Tuesday, 14 May 1985 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that: 1. The Watsonia Army Barracks contains electronic communication facilities, operated by Australian and American personnel, that give the United States the ability to pin-point Soviet nuclear submarines, hidden in the Oceans. 2. This would make it possible for U.S. killer-submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a 'first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The 'joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to the nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the 'Joint Australian-U.S.' electronic communication facilities in the Watsonia Army Barracks. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 36 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Northern Territory respectfully showeth: 1. That we are deeply concerned that the redevelopment of the Darwin International Airport is not to continue on schedule. 2. That failure to complete the project will do great damage to the Northern Territory's, and Australia's, tourism industry. 3. That the north of Northern Territory will be left with a totally inadequate airport to service its resident population. 4. That general aviation facilities and industry will be adversely affected by failure to continue with the redevelopment. 5. That the RAAF Base in Darwin will be hampered by failure to continue with the redevelopment, which could result in interference with effective defence procedures for the north of Australia. Your petitioners most humbly pray that the Senate, in Parliament assembled, should ensure the Commonwealth stands by its commitment to complete the redevelopment of Darwin International Airport by the scheduled completion date of 1988. And your petitioners as in duty bound will ever pray. by Senator Kilgariff (from 160 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, 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 15 citizens). Petitions received. Senator HILL(South Australia) —I give notice that, on the next day of sitting, I shall move: That the following matter be referred to the Standing Committee on Constitutional and Legal Affairs: National uniformity in laws relating to in vitro fertilisation and the status of children deriving therefrom and the role of the Commonwealth in achieving such uniformity. Senator BLACK(Queensland) —I give notice that, on the next day of sitting, I shall move: (1) That the terms of reference of the Joint Select Committee on Electoral Reform, as contained in the resolution of the Senate of 28 February 1985, be varied as follows: At end of paragraph 1, add the following new sub-paragraph: ''(f) the activities and operation of National Free Enterprise Limited of Queensland as a political donor, its responsibilities under the Commonwealth Electoral Act, its relationship with the National Party of Queensland, and the circumstances which led to its incorporation on 27 September 1984 and the making of a $300,000 donation 8 days later.''. (2) That the foregoing resolution be communicated to the House of Representatives by message, requesting the concurrence of that House in the Senate's modification of the resolution appointing the Committee. Senator JONES(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate noting that the trade surplus in the month of April reached $182m and the value of exports rose by $522m to $1,366m, congratulates the Federal Government for- (1) its foresight in allowing the Australian dollar to float in international money markets; and (2) achieving a situation in which exports are now confidently expected to rise and imports to fall, thus further improving the balance of trade in Australia's favour. Senator DURACK —My question is directed to the Minister representing the Attorney-General. The Minister will recall telling the Senate on 18 April this year that the Government was not considering using the external affairs power of the Constitution to intervene in the Queensland industrial dispute. Now that the Government has announced its intention to legislate, in an apparent attempt to bring this dispute under the Australian Conciliation and Arbitration Commission, will he confirm that this legislation will not rely on the external affairs power? Will he say whether it will seek to use the corporations power of the Constitution or will it be based on the industrial power, or both? Senator GARETH EVANS —I have nothing to add to my earlier answer or to the statement that was made by Mr Willis yesterday, as to the Government's likely course of action in this matter. Whatever action is taken will be the subject of a further statement in due course by the Minister for Employment and Industrial Relations. Senator ROBERT RAY —I direct my question to the Acting Minister for Foreign Affairs. Is it true that, following his glowing comments and statements about the Union of Soviet Socialist Republics, the Victorian President of the Returned Services League, Mr Ruxton, has applied for political asylum in that country? Senator GARETH EVANS —I presume that Senator Ray's question is a reference to the reports this morning of Mr Ruxton's impression, as I recall it, of the friendliness and peace-loving character of the Russian people and the politeness of Russian youth. If those reports are accurate it would appear that Mr Ruxton's conversion in Moscow is of the same order of significance as Paul's on the road to Damascus and rivalled in recent Australian history perhaps only by the conversion of Sir Joh Bjelke-Petersen on his trip a few years ago to China. It is extraordinary what messianic totalitarians seem to find in common with each other when they embark on travels of this kind. I do not know whether it is the case that Mr Ruxton has sought asylum in the Soviet Union or whether, if he did, he was doing so primarily in order to destroy the credibility of the Soviet ex-servicemen's organisation, or whether it was to take advantage of the anti-capitalist sentiment in the context of those responsible for crashed family companies. But one way or the other, I simply respond to Senator Ray by saying that if Mr Ruxton has sought asylum in the Soviet Union a great many Australians will be profoundly hoping that he does not get knocked back. Senator SHEIL —I refer the Minister representing the Minister for Arts, Heritage and Environment to an article in the Courier-Mail of last Tuesday in which it was reported that the Chairman of the Australia Council admitted that the Council had deliberately discriminated against Queensland in allocating grants resulting in less than 60 per cent of the national per capita average being given to Queensland. In view of the fact that 10 of the 14 members of the Council executive, including the Chairman, are Labor Government appointees, does this admission by the Council that it is victimising Queensland reflect a directive from the Federal Government, or is it merely that the appointees to the Council are themselves prejudiced against Queensland? Senator RYAN —I will have to respond in the negative to the last two parts of Senator Sheil's question. Certainly I cannot imagine that there is any victimisation, on behalf of either the Council itself or any particular board of the Council, towards Queensland. However, the Minister has provided me with some information about the Courier-Mail article which I will now make available to the Senate. The Government is aware of Mr Edwards's criticism of the decision of the Theatre Board to introduce ceiling funding reported in the Courier-Mail of 18 April 1985 and his criticism of the Australia Council for failure to secure sufficient funds. However, the Government is on target in honouring its commitment to restore funding for the arts to the 1975-76 levels in real terms. I am very pleased about that since I was the one who made that commitment on behalf of the then Opposition. The Australia Council's allocations were increased in 1983-84 by 13 per cent and in 1984-85 by 14 per cent. The Council has just received an additional $802,000, which meets the Prime Minister's 1984 election commitment to maintain the real level of funding for companies of excellence. The decision of individual boards with regard to the allocation of those funds is a matter for those boards to be endorsed by the Council. I remind the Senate that the Government supports the principle of arm's length funding, and the allocation of specific grants is a matter not for the Government but for the Council. Senator ROBERTSON —My question is directed to the Acting Minister for Foreign Affairs. The Malaysian Foreign Minister has recently announced a proposal for consideration by the Association of South East Asian Nations for proximity talks on Kampuchea. These would involve negotiations through an intermediary among the principal parties to the problem, including the People's Republic of Kampuchea Government supported in Kampuchea by Vietnam. Does this imply that the Malaysian Government or other governments in the region recognise the PRK Government as legitimate? Senator GARETH EVANS —The governments of the South East Asian region, including the ASEAN group, are considering a range of ideas on Cambodia. The Malaysian proposal for proximity talks has been publicly welcomed both by the Minister for Foreign Affairs, Mr Hayden, and the Minister for Immigration and Ethnic Affairs, Mr Hurford. While Australia is not involved in this proposal, we welcome any positive steps by the parties to the Cambodian problem towards a negotiated settlement. It is true that proximity talks would involve contact with representatives of the PRK authorities. Such contacts would not imply any form of recognition of the legitimacy of the PRK Government of Mr Heng Samrin. It is well understood in international law that dealings with such authorities need carry no such implication if that is not the intention of the other government or governments concerned. Australia believes that, in the pursuit of a peaceful negotiated settlement of the Cambodian problem, it is desirable to hear the views of the principal parties concerned. Prince Sihanouk visited Australia in February this year, Mr Son Sann-who leads the other non-communist group opposing the PRK-visited Australia in 1983, and we have had frequent discussions with both leaders in New York and Bangkok. This has never implied any Australian recognition of the Coalition Government of Democratic Kampuchea which, of course, includes the Khmer Rouge. Nor does the Australian Government have any intention of recognising the PRK. Australia believes that a legitimate Cambodian Government can emerge only from a negotiated settlement in Cambodia and the exercise by the Cambodian people of their right to self-determination. Senator HAINES —Is the Minister for Community Services aware of the findings of a major report by the Mission of St James and St John which was released yesterday by the Archbishop of Melbourne, Dr David Penman? Is he aware that, among other things, that report paints a picture of Australia in the year 2000 which predicts a situation in which there are 3.5 million Australians dependent on social security benefits and an unemployment rate of such magnitude and duration that a whole generation of children would have parents who were unemployed and who will never find employment themselves? Can the Minister give an assurance that no action will be taken by this Government which will further disadvantage the hundreds of thousands of Australians presently living in poverty? Senator GRIMES —I have not read the report, although I did see a newspaper article which referred to that report. Not having read it and not knowing about the methodology or the facts used in the predictions in the report or indeed the author, who I understand is a political scientist, I cannot make any comment or judgment on the report, although I will certainly obtain it, look at it and get people with more expertise than I to look at it too. I make the comment that whether or not any country has unemployment benefits at the level which the report referred to and which Senator Haines referred to, and whether or not any country has a population dependent completely on social security benefits or not, depends, among other things, on economic growth, economic stability and a thriving and efficient economy. The aim of this Government's policies is to achieve that situation. Our economic aims are to have a society in which we have such an economy that the outcome that is apparently predicted in this report does not occur. At the same time we must recognise that we will always have people who are dependent on social security and government payments and at the same time we must maintain those levels of payment, and increase those levels of payment where necessary, so that people are not living in poverty. We must try to balance those two aims. We must try to ensure that in actions taken in economic development or in the development of social security policies we do not produce countervailing effects on the other side, which is one of the problems of government, and always has been. Certainly this Government will not be taking any action which increases the number of people living in poverty in this country or the number of people who are dependent upon social security benefits. The whole aim of our actions is quite the contrary. Senator CHILDS —My question is directed to the Minister representing the Minister for Aviation. I understand that the New South Wales Government is considering an alternative site for the Sydney central business district heliport. Is it the case that the current heliport site is unsuitable because it is part of the Darling Harbour Bicentenary project? Is it also the case that so far the New South Wales Government has received conflicting advice from the various bodies involved, such as the Maritime Services Board, the Premier's Department, et cetera? Finally, when can a decision on this matter be expected? Senator RYAN —I have some information on the Sydney central business district heliport. The heliport is currently located at Berth 39, Darling Harbour, and operations are limited to day, visual flight rules, charter and air work flights. The area is to be redeveloped by the Darling Harbour Authority for the Bicentennial in 1988 but the date when the area will become available for the heliport is a matter for the New South Wales Government. In April 1983 the New South Wales Government asked the Department of Aviation to join the committee it had established to recommend a new site for the development of an unrestricted heliport. In September 1984 the committee advised the State Government that Berth 15, Pyrmont, was the most suitable site. The New South Wales Government accepted the Committee's report, decided that this site was to be developed as a future Sydney CBD heliport and arranged for preparation of an environmental impact statement. I understand that consideration is being given by the New South Wales Government to alternative sites and a date of vacating Darling Harbour. When the final advice is received the Department of Aviation will evaluate the proposal. So it looks as though a little time will elapse before a final decision is made. Senator SCOTT —I address a question to the Minister for Finance. I refer to reports of a speech by a senior member of the Minister's staff, Mr Henderson, to the Queensland University Labor Club on Saturday last. Does he agree with Mr Henderson that, rather than bringing in a broadly based consumption tax, the Government should look at widening the existing income tax base, including the introduction of capital gains taxation and death duties? Senator WALSH —I am aware of the speech. I had not actually read it before but I knew that it was to be delivered. The tone of that speech was very similar to the speech which Senator Cook gave towards the end of last week and about which I was asked a question last week. The essential message is that all options should be kept open. I would have thought that that was a proposition which would be endorsed by any reasonable person. Senator HARRADINE —My question is directed to the Minister representing the Minister for Employment and Industrial Relations. When can we expect the report of the Hancock Committee of Review into Australian Industrial Relations Law and Systems to be tabled in the Parliament for debate? Will the Government enable that tabling to take place and contributions to be made by both the Senate and the House of Representatives and by unions and employers before it makes any recommendations thereon? The PRESIDENT —I call the Minister representing the Minister for Employment and Industrial Relations, Senator Button. Senator BUTTON —I do not represent that Minister, Mr President, but I think I can answer the question as well as my colleague Senator Walsh, with whom I have just checked. The answer is that we are not quite sure. We will find out for the honourable senator as quickly as possible. Senator HARRADINE —I ask a supplementary question. I refer the Minister to the second part of my question. Will the Government enable contributions to be made on the report by interested organisations and registered industrial organisations prior to making any recommendations? Senator BUTTON —As far as I am aware no decision has been made about that question but the practice of the Government with all reports of that kind has been to allow interested parties to make comment. If it is to be otherwise on this occasion I will certainly let the honourable senator know, but I do not believe it will be. Senator JESSOP —I ask the Acting Minister for Foreign Affairs whether the Government has noted reports of large Soviet outlays being directed towards research into ballistic missile defence systems, in particular an assessment released by the Central Intelligence Agency in 1980 stating: Soviet strategic defence activities were roughly 5 times US outlays in 1970 and increased to 25 times US outlays in 1979. I also ask whether the Government is aware of a speech given by the Premier of the Soviet Union, Alexei Kosygin, at a Press conference in London on 9 February 1967 when he said: I believe that defence systems, which prevent attack, are not the cause of the arms race, but constitute a factor preventing the death of people. Maybe an anti-missile system is more expensive than an offensive system, but it is designed not to kill people but to preserve lives. Is it a fact that a defence-protected build-down of weapons proposal was also put forward by the present Soviet Foreign Minister, Andrei Gromyko, to the United Nations in 1962 and 1963? In light of the enormous amount of Soviet outlays directed to researching ballistic missile defence systems and the recent about-face in Soviet propaganda directed against the United States strategic defence initiative research program, does the Government support the proposition that the USA should halt the SDI program and allow the Soviet Union to undertake unilateral research into such ballistic missile defence systems? The PRESIDENT —Before I call the Minister, I point out to honourable senators that questions are getting a bit long. I ask honourable senators to keep their questions as brief as possible. Senator GARETH EVANS —The Government is well aware of the substantial Soviet expenditure over many years on ballistic missile systems. Although it seems to have come as news to Senator Jessop rather recently, it is, I assure him, something to which we have been quite alert for some considerable number of years. It is of course, a matter for argument how the balance of fire power and delivery systems now stands between the super-powers. Even Senator Jessop may appreciate that the question is not a simple one when one takes into account the different kinds of weapons systems, the different kinds of delivery systems and the different deployment of resources around the globe. Indeed, that is something about which defence and military experts constantly argue. The Government is also aware, in common, it would appear, with nearly every government of Western Europe and most others around the world, that there are no short and simple answers to the proliferation of ballistic missiles of this kind, and particularly not simplistic answers in terms of a capacity to readily erect a defensive system against them, such as is contemplated by President Reagan's strategic defence initiative or so-called Star Wars concept. I have outlined on a number of occasions what the difficulties are in relation to the SDI or Star Wars concept. They are not difficulties of principle in the sense that if one could erect a defensive system that would be thoroughly workable and not itself destabilising, that is obviously morally far preferable to going on with the escalating arms race of offensive weapons. So much is readily conceded. But what is not conceded is that such a system is conceptually sound and could ever actually be achieved. There are huge problems in terms of developing a technology of defence that is capable of constantly outstripping the technology of offence. It must be appreciated that the defensive system must be totally secure if it is to mean anything at all. A 5 per cent success rate for a nuclear attack would still be absolutely devastating. It is also the case that the SDI is addressed only to ballistic missile systems and not to the technology of intermediate range cruise missiles and bomber delivered weapons which are, of course, a central part of the United States armoury and the equivalent on the Soviet side. The SDI concept fails to take account of the need for simultaneous deployment of such a defensive system by both the super powers if there is not to be a destabilisation created by one super-power feeling that it will be at a permanent disadvantage if the other side gets in place an absolutely insurmountable defensive system before it does. All these things-together, of course, with the wildly escalating costs that are associated with it and the misallocation of resources that arguably is associated with any expenditure on armaments- lead the Australian Government, in common with most other governments of the Western world, to be very cautious and, indeed, not to endorse the SDI or Star Wars concept. We place our efforts in the direction of a downward spiral of arms reduction through negotiated bilateral and multilateral agreements. That is what we are doing in Geneva in relation to the comprehensive test ban treaty. That is what we are encouraging the super-powers to do. That bears a hell of a lot more relationship to the real world that we inhabit than the science fiction fantasies that so preoccupy those opposite. Senator ZAKHAROV —Is the Minister representing the Attorney-General aware of the steps being taken by the Victorian Government to rewrite statute law in language more readily understood than is current legal terminology? Does the Government have any plans for similar action at Federal level? Senator GARETH EVANS —We are familiar with the proposals, in the words of the Victorian Attorney-General, to 'Kennanise' the Victorian statute book. I should say at the outset, however, that I do not think Lionel Bowen, or anyone else for that matter, is keen to talk in terms of 'Bowenising' the Commonwealth statute book. We are, however, sympathetic to the need to get plain language into statutes to the extent that we possibly can. The Office of Parliamentary Counsel is certainly alert to that need. I believe that by comparison with most other jurisdictions whose legislation I am familiar with, and certainly jurisdictions like the United States of America, for anyone who has ever tried to read that legislation, our legislation at the national level is a model of drafting clarity. The Office of Parliamentary Counsel has, of course, to work in drafting within two specific parameters, quite apart from the need for legal precision in drafting which is not always compatible with linguistic informality. Those two parameters are: First, that existing legislation, particularly that which has been extensively amended, has a certain number of expressions which have to be adopted and go on being used; and, secondly, that certain words and phrases must continue to be used because they have taken on special meanings as a result of being the subject of judicial decisions in the past. But I am advised by the Attorney-General and the Office of Parliamentary Counsel that within these parameters that Office is mindful of the need to use short words and sentences, although at this stage there is no intention to alter in any basic way the drafting style of the Commonwealth. Finally, I draw to Senator Zakharov's attention one change that has been made in drafting style in recent months, and that has been action to remove sexism from drafting language which was spelt out in loving detail in a Press release I issued in my former incarnation on 30 September 1984 and which I recommend to honourable senators. Senator Chaney —Mr President, I ask the Minister to table the paper from which he was quoting. The PRESIDENT —Will the Minister table the paper from which he has quoted? Senator GARETH EVANS —Yes, sure. The PRESIDENT —The Minister has tabled the paper. Senator KILGARIFF —Is the Minister representing the Minister for Aboriginal Affairs aware of a full meeting of the Northern Land Council which took place on 9 May this year at which the NLC resolved that it would 'work with mine developer Denison Australia to achieve a change in Federal Government policy which prevents uranium exports, other than deposits from Ranger, Nabarlek and Roxby Downs'? In view of the fact that the traditional owners of Koongarra are to acquire 25 per cent equity in the Koongarra uranium project to be developed by Denison Australia, is the Government prepared to review its approach to the development of this mine rather than call for the return of Koongarra to Kakadu National Park? Finally, does the Minister acknowledge that the voluntary involvement of Aboriginal people in developments such as Koongarra is one of the few ways open to the Aboriginal people to achieve a level of self-sufficiency and self-respect which they do not enjoy as recipients of demeaning government handouts? Senator RYAN —I have no information on the particular meeting referred to by Senator Kilgariff in his question. The matter which he raises about the possibility of a review of our Government's policy on Koongarra would not be one for me to answer, but I can assure Senator Kilgariff that to date I know of no intention by the Government to review that policy. Were such a review to be announced it would be the subject of a Government announcement made, I presume, by my colleague Senator Gareth Evans. But at this stage I am not aware of any intention by the Government to review that policy. Senator COOK —Is the Minister for Community Services aware of an article in the South Western Times, a newspaper circulating in the Bunbury-Busselton region of Western Australia, that elderly people are seeking to register for unemployment benefit, allegedly because of the assets test? Will the Minister investigate the truth of the article and the claim, which is not reported in the article but nonetheless is circulating in the region, that pensioners have been advised to register for unemployment benefit by a local Liberal State member, Mr Barry Blaikie, and when presenting themselves to the Commonwealth Employment Service have been telling officers they have been sent by Mr Blaikie? Would the Minister agree that if elderly people are being advised in this way, it is nothing short of a disgusting attempt to mischievously confuse and exploit them? Senator GRIMES —My attention was drawn to the article by Senator Cook. The article refers to a claim by Mr Blaikie, a local State member, that elderly people in the Bunbury area who have been affected by the assets test have been applying for unemployment benefit. When we investigated the matter we found that a few people, a minimal number, had in fact done this. This is unfortunate. Unemployment benefit is not available to males 65 years and over and females 60 years and over. That has been the case, no matter what government has been in power, for as long as most of us here have been around. The people concerned are not eligible for unemployment benefit in these circumstances. All pensioners whose pensions have been reduced or cancelled by the assets test can use the hardship provisions and appeal, or they can use the pensions loans scheme, which is by now well known to all such people. The unfortunate thing is, as Senator Cook has implied, that this is a set up for political purposes and is exploiting elderly people. Senator Withers —It is like opening an electoral office just before an election. Senator GRIMES —Yes, something like that, only a little worse because one does not do this sort of thing to elderly people. Two things are happening in this connection. The first is that when people come along and apply for unemployment benefit in these circumstances-and this is peculiar to the Bunbury area-and are asked why they are taking this course, we find that in a large number of cases they have been sent there by Mr Blaikie, the local Liberal member. The second thing is that the article in the South Western Times was written by Mr Bruce Breslin, a well known Liberal Party member in the area who was a candidate for Liberal Party pre-selection. This is a classic set up of a local Liberal member cooking up a story to get his name in the paper, to get sympathy for himself and his cause and, in the meantime, causing unnecessary stress to elderly people in the area by leading them to believe that they can apply for a benefit for which quite clearly they are not eligible. That is the sort of game that one senator has played in the past. It is not a game that any respected member of parliament should play, but I suppose it is as much as we can expect from people like Mr Blaikie. Senator Sir JOHN CARRICK —My question is directed to the Acting Minister for Foreign Affairs. My question refers to the development of anti-ballistic missile systems, including non-nuclear methods such as high energy laser and particle beams. I refer to the Hawke Government's refusal to help in the development of research into the strategic defence initiative system on the main ground that such United States research would destabilise the deterrent and increase the arms race. Since it is clearly established that the Soviet Union has already made great advances in both research and development in this field, including actual installations, why does the Government not see the Soviet actions as already creating major destabilisation of the deterrent and giving that super-power the opportunity and incentive to undertake a first strike in the knowledge that the United States of America would lack similar defensive capacity? Why are the Government's strictures directed only against the United States of America? Senator GARETH EVANS —I think honourable senators would be well aware that this Government has never engaged in selective indignation when it comes to the behaviour of the super-powers on arms race matters. To the extent that it is or can be, as Senator Sir John Carrick says, 'clearly established' that research of this kind, which is directly and immediately applicable to an SDI kind of concept, is taking place in the Soviet Union, that is obviously something which we must very much take into account in making our judgment, as must the United States, on what kind of response is appropriate and what kind of strategic further development is appropriate. All I can say in that respect is that the whole history of the arms race since the Second World War has been littered by claims by one or other of the super-powers that the other side is stealing some kind of a march, and that, in turn, has led to rapid and often wildly excessive escalation of the arms race by the side so responding. I think it is a matter not for quick, emotional response, but for very cool and rational calculation as to what kind of credibility should be attached to these reports and what kind of strategic response is appropriate in reaction to them. Senator Sir JOHN CARRICK —Mr President, I wish to ask a supplementary question. Am I to understand that the Minister and his Government are not certain whether the Union of Soviet Socialist Republics has developed very extensively over some years now this kind of SDI situation? For example, are they not aware of the large radar system situated outside Moscow and the potential defence systems? Is the Minister saying that he is unable to give credibility to this situation? Senator GARETH EVANS —Of course, we are aware, as the United States is aware, of the development and deployment of certain defensive systems. We can make guesses about the kind of further research that is going on in defensive matters to the extent that we do not know. I will refer Senator Sir John Carrick's question to the Minister for Defence and the Minister for Foreign Affairs to see what further information they might care to supply. Senator CROWLEY —My question is directed to the Minister representing the Attorney-General. As the Minister will no doubt recall, the sex discrimination legislation was passed through this place after considerable debate and many suggestions from the Opposition senators that thereafter the world would come to an end as they knew it. To address that fear and given that the legislation has been in place for many months now, can the Minister inform the Senate how many complaints have been received under the Sex Discrimination Act, from whom and about what? What has been the general public reaction to the Act? Is the Government satisfied with the way the Act has been operating? Does it have sufficient staffing in general and in each State and Territory in particular? Senator GARETH EVANS —I do recall the sex discrimination legislation which was so ably steered through this place by my colleague Senator Ryan. A fine piece of legislation it was, and remains. Senator Walters —The Human Rights Commission is asking for exemptions already. Senator GARETH EVANS —Whenever I hear from Senator Walters I think of the opening lines of chapter 3 of Clive James's book Brilliant Creatures: A First Novel. As to the number of complaints received and the complaint handling procedures, I express the answer in the following terms: In the first six months of the operation of the Sex Discrimination Act 380 formal complaints were received from all States and Territories of Australia. Nearly two-thirds of the complaints were of discrimination in the area of employment on the grounds of sex, including significant numbers of sexual harassment complaints. The typical complainant appears to be a young woman working in a traditional area such as in a shop, office or service industry. Large numbers of complaints have also been received regarding membership of clubs and discrimination in the provision of goods, services and facilities. Some complaints are received from men and they particularly involve discrimination on the grounds of marital status. Almost all complaints are resolved through negotiation and conciliation procedures. Some are resolved quickly, while more complex matters may take some time. At this stage only 1 to 2 per cent of complaints are unable to be resolved by conciliation. Public reaction to the Sex Discrimination Act has generally been very positive in the experience of the Attorney-General's Department. There has been a consistent demand from members of the public for written information and over 300,000 explanatory booklets have been requested. Some misunderstandings have arisen about the provisions of the Act affecting primary school sport. These are gradually being overcome through discussions with interested organisations. The need for research into apparent performance differences between boys and girls under the age of 12 has been identified. There has been wide interest in the Human Rights Commission's inquiry into discrimination in superannuation schemes and many submissions have been received from professional bodies, women's organisations and members of the public in this regard. Finally, I was asked whether the Government was pleased with things so far. Yes, it is. However, it is still early days as the Act has been in operation for only nine months. It is clear that the dire predictions made in some quarters simply have not come to fruition; for example, that the Act would force women into the work force in circumstances not sought by them or others. The number and varieties of complaints show the need for the legislation. The Attorney-General has not received a large number of representations, although there have been some concerns regarding the pension age for men and some regarding, as I said, discrimination in children's sport. The educative effect of the Act has been very important and is supplementary, but very important, to the complaints aspects of the Act. Senator WALTERS —My question is addressed to the Leader of the Government in the Senate. Following the Prime Minister's extraordinary answer to a question put to him at a Press conference earlier this month as to whether he would ask Mr Keating whether it was appropriate to make available to the people of Australia information from the household expenditure survey on the tax parcel-I add that this is information already made available to the Australian Council of Trade Unions-has the Treasurer given permission to the Prime Minister to make this information available to the people who, after all, will be paying the tax? Has the information been made available to the business community, or has the information been reserved for the ACTU alone? Senator BUTTON —I will discuss this matter with the Prime Minister and obtain an answer. I am not quite sure precisely what he said in a Press conference some time ago, as Senator Shirley Walters put it. Senator Walters —Would you like the transcript? Senator BUTTON —No, I do not want a transcript, thanks. Let me say what I believe has happened. Certainly, there have been discussions with the ACTU about a whole range of taxation matters; that is public knowledge. In respect of any tax measures that might be implemented, I have no doubt that some of the figures used by the Government in those discussions would have been based on the household expenditure survey. I doubt very much that the actual figures of the household expenditure survey at this stage have been made available to anyone. First of all, they would be quite meaningless in the context of the present discussion on tax matters without some explanation of their relevance. Insofar as the household expenditure survey figures are relevant to the question of taxation review, it is the Government's intention-of which I hope Senator Walters is aware-to publish a White Paper, so called, on taxation issues. I am sure that contained within the White Paper there will be references to those figures which will be available to everybody on a basis of equality. However, I can take the answer no further than that. I do not believe anybody can. I suppose the point of Senator Walters's question is to suggest discriminatory and favoured release-I cannot see the question as having any other point-to a particular constituency. There were several points to Senator Walters's question, but that seems to me to be the political point Senator Walters is trying to make. I believe that not to be so. I do not think it would matter much if it was. Senator MAGUIRE —I refer the Minister for Finance to the issuing of indexed or 'inflation proof' bonds by the Government. I ask: What type of investment institutions are the probable major purchasers of these innovative securities? Will they appeal to the small investor concerned to protect his or her savings? Will the Government's major success in reducing the rate of inflation affect the demand for indexed bonds? Senator WALSH —I think the answer to the last part of the question would have to be yes. If one assumes that there is no inflation, the question becomes irrelevant; there is no difference between indexed bonds and any other bonds. The statement that the Treasurer put out on 12 May sets out that there are two types of securities which the Government will be issuing-those on which the capital value will be indexed and redeemed on maturity but on which a lower and fixed rate of interest will be paid, or a security whose coupon is indexed and at redemption the same face value will be paid but the rate of interest paid throughout the life of the security will vary according to an index of nominal interest rates. There are disadvantages in the former type of security to somebody, say, in retirement or looking to live off investment income in that the interest rate being paid is likely to be considerably lower than the nominal interest rate which now applies. There are also some disadvantages in the coupon indexed security because the real income may be almost maintained throughout the life of the security but at maturity the capital value will have been substantially eroded if there is continuing inflation. For those reasons I think it desirable for any private investors thinking of buying these securities to think about it carefully so that they know precisely what they are doing. In response to the earlier part of the question Senator Maguire asked, it is probably more likely to be institutional investors who will take advantage of the securities, in particular institutional investors who want to offer annuity payments which are indexed. Therefore, the announcement of last week ties in with the Government's desire, in association with the changes to the taxation of lump sum payments, to transform the previous and rather pernicious, in the public interest sense, practice in turning large lump sum payments into indexed annuity payments. Issuing securities in this way will facilitate that sort of transformation. Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to the comments by Mr Len Townsend of the Vehicle Builders Employees Federation of Australia which were reported in today's Australian Financial Review and which indicate disapproval of the just-in-time manufacturing concept. Does the Minister agree with Mr Townsend's very negative view that Australian industrial relations often need time for resolution and that the just-in-time concept would result in widespread stand-downs and cost more than it saved? Do Mr Townsend's comments conflict with the Minister's expressed desire to see a more co-operative union-management system in Australia which would enhance industry's international competitiveness? Will the Minister dissociate himself from Mr Townsend's comments and use the resources of the Government to persuade unions that improved efficiency is essential to the long term interests of manufacturing industry and hence its employees? Senator BUTTON —The first thing I will not do, of course, is dissociate myself, as I am asked to do, from Mr Townsend's comments. Mr Townsend's comments, which Senator Chaney was good enough to draw to my attention at the start of Question Time, are ones with which I do not agree but which have to be argued out in the context of improvements which have to be made in the performance of the motor vehicle industry in Australia. I looked at Mr Townsend's comments just a minute ago and I will not make any blanket dissociation from them because some of them are quite sensible. For example, Mr Townsend, in referring to the kanban system, as it is called in Japan, the just-in-time system-and it has become very fashionable in the Western world to talk about just-in-time systems-said: The kanban system is kept in place in Japan because of the strong competition between the many relatively small suppliers which seek orders from the major manufacturers, but its advantage is lost if an 'in-house' supplier is required to hold stocks. The situation of the Japanese motor vehicle industry, structurally, is totally different from the situation of the Australian motor vehicle industry. For example, we have a great number of monopoly suppliers in the Australian motor vehicle industry as a result of disastrous past policies, in my view, in relation to foreign investment guidelines. I am not being critical of any past administrators in saying that. I think we made mistakes about the circumstances in which we allowed industries to set up in Australia without having regard to some of these factors. All I am saying is that there do seem to me to be points-I can refer to others-made in Mr Townsend's statement which seem to have some sense about them. Having said all that, I do think that it is a counsel of despair if this Government, or any government, adopts the view that the structure and performance of industry has to be catered entirely to inadequacies in the industrial relations system. I certainly do not accept that implication in what is reported to have been said by Mr Townsend in the article in the Australian Financial Review. My answer is that I think Mr Townsend has raised some quite legitimate issues. I rather suspect, if his Press comment is right, that he raised some of them on the wrong basis, but it is a matter which I would very much like to discuss with him and others in the trade union movement before dissociating myself entirely from what has been said. Senator BOSWELL —My question is addressed to the Minister representing the Treasurer. I refer the Minister to recent taxation rulings 2121 and, the latest one, 2129, which have the effect of redefining salaries and wages, forcing many small business people who are genuine sub-contractors, consultants, share fishermen and share farmers into the pay as you earn taxation system. Does the Minister agree that this decision has resulted in small business people losing their independence and working capital, has created a more rigid labour market and has increased costs in the building, computer and insurance industries, and now for share fishermen and share farmers? Does the Minister also agree that the PAYE method of taxation is inappropriate due to the seasonal and unpredictable income of many of the people affected by this decision? Will the Minister and his Department review these rulings in the light of the hardship being caused? Senator WALSH —It is not within my Department's responsibility. I am sure that nobody is surprised to know that I do not have copies of rulings 2121 or 2129 with me, nor have I learnt them off by heart. I understand that rulings of the nature that have been outlined by Senator Boswell have been given, although of course it would not be fair or accurate to describe them in the lurid terms in which he did. Those rulings are aimed at the eradication of tax evasion. I know that that is an objective with which the National Party of Queensland will have little sympathy, if any, because tax evasion and the National Party of Queensland are almost synonymous, which was demonstrated very clearly some years ago when a court judgment was given under which the present Leader of that Party in Queensland, Sir Joh Bjelke-Petersen, was required to pay, I think, some $12,000 in taxation which he had previously evaded. If Senator Boswell is interested, I do have a copy of that judgment. I thought it was in the bottom of the drawer, but it does not appear to be there now. I used to always have a copy of that judgment in the bottom of the drawer so that I could refer to it when a tax evasion question such as this arose. Senator Button —You are slipping. Senator WALSH —Yes. I am too busy these days. I make two more points: Firstly, such rulings are the business of the commissioners and not of the Government, but I will seek the views of the Treasurer on those rulings which Senator Boswell cited; secondly, such rulings are aimed at the eradication of tax evasion. I repeat, that we all recognise that that is an objective for which the National Party of Queensland at least would have little, if any, sympathy. Senator BOLKUS —I refer the Acting Minister for Foreign Affairs to the deliberations of the United Nations Security Council on 10 May and, in particular, to the vote on the embargo on Nicaragua. Can he say which way Australia voted on that deliberation? Can he also say what action the Australian Government can now take in view of the American Government's vetoing of the resolution? Senator GARETH EVANS —On 10 May the Security Council unanimously adopted resolution 562 on the situation in Central America. In the Council's debate Australia regretted the imposition of a trade embargo against Nicaragua. This is consistent with the statements that have recently been made both by the Prime Minister and the Minister for Foreign Affairs. During the debate our representative expressed understanding of the United States concerns in the region but noted the right of all Central American countries to live in peace and security, free from outside interference. He also recognised Nicaragua's right to choose its own form of government and called for support for the actions of the Contadora group of countries which is seeking a peaceful and negotiated solution to the conflicts of the region. The Australian delegation participated actively in negotiations to promote a constructive resolution. So far as the actual voting is concerned, the United States delegation adopted the somewhat unusual procedure of requesting a separate vote on each of the 16 paragraphs of the resolution. The United States vetoed three paragraphs, including the key paragraph regretting the imposition of a trade embargo and calling for its immediate end. Australia supported all paragraphs. The resulting resolution, although, accordingly, without a direct reference to the trade embargo as a result of the United States veto, was a positive result insofar as it amounted to a call for negotiations between the United States and Nicaragua and a re-affirmation of support for the efforts of the Contadora countries. Australia's future activities in relation to this matter will, accordingly, be in accordance with the tenor of that resolution to support such further negotiations and to continue in the way that we have to try to discourage a trade embargo of the kind that has been mounted by the United States and to seek a sensible political solution. Senator VIGOR —Is the Minister representing the Minister for Trade aware that less-than-container-load cargoes in Melbourne which were previously packed into containers in off-wharf depots must now be delivered to the wharf between 7.30 a.m. and 2 p.m. only on weekdays and must be accompanied by much increased preliminary paperwork as a result of a union demarcation dispute between off-wharf labour unions and waterside workers? Does the Minister agree that this procedure, which has now been introduced in Sydney and Melbourne, will raise the costs to exporters, by direct charges, by between 10 and 20 per cent and leave their cargo at much greater risk of damage and pilfering through multiple handling? In light of yesterday's statement by the Minister for Trade, in which the importance of exports for Australia's economic well-being was stressed, what will the Government do to ensure that our exports are processed quickly, efficiently and cost effectively through our ports? Senator BUTTON —The first thing I will do is try to get a proper answer to Senator Vigor's question from the Minister for Employment and Industrial Relations. Senator Vigor gave me notice of this question, I think yesterday, but I was unable to obtain an answer prior to today's Question Time, and I apologise to the honourable senator for that. I would regard it as a matter of great regret if, as a result of a demarcation dispute on the Sydney waterfront, exporters had incurred increased charges of the kind suggested by Senator Vigor. It would certainly be detrimental to the exporting capacity and efficiency of this country. The Government would certainly approach the issue in that light. I will seek an early answer from the Minister for Employment and Industrial Relations. Senator FOREMAN —I refer the Minister representing the Minister for Employment and Industrial Relations to the recently released report on the proceedings of the conference of the National Training Council on industry and training. This report has made recommendations on proposed youth traineeships which would make use of the benefits to be gained by implementing the dual system which has proved so successful in German speaking countries. The dual system uses an industrial base to provide entry level training for young people, together with continuing training provided in an educational institution. Can the Minister state whether the Government is considering the introduction of pilot schemes to test the feasibility of establishing this system in Australia? Senator WALSH —I am afraid that I am not familiar with the policy area about which Senator Foreman has asked the question. I can do nothing but approach Mr Willis and get an answer for Senator Foreman. Senator REID —My question is directed to the Minister representing the Special Minister of State. I refer the Minister to reports which appeared in the Canberra Times on 13 and 14 May. The article on 13 May stated that the Australian Federal Police Association asserted that overtime bans closed the Australian Federal Police criminal records unit last Saturday. The article on 14 May stated that the AFP advised that that was not the case, that it was manned by only one officer and not the usual three, as one was absent on special leave and one was absent due to ill health. Why were the two officers of that very important unit not replaced? Why was that unit left two-thirds unoperational? Senator GARETH EVANS —I am advised that the Canberra Times report was erroneous insofar as it referred to the absence of three officers during one shift on Saturday, 11 May. In fact, as Senator Reid has acknowledged, one of these officers was present. As to the larger part of her question, in any case, as the Special Minister of State tells me, information on Commonwealth warrants held by the branch was readily accessible by computer at any one of a number of terminals at various points in the AFP, including the operations centre. When an inquiry is received as to whether a person is on the wanted list, it is standard procedure to interrogate this from the operations centre. It is not true to state that security systems for the police services centre at Weston were not being monitored. This is a routine task of the diplomatic and consular branch. It is not unusual for an inspector to be recalled for weekend duty. The superintendent in charge of the area was also present on both Saturday and Sunday. Again, this was not something unusual, in terms of that aspect of the Canberra Times report. Finally, the updating of branch records is carried out by Public Service support staff during normal office hours from Monday to Friday. Senator JONES —Has the attention of the Minister representing the Minister for Communications been drawn to a report in this morning's Age which contains information in regard to a decision by Rupert Murdoch to seek United States citizenship? What effects will any such action by Mr Murdoch have on his Australian holdings in television, radio and newspapers throughout Australia? Senator WALSH —I have not seen the report in today's newspaper but I have seen similar reports in earlier newspapers. This is subject to verification by Mr Duffy, but the question of Mr Murdoch's eligibility or non-eligibility to maintain his present shareholding in Channel 10 is a matter for the Australian Broadcasting Tribunal to determine rather than for the Minister per se. I understand that prima facie under the present rules, if Mr Murdoch does become a United States citizen, he is thereby deemed to have forfeited his Australian citizenship, and hence he will have to shed at least some of the shareholdings which he or his News Ltd group presently holds. Senator RYAN —Last week in the Senate, Senator Macklin asked a question regarding the Commonwealth Government's resolve to nominate the New South Wales rain forest areas for World Heritage listing. I have information which I now seek leave to incorporate in Hansard. Leave granted. The document read as follows- Honourable senators may not be aware that in October last year the Minister for Arts, Heritage and Environment wrote to all States and Territories seeking nominations for sites they considered suitable for the World Heritage list. This approach was reaffirmed by the Prime Minister in his election speech of 1984. Responses so far have been received from two States, one of course being New South Wales. Mr Cohen, as the responsible Minister, has strongly supported the NSW recommendation from when it was first mooted in early 1984. Unfortunately the draft nomination proposals by the NSW Government were submitted to the Department of Arts, Heritage and Environment on 27 December 1984-4 days prior to the final closing date set by UNESCO in Paris for 1984 applications. All senators would realise that any nomination for World Heritage listing, whether by name only or by formal submission, would require full Cabinet endorsement. I would trust even Senator Macklin would realise that the Christmas/New Year period rendered this impossible. Senator Macklin would also be aware that the Government sought an extension of the closing date for nominations from UNESCO which was rejected. He would also be aware that the Government announced on 1 January this year that the NSW nomination needed further detailing. Senator Macklin appears to have also overlooked the fact that the NSW Government has given legislative protection to its rainforest regions. Finally honourable senators will be interested to know that following a detailed revision of the NSW nomination papers Mr Cohen will be taking the matter to Federal Cabinet within the month. It will have his strongest support. Senator RYAN —Last week Senators Vigor and Bolkus asked questions about the reduction in rail services in South Australia. I have information for those senators which I seek leave to have incorporated in Hansard. Leave granted. The document read as follows- AN-REDUCTION IN SERVICES IN SOUTH AUSTRALIA Before answering the specific questions concerning the Australian National Railways Commission's (AN's) plans, it is worth making a number of general observations regarding the performance of Australian railways losses of all Australian rail systems will total almost $1 billion in 1984-85 that is, almost $3m per day of tax payers money is used to fund losses on Australian railways in AN's case, the Federal Government has contributed over $711m to fund AN's operating losses since 1975-76 in 1984-85 $87.9m has been allocated. It is clear that the performance of railways must improve and that changes must take place so that railways can meet fierce competition and deliver services to discriminating customers with other transport options in that respect this Government has already taken a number of initiatives in a national sense, this Government has pursued establishment of a Railway Industry Council with representation from State and Federal Governments, rail management and unions the Minister has endorsed and encouraged establishment of a National Freight Group by the Railways of Australia Committee to co-ordinate and promote intersystem traffic with respect to its own railway, AN, this Government is taking action to ensure that it becomes a more competitive and commercially oriented organisation in that regard, this Government passed legislation which provides AN with the framework to enable it to react more quickly to the demands of the market place while at the same time being properly accountable to the Parliament for its performance the amount of the subsidy paid to AN has already been reduced from $106m in 1982-83 to $87.9m in 1984-85 the Government has also provided $16m to AN to fund on Early Retirement Scheme to accelerate reduction of surplus staff through voluntary means. Unions can improve job opportunities in the long term by contributing to a viable and efficient railway system. Any proposed action can not be taken overnight the agreement reached when SA transferred its rail services to the Commonwealth provides for independent arbitration should the State object to any proposed reduction or cessation of services this process of arbitration allows ample scope for all interested parties to provide their views. With respect to AN's intrastate passenger services, as the General Manager and the Chairman of the Commission have confirmed, AN's plans to cease these services except Adelaide-Mt Gambier are well known because of continuing losses incurred and poor patronage reality is that transport operators already offer a cheaper and better service. The Minister is advised by AN that suggestions that AN is proposing to cease its freight services are totally misleading at this stage AN propose to phase out less than car load (LCL) traffic which is only a very minor part of its freight operations Total AN's financial information shows that significant savings could be achieved by ceasing to carry LCL suggestions that immediate closure of services is planned is unfounded. As I noted earlier, full consultation, including negotiations with State government and arbitration, if necessary, would take place. AN needs to become more competitive to provide efficient services to its customers and to reduce the contribution taxpayers makes to its losses all sections of AN's workforce can assist their long-term security by working towards greater productivity. Senator GARETH EVANS —Yesterday Senator Chipp asked me a question concerning the early release of certain prisoners. I have some supplementary information. I indicated yesterday that the Government was not aware that anyone had been convicted of the murder of Donald Mackay, the anti-drugs campaigner. I am now informed that while no person has been convicted of the offence of the murder of Donald Mackay, the persons Tizzoni and Joseph, the subject of Senator Chipp's question yesterday, are serving sentences in respect of convictions in Victoria of conspiracy to murder Donald Mackay. These conspiracy offences are still, however, Victorian State offences, not Commonwealth offences. Accordingly, to the extent that any consideration is being given to the early release of Tizzoni and Joseph, that is a matter entirely for the Victorian authorities. The general question of corruption in gaols, as I again said in answer to Senator Chipp yesterday, is primarily a matter for State authorities. I have, however, brought to the attention of the Attorney-General the concern expressed by Senator Chipp on the position of Federal offenders in State gaols. Senator Chipp also asked whether the Government was considering a government-funded witness protection scheme. I am now advised by the Special Minister of State as follows: The Government recognises that effective witness protection is an important adjunct to law enforcement agencies, particularly in the fight against organised crime. With respect to the National Crime Authority, witness protection is not simply a matter for this Government, as the fight against organised crime involves all jurisdictions and government. All governments are, of course, represented on the NCA inter-governmental committee. Indeed, the question of appropriate law enforcement witness protection arrangements generally is to be considered by the Australian Police Ministers Council later this month. Senator Chipp —Thank you very much. Senator GARETH EVANS —I am always happy to oblige Senator Chipp, particularly when he asks me so nicely. Senator GARETH EVANS —Yesterday Senator Foreman asked me a question about the Adelaide Access Handover Centre. I am now in a position to advise him as follows: The Centre, run by the Adelaide Central Mission, was a 12-month pilot project intended to gather information about such a centre for purposes of evaluation. There was no mention of ongoing Commonwealth funding made at any stage with the Commonwealth clearly stating that it was funding only a pilot scheme for just 12 months. Independent evaluation of that pilot project and the comments of the Adelaide Central Mission which ran the service have been received and are being examined. The Attorney-General's Department, the Family Court of Australia and the Institute of Family Studies are all involved in that examination. A long term decision is yet to be made on the concept of access handover centres. The Attorney-General recognises and sympathises with the difficulties faced by people who are unable to satisfactorily resolve their access problems. The value of the service in preventing violence is certainly an aspect to be considered. However, I have to say in answer to Senator Foreman that no funding to the Adelaide Centre by the Commonwealth is being considered at this stage. Senator WATSON(Tasmania) —I present Report No. 228 of the Joint Parliamentary Committee of Public Accounts on expenditure from the Advance to the Minister for Finance under Appropriation Acts 1982-83. Ordered that the report be printed. Senator WATSON —I seek leave to have incorporated in Hansard a short statement relating to that report. Leave granted. The statement read as follows- Report 228 examines the expenditure from the Advance to the Minister for Finance (Appropriation Acts 1982-83). Honourable Senators will be aware that the Advance to the Minister for Finance is a provision in the annual Appropriation Acts and made available for issue in accordance with the terms of the appropriations and section 36A of the Audit Act 1901. The only amounts which should remain a charge to the appropriations for the Advance to the Minister for Finance at the end of the financial year are urgent and unforeseen expenditures which arise between the time of preparation of the additional Appropriation Bills and the close of the financial year. The Minister for Finance is required under the terms of the appropriations to submit a statement of this expenditure to the Parliament after the end of the financial year. This statement is examined by the Joint Committee of Public Accounts. In its examination of expenditure from the Advance to the Minister for Finance the Committee seeks to ascertain whether or not expenditure from the Advance has been confined to urgent and unforeseeable requirements for which provision could not have been made in the original or Additional Estimates and whether the departments concerned have maintained efficient administration in the expenditure of funds under the items examined. The Committee received 111 submissions on the use of the Advance and decided to examine three of those submissions by public inquiry on 28 June 1984. They were: Department of Aviation, 193-2-02 Office Requisites and Equipment; Department of Defence, 230-1-05 CMF and Cadets; and Department of Transport, 664-2-05 Fuel, Light and Power. The Committee was concerned that the Department of Aviation's use of the Advance was for the payment of routine, planned expenditure. The requirement arose, however, from early delivery and the Department is to be congratulated for its prompt payment of the accounts. The Committee wishes to remind departments and authorities that in accordance with recommendations in its Report 151, Finance Regulation 55 and Directions 8/2, 8/6, 8/7 claims for payment shall be dealt with expeditiously. The Committee remains convinced that delays in payment of accounts could cause liquidity problems for creditors. If a claim is properly due and payable and there are insufficient funds available in the appropriation, then a request for funds from the Advance should be made. The Committee is pleased that the Department of Finance has reissued guidelines on the prompt payment of accounts. The information provided by the Department of Defence to the Committee by way of submission and public hearing highlighted some disturbing deficiencies in the administration of the item, particularly associated with the inability to match expenditure of a resource with the overall balance of the allocation. In addition, the computerised pay system was not designed to provide management with information for estimating purposes. The Committee is aware of the difficulties encountered by departments when experienced staff are lost and when accounting systems have to be split, due to the reorganisation of administrative responsibilities. The Committee also welcomes the assurances of the Department of Finance that the Financial Management Improvement Program and the development of a program approach to accounting were expected to ease future tranfers of elements between organisations. I commend this Report to Honourable Senators. Senator GEORGES(Queensland) —I table further information from Estimates Committee F and seek leave to have it incorporated in the Hansard record of the Committee's proceedings. Leave granted. 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 Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.10) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to amend the National Capital Development Commission Act 1957 to modernise the structure of the Commission and make it more accountable and responsive to both the Government and the ACT community. The Bill seeks to do this by replacing the Commission's corporation sole with a board of seven commissioners and by inserting a ministerial power of direction clause. The amendments proposed in this Bill arise out of the report of the Committee of Review of the Role and Functions of the National Capital Development Commission-known as the White Committee-which was tabled on 21 September 1983. That report found the National Capital Development Commission as established in 1957 had been an outstanding success in transforming what was then described as a 'bush capital' into the national capital it is today. It did however recommend that a community of a quarter of a million required different and more democratic structures than were necessary in 1957 and proposed a representative board to replace the existing Commission, to balance national and territorial interests. The Government believes that decisions on most of the Committee's recommendations should be made in the context of self-government for the ACT. The particular matters covered by this Bill are framed in such a way as to be compatible with future decisions on self-government, and should therefore proceed now. Further, a restructured commission will facilitate speedy action on the remaining recommendations once the final decisions on self-government have been taken. Under the proposed amendments, the Commission's corporation sole will be replaced by a seven member board, comprising three full time and four part time members. Of these, at least two will be drawn from the local community and at least one from outside the ACT. The Government considers a more broadly based structure than that recommended by the White Committee is appropriate. Currently, unresolved policy disputes between the Commission and the Minister are referred to the Governor-General in Council for resolution. Notwithstanding that there has been only one such situation in the past 25 years, it is a cumbersome procedure for the resolution of disputes and conflicts with the Government's policies of the role and operations of Commonwealth statutory authorities and the provision of adequate accountability and ministerial oversight. Consequently, this Bill seeks to amend the Act to include a ministerial power of direction. However, the Government rejects the White Committee's recommendation for use of the 'Commonwealth Bank model' of policy direction as an appropriate mechanism for the resolution of disputes. That model would be even more cumbersome than the present power, and would be inconsistent with practice elsewhere. This Bill provides that directions would be issued by the Minister only after consultations between the Minister and Commission had failed to resolve a particular matter and would be published in the Commonwealth of Australia Gazette and subsequently, in the Commission's annual report. Such powers of direction are a feature of the enabling legislation of other statutory authorities such as Telecom and the Parliament House Construction Authority. It is anticipated that, as in the past, such disputes would be rare indeed. The Senate will be aware that last year the Government made an in principle decision on self-government for the ACT. The Government will be considering a more detailed proposal shortly. The changes proposed by this Bill are consistent with any move to self-government, particularly in terms of a more broadly based decision making structure for the Commission. The Bill has no financial impact. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.11) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The purpose of this Bill is to bring up to date the laws applying in the Territory of Ashmore and Cartier Islands. These Islands were placed under the authority of the Commonwealth in July 1931 by an imperial order-in-council and were declared to be accepted by the Commonwealth as a territory under the Ashmore and Cartier Islands Acceptance Act 1933. The laws currently operating in the Territory of Ashmore and Cartier Islands are the laws in force in the Northern Territory immediately before the Northern Territory was granted self-government on 1 July 1978. This means that the laws in force in the Ashmore and Cartier Islands were effectively frozen at the date of the granting of self-government to the Northern Territory. The Territory of Ashmore and Cartier Islands is one of the most northern parts of Australia. The islands are about 350 kilometres north-west of Western Australia in the Indian Ocean, approximately 800 kilometres from Darwin and 200 kilometres south of Timor. The Territory consists of four small islands, three of which are in the Ashmore Reef and descriptively called East, West and Middle Islands while the fourth, Cartier Island, is approximately 70 kilometres south of the Ashmore Reef. They are uninhabited except for visits by Indonesian fishermen between about March and November, and by mineral exploration parties operating in nearby seas. Royal Australian Navy patrol boats also visit the islands while aircraft associated with the coastal protection unit overfly the area. The islands in the Ashmore Reef area abound with birdlife. In recognition of the environmental significance of the area the reef was, in 1983, given the status of a nature reserve under the Australian National Parks and Wildlife Conservation Act. Regular visits are made to the reef by officers of the Australian National Parks and Wildlife Service. The requirement to up-date legislation reflects, in part, the increased activity of oil companies in the area. The laws which apply in the Territory also apply to the Territory's adjacent area and there are several exploration companies either operating in the area or examining the area with a view to undertaking exploration activity. Honourable senators might recall that the Jabiru 1A well is located in this area. The Petroleum (Submerged Lands) Act 1967 applies to the Territory's adjacent area the laws that apply in the Territory. By bringing these laws up to date, it will be possible, for example, to apply a modern code for workers compensation and industrial safety to supplement the provisions of the Petroleum (Submerged Lands) Act. Honourable senators will note that the amendment Bill extends all the laws in force in the Northern Territory from time to time to apply to the Territory. However, when the Bill has passed through all stages in the Parliament it is proposed to recommend to the Governor-General the making of a territory ordinance specifying that certain Northern Territory laws shall not apply or are to be modified in their application to the Territory of Ashmore and Cartier Islands. For instance, there are some Northern Territory laws of a purely local nature that should not apply. Also the Criminal Code Act, which contains provisions that the Commonwealth has opposed, would be modified in its application to the Territory of Ashmore and Cartier Islands to conform with Commonwealth policy. The Bill also empowers the Minister to make appointments to all non-judicial offices, with that power being capable of delegation. Under the principal Act the Mininster holds all non-judicial offices. Section 11A of the Bill enables the Minister to arrange with Northern Territory Ministers for Northern Territory officials to exercise powers and carry out functions in relation to the laws in force in the Territory of Ashmore and Cartier islands. The Bill has no financial impact. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Bill returned from the House of Representatives without amendment. Consideration resumed from 13 May. CUSTOMS ADMINISTRATION BILL 1985 Clause 4 (Australian Customs Service). Senator CHANEY(Western Australia-Leader of the Opposition)(3.13) —I had commenced my comments in relation to clause 4 at the time when consideration was interrupted last night. Clause 4 is the clause which establishes an Australian Customs Service as an independent entity and establishes the Comptroller-General of Customs as a statutory officer. In the course of my preliminary comments I wanted to mention the misrepresentation of the second reading debate which was made by the Minister for Industry, Technology and Commerce, Senator Button, in his response. Senator Button last night referred to criticism raised in the Senate by me and others as being 'largely by way of readings from Press cuttings'. He went on to say; 'In fact, this matter was dealt with by the Mahony Review of Customs Administration and Procedures'. I do not know whether the Minister was proceeding by way of misrepresentation or inadvertence. I simply remind him that in the second reading debate, after talking about the importance of Customs and so on, I drew attention to the fact that there had been a series of problems with respect to the organisation of Customs. I referred to a series of inquiries which had been undertaken-the Black Inquiry into the Circumstances Surrounding the Making of a Customs Declaration, the Senate inquiry into pornography, the Stewart Royal Commission of Inquiry into Drug Trafficking, the Royal Commission into the Australian Meat Industry and the Mahony Review of Customs Administration and Procedures, which I specifically pointed out arose out of the difficulties involving a Liberal Minister. It therefore was quite incorrect for Senator Button to suggest that this was done largely by way of readings from Press cuttings. In fact, in my own speech, after a number of references to extracts from the reports, including a reference to the Customs Officers Association submission to the Mahony inquiry, I proceeded to point out that all of these dealt with past history and that there were more recent complaints which had been evidenced in the newspapers. I quoted from the Sydney Morning Herald and from a report from an officer of the Customs Officers Association which was contained in the magazine People. I also remind the Minister that I pointed out that the Customs Officers Association's submission to the Mahony inquiry was not fully accepted by that inquiry. Some of the criticisms were read out by Senator Button in his reply. However, I pointed out that some of that was certainly not accepted by the inquiry. I went on to say that it 'needs to be adverted to, not because one would wish to embrace all of the things that were said but simply to say that it is an association which is made up of Customs officers and they are putting forward some extremely critical views about the state of the Service'. I take this opportunity to respond to Senator Button simply because I do not believe that the misrepresentation of the approach which was taken by the Opposition to this legislation is proper. I believe that that misrepresentation should be corrected. As far as the Opposition's attitude to this legislation is concerned, we have made it clear that we believe that we should support the creation of an independent Customs Service. What we did was to raise in our amendment the possibility of referring this matter to the Standing Committee on Finance and Government Operations for investigation and report. We specified a number of matters which we thought could be properly reported on to this Senate before the Senate dealt with the legislation. That was not acceptable to the Government and it is not supported by the Australian Democrats. It has already been determined that that will not happen. In fact, the Minister in his response to the second reading debate went to some greater pains than he went to in his second reading speech to deal with the justifications for the creation of the Service in the way that this is being done. The Opposition, however, does not regard any of the explanations as adequate. It still believes that more complete explanations would have been appropriate before the passage of this legislation. It is fascinating, for example, that the Minister in his reply referred to the fact that the Committee would be asked to consider the practical impact on the Minister. He said: I do not know that there is much practical impact on me except that we have to debate this legislation. That is a very strange remark coming from the Minister, given that one of these Bills in fact transfers a very great number of functions from the Minister to the Comptroller-General of Customs. I would have expected the Minister to have indicated that the possible benefit of this legislation would be not merely to enable the Comptroller-General to get on with the job of administering Customs without being distracted by the other departmental responsibilities and for the head of his Department to get on with the business of developing industry policy and administering the affairs of the Department without being distracted by the significant problems of Customs, but also that there was something of a deck-clearing operation for the Minister himself and that that might in turn be beneficial both to Customs and to the Minister. However, the explanation that has been given by the Leader of the Government in the Senate stands as part of the record and I can only say that it increases my puzzlement about some aspects of what the Government is doing. With respect to the Minister's attempt to respond on the costs of the changes, we are given the typed definition that the costs of the changes-I again use the Ministers' words-'are not considerable at all'. He said: All they involve is the provision of some additional management support for the Australian Customs Services as a result of its split from the Department of Industry, Technology and Commerce. He went on to say: As soon as those matters are determined the precise cost figure will be available. I hope that the Minister will make that available to the Senate. No doubt, if he does not, that can be obtained from him during the Budget session later this year. I also thought that the Minister gave a rather limp reply when he commented on the suggestion of the Opposition that the Committee be asked to report on the practical impact of the changes on the Service. The Minister said: The practical impact of the changes on the Service will be absolutely minimal in a sense . . . the Government recognises that a number of changes have to be made to the Customs Service. It is just a question of how we start to bring those changes about and which authority implements them. One is left with the feeling that the Government has decided that this is a step that can be taken, that it will be a deck-clearing operation and that the Government has not thought the matter through or gone into detail on the sorts of matters raised by the Opposition. The view taken is that it will all be to the good and the Comptroller-General of Customs can get on with the job once this Bill is passed. On behalf of the Opposition I express the hope that that will be the outcome of this legislation and that the Service will find its new status and the changed legal status of the Comptroller-General and his changed administrative responsibilities of assistance in meeting the problems which have existed in the past. It seems clear that we have had as much explanation from the Government as we are likely to get during the passage of this legislation. That being the case, with some regret that we have not had the examination sought by the Opposition, I think the legislation should be passed so that we may see what practical effects flow from these two Bills. Senator GEORGES(Queensland)(3.22) —I did not have the opportunity to participate in the second reading debate on the Customs Administration Bill and its allied Bill, but I am prompted to speak following the comments of the Leader of the Opposition (Senator Chaney). He should be aware that the Department of Industry, Technology and Commerce and the Customs Service have been under scrutiny by the Joint Committee of Public Accounts. If he reads the recommendations of that Committee he will see that considerable support was given to the principle of separating out the Customs function from the Department to enable it to be far more effective than has been the case. The problem is that when an activity of that sort is contained within a department, it has to compete within that department for the resources it needs to carry out its functions. By this Bill it will now be possible for Customs to be able to rearrange its own resources without having to refer to the head of the department who comes under the Minister's responsibility. The Public Accounts Committee examined the problems of the Customs Service and the supervision of many of its functions. One related to the petroleum equalisation subsidy, and we were told of the difficulty experienced by the Department in applying resources to that area in order to recover revenue that was being diverted in a variety of ways. We found that the Department was limited by the number of people it could put into the field. It was fairly clear to us that Customs was unable to obtain quickly, or apply quickly, the resources that were needed because it had to go through rather tortuous procedures within the Department to obtain them. There was a terrible imbalance in functions. This very important government revenue function within a department was combined with other responsibilities. I assure the Leader of the Opposition that it will now be much easier for the Customs authority to concentrate on gathering revenue and to ensure that supervision in the excise area in particular is made more effective. It will also be possible for the Customs Service to seek outside assistance by way of consultancy and perhaps other support, which it is not easy for the Service to do when it remains within a major department. I thought that the Opposition would have supported this Bill without question. Senator Chaney —We have supported it, but not without question. Senator GEORGES —The Opposition has questioned it and reached the same conclusion as was reached by the Public Accounts Committee. One knows that there are difficulties in respect of certain functions of the Foreign Affairs Department; some areas of that Department are separate from the Department itself. For example, the Australian Development Assistance Bureau functioned independently of the Department but it was brought within the Department. It was found that because of that limitation it could not carry out its responsibilities effectively. It was always subject to the considerations of the head of the Department and also the ministerial considerations. This is a very limiting process. One has to appreciate that Customs is, apart from the Australian Taxation Office, one of the most effective revenue gatherers we have. Customs ought not to be limited in any way in the manner in which it carries out its duties, especially when it comes to resources. Customs ought not to be competing within a department for the resources it needs. I think that with the passage of this Bill it will be possible for Customs not so much to avoid that but not to have to be concerned with that. I make those remarks because I believe that the Leader of the Opposition was not quite so charitable as he normally is. Senator HARRADINE(Tasmania)(3.26) —I do not wish to reflect on a decision of the Senate. In fact, the decision of the Senate yesterday was to reject the proposition by the Opposition that there be an inquiry by a committee on a number of issues. I wish to take this opportunity at the Committee stage to point out to the Committee and to the Minister for Industry, Technology and Commerce (Senator Button) that the difficulties being experienced in the Australian Customs Service have led and are continuing to lead to blatant breaches of the law being allowed to go past. The Senate Select Committee on Video Material heard a good deal of evidence about this matter. I know that the Leader of the Opposition, Senator Chaney, has referred to that. However, he did not refer to it in great depth, presumably because of the time limitations. I do not propose to do that now because I would probably be ruled out of order, but I wish to refer to the Committee by simply stating that on receipt of this evidence from not only the Customs Officers Association of Australia but also the Attorney-General's Department and the Australian Customs Service, the Senate Select Committee was able to say that the laws either are not being fully enforced or are not capable of being fully enforced. Specific recommendations touching on Customs were made which have not yet been given effect to. Because they have not been given effect to, material which by any standard, including the Government's standard, is material that cannot meet the reasonable adult person test and which the Government in regulation 4A wished to prohibit is able to come into this country. In fact, people who import this material are not able to be proceeded against. Lest that give any encouragement to anybody to import such material, I understand that the Customs officers and the appropriate Customs people are keeping an eye on the matter. But, as has been said, it is a matter of resources and the state of the law. The state of the law in relation to regulation 4A of the Customs (Prohibited Imports) Regulations has been found by the Senate Select Committee to be deficient. The Committee's report detailed an actual example of what had occurred. I ask the Minister what steps are being taken by the Department to implement that recommendation and to ensure that the law is able to be enforced? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.30) —In answer to Senator Harradine's question, the implementation of the report of the Senate Select Committee on Video Material is, as I understand so far as it applies to the material which Senator Harradine referred to, the responsibility of the Attorney-General's Department. It will implement the alterations to the regulation if they are required. I will seek an answer in relation to that from the Attorney-General (Mr Lionel Bowen) as soon as possible. Clause agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. CUSTOMS ADMINISTRATION (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL AMENDMENTS) BILL 1985 The Bill. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.32) —On behalf of the Government I move: Page 20, the Schedule, before the amendment to section 25 of the Customs Tariff Act 1982, insert the following amendment of that Act: 'After section 2- Insert the following section: General administration of Act ''2A. The Comptroller has the general administration of this Act.''.'