Thursday, 23 May 1985 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament. The petition of the undersigned shows: 1. That the Belconnen Mall is a community asset, financed and operated by the Canberra Commercial Development Authority at a profit to the Government. 2. The operation of the Mall could represent a source of income to an Australian Capital Territory Territorial Government. 3. Sale of the Mall will represent a loss of $200 per head of population to the ACT community. Your petitioners pray that the Senate, in Parliament assembled, should: ensure that the decision to sell the Belconnen Mall not be proceeded with and the Mall be retained as a community asset. And your petitioners as in duty bound will ever pray. by Senator Ryan (from 511 citizens). To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully shows that: We, the undersigned electors, are deeply concerned at the possibility of an increase in indirect taxation currently being considered by the government. To pose a broadly based consumption tax would mean a proportionately greater burden on low income groups and worsen their already precarious and impoverished position. Women who are supporting mothers, together with their children, are acknowledged as the largest single group forced to exist below the poverty line. As beneficiaries of an already inadequate government pension, their futures would be even more jeopardised if there were to be a change towards increased broadly based consumption taxation. Your petitioners therefore pray that the Federal Government not adopt the proposed shift towards increased indirect taxation. And your petitioners as in duty bound will ever pray. by Senators Cooney (from 16 citizens) and Zakharov (from 39 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That in the light of the Labor Governments failure to act to correct the anomalies in the Assets Test on pensions bring to its notice and due to have effect from the 21 March, 1985 the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners, and calls upon the Australian Democrats to support Senator Messner's Bill for the abolition of the Assets Test. Your petitioners most humbly pray that the Senate in Parliament assembled should immediately seek the passage of the Social Security and Repatriation Assets Test Abolition Bill to repeal the Labor Governments iniquitous and unfair Assets Test. And your petitioners as in duty bound will ever pray. by Senator Messner (from 61 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned shows: That human embryos deserve legal protection to enable the development of their full human potential. Your petitioners request that the Senate, in Parliament assembled, should Pass Senator Harradine's Bill to prohibit experiments involving the use of human embryos created by in vitro fertilisation. And your petitioners as in duty bound will ever pray. by Senator Puplick (from 227 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: The financial plight of grape producers, their families and their respective local communities. Your petitioners therefore humbly pray that- the Government act now during the 1985-86 Budget considerations to: Remove the sales tax impost on all Australian produced wine. Make funds available for the establishment of an institution to administer the restructuring of the grape producing industry. Place revenue raising imposts on all imported wine and wine spirit. And your petitioners as in duty bound will ever pray. by Senator Messner (from 47 citizens). Petitions received. Senator PRIMMER(Victoria) —I give notice that, on the next day of sitting, I shall move: That the following matter be referred to the Standing Committee on National Resources: The adequacy of quarantine and other control measures in the Torres Strait area to protect Australia's rural industries from the introduction and spread of exotic livestock and plant diseases. Motion (by Senator Vigor) agreed to: That leave be given to introduce a Bill for an Act to amend the Broadcasting and Television Act 1942 so as to clarify the powers of the Australian Broadcasting Tribunal to determine the conditions to be observed by licensees under the Act. Bill presented by Senator Vigor, and read a first time. Senator VIGOR(South Australia)(10.04) —by leave-I move: That the Bill be now read a second time. I seek leave to have my second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This week's events in the High Court force me to make a few brief explanatory remarks. Honourable senators will be aware that on Tuesday, the High Court held that the Australian Broadcasting Tribunal's power over standards did not extend to examining programmes before they are screened. The case started at 10.22 on Tuesday morning, there was a short adjournment at 12.33 and eighteen minutes later the Court returned to give reasons for judgment. We should be grateful for the opportunity to study the High Court's decision and to devise temporary wording that will tide our film and television production industries over until the government is able to present a long-term solution. We now have excellent drama programmes coming on-stream in the children's television area. They are attracting a lot of world-wide interest. Our best writers directors and producers have become involved in this area. Now, for some months there will be no steadying influence in the industry unless this Bill-or something very similar-is passed. The Australian Broadcasting Tribunal will not be able to examine material before it is screened. The production industry will not know where it stands. Creative people will move to other areas of film and television work, many of them perhaps never to return, because their confidence has been shaken. If I may quote Mrs Hazel Hawke, a director on the board of the Australian Children's Television Foundation, on children's television: ''Failure to achieve satisfactory results has been due to the absence of concentrated and continued action and commitment not only by the networks and advertisers, but by the regulators, by governments, by film-funding bodies and the industry itself.'' Unless we act now, we will add another chapter in that discontinuity, I have great faith in the Minister's commitment to developing a long-term broadcasting strategy that gives all Australians real diversity of programme material. I support the changes being sought in the Minister's Bills before this Parliament. I do believe that the situation which has been clarified this week calls for remedial action right away, both in the children's television and Australian advertising content areas. What I am bringing forward should avoid dislocation if the Saatchi case is determined on the same principles as this one. I ask the Senate to support our creative talent in this country, and to offer immediate protection for our children. It has long been known to specialists in communications law that the wording in several parts of the Broadcasting and Television Act 1942 would not stand up very well to close inspection by the courts. One of the sources of such speculation has been the haphazard way in which the process of amendment has been attended to over the years. With changes or solutions often having been made on the run, there has not always been the time to ensure that new sections or amendments are in reasonable harmony with what is already there. While no-one raises objections, the difficulty remains hypothetical and presumably does not receive priority in corrective attention. This is the situation in relation to the words 'standards' and 'conditions' that appear somewhat randomly in sections 16, 99 and 100 of the principal Act. In both the Herald-Sun case which was determined by the High Court earlier this week, and the Saatchi case which is still on appeal, the power of the Australian Broadcasting Tribunal to set quantitative standards relating to Australian content, or enforce such standards through pre-classification of programmes, has been thrown into doubt by the courts' decision that a precise and narrow meaning must be adopted in construing the very word ''standards''. For instance, it is a requirement of Paragraph 39 of the Tribunal's Television Program Standards that all televised advertisements be produced in Australia or New Zealand. In general, they may exceed 20 per cent of matter filmed overseas only if the work is carried out by an Australian production crew or that material is archival or relates to the promotion of films, recordings or entertainers from overseas. Last November, His Honour Justice Beaumont ruled that advertising standards could only deal with quality, saying, ''It is one thing to prescribe a minimum quality for a product. It is a different thing to restrict the location of its production.'' The Australian Broadcasting Tribunal has appealed against that decision, and an outcome is still awaited. If it is held that standards can only be qualitative, without a change in the current legislation, there will be nothing to stop an avalanche of overseas-produced advertisements being brought into this country. Because the advertising and film production industries are closely related, the removal of opportunities to gain technical skills and to develop creative talent locally would lead to sharp declines in our output in both fields. If we replace the word ''standards'' with the word ''conditions'' which has a much broader meaning, as an examination of the Oxford English Dictionary confirms, we should find the Tribunals powers in the area of advertising sufficiently buttressed, and consequently encourage an industry which is able to attain the technical excellence that sees participants regularly win international awards. The same alteration in those other sections where ''standards'' are currently referred to should strengthen the Tribunal's case if further litigation arises. However, the question of pre-classification might not be advanced by this word-change alone, as the power to require the submission of programmes for examination before screening might be taken to be distinct from any power to impose ''conditions''. The High Court has already said that being able to set ''standards'' is quite different from being able to determine in advance whether or not a particular programme meets those standards. It would be quite consistent to adopt the same approach even with ''conditions''. In the case of children's television, past experience has shown that unless licences are required, by something more than public expectation or moral obligation, to screen high-quality productions, they will not devote too much money or effort in catering for younger audiences. According to Mrs Hawke's speech when opening this month's three-day conference, ''The Challenge of Kids' Television'', held in Melbourne, even with the previously perceived standards in operation, licensees were spending only about 6 per cent of their budgets on Australian children's programmes. Yet there are 4.6 million Australians aged 16 years or younger, most of whom will watch more television than they will have formal education. As Mrs Hawke said of this nation's future leaders at that conference, ''Their major source of entertainment is television and most of their free time is spent in front of a television set. The tragedy is that it does so little good when it could do so much''. Everyone who works in the area will acknowledge that without the ''C'' classification system, we would not have got nearly as far as we have. The addition of a drama component-8 hours of first-release Australian children's drama in each year-to be screened by each licensee has led to the nation's best writers, directors and producers, people such as Bob Ellis, Karl Schultz, Paul Cox and Jan Sardi, becoming involved in exciting new projects. Quite a large number of top-notch children's programmes are nearing the final stages of production. Some of them are already attracting interest in other parts of the world, and it may prove possible to re-evaluate viability in this area if substantial sales are clinched. The very real progress that is represented by the Winners series, The Henderson Kids, I Own The Racecourse, and The Fire in The Stone, commissioned by both national and commercial telecasters alike must not be frittered away by decisions that bring uncertainty and frighten away investors and talented industry professionals. We cannot afford to leave this area unattended even for a few short months, just as the fruits of many years' hard work by dedicated people are becoming apparent. I have been influenced by the desperate need to preserve continuity and show a proper regard for our children to draft a clause that will specifically enable the Australian Broadcasting Tribunal to inspect children's programmes before they go to air, and to bring in this Bill right now. On 30 April when he spoke at the National Press Club, the Minister for Communications reiterated the benefits that accrue to licensees from a controlled market-place and the obligations that they have to the community in return for their monopoly of the broadcasting spectrum. I am of the opinion that the Australian Broadcasting Tribunal has continued to steer a course in the public interest to the extent that the Act which binds it has permitted, even in the absence of a statement of the general principle or objectives of our broadcasting system, and with the interruption of a variety of curious amendments arrived at without reference to long-term goals. Consequently, I have specifically excluded only the news and current affairs area from the theoretical ambit of my interim reassertion of the Tribunal's powers. If the truth be known, the Tribunal and its staff are flat out trying to cope with the current plethora of enquiries, and have had to postpone full examination of the Australian content question and that concerning the status of woman in the electronic media. The Tribunal really doesn't have the resources to monitor compliance with what were perceived to be standards within its power to determine, let alone contemplate widening its sphere of influence. I am sure that what I have put forward will really only let it ''hold the fort'' in the public interest until such time, not too far distant, as the government has had the opportunity to consider and introduce standard-setting and monitoring powers which will serve the Australian film and television industry and the Australian public well for many years thereafter. Debate (on motion by Senator Grimes) adjourned. Motion (by Senator Grimes) agreed to: That, unless otherwise ordered, the order of General Business for consideration this day pursuant to Sessional Order be as follows: (a) consideration of Government Papers pursuant to Sessional Order; (b) General Business, Order of the Day No. 95 (Constitution Alteration (Democratic Elections) Bill 1985); and (c) General Business, Order of the Day No. 16 (Trade Practices Amendment Bill 1984 [1985]). Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate to this Bill. Debate resumed from 22 May, on motion by Senator Grimes: That the Bills be now read a second time. Senator MACKLIN(Queensland)(10.02) —Last night the Senate was debating the Dairy Produce Market Support Levy Bill 1985, the Dairy Legislation Amendment Bill 1985, the Dairy Produce Market Support Bill 1985 and the Dairy Industry Stabilization Levy Amendment Bill 1985. This package of Bills is designed to establish new marketing arrangements for the Australian dairy industry. As the Minister for Primary Industry (Mr Kerin) has pointed out, the Australian dairy industry is once again facing serious financial crisis. While all States are undoubtedly affected by this crisis, Victoria and Tasmania, which produce a higher percentage of milk for manufacturing purposes, are obviously the worst hit. Victoria produces nearly 60 per cent of Australia's total milk production, of which slightly less than 90 per cent goes into manufactured products. Most of these products are exported. This is where the first problem arises. The outlook for the dairy industry is due to a range of reasons, such as depressed prices, rising costs and declining incomes of the people in the industry. As has been noted in the debates in the Senate with regard to other rural industries, the source of many of our problems is the domination in world trade of the major manufacturing dairy organisations of the European Economic Community. The low prices currently prevailing are largely a result of the policies of the EEC and of the United States of America. These policies have been responsible for generating massive stockpiles of dairy products and, as the Industries Assistance Commission report noted in 1983, the combined EEC and United States stocks are nearly 80 times Australia's total annual butter production. Given that situation, the dairy industry is faced with enormous difficulties and enormous problems. The end result of the increased support in the EEC has been a drop in prices. In fact, they are the lowest since 1977. The short term outlook at the international level is a likely increase in the consumption of manufactured dairy products in the major producing countries. Possibly there will be some lowering of production and some decline in the level of international dairy stocks, but any reduction is likely to be marginal, given that the stocks are at the moment at record high levels. Any recovery in the import demand for dairy products is less certain and there is very little prospect of an improvement in the international dairy market during this year and possibly even next year. I turn to Australia's domestic situation. It can be argued that the current marketing arrangements have actually contributed to the problem. Artificial factors introduced by governments have encouraged milk output beyond that required for the profitable market outlets. Dairy farmers have received misleading market signals because of the manner in which domestic prices have been set and the character of the price equalisation arrangements. In fact, Australia's dairy output in the three years to 1983-84 rose by 14 per cent and stocks of dairy products in Australia now comprise about 20 to 22 per cent of production. If the current arrangements were maintained the low prices on world markets would ensure that unit returns for manufactured milk would remain depressed and there would be further contraction in dairy farm numbers, particularly in Victoria and Tasmania. One fairly obvious way to address these problems is to reduce the incentives to dairy farmers to continue producing excessive amounts of milk. Put simply, there are two ways of doing this. One is through a quota arrangement and the other is by exposing farmers to price signals which parallel national and international market situations. Earlier this year the Australian Dairy Industry Conference had proposed a plan adopting the former approach, while the Government is now proposing a plan which essentially adopts the latter approach. In certain respects industry representatives and the Government agree about the objectives of the exercise. The disagreement has been about the means to achieve those objectives. It is known that the ADIC plan was accepted by the industry, accepted by the States and accepted initially by the Government. However, it was finally rejected at Cabinet level. The features of the new plan that the Government has put forward address the problems which are essentially confronting the manufacturing sector. Market milk has long been the responsibility of State governments and there are two broad classes of dairy farmers-those with access to the lucrative market milk sector and those who supply the manufacturing sector where returns are much more adversely affected by the international trends than those of the sector which grows and sells on the domestic market. The Government has stated that its aim is to lead to a more truly national dairy industry and to develop a more efficient and profitable industry, able to respond as quickly as possible to changing market conditions and technology. The industry, while objecting to certain provisions in these Bills, has clearly accepted the thrust of the Government's plan. It is vitally important that that be acknowledged. The industry has, I believe, moved as far as possible to accommodate this plan. It is not easy and the task has been one of bringing together a range of disparate ideas, needs and industries. At the national level the industry has achieved this and the time is now right for an accommodation between the market and the industry. I believe that the industry has set the groundwork for that by really moving a very long way to accommodate itself to a plan which initially it regarded as the second best option and an option which was much further down the track than it would have liked to have gone. Hence the industry itself has put forward a range of proposals-four in number-which concern not the plan but the implementation of the plan. These amendments that the industry has proposed to the Bills are certainly not designed to thwart the intention of the plan but merely to ameliorate some of its harsher provisions. I now turn to the individual Bills which make up this package. The first of these, the Dairy Produce Market Support Bill, contains many of the essential features of the new marketing arrangements. Under these arrangements, market support payments would be used to increase export returns to an export target figure, thereby providing, as does the existing arrangement, a measure of domestic price support. The dairy industry believes that export market support payments should be determined by the Australian Dairy Corporation by relating the subsidy to the milk content of the exported products. The Opposition has foreshadowed an amendment to be moved in the Committee stage to this effect. The Australian Democrats will support it. I believe that the Government's proposal is open to fair criticism. First, relating the export subsidy for individual products to a three-year moving average of export returns could lead to erroneous calculations. One of the three years, for example, is a forward estimate and hence could be quite wrong. Secondly, the proposed system would not maximise the farm gate return from the volume of milk the industry has available to export. Thirdly, the system provides excessively high support for whole milk powder and, we believe, could lead to serious anomalies. To illustrate that, if we look at $1 per tonne return for butter, skim milk, cheese, casein and whole milk and translate it into farm gate returns under the Government's plan and the approach adopted by the industry which is incorporated in the Opposition's amendment, it can be seen that there is very little difference between the two in regard to any of the products other than whole milk powder. The amendment proposed by the Opposition would remove the anomaly which is contained in the legislation. I note in passing that, although the proposed amendments would seem to give too much power to the industry, it has to be remembered that, after all, the industry is paying the subsidy and not the taxpayer. The Dairy Legislation Amendment Bill 1985 contains amendments to the Dairy Produce Act 1924 and the Dairy Produce Sales Promotion Act 1958. The most significant provision is that which discontinues export pooling for production on or after 1 July this year. The Minister for Primary Industry (Mr Kerin) has pointed to the problems he sees arising from export pooling. But I believe that the dairy industry has argued cogently that the abolition of export pooling from essentially the end of next month, would cause severe discontinuities and probably would lead to severe disruption. There would be unnecessary price competition between exporters on some of the more lucrative export markets. Opening prices in 1985-86 would fall by about $1 per kilogram because, without an export pool, the Dairy Corporation would be unable to provide initial advances to manufacturers at the level at which they have done to date. Again, the Opposition will move an amendment and the Australian Democrats will support it. Honourable senators should note that the industry position does not argue in favour of indefinite export pooling. The proposal is that export pools on butter and cheese should be continued in 1985-86 and 1986-87. The industry believes that the loss of export pooling can be accommodated in 1987-88. Indeed, the amendment has a sunset clause built in it. This Parliament would be required to undertake no further action and export pooling would cease at that time. Under the current system, the winding-up of an export pool can certainly cause problems. Our proposal would make it possible to wind it up at that time. Probable improvements in market conditions over the next two years will mean that the winding-up of an export pool will be able to be carried out with minimal disruption. I hope that the Government, which has taken this view with other industries, for example, the car industry, will take a similar view in relation to this industry and allow some time for adjustment. The industry has agreed to meet this arrangement but it wants some time in which to bring itself into line. I think that is a fair and reasonable request. It seems that the Government's opposition is based on the fact that in two years time there will be an election year but I put it to the Government that this does not have anything to do with the industry, it has much more to do with the politics of this place. While that may seem terribly important to us, we are here dealing with the livelihoods of other people and we should try to take that into account as the demand should be on us to put their livelihoods ahead of ours. The Dairy Produce Market Support Levy Bill provides for the imposition of a levy on the milk fat content of the relevant dairy products-whole milk and whole milk products. The maximum levy rate is 45c per kilogram of milk fat with the operative rate being established by regulation following a recommendation of the ADC. The levy is, of course, payable by the producer. I think it is important to keep emphasising that the people who are paying the bills are the people who are producing the products. The industry believes that the legislation should permit the Government, via regulation if possible, to introduce a two-price system by implementing a dual rate of levy. Regrettably, the Opposition parties have not been persuaded by the industry's arguments on this issue. It is particularly regrettable because in many respects the package of four proposals put by the industry are interdependent because of the divergent needs of the various States. Hence, I foreshadow that I will move in the Committee stage an amendment which will provide for that dual rate of levy. It will not impose it, it will merely leave open the possibilities of its being implemented by the Government if it wishes to do so. If it does not wish to do so there is no obligation on it actually to implement it. The amendment provides another mechanism which, I suggest, might be useful in the foreseeable future with regard to at least two States. The final Bill is the Dairy Industry Stabilization Levy Amendment Bill, which is an integral part of the package and which imposes a levy on certain dairy products. Funds from the levy are intended to provide, as has happened in the past, support for domestic prices of dairy products. The Minister has said that the levies form part of the transitional arrangements designed to ease the movement over time to a lower level of support. I think that, as part of the package, it is something for which the industry must be commended for coming to grips with and for finally accepting. I admit it is not without a great deal of heartache that it has done that. One of the things that have to be said about the Minister for Primary Industry is that he has made some hard decisions, but it is a pity some of the harder decisions were not made in the past. If they had been we may not be in the position we are in today. Nevertheless, the arrangement the Government has chosen cannot be seen as the best arrangement. I admit there are differing arguments on this. Senator Cooney presented a proposition last night with regard to this. I believe that on balance it does fall on the other side. The industry is suggesting that it hold the support for two years and then have a phasing out period over the next four years-that is the same six-year time frame the Government has suggested-and that each of the last four years have a step down so that at the end of the period the situations which the industry and the Government are proposing will be the same. The essential difference is that the Government has chosen to do this via a complex formula. The difficulty there is predictability. I buy the theoretical point that Senator Cooney raised last night that under the Government's formula there is a theoretical possibility of higher returns to the growers. I do not think it is likely to occur, but it is a possibility and I accept Senator Cooney's proposition. Nevertheless, I believe and the industry believes-I think this is extremely important-that that predictability of staging down enables the growers to know what their returns will be ahead of time. Under the Government's proposals, that is not possible. The time frame about which we are talking can be up to 18 months. We are talking about products, and hence not just about the market milk operation. It must be acknowledged that the industry, if it is willing to accept the theoretical possibility of lower prices, in opting for a predictable return ought to be listened to a little more seriously than it has been. I understand that this proposal is not necessarily one that the Department originally suggested and that it came from an outside group. If the Government returned to what I understand to be its original position, it would be worth while if this amendment-even if the others cannot be reconsidered-could be examined closely when it returns to the House of Representatives for reconsideration-hopefully, today. In conclusion, I want to comment on one matter which is associated with but is not part of the legislative package before us today-the question of the adjustment mechanism which has been mentioned in the Press in recent weeks. The Minister has indicated publicly his willingness to work closely with State governments and industry to ensure that adjustment occurs in a fair and efficient manner, and it is pleasing to note that discussions have already been held with the Victorian Government. Despite some differences as to how to achieve the objective, the Government, the industry, the Australian Democrats, and, I am sure, the Opposition, would agree that humane rationalisation of an industry which is so beset with problems as the dairy industry is long overdue. Let us hope that the Government will reconsider the amendments which, hopefully, the Senate will propose to the legislation, and consider them not as a belligerent attempt to attack the Government's plan but as an attempt to modify the plan in its implementation, so that the Government and industry can work together and put the industry on a firm basis. The industry provides an enormous amount to Australia. In particular, it provides so much to the families and to so many regions of this country. Let us hope that we do not have to go through the sort of head-kicking exercise that occurred in this chamber last night. Let us try to make sure that what we are doing is done in a way that will accommodate the variety of propositions that have been put. I still believe that there is the possibility of coming to an accommodation with regard to these various matters. Senator BOSWELL(Queensland)(10.27) — Today we are debating, cognately, a series of milk Bills-the Dairy Produce Market Support Levy Bill, the Dairy Legislation Amendment Bill, the Dairy Produce Market Support Bill and the Dairy Industry Stabilization Levy Amendment Bill-that will reduce another primary industry to rags. This series of Bills should be called the Kerin massacre because they prove once and for all that the Australian Labor Party does not care about the farmer-and not only that; it does not care for the person who works in a milk processing plant, who drives a truck, or who works in the dairy industry in any capacity. These Bills show no thought to any social consequence that may happen if they are implemented. They will bankrupt 2,000 to 3,000 farmers. They will destroy many good men and women who will stand at the front gates of their farms before the bailiff moves in. Those people will see their life's dreams, their work and their hopes all taken away from them. Anyone who tells me that the Labor Party is concerned for the battler after this series of Bills just does not understand. These Bills betray any social principles that the Labor Party ever had. The Bills are aimed at reducing the milk quotas from six billion litres to 5.1 billion litres. The dairy industry realised that production had to be controlled. It had a plan that had the backing of every State dairy council in Australia and the backing of every State government Minister. It was put before Mr Kerin at an Agricultural Council meeting three days before the Victorian election. Two days after the election it was rejected by Mr Kerin-once again proving that he does not really care about the farmers. He tells them one thing out in the field, but he returns to Canberra and does exactly the opposite. We have seen it time and again. We see it now in the dairy industry, and we have seen it in the beef industry and the sugar industry. I will not go into the Australian Dairy Industry Conference plan that was scrapped other than to say that it would not have cost the Government 1c to implement. The dairy industry would have imposed its own levies. It would have accepted a 10 per cent reduction in output and it would have put a heavy penalty on the overproduction of milk. That was the only way to bring the milk production into line at the minimum cost in human hurt. What does Mr Kerin want? He wants a scheme that will come into place on 1 July and will ruin 3,000 dairy farmers-the final solution to the dairy problem. He says that the Australian people are paying much more for dairy products than they would if they were imported. This plan will wipe out the dairy industry and we will import yoghurt, butter, cheese and other dairy products. We will keep a few cows around to provide some fresh milk-enough for a cup of tea. The dairy farmers are being asked to compete in a corrupt, prostituted world market that is subsidised by the taxpayers of the European Economic Community. The EEC farmers are paid huge amounts to produce milk and dairy products. The excess is being dumped for whatever price the EEC can get and the EEC taxpayer picks up the difference. Mr Kerin proposes a consumer transfer back to the people in the city to let them have milk at possibly 1c or 2c cheaper, with maybe a couple of cents saving per kilo on butter and cheese. That is the Kerin plan-export jobs and import food. This is the most disgusting piece of legislation I have seen. It is an academic plan that will cost Australia $100m in dole payments a year. It will destroy the lives of 3,000 dairy farmers and their families and will put 15,000 people in the dole queue. Senator Walsh —Who wrote that for you? Senator BOSWELL —I wrote it myself. Mr Kerin is doing this in the name of deregulation. I have said time and time again that I am for deregulation. Everyone in my Party believes in deregulation. My Party supports the principle, but deregulation cannot be selective. We cannot expect the great primary industries of this nation to carry millions of dollars in tariff protection-$9,000 a year for each farmer, and we have 170,000 farmers, which works out at $1.53 billion. That is consumer transfer in tariff protection from the country to the city. The Australian Labor Party believes that farmers are feather-bedded and receive huge government subsidies. Let us look at some of the subsidies that secondary industries have received since this Government came into power. The level of government assistance to secondary industry over the last 10 years has fallen from 36 per cent to 28 per cent. It has fallen from 28 per cent to 8 per cent in the case of primary industry. But the Government continues to put forward its line of argument on deregulation in primary industry. I have taken the trouble to ask the Parliamentary Library to prepare a list of legislation that has come through this House since the Government came to power giving protection to secondary industry in the form of government assistance. The Government has given $176m to the steel industry to get it back on its feet. It has given $150m to the car industry, which is dominated by multinationals and has a low level of Australian ownership, unlike the dairy industry, which consists of family farms and is the basis of family society. It has given $70m to the Australian National Line. It has imposed new tariffs to protect many secondary industries, such as tariffs on air conditioners, injection moulding equipment, electric motors, computers, and, of course, agricultural equipment. Those are just a few examples. The Government has also increased research funding for secondary industry. I do not want to run those proposals down. My Party voted for them, but I point to the inconsistencies in this Government's policies. There is one rule for primary industry and another for secondary industry. Secondary industry receives a whole host of government assistance. Primary industry gets nothing, despite having to operate in a corrupt world market, having to support secondary industry through the transfer of tariff and being slugged with ever increasing charges by this Government. In contrast, let us examine what primary industry has lost since this Government came to power. The Government has increased inspection charges on meat by 200 per cent and it has increased charges on a wide variety of other primary products, including eggs, edible oil, honey, wheat and dried fruit. It has abolished the income equalisation deposits scheme, imposed a 15 per cent tariff on grain harvesters and abolished the drought fodder and interest payment subsidies for drought sufferers. It has also imposed a 10 per cent sales tax on wine, cut funds for the rural adjustment scheme by 40 per cent, from $44m to $28m, cancelled the bicentenary water resources program and cut the petroleum products freight subsidy by $130m. We have seen constant increases in aviation fuel excise and a callous and total disregard for the election promise to the sugar industry to implement a sugar underwriting scheme. It has diverted funds accrued from the 2c a litre levy on fuel from the Fraser Government's road projects to general revenue. There have been real cuts in funding for rural research and the emphasis in the Department of Trade has moved from primary industry to secondary industry. The introduction of the assets test has hit primary industry the hardest due to the rule which does not allow rural pensioners exemption for their landholdings. The list goes on and on. This Parliament has provided millions of dollars to support the jobs of people working in factories in and around Melbourne and Sydney. I am sure these people would not mind paying an extra 20c or 30c to have an Australian dairy product on their breakfast table. There are double standards in this Government; it has one set of rules for the country and another for the city. Mr Kerin's plan is an academic plan because he is a product of the Bureau of Agricultural Economics. He is the nearest thing to a farmer that the Australian Labor Party has to put up as Minister for Primary Industry but he is receiving his instructions from the BAE. If Mr Kerin wants to put world parity prices on dairy products I suggest that he also put them on the BAE. We have an academic Minister backed by academics; so the people in the bush have become cannon fodder for this Government. They are numbers, statistics. What is the ruination of 3,000 people to a Primary Industry Minister who has a super-safe seat in the western suburbs of Sydney? Not only will this legislation affect the dairy farmers and people who work in the dairy factories but also it will affect thousands of small businesses-the milk vendors of Australia. The Government has the mistaken belief that if prices are reduced by taking away deregulation the market will rise. That is a complete fallacy. In fact, even when the milk vendors are forced out of business people will not buy their milk from the supermarkets in any great quantity; so the consumption of milk will fall. We will see heavy discounting by the bigger supermarkets and that also will affect the smaller family businesses. Eventually, as the milk vendor is forced out of business, the price will rise, as happened in the bread industry. Prices will rise in the long term and ultimately the person who buys the milk will pay that higher price. Senator Walsh —Rubbish. Senator BOSWELL —It is not rubbish. In Queensland the price of butter was cut when the supermarkets put it out as a loss leader. Butter was sold under cost. The consumption of butter in Queensland fell by 3 per cent. So to say that because the price is cut sales will rise is a fallacy. This legislation will affect all those small milk vendors and small family stores. Discounting might give a short term fall in price but in the long term the price will rise. I repeat that sales of butter in Queensland fell this year when the price was cut. There could be some support for the Kerin plan if it could be proved that the Australian public were paying excessive prices for their milk and dairy products, but they are not. Australians are enjoying prices for dairy products which are the second cheapest in the world. I have here a list of prices and I seek leave to incorporate it in Hansard. Leave granted. The list read as follows- RETAIL PRICE US$/kg. Butter Cheese Australia 2.87 4.30 Canada 3.99 6.00 USA 4.51 5.58 UK 3.22 4.37 Germany 4.25 4.92 France 4.54 5.17 Sweden 3.63 5.31 Source: International Dairy Federation Document 173 of 1984. Senator BOSWELL —There may even be some support if the industry were inefficient, but it is the most efficient industry in the world. There may be some force in the Labor Party's argument if Australian farmers were millionaires, but the average Australian farmer earns $7,000 a year. There is no reason to support this plan, other than that it will marginally reduce the consumer price index. We in the Opposition are forced to support the plan because if it fails the dairy farmers will be in a worse position. Therefore, we will reluctantly support the Bill with the three amendments that will be moved by my colleague Senator Collard. Senator WATSON(Tasmania)(10.41) —The Kerin plan for the rationalisation of the dairy industry as it now stands would be absolutely disastrous, not only for the industry but also for the whole Australian economy. At present, even with depressed world prices, dairy production is worth over $2 billion annually to Australia; that is, when one adds the value of meat from the dairy farmers and the added value of dairy processing. But dairy farmers are realists and they are the first to acknowledge that the industry is in dire trouble. The essential cause of the problem faced by the industry is the collapse of world market prices brought about by very severe oversupply of dairy products world-wide. Unfortunately, this collapse in world market prices has coincided with the expansion in the Australian production of milk. Few countries produce milk as efficiently as Australia. Farmers in Europe receive approximately $A6 per kilogram of butter fat and farmers in North America receive approximately $A11 per kilogram of butter fat, but Australian farmers receive only $2.50 to $3 per kilogram of butter fat for milk which is used for manufacture, which is about 75 per cent. That discrepancy in prices is just hopeless. It is against that scenario that we have seen the introduction of this cruel so-called Kerin plan. While few countries can match the efficiency of Australian dairy farmers in milk production, the European Economic Community and the United States of America have created mountains of surplus butter, cheese, et cetera, which has been sold on world markets with a heavy subsidy. This is but one of my most stringent criticisms of the so-called Kerin plan, because it penalises dairy farmers for market forces beyond their control. The main thrust of the proposed new marketing arrangements is supposed to be a deregulated, 'let market forces apply' approach. While the scheme is supposed to be deregulatory, the Australian Dairy Corporation will be required to appoint more staff to administer the scheme. So much for deregulation. However, this is an absurd objective, given the present world market for dairy produce. It could not have come about at a worse time. The Australian dairy industry does not operate in a free world market. The heavy protection effected by the EEC, the United States and New Zealand towards their domestic producers has in fact corrupted the world market. This is the essential point I made to Senator Cooney last night-the corrupted world market, because no other dairy industry in the world relies solely on revenue from the so-called world market or uses these corrupted prices that apply on the world market to determine domestic prices. But this is the thrust of the Kerin plan-using corrupted prices and trying to sell it off as a free market type proposal. It is interesting to contrast the Federal Government's attitude towards the dairy industry with its contribution of more than $2 billion which eventually comes into the economy from this great industry which directly employs 50,000 to 60,000 people, with the recent discussions on the Bounty (Injection-moulding Equipment) Amendment Bill in which the Government's decision to continue assistance to the one remaining manufacturer in Australia amounts to about a $40,000 subsidy per worker for the next four years. That gives some idea of the imbalance and the injustice in this plan which has been put forward. Many of the dairy industry's problems are not of its own making. The Federal Government needs to be reminded of this when framing the rationalisation of the dairy industry. One of the most striking observations that has emerged from the furore surrounding the proposals of the Minister for Primary Industry, Mr John Kerin, is the degree of rationalisation that has already occurred within the industry. Over the last 20 years the number of dairy farms in production has fallen from 49,000 in 1964 to 18,000 in 1985. There has been a further rationalisation since 1977 as demonstrated by the fact that there has been a 28 per cent increase in the number of dairy farms with more than 200 cows and a concurrent fall of 70 per cent in the number of farms with less than 100 cows. Since 30 April 1980 the number of registered dairy farmers in my State of Tasmania has dropped by the alarming number of 280, in that small State. At 30 March this year there were 1,242 dairy farmers in Tasmania. There is a general agreement among dairymen, manufacturers, State governments and the Federal Government that the dairy industry is in trouble and needs a degree of restructuring. Despite an already traumatic period of rationalisation since the 1960s, it is clear that there will be a further contraction of the industry with or without the Kerin plan. The Cain plan, finalised on the eve of the Victorian elections, could have rationalised the industry by the introduction of a two-price scheme. A number of commentators have expressed the opinion that the first reaction of dairy farmers under the Kerin plan, rather than to reduce production, will be to produce more milk in order to try to maintain their incomes and to meet their high debt repayments. That is quite contrary to the intention of the proposals. In fact, the hoped for reduction of milk flow will not eventuate until 1986-87 or 1987-88 when large numbers will leave the industry simply because they and their families can no longer work the long hours-over 80 hours per week-for little reward. This is in contrast to what is happening in some of the public sector areas, where there are demands for reduced working hours. The dairy farmers will be asked to work longer hours for less pay. That is not very democratic. Another aspect of the Kerin scheme which disturbs me and those closely associated with the industry is the nature and make-up of the group upon which this impetus for contraction will fall. Rather than forcing out the inefficient farmers, it will force out the young farming families, particularly those in Victoria and Tasmania-those poor people who have taken the best advice from the Federal and State governments and who have taken on high debt loads in order to modernise their production. These are the ones who will be