means of properly enforcing the existing legislation. I remember that Special Prosecutor Gyles said in reply to a question I asked him at a Sydney meeting of the Senate Standing Committee on Constitutional and Legal Affairs that he could not understand why the charge of conspiracy to defraud the Commonwealth had not more readily been utilised in relation to these more dramatic and obviously criminal attempts to evade taxation. I repeat that if we utilise the existing provisions in the Act we will achieve the same object by a much more satisfactory means. That is what I said when we were in government. That is what I say to this Government. Legislation of this nature is unnecessary and undesirable even to achieve the objectives that Senator Elstob is after. It is simply an unnecessary and undesirable short-cut because it imposes legislation which places in jeopardy the principle of certainty under the law, a principle which I would think Senator Elstob would certainly consider important. Of course, this is the action of a government desperate for more money. I suppose that governments desperate for money tend to sacrifice principle. Of course, that is what we are seeing in relation to the proposed taxation summit- otherwise now commonly referred to as the taxation farce. This is a desperate lunge by the Government for further revenue. The taxation summit will be all about how to impose new taxes and raise more revenue. The tragedy of that of course is that respected academics and respected institutions are being snared within the farce in the misguided belief that they will contribute to taxation reform. As I think was said wisely yesterday by Senator Peter Rae in the debate on the Bills, the Australian Labor Party has split into its factions and each of the factions is taking a position of advocating the raising of greater revenue. The Left wants to raise more revenue through the summit by imposing capital, wealth and death duties. The Centre Left wants to do this by capital transfer taxes and wealth and expenditure taxes. Labor Unity proposes to do this by new capital taxes and new consumption taxes. The New South Wales Right seems to be taking a somewhat similar position by wanting to impose the same new additional taxes. However, what they have all agreed on is that we should have retrospective taxation laws. I can say that I certainly have not heard-although some other senators might-any suggestion that the question of retrospectivity should be put to the taxation summit as either a desirable or an undesirable principle. That is something the Labor Party regards as beyond debate. The only remaining major area of taxation avoidance which the Government should be tackling is the cash economy. One reads of estimates that it is costing the economy between 10 and 15 per cent of gross domestic product. This would be between $5 billion and $8 billion annually. That is the area this Government should be concentrating on. The Fraser Government was tackling this last major area of taxation avoidance. I remind the Senate that the prescribed payments system which the Fraser Government introduced netted some 60,000 new taxpayers. The reforms that the coalition put to the Australian people at the last election included this firm commitment: To reduce the present heavy reliance on personal tax as a source of revenue by broadening the tax base and putting greater reliance in indirect taxation. That would have been a further step in the direction of countering the cash of a black economy. To provide a better balance between direct and indirect taxation in our system would strike a blow at avoidance through the cash economy. Of course, the Hawke Government in fact failed at the last election to put any tax policy to the Australian people. The policy of the Liberal Party was to give tax relief. As I said, Labor's non-policy will be to raise revenue through new taxes and in an effort to supplement income from its attempt to impose retrospective tax on the Australian people, as it is seeking to do today. That is an attempt which we on this side of the chamber will oppose again and again each time the Government attempts to introduce legislation of that type into this place. In summary what I say to the Labor Government is that retrospective tax laws are unnecessary and undesirable. The Government should concentrate on getting its prospective tax laws right and on enforcing existing laws. The Government should accept what the Commissioner of Taxation said about the Fraser Government's program of combating tax avoidance and should cease attempting to win cheap political points through misrepresentation. The Labor Government ought to look to the expenditure side of its Budget rather than attempting to raise revenue at the cost of the loss of certainty under the law. The Labor Government should acknowledge that the Opposition will support legislation to clamp down on the vestiges of any past avoidance practices that still remain and on any new practices, as it recently did under the trust recoupment Bills. The Government ought to be providing answers to the last major area of taxation avoidance-the cash economy. If the Labor Government concentrated on these matters I suggest it would be rendering a more worthwhile service to the Australian people for what remains of its term of office. Senator MASON(New South Wales)(10.29) —I have an acute sense of deja vu, as other speakers in this debate have had, as I restate what substantially are old arguments and what appear to be intractable and diverse points of view on this matter of taxation retrospectivity. As I see it, the main problem is the need to distinguish in one's mind between two principles-tax equity and so-called retrospectivity. I will deal with the question of retrospectivity a little later because I think there are points in that regard which have not yet arisen in this debate and which I would like to draw to the attention of honourable senators. The point of tax equity is one which certainly has determined my view. As in the past, I will vote with the Government on this legislation. That will, as everybody knows, represent a division of opinion within the Australian Democrats. I make no apologies for that. I think it is part of the logic of the Australian Democrats, and has been since our foundation, that we operate as members of parliament. We do not always or necessarily operate along caucusing lines. In fact, operating along caucusing lines basically is anathema to us. If we can achieve consensus on our point of view, so much the better. That is a good and healthy thing and it is possibly something of a microcosm as to what could be a more enlightened future government of this country than one based on sheer confrontation which is in itself so wasteful. There are, as I say, two very respectable principles at stake and the choice between them is a difficult one. The community finds it a difficult one, just as the Australian Democrats find it a difficult one. I would like to address my remarks to both points-tax equity and retrospectivity-because they seem to be the nub of this debate. I can only agree with what Senator Elstob said. One can, I think, properly take an old-fashioned view of the general obligation of citizens to contribute to society and to the protection and facilities that government and society give them. I think that is fundamental. It is something which, as I said, is old-fashioned. We would no longer laugh at the concept of Sir Walter Scott, who, so that he could pay all of his debts rather than remain a bankrupt, wrote novel after novel until he killed himself. One can see a morality in that view and a basic soundness of mind and attitude which is perhaps something which we in our modern societies have lost and which we have lost to our discredit and-probably also, I suggest-to our disadvantage. That does not mean that we have to go further and further along the same path. I suggest that it ought to be the first and foremost obligation of those who can best afford to pay to contribute towards the costs of society. One can understand people who are on the breadline, people who are starving or cannot provide clothing for their children, misstating their tax returns and trying to evade paying tax, because the motivation-almost the necessity-for them to do so is very strong. But it is very difficult to understand people who have millions of dollars, all the money they are likely to need in their lifetime and more deliberately taking the view that it is perfectly all right, simply because of legal interpretations of very complex laws, to avoid their responsibility towards the society under whose protection they are brought up and from which, probably in this case more than other citizens of this society, they have benefited. This seems to me to be basically an immoral point of view, whichever way one looks at it, and one which, of course, is something of a national cancer not only here but in other countries. That kind of rip-off, of course, merely increases the pressure on the first type of person I mentioned, who is forced into a worse and worse situation because of the lack of conscience-I use that old-fashioned word-on the part of those people who could well have afforded to pay, but who were able to afford to devise the means not to pay. It seems to me that, no matter how one hedges around the point, one comes back to that fundamental point. That, of course, is the reason why I will vote for this legislation. I am a senator for the State of New South Wales, which includes the city of Sydney, which has many poor people. It is a city in which from time to time old people who cannot survive on the pension and the rent allowance, because rents are so high in Sydney, live in appalling accommodation. There have been a number of fires in the Kings Cross area and some of these people have been burnt to death. I feel very deeply about this issue. I believe that those people in our society who think it is perfectly all right to use any sort of tax evasion scheme and avoid their fundamental obligations to society should consider that circumstance, and the degree to which they have contributed towards that sort of circumstance, and whether that enables them to live with their conscience. That seems to me to be the only final solution. It is a matter of morality. We know from the bitter experience of past years that it is not really possible to devise laws that can prevent this type of attitude from finding its mark. I turn to the point that Senator Hill made, partly by way of interjection during Senator Elstob's speech, because I feel that he has a horse that does not run. He has said that the answer is to fix up the law. How can one possibly do that? The new scheme must be known about. It must emerge into the light of day. It must be identified and investigated. That having been done, legislation must be drafted to deal with it. That legislation has to be introduced into this place and passed by the Parliament. I would not have thought that any member of this Parliament could suggest to me that that is an instantaneous process. We all know from our experience that that would be an absurd point to make. I suggest, Mr Acting Deputy President, that if you concede that point you must concede that to sanctify the principle of non-retrospectivity in the tax laws is virtually to give people a licence to coin money. We are saying to them: 'We will not have any retrospectivity; therefore, we will allow you that period of eight months to a year or 14 months from now into the indefinite future in which you will be able to implement your schemes and get that money, and there is no way in which we can stop you'. I would be obliged if Liberal-National Party senators who may speak later would address this point because I think it is a basic point. I am not saying that nothing could be done. I know that my colleague Senator Jack Evans is making valiant efforts and he is looking at a method whereby schemes have to be submitted to the Australian Taxation Office before they are entered into. But I suggest that even in that regard, unless there is some sort of feeling of morality in the community, that also could be got around in one way or another. The reason, of course, is that the taxation laws and, in particular, the Income Tax Assessment Act, are so enormously complex and the whole area is so difficult to administer and police that it is subject to evasion. This, of course, has been found in other countries. This Government is not the only government in the Western world to have faced this problem. There has been so-called quasi legislation in other areas to deal with it. If the problem of detecting the schemes at the time they originate could be solved, the Senate might responsibly take a different view. But, until it is solved, surely we are talking in circles if we are saying that there is any way in which we can prevent the tax cheats from taking advantage of the situation. I do not have a desire to sanctify or embrace the principle of retrospectivity; far from it. I am the last person to believe that there should be penal legislation which is applied retrospectively, especially when some sort of penal sanction is involved. That has been mentioned in this debate from time to time. This is something that we must look at. As I said, whether one takes that principle of what one sees as retrospectivity or the tax equity principle as being the most important principle is a matter for individual people to look at. I respect honest and consistent convictions in this matter, as have been put forward by Senator Hill and some of my colleagues. They are not taking that stand because they are the friends of tax cheats; far from it. When representatives of the Government make stupid statements of that kind they are not advancing or helping this debate. It is a more serious debate than that; it is a more important debate than that. To reduce it to that level is to misrepresent it totally. I reject that kind of application. I will look briefly at the question of retrospectivity because I think there is a point, which may or may not have validity, which I would like to bring to the attention of honourable senators and which I do not think has been raised previously. I believe that the Bills are not retrospective in the sense that they specifically change the law retrospectively. I think most of my colleagues on both sides of the chamber might agree with that point. I will look briefly at the implications of that point. The legislation which it is proposed should be amended did not in so many words describe bottom of the harbour type evasion or any other specific tax schemes and say that they were legal. Therefore, it would be absurd to say that the intent of the legislation and its creators would in any sense authorise or sanction such schemes. Surely it is our responsibility as legislators to look at that legislation and its intent. Whether its intent was imperfect is another matter. Do any of us who sit in this place believe that we are capable of creating perfect legislation? Of course we do not. We know that we try to approach that state as closely as we can. In some areas it is far more difficult to do so than in others. The area that we are talking about now is one of those areas. I make the following point to those people who take such a view. Take a person who is driving at 45 kilometres an hour through an area which has a speed limit of 50 kilometres an hour. A year later the speed limit is changed to 40 kilometres an hour and the person is charged with having exceeded the speed limit a year earlier. That is absurd; it is not a reliable or accurate analogy with this legislation. I think those who make that kind of assertion and analogy are, again, obscuring the situation in a very difficult and complex area. I think all parliaments and all members of parliament have attempted to create tax laws which make this sort of evasion impossible. I do not think there is any attempt to sanction it in any way, and we ought to regard that as a prime point. On the contrary, these schemes have tended to evolve from court interpretations. The real issue comes down to whether or not Parliament, in its wisdom, has the power or the right to legislate when it believes that a court decision has not led to a desirable state of affairs. There is also an inexorable logic in this argument. If one accepts, that because the court has said a certain thing, or because something has been devised which in some way has been construed from a court interpretation, this Parliament has no right subsequently to do anything about it- Senator Dame Margaret Guilfoyle —On a retrospective basis? Senator MASON —Senator Dame Margaret Guilfoyle misses my point. My point is that this legislation is not truly retrospective in that there is no legislation which directly sanctions these schemes. If one says that, one is entering, by inexorable logic, on to the shaky ground that this Parliament does not and should not have the power to look at past court decisions and alter them. The logical extension of that is to set the authority of the court system above and beyond that of Parliament. Senator Dame Margaret Guilfoyle —On a retrospective basis? Senator MASON —It would be on whatever basis one cared to look at it-and I agree that here it would be on a retrospective basis. This is a nettle we have to grasp. It is not a simple or easy one but I concede the honourable senator's point and I ask her to concede mine-that that is the inexorable logic of the situation. If the honourable senator opposes this legislation she will be saying that that is the right of the High Court of Australia. I am not in any way impugning the High Court or anything in our court system; far from it. I am merely looking at the machinery of government. She will be saying that the High Court is the superior authority in the land and Parliament is not the superior authority in the land, that if the High Court makes a decision, whether subsequently legislators think it is right or wrong, whether it has led to the most monstrous consequences in the community, or whether it has led to appalling inequities-as this legislation has-it must be supported. I cannot for a moment understand how that sort of logic can apply, with all respect to those who agree with it, and that is why I am making this point. I think it is something of great and fundamental importance for us to consider because it goes far beyond this mere debate. It goes to the very nature of Parliament, the very right that Parliament has to operate in any future situation. Much as one may dislike the principle of retrospective legislation-much as I dislike it-one cannot apply this principle to the stage where one reduces, restricts or restrains the right of parliaments to do anything about it in the future. That seems to be something that we cannot accept. To accept that principle would be a very high cost for the Parliament. I am concerned about the point made by Senator Hill-it was made by others also-which, with all respect, is utterly spurious. His point was that if we pass one piece of retrospective legislation it automatically means that all legislation will be retrospective and we have sanctified the general principle. That is utter rubbish. There is no way in the world that principles like that have to be applied universally or that there is any kind of precedent. Because this Parliament exercises its right to apply a quasi-retrospective law where it feels the need for it in one area, that in no way indicates that the Parliament has any obligation or requirement to do it on any future occasion any more than the numbers on one vote have to be the same in any future vote. That is simply saying that nothing new can ever happen, and that, of course, is a ridiculous point of view. It is one which ought to be put quietly away. Of course it is a fact that retrospective legislation has been passed by many parliaments before and indeed by this one. So that argument is quite ridiculous. I ask: How often in political affairs can one afford the luxury of the unqualified support of a single principle, especially if it is in clear conflict with another principle? The whole of our business here, as so often happens when legislation becomes more complex, is of setting various interests against each other, of assessing what is good and what is right and of accepting the idea that any kind of new law tends to have a retrospective application. Of course it does. Take what happened when the first home owners scheme was changed. I know of young people who were working diligently to save and were ready to buy a house when the scheme was changed. Of course the requirements were altered and of course they had retrospective application. Senator Dame Margaret Guilfoyle —You do not mean they had to give the money back, do you? Senator MASON —They were not called on to give back the money but they did not get money which at that time they had every expectation they could have. Senator Dame Margaret Guilfoyle —But your application would be to take that money back from those people. Senator MASON —No, not at all. With all respect, I suggest that there is a fault in logic there. Such people did not get money which they felt they had every reasonable expectation to get as a result of legislation. There is no real difference, in terms of money or anything else, between that situation and what these Bills propose to do. I refer to civil liberties as another example. Civil liberties is a principle we all respect. Yet we do accept limitations to our civil liberties in that we abide by laws which are decided on by parliaments to be to the common good. That does not alter our principle that we believe in civil liberties. We would agree that it is reasonable to limit our civil liberties to the extent that we do not drive our cars on the right hand side of the road, because that is obviously not to the good of the public. On the other hand, we may feel that it would be an unjustifiable infringement of our rights if we all had to have identity cards and once a week report our movements in writing to the police. That, of course, is the sort of rational interpretation of principles which any act of government, any process of government, has to encompass. These things are a matter of judgment and a matter of degree. When one looks at history it is rather sickening to see how often most of the hardship, cruelty and suffering of this world have been due directly to making one principle or another a god applicable without reference to surrounding circumstances. It was on this basis that the Spanish Inquisition burned hundreds of people at the stake. Those people saw that as a perfectly respectable principle which they were not going to mitigate. Those who carried out those acts-I have done some reading of history of that period-did so in the absolute belief that such action was right and just and was even in the interests of the people who were burned. There are people of certain religious sects who even now would happily and with good conscience allow their children to bleed to death because of principles in which they firmly believe. This is not an argument against principle or its value; it is an argument for the intelligent, perceptive application of principle, an attempt to convey to honourable senators the belief that one cannot take a principle and apply it universally except to one's own great harm. Also-this is the final and important point-if one applies that principle with universality, regardless of the surrounding circumstances, one will get an extremist situation in society. That is what happened at the time of the Spanish Inquisition when people were burnt to death. What is happening now