. Senator Chaney —Was that circulated? Senator BUTTON —Yes. I think probably that amendment was circulated when we started with the Bill rather than today. The purpose of the amendment is to correct a drafting omission from the proposed amendments to the Customs Tariff Act 1982, as set out in the Schedule to the Bill. As indicated in the second reading speech, the main purpose of the Bill is to invest the general administration of the legislation to be administered by the Australian Customs Service in the Comptroller-General of Customs. To this end the Schedule to the Bill contains a list of that legislation and proposes to amend each enactment expressly to provide for the Comptroller-General of Customs to have the general administration of each Act. Such a provision has been omitted from the Customs Tariff Act. This amendment proposes to correct that deficiency. I say also that of course in the Schedule to this Bill there are a number of discretions which are now exercised by the Minister for Industry, Technology and Commerce which have been invested in the Comptroller-General. They are mainly-I am saying this in relevance to something Senator Chaney said earlier-discretions under a series of excise Acts. This certainly relieves the Minister of some responsibility. I will give an example. Each month the Minister signs an instrument of delegation under, for example, the petroleum trade subsidy legislation delegating his powers to various people in remote areas of Australia. I do not think the Minister is ever in a position of knowing who those people are or what precisely is being delegated. So there are discretions of that kind in the Schedules to this Bill. Amendment agreed to. Bill, as amended, agreed to. Bills reported with an amendment; report adopted. Bills (on motion by Senator Button) read a third time. Consideration resumed from 9 May, on motion by Senator Grimes: That the Bills be now read a first time. Question resolved in the affirmative. Bills read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(3.35) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- FISHING LEGISLATION AMENDMENT BILL 1985 The principal purpose of the Bill is to provide clear and legally-based powers for the development and implementation of management plans in accordance with the stated objectives of the Fisheries Act 1952 of ensuring that the living resources of the Australian fishing zone are not endangered by over-exploitation and that there is optimum utilisation of those resources. The Fisheries Act 1952 falls short in many respects of providing the necessary legal powers for implementing fishery-specific management plans utilising modern management concepts and practices. These management plans are required in order to contain increases in fishing effort in Australian proclaimed waters, thus enabling us to avoid depletion of our marine resources and prevent over-capitalisation and persistently depressed earnings in particular fisheries. Appropriate plans based on administrative arrangements have already been adopted in the rock lobster, northern prawn and southern bluefin tuna fisheries. The major amendment proposed in this Bill will give full legislative backing to those plans and provide the Commonwealth with much greater flexibility in their development and implementation having regard to the requirements of individual fisheries. Management plans will be able to deal with the determination of the manner of measuring the fishing capacity in a fishery, the total fishing capacity for that fishery, the allocation of that fishing capacity among licensed fishermen by way of units and the regulation, recording and evidencing of transactions involving units of fishing capacity. The capacity of a fishery can for example, be measured in terms of outputs such as the allowable catch or inputs such as permitted quantities of fishing gear such as lobster pots or the size and engine power of the fleet in the particular fishery being managed. Management plans will also provide a basis on which fishermen will be able to plan their business arrangements with greater assurances of continuity over a period of years. At present, fishery licences are re-issued annually. The Bill will provide a basis for longer periods of licence validity and for renewal of licences, overcoming a major difficulty faced by the fishing industry in the existing legislative arrangements. This Bill will enable the implementation of the major recommendations on fisheries management which were unanimously adopted at the recent Australian Fisheries Conference. I would also like to stress that the development of new management plans by this Government for specific fisheries will continue to be undertaken in close consultation with the State Governments and industry groups involved. While management plans will be subject to Parliamentary scrutiny and disallowance and will have the force of law, the Bill preserves the established techniques of licensing of master-fishermen and boats and of regulating the operations of the fleet through prohibitions by notice. Examples of prohibitions are closed seasons, legal minimum sizes and fishing gear controls. The Bill thus combines the established practices of, when necessary, regulating individuals in their fishing activities with the flexibility that management plans will provide for regulating the capacity of the fleet as a whole in any particular fishery. The detailed scheme of the Bill is set out in the Explanatory Memorandum which has been circulated. As well as providing for management plans, the Bill reviews the penalties under both the Fisheries Act 1952 and the Torres Strait Fisheries Act 1984 and brings them into line with current Commonwealth legal policy and contemporary monetary values. It provides for a number of specific amendments of the Torres Strait Fisheries Act to deal with administrative details revealed in the bringing of that Act into operation and a number of miscellaneous amendments of both principal Acts. This Bill and the accompanying Fisheries Levy Amendment Bill have no direct implications in themselves for revenue or expenditure. The Fisheries Levy Bill will authorise the collection of levies based on units of fishing capacity in specific fisheries on a basis that will be determined for each such fishery. In practice this means that levies will normally be imposed and collected on a pro rata basis according to the number of units of capacity held by individual fishermen rather than on a flat amount per licence. The Bill is an important step in the development of one of Australia's important food producing and export industries and in the conservation of our marine resources. I commend the Bill to the Senate. FISHERIES LEVY AMENDMENT BILL 1985 This Bill is associated with the Fishing Legislation Amendment Bill. It amends the Fisheries Licences Levy Act 1984 to incorporate a number of provisions consequential on that Bill. The Fisheries Levy Amendment Bill 1985 enables levy to be imposed on the allocation, or the renewal of an allocation, of units of fishing capacity in a prescribed class of units, that are not assigned to a boat. Levy can also be imposed on the renewal of a boat licence under the Fisheries Act 1952 in a prescribed class of licences or on the variation of a boat licence under either the Fisheries Act 1952 or the Torres Strait Fisheries Act 1984 in a prescribed class of licences. This Bill and the accompanying Fishing Legislation Amendment Bill have no direct implications in themselves for revenue or expenditure. I commend the Bill to the Senate. Senator ARCHER(Tasmania)(3.36) —The Opposition supports the Fishing Legislation Amendment Bill 1985 and the Fisheries Levy Amendment Bill 1985. I wish to make a few general comments about various aspects of the fishing industry and this legislation. Of course, the aim of the legislation is to provide the framework whereby the maximum profitable sustainable yield can be provided for Australian fishermen. Historically this has not been easy. There have been a lot of fluctuations in the industry since its earliest days. In recent times the industry has been subject to technology changes of enormous proportions and great increases in amateur effort. It also has had to contend with fluctuating exchange rates, undreamed of cost increases, the influences of foreign fish and foreign fisherman and so on. Australia-wide we have come from what was largely 30 years ago a cut lunch industry to a situation in which sections of the industry are extremely competent by any world standards. This probably applies in particular to areas such as lobsters, prawns, scallops, oysters, the new tuna fishery and some of the deep sea trawl industry. We hope they will be typical of many other types of fishing in the not too distant future. The technology involved in catching and processing and in the fishing boats is absolutely first class. I give enormous credit to the industry for the way in which it has progressed when it has never been really easy to do so. As soon as any one group makes progress there seems to be an automatic cut-off to follow. Usually this is for very sound biological reasons. The groups I have mentioned have usually accomplished what they have in spite of those cut-offs and the many traumas on the way. The capitalisation of the fishing industry is now enormous. The efficiency of the good fisheries is excellent. In many places the fishing industry is still regarded as a peasant industry. It is certainly nothing like that; it involves a group of highly skilled professionals. In looking at the amendments and the legislation now before us I have to say that the Fishing Act of 1952 still is in pretty much of a mess. The first time I dealt with that legislation and tried to work something out from it Arthur Bollen told me that a complete revision of the legislation was well under way. That was not yesterday. I gather that if I asked a question now I would probably find that the revision was well under way. However, I still find difficulty in fathoming out the legislation. I believe it should be put on the priority list again. Those needing to use the Act should be able to understand it thoroughly and not have to wade through the hundreds and hundreds of amendments that have been made to it over a period of years. This was a major recommendation of the Senate Standing Committee on Trade and Commerce in 1982 and all members of that Committee regret that it has not yet taken place. The management question has had considerable investigation over many years; various fisheries have been considered for various types of management on many occasions. The scheme covered by these Bills is for the establishment of a system of units for managed fisheries, and I recognise that the idea is not new and that it has both support and opposition. I equally recognise that some scheme had to be undertaken and that the fisheries concerned want a scheme and have already moved in this direction. My hope for this scheme-for any scheme-is that it will not provide poor fishermen with an income that they do not deserve; that it will best reward the most efficient fishermen; that it will improve profitability; that it will produce stability; that it will encourage investigation of new fisheries; and that it will ensure maintenance of stocks for the future. I am quite satisfied in my own mind that units in this case and in any similar case should be transferable and should be capable of accumulation or division, as is appropriate for the most economical co-operation of the fishery. In all primary industries where there is clearly a problem of available produce or market restrictions this method to me is the one preferred. How the Department which supports units for fishing so totally rejects them in dairying defies all imagination. The need and circumstances are almost identical: The existing effort simply exceeds what is available. I would now like to use the opportunity of this debate to raise the question of fuel costs. I asked a question last week about an impact study on the effect of this year's fuel cost rises on the profitability of existing fisheries and on the likelihood of new developments. I have not yet received a reply, and I hope that I will be able to get some response shortly. Fishing uses more fuel per unit of production than any other industry and its situation needs to be taken into account. There is little use in putting new legislation into action to save the fishing industry if at the same time fishermen are unable to continue to fish because fuel becomes too expensive to use. How many honourable senators appreciate that the cream of the tuna fleet and, of course, of the prawn fleet are now putting from $35,000 to $40,000-worth of fuel in their boats before they go to sea? I have had a great interest in fishing and the industry over many years and I look forward to improved performance, greater Australian participation and increased development in the years ahead. For instance, Australianisation of foreign fishing and joint ventures is not going well enough, and the Australian interests have not done as well as I believe they should have, in spite of a reasonable effort to encourage them by the Government, by the Australian industry and so on. I have to say that I have not always been totally happy with the administration and other aspects of the Australian management, as the present and previous Ministers have been well aware. I do not want to open up on this occasion in particular, but I simply draw attention to the fact that difficulties are probably attributable in many cases to the shortage of departmental officers with a working knowledge of fishing and a rapport with fishermen. This will continue to be the case until fisheries administration becomes more of a career in which officers wishing to get advancement may invest time in getting practical experience and still get their promotion in the service. The major difficulties in the industry have always been in its own organisation and representation. The industry is spread around the entire coastline of Australia. Those in the industry work at all hours and all days and, as a group, are seldom good at meetings. Each group feels that it is different as to location and species, even though I have found that their problems are usually much the same or at least very similar. The most appropriate organisation for the industry itself and the funding of that organisation is still the most important issue requiring attention. I have great regrets that the Australian Fishing Industry Council failed. That was certainly no fault of Fred Connell and the others who gave it every chance, but I believe we all know that in the available situation it can probably be no better as yet. I had hoped that by now the industry reorganisation would have produced legislative amendments, but that is not so. I hope that when advisory committees finish their job we may be closer to a totally representative industry-funded organisation that can make the sort of contribution to be expected from a body of the size and importance of the fishing industry. For instance, the annual meeting of the Trawler Owners Association of Australia will be held this week at Ulladulla. In the notice sent out by its executive officer stocks, profit, et cetera, and the future are raised very well-I make it clear that the stock is the most important issue for the industry-but I take the point of the trawlermen that right now biologists are rampant-they are everywhere-and that economists are nowhere to be found; and that, no matter how good biologists say stocks are, if they cannot be caught at a profit it does not matter much at all. The newsletter that came out with the notice has a paragraph or two that would be well worth incorporating. I read one paragraph to point out what I mean. In it the executive officer, Mr Laurie Walkear, says: We have a veritable army of biologists, with a fleet of vessels, all having meeting after costly meeting so that they can tell us after umpteen years that they are not too sure of anything, but whatever it is, things are quite O.K. From a biological point of view of course. Meanwhile there is not an Economist in sight. Is it too hard? Or too distasteful? Or isn't there any fun in it? Whatever it is, we need a few around, and soon. This particular group is in severe economic difficulty. It has been pushed into various corners by changes in circumstance and it really needs some help. It does not really matter to it whether it is determined that there are fish there or not if the fishermen cannot economically catch them and sell them. I have trouble going along with advisory committees, not only in fishing but generally. Beyond their being a short term exercise and while, in the case of the fishing group, I respect the members on the present committee and the job they are doing, there is always the problem with a committee of this sort that it is a committee giving advice to the Minister, not to the industry; and it is usually the industry that needs representation. The management of the northern prawn fisheries has demonstrated what can be achieved, and I would like to take this opportunity to give it great commendation for what it has done at a time when the Government was not too sure what it ought to do. The organisation, led by Peter Pownall, has demonstrated what can be done and, having struggled to rationalise a very bad situation for many years, there is every indication that it can fix it; and this legislation regularises the arrangements that cover its very excellent buy back system. If it has a good season and follows the plan through, it will be better off as an industry in the future. I only hope that every approach-and there certainly will be approaches-will be turned down totally as they arise. All sorts of approaches will be made to water down this scheme, and I hope that they are totally resisted. My congratulations certainly go to Peter Pownall and all the boys from the north, and I offer them as a model for other fisheries. In the southern end of Australia there are problems with the trawlermen-those who fish for shark and scallops, for a start. Their problems are worsening and it is going to require great wisdom, care and a lot of manoeuvring to get them through the minefield that lies ahead of them. I regret that governments always take too long to act. The problems are there. I feel that so often awful damage is done before the appropriate action for the fishery is taken. For evidence of that we have only to look at the southern bluefin tuna fishery and the serious trouble it is in. It is an international problem. Yet that fishery is one of the most researched fisheries in the world. So much has happened there that has been wrong. How to get it right for the future is still the job ahead. The fishermen, especially those at Port Lincoln, are the true professionals of Australian fishing-people like the Puglesis, the Lukins and Michael Thomas. I have come to know those gentlemen pretty well. A finer bunch would be hard to find. Most of them started from the bottom and worked their way up. When I say 'worked' I mean worked. The fact that they are becoming victims of international problems is most regrettable. I trust that the scheme which is now in vogue for them will get them out of their difficulties. The Western Australian tuna fishermen are also deserving of particular consideration in this debate. They too have followed everything that they were told or encouraged to do. The fact that it was wrong in the first place and took a long time to rectify was not their fault. I am sorry for them. I noticed a report in the West Australian of 4 May about the income of the fishery. In part the report states: This reduction represents a 78 per cent drop in income to the community from around $650,000 to less than $140,000 . . . That is an enormous problem for a small community. We cannot do any more than to feel terribly sorry for that community. The lobster fishermen around Australia are the pioneers in management controls. In Western Australia the system is accepted and appreciated, likewise in Tasmania and South Australia. Of course, not everyone likes it, but it is accepted for the job it does and the need that it fills. There would be no lobster industry were it not for the management that has been applied. The management of the various fisheries was one of the prime considerations in the Senate report. Although the report was substantially approved by government, and even more by industry, it is regrettable that progress on it has still been fairly slow. I personally and the Opposition generally support the Bills and the fact that the legislation gives a legal basis to actions that the industry substantially has undertaken and/or accepted. I would, however, like to move later the amendment that was moved in the other place and draw attention to the fact that in no way is it designed to hold up the legislation-far from it; it is designed to grant a right of appeal against a bureaucratic decision. I am sure that members on both sides of the chamber believe that a right of appeal is fundamental to any form of action. The question of this clause was raised by the Senate Standing Committee for the Scrutiny of Bills. It was pointed out there that some mention needed to be made of the right of appeal. I would appreciate it if the Minister could give that his attention. Senator BOSWELL(Queensland)(3.53) —Today we are debating the Fishing Legislation Amendment Bill 1985 and the Fisheries Levy Amendment Bill 1985. These two pieces of legislation introduce the concept of a management plan into the existing fishing legislation. It gives the Minister for Primary Industry the power to determine a plan of management for a fishery. In such a plan the Minister may determine the fishing capacity of a fishery and the manner in which that fishing capacity is determined. The legislation also provides for fees to be imposed by way of regulation. A fishery plan of management can be identified by reference to a species of fish, a description of fish, an area of waters or of seabed et cetera. The legislation states that the determination of the plan of management is to be published in the Commonwealth of Australia Gazette. The legislation also increases the penalties for foreign boats fishing privately from $1,000 to $5,000; for foreign boats equipped with nets, from $5,000 to $25,000; for boats fishing in the Australian fishing zone, from $5,000 to $5,000 if it is a summary offence and $250,000 if it is an indictable offence and for boats landing fish in Australia, from $10,000 to $50,000. I would like to say at the outset that I am glad that the Minister for Industry, Technology and Commerce, Senator Button, is the Minister at the table because he has displayed some concern for the fishing industry. I wish he could give primary industry the same benefits that he fights for for secondary industry. The Opposition supports the Bills. The Bills will allow the fishing industry to introduce its northern prawn fishery plan. These two pieces of legislation have been called for by the fishing industry over the last two years. As Senator Archer said in his excellent address, it is exactly what the dairy industry wanted and did not receive. The legislation allows the industry to rationalise and not overwork a resource that may not be able to recover if overexploited. As I said, the dairy industry wanted a similar package but was unable to obtain it from the Minister for Primary Industry, Mr Kerin. Fortunately for the fishing industry, the Government is giving it the proper legislation to regulate its own industry and to allow a buy back scheme to operate in the northern areas. The Opposition supports the Bill because it is the best the Government will allow, but it feels the Government could have been a little more sympathetic in its treatment of this great primary industry. However, I suppose the fishing industry should be grateful for small mercies. It has been lucky to get anything while this Government is adopting an anti-primary industry campaign through this Parliament. The northern prawn fishery plan will cover an area between Broome and Cape York. In that area there are 293 boats operating. The plan will reduce that number of boats by a third. The industry will buy back one third of the licences and boats over the next period of years. What the industry required and was refused was government financial assistance, a government assisted loan. It was told to go out and borrow money on the open market. I do not know what the commercial rates of interest are at the moment-I think they would be about 17 1/2 or 18 per cent. The fishing industry must provide that money from commercial borrowings. Many people will be forced out of the industry because they will not be able to meet the cost of their contributions under that plan. I again draw the attention of the Senate to the double standards that we have seen exhibited many times. This Government does not mind giving $326m to the Broken Hill Proprietary Co. Ltd or $150m to the biggest multinationals in the world-General Motors-Holden's Ltd, and the Ford and Nissan companies-but just let the sugar industry want financial assistance! The fresh, canned and frozen fruit industry received a tax imposition of $330,000 last week by way of inspection levies. When the dairy industry asks for something that does not cost the Government anything, of course it does not get any sympathy at all. The Government has told the industry that the user pays-that is the Government's policy. The fishing industry is the most intensive user of fuel of any primary industry. Forty per cent of the cost of every kilo of fish caught is taken up in buying fuel. The fishing industry uses 220 million litres of fuel a year. The two fuel increases which have occurred this year alone have cost the industry an additional $12.1m. The Government receives from the fishing industry $42m by way of government excise, so I would not have though it unreasonable for the Government to assist the fishing industry in the form of a government funded loan to finance this buy back scheme. The Government receives $42m-in fact, it receives 10 per cent of the total output of the industry-and it has not got one cent invested. The Government is the greatest user because it gets $42m from the industry, yet the Government is unable to give an assisted loan. In Canberra there is one rule for the multinationals and there is another rule for primary industry. I am sure that Senator Button would have to agree with that. Senator Button —Which was the first group? Senator BOSWELL —In Canberra there is one rule for secondary industry and there is another one for primary industry. Senator Button, as the Minister who looks after secondary industry, should be commended for the way in which he fights for secondary industry. The Government is not giving primary industry the recognition that it deserves. Senator Button —Particularly when your mob had clout in coalition governments; there was always a difference between primary and manufacturing industries. That is the problem today. Senator Puplick —There is no point in being nice to Senator Button. Senator BOSWELL —I am trying to be nice to Senator Button but he attacks me. Senator Puplick is perfectly right; there is no point in being nice. The ACTING DEPUTY PRESIDENT(Senator Colston) —I suggest that we all be nice and direct remarks through the Chair. Senator BOSWELL —As I have said, the Government gets $42m from the fishing industry which has asked me to make representations in regard to the bicentennial road funding. People in the fishing industry pay 2.2c a litre on the fuel that they put in their trawlers. They tell me that they are having a hard job putting the trawlers on the road. They asked me to make this representation. I think the 2.2c a litre tax for the bicentennial road funding comes within Senator Button's responsibility. Senator Button —It is not mine, thank God. Senator BOSWELL —Are you not the Minister responsible for customs and excise? The fishing industry is worth $450m in export earnings to this Government and $900m to the Australian economy. The fishing industry is the backbone of many decentralised towns where other support industries have established themselves around it, for example, radio, radar workshops, engineers, slipping and boat yards and many others. It is the fifth largest export industry yet it receives very little assistance compared with subsidised overseas fishing industries, particularly those in Japan, which receive huge subsidies. Japan's fuel subsidy is of tremendous value to its fishing industry which, of course, is very efficient. There are very few government subsidy schemes for the fishing industry. The industry does not qualify for the mortgage guarantee scheme and does not have access to development finance. I believe that the Government is thinking of taking away the investment allowance. One thing has hit the industry like a thunderbolt in the last week. I tried to address a question on this matter to Senator Walsh today. One should not try to ask anything of Senator Walsh because all one gets is a bucket. I asked Senator Walsh an intelligent question on behalf of the fishing industry and all I got was attack. I will put a proposition to Senator Button who, I believe, will treat it more sympathetically. A new taxation ruling, which is 2129, came down last week. That ruling specifically states: Share fishermen are considered to be employees for the purpose of sub-section 221A of the Act. It continues: Where evidence exists that a master and servant relationship does not exist tax instalments are still considered necessary in most instances because payments are considered to be wholly or principally for the labour of the person in terms of paragraph (a) in the definition of salary or wages. I point out to Senator Button that the consequences of that ruling in the fishing industry will be devastating. Skippers, owners and deckhands must break existing contracts, which could lead to litigation. The deduction and payments of taxation instalments are impractical in isolated areas because of the lack of adequate postal services and/or government agencies. In other words, if a boat is in the Torres Strait for two months at a time it would not be practical for the skipper to buy tax stamps. There are no post offices there; there are no agencies where such people could obtain tax stamps. Of course this measure will not work, but not for that reason alone. The payment of tax instalment deductions would absorb considerable cash surpluses during peak seasons when earnings are high. This means that money would not be available during periods of low catches. In the prawn trawling industry deckhands can earn something like $3,000 a week during the peak season, which runs for two or three months, but they would be lucky to earn $200 a week in the off-season and during the cyclone season they would earn nothing. Senator Button —What do they earn in the peak? Senator BOSWELL —They earn $3,000 a week but their earnings would go down when the boats are put away for three months during the cyclone season. How are these people going to survive while they are waiting for the Australian Taxation Office to give them back the money? If they earn $3,000 or $4,000 in the peak of the productive season and pay tax on that, how will they be able to survive in the off-season when they will be getting no money while they are waiting to receive their money back from the Taxation Office? The assertion by the Taxation Office that a master and servant relationship exists has ramifications for workers' compensation, payroll tax and wider industrial relations problems. In other words, the fishing industry is very concerned that it could be unionised and that would be the last thing that it would want. It could not survive with people working an eight-hour day and on a wage. Traditionally the industry has been placed on a share-of-profits arrangement. It is the only way that it will work. It makes for the greater efficiency of the industry. People are prepared to work 16 hours a day while the fish are there and to take time off when they are not. This ruling from the Taxation Office could do terrible damage to the fishing industry. I point out to Senator Button that the industry is most concerned about it. This ruling will not stop only at the fishing industry; it will carry on to share farmers, kangaroo shooters, timber getters and workers in all industries-mainly primary industries too-that work on a share-of-profits basis. Fishermen, like all other primary industry people, are prepared to pay their share to the nation, but this complication of filling in tax forms will mean that they will either ignore the ruling or pay thousands and thousands of dollars to accountants for administrative costs. It will also involve many other industries. I take this opportunity, as Senator Button is in the chamber, to bring up this matter because I believe that it is another example of the anti-primary industry bias that we have seen displayed over the last two years by this Government. That tax ruling must be addressed very quickly by the Government. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(4.08) —in reply-I thank the two honourable senators who have contributed to the discussion on the Fishing Legislation Amendment Bill 1985 and related Bill for the support for the legislation which they have offered. I particularly comment on Senator Boswell's speech because someone once said that even death is a learning experience. I certainly learnt something about the fishing industry-particularly the northern prawn fleet-from Senator Boswell's speech and that was helpful to me. The point that Senator Boswell made about the tax ruling seems to have a lot of validity. It is one which ought to be examined closely by the Government and I will see that that is done. The honourable senator would appreciate that a tax ruling that was brought down, I think, last week is not necessarily something which is susceptible to remedial action four or five days later, but it is certainly one that I will have looked at. I will refer the comments which Senator Boswell made to the appropriate department. My knowledge of the fishing industry is about as profound as that of some other senators about a lot of other things. I do not wish to speak at any length about the legislation. It is an important reform and I think it is recognised that it represents an important reform. I am glad that it is supported by the Senate. I commend the Bills for a speedy passage. Question resolved in the affirmative. Bills read a second time. The Bills. Senator ARCHER(Tasmania)(4.10) —I gave notice of an amendment to clause 28 of the Fishing Legislation Amendment Bill. I now move: Page 16, clause 28, leave out the clause, insert the following clause: '28. Section 16A of the Principal Act is amended by inserting after ''9A (1)'' (twice occurring), '', (3A)''.' Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(4.11) — This amendment was moved in similar form in the House of Representatives. The Government is concerned to protect the right of a fisherman to seek review of a decision of the Minister or the Secretary made under the Fisheries Act, but there are special circumstances which apply in the case of suspending a licence. The Government is also concerned to protect the rights of fishermen who conduct their fishing activities in compliance with measures for managing the fisheries. Section 9A (1) of the Fisheries Act provides precise grounds for the exercise of the suspension power. That is to say, the Minister is very confined in the exercising of a power to suspend a licence by the provisions of section 9A. In circumstances where one of those grounds set out in 9A is satisfied, no decision to exercise the suspension power would be made without a careful examination of all aspects of the matter. Indeed, since the power that is in 9A was inserted into the Fisheries Act in 1973 it has been exercised only on a handful of occasions. The Fisheries Act protects the rights of a fisherman who has had a licence suspended by providing for cessation of a suspension where the Crown does not institute legal proceedings within one month. After the suspending of a licence, the Crown has to initiate legal proceedings in order to confirm that process, as it were. If the Crown does not do that, the suspension may not be renewed. It is doubtful whether the review procedures in section 16A of the Fisheries Act could produce a result within that period. If the review procedure proposed in section 16A was used, it is considered that it could not produce a result within the time I referred to a minute ago. Under the present procedure, once a matter does go before a court, of course, the court will look into all the circumstances of the case. In a sense, there is a process of judicial review available. A person aggrieved by a suspension decision which lapses through failure to institute legal proceedings may complain to the Ombudsman about the administration of the scheme. This, combined with the strict statutory requirements concerning suspension, provides a satisfactory balance of administrative review. In essence the legislation as presently envisaged provides an efficient and fair method of administrative review and the proposed amendment, in the view of the Government, adds nothing to it except words. The present review process is considered satisfactory and the Government, for those reasons, cannot support the Opposition amendment. Senator ARCHER(Tasmania)(4.14) —The sort of case that comes to mind would be in the early days of, say, the banana prawn fishery. At the time of the year when the banana prawns rise, 30 days is the whole season. If there is to be a charge on a 30-day basis, a fisherman could miss the entire season. I gave this some thought last night-- Senator Button —Who is more at risk-the fisherman or the suspender? The suspender is, isn't he? Senator ARCHER —The fisherman is at risk inasmuch as he could lose his season's livelihood if he were to be put out for 30 days and no charge arose at the end of that 30 days. Senator MACKLIN(Queensland)(4.15) —I indicate that the Australian Democrats do not support this particular amendment. The proposition that the Government has brought forward was debated in this chamber on 2 May last year when the fishing legislation was amended on that occasion. We had a similar debate then when I think the types of concerns that the Opposition has now raised were raised at that stage by us. I suppose it is a matter of regret that the procedures of review would be of such a kind as to probably take at least 30 days to get through anyhow, and so under one or other of the headings very little advance would be made in the interests of the person whose licence was suspended. It does not seem that going down the review path on the suspension aspect would actually materially assist the person. Indeed, I think that the current arrangement where there is a legislative limit-that is, the one month-at least is firm, whereas under the procedures set down for the appeal it would almost be an open-ended operation, basically at the behest of the operations of the bureaucracy. It depends how rapidly the bureaucracy gets itself moving. Senator Archer —It would probably be a good thing if you were not fishing for, say, banana prawns. Senator MACKLIN —It may be, but Senator Archer's amendment will not assist matters because it will take 30 days anyway to get the matter reviewed, and that does not seem to be terribly much different from one month. Amendment negatived. Bills agreed to. Bills reported without amendment or requests; report adopted. Bills (on motion by Senator Button) read a third time. 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 Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(4.19) —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 proposes a number of major amendments to the Customs Act 1901 and the Excise Act 1901, and a number of minor and consequential amendments to each of those Acts, and the Distillation Act 1901, the Spirits Act 1906, and the Coal Excise Act 1949. The major changes to the legislation concerns proposals to: (a) amend the Customs Act to change the legislative basis for the allocation of import quotas by tender; (b) amend both the Customs Act and Excise Act to introduce more effective controls over ships' and aircraft's stores, impose liability on bodies corporate in respect of breaches of customs or excise law resulting from certain actions by their directors, servants or agents, and automatically index the rate of the rebate which is payable to those who have paid duty on diesel fuel used for certain off-road purposes, and; (c) amend the Excise Act and the various other Excise Acts to increase the level of penalties and update the prosecutions provisions. I will now deal briefly with each of the proposed changes. Clauses 18 to 22 of this Bill amend Part 15 of the Customs Act to provide the required legislative bases for flexible quota periods, which will permit, amongst other things, the implementation of the policy objectives of the Government's plan for the motor vehicle industry. The Clauses will also resolve some practical difficulties in the general administration of the tender quota scheme, facilitating tender-quota arrangements for assistance to the motor-vehicle industry as well as other areas where import quotas are used, notably in the textiles, clothing and footwear area. In brief, the proposed amendments: (1) enable the Minister administering the Customs Act to determine the periods of validity for which tender quota schemes are to run; (2) change the requirements of the tender quota undertaking so that tenderers need only undertake to enter the relevant goods for home consumption and not also undertake to import the goods; and, consequently, (3) change the importation requirement of quota instruments to a requirement that the goods be entered for home consumption. In announcing the Government's policy on the motor vehicle industry in May last year, four central aims were highlighted; they were, to give the industry more time to restructure and modernise; to make it more efficient; to hold down the price of cars; and to reduce job losses in the short term and provide job stability. An important element of that policy concerned tariff quota arrangements for imports. The Government decided, amongst other things, to allocate an increasing proportion of tariff quota by tender in two pools, the first pool for a one year allocation in respect of which 17 300 units of import quota have already been allocated for 1985 and the second pool for an allocation in each of four years commencing in 1986. Provisions of the existing Customs Act impose the constraint that tenders be called for and dealt with one year at a time. The proposed amendments are necessary so that multiple year tender arrangements can be implemented. In addition, avenues have been considered by which the tender scheme may be made more flexible in line with the Government's general attitude to the allocation of quota by tender and normal commercial practices. For example, supply and shipping arrangements for quota goods often cannot be organised to exactly correspond with the existing 12-month quota period. Such a rigid quota period also reduces importers' flexibility to react to market changes. The Government considers it appropriate therefore, to provide importers with some degree of flexibility at each end of each quota year. In the context of the motor-vehicle industry, it is anticipated that quota allocations be given 14 months validity, to allow some degree of anticipation and carry-over. The other parts of this particular amendment package provide for the removal of certain technical requirements from the tender quota undertaking and Ministerial Determinations. Such changes are consistent with other areas of the Customs Act and established customs procedures, and will have no adverse effect on assistance levels provided through tender quota arrangements. The amendments proposed in respect of controls over the loading and safe-keeping of, and accounting for, ships' and aircraft's stores (particularly spirituous liquor and tobacco products) in Clauses 7, 9 to 12, 34 to 36 and 44 of the Bill are intended to correct deficiencies in the present system, which is not sufficiently effective in preventing illicit diversions, with a consequent erosion of Commonwealth revenue. The proposed measures accord with those permitted for adoption under the International Convention on the Harmonization of Customs Procedures. The Bill also proposed in Clauses 17 and 43 to insert provisions to correct present deficiencies with prosecutions attempted against bodies corporate. Bodies corporate against which proceedings are brought, are presently able to escape liability in some cases by proffering the defence that the director, servant or agent whose conduct constituted the offence was acting without the knowledge or consent of the body corporate and without its authority. Under the proposed provisions, the state of mind and conduct of a director, servant or agent of a body corporate (or the servant or agent of an unincorporated principal) may be imputed to that body corporate (or other principal) where the conduct engaged in was within the person's actual or apparent authority. In clauses 13 and 37 of the Bill, an important amendment to the diesel fuel rebate scheme is proposed. The amendments will permit the automatic indexation of the rate of the rebate which is payable to those who have paid duty on diesel fuel purchased for off-road use in agriculture, mining, fishing, forestry, households, hospitals and nursing and aged persons homes. The decision to index the rate or rebate to movements in the Consumer Price Index was announced in the Treasurer's 1984-85 Budget speech. The indexation will occur at six monthly intervals and coincide with the automatic indexation presently applied generally to all rates of excise duties and corresponding customs duties. A further important feature of this Bill is the updating of penalties prescribed for offences against the Excise Act 1901, the Coal Excise Act 1949, the Distillation Act 1901 and the Spirits Act 1906. Many of the penalties for offences which strike at the very heart of proper revenue flow have been unchanged for over 80 years. The increases which the Bill proposes have been arrived at in consultation between the Department's of Industry, Technology and Commerce and the Attorney-General's Department. Particular regard was given to the increases in penalties for offences against the Customs Act 1901, which Parliament approved in 1982, and to comparisons with penalties prescribed for offences against other Commonwealth Acts. Increases proposed in relation to some particularly revenue sensitive offences are substantial, but are seen as necessary to provide effective deterrents against the increasing sophistication of 'white collar' crime generally, and the high rewards which can be obtained by large scale revenue evasions. Financial Impact Statement The only measure contained in this Bill which will require any direct additional financial outlay by the Government is the proposal to index diesel fuel rebates. The estimated costs of indexation for the 1985-86 and 1986-87 financial years is $4.3 million per annum. I commend the Bill to the Senate. Debate (on motion by Senator Collard) adjourned. Debate resumed from 9 May, on motion by Senator Grimes: That the Bills be now read a second time. Senator COLLARD(Queensland)(4.20) — The Australian Dried Fruits Corporation Amendment Bill, the Dried Sultana Production Underwriting Amendment Bill and the Dried Vine Fruits Equalization Levy Amendment Bill are all to do with the Australian dried vine fruits industry. This industry, even though it is small, contributes between $65m and $120m each year to our gross domestic product and provides an export income of between $50m and $80m a year, thus aiding our balance of trade. Four thousand growers and their families are involved in the industry and it is estimated that about 17,000 people are directly or indirectly employed in it. So we can see that this is an effective and vital industry to Australia. Any government assistance to this industry, as indeed to all primary industries, is at a minimal level. I must state that again because there seems to be abroad in the community an opinion that primary industries are heavily subsidised, protected and all the rest of it, when in fact the opposite is true. This is one industry that needs very little assistance from the taxpayer. It has