forced to cease their operations as dairymen. Those dairy farmers are also acknowledged as the most efficient in the country-a tragedy. By forcing efficient producers out of the market over the next few years and entrenching inefficient farmers, the Kerin plan will ensure that the problems of rationalisation of the dairy industry continue to plague the industry over the next decade. It is proposed that the Kerin plan will be inaugurated at the beginning of July. As it stands at present, its impact will be disastrous. It is an ambitious plan which aims to do too much too quickly. What is needed is an orderly transition into the new marketing arrangements and a slower phasing-out of the existing arrangements which would prevent unnecessary exits from the industry. The Tasmanian Minister for Primary Industry recently advised Mr Kerin of a number of modifications that the Tasmanian Government felt would make the transition much less traumatic and less chaotic nationally. Those amendments have also been supported by the dairy industry. They do not attempt to alter the thrust of the Kerin plan but rather to achieve a smoother transition from the current arrangements to the new plan. What is wrong with that? Senator Walsh —What was the cost? Senator WATSON —A smoother and less traumatic transition is what is needed. Senator Walsh —What was the cost? Senator WATSON —Under the current arrangements export pools are conducted by the Australian Dairy Corporation on five products-butter, cheddar cheese, skim milk powder, casein and whole milk powder. The pooling arrangements have operated in one form or another for almost 50 years. Export pooling involves no taxpayer contribution or additional consumer subsidy to the industry. The Government has decided that the export pooling system will be abolished as from 1 July 1985. Removal of export pooling without giving the industry any opportunity to make necessary adjustments to accommodate the changes will have catastrophic effects. It will cause significant price cutting on the local market and in preferred export markets. Manufacturers who are unable to place products on the better returning export markets will have no option but to undercut other suppliers to the domestic market, or the more profitable export markets where they exist. The effect will be an erosion of domestic prices and a loss of export revenue to the industry and to Australia as a whole. For the benefit of the Minister for Finance, Senator Walsh, that will be the cost. That will be the cost to everybody. The export pooling system is also a fundamental component of the industry's financing arrangements. Export pooling, in combination with underwriting, provides a guaranteed floor price from which the Australian Dairy Corporation can make advances to the industry in the form of product loans. Removal of export pooling will mean that there will be no guaranteed minimum value for product. As a consequence, the Australian Dairy Corporation's advance to the industry will have to be set at relatively conservative rates. The effect on the farmer will be an initial opening price of 80c to $1 per kilogram of butter fat lower than would be the case under the existing arrangements. The most savage part of the Kerin plan is that farmers will be given no more than a few weeks notice that the whole financing arrangement that has underpinned the industry in the past is to be thrown out. Through delayed payments for milk, the burden of financing the industry's operations will, under the Kerin plan, be carried by the farmers. The amendments which the Government introduced to its original proposals in the House of Representatives will at best have a marginal effect on this problem. The industry and the Opposition are not proposing that the Government should continue export pooling indefinitely; simply that it should delay for two years abolition of the pools on two of the five products-butter and cheese. The Government argues that there are no advantages to delaying the phasing-out of the pools. This is nonsense. There are at least four reasons why the industry would be in a much better position two years down the track to accommodate phasing-out of the pooling system. The first is that it is likely that by 1987-88 milk production will have begun to decline. As a result, the industry will not have the chronic surplus of products to dispose of on low price export markets as it does at present. The second reason is that the international market prices for dairy products are cyclical. It is likely that by 1987-88 international prices will have improved from their current disastrously low levels. The Bureau of Agricultural Economics supports this view. The third point is that, under the Kerin plan, export support will be provided to currently non-leviable products and distortions in the system which disadvantage certain products will then be corrected. Corrections of these anomalies in the current system should see the expansion, possibly even the doubling, of exports of non-traditional dairy products by 1987-88. To the extent to which this occurs, exports of bulk products, for example, butter and cheese will be reduced, thus reducing the necessity for an export pool on these products. The fourth reason is that two years notice of termination of export pools will give both farmers and manufacturers lead time to adjust their financial arrangements to accommodate relatively lower product loans from the Australian Dairy Corporation and, consequently, lower opening prices for milk. Let me comment on the phase-out of domestic product levies. Under the Government's proposals domestic product levies would be maintained at a level which would support the existing domestic market prices during 1985-86 but would be phased out in accordance with the formula from 1986-87 right through to 1990-91. There are two issues of concern regarding the Government's proposals in respect of the phasing out of product levies. Firstly, while the Government claims its proposal maintains support levels for 12 months in practical terms it maintains support for only six months production at farm level. Under the new legislation product levies are applied at a rate appropriate at the time of sale. While 63,000 tonnes of cheddar cheese produced in 1985-86 will be sold on the domestic market, only 25,000 to 30,000 tonnes will be sold during this financial year. The remainder will be sold in 1986-87, when support levels will be substantially reduced. Manufacturers of cheese must determine the price which they will pay farmers in 1985-86 on the basis of domestic support levels in 1985-86 and 1986-87, the latter being as yet unknown. The Opposition amendment continues current support levels until July 1987, which in practical terms means 18 months production. That is a reasonable approach. Secondly, the formula results in an unreasonably high rate of adjustment in the first year in which it would apply. Most industry observers believe that milk production in 1985-86 is likely to be about 6,000m litres or about the same level as in 1984-85. Similarly, most observers do not anticipate a substantial reduction, if any, in market milk prices. Given this scenario, the Government's formula would result in a 50 per cent reduction in product levies between 30 June 1986 and 1 July 1987. It was 60 per cent prior to the Government's amendment being introduced into the House of Representatives. If half of the levy has gone in the first year the effect of the formula adjusting the rate of phase-out of the other 50 per cent of the levy is of little practical significance. The industry's suggestion, which the Opposition supports, is simply to phase out the product levies in four equal steps from 1987-88 until 1990-91. In this way there is no uncertainty regarding future support levels. The industry needs certainty. The industry and the Government know precisely the rate at which the industry's support will, therefore, be phased out. This amendment may or may not result in higher support in a particular area or year. It does, however, make support levels much more predictable. Let me now comment on the method of determining market support payments. The Government has proposed that market support payments be related to a fixed percentage, say, 130 per cent of a three-year moving average of export prices. The intention is to measure these prices on an f.o.b. basis. The concern expressed by the industry and shared by the Opposition is that this system could result in anomalies. An amendment to overcome these anomalies has been suggested. But the Government has rejected this amendment in the House of Representatives on the basis that the target price mechanism reflects market prices. In fact, it does not do so. The target price is related to market returns during the two previous seasons, and the estimate of price in the forthcoming season is made up two months prior to the season commencing. There is no certainty that the target price so determined will reflect market prices during the year in question. Because of this, certain anomalies can arise. Whole milk powder is a good example. The existing marketing arrangement disadvantages whole milk powder as an export product. As a result only the very best whole milk powder markets were supplied. Consequently, the target price for whole milk powder, which reflects historical prices for whole milk powder under the old marketing system, is excessively high when compared with butter and skim milk powder. The effect of the Opposition amendment to clause 19 of the Dairy Produce Market Support Bill is to give the industry some control over the products to which this target price mechanism for determining export market support payments is to be applied. It should be stressed that the products excluded from this system are not disadvantaged. Under section 20 of the Bill the Australian Dairy Corporation is obliged to set market support payments for these products at a level which is 'appropriate to the other products'. The suggestion by the Minister that the amendments will discriminate against certain companies, I believe, is a nonsense. There is one further issue which I believe the Government should address; that is, the question of subsidised or dumped cheese. There are almost no restrictions on imports of dairy products into Australia. As a result Australia has become the dumping ground for other countries surpluses, particularly in cheese. The Australian industry has successfully taken countervailing action against imports of certain European Economic Community and Norwegian cheeses, but the process of securing countervailing protection is slow and very cumbersome, as we have found in other areas. For example, the industry first applied the countervailing duties on EEC edam, gouda and blue vein cheeses in August 1982. A prima facie case was established in June 1983. The case was not finalised until December 1983, six months later, when the EEC agreed, under duress, to reduce but not remove its export subsidies on certain varieties of cheese and then not all varieties exported to Australia. The Corporation did not advise the Government-or the appropriate question was not asked-that the EEC exporters would be able to ship cheese from Europe at the pre-arranged subsidy rate up until July 1984. Shipments arrived in Australia at the old subsidy rates up until September or October 1984. The effect of the countervailing duty, initiated in August 1982, was not felt in the market-place until December 1984. That is some two and a half years later. What further proof is necessary that the existing measures to protect the industry against subsidised imports are not working satisfactorily? There is a further problem for the Australian cheese industry related to the enforcement of Australian food laws. Australian producers are not permitted to add sodium nitrate and certain other preservatives to cheese but European cheeses sold on the Australian market frequently contain these additives. Either all cheese sold in this country should be required to conform to Australian food standards or we should drop our own food regulations and adopt European standards. As it now stands, the food regulations are a significant disadvantage to the Australian industry in competing with European cheeses. I deeply deplore the statements made by the Minister for Finance, Senator Walsh, and his attitude towards the Opposition's amendments. I hope he will reconsider his position in the interests of the Australian nation, but particularly in the interests of the Australian dairy farmers. Senator BLACK(Queensland)(11.05) —I support the Dairy Produce Market Support Levy Bill 1985 and cognate Bills. I shall speak only briefly on these Bills. I wish mainly to deal with the comments made by my colleagues from Queensland, Senator Collard and Senator Boswell. I noted that when Senator Collard spoke he referred to the Bills as part of a shady deal with the Australian Council of Trade Unions to keep down the price of milk products. On the other hand, Senator Boswell said that it was a plot involving the Bureau of Agricultural Economics. One sees reds under the bed and the other sees eggheads under the bed. It is fair to say that that is an appropriate comment on the way they see politics in Australia today. This legislation is designed to modernise the Australian dairy industry. It does not seek to increase the burden of regulation on dairy farmers; rather it seeks to provide a basic level of support for those farmers so that they can survive the ups and downs of international and local markets. As we all know, overregulation is one of the main dangers to small scale farmers in the dairy industry. Not only does overregulation lead to frustration and resentment against the system, it can also lead to corruption and the use of undue influence by those who interpret and apply the legislation. One form of regulation that is particularly open to abuse and is based in my home State of Queensland is the entitlement or quota system which gives each farmer a certain quota of milk which he is entitled to supply to processors. The major problem with the entitlement system is that the quota-the actual piece of paper-is worth a lot of money. If a farmer wants to expand somehow he must get the extra quota. This extra capital cost of the expansion is passed on to consumers who pay more for their milk and dairy products. The people of Queensland pay more for their milk than people in any other State in Australia. The reason for this is not hard to find. When the quota system was introduced in 1977 some safeguards were built in to prevent a trade-in quotas developing. These soon proved to be totally inadequate. The quotas of those who leave the industry for one reason or another are supposed to be returned to a pool where they can be split up and distributed to disadvantaged dairy farmers with small quotas. These are the small dairy farmers who were so eloquently defended by Senator Boswell earlier. Unfortunately, like so many other things in Queensland, dairy quotas and their trade quickly became an area for the exercise of political patronage by the National Party of Australia in Queensland. My good friend and colleague the honourable member for Rankin (Mr Beddall) pursued these matters in another place and showed how a senior National Party Minister, Mr Russell Hinze, and the Senior Vice-President of the Queensland National Party, Mr Charles Holme, had used their positions of political power to dodge both the letter and the spirit of the law. Senator Peter Baume —On a point of order, Mr Acting Deputy President. The honourable senator has just said that a member of a State parliament had taken certain action to dodge both the letter and the spirit of the law. I believe that that is probably contrary to the Standing Orders. The ACTING DEPUTY PRESIDENT(Senator Jessop) —Senator Black should be careful about the phraseology he uses in his speech. I do not think he transgressed the Standing Orders because he did not name any particular person. Senator Peter Baume —Yes, he did in fact name one. The ACTING DEPUTY PRESIDENT —I am afraid I did not hear that. I suggest that Senator Black continue his speech but avoid that sort of comment. Senator BLACK —Thank you, Mr Acting Deputy President. Despite the fact that these persons already have massive quotas, they have both been guilty of what I would term quota stripping-that is, buying a farm as a going concern, transferring the quotas to their existing farms and selling off the farms without any entitlement. Both of these men are from advantaged areas. Mr Holme's dairy earns 10 times as much as the average Queensland dairy. Nevertheless, in 1981, with the support of the then Primary Industries Minister, Mr Ahern, Mr Holme engaged in what I term quota stripping. Senator Boswell —On a point of order, Mr Acting Deputy President: You asked Senator Black not to name people. He is failing to adhere to your ruling and I ask you to call him to order. The ACTING DEPUTY PRESIDENT —I do not think there is any point of order. Senator BLACK —That piece of quota stripping saw Mr Holme gain an entitlement of $70,000 a year for a one-off outlay of $87,000. In 1982 there was a similar transaction which resulted in another senior member of the National Party in Queensland supplying two separate processors, contrary to the intent of the Dairy Produce Act 1978. Quota stripping is outlawed by sections 86 and 87 of the Milk Supply Act 1977, as amended in 1981. It is quite clear that Mr Hinze and Mr Holme used their positions to get the Milk Entitlements Committee to overlook the already huge milk quotas they had, to ignore its responsibility to the ordinary struggling dairy farmers of Queensland and to approve the transfer of quotas to a few of the senior manipulators of the National Party in Queensland. The question left unanswered by the honourable member for Rankin deals with the way in which these persons managed to achieve the quota transfer without bringing down a storm of protest on themselves. The short answer to this question is that they already had a person on the Committee who relied on the political patronage of the National Party to be there in the first place and who had pioneered this method of quota stripping. This person's name is Pat Rowley, a member of the Milk Board, director of the metropolitan group of milk producers, State chairman of the dairymen's organisation, member of the Milk Entitlements Committee and a member of the Dayboro branch of the National Party. On 12 February 1981 Mr Rowley brought a farm at Mount Pleasant. The place he bought was a neighbouring property but not an adjoining one. He bought the property subject to his gaining approval from the Milk Entitlements Committee of which he is a member. The property he acquired had an entitlement of 365.44 litres daily. If the seller wished to get out of dairying this entitlement should have gone into a drop-out pool for distribution to less privileged dairy farmers. The distribution is done by way of the Milk Entitlements Committee of which Rowley is a member-the same Committee which heavily favours advantaged farmers. By 1981 the Committee had approved the transfer and Rowley then had an entitlement of 915 litres a day. I ask the Senate to bear in mind the fact that Rowley was on the same Committee which later approved the deals to which I referred earlier. This level of activity might come as a bit of a shock to dairy farmers in other States, but in Queensland this sort of behaviour has now become standard. If one cannot do something the proper way, one makes a donation to the National Party or the appropriate front organisations and suddenly all the obstacles disappear. I would like to know what the battling dairy farmers of Queensland make of this situation. For the last 30 years or even longer they have been lining up to vote for the National Party or the Country Party, putting their hands in their almost empty pockets to support their local candidates. But now they find that the State Government that is supposedly looking after them is in fact stabbing them in the back. Senator Boswell —On a point of order, Mr Acting Deputy President: Senator Black has not touched on the Bills for one second; he is making a continued attack on the Queensland Government and supporters of the National Party. That continually happens in this place. I ask you to call Senator Black to order and to refer him back to the Bills about which he does not have a clue. He does not understand the Bills and if he does not understand them I ask you to sit him down. Senator Button —On a point of order, Mr Acting Deputy President: We are talking about a national industry and what happens in Queensland or Western Australia is relevant to the structure of this industry. If the industry currently operates under systems which are capable of abuse, those abuses should be rectified in any restructuring arrangements. In those circumstances Senator Black's comments are just drawing attention to possible abuses which should be rectified in any rationalisation process. If the same thing were being said about my own State of Victoria, I would not feel offended, nor should any senators in a national parliament. Rorts are rorts and they are matters of concern to this Parliament wherever they occur. I think that the comments that are being made are quite in order. You may seek to rule on the matter at a later stage, Mr Acting Deputy President, if you thought Senator Boswell was being unduly offended. The ACTING DEPUTY PRESIDENT —Senator Black, I have listened to your speech carefully. I warned you earlier. You have been referring to the dairy industry. I suggest that you get a little closer to the Bills that are before the House. There is no point of order. Senator BLACK —One matter that was canvassed extensively during the formulation of this legislation was the problems associated with the existing system of entitlements. The matters which I have raised related directly to those problems. I can understand the dicomfiture of the National Party over the matters I have raised, but they are relevant to the Bills before the House. As I was saying, 14 per cent of dairy farmers in the south-eastern corner of Queensland now control 30 per cent of the market because of the system. The other 86 per cent of dairy farmers battle over what is left. The average income for a dairy farmer in the south-eastern portion of Queensland is $71,000 a year while the average income for a dairy farmer in other areas immediately adjoining the notorious Gold Coast region is about $28,000 to $30,000 a year. These figures speak for themselves. Only some dairy farmers have been benefiting from the way the system has been applied in Queensland and the others are simply being used. On the other hand, these Bills are designed to facilitate a transition from the current complex, inefficient and inequitable arrangements to a more market-oriented, less regulated system for the marketing of dairy products. I have been involved in some of the extensive discussions during recent months about the thrust of the Government's legislation in this area. I am confident that the ordinary dairy farmer in Queensland will receive a far better deal from this legislation than he has received from State legislation administered by the political manipulators and rorters of the Queensland National Party. Senator BROWNHILL(New South Wales)(11.16) —I rise to speak on the Dairy Produce Market Support Levy Bill 1985, the Dairy Legislation Amendment Bill 1985, the Dairy Produce Market Support Bill 1985 and the Dairy Industry Stabilization Levy Amendment Bill 1985 introduced cognately into this House yesterday by the Minister for Finance, Senator Walsh. I sometimes wonder why some of the Queensland Australian Labor Party senators live in Queensland as they seem to be so derogatory about Queensland every time they speak in this House. I wonder whether the people of Queensland will think the same when they go to the polls next time and vote for the National Party of Australia again, rather than for the Labor Party. A decade ago, there were some 388 factories in the dairy industry employing 21,700 people. Today there are some 264 factories with a work force of some 17,900 people. Since 1979-80, milk production has fallen from 7.2 billion litres to the six billion litres it is today. The industry is rationalising. I believe that it is a responsible industry, contrary to the beliefs of Senator Black, judging from the way he spoke a little while ago. The industry produces high quality milk which costs some 40c a bottle, which is a very low price to pay for such a good food. In 1970-71, the total number of farms was over 37,000. Today, the number of dairy farms is some 19,000. The dairy industry contributes between 3 to 4 per cent of total exports of rural origin. Farm incomes in the dairy industry are crucially affected by the prices of market and manufacturing milk. Surplus production must either be sold on unprofitable export markets or placed in storage. A point has already been made about the European Economic Community, which is the source of some 60 per cent of total world exports. Those exports come from a highly subsidised area. Nineteen per cent of the total exports of world supplies comes from New Zealand, which is also subsidised, nine per cent comes from the United States of America and five per cent comes from Australia. The immediate outlook for the dairy industry is depressed due to the problems of low prices, rising costs and declining incomes. Current marketing arrangements have encouraged milk output beyond that required in profitable marketing outlets. The industry is rationalising. It needs time. The Kerin plan, the academics' plan or the bureaucrats' plan-whatever one likes to call it-whilst containing a number of provisions relevant to the industry, also includes some totally unnecessary and unacceptable, harsh provisions which will badly destabilise the moderate, progressive steps of the industry towards rationalisation. The Kerin plan, as introduced to this House by the Government, is a recipe for social and economic chaos within the dairy industry which will affect the livelihood and security of thousands of families. Hardship, heartbreak, relocation and the breakdown of communities will occur. The industry, the Opposition parties and the Government are pursuing similar goals. However, the legislation fails to recognise that some time must be given to the industry if any adjustment proposal is to work to enable farmers, factory managers and those employed in the industry to prepare themselves for a new and tough environment. Industry unrest could be overcome if the Government were to take another look at the speed with which it is trying to achieve lower production levels. Perhaps if the Minister for Primary Industry (Mr Kerin) had consulted as much with the dairy industry as the Labor Government consults with the Australian Council of Trade Unions on other matters many of the amendments in the legislation would not have been necessary and the dairy industry would have got what it wanted, as would the Australian community. For the benefit of those on the other side who do not know much about farming I say that it takes time to reduce herd numbers and levels of production. There is an average six-month lag between the production and sale of dairy products, that is, milk used for purposes other than domestic fresh milk consumption. Breeding programs take a while. They take something like 2 1/2 years to bring to consummation, which is different from what honourable senators opposite would think. No other industry in Australia has ever had such a brutal ultimatum handed to it. The Opposition has three main areas of concern. The first area of concern is export pooling. The second area of concern is with the provision in the legislation that current domestic prices be maintained for two years instead of one year, to give more time to the industry. The third concern is that it is essential to ensure that the way in which support payments are established is even-handed between co-operative and proprietary companies. Mr Kerin, in introducing this legislation, has squandered the opportunity to negotiate an effective milk supply management plan which will prevent either chronic surpluses or shortages of supply to the Australian domestic export markets. The dairy industry is not heavily supported by taxpayers' funds. The Kerin plan threatens irreparable harm to our dairy export trade. The Minister's Department, and the Minister himself, do not even know how far production will drop under this legislation, although the dairy industry predicts that we will end up barely being able to supply our domestic needs. There is a real fear that we may lose our self-sufficiency and that the Kerin plan could result ultimately in a sell-out to the New Zealand dairy industry. The $20m offered for reconstruction will not compensate for the exodus of some 20,000 to 25,000 people who will be forced out of this great industry. The loss of jobs could cost taxpayers some $2m per week in welfare payments. Problems of this plan do not affect just the farmers, manufacturers and employees. The Australian Oilseeds Federation has joined the Australian Dairy Farmers Federation in calling for a more equitable, predictable and rational dairy plan. The AOF can see that a short term, downward movement in dairy prices towards world dumped prices threatens its industry. As soon as the world market shifts away from a dumped price, Australia could find itself with inadequate supplies, not only of dairy products but also of oilseed products. The oilseed industry says: The result- of this plan-- would be serious disruption of the margarine industry with substantial job losses . . . We believe the Government is planning to proceed 'too fast too soon' without sufficient consideration of our industry. I cite some figures in a paper I have which gives the views of the Australian Oilseeds Federation as to the effects of the Kerin dairy marketing plan. There are some 15,000 oilseed growers at the moment in Australia producing some 700,000 tonnes of oilseeds. By 1985-86, Australia will be self-sufficient in soft oils, providing valuable, alternative crops to wheat. Hence the point I am making about the flow-on effects of the dairy plan to other primary industries in Australia. The crushing industry has a capital investment of some $75m and employs some 500 persons. The margarine industry has a capital investment of $200m and employs some 2,000 people. In 1983-84 the consumption in Australia of margarine was some 148,000 tonnes, or 71 per cent of total margarine and butter production in Australia. Currently-this is the point I would like to make-butter and polyunsaturated margarine have similar shelf prices. Intense competition between the products is good. Strong brand competition between margarine companies ensures consumer protection. The effect of the Kerin plan could be to reduce the price of butter from $2,400-odd a tonne to $1,600-odd a tonne by 1991-1992. Higher costs of vegetable oils coupled with reduced butter prices will cause an estimated loss of sales of margarine of 25,000 tonnes. Honourable senators might ask why I am talking about the margarine industry when we are debating a dairy Bill. The reason is that the flow-on effects both in and out of that industry to the wheat industry and the farming community will be felt as they will have to relocate their efforts and resources a lot more than Mr Kerin bargained for when he introduced these Bills. Another industry that will be affected will be the milk vending industry. At the moment there are some 4,500 milk vendors in Australia and their livelihoods are at stake with this Bill. A letter from the Amalgamated Milk Vendors Association of Queensland states in part: Milk vendors cater for the less fortunate-the infirm, elderly and disadvantaged members of the public. They are obviously people who have not been considered in the introduction of this Bill brought down by the Government. The letter continues: Vendors take great pride in delivering under the most adverse conditions such as those created through floods, cyclones, industrial disputations-- we have plenty of them at the moment-- and other natural disasters. Fresh milk is supplied daily and consumers are offered a choice of pack. Vendors also give a service to customers requiring small amounts of milk (e.g. one bottle twice a week) and this service can only be maintained whilst there are viable balanced runs catering for both small and large deliveries. If the eyes are picked out by Supermarkets, this valued service-- will be lost to the community. The letter continues: In regional and remote country areas which are already under severe industry stress, the service provided by Milk Vendors and the value of associated industry business is of even . . . greater significance. . . . . Nowhere is cognizance paid to the importance and value of the role of the Milk Vendor in marketing white milk and dairy products, nor is there any specific reference to an intended role envisaged under Mr Kerin's National Dairy Plan. Much emphasis is made by the B.A.E.-- that point has already been made here today as obviously Mr Kerin is taking a lot of notice of it- and others to a resultant reduction in the retail price of milk to the consumer and the alleged assumption that such action will lead to an appreciable increase in sales. Such hypothesis is not accepted-- Another industry that will be affected is the beef industry, especially the home trade beef industry, because if the dairy farmers are forced out of being milk suppliers they will go into vealer production and most probably cause an oversupply in our home beef market. Senator Boswell —That is what they want, cheap meat! Senator BROWNHILL —Thank you, Senator Boswell. The Government wants the whole of the rural industry to be put into the hands of the receivers. That is the socialist dream, to get the rural industry right under its thumb. It is unrealistic for Mr Kerin to attempt suddenly to apply a so-called deregulated market force approach to the dairy industry which is competing on a world market severely distorted by EEC dumping. In short, the Government is prepared to forgo virtually $350m to $400m in dairy product export revenue built up over many decades. This will only give the EEC planners an incentive to do the same to our efficient sugar, wheat, beef, sheep meats and other industries. Australia cannot afford to abandon multimillion dollar export industries at a time of high overseas borrowings and extensive repayment problems. Those problems have been brought to the notice of this House many times. Mr Kerin's plan, and the way in which it was introduced into this House yesterday by the Minister for Finance, Senator Walsh, with the threat that the Government will not accept the amendments that have been suggested by the Opposition, smacks of stand-over tactics, blackmail and the holding of a gun at the heads of all senators, all dairy farmers and the people of Australia. As I have said, the industry recognises the problem of overproduction of milk and it is rationalising itself. It needs time to restructure. It is using self-help techniques to do this. Give it time. With the Opposition's amendments this can be achieved. Senator ARCHER(Tasmania)(11.30) —The importance of milk to the community can be gauged by the fact that recently the Victorian Government proclaimed a state of emergency and declared milk an essential product to all Victorians. As against this, states of emergency have not been declared over breakdowns in providing hospital services, power disruptions, train stoppages or other matters, but a state of emergency was declared in relation to milk. I request that the Government take into account the importance that the industry has to government and public alike. That move also demonstrated that the State Government at least recognises its responsibility in the maintenance of milk supplies. I respect the fact that the Government brings down legislation. I respect the Minister for Primary Industry, Mr Kerin, and the job he is endeavouring to do as far as the milk industry is concerned. I do not believe that the Government intends to wreck the milk industry. I do believe that a considerable amount of misjudgment, misinformation and misunderstanding has gone into the formulation of the legislation. I see it as my position to raise those matters to include a human element in the legislation and to demonstrate what the future holds. I ask the Government to consider those points while we all work for what is best. I do not enter the debate to do anything more than secure this opportunity to bring about a stable, profitable and long term dairy industry. I start off by making some comments on considerations that I believe are often overlooked concerning the production, consumption and the export of dairy products. Firstly, Australian dairy produce can be and is produced at a cost less than that of every other country in the world-most of all, New Zealand. That is efficiency. Not too many industries can say that. Secondly, it is in every State and the governments of those States have had to take action to establish a stable and high quality milk supply all year round at a price that can ensure such supply is maintained. In spite of the implications to the contrary, the only reason we have a price set up for fresh milk from State to State is that it reflects the need and desire of the States to have milk and to pay the price that is necessary to procure it; nothing more, nothing less. Lower prices would, in their opinion, prejudice their ability to maintain quality and/or continuity. What is not readily understood is that the supply fluctuates considerably due to season and climatic circumstance. Milk flow varies for a whole variety of reasons and in order to secure a minimum quantity of milk in the difficult months of the year a surplus automatically flows in the peak periods. Out of season milk is expensive to produce and no dairy farmer milks on a year round basis unless he gets adequate compensation for doing so. To cut 25 per cent from the present total Australian production would, without doubt, require an increase in domestic milk prices to ensure production in the worst months of the off season. The balance, of course, goes to the production of those other products-cheese, butter, powder and so on-and the worst problem that the processing sector has is coping with a fluctuating milk flow and the utilisation of capital investment, plant and staff. I find it quite extraordinary that even in this great rural country there are still people by the millions who believe that milk is what one gets out of a bottle. As far as export is concerned, every item we sell is valuable to our economy. Four hundred million dollars of export income is $400m. This country only achieved its greatness on account of the primary products that it sold overseas. It was not the secondary and tertiary sectors that made Australia great, even though they have their place today. There is much talk of consumers paying a distorted price for dairy products. I ask the Minister: Where in this world is there absolutely no distortion in the price of dairy products? Where can he find a true price? I received an information document from the Library recently. In part, on page 7, it states: The best proxy for world prices are those received by producers in New Zealand since that country exports most of its output under close to free-market conditions, as outlined below. I contest that very solidly. I suggest that the 11.7c per kilogram or per litre, as the case may be, is just as much an artificial figure as is the 27.8c for the United States, 25.2c for West Germany, and 21.6c for Great Britain. In my opinion, the New Zealand cost is clearly more than that. It is based on only the accounted section of the inputs. One has to consider that the New Zealanders have a whole range of non-accounted inputs, including, for instance, a $750m loan to the dairy authority at one per cent interest. Of course, this represents a subsidy of 20c a kilogram on every kilogram of product handled in that country. In the New Zealand Commodity Report of 10 May, the price of manufacturing milk in New Zealand was given as follows: Final payments for the 1984-85 season are expected to amount to 8 to 9c per kilogram over and above the basic price of 381c per kilogram. In other words, the New Zealand price for manufacturing milk will be 390c a kilogram. That price converts to about 260c Australian, which is almost exactly the same as Australian producers are paid in my State of Tasmania. As I have said, the 11.7c is just the accounted portion of the New Zealand milk price. Australia, too, produces a very low cost milk and has very little undisclosed cost; so I do not want anybody to tell me that Australian milk is dear. I have arranged with Senator Walsh to have a table incorporated in Hansard. It shows the relative prices for butter in several countries and Australia's relative position, and it clearly demonstrates that Australians buy their butter very advantageously. The table, in Australian dollars, shows that people in the United Kingdom pay $3.67; those in France pay $3.10; in West Germany the price is $3.73; in the Netherlands, $3.46; Canada, $4.26; the United States, $3.64; Australia, $2.42; and New Zealand, $1.45. The DEPUTY PRESIDENT —Does the honourable senator seek to incorporate that table? Senator ARCHER —Yes, Mr Deputy President. Leave granted. The table read as follows- REPRESENTATIVE BUTTER PRICES IN CERTAIN COUNTRIES AT DECEMBER 1983 Prices Expressed in A$ per kg Country Price $ United Kingdom 3.67 France 3.10 West Germany 3.73 Netherlands 3.46 Canada 4.26 United States 3.64 New Zealand 1.45 Australia 2.42 Source: Australian Dairy Corporation Compendium, 1984. Senator ARCHER —I thank the Senate. In spite of comments to the contrary, our consumers do very well, too. They do not pay too much, and they pay much less than consumers in every comparable country, except New Zealand. For 50 years, under dairy equalisation and pooling, we have concentrated on securing the best world prices available. Initially, the equalisation scheme arranged for bulk butter to be sold to the United Kingdom. After the United Kingdom's entry to the European Economic Community, the dairy corporation pool was established, and it has produced, without argument, the best prices available for our export products, and at least as high a price as that secured by any other exporting country. Contrary to everything that the Government has said, the system of pooling rewards good marketing and penalises bad marketing. Senator Cooney did a good job last night in speaking to the notes that he was given. He made five points against pooling. I regret that all five points he raised were wrong. Pooling does not tend to make the cost to consumers higher. That is rubbish. It does not encourage overproduction. How could it? It does not provide greater assistance to the lowest value product. That matter would definitely be corrected through an all milk levy. It does not hamper new products, because that matter, too, would be covered by an all milk levy. It does not encourage a production mentality instead of a market mentality. It is impossible to talk about setting up a market organisation in six weeks, which is the alternative. I regret that those points, although they were well put, were so wrong. The operation of pooling is quite simple, but clearly it is misunderstood by the Minister for Primary Industry (Mr Kerin) and by many other people. In the Committee stage of this Bill it will probably be necessary to explain this matter fully, because it makes all the difference to the need for pooling, which, incidentally, operates in every other dairy product exporting country. Australia alone believes that there is some system that it can operate that will be better. Clearly, that is wrong. Also, to set up a system such as that which the Minister appears to have in mind, for every manufacturer to establish and operate a marketing division to look for the various world markets-and all in six weeks-is absolutely crazy. Everybody knows it. That, of course, is without considering the enormous cost to the industry of having every manufacturer trying to compete as an exporter. It is important that costs be taken on the basis of their comparative increase. The following figures tend to show that dairy produce costs have increased much more gently than almost any other cost, particularly their own input costs, in the period between 1970 and 1985. From a 1970 index base of 100, the average weekly wage in 1985 is 524; the municipal rates figure in Tasmania is 472; butter factory hand wages, 502; super grade petrol, 659; diesel, 744; telephone rentals, 521; telephone local calls, 400; postal charges, 550. But on the receipts side, the average manufacturing milk price in Tasmania shows an index of 245; wholesale butter price, 239; wholesale cheddar cheese, 353; and retail milk, 370. I seek leave Mr Acting Deputy President, to have the tables containing those figures incorporated in Hansard. Leave granted. The tables read as follows- COSTS Average weekly wage Year Wage Index $ 1970 76.30 100 1975 148.20 194 1980 233.55 306 1985 400.00 524 MUNICIPAL RATES (based on 290 Acre Dairy Farm in Wynyard Tas, from 1970-1985 with no capital changes)(Property milking 80 cows) Year Rates Index $ 1970 212.00 100 1975 372.00 175 1980 745.00 351 1985 1 000.00 472 WAGES FOR BUTTER FACTORY HAND Year Wage Index $ 1970 46.00 100 1975 97.20 210 1980 162.90 354 1985 231.10 502 On top of the base wage, the processors have the following on-costs: Per cent $ week Long Service Leave 2.5 5.78 Holidays (include 17 1/2% load) 9.1 21.03 W/Comp 2.5 5.77 Service Pay 3.4 7.86 Public Hols 3.8 8.78 Shift Loading 3.0 6.93 Super 2.0 4.62 The total weekly cost per employee in 1985 represents $291.87. COSTS For costs (Hobart wholesale) Year Super Index Diesel Index c/litre c/litre 1970 8.2 100 7.2 100 1975 11.38 138 10.96 182 1980 26.24 320 25.14 352 1985 54.01 659 53.61 744 TELECOM CHARGES Year Rental Index Calls Index $ $ 1970 23 100 0.04 100 1975 85 370 0.09 225 1980 85 370 0.09 225 1985 120 521 0.16 400 AUSTRALIA POST POSTAGE CHARGES (Cost of a Standard Letter) Year Charge Index $ 1970 0.06 100 1975 0.18 300 1980 0.22 366 1985 0.33 550 INCOME Average manufacturing milk prices (Tasmania) Year c/kg B/fat Index 1970 110 100 1975 154 140 1980 259 235 1985 269 245 WHOLESALE BUTTER PRICE (BULK) $/tonne 1970 1 012 100 1975 1 220 121 1980 1 550 153 1985 2 415 239 CHEESE, WHOLESALE CHEDDAR $/tonne 1970 638 100 1975 1 020 160 1980 1 400 219 1985 2 250 353 RETAIL MILK PRICE, TASMANIA Year Price/litre Index $ 1970 0.20 100 1975 0.32 160 1980 0.46 230 1985 0.74 370 Senator ARCHER —I thank the Senate. It has been said that the industry has failed to modernise and to become efficient. I do not accept that assertion, either. When we consider that the industry has reduced its herd from 46,000 to 20,000, that cow numbers have decreased from 2.8 million to 1.8 million and that productivity has increased from 2,600 litres to 3,300 litres, I do not think we can really claim that the change that has been made is anything less than miraculous. Accordingly, I seek leave, Mr Acting Deputy President, to incorporate the table showing those figures. Leave granted. The table read as follows- Year Vic. NSW Qld Tas. SA WA Aust. No. of herds 1970 19,071 n.a. 8,689 2,362 6,659 1,553 n.a. 1975 14,920 4,834 4,622 2,229 3,064 961 30,630 1980 11,462 3,601 3,052 1,522 1,730 622 21,989 1984 11,000 2,987 2,611 1,285 1,550 625 20,258 No. of cows (thousands) 1970 1,270 650 490 160 150 1 2,830 1975 1,280 440 360 150 140 1 2,480 1980 1,030 310 240 100 100 7 1,870 1984 1,010 280 230 100 100 680 1,790 Whole milk production (millions of litres) 1975-6 3,518 980 683 436 398 233 6,248 1980-1 3,065 840 516 289 319 214 5,243 1982-3 3,164 905 572 322 340 221 5,524 1983-4 3,400 940 629 340 382 232 5,923 Production per cow (litres) 1970-1 3,201 1,980 1,601 2,835 3,204 3,426 2,600 1975-6 2,935 2,093 1,799 3,163 3,049 2,446 2,612 1980-1 2,967 2,586 2,135 2,858 3,140 3,004 2,810 1983-4 3,385 3,258 2,700 3,452 3,859 3,387 3,303 Senator ARCHER —Our dairy farmers are absolutely second to none in the world, but I regret that that does not give them any special consideration-far from it. The farmers who moved into the industry, particularly after the 1976 shake-down, are a great group. They are basically in the 30 to 45 age group. They are highly skilled. They are well qualified and they are leaders in the community. Their children go to local schools and they belong to local organisations. They are milking good herds. They are using high technology and many of them are employing one to three assistants. Many of them are milking 150 to 300 cows. The crunch is that many of them owe 35 per cent to 45 per cent of the value of their assets. The speed and severity of the proposed cut