is that people who quite deliberately and with intent have rejected their obligation to society to pay taxation will be able to get away with it. This is a matter of great concern to the Senate; but not only that, it is a concern to such a degree that we cannot allow the present intractable situation of conflict and division in the Senate to continue. Apart from anything else it does not reflect credit on this Parliament, and the community looks at it with cynicism and dismay. Senator BROWNHILL(New South Wales)(10.50) —The only virtue in having this piece of legislation dragged out for what I believe is the fifth time is to give new senators such as myself a chance to have a say on the Government's appalling tax record. I believe this current legislation is identical to the Taxation (Unpaid Company Tax) Assessment Bill 1983 (No. 2), which was introduced on 23 August 1983. Before I talk further on the record of that Bill, I would like to make a couple of points about the implications of this legislation. The Deputy Leader of the Opposition (Mr Howard) in the other place earlier this week rightly called this legislation the Blue Hills of Canberra, and it is blue times for all of us under this Government today. This legislation is dealing with more than just a legal document. Retrospectivity in legislation can only breed insecurity, and insecurity is relative to one's confidence in the law. If one loses confidence in the law and the legal process, one is heading for a complete breakdown in society. When one enters into a contract, one does so with confidence that the rules in the contract and the expected products of the arrangements are firm. When one starts to doubt those rules, one develops insecurity and instability, both socially and economically. One cannot have rules in a game that change when the game is over. If that happens people lose faith in the game itself. This insecurity bleeds over into other aspects of this legislation; namely, the involvement of personnel in companies who would be affected if this legislation were to be passed. This brings into doubt the whole question of the meaning of 'proprietary limited'. If this legislation were passed and approved the effects, social, economic and legal, would be enormous. All these arguments have been spelt out time and again, but still the Government feels the needs to bring on this legislation. I really do not understand why this Government is wasting our time, and the taxpayers' money, in bringing this on knowing full well it will simply be rejected once again. I wonder how much money has been spent in staging what can only be called a farce. Is this Government so devoid of ideas that it must drag up old chestnuts like the Taxation (Unpaid Company Tax) Assessment Amendment Bill time and again? To me, it is just another example of how this Government has become skilled at wasting money. It is another example of the Government's attitude to taxation reform. The Opposition believes that there is a strong need for an overhaul of the taxation system in Australia today but it is being clouded by the debate about the so-called summit. The Opposition's policies on this matter are clear. They have been spelled out clearly to the electorate. Unlike the Government, the Opposition has concrete proposals for taxation reform. We believe there is an excessive and growing reliance on personal income tax. We believe that the tax base should be broadened and a greater reliance placed on indirect taxation. The Opposition has made firm commitments to the electorate on tax reform, as I have said. On the other hand, the Government has made no such commitment-not even before or during the election campaign. The Government still has no answers, and this is starting to show in the economy. One has only to pick up newspapers to see how the economy is off the rails. The Government is trying all the time to talk up business activity, but with little effect. Today's Australian reports a top executive of a retail sales chain as saying: . . . retail sales had been patchy in the past couple of months and there was an apparent weakness in consumer confidence. Another gentleman from another company is reported as saying: A division of one firm had 30 per cent of its orders on hold in March because customers could not meet credit requirements. Another top executive is reported as saying: . . . interest rates were high during the tax rundown period. And they will get higher. Another gentleman, from the Australian Mutual Provident Society, did not see any significant evidence of major investment projects on the drawing boards. One can go on and on quoting top business people in the community who are losing confidence in this Government. 'Big tax shortfall threatens Budget', according to yesterday's Australian Financial Review. 'Interest rates on move up', according to the Australian-and the Treasurer (Mr Keating) promised us they would fall. 'Australian dollar falling' says every newspaper. What answers has this Government to these problems? Ministers keep delving back into the past to try to find solutions, but problems will not be solved by looking to the past. They will be solved only at the time, now and in the future. The Prime Minister (Mr Hawke) has been on national television to assure us that the economy is in good shape and in safe hands. I wish he were right. The next day the dollar slumped again. The Government appears to have no answers to the tax problems facing Australia. Everything is being put into the tax summit basket. I am sure hundreds of thousands of Australians are beginning to think that this tax summit will be put into the too hard basket. The Government, to avoid doing anything new, continuously reintroduces unacceptable legislation that has been rejected time and again. When will the Government stop its obsessive passion with retrospective legislation, with trying to ginger up the already declared dead issue of tax avoidance, and get on with the real work of tax reform? This Government appears to be incapable of coming to grips with the delicate subject of tax reform. If the various factions of the Australian Labor Party could agree among themselves how it should be done that would be a worthwhile excercise. The Treasurer is prepared to acknowledge a need for changes to indirect taxation, while the left factions are almost paranoid about the redistribution of wealth, about bringing retrospective legislation before Parliament. First, we have to create wealth. An editorial in the Australian last month said that few issues would be more important to the nation this year than tax reform. It continued: The tax summit will have to grapple with reforming the Australian tax system in such a way to benefit the majority of Australians. Various trade unions, the ACTU and now the centre left faction of the ALP have all made contributions to the debate. The worrying aspect of these contributions is their concentration on wealth redistribution and the apparent lack of concern for wealth creation. For it is very clear that the way you cut up the cake has a profound influence on the overall size of the cake. Again, I am saying that we should look to the future, not to the past, in terms of legislation that affects the taxation system. Obviously taxation plays a major part in affecting personal incentive. It is interesting to note how that incentive has been eroded over the years. In 1954-55, 30 years ago, income tax was 35 per cent of Commonwealth budget revenue; today it is 53 per cent. More striking, however, has been the increase in the marginal income tax rate for taxpayers on average weekly earnings, and how over the years the income tax burden has moved to the middle income earner. In 1954-55 the average marginal tax rate was 19 per cent. In the intervening years this has more than doubled to 46 per cent. Thirty years ago a man on average weekly earnings had to earn 18 times his weekly wage to move into the top income tax bracket; now he has to earn less than twice his weekly wage. So now in Australia we have a new definition of wealthy. Imagine what this has done to incentive-incentive for the individual and incentive for business. Without that incentive, both for the individual and the corporation, we have no growth, no turn-round in our economy, and no confidence in a government which tries to bring in retrospective laws on taxation. It is time that this Government stopped wasting our time on legislation it knows will not pass this chamber and started working on real tax reform. The Government knows the Opposition's policy on tax reform. We want reform. We believe an overhaul of the tax system is overdue. We believe there is too much emphasis on personal income tax. There has to be a shift in emphasis to encourage incentive, growth and expansion. When is this Labor Government going to start getting its act together? If its various factions cannot agree on a policy now, how is the summit some months away going to do it for them? The people elected this Government to govern, not to waste its time on summits or old, tired legislation. The cost of government is already outrageously high. At least let us try to give the electors some value for their money. Senator Dame MARGARET GUILFOYLE(Victoria)(11.00) —As many of the speakers in this debate have said, we are debating for about the fifth time the matters to which the Bills that are before us-the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1985 and the Dividend Recoupment Tax Bill 1985-relate. It does make one ask why they are introduced again and again when the attitude of the Parliament with regard to retrospective legislation has been made perfectly clear. We have had from the Government a number of different Bills which have a retrospective effect. On some occasions the Senate has made it clear that it would accept those measures prospectively and in some cases it has taken action to ensure that Bills that would have that effect have been passed. These Bills are part of a series of Bills that have been introduced in different forms since the Government was first elected in 1983. The Government's approach to retrospectivity is not consistent in the matters that are covered by these Bills. The Government keeps changing the Bills. It will be recalled that the first Bills of this type that were introduced were so draconian that we did not hear much about them at all after the Senate rejected them. I doubt whether the Government even understood the severity of the measures that were proposed. It went very quietly when the first group of Bills were rejected in this place. The Government has made a series of attempts to get this type of legislation passed. I note that the figures that are given with regard to these Bills total several hundreds of millions of dollars and the description of the Bills is that they will extend the scope of the legislation so that personal income tax avoided by former owners of companies stripped of pre-tax profits will be subject to recoupment. I have to ask whether the Government is really serious about regaining tax revenue under the circumstances that it claims, because it has certain powers with regard to Bills of this kind and those that were rejected throughout last year. It could be said that it had the double dissolution machinery whereby it could have taken constitutional steps to have had Bills for retrospective tax passed following a double dissolution. The Government chose not to do that and to that extent one has to question the sincerity of the Government or the urgency in the mind of the Government with regard to its so-called recoupment tax Bills. Senator Brownhill, who has just spoken, asked why the Government keeps bringing the Bills in; it knows the views of members and senators in the Parliament. The easy answer to that is that it is because of a commitment that it gave under the prices and incomes accord to the trade union movement, that it would introduce retrospective tax Bills. An attitude was expressed by the trade union movement that pay as you earn taxpayers did not have the options to manage their tax affairs and minimise their tax that others who were in business or who were in other associations had, so part of the commitment under the prices and incomes accord is that the Government will introduce retrospective legislation. The Government talked about it at the last election when it did not have a tax policy and when the Prime Minister (Mr Hawke) stumbled into a commitment to hold the summit that will be held in a month or two. As I said, at the time that it was talking about its prices and incomes accord and a tax summit it had the option of a double dissolution of the Parliament and of then putting its Bills to a joint sitting of the Parliament, thereby making a really strenuous effort to get them passed by the Parliament. I think the Government is quite relaxed when we reject the Bills for it, because it is then able to say that it has given some weight to the commitment it made to the trade union movement under the accord and it also gives it someone to blame for the size of the deficit and its own inability to control the growth of Government expenditure. That is not government; that is just passing the buck to a group of people here whom it chooses to call friends of tax cheats. Each time it brings in these Bills it uses them as a vehicle to continue the myth that the former Government failed to stop the tax avoidance industry. As someone who acted for the former Treasurer (Mr Howard) in this place, I have to say that time and time again Bills were brought in to amend the tax law in order to stop contrived and artificial schemes that avoided tax, sometimes on a general basis, sometimes for specific schemes. It was well known that throughout the five-year period when John Howard was Treasurer more Bills were brought in to amend the tax law to stop artificial schemes than were brought in at any other time. For it to be said in Parliament that these Bills are the only way in which any attempt has been made to stop the artificial contrived tax schemes or tax avoidance schemes is quite misleading and quite dishonest. Mr Dawkins, as Minister for Finance, made the public comment that the tax avoidance industry is dead. That is so, not because of any legislation of the present Government but because the series of changes made by the former Government to ensure that any of the contrived schemes that were able to be stopped by legislation or by the criminal penal legislation had the effect that was expected. These schemes have been stopped. The Hawke Government has attempted to bring in this type of legislation time and time again. It is sheer hypocrisy for it to present this legislation as an attempt to do something that had not been attempted to be done and something that needs to be done, thereby justifying penalising a selective group of people for schemes that go back over a decade. Senator Mason presented a very circuitous argument about retrospectivity and his view that these were not retrospective tax Bills. It seemed to me to be a very confused argument, but he perhaps made it clearer when he talked about the changes that were recently announced by the Government to the homes savings grant scheme. This is a perfect example of the point that has been contended by the speakers for the Opposition with regard to retrospective legislation. In the past few days the Government has announced changes to the homes savings grant scheme-as a government is perfectly entitled to do-which will reduce the benefit that is to be paid in the future to people who are eligible to receive a benefit under that scheme. It is a scheme that has been extremely helpful to many thousands of people who have purchased homes under the scheme. The Government has announced that in future there will be a reduction or a change in the basis on which these grants will be made. The Government did not, in the last few days, bring in a Bill that retrospectively changed the homes savings grants scheme date from when it first instituted it in 1983. It did not bring in a Bill that required people who had a grant to repay that grant after they had purchased their home and after they had had the expectation of the use of the funds. That is the analogy that Senator Mason ought to see if he is talking about the retrospectivity of the Bills that are before us. It is changing the rules a long time after the transactions have occurred. In this case it is asking for a repayment of tax on a basis that did not exist at the time that these schemes were entered into. We have heard some comment about the tax summit. Like, I am sure, most of my colleagues, I have received a number of submissions from organisations which intend to make representations to the tax summit. I have looked through the submissions that I have received and none of them mentions retrospectivity as a subject for urgent debate at the tax summit. A lot of the submissions talk about a tax system that ought to have equity, efficiency and simplicity. I think that we would all agree that those elements are desirable and necessary for compliance with any tax system. If one is looking for equitable tax system, I think one must look for fairness, justice and some certainty for the people who have to comply with it. I fail to see that there can be any fairness, equity or justice in a system that embarks in a general way on retrospective legislation. Such a system has been advocated by some speakers from the Government Party. Senator Elstob considers that retrospective tax legislation is quite desirable. Senator Mason on the one hand does not seem to believe that what is before us is retrospective and on the other hand believes that it is quite all right to bring forward legislation to change the law retrospectively after decisions that have been made in a court. Therefore, a person who has won a case in the court can be affected retrospectively by some change in tax law. I think the path advocated by Senator Mason would lead to a rather peculiar system of justice, given the court's role of interpreting legislation. Many aspects of the Australian taxation system will undoubtedly be focused on in the tax summit. However, it perhaps would be desirable if the tax summit were preceded by a discussion on the level of government spending. One cannot look at taxation without looking at government expenditure. It is the essence of government to withdraw from the people the funds that are required to pursue government programs on behalf of the Australian people. An element of disquiet enters into that relationship when government expenditure reaches a punitive level and government gives people little choice in or does not allow them to meet their personal commitments and aspirations. The summit when considering tax as a matter of importance ought to be looking at the level of government spending and what people expect the Government to do on their behalf. Points have been put forward with regard to what is at present the normal process of government expenditure, the review and effectiveness of programs and the reduction of expenditure wherever that is possible. I think public discussion so that people can have a complete understanding about this matter is a very healthy way to go about the pre-Budget stage. However, the situation is not helped when a government rejects immediately the undertaking of any sort of review in regard to changes that might be desirable. I know that it is very difficult for a government to look at the level of expenditure and go into the pre-Budget stage with so many commitments that seem to be inescapable and unavoidable-commitments to State governments, local government and organisations; commitments to cash payments under much of its social welfare legislation and things of that kind which lead to a high level of government expenditure in this country and which result only in what people might think of as a high level of taxation. So the prerequisite to looking at changes to the tax system when this matter is being discussed at the summit is a consideration of government programs and people's expectations of what government should do for them with their taxes. Many proposals have been put forward suggesting that it will be easy to move to a system of broader indirect taxes and that somehow this will mean that there will be no more tax avoidance. That does not necessarily follow. Whatever system of tax, excise or collection by government is instituted, there will always be the requirement for compliance; there will always be the tendency for people to minimise the taxes or charges which they have to pay. That is why it is important that fairness and justice be readily seen. People who are being asked to comply with a system for the valid reason that a government is undertaking programs on their behalf should be able to understand the system. They should be confident that the system will not change after they have paid tax for a financial year. The Australian Taxpayers Association is a broadly representative body of Australian taxpayers in the sense that it undertakes to put forward views of taxpayers throughout this country. That body says that tax avoidance 1970 style is virtually dead. It said that higher penalties and the specific changes to the law have achieved that. I have been making that point when I have talked of the changes that were made particularly during the five years when John Howard was the Treasurer of this country. We want to see such a situation. We would have expected the Government at that time to have reacted and brought in legislation that stopped tax avoidance schemes. Higher penalties and specific changes to the law have achieved that. The extra weapons that have been given to the Commissioner of Taxation to enable him to seek compliance with resources and to act in other ways have also been important elements in ensuring that tax avoidance 1970 style is dead. The Australian Taxpayers Association went on to mention that the Commonwealth Auditor-General recently disclosed that about $1,000m of tax is being evaded because some people leave interest and dividends out of tax returns. That is another area in which compliance needs to be undertaken. People are aware that they should disclose their income from all sources. However, they evade tax by leaving details of money earned from interest and dividends out of their tax returns. Another big area, of course, is the cash economy which has been partially dealt with by legislation and the prescribed payments scheme. I do not believe that anyone would assert that that legislation has been able to eliminate the cash economy and that tax is not being evaded because of non-disclosure. Therefore, we would see that further legislation is required in certain areas. We believe that further attempts should be made to gain compliance, to achieve the equity and fairness that I mentioned earlier and to get a simple and efficient taxation system. I do not believe that the only way to do this is to introduce retrospective legislation. Opposition speakers, not only in this debate but also in all the previous debates that have taken place on retrospective legislation, have stressed that fairness in the payment of tax, equity in the system and a fair sharing of the tax burden are all elements that they would wish to see in the taxation system. However, we cannot accept that retrospective legislation is the way in which this should be achieved. As I said earlier, I cannot accept the deep sincerity that the Government has shown in this matter because it did not take the ultimate step to prove to everybody its belief in retrospective legislation. The Government could have had a double dissolution. It could have sought a joint sitting of the