very little protection vis-a-vis the sort of protection that we see applied to secondary industry. Our manufacturing industries receive across the board about 25 per cent protection and, of course, our wage and salary earners have full indexation. As I indicated, it must be said time and time again that our primary industries make a tremendous contribution to our GDP and our export sales and exact very little in return from the taxpayer, the Government or the community. Mr Hunt, in his speech during the second reading debate in the other place, outlined some of the protection which is afforded to manufacturing industries and gave a significant example of protection to a secondary industry which employs very few people in comparison with some of the primary industries but to which we pay $14m to $16m by way of tariff protection. As I understand it, the cost to the Government of these measures would amount to only about $2m per annum whereas the industry itself contributes in excess of $20m by way of levies to help the equalisation program. Export prices are very seasonal in this industry. They are subject to wild fluctuations and depend almost entirely on the growing conditions in Greece, Turkey and the United States of America. Obviously, if those countries have good seasons and big crops the export market is subject to very low prices. Let me indicate how the market fluctuates. In 1983-84 the price was $665 per tonne and in 1980 it was at a high of $1,260 per tonne. Therefore, the equalisation program which has been in place, and which this package of legislation leaves in place but alters, has been very necessary. As I indicated, it is funded by a levy on growers and involves consumer transfers from the domestic market to the export market. Notwithstanding this, the retail price has not risen beyond the rate of the increases in the consumer price index, and that is probably the case with all primary industry products. Any increases have been either in line with or less than than the CPI increases. The equalisation has ironed out the peaks and the troughs and has been of a great assistance to the industry in that buyers, knowing that they will not be subject to wild variations, have been able to plan accordingly. This has helped the food industry in particular. Kellogg (Aust.) Pty Ltd, for instance, when it is buying on the domestic market, has a fair idea of what the price will be and can plan ahead. Significantly, domestic consumption has risen steadily at about 5 per cent per annum. This reflects the careful and correct handling by the industry of possible price fluctuations. It is a very close knit industry situated in New South Wales, Victoria and South Australia. It has provided jobs and decentralisation in those States and, as I have indicated, it has provided exports and contributed to our balance of trade. The first Bill, the Australian Dried Fruits Corporation Amendment Bill, restructures the Corporation. It is significant that once again we find a piece of legislation from this Government which means that the growers lose control of their Corporation. It increases the Corporation's membership from eight to 10. I think this chamber should be reminded that in 1978 the Corporation's membership was decreased from 12 to eight to help contain costs. It must be spelt out that such boards or corporations are funded fully by levies from the growers. No taxpayers' money goes into any of these commodity boards. I think that is significant. Taxpayers' money goes into underwriting schemes but not to the funding of the boards. In 1978 the membership of the Corporation was reduced from 12 to eight to help contain costs, yet this Government has now seen fit to increase the membership from eight to 10. That does not sit too well beside the Government's recent legislation which sought to decrease the membership of the Australian Wheat Board, which has a far bigger job, from 15 to 11. By way of amendment the Senate reduced that number further to 10 and gave the growers control of their commodity board once again. In this instance the Government is seeking to increase the Corporation's membership from eight to 10. The Opposition will not be supporting that increase. As I said, the Corporation is financed by growers' levies. It is not a big industry and there is no need for the Corporation's membership to be increased. It is significant that if the membership of the Corporation is increased from eight to 10 the growers will lose control, as would have happened in the case of the Wheat Board. I think that point must be made about all such legislation currently coming from the Government. No taxpayers' money is used and the Corporation is fully funded by the growers through levies, yet they lose control. The Australian Democrats are moving an amendment which seeks to give the growers control again but maintains the increase of the Corporation's numbers from eight to 10. We will not be supporting that amendment because we would prefer to see the Corporation maintain its old level of eight members, four of whom are growers. The second Bill is the Dried Sultana Production Underwriting Amendment Bill. The present legislation was enacted in 1982. It has improved confidence within the industry by guaranteeing a minimum net return of 90 per cent of average production in the years 1982-83 and 1983-84, rising to 95 per cent in 1985-86. I underline the fact that the underwriting provisions cost taxpayers less than 20c each in 1983-84 despite the dumping action of other export competing nations. The Bill now under consideration seeks to set the guaranteed minimum rate at 80 per cent, but it changes the base of the system from all sales to only export sales. That is worthy of consideration. The Bill effectively matches or increases underwriting payments of recent years for the dominant export variety, sultanas. Although sultanas dominate the export sales, there is a strong case for currants and raisins to be included under the provisions of this Bill. That was pointed out by Opposition speakers in the other place. Their inclusion would further enhance the confidence of the producers and could help to develop the export capacity of those varieties. I understand that the Democrats will move an amendment to the motion for the second reading which takes that into account. I hope that in the near future the Government will pick up that amendment. We will support the Democrats in regard to that amendment to the motion for the second reading of the Bill. The third Bill deals with equalisation. I have mentioned the need for equalisation because of the wild fluctuations in export prices. It seeks to make changes in line with an Industries Assistance Commission report. We will move an amendment to go along with its recommendation, but which provides that it be stopped at the commencement of the recommendations in relation to 1988, and seek a further IAC report on the situation from that date. The Democrats will move an amendment in line with the industry request. The Opposition feels that as much as we would disagree at times with some of the IAC reports, there must be a yardstick, and it is providing us with a yardstick in this case and in relation to a few other pieces of legislation which will be debated in this chamber. So we would go along with the recommendations of the IAC report, but only to the extent of its recommendations in relation to the 1988 season. We think that the reduction in equalisation assistance for currants, raisins and sultanas to 15 per cent goes too far, is too drastic and too soon. We would ask the IAC to submit another report in 1988 which would take us on from there. As I have indicated previously, the equalisation levy has worked very well. It seeks to equalise prices so that there will not be the wild fluctuations of prices in regard to all of our primary products. The prices on the overseas markets, the dumped markets, are corrupt prices which simply bear no relationship to the cost of production in those countries. Yet we expect our growers to compete in that sort of a market without any great assistance. This equalisation program within the industry has worked. Admittedly, there have been consumer transfers, but it still works within the industry and it has worked well. It has not needed any taxpayers' money to prop it up. The Government amendments will, I believe-as do many of my colleagues in the other place-provide greater fluctuations which will not help the industry to any great extent. But I would expect, as in most cases in which there are fluctuations such as this, the fluctuations probably will not be passed on to the consumer. The wholesalers or the manufacturers who will purchase the fruit at more fluctuated prices will probably iron out the problem. I hope that that is true so that the consumer is not subject to these fluctuations and we do see a price that is almost as stable as it has been in the past. As I indicated, at the Committee stage we will seek to alter the Australian Dried Fruits Corporation Amendment Bill; we will agree with the Dried Sultana Production Underwriting Amendment Bill; and we will move amendments to the Dried Vine Fruits Equalization Levy Amendment Bill. Senator MACKLIN(Queensland)(4.34) —The package of Bills that we are discussing today with regard to the dried vine fruit industry in Australia makes one feel that as the various pieces of primary industry legislation are debated in this chamber, which occurs seemingly on a regular basis at the end of each session, the prospects for most of our primary industries in Australia rarely seem bright in the year ahead and that governments have constantly attempted to assist the industries in one way or another by restructuring arrangements and making alterations to the way in which support is provided to those industries. This particular package falls directly within that fairly time-honoured activity. The problems that arise, however, in regard to the current proposals are many. First, there is contained within the philosophy behind these Bills a rejection of a market entitlement scheme. This particular rejection prevents the formulation of any production targets. I also think that, ironically, it fails to give market signals, and certainly no clear market signals, to growers. That will be one of the arguments that I am sure the Minister for Finance (Senator Walsh), representing the Minister for Primary Industry, will make in a week or so when we discuss the dairy industry. Senator Collard —I think 'market signals' is the in term. Senator MACKLIN —Certainly, market signals is the in term. Unfortunately, it is not included in this package of legislation so it is out on this occasion. I believe that all industries would seek to understand their export markets in the clearest possible sense because the people who benefit most from having those clear market signals are the growers. So the growers are very anxious to have those signals made clear to them. I think the only way to do so with regard to the dried vine fruit industry would be by way of a market entitlement system. Secondly, the greater instability in returns to growers in future years will flow directly from the equalisation levy ceilings which are imposed. The ceilings undoubtedly will cause Australian dried vine fruit prices to fluctuate wildly. I will refer shortly to the history of that exercise. Thirdly, the low prices for any period on the Australian market would be the base for future prices. Looking at the history of this exercise, it would seem to be an exercise in which any loss of return to growers would be unable to be recovered in future seasons; those losses would merely be compounded forward. I have distributed to the Minister and the Opposition spokesperson on primary industry a list which I would seek to have incorporated in Hansard. Leave granted. The table read as follows- Percent Actual change Per- Aust- Formula from cent ralion price/ previous change price/ tonne year CPI tonne $ $ 1975 761.68 -16.8 +16.9 948 1976 692.04 - 9.1 +12.2 948 1977 1,348.94 +94.9 +13.4 998 1978 1,354.52 +0.04 + 7.9 1,070 1979 1,717.19 +26.8 + 8.8 1,150 1980 2,362.89 +37.6 +10.7 1,270 1981 1,787.74 -24.4 + 8.9 1,430 1982 1,559.24 -12.8 +10.7 1,608.70 1983 1,417.41 - 9.1 +11.2 1,812 1984 1,213.85 -14.4 + 3.9 1,812 Senator MACKLIN —I thank the Senate. If honourable senators look at that list, they will see that I have sought to take the Government's equalisation levy formula and project it to past seasons. If one does so, one comes up with some rather fascinating figures. For example, it is rather interesting to look at the percentage change in previous years. For 1975 the figure is minus 16.8 per cent; for 1976 it is minus 9.1 per cent; for 1977 it is plus 94.9 per cent. There is a wild fluctuation if one applies backwards, in regard to the figures we now know, the formula devised by the Government. I think that that is illustrative of the difficulties that we will face in the future. Those fluctuations historically are present and they will be present in future years. Of particular concern to me is the fact that if one looks at past seasons one sees that we have had a price increase of about 37 per cent which would have been applied to the Australian market under the Government's formula. In looking at this market we have to take cognisance of what is said by the people who understand the industry. I think there is almost total agreement amongst people in the industry itself to the fact that there is not a great deal of price elasticity in this area, that the consumer of Australian dried vine fruits is unlikely to agree easily to a hike of 37 per cent and continue buying the Australian product. Senator Button —But just in case the consumer is? Senator MACKLIN —I am suggesting that the consumer is unlikely to do so. I am trying, using the Government's formula, to say what might happen on the basis of past figures. I think the market would reject a price rise of 37 per cent. Such a price rise forced on buyers by the type of levy which is being suggested in this legislation would undoubtedly result in a dramatic loss of sales and an increased dependency by the industry on the export market. Pressure would be put on the growers to move from the domestic market to the export market. Is that possible? I suggest that it is not possible for a number of reasons, most of which I would like to leave until this legislation is dealt with at the Committee stage, when we will be able to discuss these matters in greater depth. I think it has to be acknowledged that imports will have a ready Australian market if the price of the Australian product is increased. There is to be no increased protection from imports. The import duty of $200 per tonne has been retained. This figure, of course, is rapidly being eroded by inflation and by movements in the value of the Australian dollar. The Government has sought to assist in some of the problems that it sees will arise by proposing a $5m adjustment program. However, I do not believe that this amount will be adequate in view of what would have been the result had the formula been applied over the last three years. For example, if one expended the whole of that $5m on a vine pull program the result would be a decrease of only 5,000 tonnes of production. That is hardly something that would assist in any way. Therefore, I think that $5m has to be seen as inadequate in terms of the exercise that the Government is seeking to undertake. As was the case with the old scheme that was introduced by the Fraser Government, this Government's underwriting provisions are planned to apply to sultanas only. I think that as a result currant and raisin growers will be seriously disadvantaged. For example, it is expected that 50 per cent of the 1985 currant crop will be disposed of in the export market. However, it is still not known how much further production will come on stream from the new vines which have been planted in the last two years. It is my understanding that there have been extensive plantings of new raisin varieties in the last couple of years and as a result there could be a fairly large jump in raisin production. I acknowledge that the demand of wineries, for example, for raisins provides at least a diversion from other domestic and export markets. However, I am not at all sure, given the current situation with regard to the wine industry in Australia, that wineries will be in a position to do very much to assist raisin growers. The positive aspect, of course, of the proposals is that the Government has come up with an improved underwriting scheme for sultanas which will certainly go much further to meet the unachieved aims of the present scheme and provide the type of relief from the fluctuations that I have already mentioned. I think the industry itself is rather mindful of the positive aspects of the Government's proposals and is quite happy to state that it supports the Minister's movements in that area. I think any further comment I have on this legislation would best be made at the Committee stage. In conclusion, I move as an amendment to the motion that the Bill be now read a second time: At end of motion add: ', but the Senate is of the opinion that comprehensive production underwriting legislation should be enacted for all dried vine fruits'. Senator ARCHER(Tasmania)(4.46) —I want to speak on the dried vine fruits Bills, mainly because the dried vine fruits industry deserves support from this Government and from members of this Parliament. It was interesting to note that the Government was able to muster only one of its members to speak on this legislation when it was before the other place. I regret that the industry is not taken more seriously by the Government. I also regret that it is noticeable that not even one Government senator is on the speakers list for this debate today. Senator Robertson —That has nothing to do with it, and you know it. We want to get home. Senator ARCHER —Senator Robertson says that it is far more important to get home than it is to debate adequately legislation concerning the productive industries of Australia. Of course, this industry is given minimal consideration because it is predominantly centred in three electorates, not one of which is held by the Government. I find it very disturbing that the industry found it necessary to report that the Government did not even see fit to discuss this matter with it prior to the presentation of these Bills. I seek leave to incorporate in Hansard a copy of a letter from the Australian Dried Fruits Association in which these regrets are expressed and the effects of the legislation are laid down very clearly. Leave granted. The document read as follows- ND061 April 19, 1985 The Hon. J. Kerin, Minister for Primary Industry Dear Mr Kerin, The ADFA is extremely disappointed with the measures announced as aid to the DVF Industry. The ADFA also regrets that the Government has seen fit to introduce legislation on these matters prior to consultation with the Industry via the ADFA. It appears the Government has acted with indecent haste in framing and tabling this legislation without the usual, time-honoured negotiations with the ADFA. In the present case the Government appears to be riding rough-shod over the Industry, as a paper by your Department explaining the proposals is yet to be received but already the Amendment Bills are before the Parliament. The proposed measures will not 'establish the DVF Industry on a more secure footing' as indicated in your announcement. On the contrary, the greater uncertainties brought to bear on DVF producers by the Government proposals will not only force out marginal growers but will cause stagnation of the whole Industry. The Government has failed to provide any base on which the innovative and progressive growers can plan their investment decisions. There are no production targets, no additional constraints on imports, and greater instability of incomes. The ADFA believes the Government has failed to recognise that while aiming to reduce tonnage available to export markets, it is essential for Australian producers to maintain, and where possible, improve the competitiveness of Australian DVF on world markets. There are national rewards to be gained from an efficient DVF Industry which can only be achieved where growers are given the security to commit their human and financial resources. The present plan does not provide this security. The major consequences of present proposals are: 1. The rejection of a market entitlement scheme prevents the formulation of an Industry production target, and fails to provide the clear market signals needed by growers. 2. A greater instability in returns to growers in future years due to equalisation levy ceilings. These ceilings would force Australian prices for DVF to wildly fluctuate. 3. The low prices for any period on the Australian market would be the base for future prices. Returns to growers lost from the Australian market in any period would not be recovered but would be compounded forward. 4. The peaks demonstrated by the Government's equalisation levy formula would be unobtainable because of market pressures. For example the Government formula when applied to past seasons shows that a price increase of up to 37% should theoretically have been applied to the Australian market. However, the market would reject any price increase of this magnitude, and if forced upon buyers, would result in dramatic losses of sales and an increased export dependence for the Industry. 5. The periods of low Australian prices could be enforced on the Industry and lead to dramatically reduced returns to growers because of pressure from buyers and the availability of imported fruit. 6. There is no increased protection from imports. While an import duty of $200 per tonne was retained this is being rapidly eroded in real value by inflation. 7. The $5 million adjustment money was inadequate to grapple with the adjustment needs of the Industry. For example, even if the sum was fully expended on vine pull compensation, less than 5,000 tonnes of production was likely to be removed from the Industry. 8. There must be considerable doubt whether $5m funding for adjustment will be achieved. For the first time for a rural adjustment program, contributions would be required from the States. It is known that Victoria, the State with the greatest DVF adjustment need, may be reluctant to support the scheme upon the terms announced by the Commonwealth. Significantly there appears to have been little, if any, consultation with the States prior to the announcement, and no commitment of any State funds to date. The one positive aspect of the proposals is the improved underwriting of returns. The new scheme will go much further in meeting the unachieved aims of the existing scheme to provide relief from sudden dramatic falls in returns to growers. However, like the old scheme, the new underwriting provisions are planned to apply to sultanas only with the result that currant and raisin growers would be seriously disadvantaged. The revised equalisation arrangements and the resulting severe grower income fluctuations will hit currants and raisins yet there is no provision for underwriting. I regret that there has been insufficient time allowed to make personal representations to you. A fuller assessment of the proposals is presently en-route to you with a copy also despatched to your Department. Yours sincerely, H. M. TANKARD Chairman Senator ARCHER —The Government's attitude on this and similar industries is impossible to understand. The effect of this legislation is not to aid efficiency and improve grower competitiveness; it is exactly the opposite. It cannot but help reduce the industry's capacity to improve technology even further in order to keep Australia's dried fruits industry on top of the world in terms of quality. Australia's dried fruits are, as we all know, absolutely second to none in the world when it comes to quality. What we should be doing is ensuring that they stay that way by making the industry profitable, keeping it profitable and keeping the product on top. As a previous speaker in this debate has mentioned, Australians eat more dried fruit than do people in any other country. I hope that this trend continues and that we increase consumption, because the quality and value of this product are absolutely tremendous. We need to remember that about 50 per cent of the major crop is sold to processor users and that the importance of a regular stable market just cannot be overemphasised. One needs little imagination to see the extent of the problems that would arise if it became too difficult for those users to keep abreast of wildly fluctuating markets. The industry, as we all know, has done much to keep both supply and price stable in the interests of long term production and consumption. For some philosophical reasons, the Government has determined that that is undesirable and has decided that full market fluctuations should be let loose, even if it totally disrupts the production of these products and leads to an ultimate loss of market. Perhaps in summarising the debate the Minister will give some rationale for this decision or the Government's assurance that this may not be so. It is not that the profit of the growers is excessive-far from it. It is not the case that prices have risen to unreasonable levels because, in fact, they have only kept roughly in line with the consumer price index. It is not that they are insignificant in the field of employment, as 4,000 people are directly employed in the industry and a total of 17,000 people in all live off it. What has happened is that due to high subsidy and overproduction elsewhere in the world, the use and sale of grapes have moved certain markets. The three areas mainly involved are southern Europe, California and the River Murray area. Changing varieties of grapes and changes in the use of specific varieties obviously bring changes to the industry. Mostly these changes are relatively short term and there is a shakedown. Probably one of those periods is with us right now. If the Government believes that ironing out the industry after a couple of difficult years will solve the problems, I think I can assure it that it is wrong again. There will always be bad years and good years and usually, regrettably, this seems to depend on someone else's disaster somewhere else in the world, but it happens often enough and the climate in Australia is dependable enough that we are able to have good fruit in years when others do not. What do we know about the dried fruits industry? We should know a good deal because I understand there have probably been more inquiries and more reports on this industry than on any other in Australia. When I talk to people in the industry or people who depend on the industry, I gather that not one of those inquiries has shown up anything which the industry and those involved in it or interested in it have not already known. Basically, of course, there are two parts of the industry. There are those growers on farms established for war service land settlement and in many cases still growing varieties with poor market appeal, produced under less than ideal conditions and giving fairly poor crops. They do, however, provide homes for many people, often war veterans and/or migrants, and they provide some income to those people. There is no known present alternative profitable use for those farms and, as of now, the people who work them cannot even retire on the farms because of the nature of the assets test. The other group is very modern and well equipped, using the best technology in the world and getting production again probably better than anywhere else in the world. But, regrettably, this legislation treats them all the same. There can surely be no valid reason for the exclusion of domestic sales from the formula for equalised returns, nor for the exclusion of currants and raisins. I still request the Government to consider including those items, even at this stage. The industry injects almost $200m into the economy of the Sunraysia area alone and, without reasonable stabilisation, the future of that area looks very shaky. Other speakers have mentioned fluctuation. I would make the point that in 1980 the sultana price was $1,260 a tonne; in 1984 it was $650 a tonne; in 1985 it is $900 to $950 a tonne. Anybody can see the need for an effective scheme of stabilisation. Men like Mr Henry Tankard, the Chairman of the Australian Dried Fruits Association, are world leaders and top men among primary producers of any type in Australia. They justifiably raise the matter of lack of consultation. They recognise the problems of a vine pull scheme which may reduce the actual quantity of grapes only by a very small amount. Apparently no proposal has been put to the States as to their contribution to and supervision of the vine pull and there is nothing in the arrangements to place any constraint on new plantings going on possibly at the same time. I and the industry fully recognise the nature of the industry and the problems that have been part of it since the first soldier settlers went to the areas in about 1920. The best thing this Government could be doing right now would be to remove some of the uncertainties to enable those with a future to settle down and continue to lead the world. But this legislation cannot and will not do that. It will only add to the uncertainties and will bring stagnation to the whole industry. If these Bills are passed, it will require another batch next year to try to tidy up some of the mess that will be left behind. We see a government approach where there are no production targets and no extra constraints on imports. I feel free to ask just what is the intention of these Bills. Where does the Government intend to stop in its selling of Australian jobs and investments to subsidised overseas nations? The European Economic Community in particular must be delighted to feel that Australia, like no other country in the world, is prepared to abandon its productive, efficient primary sector and to give it to the EEC on a plate. Perhaps it is some philosophy that I know nothing about. Perhaps it is just a theory developed by some academic who has no idea of life in the real world-someone whose job is secure, whose income is indexed and who determines what happens to those whose life is at stake and those who provide jobs for others and not only support communities in regional areas but provide valuable export dollars for Australia's declining international position. What we need now-more than has ever been provided in the past-is an effort to assist these sorts of industries and to build up our incomes in the years ahead. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(4.57) —I thank honourable senators who have commented at some length on the Australian Dried Fruits Corporation Amendment Bill and allied Bills. I wish to make one or two comments. I noted that in the course of the speeches made in this debate few references were made to the Industries Assistance Commission inquiry and report on this industry. I would merely make the point that the industry made its representations to the IAC on these matters and was able to put its position very carefully. In light of that evidence, the IAC made its report. The basic purposes of these Bills are described in the second reading speech in each case. I would have thought that some comment might have been made about the industry's reactions to this legislation on a more recent basis than was reflected in some of the remarks in this debate, which were based on earlier comments by the industry about the effects of these Bills. In the longer term it is important to address some of the philosophical questions which were raised, particularly by Senator Archer. But whatever such questions involve, it seems to me a matter of reality that the export market for our products will most likely be smaller than it has been in the past. That matter must be faced up to by the industry. I do not in any way derogate from what Senator Archer said about the essential efficiency of the industry, but if it is to be encouraged in any way into a state of overproduction, that will not help its general situation in the longer term. Senator Macklin has moved an amendment relating to the underwriting of all dried fruits, and I think he particularly referred to currants and raisins. The Australian Dried Fruits Association believes that the new underwriting scheme is a considerable improvement on the old one. But, as Senator Macklin pointed out, it has offered the criticism that the scheme does not extend from sultanas to currants and raisins and that there is no guarantee that the proposed scheme will continue past 1990. As I understand it, the essential thrust of the Australian Democrats' second reading amendment is to pick up those points and to ensure that the underwriting applies to currants and raisins as well as sultanas. Of course it is true that underwriting provides some income support for dried vine fruit producers when their incomes would otherwise be affected by sudden large falls in returns from export sales. But, as the IAC pointed out, the production of currants and raisins is significantly below that of sultanas. That body took the view that the underwriting should not be extended to these other varieties at this stage. For example, last year the volume of raisins and currants available for export was so low that the equalisation arrangements were not enforced. I understand the point that was made about fluctuations, but that was the situation last year. The Government understands that 1985 season production levels are estimated at 66,000 tonnes of sultanas, 5,000 tonnes of currants and 1,860 tonnes of raisins. The figures for currants and raisins are very small when compared with the figures for the production of sultanas. It is the Government's view that at present the volumes of currants and raisins do not justify underwriting. I think it is implicit in what I have said, and indeed in what the IAC has said, that if that situation required addressing in the future the Government would examine it. In response to the amendment moved by Senator Macklin I just make the point that at this stage the Government is of the opinion that comprehensive production underwriting should not be extended, though in the future an open mind would be kept on that issue. I commend the Bills to the Senate and indicate the Government's opposition to the amendment of the Australian Democrats. Question put: That the words proposed to be added (Senator Macklin's amendment) be added. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 37 Noes . . . . . . . . . . . 30 —— Majority . . . . . . . . . 7 —— Archer, B. R. Lewis, A. W. R. Baume, Peter Macklin, M. J. (Teller)Boswell, R. L. D. Mason, C. V. J. Brownhill, D. G. C. Messner, A. J. Carrick, Sir John Missen, A. J. Chaney, F. M. Parer, W. R. Chipp, D. L. Puplick, C. J. G. Collard, S. J. Reid, M. E. Crichton-Browne, N. A. Scott, D. B. Durack, P. D. Sheil, G. Evans, Jack Short, J. R. Guilfoyle, Dame Margaret Teague, B. C. Haines, J. Townley, M. Hamer, D. J. Vanstone, A. E. Harradine, B. Vigor, D. B. Hill, R. Walters, M. S. Jessop, D. S. Watson, J. O. W. Kilgariff, B. F. Withers, R. G. Lajovic, M. E. Aulich, T. Hearn, J. M. Black, J. R. Jones, G. N. Button, J. N. McClelland, DouglasChilds, B. K. McKiernan, J. P. Coates, J. Maguire, G. R. Colston, M. A. Primmer, C. G. Cook, P. F. S. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Richardson, G. F. Elstob, R. C. Robertson, E. A. (Teller)Evans, Gareth Ryan, S. M. Foreman, D. J. Sibraa, K. W. Georges, G. Tate, M. C. Giles, P. J. Walsh, P. A. Grimes, D. J. Zakharov, A. O. Rae, Peter Coleman, R. N. Bjelke-Petersen, F. I. Gietzelt, A. T. Knowles, S. C. Bolkus, N. MacGibbon, D. J. McIntosh, G. D. Question so resolved in the affirmative. Original question, as amended, resolved in the affirmative. Bills read a second time. AUSTRALIAN DRIED FRUITS CORPORATION AMENDMENT BILL 1985 Clauses 1 and 2-by leave-taken together, and agreed to. Clause 3 (Membership of Corporation). Senator MACKLIN(Queensland)(5.11) —by leave-I move: (1) Page 2, clause 3, proposed new paragraph 15 (1) (b), leave out '4', insert '5'. (2) Page 2, clause 3, proposed new paragraph 15 (1) (d), leave out '4', insert '3'. I have circulated those amendments to the Australian Dried Fruits Corporation Amendment Bill. The essential point is that the Government has decided, for some reason still shrouded in mystery, to increase the number of members on the Australian Dried Fruits Corporation Board from eight to 10. In doing so it has taken away the grower majority. As I indicated during the debate on the fishing legislation, the Australian Democrats policy is to support grower majority on commodity boards. Hence I have moved the two amendments to increase the number of members representing producers from four to five and to reduce the other members appointed by the Minister for Primary Industry from four to three. This will restore the grower majority and leave the Corporation with 10 members-a number which the Government, for some reason, wishes to have. The reasons for retaining grower majorities on such corporations have been rehearsed on innumerable occasions in this place. I do not believe that in a situation in which the efforts of such a corporation largely are funded by the growers themselves, the direction of their funds and the control of the direction of their industry ought to be taken out of their hands and put in the hands of the Government. Let us be clear that this would not mean control of the industry from this chamber or the other place-we could argue about the effects of that-but essentially would mean bureaucratic control of the industry. I do not believe that would achieve the types of objectives that the Government wishes in any more effective way than the current arrangement. Indeed, I believe that having grower control is the best safeguard for directing the industry towards a prosperous future because it would be controlled by the very people who have a permanent and continuing stake in the health of their own industry. Senator COLLARD(Queensland)(5.14) —As I indicated in the debate on the second reading of the Australian Dried Fruits Corporation Amendment Bill, we will not support the Australian Democrats amendment and we will not be voting for clause 3 of the Bill. I reiterate that in 1978, because of the cost structure of a small industry, the Australian Dried Fruits Corporation Board was reduced from 12 members to eight. Like Senator Macklin, I can see no reason to increase the numbers on the Corporation. The increasing of the Corporation numbers has put members other than growers on that Corporation. We are not in agreement with that. Senator Macklin's amendment seeks to put back a grower majority but still leave the Corporation numbers at 10. By not voting for Senator Macklin's amendment and by not supporting clause 3 generally we are indicating that we want the numbers on the Corporation to stay the same; that is, eight members-four growers, one chairman, one government representative and two members with special expertise. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(5.15) —The essential purpose of this legislation which in a sense would be thwarted if not frustrated or disposed of by Senator Macklin's amendment, and indeed the foreshadowed action of Senator Collard's Party, is to provide two additional members with special qualifications for the Australian Dried Fruits Corporation. The reasons for that are not sinister, as might have been implied. The implication is that if the growers fund most of the activities of the Corporation they should therefore have an exclusive right to have a majority on that Corporation with no other specialist experts added. The Government's policy point is to try to improve the effectiveness of the Corporation, which the Government views as being hampered by the Corporation's present composition and range of expertise, if I may put it in those terms. Earlier, in the second reading debate, there was a lot of discussion about fluctuations in production and sales by this industry. I think this industry is like any other in that probably it has suffered in the past from a lack of expertise in marketing its products and so on. The assumption is that the producer always knows best about these matters. I am not criticising the way Senator Macklin put it but I read in his remarks the assumption that because growers pay the money they call the tune, and that therefore this is good for the industry in terms of its capacity to market its product. Senator Collard —It is their product. They not only pay the money. Senator BUTTON —Yes, I know. It is arguable that implicit in all that is the suggestion that they have not been as successful as they might have been in marketing their product. That is true. I am not singling out this industry for that criticism. Senator Macklin —We are not opposing the appointment of experts to the Corporation by our amendment. Senator BUTTON —No. I am saying that the purpose of the legislation is to enable two extra people of particular expertise to be appointed to the Corporation Board. The Government believes the appointment of two members with particular skills in commerce, finance or marketing would increase the general level of expertise available to the Corporation and would allow it more adequately and independently to address the increasingly difficult marketing environment with which the industry is faced. We are talking about an industry which is sick, for goodness sake-everybody agrees about that-which has enormous problems. The response is: 'Let's leave the board of the Corporation exactly the same as it has always been because these people on the Corporation will have the capacity to address these problems'. As I have said, this requires particular skills and expertise, particularly commercial and marketing skills. The fact that one is a businessman does not mean one has the capacity to sell one's product well. In any industry, the fact that one is a grower does not mean necessarily that one has the capacity to market one's product well. That simply is the point the Government is seeking to make in terms of the composition of the Corporation. There is no reason why the membership of the Corporation should not be consulted about appointments made to its Board of this category of persons with financial, commercial or marketing expertise. It is not fair in a sense to say that the Government is seeking to impose public servants on the growers, this beleaguered group, or something like that. That is not true at all. The Government is trying to give the Board of the Corporation additional balance in terms of the skills, talents and expertise available to it. As I understand the Democrats' proposal, instead of two extra members with special qualifications, they want one, the second of the two, as it were, being a grower member. The idea behind that is to keep what has been called grower control. At the moment there are four growers on the Board of the Corporation, two specialists who traditionally have been packers appointed after consultation with the industry-not marketers or finance people or commercial people necessarily, but people who have businesses involved in the packing of dried fruits-one independent chairman and one Commonwealth Government representative. It is not intended that there should be more than one Commonwealth Government representative. While there are four growers on the current Board of the Corporation, in effect there are six industry people on it-that is to say, growers and people who pack the products of the growers-but there is very little balance by way of independent specialists. The proposal is to give the Corporation broader in-house expertise and marketing and financial talent which, in the agreed state of this industry, we feel would be an improvement. There is always in a board of wider composition some capacity for a little more lateral thinking, some imaginative thinking, and so on; and that is all the Government is proposing. As I understand what my colleague Senator Collard intends to do-- Senator Collard —That is as bad as currants and currents, isn't it? Senator BUTTON —Much worse, if I might say so, in the honourable senator's case! The point of Senator Collard's proposed action is to dig in on the number eight and on the traditional principle of grower control. I understand that from his point of view. I am trying to look at it from the point of view of the industry as a whole, and in that regard this amendment may be very important. If the Democrats' amendments were carried, I can quite sincerely say, I do not think it would be a particular advance for the industry. If one were to look back on the industry in four or five years time from an objective point of view and to see that these sorts of changes might have been made to the approach adopted by the industry but were defeated by this Democrats' amendment, that would be a source of great regret to me, but I hope that people at the time would express their regret to Senator Macklin rather than bothering me about it. I commend the Government's legislation to the Senate and I oppose the amendments simply on the basis that I think they are a little traditional, a little short-sighted and a little conservative in an approach to an industry which requires considerable change. Senator Haines —Oh, my bleeding heart! Senator BUTTON —Seeing that Senator Haines interjected, I think that somebody such as she would be an ideal member of the Board of this Corporation because she would lend, I am sure, an imaginative and hard commercial approach to the deliberations of the Board, and that would be a very good thing. Senator MACKLIN(Queensland)(5.25) —The views put by the Minister I do not disagree with in substance. We are not opposed to increasing the expertise of the Corporation, if the Government wishes that and feels that it is useful. At the same time we do not wish to lose the grower majority on the Corporation. So my amendments, while leaving the Corporation with a newly-expanded 10-member Board, seek merely to move the numbers around as little as possible to give an additional number of members to the growers. The Opposition is proposing to oppose the clause entirely. I indicate at this stage that, if our amendments are not accepted, we will be forced to support the Opposition by voting against the entire clause. Senator COLLARD(Queensland)(5.26) —I still stand by the necessity for four growers on an eight-man board. I point out to the Minister, despite his eloquence, that we are standing by our decision because there is a cost involved in increasing the size of the Board. We are talking about an industry that is going to decrease in size over a period. As I indicated in my speech at the second reading stage, the Corporation is fully funded by levies from the growers and we see no necessity to expand it. If there is a necessity to bring in extra expertise at times, it can always be brought in to deal with a particular marketing situation, without having extra full time members. I stand by what I indicated in the first instance. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(5.27) —I see that honourable senators are tending to dig in a bit in their respective positions, but I wish to make a final plea on the question of grower control. One of the reasons that the Government extended the number to 10 was to preserve, like one preserves dried fruits, all those growers on the Board of the Corporation. We want to preserve them. We just want to enhance the capacity of the Board by introducing a bit of new, imaginative and lateral thinking, which I know might be repugnant to some honourable senators but which I think would be in the interests of this industry, as it is in the interests of any industry. I again commend the legislation to the Senate, in spite of the grave adversity I clearly face from people who have some of the qualities of the fruit which we have been talking about. Question put: That the amendments (Senator Macklin's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 59 —— Majority . . . . . . . . . 53 —— Chipp, D. L. Macklin, M. J. (Teller)Evans, Jack Mason, C. V. J. Haines, J. Vigor, D. B. Archer, B. R. Kilgariff, B. F. Aulich, T. Lajovic, M. E. Baume, Peter Lewis, A. W. R. Black, J. R. McClelland, DouglasBolkus, N. McIntosh, G. D. Boswell, R. L. D. McKiernan, J. P. Brownhill, D. G. C. Maguire, G. R. Carrick, Sir John Messner, A. J. Chaney, F. M. Missen, A. J. Childs, B. K. Parer, W. R. Coates, J. Primmer, C. G. Collard, S. J. Puplick, C. J. G. Colston, M. A. Ray, RobertCook, P. F. S. Reid, M. E. (Teller)Cooney, B. Reynolds, M. Crichton-Browne, N. A. Richardson, G. F. Crowley, R. A. Robertson, E. A. Devlin, R. Scott, D. B. Durack, P. D. Sheil, G. Elstob, R. C. Short, J. R. Evans, Gareth Sibraa, K. W. Foreman, D. J. Tate, M. C. Georges, G. Teague, B. C. Giles, P. J. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Hearn, J. M. Watson, J. O. W. Hill, R. Withers, R. G. Jessop, D. S. Zakharov, A. O. Jones, G. N. Question so resolved in the negative. Question put: That the clause be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 30 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 5 —— Aulich, T. Giles, P. J. Black, J. R. Hearn, J. M. Bolkus, N. Jones, G. N. Button, J. N. McClelland, DouglasChilds, B. K. McIntosh, G. D. Coates, J. McKiernan, J. P. Colston, M. A. Maguire, G. R. Cook, P. F. S. Primmer, C. G. Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M. Devlin, R. Richardson, G. F. Elstob, R. C. Robertson, E. A. (Teller)Evans, Gareth Sibraa, K. W. Foreman, D. J. Tate, M. C. Georges, G. Zakharov, A. O. Archer, B. R. Macklin, M. J. Baume, Peter Mason, C. V. J. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Missen, A. J. Carrick, Sir John Parer, W. R. Chaney, F. M. Puplick, C. J. G. Chipp, D. L. Reid, M. E. (Teller)Collard, S. J. Scott, D. B. Crichton-Browne, N. A. Sheil, G. Durack, P. D. Short, J. R. Evans, Jack Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Haines, J. Vanstone, A. E. Hamer, D. J. Vigor, D. B. Hill, R. Walters, M. S. Jessop, D. S. Watson, J. O. W. Lajovic, M. E. Withers, R. G. Lewis, A. W. R. Coleman, R. N. Rae, PeterGietzelt, A. T. Bjelke-Petersen, F. I. Walsh, P. A. Knowles, S. C. Grimes, D. J. MacGibbon, D. J. Ryan, S. M. Kilgariff, B. F. Question so resolved in the negative. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill, as amended, agreed to. DRIED SULTANA PRODUCTION UNDERWRITING AMENDMENT BILL 1985 Bill-by leave-taken as a whole, and agreed to. DRIED VINE FRUITS EQUALIZATION LEVY AMENDMENT BILL 1985 Clause 1 agreed to. Clause 2 (Rate of levy). Senator COLLARD(Queensland)(5.41) —by leave-I move: That the House of Representatives be requested to make the following amendments: (1) Page 2, clause 2, proposed new paragraphs 6 (3) (d) and (e), lines 20 and 21, leave out the proposed paragraphs. (2) Page 2, clause 2, proposed new paragraphs 6 (4) (d) and (e), lines 27 and 28, leave out the proposed paragraphs. (3) Page 2, clause 2, proposed new paragraphs 6 (5) (d) and (e), lines 34 and 35, leave out the proposed paragraphs. The purpose of these requests is as I outlined in my speech during the second reading debate. We recognise that the percentage of payments laid down for the equalisation of currants, sultanas and raisins is as indicated by an Industries Assistance Commission report. I also acknowledge that the Australian Democrats have circulated requests which are in accordance with the industry's wishes. I point out, as did the Minister for Industry, Technology and Commerce (Senator Button) that the industry put its case to the IAC. The Opposition wants to use the IAC as a yardstick even though there are times when we would disagree with some of its recommendations and also some of its reasons for them. However, in this case, we think that to drop back to an equalisation payment of 15 per cent for each of the varieties of dried vine fruits is too much. That is the reason for my moving the requests which basically take out proposed new section 6 sub-sections (3) (d) and (e), (4) (d) and (e) and (5) (d) and (e). We want the IAC to look once again at the dried fruit industry in 1988 because we think that it will then find that a 15 per cent equalisation payment is too low. As I have said, the requests would delete proposed new section 6 sub-sections (3) (d) and (e), (4) (d) and (e) and (5) (d) and (e), accept the IAC recommendations to 1988 and then have the IAC look at the matter once again. Senator MACKLIN(Queensland)(5.43) —The Australian Democrats will not be supporting these requests. The industry prefers the requests which I have circulated. The situation we are talking about, in terms of both Senator Collard's requests and the requests I hope that I will have a chance to move if his are not successful, really turns on the 15 per cent equalisation payment that the Government is proposing. The 15 per cent has to be seen in the context of the material which I circulated during my speech at the second reading stage of the debate. Obviously, due to the wild fluctuations in prices, the 15 per cent would certainly not be useful if wild fluctuations occur again in the following years. Dried fruits are not a dietary stable food. They are, as I emphasised during my speech at the second reading stage of the debate, very susceptible to price fluctuations. If the price of our dried vine fruits increases at anywhere near the rate that it could under the conditions referred to in the figures which I have presented, the consumer will simply reject them. Furthermore, about 50 per cent of Australia's consumption of dried vine fruits is by manufacturers who are incorporating those fruits into other types of products. For example, such fruits are now increasingly used in breakfast cereals although the traditional areas of cakes and biscuits still absorb a fairly large percentage of dried fruit production in this country. As indicated by the table that I circulated, the price of Australian dried fruit could be expected to fall possibly by more than 60 per cent in the next four years if we have adverse seasons and difficult international trading arrangements. As I have suggested, the 15 per cent equalisation payment is, on average, one which the Government wishes to set. In allowing the percentage to fall to that level we will be putting the industry into probably totally unacceptable troughs and highs. I admit that there is a certain amount of arbitrariness in opting for any percentage level. The level that is proposed by the industry-the level which I have proposed in the requests which I hope to move later-is 25 per cent. I believe that this would be a better level and would better meet the aims of the industry. For example, under the Opposition's requests the rate of equalisation payment on currants would be 27.8 per cent, sultanas 23.6 per cent and raisins 42.2 per cent. In keeping with the type of amendment I moved on the Australian Dried Fruits Corporation Amendment Bill 1985, I have tried to accept the thrust that the Government is working towards. Hence, I have moved through to the later seasons; in other words, I have gone through the whole exercise and in my requests sought an equalisation payment of 25 per cent. In the long run, targeting at that level is much more likely to achieve stabilised industry in this country than if we moved to a 15 per cent level. The nominal rate of 25 per cent, which is incorporated to some extent in the Opposition's requests, will not be achieved, on average, as indicated by the various highs. The industry is likely to continue in the way in which it has in the past. It is likely to continue as a labour intensive industry; it is likely to continue with the types of fluctuations that it has experienced. If the industry, in particular the Victorian industry-does not have this type of support a significant number of people could be thrown out of the industry. I admit that when one tries to settle on a percentage figure in this area one is open to a number of criticisms. However, if we support equalisation payments of down to 15 per cent we will certainly place unacceptable levels of pressure on the industry which could result in very significant unemployment prospects facing it in a very short period. The way that the Government has approached the matter in terms of moving through each year with a predicted percentage of equalisation payment is an excellent idea. I hope that the Government would have tried the same approach with the Dairy Industry Stabilization Levy Amendment Bill which is now in the other place; in other words, it would be giving a very firm percentage of equalisation payment to the grower so that everyone would know where he would be in the coming season. One does not then have to take a stab-by the application of a formula, the contents of which are unknown at this stage-to try to work out what it is that the support will be. I think the approach the Government has taken here is the correct one. My only opposition to it is in terms of the base level. I believe that if that is changed to 25 per cent it will satisfy both the Government's objectives and the industry's objectives. Hence, I indicate that the Democrats cannot support the Opposition amendments at this point. I hope to have an opportunity at a later stage to move the amendments that I have circulated. Senator COLLARD(Queensland)(5.50) —If I cannot persuade the Australian Democrats by my eloquence, maybe the logic of my argument will. We will not be supporting the Democrats' amendments and if they do not support the amendments I have moved, we will end up with the 15 per cent equalisation which neither of us wants. The Opposition has used the Industries Assistance Commission figures as a yardstick. The equalisation percentage for raisins going from 47 per cent to 15 per cent in two years is quite a jump, and yet that is what it will be if the Democrats vote against our amendments. Senator Macklin —You could support our amendments; no trouble at all. Senator COLLARD —We will not be supporting the Democrats' amendments. Be it on their heads if the equalisation percentage goes down to 15 per cent. As I said, we do have a basis. We are using the IAC as a yardstick. Maybe the logic of my argument will persuade the Government also that we should look at the situation in 1988. I think there is good reason for us to do that in this very fragile industry. I certainly agree with Senator Macklin that 15 per cent is too low. That is why we want to look at it again in 1988. I have moved my amendments and I stand by them. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(5.52) —I begin by saying that, not being thoroughly familiar with all the shapes of the particular dried fruits we are discussing and things like that, I believe there are some general principles that have to be addressed. The first principle came up in Senator Collard's latest remark that the situation should be reviewed in 1988. I make it quite clear that, irrespective of any instructions I have, I tend to oppose that on general principle because if there is anything an industry needs in looking to its future it is some degree of predictability and continuity. The prospect that the situation is to be reviewed in three years time opens up all sorts of uncertainties which I think are undesirable. The second principle of general application which I swing in from my own portfolio relies very much on two statements made by Senator Macklin. The first statement he made-and I think I quote him correctly-was that the Australian Democrats are advancing what he called the preferred position of the industry. Later on he referred to the Government proposal as exposing the industry to an unacceptable level of pressure. I connect those two statements together from the point of view of my argument and assure honourable senators that if one accepts the preferred position of an industry one will get a result which is nothing but an acceptable level of pressure. It is not necessarily desirable that an industry be the judge in all respects of the degree of pressure to which it ought to be exposed by any government legislation and any consequent plan for the industry. In the Dried Vine Fruits Equalization Levy Amendment Bill the proposal by the Government, of course, is to phase down over effectively a period of five years, to 15 per cent in respect of each of the fruits concerned. The Opposition says: 'Let us stop that process at the end of three years; irrespective of whether it is a nice comfortable level, stop it at the end of three years and have a look at it again'. I reject that simply for the reasons of predictability and certainty, which I think are very important. Secondly, of course, the Democrats say in a sense: 'Well, we have an arbitrary level of 25 per cent which we determine on the basis that that is the preferred position of the industry'. The Government's view is that the assistance proposed by equalisation in the Government package will continue to provide a very significant consumer transfer and thus significant assistance to this industry. I illustrate that by way of an example which illustrates the amount by which the equalisation arrangement could enable domestic prices to be above average export prices at the 15 per cent level. The point I seek to make by way of example is that at the 15 per cent level there is a considerable consumer transfer involved and a considerable level of assistance to the industry. Assume that Australian production is 65,000 tonnes, of which 45,000 tonnes are exported and 20,000 tonnes are sold on the domestic market. Those figures are similar to the expected 1985 season situation. If one also assumes that the average export return is $1,000 per tonne, at the 15 per cent level the maximum equalised return would be $1,150 per tonne. This would enable a domestic return of $1,488 per tonne-almost 50 per cent above the average export return. One can structure other examples of the same kind, but that is a simple example that is based on the anticipated 1985 season results, calculated at the 15 per cent level, and indicating the level of assistance that remains to the industry. The Government very strongly believes that the amendments which have been moved, both by the Opposition and by the Democrats, would considerably dampen market signals and would inhibit the ongoing adjustment necessary to put the industry on a stronger footing. As I said earlier, accepting the assessment of Senator Macklin about the degree of pressure that is regarded as necessary and accepting the view of the industry is, in our view, not even in the interests of the industry because it would dampen the market signals, and thus prospective new entrants to the industry would not get the right signals. The review of the arrangement in two or three years, as proposed by Senator Collard's amendments, would create uncertainty, impair investment and marketing decisions and inhibit adjustment. The industry, in our view, must have the benefit of a stable policy environment and market signals at the same time, which would enable decisions to be made on a sound basis. The market signals, of course, are the best indicator to the industry, and in the circumstances of the example which I cited they are not insubstantial at a 15 per cent level, where market signals would still be available to the industry but the levels of assistance would be still substantial. In periods of extremely low prices for sultanas, growers will receive considerable protection from the new underwriting arrangements, which will be more sensitive to price changes. It is just not realistic for non-viable producers to expect a guarantee that they will stay in the industry, irrespective of change in market circumstances. Not only is it unrealistic, but also it may not be kind to create that anticipation. We simply make the point that we are very conscious of the need for a restructuring process to take place in this industry. We do not think the 15 per cent figure has been calculated without regard to the consumer transfer involved and the level of assistance which is accorded the industry. As the example I have given shows, that assistance is quite substantial. More than anything else-I am addressing Senator Collard's amendment rather than Senator Macklin's amendment in saying this-we think it desirable that the industry should have this scheme, as it were, available to it for a period of five years. The industry cannot sit back and assume that this scheme will be reviewed in 1988 on the negative side and therefore that it does not have to worry about things or, alternatively, that it will be reviewed on the positive side and that it therefore cannot make investments and so on because of uncertainty about the future. For those reasons the Government cannot accept the amendments. We do not regard them as being in the best interests of the industry as a whole, for the reasons I have indicated. Senator COLLARD(Queensland)(6.01) —I just point out to the Minister that primary industry is used to reviews of its prices. As my colleague Senator Scott quite rightly said, the floor price scheme for the wool industry is reviewed every year, so the argument which the Minister has just put really does not hold water. As a matter of fact, the industry has a fair predictability for three years, more than there would be in some industries, after which the scheme could then be reviewed. I cannot accept the logic of the Minister's argument. Maybe he can accept mine and agree with my amendments so we can get this Bill through. I have just shot down his one argument in flames. Senator ARCHER(Tasmania)(6.02) —I would like to know whether any sort of impact study has been done on the degree of extraction from the industry that is anticipated, the likely effect on production and what will happen to the number of people and the various communities that will be involved. I support the 25 per cent theory because I believe that it will take quite a while to readjust the communities. It is pretty easy for the Minister to come up with a lot of this academic mumbo-jumbo, but what about the people who are at the bottom of all this? There is no doubt in the industry that it needs adjustment, consolidation and refining, but the way to do it is not just to toss it all out and then say: 'We made a mess of that; what are we to do about it?'. I think the people involved are very important. I believe that only by allowing a little more time and giving a little more thought to what is to happen and to how all the communities involved are to settle down will we really be able to determine what is best. This is why I believe that if we make this scheme available for three years, plan what is going to happen after that and see the position which the industry has reached by then, there will still be plenty of time for the percentage to come down further, which the industry would like to see happen. But there certainly needs to be a floor to this assistance at the moment. I ask the Government to give us some sort of undertaking that this assistance will go out in a planned way and not just in a rout. That is what we really need to know. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.04) —With regard to the last remark, that this assistance will go out not in a planned way but in a rout, the proposal in this legislation has its bite over five years. No sudden decision has been made which will affect the industry in one fell swoop, as it were. Senator Archer began by asking whether there has been any impact statement, as he called it. I do not think it would be correct to say that there had been an impact statement. It would be correct to say that this industry has been pretty highly assisted. The two elements in the Government's package involve the consumer transfer and level of assistance, which we have been talking about in the course of this debate, and the provision of market signals which will particularly affect the more marginal areas of the market. As I think Senator Archer knows, in respect to those areas an adjustment package, the tree pull package if you like, is now the subject of consultation with the States. The Commonwealth is contributing $5m to that. I understand that it would mean a payment to the marginal block owners of $24,000 to $25,000, which in a sense is a structural adjustment package. Of course one can argue that it may not be a perfect package, but I make the point that the issue has been addressed. It is not something which has been done with gay abandon, as might have been implicit in the way Senator Archer put his question. Senator MACKLIN(Queensland)(6.06) —Fairly obviously, the 15 per cent proposed in the Bill originated from the average level of assistance to the industry over the last 11 years. That is where the figure was plucked from. If that is the case, would that not be the major argument as to why the Government would not want to reduce the figure to 15 per cent? If that is the average for the last 11 years what will happen in extraordinarily low income years, and why is the Government proposing to base assistance in future years on the extremely depressed year of 1984? Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.07) —I suppose that it is a matter for subjective comment, in a sense. Senator Macklin is saying that, in his view, if the figure is reduced to 15 per cent the industry will have inadequate assistance. That is not the Government's view. I thought we had been through those hoops already. I come back to one thing I said in answer to Senator Archer, for which I apologise. I said that the Commonwealth had provided $5m. That is not true. The Commonwealth will provide two-thirds of $5m on the basis of arrangements with the States. I withdraw that original figure. Senator MACKLIN(Queensland)(6.08) —I do not know whether the Minister understood my question. I was trying to put to him that 15 per cent, the maximum level of assistance provided for in the Bill, was the average level of assistance provided in the last 11 years, as stated in the Industries Assistance Commission report. Why would the Government adopt that level of 15 per cent as the maximum when in fact it was the average for the last 11 years? Obviously we need to aim somewhat higher to take account of the extremely low income years. We cannot use the average as the maximum. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.09) —I refer to the example I gave earlier. I am instructed that the level of 15 per cent provides market signals in the view of the Government. We are talking about 15 per cent in an equalisation context. As I understand it, that is a totally different context from the example Senator Macklin gave about the levels of assistance in the last 11 years. Question put: That the requests (Senator Collard's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 29 Noes . . . . . . . . . . . 36 —— Majority . . . . . . . . . 7 —— Archer, B. R. Messner, A. J. Baume, Peter Missen, A. J. Boswell, R. L. D. Parer, W. R. Brownhill, D. G. C. Puplick, C. J. G. Carrick, Sir John Reid, M. E. Collard, S. J. Scott, D. B. Crichton-Browne, N. A. Sheil, G. (Teller)Durack, P. D. Short, J. R. Guilfoyle, Dame Margaret Teague, B. C. Hamer, J. Townley, M. Hill, R. D. Vanstone, A. E. Jessop, D. S. Walters, M. S. Kilgariff, B. F. Watson, J. O. W. Lajovic, M. E. Withers, R. G. Lewis, A. W. R. Aulich, T. Haines, J. Black, J. R. Hearn, J. M. Bolkus, N. Jones, G. N. Button, J. N. McClelland, DouglasChilds, B. K. McIntosh, G. D. (Teller)Chipp, D. L. McKiernan, J. P. Coates, J. Macklin, M. J. Colston, M. A. Maguire, G. R. Cook, P. F. S. Mason, C. V. J. Cooney, B. Primmer, C. G. Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M. Elstob, R. C. Richardson, G. F. Evans, Gareth Robertson, E. A. Evans, Jack Sibraa, K. W. Foreman, D. J. Tate, M. C. Georges, G. Vigor, D. B. Giles, P. J. Zakharov, A. O. Rae, P. E. Coleman, R. N. Bjelke-Petersen, F. I. Gietzelt, A. T. Knowles, S. C. Grimes, D. J. MacGibbon, D. J. Ryan, S. M. Chaney, F. M. Walsh, P. A. Question so resolved in the negative. Senator MACKLIN(Queensland)(6.16) —by leave-I move: That the House of Representatives be requested to make the following amendments: Clause 2, proposed new sub-sections 6 (3), (4) and (5), leave out the figures contained in each of the paragraphs of those sub-sections, insert the figures indicated in the following list: 6 (3) (a) 42.4 per cent [in substitution for 40.4 per cent] (b) 38.1 per cent [in substitution for 34.1 per cent] (c) 33.8 per cent [in substitution for 27.8 per cent] (d) 29.5 per cent [in substitution for 21.5 per cent] (e) 25 per cent [in substitution for 15 per cent] 6 (4) (a) 34.4 per cent [in substitution for 32.4 per cent] (b) 32 per cent [in substitution for 28 per cent] (c) 29.6 per cent [in substitution for 23.6 per cent] (d) 27.2 per cent [in substitution for 19.2 per cent] (e) 25 per cent [in substitution for 15 per cent] 6 (5) (a) 81.4 per cent [in substitution for 79.4 per cent] (b) 67.3 per cent [in substitution for 63.3 per cent] (c) 52.2 per cent [in substitution for 47.2 per cent] (d) 39.1 per cent [in substitution for 31.1 per cent] (e) 25 per cent [in substitution for 15 per cent] I do not think it is necessary to rehearse the debate that we have just had with regard to the lower level of assistance that we would be looking for. My suggested amendments effectively would mean that at the base level in regard to each of the commodities that we are talking about there would be equalisation assistance of 25 per cent rather than 15 per cent; hence, our consequent amendments refer to the prescribed percentages for each of the growing seasons referred to in each proposed new sub-section. I would hope that the Opposition would support these suggested amendments on the basis that they are the propositions which have been requested by the industry. They provide, I believe, the way in which to assist the industry, particularly during those low income years. I must admit that I still cannot follow the reply given by the Minister for Industry, Technology and Commerce (Senator Button) to my previous question. It seems to me that if one has a 15 per cent level as the average level, one should not set that as the maximum level because there is no way in the world that it will be able to provide the type of support that one wants in those low income years. I believe that the amendments that I have moved would go part of the way towards achieving the Government's objectives of predictability over the next five years. They follow the same scheme basically as the Government has proposed. The only difference is the level to which the assistance drops. I re-emphasise the point I made by way of interjection, that the industry currently is receiving support to the value of $200 per tonne on import duty. It is significant that that level has not been altered. Senator Button —It has, by the devaluation. Senator MACKLIN —It has been altered, I believe, in terms of the rate of inflation over the years. Economic measures that the Government tells us it will take-presumably we will hear about those at 8 o'clock-are designed to raise the level of our dollar again. If the Minister is now saying by way of interjection that our dollar will remain at its present level or fall to a lower level, perhaps he will interject in such terms. If the announcements that the Government has been making are aimed at raising the dollar to a reasonable level again, that $200 will be an ever decreasing barrier to imports. I believe that with the pressure on increasing the domestic cost of dried vine fruits to the consumer there will be increases in price and imports will be at a considerably lower cost. Those imports will eat into a market that has been well established by our industry. I would have hoped that the Government could see its way clear to moving that support from the 15 per cent level to the 25 per cent level. I believe that that would indicate on the industry's part a very large accommodation to the Government. I do not support the Minister's comment that the industry does not necessarily know best what it is about and that to go along with an industry's suggestion is to give everything away. I believe that the industry has gone a long way with the Government. However, I believe that ultimately the industry's preferred position will be quite different from where the Government is now taking it. The industry has accommodated the general thrust of the Government's proposal. It has accepted where the Government wishes to take it. It is now merely saying that the level of support that the Government has determined should not drop as low as it has. I am quite sure that the preferred level of support for the industry might very well stay at the level it is this year in each of the commodity areas rather than drop. So it is not the preferred model of the industry by-- Senator Button —I am sorry; you said it was earlier. Senator MACKLIN —I am saying that it is not preferred in the sense of being the optimum one that the industry would like. The industry is saying that if it has to go along with what the Government is suggesting it would like the figure to be reduced to 2 per cent and not 15 per cent. Senator COLLARD(Queensland)(6.22) —I would like to restate my position. The Opposition will not be supporting the amendments requested by the Australian Democrats. It is regrettable that the Government or the Australian Democrats did not see fit to support our amendment which proposed a review in 1988. As I said, the amendments requested by the Democrats reflect the position put down by the industry. Obviously this is the position that the industry put to the Industries Assistance Commission. The IAC took all things into consideration and came up with the recommendations that are in the Bill. It is regrettable that the Democrats or the Government did not see fit to agree to a review being held in 1988. The Opposition will not be supporting the amendments requested. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.23) —We will not be supporting the requested amendments either. Senator Macklin —Surprise, surprise. Senator BUTTON —It comes as no surprise to Senator Macklin. I want to have another go at answering the question which the honourable senator put to me before. As I understand it, equalisation provides, at a maximum, for equalised returns of 15 per cent above average export returns. It does not set a ceiling on domestic prices which can be commanded by market forces. When world prices are very low, natural protection over the $200 specific duty rate may provide a market climate where domestic prices can be set higher. That, I understand, is the position which is adopted in relation to the honourable senator's comments. I have nothing further to say about the requested amendments. Senator MACKLIN(Queensland)(6.24) —I would like to reiterate that I think it is a pity that the requests will not be carried. I think there will be considerable problems for the industry in the years ahead. I had hoped that the Opposition would have been able to be flexible enough. Although we were not able to achieve the objectives of my request that was voted on previously, we were able to support the lesser position. I had hoped that the Opposition might have been able to do likewise in the interests of this industry. Obviously it is not. Question put: That the requests (Senator Macklin's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 58 —— Majority . . . . . . . . . 52 —— Chipp, D. L. Macklin, M. J. (Teller)Evans, Jack Mason, C. V. J. Haines, J. Vigor, D. B. Archer, B. R. Jones, G. N. Aulich, T. Kilgariff, B. F. Baume, Peter Lajovic, M. E. Black, J. R. Lewis, A. W. R. Bolkus, N. McClelland, DouglasBoswell, R. L. D. McIntosh, G. D. Brownhill, D. G. C. McKiernan, J. P. Carrick, Sir John Maguire, G. R. Childs, B. K. Messner, A. J. Coates, J. Missen, A. J. Collard, S. J. Parer, W. R. Colston, M. A. Primmer, C. G. Cook, P. F. S. Puplick, C. J. G. Cooney, B. Ray, RobertCrichton-Browne, N. A. Reid, M. E. Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Durack, P. D. Scott, D. B. Elstob, R. C. Sheil, G. (Teller)Evans, Gareth Short, J. R. Foreman, D. J. Sibraa, K. W. Georges, G. Tate, M. C. Giles, P. J. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Vanstone, A. E. Harradine, B. Walters, M. S. Hearn, J. M. Watson, J. O. W. Hill, R. Withers, R. G. Jessop, D. S. Zakharov, A. O. Question so resolved in the negative. Clause agreed to. Remainder of Bill-by leave-taken as a whole, and agreed to. Bills reported with an amendment and without requests; report adopted. Bills (on motion by Senator Button) read a third time. Sitting suspended from 6.33 to 8 p.m. Senator WALSH(Western Australia-Minister for Finance) —I would rather have done the sensible thing and had this statement incorporated in Hansard, but I understand that leave would have been denied. I did then flirt with the idea of tabling the statement but instead, in view of the Opposition's attitude, I seek leave to make a statement and move a motion to take note of the statement. Leave granted. Senator WALSH —Tonight the Treasurer (Mr Keating) is presenting in the House of Representatives and to the nation a statement of expenditure savings. These measures, which total $1.259 billion, are a progress report-a first and major instalment-towards meeting this Government's budgetary commitments for 1985-86 and for the remainder of our parliamentary term. The decisions the Treasurer is announcing tonight arise from the extensive review of Commonwealth spending that we embarked upon early this year. That review was undertaken in recognition of the well-known difficulties of the outlays reduction task, and the wish to secure savings over the full financial year commencing on 1 July 1985. These decisions follow, and will help consolidate, the undoubted success of the Labor Government's economic strategy since March 1983. The evidence of that success is there for all to see. During 1982 our non-farm economic growth rate was 0.9 per cent; during 1983 it rose to 2.6 per cent; and during 1984 it rose yet further, to 5.1 per cent. These figures, of course, are more than mere statistics to the unemployed who now have jobs or to the many thousands of others whose jobs were threatened by the trend of unemployment under the Liberal-National Party Government. The strong positive growth recorded in these statistics is being continued through this financial year. Recent data confirm the Government's expectations that the Budget time forecasts for activity in 1984-85 will be met. Australia's economic growth during the first two years of the Labor Government will match that achieved during the entire seven years of the Fraser Administration. Stronger economic growth and reduced inflation have been our overriding objectives since winning office. It is only through the achievement of non-inflationary growth-sustainable economic growth-that we can provide jobs to the unemployed and for our young people. It is only through growth that we will be able to provide real benefits to other needy groups in our society. It is only through growth that we can create the more equitable and just society to which the Australian Labor Party is committed. In 1983 the Government inherited an economy deep in its worst recession since the 1930s. A boost in public sector spending was needed to stimulate economic activity and produce more jobs. That was necessary to fill the gap left by the private sector, which had been shattered by the policies of the coalition. But the Government always recognised that to produce a sustainable, long-lasting economic recovery, the private sector would have to be restored to its traditional, major role. Already that is happening. Private sector investment, consumption and job growth have recovered strongly. The Government wishes to encourage and accommodate that trend. That is why we have made our trilogy of commitments, in which we have pledged: There will be no increase in tax revenue as a proportion of gross domestic product in 1985-86 and over the life of the Parliament; Government expenditure will not increase as a proportion of GDP in 1985-86 and over the life of the Parliament; and The Budget deficit will be reduced in money terms in 1985-86 and reduced as a proportion of GDP over the life of the Parliament. The trilogy amounts to a recognition by this Government that the share of the public sector in the Australian economy should be limited in the interests of further productive investment, job creation and growth by the private sector. That task has been made more important by the recent fall in the value of the Australian dollar. In the past few weeks the exchange rate has been moving upwards from its low point. But there remains a very substantial depreciation of the Australian dollar to which the economy must adapt. The positive implications of the dollar's fall in value are very significant. Until now a large part of the recovery in demand within Australia has spilled over into extra imports rather than domestic production. The depreciation will provide a large boost to activity by encouraging demand to be met from local sources rather than imports and by assisting exporters to compete in international markets. As a result, we expect exports to grow faster than imports in 1985-86, so that rather than subtracting from economic growth as it has this financial year, the external sector could add a percentage point or more to GDP in 1985-86. That will provide an additional boost to job opportunities. The potential benefits of the depreciation, however, will not be realised unless economic policies are directed against the development of an inflationary round beyond the initial price rises caused by the lower exchange rate. One of the requirements for this is fiscal restraint by all levels of government in Australia. Furthermore, interest rates are now higher than they would have been if the depreciation in the dollar's value had not occurred. That makes it even more important that we assist in moderating interest rate pressures by reducing the demands of the government sector on financial markets. The Prime Minister (Mr Hawke), the Treasurer and I have emphasised a number of times that in this year's Budget we will cut the deficit in money terms, and that cut will be significant. This Government wishes to ensure that companies borrowing to increase their levels of activity and investment will not be impeded by sustained public sector competition for borrowed funds. Deficit reductions are also required to slow the growth of public debt. It is clearly not appropriate now that we are achieving strong growth, to continue adding to our debt at the rate of recent years. Taxpayers of the future would certainly not thank us for the interest burden. Government also has a responsibility to current taxpayers. We have the duty to avoid waste and extravagance, to spend in accordance with community priorities and to target assistance to areas of greatest need. The Government has pledged itself in the trilogy to ensuring that the burden of taxation does not rise over the life of the Parliament. Deficit reductions will be achieved not by easy resort to higher taxation but through expenditure restraint. It is with those thoughts that we have approached tonight's statement. In choosing where to make the necessary cuts, concern for the needy and the less well-off has continued to characterise our approach to public spending. We have maintained the high levels of support we have brought about for the needy. The cuts are directed elsewhere. That orientation does not mean those cuts will go unremarked. It is impossible to cut without protest. But the Government has to determine priorities and the overriding priority at this time is to get the right budgetary outcome in the interests of all. Before turning in detail to the expenditure decisions we have made, I should add that while some specific purpose grants to the States have been decided, the bulk of Commonwealth-State financial payments will be settled at the Premiers Conference and Loan Council at the end of this month. Needless to say, the Commonwealth will be expecting the States to contribute to the restraint required of all levels of government. As indicated earlier, the result to date of our thorough examination of expenditure programs is to reduce the 1985-86 Forward Estimates by a total of $1.259 billion. As I have explained, the total cost of programs in the Forward Estimates report will be substantially affected by the depreciation of the Australian dollar, the changed outlook for the economy and various other factors. While the full effects of these have not been quantified, total program savings against latest available estimates are of the same order. These savings do not mark the end of the expenditure control process. With the aim of seeking further savings, we will be continuing to review all areas of spending until the Budget is finally settled in August. The Budget Papers will include a reconciliation of the Budget and Forward Estimates, showing the effect of government decisions and other revisions on the final estimates. I turn now to indicate some of the initial decisions. SOCIAL SECURITY AND WELFARE Family Allowances From November 1985, family allowances will not be paid for dependent students aged 18 years and over except in cases of specific need. Eligibility for family allowances will continue as at present for certain categories of full time students for whom education or welfare assistance is payable. As well, the final $6.20 per week of tertiary education assistance will be subject to a more liberal income test from the beginning of 1986. Net savings against forward estimates in 1985-86 are estimated to be $20m and substantially more in the following year. Child Care Savings in the children's services program will amount to $15m in 1985-86 and $30m in a full year. These savings will be achieved by reducing the current subsidy. The savings will not be at the cost of the undertaking to provide an additional 20,000 places over the next three years. Grants for Aged or Disabled Persons' Facilities Total savings of $9m have been made in this area. A review of in-principle approvals for capital funding of aged or disabled persons facilities has revealed that there are a number of organisations which have not yet proceeded with the construction of projects for which they have long held approvals in principle. In future, such approvals will lapse if the organisations have not brought their project to tender stage within six months of notification. Applications for renewal of lapsed applications will be considered against the criteria and competing demands at the time. Social Security Administration Greater efforts will be concentrated on the detection of fraud and mispayment within the social security system. Savings of $25m against the Forward Estimates are envisaged. Repatriation Disability and War Widows' Pensions The Government has reviewed the conditions applying to the grant of disability and war widows' pensions having regard to certain decisions by the High Court and their implications for the Repatriation Commission. These decisions, particularly a decision made this year, mean that such pensions may have to be granted even where there is no evidence whatsoever linking disabilities or death to war service. The Government recognises that the repatriation legislation was intended to be generous and it fully acknowledges that the community must honour its responsibilities to the veteran and war widow population. I hear the lawyers squawking. Lawyers in the Parliament who have no regard for the public interest are dangerous enough; lawyers who get on the High Court are even more dangerous. However, the Government also believes it is only fair that those pensions should not be granted unless there is a reasonable link between war service and a claim for pension eligibility. It was never intended that the law should provide otherwise. An amendment to the Repatriation Act will be introduced to make this clear. Apart from that clarification, the existing standard of proof will continue to apply to veterans with service overseas in wartime, to those who in World War II served in Australia in direct combat against the enemy, and for peacetime service on peacekeeping missions or hazardous duty as designated by the Minister for Defence. Claims by other veterans will be dealt with on the civil standard of proof. Claims for war widows' pensions will be dealt with according to the service of their husbands, except that all such claims made 40 years or more after a veteran's war or other qualifying service will also be decided on the basis of the civil standard of proof. Further details will be announced separately. Special Rate Disability Pension It is also proposed to amend legislation concerning eligibility for special rate disability pensions. In keeping with the Government's public commitments, the pension of existing beneficiaries will not be affected. The present provisions have been largely unchanged since they were first introduced over 60 years ago. They were intended to provide-during or immediately after a war-for very seriously injured veterans requiring special benefits because they were unable to be employed. Most Second World War veterans have now left the work force and most have had full working lives. The legislation will be amended to provide that future applicants will be granted totally and permanently incapacitated pension only where the veteran is eligible to