would ensure that those farmers could not survive under the very poorly devised scheme before us. I and they do not argue against reduction, but orderly reduction is sought, not a rout. I was horrified when the Government said that it had not carried out any investigation of the impacts of the proposition. There is no information on which locations are likely to be most affected, how many farmers are likely to be affected and to what extent rural towns and communities will be affected. What will be the costs of relocation, organisation and/or unemployment and the other alternatives and/or occupations that will be open to those being displaced? The Minister covered this issue in a Press release on 7 May, when he said: Clearly, there will be a range of actions taken by farmers over the next twelve months as they make decisions on their future. They may reduce the number of cows they have in production, they may change from dairy to some other form of agricultural production, they may remain on the land but seek off farm employment or they may want to leave the farm. Likewise, factories will make individual decisions about employment levels, product mix, marketing and so on. Perhaps the Minister who replies to this debate will tell us some of the real alternatives. How can we keep the older people on the farms when we now have an assets test that prevents them even from living on the farms they have owned for years, after these farms have ceased to provide them with a living? To my knowledge, the industry has sought co-operation for at least three years to reorganise further. Different States have progressed with their reductions at different rates. While, I am pleased to say, that no State has made a greater reduction in the last 15-year period than Tasmania, it would now appear that if the Kerin plan were implemented as proposed, Tasmania would not only suffer again but suffer more than any other State. The number of producers in Tasmania has decreased from 4,000 in 1970 to 1,200. There were 160,000 cows and there are now 98,000. Milk production in 1970 was 470 million litres. It is 320 million litres this year. There is no way that Tasmania will gain anything from the plan. There will be no across the border milk sales from Tasmania. There will be no handy product sales. What about a place like King Island? King Island has a prosperous speciality dairy product factory. It is in one of the best grassland areas of the world. What would the Kerin scheme do to that operation, apart from cutting the price of milk by about 35c a kilogram of butterfat? Can those farmers be expected to survive under such a program? I draw the attention of the Senate to a letter I received from the Preolenna Youth Club, which is in a small dairying settlement in Tasmania. The letter is signed by 37 members of that club. Mr Acting Deputy President, I seek leave to incorporate the letter in Hansard. Leave granted. The letter read as follows- Preolenna Youth Club, RSD 503 Preolenna, Wynyard. Tas, 7325 April 4, 1985 Mr B. Archer, C/- Parliament House, Canberra, 2600 Dear sir, As family of dairy farmers and those relying on dairy farming we wish to register our extreme concern over the recent dairy decision announced by Mr Kerin on Friday March 22. As youth of this nation we seek your support to defeat this totally unacceptable proposal. Yours sincerely, Signed by Susan D. Brett, Club Co-ordinator Other signatories Louise Freeman, Cheryl Diprose, Geoffrey Diprose, Tim Freeman, Wally Reeve, Michael Humble, Paul Humble, Roseanne Fowler, Amanda Fowler, Stuart Beswick, M. D. Guard, Leon Beswick, R. A. Fowler, P. J. Beswick, C. Luttner, W. A. Beswick, M. G. Fowler, S. Beswick, Daryl J. Lohrey, Leslie Cooper, Shane Brett, Leanne Shires, Neil Shires, S. J. Diprose, F. Fenton, Karl Johnstone, G. M. Luttner, Fergus Luttner, Steven Rowe, Melanie De Vito, Adele Beaumont, Hugo Luttner, Serena De Vito, Ian Diprose, Elizabeth Bellen, Steven Barnett. Senator ARCHER —This letter speaks for dozens of rural communities not only in Tasmania but Australia-wide. I was very touched by that letter. I ask that Government members contemplate it carefully. I was surprised at Senator Cooney's speech. He was the only Government member to speak on the legislation. At no stage in his speech did he mention people. I do not understand why this Government has chosen to make the producers of food the scapegoats for the nation's excessive cost structure. To follow this logic does no more than to export Australian jobs to countries that provide enormous subsidies so that we can import our food from them. I was pleased that the word 'consensus' came into discussions earlier. I notice that on one occasion the Minister for Primary Industry said: After long and comprehensive consultations and negotiations with the States and with industry . . . I remind the Senate that any impression that there was agreement is purely accidental. There was a series of meetings and everyone except Mr Kerin agreed. So one could be excused for thinking that there was agreement all round. A Press release of 1 March-this was a very important day-from the office of the Minister for Primary Industry stated: The Minister for Primary Industry, John Kerin, said that Premier Cain's intervention has meant that agreement was able to be reached by the States on the central elements of the ADIC plan. The Minister said: I have always promised the industry that I would take ADIC to the Cabinet . . . Later on he said: The States now have agreement on a 2 cent/litre levy and that they will not trade market milk interstate. In keeping with my consistent position on the ADIC plan I will convey the agreement reached to my Cabinet Colleagues . . . I believe that those statements give an impression which is more true now than it was at the time they were made. It is distasteful that such a document was ever produced. How can the returns be improved? Is there more money in the system? I was listening to a representative of the Canadian dairy industry recently, who said that producers in his country get 80 per cent of the retail price of milk. In the Industries Assistance Commission report there is a schedule dated 1 October 1983 which shows that in Victoria 40 per cent of the price goes to the producer and 60 per cent goes to other interests that take a slice along the way. I do not know why Australian producers should have so much trouble getting paid a reasonable price for their products. On several occasions the Minister for Primary Industry has made mention of the national industry concept. I must respond on the basis that setting one State against another and every processor against every other processor will not and could not achieve that aim. The results would be exactly the opposite. To remove the fundamentals of the arrangement with New Zealand on dairy marketing can only encourage our friends across the Tasman also to ignore the arrangement. If they do, Australia and her industry will suffer most. I implore the Government not to do anything that would damage or destroy a very sensible arrangement, one which I hope could be extended to other industries for a similar good purpose. I ask the Government also to consider the price of milk in the EEC countries. It should add to that price the normal cost of production, holding and transport charges, and apply countervailing duties across the board where it is apparent that product is reaching us at low prices. I also draw attention, as did Senator Watson, to the fact that approximately 10,000 tonnes of cheese enters Australia every year which fails to pass the fundamental health standards applied to Australian production. I ask that the Government ensure that the health standards of imported cheese be no lower than those required for Australian produced cheese. That sector alone involves well over 100 million litres of milk per annum, and I believe we could start there. Over the past two months farmers, processors and State governments have presented their cases and facts in Canberra in an excellent manner. I must say that the industry is in very good hands. Even though this debate cannot produce the result that has been agreed upon by the various State governments and the industry, that certainly is not for the want of effort and the manner in which the dairy industry has put its case. I congratulate it for that. I draw attention to the facts relating to the manufacturers as well as to the producers. Since the 1977 legislation the industry has complied with everything that the law required. It has done all those things requested of it. It has amalgamated, modernised, automated and chased markets, and many parts of the industry have changed their product pattern to a very considerable degree. In summing up in the other place the Minister made a gratuitous comment about the fact that the Opposition had just taken the advice of the industry. His comment was anything but complimentary. Clearly that was not so. The Opposition at no stage accepted the proposition that the industry put forward. The Opposition went through the case very thoroughly with the industry. The Opposition negotiated with the industry, reduced and refined its plan and did everything possible to come up with a case that we believed was absolutely impeccable. We had a lot of difficulty trying to get the industry to stick with the agreements that were made. We need to bear in mind the fact that the Minister's comment was so inaccurate. Perhaps if the Minister had listened to the industry more we would not be in the mess we are now in. Mr Wright, a member in the other place, suggested that we not worry about it. His advice was just to get started and wait and see. Rural areas of Australia have been watching the Canberra performance fairly closely and many country people will be looking at the support given to the industry by the incumbents of various seats. Those incumbents include the honourable member for Rankin (Mr Beddall), the honourable member for Bendigo (Mr Brumby), the honourable member for McEwen (Mr Cleeland), the honourable member for Hunter (Mr Fitzgibbon), the honourable member for Leichhardt (Mr Gayler), the honourable member for Streeton (Mr Lamb), the honourable member for McMillan (Mr Cunningham), the honourable member for Ballarat (Mr Mildren), the honourable member for Eden-Monaro (Mr Snow) and the honourable member for Capricornia (Mr Wright). I suggest that some of those members ought to be looking over their shoulders right now. Senator Button —Is that the way we should determine an industry structure, Senator? Is that what you are saying? That is what you are saying, isn't it? Senator ARCHER —I am saying that those members will have their performances judged in the electorate. That is something we should all consider. Many speakers in the overall debate on the dairy industry have made much of protection, support, market forces, efficiency and so on. They have used all those modern buzz words. I just wonder what they are talking about. How can one operate on what is a real market price? How can one work with a free market force when the greatest single cost is so totally protected? How can one compare efficiency when various factors are totally controlled-for example, the cost of wages? How can one judge performance while that is the case? Again I commend the industry on the way it has taken every step possible over the last couple of years to try to get changes made. It knows what changes are necessary and has endeavoured to institute them. It was the industry which brought forward all the points we have been considering. Not a soul is arguing about the need to curtail production; no one is arguing that we need a cut and shut industry, but we do want to know what it is going to be like and we want some choice for the people presently in the industry. Our argument concerns the insensitivity of the plan, the total arrogant disregard of its social and financial impact. Whole rural communities will suffer. I list nine problems resulting from the legislation. It will do nothing to control production next year; probably it will have the reverse effect. It totally destroys the current market signals and replaces them with historic prices; it upsets our relationship with New Zealand, based on our memorandum of agreement; and it destroys our concept of a national industry by playing every State against every manufacturer. Milk prices can never go up by the 30c that the Minister has been talking about; they can only come down. There can be no less regulation. Regulation will be shifted more to the States and will involve more Australian Dairy Corporation staff. Pooling is just not understood by the Minister and his Government, and the enormous financial involvement of both Government and industry in this plan could be alleviated if the implementation of the plan were delayed for just a bit longer. I ask that for the industry's good the Government reconsider these points that have been put forward. Senator SHORT(Victoria)(12.01) —Much has already been said in debate on these dairy industry Bills by members of the Opposition and I do not propose to traverse too much of the ground already covered. I note in passing that with the exception of the Minister for Finance (Senator Walsh) only two Australian Labor Party senators have participated in this very important debate. Indeed only Senator Cooney even attempted to address the central issues. There are certain issues I wish to touch on because of the importance of the dairy industry on a national basis and because 60 per cent of the industry is concentrated in my own State of Victoria. Almost 90 per cent of Victorian milk production goes into manufactured dairy products-a higher proportion than in any other State except Tasmania. The importance of the dairy industry is often overlooked. It directly employs about 57,000 people; 40,000 of them on almost 20,000 dairy farms and 17,000 or more in some 260 dairy factories around Australia. Many more people's livelihoods depend indirectly on the industry, particularly in country areas. The total value of dairy production exceeds $1,000m per annum, or approximately 8 per cent of the gross value of Australia's total rural production. It contributes between $350m and $400m in export earnings each year. So the industry is very significant. Not only is it significant but it is also highly efficient in some States, particularly Victoria and Tasmania. The industry in those two States is the second most efficient in the world, second only to New Zealand. Not many other Australian industries, if any, can claim this degree of comparative international efficiency. What is even more remarkable is that this efficiency has been achieved despite a horrendous maze of regulations imposed by both State and Federal governments. I will come back to that point in a little more detail later. One example is that Victoria alone has specific pricing arrangements for no fewer than 331 milk products. In effect, so complicated are the overall regulatory controls on the dairy industry that we do not have a national dairy industry; rather we have seven separate industries-one in each of the six States plus an export industry for manufactured milk products. It is this export industry which is the major problem, though not the only problem, facing the Australian dairy industry. It is, in the main, the subject of the Bills now before the Senate. Seventy-three per cent of all milk production in Australia goes into manufactured milk products, particularly butter and cheese. The remainder is consumed as liquid milk. A large proportion of these manufactured dairy products is exported and our exports face fierce and totally unfair competition in third markets from the massively subsidised exports of the European Economic Community. The total cost of EEC subsidies for dairy products is almost $6,000m per year. The Victorian dairy industry, because a very high proportion of its production is exported, is the main sufferer from these unfair trading practices of the EEC. The mountain of EEC subsidised dairy products has become so great that it outweighs Australia's dairy exports by 12 times. It is essentially for this reason that Australia has the problem of considerable over-production of milk. We produce more milk than we can find a profitable market for. Over the past 10 to 20 years the Australian dairy industry has undergone a massive rationalisation in an attempt to cope with the oversupply problem. No other Australian industry has proceeded so far with rationalisation. In the past 20 years the number of dairy farms has been reduced from about 50,000 to fewer than 20,000. In the last 10 years alone the number of dairy factories has been reduced by one-third. The industry has demonstrated beyond any doubt whatsoever the courage to undergo massive rationalisation. However, the problem of oversupply remains. The industry recognises and accepts this fact, and it therefore accepts the major thrusts of the dairy industry Bills we are now debating. Those thrusts are two fold; firstly, to further reduce milk production in Australia and, secondly, to remove and alter some of those regulatory measures which have prevented dairy producers from receiving appropriate market signals which will give them a proper guide as to the directions in which they should be moving, both in terms of the total volume of milk and the most profitable mix of products. So there is no dispute between the Government, the Opposition or the industry over these objectives. There is also general agreement between the Government, the Opposition and the industry that there should be a levy on all milk produced to support the export prices from the corrupted and distorted world market to the level of some 30 per cent above export market prices. There is agreement that the tariffs on imported dairy products should be reviewed; that the Australian Dairy Corporation should have improved access to finance for the marketing of dairy products; and that there is a need for appropriate underwriting provisions. They are all areas of agreement between the Government, the Opposition and the industry. However, there is considerable and totally justified dispute over the manner in which this Hawke Labor Government and the Minister for Primary Industry (Mr Kerin) in particular have treated the dairy industry in their approach to the problems facing the industry. There is also grave and totally warranted concern about the dangerous and disruptive speed with which the Labor Government is forcing the industry to undertake the next major phase of its rationalisation program. The manner of approach towards the dairy industry by this Government can be described only as deplorable. It is brutal, truculent and totally insensitive. Not only that, but also the Hawke Labor Government and the Cain Labor Government in my own State have shown, I believe, a degree of deceit and dishonesty in their dealings with the dairy industry and the electorate that defy accepted codes of political decency. I will illustrate that harsh condemnation with two examples. On 12 November 1984, only three weeks before the Federal election, the Minister for Primary Industry released a statement which said, inter alia: I have not moved away from the levy entitlement plan negotiated between me and the Australian Dairy Industry Conference and supported by the Australian Dairy Farmers Federation. On 28 February 1985, two days before the Victorian election, the Victorian Labor Premier, Mr Cain, claimed that he had obtained agreement to a plan for the dairy industry, supported by the industry, the Federal Government and the six State governments. This claim by Mr Cain probably won him the State election. Two days after the State election, the Federal Minister for Primary Industry announced that the Federal Government rejected this plan. Rarely, if ever, in Australian political history has a government, and in this case two governments, both Labor, perpetrated such a wilful deceit on an industry or on an entire electorate. Senator Collard —A cynical political exercise. Senator SHORT —It certainly was. The new plan for the dairy industry which the Hawke Government eventually came up with in March contains a number of extraordinarily harsh provisions. The Government, when the Bills were debated in the other place, was almost totally intransigent on these provisions and it has refused to budge. I find it difficult to understand the reasons for this intransigence. The provisions to which the Opposition and the industry so strongly object do not go to the heart of the Government's proposals. As I said earlier, both the Opposition and the industry support the general thrust of these proposals. The objectionable provisions relate only to the timing of the implementation of some, not all, of the Government's plan. There are two areas in which we believe the timing which will be imposed by the Government is far too harsh and draconian. The changes which will be imposed on the industry have far-reaching economic and financial implications for whole communities and they have also enormous potential social implications. The dairy industry and the communities dependent on the industry are not looking for relief from these changes. All they are asking for is a little more time in which to carry out the transition process. The Government is saying that most of the changes must come about on 1 July 1985. The industry and the Opposition say that this period, of only another five weeks, is too short in respect of some of the provisions and that the adjustment time span should be lengthened by up to a couple of years. The Opposition is pressing for a slightly lengthened time span in only two areas. The first area is to extend the existing export pooling arrangements for butter and cheese by two years, to apply from 30 June 1987, instead of 30 June 1985 as proposed by the Government. The second area is to maintain current domestic prices for two years instead of the one year as decided by the Government. There is a third amendment that the Opposition is proposing, which I will briefly mention later. The Opposition's amendment to extend the existing export pooling arrangements for butter and cheese for two years would give the industry time to adjust and respond to the changeover during the next six to 12 months. It is not just dairy farmers who will be affected, but also dairy factory employees, particularly in the co-operative dairy factories in Victoria and Tasmania. Without this two-year extension the industry will suffer enormous and totally unnecessary upheaval and hardship. If the pooling is taken away immediately, the Australian Dairy Corporation, which currently funds advance payments to manufacturers of up to 90 per cent of the underwritten product value, could well be forced immediately to reduce its lending from 90 per cent of the product value to as low as 50 per cent of a more conservative valuation of that produce. This, in turn, would reduce significantly the first advance payments to farmers. Quite frankly, although neither the industry nor the Opposition wishes to oppose the nature of this change, we believe it is nothing short of brutal to introduce it with such savage speed. The pooling arrangements have been in operation for 50 years. The whole industry has been built around these Government imposed arrangements. There seems to me to be no valid reason whatsoever for terminating them with such brutal rapidity, rather than to do so in two years time, thereby giving the industry some breathing space in which to adjust. It is important to note that the Industries Assistance Commission, in its report of March 1984 on the dairy industry, agreed with this view of the Opposition. The Government has chosen callously to ignore the IAC recommendation. The second amendment of a timing nature which the Opposition will move is to maintain current domestic prices for two years. The Government's proposal is for only one year, after which domestic prices would be phased down to a level 30 per cent above the export price. Under the Government proposal, assuming that market milk prices and the level of milk production for the next year or so remain unchanged, levies on butter and cheese will drop by an estimated 50 per cent in 1986-87. The Government's proposal fails to recognise that a large proportion of dairy products manufactured in one year are not sold until the following year. By extending the existing support levels for two years rather than one year, dairy production would be covered for around 18 months rather than the six months which would be the case under the Government's proposal. The two-year extension seems much fairer than the Government's proposal. It takes account of the nature of the industry, including the fact that it takes time to reduce herd numbers where breeding programs are based on a cycle of about two and a half years and the inescapable average six-month lag between the production and the sale of dairy products. The amendment that the Opposition proposes would leave the industry in exactly the same position in five years time in relation to domestic prices as would the Government's plan. The big difference is that our amendment would give the industry a little more time to make its initial adjustments and would provide a simpler and more predictable mechanism to reduce production levies over the period. It would therefore permit better business planning by the industry and would be less socially and economically disruptive in the short term. If the Government's proposals on export pooling and domestic price support levels are adopted without the amendments that the Opposition proposes to move, the regrettable result will be that, although rationalisation of the industry will occur, it will be the younger and most efficient producers, particularly in Victoria and Tasmania, and not the least efficient producers, who will be forced out of the industry. Surely that cannot be the Government's intention. The third amendment that the Opposition will move does not relate to timing. Rather, it relates to the method of establishing market support payments. Without going into the technical detail, the effect of the Government's proposals in this respect will be to distort the market as between dairy products by giving greater market support to whole milk powder than to butter and cheese. This would cause levy funds collected from farmers to be transferred to the two large dairy product producers, Nestle Australia Ltd and Unigate Australia Pty Ltd. The amount involved could be some $5m per annum. The Opposition believes that this in an inequitable anomaly and we propose a simple amendment to overcome the distortion. It is also worth noting that the three problem areas we see in the Government's plan for the dairying industry go beyond that industry; in particular, as Senator Brownhill mentioned earlier, the Australian oilseeds industry is also concerned because of the disruptive effects that the timing of implementation of the plan will have on the margarine industry. It is also important to recognise that the problems confronting the dairying industry in Australia go well beyond the problems with which these Bills are concerned. Most of those other problems lie squarely at the feet of State governments. I mentioned earlier that, with respect to the domestic market in Australia, there are really six separate dairying industries, one in each State. Each State has cosseted, shackled and inhibited its dairying industry with a positively mind-boggling array of regulatory controls. I mentioned that in my State of Victoria there are 331 milk products subject to separate pricing arrangements. These arrangements have not assisted the industry. On the contrary, they have compounded the industry's problems over and above the problems caused on the export markets by EEC dumping. The lack of flexibility in pricing imposed by the Victorian Government inhibits the highly efficient Victorian dairying industry from competing in its own market and in interstate markets. However, the other major internal problem for the industry is the present restraints which exist on interstate trade in milk. Part of this restraint has arisen from the Dairy Industry Assistance Act and the Dairy Industry Assistance Levy Act which the previous Federal Government enacted in 1977. These Acts were never proclaimed but there is no doubt that their very existence has been seen by the dairying industry as inhibiting interstate trade in milk. The Opposition welcomes the Government's intention to repeal those Acts. But this action will not by itself open up interstate trading. That will require action by State governments, which have the responsibility for the regulation of the market milk sector. It is essential that State governments, and most of all the Victorian Government, take steps to remove their plethora of regulations over the dairy industry to make it a truly national industry. The present situation is totally unacceptable for both producers and consumers alike. The Cain Government in Victoria has shown no signs of taking any initiative to resolve this situation. Indeed, it appears to have enshrined price fixing arrangements in its latest Act relating to the dairy industry. If that is the case, it should stand condemned by every dairy farmer in Victoria. To return to the Bills, I summarise by saying that the Opposition, like the dairying industry, is in agreement with the overall objectives of this legislation. However, we condemn the Government for the manner in which it has treated the dairying industry in the long negotiations and the way in which it was so deceitfully dishonest not only with the industry but also with the electorate before both the last Federal election and the Victorian State election. We also consider that the Government is planning to implement several of its proposals with totally indecent haste, which is both brutal and unnecessary. It is a pace which ignores the fundamental practical realities of the industry. It is a pace which will cause massive economic and social dislocation, particularly in Victoria. All members of this Labor Government who claim to be representative of rural electorates should hang their heads in shame at the social and economic hardship which the timing of the implementation of the Government's legislation will cause. I urge Government senators to remove this quite unnecessary hardship by supporting he Opposition's amendments. I welcome the decision by the Australian Democrats to do so. I believe honourable senators on both sides of the chamber must have been appalled at the truculence of Senator Walsh in his outburst in this place yesterday when he attempted to blackmail Opposition and Democrat senators into supporting the Government's proposals without any amendments. Not only did he demean himself and the Government; he demeaned the Senate. For that he, and through him the Government, will stand condemned by the Australian electorate. Finally, I wish to record publicly my tribute to certain people and organisations that have worked so hard, so patiently and in such a willing spirit of negotiation over many months to reach a satisfactory negotiated compromise over these difficult issues. I particularly mention the representatives of the Australian Dairy Farmers Federation, the Australian Dairy Industry Conference and the United Dairy farmers of Victoria. I also pay great tribute to my colleague Mr Ralph Hunt, to the members of the Opposition's primary industry committee and especially its Chairman, Mr Peter Drummond, and to several of my Liberal Party Senate colleagues, notably Senators Archer, Lewis and Watson. Senator HAMER(Victoria)(12.25) —The dairy industry is a perfect example of the overregulatory madness which besets this country and which has caused a decline in our status from being the richest country in the world per capita 80 years ago rivalled only by the Argentine. We have now fallen to about sixteenth and are still falling. There can be no dispute that the dairy industry is in great difficulties. The outrageous behaviour of the European Economic Community has depressed world market prices for dairy products below the costs of production in the most efficient countries, of which Australia is one. Some support for our dairy industry is essential if we are to continue with the exports which have made an important contribution to our balance of payments. The present system just does not work sensibly and produces absurdities, such as making it profitable for manufacturers to produce products and to sell the milk product for 5c a litre when it costs more than 12c a litre to produce. Any system which produces results like this has to be changed. It is not only the export markets that are in trouble. We have an internal liquid milk marketing system which is economically absurd, pre-dates Federation and ignores the existence of refrigeration. Because of the grossly overregulated nature of the industry we are producing six billion litres of milk a year when there is a market for not much more than five billion litres. The returns for the people working in the production end of the industry are far too low-far below average weekly earnings for some of the hardest working people in the community. Obviously something has to be done. One of the depressing things is the way in which industries which are in regulatory chains seem to hug their shackles like a security blanket and, instead of wishing to be rid of them, merely want their arrangements to be adjusted a little. Primitive tribes used to go through prayer ceremonies each sunset for the sun to rise again the next day. I do not know whether they all believed this was necessary, but no one was prepared to take the risk of not doing it. But the sun will still rise if we deregulate. We must reduce the gross overregulation in this industry which results in instances such as the Victorian Dairy Authority setting no fewer than 331 separate prices for milk products from farm gate to consumer. This sort of overregulation damages everyone and the whole national economy. What is to be done? As I have said, there is no doubt that if we are to continue to export we will have to subsidise our exports and a levy on milk production, the cost of which will ultimately be paid for by consumers, is probably a fair way of providing this subsidy. I agree with the amendments moved by the Opposition, which would have the effect of making the transition to a lower level of milk production more gradual and giving more time for dairy farmers to adjust and perhaps shift into other forms of production. But what is really crazy is the domestic whole milk marketing situation in Australia. That is why I have the sacred cows in my sights. It is a fact of life that different primary products are produced more efficiently in different areas. Take bananas, for instance. As far as I am aware, no one has suggested that bananas should be grown in each State and each State should have a banana marketing board to insist that only bananas grown in that State should be marketed there. Senator Crichton-Browne —That is what they have done to sugar. Senator HAMER —Sugar is the other terribly overregulated industry and is the other industry which has serious problems. There is a cause and effect. Overregulation produces serious problems. No one has suggested that only Tasmanian bananas should be marketed in Tasmania. That is economically absurd. But we are doing just that with our milk marketing. As a nation we should be in the business of doing things in the areas where we do them best. Where do we produce milk most efficiently in Australia? I seek leave to incorporate in Hansard a table showing the cost of milk production per litre in each State in Australia. This has been cleared with the Leader of the Government in the Senate (Senator Button). Leave granted. The table read as follows- CASH COSTS AND CASH RETURNS FOR MILK PRODUCTION PER LITRE, BY STATES 1982-83 (latest figures available) Cash Cash receipts costs State per litre per litre c c New South Wales 28.6 19.7 Victoria 21.0 13.0 Queensland 28.8 17.2 Western Australia 41.2 25.1 South Australia 28.7 18.0 Tasmania 24.3 13.9 Australia 24.2 15.2 Source: BAE: Rural Economy Quarterly Review. February, 1984. Senator HAMER —This table shows clearly that milk is much more cheaply produced in Tasmania and Victoria. Senator Collard —Is this on a seasonal basis? Senator HAMER —Yes. There is a thing which has been invented perhaps since Senator Collard went to school called refrigeration. This table shows clearly that milk is much more cheaply produced in Tasmania and Victoria. Milk costs 13c a litre to produce in Victoria and just under 14c a litre in Tasmania. The costs in other States are considerably higher-17c in Queensland; 18c in South Australia; almost 20c in New South Wales; and 25c in Western Australia. There is no sensible reason to try to prevent milk from the more efficient producing areas of Australia being sold in the higher cost areas. If there is a genuine local demand at certain times of the year for locally produced milk at prices that it can be produced for locally, of course the demand will be met. One does not need State government interventions to do this; entrepreneurs and the market will do it for them. In fact, the only thing that can stop it happening will be if State governments endeavour to regulate. There are also transport costs. I am told that the cost of transporting milk from Victoria to New South Wales is about 4c a litre and the cost of transporting milk from Victoria to Queensland is between 8c and 10c a litre. If one studies again the table I have incorporated in Hansard one will see that the Queensland milk industry would be totally protected by transport costs from milk exported from Victoria. In the case of Western Australia, even though its costs of production are nearly double those of Victoria it, too would be protected from competition by transport costs. There is no need for regulations to prevent this happening; the market will do it for them. There is no need for State government interventions. Australia should be one national milk market. Anything else is an economic monstrosity. At the moment State government regulations hinder the movement of market milk between States. These regulations are not only costly to the community but they are also illegal. The current arrangements are clearly in breach of section 92 of the Constitution, which states: On the imposition of uniform duties of customs,-- this has happened, I can assure honourable senators- trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free. In the mid-1970s this was tested in the High Court of Australia. A Victorian company challenged the validity of certain provisions of the New South Wales Dairy Industry Authority Act 1970 and the New South Wales Pure Food Act 1908. These provisions operated to make illegal the possession and sale of milk produced in another State and brought from that State for the purpose of sale in New South Wales. The High Court held that, in the absence of any suggestion that such milk was unsuitable for human consumption, certain provisions of the New South Wales Acts could not validly operate with respect to milk supplied and sold in the course of interstate trade by a Victorian processor by reason of section 92 of the Constitution. What happened? I am sure that honourable senators, knowing the grotesquely overregulatory nature of this industry, will not be surprised to find there was a deal by which Victorian producers would supply 45.898 per cent of the milk to the Albury section of the Murray milk industry and 8.67 per cent for the central southern distribution industry. What economic madness! What a bureaucrat's delight! It is high time a few of these sacred cows were shot and market forces determined who provides the milk most efficiently for the benefit of both efficient producers and the consumers. One great gap in the Kerin plan is that there is no impact statement on what the effect will be on the industry. There is an impact statement on what the effect will be on the Government, but nothing about what the impact will be on the industry. I strongly suspect the results will be a phasing out of many of the efficient and younger-and, therefore, more debt ridden-milk producers in Victoria and Tasmania. When I said earlier that the Australian dairy industry was one of the most efficient in the world I did not mean that on a nation-wide basis. In many areas we produce milk very inefficiently and expensively. Surely any plan that results in the retention of costly production of milk and the phasing out of efficient milk producers needs further thought. Senator CRICHTON-BROWNE(Western Australia)(12.36) —We are debating the Dairy Produce Market Support Levy Bill 1985 and cognate Bills. This is a package of legislation which is designed essentially to establish new marketing arrangements for the dairy industry. In general, I think it is fair to say that there is agreement over the nature and extent of the problems facing Australia's dairy industry and the direction in which the industry should be headed. However, at the same time it is important to bear in mind the importance of the dairy industry and the tremendous contribution which it has made in the past, is presently making and will continue to make in the future to our economy. The gross value of dairy production in 1984-85 has been estimated preliminarily to be worth $1,074m. Exports of dairy products are estimated at $400m by the end of this financial year. Looking at employment in isolation, the industry directly employs about 64,000 people in more than 18,335 farms. A further 17,900 people are employed in 264 dairy factories. However, the dairy industry has been faced with appallingly low returns in recent times. On dairy farms in 1983-84 the income per man year of labour was only $10,099. Perhaps more importantly, the farm income per work year of family labour, which is more relevant, is forecast to be $4,345 in 1984-85. The present dilemma of the Australian dairy industry needs to be seen against the decline in international prices for all major dairy products and the reason for this international decline. In terms of Australian currency, international prices fell by 19 per cent for butter and 14 per cent for both cheese and skim milk powder during 1983-84. To put Australia's position in the world economy in perspective I shall read the figures for world trade in major manufactured dairy products. For example, the European Economic Community was the source of 60 per cent of world exports between 1980 and 1982, followed by 19 per cent for New Zealand, 9 per cent for the United States and only 5 per cent for Australia. Also, when it is understood that only 5 per cent of world production is traded internationally, it is obvious that small changes in production and consumption can result in very sharp fluctuations in the price at which dairy products are traded internationally. Without going through in great detail the various and varying forms of subsidies paid to European Community and United States farmers, I point out that it is the level of support to farmers in these countries and the dumping methods used, particularly by the European Community, that have led to the presently depressed levels of manufactured milk products and the high levels of surplus stocks on hand. In terms of United States currency, in 1983 United States producers received 27.8c a kilogram, West German producers received 25.2c, British producers 21.6c and French producers 20.6c. Australian producers received only 14.2c. It is true that that is counteracted, accommodated and assisted in part by the fact that Australian producers receive a higher price than their overseas counterparts for their market milk, but in terms of manufactured milk products, it gives a clear example of the advantage provided to the producers in overseas countries by subsidies granted by their governments. The net result of these heavy subsidies to overseas farmers has been to create massive stockpiles and to drive export prices down, in some cases, below the General Agreement on Tariffs and Trade prices. The industry itself has already recognised-as we have-the need for reductions in production and for the rationalisation of the industry. At present there are distortions and wrinkles in the industry which must be ironed out. The community accepts that, the producers accept that, the manufacturers accept that and the Opposition accepts that. Sadly, the Government does not understand that this needs to be done in a sensible, reasonable, rational and balanced way in order to provide continuity of supply and continuity of a reasonable source and level of income for the producers. Stocks of dairy produce are at present at record levels. In the European Community and the United States stocks of butter and skim milk powder are in excess of one million tonnes in each area. That figure can be put into perspective when we consider that the volume of Australian exports in these products in 1983-84 totalled 92,000 tonnes. Our total exports were 92,000 tonnes, compared with two million tonnes of stocks held on hand in surplus by the United States and the European Community. In view of the time I seek leave to continue my remarks later. Leave granted; debate adjourned. Report of the Committee for Reasons Senator COLLARD(Queensland)(12.42) —I present the report of the Committee appointed to draw up the reasons for the Senate not agreeing to the amendment made by the House of Representatives to the Wheat Marketing Amendment Bill 1985. The report, which has been circulated to honourable senators, is as follows: Having regard to the fact that the Australian Wheat Board is an entirely self-funded body that is wholly and solely responsible for the disposal of its product, it is the view of the Senate that the amendment to the Bill by the House of Representatives should be rejected. It is the Senate's belief that the wheat growers of Australia should have majority control on the Board. The Government's desire to have people with special expertise (with which the Senate agrees) is accommodated by having three such people on the Board. However, the Government's arrogant threat as 'proposed' by the Minister Representing the Minister for Primary Industry, Senator Walsh, to abandon entirely the Australian Wheat Board seems excessive in the light of the fact that the Senate is proposing three members with special expertise as against four as proposed by the House of Representatives. I thank my colleagues on the Committee, Senator Macklin and Senator Archer. I move: That the report be adopted. Senator GRIMES(Tasmania-Manager of Government Business)(12.44) —I thank Senator Collard for giving the Senate the results of the Committee for Reasons. The Government recognises the reality of the numbers in this place and understands that these honourable senators had a duty to do. I merely make the remark that I do not think the situation is helped particularly by the whole of the Senate using the pejorative terms used by Senator Collard and his colleagues in the presentation of this report to another place. However, if we must play party politics in reports like this, I suppose we must. The best thing to do is to let it pass through. Question resolved in the affirmative. Sitting suspended from 12.45 to 2 p.m. Senator DURACK —My question is directed to the Leader of the Government in the Senate. I refer to the ministerial statement he made in the Senate yesterday on the Government's response to the report of the Hope Royal Commission on Australia's Security and Intelligence Agencies. I refer him to the section of the response dealing with the establishment of a parliamentary committee, which states: While the Government has been conscious also of the need to carefully protect intelligence and security information, it believes that appropriate arrangements can be made to ensure that a small but informed Parliamentary Committee would operate effectively . . . . . . appropriate safeguards for national security classified material would, of course, have to apply. I ask the Leader of the Government whether such appropriate arrangements and safeguards will include any form of security clearance for senators and members who would serve on that committee. Senator BUTTON —A number of detailed matters have to be attended to under the general heading of the proposal to establish a parliamentary committee which would be responsible for the functions as set out in the ministerial statement referred to by Senator Durack in his question. The appropriate measures, as referred to in that statement, will be presented to the Parliament in the Budget sitting, after the recess. Senator DURACK —Mr President, I ask a supplementary question. Does that answer mean that the Government has decided to establish this committee without addressing such a fundamental question as security protection? Senator BUTTON —No, it does not mean that. Senator ELSTOB —Can the Minister representing