Parliament to make this the hallmark of its approach to tax legislation. But it did not do that. Again with barely a whimper, the Government has brought in retrospective legislation to this Parliament. It expects that the Senate will reject that legislation. I believe that that again will be the fate of these Bills when the vote is taken shortly. Again, I put the proposition: If the Government is so serious about the legislation let it bring the Bills back again and let us reject them again. The Government will then have the double dissolution machinery on which it can be tested on a second occasion. Many speakers in this debate, including Senator Peter Rae who led for the Opposition, have indicated that the Opposition does not support the legislation. I feel very confident that our reasons for rejecting these Bills are understood by the Australian people. As I have said, the Government has certainly not made the point in its approach to the summit that it would accept or expect retrospective legislation to deal with matters of compliance or that the rules should be changed because of the detection of some scheme. I suggest that this debate shows again that prospective legislation to assist our taxation system is always considered sensibly and seriously by the Senate. However, I think the continued attempts to bring in retrospective legislation will result in the same sort of vote, certainly from members of the Opposition parties. Senator KNOWLES(Western Australia)(11.20) —I wish to record my strong opposition to the Taxation (Unpaid Company Tax) Assessment Amendment Bill and the Dividend Recoupment Tax Bill for three basic reasons. Firstly, all legislation that imposes liabilities and penalties retrospectively is immoral, and ultimately threatens the entire basis of the rule of law. Secondly, these particular Bills are unjust and punitive in their operation, and threaten both the existence of many smaller businesses and the whole concept of limited liability, without which investment cannot operate. Thirdly, these Bills are a cheap political device on the part of this Labor Government, trying to unify its factions and conciliate the Australian Council of Trade Unions in the run-up to the great taxation summit. As a Liberal senator from Western Australia, I am proud that my State Party has a consistent record of opposition to retrospective legislation. I am equally proud to stand here as a member of a Federal Liberal Party that will not countenance retrospective laws, penalties and liabilities in the future, in opposition and in government. It is the first principle of the rule of law, in our tradition of English common law, that if an activity is legal at a certain time, it cannot subsequently and retrospectively be made illegal, with penalties imposed upon those who were at the time acting within the law of the land. It is not good enough to say that taxation is such a complex area that retrospective laws become necessary. It is also not good enough to argue that these Bills do not involve retrospective punishment, but merely the recoupment of tax revenue. The fact is that a retrospective liability is being imposed; tax evasion has always been illegal. It is not good enough to allege that all tax avoidance schemes were immoral and that this somehow justifies restrospectivity. So many activities in our society are legal but not necessarily moral. Honourable senators should consider the consequences of retrospective illegality and punishment, and the ramifications become even worse when we realise that some concepts of what is moral change over time. Are we to encounter retrospective penalties for the new deadly sins of sexism and racism? Supporters of the Government might argue that they have no further plans for retrospectivity, but the principle remains the same. The more we have retrospective laws in the taxation field, the greater the risk that this evil principle will spill over into other areas of law. While I hold no brief for retrospective tax liabilities of any kind, I would reiterate the point made by other senators in this debate, and last year, that these Bills break new ground in imposing new liabilities going beyond the recoupment of normal taxation. These Bills are essentially punitive in their nature. They seek to recover this supposed avoided revenue at the highest possible rate, above the current maximum of 60c in the dollar. Far worse, they proceed on suppositions that often bear no relation to the actual operations of private companies. The legislation assumes that retained earnings are distributed 100 per cent to shareholders, disregarding the fact that private companies can retain 70 per cent of earnings under laws existing for several years. In practice a private company can elect to pay tax on undistributed profits, which at 50 per cent would be less than the maximum rate of tax in the hands of the shareholders. This retrospective tax is being levied at a rate 41 per cent higher than would have occurred in a normal private company situation, where 70 per cent of the profits could be retained in the company. Either this legislation was drafted in blissful ignorance of private companies and small business, or it has been framed as a punitive measure. By removing the so-called 'innocence clause' this Bill will actually create a situation where the vendor-shareholders who successfully avoided tax will be better off than those who went to promoters and unsuccessfully avoided tax. Shareholders in the former category are not liable for this recoupment tax. Such illogicality aside, it offends another established principle of natural justice that people can no longer claim as a defence the fact that they held an honest belief that the company did not have certain tax liabilities. All companies under the scope of these Bills are being treated, because of the abolition of the innocence clause, as though they were sent to the bottom of the harbour. This Bill will levy its retrospective penalties on shareholders of companies that did meet the requirements of existing tax and company law. For all the rhetoric about wealthy tax avoiders, this Government has not given much thought for the people who will be the actual victims of this legislation. Existing businesses will suffer the effective confiscation of working capital, or they will quite simply be sent to the wall. Business bankruptcies will not, of course, affect only the shareholders, but the employees who will lose their jobs. While the major impact of this legislation will fall upon private companies, it can, of course, apply to public companies and thus threaten the entire concept of limited liability. Shareholders of public companies cannot be expected to have knowledge as to the legality or propriety of taxation and accounting procedures undertaken by the management. It was a particularly shameful aspect of the 1982 legislation that it lifted the corporate veil and recouped tax from ordinary shareholders of two public companies, Metro Industries Ltd and Westwools Ltd, who had, in effect, received nothing more than dividend payments. Our whole financial system is based on that principle of limited liability first expressed in Britain during the 1860s, that allowed the investment of limited capital without the risk of losing more than the amount ventured. Without it, only those wealthy speculators who seem to obsess the Australian Labor Party could afford to buy shares in any company, private or public. This assault on the principle of limited liability will discourage people with modest incomes and savings from investing in any Australian enterprise. The Hawke Government showed what it thought of small investors when, in May 1983, it abolished the modest dividend rebate that reduced the double taxation of company profits. This punitive legislation now before the Senate would make people think twice before they invested in any company, particularly the elderly retired, who cannot cope with the thought of harassment by the Australian Taxation Office. The point should be made that, with all these threats of new retrospective laws, this Government has created a climate of fear among many ordinary Australians. People not only fear the imposition of a capital gains tax, a wealth tax and other new taxes, but fear that they will somehow apply retrospectively. Perhaps they are right, given the intentions of the Hawke Government expressed in these two Bills before us. Whether or not such fears are correct, it is a sad state of affairs when people are concerned that they will be assessed on a block of land they have sold for a modest return after 25 years, or hesitate to transfer capital to close family members in case this Government dreams up a retrospective gift duty. I return to my third point, that these Bills have far more to do with the confused and conflicting internal politics of the Labor movement than with furthering an honest taxation policy for Australia. On 3 March 1983 the outgoing Treasurer, Mr Howard, was informed by the Taxation Commissioner that the introduction of Part IVA of the taxation Act in May 1981 had 'from that date effectively put a stop to the promotion of new tax avoidance schemes of a blatant, artificial or contrived nature'. So much for all the rhetoric of the millions of dollars being ripped off by the tax avoidance industry. Even more interesting is a remark made in April last year, by the former Minister for Finance, Mr Dawkins, whose knowledge of tax avoidance I would not dream of challenging. He told a meeting of chartered accountants in Sydney that tax avoidance in Australia was 'dead as an issue'. Perhaps Mr Dawkins wanted to be polite to members of a profession subjected to generalised slanders throughout the tax avoidance debate, but I prefer to think that he was being honest. This honest appraisal of the situation last April was laid aside during the election campaign with more fanciful attacks on the tax avoidance industry. As a tactic it did not work very well in my own State of Western Australia where there was a 4 per cent swing against the ALP. Having been of dubious value last December, the tax avoidance bogy is being revived here today as window dressing for the taxation summit. The Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) know that they have no hope of implementing any shifts from income to indirect taxation without the compliance of the Left, the Centre Left and the 'left right out' factions of the Australian Labor Party and of the other arm of this Government, the ACTU. Without any concern on the part of the Government as to the interests of the Australian economy or even of basic social justice, we are seeing the first crude political trade-off to obtain that support. These Bills are supposedly directed at the people who do not vote ALP and who can be portrayed as evil tax avoiders to excite the passions of the mean-minded elements in the Labor movement. I might say as an aside that these sordid bargains will not stop with this legislation but will extend to the imposition of capital gains taxes and death duties, which the Treasurer knows to be economically disastrous, administratively costly and morally wrong, but which will be exacted by members of the Left and their allies. This charade would be comic if it were not for the fact that these two Bills will bankrupt small business, throw Australians out of work and punish many law abiding taxpayers for measures which were perfectly legal at the time. I hope that the Senate stands firm against the evil of retrospective legislation and consigns both Bills, partners in crime, to the scrap-heap. Senator JACK EVANS(Western Australia)(11.31) —We need to look first of all at this legislation in its historical context and then at the legal and moral arguments. The Taxation (Unpaid Company Tax) Assessment Bill and the Dividend Recoupment Tax Bill have quite a history. They relate initially to very serious government inaction on tax avoidance in the period from 1970 to 1980. That really was the basis on which it became possible for retrospective legislation to be accepted by this Parliament in the first instance. It was almost an admission of guilt by Parliament that for all those years governments and parliaments had allowed a situation to remain and, in fact, to be exacerbated to the detriment of the great majority of Australian taxpayers. I claim innocence in the lack of activity over that period. I was not then a member of the Parliament; neither was I a member of the Parliament when the first legislation was passed. I would have voted for that legislation because I believe in the principle contained in it, which I will describe in a few minutes. It became obvious that there was to be a search for scapegoats. This may have led, in the minds of some, to a vendetta against certain people in the community. Whether or not one agrees that a vendetta was justified, nevertheless, it was portrayed by the media as a vendetta because certain people were being hounded around the country as a result of certain unfortunate statements which were made in this Parliament under privilege. In 1982 the Fraser Government passed the first legislation, but it would appear that it allowed certain loopholes for various pressure groups or friends-however one likes to describe them-in that legislation. The Fraser Government also left totally inadequate safeguards in that legislation for innocent people. That is an anomaly which the Australian Democrats have picked up subsequently. In fact, we currently have a Bill before the Senate to endeavour to remedy that anomaly. In 1983 we saw the first of the present Government's bottom of the harbour Bills. It became obvious that the Government intended to get rid of tax avoidance, if it was humanly possible, through the legislative process, not just by making it illegal to avoid paying tax but also by having the threat of retrospective legislation hanging over the head of any possible future tax avoider. The first of this Government's Taxation (Unpaid Company Tax) Assessment Amendment Bills did not get through. We endeavoured to amend it but our amendment was lost on the second reading vote. In 1983 the second of these Bills came to light. That Bill still contained no provision for people who we believed may have been able to prove themselves innocent but would have had to pay out in full despite their innocence. Also in 1983 the third T(UCT)A Bill was introduced by the Australian Democrats as a private senator's Bill to establish an anomalies tribunal. Then in 1983 the Government's third Bill was introduced. That Bill provided, in addition to the original provisions, some relief to public company shareholders. That piece of legislation was destroyed by Opposition amendments. Despite the fact that it was passed it was an abortive piece of legislation. Finally, in 1984, a piece of legislation similar to the second and fourth proposed Bills was introduced. That legislation also was not passed. That led to a very interesting situation. The Government proclaimed that it would get tax cheats at any cost, that it would hound them until they paid their proportion of their ill-gotten gains to the Commissioner of Taxation. The Government was presented with a magnificent opportunity to carry out its threat because it decided to have an early election. It could just as easily have held a double dissolution at that time and given itself the numbers in the combined Houses to force through its legislation on bottom of the harbour tax avoiders, but it missed the opportunity. For reasons known only to itself it did not take advantage of the trigger that it had deliberately and carefully set up so that it could go to the people and say: 'We want your mandate for this legislation. We want to have the opportunity to get it through the Parliament despite the opposition of some people in the Senate. By going to you in a double dissolution you can give us enough numbers in the combined Houses of Parliament to get our legislation through'. But the Government ignored the opportunity, and so the legislation has still not passed through this Parliament. Let me refer briefly to the Australian Democrats' record on this legislation because I think it is something that needs to be proclaimed. It is something for which not just Australian Democrats' senators but also Australian Democrats' members, supporters and voters can feel justifiably very proud. We have been absolutely consistent in our approach to this legislation, which is more than can be said for any other political party. We have been totally consistent. We have had divisions in the Australian Democrats, as there have been divisions in the votes of members of the Liberal Party of Australia. Our divisions truly represent the divergent views of the total community on this legislation-a community which is torn between two principles. There is the principle which holds that retrospective legislation is not acceptable. I think that that feeling is based in part on the fear of the extension of the retrospective legislation principle. Whether that is justified or not, that is, nevertheless, the way many people in Australia perceive this legislation. On the other hand, some of us believe that the receivers of illegally obtained wealth-I stress 'illegally obtained wealth'-should not be allowed to rob their fellow Australians. I ask: Who are the friends of the tax cheats? That is a phrase that has been used not only in elections but also in this place from time to time. Just who are the friends of the tax cheats? Senator Walsh —Everybody over there except you and Mason; that is who. Senator JACK EVANS —Let us have a look at who are the friends of the tax cheats so that Senator Walsh can load his firearms with buckshot instead of with a single shot. There are many friends of tax cheats. There are those who oppose retrospective legislation and who I accept may be caught up in that accusation, but they are at least doing so as a matter of principle. There are those who legislate to ensure that loopholes exist in tax laws for the benefit of their friends and supporters. They are a lot more subtle, a lot more clever and a lot less obvious. There are those who ignore the legislative flaws for years and years thereby allowing the tax avoidance industry to flourish. That sweeps up many people, including most of the people in this Parliament today, including even Senator Walsh and including Ministers and shadow Ministers who, over many years, allowed the tax avoidance industry not just to exist but to grow in such a way that those of us with any sort of a conscience felt guilty for our Australian Parliament because it was allowing this to happen. It was allowing an industry to be prostituted, promulgated and promoted blatantly by professional people across this land. In my opinion other friends of tax cheats include those in High Courts who distorted the interpretation of laws to benefit fellow conservatives. I use that word not in a political sense but in a sense that they were fellows who were doing very nicely, thank you, out of the present system. They did not want to change anything because it was to their benefit to allow the tax avoidance industry to flourish. We had a quite ridiculous interpretation of section 260 of the tax Act which subsequently practically every lawyer, every constitutional lawyer and every parliamentarian has proclaimed to be a ridiculous interpretation. But we lived with that for many years as a result of an interpretation in the High Court. Finally, the friends of the tax cheats include those who aid and abet the massive distortion of our tax system. That includes some professional people. I will not sweep everybody into this category. But these people know who were the lawyers and the accountants in their professions who were deliberately setting up this industry. They are the friends of the tax cheats and they are the ones who still have not been placed on the hook of any piece of legislation. They are still enjoying their professional reputations as lawyers and accountants without what I believe should be the stigma associated with their acts over the last decade. Speaking for myself, I have voted in favour of every piece of tax avoidance legislation that has come to this Parliament. I have spoken vigorously inside and outside the Parliament about the tax avoidance industry and about tax avoiders. In my first few months within this Parliament I probably became the most lobbied person in this Parliament, as a result of listening to the pleas of those who had been caught up by the Fraser legislation and who were about to be caught up by the Hawke legislation on tax avoidance. Whilst listening to them sympathetically and considerately, I was persuaded by their arguments-I heard all of them-that there needed to be some easing up on the tax avoidance industry. I also took deliberate steps to clarify the hazy lines between the tax avoidance practices of some people and the legal, justifiable and moral tax minimisation practices in which I suspect practically all of us engage. I went so far as to introduce a tax avoidance schemes Bill which did provide machinery for having tax avoidance schemes registered, approved by the Treasurer in prospect, so that we would not ever again have to go through the processes of retrospective legislation to catch those who had avoided their obligations to pay their taxes. All governments have been guilty of inaction and I have mentioned this. But what needs to be stressed is that while that inaction of governments was tolerated, 15 million Australians were victims of it. Every million dollars which one of these frauds managed to get away with meant that more tax had to be drawn into the revenue system of government through increased taxes for the rest of the taxpayers of Australia. I think that there is justification for this legislation. I think we need to look at it coolly and calmly in this context. It is a false argument to propose that people who would be caught by this legislation behaved legally at the time. I want to stress this: This legislation is being introduced because of the illegal acts of people at the time. Senator Peter Rae —What law did they breach? Senator JACK EVANS —If Senator Rae is not aware of the law which precludes the destruction of company records, I am surprised and disappointed. The honourable senator should hear me out. He does not deny that that law was breached. The acts of tax evasion were illegal because that law was breached. The laws of this land were broken. Nobody has denied that. The laws of Australia, in terms of tax payments, were broken because company records were destroyed. This legislation deals with the beneficiaries of those illegally gotten gains. I go further: It does not, as so many people have implied, impose penalties on those beneficiaries. It does not create criminals through the retrospective laws. There goes the argument of most of the people who claim that this retrospective legislation is horrendous and is a precedent for all sorts of other laws being changed. This piece of legislation does not make criminals of the people who are caught up by it. That is a red herring. It is a straw man argument. No criminals are being created by this legislation. All that this legislation does is to collect taxes from people on the moneys which were legally taxable but which were avoided by illegal acts. That is all this legislation is doing: It is collecting the taxes which were evaded-I go further; not avoided, but evaded-through an illegal act. But because those moneys happened to finish up in somebody else's hands-that was the clever part of the deal; that was the way around the technicality of the law-Senator Rae is saying that that is okay and that makes it legal. He