receive a 100 per cent general rate pension, is totally and permanently incapacitated from injury or disease that has been accepted as related to his war service and is also suffering a loss of wages or earnings from that incapacity which prevents the veteran from continuing in remunerative work. Dependants' Pensions The legislation will also be amended to delete from future grants of disability pension the provision of minor amounts paid to certain dependants of disability pensioners. The social security system now provides for people in these categories who are in need. Existing dependants' pensions will be frozen at the levels payable at the date of effect of the legislation. War widows' and orphans' pensions will not be affected by this change. Total savings from these several measures are expected to be $36.8m in 1985-86 and significantly more in later years. Service Pensions Service pensions will be reviewed regularly to reduce overpayment, saving an estimated $6.2m in 1985-86. Veterans' Administration The cost of providing free transport and travel allowance to pensioners will be rationalised by a variety of measures, including less reliance on the Commonwealth car pool. In addition, the administration of pension payments will be improved and associated costs reduced by the direct crediting of pension payments with limited exemptions. These measures will provide savings of around $4m in 1985-86. Defence Re-establishment Loans This scheme is to be terminated. It was set up to assist service people with business and agricultural ventures, but it is no longer effectively meeting its objectives, particularly in view of other measures now available. Loan applications received up to today will be processed. Savings of $1.3m are expected in 1985-86. HOUSING Defence Service Homes The Government has decided that the private sector should take over the administration of the defence service homes loans scheme. The entitlements of those who already have or are eligible for these loans under the existing scheme will not be affected. The new arrangements, expected to apply from 1 January 1986, will eliminate the 10-month waiting period and loan amount restrictions. Under the revised scheme, the Government will arrange for private financial institutions to provide loans which will continue to include a substantial government funded interest concession. The institutions will also be invited to take over the administration of existing loans. Savings are expected to be $60m in 1985-86 and about $120m in a full year. In the medium term, these arrangements will also allow a substantial reduction, amounting to some hundreds of staff years, in the Commonwealth sector. Details will be announced separately, and a revised home ownership assistance scheme for future members of the Defence Force will be announced later. First Home Owners Scheme As announced recently by the Minister for Housing and Construction (Mr West), assistance available to first home buyers under the first home owners scheme has been reduced. There will be savings of $25m in 1985-86. Other In the administration of the Department of Housing and Construction, additional savings totalling $11m against the forward estimate are to be achieved in the Government's administrative operations through reductions in provisions for repairs and maintenance of Commonwealth buildings. Savings of $16.7m will also be made in the use of consultants, computing equipment and services, plant, and in general administration. DEFENCE SPENDING The approved planning guidance for defence outlays was for real growth of 4.5 per cent in 1985-86. Because of the budgetary situation, real growth will now be limited to 3.1 per cent. This compares more than favourably with the average annual real growth of about 2.5 per cent in defence outlays under the Fraser Government. It results in a saving of $83.9m against the Forward Estimates. HEALTH The general patient contribution under the pharmaceutical benefits scheme has not been increased since January 1983. From 1 July 1985, the contribution will increase by $1 to $5 per prescription, saving $40.3m in 1985-86 and rather more in subsequent years. Even at this level, the contribution falls well short of the average cost of prescriptions funded under the scheme. The repatriation pharmaceutical benefits scheme will also be modified as it applies to service pension beneficiaries who receive fringe benefits and have no accepted disability. These beneficiaries will now be assisted in the same manner as are pensioners in the general community under the pharmaceutical benefits scheme. This modification will save $7.9m in 1985-86. The Commonwealth contribution to the Health Benefits Reinsurance Trust Fund will be reduced with savings of $15m in 1985-86. The Government remains committed to the community rating principle which ensures that health insurance is available on the same basis to the whole population. Nursing Home Benefits The Commonwealth has decided on a number of measures in this area in the face of rapidly rising costs. The maximum level of nursing home benefits payable in Victoria, South Australia and the Northern Territory is to be frozen. The benefits payable in those States and the Northern Territory are significantly higher than in other States, reflecting the different standards imposed by governments. Similarly, the level of Commonwealth nursing home benefits payable for all State and Territory government homes is to be frozen. This latter measure does not extend to some prescribed government nursing homes run by non-profit, charitable, benevolent or similar organisations. These revised arrangements will be kept under review. In addition, the prescribed minimum nursing home patient contribution is to be restored to 87.5 per cent of the maximum standard rate of pension plus supplementary rental assistance. These measures will provide savings of $14.1m on the Forward Estimates. Veterans' Health Costs New arrangements will be introduced for the supply of spectacles, dental services and the care of veterans in psychiatric institutions. This will produce savings of at least $7.4m in 1985-86. Isolated Patients Travel and Accommodation Assistance Scheme The patient contribution under this scheme will be increased from $20 to $30, saving $1.1m. The contribution has not been increased since the introduction of the scheme in 1978. EDUCATION Pre-schools are essentially a State responsibility and the Government has decided to terminate grants to the States for pre-schools from 31 December 1985. This decision will save $16.5m in 1985-86 and $33m in a full year. Against the background of substantially increased participation rates, it has been decided to spread funds originally allocated for the final year of the participation and equity program over both 1986 and 1987 with savings on the 1985-86 Forward Estimates of $22.6m. Planned outlays on the technical and further education capital program will be reduced by $12m in 1985-86. The Commonwealth Tertiary Education Commission has been asked to advise on the specific allocation. From the beginning of 1986, no further grants for the libraries element of the Schools Commission's capital grants program will be provided. The Commonwealth has provided earmarked funds for school libraries for many years and the Government now considers that further funding requirements can be met within the general element of the capital grants program. The estimated saving in 1985-86 is $10.8m. Additional savings have been found by: Reducing Commonwealth expenditure by $2.5m on special programs of assistance to schools; tightening the eligibility criteria for student assistance and terminating the fares allowance to unmarried independent students, saving a total of $2.9m; the announced increases in overseas student charges, providing net savings of $3.2m in education spending; and deferring to September 1985, the commencement of construction of the Australian Film and Television School's new premises, saving $2.9m. LABOUR AND EMPLOYMENT Expenditure on the community employment program is to be reduced by $120m on the 1984-85 Budget provision. While that represents a substantial cut in funding for CEP, it has been recorded in this statement as a saving against the forward estimate of only $10m. This is because the forward estimate for CEP only took account of the need to maintain the same rate of new project approvals as in 1984-85. In addition, the allocation for labour market programs is to be reduced by tightened targeting and priority setting. Savings of $15.8m against the forward estimate will be obtained in 1985-86. Migrant Centres and Programs The 1984-85 refugee and special humanitarian program provided for 12,000 assisted passage places with a decreasing number of boat people and an increased emphasis on family reunion. The number of such places in 1985-86 is be reduced by 2,000, providing savings of around $3.6m. The Government intends to sell surplus migrant centre buildings and associated land. The sale of these properties, located in the eastern mainland States and South Australia, together with a reduction in associated costs, saves an estimated $16.6m in 1985-86. COMMONWEALTH STAFFING The Government is concerned at the rapid increase in Public Service staffing. In 1983-84, growth in staffing, including the full-year consequences of staff growth allowed by the former Government, was about 4 1/2 per cent. This growth rate was significantly reduced, to about 2 1/2 per cent in 1984-85. The Forward Estimates report indicates that possible Commonwealth staffing growth in 1985-86 ranges between 0.3 per cent, as estimated by the Department of Finance, and 2.0 per cent, as sought by departments. Staffing issues have not yet been resolved, but the final growth figure for 1985-86 will be closer to one per cent, thereby again halving staffing growth rates which we inherited from our predecessors. Full staffing details and implications will be provided in the Budget Papers. INDUSTRY ASSISTANCE AND DEVELOPMENT Petroleum Products Freight Subsidy From 21 May 1985, the Commonwealth will reduce the subsidy presently being paid under the petroleum products freight subsidy scheme. The reduction of up to 4c per litre in the subsidy will save $116m on the 1985-86 forward estimate. The subsidy will continue to assist consumers in remote areas where the cost of transporting petroleum products is in excess of 5.2c per litre. Tourism The Government intends to terminate the subsidy for diesel fuel costs of Great Barrier Reef Island tourist resorts with expected savings of about $300,000 in 1985-86 and $500,000 in a full year. The 1985-86 allocation in the forward estimates for tourist projects within the steel region assistance program is to be reduced with a saving of $4m. Trade The Government has been increasingly concerned at both the growing cost of the export market development grants scheme and its effectiveness. Commitments under the scheme have been rising alarmingly and due to its open-ended nature, that trend seems bound to continue. There is, moreover, evidence casting doubt on its value. In particular, it had been found that nearly 50 per cent of grant recipients actually export nothing or very little. Consequently, the Government has accepted the thrust of the report of the National Export Marketing Strategy Panel, and a revised scheme-maintaining the 70 per cent grant rate-will take effect on 20 May 1985. For 1985-86, savings will be $48m, resulting from implementation of the new scheme and a deferral of payment of some commitments into future years when the reduced cost of the amended scheme will make less of a call on the Budget. As part of the recent review of the Trade portfolio, a reduction of 50 staff, saving $2.6m in 1985-86, is to be realised. Relevant to these decisions, I note that the recent depreciation will provide real and effective assistance to exporters. Industrial Research and Development The Government remains committed to providing adequate support for industrial research and development. However, spending on selected industrial research and development grants programs in 1985-86 will be held to the same money level as in 1984-85. This will reduce the forward estimate for 1985-86 by $9.6m. Primary Industry The Commonwealth contribution to the bovine brucellosis and tuberculosis eradication campaign in 1985-86 is to be maintained at the same money level as in 1984-85. This will result in savings of over $6m. This allocation will enable the continued steady progress of the campaign. Other Assistance Initiatives introduced by the Government in 1983 substantially increased the capacity of the Australian Industry Development Corporation to expand its activities through borrowings. In that light, the AIDC has now withdrawn its request for a capital instalment of $12.5m in 1985-86. The Government has commissioned a study to examine the need for a more broadly based manufacturing industry advisory service. Pending consideration of that study, the Government has decided not to proceed with the establishment of an advisory service on computer aided manufacture estimated to cost $2.4m in 1985-86. GENERAL AND SCIENTIFIC RESEARCH Savings of $24.9m will be made against the forward estimates submitted for the Commonwealth Scientific and Industrial Research Organisation. CSIRO will have about the same real level of resources for ongoing activities. A cost recovery program is to be introduced in 1985-86 for services provided by the Australian Government Analytical Laboratories resulting in additional revenue of $2.3m. WATER SUPPLY, ELECTRICITY AND GAS The Commonwealth is to reduce the 1985-86 forward estimates for the Federal water resources assistance program by $8m. This will allow the Commonwealth to meet formal commitments and to continue projects including new water research initiatives. The Northern Territory Government has decided recently to generate electricity from natural gas, rather than coal as previously envisaged. In view of the significant lessening of future costs that this implies, the Commonwealth will reduce its assistance in 1985-86 towards meeting operating losses of the Northern Territory Electricity Commission. Under new arrangements which will phase out the Commonwealth's annual subsidy over four years, assistance in 1985-86 will be reduced by some $37m. The liquefied petroleum gas subsidy will be abolished from 1 October 1985, saving $1.4m against the forward estimate. Automotive LPG is not covered by this scheme. The Government believes that this scheme distorts energy demand and prevents the most efficient use of energy resources. TRANSPORT The Minister for Transport (Mr Peter Morris) has recently introduced a Bill for a new, five-year transport program to replace the Roads Grants Act. The total provision for roads under the Australian land transport program and the Australian bicentennial road development program represents savings of $60m against the Forward Estimates. In addition, following improved financial performance, the operating subsidy payable to the Australian National Railways Commission will be reduced by an estimated $5.6m. Savings of $5.3m will be achieved against the forward estimate for the Tasmanian freight equalisation scheme. Aviation The Government has decided not to renew the Western Queensland air services subsidy scheme and the Melbourne-Tasmania air fare subsidy. The estimated 1985-86 cost of these subsidies was $7.5m and is additional to the total savings detailed in this statement. Provisions in the forward estimates for the aerodrome local ownership plan are to be reduced by $7m in 1985-86 to reflect the current state of progress on negotiations with local authorities. The Forward Estimates provision for plant and equipment in 1985-86 for airports and airways services is to be reduced by $7.3m. In line with the Government's emphasis on a more commercial approach to airport management, initiatives have been taken to expand business concession revenues which will reduce Forward Estimates by around $9.6m. As recently announced by the Minister for Aviation (Mr Peter Morris), the development of Darwin Airport is being reappraised. Estimated savings against the 1985-86 Forward Estimates are $36.8m. Rescheduling of expenditure on other airport projects at Brisbane, Townsville and Sydney is expected to reduce estimated spending by a total of $14m. It is not expected that the planned commissioning date of late 1987 for Brisbane Airport will be affected. COMMUNICATIONS The global 1985-86 funding for the Australian Broadcasting Corporation is to be limited to $395m, a saving of $7.9m against the forward estimate. Funding for the Special Broadcasting Service in 1985-86 will be $46.5m, a saving of $3.5m against the forward estimate. The Government has indefinitely deferred the extension of the SBS to Darwin resulting in a saving of $0.5m. There will also be additional savings of $2.5m against the forward estimate on the amount to be provided in 1985-86 for the installation of new transmitters for the ABC and SBS. The Government has also decided that the funding of national broadcasting requires further examination and will be reviewing this issue in the near future. Pending a full review of existing arrangements, the net payment in 1985-86 to Telecom Australia for operating and maintaining ABC transmitters will be set at $50m, a saving of $3.5m against the forward estimate. The Government has decided that the Australian Telecommunications Commission is to repay $35m in 1985-86 of interest-bearing Commonwealth advances. This will not be at the expense of an increased borrowing requirement and, in accordance with established practice, the repayment will offset outlays in this function. URBAN AND REGIONAL DEVELOPMENT The Government has decided to sell the Belconnen Mall in Canberra. As in so many other areas, this Government will do what the previous Government failed to do. The Government has also decided that the planned Tuggeranong Town Centre in Canberra should be developed and operated by private interests. This will enable an early start on proposed additional community facilities. These measures together will provide savings in 1985-86 estimated at about $72m. The decision on the Tuggeranong Town Centre will also avoid the need for additional Commonwealth borrowings amounting to about $30m. NATIONAL ABORIGINAL CONFERENCE As the Minister for Aboriginal Affairs (Mr Holding) has announced, operations of the National Aboriginal Conference will not be extended beyond 30 June 1985. Senator Chaney —Shame! Senator WALSH —I note the interjection. This decision will save $8.6m against the forward estimate. An alternative representative national Aboriginal body will be established and funded from the global allocation available to the Aboriginal Affairs portfolio. LOCAL GOVERNMENT For 1985-86, general purpose assistance to local government is to be limited to a 2 per cent increase in real terms over 1984-85 levels. This increase exceeds that provided in the previous two years but still represents a saving of around $62m from the 1985-86 Forward Estimates. The issue of longer term arrangements for the funding of local government is currently being examined by the National Inquiry into Local Government Finance which is due to report after the 1985-86 Budget. ADMINISTRATIVE SERVICES Government decisions will result in administrative savings in a number of areas. The main measures are set out below. Savings of $6.5m will be achieved by improvements in the management of overseas property holdings, involving the sale of some surplus property and economies in managing the remainder. Savings of $4.6m will be achieved by a rationalisation of the existing Commonwealth vehicle fleet, aimed at a 5 per cent reduction in the overall fleet size. The Government has been increasingly concerned at the resources devoted to the provision of material under the freedom of information legislation. The cost in 1984-85 is estimated to be $20m, involving about 300 full time staff. Charges will be increased to recover a greater proportion of costs, and staff savings will be made, leading to a total saving of $5m in 1985-86. The Attorney-General (Mr Lionel Bowen) will shortly announce the new charges. The Government has decided that under-used defence land and buildings to the value of $15m are to be disposed of in 1985-86. From 1 January 1986, payments to Australia Post to cover the costs of Customs inspection of overseas postal articles will be discontinued. Costs of importing through the parcel post will henceforth be borne by users. Savings are estimated at $2.4m in 1985-86. Senator Puplick —That's a nice subsidy for the drug smugglers, isn't it? Senator WALSH —It used to be, but it is going to be stopped. LEGISLATIVE SERVICES Expenditure by the Parliament House Construction Authority in 1985-86 will be limited to $154.1m, a reduction of $15.9m on the Forward Estimates. This reduction will also help to ease serious capacity pressures in the Australian Capital Territory construction industry. The Government had decided not to conduct habitation reviews to update the electoral rolls in 1985-86, saving $2.8m. LAW, ORDER AND PUBLIC SAFETY Director of Public Prosecutions Savings of $5.6m will result from revised procedures for committing legal expenses. This will not impact on the Government's ability to prosecute major tax fraud offenders, something which I imagine the Opposition will be disappointed to hear. FOREIGN AFFAIRS AND OVERSEAS AID The Government has decided to reduce the forward estimates for the 1985-86 aid program by $23.9m. The allocation of the program will be announced later, in the normal way. There will be a decrease in 1985-86 in the ratio of official development assistance to gross national product, but all formal obligations for discharge in 1985-86 will be met. MONETARY AND WAGES POLICIES The decisions that I have announced tonight take their place in the Government's overall approach to economic policy, including monetary and wages policies. There has been much ill-informed comment about monetary policy since the Government's decision in late January to suspend the M3 monetary projection for 1984-85. It should be clear to anybody who has monitored monetary developments since that time that the Government and the authorities have not departed from the firm non-inflationary monetary policy stance which has characterised this Government's period in office. The M3 projection was suspended because that aggregate-indeed the monetary aggregates in general-was not providing a reliable guide to financial conditions. Unfortunately, but unavoidably, that continues to be the case. Australia has been undergoing major institutional change in its financial sector, much of it stemming from deregulation of the banks and other financial institutions and of foreign exchange dealings. These changes have widespread support. They will undoubtedly improve the Australian economy and the living standards of all Australians. For the present, however, they complicate the conduct of monetary policy. In particular, the M3 aggregate is badly flawed as a monetary indicator and is not maintaining a reliable relationship with trends in the real economy. Current circumstances in Australia-just as similar circumstances in periods of financial innovation and deregulation in the United States, the United Kingdom and elsewhere-lower the weight that can be put on the monetary aggregates. A considered assessment of a wide range of indicators is called for. As the Treasurer said in January, the future of the practice of conditional projections-and the more general issue of the prominence to be attached to such aggregates in conditions of change and uncertainty-will be determined prior to the forthcoming Budget. Meanwhile, it should be clear to all that financial conditions have firmed in recent months and that policy has played its part in that firming. This was appropriate in the light of the apparently rapid growth in the demand for credit and the earlier sharp weakening in the Australian dollar. This firmer stance for monetary policy will be maintained so long as it is required. With that in mind, the Treasury will be announcing the details of a bond tender for an amount of $1,200m on 23 May. I now turn to the important subject of wages policy. The right wages outcome is essential if we are to maximise the gains and minimise the costs to the Australian dollar's depreciation. This Government's accord with the trade union movement provides a mechanism through which a wages outcome, consistent with continued strong growth in the economy, can be achieved. Such an outcome must involve a lesser real wage level during the adjustment period than would otherwise have applied. We have been examining options and are discussing them with the Australian Council of Trade Unions. Clearly, the required objectives could be achieved by discounting the consumer price index for wage adjustment purposes to the extent that price increases were due to the devaluation, or by delaying the implementation of any productivity increase. In considering this issue, it is important to appreciate the factual uncertainties surrounding it. As we have so clearly seen, floating exchange rates are very volatile. Nobody can predict just where the Australian dollar will settle or move in the period ahead. Nor is it possible to predict with any certainty what effect a given depreciation will have on prices. The price effect is subject to variable lags and depends on sourcing options and supply and demand conditions. It is fairly clear, however, that there was little impact on prices in the March quarter. While a larger part of the price effect may show up in the current quarter, on the basis of past experience the full impact of the depreciation will come through over a longer period. Against this background it is the Government's view that the wage indexation case should proceed as normal in September under the principles. As for any productivity increase, however, it is our view that the questions of the size, timing and phasing of any such increase should be deferred until the scope of the depreciation and the extent of its effect on the economy becomes apparent. CONCLUSION The decisions announced tonight make clear the Government's approach to the 1985-86 Budget. These decisions will inevitably be unpopular with some members of the community. But the consequences of not facing up to priorities this way would put continued recovery in the Australian economy at risk. For too long, tough, politically unpalatable decisions were put off in this country, because our predecessors did not have the courage to take essential hard decisions. When it came to the crunch, they put their short term political interests first. As a result they allowed the economy to career into recession with the burden of their irresponsibility falling on those who could least afford it. Inflation ravaged savings and living standards while hundreds of thousands of Australians were thrown out of work. This Government believes it has a responsibility to all Australians to run the economy in the national interest, and a particular responsibility to those sections of the community which are least able to protect themselves. In our first two years we did not flinch from the decisions that we knew had to be taken and we have not done so in the preparation of this statement tonight. We have the courage to put the national interest first and we have the confidence that our decisions will be justified by the national economic performance in both the medium and the long term. If there is a short term political price in these measures, we are prepared to live with it. For in the long term Australians will know that our stewardship of their affairs will have provided them with growth, with jobs and with opportunities which for so long have eluded them. They will remember that Australia's new prosperity was provided by an Australian Labor Government. I move: That the Senate take note of the statement. Debate (on motion by Senator Chaney) adjourned. Debate resumed from 28 March, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator DURACK(Western Australia)(8.46) —The Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 introduces, for the first time under petroleum off-shore legislation, the notion of cash bidding for oil exploration permits. The Opposition rejects the principle of cash bonus bidding as a basis for granting off-shore petroleum permits in Australia. The proposal by the Minister for Resources and Energy (Senator Gareth Evans), who introduced this Bill, amounts to an up-front tax impost dressed up as an auction system for the right to undertake the risk of exploration. Cash bonus bidding will represent a radical departure from the previous system of allocating permits and will set a precedent in granting rights to explore not only for petroleum off-shore but also for minerals generally in Australia. It is an extremely bad example to be set by a Federal government. It is typical of Senator Evans to rush in and announce policies before proper consideration of the full effects of such new measures. I refer to comments from a recent speech by the Premier of Western Australia, Mr Burke, which upset Senator Evans, Senator Walsh and others to a great extent. Mr Burke addressed the twenty-fifth annual conference of the Australian Petroleum Exploration Association Ltd in Perth. The Premier described the proposal as inappropriate and undesirable. He said: We object to the concept simply because it would increase the cost of exploration and because it will drive small Australian companies out of the most prospective areas. The Government must realise that Australian exploration has not been sufficiently successful to allow its cost to be increased by diverting funds away from exploration and into Government revenue. In those words Premier Burke summed up the major objections to Senator Evans's and the Federal Government's proposals. They were not greeted very kindly by Senator Evans's colleague Senator Walsh, who said: Mr Burke displayed a degree of conceptual ignorance of the subject which was matched only by his political impertinence. However, Senator Walsh did not seem to realise or understand that Senator Evans had consulted the States about the proposal. Western Australia is a member of a joint authority and had a close interest in it. Such comments highlight the arrogance with which this Government has dealt with this proposal. At least the Premier of Western Australia had listened to the views of industry; the same cannot be said of Senator Evans and the Federal Government. Senator Evans has now decided to apply the new scheme to areas under Commonwealth control for two years and then review its operations with the States. That is facing reality because the States, as well as the industry, are strongly opposed to it. Apparently Senator Evans had assumed that these token concessions would appease the States, the industry and this Parliament. Indeed it is just a further example of the contempt and arrogance with which this Government has treated both Parliament and the industry. The Liberal Party of Australia and the National Party of Australia are vitally concerned about the future of the oil industry and exploration in Australia. Cash bonus bidding proposals and the proposed resource rent tax will be a clear disincentive to resources development in Australia. This proposal for cash bonus bidding seems to be based more on theories of economic rent and bureaucratic convenience than on the interests of this country. In his second reading speech and in other speeches that he has made in trying to defend his position-I might say, an embattled position, in view of the total opposition that this proposal has met throughout industry, from the States and from all those who have commented on it-Senator Evans offered a number of arguments which I propose to deal with. He said that the proposal followed extensive consultation but, of course, he did not mention the opposition by industry and by the States. I have quoted the comments of Premier Burke of Western Australia, which I understand reflect the position of the States which Senator Evans met with at a recent Australian Minerals and Energy Council meeting in New Zealand. Senator Evans said that cash bonus bidding had been used in the United States in wildcat areas, contrary to claims that cash bonus bidding only applies overseas in areas that have extensive exploratory activity. However, the number and size of cash bids overseas have not been indicated. More importantly, the number of potential explorers dissuaded from participating is not known or has not been stated. It is therefore impossible to judge the impact that cash bonus bidding has had in the United States. The most important aspect is that Australian oil fields are more complex and are less known and less prospective than overseas oil fields, particularly those in the United States. Therefore such overseas comparisons as that argument makes are not appropriate to Australian conditions. Senator Evans contended that the existing work program system is difficult and costly to administer, is inequitable in selecting the successful bid and proves difficult to enforce work program commitments. This argument, however, ignores the fact that the work program system has been successfully operated in Australia for many years. Although it may not be perfect, it has a proven track record and it can be enforced and it has been enforced. Moreover, cash bonus bidding will apply, according to the Government's own statements, only to selected areas. The work program system will continue to apply to the bulk of applications for oil exploration permits. Cash bonus bidding is inequitable and discriminates against smaller Australian companies without access to adequate low cost finance, whereas the work programs system assists small Australian exploration companies. The accumulated skill and experience of these small companies, which do not seem to be understood by the Government, are vital, in association with larger companies, to the total exploration effort. Senator Evans made a number of points in response to arguments against cash bonus bidding. He said that the amount of funds available for exploration was not limited and claimed that cash bonus bidding was similar to farm-in arrangements, and that recent evidence indicated that it would be an incentive to foreign investors, which would increase the total amount of investment funds which would be available. This argument is a surprising one, to say the least. Clearly the source and cost of funds for exploration are finite. Domestic companies have limited ability to tap local and overseas capital markets for large up-front risk capital. The cost of such capital raisings may limit the ability of Australian companies to compete for these cash bonus permits. Small Australian companies with limited cash flow have less ability to fund these payments from their own internally generated funds. Commitments to shareholders, of course, will limit ability to obtain funds from equity sources. Certainly large domestic and foreign companies with access to regular cash flows or international finance may be able to finance their offers or their payments under cash bonus bidding at lower cost, but this suggests that smaller Australian companies will be at a competitive disadvantage under this system. Although foreign investment may increase, there is no guarantee that total investment will increase and that Australian participation will be maintained. Successful tenderers may attempt to increase subsequent farm-in payments to recoup their payments. This may limit Australian participation and the further development of oil fields. It should be understood that farm-in arrangements are not identical to cash bonus payments. In all cases, farm-in deals off-shore are made on the basis of prior exploration. In some cases, farm-in deals are made to recoup funds already invested. Under farm-in arrangements, payments remain within the industry, whereas under cash bonus bidding payments go to the Government. Although farm-in payments may not always be used directly for oil exploration, the availability of these funds may indirectly assist further exploration by reducing competing demands for funds within the industry. Senator Evans quoted a number of farm-in arrangements which he said suggests that ample funds were available for exploration. However, some of the companies cited by Senator Evans have claimed to have been misrepresented. They note that they either sought funds to invest in further exploration and development or formed consortia only to evaluate the viability of participating in cash bonus bidding permits. The Government claims that cash bonus bidding is complementary to its proposed resources rent tax and that the two will provide certainty in investment decisions and deter overbidding. This argument is based on airy-fairy theories of economic rent which Senator Walsh has promoted from time to time in the Senate. Senator Gareth Evans —You mean you can't understand it? Senator DURACK —I do not think Senator Gareth Evans understands it. I am just about to point this out. We have heard Senator Walsh on these theories from time to time. If on occasions a substantial rent is earned on a mineral resource, it certainly cannot occur twice. It is typical of governments to try to double their take, and Senator Evans is proving no exception to this unfortunate rule. While the resource rent tax attempts to obtain the economic rent from the production phase of minerals development based on a known value such as profit, cash bonus bidding attempts to extract the economic rent from the exploration phase of minerals development where the end value is unknown and any decisions may be based on irrational expectations and incomplete knowledge about the true value of mineral leases. There is no certainty that any benefit will accrue to companies prior to exploration. Where up-front payments for perceived or notional economic rent are made without any discoveries, companies will suffer losses unless payments are recouped, at least partially, by tax deductions or by the government refunding the cash bonus payment. It cannot be assured that any returns from any future production will fully compensate companies for inflated cash bonus payments. For instance, the Government may effectively talk up bids by declaring areas to be highly prospective. The Government implies that the risk will affect only the size of bids and not the number of bids. However, increased risk may reduce both the prospective number and the size of bids. Proposed new section 22B, deals with the calling for and handling of applications and provides discretionary power to the Joint Authority to award or refuse permits. It does not stipulate any conditions. It permits criteria to apply to permits to be announced by the Government at the time applications are called for. The Bill also provides the Joint Authority with power to require further information. Senator Evans has indicated that the Joint Authority-in the immediate case it will be only the Commonwealth Minister-will reject bids if it considers that there is evidence of collusive bidding, if there are insufficient technical or financial resources or if conditions known prior to biding are not met. I believe that these aspects of the Bill make it clear that the cash bonus bidding proposal will not be the administratively simple system that the Government and Senator Evans maintain it will be. Furthermore, unlike under existing off-shore permit arrangements, only limited renewal options will be available under the cash bonus bidding system. Indeed, only one permit renewal is provided for in clause 7 of the Bill. Clause 8 stipulates that only 50 per cent of the permit area is to be eligible for renewal and removes the option to renew a permit over a minimum of 16 blocks. However, limited renewal clauses may be inappropriate given the more complex geology and greater risk associated with off-shore exploration in Australia. The arguments that have been advanced by Senator Evans on behalf of the Government in his efforts to persuade the industry, commentators and members of this Parliament of the merit of these proposals have, I think, been summarised in what I have said. He introduces in this legislation a proposal which has been around in Australia for some time. As I said, it has been used to some extent in the United States under completely different conditions. He is seeking to replace the system of granting exploration permits on the work program basis, which has been a time honoured system in this country and which has worked effectively and honestly and is acceptable to the industry. I think that any Minister and any government would take on a very hard job indeed in trying to persuade us that a change is desirable. Senator Evans has produced the arguments that I have just analysed in order to do that but, as I hope I have established, those arguments are fallacious and indicate in many cases that he simply does not understand the conditions under which the Australian oil exploration industry has to operate and pursue this very difficult and vitally important task for Australia. I believe that anything which will be a disincentive to the industry or which will divert money from exploring simply to government is totally unjustified. The arguments in support of cash bonus bidding are, as I have shown, superficial or inconsistent with the successful commercial arrangements which are in existence and which people in the industry have become used to. The work program system, under the Government's proposals, will continue to operate not only on-shore but also in most of the off-shore areas. The Government, in a last desperate effort to persuade this Parliament and the State governments of the desirability of change, has offered to apply the system in Commonwealth areas for only two years, after which it proposes to discuss the matter again with the States. But, overwhelmingly, the time honoured work program system will continue in Australia. That is the extent to which this Government's proposals have been reduced. I suggest that it is quite clear that the primary consideration behind the Government's proposal is the raising of revenue. The limited size of the permit areas, the limited renewal options and the lack of tax concessions or the writing off of these payments against a proposed resources tax clearly suggest the paramount objective of raising revenue. I know that the Government has been at great pains to deny this. However, even the Governor-General's Speech delivered at the opening of this Parliament, in which it was announced that this legislation would be introduced, referred to its revenue raising importance. When one comes to analysing the reasons for it, when one has considered all the other arguments, one finds that the only possible reason is that this Government wants to use this system to gain further revenue and to do so at the expense of vitally necessary oil exploration, particularly off-shore. The Opposition, in view of the number of times that Senator Evans has tried to persuade industry on this subject, has given careful consideration to the arguments that he has brought forward. An analysis of the arguments, as I have shown, indicates that they cannot be sustained. For all those reasons, and in the interest of continued orderly and successful exploration for oil in the off-shore areas of Australia, the Opposition will vote against this proposal. Senator JACK EVANS(Western Australia)(9.08) —The Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill is a critical Bill because if it is passed it will change the direction of oil exploration in Australia. It will change the direction in terms of the type of investment, the time of the investment, whether we are going to attract overseas explorers and whether we are going to provide incentives for the small Australian explorers, be they parts of joint ventures or independent explorers, to participate in the potential great future of oil exploration in and around this country. Because it is such a critical piece of legislation, because if it is passed it will be a trend setter and will be seen around the world as a dramatic change in direction by Australia's government in oil exploration and, therefore, will be viewed as either an inducement or a disincentive to come to this part of the world to invest in oil exploration, it needs to be given very critical consideration. I pay a tribute to the Minister for Resources and Energy (Senator Gareth Evans)-despite comments that I may make shortly it is not a cynical or facetious tribute-for the consultations that he has allowed and generated over the months that this piece of legislation and the drafts which preceded it were being contemplated by the Government and were being considered by representatives of the industry. I place on record my gratitude to the Minister for attending and initiating conferences between industry leaders and other interested parties, be they from political parties or elsewhere, to try to resolve a problem which is potentially dynamite if it is not handled in the right way at this critical time. In thanking the Minister for those consultations I should also place on record some disappointment at his interpretation of the consultation processes, because it became quite evident that when he had consultations with Premier Burke he caved in pretty rapidly. That proved to us that Premier Burke had certain degrees of power that other interested parties may have lacked, because the Minister's consultations with industry representatives indicated that he was not participating in genuine negotiations. There was dialogue, there was listening and there was understanding on all sides, but there was not genuine negotiation because from day one until this evening the Minister has not budged one inch, one centimetre or one word in relation to this proposed legislation. I therefore believe that the Minister for his own reasons was either unwilling or unable to negotiate genuinely. One has to look for the reasons for this situation. I have endeavoured to find them because, at the end of months and months of endeavour to get something really worth while for this industry, it is frustrating this evening that the Minister apparently will not allow any amendment or any modification to the original plan. This is potentially destabilising for the industry because it indicates that the new Minister is not a negotiator and is not willing to listen or to take on board the concern of the industry and to take some lead and some guidance from the industry leaders, from the people who represent not only the Australian exploration industry but also overseas interests who are operating in this country. In