the Minister for Employment and Industrial Relations confirm that there is an acute shortage of skilled computer personnel in Australia? Given the rate of unemployment and the potential job market in the computer industry, has the Government tackled this situation and, if so, by what means? Senator WALSH —I am informed that demand for skilled computer personnel has risen rapidly during the last 18 months in response to the general economic recovery brought about by the policies of this Government. Growth in demand, however, has varied by skill level and experience, rising only moderately for recent graduates but strongly for skilled programmer-analysts with extensive commercial experience. Some shortages of high level and specialist skills have been reported. The Government is responding to the shortages in a number of ways. Priority is being given to action to meet future requirements for computer-related skills as far as possible from domestic resources. However, an international labour market exists and the higher levels of programmer-analyst occupation at those levels and some continuing reliance on immigration may be necessary. Higher education institutions have substantially increased training intakes since the mid-1970s. The share of domestic training in the total supply of computer programmers and systems analysts has risen from about 50 per cent in 1979-80 to about 60 per cent at present. The Government, through the National Training Council's Standing Committee on Training for Advanced Technology, is also examining measures to bridge the experience gap which often confronts new entrants to the programmer-analyst work force. The Department of Employment and Industrial Relations is currently assessing the need for overseas recruitment of skilled computer personnel in the context of the skilled immigration program for 1985-86. The results of that assessment will be announced shortly. Senator CHANEY —I ask the Minister for Finance whether he is aware that, speaking yesterday about the possible discounting of the consumer price index for the effects of any new consumption tax, Mr Cliff Dolan said: We have said that we will not countenance that under any circumstances. Given the Minister's view that the introduction of such a tax without agreement on discounting would be 'quite catastrophic'-Senator Walsh's words-does this restatement of the union movement's opposition effectively end the prospect of a broad-based consumption tax, particularly as it comes only 24 hours after the Treasurer spent a day with members of the Australian Council of Trade Unions Executive putting his case and answering their concerns? Senator WALSH —Yes, I did see reports of what Mr Dolan has said. He has a view. As far as I am aware, the ACTU does not have an official view at this stage. The more relevant question for the Government is: What will the Government's policy be if that situation arises? It had been made very clear by various Government members that the Government would argue that, if there is to be a broader-based or deeper consumption tax which significantly increases the CPI, that CPI increase should not flow through into wages. Senator CHANEY —Mr President, I ask a supplementary question. The Minister, in his answer, attributed Mr Dolan's views to his speaking in a personal capacity. Mr Dolan is reported to have said that it is the ACTU which has clearly stated its opposition. I ask the Minister: Is he in a position to confirm whether Mr Dolan was speaking in a personal capacity or as President of the ACTU? Is he denying that the ACTU view is as presented by Mr Dolan? Senator WALSH —I apologise. I read the report quickly. I did not realise that Mr Dolan was claiming to speak officially on behalf of the ACTU. Assuming that report is correct, I do not really know whether the ACTU has made a formal decision on this matter or not. Senator RICHARDSON —Is the Minister representing the Treasurer aware of an article which appeared in the Sydney Morning Herald on 9 May 1985 which reports on comments made by Mr Ian Temby, QC, Director of Public Prosecutions, that it could take 10 years or more to complete legal action against bottom of the harbour tax schemes? Is it true that only one person has been convicted for bottom of the harbour offences? Has the tax avoidance legislation so far enacted been an effective mechanism in recouping lost taxation revenue? If not, will this revenue shortfall cause budgetary problems? Senator WALSH —I have seen the Press report to which Senator Richardson refers. It is out of context or, probably more accurately, incomplete. In reply to a question, Mr Temby said: It could well be that the last bottom of the harbour case will not be finished until 10 years hence if every person criminally involved to any extent was prosecuted. The latter part of that statement was not reported. It is not correct to say that only one person has been convicted. As of now there have been two convictions, of Messrs Faint and Hurley, who were each sentenced to two years imprisonment. There will, however, be cases running for some time. Committals currently are a minimum of three months. Some may be as long as 18 months. There are delays in cases being listed due to normal court delays. The trials are lengthy and complex. Inevitably, there will be appeals and procedural sidetracks; for example, reviews under the Administrative Decisions (Judicial Review) Act. Also proceedings are anticipated to restrict extraditions from one State to another. Over 50 people have been charged with bottom of the harbour offences. The investigation of a number of others is continuing. In regard to the last part of Senator Richardson's question, as to whether tax avoidance legislation so far enacted has been an effective mechanism in recouping lost tax revenue, the answer would have to be no, it has not been completely effective because the Senate insists on rejecting the legislation that would make it completely effective. Indeed, half the Senate continues to express the view that if somebody has had his fist in the till all the week, and he is caught with his fist in the till on Friday, he has to give back what he pinched on Friday but he does not have to give back what he pinched on Monday, Tuesday, Wednesday or Thursday. That is the view of half the Senate. It is not the view of the Government. The view of the Government is that he should have to pay it back no matter when he pinched it. Senator CHIPP —I ask a question of the Minister representing the Attorney-General. I refer to the appalling circumstances surrounding the death of a three-year-old girl in Melbourne this week after she had been put on a water diet for four weeks. Is the Minister aware of the grave concern expressed by police about the total breakdown in community services in relation to this case? At the Attorney-General's next joint meeting with State Attorneys-General will he raise this issue with a view to ensuring that laws relevant to situations like this are uniform throughout the Commonwealth and are stringent enough to avoid a repetition of this tragic case? Senator GARETH EVANS —I will, of course, pass on Senator Chipp's concern about this matter, which I am sure represents and reflects the concern of many other honourable senators in this place, to the Attorney-General. As Senator Chipp acknowledges, this is a matter in the first instance for State law and not something as to which the Commonwealth can do more than encourage the implementation of effective law around the rest of the country, perhaps by way of not only encouraging uniform laws but also setting an example here in the Australian Capital Territory. In that respect I mention that the Law Reform Commission did prepare a report some little time ago on child welfare, an excellent report, which was presented to the previous Government and which contains very valuable discussion of the problem of neglected children, including the question of children in the care of medical treatment. The Government is still studying that report with a view to its implementation in the Australian Capital Territory. That, in conjunction with the recently released Carney report in Victoria, also dealing with child welfare matters, suggests that there is now a solid basis of research and recommendation on which appropriate laws and procedures can be built, to the extent that there are inadequacies in existing law and practice. Senator ROBERTSON —Is the Minister for Finance aware of a call by the honourable member for the Northern Territory, in his capacity as shadow Minister for northern development and local government, for the establishment of a new State of north Queensland? Can the Minister inform the House of the cost of the honourable member's proposal? Senator WALSH —In answer to the first half of the question, I am aware that the honourable member for the Northern Territory, in speeches in Innisfail and Townsville, called for the establishment of a new State. Indeed he said: There is no reason at all why there must always be a six State Australia. The Northern Territory will make it seven and eight or nine would do just as well, probably better. He also called for full representation in the Senate for the new State as well as full representation in the Senate for the Northern Territory. That, of course, has quite significant cost implications by itself. If the Northern Territory were to have a full representation of 12 senators and if there were to be 12 senators from one or two extra new States created in northern Queensland there would be an increase of something like 100 politicians. I am not sure off the top of my head what the cost of that would be, but it would certainly run into many millions of dollars. The total cost of the package of that number of politicians with office equipment, staff and everything else, would be of the order of $22m. If the Northern Territory is an indication of the bureaucracy required to run the proposed State or States, there would need to be about an additional 14,000 public servants and that would cost in the order of $400m. If the area to be encompassed by the proposed State were the area north of the Tropic of Capricorn which has about one million people or six to seven times the population of the Northern Territory-the Northern Territory receives some $700m-odd of Commonwealth funds, which is more than four times the national average-and if the new State or States of north Queensland were to be formed and if they were to run governments as extravagant as that run by the honourable member for the Northern Territory when he was Chief Minister, and on the same basis, the additional cost to the Commonwealth Budget would be of the order of $3 billion to $4 billion. Perhaps one of the most extraordinary things of all in the speech of the honourable member for the Northern Territory was this: North Queensland needs to by-pass Brisbane, removing what is effectively an unnecessary level of decision making between the north and the realisation of its aspirations. That gives us a hint as to what Mr Everingham thinks of the Premier of Queensland. Since Mr Everingham is the spokesman for northern development and local government on behalf of the Liberal Party of Australia, I cannot say whether he was speaking officially on behalf of the Liberal Party and whether we should expect that the Liberal Party will officially incorporate into its policy establishment of one or two new States in north Queensland with the consequential increased expenditure which that would generate. Senator PETER RAE —I would like to be serious and ask the Minister for Finance a question which follows Senator Chaney's question in a further attempt to elucidate something from this Government in relation to one of the most important questions facing Australia. The Minister will no doubt recall that in answer to a question from me on 7 May, and in dismissing the views of Mr Joe Thompson about union opposition to discounting the consumer price index for the effects of a consumption tax, he warned that in the absence of discounting a feedback into wages could sustain a very much higher level of inflation and he said that views of significant people in the trade union movement on discounting were 'terribly important'. I emphasise the words 'terribly important'. Is the Minister aware that, in restating the opposition of the Australian Council of Trade Unions to discounting, Mr Cliff Dolan, the President of the ACTU, said yesterday: 'It may be a question of accepting somewhat higher inflation than the Government is expecting over the next two years'? Is the Minister concerned at this view or does he still consider that Mr Dolan's opinions are not relevant to the tax debate? Senator WALSH —I am again flattered that the members of the Opposition are such avid readers of my answers to questions. They are apparently titillated by them. I think it is unarguable that if a one-off increase in the CPI was fed back into wages inflation would be higher than it would otherwise have been. When I answered that question on 7 May it was put in the context, if I remember correctly, of an increase in the CPI caused by one-off indirect tax changes of the order of 7 per cent. There is no dispute at all that if one-off increases in the CPI caused only by a change in the taxation system of that magnitude were to be fed back into wages, there would be a substantially higher rate of inflation than would otherwise have been. As for Mr Dolan's comments, the ACTU is coming along to participate in the tax summit. Senator Rae's Leader could also participate in it if he had chosen to do so, but of course he chose not to do so. Therefore one must conclude that he has no views worth putting to the tax summit, which would not surprise many people anyway. I suggest that Senator Rae display a bit of patience and wait until the summit has been held. He will get a better indication of what the ACTU's position is after it has considered the questions and options and so on that are put forward, and the information provided. The Government will make a decision some time after that. Senator PETER RAE —Mr President, I ask a supplementary question. Will the Minister answer the final part of my question, which was: Is the Minister concerned at the view, or does he still consider that Mr Dolan's opinions are not relevant to the tax debate? Senator WALSH —The attitude that the Australian Council of Trade Unions finally adopts on this question will of course be important. Senator COLSTON —I seek leave, Mr President, to ask a question of the Chairman of the Senate Select Committee on Animal Welfare, Senator Georges. Leave granted. Senator COLSTON —I refer to a newspaper article which reports that a Sydney man is organising Australia's first bullfight, at Adelaide in November this year. Has the Select Committee on Animal Welfare had the opportunity to look at this proposal? If not, is it possible that the Committee may be looking at this or similar proposals in the future? Senator GEORGES —Mr President- Honourable senators interjecting- The PRESIDENT —Order! This is Senator Georges's first answer to a question. He shall be heard in silence. Senator GEORGES —Yes, the article concerned has been drawn to the Committee's attention, together with a number of other incidents that have occurred which are of very great concern to the Committee, such as the destruction of wallaby populations in Tasmania by the use of the chemical 1080, the organised deer hunting for the tourist trade in the northern part of Queensland, and the organised pigeon shooting in the streets of Rockhampton in the early hours of the morning. All these matters are a grave reflection on the activity of humans in regard to animals. One can only say that humans do not show up well. The particular matter to which Senator Colston has referred is a startling commentary on human attitudes. It is said in the statement that the ears and tail of the bull will be awarded to the winner of the grand prix that is to take place in Adelaide. If I might say so, other areas of more substantial contact with animals, especially in the field of animal experimentation, leave very much to be desired. We will be making a report to the Senate on the progress of the Committee. We will have in mind the investigation of these incidents. I notice that the Royal Society for the Prevention of Cruelty to Animals in Adelaide is in a position to do something about this matter. Possibly it can be more effective than the Committee. I hope it will take the matter in hand. Finally, if one were to consider the animals and the humans together, one could always ask: Who are the brutes? Senator KNOWLES —Does the Minister for Finance agree with his colleague, Dr Andrew Theophanous, who said on AM this week that working people had borne a disproportionate share of the economic burden in recent times? Given the Prime Minister's view that Australians have been living beyond their means, does the Minister believe that the interests of longer term economic recovery require a reduction in the real level of wages? Senator WALSH —I did not hear the statement of Andrew Theophanous, but I was asked whether I agreed with his statement that in recent times ordinary working people have borne a disproportionate share, or words to that effect, of the burdens on this society. If applied to the period of the last Liberal Government at least, that is undeniably true, because ordinary working people, honest wage and salary earners, were paying their taxes, and other people were not paying their taxes because they were sinking their companies to the bottom of the harbour, particularly in Perth. Given that Senator Knowles was an official of the Liberal Party of Western Australia at the time when more than half the members of the Liberal Party's finance committee were ultimately shown to have been directors of companies which had sunk their companies to the bottom of the harbour, she should, presumably, have had some rather intimate knowledge of the way assorted people were failing to pay the taxes which they ought to have paid, through sinking their companies with their profits to the bottom of the harbour. Because of those actions- Senator Crichton-Browne —Mr President, I take a point of order. I know that, as usual, you will have been listening with a great deal of care to Senator Walsh's discursive response to Senator Knowles's question. I put it to you, Mr President, with respect, that on two occasions Senator Walsh has sought to cast reflections upon Senator Knowles, contrary to Standing Orders. The PRESIDENT —I have listened carefully to the remarks of Senator Walsh. There is no point of order in the point taken by Senator Crichton-Browne. But I ask the Minister to try to restrict his answer to the questions asked by Senator Knowles without getting into the realm of debate. Senator WALSH —Certainly, Mr President. If I was debating the question, I apologise. I thought I was just answering the question whether in recent times ordinary working people have been ripped off and exploited by others. The answer to that, unquestionably, is yes. I was just citing one example of the ways they were ripped off-that half the members of the Liberal Party finance committee in Western Australia sunk their companies to the bottom of the harbour to avoid their taxation responsibilities, and Senator Crichton-Browne and Senator Knowles were senior officials of the Liberal Party at the time all that happened. They ought to have known about it, without asking me. Senator REYNOLDS —I address my question to the Minister representing the Minister for Health. Is he aware that the minority Queensland Government had deliberately planned this week's raids on two fertility control clinics for over 12 months, with the ulterior motive of launching yet another devious attack on the Hawke Labor Government by seizing Medicare documentation as well as private medical records? What rights does the Federal Government have in relation to the protection of confidentiality of Medicare documentation? Can the Minister take action to have Medicare records returned immediately and will he put in place procedures which will prevent any future blatant breach of confidentiality by the irresponsible Queensland minority Government? Senator GRIMES —I have read the Press reports of the raids on the fertility control clinics in Queensland by the Queensland Government, but I did not note that they had been planned for about 12 months. Senator Reynolds has apparently seen a statement to that effect and therefore infers that the Queensland Government had an ulterior motive, a conspiratorial motive, in doing this because it seized Medicare records during the raid. The only comment I would make on imputing that motive to the Queensland Government is that there is an old saying around here: 'If you have the choice between a conspiracy and a stuff-up when you are talking about the Queensland Government, you can back it in that it is the latter'. I agree that it seems extraordinary that the Queensland Police, in seizing the records which they took, chose also to take the Medicare documentation. I, too, have grave doubts about the motives of the Queensland Police and the raid in general. I suppose that if the police feel that they need evidence to prosecute people for the alleged offences, as they claim, they may take medical records although most of us would be concerned about that. For instance, there are strict rules in the Australian Federal Police about the use of such medical records and their storage. Medicare records are supposed to be protected by Commonwealth legislation. It is very difficult to understand of what use Medicare records would be in such a prosecution. If the aim of the Queensland Government, through its police, is to disrupt Medicare in Queensland by this seizing of Medicare records, it will not succeed, because the Medicare system has an inbuilt capacity to cope with the loss of large numbers of records such as that. If those records have been illegally seized, I certainly believe that the Minister for Health should do and will be doing something about it. I will refer these specific matters to the Minister for Health and get an early reply for Senator Reynolds. Senator SCOTT —I remind the Minister for Industry, Technology and Commerce of part of an answer to a question yesterday in which he said, amongst other things: The Government's clear disposition is not to discount the effects of the devaluation at the September quarter hearing. Is the Minister aware of the information contained in the most recent Business Council of Australia bulletin on the effects of devaluation? I ask the Minister whether he agrees with the following statement: The devaluation will increase the rate of inflation by at least several percentage points before the year is out, and that some of these effects will be included in the CPI index used for the September national wage case. Will the Minister now assure the Senate that, if the Business Council prediction is correct, the Government will not support a full flow-on of the consumer price index but will discount for the effects of the devaluation? Senator BUTTON —I have said on a number of occasions in the Senate-I had better say it again because I still get these sorts of questions-that the role of the Commonwealth Government in relation to the wage case later this year will be to put a submission to the Australian Conciliation and Arbitration Commission on the Government's view. As I said yesterday, the Government's predilection-I used terminology such as that-was not to argue that the effects of the devaluation be discounted in that case. The reason I have expressed that view on a number of occasions is that the Government does not feel that the CPI effects in the September quarter will be very significant. If I may say so, that is a marginally different approach from that suggested in the Business Council newsletter that Senator Scott quoted from. I take it no further than to say that before the Government makes a submission to the Conciliation and Arbitration Commission it will make up its mind bearing those factors in mind. Senator COATES —Has the Minister representing the Attorney-General seen the reported comments of the Leader of the Opposition about the Opposition's attitude towards the establishment of a joint parliamentary committee on the Australian Security Intelligence Organisation? Mr Peacock was reported as describing the proposed committee as a 'security risk' and a 'limit on ASIO's operational efficiency'. Can the Minister outline the purpose of the committee? Does he see any justification in the opposition to the setting up of the committee and the Opposition's promise to abolish it if ever returned to government? Senator GARETH EVANS —For a number of years the Australian Labor Party has been arguing for the existence of a parliamentary committee on security as a desirable element in an overall accountability structure in relation to a major security agency. I guess it would in a sense have been surprising if the Government had done other than indicate an intention to proceed with that structure. Certainly, the views of Mr Justice Hope on the necessity of such a body in the Australian context as compared, for example, with the United States of America were weighed very carefully by the Government in coming to its decision. But, on balance, we believe, as the Prime Minister said yesterday, that a further improvement in the accountability of ASIO and the security community can be obtained by directly involving the Parliament, on both sides and in both Houses, in imposing the extra discipline of some degree of external scrutiny of that intelligence community. The precise functions of the committee will be defined in part of a legislative package to be brought forward in the Budget session, at which time more detailed questions on the structure and mode of operation of the committee will also be addressed, as Senator Button said in answer to an earlier question. Certainly I can again say, as did the Prime Minister yesterday, that the Government is fully aware of the need to protect sensitive security information. We believe that appropriate arrangements can be made to ensure that a small but well informed parliamentary committee can operate effectively in the public interest. It is really extraordinary, against that background, that the Opposition Leader reacted as he did. Such a committee will obviously contribute to a better-informed, bipartisan approach to security matters, which one would have thought would have appealed very much to the Opposition. In our parliamentary democracy, the Executive, in all its manifestations, is ultimately accountable to the Parliament. I express surprise that the Leader of the Opposition questions the more effective exercise of that responsibility in the way that is proposed. I note that there is an inconsistency of approach to the extent that, having huffed and puffed as he has, the Opposition Leader has nonetheless said that the Opposition would participate in such a committee. Generally speaking, I say on behalf of the Government that the reaction of Mr Peacock was entirely lacking in principle, in sense or in statesmanship and entirely justifies the description of him that was given by the Treasurer in the House of Representatives yesterday. Senator CHANEY —My question, which is addressed to the Minister for Finance, follows his answer to the question asked by Senator Richardson. The Minister suggested in his answer that the previous Government's bottom of the harbour legislation had not been successful. I ask the Minister on what he bases that comment. Can he tell the Senate how much has been recovered under that legislation and to what extent the estimates of what would be recovered have been met and satisfied? Can he give any other reasons for his saying that the legislation as passed has not achieved its objectives? Senator WALSH —Senator Chaney has misconstrued the answer I gave. I did not say that the previous Government's legislation was not being successfully applied. As far as I know, it is. But that was not the question. The question was: 'Has the legislation so far enacted been effective in recouping lost taxation revenue?'. The answer to that is no, it has not been, because the legislation enacted is inadequate. The legislation enacted so far, with one exception which I will mention soon, recovers the company tax which would have been payable had companies not been sunk to the bottom of the harbour. The one exception, of course, is clause 3 (12) of the relevant Bill, which exempted from liability shareholders in companies sold to bottom of the harbour operators but who had subsequently attempted a failed tax avoidance scheme before sinking those companies to the bottom of the harbour. No sensible attempt was made at any stage to present a case for allowing that exception. The legislation already passed recovers only part of the tax which had been avoided or evaded, because as well as the tax on those companies exempted by clause 3 (12), which I have already mentioned- Senator Chaney —Do you know how much has been recovered? Senator WALSH —I do not know. I will get an answer for the honourable senator. Nobody was obliged to pay tax under the previous Government's legislation on the deemed dividend payments. That is, when the companies were sunk, not only did these current year profits escape from the net but also profits from previous years, which sooner or later would have been required to be distributed to shareholders, disappeared to the bottom of the harbour. This Government has attempted to recover the personal tax which would have been payable had companies not been sunk to the bottom of the harbour as well as the tax that would have been payable had the clause 3 (12) exemption not been inserted for reasons which remain to this day a matter for wide-eyed conjecture. Senator SIBRAA —I direct my question to the Acting Minister for Foreign Affairs. On 15 May 1985 in answer to my question on Lebanon the Minister advised that he had requested the Australian permanent representative in New York to explore the scope for constructive action in the United Nations Security Council. Can the Minister advise what steps have been taken? Senator GARETH EVANS —I said on 15 May that I was asking the Australian permanent representative in New York to explore, as Senator Sibraa has put it, with the representative of Lebanon the scope for constructive action in the Security Council on the problems of Lebanon. The permanent representative has now held discussions with his Lebanese counterpart and with a senior member of the United Nations Secretariat. Also our Ambassador to Lebanon has called on the Secretary-General of the Lebanese Foreign Ministry. The Lebanese representatives expressed appreciation for Australia's interest and willingness to help. The Secretary-General of the Lebanese Foreign Ministry outlined Lebanon's views on possible United Nations action. He said that the first step was to implement Security Council resolution 425. This resolution called for the withdrawal of Israeli forces from Lebanon and established the United Nations Interim Force in Lebanon, UNIFIL, to confirm Israel's withdrawal, restore peace and assist the Lebanese Government to re-establish its authority. The Lebanese authorities therefore would not favour action in the Security Council until Israeli forces had withdrawn from Lebanese territory. The Israeli withdrawal is expected to be completed early in June, after which we would urge that the Security Council consider the situation. Australia would participate actively in such consideration. We would emphasise the deep concern of the Government and people over the grave situation in Lebanon and seek constructive action by the Council. I have asked our permanent representative in New York to call on the Secretary-General of the United Nations to discuss the scope for action in the Council and by the Secretary-General to promote the cause of peace in Lebanon. Senator HAINES —My question is directed to the Minister for Community Services. In answer to a question in the Senate on 10 May the Minister indicated that he was aware of allegations made in November 1983 concerning the safety of children resident at the Manly complex of the Royal Far West Children's Health Scheme. Can the Minister say whether those allegations concerned, among other things, the sexual assault of younger children by older children and whether the matter was referred to the New South Wales Crown Solicitor? Has an independent inquiry been ordered into the Royal Far West Children's Health Scheme? If one has, can the Minister say, first, what conclusions the inquiry reached; secondly, what recommendations it made; thirdly, what action is likely to be taken, when and by whom; and, finally, whether the Council of the Royal Far West Children's Health Scheme is able to censor or ignore all or any of the recommendations? Senator GRIMES —As Senator Haines has said, I answered a question, from Senator Sibraa, on 10 May about the Royal Far West Children's Health Scheme. I think I said at the time that I was aware of complaints made about the operation of that scheme. I was also aware of, and in fact have recently received, the reports of two inquiries into that Scheme-one by Professor John Beveridge, the Professor of Pediatrics at the University of New South Wales; and another by a paediatrician and I believe an official of the New South Wales Health Department. The question of the Royal Far West Children's Health Scheme involves the Commonwealth, as Senator Haines probably knows, because it funds that institution in Manly as a nursing home to the extent of some $2m a year. The New South Wales State Government also provides funds through the Department of Health and runs a special school at the institution. Therefore both governments are involved. There are three types of complaint. The first type, mentioned by Senator Haines, concerns allegations of misconduct and sexual assault of occupants of the home at the time; the second type relates to the efficiency and efficacy of the service; and the third type involves the appropriateness of such a service in this day and age. Mr Mulock, the Minister for Health in New South Wales, is primarily involved in regard to the first type of complaint as his Department is the licensing authority, although obviously we are concerned. The second type of complaint, the efficiency of the service, involves both the Federal and State departments. The third type, the appropriateness of such a service in this day and age when paediatricians and other specialists are readily available in all New South Wales country towns, is primarily a matter for the Federal Government in light of its very large funding. I have had a brief conversation with Mr Mulock about the matter and the Secretary to my Department has had one meeting with the Secretary to the Department of Health in New South Wales. I am about to discuss with Mr Mulock and the heads of both departments the appropriate steps to take from here. Senator Peter Baume —Does there seem to be substance to the complaints? Senator GRIMES —I am not willing to make a judgment of that type. What I do know is that the Council of the Royal Far West Children's Health Scheme is concerned about at least one of the reports. There have been discussions between the Department of Health in New South Wales and the Council as to what action should be taken. However, I take the view that the questions raised on all three levels are serious ones. They are serious not only for the children who use that service and their families but also for the Federal Government because of its considerable funding of the Scheme. I intend to finalise very quickly the appropriate action which I think should be taken and see whether the New South Wales Government and the Federal Government cannot take action which will sort out this problem to the satisfaction of both governments and in particular to the satisfaction of the community of New South Wales. Senator JONES —My question to the Minister representing the Minister for Transport relates to the fact that unleaded petrol will be available in Australia shortly. When will unleaded petrol be available to the motoring public, and in what quantities? What percentage of cars and other vehicles currently available for purchase in Australia are equipped to take unleaded petrol in safety? What are the dangers of unleaded petrol being used in conventional vehicles? What would be the environmental advantages of the universal use of unleaded petrol in vehicles constructed to handle it with safety? Senator RYAN —I will refer that question to the Minister for Transport and seek a reply. Senator REID —I refer the Minister representing the Minister for Social Security to the mini-Budget proposal to eliminate the family allowance for dependent student children over 18 years and the effect this decision will have on families. Where there are three or more children in a family and the older children cease to attract family allowance, will the reduction of family allowance be at the lower rate payable to the first and second child or will the mother lose the family allowance at the higher rate payable for the third and subsequent children? Senator GRIMES —I must admit that I have forgotten. I will obtain that information as soon as possible, either out of the notes I have or from the Minister, and will let the honourable senator know. Senator CHILDS —Has the Acting Minister for Foreign Affairs seen the report in the Sydney Morning Herald of 4 May quoting the Aerospace Daily which claims that Israel has deployed a number of nuclear-armed Jericho 2 missiles in the Negev Desert and the Golan Heights? Can the Minister confirm this report? What implications for stability in the Middle East would such nuclear-armed missiles represent? Senator GARETH EVANS —The Government is aware of recent reports alleging that Israel has deployed a number of intermediate range nuclear missiles in the Negev Desert and the Golan Heights. The Government is not in a position at this stage to comment on these reports, but certainly it is concerned about the possible effects such reports might have on the stability of the region. The Government's policy on the proliferation of nuclear weapons is very well known. It is our firm view that the only way to avoid the increase of additional suspicions and tensions arising from the existence of unsafeguarded nuclear facilities is for those countries involved to place those facilities under international safeguards. The acceptance of binding non-proliferation commitments such as those embodied in the Treaty on the Non-Profileration of Nuclear Weapons would do much to reassure countries in the region and the international community of the peaceful intent of nuclear programs. I will take Senator Childs's question on notice and give him such further information as I can in due course. Senator LEWIS —My question is directed to the Minister for Industry, Technology and Commerce and refers to shipping freight rates. I refer to the Minister's Press release about the Government's decision to reject the Industries Assistance Commission interim report on fertilisers and the decision instead to continue the current arrangements for another 12 months pending the release of the final IAC report. Although it is not mentioned in the Minister's Press release, I ask the Minister: Is not one of the major problems in that industry the excessive freight rates of Australian flag shipping for the cartage of phosphate rock from Christmas Island? Are these rates not causing great difficulty for that industry and, indeed, for every Australian industry which is forced to ship on Australian flag ships? Does the Government intend to do anything to overcome the burden on Australian industry caused by these freight rates being so totally out of kilter with world shipping freight rates? Senator BUTTON —The IAC final report on fertilisers will, no doubt, address some of these issues. I hope that it does. I am particularly asked by Senator Lewis whether the cost of shipping phosphatic rock from Christmas Island, basically to South Australia, is a great cost burden on the industry. The answer to that question is yes. Unhappily, the purchasers of that phosphatic rock entered into a contract with the Australian National Line in which they agreed on a price and, as I understand it, that contractual arrangement expires in 1987. I make that point simply because it is true that the cost of transport in Australian flag ships casts a considerable burden on Australian industry generally. That is a matter which has developed over a number of years under successive governments, but mainly under the honourable senator's Government, and that is a matter which is now being addressed as best it can by the Minister for Transport and others. There have been, for example, some improvements in manning scales on Australian shipping routes. Senator Chipp —Are you satisfied with the way ANL is being run now? Senator BUTTON —No; but I take it that Senator Lewis's question is intended to be constructive. It is a matter which requires continuing persistence and so on. I do not think we will get any immediate results tomorrow, but we are very aware of the problems and are trying to correct them. Senator CROWLEY —My question is directed to the Minister representing the Minister for Health. Has the Minister seen the article in today's Sydney Morning Herald reporting the Australian Medical Association's successful lobbying of the World Medical Association to have its Thirty-seventh World Medical Assembly moved from the planned venue in Capetown, probably to Brussels? Can he comment on the statement by the AMA that the concern was not entirely about South African politics, but also about the level of violence and unrest in South Africa? Is not this decision evidence, albeit qualified, of widespread concern in this country about the South African situation? Does the Federal Government support these efforts by the Federal President of the AMA? Senator Crichton-Browne —Are you happy with Mr Barnard? Senator GRIMES —Dr Barnard, for the information of Senator Crichton-Browne, got out of South Africa. Senator Crichton-Browne —He did not get out of South Africa; he is on a cruise around the world. The PRESIDENT —Order! I ask Senator Grimes to answer Senator Crowley's question. Question Time is coming to an end and there are other questions to be asked. Senator GRIMES —I am sorry, Mr President. Yes, I did note that Dr Lindsay Thompson, the President of the AMA, was one of the people who lobbied that the World Medical Association no longer have its meeting in South Africa. I have read that he did that partly because of the problems of violence in South Africa. I understand also that one of the problems has been what the World Medical Association considers to be the less than satisfactory performance of the Medical Association of South Africa in dealing with doctors who have been involved in cases such as the Steve Biko case and other cases where people have died in custody in South Africa. I think it was a very sensible approach for Dr Thompson and the AMA to take. We all know that for a time the South African Medical Association in fact was banned from the World Medical Association. It was allowed back in because it seemed to be taking a fairly liberal attitude. It was certainly making some gestures towards opposing apartheid. However, in recent years it has done very little to assist coloured and black African doctors. The South African Medical Association has not taken what one would consider to be a positive view to the desegregation of hospitals in South Africa. All in all, with the existing unrest and violence in South Africa, I think it was very wise of the World Medical Association to take the action it has. I am pleased that Dr Thompson, unlike some Australian cricketers, has supported government policy in this regard. Senator MacGIBBON —My question is directed to the Minister representing the Minister for Transport. Is the Minister aware that Qantas Airways Ltd sought to operate a charter flight from Kastrup, the airport of Copenhagen, to Australia earlier this year? Is the Minister aware that the Department of Transport sent an inspector to see whether Kastrup was safe? Kastrup is the seventh busiest airport in the world and is owned and operated by a country which is a member of the International Civil Aviation Organisation, the body which sets international airline safety and operational standards. First, is it true that the inspector sent was not one of the Department's pilots endorsed on Boeing 747 aircraft-the aircraft Qantas wished to operate into Kastrup-but a pilot endorsed on F28 aircraft, the smallest jet aircraft on regular public transport service in Australia? Secondly, why was it necessary to inspect an airport for which all relevant data was held in Australia and which is known to conform to international safety standards? Thirdly, who paid for this piece of bureaucratic stupidity and feather-bedding? Senator RYAN —Senator MacGibbon has asked a long and detailed question. He obviously has it written out already, so I suggest that he put it on notice. Senator COOK —Did the Minister for Resources and Energy see the Comment column by Michael Barnard headlined 'The mines of misinformation' in Tuesday's Melbourne Age? Is it true, as the article suggests, that governments take 90 per cent of pre-tax income of larger mining companies and these companies are, therefore, in practice little more than share farmers working for the Government? Senator GARETH EVANS —I did see the article to which Senator Cook referred. What I have not seen is the report referred to in that article by a Mr Forbes, which I understand is in a publication called Common Sense, which may or may not live up to its name, which publication apparently contained the figures relied upon by Mr Barnard. I point out that a survey carried out by the Australian Mining Industry Council indicated that in 1983-84, 63 per cent-a very different figure-of gross generating profit by AMIC companies, including the five companies referred to, in minerals production, excluding petroleum, was paid to governments in the form of income taxes and resource based taxes. More than one-third of this was paid to the States in the form of mineral royalties, tenements and licence fees. The important point for honourable senators to bear in mind is that in this type of analysis it is not so much the proportion that tax bears to pre-tax income as, rather, the rate of return being earned on funds invested. In the petroleum and minerals sector there are some extremely profitable ventures; for example, Bass Strait petroleum and Utah coal mining. The community is entitled, we believe-and I think this would be generally accepted-to a substantial share of the benefits from this exploitation of community owned resources. One point which is worth mentioning is that the Government is aware of the problems and the structure of mining taxation in the area of resource related charges levied by State governments which are often related, it has to be said, more to State government revenue requirements than to the capacity of industry to pay. The solution of those problems will require co-operation by State governments. The thoroughgoing review of the tax system which is now occurring within the context of the tax summit may, we all hope, prove helpful in this respect. Senator MISSEN —My question is directed to the Minister representing the Minister for Communications. It relates to the quality and persuasive nature of today's television violence and to the effect that it is having on television viewers. The findings of the Task Force on Violence commissioned by the United States Attorney-General concluded in September 1984 that: The evidence is becoming overwhelming that just as witnessing violence in the home may contribute to normal adults and children leaning and acting out violent behaviour, violence on t.v. and movies may lead to the same result. Is the Minister aware of the Task Force's assertion that 'the networks, local stations and cable television distributors have major responsibility for reducing and controlling the amount of violence shown on television'? In the light of these disturbing conclusions, I ask the Minister: What is the Government doing to ascertain the magnitude of this problem in Australia? Will consideration be given by the Government to implementing the recommendation of the American Psychological Association which suggests that broadcasters, in addition to reducing violence, should provide time for public service messages that would warn viewers about the potentially harmful effects of viewing televised violence? Senator WALSH —I was not aware of the findings to which Senator Missen refers, and I do not think the Minister for Communications, Mr Duffy, was either. The Australian Broadcasting Tribunal is the authority which has the responsibility to ensure that the commercial stations comply with appropriate program standards. The Australian Broadcasting Corporation and the Special Broadcasting Service are also required under their legislation to have regard to standards established by the Tribunal. The Tribunal's television program standards include a classification system which sets out the suitable times at which various programs may be shown, having regard to the likely composition of the audience. In contrast with the relatively unregulated practice in the United States, this system enables the separation of programs containing violence and other adult type ingredients from times when children are likely to be viewing unsupervised and in large numbers. This program classification system-together with the rest of the television program standards-is currently undergoing a review and the findings of relevant social research will be taken into account during the process. The Broadcasting Tribunal's powers to make program and advertising standards have recently been the subject of a Federal Court decision. As Mr Duffy stated recently in a different context, it is the Government's intention to bring forward in the Budget session amendments to clarify and affirm the Tribunal's powers to make standards. Senator MISSEN —I ask a supplementary question. I referred to certain recent evidence by United States sources which I made available to the Minister for Finance and to the Minister for Communications. What the Minister has told us is what is normally understood but what I am asking is: Is this affecting the present decision of the Tribunal? Senator WALSH —I was not aware of the findings of the United States Task Force, if that is what Senator Missen is referring to, and I understand that Mr Duffy was not either. But I will see if he has anything further to add to what I have said. Senator GRIMES —During Question Time Senator Reid asked me a question about the rate at which family allowance will be paid after family allowances are cancelled for dependent student children over 18 years of age. The situation will remain as it is now when family allowance is cut off for a child of 16 years of age or when the child no longer is dependent. In other words, the rate at which the family allowance will be paid will depend on the position of the remaining dependent children in the family. If there is one child, it will be $5.25; for two children, it will be $5.25 and $7.50; and for three children it will be $5.25, $7.50 and $9, if I have remembered those rates correctly from my days as Minister for Social Security. That is the situation now. In other words, if there are three children in the family, the third child is excluded. In effect, what Senator Reid has said is right about the higher rate. Senator CROWLEY(South Australia) —by leave-I simply want to take the opportunity to put entirely beyond doubt a small matter that was raised by Senator Peter Baume in speaking yesterday in the Senate to a paper on women and sport. After reading out some statements of the policy of the Liberal and National parties affecting women, he proceeded to say that what I and our group had been doing was entirely consistent with the thrust of the Liberal Party's policies. Where the Liberal Party policy is consistent with that of the Labor Party and the Government I am quite happy about that, but I would like the Senate to be entirely clear that I am not doing work on women and sport, with her group or whatever, to be consistent with Liberal Party policy. I know that on previous occasions Senator Withers somehow seemed to have his remarks attributed to me also; so I thought that I should take this opportunity to make it quite clear that what I was doing was consistent with the terms of reference of our group. I was amused to discover on reading Hansard today that Senator Baume had attributed to me the possibility that I was consistent with Liberal policy. I just want to put on record clarification of that matter. Senator GRIMES(Tasmania-Manager of Government Business)(3.06) —I move: That, unless otherwise ordered- (a) the Senate, at its rising, adjourn till Monday, 27 May 1985, at 2 p.m.; (b) the hours of meeting of the Senate for that day be- 2 p.m.