says that the illegal act becomes legal because the money finished up in somebody else's hands. What an argument! What an absolutely fallacious argument to suggest that it is okay to receive ill gotten gains but that it is not okay to take an illegal action to create those ill gotten gains. Senator Rae will have us believe next that it is okay to accept stolen goods-another form of ill gotten gains. If there is not an element of stealth in this action there is stealth from 15 million Australians. It is not just stealth from Senator Rae or another individual: It is stealth from 15 million Australians. Because it is stealth from all of us, Senator Rae is saying: 'Let them get away with it; there is no real crime there'. He is saying that we should let them get away with all these millions-or billions, as we are starting to discover-of dollars because they got the money in sweet innocence, they were the third party, they were only the receivers of illegally gotten gains. That is the argument for anti retrospectivity. I make another plea to this Government and to this Parliament to consider the people who have been caught up in all innocence-there are a few-with the Fraser legislation and who would be caught up with this legislation if it were passed. I have asked for a separate, special appeal system to be provided for those people. I still ask for that. I put it to the Government that if it supports the Bill that I put before this Parliament it will destroy one of the few remaining arguments that the Opposition may have in the market place-the argument that this legislation or any bottom of the harbour legislation may pick up a genuinely innocent person. If we take that argument away from members of the Opposition, there is a chance that next time around a few consciences will start to be pricked and this legislation will be passed. In any case, whether or not the Government wants to do it for that reason, there is a justifiable reason for putting down and passing a piece of legislation which gives a justifiable right to innocent sufferers from the original T(UCT)A legislation to appeal, to have their assessments reduced or withdrawn or to be given additional time to pay. That is what the Bill that I have introduced would do. This has been an emotional debate because some very high principles are at stake. I hasten to add that I respect the views of both sides in this debate, whether or not they agree with my arguments. I respect those who believe in the principle of retrospectivity and fear where it may lead us. Similarly, I believe that this Parliament has a responsibility to the people it represents to kill the tax avoidance industry and to ensure that, not only in retrospect but also in prospect, all Australians pay their share of tax whether they be pay as you earn taxpayers, small business people-those two categories have paid much more than their share over recent years-or millionaires who can manipulate the system so that they pay no taxes at all but get not only all the benefits of their ill-gotten gains but also all the benefits that this country provides for them. I ask all honourable senators to give very careful consideration to this vote and to do as they have done previously. I appeal particularly to honourable senators on this side of the House to be prepared to divide, which they did previously on a T(UCT)A Bill. I ask them to be prepared to stand up for what they really believe in. If we look back through the Hansard records of those original speeches we find that some very high-principled, moralistic speeches were made which could equally be made on this legislation. They were made then by members of the Liberal Party. I believe that those members who felt that way then may still feel that way today and I hope that they will be given the opportunity to express that feeling in a vote on these Bills. Senator PETER RAE(Tasmania) —Mr Acting Deputy President, I claim to have been misrepresented and wish to make a personal explanation. The ACTING DEPUTY PRESIDENT(Senator Elstob) —You may proceed. Senator PETER RAE —Senator Jack Evans suggested that I approved of illegal acts and that I had suggested that no action should be taken against the people who had perpetrated illegal acts. That was a figment of his imagination, a total invention. I have never said any such thing, nor do I believe it. I simply make it quite clear that I do not approve of illegal acts and I do not approve of the idea that no action should be taken against the people who are guilty of illegal acts. I do not take it any further than that. Senator WALSH(Western Australia-Minister for Finance)(11.55) —I have not heard the entire debate on the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1985 and the Dividend Recoupment Tax Bill 1985, but I assume that most of the speakers delivered the set piece speeches which they have delivered in the past. One or two new senators also spoke. I think Senator Jack Evans gave a very good summing up of the case. It is a pity that the best of the Australian Democrats senators will not be here after the end of June. Two reasons have been advanced by the people who will vote again to protect the ill-gotten gains of tax evaders. The first is a claimed objection in principle to retrospective legislation. That argument could perhaps be legitimately used by Senator Chipp or Senator Haines, who have always voted against retrospective tax legislation. It could legitimately be used even by a number of people in the Liberal Party; I do not have all their names. Senator Peter Rae —I am one of them. Senator WALSH —Senator Rae tells me that he is one of them and I concede that. However, it is not an argument which can legitimately be used by Senator Harradine or by 14 of the present Liberal-National Party senators who voted for retrospective legislation in 1982 and have voted against retrospective legislation ever since. In defence of the Liberal-National Party senators who have that contradictory voting record, one could enter a plea of mitigation; that is, that they were under party pressure, party discipline, to vote the way they did in 1982. For Senator Harradine, of course, no defence whatsoever is admissible. Senator Chipp has long been on the public record claiming that he was offered half a million dollars to vote against legislation of this type. It has always been my view that Senator Chipp had an obligation to state to the Senate who it was that made that offer, but I accept his statement that such an offer was made. I believe, as I have said before, that short of a death threat an attempt to bribe a member of Parliament is the greatest possible contempt of Parliament. I wish that the people who purport to have some respect or some affection for the claimed dignity of the Parliament and the Senate would stand up and take some action when the integrity of the Parliament is threatened in the most fundamental way. The second reason advanced for voting against the Government's legislation-for which the Prime Minister (Mr Hawke) gave a specific commitment in his policy speech during the election campaign last year and for which the Government therefore has a mandate-is that there is no longer any need for retrospective legislation of this type because, it is asserted, the Part IVA amendments to the Income Tax Assessment Act of May 1981 have closed off for all time the possibility of similar fraudulent tax avoidance. That claim is wrong. It has been refuted by the success of trust stripping for charity donations-what has become known as the new generation trust strips. Under that scheme donations to charity, which are payable 80 years hence and which therefore have a negligible present value, have been fully deducted from current taxable income. It has been upheld in the courts. The perpetrators of that scheme, thanks again to the actions of the same honourable senators who will defeat these Bills, have been allowed to walk away with $9.5m, essentially on the same spurious grounds-that they were opposed in principle to retrospective legislation. I know Senator Rae will not like what I am about to say because I think it succinctly sums up the attitude of honourable senators who will vote against this Bill. What they are saying to would-be tax avoiders or tax evaders-whatever you like to call them-is this: 'If you have been robbing the till all week and we find out on Friday that you have been doing this we will say that if you continue to rob the till you will have to pay back any further money that you steal but that what you have stolen to date you can keep'. Essentially that is the attitude of the people who will defeat this legislation. They are telling thieves that they will be under no obligation to repay what they had stolen before the theft was detected; they will be obliged to repay only what was stolen after the theft was detected. Senator Chipp —Don't you concede that these thieves involved in the bottom of the harbour scheme were doing it legally? There is a great deal of difference. Senator WALSH —If Senator Chipp wants to introduce one of those fine casuistic lawyer's distinctions, that is so. I expect he introduces it as a point of law. As Malcolm Fraser used to say, there ought to be an obligation on citizens over and beyond the strictest requirement of the law. However, I am indebted to Senator Chipp for raising that point because it opens up the whole question of the ethics of the legal profession, a question to which I think the legal profession ought to address itself. For instance, we had the spectacle in Dublin last year of one of the most prestigious QCs in the United Kingdom arguing before a court for weeks that it could not extradite a man because he was not Robert Trimbole. The same QC appeared in court the next week and said: 'All right, that was a fib, he is Trimbole. But you still cannot extradite him'. He then gave some other reason. No odium whatsoever accrued to that prestigious QC for so arguing a case. The morals of the legal profession are so flexible that they will accommodate anything. There seems to be no limit on the degree or amount of anti-social action which the legal profession will accommodate. Senator Chipp —I agree with you 100 per cent and I commend you for saying what you have just said. Senator WALSH —I suggest that as Senator Chipp is still a qualified lawyer he ought to take the matter up with the legal profession. The ethics of the legal profession are appalling. I really do not think there is any point in going into this matter in any more detail, except to state once again the simple proposition-proven by the success of the new generation trust strips-that Part IVA of the Income Tax Assessment Act does not provide an iron clad guarantee. I make the concession to the legal casuists that such actions may not be technically fraudulent but they are certainly in every other sense fraudulent. Actions aimed at defrauding the public revenue are not precluded by Part IVA. The only way to ensure that potential perpetrators of fraud of the public revenue will not be allowed to keep the gains from their fraud is for this Parliament-which in the present context means this chamber-to serve notice on the community to issue a credible threat of retrospective legislation and retrospective recovery. If such a threat were issued the tax avoidance industry would be killed. Senator Peter Rae —Capital punishment never cut out murder. Senator WALSH —That was a rather silly interjection. Unlike claims made to the contrary during the debate, this legislation does not impose any criminal penalties. It seeks to recover money which ought to have been paid to the Commissioner of Taxation years ago. It imposes no criminal penalty. Until this Parliament issues a credible threat of retrospective legislation perpetrators of tax avoidance-evasion schemes will be able to continue to practise their anti-social craft with at least some prospect of success. Senator Harradine —Mr Deputy President, I claim to have been misrepresented by the last speaker. The DEPUTY PRESIDENT —Senator Harradine, do you claim that something you said in this debate has been misrepresented? Senator Harradine —I claim that something Senator Walsh said- The DEPUTY PRESIDENT —No, do you claim that something you said has been misrepresented by Senator Walsh? Senator Harradine —No, Mr Deputy President. I seek leave to make a personal explanation in respect of that matter. Leave not granted. Senator Harradine —Mr Deputy President, I seek leave to make a statement in respect of my not being on the speaker's list by reason of the fact that I believe the Government wanted this legislation out of the way today. Leave not granted. Question put: That the Bills be now read a second time. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 33 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 2 —— Aulich, T. Grimes, D. J. Black, J. R. Hearn, J. M. Bolkus N. Jones, G. N. Childs, B. K. McClelland, DouglasCoates, J. McKiernan, J. P. Colston, M. A. Maguire, G. R. Cook, P. F. S. Mason, C. V. T. Cooney, B. Primmer, C. G. Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M. Elstob, R. C. Richardson, G. F. Evans, Gareth Robertson, E. A. (Teller)Evans, Jack Ryan, S. M. Foreman, D. J. Sibraa K. W. Georges, G. Walsh, P. A. Gietzelt, A. T. Zakharov, A. O. Giles, P. J. Archer, B. R. Lewis, A. W. R. Baume, Peter MacGibbon, D. J. Boswell, R. L. D. Macklin, M. J. Brownhill, D. G. C. Missen, A. J. Carrick, Sir John Puplick, C. J. G. Chaney, F. M. Rae, PeterChipp, D. L. Reid, M. E. Collard, S. J. Scott, D. B. Durack, P. D. Sheil, G. (Teller)Guilfoyle, Dame Margaret Short J. R. Haines, J. Teague, B. C. Hamer, D. J. Townley, M. Harradine, B. Vanstone, A. E. Hill, R. Vigor, D. B. Jessop, D. S. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Knowles, S. C. Withers, R. G. Lajovic, M. E. Coleman, R. N. Bjelke-Petersen, F. I. Button, J. N. Messner, A. J. McIntosh, G. D. Crichton-Browne, N. A. Tate, M. C. Parer, W. R. Question so resolved in the negative. Messages received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to the following Bills: Extradition (Commonwealth Countries) Amendment Bill 1985 Extradition (Foreign States) Amendment Bill 1985 Debate resumed. Senator DURACK(Western Australia)(12.15) —When the debate on this matter was adjourned earlier this morning I indicated I would be prepared to accept a small change to the amendment that I had moved to Senator Tate's motion so that it would apply to a Bill introduced by the Government in either this chamber or the other place. That led to some technical drafting questions which have now been resolved. I now seek leave to move the amendment in the terms that have been circulated in the Senate. Leave granted. Senator DURACK —I move the amendment to Senator Tate's motion in the following terms: At end of motion add: '', but that the Committee, in the course of its inquiry, not consider the provisions of any Bill on this subject prepared by the Government unless such Bill has been introduced into the Parliament and the Senate has authorised the consideration of the provisions of that Bill by the Committee''. Senator TATE(Tasmania)(12.16) —I briefly indicate that the new wording of Senator Durack's amendment has been discussed by senators on this side of the chamber in conjunction with the Australian Democrats and the relevant Ministers. It is acceptable because the wording is better than that contained in the original amendment. We will not oppose it. Amendment agreed to. Original question, as amended, resolved in the affirmative. Debate resumed from 18 April, on motion by Senator Grimes: That the Bill be now read a second time. Senator COLLARD(Queensland)(12.17) —I say at the outset that the Opposition will not oppose the Soil Conservation (Financial Assistance) Bill 1985 although we have some concern about one or two aspects of it. Soil, I guess, in a nation such as Australia is one of our greatest assets. Australia, whether it likes it or not, or whether most people know it or not, relies greatly on its rural industries. We rely on them tremendously for employment alone. Of course, when we look at our balance of trade figures, even though, as I have indicated at times in the Senate, some people are losing money while they are working the soil, it is still providing us with 40 per cent of our export earnings. So the conservation of our soil is of great importance. It worries me that many people are not really aware of the effect of the rural community on our great nation. This was particularly brought to my attention by a letter to the editor in yesterday's Australian from a B. Watts of Ashgrove Avenue, Ashgrove. I will quote only two parts of the letter which do not detract from what he is saying in the rest of the letter. With regard to farmers, he stated: For years they lived literally off the fat of the land. Now, when times are tough, they look to governments for assistance and handouts. . . . . . . we have known good and bad times in business, but we never approached any government for assistance and we never whinged. Unfortunately, that is probably indicative of the thinking of many people who live in cities. To my knowledge there has never been any fat of the land on which rural producers could live. They have got what they worked for, and they have worked damn hard. Rural producers have never asked too much of the Government. They have asked the Government to get off their backs, but if it is not going to do that it should at least recognise that rural producers are doing a lot for other sections of industry. Quite often the business community of Australia is providing to captive markets, that is, the domestic market, whereas the rural industries are providing to world markets and in very different circumstances. Many times in the last few weeks we have tried to get over to the people of Australia and to the Government that when we are dealing on world markets we are competing against subsidised surpluses, so market forces do not apply. It is a whole new ball game. The rural industry has had its problems. In the Queensland dairy industry alone 20,000 farmers have gone out of business over the last 10 or 15 years. Therefore, we are well aware of the travails and the ups and downs that prevail in the market-place. I reiterate that most of our businesses are dealing with captive markets. On top of that they are able to pass on their costs. They also work under the protection of tariff barriers and quotas. As I have said, rural producers are not so much after government assistance as for getting the Government off their backs. The dairy industry and the sugar industry at this point are in a great state but they still employ a lot of people. The sugar industry employs people who directly grow the sugar, people who mill it and people who sell it. The same applies to the dairy industry. It is interesting to note that in one way or another the dairy industry employs 53,400 people. The motor vehicle manufacturing industry employs only 36,593 people; yet those 36,593 people are sheltering behind tariffs and quotas. Why are they any different from the people in rural industry? I use that argument to try to counter the sort of thinking behind some letters to the editor. Thus I mention the contribution that the rural industry is still making to Australia and to our balance of trade, which is in all sorts of problems. When one looks more closely at the problem of soil erosion one recognises that in times past it has been caused by overgrazing and greed. We all acknowledge that. Quite often soil erosion is caused by overgrazing because a grazier is just trying to make a living in spite of all that prevails against him, as at this time. If he gets a good season he builds up his flocks. Often when there is a drought he cannot unload his stock quickly enough, hence the overgrazing. In earlier times in particular, soil erosion has been caused by a lack of knowledge. I notice that the Bill mentions the salinity problem, particularly in New South Wales and Victoria. We now know that this was brought about by felling of the trees. This enabled the water table to creep up, and as it crept up it came through a salt layer that was put down thousands, hundreds of thousands, or millions of years ago when that part of the country was an inland sea. This brought the salt to the surface and the salt has laid waste hundreds or thousands of hectares of what was once good grazing property. We now know the facts. Nobody is blaming anybody for what has happened in the past. Farmers in the area are now seeking to redress the situation by once again planting trees. It is interesting to note that the Commonwealth Scientific and Industrial Research Organisation estimates that it will cost $1 billion to $2 billion to overcome the salinity problem alone. Of course droughts and fires take away all the cover so that the soil is immediately open to wind erosion or, if there is a heavy storm straight afterwards, to soil erosion. Quite often after a long drought very little root structure is left to bind the soil together. I stress that our soil is a national asset. The rural industry does not have the financial capabilities of coming to grips with the problem; that must be understood. This year rural incomes are set to decline by 17 per cent. It is expected that this year the return on invested capital will be 1.5 per cent across the board in the rural industry. I think the bond rate is currently running at around 13 per cent; I have not looked at it recently. Real interest rates in Australia are about 6 per cent, the highest we can remember, certainly since the Depression. This gives an idea of the state that the rural industries are in and of the inability within their own financial resources to come to grips with what is a national problem. Soil is a national resource and, as I have said, farmers husband it for the national benefit. Thus it is right and fair that the nation bear some of the financial burden of conserving our soil. Both sides of this chamber recognise that fact. Prior to the 1983 election the Australian Labor Party promised to spend $4m that year on soil conservation; in fact it spent only $1m. Fortuitously, after the Government's second election to office, this Bill makes allowances for an appropriation of $4m for 1984-85. The Opposition puts a higher priority on soil conservation. Prior to the 1983 election we promised to spend $5m in 1983-84, building up to $15m in 1987-88. I have said that there is one aspect of the Bill with which the Opposition is not too happy and that is that it will set up another statutory authority-the Soil Conservation Advisory Committee. I do not think it is necessary. It will duplicate State functions already in place. There will be another bureaucracy, and honourable senators know what that means. The expenses of that Committee will be $180,000 per annum for the first two years and $120,000 per annum for subsequent years. Quite a few farmers in this chamber and in the other place could well do with that $180,000 for soil conservation on their own properties. If I had that money I could certainly handle the problems of soil erosion and the dispersal lanes on my farm. I do not like, and the Opposition is not happy with, the idea of setting up another statutory authority. It will unnecessarily cost money and, in particular, it will duplicate work which is already being done by the States. However, the Opposition will not oppose this Bill. Senator BROWNHILL(New South Wales)(12.29) —For the record, I will state what the Soil Conservation (Financial Assistance) Bill sets out to achieve. Firstly, it will provide a statutory basis whereby the Commonwealth can contribute to soil conservation nationally by providing financial assistance