searching for some rational explanation I wonder whether the Minister is carrying a brief in which he lacks conviction and whether he is letting us run up to and tonight leap over the precipice simply because he wants perhaps to prove to his predecessor that he really tried hard and that this is the only way in which he can convince his Cabinet colleagues and his Caucus colleagues that they will have to go back to the drawing board and blame it on the Australian Democrats and the Opposition. Maybe he was carrying his Department's brief. Senator Gareth Evans —Has it ever occurred to you that I do not think much of your arguments? Senator JACK EVANS —I am looking for some rational explanation because so far I have heard no rational explanation of the case for absolute non-negotiability of the Government's legislation. He certainly has not given any indication that he is carrying an industry brief or that he has an interest in the industry's beliefs and the industry's needs. What I am concerned about is that it is possible that the brief he is carrying was an appropriate brief for his predecessor, Senator Walsh, when Jabiru appeared highly prospective, when explorers may have been knocking on Australia's door to get in at any cost. It may have looked like the North Sea venture being repeated. It may have looked like some part of the United States off-shore oil areas. But that was 18 months or two years ago. The timing for this legislation is now wrong because Jabiru is not highly prospective. It is not the area in which to experiment with a new concept for this country. In fact, if we were to proceed with this legislation, the very thing that I am sure this Government fears, most of all, as did its predecessor-the reduction in oil exploration in this country-may come about because we are looking at making the high risk area and the more expensive area the first of the experimental cash bonus bid system areas. Industry representatives have been trying to persuade the Minister-but from his comments, without much success-that they have limited budgets, that there is only a certain amount of money available for exploration in this general area, and that if the money is spent up front, and that money goes into government coffers, it simply means that less money overall will be spent on exploration. I would have thought that if this country needed high risk investment in any area, it must be in the off-shore oil exploration area. Every incentive should be given to explorers to take those risks because the benefits for this country in the end, if the risks pay off, are massive. But it seems that, in line with the mini-Budget that was presented tonight, this Government's philosophy is: 'We would rather have a dollar today than a million dollars in 1988, 1990 or 1995'. It is known in some parts of the world as the 'quick buck' philosophy-get it now and it does not matter about the future because that is somebody else's problem. One thing that has worried me throughout our negotiations has been that the Minister seems to be under the impression that Australia's exploration program is similar to America's exploration program, that our needs are similar and that we should have a rather similar approach. I would like to thank the Minister for the opportunity of meeting Professor Walter Mead, who is probably one of the more renowned consultants to the United States Government on this subject. In fact, he is a very strong advocate of cash bonus bidding. But when it came down to the comparison of the benefits of cash bonus bidding for the United States and cash bonus bidding for Australia, we discovered that we were working towards two entirely different objectives, because the United States primary objective is to get money in the bank up front, as much as possible and as rapidly as possible. That is the Government's policy which is overtly expressed in everything that it does and everything that it says. Once the money is in the bank, as far as the American Government is concerned, that satisfies its needs. The rest of the risk is entirely up to the explorer and the explorer either benefits substantially or fails miserably. However, the Government does very well out of it because it has its money up front. One of the distinctive things about the United States is that it does not really care whether it produces from its wells in 1985. In fact, in many respects it would prefer to be producing from its wells in 1995, 2005 or even 2055 because it already has the oil that it needs. Its concern is one of more oil later. Australia's concern is one of more oil in the near future. We need exploration to be carried out at a rapid rate, we need discoveries to be made at a rapid rate and, therefore, we need to give every inducement we can to get explorers out into the field to carry out seismic surveys and put down wells. Of course, there is no resource rental tax in the United States and all the money comes in up front. In Australia it is going to be the opposite. According to Professor Mead, what is going to happen in Australia is that bids are going to be very low because of the fear of a very high resource rental tax. The bids are going to be peanuts. In fact, when he learned of our resource rental tax system he indicated to me that the range would be in the vicinity of $20,000 to $50,000 per bid. That would not worry the Minister-and I am taking his word on this-because this legislation is not a revenue raising exercise. The Minister has made it clear that the objective of this legislation is not to raise revenue. Its purpose is to help sort out the differing bids, one from the other, so that a rational decision can be made in a logical way on the highest bidder. That is an admirable objective which I am not criticising at all. I just make the point that the Minister seems to- Senator Gareth Evans —That is the prime objective. I have always said that revenue was a secondary objective. Senator JACK EVANS —Absolutely. Therefore, it would seem that the Minister would not care whether the bids were $20,000 or $20m, as long as they were not all the same. Senator Gareth Evans —I would have a preference. Senator JACK EVANS —I suspect that there might be a minor preference there! The key to this, of course, is that if we are going to get only peanuts up front because everybody knows that the successful explorers are going to be paying handsomely into our coffers at the end of the exercise, we are going through one hell of a fuss and taking tremendous risks over this Bill just to experiment for a few thousand dollars. I would just like to place on the record a couple of the alternatives that have been put to the Minister, because there are alternatives. The first alternative, and the most likely one to evolve out of our deliberations on this Bill, is the existing system. I say that because if everybody holds fast, nobody changes position and the Minister says 'You can all get lost; I am not interested in anything but my Bill' we are going to be stuck with the existing work program bid system. On behalf of the Australian Democrats I have suggested a variation to that; namely, a work program bidding system with a bank guarantee. I acknowledge that there are problems with that system. I simply indicate that it is one of the alternatives. It is a genuine attempt-and I think the Minister will acknowledge this-to solve the problem that the Minister saw as his primary problem, which was how to distinguish between one bid and another. I believe that that primary problem could have been resolved through having a work program costed by experts, including the bank which was going to guarantee that work program. The work program could have been guaranteed by a bank with the risk of forfeiting, say, 15 per cent of the value of the work program if the program were not taken through to, let us say, 75 per cent of the complete program which was included in the bid. There were advantages and disadvantages with that system. Frankly, I do not believe that the disadvantages outweigh or get anywhere near the disadvantages of the cash bonus bidding system. Another proposal was put by the industry. I believe that far more investigation and far more endeavour would be needed to make that alternative program work. I would like either to incorporate that proposal in Hansard or read it to the Senate. If the Minister is happy, I will seek leave to incorporate the telex in Hansard. Senator Gareth Evans —I was going to incorporate it myself. Leave granted. The document read as follows- 1. The present cash bidding Bill be withdrawn and the Government pursue the necessary amendments to existing legislation to permit it to-- (a) Declare 'guaranteed activity permits' where successful applicants will be required to guarantee their initial work programmes for the first two or three years of the life of a permit on a dry-hole, trouble-free basis: (b) Institute a review system as practised in the North Sea by the U.K. Government to short-list applicants for these specially-designated permits and subject them to a detailed technical review on a range of criteria which will establish the optimum application. 2. Under the 'guaranteed activity' system the successful applicant to be penalised for non-compliance with programme commitment by having to pay to the government a sum equivalent to the difference between work carried out and work committed on award of the acreage. Capacity to meet such a financial commitment should be one criterion of consideration of a company or joint venture for short-listing for application review. 3. The system could be structured to allow further for subsequent years' work to be similarly committed on a year-by-year basis. 4. It is necessary for some government discretionary power to be applicable as to timing where force majeure, unavailability of contractors or equipment, or exploration disaster interfere with timely fulfilment of a commitment. 5. The successful work programme and the financial commitment should be matters of public record. 6. Except for the 'guaranteed activity permits' the Act should remain in force in its present form. Senator JACK EVANS —I thank the Senate. Just picking out a couple of points from the telex, the benefit of that alternative is that it is a guaranteed activity system based on a work program. It provides for a commitment in respect of which the explorer would pay the Government a sum equivalent to the difference between the work carried out and the work committed on award of the acreage. In addition to that broad principle there are criteria which would enable the Government to set its own standards on oil exploration in this country for many years to come. As an illustration of this, I mention typical criteria which may have to be modified and adapted to Australian conditions and which currently apply to the United Kingdom's North Sea exploration areas. The work program is a fundamental part of this process. In addition to that, the Minister and his Department would have responsibility for assessing the technical competence of an explorer to undertake a program of exploration and production; the capability to produce the funds; the history of the applicant, particularly the Australian history if that is available; the exploration work already done by the applicant, which is relevant to the areas applied for; and the extent of the contribution which the applicant has made or is planning to make to the economy of the country, including any contribution to the strengthening of the balance of payments, the growth of the industry and employment in this country. One would have thought that the Minister would grasp that with both hands because ideologically that must be a path down which this Government would like to tread. Another criterion of the United Kingdom operation is as follows: The extent to which the applicant has involved or plans to involve, UK owned and controlled organisations in his exploration, development and production activities on the UK Continental Shelf through the generation of new technology, the placement of research and development contracts and the provision of opportunities for the design, demonstration and testing of products and techniques; My goodness, fancy a Labor government knocking that back! It is hard to believe. There is another criterion that is even harder to believe: whether the applicant subscribes to the Memorandum of Understanding to grant reasonable access to representatives of independent trade unions to his offshore installations. Another criterion is: the applicant's record in respect of training for employment on offshore installations. They are just samples. I beg the Minister not to respond by saying that they cannot be used in Australia because the conditions in this country are different. Of course they are different, but there are criteria which would benefit this country in the same way that the United Kingdom has benefited from establishing those criteria for itself. Is it beyond the wisdom of this Government, this Minister, and his Department to discover criteria which would benefit this country in the same way and use those in addition to the work program bid? I am sure that it is not, and I wonder why we have not tried a little harder to establish such criteria. I make a final plea-and it is the last of very many-to the Minister: Please take the existing work program bid system back to the drawing board for minor modifications. Add the sorts of criteria that can benefit this country and provide incentives as well-incentives that will get the oil exploration industry in and around Australia up and running. On a personal level that will establish the Minister as a Minister who is willing to listen to the industry, who is willing to lead the industry down a productive, positive path and not an obstructive, damaging path which is the way the industry sees this Bill. Senator PARER(Queensland)(9.32) —The Senate has before it a Bill to amend the Petroleum (Submerged Lands) Act 1967 to provide for a cash bidding system for the award of petroleum exploration permits in certain off-shore areas. The Opposition is opposing the legislation, as is the Australian Petroleum Exploration Association-APEA-which represents over 100 companies engaged in oil and gas exploration. Also in opposition are most State governments, including the Premier of Western Australia, Mr Burke, who for his trouble was described in this chamber by one of his colleagues as being 'conceptually ignorant'. So much for consensus and accord. It seems that consensus applies to this Government only when the wishes of the unions are at stake. The Minister for Resources and Energy (Senator Gareth Evans) has taken the view that all the troops are out of step except himself. So much for the comments made by the Minister in his second reading speech that 'the Bill was introduced following extensive consultation with the industry'. If he continues in this vein, I fear he may achieve a reputation as notorious as that of a Minerals and Energy Minister in a previous Labor government who was more affectionately known as the Strangler or the Minister Against Minerals and Energy. The existing situation as it has applied throughout Australia is that prospective areas are advertised and proposals are made by interested parties, detailing the work program to be carried out. The whole thrust of such proposals is to maximise the size of the exploration dollar. The current work program bidding system in general works well and is strongly supported by all exploration companies. Let me take the Senate through the process so that it is fully understood. Generally, proposals are made by a number of consortia and will highlight the following: First, technical ability with a proven track record. It is usual for the curriculum vitae of key people to be provided in detail. Second, financial capability of the consortium not only to carry out the exploration but also the ability to go into production should the exploration be successful. Third, a proposed level of Australian control and equity at each stage. Fourth, a detailed work program which shows, among other things, an understanding of the geology of the area, gleaned from nearby work or work carried out previously; a program of exploration including required seismic surveys, the type of drilling and the pattern of proposed work; and a preliminary development program should viable reserves be discovered. A decision is then made on the proposal considered most likely to provide the best exploration program and ultimately development. While I have provided this resume in precis form, it will be appreciated that each applicant is required to do a substantial amount of initial research and groundwork prior to making a submission. That in itself can be an expensive process. Similarly, departmental evaluation can also be a difficult process, and as is the case in any competitive situation, there can be only one winner. This is not a sufficient reason, however, for changing a system which has evolved over many years and which has been clearly accepted by the industry as the best method of allocating prospective areas. If Commonwealth departmental personnel are unable to implement a system which has been used successfully by the States for many years, they should not be there. If they are unwilling because they believe it is too difficult, they are simply reinforcing a community view of their work habits. Knowing many of the public servants involved in this case, I do not believe those conclusions to be correct. There has to be some other purpose. The work program bidding system, like any system, is not perfect. However, arguments that the present system is difficult to administer are greatly overstated. There are administrative solutions to these problems-for example, the imposition of penalties on consortia which fail to meet their work program commitments. Such solutions are supported, even suggested, by companies involved in exploration as a means of achieving greater accountability. Moreover, at this stage, cash bonus bidding is said to be introduced for certain selected off-shore areas. The majority of exploration areas will apparently continue to be subject to the present arrangements. How can the Minister argue for the introduction of a new system because the old system is rotten when that supposedly rotten system will continue to operate in most other areas. The argument that the change is required because of the inadequacies of the present system is simply a red herring. The real reason, I suggest, is not hard to find, and I will come to it presently. A system of cash bidding is now proposed against a background of declining exploration in off-shore areas, particularly in wildcat wells, despite recent attempts by the Government to juggle the figures to support the Minister's arguments. This is serious because off-shore areas are assessed as being the most prospective for finding large oilfields in Australia. As most people will recognise, we are not, and have not been for many years, recognised as an easy place to find oil. More importantly, these more prospective off-shore areas provide the greatest opportunity to maintain our status as a net exporter of petroleum. At the moment domestic oil production provides a saving of over $5 billion in foreign exchange, and is a source of enormous revenue to both State and Federal governments. However, the future is by no means so secure. Experts in the industry widely recognise that future domestic oil production can be guaranteed only if governments show a determination to support exploration in this country-otherwise we will, by as soon as 1990, become a net importer of oil. The Minister has claimed in public forums that cash bonus bidding is not a fund raising exercise for the Government. This claim which he has made on various occasions, including the second reading speech, is not in accordance with the Governor-General's Speech on the opening of this Parliament in which it was said: The Government will introduce a cash bidding system for highly prospective petroleum areas in the Territory of the Ashmore and Cartier Islands and will hold discussions with the States with a view to introducing the new tax regime in other offshore areas. Senator Jack Evans was searching for a reason why the Minister was persisting with this, irrespective of the so-called negotiations with APEA. I suppose APEA would have to look back and say that it wasted a great deal of time and money because it got nowhere. I refer Senator Evans to the 'Australian Labor Party Platform Constitution and Rules', which under the sub-heading 'Taxation' on page 168, states: The development of Australia's resources requires a government tax regime which ensures the benefits of resources are shared equitably between producers and the Australian community. It goes on that Labor will: Replace existing taxes on petroleum production with a resources rent tax, in conjunction with front end payments by tender for the right to explore highly prospective areas. The point I make is that the Minister was unable to come to any other conclusion. He was following his Party platform. He had no choice and yet he carried on with the charade of negotiations that went on for weeks and weeks. I think it is clear to everyone that cash bonus bidding is simply an up-front payment. It is a tax on exploration. It is a tax before discovery and must reduce funds available for genuine exploration. A portion of money which would have been spent on drilling holes will go into the bottomless pit of government revenue to join a lot of other money from an already overtaxed community. If it follows the path of other government expenditure it will almost surely be non-productive. Cash bidding will also tend to disadvantage Australian companies-certainly small Australian companies-whose shareholders will provide money for exploring a prospective area but will be very reticent to provide an up-front payment to government. The Minister argues that it is an untenable assumption that there is a limited pool of funds available for exploration in Australia. That observation points to a total misunderstanding not only of exploration in Australia but also of our precarious economy. This is the sort of argument which will make the greatest risk takers in the country more than ever convinced that we may be in for a new period of Connorism. It is patently obvious that the Minister at this stage-I say 'at this stage' because he has held the portfolio for only a short time-has little understanding of exploration. Even though he is obviously inexperienced, I would have thought that with his past experiences he would have had the wisdom to listen to those people engaged in the industry. Judging from his second reading speech he has apparently convinced himself that the oil is there, that the volume is known and that all that has to be done is to feed this information into a computer which, in turn, will tell a consortium how much it will earn over a known period and thus the amount that can be offered up front. That is absolute nonsense. Anyone who has had anything to do with exploration will be able to attest to that. Exploration in general is risky and oil exploration is the most risky of all. For example, of 697 new field wells drilled between 1972 and 1976, only 19, or 3 per cent, were successful. The Minister in his second reading speech drew attention to the Foreign Investment Review Board requirements of over 50 per cent local equity during the development phase. This is not the time to debate the FIRB, except to say that if ever we had a time when the rules should be relaxed in this area so that we can have equity participation rather than debt involvement, I think it is now. I just make the comment that it is a mistake to bring in the FIRB at the development phase. This has not been thought through. Why should those equity requirements come into play at the end. An Australian consortium is in a much stronger position to negotiate financial support and project control at all stages if it is known that the level of Australian ownership and control is a factor in the decision-making process. Cash bidding detracts from the very thing in which we as a nation have a vital interest. It diverts attention away from the maximum use of the exploration dollar to some sort of guessing competition as to the minimum figure paid to government up front. It can develop into a speculative money game instead of a serious exploration program. As a nation and with the gap of future demands and known supply widening, we cannot afford to create such a climate. Senator COOK(Western Australia)(9.45) —I support the Government's legislation, the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985. In doing so I commend to the Senate the second reading speech of the Minister for Resources and Energy (Senator Gareth Evans) which, as we know, was delivered on 28 March. The important point to remember about this legislation is that it is the Crown which owns all the off-shore oil and minerals in Australia. Therefore, this Government, as the representative of the Crown, is concerned about making sure that the allocation of prospecting licences in those areas is farmed out efficiently and effectively for proper and comprehensive prospecting and development should discoveries be detected and that the public interest is served in guaranteeing that we move to an improved system of oil self-sufficiency. The cash bidding proposal of this Government-a system that has worked effectively for many years in the United States of America-is the preferred way of moving. This legislation seeks to replace the current-what I would describe as old and defective-system of work program bidding which has operated until now. I believe that there is a ready and wide understanding in the industry of the deficiencies of the present program and that much of the debate about what should be done, given the Government's initiative in bring forward this legislation, has, in fact, highlighted those deficiencies. One reasonable conclusion to draw from all of that debate is that really the current system is shot full of holes. Indeed, now the industry organisation is seeking to argue for alternatives which suggest that the current system is not strongly supported by it. This legislation seeks to remove the work program bidding system, a system in which prospectors bid for a right to prospect a certain acreage by submitting a schedule showing what type of work they propose to carry out on that acreage, and replace it with a system which, in fact, auctions off the acreage for prospecting to the highest bidder, given some other qualifications as well. As I have said, this system has worked well in the United States. It is a flexible, easily managed system and an efficient way of cutting through the red tape associated with the work program bidding. Indeed, one would have thought that, given that it is a direct attempt to allow market forces to determine the value or the prospectivity of certain acreages, an industry that prides itself on arguing in favour of market forces would have supported it. For this Government all legislation is, of course, important, but legislation in the resources and energy field is vitally important because it is here that we come under great scrutiny. We are concerned to promote exploration and development of our resources. We believe that in the world at present there is a reasonably strong supply of oil. One would not say that there is a glut but, nonetheless, there is a strong supply. Australia, as a producer of oil from Bass Strait, is tapering off in terms of what we would domestically produce. We are aware that the International Energy Agency, the sub-agency of the Organisation for Economic Co-operation and Development which is devoted to energy matters, warns of impending shortages of oil as world gross domestic product lifts, despite conservation methods implemented by that agency and by governments associated with it, and that by the years 1990 and 1995 rationing due to shortages will begin to apply. It is therefore important that we get things right and make sure that the positive exploration of Australia's potential reserves is carried out. In balancing the issues as to what should educate the mind of a government in proposing how the incentive should be given to exploration, there are, of course, the interests of the industry. I do not think that anyone would argue that over a long period this Government has not conducted itself entirely properly in order to carry out consultations with the exploration industry in Australia. In February 1984 we released a discussion paper inviting comment on the movement to cash bonus bidding and in December 1984 we released a draft Bill on how we proposed to implement the movement to cash bonus bidding. We took into consideration the constructive comments of the industry and State governments; we conducted an extensive round of discussions with all the State governments and the Territories on this. Therefore it cannot be said that there has not been a proper course of consultation and discussion with the industry and the various States. If I have a criticism about the way in which the debate has been developed, it is that we have tended to focus on the points of conflict-that is, where the industry disagrees with the concepts advanced by the Government but has not put a countervailing argument strongly enough or where community organisations have not put an argument on the national or public interest in this matter. Although the Government recognises and respects strongly the views put by the industry as to what would suit them best in this matter, the Government must balance the industry's views with the need to ensure that potential reserves are recovered and that this is done in the national interest. That is the countervailing argument. Unfortunately that argument does not get all the coverage it deserves as we descend into looking at the merits of the detail of this scheme or that scheme. While the Government is concerned about the views of the industry and has sought, I believe, sympathetically and sensitively to try to meet those needs-embracing industry concerns-in the final analysis it has a duty to the public. If there are conflicts and those conflicts have had an opportunity to be aired and brought to resolution but there is still no agreement, of course, a government has to make a decision as to what is in the best interests of the community and move down the track which it as a government believes fundamentally is the proper course. That is what has happened in this circumstance. I do not believe anyone could argue that there has not been a proper opportunity for full debate. However, if in the end that debate is unresolved it will be necessary for the Government to act, and the Government is acting. I am perturbed, if not annoyed, by the tenor of the debate on this matter in the Senate. Many of the speakers in the debate have not concentrated on the merit of the proposition and unfortunately for themselves, because I believe it reflects badly on them, tried to attack the personality of the Minister for Resources and Energy (Senator Gareth Evans) and diminish his standing in the community. I appreciate that that is a form of parliamentary tactic, although not the most edifying form of parliamentary tactic. I believe that when we are dealing with a matter of national concern such as this it is not a form of tactic that ought to be encouraged. I think it ought to be said that the Minister has conducted himself in the negotiations with industry-following on the work done by the former Minister, Senator Walsh-in a way that reflects credit to himself and to the Government. Attempts to try to portray him otherwise can be disproven by resort to the record. I think those honourable senators who launch such attacks are made smaller by their efforts to tear down the good work done by the Minister. I think that point needs to be squarely made. In attempting to show that the Minister was not representative of the mainstream of thinking-at least among the governments-reference was made to criticism by the Premier of Western Australia, Mr Brian Burke, of the draft cash bonus bidding legislation brought forward for public discussion. To my knowledge, while it is unquestioned that Mr Burke made criticisms of the Federal Government at an earlier stage, those who wished to consult him now would find no comfort for their allegations. I believe that with the effluxion of time, the availability of new material and the opportunity to have further discussions-as was acknowledged by Senator Jack Evans of the Australian Democrats-with the world expert on cash bonus bidding, Professor Walter Mead, a visiting professor from the United States, that view of the Western Australian Government would be different. Those honourable senators opposite who have relied on Premier Burke, as all Opposition speakers have done, will find that they do not have a very substantial case because I understand that that is not now the view of the Western Australian Government. Listening to many honourable senators speak in this debate, one would imagine that there are simply no problems with the current situation. The most recent problems concerning the current work program bidding situation in the Gippsland Basin were set out in the second reading speech. However, I think it is worth recording, in this the substantive debate, what those problems were. If the Opposition launches an attack on the legislation based on current practices that is the flimsiest and most insubstantial foundation upon which to rely. In 1980 applications were invited for three permits in highly prospective areas in the Gippsland Basin. Twenty-nine bidders submitted work programs as to how they would develop those permits. In other words, more than eight applications were submitted for each permit. Most of the propositions involved large work programs. I think this is a feature of the work program system which could cause it to be said that extravagant bids are put in for extravagant programs in order to win the contract. However, large work programs were submitted in the Gippsland Basin. A range of different explorational philosophies was paraded. There were great administrative difficulties in making subjective determination as to which of those large programs ought to succeed. In the end there is no evidence based on the record for one to be sure that one is right. I think the Minister made the point in his second reading speech. What happened in Gippsland was instructive. One permit was surrendered after four of the 12 wells for the program submitted were drilled, leaving eight wells undrilled. That permit was surrendered at that point. With another permit, six wells out of the 19 originally proposed in the program were completed but the remaining 13 were not. There is now doubt about the future program with respect to that permit. A third permittee deferred some of the commitments and applied for a reduction in the program. This is an example of a highly prospective area and of the so-called efficiency and good working arrangements under the current system. I do not think that anyone looking at that record objectively could say that that was an efficient, flexible and fair way of managing our prospectiveness in a critical area of natural resources. When one considers that there were 29 bidders, of which three were successful, and that that was their record, a question of equity is raised. Is it fair to the other 26 bidders who missed out that those three should be able to alter or amend their programs or not complete their programs? As I have said, the tendency is to put in an extravagant work program bid in order to win the contract and then apply for an amendment to make the program workable. Of course, that throws the Government into a position of having to make a subjective judgment as to the best bid available. I have referred in some detail to the discussion that this Government entered into with the industry, the States and the Territories on the draft of the legislation now before the Senate. I must say that I found it very instructive to discuss this matter with Professor Walter Mead, who I believe was available to the Australian Democrats and, I assume, the Opposition. Certainly, he had a fairly public presence in Australia when he was here the other month. He is, it is recognised, the world expert on this topic. I think it would be useful if I put on the record of this debate some of the views he communicated to me and some of the references that perhaps others should look up in order to satisfy themselves about the so-called inequities with this program. Professor Mead is a professor of economics from the University of California at Santa Barbara. He is a distinguished United States economist. He has testified to a whole host of Senate and House of Representatives inquiries. He has been the President of the Western Economic Association in the United States. He serves with distinction on a number of editorial boards. Some references that he commends to the Australian debate on cash bidding are as follows: The Energy Journal of October 1983, an article entitled 'The Rate of Return Earned by Lessees under Cash Bonus Bidding for OCS Oil and Gas Leases'; the Free Market Energy booklet section entitled 'Federal Leasing Policy' published by Universe Books in 1984, written by S. F. Singer, who is the editor; 'Competitive Bidding under Asymmetrical Information: Behaviour and Performance in Gulf of Mexico Drainage Lease Sales, 1959-1969'; and the Review of Economics and Statistics of August 1984. There are several other references, which are substantial references in themselves, that I am only too prepared to make available. Some of the points that come out of those articles do, I believe, answer some of the substantial points put by the Opposition. I start with its point that the Australian scene is not a fair comparison with the United States scene; that our industry is not a mature industry, a well developed industry, as is the case in the United States. There is some truth in that. We do not have a history of exploitation of petroleum resources as the United States has. However, to dismiss it in those terms is facile because there are legitimate comparisons to be made. In the not so recent past in the United States, between 1954 and 1969, 1,200 leases in the Gulf of Mexico were let. Those leases were classed as wild-cats. Figures issued by the United States Department of Interior show that 10 per cent of acreages leased were frontier areas outside the Gulf of Mexico and the Santa Barbara channel. The current United States program in Alaska is in an area that is previously unexplored. While it can be argued that aspects of the American industry are more mature and, therefore, qualitatively different from the Australian industry, the apples to apples comparison, I believe, is with the Australian industry and those examples in the United States that I have cited. In those cases, cash bonus bidding has proven itself as a flexible, efficient distributor of the rights of the market to decide how to allocate the prospective areas. There have been a number of other criticisms from the industry. I wish to turn to some of those. Industry claims that companies have only a fixed amount of capital to spend in a particular area so they will be unwilling to bid for acreage. If that were true, it should not pose any difficulty for industry. If that were true no one would bid for the acreage so the Government would have to give it away. The truth is that companies are concerned about cash bidding because of the prospect of their having to make positive bids to secure leases. The Government owns the leases and the value of those leases is reflected in the amount of cash bids. If exploration is worth while, companies will find the funds to do it and they will never bid an amount which makes the exploration not worth while. I refer to another criticism. Industry claims that cash bidding is inconsistent with the spirit of the resource rental tax concept. I argue that that is a false assertion. The RRT is a tax on rent, as is cash bidding. Cash bids reflect the residual rent value of a lease after the anticipated effects of the RRT are taken into account. An up-front cash payment which is fixed by the Government would not be inconsistent with the RRT concept since a fixed payment is not based on resource rent. However, under cash bidding, companies are left to determine the cash payment. Thirdly, industry claims that cash bidding will distort exploration decisions away from high cost, high risk areas. This claim could be valid if the Government applied uniform up-front fixed fees for all leases. But the fee, the cash payment, is determined by the companies themselves under the cash bidding system. If high cost, high risk exploration warrants a small cash bid, companies will submit only a small bid. They will not walk away from high risk exploration to low risk exploration as a result of cash bidding. I turn to the fourth criticism. Industry asserts that cash bidding will complicate off-shore exploration. Cash bidding is much simpler than work program bidding-that is the point I have been making all through my remarks-since successful applicants are determined by bids offered, not by complex work programs which are difficult to compare and which require subjective judgments to decide. Industry has proposed that the Government refine the work program bidding system by ensuring that commitments are met. Companies would find it hard to live with that proposal. Suppose a company offered to drill 10 wells and the first six wells were absolutely dry, providing no encouragement for further drilling. How would the company regard a Government requirement that the remaining four wells be drilled? The company would be happy to relinquish the lease instead of completing its commitments, but the ability to relinquish at will would allow companies to make ambit claims about their work program commitments in the first place when completing the lease. Industry claims that cash bidding will discriminate against Australian companies and also multinational companies trying to secure 50 per cent Australian equity. This ignores the possibility of joint bidding. Small Australian companies can form a bidding consortium, either with each other or with multinational companies. In this way the amount they need to put towards a cash bid can be greatly reduced. Industry has suggested that in view of the poor seismic information in the Timor Sea area the area is unsuited to cash bidding. Industry has stated repeatedly that it uses risk weighted analysis-that is, expected monetary value analysis-in assessing the viability of exploration programs. This takes account of possible returns and the risk faced in obtaining them. If information is poor the risk is greater and the expected monetary value is lower; that is, cash bids will be lower if the risk is high. Again, the companies have nothing to worry about since the poor quality of information reduces the size of the bids. But in any case, as Professor Mead pointed out when he was here, there is ample opportunity for the seismic information to be obtained in advance of the bids being called for. Indeed, the regular practice in the United States is for one of the companies-it may not even be a bidder-to conduct the seismic evaluations and then, at a small fee, enable the would-be bidders, or the prospective bidders, to have access to that seismic information so that their bids, when they are sealed and submitted, are bids based on the best available knowledge at the time. If one looks at the Timor Sea area, the area to which this legislation would apply, one will see that,firstly, there is a very good opportunity for all of the relevant information to be available and, secondly, it is well known as a highly prospective area-precise information is available to which access is available-and since the information is there no one can be disadvantaged in any way. In economic terms, cash bidding systems are the most efficient means of allocating exploration rights, particularly where competition is high. As I have said, it has significant economic efficiency, equity and administrative advantages over the work program bidding system. I have emphasised a number of those. In the five minutes or so remaining to me I will pick up a few more of the criticisms that have been made. One of them is that cash bidding will increase the financial risk of off-shore exploration. Companies will take into account the expected risks when they submit their bids, and the costs involved in exploring a permit when they are considering framing their bids. The cash bid in no way changes those risks and costs. Rather, the risks and costs influence the size of the bid. Compared with the work program system the cash bidding system will reduce the risks faced by companies. Under the cash bidding system companies will be free to undertake the most commercially viable exploration program consistent with changing economic conditions and prospectivity assessments. Under the work program system companies are committed to an exploration program designed up to six years in advance and must face the considerable risk that changing circumstances will make that exploration program uneconomic. A final criticism is that cash bidding is inconsistent with the resources rent tax. Cash bidding and the resources rent tax are necessary to ensure that the community receives its appropriate share of economic rent. Under the work program system companies are encouraged to over-explore an area which, because the cost of exploration is deductible from RRT, would result in the collection of RRT below that which would otherwise be expected. The Government believes that it should collect, on the community's behalf, a share of the economic rent for use on general welfare objectives rather than leave it all with the companies. Cash bidding and resource rental tax together ensure an appropriate sharing of economic rent. Both are charges on economic rent. I have dealt with most of the other arguments concerning discrimination against Australian companies and the reduction in the amount of funds that it is argued may be available for exploration generally. Let me conclude with these remarks. I am disturbed that the Australian Democrats have taken the view that they have and have sought to impede the passage of this legislation through the Senate by suggesting alternatives which, I think, reflect only the industry view. As I have repeated, while this Government respects the views of industry, there is-I hope that the Democrats are alive to this-the wider community and public interest to take into account. It seems to me that the Government is trying to achieve a free