-6.30 p.m. 8 p.m.-10.30 p.m. (c) the Sessional Order relating to the adjournment of the Senate have effect at the terminating time that day; and (d) the routine of business, for that day, be as follows: (i) Petitions (ii) Notices of Motion (iii) Questions (iv) Any proposal pursuant to Standing Order 64 (v) Consideration on Government Papers pursuant to Sessional Order (vi) Formal Motions-Discovery of Formal Business (vii) Postponement and re-arrangement of Business (viii) Government Business, Notices of Motion and Orders of the Day, or vice versa, as set down on the Notice Paper As a brief explanation, honourable senators will notice that this motion relates to only one day. If we do not happen to finish the business of this session on that day, we will still have the opportunity on Monday for negotiation about the rest of the week. Senator CHANEY(Western Australia-Leader of the Opposition)(3.07) —I acknowledge the way in which the Government has gone about this. I think it is very sensible to put the day down and give us a chance to consider it at our party meetings. We hope that we will get some sensible arrangements for the conclusion of the sitting in good order and condition. Senator HARRADINE(Tasmania)(3.08) —I take it that this motion is in respect of Monday only thus far, and I acknowledge that. Senator Grimes —Yes. Question resolved in the affirmative. Assent to the following Bills reported: First Home Owners Amendment Bill 1985 Fishing Legislation Amendment Bill 1985 Fisheries Levy Amendment Bill 1985 Dried Sultana Production Underwriting Amendment Bill 1985 Dried Vine Fruits Equalisation Levy Amendment Bill 1985 National Welfare Fund Repeal Bill 1985 Banks (Shareholdings) Amendment Bill 1985 Export Inspection Charge Bill 1985 Export Inspection Charge Collection Bill 1985 Export Inspection Legislation (Consequential Amendments) Bill 1985. Senator GEORGES(Queensland) —I present report 231 of the Joint Parliamentary Committee of Public Accounts. Ordered that the report be printed. Senator GEORGES —I seek leave to incorporate a short statement in Hansard. Leave granted. The statement read as follows- Report 231 contains the response to the Committee's 222nd report, in the form of a Department of Finance minute sent to the Committee by the Minister for Finance. Honourable senators will recall that the Committee's 222nd report examined the report of the Auditor-General March 1982 and was tabled on 7 December 1983. The Committee's conclusions and recommendations concerned results of audits into matters affecting the Departments of Defence, Health, Home Affairs and Environment, Primary Industry and Social Security. The Committee was advised in the response that the process of selection of helicopters for FFG-07 Class Guided Missile Frigates is continuing, with the expected delivery date still expected to be 1988. The Department of Health item, reimbursement to registered medical benefits organisations of Commonwealth Medical Benefits, has been included in the Committee's inquiry into medical fraud and overservicing. This inquiry is expected to report during the Budget Sittings 1985. As from 11 March 1983, the Department of Territories became responsible for Norfolk Island and arrangements have been made to facilitate audit procedures and to prepare an asset register. Consideration of the Department of Primary Industry's levies, taxes and charges was incorporated into a subsequent submission from the Department to the Committee dated 5 December 1983 and it appears in this report. The Department gave details of an improved system for levies and charges which was expected to be operating by 31 May 1984. Advice has since been received that the enhanced system became operational as expected. The main changes which the Department of Social Security has implemented with regard to the Commonwealth Rehabilitation Service are: computerisation of the Service's statistical collections has begun and a national internal review undertaken; training workshops were held in conjunction with the review; as from November 1984 statistical bulletins are available for distribution at State office level; a further system review, with the participation of the Auditor-General's Office, will be undertaken. I commend this report to honourable senators. Senator FOREMAN(South Australia) —In accordance with the provisions of the Public Works Committee Act, I present the reports relating to: 1. Development of terminal area, Townsville Airport; 2. Construction of new telephone exchange building for Telecom Australia, Kent Street, Sydney. Ordered that the reports be printed. Senator SIBRAA(New South Wales) —On behalf of the Joint Committee on Foreign Affairs and Defence I present a report on the Jackson report on Australia's overseas aid program dated May 1985, together with the transcripts of evidence and extracts from the minutes of proceedings. Ordered that the report be printed. Senator SIBRAA —by leave-I move: That the Senate take note of the report. I seek leave to incorporate my speech in Hansard. Leave granted. The speech read as follows- 1. This inquiry was first referred to the Committee in the previous Parliament by the Minister for Foreign Affairs on 7 June 1984 when he tabled the Jackson Report in the House of Representatives. 2. In tabling the report the Minister announced that there would be an opportunity to debate the major issues canvassed in the report and that this process would take about 12 months. The consequent debate in the community has indeed been vigorous and extensive, and has been assisted in no small measure by the willingness of members of the Jackson Committee, including its Chairman, Sir Gordon Jackson, to make themselves available to take part in it. As a result, the main issues addressed in the report have received the kind of thorough airing that an issue of the importance of Australia's aid activities deserves. The report of this Committee forms a part of that healthy process. 3. In addressing the reference made to it, the Committee decided to focus its attention on six broad areas which have dominated the public debate and which are at the heart of the Jackson recommendations. Those areas are: aid philosophy; the question of the relationship between trade and aid; aid to Papua New Guinea; the geographical distribution of aid; multilateral aid; and constraints on aid effectiveness, including the aid volume issue. As well, the Committee gave attention to several less broad but nonetheless highly important matters of significance to the Australian aid effort, including notably issues concerning women in the development process, the role of non-government organisations, and the future of development education. 4. All of these areas involve issues on which very firm, often very different, views are held by individuals and groups within the Australian community. The Committee, like the Jackson Committee itself, was left in no doubt of the sincerity with which these differing viewpoints were held, and all were vigorously advocated during our hearings. At the end of this process, however, and with some qualifications I refer to later, the Committee found itself in general agreement with the spirit and recommendations of the Jackson report. In this regard the Committee found it helpful to meet with Sir Gordon and some of the members of his committee on two occasions, in August last year and again in March of this year. On behalf of the members of the Committee I pay tribute to Sir Gordon Jackson and the other members of the review committee for their efforts. 5. The Jackson conclusion that the most effective contribution of aid lies in removing major constraints to development was endorsed by the Committee. A more sensitive and comprehensive mechanism of country programming within ADAB will help to ensure that the humanitarian purpose behind the giving of aid, which the Committee felt should be the paramount objective of aid programs, will be more effectively embodied in the overall Australian program. 6. The trade aid question dominated the public hearings of the Committee with a range of conflicting views being put to us. The Jackson Committee was against the use of aid as a subsidy mechanism for industry or as a substitute for industry policy. The Confederation of Australian Industry referred to the Jackson Committee's approach as one which abstracts itself from the real world, while some non-government organisations took the view that increased use of mechanisms such as the development import finance facility would not be a legitimate means of meeting aid objectives. The Committee's conclusion was generally to support the Jackson Committee approach, but it has suggested that ADAB improve its efforts to ensure that the business community is fully aware of the opportunities available to it under the aid program. The report points out some of those opportunities. In that connection and in response to a view pressed with the Committee by the business community in particular the report notes that if our aid to Papua New Guinea is excluded Australia has one of the most heavily tied bi-lateral programs in the world, and very little scope remains to increase the extent of tying, even if that were thought desirable. The Committee concluded that the value of the aid program to commercial interests can best be extended by careful selection and design of aid programs so as to emphasise areas in which Australia is competitive. 7. In regard to aid to Papua New Guinea, the Committee supports the Jackson proposal for a predictable and gradual reduction in Budget support accompanied by a move from that form of aid to project aid. The Jackson Committee suggested a 5 per cent decline in the level of budget support with a 3 per cent decline in the overall level of aid. The Committee considers that the Jackson recommendations should serve as the basis for our agreement with Papua New Guinea but that the rates of decline recommended by Jackson should be gradually accelerated. 8. Another important area of discussion on the Jackson Report has been the geographic focus recommended in it, and particularly as that affects aid to Africa. Jackson suggested four geographic categories for Australia's aid effort, and this Committee supports the general thrust of the Jackson recommendations aimed at rationalising the geographic distribution of our program and thus increasing the effectiveness of our overall aid effort. So far as Africa is concerned, the Committee recommended that Australia give very positive consideration to joining the African Development Bank at an early date. This would give Australia an enhanced and much more effective involvement in long-term project aid in Africa, where 26 of the world's 36 poorest countries are located, and would complement the continued Australian effort in all other areas of aid to Africa, which the Jackson report recommends and which the Committee supports. The Committee also suggested that membership of the Caribbean Development Bank be considered at a later stage should Australia develop particular expertise in the problems of small island states. 9. The Jackson Committee's findings on the management of aid delivery were commented on by the Minister when he tabled the report, he noted that it documents a sad history and points to considerable room for improvement. The Committee was informed that initiatives are underway to improve the resources and capabilities of ADAB. The Committee strongly supports the Jackson recommendations on aid management. It has recommended the establishment of an external review unit and an internal effectiveness review unit, their purpose being to monitor the implementation of the Jackson recommendations and (in the case of the former) to report annually on the Government's response to the report. The external review unit would be made up of individuals chosen from inter alia the business community, trade unions, non-government aid organisations, ADAB, the academic community and the Parliament. 10. The proposal that the head of ADAB be made a statutory officer was considered favourably by the Committee. 11. The Committee noted with disquiet the announcement by the Treasurer on 14 May 1985 that the forward estimates for the aid program had been reduced by $23.9m, and pointed to the likelihood that many of the Jackson recommendations which have attracted community support would have to be delayed or foregone unless available resources are increased. 12. In concluding, I would thank the members of the sub-committee who first considered the report and to the members of the main Committee whose expeditious consideration of it allowed it to be tabled here today. I would also thank the Director of ADAB, for seconding Mr Kerr-Stevens of his organisation to act as the adviser to the sub-committee. The secretariat, as I have come to expect, worked tirelessly and deserve much of the credit (but none of the blame) for this report. Thank you Mr President. Debate (on motion by Senator Peter Baume) adjourned. Senator ROBERTSON(Northern Territory) —I present a report of the Australian Parliamentary Delegation to Vietnam, Cambodia, Thailand and Laos. Senator ROBERTSON —by leave-I move: That the Senate take note of the report. I seek leave to incorporate a copy of the tabling statement in Hansard. Leave granted. The statement read as follows- It gave me a good deal of pleasure to table the Official Report of the Australian Parliamentary Delegation to Vietnam, Cambodia, Thailand and Laos. I do so on behalf of the delegation which it was my privilege to lead. The visit was historic in that it was the first time an Australian Parliamentary Delegation had visited the Peoples Republic of Kampuchea, the nation which is still recognised in some areas as Cambodia. As indicated in the Report the Australian Government does not recognise either government in the country so we were welcomed as a delegation representing the Australian Parliament. The term 'welcomed' is carefully chosen as our reception could not have been more cordial. I hasten to add that each of the other countries visited extended the same welcome and also spread no effort in attempting to make our visit worthwhile and at the same time enjoyable. There are two difficulties facing any group which visits another on what we loosely call fact finding missions. The fact is that most people find it difficult to look or listen objectively despite the best of intentions. The other is that all countries, our own included, present to their guests those things they want them to see, for whatever reason. As a result visitors leave with a less than complete understanding and appreciation of the country and its people. Conscious of these factors we decided in preparing our report to try and record what we were told and describe what we were shown. Where it was possible for us to verify claims made we have done so. Where there were different views put regarding the one incident we have recorded them. Where what was said did not appear to us to coincide with the situation as we observed it this has been noted. But we would wish to be seen as recorders rather than critics or apologists. We feel sure our hosts would appreciate and welcome such an approach. May I once again pay tribute to those who contributed to the success of the tour: Our hosts in each of the countries and the officers, particularly the interpreters who provided sterling service. Officers of the Department of Foreign Affairs, those in Australia and particularly those in overseas missions who on the one hand provided background briefings and on the other extended personal friendship and assistance. Our Secretary, Alan Hume for his unfailing good humour and constant support and other Parliamentary officers for their contributions. Members of the delegation who at all times are worthy ambassadors for their country not forgetting the two wives whose inclusion in the group was most appreciated and whose contribution was significant. I think it is fair to say that Australians generally know little of the area which we visited. It is our hope that the report will help in a small way to repair this situation and assist in building bridges between those countries and ourselves. I must apologise for the late presentation of the report. It is due in the main to the resignation from the Public Service shortly after our return of the delegation, the Secretary, Mr Alan Hume. His resignation I should note was not as a result of his trip. We also experienced delays in securing accurate statistics, for example only today I received late material which should be included in the report. May I suggest that on page 65 of your copy you amend the section dealing with the numbers of refugees coming to Australia to read: ''Up to June 1984, there was a total of 88,112 Indo-Chinese refugee arrivals in Australia, of which 26,223 had come from Thailand. Amongst the Indo-Chinese arrivals from Thailand, there were some 10,801 Kampucheans, most of whom would have come from camps along the Thai-Kampuchean border such as those visited by the Delegation. To this figure should be added Vietnamese ''Land'' people, for which it is difficult to obtain precise figures (in the period, 8,944 Vietnamese refugee arrivals came from Thailand, and this figure would have included both ''land'' and ''boat'' people).'' This amendment will present a fuller picture than that which is given by the present paragraph. While every care has been taken to avoid errors the manner in which the final draft was prepared (in some haste to enable the report to be tabled before we rose) allows of the possibility. For this I apologise. I commend the report to the Senate and look forward to having it debated in due course. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator ELSTOB(South Australia) —I present the third report of the Publications Committee. Report-by leave-adopted. Senator VIGOR(South Australia)(3.13) —I move: That the Senate take note of the paper. This is the final report of the Australian Egg Board, whose demise follows the repeal of the Egg Export Control Acts and the Egg Export Charges Acts as from 1 January this year. The Egg Board came into being to solve a perennial problem of all of Australia's primary industries-the problem of marketing a commodity where the overseas price is less than local production costs. Australia's egg producers are among the most efficient in the world-that is, their cost of production is among the lowest in the world, and they use the most technically advanced production methods to minimise production costs. However, they export to countries which have very high tariff walls to protect and encourage their own inefficient producers. Such a country is Japan, which has been the major export market for Australia's eggs for the last decade, and was one of the markets to which Australia turned when the United Kingdom market was no longer available after the United Kingdom joined the European Economic Community. Australia also used to be a major exporter to the Middle East, until large increases in freight rates reduced our competitiveness. The other major disability of Australian primary exports is competition in the face of dumping by overseas countries. These countries are prepared to get rid of their surpluses at any price. We have no such mechanism. The egg industry of Australia has not been affected by this problem, as its surplus for export has never represented more than 27 per cent of production, and is now more like 7.5 per cent. This has been because of the effective operation of the Egg Board. This low surplus of eggs has been achieved at a high cost to the egg industry in terms of restrictions on production, and has led to a secondary growth industry-that of trade in hen quotas-which will make it very traumatic for the industry if the present moves towards deregulation succeed. Many producers have invested heavily in buying quotas from other producers who have left the industry and these people stand to lose a considerable capital investment if the quotas are removed. The other main exporters of eggs are Canada and South Africa, which have a national exporting body, and the United States of America, where individual producers sell their surpluses on the world market for whatever they can get. The latter model is probably the only long term self-adjusting production-export model. I commend the report to the Senate. Question resolved in the affirmative. Senator COONEY(Victoria)(3.17) —I move: That the Senate take note of the paper. I would like to make some remarks about the person whose name appears on the outside of this statement; that is, the Hon. Barry Jones, MP. He has recently been the subject of some comments in this chamber, particularly by Senator Puplick, who with his usual eloquence and style has somewhat lampooned this Minister. The fact of the matter is that Mr Jones is a man of great reputation in the field of science and technology. It is perhaps a little unfortunate that he has-- Senator Puplick —No achievements but much reputation. Senator COONEY —He has had some achievements. Perhaps Senator Puplick should listen to what a body of the Organisation for Economic Co-operation and Development has to say about him. I draw attention to the support for the Minister in a recent report from the OECD on science policies in Australia and, in particular, to paragraphs 10 and 11. This report draws attention to how slow Australia had been to recognise the significance of technological change. Perhaps this is where the confusion arises. While criticising the various governments of Australia, the report singled out Mr Jones for honourable and enthusiastic mention. Perhaps it would be fair, in the light of what has been said here recently, if I read the report from the OECD examiners. It states: A third theme, and one which we consider of the greatest importance, albeit awkward to describe, has to do with attitudes to technology. Since the Labor government assumed office in 1983 there has been an intense discussion in Australia of the role of technology in national life. One of the very few things on which essentially all our interlocutors agreed-from trade unionists to venture capitalists and from state government officials to teachers of advanced education-was that the Minister for Science and Technology-- that is Mr Jones, now the Minister for Science-- had done a valuable job in stimulating discussion of technological questions in 1983-84. The effort to encourage discussion and understanding of technology-which is common, once again, to many OECD countries-must be pursued further. Although there is criticism to be made of many aspects of science in Australia, the fact remains that the person who has been foremost in advertising, pursuing and directing attention to the absolute need for science so that this country can develop as it should has been Barry Jones. That is indicated by the enthusiasm with which his efforts have been met in the OECD. His writing and his speeches have gained international recognition. I refer, for example, to the book Sleepers, Wake-Technology and the Future of Work which has been translated into Japanese and Swedish and has been widely read elsewhere. Senator Puplick —As soon as it is readily understandable in English it will be fun. Senator COONEY —Senator Puplick is confused. He sees quite properly that the state of science in Australia should be remedied and remedied quickly. However, he makes the mistake of saying that because science is not in the state we would like it to be, the Minister for Science is responsible. Senator Puplick is putting the cart before the horse. If the importance of science is to be recognised in the future it will be recognised centrally and mainly because of the efforts of the present Minister for Science. That is why it is unfair to load the defects in this field on his shoulders when those very shoulders are the ones that are lifting-and it requires a lot of lifting-the level of recognition in Australia of the need for science. I simply wish to put on record that the Minister is a man who deserves great praise and credit. His qualities have been recognised overseas and should be fully recognised in Australia. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator PETER BAUME(New South Wales)(3.23) —It is necessary that Senator Cooney's remarks be responded to. His loyalty to his friend and colleague is commendable. He has defended and praised Barry Jones the man, but not really Barry Jones the Cabinet Minister. It has been said in some books on the subject that a successful Cabinet Minister has to do three things at least-he must master the departmental paper; he must win in parliament; and he must win in Cabinet. On that score of course Senator Ryan would fail all three tests, but we are talking about Mr Jones. Barry Jones is all that Senator Cooney says he is, and he is more. He is reasonable, elegant, learned and has a marvellous record in television quiz programs. He is an author whose book I enjoyed. I actually read it and enjoyed it, whether or not I agreed with it. He is a leader in pronouncing on the rhetoric of what is needed for science in Australia and what is needed to make the world a better place in which scientific achievement can advance. He is all those things. The only thing he cannot do is deliver the resources which are needed to make any of his rhetoric come true. Senator Puplick said quite correctly that the scientists in Australia love Mr Jones but they despair because here is this elegant Minister who cannot deliver anything. Let me be quite clear: There is no attack on a very good friend. There is simply a sense of despair which Senator Puplick has expressed as to where science will go without any resources. It may be true that the Organisation for Economic Co-operation and Development in its wisdom said that Barry Jones would be the leader of a revolution which would help Australian science. Senator Puplick —It also recommended not to split up his Department. Senator PETER BAUME —Yes; he has lost every battle. He has lost part after part of his Department and he has lost resources. When dealing with the Commonwealth Scientific and Industrial Research Organisation recently I had occasion to identify in all the areas the millions of dollars which he had been unable to get for that organisation. The scientists who look to the Department of Science and Mr Jones for support can reflect upon the words of the OECD examiners. They can draw comfort from those words when there is no money for salaries. They can draw comfort from those words when CSIRO has to lay off up to 180 staff in order to accommodate the cuts. They can remember those words and get comfort from them as jobs are lost. They can reflect upon them as their equipment becomes obsolete and cannot be replaced because their Minister failed to win any battle in the Cabinet. They can reflect upon those words when there is no money for new buildings or for any of the things that a scientific establishment requires. I put it to Senator Cooney: We agree with all that he has said about Barry Jones; we simply say that in terms of being a Minister for the Department of Science his actions have not even approached his rhetoric and in terms of ministerial achievement he has really been a failure. Senator VIGOR(South Australia)(3.27) —I wish to bring to the notice of the Senate the fact that the Department of Science and Technology has now been split despite remarks which I would like to quote from the report of the Organisation for Economic Co-operation and Development examiners. The examiners said in their recent report: We favour a strong voice for science and technology at the ministerial level. We are also convinced that those two topics-science and technology-should be treated within a single portfolio, since they are so completely inter- twined. Many of Australia's technological opportunities, as we argued in chapter III, lie in facilitating the process of transition from science to technological application: it would be perverse to divide the two within central government. Yet the statement we are considering is the last report of the Science and Technology Department before it was split. On page 26 of the OECD examiners' report we have another statement which says that Australia needs more university graduates in the area of science and technology and it is the Government's responsibility to provide these. The funds given to universities are in no way directed to helping this process. One of the things that I found quite interesting both in the OECD examiners' report and in the Science and Technology statement was the requirement which the OECD examiners recognised for a continuum between science, technology, invention, industry, commerce and trade. Currently these sectors are treated completely independently within the Australian community. Each of the persons within the community who is an operator or a professional person has his or her own language. Very little is done within the universities or by the Department of Science to tie together the interests of each one of these areas. Scientists talk a unique language in each particular discipline. There is no teaching within the university system to make the language uniform so that there can be understanding between the different disciplines. We then have each of these people talking to technologists and the technologists have great difficulty in identifying with pure science areas and finding ways of turning science into products. We then have problems in industry of actually understanding, developing and marketing technological products or inventions. I take as an example the 12 winners of invention of the year awards run by the Australian Broadcasting Corporation program The Inventors. Of these only two have been developed commercially, and one is the Sarich engine. In the Science and Technology Statement, we see on page 47 a division of funds between the private sector, the government sector and business enterprises including government business enterprises. Australia has most of its science money going into the government sector; yet that sector has the lowest output amongst all the sectors in terms of effectiveness in the application of science and technology. Mr Deputy President, I seek leave to incorporate in Hansard figure 3 on page 47 of the statement to illustrate my point. The DEPUTY PRESIDENT —Is it a diagram, or printed material? Senator VIGOR —It is a diagram. The DEPUTY PRESIDENT —Then it cannot be incorporated in Hansard. Senator VIGOR —I just wish to state, then, that my point is demonstrated by the diagram on page 47 of the statement. Australia has a proportionately higher level of patent registrations than its trading position in technological-based products would indicate and its trading position in tech-based products is declining. The report of the Organisation for Economic Co-operation and Development examiners states that all industries will be forced to keep up with a rapid pace change and that this will require many more highly skilled and well-educated personnel. More university graduates will be needed. It is the Government's responsibility to provide them. There is very little talk about interaction between the Department of Science and the universities in the planning policy described in this statement. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Question resolved in the affirmative. Senator WATSON(Tasmania)(3.32) —I move: That the Senate take note of the paper. I deplore part of one recommendation of the report of the Human Rights Commission on Human Rights and the Migration Act 1958, that of allowing into Australia, through the migration program, certain homosexuals. I believe that such a proposal will further erode traditional family relationships and the security of the family unit. It seems fashionable today to talk about the family but not about marriage. I believe that the contorted logic of the Human Rights Commission is based on a strong emphasis on the family in our migration policy and on the right to freedom of association. However, to accept the Commission's view that persons in permanent homosexual relationships are discriminated against in a way that is inconsistent with section 26 of the Racial Discrimination Act if they are not accorded the same rights of reunion as are married and de facto couples, I believe, is distasteful to all decent living Australians. The emphasis today increasingly is on freedoms but not necessarily on community responsibilities. It is about time that the rights of the community at large were respected. To include people within the migration program who have such highly different standards and principles from those of the great majority of Australians is somewhat reprehensible. I remind the Senate that acquired immune deficiency syndrome is almost entirely transmitted in the Western world by promiscuous homosexuals. In the United States of America only 5 per cent of the 10,000 cases of AIDS already reported have occurred among people who are not members of the high risk group, that is, homosexuals. We have enough problems at the moment internally without adding such a group of people to our migration program. The whole blood transfusion program is now at risk in the public mind. A very high proportion of people nowadays are advising their doctors not to give them blood transfusions if they go to hospital. I think it is a tragedy, for example, that a 66-year old San Franciscan nun contracted this disease through a blood transfusion. Already in Australia two babies have died from AIDS as a result of blood transfusions. The recommendations of the Human Rights Commission certainly will not help this situation. In conclusion, I say that the Minister for Immigration and Ethnic Affairs, Mr Hurford, has been quoted in the Australian as saying that the migration policy, in regard to homosexuals, is unlikely to be changed. I hope that he will not be influenced by this section of the Human Rights Commission's report. Senator PUPLICK(New South Wales)(3.36) —It had not occurred to me to contemplate entering this debate on the report of the Human Rights Commission on Human Rights relating to the Migration Act 1958. However, I would not want the Senate to assume that my friend and colleague Senator Watson speaks, in all that he says, for every senator on this side of the chamber. While I agree with aspects of the way in which the Human Rights Commission has dealt with the question of discrimination against the homosexual partners of persons otherwise eligible to enter Australia, I regard myself as being, in Senator Watson's words, 'a decent living Australian'. Nevertheless, I do not find myself grossly offended, insulted or, indeed, threatened by the Commission's recommendation. It is most unfortunate that in a matter such as this, comments about the spread of acquired immune deficiency syndrome are dragged into the debate in a way which simply perpetuates the homophobic and unfortunate attitude towards this crisis, which is fundamentally a public health crisis, which is not helpful to the victims and sufferers. Of the 17 or so people who have died in Australia of the disease AIDS, one of them was closely and personally known to me. He was a person whose death touched me as a lost friend. I make no secret of that. It is not a matter I find embarrassing or something to be ashamed of. Senator Watson mentioned that AIDS is largely transmitted by promiscuous homosexuals. That may or may not be a totally accurate statement. Let us take it for the moment that that may be a totally accurate statement. The fact is that the Human Rights Commission, in dealing with this matter, says that it wants to recognise the relationship of homosexuals who are in a permanent relationship. A 'permanent relationship' is a relationship which excludes, I think, the term 'promiscuous' in the way in which Senator Watson used it. I believe that the de facto relationship is difficult to establish in terms of bona fides, whether it be between homosexual or heterosexual couples. The question has been raised of whether the institution of marriage-an institution in which I have the deepest belief-is threatened or not threatened by de facto relationships. That threat would be equally true regardless of the sexual nature of the partners in the de facto relationship, or in the sanctified relationship of marriage. I do not want to get involved in the debate other than to go on the record as saying that it is my view that, where bona fide relationships exist, if they are based upon the principles of love, mutual respect and commitment, I make no moral judgment on the basis that the relationship is between persons of the same or of the opposite sex. I do not find anything repellant about the Human Rights Commission's recommendation. I feel insulted by Senator Watson's remark that the recommendation would be repellant to 'decent living Australians'. If anyone else believes that because I do not find these relationships offensive I do not qualify as a decent living Australian, I find that regrettable. I hope that when matters of this nature are considered they might be considered with a little less emotion, a little more sensitivity and a little recognition that differences, particularly those differences grounded in real feelings of mutual love and respect, are matters to be respected and not matters to be made part of an unfortunate, divisive, politically unhelpful debate. Senator GRIMES(Tasmania-Minister for Community Services)(3.39) —I wish to speak briefly on this matter. My comments also arise from the remarks made by Senator Watson. I have no difficulty in speaking about the recommendation of the report of the Human Rights Commission on Human Rights and the Migration Act 1958 which, as Senator Puplick says, refers to permanent and long standing relationships between homosexuals. I have no hesitation and no problem in echoing the words of Senator Puplick. I believe he articulated my view and, I am sure, the views of many other people in this place on that matter most adequately. I equally believe that Senator Watson is, in his own words, 'a decent, clean living Australian'. Therefore, I ask him to consider whether he is assisting the cause, assisting the Commonwealth Government of Australia and all the State governments in their efforts to deal with what is a very serious public health problem, by spending most of his speaking time opposing the first recommendation of the Human Rights Commission report by talking about AIDS-the acquired immune deficiency syndrome-in the way in which he did. I emphasise that the AIDS problem in this and in other countries is a public health problem. It is recognised as such by all governments of this country which are co-operating in an effort to handle that public health problem. Dr Blewett, the Minister for Health, I imagine by now has made a long and detailed statement to the House of Representatives that he was due to make this afternoon on what the State and Federal governments are doing in this matter. But what is also important in coping with this public health problem is that we have the co-operation of not only the health authorities but also the communities at risk, and one of the communities at risk in this country is the homosexual community. By and large the authorities have had the co-operation of that community through education and discussion, and will continue to do so. It may be, as Senator Watson says, that the most common source of the spread of the disease in this country-before we knew what the disease was, by the way-was through what he chooses to describe as 'promiscuous homosexuals'. That does not apply everywhere and need not apply here. In New York, for instance, the most common cause of the spread of the disease is understood to be through people who are intravenous drug users. I think the worst thing about his opposing the recommendation of the Human Rights Commission, which was about allowing people in long-standing and permanent relationships to be joined in this country-I do not object to his having those views-is that he believes he will be assisting the public health effort against the spread of AIDS in Australia. I think he is gravely mistaken. If we treat this as anything but a public health problem; if we treat it, as I said the other day, as some would, as a visitation from on high; if we treat it as something which has been sent to punish our society, and in doing so single out groups in the way in which I believe John Watson perhaps unwittingly did today, we are not going to assist a sensible approach to the public health problem that we have. We are not going to assist sensible debate in this country but we will divide this society in a way that I do not think anyone in this Parliament should. I therefore ask him to consider the words that he said, no matter how unfortunately inadvertent they may have been. I do not think he will assist the cause in the future if he continues in this way. Question resolved in the affirmative. Senator KILGARIFF(Northern Territory)(3.45) —I move: That the Senate take note of the paper. In speaking to the Commonwealth Grants Commission fifth report 1985 on special assistance for the Northern Territory I note that in July 1978, by virtue of the Northern Territory (Self-Government) Act, a financial arrangement was made between the Federal Government and the Northern Territory. Under clause 2 of the memorandum of understanding the Northern Territory Government became eligible to apply for a grant of special assistance on the recommendation of the Commonwealth Grants Commission on a basis similar to that of the claimant State. The introduction in the report states in part: In conformity with this agreement, the Commonwealth Grants Commission Amendment Act 1978 was enacted to enable the Commission to inquire into and report to the Minister upon such applications. The Commonwealth Grants Commission has been a very responsible statutory body over very many years and has been responsible for recommending funding to claimant States from the Federal Government. I believe that the findings of the Commonwealth Grants Commission fifth report on special assistance for the Northern Territory have put the lie to the accusations of financial extravagance and overspending which have been recently made against the Northern Territory Government. Quite clearly, the Grants Commission has looked at the situation and has made a report to the Government and the Minister for Territories (Mr Scholes) and yet it is the Minister who makes these attacks on the Northern Territory, despite the Commission's recommendations. The report, it is true, comes to the conclusion that for the financial year 1982-83 the Northern Territory received Commonwealth assistance of some $355,498,000, whereas its assessed needs were $342,886,000. In effect, the Commission says that the Territory received some $12,600,000 in excess of the amount it needed to provide services to the people of the Territory on a similar basis to the services which are provided to residents of the States. The report of the Commission states that the Commission has attempted to assess the Territory's financial need by determining the level of expenditure the Territory would incur if it pursued the same expenditure policies as do the standard States-New South Wales and Victoria. It is to be noted that the Grants Commission has not applied the factor assessment method because it has difficulty in obtaining data and in evaluating that data. That not having been done, one wonders what the situation would be under the financial arrangements for the Northern Territory, under the memorandum of understanding regarding special circumstances, if, for instance, the remoteness of the area, the small population and the high percentage of Aboriginal people living amongst the Territory population were taken into account as extra funds are required for their welfare. Even taking the approach it has, the Commission has come up with the figure of only $12m as the amount received by the Territory in 1982-83 in excess of its requirements for the provision of services to its residents. I must say that I believe this is a paltry sum when one considers the money which the Commonwealth grabbed back from the Territory last week when, despite the recommendations of the Commonwealth Grants Commission, the Treasurer, Mr Keating, announced the Government's economic package. He took $37m in one swipe from the Northern Territory Electricity Commission, which will bring tremendous pressure to bear on the people of the Northern Territory. That means that the rates will go up considerably. He took $36m in another swipe from funds destined for the redevelopment of Darwin Airport. In all, he took a total of $73m, and that is only the beginning because there have been cuts in defence in the Darwin