to the States, Commonwealth departments, other institutions and individuals for this purpose. Secondly, it will establish a Soil Conservation Advisory Committee comprising members nominated by the Commonwealth and the Australian Soil Conservation Council to recommend priorities, strategies and conditions for the expenditure of funds provided under the Bill, to provide advice on soil conservation in general to the Commonwealth and to report annually on the operation of the legislation. I commend the Government for bringing in this Bill. Obviously the Government took great heed of the Collaborative Soil Conservation Study of 1975 to 1977, a study carried out by the States and the then Federal Government. The study was entitled 'A review of a Basis for Soil Conservation policy in Australia'. It is perhaps a pity that it has taken so long for its recommendations to come into effect. In giving some of the reasons for the necessity to protect the soil I shall give some of the figures detailed in that study. The study showed that 52 per cent of the land in use in Australia needs some form of treatment for land or vegetation degradation. This area amounts to more than one-third of the entire land mass of Australia-a rather horrific figure to think of. Over 5 million square kilometres are used for agricultural and pastoral purposes. Of this total area in use, 23 per cent, or 1.8 million square kilometres, needs treatment with land management practices only, while 29 per cent, or 1.48 million square kilometres, needs conservation works of various kinds, almost invariably in conjunction with appropriate management practices. About 2.5 million square kilometres of land are not used for agricultural or pastoral purposes. This means that already a great deal of Australia's land mass is not even fit to produce any wealth for our country or food for the nations of the world. For example, some 55 per cent of the arid zone, which is about 27 times the size of Tasmania, is in a state of degradation. The study to which I have been referring found that on about one-quarter of the degraded area the deterioration of the vegetation is accompanied by some erosion. The fact that conservation works are needed on one third of all arid grazing land gives great concern to the people of Australia. The soil is a precious and easily eroded resource. While seeking to maintain the highest returns from it in our lifetime, we should protect the soil, look after it and make it better for future generations. The study also showed that the non-arid zone, where rainfall is normally sufficient to sustain dry land crops and sown pastures, covers 2.3 million square kilometres or 30 per cent of Australia. More than 98 per cent of Australia's population lives in that zone, so obviously soil conservation schemes are needed to protect the water supplies for people living in those areas as well as to improve the soil. Australia has a limited resource and it must be protected. I could go on at length to quote from the collaborative study. It is important that something be done on a national scale. That is why the Opposition is supporting this Bill. I can foresee problems and will now seek to deal with some of them. The administrative cost of running a national soil conservation body, we were told by the Minister, when he introduced the Bill, will be some $120,000 a year. I ask the Minister and the advisory committee, when it is set up, to look at the costs of running the service so that it does not take up all its money in running the body as another government instrumentality. If that happens, the benefits of the Bill will not accrue to those people who need it-the people who look after the soil itself. The cost of running the service must be kept low, and that applies particularly to the cost of running the advisory committee and administrative costs. It is said that the financial impact of the Bill cannot be accurately quantified. I would have thought the Government had something in mind as to the amount that would be available in some of the forthcoming years. The Government in the first year of office gave a commitment to allocate $4m. In that first year, 1983-84, only $1m was allocated instead of $4m. In the 1984-85 financial year $4m was allocated, so we are already $3m behind scratch. Based on 1975 figures, the costs of conservation works needed to control land degradation in Australia were estimated at some $675m. That was 10 years ago. We are now 10 years down the track, the Australian dollar is now at a different value, and different costs are now associated with the problem of reclamation and so on. That was the estimated cost at that stage. The estimated cost of conservation works on non-arid grazing land and on extensive cropping land in those days was $234m. The costs involved are horrendous, and associated costs include not only government costs but landholders costs. The cost to the community is enormous. I am sad that this nation is 10 years further down the track-I speak as somebody who is vitally interested in soil conservation-and there is still a great backlog to make up. I am concerned about the way in which the Soil Conservation Advisory Committee is to be appointed. The Minister may end up having too much control over an area which most probably should be looked after by State interests. The Minister could have a big influence on matters about which he may not know as much as he should. My remarks apply to such a Minister at any time. Let me deal with how the Committee is to be elected and its constitution. It will have between five and seven members. The two members appointed by the Australian Soil Conservation Council-or, until that body is fully functional, by the Australian Agricultural Council-will probably be State government employees, but will represent the Council rather than a State or States. The Commonwealth will be represented by a single member. Between two and four other persons will be members. The Minister is to appoint all members but will be obliged to appoint the two members nominated by the Council. My view is that if people appointed to that Committee are more interested in conservation measures of an extreme nature-they would probably receive Press coverage-than in our vital resource, the soil, this legislation could get out of kilter. I urge the people who will select the Committee members to see to it that those who are on that body are practical people with special expertise. I suggest that they be brownies rather than greenies. Our precious resource, the soil, does not get enough publicity in the Press compared with the attention given to people who are interested in conserving our natural resources. I am on side with people who wish to conserve all natural resources, but the vital resource, the soil, needs to be represented by the brownies. That is an apt name for them, because that is the colour of the water that flows down the rivers taking our lifeblood, the soil, away to the sea. I hope that we have on the Committee people with special expertise and people who are vitally interested in the soil. The Bill provides for funding of individuals. I cannot quite understand why the Commonwealth wants to get into the act of giving money to private individuals in the States. In my home State of New South Wales that is completely and properly done at this stage. The New South Wales Soil Conservation Service looks after individuals. This Bill draws together all the States to share the common problem of soil degradation. I think it is very good that the Bill provides money for universities and other instrumentalities. However, again, there might be duplication of some State matters. The advances to the States are not clearly set out but they should be equitable and fair. I quote from a recommendation in the 'Collaborative Soil Conservation Study' report of the Standing Committee on Soil Conservation of some years ago: Encouragement would thereby be given to initiatives in particular States so that the total expenditure on soil conservation in each State would reflect State priorities, based on perceived need and capacity for action. The report continues: The increased level of funding should be provided on a consistent basis and not be subject to sharp annual fluctuations. I entirely agree with the setting up of the Trust Fund because hopefully it will alleviate the problem of sharp fluctuations. The report goes on to say: The actual rate of increase in Commonwealth funding would be determined in part by the ability of soil conservation authorities to expand their activities as well as the availability of matching funds from State government sources. As I said, the advances should be fair and equitable to the States. Let me put in a plug for the Soil Conservation Service in my home State of New South Wales It is the largest soil conservation service in Australia. It employs some 722 people and 500 of those people are at the coal face. If this Commonwealth Advisory Committee is going to put all of the powers in the hands of the Commonwealth and take power away from the States I will be very much against it. I hope that the good offices of the Department that is going to administer this will make sure that that does not happen. In New South Wales we have project areas. I hope that the money available from the Trust and from the Advisory Committee's recommendations goes to project areas rather than one-off-type schemes. I believe that the complete valley systems that are tackled by co-operation between land holders and instrumentalities within a valley catchment is the most sensible way to tackle soil erosion problems. In New South Wales we have implementers of soil conservation, not just talkers. We have a Soil Conservation Service that assists farmers in practical ways and tackles the problems of damage to rail, road and public facilities in such a way that the whole community benefits. The New South Wales Soil Conservation Service gives resource guidance and ensures that catchment areas which supply water to cities and towns get good quality water. Rural production is our lifeblood and it is dependent upon soil. We must keep soil on our farms. We support the Bill, but ask that the points I raised be noted. The prospect of co-operation, co-ordination and communication between individuals, farms and Government agencies on conservation leads me to support this Bill wholeheartedly. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Senator Dame MARGARET GUILFOYLE —I refer the Minister for Finance to a speech he made in Sydney yesterday in which, referring to the need for unions to moderate wage claims to avoid cancelling the beneficial effects of devaluation, he said: There would be opportunities for demonstrating moderation in claims in relation to exchange rate effects at the next wage indexation hearings and in relation to productivity-related pay increases. Given that the Australian Council of Trade Unions Senior Vice-President, Simon Crean, has already rejected anything less than full wage indexation and is seeking productivity gains, can we take it from the Minister's remarks that the Government intends to support discounting at the next wage case hearing? Will this require renegotiation of the prices and incomes accord? Senator WALSH —My views, of course, are a matter of public record in the speech I made yesterday. Senator Dame Margaret Guilfoyle asked whether this could be taken as an indication that the Government will be doing something or other. No, it cannot, because no decision has yet been made by the Government, for the reasons which the Prime Minister has referred to on a number of occasions, that is, that the issue will not be relevant in the national wage case context until, I think, about September of this year. In that intervening period I would expect the Government to be examining a number of options. Senator JONES —My question, which I direct to the Leader of the Government in the Senate, refers to the telex sent by the Prime Minister to Sir Johannes Bjelke-Petersen seeking a meeting with the Queensland Government, the Australian Council of Trade Unions and the Federal Government, with a view to seeking a resolution of the continuing electricity dispute in Queensland which is having adverse effects on the Queensland and Australian economies. Does the Minister believe that any such meeting or discussion may help resolve the dispute in the interests of consumers, trade unionists and the State Government? Is the Minister also aware that there is a growing, deep concern in Queensland that the Premier's refusal to hold discussion with any of the parties will only worsen the position in that State? Senator BUTTON —I am sure that there is growing concern in Queensland, as there is everywhere else, about the intractable attitude of the Premier of Queensland towards this dispute. As I have said on previous occasions, the Commonwealth Government has taken the view right from the beginning that the matter can be settled only by sensible discussion, that there will be no resolution of the dispute if it is allowed to go on in the way it has in the past few weeks. To that extent the Prime Minister sent a telex to Sir Joh Bjelke-Petersen seeking a meeting with the Queensland Government and, if necessary, with the Australian Council of Trade Unions. Of course, the other way in which the issue might profitably be addressed is by invoking the jurisdiction of the Australian Conciliation and Arbitration Commission. Any of those routes would lead, I think, to a sensible rapprochement on the issue. But, of course, at the present time the Queensland Premier has resisted any of those overtures. The Commonwealth Government will, of course, keep trying. Sir Joh will have the opportunity in the next few days to consider the refusal which was given last week. Senator WATSON —Does the Minister for Finance recall that on 27 March he told Senator Chaney that he had a tentative intention of releasing forward estimates of outlays next month? Is the Minister aware of the Treasurer's statement yesterday that 'forward estimates are the unadjusted estimates before the Expenditure Review Committee touches those estimates. I don't see a lot of point, therefore, in publishing them'? Is it still the Minister's intention to release the expenditure estimates in May or late April? Senator WALSH —Again, I am flattered by the diligence displayed by the Opposition in reading at Question Time what I have to say. As I recall, I said that in March. I was quoted correctly. A decision has not been made by the Government yet as to whether the expenditure estimates will be released. My view has not changed from the one I gave in March. I am not sure whether I made it clear at that time. If I did not, I certainly make it clear now. The Government has not made a decision as to whether to release those estimates. I think the honourable senator asked me whether I was aware of the statement made by Mr Keating. I am not aware of a statement but I have seen a Press report along the lines to which Senator Watson referred. Senator COATES —Has the Minister for Education seen Tasmanian Press reports yesterday in which the Tasmanian Minister for Education, Mr Beswick, claimed the education of Tasmanian handicapped children will suffer in 1985 as a result of reduced Federal Government support for special education programs? Is Mr Beswick correct in his claims that the Federal Government has cut back its funding of special education programs in Tasmania? if not, can the Minister outline what financial support the Federal Government provides for special education in Tasmania? Senator RYAN —My attention has been drawn to a report in the Hobart Mercury of 18 April in which the Tasmanian Minister for Education, John Beswick, is quoted as telling the House of Assembly that support for special education under the Commonwealth Schools Commission program to assist children in special and ordinary schools fell from $642,000 in 1984 to $614,000 in 1985. If Mr Beswick has been quoted correctly, his figures require correction. Under the States Grants (Schools Assistance) Act 1984, which sets out the Commonwealth programs for schools for both 1984 and 1985, $666,000 is available for special education in government schools in Tasmania for 1984 and $614,000 for that purpose in 1985. What Mr Beswick has ignored, however, in quoting the 1985 figure, is that under the Commonwealth's early special education program, which commenced in 1985, a further $50,000 is available for early special education programs that were formerly funded through the general special education element for government schools activities in this field in Tasmania. The apparent reduction would, therefore, be from $666,000 in 1984 to $664,000 in 1985. This minor reduction is simply a result of the application of the formula for distributing funds under this program to the States, which program is based on each State's proportion of school enrolments. As Tasmania's government school population is declining as a proportion of the national government school population, it follows that successive annual amounts available to Tasmania will be reduced. Obviously there has been no real reduction in the level of services. Senator CHIPP —I ask a question of the Minister representing the Prime Minister. Does the Australian Government intend to support in the United Nations an economic boycott of Pretoria? Has Mr Hayden announced the launching of a voluntary code of conduct for Australian companies in South Africa? Is it not a fact that the Prime Minister has offered government legal and financial support to any cricketer facing an action for backing out of a contract to tour South Africa? At the same time, has the Department of Housing and Construction given a prize contract for the paving of the new Brisbane Airport to L.T.A. Doval Constructions, a subsidiary company 65 per cent owned by a wholly South African owned conglomerate and partly controlled by De Beers Consolidated Mines? How can the Government justify such outrageous double standards? How can it reconcile awarding such a tender to a South African company, given that the nearest totally Australian tender was within a mere $40,000 of the L.T.A. Doval Constructions tender, at a time when the Government is making such a virtue of its anti-apartheid policy? Senator BUTTON —There are a number of sub-questions-I do not derogate from their intellectual content-in Senator Chipp's main question. The first relates to-- Senator Durack —Have you become an examiner of questions to give them a mark? Senator BUTTON —The honourable senator has been thinking about that issue since he was touched last week. I am sure he has. Some people never get over it; that is the point. The PRESIDENT —Senator Button, can you come back to Senator Chipp's question? Senator BUTTON —Certainly, Mr President. The point I was making is that there are several parts to Senator Chipp's question. The first relates to a United Nations boycott of Pretoria. As I understand it, the Government has not made a decision on that matter, but I will obtain instructions from the Minister for Foreign Affairs as soon as I can. Yes, it is true that Mr Hayden has announced, and the Government has determined, a voluntary code of conduct for Australian companies operating in South Africa. As Senator Chipp said, the Prime Minister said that legal aid would be available to cricketers who sought to back out of a contract to tour in South Africa. The last two parts of Senator Chipp's question relate to the alleged letting of a contract for work at Brisbane Airport. That was the subject of a question from Senator Parer yesterday. Senator Ryan undertook to obtain information from the relevant department. She has not yet been able to do so but will do so as soon as possible. That information will be available perhaps at the end of Question Time. I shall comment on the double standards alleged in the question. Senator Chipp —Double standards only if it is true; that is what I am asking. Senator BUTTON —I understand that; but in a way the question of double standards goes further than that in regard to our position with South Africa. A number of Australian companies are trading in South Africa. That was the point of the voluntary code of conduct in relation to South African companies. There is a reasonably strong trading relationship with South Africa which has existed in the life of a number of previous governments and is continuing. In a sense, any contract let for work at Brisbane Airport is, I suppose, in the same moral relationship-if Senator Chipp would prefer me to put it in those terms-as other trading activities between the two countries. Senator Chipp —Fair go! Senator BUTTON —It is not 'fair go' at all. Senator Chipp —You are asking cricketers to give up two hundred grand and you are letting contracts to South Africans. Senator BUTTON —The honourable senator misunderstands me. I am saying that, insofar as that represents a business transaction between a South African company and an Australian government instrumentality, it has exactly the same status as a normal trading relationship of an Australian company selling goods in South Africa. If one wishes to draw moral fine lines, I do not think there is one to be drawn between those situations. I concede that there is a difference between sporting contracts and the status which has been accorded trading relationships between South Africa and Australia. If the honourable senator is alleging hypocrisy and double standards on that issue, that is in a sense something he is quite entitled to do. We will make available as soon as possible information on the factual aspects of the last part of the question. Senator HEARN —My question is addressed to the Minister for Veterans' Affairs. He will be aware of the severe strains placed on the Department's administration and institutional staff by the rigid staff ceilings of the previous Fraser Government. What steps has he taken, and does he propose to take, to improve services for veterans who are dealing with the Department? Senator GIETZELT —Senator Hearn's question causes me to reflect upon the policies that were applied across the board during the Fraser years in respect of all of the services provided by all Commonwealth departments for the Australian people. The across the board application of staff ceilings had the effect of restricting the Department of Veterans' Affairs in carrying out its proper functions in the various services that it provides for the 600,000 veterans. The pension process slowed down. That has been acknowledged in the debates that we have had on legislation dealing with veterans' affairs. The treatment services bogged down. I am still battling with that problem. I have even had letters from the former Treasurer asking why it takes so long for doctors' accounts to be paid. It is not because of a shortage of funds, but because of the staff ceilings that were applied when he was a member of the Fraser Government. Applications for loans for defence service homes were also bogged down, as indeed was the resolution of problems associated with various repatriation hospitals. This Government has followed a policy to overcome the overall policies that were being pursued. We have a resource planning process which has brought about more flexible staff arrangements, including such matters as employing part time staff. I increased staff ceilings by 2.5 per cent in the first few months that we were in office and by 10.3 per cent in the following year. In the last Budget they were increased by 9.8 per cent. We have decentralised a number of services in regional areas. It is contemplated that even in the next Budget there will be staff increases which will enable us to carry out