market to enable the market to determine the value of a particular acreage for prospecting reasons. I find it more than passing strange that both the Opposition and the Democrats, both of whom pay frequent and usually loud lip service to the idea of a free market, are opposed to this most obviously workable concept, a concept that has proven itself in the United States of America, and, I believe, would prove itself of great value and merit in Australia in providing for a better and more equitable allocation of areas for prospecting, certainly when one considers the example I cited earlier in my remarks of the surrendering of leases in the Gippsland basin which has shown, more graphically than any other example, that the present system is not working to achieve the equity, the flexibility and the efficiency which the Government wants and which this legislation would ensure was achieved for Australia. I commend the legislation. Senator Sir JOHN CARRICK(New South Wales)(10.14) —The Senate is debating the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 which seeks to introduce a new system of allocation of oil exploration leases off-shore. It seeks to replace the present system of allocating the leases, a system known as the work program. If this legislation is to succeed those who support it here and in another place must argue and show, first of all, that the present system has been a significant failure and that the new system would, of necessity, be an improvement. They have not advanced such arguments. They could not advance the present system as a failure because the Fraser Government's program of oil exploration has been and remains an outstanding success. If it is to be altered one must look at the world scene and the Australian scene and argue why it should be altered. Senator Cook mentioned that the International Energy Agency-on which for a number of years I was the Australian representative and for part of that time chairman-has indicated that in a very short time the world will once again experience a shortage of oil. I thoroughly agree with that. This will happen not only as the world moves out of recession but also as the developing countries seek more energy. Primarily they have no source of energy other than oil energy and it will be the developing countries that will be making big demands. It has been pointed out by the IEA that every 10 to 15 years it will be necessary to find another oil field the size of Alaska or the North Sea just to keep pace with demand. In the past 10 years no such field has been found. Around the world the recession has demonstrably driven people to conserve oil and to move towards alternative fuels, and this, of course, has kept demand down. In future oil will again become scarce and its price will go up. What of Australia? Let me take the performance of the past Labor Government as a starting point. When the Whitlam Government came to office in 1972 there were some 23 oil drilling rigs in Australia. When it went out of office there were two, and only one was working. In 1975 only 25 holes were drilled in Australia. In other words, in those three years the Labor Government had managed, very successfully, to cease all significant oil exploration in Australia. Let us look at what has happened to the projections. The experts said that in 1977 our oil self-sufficiency would be 67 per cent-that is, we would have to import some 33 per cent-and that if we did not find significantly more oil by 1985 our self-sufficiency would be 50 per cent, by 1990, 40 per cent and by the turn of the century 10 or 20 per cent; and every 10 per cent fall would mean more than $1 billion in valuable foreign currency to import oil into Australia. Quite clearly, if that fall had occurred we would not have been capable of finding the foreign exchange to pay for the oil, nor would we be able to do so now due to our precarious balance of payments. What happened? Against the abject failure of the Labor era, oil exploration in Australia became a conspicuous success and was commented on throughout the world. The International Energy Agency said that the methods of energy search in Australia could not be bettered. That was its comment, which I paraphrased from memory. In 1982-83 some 230 holes were drilled in Australia. The figure had moved to record proportions and was inherited by the Hawke Government. Not only had we then surpassed the 67 per cent self-sufficiency level but we had moved up to about 77 per cent and were capable of exporting oil. Because the only indigenous oil is what we call the lighter end of the barrel, the lighter fraction, we must import something like 20 to 25 per cent of the heavier fraction-the bitumens, the tars and so on. At this moment in the lighter fractions we are fully self-sufficient, but the advice from the Bureau of Mineral Resources, Geology and Geophysics and from the experts is that within a lead time of five years Australia's self-sufficiency will fall, and will fall significantly, unless we keep up a very significant successful oil search program. There is no indication at all that this will be so. Therefore whatever we do must be done with the best advice and the best intention to find more oil. In the extraordinary period of the Fraser Government the work program was used and was part of a mechanism which provided the allocation of leases to lessees who in their work were conspicuously successful. Australia is recognised throughout the world as perhaps the most difficult country for oil exploration-most difficult in terrain, most difficult in size and in cost, and doubly so because the prospectivity, where it does look more real, is often off-shore and an off-shore well can cost $10m, $20m or more. Australia has these enormous difficulties and yet in the seven to eight years of the Fraser Government we were able to overcome a great peril in terms of a potential shortage of oil and to put into place a program of great success. It is now proposed, for whatever reason, that we change that program. Why are we changing the program? The proposition is virtually that we take away a program of allocation by a work program and we put in its place that the lease goes to the highest bidder. That is the test-the fellow with the highest amount of money to put forward gets the lease. How strange is this? Let us look at the works program which has been criticised by the Labor Party. In nearly four years as Minister it was never seriously suggested to me by anybody that the work program was significantly defective. Let me make that perfectly clear. Some people suggested to me that if one wanted to raise money for tax purposes, one would look at front end bonuses. It has never been suggested that the front end bonus was other than a money raiser. What else could it be? I wish to look at this matter because Senator Parer explained something of the details of the approach to this work program. This is what happened: The responsible Department and the responsible Minister had before them information on all of the various bidders-information upon the integrity of the bidder, the commercial and industrial reputation of the bidder; the financial solvency of the bidder; the capacity of that bidder to bring forward the finances that were necessary; the technical capacity of the bidder; the skills and nature of the expertise of the bidder; the background experience of the bidder and the knowledge of the bidder of the geological and seismic nature of the area; all these things. In addition, they had before them the existing commitments of the bidder. Would the bidder be free to give full attention to the program and would the bidder therefore be free to carry out the program in the time that was allotted. What better method could there be? Is it suggested that instead of that method, when we say that we will give it to the highest bidder, that is a more scientific and more objective arrangement than going through tenders, just as a tender board does, to decide the highest tender? If it is wrong for the work program to be in place, why do we in everything we do as a Commonwealth government or as a State government use exactly the same considerations as boards that consider tenders? They are exactly the same considerations. We look at the quality and nature of the people coming forward and we do not necessarily say that those who submit the highest tender-the highest bid-will get the lease. That would be a nonsense situation. It was said by Senator Cook that he could demolish this argument about work programs because in 1980 in the Bass Strait there were some 29 bidders for some three leases, and the history was that in particular cases some of the work programs were not discharged. How can he say that those three bidders might not have been the highest cash bidders? How can he say that a higher cash bidder put in place of another bidder would have any other experience? The thing becomes a nonsense anyway. During my time as Minister I had occasion repeatedly to say to my Department: 'Let me know where there are instances of work programs which are not being carried out and which are not being kept up to date because it is absolutely necessary that we keep the integrity of the programs'. It was always competent upon the Minister to call for the surrender of the lease if in fact the program was not being discharged. We had an extraordinary situation. We had and still have in place in Australia the most successful oil exploration program that one could devise; a program internationally recognised as such, changing the face of Australia from a perilous shortage to current self-sufficiency, and with the knowledge that, backed by import parity and with the system of integrity that was in place, it would go on again with a tail wind, in very difficult circumstances, to produce self-sufficiency into the 1990s. We knew that in the 1990s Australia would once again face a major challenge in terms of oil shortage. But suddenly the Government has come in and said: 'We are going to change this-we are going to change what was a first class, successful program and we are going to take away a method that is universally recognised in tendering considerations throughout the world, a program that is recognised for its efficiency and its integrity, and we are going to put in its place a program whereby we will give the tender to the highest bidder'. Yet there is no proof at all that the highest bidder would not have the highest failure rate. Nothing has been said to justify it. I think it is nonsense for the Government to come forward and say that this is not a program it is putting in place to raise money. Why would it put it in place otherwise? Does anybody really believe that the highest bidder is necessarily the most experienced, the most reputable, the best qualified, the best equipped and the most knowledgeable? How can simply putting the highest amount of cash on the table supplant all the other qualifications that are necessary in this situation? It seems to me a nonsense of some magnitude that this should be so. In any case, what a silly situation it is. What the Government is doing is in fact putting a tax on high risk investment in Australia. Even the most prospective oil fields and the most prospective leases have very high opportunities for failure. We are in fact taxing a person who is very likely to fail. If the Government wants to raise revenue, let it give the maximum stimulus that can be given so that when an explorer finds oil, by all means look to the national interest. It is the duty of government under those circumstances to ensure that a fair return comes back to government once an explorer finds oil. But let us in fact say that in those cases where there is reasonable prospectivity-those very rare cases in Australia-we are going to have a system that makes decisions based on proper considerations. We say that as they are the right ones for tendering in all other commercial and industrial processes we are going to decide by those methods and not by in fact calling in a speculative state for the highest bidder. There is ample evidence that the highest bidder is often also the most committed-committed elsewhere-who simply wants to reserve his bets and hang on to a particular lease for a while. Debate interrupted. The PRESIDENT —Order! It being 10.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Senator McKIERNAN(Western Australia)(10.30) —I speak tonight on a matter of grave concern, at least to all fair-minded people who worry about the spread of racism in our community. I take the opportunity to inform the Senate and therefore the nation of the antics and actions of a few very greedy people in my home State of Western Australia. I am confident that their actions will be condemned by the vast majority of people. The few about whom I speak constitute an eight member action committee that represents the Ballajura-Alinjarra Ratepayers Association. Ballajura and Alinjarra are relatively new developing suburbs located 15 kilometres north of Perth. The few must also include the majority of approximately 200 people who attended a public meeting organised by the Association on Saturday afternoon last. Let me sketch in a few of the background details. The Western Australian Government, in a further attempt to stimulate the economy of that State and to provide jobs, recently advertised to find a joint venture partner to take a 50 per cent share with the State Housing Commission in the development and marketing of two parcels of land at Alinjarra. The total area of both parcels is just over 122 hectares. In an attempt to relieve the growing number of people on the State Housing Commission rental homes list waiting to be housed, the State Government included the following clause in the advertisement: The Commission will require an option to acquire from the joint venture a minimum of one in nine of all lots produced, for its own rental purposes. It is this clause that has motivated the abovementioned Ratepayers Association to start to act like white South Africans. The President of the Ratepayers Association, a Mr Richard Moormon, acting for Association members, he says to protect the value of properties in Alinjarra, is quoted in the local newspaper, the Wanneroo Times, on 7 May last as saying that the Association does not want disadvantaged people moving into their area. Mr Moormon, as quoted in the newspaper report, continued: I bought land here because I thought we'd have a prestige subdivision, away from low income, disadvantaged areas, said Mr Moorman. I'm not prejudiced. I just don't want to live with disadvantaged people. If this development goes ahead and one house in nine is for SHC rental, we'll have Aborigines, who are disadvantaged because no one employs them and they have drinking problems, we'll have the unemployed, we'll have low income earners with two or more kids and earning $300 a week, and we'll have Vietnamese refugees. I don't want my kids to go to school with them. If this goes ahead, when we get a high school it will be made up of a large proportion of disadvantaged kids who have disturbances, probably because they come from broken families. I came to Alinjarra to get away from that. Maybe I'm selfish, but I was here first. No one gives two hoots about the people here. I've got no confidence in the shire. They'll support the development if they can get revenue. The shire didn't notify us, our State parliamentary representative didn't notify us about this development. We're on our own. Labor policy supports disadvantaged people, so I don't think the Government will consider us. Okay, we gambled. We knew it was SHC land next to us, but when we inquired before buying here, we were told there were no plans to develop it for years to come. We're worried about the value of our property. Who's going to buy a block in that development for $20,000, which compares to prices here, if they know disadvantaged people could be living next door? You wouldn't buy it for $10,000 if you knew an Aboriginal was living next door. What developer would build prestige homes for rentals? If they did, we'd all sell up and go on the dole and rent one. We're concerned that disadvantaged people can't afford to maintain their gardens and lawns, and the upkeep of rentals won't be very good. Already Alinjarra residents are concerned that they can't get a good price for their homes because people know a SHC development will be next door. The inflammatory nature of the above comments attracted much attention in Perth commercial radio talk back shows in the latter part of last week. It would be accurate to say that there was nearly unanimous condemnation of the remarks, but even this weight of public opinion did not affect Mr Moormon. He chaired a public meeting called by the Ratepayers Association on Saturday afternoon last. The meeting was attended by about 200 people. He admitted making the remarks that I have just quoted and dismissed them, saying that the report was biased. I attended the meeting and came away feeling many different emotions: Anger, shame, disgust and concern. I was ashamed that the majority of the meeting could, in such a public manner, endorse bigotry and race hatred. They did this by endorsing a course of action which came from the chair to oppose the development in its present form with the emphasis on the rental clause. At no time was any consideration given to the sufferings of the growing number of people at present waiting for Housing Commission rental homes. The Perth Weekend News, in a front page headline on Saturday, 4 May 1985, summed up the situation that the homeless face in Western Australia at the moment. The headline blared 'Despair as 9,000 face housing crisis'. I was angry at the way the meeting was controlled. The chair ensured that only one viewpoint or attitude could prevail. I was concerned that the majority of those at the meeting, who were mostly under 40 years of age, could so easily lose their middle class respectability and act like a rabble when the alternatives view to theirs was put forward. The crowd behaved like a mob of unruly school children when a representative of the Housing Commission sought to assure them of the standards that would be enforced. A written assurance from the Western Australian Minister for Housing was scoffed at and dismissed out of hand. For the information of the Senate I will quote part of the Minister's letter, which was distributed at the meeting. It states: While I can understand some of the fears which may be felt by established residents in Alinjarra, I believe they are fears which relate to past State Housing Commission mass estate developments. I can only re-iterate that the current proposal involves private developers and private builders building to their own designs. The State Housing Commission's only involvement will be to reserve an option to buy back 1 in 9 of the lots created. In other words there would be a scatter of approximately 100 S.H.C. houses amongst a total of 1000. In accordance with newly established policies, these S.H.C. homes will be designed and built by the same builders who will be building the private homes in the vicinity thus ensuring a similar standard and finish. The ingoing tenants will be carefully selected for, in spite of the critical remarks of one resident in this week's 'Wanneroo Times'', there are people in S.H.C. waiting lists who are as house proud as any home owner. These properties will be very carefully monitored and supervised after occupation as provided for in new S.H.C. policy. I trust you will accept this letter as a written guarantee that the abovementioned development proposals will be strictly adhered to by the Commission. However, because it is the Government's wish to respect any reasonable concerns of established residents in Alinjarra, I am also willing to undertake that as soon as subdivisional plans are available from the successful tenderers, to meet with local residents and yourself to discuss in detail the basis of any State Housing Commission involvement. I was even more frightened by the ease with which the Liberal Party candidate for the local seat in the next State election offered to fight on behalf of the meeting. Apparently he will be quite at ease representing racists and bigots-political expediency at its lowest. He urged the crowd to fight the Government over the development and said that the land should be flogged off to private developers. His reward was a resolution to establish a fighting fund to support the political candidate who will represent their views. His invitation to the meeting, the reception he received when introduced and the resolution to establish the fighting fund has led some of the residents from Alinjarra to make the accusation that the meeting was a Liberal Party set-up. The policies of that Party in Western Australia in regard to Aborigines are in marked contrast to those expressed in this chamber last week by senators of the same Party during debate on a matter of public importance. In conclusion, let me inform the Senate that the name 'Alinjarra' is an Aboriginal word meaning 'place in the north'. Land in this prestige subdivision sells for $14,000 per block. One can buy a home and land package for $50,000. Is the Liberal Party in Western Australia developing a new breed of petty bourgeois racists in the West? Senator KILGARIFF(Northern Territory)(10.41) —Mr President, I would like to tell you a little story tonight about a person called Jermias Koanfora, a Timorese who did much to rescue Royal Australian Air Force personnel in Timor. Over the years he has been given very scant attention by Australian authorities. During the early weeks of May substantial coverage in the media has been given to VE day. Forty years ago the greatest global conflict the world had ever seen came to an end in Europe but the war went on for some time in the Pacific area. I wish to speak very briefly this evening about something which took place in the South Pacific region during World War II. In Timor in 1942-on 13 April 1942, to be specific-a RAAF Hudson aircraft, A16-159, crashed on the shores of Koepang Bay near the village of Pariti. The four crew members of the aircraft, Flight Lieutenant H. O. Cook, Flight Officer V. Leithead and Sergeants Hearle and Witham, were helped across the shore by a Timorese by the name of Jermias Koanfora and his friends. Hearle and Witham were badly injured and could not travel. Although none of the airmen could speak Indonesian or Timorese, Koanfora cared for them and provided guides and two horses for Cook and Leithead. Led by the guides, Cook and Leithead reached their escape point, Berata, and were picked up by a submarine which took them home to Australia. The other two members of the crew were captured by the Japanese and subsequently bayoneted. While the two officers were still heading for Berata, the search party was stalled by Koanfora, who told its members that the two wounded men were the only members of the crew. The delay enabled the two escapees to arrive at Berata just ahead of their pursuers. Koanfora was later singled out for severe punishment by the Japanese as a result of his covering up for the officers. He was arrested by the Japanese and imprisoned. During his four months' imprisonment he was subject to great deprivation and nearly lost his life. His health never fully recovered from the ill-treatment that he received. This story of courage and sacrifice is one of many which have been reported by Australians who owe their lives to the native people of New Guinea and Timor. Often the natives tended to sick and lost servicemen knowing that they would be severely punished by the Japanese if they were discovered to have helped allied soldiers. Koanfora jeopardised his own safety in just such a way. I raise the story of his bravery so many years later in this place because the story did not end with the return of the Australian officers to Australia. In 1959, at 58 years of age, Koanfora received a letter from a Mr Dominie Dekker, apparently the Chairman of the Kupang Protestant Church Synod, saying that he had seen a report in an Australian newspaper that Koanfora was to be paid 40,000 pounds sterling for saving the lives of the airmen. Of course, this was a ridiculous amount. However, that was the amount which was stated. In 1961, Koanfora attended a ceremony at Koepang, where Dekker and representatives of the Australian Government, led by Group Captain Handbury, presented him with a scroll expressing the appreciation of the Australian Government for his assistance to the airmen. He was also given a sum of money. I recently wrote to the Minister for Defence (Mr Beazley) as I have received several representations during the year regarding this matter. I received an answer from the Minister Assisting the Minister for Defence, Mr John Brown. I have been advised that the Department of Defence has been unable to locate any file on this matter. It is presumed to have been destroyed over the years. The sum of money which was paid to Koanfora is believed to have been 25 pounds because Department of Finance files show an approval in 1958 for an ex-gratia payment of that amount to Mr Jermias Koanfora. So, instead of the 40,000 pounds which was talked about by a newspaper, Koanfora only got 25 pounds. I believe that if this represents the true figure which was paid to Koanfora, his actions have been grossly undervalued. Mr Koanfora is now 84 years old. He is blind and is living in very poor circumstances. It seems a pity that he has not received any real compensation from the Australian Government for the privations which he suffered as a result of his protection of our countrymen. I would hope that the matter will not rest here, with a letter from Mr Brown telling me that the relevant records of payment have been lost. When one thinks of the dozens, indeed hundreds, of lives which were saved by the Timorese people, the natives of the islands, and the other Pacific islands, during World War II, it seems that the people of Australia owe an enormous debt to those people which the Government could acknowledge in a practical and meaningful way even now to this old man who is 84 years old. I hope that this matter is further pursued and a suitable reward is provided to Mr Koanfora for his assistance to our servicemen. Of course, that is but one story. Even after so many years we should have the graciousness to accept the responsibility of ensuring that this old man is looked after. For what he did and for what he suffered he was given only 25 pounds. Being an Australian, I have a guilt complex because of the lack of assistance and sympathy that we have shown to the Timorese people over the years for the very many things that they did for Australian servicemen who either crashed on Timor in aircraft or were captured, as was Senator Sir John Carrick who was taken prisoner in that area. In closing, I remember that once I was in the highlands of Timor just before the disastrous civil war broke out. I wandered in the highlands and I met a group of old Timorese people. Recognising that I was an Australian, they came out to greet me. These were people who had assisted Australians tremendously during the war years. One could see at that time that Portugal was walking away from its responsibilities in Timor, leaving it open to civil war. I said to those old men: 'Aren't you afraid of what the future portends for you?'. They said: 'No, we are not afraid because we have got friends. We have got Australian friends and they will look after us'. So it is a very sad story. When one recalls this simple story of Mr Jermias Koanfora, I do not think it is too late for Australian authorities at least to recognise this old man and the things he did to save the lives of those Australian airmen. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.49) —The Senate is indebted tonight to the contributions of Senator McKiernan-which I shall ensure is referred to the Minister for Aboriginal Affairs (Mr Holding)-and Senator Kilgariff, which would seem appropriate to be drawn to the attention of the Minister for Veterans' Affairs (Senator Gietzelt). Question resolved in the affirmative. Senate adjourned at 10.49 p.m. The following papers were tabled: Commonwealth Teaching Service Act-Determination 1985 No. 1. Public Service Act- Appointment-Department of Employment and Industrial Relations-R.F. Durnford. Determinations 1985 Nos. 27, 32. Presiding Officers' Determination 1985 No. 2. The following answers to questions were circulated: (Question No. 69) Senator Vigor asked the Minister representing the Minister for Territories, upon notice, on 19 March 1985: (1) Were any funds and/or resources under the control of the Australian Capital Territory (A.C.T.) Gaming and Liquor Authority used to develop or support a case for any application, or for the development of any application, for a public broadcasting licence in Canberra; if so, what were those funds and/or resources and under whose authority were the funds and/or resources applied. (2) Will any increase in revenue, arising from an increase in betting due to the provision of a complete racing service in Canberra on the proposed Canberra and District Racing and Broadcasting Broadcasters public radio station, or any part of such increase in revenue, be passed on to the community through the Community Development Fund, or will it be introduced to the racing clubs which will in part control the station. Senator Ryan —The Minister for Territories has provided the following answer to the honourable senator's question: (1) Yes. Funds and resources of the ACT Gaming and Liquor Authority (Authority) were used to support an application for the establishment of a racing and sporting radio station in Canberra. ExpenditureExpenditure incurred so far by the Authority in its association with Canberra and District Racing and Sporting Broadcasters Limited (CDRSB) is as follows: $25,252 has been advanced to CDRSB, representing the first six and a half months of the fees ($900 per week) undertaken to be paid by the Authority for the broadcast of dividends, scratchings, pre-race approximate dividends, results and other relevant racing information. $120 Cost of corporate membership of CDRSB during 1985. $80 Cost of corporate membership of CDRSB during 1984. $25,452 Total. ResourcesResources used by the Authority in support of the application include: Clerical and research assistance in preparing the application. Provision of advice to the provisional CDRSB Committee and subsequently the CDRSB Executive Committee. Research in respect of the nomination of two members for the CDRSB Executive Committee, none of whom is a member of the Authority or on its staff; Appearance at the Australian Broadcasting Tribunal's hearing in support of the CDRSB's application; Provision of a location for CDRSB meetings. Authority resources have been made available to provide clerical and administrative support to assist in the establishment and, if necessary, initial operating period of the station. This level of support was to be progressively reduced to allow CDRSB to achieve complete independence by the end of its third year of on-air operation. The funds and resources were provided by the Authority in accordance with their understanding of sub-section 15 (1) of the ACT Gaming and Liquor Authority Act 1981 which grants to the Authority 'the power to do all things necessary or convenient to be done in connection with, or incidental to, the performance of its functions'. (2) At present a minimum of 1 per cent of the Authority's Totalizater Agency Board (TAB) turnover is allocated to the Community Development Fund and 2 per cent to the three prescribed race clubs. Any increase in TAB revenue as a result of the CDRSB station's operation will therefore result in a greater amount being received by both the Community Development Fund and the race clubs. (Question No. 79) Senator Jones asked the Minister representing the Minister for Primary Industry, upon notice, on 20 March 1985: (1) Has the Minister for Primary Industry's attention been drawn to reports that the 1985 United States Farm Bill is likely to include grain price cutting to prop up the massive United States trade deficit, and to take the pressure off America's inflation and interest rates; if so, (a) what effect will this forecast action, by the United States, have on Australian wheatgrowers; and (b) what is the general economic threat to Australia of this action. Senator Walsh —The answer to the honourable senator's question is as follows: (1) The Minister for Primary Industry is fully aware that the United States Farm Bill presently before Congress includes provisions to progressively reduce the extent of price support to United States farmers thus encouraging market oriented decisions. Under the current proposal, the United States loan rate, which is generally accepted as providing a floor for world wheat prices, is to be reduced by 25 per cent. (a) In the current oversupplied world wheat market it could be expected that a reduction in the United States loan rate would lead to a reduction in world wheat prices. Market forces would place upward pressure on prices only if other major world wheat producers also adopted market oriented policies and world wheat stocks fell to significantly lower levels. As Australian wheat is priced in United States dollars, actual return per tonne to Australian farmers is influenced by the value of the United States dollar relative to the Australian dollar as well as world market prices. As final decisions have not been taken on the loan rate by the United States and any loan rate variations will not affect Australian wheatgrowers until the 1986 wheat harvest, reliable estimates cannot be made of the effect of United States policy decisions on Australian wheatgrowers. The Minister recently visited the United States specifically to emphasise to Government and industry leaders the export dependency of our primary industries and to stress that Australian wheat marketing arrangements are already market oriented. (b) In view of the importance of the wheat industry to the Australian economy, rural and national income are sensitive to variations in returns from wheat growing. While the impact of United States agricultural policies on Australian grower returns should not be understated, wheatgrowers' incomes are very significantly affected by climate. The record 1983-84 crop, for example, was almost a 300 per cent increase on the drought affected 1982-83 crop. In view of the uncertainties attached, it is not possible to quantify the effect of United States policy decision making on the Australian wheat industry or to reliably estimate the industry's economic contribution in future years. (Question No. 132) Senator Bolkus asked the Minister representing the Attorney-General, upon notice, on 27 March 1985: Were officers of the Australian Taxation office refused much needed guidance from the Australian Government Solicitor as to available remedies and the material necessary to exercise them, in relation to company stripping and taxation matters, given the comments in the final report of Special Prosecutor, R. V. Gyles, Q.C.; if so, what action will the Attorney-General take to remedy the situation? Senator Gareth Evans —The Attorney-General has provided the following answer to the honourable senator's question: No. In 1983, the Commissioner of Taxation sought and was given general advice in relation to company stripping and the recovery of taxation. That advice canvassed both civil and criminal options, and advised that specific cases should be referred to the relevant Deputy Crown Solicitor's Offices (as they then were). (Question No. 152) Senator Collard asked the Minister for Veterans' Affairs, upon notice, on 28 March 1985: (1) What are the staffing levels Australia-wide of occupational, speech and physiotherapists in repatriation hospitals and do these levels show an acute shortage of such staff. (2) What are the minimum commencement salaries for such professionals in repatriation hospitals, and will the Minister for Veterans' Affairs provide comparative figures on salaries of these therapists with salaries of other professionals employed in repatriation hospitals, such as nursing sisters, pharmacists and dentists. (3) Do repatriation hospitals report a high level of staff turnover of occupational, speech and physio-therapists; if so, can this high turnover rate be partly attributed to an inadequate salary and career structure for these professionals. Senator Ryan —The Acting Minister for Veterans' Affairs has provided the following answer to the honourable senator's question: (1) The staff levels of occupational therapists, speech therapists and physiotherapists employed in repatriation hospitals are as follows: Full-time Full-time Part-time Staff positions staffing staffing shortages Occupational Therapists 72 56 14 (Full-time equivalent 8.61) -7.39 Physiotherapists 102 91 13 (Full-time equivalent 8.55) -2.45 Speech Therapists 11 10 2 (Full-time equivalent 1.22) +0.22 The above figures reflect a shortage of full-time occupational therapists and physiotherapists in the Department Australia-wide. Part time staff have been employed because of the difficulties in recruiting to the full time positions. (2) The minimum commencement salaries for therapists and other professional staff employed in Repatriation hospitals are as follows: $p.a. Occupational Therapists, Physiotherapists and Speech Therapists 16,074 Social Workers 17,713 Dentists (Not employed in Dept.) 24,341 Engineers 18,236 Nursing Sisters 16,289 Science Based Categories (Pharmacists, Technologists and Dietitians, etc) 18,236 Section 32 of the Public Service Act provides that therapists who possess a degree in their speciality, or who have qualified for admission, or have been admitted to a PSB recognised degree course, are advanced to the first incremental rate above the minimum on commencement $17,105 p.a.). If therapists also possess recognised prior relevant experience in a public hospital system they are entitled to accelerated salary advancement within the base salary range $16,074-$22,257 according to the length of experience. With the exception of nursing sisters these provisions are not available to other staff groups shown above. (3) Repatriation hospitals are experiencing significant difficulties in the recruitment and retention of physiotherapists and occupational therapists. With the exception of South Australia there have been no problems in recruiting and retaining speech therapists. The physiotherapy area is causing most concern. In Western Australia and New South Wales the turnover rate of physiotherapists has been over 100 per cent during the last two years. The South Australian turnover is 54 per cent, Victorian 35 per cent and Queensland 26 per cent. Most staff are leaving for hospitals in the State Health system or to enter private practice. Recruitment campaigns attract poor responses and those appointed are either relatively inexperienced or are new graduates. In occupational therapy, although the turnover rate is not as high as in physiotherapy, there are similar problems in recruiting and retaining experienced staff. The only repatriation hospital experiencing difficulties with speech therapists is RGH Daw Park in South Australia where there has been 100 per cent turnover in the three positions during the past two years. Disparity in the rate of pay for Commonwealth therapists compared with those for therapists in the State hospital systems and the lack of career opportunities are the most frequently stated reasons for therapists resigning from repatriation hospitals. Senator Walsh —On 26 February 1985 (Hansard, page 174) Senator Hearn asked me questions, without notice, in my capacity as Minister representing the Minister for Primary Industry in the Senate. His questions concerned (1) toxic effects of crop spraying in northern Tasmania and (2) was the Federal Government conducting or funding research into the effect upon humans, animals or the environment of the toxic effects. The Minister for Primary Industry has supplied the following answers to the honourable senator's questions: (1) The Minister for Primary Industry is aware that concern has been expressed by certain sections of the community of the Devonport area of northern Tasmania. The Minister is also aware that, following an ABC television segment on 14 March 1984 alluding to the concerns of people in the Forth area of the North-West Region of Tasmania, the Tasmanian Department of Health Services undertook an investigation into the health issues associated with aerial spraying of pesticides in that area. The report of that investigation was released by the Tasmanian Minister for Health at a Press conference held about May 1984. The Minister for Primary Industry is not aware of the specific cases to which the honourable senator alludes but if details are provided they will be transmitted to the Tasmanian Minister for Health with a request for a detailed investigation. (2) The Commonwealth Department of Primary Industry is not specifically conducting or funding any research into the effect upon humans, animals or the environment of toxic chemicals used for aerial crop spraying. It is understood that the State Departments responsible for agriculture, health, parks and wildlife and the environment from time to time undertake investigations of the use of pesticides applied from both ground based equipment and aircraft. It is a requirement of the regulatory authorities responsible for control of pesticides in Australia that the agricultural chemicals industry undertake extensive studies of the possible effects of pesticides on humans, animals and the environment prior to their clearance and subsequent registration by the State regulatory authorities. The nature and extent of the required data package is set out in PB310A-Requirements for Clearance of Agricultural Chemicals prepared by the Department of Primary Industry. That document sets out the requirements for toxicity and health effects data development as prescribed by the National Health and Medical Research Council, as well as the requirements for data for environmental, efficacy and safety evaluations. (Question No. 174) Senator Maguire asked the Minister representing the Minister for Transport, upon notice, on 28 March 1985: What information is now available concerning the proposed conversion of the Adelaide-Melbourne railway line to standard gauge, in particular: (a) has the project evaluation study conducted by the Victorian State Transport Authority and the Australian National Railways Commission been completed- (i) if so, what was the outcome of the study and has a commencement date been set for work to begin on the standardisation of the Adelaide-Melbourne railway line, (ii) if the study has not been completed, what is the expected completion date and are any interim findings available; (b) are any proposals under consideration to convert any connecting railway lines to standard gauge; and (c) what is the latest estimated cost of standardising the Adelaide to Melbourne railway. Senator Gietzelt —The answer to the honourable senator's question is as follows: (a) (i) and (ii) No. Some work on evaluating the project has been undertaken by the Victorian State Transport Authority (V/Line) and the Australian National Railways Commission (AN) which indicated that the project could be economically viable under certain conditions. However, there are fundamental differences between the two systems on likely capital costs, potential markets and new traffic levels. AN has commissioned an independent market survey to investigate potential traffic growth. Further progress with the study of the project will depend on the results of this survey and further discussions between AN and V/Line. (b) The studies undertaken to date envisage standard gauge connections to Wolseley, Mount Gambier, Portland, Maroona and Geelong based upon an intended mainline of Ararat-Geelong-Melbourne in lieu of Ararat-Melbourne-Geelong. They also envisage conversion to standard gauge by the inclusion of a third rail from Adelaide to Tailem Bend to enable retention of broad gauge to the Cambrai and Murraylands lines and through Pinnaroo to V/Line's broad gauge network. (c) I am advised that the most recent estimate of cost is $220m. However, a more detailed assessment of construction costs could see some reduction in this figure. Senator Gareth Evans —On 21 March 1985 (Hansard, page 565) Senator Archer asked me, as Minister representing the Attorney-General, the following question without notice: In the light of the willingness of the New South Wales Police to give evidence to Mr Justice Stewart under indemnity from prosecution, does the Minister now concede that there is a means of authenticating the material? Why is the Attorney-General not prepared to ensure that the truth is established about the tapes and criminals brought to justice? Does it have anything to do with the possibility, as alleged today by Bob Bottom, that a very senior political figure in New South Wales used information on the tapes to head off legal action and would be exposed if police gave evidence? The Attorney-General has provided the following answer to the honourable senator's question: The Government, having given detailed consideration to the issues involved in the granting by an Attorney-General of an indemnity from prosecution and following consultations with the New South Wales Government, Mr Justice Stewart and Mr Temby, Q.C., introduced amendments to the Telecommunications (Interception) Act 1979 to allow materials resulting from illegal intercepts in New South Wales up to 28 March 1985 to be furnished to the Stewart Royal Commission and to allow the Royal Commission to pass those materials to all relevant investigation, prosecution and police authorities. This action may now be taken without the commission of an offence against that Act. At the same time, the relevant Letters Patent establishing the Stewart Royal Commission were amended by both the Commonwealth and New South Wales to expand the powers of the Royal Commission to investigate the unlawfully obtained material. Where Mr Justice Stewart is satisfied of certain matters he may recommend to the Attorney-General that indemnities be granted to the person giving the evidence including, of course, police officers. Those conditions are outlined in my second reading speech given on 28 March 1985. Specific answers to the honourable senator's questions are as follows: (a) Investigation of the authenticity or otherwise of the tapes can now proceed. (b) The actions which culminated on 29 March 1985 with the amendment of the terms of reference of the Royal Commission and amendment of the Telecommunications (Interception) Act 1979 ensure that the means are available to establish the truth. (c) No.