area, cuts in education, in the petrol freight subsidy-which will bring enormous hardship to the people of the Territory-to the community employment program, communications and a host of other areas, which will all have a detrimental effect on the Northern Territory. We are told by the Federal Government that these cuts are to be made because we have been extravagant in the Territory and because we have received excessive Commonwealth funding. But the size of the funding cuts to the Territory, in view of the findings of the Commonwealth Grants Commission, are totally out of proportion to any provision of excess Commonwealth funds. The fact is that funding cuts to the Territory have nothing to do with excessive Commonwealth funding or fiscal extravagance but everything to do with the fact that the Prime Minister, Mr Hawke, and the Minister for Finance, Senator Walsh, are not interested in the people of the Territory who, on 1 December last year, failed to return one of their colleagues to the House of Representatives. If anyone doubts what the funding cuts are all about, he has only to look at the report of the Commonwealth Grants Commission, which makes it perfectly clear that the Territory is not guilty of the gross extravagance with which it has been charged and the excesses to which Senator Walsh so often and monotonously refers. Question resolved in the affirmative. Motion (by Senator Grimes) agreed to: That further consideration of General Business be not proceeded with this day. Debate resumed. Senator CRICHTON-BROWNE(Western Australia)(3.51) —Prior to the suspension of the sitting for lunch we were considering the Dairy Produce Market Support Levy Bill 1985 and associated Bills. (Quorum formed) I was referring to the fact that stocks of dairy products were at record levels, the European Economic Community and the United States between them having stocks in the range of two million tonnes. The magnitude of those stocks can be demonstrated by the fact that Australia, in 1983-84, exported a total of 92,000 tonnes. That provides a contrast in the degree of contribution we make to the pressures and fluctuations in price of these commodities as compared with that of the rest of the world. World prices for dairy products are therefore extremely depressed and the competition is so fierce that sales have been reported, as I said earlier, considerably below the minimum prices under the General Agreement on Tariffs and Trade. Nor is there any prospect of improvement in this situation. According to the Australian Bureau of Agricultural Economics, there will be no significant recovery in prices until at least 1986-87 with perhaps small declines in production in Europe and America being offset by increased production in the Union of Soviet Socialist Republics. Dairy farmers' incomes are currently protected to an extent by the existing market arrangements which subsidise export returns. The aim of the legislation before us is to reduce the level of that assistance which is given to the industry with the aim of cutting milk production. The industry certainly agrees that milk production needs to be reduced, but the effects of this Government's scheme are likely to be so drastic as to wreak absolute havoc on the dairy industry, particularly at a time when it is least able to accommodate it. This point was made very succinctly in an editorial in the Weekend Australian of 31 March 1985. It states: What Mr Kerin seems to have overlooked is that Australian dairy farmers are very efficient producers and that most other nations with dairy industries give those industries enormous government support. The Australian Government should not sacrifice the future of Australian dairy farmers for the profits of their counterparts in Europe, the US or New Zealand. That is exactly what will happen. Australia will vacate the world market and the gap will be filled by the United States, the EEC and New Zealand. As the Industries Assistance Commission pointed out in its report on the dairy industry in November 1983, there has been very substantial rationalisation of the dairy industry since the early 1970s, resulting in fewer and larger dairy holdings. I illustrate that point. Between 1971 and 1982, the number of dairy holdings with less than 60 cattle fell by 75 per cent while the number of holdings with a herd of over 200 cattle increased by only 28 per cent. Since 1982, however, milk production has been slowly increasing. From 5,200 million litres in 1980-81, milk production is expected to reach over 6,000 million litres by the end of 1984-85. This is perhaps reflected in the number of herds and productivity gains. The domestic market for milk is unlikely to increase substantially; therefore, surplus milk products must be sold on the export market, which, as I have already indicated, is extremely depressed and is likely to remain so in the near future. The Bureau of Agricultural Economics, in an economic evaluation of the dairy industry based on its submission to the IAC inquiry, made the point that investment, production and consumption decisions in the long term for the dairy industry must be made on the economic reality of long term world dairy prices. The dairy industry must be able to meet fair competition, with a level of production sufficient to provide exports for remunerative markets. That means that there must be an excess of production beyond that available for domestic consumption. Ultimately, this means a lower level of assistance to the industry, but the transfer must be done with great care. The Bureau of Agricultural Economics submission said: The costs associated with a rapid dismantling of the present transfer arrangements could be very high . . . adjustment would affect most adversely the small group of farmers unable to reduce their costs . . . the rapid removal of present transfers might result in unnecessary adjustment costs and hardship if the industry contracted beyond its long-term stable level of production in response to export parity prices . . . removal of the present assistance would increase the Australian industry's vulnerability to the relatively unstable world market. The present dairy marketing arrangements support domestic prices for manufactured products to an average figure approximately 70 per cent above that of export prices. The aim of the new marketing plan is to reduce this support to 30 per cent above export prices. This aim, by and large, is supported by the industry. This legislation is to be achieved by a levy on all milk production, sufficient to provide a level of support of 30 per cent above the average export prices, over three years, working out at around 1.5c per litre. Other calculations, contrary to mine, show the figure at 1.4c, but it is somewhere between 1.4c and 1.5c per litre. To provide a buffer between the present arrangements and this much lower level of assistance, a levy has been imposed upon butter and cheese sufficient to maintain current domestic prices on dairy produce. However, after 1985-86 this support will be dramatically cut. According to a formula, if milk production and market milk prices remain the same, the levy on butter and cheese will be halved. If milk production increases, the levy will be reduced even further. There is a very real and quite proper fear in the dairy industry that the imposition of the levy on all milk production might encourage farmers actually to increase production to maintain their incomes. In that case, by 1986-87, a very severe cut in prices would result in a sharp reduction in the levy on butter and cheese, resulting in a cut in farmers' returns of such magnitude as would cause excessive adjustment in the industry. That is one of the dangers, as already indicated, that was remarked upon by the BAE. It has been touched upon by almost every speaker on this side of the House. In order to avoid this situation the levy could be reduced in four equal steps to effect a more gradual reduction in assistance. Additionally, current levels of assistance should be maintained for two years rather than one. This would give world dairy prices some chance, modest as it might be, to improve, thereby reducing the likelihood that the industry will overadjust. Compounding these problems is the decision of the Minister for Primary Industry (Mr Kerin) immediately to scrap the system of export pooling. As we know, under present dairy marketing arrangements an average export price is determined for each dairy product by the Australian Dairy Corporation for the coming financial year, taking into account expected movements in the world price. All exports then receive the average price. The export pool is supported by any surplus from the pooling process and from levies on domestic production. In the long term, it is agreed that export pooling should be phased out. In order to enable a greater responsiveness to export markets, however, simply to scrap the system in a few weeks time is to invite chaos into the industry. This type of unilateral, arbitrary decision, in my view, has never been cast or imposed upon any other industry. The Industries Assistance Commission proposed scrapping export pooling in its draft report on the dairy industry, but subsequently it accepted the argument that to do that would 'induce an unacceptable level of instability into producer returns and would place considerable adjustment pressure on the industry'. Consequently the IAC recommended the retention of export pooling subject to review within three years. This Government is arguing that to abolish export pooling would encourage manufacturers to develop new and more lucrative markets. While there may be some merit in that argument in the long run, it is obvious that this cannot be achieved by 1 July 1985, after which date it is proposed by Mr Kerin, Senator Walsh and the Labor Government that export pooling be scrapped. In addition, in the present situation in which produce is being sold at below GATT minimum prices, it is very likely that Australian producers will be forced to compete with each other in their most lucrative markets to the point where export returns could be beaten down even further than today's levels or those predicted. The speed with which this Government is attempting to force adjustment upon the dairy industry is totally unrealistic. The nature of dairy farming is such that it takes years rather than weeks to alter production levels. The consequences of ignoring that fact will be very severe indeed. I cannot believe that this Government does not understand that an industry of this nature cannot adjust overnight in the way that is intended in this legislation. Mr Vawser, the Chairman of the Australian Dairy Corporation, in his address to the BAE National Outlook Conference at the beginning of this year spoke on the decision on marketing arrangements for the industry. He said: Without foresight and understanding, the industry could be reduced to a rump, to the ultimate detriment of the economy and the Australian community. Unfortunately, this seems to be where the industry is heading with the Kerin plan. The Australian Dairy Farmers Federation has expressed fears that Labor's plan will force so severe a cut in production that Australia could actually be short of milk in three years time. Additionally, the Federation predicts the loss of up to 25,000 jobs. The repercussions on rural communities would be immense. One need not be very bright or enlightened to understand that the vast majority of those jobs will be lost in rural areas which are already subject to very high levels of unemployment, and where it is very difficult to find alternative work and to sell homes and move to another location. I find it very interesting to compare the attitude taken by this Labor Government to protection afforded the dairy industry with its attitude to the levels of assistance which shelter many of our manufacturing industries-industries which have high levels of employment and intensive labour, and where there are strong unions affiliated with the Australian Council of Trade Unions which have muscle with this Government. Total Commonwealth outlays on the dairy industry in 1984-85 are estimated to reach only $11m. I ask honourable senators to compare that figure with the $78.1m allocated to the textile industry or the $52m paid in bounties to the incompetent, inefficient, subsidised steel industry in the same year. The BAE estimates the economic cost of assistance to the dairy industry at between $25m and $40m a year, depending on whether one takes export or import parity prices. The cost of protection to consumers is minimal. It is somewhere between $15 and $25 a year per person, again depending on whether or not one uses export or import parity prices in one's calculations. Even $40m pales into insignificance when compared with the $1,500m a year costs that the manufacturing sector's tariffs impose upon the rural sector as a whole. That works out at a cost of $9,000 per farm in subsidies to the manufacturing sector that are cast upon the rural sector. The Balderstone report entitled 'Agricultural Policy: Issues and Options for the 1980s' noted the deleterious effects of protection on agriculture and suggested that the levels of protection should be reduced 'starting with the most highly protected industries'. Nobody can claim in honesty, in truth and with confidence that the most highly protected industry is the rural sector; it is one of the very lowest. The National Farmers Federation commented on this point in its submission on farm costs. With the exception of the financial sector the Federation submitted: The delay in action to reduce protection is becoming so serious as to constitute a serious threat to the general viability of the Australian economy. The response of this Labor Government, far from starting with the most highly protected industries, is to hack away at the least protected sector of the Australian economy-the rural sector. It is particularly unfortunate, to say the least, that the Government should opt for this course of action when the chance of pursuing a more sensible and gradual policy of adjustment is so apparent. Such a policy is available and is the subject of our amendment. This policy could be rationally accepted and put in place. It would have the good will and support of the rural sector, the public and the Opposition. For some reason which escapes my attention and the logic of colleagues on my side of the House, that decision will not be made. The decision that has been made is arbitrarily to chop support from the industry. My concluding point concerns the proposed termination of allowances to manufacturers for certain costs, primarily storage and interest payments. This again illustrates the unnecessary harshness of Labor's dairy plan and its willingness to leave the Australian industry extremely vulnerable on the international market. The Australian Dairy Farmers Federation points out that under this legislation: Australia will be the only country signatory to the GATT international minimum pricing agreement for dairy products which does not have a centralised system for meeting storage costs of products when markets cannot be found above minimum prices. What I find intriguing about this question of protection, in regard to both the dry dries on our side and the wet wets on the other side, is that there never seems to be any rational balance. The logical conclusion seems to be that Australia ought to abolish all its protection-all its tariffs and all its bounties-and expose itself to the vulnerability of competition from the rest of the world, which continues to have tariffs and bounties. Then we have the other situation in which the manufacturing sector particularly has become flush and has grown fat, weary, lazy, incompetent and inefficient as a result of the level of taxpayers' funds that has been used in the past to prop it up. In my view the rational course of action is for us to reduce our levels of protection, our levels of assistance, when they are compatible with the levels of assistance provided by other countries. It is absurd for us to be, with the exception of New Zealand, the only country that does not have some form of subsidy of the nature that in particular the United States and the European Community have. It is absurd for anybody to expect us to be able to compete on the world market with the European Community and the United States, given the enormous stocks and levels of protection they have. This is a particularly serious matter at present when world dairy prices are so low that frequently Australian exporters are unable to sell products above the General Agreement on Tariffs and Trade minimum price. The European Community is dumping in the countries that are our traditional consumers and in our future markets, in the Third World countries. As a result of this legislation we just will not be competitive. The great tragedy is that the industry is quite willing to aim for a lower level of assistance. In view of the nature of the dairy industry and the present world situation surely it is reasonable to expect that it be allowed to adjust gradually, carefully and systematically. As I said at the outset, the industry is quite happy to adjust. It is quite happy to remove the wrinkles, to rationalise and to take less subsidy than it is presently receiving providing it is given time to adjust in a sensible and proper way. But, no, we find at this late hour the Government announcing that it will introduce its legislation to take effect in some areas from 1 July 1985. What a stark change that is from the position the Victorian Government took immediately before the last election. As an earlier speaker in this debate said, the last election in Victoria was probably won on the basis of the Victorian Government's deceit and dishonesty. It gave the Victorian industry to believe that it supported the proposition now put by the Federal Opposition. The Victorian Government said that it agreed with the general proposal of all the States for the orderly adjustment of the marketing arrangements for manufactured milk. What did the Commonwealth Government say at the time? It was deafening in its silence. It gave tacit support, tacit approval and tacit agreement to Mr Cain. There was not a suggestion, not a word, not an iota of sound to indicate that this sort of legislation would be introduced and cast upon the rural sector, flinging people to the wolves to the extent that many are likely to lose their farms. These are people who have over generations built up their holdings in the industry; people who have created wealth for this country. In the last year alone the industry's export earnings amounted to $400m. Through either blind negligence or stupidity Mr Kerin and Senator Walsh-who in an insidious fashion is having his bit to say-are now imposing legislation on the industry which it will not be able to carry or wear. If the Government refuses these proposed amendments and refuses future subsidisation in any way, as it has threatened, that decision will rest upon the Labor socialist Government and not on the Opposition. I have no doubt that that point will not pass over the heads or by the ears of the farming community. Senator HARRADINE(Tasmania)(4.15) —I thank Senator Jessop for enabling me to say a few words at this time in view of the fact that at the time I was to speak, 4.30 this afternoon, I have a pleasant duty to perform, in my capacity as a member of the Library Committee, relating to the retirement of senior officers of the Library. I will be extremely brief because most of the matters that I had wished to raise have already been raised. It appears that the Senate has agreed to deal with this dairy industry legislation in General Business time in order that the House of Representatives may receive the Senate amendments that are likely to be carried in time for it to give them consideration prior to its adjournment later this evening or early tomorrow morning. I appeal to the Government to reconsider its attitude, as stated by Senator Walsh last night. The Government's attitude demonstrates a complete disregard for not only the proposed amendments but also what lies behind the proposed amendments that are likely to be carried in this chamber. What lies behind those proposed amendments is the future of thousands of persons involved in the dairy industry. I know a number of those people personally. They are battlers; they are family men and women with children who, if the Government ignores the proposals being put to the Senate today, will be drastically affected. The Government will be ignoring the months-indeed it is a year or more-of work of people who have been involved in addressing the problem that we all acknowledge exists. They performed their work in order to achieve an area of agreement amongst disparate groups only to see that work accepted and then dashed. I appeal to the Government not to disregard those months of hard toil by those concerned and knowledgeable persons in the industry, and not to disregard the plight of the battlers who will be affected if the Government does not accept the proposed amendments that are likely to be carried in this chamber. Again, I thank Senator Jessop. Senator JESSOP(South Australia)(4.19) —The package of dairy industry Bills proposed by the Government is, as far as the Opposition is concerned, inadequate and require amendment. Amendments will be moved later in the Committee stage. I suggest first that the industry itself did recognise the problems of overproduction. The various sectors of the industry were very careful to consult amongst themselves and proposals were put before the various State Ministers and the Federal Minister for Primary Industry (Mr Kerin) some time last year. These proposals were accepted unanimously by the Ministers concerned, so it is with some concern that we find that the Bills before us today ignore the disruption that would occur to the industry if the Bills were allowed to pass without amendment. Perhaps the most surprising, and certainly the most deplorable, feature of the proposed new dairy marketing arrangements is the deceit practised by the Minister for Primary Industry as shown by the contrast between the tenor of the discussions he held with the industry last year and the draconian sweep of the legislation evident in these four Bills. Perhaps we could add the contrast between the pretended intentions of the legislation as expressed in the Minister's second reading speeches and the actual impact on the dairy industry. Introducing the Dairy Produce Market Support Levy Bill-the first of the four Bills in this package-the Minister stated: . . . when world prices began to decline present marketing arrangements continued to encourage production increases. The Minister then asked us to 'contemplate the insanity of a marketing arrangement which rewards individual manufacturers for continuing to produce for export, when these exported products in some cases return less than half the cost of production of the milk used in their manufacture'. If we overlook the fact-and we can do that-that the milk production increases which the Minister deplores were produced at marginal cost and that the cost of converting the milk into dairy products was also marginal, the true cost may well have been only a fraction of the average cost and the productive use of otherwise idle resources may have been a sensible economic choice. Let us look instead at the intentions of the Bills now before us to see whether they remedy the ills of which the Minister complains. Let us overlook also the fact that the domestic prices for Australian dairy products are among the cheapest in the world. That fact has been demonstrated repeatedly during the debate. Senator Crichton-Browne —And top quality. Senator JESSOP —As Senator Crichton-Browne said, our dairy products are top quality. We observe from the second reading speeches that although the Minister conceded that world market prices are corrupt, so that some measure of assistance in the form of higher domestic prices is reasonable, Australian consumers now support the dairy industry by paying higher prices for their dairy products than would be the case in the absence of the current market arrangements. We also observe from the same sources that the proposed abolition of export pooling is to ensure competition between manufacturers for export markets. Both of these measures, separately and together, will eventually result in lower returns to dairy farmers. I think Senator Crichton-Browne and others have alluded to that. In fact, the aim of the legislation to reduce returns to a point where a large number of dairy farmers-some 25 per cent-are forced out of the industry, is demonstrated by the formula in clause 7 (3) of the Dairy Industry Stabilization Levy Amendment Bill. That clause permits current levels of farm prices to be maintained, and then for only two years, only if national milk production falls by some 24 per cent. It is therefore difficult to see why, if a fall in prices under the current arrangements would induce increased milk production, there should be any different reaction to the price reduction which is intended by the proposed legislation. I believe quite firmly, and I understand that this belief is held generally by the dairy industry, that whilst price reductions will follow the introduction of the proposed legislation, if it gets that far-and I include here the steep initial reduction that would occur in the opening prices on 1 July, which is the proposed commencement date for this new legislation, as well as the expected and intended downward price movement during at least the early years of the new scheme-there will be an immediate increase in milk production as every dairy farmer attempts to at least maintain his gross income, at best to offset steadily increasing production costs. This steep increase in milk production will lead to even larger volumes of products that cannot be sold at any price because of international agreements, followed immediately by a massive reduction in farm income and an even faster rate of exit from the dairy industry. This would be caused by foreclosures and other financial pressures, followed by increasing production as prices recover-an overshoot and a continuous but diminishing typical cobweb behaviour until equilibrium is reached, if it is reached, about the time the legislation is to terminate. This instability and its economic, social and personal costs, could be avoided if the Minister were to honour what amounts to an undertaking that he gave to the Australian Dairy Industry Conference in August last year. On that occasion, the Minister stated, I believe unequivocally: Equalisation arrangements of the type now in place and as proposed give the wrong marginal price signals to producers . . . I believe that, for the dairy industry, the price mechanism is a fairly blunt weapon for tailoring production to remunerative demand. I remind the Senate that the sole regulatory mechanism in the Bills before the chamber is that of price. The Minister, on that occasion last year, continued: For those reasons I am still open to be convinced that the advantages of an entitlements scheme may outweigh the disadvantages. Then the Minister laid down the conditions on which he was prepared to put forward an entitlements scheme. Those conditions were that the scheme should be simple; it would need to have broad industry support; it should be structured so as not to freeze the structure of the industry; it should not give rise to high values for entitlements, and it should not institutionalise a level of production that is above remunerative market opportunities. Regrettably, although the industry supports the principle of production restraint through an entitlements scheme and had proposed an amendment to those Bills which it believes would facilitate the introduction of such a scheme, the industry has not addressed itself to meeting the specific conditions which the Minister set down for entitlements to be acceptable to him and, one must presume, to the Government. First, let us deal with the simplicity of the scheme. Reference has been made to the necessity for such a scheme to be acceptable to all State governments because complementary State legislation will be required. The 1976 report of the Industries Assistance Commission recommended an entitlements scheme as the second stage in the progressive deregulation of its then proposed-and now current-stabilisation scheme. It proposed that the scheme be centrally administered by the Australian Dairy Corporation; a proposal that surely represents the absolute in terms of simplicity, equity and impartiality. As to broad industry support, the support then given to an entitlements scheme by the Australian Dairy Industry Conference-the industry's official mouthpiece-was reinforced seven months later by all State Ministers of agriculture at a meeting on 28 February, which the Minister reported in his media release on 1 March as demonstrating the degree of support which would enable him to put the proposal to the Government. The third condition of the avoidance of structural rigidity was met, shortly after the Minister's address, by the acceptance by the industry of free negotiability of entitlements; a condition that had always been insisted on by the Minister and had been recommended in the 1976 IAC report. The condition concerning the avoidance of high capitalisation values for entitlements is perhaps harder to meet, but several suggestions have been put to me by the industry, all of which appear to have merit and could well be combined. I am sure that a fixed life, perhaps as short as two years or as long as the proposed four years, prior to a review of the scheme, would provide sufficient uncertainty to keep entitlement values to a workable minimum. Meeting the final condition-an entitlements scheme that is confined to remunerative markets-will depend on an agreed identity of remunerative markets which, in the generally unstable world dairy market structure, vary almost from day to day. But agreement here should present no difficulty and surely is outside the contents of a Bill. The question is simply whether the 5.6 billion litres proposed by the industry includes some unremunerative markets or whether entitlements should include domestic and so-called preferred export markets favoured by the IAC; whether the Minister's original maximum of 5 billion litres is better or whether the goal should be to effect a rapid reduction from some higher figure down to the 4.6 billion litres as proposed in the Minister's plan put to the Australian Agricultural Council on 11 February. However, the undoubted merits of an entitlement scheme as a means of ensuring a stable, viable and efficient dairy industry are not sufficient to enable such a scheme to stand alone as the only modifying factor in the proposed new legislation. For example, the 1976 IAC report recommended that the transition from stage 1 to stage 2 of its three-part proposal, which transition regrettably failed, should include a fully negotiable entitlement scheme and the retention of the export pooling component of the equalisation pools in stage 1-a recommendation that was reiterated by the IAC in its 1983 report. The amendment which is proposed to clause 19 of the Dairy Produce Market Support Bill was similarly supported by the IAC in section 5.2 of its 1976 report for the same reasons as have been put forward; namely, that the primary purpose of the proposed legislation is to support the dairy farming sector of the industry so that support payments should be related to that portion of manufactured dairy products that is supplied by the dairy farmer-the milk and milk constituents content, not the labour, packaging and other costs added during the manufacturing process. Finally, I turn to the amendment that will be suggested to clause 7 of the Dairy Industry Stabilization Levy Amendment Bill. I have already referred to the fair deal that I believe Australian consumers receive when they buy Australian dairy products, the prices for which are among the cheapest in the world, in contrast to the Minister's view that our consumers pay too much. The purpose of the amendment is no more than to extend the transition period during which domestic pricing moves from arbitrary levels of support to a predetermined price relative to export prices. Even in the market signal environment created by an entitlement scheme, if we have regard to the continuing increases in dairy farm and factory production costs and the fact that domestic prices for dairy products have not increased for over two years, the rate of production proposed in the Bill must be regarded as unacceptably rapid. I have consulted closely with the South Australian dairy industry. I am grateful for the advice that has been given to me by Mr David Higbed. I congratulate the Minister on the effectiveness of his consultation with the industry and I sincerely trust that the Senate will pass the amendments at the appropriate time so that this important industry will not suffer the disruption that these Bills would create. Senator LEWIS(Victoria)(4.34) —Apart from the Minister for Finance (Senator Walsh), I think I am the last of the speakers on the Dairy Produce Market Support Levy Bill and related Bills. The facts about the industry, its problems, its difficulties and the Government's solutions to them have been put to the Senate at length. It is very interesting that, notwithstanding the fact that there were about 15 speakers, only one Government senator was prepared to speak on these Bills and the effect that they will have on this very important industry. I must say that I did enjoy Senator Cooney's speech. I hear some laughter from the Government side, but I mean that. I thought that his effort to put the Government's case was excellent. Senator Collard —He made a better effort than a lot of them. Senator LEWIS —As Senator Collard said, he made a better effort than the rest of them because, of course, the rest of them did not even try. But Senator Cooney demonstrated that he can handle a brief. Senator Gareth Evans —He has been doing that for a number of years. Senator LEWIS —Yes. I suppose that is what lawyers are trained to do. But in any event he did it fairly well and what he was saying came across- Senator Macklin —Would you employ him; this is it? Senator LEWIS —Yes, certainly I would have briefed him in my time. What he said came across as very reasonable. Unfortunately, though, his instructions were demonstrably wrong in five areas, as outlined in the speech by Senator Archer. I will not bother to repeat those areas; they are set out very clearly in Senator Archer's speech. One point about Senator Cooney's speech that I do wish to take up is that he asked for evidence that more than a small minority of farmers will be put at risk by the legislation. He seemed to imply that if this could be demonstrated the Government might change its mind about this legislation. Of course, we know that that will not happen because Senator Walsh has already told us that the Government will not change its mind and will reject our amendments. The fact that Senator Cooney is asking such a question is, in my view, clear evidence that the Minister for Primary Industry (Mr Kerin) has been dissembling when addressing the ALP Caucus to explain the legislation. If one looks at the Minister's second reading speeches, the proposition does not come clearly through. In fact I found it necessary to examine all the second reading speeches and then go back to look at his public statements as shown in his Press releases in order ultimately to reduce this legislation to three simple propositions. This is the evidence which I present to Senator Cooney: The plan is designed to cut back production of milk to what the Minister describes as what can be sold profitably. The Minister has made it clear that that is what the plan is all about. That amount, the Minister has indicated in other speeches, he estimates at about 4.6 billion litres per annum. Production is estimated at 6 billion litres for this year. The conclusion is that it is necessary to cut back by 1.4 billion litres. That is the evidence for which Senator Cooney was asking and it was clearly demonstrated by the fact that we have this legislation before the Senate at the moment. If that were not the purpose of the legislation we would not be debating these Bills. This ALP proposal requires these dairy farmers to cut back by this 1.4 billion litres per annum, in effect forthwith-commencing in six weeks time. I refer to a speech by the Leader of the Government in the Senate, Senator John Button, on 17 October 1984 in an address to the Australian Business Congress. Again it was a speech which I admired, an excellent speech. Of course, at that stage Senator Button was wearing that hat he wears when he addresses businessmen and not the hat he wears when he addresses unionists. There is sometimes a difference. In the course of this speech Senator Button said: If industry policy was solely a matter of lowering protection levels . . . and watching resources shift into more efficient sectors, restructuring would be simple, but we should not delude ourselves into believing that any government in Australia, or elsewhere in the world, has unequivocally accepted wholesale tariff reduction as a principal arm of economic policy. Senator Button was talking about industries which are not primary industries. He was pointing out that if one were trying to shift resources and it was just simply a matter of lowering protection levels and watching industry become efficient, it would be very easy. He went on to say: The main qualification to this approach lies in the speed in which tariff reduction can be carried out. This Government-- Senator Button's Government-- has announced its intention to proceed to reduce levels of protection, but in areas such as motor vehicle policy it has done so on a gradual basis. Senator Archer —The right way. Senator LEWIS —As Senator Archer says, the right way. It has done it on a gradual basis. That is what our amendments are all about. Senator Archer —That is all anybody wants. Senator LEWIS —As Senator Archer says, it is all anybody wants. I make no criticism of Senator Button for that approach. I admire him for his approach to the industry and I hope that he can successfully restructure Australian manufacturing and secondary industries in the way that he is going about it. When one looks at what Mr Kerin is proposing in regard to the dairy industry, one wonders why he does not go and get a lesson from Senator Button. If these cows were mechanical cows, the pressure of the Australian Council of Trade Unions on this Government would have resulted in a plan for restructuring the industry very different from the plan which Mr Kerin- Senator Collard —They would be on clover. Senator LEWIS —I acknowledge Senator Collard's pun. This Government's plan to restructure the dairy industry is, in effect, to take out of the industry some 2,000 to 3,000 of the 19,000 current Australian dairy farmers. As has been pointed out in the Senate, this industry has been involved in extensive restructuring for over a decade. In the last few years, since about 1977, it has restructured massively. Yet this proposal is to wipe out another 2,000 to 3,000 Australian dairy farmers. Which dairy farmers will be wiped out? Not the market milk suppliers. Those who are currently receiving about 30c per litre and struggling to survive on 50-cow dairy farms are not the ones who will be wiped out. Those people have my sympathy. I know the difficulties and the harshness of their work. When I first went to Warrnambool in the mid-1950s I knew people who were surviving on 50-cow dairies. They were probably milking in dairies erected by their grandfathers and, in some cases, great grandfathers, in mud and slush up to their knees in winter and generally in very poor conditions. But they managed to survive by milking 50 cows twice a day seven days a week. These dairy farmers do not exist any longer in the efficient areas of Victoria. There are young, enthusiastic dairy farmers milking 110 to 120 cows a day and not in mud and slush up to their elbows but, in fact, in modern circular dairies with silos to provide feed and with all the latest equipment. They are doing very well. Certainly those who are supplying market milk in Brisbane and Sydney, and Adelaide for that matter, have my sympathy. On the other hand, they will continue to be protected by State government schemes. The dairy farmers who are required to cut back under this legislation are those who supply manufacturing milk. They are currently surviving on 13c or 14c a litre and milking double the number of cows with probably just the minimum of help from their family. Mostly Victorians and some Tasmanians will be wiped out because 87 per cent of their production goes into manufacturing milk, which is the area to be cut back. Most of these people are young dairy farmers who are in debt. They are not in debt because there has been anything wrong with their methods; they are in debt because they have borrowed funds to become efficient to cope with the cutbacks which occurred in the late 1970s. Many of them have leased or purchased larger farms; they have bought or bred larger herds; they have built new efficient dairies and new silos and made sure that the cows are well cared for with concrete paths. Generally the whole industry is so much more efficient than it was 25 years or so ago. These people are being given some five to six weeks under this legislation. The amendments which the Opposition is proposing are designed to extend that transition period to two years to give these farmers some time to change their product and to give their co-operatives time to reorganise their international marketing arrangements. I certainly hope that those co-operatives take the opportunity that is given to them because that is an essential reorganisation in the industry. Another matter which bothers me is that most of these dairy farmers will go out of the dairy industry and into the beef industry. That will ultimately be to the detriment of that industry. But that is another problem which no doubt we will be confronted with at some stage in the future. Senator Walsh in demonstrating his and this Government's utter and complete contempt for both the Parliament and the legislative process has told us that we on the Opposition benches must accept the Government's ultimatum or else. If the Australian Labor Party had its way, Australia would have a one-party system of government and democracy and the parliamentary system would be right out of the window. Senator Walsh interjected on a previous speaker. If my memory serves me correctly, it was Senator Watson. He asked what our amendments will cost. Firstly, I say to Senator Walsh that our amendments provide no additional cost to the taxpayer. Indeed, it could be argued that by extending the adjustment period over two years the burden to the taxpayer will be reduced. Secondly, I refer to the cost to the consumer. Export pooling has, at the most, a minor indirect effect on the domestic price and may be disregarded altogether. In theory the Government's formula could provide higher domestic prices in a particular year. The basis for determining the export market payments, which is the subject of our third amendment, has no relationship to or effect on domestic prices. I ask Senator Walsh to apply his mind properly to the costs of these amendments rather than to apply his rhetoric. Let me finish with some quotes from the editorial of the Australian of 30 March this year. It says: Mr Kerin says we have too many dairy farmers producing too much milk, butter and other manufactured dairy products. He wants to make the industry competitive with overseas dairy industries. What Mr Kerin seems to have overlooked is that Australian dairy farmers are very efficient producers and that most other nations with dairy industries give those industries enormous government support. European dairy farmers' home markets are protected by subsidies and tariffs and the European Community has built up surpluses. While Australia may well have too many dairy farmers who produce too much, can we in these days of very high unemployment afford to implement a scheme which it has been estimated will see up to 9,000 efficient dairy farmers go out of business? I did not suggest a figure of 9,000. The estimate that has been given to me is 2,000 to 3,000. The editorial goes on: Even if we forget the farmers, imagine the impact on small rural communities if half Australia's dairy farmers were suddenly forced out of business. Certainly, there is a need for urgent international talks on dairy industry rationalisation-but while other governments are protecting their dairy industries the Australian Government should not sacrifice the future of Australian dairy farmers for the profits of their counterparts in Europe, the US or New Zealand. That puts it as well as anyone in the Senate has put it, and certainly better than I can. Why should we sacrifice dairy farmers in Australia for the benefit of their counterparts in Europe, the United States or New Zealand? All of Australia's product has been sold in the past few years and will continue to be sold. Perhaps it will not be sold profitably-which is the way Mr Kerin sees it-but it has been sold in the market-places and the probability is that it will continue to be sold. As our dairy farmers withdraw from the international market their places will simply be filled by dairy farmers in Europe, the United States or New Zealand and ultimately we will discover that 4.6 billion litres is too much milk and again we will have to cut back in some way. Why this Government should send dairy farmers to the wall in such a brief period when it is showing such a sensible approach to the manufacturing industry is quite beyond me. Senator WALSH(Western Australia-Minister for Finance)(4.54) —I shall not speak for long. A number of amendments are coming up and I do not propose to deal with them now, except to say that essentially what they seek to do is to retain for at least two years, and possibly a longer period, the present arrangements. In other words, they seek to retain the very system which has caused the problem, the very system which, within the last five or six years, has caused production to blow out from around five billion litres a year to six billion litres. The Government will not accept any of the proposed amendments for that reason. There is one correction of fact that I wish to make. Senator Boswell claimed that an Agricultural Council meeting on 28 February had accepted an alternative entitlement plan. There was no Agricultural Council meeting on 28 February. There was a meeting of a number of State agricultural Ministers and Mr Kerin and the State Ministers present gave varying accounts, to say the least, of the proposal that was put to that meeting. There was, however, an Agricultural Council meeting held on 5 February at which a Commonwealth entitlement plan was put forward to the States. It was rejected by all of them. Question resolved in the affirmative. Bills read a second time. DAIRY PRODUCE MARKET SUPPORT LEVY BILL 1985 The Bill. Senator MACKLIN(Queensland)(4.56) —by leave-I move: That the House of Representatives be requested to make the following amendments: (1) Page 3, clause 6, sub-clause (1), leave out 'Subject to this section,'. (2) Page 3, clause 6, leave out sub-clause (2) and (3). (3) Page 3, clause 8, sub-clause (2), leave out 'sub-section 6 (1)', insert 'section 6'. As I pointed out in my speech during the second reading debate, these requests are the fourth in a series of alterations to the package of Bills as proposed by the industry itself. The effect of these requests would be to alter the Bill in such a way as to enable the Government by regulation to do what it is currently able to do under the Bill, or by regulation to put a two-tiered levy into the Bill. In other words, these requests do not force anything on the Government. They do not require the Government to do anything but they provide the opportunity to the Government, should it wish to do so at some stage in the future, to alter the methods by which it operates the levy and, in particular, to have the two-tiered price structure put in place if that seems desirable at a later stage. Senator WATSON(Tasmania)(4.57) —I can understand the rationale behind these requests relating to the two-tiered price structure. In effect they give the Minister yet another string to his bow to assist in matching milk production to profitable demand. By implementing a dual rate of levy through regulation, as opposed to a single uniform rate for all milk, a price signal can be conveyed to farmers which will accurately reflect the true value of marginal milk production. If a dual rate of levy becomes necessary, the Minister, I contend, has the option of bringing this form of amendment back to Parliament itself