our proper responsibilities and obligations to veterans. That very starkly shows the difference between our Government's approach and that of the previous Government. Senator COLLARD —I direct my question to the Leader of the Government in the Senate. I refer the Minister to the fact that the Department of Aviation has issued a notice to airmen that notification, flight planning and processing of aircraft movements will not be available for regular public transport and cargo flights in Queensland today. What action is the Government taking to ensure that services are restored and what action will it take against any employees of the Department of Aviation who have joined in the Australian Council of Trade Unions blockade? Was this notam forced on the Government by its employees participating in the ACTU blockade of Queensland, or did the Government decide to direct the officers involved not to provide these vital services for fear of union retaliation? Senator BUTTON —The Government has not directed anybody. This question is another attempt to raise the temperature of this matter because heat rather than light is sought by the Opposition in this dispute. It was sought, by the Liberal Party today, in a series of advertisements published in newspapers which were outrageously untrue, which were designed totally to raise the heat in this dispute and which were false in most major particulars. It was sad to hear the Leader of the Opposition, Mr Peacock, on the AM program this morning, putting himself out on a limb on this issue-something which his deputy and heir apparent, Mr John Howard, has been very astute not to do. However, the gullible Leader of the Opposition has put himself out on a limb on this matter and did so very effectively on the AM program this morning. Senator Collard's question goes to a number of details about a circular which suggested that notification of flight plans would not be available today. If everything Senator Collard says in this place were to be believed, there would be a lot of sense in not having notification of flight plans available today, because no planes will be flying anyway. I do not know how he wants it. I will look at the details of the question. I am probably not any better informed than Senator Collard on whether such a notice was sent out. Senator COLLARD —I ask a supplementary question. Has the Department of Aviation issued a notice to airmen that notification, flight planning and processing of aircraft movements will not be available for regular public transport and cargo flights in Queensland today? Senator BUTTON —I have already answered that question. I said I was probably no better informed than Senator Collard was. Senator Peter Rae —He does not know. Senator BUTTON —That is right. That is what I said. Senator RICHARDSON —My question is directed to the Minister for Industry, Technology and Commerce and relates to the decision of the Government on 16 November last year to withdraw the developing country preference in respect of imports of cold rolled strip and sheet steel from the Republic of Korea, Brazil and Taiwan. Can the Minister report on the effects of that decision on the Australian steel market? In particular, has the Australian industry's share of the market been restored to 80 per cent? Further, has there been any retaliatory action by the Republic of Korea, Brazil or Taiwan as a result of the decision? Senator BUTTON —Senator Richardson asked a question about the Australian steel market. I think it is important to make the point right at the beginning that various sections of the Australian steel market are identified in respect of the steel industry plan. In some sections of the steel market the industry has above 90 per cent of the market and in other areas just below 80 per cent of the market. I say that by way of preliminary explanation. The substance of Senator Richardson's question was: What was the effect, if any, of the removal of the DC preference on steel which affected Taiwan, the Republic of Korea and Brazil, that decision having been announced on 16 November 1984? Let me say that the removal of the DC preference, of course, had an effect on import prices, and that should be reflected in the prices of Korean steel in particular, which is what Senator Richardson asked about, in the Australian market. Recently there has been some increase in the price of imports and an improvement in the domestic industry's order position, although admittedly the devaluation of the dollar could have contributed significantly to that improvement. The local industry's market share in cold rolled strip steel at the end of January this year was about 77 per cent, which compares with 74 per cent late last year. I also make the point that, in spite of the fact that the local companies held less than 80 per cent of the market share through 1984, the sales and transfers increased by something like 22 per cent compared with 1983, because of an increase in total demand. Of course, the industry's profitability increased considerably through 1984. Senator Richardson will be aware that it is the function of the Steel Industry Authority to report quarterly to the Government. One of its functions is to monitor prices and market shares for both the Australian industry and the import share of the market. I was also asked about newspaper reports of alleged retaliation against the Australian exporters by the Republic of Korea in its imports of, particularly, iron ore and coal. There is no doubt, as the Government anticipated, that concern has been expressed about that by the Korean steel industry and indeed by Korean Government representatives. I think it is pretty fair to say that that concern has now abated somewhat and we believe the Koreans will do what they have done in the past; that is, to purchase iron and coal at the best price, having regard to the quality of coal and iron ore required and delivery times. We do not believe the removal of the DC preference should have any long term effect. I might say that the Minister for Trade, Mr Dawkins, is going to Korea in approximately a week's time and will be further discussing some of these issues with the Korean authorities. Senator BOSWELL —My question is addressed to the Minister representing the Minister for Communications. Is it a fact that the members of the transport workers unions who are delaying and obstructing mail services in and out of Queensland as part of the Australian Council of Trade Unions blockade are in breach of the Postal Services Act? If so, will the Government take any action under section 94 of the Act to ensure that Queenslanders and all other Australians receive the mail service to which they are entitled? Senator WALSH —I do not know whether it is a fact or not. I did not even get time to read the newspapers this morning; much less do I know by heart the Postal Services Act. I will refer the question to the Minister to see what he has to say about it. Senator ZAKHAROV —Is the Minister representing the Treasurer aware of the dissatisfaction of some personnel at Australian Antarctic stations about the level of tax paid while they are absent from Australia? What taxation rebate is available to these personnel? Does it adequately compensate for the isolation and harsh working and living conditions in the Australian Antarctic Territory? Senator WALSH —I have a note from the Treasurer on this. The Treasurer says that he is not aware of any dissatisfaction of the type to which Senator Zakharov has referred. I am told that people who reside continuously at Antarctic stations for more than half a financial year are eligible for the special zone A area rebate, which is $875 this year and $938 in subsequent years. I am not sure what that means. The honourable senator will recall that the Government increased this rebate from $750 to the present limits in the 1984-85 Budget. In the case of married taxpayers the rebate is increased by 50 per cent of the relevant dependants' rebates. Antarctic personnel also receive allowances over and above their basic salaries to compensate them for the isolation and the harsh conditions under which they work and live. In the Treasurer's view, the income tax zone rebate is no more than a general concession in re- cognition of those conditions. Senator TEAGUE —My question is directed to the Minister for Finance. I refer the Minister to a letter in today's issue of the National Times in which the member for Makin, Mr Peter Duncan, accuses Senator Walsh and his Department of intellectual dishonesty over the Minister's support for reintroduction of tertiary education fees. Referring to the argument that those who benefit from education should pay at least part of the cost, Mr Duncan says: This argument is as spurious as it is simple. Given Australian concern for equity and access in educational resources, does the Minister accept Mr Duncan's contention that later research than that quoted by Senator Walsh has established that the abolition of fees has markedly increased the participation rates of disadvantaged students? Senator WALSH —Senator Teague has found the question. I am not sure whether I can find the answer. I did see that letter. I looked through it quickly and saw a reference to intellectual honesty. If I may say so, I thought the letter itself was a bit lacking in intellectual honesty, particularly when the major peg of the argument was the claim that low income groups would be deterred from entering university if my proposition-as it was described-was introduced. Mr Duncan knows very well, because he has been told to his face, that the proposition which I suggested would have totally excluded any fees being imposed on low income groups. So I think intellectual honesty is a subject on which Mr Duncan could take a few lessons himself. On the alternative proposal for funding it from general taxpayers' funds, one of the problems is that people rarely volunteer to pay taxes. One of the reasons for converting pensions into lump sum payments is the very powerful taxation advantages-indeed, to the point of almost no taxation at all-of taking a payment as a lump sum, whereas if a payment is taken as a pension it is, of course, taxable. That concession is particularly attractive to someone who is on, say, an MP's income. That has been changed by this Government. Those extraordinarily generous lump sum-virtually completely tax exempt-provisions do not apply but they did apply on entitlements accrued until 1 July 1983. Senator TEAGUE —Mr President, I wish to ask a supplementary question. I refer the Minister to the last part of my question about later research. Has the Minister considered the evidence since Anderson in 1976, some eight years ago? Senator WALSH —I have seen a table which compares some figures for 1974 and 1979 and which purports to test the effect of the removal of tertiary fees. I just note for the record that tertiary fees did not apply in either 1974 or 1979. So as well as intellectual honesty a bit of intellectual rigour seems to have been lacking because I thought that the fundamental principle of science was that one attempts to test the effects of one variable by isolating it-in other words by taking one variable out of a model or something and seeing what changed after that one variable was removed. In the case of that comparison between 1974 and 1979 fees did not apply in either year, although I acknowledged that to some degree there was a pipeline effect. But the people who prepared that comparison clearly could do with a bit of training in basic scientific principle as well. Senator McINTOSH —Can the Minister representing the Minister for Aviation inform the Senate whether it is a fact that Qantas Airways Ltd will not carry members or officials of the All Blacks rugby team on their proposed tour of South Africa? Senator GIETZELT —I think it is well known that the Government's attitude in respect of sporting links with South Africa is one of total opposition. The Government will do all within its power to ensure that its position is similar for Australian sports men and women and New Zealand sports persons, if we have any influence over them at all. I understand that the possibility of directing Qantas not to carry members of the New Zealand team is under consideration by the Government. I expect that the Government will have support from the Opposition on this attitude. I believe that apart from a few odd bods in the National Party we maintain the same bipartisan attitude in respect of sporting contacts with South Africa as has existed for quite a considerable number of years. I am advised that, under the terms of the guidelines, the directors of Qantas can be influenced not to carry a group of passengers. Therefore, it would be possible for the Government to exercise these powers to prohibit Qantas from carrying New Zealand rugby players on their way to South Africa on its Zimbabwe service. I am further advised that on 25 March a mandatory instruction was promulgated by the Qantas manager in New Zealand to all the offices of Qantas in New Zealand that if the tour was announced Qantas would not be associated in any way with its promotion. A cable has just been received from Wellington indicating that the Qantas regional manager has told the public generally that Qantas will not carry members of the All Blacks team or officials associated with the tour. Therefore, it would appear that, even though the Qantas organisation is free to make its own commercial decisions, it nevertheless is broadly carrying out the Government's policy in this matter. Therefore, I would expect that in no way will Qantas or this Government be associated with the All Blacks tour of South Africa. Senator SHORT —My question is directed to the Minister for Industry, Technology and Commerce. Is the Minister aware that the Australian Broadcasting Tribunal has required that, with limited exceptions, all broadcasting and television advertisements be 100 per cent locally made? Does this requirement contravene the spirit of international trading arrangements to which Australia is a party, including the General Agreement on Tariffs and Trade? Is the Minister also aware that general opinion amongst advertisers in Australia is that the local product is competitive in terms of cost and quality and is, in fact, the subject of a flourishing export trade? Does this indicate that the need for the requirement no longer exists? For this reason, and in view of its applications for Australia's international trading relationships, will the Minister therefore undertake to discuss the matter with his relevant ministerial colleagues with a view to terminating the requirement? Senator BUTTON —I am aware of the rulings of the Australian Broadcasting Tribunal in relation to this matter. It is perhaps worth while my explaining, as I understand it, the basis of those rulings over a substantial period. Currently there is a program standard 39 which requires all television advertisements to be produced in Australia or New Zealand, subject to limited exceptions. This standard was introduced by the Fraser Government. It is instructive to note that the Australian Broadcasting Tribunal, in its report into self-regulation several years ago, in paragraph 8.40, stated: Any consideration of the Australian character of commercial television would be incomplete without a reference to the existence since 1960 of a Ministerial order which has prohibited the use of imported advertisements on Australian television. So there has been both a ministerial order straddling a number of governments since 1960 and program standard 39 which was introduced in the last few years. Of course, the fact that that standard has existed for some period and the fact that it is seen as integral to support of the local industry and retaining the indigenous character of Australian television, do not mean that that is right. I am also asked whether the need for the requirement any longer exists because of the alleged competitiveness of the Australian advertising industry both in Australia and internationally. I am not in a position to answer that question precisely. I think the standard is very much dictated by a sort of value judgment. All I can say is that there is no reliable information available to the Government on exports of advertising material. I am quite unable to say what the extent of that is. I am not sure that there is much valuable information which can help us in relation to answering that question. Senator Short also asked whether the regulation and the effects of the regulation were in breach of the spirit of international trading arrangements such as the GATT. All I am able to say in relation to that is that there has been a long-standing international debate as to whether the GATT covers services of this kind as well as products. That debate is still alive and well, as I understand it, both in the GATT and in a number of countries. Indeed, Senator Short, who I have no doubt will be aware of these things, will know that a number of countries have asked, in respect of a future round of multinational trade negotiations, that the question of services be specifically placed high on the agenda because they consider that those issues have not been resolved. It is services of this kind, amongst others, that countries have sought to have on the agenda for the next multilateral trade negotiations round and also for consideration by GATT. The honourable senator asked whether I am prepared to discuss the matter with other ministerial colleagues with a view to terminating the requirement. I will certainly raise the issue with my colleague the Minister for Communications, but on the basis of material currently available I will not be advocating to him that the current arrangements be terminated. Senator AULICH —My question is addressed to the Minister representing the Minister for Arts, Heritage and Environment. I refer to attacks by the Tasmanian Premier on the register of the National Estate and its effects on Tasmanian development. Is the Minister aware that the Premier has described the register as a Commonwealth takeover and land grab, et cetera? Is the Minister aware of the open letter placed by Mr Cohen in the Tasmanian media outlining the truth about the register of the National Estate? Senator RYAN —I have a brief concerning the Tasmanian World Heritage listing, but I do not think it addresses the issues raised in Senator Aulich's question. What information I have concerns the arrangements made for the management authority of the World Heritage area rather than the various complaints in this regard. I think I should seek detailed information from the Minister in response to Senator Aulich's question. Senator WALTERS —My question is directed to the Minister representing the Minister for Social Security. I refer to the injustices that now occur through the introduction of the Hawke assets test to many small farmers who are either pensioners or approaching pension age, as well as those pensioners disadvantaged because they did not choose to invest in luxurious homes. Does the Minister agree with Senator Haines, spokesman for the Australian Democrats on social security matters, who, in reply to representations made to her by a pensioner, said: 'Those anomalies which exist are limited to people in aged cottages and people on unproductive land'? Senator GRIMES —If I get the gist of Senator Walters's question, I probably do agree with what Senator Haines is alleged to have said, although I certainly have not seen any such statements by Senator Haines. There are probably two basic problems with the treatment of farmers under the assets test, problems of which we are well aware. One has been the claim by various newspapers and by honourable senators opposite that the valuers who are checking valuations for the Department of Social Security have in some cases overvalued land. Obviously, that may be so. Mr Howe has said that that is so and we have review officers looking at it at the moment. I point out that of the 57,000 people who are affected by the assets test only 600 people have appealed about the overvaluation of their land. Secondly, I presume that when Senator Haines said that the main problem was non-productive or unproductive land she was talking about these people who have land which could be productive, which could provide an income, but which by choice they do not make productive and therefore they do not get an income from it. We are aware, as we always were-both Senator Gietzelt and I have said this-that the most difficult area in the application of the assets test is probably the rural area. What we have done, therefore, is set up the hardship provisions, the provisions suggested by Professor Gruen. Mr Howe has introduced a review procedure which is very rapid, and there are other appeal provisions in the legislation. We will continue, as does Mr Howe, to review the application in rural area. The question remains: Should the ordinary taxpayer of this country be called upon to pay a full pension to someone who has land which is potentially useful and is worth a considerable amount of money? Should people be able to choose not to use that land, not to make it productive and still receive a full pension? We do not allow other people in the community to do that and I do not think we should allow these people to do it. I know that cases have been presented in the newspaper and on the television, but the fact remains that the number of people who have appealed against valuation is at the moment just over 600, so I do not think we have done too badly. Senator Peter Rae —You have plenty more coming, I can tell you. Senator GRIMES —Of course many more will come because people such as Senator Rae and Senator Walters will urge them to do so, but that does not mean that they will succeed. Senator TATE —My question is directed to the Minister representing the Minister for Social Security. Is it a fact that receipt of the unemployment benefit is put in some jeopardy if a person performs more than a few hours of work for a voluntary organisation or community group or undertakes study for more than a few hours per week? Does the Minister agree that this situation continues the isolation and shutting out from the community of those who receive the benefit? Will the Government give an assurance that it will undertake a review of the guidelines and their operation in this regard to try to ensure that those who receive the unemployment benefit are brought back into a relationship with the community whereby they maintain their social skills and feel that they are part of the whole Australian community? Senator GRIMES —The problem presented by Senator Tate is one that was often brought to me in opposition and when I was Minister for Social Security; it is a problem which has had to be wrestled with by Ministers for Social Security for some time. I, like Senator Tate, have a good deal of sympathy for unemployed people who want to use their time constructively until they can obtain employment, either by improving their qualifications or, for example, as he said, by providing some community services. As a result of the efforts of the Australian Labor Party in Opposition, and to some extent as a result of a couple of decisions by the Administrative Appeals Tribunal and later the Federal Court of Australia, the rigid application of a set number of hours of day time study was modified some years ago so that when there was a doubt about people's capacity to work each case was considered on its merits. I must also say, though, that I have considerable sympathy for social security officers who have to try to administer this difficult area, particularly in recent times when some tertiary institutions have adjusted the