in the form of legislation. I cannot speak for the whole of my Party, but I believe that such a fundamental change to the system should be implemented by Parliament rather than by ministerial decree or regulation, as has been suggested by Senator Macklin. Since this legislation has been conceived in such a hurry and rushed through this Parliament, amendments are almost inevitable in the near future, despite what Senator Walsh said yesterday. Senator COLLARD(Queensland)(4.59) —The Opposition will not support these requests, although we are not without sympathy for them. The request relating to a two-tier system is a little along the lines of the scheme that was put up by the Australian Dairy Industry Conference and agreed to by all the State Ministers in that now very cynical but well-known political exercise that took place two days before the Victorian election. It provided for entitlements and a two-tier system with penalties on anything above 90 per cent of previous production. Its implementation was to be worked out on a State by State basis. I am not without sympathy for the proposition and I believe it may even be necessary in the future as the Kerin plan comes into operation and people, instead of reducing production, scramble to increase production to try to make their way and make their alley secure. We will not support it this time even though we are not without sympathy for the proposition and I believe the Government might find it necessary to implement such an amendment in the future. Senator WALSH(Western Australia-Minister for Finance)(5.00) —First, I make another correction on a point of fact. The meeting on 28 February, which was not an Australian Agricultural Council meeting, did not come out with a proposition agreed to by all primary industry Ministers because the Western Australian Minister was not there, nor was the Northern Territory Minister, if honourable senators want to count him. The Government will not accept this amendment. As Senator Macklin says, it opens up the potential for the introduction of a two-price scheme, the concomitant of which, of course, is quotas. It is not possible in the time available to implement quotas by 1 July. The proposal would be inoperative for the next financial year. A Commonwealth scheme, which had been thought through in detail, was put to the Agricultural Council meeting on 5 February. It entailed a two-price scheme and quotas and was rejected, as I said before, by all States. It is not possible, even apart from the time constraint, to implement effectively a two-priced scheme without supporting legislation being enacted in all States. There is obviously no chance of getting that before 1 July. The introduction of a two-price scheme and quotes was arguable at one time. For that reason the Government put forward a serious proposition for it. There is an arguable case to be put for it. The Commonwealth put that case at the beginning of February. It was rejected by all States. The proposition continues to surface now and again by people who think it is a good idea. However-this applies particularly to the States-these people have never shown the slightest inclination to accept the legislative and political responsibility which would be essential to make such a proposal operative. The States have still shown no such inclination to accept that legislative and political responsibility. Senator MACKLIN(Queensland)(5.02) —The proposal I have put forward does not require there to be a two-price milk payment scheme. It permits such a scheme to be established if the Government so wishes. Putting the whole thing into operation by the middle of the year may very well not be feasible. I take the point of the Minister for Finance with regard to the agreement of the States. That is why the amendment is moved in the form it is. The amendment simply allows to be done precisely what is done already by the Dairy Produce Market Support Bill by regulation. I am still quite unsure as to why the Opposition is not supporting my proposal. I would certainly welcome some clarification on the matter. As I understood it, the two senators who spoke for the Opposition parties said that they supported and had sympathy for the idea. They then said they were going to vote against it. I am not at all sure why they are seeking to do that at this stage. The proposal does not alter the Bill. The Government can implement the Bill as is. I am still at a loss to understand the Opposition's position on this matter. Request negatived. Bill agreed to without requests. DAIRY LEGISLATION AMENDMENT BILL 1985 The Bill. Senator COLLARD(Queensland)(5.04) —by leave-I move: (1) Page 5, clause 13, leave out '20AA and 20AB'. (2) Page 5, after clause 13, insert the following new clause: '13A. Sections 20AA and 20AB of the Principal Act are repealed and the following sections substituted: Export of certain dairy products prohibited unless exporter party to arrangement '20AA (1) A person, other than the Corporation, shall not export, or cause to be exported, dairy products as specified in section 20AB from Australia unless the person is a party to an arrangement with the Corporation entered into under section 20AB that relates to those dairy products. Penalty: $1,000. '(2) The regulations may provide that this section does not apply in relation to dairy products of a prescribed class. Export sales pooling arrangements '20AB (1) In this section- ''exporter'', for the purposes of this section, means a person, a partnership or a body corporate, accepted by the Corporation as being engaged in the sale of dairy products to overseas markets; ''principal markets'' means markets or groups of markets prescribed for the purposes of this section by the Regulations; ''pool'' means a separate account set up and maintained by the Corporation in respect of the dairy products, and for the periods, specified in sub-section (2). '(2) The Corporation shall establish and maintain pools for the purpose of this section as follows- (a) butter and the commercial butter equivalent of butter oil exported between 1 July 1985 and 30 June 1986 but manufactured after 30 June 1985; (b) cheddar cheese and the natural equivalent of processed cheddar exported between 1 July 1985 and 30 June 1986 but manufactured after 30 June 1985; (c) butter and the commercial butter equivalent of butter oil exported between 1 July 1986 and 30 June 1987 but manufactured after 30 June 1985; (d) cheddar cheese and the natural equivalent of processed cheddar exported between 1 July 1986 and 30 June 1987 but manufactured after 30 June 1985; '(3) The Corporation shall, from time to time, for the purposes of this section, fix an average price for each of the dairy products in respect of which a pool is maintained by the Corporation under sub-section (2), being a price that the Corporation considers will be the average export price for those dairy products. '(4) The Corporation may, from time to time, for the purposes of this section, fix assessed export prices for each principal market for each of the dairy products in respect of which a pool is maintained by the Corporation under sub-section (2), being prices that the Corporation considers appropriate at the time and in the circumstances. '(5) The Corporation may, with the approval of the Minister, make to persons engaged in the production, storage, distribution, sale, export or promotion of dairy products payments to meet expenses incurred in the storage, distribution, sale, export or promotion of dairy products to which this section applies and, where any such payment is made, the amount of the payment shall be debited to the appropriate pool. '(6) Where an exporter makes sales of dairy products, in respect of which a pool is maintained by the Corporation under sub-section (2), to a principal market and the assessed price for the relevant principal market at the time of a sale is greater than the average price for the product determined under sub-section (3), the exporter shall be required to pay to the Corporation for the purposes of the relevant pool the difference between the average price for the product and the assessed price for the product in the relevant principal market. '(7) Where an exporter makes sales of dairy products, in respect of which a pool is maintained by the Corporation under sub-section (2), to a principal market and the assessed price for the relevant principal market at the time of a sale is less than the average price for the product determined under sub-section (3), the Corporation shall pay to the exporter from the funds available for the purposes of the relevant pool the difference between the average price for the product and the assessed price for the product in the relevant principal market. '(8) Where, at the end of each financial year, the Corporation is satisfied that no more amounts will be credited or debited to any of the pools established pursuant to sub-section (2), the Corporation may- (a) if the funds in the relevant pool are in credit, divide the amount of the credit amongst exporters who have contributed funds to the pool in accordance with sub-section (6) in the year in question, in proportion to their respective contributions to the pool; or (b) if the funds in the relevant pool are in deficit, transfer an amount equal to the deficit from the Supplementary Market Support Trust Fund established under section 28 of the Dairy Market Support Act 1985. '(9) Where the Corporation engages in the export of dairy products of the kinds specified and during the periods specified in sub-section (2) it shall, for the purposes of sub-sections (6), (7) and (8) be considered to be an exporter.'.'. As I explained in my speech during the second reading debate on the Dairy Legislation Amendment Bill 1985, these amendments are designed to carry on the export pooling arrangement for a further two years, as opposed to their ending on 1 July 1985. For all the reasons various speakers have given in the second reading debate, the amendments are designed to allow the dairy industry time to adjust. I made the point, and many other speakers made the point, that the dairy industry is well aware of its problems. However, being aware of its problems, it wants time to adjust to them. It has had quite a good record of adjustment to this point in regard to the rationalisation that has taken place in all States. As I indicated, somebody who joined, or artificially inseminated a cow yesterday, depending on breeding patterns, has committed himself for a minimum of 19 months, considering lactation periods. In fairness to the dairy industry, these amendments and one of the other Opposition amendments are designed to allow time for the dairy industry to adjust. That is the reason why we are moving them. I might say that it has been done after having had much consultation with the dairy industry. If the Government had had better consultation with the dairy industry it probably would have come up with a better proposition and would not have found itself in its present position with the Opposition moving amendments in the Senate and having them carried. Senator ARCHER(Tasmania)(5.07) —The necessity and desirability of having an export pooling scheme should be very clear to the Government by now. I also compliment Senator Cooney on the points he made last night. As I said earlier, it is regrettable that of the five points Senator Cooney raised I would contest every one as being incorrect. If we carry these amendments we need to demonstrate that Senator Cooney's points are wrong. There is no way that these amendments, as against their alternative, could augment costs. The alternative is to send a whole barrage of people from the industry around the world to sell the same amount of produce that is now sold through export pooling. Senator Cooney said that our amendments would encourage over-production. Why would they encourage over-production? No information was given by Senator Cooney as to why he felt that would be the case. He said that they would provide the greatest degree of assistance to the least viable part of the market. They would not do anything of the sort. What our amendments would do, by implementing a general milk levy, would be to make it possible for people to go where the market is. They certainly would not hamper the development of new markets or new products for the same reason. People who would be able to get this sort of levy over all products would go where the market took them. They would be encouraged to go where the market was. Senator Cooney said that our proposals would direct the minds of manufacturers toward production rather than marketing. What absolute nonsense. Absolutely nothing indicates that my poor friend Senator Cooney was not led up the garden path with a brief that was absolute baloney. Senator Collard —He did well with a poor brief. Senator ARCHER —He did. However, what he says is just not the case. It is now proposed to abolish export pooling, from when it is due to run out-30 June. I would like the Minister for Finance, Senator Walsh, to explain to me how every dairy company in every State of Australia could get organised to go and be ready to merchandise by 1 July this year, when there have been 50 years of practice in doing what every other exporting dairy country has found to be the best method. How could we do that economically and efficiently in the time. Senator MACKLIN(Queensland)(5.09) —I suppose one can understand the Government's opposition to these amendments, expressed by the Minister for Finance, Senator Walsh, when he interjected during the second reading debate last night. However, the major claim the Government is making in refusing to support these amendments is that they seek to put in place a market-driven system, which is basic to Senator Cooney's proposition put forward during the second reading debate. The fact is that there would be as much an absence of market signals under the Kerin plan as there is under the existing system. The proposed system would not be free of market distortions. For example, let us look at the Kerin plan as it is set out in the legislation, taking an export target price equivalent to 130 per cent of a three-year average of export prices established in advance each year. Export market payments are equivalent to the difference between the Australian Dairy Corporation estimate of an average export price and the established price target, as it is to be paid to exporters under the scheme. If the average export price for a particular product falls during the year the net return stays unchanged because export market support payments are increased to compensate. In other words, during the year exporters are totally insulated from movements in export prices. This does not occur even under the current arrangements. The Government's proposed system will still reward the production of exports for which there are no profitable markets. That is the same criticism that Senator Cooney made about the current arrangement. It seems clear that we are not getting this extraordinary free market operation that government speakers have been referring to; we are getting the modification of the scheme. If that is the case there seems to be very little reason, other than the political reason of an election year as I mentioned in my speech during the second reading stage, why this could not take place. I again suggest that if it did it would be in keeping with the propositions of the Minister at the table, the Minister for Industry, Technology and Commerce (Senator Button), with regard to the car industry. In that case a predictable pattern has been set in place over a number of years to restructure an extremely important Australian industry. I think the predictability element, as in the proposed car plan, is vital to the maintenance and continuation of industries in this country, and so it is in this area. When one is changing from one scheme to another, regardless of the virtues of whether it is a good or bad move, it seems to me that if any move is made, even from an absolutely atrocious system, one has to leave a certain amount of time for adjustment. We cannot overnight expect the types of things to occur that the Government is expecting. The industry has suggested two years. I suppose even one year or six months would be better than the short time the industry will have with the scheme operating at the end of next month. I think that that is essentially the proposition that the industry is putting up-the difficulty of doing it in that short time. There are now at least some indications that the international market will be far better at the end of that period than it is at the moment in regard to a number of items. That improvement may or may not occur. I am the first to acknowledge the fluctuations in the international market. I simply say that at the moment the signals suggest that a number of factors in a number of commodity areas would give us at least some cause for hope in two years time in terms of Australia's competing, and competing well, on the international market. The Minister for Primary Industry (Mr Kerin) would certainly know that as well as I do. It seems to me that the proposition is not in black and white; it is put in this way: Yes, the industry has accepted the Government's proposals but is seeking some further time to get a reasonable adjustment going to be able to meet the demands that the Government is making. I think we find some significant support, even in the industry, for getting rid of export pools. I am happy to admit that, and I think every senator here would have met a significant number of dairy farmers who actually say that. Senator Boswell —No way. Senator MACKLIN —I am sorry, but there are, and I have spoken to them. Those people have also said to me that whilst they would be happy to get rid of export pools they are also looking at some type of phasing-in operation and at some attempt to meet the demands made on the industry by the Government. That is the type of proposition they are putting over and over again. I believe the Government should seek, in consonance with the type of thing it has done in other industries, to do the same for this industry so there can be a rational and reasonable approach to adjustment for those dairy farmers who are in a crisis at the moment. Senator ARCHER(Tasmania)(5.15) —Following what Senator Macklin has just said, I think we ought to look at what we are trying to achieve and what the Kerin plan would achieve. For a start it will not control the production of milk in the coming year. Secondly, it will destroy the market forces concept that goes with pooling, where the pool prices are fixed according to the current prices and future prices. The Kerin plan replaces those with what happened last year and the year before. Thirdly, it will certainly upset our relationship with New Zealand. We have this memorandum of understanding in relation to dairy products and dealing on third markets. If we pull out of that agreement which is so important to New Zealand we cannot expect New Zealand to stand by and look after something that suits us. There is absolutely nothing in the plan that would support the contention of the Minister for Primary Industry (Mr Kerin) that approval of it would put up the price of milk by 30c a litre. Nobody has convinced me that there is any justification for that, but if the Minister has something on it I would like him to produce it. It is obvious from most of the comments of the various speakers-the only Government speaker made a comment about this last night-that the pooling question is not understood. I do not think anybody on the Government side has indicated that he knows how pooling works. I think it is very fundamental to the arguments for or against the subject to know first of all how it works. But the comments made by various speakers indicate that this is just not the case. This totally academic economic approach seems to lose sight of the fact that we are talking about people. I ran out a few figures to indicate what we are talking about. At present we have about 20,000 farmers in Australia and the Minister is talking about a 25 per cent reduction. On an average farm value of about $300,000 walk in walk out the losses on equipment, stock and redundant buildings for those who stay would amount to about $100,000 each. That is about $500m. A 25 per cent reduction in the number of cows, which at present is 1.8 million, would represent a reduction of 450,000 cows. Their value as milkers may be $500, or, as choppers, $300. A loss of $200 per cow on 450,000 cows represents $110m with young stock. The recapitalisation for other pursuits-goodness knows how much we would be talking about per farm-may be $20,000 to $50,000 a farm. The loss to the manufacturing sector of having to change as quickly as this could involve anything from $50m to $80m. The unemployment of something like 7,000 or 8,000 people-figures much higher than that have been mentioned but I would not support them at this stage-would amount to $50m a year. Given a little time to turn the axe over and use the other side, I think the Government would find it would work a lot better. We have never argued that the Government does not have the right to make changes and we have never argued that a lot of changes were not necessary. The industry supports change and it was the industry which introduced the request for change. I do not argue against the Minister's right to do this but I would like to see him improve it as it is so patently wrong. There are so many simple errors. I am pleased to see the Minister joining us now and I give him great credit for taking the issue in hand. I hope we are able to get the measures through with only a couple of minor amendments that would make all the difference to the operation of the industry over the period ahead. Senator WALSH(Western Australia-Minister for Finance)(5.20) —The amendments would extend export pooling for two years, by which time a head of steam would be built up for a further extension. Export pooling is the mechanism which prevents the marginal market price from being received by either factories or farmers. For that reason it is a major cause of the present problem. Under the existing export pooling arrangements, it is possible for a factory to make a sale of butter, for example, to Russia at almost any price, or no price at all, and pick up a subsidy of $1,000. That is not possible under the arrangements proposed in this Bill because the export pooling arrangements prevent the marginal market price signal getting through to factories or farmers. Even if they do not provide an incentive to increase production, they certainly do not provide an adequate incentive to reduce production. Given that export pooling is a major cause of the present problem, an expansion of production in the last five years, it is a particularly convoluted logic that says that the way of solving the problem is to retain the mechanism which largely caused it. The Government will therefore not accept the amendments. Reference was made to opening prices. I presume that it is known in the Senate, although it has not yet been stated in this debate that the Government agreed some weeks ago to guarantee a loan of up to $10m to the Australian Dairy Corporation which would enable the Corporation to make finance available to dairy factories to maintain opening prices similar to those which prevail this year, although it seems likely that the ultimate prices received will be somewhat lower. In the first instance, more discipline will be imposed on factories, and ultimately, through the factories, one would expect it to extend to dairy farmers. By the abolition of export pooling, more discipline will be imposed on the factories not to make sales at sacrificial prices and at little cost to the factory, because the losses on sales at sacrificial prices under export pooling arrangements are spread over the entire industry. Question put: That the amendments (Senator Collard's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 35 Noes . . . . . . . . . . . 30 —— Majority . . . . . . . . . 5 —— Archer, B. R. Knowles, S. C. Baume, Peter Lajovic, M. E. Bjelke-Petersen, F. I. Lewis, A. W. R. Boswell, R. L. D. MacGibbon, D. J. Brownhill, D. Macklin, M. J. Carrick, Sir John Mason, C. V. J. Chaney, F. M. Missen, A. J. Chipp, D. L. Puplick C. J. G. Collard. S. J. Rae, PeterCrichton-Browne, N. A. Reid, M. E. (Teller)Durack, P. D. Scott, D. B. Guilfoyle, Dame Margaret Sheil, G. Haines, J. Short, J. R. Hamer, D. J. Teague, B. C. Harradine, B. Townley, M. Hill, R. Vigor, D. Jessop, D. S. Watson, J. O. W. Kilgariff, B. F. 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. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. (Teller)Elstob, R. C. Ryan, S. M. Evans, Gareth Sibraa, K. W. Foreman, D. J. Walsh, P. A. Georges, G. Zakharov, A. O. Parer, W. R. Coleman, R. N. Walters, M. S. Gietzelt, A. T. Withers, R. G. Ray, RobertMessner, A. J. Grimes, D. J. Vanstone, A. E. Tate, M. C. Question so resolved in the affirmative. Bill, as amended, agreed to. DAIRY PRODUCE MARKET SUPPORT BILL 1985 The Bill. Senator COLLARD(Queensland)(5.30) —by leave-I move: (1) Page 9, sub-clause 19 (1), leave out the sub-clause, insert the following sub-clauses: '(1) Where dairy produce that is exported from Australia was, at the commencement of the marketing year during which it is so exported, dairy produce of a kind that was, in accordance with the provisions of sub-sections (1A) and (1B), prescribed dairy produce for the purposes of this Act, the rate at which market support payments are payable in respect of dairy produce of that kind is the amount per unit of that dairy produce that is equal to the difference between the export target price in relation to each such unit of dairy produce of that kind in respect of that marketing year and the estimated average price in force in relation to each such unit of dairy produce of that kind that is so exported during that marketing year at the time when that unit of dairy produce is so exported. '(1A) For the purposes of this section, and notwithstanding anything contained elsewhere in this Act, 'prescribed dairy produce', unless otherwise determined in accordance with the provisions of sub-section (1B), means butter, cheddar cheese, skimmed milk powder and casein. '(1B) The definition of 'prescribed dairy produce' for the purposes of this section provided in sub-section (1A) may only be varied by instrument in writing signed by the Minister. '(1C) The Minister shall not sign an instrument under the provisions of sub-section (1B) unless it is fully in accordance with a recommendation, in writing, of the Corporation. '(1D) The Corporation shall not make a recommendation under sub-section (1C) to the Minister unless it has consulted with the conference on the matter.'. (2) Page 11, sub-clause 19 (6), line 19, leave out 'declared by the regulations', insert 'determined in accordance with sub-sections (1A) and (1B)'. (3) Pages 11 and 12, clause 20, leave out the clause, insert the following clause: '20. Where dairy produce that is exported from Australia was not, at the commencement of the marketing year during which it is so exported, dairy produce of a kind that was prescribed dairy produce for the purposes of section 19, the rate at which market support payments are payable in respect of dairy produce of that kind is such amount per unit of dairy produce of that kind as the Corporation determines in writing, from time to time, to be appropriate having regard to the rates of market support payments that are applicable to dairy produce of kinds that were, at the commencement of that marketing year, so declared to be prescribed dairy produce.'. (4) Page 16, clause 29, after paragraph (2) (e), insert the following paragraph: '(ea) money repaid to the Supplementary Fund, being money that was lent out of the Supplementary Fund to the Corporation for the purposes of the operation of the pools established pursuant to sub-section 20AB (2) of the Dairy Produce Act 1924;'. (5) Page 18, clause 32, after paragraph (d), insert the following paragraph: '(da) in making loans out of the Supplementary Fund to the Corporation for the purposes of the operation of the pools established pursuant to sub-section 20AB (2) of the Dairy Produce Act 1924;'. Very briefly, the current arrangements disadvantage producers of whole milk powder. If the Opposition amendments are accepted, this disadvantage would be corrected, but not overcorrected. It would be overcorrected if the unamended legislation-that is the Kerin plan-were passed. Under the Kerin plan, a unit of milk exported as whole milk powder receives export support payments which are 20 per cent higher than a similar volume of milk exported as butter or skim milk powder. The amendments will ensure that support payments to both product groups are the same. The amendments will also ensure that further anomalies will not arise in the future. Mr Chairman, I have consulted with the Minister for Finance (Senator Walsh). I have a small table to prove my point. I will not read it, but I seek leave to have it incorporated in Hansard. Leave granted. The table read as follows- Butter SMP WMP DLRS/T DLRS/T DLRS/T Kerin Plan 1,779 1,131 1,596 Amended Kerin Plan 1,779 1,131 1,541 Old Arrangements 1,870 913 1,263 Clearly, WMP is very much advantaged by the new system. The amendment simply assures there is no over-correction of the WMP problem. Senator COLLARD —Thank you, Mr Chairman. I rest my case. Senator WALSH(Western Australia-Minister for Finance)(5.31) —The Government will not accept the amendments. The present arrangements discriminate against whole milk powder because the notional subsidy paid is not related to the f.o.b. price. Under the Government's proposal, the subsidy paid would be determined by the export target price mechanism. I believe that it is also worth noting that the product that the present arrangements discriminate against-a discrimination which the Opposition apparently wishes to continue-happens to be the one which has the greatest value added. I believe this is true of any common milk product. It seems to be a particularly strange policy to discriminate against the product which has the greatest amount of value added. If anything, one would have thought there would have been a case for doing the opposite. Senator MACKLIN(Queensland)(5.33) — The Australian Democrats will support the amendments moved by Senator Collard. The difference between the Opposition's amendments and the current legislation arises essentially because whole milk powder is a relatively high value added product. That is the essential distinction that one draws between that and, for example, butter, skim milk or casein. I suggest that the Minister for Finance (Senator Walsh) have a look at the table that the Opposition incorporated in Hansard. He will see what actually would happen under the proposed system. The Government's proposal is overcompensating for the situation in the past, when, undoubtedly, there was not enough compensation. Looking at the figures, it is undoubtedly the case that under the Government's proposal, there would be over- compensation. Because whole milk powder was disadvantaged under the previous system only the best markets were supplied. Under the current Government proposal disadvantages to other products would flow through from advantaging the whole milk products. It seems to me that because of the relationship between various milk products one should not go too far in trying to rectify the situation. The industry's proposal to levy not the f.o.b. price but the milk content of a product seems to be a very simple and straightforward method. It has the added advantage that the people who are actually paying the levy-the producers-will pay it only on that part of the product which is theirs. They will not pay for any part of the product which has been developed by any other group. Hence, in the case of a high-packaged milk product the producer would pay a levy only on the milk content of that product and not on the expensive packaging. Under those circumstances, it seems to me that it is fair that the people who are actually paying the bill-the levy-do so only in regard to their share of the final items which are sold. Question put: That the amendments (Senator Collard's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 34 Noes . . . . . . . . . . . 29 —— Majority . . . . . . . . . 5 —— Archer, B. R. Knowles, S. C. Baume, Peter Lajovic, M .E. Bjelke-Petersen, F. I. Lewis, A. W. R. Boswell, R. L. D. MacGibbon, D. J. Brownhill, D. Macklin, M. J. Carrick, Sir John Mason, C. V. J. Chipp, D. L. Missen, A. J. Collard, S. J. Puplick, C. J. G. Crichton-Browne, N. A. Rae, PeterDurack, P. D. Reid, M. E. (Teller)Guilfoyle, Dame Margaret Scott, D. B. Haines, J. Sheil, G. Hamer, D. J. Short, J. R. Harradine, B. Teague, B. C. Hill, R. Townley, M. Jessop, D. S. Vigor, D. Kilgariff, B. F. Watson, J. O. W. Aulich, T. Hearn, J. M. Black, J. R. Jones, G. N. Bolkus, N. McClelland, DouglasButton, J. N. McIntosh, G. D. (Teller)Childs, B. K. McKiernan, J. P. Coates, J. Maguire, G. R. Collard, S. J. Primmer, C. G. Cook, P. F. S. Reynolds, M. Cooney, B. Richardson, G. F. Crowley, R. A. Ryan, S. M. Devlin, R. Sibraa, K. W. Elstob, R. C. Tate, M. C. Foreman, D. J. Walsh, P. A. Georges, G. Zakharov, A. O. Giles, P. T. Parer, W. R. Coleman, R. N. Walters, M. S. Gietzelt, A. T. Messner, A. J. Ray, RobertWithers, R. G. Grimes, D. J. Vanstone, A. E. Evans, GarethChaney, F. M. Robertson, E. A. Question so resolved in the affirmative. Bill, as amended, agreed to. DAIRY INDUSTRY STABILIZATION LEVY AMENDMENT BILL 1985 The Bill. Senator COLLARD(Queensland)(5.47) —I move: That the House of Representatives be requested to make the following amendment: Pages 3 and 4, clause 7, leave out proposed sub-sections 7 (2) to 7 (10), insert the following sub-sections: ' ''(2) The rate at which levy is imposed on dairy products of a particular kind being dairy products that are produced on or after 1 July 1985 and sold during the year commencing 1 July 1986 is equal to the rate determined by the Minister for the purpose on the day before commencement of that year. ''(3) The rate at which levy is imposed on dairy products of a particular kind, being dairy products that are produced on or after 1 July 1985 and sold during the year commencing on 1 July 1987, is a rate that is calculated on a day determined by the Minister for the purpose, being a day occurring before the commencement of that year, by multiplying the rate of levy applicable to dairy products of that kind that are sold in the year ending 30 June 1987 by .75. ''(4) The rate at which levy is imposed on dairy products of a particular kind, being dairy products that are produced on or after 1 July 1985 and sold during the year commencing on 1 July 1988, is a rate that is calculated on a day determined by the Minister for the purpose, being a day occurring before the commencement of that year, by multiplying the rate of levy applicable to dairy products of that kind that are sold in the year ending 30 June 1987 by .5. ''(5) The rate at which levy is imposed on dairy products of a particular kind, being dairy products that are produced on or after 1 July 1985 and sold during the year commencing on 1 July 1989, is a rate that is calculated on a day determined by the Minister for the purpose, being a day occurring before the commencement of that year, by multiplying the rate of levy applicable to dairy products of that kind that are sold in the year ending 30 June 1987 by .25. ''(6) No levy under this section shall be payable in respect of dairy products that are produced after 30 June 1990.''.'. This request will ensure that the present domestic pricing arrangements will continue for another two years and then be phased out in four equal steps by 1991. Our request will provide some predictability in the pooling. As we have said before, the industry needs time to adjust. The Government's proposal is for one year plus a formula, and nobody knows how that formula will be applied. So there is complete unpredictability. This argument is in line with all our other criticisms of the legislation to this point. We do not like it although we are prepared to live with it, but if our requests are carried it will give the industry time to adjust and some predictability. Senator MACKLIN(Queensland)(5.44) —The Australian Democrats will be supporting the Opposition's request, to which there are two basic parts. The first concerns the maintenance of the existing system for two years and the second involves the four-year phase-out operation. The Government has suggested all along that it is maintaining support for one year but in effect it is maintaining it for only six months. The reason for that is that the levies will be applicable at the time of sale rather than at the time of production, as under the current arrangements. This effectively means reducing the remaining maintenance period from 12 months to six months. The Opposition's proposal would effectively provide support for 18 months production, not the two years that has been suggested by the Government. The point of contention we had in the second reading debate was the phasing-out of assistance in four equal amounts. The argument essentially concerned opting for a predictable phase-out as against a formula phase-out. It is my understanding that the formula proposal could lead to a drastic reduction in assistance. While there is the possibility of theoretical increases at a later stage, the industry would be better served by the four equal amounts phase-out because of the delay between the milking and the final production point. A quarter phase-out spread equally over four years would mean more predictability than would be the case with the levy operation. This request is not central to the Kerin plan. The same time frame applies and hence I believe it is a request which the Government could accommodate within its overall framework. It is not as the Government has set it out. The cost factors, from what I have been able to calculate, are almost identical; so it seems to me that the Government really does not have a basis for continuing to resist this proposition forwarded by the industry. Senator WALSH(Western Australia-Minister for Finance)(5.46) —The Government will not accept this request. I find it difficult to understand. Everybody I have heard speak on the dairy industry legislation recognises that what the Government is proposing to do is something that needs and ought to be done. But the Opposition comes up with the response: 'But not yet'. This falls into a similar category to the request moved by Senator Collard to the Dairy Produce Market Support Levy Bill, although I think it is less important. The product levies have been the cause of a major distortion between actual market prices for particular products and the prices received by producers; therefore they have prevented the expansion of the relatively profitable end products that the dairy industry is capable of producing and have propped up the production of relatively less profitable end products. The dairy industry in Australia has a long and sorry history of that. The price of butter was propped up throughout most of the 1950s, the 1960s and the early 1970s in much the same way, at a time when the industry ought to have been encouraged to diversify into other end products. Although both the request and the Government's proposal contain an ultimate phase-out of the product levy, the request leaves them untouched for two years and then has a quantitative four-year phase-out. The Government's formula approach commences almost immediately and does have within it a counter cyclical element which has some merit. Question put: That the request (Senator Collard's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 34 Noes . . . . . . . . . . . 29 —— Majority . . . . . . . . . 5 —— Archer, B. R. Knowles, S. C. Baume, Peter Lajovic, M .E. Bjelke-Petersen, F. I. Lewis, A. W. R. Boswell, R. L. D. MacGibbon, D. J. Brownhill, D. Macklin, M. J. Carrick, Sir John Mason, C. V. J. Chipp, D. L. Missen, A. J. Collard, S. J. Puplick, C. J. G. Crichton-Browne, N. A. Rae, PeterDurack, P. D. Reid, M. E. (Teller)Guilfoyle, Dame Margaret Scott, D. B. Haines, J. Sheil, G. Hamer, D. J. Short, J. R. Harradine, B. Teague, B. C. Hill, R. Townley, M. Jessop, D. S. Vigor, D. Kilgariff, B. F. Watson, J. O. W. 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. (Teller)Coates, J. McKiernan, J. P. Colston, M. A. Maguire, G. R. Cook, P. F. S. Primmer, C. G. Cooney, B. Reynolds, M. Crowley, R. A. Ryan, S. M. Devlin, R. Sibraa, K. W. Elstob, R. C. Tate, M. C. Evans, Gareth Walsh, P. A. Foreman, D. J. Zakharov, A. O. Georges, G. Parer, W. R. Coleman, R. N. Walters, M. S. Gietzelt, A. T. Withers, R.G. Ray, RobertMessner, A. J. Grimes, D. J. Vanstone, A. E. Robertson, E. A. Chaney, F. M. Richardson, G. F. Question so resolved in the affirmative. Bill agreed to with a request. Dairy Produce Market Support Levy Bill 1985 reported without requests, Dairy Legislation Amendment Bill 1985 and Dairy Produce Market Support Bill 1985 reported with amendments and Dairy Industry Stabilization Levy Amendment Bill 1985 reported with a request; report adopted. Dairy Produce Market Support Levy Bill 1985, Dairy Legislation Amendment Bill 1985 and Dairy Produce Market Support Bill 1985 (on motion by Senator Walsh) read a third time. Senator CHILDS(New South Wales) —I present the report of the Standing Committee on Privileges on the question of appropriate penalties arising from the report of the Committee of Privileges of 17 October 1984, together with the transcript of both public and in camera evidence. The in camera evidence is tabled with the consent of the persons who participated in the proceedings. Ordered that the report be printed. Senator CHILDS —by leave-I move: That the recommendations of the Committee of Privileges, as contained in paragraphs 5.19, 5.20 and 6.5 of the Committee's report on the Question of Appropriate Penalties arising from the report of the Committee of Privileges of 17 October 1984, be adopted. I seek leave to have my speech, on behalf of the Committee, incorporated in Hansard. Copies of the speech have been circulated in the chamber. Leave granted. The speech read as follows- On 27 February 1985 the Senate referred to this Committee the question of what penalties, if any, might, in the Committee's opinion, be appropriate with respect to the serious contempts of the Senate constituted by certain publications in the National Times the subject of the Committee's report, tabled on 17 October 1984 and adopted by the Senate on 24 October 1984. In considering the matter, the Committee took into account certain written submissions made on behalf of John Fairfax and Sons Ltd, and Mr Brian Toohey and Ms Wendy Bacon of the National Times. The Committee also heard oral submissions on their behalf from Mr Neil McPhee, QC, at hearings on 3 April and 30 April 1985. Mr McPhee was accompanied by junior counsel and the instructing solicitors. Mr Max Suich, representing John Fairfax and Sons Ltd, and Mr Toohey and Ms Bacon also attended both hearings. The Committee's general conclusion is that serious contempts of the type which occurred in 1984 warrant severe penalties. It has further concluded that such penalties should be imposed on any person who wilfully discloses private proceedings of a Committee without the authority of that Committee or the Senate, and on the organisation which is responsible for the publication of such proceedings. The severe penalty for the person who divulged the information would need to be determined at the time the offence was proved. So far as an organisation responsible for the publication is concerned, the Committee has concluded that a substantial fine is appropriate. In the present case, the source of the information published by the National Times has not been discovered. The organisation responsible for the publication of the information was John Fairfax and Sons Ltd. In the circumstances, and also for the reasons set out in paragraphs 5.16 and 5.17 of the Committee's report, the Committee recommends to the Senate that no penalty be imposed on John Fairfax and Sons Ltd at this time, but that if the same or a similar offence be committed by any of the media for which John Fairfax is responsible, the Senate should, unless at that time there are extenuating circumstances, impose an appropriate penalty for the present offence. The Committee also recommends that the period of what is in effect a 'good behaviour bond' should be for the present session of the Parliament, that is, until the dissolution of one or both Houses of, or the prorogation of, the Parliament. The third recommendation by the Committee relates to the introduction of legislation to put the power of both Houses of the Parliament to impose a fine beyond doubt, and to prescribe a method of collecting such a fine. As I indicated in tabling the report of the Committee of Privileges in 1984, it is not the Committee's intention that the motion be put to the Senate before honourable senators have had an opportunity to consider the report. Senator CHILDS —Mr Acting Deputy President, I seek leave to continue my remarks later. Leave granted. Motion (by Senator Childs) proposed: That the resumption of the debate be made an order of the day for the next day of sitting. Senator Chipp —Mr Acting Deputy President, could I have a indication from the Government as to when this debate might be resumed? Senator Button —I understand Wednesday of next week. Question resolved in the affirmative. Debate resumed from 22 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator COLLARD(Queensland)(6.00) —The Repatriation Legislation Amendment Bill 1985 is a consequence of the mini-Budget brought down by the Government recently. I will give the Senate a brief history. When Senator Messner was Minister for Veterans' Affairs he instituted a scheme whereby all the repatriation legislation could be streamlined and consolidated into one piece of legislation. We believe that is a good idea. It makes it much simpler for everybody. The present Government has gone along with those plans. The ex-service organisations are well aware of that streamlining and consolidating procedure and they expected that it would result in a Veterans' Entitlement Bill to be brought into the House of Representatives this session to lie on the table during the winter recess to allow consultation with ex-service organisations prior to being debated in the Budget session. That was the expectation of the ex-service organisations. They were prepared to go along with that. They expected that any major alterations would be included in the Veterans' Entitlement Bill and that there would be adequate consultation with the Government and they could put forward their propositions, which the Government could either accept or reject. All the ex-service organisations had this expectation. While I have held the shadow portfolio of veterans' affairs wherever I have been I have found that expectation. In the recent mini-Budget many changes were made to veterans' benefits. This legislation is the result of those changes. The ex-service organisations feel that they have been conned. Indeed, no less a person than Sir William Keys has said that in a Press release. Worse things have been said by other ex-service leaders in recent times, and I have been the recipient of some telexes. This indicates the feeling there is amongst the ex-service organisations at the way in which they have been treated. Earlier this year, with some sort of prophetic strategy, when addressing the Biennial Conference of the Australian Federation of Totally and Permanently Incapacitated Ex-Servicemen and Women, the Minister for Veterans' Affairs, Senator Gietzelt, said: If you want to see the Repatriation system preserved, it's time for you to make your voices heard. So as not to take it out of context, I point out that he continued: You need to lend your public support to a budgetary strategy which acknowledges the limitations, both political and economic, on the size of the deficit, while at the same time meeting our commitments to the veterans community. I guess there we had the warning signals: 'If you want to see the repatriation system preserved, it's time for you to make your voices heard'. Of course, I took umbrage at that as did many other people in the ex-service organisations. People who have had to fight once for this country should not have to fight again for the entitlements that they believe are their just desserts. The Government is going down the track of cutting back on expenditure. The Minister for Finance (Senator Walsh) has indicated to us on many occasions that the Government will take a fine tooth comb through many government departments. I have no objection to that in general terms. Indeed, when we were in government we did the same thing. But it certainly appears to the veterans that they are being singled out for special action. They