hours of study and the nature of courses to try to fit people's courses into the social security system rather than program the courses on an educational basis. Basically it has been this Government's policy not to discourage some interim study when we are satisfied that the person is looking for work and able to accept work that is offered, but I do not believe that the unemployment benefit should be a top-up or even a substitute for educational allowances where students are committed to full time courses. If we allow that sort of procedure to be followed, people who cannot pass the tertiary education assistance scheme income test or people who do not go near the TEAS income test, as happens frequently, can then substitute the unemployment benefit for the tertiary education allowance. In the same way, I do not believe that the Government is too hard on unemployed people looking for work and putting some time into a voluntary organisation until work is found. But, again, we do not see the unemployment benefit as a salaried subsidy to a full time employee in a voluntary organisation, and neither did the previous Government. I will refer the matter to my colleague the Minister Assisting the Prime Minister for Youth Affairs to see whether it is being considered at the moment in the youth income support area. Although I will refer the matter of the administration of the legislation to the Minister for Social Security also, I do not believe that that has changed in recent years. Senator REID —My question is directed to the Minister representing the Special Minister of State. I draw his attention to the reports of the high level of crime in the Australian Capital Territory. Will the Minister confirm that lack of funds has resulted in police in the Australian Capital Territory not being able to work overtime? Is it also a lack of funds that is the reason why police cannot get access to information from the Motor Registry computer after 5 p.m.? Senator GARETH EVANS —My brief from the Special Minister of State on this issue states that the overtime allocated to the Australian Federal Police in 1984-85 was $10,090,000. This has not been reduced. The articles refer to advice which has gone from the AFP headquarters to all commanders following a review within the AFP of all Budget expenditure figures on the balance of overtime available for the rest of the financial year. Where essential to maintain ongoing operational commitments, overtime allocations to commands have been adjusted. No transfers have been made from detective areas of the AFP to uniform duties to maintain protection for Family Court judges. Detective squads have not been reduced. The 22 per cent referred to in articles in the Sydney Morning Herald and the Canberra Times referred to the level of expenditure by which the eastern region of the AFP is exceeding its budgeted overtime. Following a review of the region's requirements supplementation has been made to ensure operational commitments can be maintained. No essential operational commitments, I am told, have been reduced. The Minister also makes the point that the AFP has continuing and increasing demands being placed on its limited resources. It cannot perform all tasks within a time frame in which it would wish to. It is good management to set priorities and to deploy resources accordingly. A high level committee within the AFP monitors operational requirements and reviews the effectiveness of expenditure. The Commissioner will continue to monitor closely expenditure and operational requirements. Should the need arise, where additional overtime is essential, an approach for additional funds will be made through the normal channels. Senator REID —As a supplementary question I ask the Minister whether he can give an answer to that part of the question, about which presumably he does not have information, in relation to access to the Motor Vehicle Registry computer? Senator GARETH EVANS —I will seek further particulars on that matter. Senator ROBERTSON —Did the Minister for Resources and Energy hear a report on this morning's AM program claiming that certain documents had been withheld from the McClelland Royal Commission into British Nuclear Tests in Australia between 1952 and 1963 by the United Kingdom Government? What is the truth of this report? If it is true, will it prevent the Commission from adequately carrying out its task? Senator GARETH EVANS —I did hear the AM report this morning recording that in the House of Commons Mrs Thatcher had said that some papers had been withheld on the grounds of national security, international security and personal sensitivity. This is a matter which I have been monitoring fairly closely since assuming this portfolio. That matter, along with a number of other matters concerning the course of the inquiry, has been the subject of a number of discussions by me with the relevant United Kingdom Minister, Mr Adam Butler, with Mr Justice McClelland and with other British officials both here and in London. It is my understanding from those discussions that the United Kingdom Government has been co-operating with the Royal Commission and that there is no belief in the Commission that it has now been denied access to documents of significance for its inquiry and its conclusions. I have been advised-this does conform with what was said to be Mrs Thatcher's answer in the House of Commons-that there are three categories of documents which have given rise to some questions of difficulty in determining their release to the Royal Commission. The first category concerns documents relating to detailed questions of weapons design and the composition of the weapons, to which access has been denied on national security grounds. Secondly, there are documents relating to the effects of these weapons and containing information or individual records about particular persons involved. Information about the effects of weapons has not been denied to the Commission, but to the extent that questions of personal sensitivity have been involved the documents there have been subject to clearance. Thirdly, there has been a category of documents containing sensitive foreign relations issues. These are primarily associated with the fact that there were one or two third countries involved at various stages of the test programs. I instance the United States, New Zealand and Canada. Access to documents affecting such third countries again is subject to clearance by them. Finally I mention that I have been advised that counsel assisting the Royal Commission, Mr McClellan, sought and received an assurance of co-operation from the United Kingdom Government at the Commission's last sitting day in London. The assurance was in the following terms: All documents that have been identified to date have been provided-or will be provided-either as complete versions or, where appropriate, in a sanitised form. The British counsel continued: Secondly, I would like to say that my clients will do their very best to ensure that all relevant and material documents which emerge after the Commission has left the United Kingdom are made available. I have not heard anything subsequently from the Commission which would suggest that there is any degree of concern at all about the level of co-operation by the United Kingdom Government and access to the material that the Commission has had from the United Kingdom Government. I think this morning's report should be understood in that context. Senator DURACK —I refer the Minister representing the Attorney-General to alleged public statements, some of which were quoted on the AM program this morning, by the Director of Public Prosecutions, Mr Temby. I refer particularly to the reported statement: No amount of drug abuse, dirty movies or official corruption can justify the inroads being made on the personal privacy, liberties and freedoms which we have traditionally enjoyed. Mr Temby then went on to express critical views on proposals to extend police powers and also, as far as I can make out, the decision to give indemnities to New South Wales police officers. Does the Government agree with Mr Temby's views on law enforcement? Does the Government agree that it is appropriate for the holder of such a sensitive law enforcement office to express views on matters of current political controversy in his area of responsibility? Senator GARETH EVANS —Although the Opposition would obviously wish it otherwise, this is a society which respects and values free speech. That extends to the right of statutory officers to speak out on sensitive issues of the day as they see fit. I take the view, and I believe the Government would take the view, that Mr Temby is entitled to the views that he expressed this morning. A number of people on both sides of this chamber no doubt would share those views. Senator DURACK —I ask a supplementary question. Does the Government agree with Mr Temby's views? The Minister did not deal with that. Senator GARETH EVANS —I am not in a position to speak for all my Cabinet colleagues, and I do not believe it would be appropriate for me to seek to do so. However, I will refer the question to the Attorney-General to see whether he wishes to make any additional comment. Senator SIBRAA —Has the Minister for Education seen a Press report in a Bathurst newspaper in which Senator Baume alleges that funding for new non-government schools and Bathurst's existing non-government schools wishing to expand is being put in jeopardy by the Government's policies? Can the Minister inform the Senate whether the claim is correct? Senator RYAN —Typical of the kind of claims that Senator Baume likes to run around the country making on the topic of funding for schools, these claims are wrong. Any examination of the new non-government schools policy report, which I tabled in the Senate three weeks ago, will demonstrate that the sort of mischief that Senator Baume is seeking to stir up in Bathurst is totally unfounded. In terms of the future funding of non-government schools, as a result of our funding decisions last year non-government schools in this country of course have greater security and stability with regard to their recurrent funding than they have ever had in the history of this country. Non-government schools now have a four-year legal guarantee and funding proposals for an eight-year period which will give them the opportunity to plan and conduct their business in the most stable atmosphere that has ever been created. I would say that that was in marked contrast to the rather erratic approach to non-government schools funding that was characteristic of the previous Government. Quite clearly that reported statement of Senator Baume is wrong. An examination of the criteria for priority listing for new non-government schools or schools which, under a very clear definition, are effectively new schools demonstrates that there is no reason why parents of children attending schools in the Bathurst area need to have any fears whatsoever. For example, high priority funding will be accorded to schools applications which include extensions of educational provision, for instance, from primary to secondary in stable and declining areas which are consistent with planned educational provision and which relate to the logical completion of a stage of schooling or developments reflecting the planned rationalisation of services and facilities. Both of those categories will receive high priority categorisation under the new system. Medium priority will be afforded to schools serving stable areas which are consistent with the planned education provision, excluding extensions already given high priority and schools serving declining areas which are consistent with planned educational provision, excluding extensions already given high priority. From those few examples alone it is quite clear that the fact that enrolments in schools in Bathurst may be in decline will not automatically give a low priority to any proposals for new schools or extensions. Other matters will be taken into account and it is quite possible under the new provisions that proposals for extensions or new schools in the Bathurst area will receive the highest priority categorisation depending, of course, on the degree to which proper planning procedures have been carried out. In conclusion, I express again my regret that Senator Baume, instead of making a constructive contribution to the education debate in this country, seems consistently to choose a negative course of action to arouse fears where no basis for those fears exists, and to stir up anxieties which have absolutely no relation to the funding arrangements which have been announced or to the decisions that have already been made by this Government which, as all senators must agree, provide more stability and security to the non-government sector than it has ever before experienced. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Community Services)(3.02) —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 authorises the Commonwealth to enter into a 4.5 year agreement with each State and with the Northern Territory for the provision of financial assistance by the Commonwealth to a State or the Northern Territory, to enable non-government organisations and local governments to provide a range of supported accommodation and related support services. These services will assist men, women, young people and their dependants who are either permanently homeless, or temporarily homeless as a result of crisis, and who need such support to move towards independent living where possible and appropriate. The joint Commonwealth/State program established by the Bill, which contains an Agreement in the Schedule, will be called the Supported Accommodation Assistance Program. When this Government came to office in March 1983, homelessness was seen as a major priority for urgent attention. There were no clear cut policies or directions to remedy youth or older age homelessness, and there was no co-ordination of supported accommodation services for homeless women and their children. The Supported Accommodation Assistance Program arose from recommendations contained in a review of crisis and youth accommodation, on which a Joint Ministerial Statement was presented to the House on 17 November 1983 by the previous Minister for Housing and Construction, the Hon Chris Hurford, on behalf of himself, myself as Minister for Social Security, and the then Minister for Education and Youth Affairs, Senator the Hon Susan Ryan. In the Joint Ministerial Statement, the major objectives of the Commonwealth's involvement in crisis accommodation programs were stated to be- 'to provide a range of services to meet the needs of the homeless, and those facing other crisis accommodation situations such as eviction or domestic violence. Arrangements need to be logical and practical to assist non-government sector involvement, to ensure needs are met in a cost effective way, and to help the co-ordination of Commonwealth and State action.'. This Bill is directed at achieving those objectives, and will provide an important Federal Government contribution to the United Nations International Year of Shelter for the Homeless in 1987. The review of crisis and youth accommodation found that there were difficulties with administrative arrangements, where some programs were administered and funded by the Commonwealth and others administered by and cost shared with the States. There was no overall planning, programs were unco-ordinated and were unnecessarily complex. This meant that needs were not being met. The review recommended that, following negotiations with States and consultations with women's and youth groups, Aboriginal organisations and service providers for other homeless people, all Commonwealth crisis accommodation programs should be brought together under a single Act of Parliament. The review recommended that this Act provide funding to the States and Territories, embody a 5 year Commonwealth/State Agreement, and be accompanied by the establishment of Commonwealth/ State co-ordinating committees which would also include representatives of relevant non-government organisations. Since the presentation of the Joint Ministerial Statement, the Government has been negotiating with State and Territory Governments, service providers and appropriate non-government organisations and advisory bodies regarding the recommendations contained in the review. The views of these Governments and organisations, and the recommendations of the review, have been taken into account in the formulation of the Supported Accommodation Assistance Program, and incorporated in the Commonwealth/State Agreement which forms a schedule to the Bill. The aims of the Program are- to provide improved and more equitable funding of approved services, to fund new services in areas of high need, and to move towards improved wages and conditions for workers; to move progressively during the Program to improve the assessment of the need for services, and to distribute funds on the basis of improved assessment within each State and Territory; and to facilitate the involvement of service providers in advising on program needs and priorities. The Program will provide funds for recurrent and capital non-housing purposes to non-government organisations and local government authorities. Such bodies may provide assistance to those in need of supported accommodation in the short, medium or longer term. Supported accommodation includes services provided in refuges, hostels, half-way houses, and other related support services. Services funded under the Program would preferably seek to encourage self-help, on a non-institutionalised basis. The Program is to be administered by the State and Northern Territory Governments according to Guidelines which will be jointly agreed by the Commonwealth, State and Territory Ministers, and which will be published in the Commonwealth of Australia Gazette. The Guidelines provide for service provider advice on program needs and priorities. The operation of the 4.5 year Agreement in each State or the Northern Territory requires the formal consent of the appropriate State or Territory Minister. Financial assistance to the States and the Northern Territory for the purposes of the Program shall be by way of grants. These grants will be matched in part by contributions from each State and the Northern Territory across the Program as a whole, according to a formula specified in the Agreement and agreed between Ministers. States and the Northern Territory will be required, as a minimum, to maintain their 1983-84 efforts in respect of services covered by the Sub-programs to which I shortly will refer. State and Territory matching funds will include moneys provided from their own resources committed and expended on programs conducted by the State or Territory, or by local governments and non-government organisations, that I consider provide services consistent with the Guidelines for the Program. Many of these services are already funded by States and the Northern Territory under their own programs. The Program will incorporate projects currently funded under a number of Commonwealth, State and Territory programs. Under the Program these projects will be funded under one of three sub-programs specified in the Agreement: the Youth Supported Accommodation Sub-program, the Women's Emergency Services Sub-program or the General Supported Accommodation Sub-program. The sub-program structure recognises the different needs addressed by services operating in these areas. The Youth Supported Accommodation Sub-program is designed to provide supported accommodation and related support services for young people aged 12 to 25 years and, where applicable, their dependants, who are homeless as a result of crisis and who need support to move towards more appropriate accommodation options, including independent living. It will incorporate all services funded in the past under the Youth Services Scheme, which was a joint Commonwealth State program first funded as a pilot scheme in 1979. The Sub-program will also incorporate youth projects funded under the Commonwealth's Homeless Persons Assistance Program, as well as a number of State-funded youth programs. There is a dire need for improved facilities for homeless youth. In 1980-81, 15,000 young people requested help from refuges funded under the Youth Services Scheme. More than half of these requests could not be met, yet a large majority of these young people also were unemployed. The demand for youth refuge accommodation has not decreased. The problem is compounded in that youth are often given a low priority for public housing in some States, are frequently excluded from private accommodation in favour of other clients, and have low incomes relative to rents in the private sector. The establishment of this Sub-program is particularly significant at this time as 1985 is International Youth Year. In recognition of the needs of homeless youth, the Government has allocated $830,000 for new youth services under the Supported Accommodation Assistance Program in the current financial year, and $1.66m in 1985-86 (which is the full year effect of the 1984-85 allocation). The Women's Emergency Services Sub-program is designed to provide supported accommodation and related support services for women and women with dependent children escaping from intolerable domestic circumstances or other crisis situations who need support to move towards independent living where possible and appropriate. It will incorporate women's refuges funded under the Women's Emergency Services Program in 1983-84, payments to child care workers in women's refuges previously funded through the Children's Services Program, and those women's refuges previously funded under the Homeless Persons Assistance Program whose services are consistent with the purposes of this Sub-program. A number of State-funded women's refuge programs will also be incorporated. It is not the intention of the Government to restrict women to the Women's Emergency Services Sub-programs. Women will have access to all three Sub-programs, depending upon their needs. Women's refuges will benefit from the Program because it rationalises and co-ordinates supported accommodation services for women (including child care in women's refuges), has the capacity to meet the needs of a broad range of women in crisis, and enables women's refuges to focus on services assisting women escaping from domestic violence and intolerable domestic circumstances. The scope of the program has been extended to cover non-clinical community-based rape crisis centres and incest centres. It is recognised that women's refuges meet the needs of women in crisis situations generated by economic, social and physical circumstances which make their present living conditions intolerable, by providing non-institutionalised assistance for them and, where applicable, their dependent children. Women's refuges also assist residents to gain the knowledge and skills they require to manage their own lives within the wider community, through self-help and mutual support for them after they have left the refuge. Women's refuges also promote public awareness so that health, housing, welfare and legal services are designed to be more relevant to the needs of women. Both the Commonwealth and the States recognise the need for educational and preventative work on domestic violence as an important and legitimate function of women's refuges, and this work will be supported under the Program. The third Sub-program is the General Supported Accommodation Sub-program. This Sub-program is designed to provide supported accommodation and related support services for men, women and their dependents who are permanently homeless, or temporarily homeless as a result of crisis, and who need support to move towards independent living where possible and appropriate. Services which do not clearly fit within the youth or women's sub-programs or which need to cater for a variety of age groups or needs, could be funded under this Sub-program. The Program will not fund services which provide emergency housing but not supported accommodation. Housing authorities are to maintain their responsibilities for emergency and other related housing programs. The Program will also not provide funds for services which provide accommodation as an aspect of or as an adjunct to their major focus, for example, services specialising in student housing, rehabilitation of psychiatric services where the provision of accommodation is dependent upon undergoing rehabilitation or psychiatric treatment, clinical health centres, and migrant hostel accommodation. Services with the primary aim of catering for groups which are the particular responsibility of the Commonwealth or the States, such as State wards, are also excluded from the Program. Under the Program, the Government is providing for a considerable increase over the level of funds available in the past. This is evidence of the Government's firm commitment to expanding present services for women, youth and the permanently homeless, and to improving wages and conditions for workers in such services. For the period of 6 months from 1 January to 30 June 1985, estimated Commonwealth expenditure on the Program is $11.719 million. In 1985-86, the estimated minimum Commonwealth expenditure on the Program is $27.242 million. This will be increased as services under the Homeless Persons Assistance Program, initially excluded, are included in the Program. The total Federal funding in 1985-86 is well in excess of 100% higher than comparable funding provided for services for homeless people in 1983-84 under various programs, including the Youth Services Scheme, the Homeless Persons Assistance Program, the Women's Emergency Services Program and grants provided to child care workers in womens' refuges. Actual Federal expenditure on programs and services for homeless people was $17.7 million in 1983-84, and projected expenditure in 1984-85 and 1985-86 is $25.9 million and $36.4 million respectively. These amounts include actual or projected expenditure in the Australian Capital Territory. Funding provided for the Program will not remain static. Provision has been made in the Agreement to guarantee increases in the Program's salaries component to reflect wages growth. The Bill guarantees minimum levels of Commonwealth financial assistance by providing for annual appropriations, after the first full financial year, related to the total moneys expended by the Commonwealth in respect of the prior financial year. Increases in operational costs and additional funds for new staff and services for the homeless will be considered in the annual Budget. Any additional Program funds will be distributed on a per capita basis between the States, subject to minimum provisions to protect the smaller States. The Government and the States will be developing a needs-based system for funding over the life of the Agreement. The increased Commonwealth effort in this area will be subject to matching requirements on the States. For the first time, Federal and State funding will be combined to ensure an ''adequate deal'' for one of the most neglected groups in our society-the homeless. Capital housing funds for services funded under this Program will be available under a complementary program within the 1984 Commonwealth State Housing Agreement. Under the Crisis Accommodation Program, $12.6 million has been provided to the States and the Northern Territory in 1984-85. The funds will be unmatched and represent an increase of approximately 30% over capital funding provided under various programs in 1983-84. The two Programs will be co-ordinated by one Commonwealth/State advisory committee in each State to ensure a true logical approach to the provision of supported accommodation services. The Supported Accommodation Assistance Program will build on existing State, Territory and Commonwealth programs for women, youth and other homeless people. It will enable the Governments to co-operate to provide for the range of needs of people who are permanently homeless, or temporarily homeless as a result of crisis, and who need support services, by improving the co-ordination, delivery and standard of service provision. Through this Bill, the Commonwealth is firmly committing itself to the funding of supported accommodation services. In accordance with the Government's platform, this new Program will enable the provision of an appropriate mix of short and longer-term accommodation with related support services, and encourage self help. I thank the State and Territory Ministers for their co-operation, and extend my thanks to Commonwealth, State and Territory officers, in the formulation of the Program provided for in the Bill. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Motion (by Senator Grimes) proposed: That the Senate do now adjourn. Senator KILGARIFF(Northern Territory)(3.03) —As the Senate is now to adjourn to present the Address-in-Reply to the Governor-General, I seek leave to have incorporated in Hansard various papers relating to the Northern Territory Public Service superannuation scheme. Leave granted. The documents read as follows- LEGISLATIVE ASSEMBLY MINISTERIAL STATEMENT HON. I. TUXWORTH Mr Speaker, I seek leave to make a statement on the subject of Public Service Superannuation. At Self-Government Northern Territory Public servants were eligible to contribute to the Commonwealth Superannuation Scheme (CSS). This eligibility was also extended to new appointees. Apart from a small number of Statutory Authorities personnel, all permanent public servants have been compulsory contributors to the Scheme. Honourable members will recall that at that time, the financial arrangements between the Commonwealth and the Territory did not provide the necessary financial capacity for the Territory to meet its employer superannuation liability. It was agreed in the Memorandum of Understanding that the matter of superannuation, and in particular our capacity to pay, should be considered by a Joint Commonwealth/NT Task Group. Prior to the Task Group's recommendations. The NT Government undertook to implement a NT Superannuation Scheme. We proposed a scheme and embodied this in the Superannuation Bill 1982. However, the Commonwealth failed to pass the complementary legislation necessary for this to proceed. This was due to union reluctance to support the proposed scheme on the basis of it being guaranteed by the Territory and not the Commonwealth. I must say also that apart from some minor disagreements over matters of detail the Commonwealth had to date been supportive of these objectives and aims. The Task Group considered the matter and reported in June 1984. The Commonwealth and the Territory agreed to the recommendations of the Task Group on 25 October 1984. In summary it was agreed that: The Commonwealth would make annual payments to the NT to allow the Territory to fund the employer financed benefits of the CSS on an emerging cost basis. The payment would be in respect of benefits that became payable on or after 1 July 1984 to Territory employees in respect of whom the Territory had not to that date been provided with the financial capacity. The arrangements were so designed to permit the NT Government to facilitate the introduction of an NT Scheme. Mr Speaker, I put it to the Assembly that the NT Government has pursued a course of supporting all arrangements made with the Commonwealth to provide comprehensive superannuation cover for our employees. Mr Speaker, I must now report that the Commonwealth have decided, without any prior consultation and without any notice, to walk away from these arrangements. This means either no Superannuation Scheme for our public servants or our accepting a continuing contingent liability estimated to be $50m per year. This estimate is based on actuarial advice that the cost of the Commonwealth Scheme as it relates to Territory employees is of the order of 17% of salary annually. I now table the letter from the Commonwealth containing their decision and my response. Honourable members will appreciate the substantial impact of the Commonwealth's unilateral action. The NT Government has not and has never had the capacity to fund any Superannuation Scheme for the Public Service. The Commonwealth's decision will inevitably lead to morale problems in the Public Service unless other arrangements can be made. Mr Speaker, as you can imagine the Northern Territory Government regards this total abrogation of the Commonwealth's responsibility as witnessed by the signature of the Prime Minister of Australia and the Chief Minister of the Northern Territory, as the most abominable conduct of a government conceivable. Mr Speaker, it is not only a matter of betrayal of that memorandum of understanding, but a betrayal of an understanding entered into in good faith by thousands of Northern Territory public servants upon their compulsory transfer to the Public Service of the Northern Territory. Not only Mr Speaker was it an understanding of those officers of the then Australian Public Service it was also an arrangement enshrined in the law of this country by way of amendment of the Commonwealth Public Service Act. A similar provision you will recall Mr Speaker was incorporated by way of mirror legislation in our Public Service Act. What I refer to Mr Speaker, is of course an undertaking verbally, in writing and by statute guaranteeing that no officer of the then Australian Public Service transferred compulsorily to this service would have their terms and conditions of employment eroded. So we see Mr Speaker, not only a breach of the memorandum of understanding, and I repeat, an understanding witnessed by the signature of the Prime Minister and the Chief Minister, but a breach unilaterally of the clear expressions and intention of the laws of this country. Notwithstanding the note of finality in Senator Walsh's letter we will do everything we can to have this decision reversed. I will keep the assembly and unions informed of developments. I commend this statement to the House. MINISTER FOR FINANCE Parliament House Canberra, A.C.T. 2600 4 April 1985 The Hon. I. L. Tuxworth, M.L.A.Chief Minister for the Northern TerritoryP.O. Box 3721 Darwin, N.T. 5794 My dear Chief Minister I refer to my predecessor's letter of 25 October 1984 about the arrangements under which the Territory would meet the employer liability for benefits payable to its employees under the Commonwealth Superannuation Scheme and to your reply of 21 November 1984. I have reviewed these arrangements and have concluded that they should be varied significantly. Under the revised arrangements that I have agreed with the Prime Minister the Territory will be required to meet a portion of the emerging cost of employer-financed benefits payable to its employees who retired, or retire, on or after 1 July 1984. The Territory is to meet that part of the liability that relates to the person's employment with the Territory on or after that date. The Territory would not, however, be required to meet any liability in respect of an employee who retired before that date. That liability would continue to be met by the Commonwealth. Also, the Territory will be required to fund the employer superannuation contributions from its own resources. That is, no additional financial assistance will be provided by the Commonwealth to the Territory for that purpose. Should the Territory decide not to pay the employer superannuation contributions, action will be taken to terminate membership of Territory employees in the Commonwealth Scheme. In that event, and should you so desire, I would be prepared to consider arranging for the preservation of the accrued entitlements of employees affected. Yours sincerely PETER WALSH Chief Minister Darwin 18 April 1985 The Hon. R. J. L. Hawke, A.C., M.P.,Prime MinisterParliament HouseCanberra, A.C.T. 2600 My dear Prime Minister, I refer to the letter from the Minister for Finance dated 4 April 1985 dealing with superannuation arrangements for the Northern Territory from 1 July 1984. In his letter Senator Walsh informed me that the Northern Territory is required to meet that part of the superannuation liability that relates to an officer's employment with the Territory from that date without Commonwealth financial assistance. Senator Walsh's action sets aside the agreement reached in an exchange of letters between the former Minister for Finance and myself in 1984. It is in conflict with the Memorandum of Understanding between our Governments. I believe the issues have not been thought through and that the decision is a serious mistake. I wish to protest in the strongest possible terms at the timing and effect of this precipitate and unilateral action by your Government. Before commenting on the implications of Senator Walsh's letter I feel that it is necessary to recapitulate on events preceding the agreement on 25 October 1984 entered into by Mr Dawkins. I turn first to the Memorandum of Understanding in Respect of Financial Arrangements Between the Commonwealth and a Self Governing Northern Territory. Under that Agreement, Northern Territory public servants are to be eligible to contribute, or continue to contribute, to the Commonwealth Superannuation Scheme. No financial capacity was provided to the Territory to enable it to meet employer superannuation liabilities for the mainstream of employees, now numbering more than 12,000. However, a study by a joint Commonwealth/ Northern Territory task group, including actuaries, who were to report to Ministers on future arrangements was foreshadowed. In the meantime, the Commonwealth met the emerging cost of superannuation benefits. That study was carried out and the arrangements proposed by the task group were agreed to by Mr Dawkins (on behalf of the Commonwealth) on 25 October 1984. Those arrangements include a formula to calculate the specific purpose grant from the Commonwealth to the Territory each year pursuant to the Territory's agreement to meet the emerging cost of the superannuation liabilities coming into being from 1 July 1984. On the basis of actuarial advice, the abrogation by your government of that agreement exposes the Northern Territory to an immediate and unfunded actual cost and liability of about $50m per annum. Funding of superannuation payments on an emerging cost basis would in the short term defer the level of cash payments, but would involve very much higher payments in the longer term. Given the magnitude of these liabilities, the Territory is simply unable to meet the terms now dictated for membership by its employees in the Commonwealth scheme. The emerging cost of employer contributions related to such membership would progressively erode our capacity to discharge the responsibility to provide the basic range and quality of government services throughout the Territory. This would be negligent in the extreme. The fundamental protection afforded the Territory, via guaranteed access to the Commonwealth Grants Commission under clause 29 of the Memorandum of Understanding, when financial needs are unsatisfied in any year is effectively repudiated in Senator Walsh's statement that no additional assistance will be provided by the Commonwealth to fund this cost. Such repudiation goes to the very heart of the Territory's financial arrangements and cannot be accepted. It also has significant implications for the States and the Grants Commission. I should also point out that there are still many compulsory transferees from the Commonwealth Public Service in the Northern Territory Public Service. It is most unlikely that the Territory and the Commonwealth have the power to terminate those officers' membership of the Commonwealth Superannuation Scheme without some Commonwealth legislative or other action. It is therefore quite unreasonable to suggest that the Territory shall meet the cost of superannuation benefits for such officers without an agreement covering appropriate Commonwealth financial assistance. In view of the obvious severe implications which this decision has for the continued viability of effective self-government in the Northern Territory, I urge you to reconsider this matter and to reinstate the specific financial capacity already agreed. As I have indicated to you previously, the Northern Territory is happy to discuss any aspect of the existing financial arrangements between our two Governments which you consider to be in need of review. Any changes, however, should be based on agreement between our two Governments. Because of the serious implications of Senator Walsh's letter on the Territory's finances and on public service industrial harmony, I would like to discuss this matter with you as a matter of urgency. Yours sincerely Ian Tuxworth MINISTER FOR FINANCE Parliament House Canberra, ACT 2600 The Hon. I. L. Tuxworth, M.L.A. Chief Minister for the Northern Territory PO Box 3721 Darwin, NT 5794 Dear Chief Minister I have received the Report of the Joint Task Group on Northern Territory Superannuation concerning the arrangements under which the Territory would meet the employer liability for benefits payable to the employees under the Commonwealth Superannuation Scheme. I agree with the arrangement proposed by the Task Group as summarised in the attachments to this letter and that they should operate from 1 July 1984. If you agree, I suggest that our officers put them in place as soon as practicable. Yours sincerely J. S. DAWKINS 25 October 1984 21 November 1984 The Hon. J. S. Dawkins, MP Minister for Finance Parliament House Canberra, ACT 2600 Dear Minister I have received your letter of 26th October concerning the arrangements under which the Territory would meet the employer liability for benefits payable to Territory Government employees under the Commonwealth Superannuation Scheme. I agree with the arrangements and the operative date of 1 July 1984 as proposed by the Task Group and have directed my officers to put them in place as soon as practicable. Yours sincerely IAN TUXWORTH To the Prime Minister To the Minister representing the Prime Minister, Senator Button In a recent letter to the Northern Territory Government the Minister for Finance broke a written agreement with the Northern Territory Government and advised the Northern Territory it would not be meeting its employer contributions for superannuitants in the Northern Territory Government who are members of the Commonwealth Superannuation Scheme and I ask: Did the Minister for Finance consult with the Prime Minister on this matter? If he did, does the Prime Minister endorse the actions of the Minister for Finance? Does the Prime Minister know that the letter sets aside a written agreement between the then Minister for Finance, Mr Dawkins, and the Chief Minister of the Northern Territory signed on behalf of their respective Governments in October 1984? Does the Prime Minister know that the letter also cuts across the terms and conditions of the memorandum of understanding regarding superannuation for transferred employees to the Northern Territory Public Service? Could the Prime Minister advise how these employees with entrenched rights and access to the Commonwealth Superannuation Fund and who are still members of the Commonwealth Public Service will be covered by the Minister's refusal to honour the Commonwealth's obligations? Senator PETER RAE(Tasmania)(3.04) — The question that I intended to ask the Minister for Finance (Senator Walsh) today, had I received the call, would have related to the papers which have just been tabled by Senator Kilgariff. On the next day of sitting, I will seek to ask Senator Walsh about his unilateral breach and repudiation of an agreement made between the Commonwealth and the Northern Territory. But the papers do relate to what is a clear breach by the Minister of a unilateral basis of an undertaking formally made between the Commonwealth and the Northern Territory Government. Senator CHANEY(Western Australia-Leader of the Opposition)(3.04) —I, too, regret that Question Time was not prolonged. But I put on the public record my curiosity about the answer given by the Minister for Finance, Senator Walsh, to a question from Senator Baden Teague today. In regard to that question, which related to the reintroduction of tertiary fees and certain comments made by Mr Peter Duncan, there was a useful response from the Minister on the question of intellectual honesty with respect to that particular matter. He went on, however, in a rather interesting way to talk about payments of lump sum superannuation, the taxation of those lump sums and the difficulty of getting people to pay any taxation. I use this opportunity to ask the Minister whether he is suggesting that Mr Duncan was disadvantaged by the changes made by this Government to the tax on lump sum superannuation, or is he suggesting that Mr Duncan, by getting some tax advantages, made the provision of so-called free education at the tertiary level more difficult? I found it was an unusually cryptic response for Senator Walsh and I wonder whether at some time he might enable the Senate to know precisely what he had in mind. Senator WALSH(Western Australia-Minister for Finance)(3.05) —I am sorry if I did not make it clear to Senator Chaney. The point I was making was that Mr Duncan was the recipient of a very large lump sum payment, I understand of about $220,000, about 90 per cent of which had accrued prior to 1 July 1983 and therefore was taxable under the old lump sum provisions and not the new lump sum provisions. In view of Mr Duncan's call for higher taxes and a crack-down on tax avoidance as a preferred alternative to charges for services, I invite him to comply with the spirit as well as the letter of this Government's policy on taxing lump sum payments by paying tax on his lump sum payment, which he received for service in the South Australian Parliament, at the rate applicable to a lump sum which accrued after 30 June 1983, which is the date on which the Government's lump sum tax policy came into operation. According to my rough calculations, the tax which would actually have been levied on Mr Duncan's lump sum payment would have been about $11,000. The tax which would have been levied if the entitlement had been entirely accrued after 1 July 1983 would have been $58,500. The difference between the two is about $47,500. I think that that illustrates the point that I was making. Lump sum payments, until this Government cleaned up the previous Government's negligence in this area, provided a very substantial method of minimising, evading or avoiding tax-or whatever one likes to call it-by people on high incomes, particularly by people on the maximum marginal rate of income tax. Of course, every member of parliament, unless he uses some dodgy tax evasion scheme, is exposed to that rate of tax. Question resolved in the affirmative. The PRESIDENT —For the purpose of presenting the Address-in-Reply to the Governor-General, the sitting of the Senate is adjourned until Monday next at 2 p.m. Senate adjourned at 3.08 p.m. The following papers were tabled: Defence Act-Determination 1985- No. 17-Travelling Allowance and another Navigation Act-Marine Order 1985- No. 1 (Health-Medicines and Medical Stores) Public Service Act-Determinations 1985- Nos. 19, 23, 24, 25 Wildlife Protection (Regulation of Exports and Imports) Act-Declaration under sub-section 9 (1), dated 14 April 1985