made a sacrifice once and are being asked to make a sacrifice again, and they do not like it. The ex-service organisations accept the fact that, if there has to be a general belt tightening throughout the community, they are prepared to be part of it, within certain constraints. But in this instance it seems that the ex-service organisations are the ones being singled out. If there have to be sacrifices across the country, why are others not involved? Why do we not abolish the dole to the wives of strikers? Why do we not get rid of the Human Rights Commission? There are many areas in which we could save money without affecting the ex-diggers. It is quite significant that at that time of the introduction of this legislation the Minister is overseas. I do not disagree with his going overseas for the Anzac ceremony that took place in Turkey; it was right that he should be there as the Minister representing the veterans of this country. He went over to that ceremony with ex-servicemen to represent us on Anzac Day. But when a piece of legislation with such far reaching ramifications as this one comes into the Parliament the Minister responsible for it should be here. Unfortunately, he is overseas. Certain administrative changes are to be made. I believe some of them are good changes; they are necessary tidying up measures. I instance the changes relating to mental health. It is ridiculous that somebody should be kept in a mental institution if he does not need to be there. If such people can be moved out of that institution into a nursing home, where the atmosphere is obviously much better, or even into home care, that should be done. That is a plus in the Bill. The direct crediting of pensions is also a plus. Obviously, this will save the Department a lot of money on the posting of cheques and in preventing the theft of cheques. The provisions relating to access to optometrists also makes sense. If we want to go to an optometrist, we go to one. But the situation with the veterans was that they had to go to a local medical officer, at a cost, to get a piece of paper to refer them to an optometrist. Those are administrative provisions which needed tidying up. I refer now to section 47 of the Repatriation Act. When I first took over this shadow portfolio, as most honourable senators would be aware, veterans' affairs was not one of my favourite subjects, and certainly not one in which I was interested to any great extent. I was more interested in transport, communications, defence and so on. I had not heard of section 47 or Nancy Law or O'Brien. But it did not take me long to find out about them. As one moves around the ex-service organisations one finds that many of them have taken it upon themselves to look after those people who are not aware of the benefits available to them within the repatriation scheme. They study the legislation and, to their credit, they look after those who do not know their entitlements. They are experts on section 47 and the Nancy Law case. Indeed, it has not taken them long to be experts on the O'Brien case. The most important and controversial amendment in this whole package is that relating to section 47. This section deals with the standard of proof required for a claim to be granted. It has been seen by the veterans as vital to the establishment of their entitlements. The present Act provides that the Commission shall grant a claim unless it is satisfied beyond reasonable doubt that there are insufficient grounds for granting the claim. The Bill seeks to change this in four respects. Firstly, in determining a claim with respect to death or incapacity the Commission must be reasonably satisfied that there is material before it that raises a reasonable hypothesis linking the death or incapacity to war service. Secondly, in the case of claimants with war service outside Australia the Commission shall grant a claim unless it is satisfied, beyond reasonable doubt, that there are insufficient grounds for granting the claim. This preserves the present situation except for the addition of the first example I have just given. Thirdly, in respect of any other claim, the Commission is prevented from granting the claim unless it is reasonably satisfied that there are sufficient grounds for granting a claim. This seems to suggest that the Commission has to be positively satisfied of the sufficiency of the evidence before granting a claim, and represents a major change from the present position. Fourthly, in making any further decisions under the Act or regulations, the Commission shall act to its reasonable satisfaction. This also changes the present position. Section 47 and the lack of consultation are causing the greatest concern to the ex-service organisations. I thank the shadow Minister in the House of Representatives for doing a little bit of research. I will not go into detail, but on page 2840 of the House of Representatives Hansard of 21 May honourable senators will find the contribution made by the honourable member for Denison (Mr Hodgman) to the debate on this legislation. He quoted the contribution made to the debate by Dr H. V. Evatt when section 47 was introduced. Dr Evatt was concerned that veterans should be well looked after. I think it is quite notable that after all the elder statesman of the Labor movement did for the veterans' organisations the Labor Party is now trying to change the onus of proof and the ramifications of section 47. We will not be opposing the Bill at the second reading stage but we will be moving to insert sunset clauses. I understand that the Government is prepared to accept those- Senator Chipp —How can you say you are a friend of the RSL if you let this Bill through? You will betray every ex-serviceman. Senator COLLARD —The ex-service organisations want consultation regarding section 47. Sunset provisions in all the clauses pertaining to section 47 of the Act will allow the ex-service organisations and the Government time to consult. The Government must consult with them. Senator Haines —So you want a whole lot of people to be affected between now and the Budget session? If you accepted our amendment you could have deferred it until the Budget session. Senator COLLARD —The honourable senator will have her turn to debate this matter or Senator Macklin will have his turn on her behalf. We ought to keep faith with the ex-service organisations. I believe that they have been let down badly and have been conned. We are moving sunset clauses so that this Government can consult. It can then come back to this Parliament with whatever legislation has resulted from that consultation. We are not opposing the Bill. Senator Chipp —Does the RSL agree with that? Senator COLLARD —I have advised the RSL and other ex-service organisations of the stand we are taking on this matter. Senator Chipp —Did they agree with it? Senator COLLARD —At that stage they did not agree or disagree. I advised them of the stand we were taking. The ACTING DEPUTY PRESIDENT(Senator Tate) —Senator Collard, will you address your remarks through the Chair. Senator COLLARD —Mr Acting Deputy President, you even look better than Senator Chipp. Senator Haines —What about me? Senator COLLARD —It is near the end of a long session but even so Senator Haines is not looking too bad. We will not be opposing the Bill at the second reading stage, but we will be moving sunset clauses to allow adequate consultation. Quite obviously, if after that consultation changes are to be made to this legislation which affect any cases which are heard in the intervening period, any new legislation will take that into account. Senator MACKLIN(Queensland)(6.15) — The Senate is debating the Repatriation Legislation Amendment Bill, which will amend the Repatriation Act in a number of ways. Many of the amendments are consequential on a series of substantial amendments throughout the Bill. The Australian Democrats' original position on this Bill was to vote against it. However, we knew that we would not have the Opposition's support; hence, we moved to a second position-to try to get a deferral of this legislation until the Budget session. The reason we took that stance was simply to keep the Minister for Veterans' Affairs (Senator Gietzelt) to the promise made in this chamber that no changes would be made to the Repatriation Act this session, that any proposed changes would be laid on the table and would be available to veterans' groups for consideration and consultation with their members and that the changes would be made in the Budget session. This Bill is an open and flagrant violation of the promise made in this chamber by the Minister, whose whereabouts are unknown. The proposition put to this chamber by the Minister in answer to a question was not the only occasion upon which the Minister has made that type of assertion. I refer specifically to section 47 and a letter from the Minister dated 17 November 1984. It states: Dear Sir Gordon, First you state that the retention of section 47 (2) is imperative and is fundamental. I agree with you in respect of determining whether a veteran's incapacity or death is related to his war service. I have stated on a number of occasions that there is no intention to change the onus or standard of proof which rests on the Repatriation Commission in deciding whether a disability is service related. The Minister for Education (Senator Ryan), who is in the chamber, in answer to a dorothy dixer the other day decided to attack me in regard to comments I made. She said- Senator Ryan —Misleading. Senator MACKLIN —The Minister should just listen. It will help her. She has no idea about this portfolio and what I have to say might be a useful education. She said: I am advised that these comments are in many respects grossly inaccurate and misleading. A Press release of 15 March last year from the Minister for Veterans' Affairs states: The Minister for Veterans' Affairs, Senator Arthur Gietzelt, has described comments made by Democrat Senator, Michael Macklin, on Repatriation legislation as misleading and misinformed. This type of operation on the part of the Government seeking to denigrate me has been about what? The Press release continues: Senator Gietzelt said it was malicious to say that the Act would be changed to require a Veteran to prove a claim rather than the Department to disprove a claim. The provisions of section 47 would remain as at present . . . That is what the Minister said in attacks on me. That is precisely what this Bill does. To describe what I was doing as misleading is very interesting. It is the height of hypocrisy for the Minister for Education to say what she did when a Press release from the Minister for Veterans' Affairs has specifically said, in attacking me, that there would be no change to section 47. What do we have in this Bill? Clause 16 proposes a change to section 47. That is fairly typical of the type of operation which seeks to denigrate other people who are carrying out their duty to their constituents. The things that I was saying at that time have been proved to be true. They are in this Bill which the Government is trying to ram through the House tonight. Letter after letter has been written and speech after speech has been made by the Minister in regard to section 47. He has gone on the record time and time again. I quote the Minister again: The intention of the proposed legislation is to consolidate and simplify the provisions-- Oh, yes! Consolidate and simplify! The idea is to put into legislation the things that the Repatriation Commission could not get through the courts of this land. This is a sneaky, behind-the-scenes operation to do what the Commission could not do in open court. Senator Haines —And with the collusion of the Liberals. Senator MACKLIN —Yes, with the collusion of the Opposition. If this Opposition had supported my amendment at the second reading stage at least the veterans of this country would have been given a chance to have a look at this matter. But the Opposition said 'Oh no, let's not do that. Let's make some other crawling operation and see whether we can curry a little bit of favour'. I wonder why the Opposition would not join with the Democrats in supporting the amendment in order to see whether we could hold the Minister to the promise he made in this chamber to go to the veterans. Senator Collard —We are doing that. Senator MACKLIN —You are not doing it at all, not in the least. I return to the Minister's statement. He said: The intention of the proposed legislation is to consolidate and simplify the provisions relating to various repatriation benefits- this is one of those soothing speeches made at conferences to try to calm down veterans; no doubt it was written by someone in the Department for that purpose- available to veterans and their dependants. It is also intended to remove outmoded and discriminatory provisions in the present legislation. Let me also say firmly that it is not- and the 'not' is underlined in this speech which was handed out to the Press- the intention to change the onus of proof which rests on the Commonwealth in deciding if a disability is service-related. It goes on and on and on. Here we have another one of those soothing documents put out by the Department to veterans telling them not to worry. In effect it is saying: 'Do not worry about what will happen. Section 47 as specifically mentioned is not being changed in this legislation'. That is the type of activity that we have seen. What is the basis for this proposition that the Government has put forward in its economic statement? I draw an analogy with the Fraser dole bludger operation. This is the Hawke veteran bludger operation. The Government is trying to say: 'There are too many of these bludgers around'. It is trying to catch everyone through the operation of this Bill. How does it propose to do this? We find this proposition in the economic statement: 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. I reiterate that- . . . mean that such pensions may have to be granted even where there is no evidence whatsoever linking disabilities or death to war service. That is what the Government said in that document. I turn now to page 5 of the High Court judgment. I emphasise that this is not the Solicitor-General's opinion, it is the High Court judgment. I hope that the Minister will not serve me up some half-baked notion from some lawyer when we have a court system which actually makes determinations about what Acts mean. The judgment says: We have explained that the first of two basic questions put in issue by the parties in the AAT hearing was whether the respondent's anxiety neurosis had arisen out of or was attributable to his war service. That was the question. Was the anxiety neurosis related to, did it arise out of or was it attributable to his war service? The judgment continues: The fifth finding of the AAT determined this question in favour of the Commission. With all respect and despite the valiant advocacy of the Solicitor-General, we consider it to be a surprising conclusion. In opinion, it flies in the face of commonsense to say that an anxiety neurosis which is occasioned by reason of the separation of the respondent from his wife because of his war service at a time when she is in desperate need of his company, is not attributable to that war service. It is even more surprising when tested by the onus of proof provision. In other words, the proposition is put very clearly by the High Court judges that it flies in the face of common sense to suggest this. But, no, the Government is not deterred by that. Not only does the Government not think that it flies in the face of common sense, but it is quite happy to make the proposition in the pieces of paper that are floating around and in the explanatory memorandum that there is no connection between the two facts when the High Court has quite specifically said that there is a connection. If one continues to read the High Court judgment, one finds that there are a variety of propositions in the majority judgment that go to the very heart of the matter that we are considering in section 47. That is the section that this Government has promised time and again not to alter, amend or change. That promise has been made to veterans' conferences, it has been made in letters to people who are concerned about it and it has been made in this chamber. That is now to be totally ignored. The other propositions in the High Court judgment are also extremely impor- tant. I acknowledge that it is a majority judgment-if the Minister is interested in that fact-and undoubtedly we will have quoted to us the various sections from the dissenting judgment. Senator Haines —From the Liberals, you mean. Senator MACKLIN —No, not from the Liberals. In fact, in this whole exercise the Liberals are seeking to have two bob each way. The veterans and the Returned Services League, under the name of Sir William Keys, have made it very clear what they want to do. They want the type of consultation that this Government promised them. They want that and they want it now. Not only do they not want the Opposition amendments, they want the Bill put aside to allow the type of consultation that the Government promised. If this Opposition was in tune with the veterans' wishes it would be doing just that. It is a pity that Senator Collard has been in this shadow portfolio for such a short time. Otherwise he would have argued much more strongly in the shadow Cabinet and he would have persuaded those people whom he says could not be persuaded because he would have known what was going on, he would have known the history of this operation and he would have known how central the whole matter is to what the veterans have been saying time and time again. The National President of the RSL, Sir William Keys, has given us his opinion of the economic statement. Honourable senators should remember that this Bill introduces a change to the legislation-a massive change to something that the Government promised never to change. I take issue with the way in which this change has been made. When we had the Fraser Government's razor gang cuts, the amalgamation proposals of tertiary institutions were introduced in an economic statement. The Minister for Education (Senator Ryan) when in opposition in this chamber attacked the Government on that issue. In the same way I attack this Government for introducing a major change in repatriation in a cutting document, in a document that is aimed at saving money. That is what this operation is all about. It is about saving money from groups in the community who cannot afford it-groups who the Government promised would never be subjected to this operation. The history of this operation is very interesting. Section 47 has been called the Evatt amendment, with very good reason. It is the type of amendment that Dr Evatt, when he was a member of the other place, was working on time and again-immediately after the Second World War until the Labor Government lost power in 1949. The PRESIDENT —Order! It being 6.30 p.m., under sessional order I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 6.30 p.m. The following papers were tabled: Customs Act-Regulations-Statutory Rules 1985 Nos. 68, 71. Health Insurance Commission Act-Regulations-Statutory Rules 1985 No. 70 Lands Acquisition Act-Statement by the Minister describing lands acquired by agreement under sub-section 7 (1) of the Act, for specified public purposes. Governor-General's Messages-Assent to Laws: Messages from His Excellency the Governor-General were reported, informing the Senate that His Excellency had, in the name of Her Majesty, assented to the following Laws: 20 May 1985- Message No. 13- First Home Owners Amendment Act 1985 (Act No. 23 of 1985) 22 May 1984-Messages- No. 14- National Welfare Fund Repeal Act 1985 (Act No. 24 of 1985) Banks (Shareholdings) Amendment Act 1985 (Act No. 25 of 1985) Export Inspection Charge Act 1985 (Act No. 26 of 1985) Export Inspection Charge Collection Act 1985 (Act No. 27 of 1985) Export Inspection Legislation (Consequential Amendments) Act 1985 (Act No. 28 of 1985) No. 15- Fishing Legislation Amendment Act 1985 (Act No. 29 of 1985) Fisheries Levy Amendment Act 1985 (Act No. 30 of 1985) Dried Sultana Production Underwriting Amendment Act 1985 (Act No. 31 of 1985) Dried Vine Fruits Equalization Levy Amendment Act 1985 (Act No. 32 of 1985) The following answers to questions were circulated: (Question No. 29) Senator Missen asked the Minister representing the Minister for Communications, upon notice, on 21 February 1985: (1) Did the Minister for Communications say in answer to a question on notice (Question No. 208, Hansard page 584, 8 September 1983), in relation to the future location of an ABC representative on the African continent ' . . . the African continent is high on the priority list in this regard'; if so, as over a year has passed, how high is that priority. (2) When can such action be expected. (3) Is it the Government's policy that representative(s) appointed to serve the African continent, or part of it, will not be based or located in South Africa. Senator Walsh —The Minister for Communications has provided the following answer to the honourable senator's question: (1) and (2) The answer to the question on notice did include the statement quoted. I am advised by the Australian Broadcasting Corporation that the location of a staff correspondent on the African continent remains a high priority for the ABC within the context of a continuing review of overseas posting. Nevertheless, the early posting of an ABC correspondent to Africa is unlikely because of funding constraints. (3) In view of funding constraints, the question of location has not been finally considered. (Question No. 118) Senator Peter Rae asked the Minister for Finance, upon notice, on 20 March 1985: Did the then Minister for Finance, Mr Dawkins, release during the 1984 election campaign a 100-page dossier on the alleged shortcomings of the former Treasurer, Mr Howard; if so, what was the cost to the taxpayer of: (a) preparation; and (b) publication of this document. Senator Walsh —The Minister for Trade, my predecessor as Minister for Finance, has provided the following answer to the honourable senator's question: Prior to the last election I prepared a document, published by the Australian Labor Party at no cost to the taxpayer, which dealt in a comprehensive form, with the abysmal record in economic management of the former Treasurer, the Hon. John Howard, MP who is now Deputy Leader of the Opposition. In view of the honourable senator's interest in the matter I would add that I issued the document at a time in the election campaign, when it was important that all Labor candidates remind their electors of the gross financial, economic and personnel mismanagement that was the hallmark of the Howard years. It is important to remember that the chief architect of the economic devastation which was the mark of those sad Fraser years remains today the Opposition spokesman on the economy. As such, it follows that Mr Howard could once again be the Treasurer in any future Coalition government. Because of this, I believed it was well worthwhile reminding electors of Mr Howard's record and his role in the previous Government. The information to support my contention was supplied by various indicators which dealt with such subjects as inflation, unemployment, gross domestic product and the rate of real growth, interest rates, errors in money supply projections, errors in outlays projections, errors in deficit projects, errors in costs of unemployment benefits, budget payments for capital purposes, growth in outlays, Public debt interest, In view of the honourable senator's interest, as evidenced by his question seeking information about the document I produced, the parts dealing with these aspects of the former Treasurer's policies and performance are set out in full below. The Indicators Inflation As is now well known, inflation was never beaten during the years of the former Government. For example, consumer prices (as measured by the CPI) continued to grow steadily after an initial jump and even though their rate of growth gave some little evidence of restraint for a couple of years. Of course, by the end of the Howard legacy, inflation had again accelerated dramatically. Another relevant measure is that of real unit labour costs: It shows the relative price of employing labour and includes wage and 'on-costs'. This measure also shows the same pattern of hike, limited fall and then further hike. TABLE: INFLATION Fraser 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 Year on year % average CPI 14.0 9.4 8.2 10.1 9.4 10.4 11.5 Hawke 1983-84 Year to year Sept. 1984 6.9 3.6 Unemployment Unemployment rose during the Fraser years, at first gradually, and then at levels not seen since the Depression. There can be no more complete testimony to policy failure. (186,000 jobs were shed during Fraser's last year, but the Hawke Government's policies have seen the creation of more than 340,000 jobs since April 1983.) TABLE: RATES OF UNEMPLOYMENT Fraser 1976 1977 1978 1979 1980 1981 1982 1983 May seasonally adjusted 4.5% 5.6% 6.2% 6.2% 6.3% 5.6% 6.6% 10.3% Hawke May 84 (seasonally adjusted) 8.9% Economic Performance and Real Economic Growth Perhaps the former Government's most extraordinary record was that it created negative growth in 1982-83, that is it actually caused the economy to shrink. After years of halting growth broken only by the short lived and illusory resources booms the economy actually and finally in terms of the former government's administration, reduced in size. TABLE: GROSS DOMESTIC PRODUCT-RATE OF REAL GROWTH Fraser 75-76 76-77 77-78 78-79 79-80 80-81 81-82 82-83 (% change on previous period)Income Based 2.5 2.8 0.8 5.1 1.6 3.6 2.5 -1.2 Expenditure Based 3.8 3.1 0.5 5.7 1.7 2.8 2.7 -1.3 Hawke 83-84 Income Based 5.7 Expenditure Based 4.7 Interest rates 2.5.1 Interest rates for both business and home buyers show the same pattern of failure-a little progress, followed by a glimmer of hope, and then collapse as the inflated demand for funds and hyper-inflation took their toll as shown by the following table. TABLE: INTEREST RATES Fraser Interest Rates 75-76 76-77 77-78 78-79 79-80 80-81 81-82 82-83 5 year bond (end June) 9.41 10.21 9.09 10.00 11.78 13.15 16.40 14.35 Housing (end June) *9.25 *9.25 *8.75 *8.25 *9.25 11.5 13.5 12.5 10.5 10.5 10.0 9.5 10.5 Hawke 83-84 5 year bond (end June) 13.00 Housing (end June) *11.5 12.0 Note: *Housing rates expressed as a range. Money Supply Against the test of the former Government's obsession with money supply and monetary targets, its monetary policy performance was also a failure. However, to be fair, there were two years in which their Government came in on target. Notable however is that both were the years before Mr Howard's Budgets. TABLE: ERRORS IN MONEY SUPPLY PROJECTIONS Fraser (M3 growth %) (76) 76-77 77-78 78-79 79-80 80-81 81-82 82-83 Projection 11-13 10-12 8-10 6-8 10 9-11 10-11 9-11 Outcome for period 10.2 11.0 8.0 11.8 12.3 12.7 11.3 11.1 Hawke 83-84 Projection 10-12 Outcome for period (11.4) Note:M3 the common measure of money supply, includes cash and current account balances.(76) first target set during 1976. Budgeting Successful budgeting is the key measure of any government's ability to build and retain the confidence of the people, generally, as well as of the business community. It indicates stable policies and a desire to steer a measured, controlled and consistent course. Particular concern must always be registered when expenditures overtake estimates and when receipts are less than estimated. When the estimates are such that economic commentators can immediately see problems the phrase now used to describe the figures is the one coined by the late Sir Phillip Lynch, as in 'RUBBERY' which was the word he used at the National Press Club in relation to the 1978 Budget. By comparison with the discipline which brought the Hawke Government's 1983-84 deficit in 4.7 per cent below the Budget estimate, and outlays below the estimate by $20m, Mr Howard overshot his expenditure targets for every one of his Budgets, and was wide of his estimated deficit targets for each of his five Budgets-in fact, he never did achieve a surplus. The following table shows the extent of Mr Howard's incapacity to Budget. TABLE: ERRORS IN OUTLAYS PROJECTIONS Budget Estimate Actual Change $m $m $m 1978-79 28870 29045 + 175 1979-80 31692 31694 + 2 1980-81 36029 36274 + 244 1981-82 40877 41339 + 463 1982-83 47067 48982 +1915 1983-84 56590 56570 - 20 That is, Mr Howard overspent in every one of his Budgets. TABLE: ERRORS IN DEFICIT PROJECTIONS Budget Estimate Actual Change $m $m $m 1978-79 2813 3478 + 665 1979-80 2193 2033 - 160 1980-81 1565 1128 - 437 1981-82 97 549 + 452 1982-83 1674 4473 +2799 1983-84 8361 7960 - 401 That is, 3 out of 5 Howard deficits blew out beyond his Budget projections, culminating in the massive blowout in 1982-83. You should note that one consistent cause of Mr Howard's deficit blowouts was the underestimation of the cost of unemployment benefits, that is the number of people who would be unemployed during the year. At the time he was making his Budgets he could so little see the effect of his policies on the economy that he never recognised the number of Australians those policies would throw out of work. TABLE: ERRORS IN COSTS OF UNEMPLOYMENT BENEFITS Difference Budget as % of Year Estimate Actual Estimate $m $m % 1975-76* 367.2 515.8 40 1976-77* 487.6 626.1 28 1977-78* 661.1 794.1 20 1978-79* 801.1 910.0 14 1979-80 998.0 925.2 -7 1980-81 959.0 995.7 4 1981-82 1090.0 1224.3 12 1982-83 1567.0 2249.0 44 1983-84 3261.0 2912.3 -11 * Amounts for these years have been obtained by pro-rating the amount of unemployment benefits and sickness and special benefits on the basis of the 1978-79 breakdown, because until then unemployment benefits were not available separately. Capital Investment Government expenditure is of two types-current consumption expenditure and capital expenditure. Capital investment by the Government in infrastructure-for example roads, buildings, schools and hospitals-is a crucial factor in the nation's future well-being. If the nation's capital stock of public assets is allowed to run down in an attempt to limit the growth in outlays then the cost is borne by future generations by even heavier taxes or charges. This method of outlays control is the laziest and most irresponsible budgetary method. It is also, politically, the easiest of control processes. Unfortunately the ease with which such controls can be taken is inversely related to the long term damage which this does. Historical figures for Commonwealth capital expenditure are as follows in the table and graph below. It is also important to remember that during the years of the former Government under Mr Howard, while capital outlays were restrained, Budget outlays for non-capital that is current consumption purposes grew at an annual rate of 4 per cent in the seven years ending 1982-83. One critical comparison stands out: in 1975-76 total budget payments for capital purposes represented 20.2 per cent of total outlays, by 1981-82 it had dropped to 8.7 per cent and was only brought to 9.6 per cent in 1982-83 by the injections of capital to Australia's undercapitalised, commercial authorities made by this Government in the closing months of that year. TABLE: TOTAL BUDGET PAYMENTS FOR CAPITAL PURPOSES 75-76 76-77 77-78 78-79 79-80 80-81 81-82 82-83 Real Growth % -15.4 -22.5 -16.7 -14.8 -13.0 2.3 -3.9 10.3* * Taking out capital injections by Hawke Government. Annual average real growth in capital expenditure between 76-77 and 82-83 was -8.4 per cent. Growth in Outlays The growth in outlays was one of the most significant aspects of the Howard period. The re-ordering of priorities requires discipline, intelligence and application. Such characteristics were rarely exhibited. In the latter years outlays developed a dangerous momentum reflected in an increasing rate of growth both in real terms and as a proportion of GDP. Moreover, their structure became increasingly distorted-first by the falsehood of turning what should have been direct expenditures into tax expenditures (health and welfare especially) to mask outlays growth: second by expenditure on clearly pork-barrel items; and finally, by the mushrooming of unemployment benefits as the economy began its terrible collapse in 1981-82. The growth in the structure of outlays itself-culminating in the horrendous $9.6b prospective deficit for 1983-84-imposed huge limitations on the Hawke Government's budgeting. Simply to turn the direction of outlays around, let alone restrain their rate of growth, has meant some sacrifice of higher goals and sheer hard work. Moreover, the rate of growth has been turned around sharply, growth between 1982-83 and 1983-84 was two thirds lower than growth between 1981-82 and 1982-83. (As well, the Hawke Government's responsible action in turning tax expenditures into accountable real outlays added 1.1 per cent to outlays in 1983-84, and should be discounted from the outlays growth in 83-84.) TABLE: GROWTH IN OUTLAYS Fraser 78-79 79-80 80-81 81-82 82-83 Real growth in Outlays 1.6 -0.5 3.4 2.6 6.5 Outlays as proportion of GDP 28.2 27.3 27.3 27.7 29.9 Hawke 83-84 Real Growth in Outlays 7.7* Outlays as proportion of GDP 30.5 * Real increase would have been substantially reduced were it not for the inherited debt. (See below) Public Debt Interest The inherited debt has added $2b to outlays and the deficit in each of the first two Hawke Budgets. One consequence of the years of overshooting budget targets and steadily mounting deficit outcomes, is the interest burden on public debt. The deficits of the Lynch/Howard Budgets added around $19b to public debt-Howard's 5 years alone adding around $13b. All up, (at an interest cost of at least 10 per cent and much higher after interest rates started their Howard induced climb through the roof in 1980) that added $2b to the public debt interest bill for each succeeding Budget; that is $2b of the 83-84 and 84-85 deficits is directly attributable to Mr Lynch and Mr Howard's loose budgets. If this Government had not reined in the deficit from Mr Howard's $9.6b, the extra interest bill would have been around $200m. That interest bill grew steadily as a proportion of GDP during the Howard years. The following table shows this growth. TABLE: COMMONWEALTH BORROWINGS-GROWTH AND COST Interest Securities Liability on Issue as % of (at 30 June) $A million GDP 1976 20 338 1.9% 1978 26 923 2.1% 1983 39 128 2.4% That is, during the Fraser Government's term the debt in dollar terms doubled and the interest liability increased by around 25 per cent in real terms. What these indicators collectively reveal is that Mr Howard, in alliance with Mr Fraser, brought the Australian economy to the point where inflation was out of control, unemployment was continuously and rapidly rising and the potential deficit for 1983-84 was $9.6 billion dollars. Of course, the future management of our economy is crucial for the continued well-being of all Australians. It is therefore absolutely critical to the future success of our economy that economic policy should never again be committed into the hands of a person whose record is one of obvious ineptitude, widespread policy reverses, and failure on key issues as well as weakness in the face of hostility from vested interests within the coalition partners and from his own backbench. The document I prepared proved these propositions. Put simply the work of economic recovery that was so ably set in train by the Hawke Government cannot be allowed to be absorbed by those whose records should disqualify them from serious consideration for the national task of efficiently and effectively governing Australia. In support of this, in the report which is the subject of the honourable senator's questions I argued that it was high time that the appalling management of our predecessors was fully exposed so that the Australian people could see for themselves that the record of Mr Howard and his cohorts cannot stand scrutiny. There was a real danger, in the unlikely event that the coalition parties might win the next election, Mr Howard would one again be able to wreak his own personal havoc on the Australian economy. On 21 March 1983 Mr Peacock stated that Mr Howard could be handicapped in the immediate future by having to defend the economic policies of the Fraser Government. That statement remains very true. The document which is the subject of the honourable senator's question indicated that all of the accepted, major measures of performance prove that the seven years of the former Government, with Mr Howard and Mr Lynch as Treasurers, were an economic disaster. Ultimately, their major strategy of 'fight inflation first' failed because it was the only policy they had. Perhaps it should have been 'fight inflation only'. Sound economic management is more complicated than this. However the final three years were especially tragic because they culminated in the almost total collapse of the Australian economy in 1982. In part, this was caused by the phoney 'resources boom' constructed to aid the winning of the 1980 election campaign. Economically those years can best be explained by looking at them as three distinct policy periods. The first policy period, roughly between 1976 and 1978/79, showed a smidgeon of progress in achievement of the goal of lowered inflation (though only in national terms, because Australia's inflation rate remained persistently above that of our international trading partners). Yet the cost of this was the continuing growth in unemployment-which climbed inexorably-since the economy grew only 'in fits and starts', and at a less than satisfactory average rate. Such poor performance was sometimes explained as the necessary concomitant of industrial rationalisation, but of course the reality was steady stagnation rather than rationalisation. Monetary growth projections were introduced in 1976, and these it must be conceded, achieved 'success' for a couple of years. Nevertheless, the end result of such monetarist policies was a severe and sustained credit squeeze, which forced up interest rates and made real investment unattractive. The document I prepared and which is the subject of the honourable senator's question went on to point out that in 1979/80, however, the former Government changed direction, and started talking up the 'resources boom'. This talk went on for a couple of years. Of course in some respects this attitude changed economic policies and performance. The monetary targets were overtaken and inflation rose. At the same time, there occurred two bursts of reasonable growth (with a flat spot in 1980), which culminated in a marginal cut in the rate of unemployment in 1980/81 (though this rate was still well above that of 1975/76). But more alarmingly, interest rates began accelerating, and wage and profit expectations were talked up unrealistically. To make matters worse, the former government abandoned all vestiges of a wages policy in 1981. Finally, after that mis-adventure, came the collapse of 1981-82 and 1982-83. That collapse can be attributed to a combination of the ill effects of the two earlier approaches. The first made people cynical about Australia's real prospects at the same time as it generated little real change in industrial arrangements. The second created inflationary expectations which ended any possibility of firmly based growth. Abandonment of the attempt to make a wages policy further exacerbated inflation, particularly in the labour market, notwithstanding the nominal efforts at restraining real unit labour costs which had been made. Not surprisingly, industries started to shed labour at an alarming rate, thousands of jobs were lost every month, and the economy shrank. At the end of this period, the Australian economy was in utter disarray. The former government had worked itself into a corner, without policy ideas and with no hope of responding to the situation it had created. In any debate about the Hawke Government's economic management, and this was the point behind the document which is the subject of the honourable senator's questions, it is crucial to emphasise that the economic recovery has not been, as alleged by the Opposition, some matter of luck. It has resulted from carefully putting policies into place which have achieved the following: Reduced inflation Stabilised incomes Created jobs Stimulated depressed sectors of the economy, and Most significantly, encouraged confidence by engendering certainty and a sense of direction. The former Treasurer, Mr John Howard, has been the keenest and most strident complainant about the Hawke Government's performance in these matters and it seems that he wishes us to forget or ignore his own record in office. I made the point in the document which is the subject of the honourable senator's question that it is worth remembering, therefore, how economic policy was made under the Fraser Government, because this throws startling light on Mr Howard's claims to expertise and his desire to be taken seriously as an economic manager. The high profile Mr Howard has adopted in Opposition has resulted in him being seen as the economic brains of the Coalition and in him continually being questioned about his leadership ambitions. It is interesting to note that he has refused to pledge his loyalty to his leader. The high profile, however, would seem to be one way of masking a record of blunders, admissions of mistakes and losses in Cabinet. Ultimately the question had to be asked whether Mr Howard was ever intellectually strong enough to perform effectively his major role as Treasurer. Was he in fact the puppet of a cabal of Ministers most of whom have now left the political scene? Would he be able to perform any better in any future coalition government? Would we be back on the same old inflation/unemployment/no growth/merry-go-round from which the Hawke Government rescued the nation? Fortunately it is likely that the Australian people will never know the answers to these questions. If the document I prepared which is the subject of the honourable senator's question, assisted in this debate and the resolution of these issues, then it served its purpose very well. (Question No. 124) Senator Peter Rae asked the Minister for Resources and Energy, upon notice, on 26 March 1985: Did Energy Systems International Pty Ltd make an application in 1983 to the National Energy Research, Development and Demonstration Council (NERDDC) for a $1m research grant for the purpose of establishing a wind farm at Marrawah in Northern Tasmania; if so: (a) has the application been considered, and if so, with what result; and (b) what were the reasons for NERDDC decision, or for the delay if no decision has been made. Senator Gareth Evans —The answer to the honourable senator's question is as follows: Yes. (a) The Project application was received and assessed by NERDDC in 1983. NERDDC did not recommend that the project be supported. (b) NERDDC's advice was as follows: 'The project was not supported by NERDDC, principally because of the lack of support from the Hydro-Electric Commission. The project did not originate with the HEC, nor was it prepared in consultation with that organisation. At the time of submission, it had not received the official approval of the Commission. As grid-connection is an essential part of the project, it could not proceed without permission from the HEC to connect the wind-farm into the Tasmanian electricity grid. Furthermore, commercial wind farms will not be feasible in Tasmania without the approval of the HEC, as they require both grid-connection and an acceptable electricity purchase price. Other factors influencing NERDDC's assessment relate to a detailed information relating to the feasibility of wind farms in the Tasmanian context. NERDDC is not convinced that medium-scale wind generators are an entirely appropriate form of electricity generation for Tasmania: There is a need for a more detailed study of the economic feasibility of wind farms in Tasmania No detailed study has yet been undertaken of the effects of wind farms on electricity supply in the Tasmanian grid It is not clear that medium scale wind generators are the most appropriate option. It could be possible that larger, megawatt-scale wind generators, for example, will prove superior in the given application, although it is by no means certain that any wind technology would be competitive with existing power generation systems. The wind resource data on which the application is based are limited both in duration and in spatial coverage. More extensive data are needed before a major project could be embarked upon with confidence. As a case in point, a 55 kW 'Windmatic' wind generator was installed at Ballarat in 1983, following an 18 month wind resource monitoring period, and immediately suffered two months of unanticipated calm weather. It is questionable that the project is an entirely appropriate activity for NERDDC, as this demonstration of commercially available wind generators has at least some elements of promoting the concept and familiarising local industry with the technology. NERDDC holds the view that, before a major demonstration project is carried out in this area, there would be merit in conducting a thorough study on the technical and economic feasibility of wind farms in Tasmania.' Noting the deficiencies in the application outlined above and NERDDC's view, my predecessor Senator Walsh approved a recommendation that the HEC undertake a technical and economic feasibility study on wind power in Tasmania. The study, which is receiving support under the National Energy Research, Development and Demonstration Program, is being undertaken in two phases: Phase I of the study covers wind resources, plant availability, site selection, local manufacture, economics and environmental considerations Phase II will involve a detailed design study for a particular site and will give consideration to the effect of integrating wind turbines into the grid system. Work is progressing satisfactorily and wind measuring equipment is now operating at four sites. Analysis of wind data has also commenced with a view to modelling the operation of the system. A report covering Phase I of the study is in the final stages of preparation and will be made available to the public under the normal system for NERD& Program reports-i.e. it will be supplied at the cost of reproduction on application to my Department. Additionally moves were made to strengthen NERDDC expertise on wind energy matters. In April 1984 Senator Walsh appointed Dr J. D. Kalma of CSIRO, who is an expert on wind energy resources, to the Technical Standing Committee on NERDDC responsible for providing advice on such matters. (Question No. 134) Senator Townley asked the Minister representing the Special Minister of State, upon notice, on 27 March 1985: (1) What is the rate of travelling allowance per day paid to Commonwealth Ministers while overseas. (2) Is this travelling allowance acquitted; if so, to whom; if not, why not. Senator Gareth Evans —The Special Minister of State has provided the following answer to the honourable senator's question: (1) When a Minister visits areas where there are Australian posts, the normal practice is for those posts to meet accounts for official expenses incurred during the visit. In such cases, an advance at the incidental rate of travelling allowance of $63 a day is normally paid to the Minister before departure to meet any unforeseen official costs that the Minister prefers to meet personally. When a visit is to be made to a country where there is no Australian post, the Minister may elect to have the Special Minister of State determine a special travelling allowance rate for the area. Such a determination is based on the overseas travelling allowance payable to Senior Executive Service officers of the Australian Public Service. In this situation the Minister personally pays accounts including those for meals and accommodation. When a Minister is granted 'guest status', the host country normally meets all internal expenses. In such cases, the incidental rate of travelling allowance of $63 a day is payable to the Minister irrespective of whether there is an Australian post in the particular country. (2) Yes. Upon completion of the visit, any unspent portion of the advance is returned to my Department, together with a statement that the balance was spent for official purposes. After all accounts relating to the visit have been received from the overseas post, my Department forwards copies to the Minister's office. The Minister is asked to identify and pay for any items of personal expenditure and to provide a certification that the remainder of the expenditure was for official purposes. (Question No. 135) Senator Townley asked the Minister Assisting the Prime Minister for Public Service Matters, upon notice, on 26 March 1985: (1) What is the rate of travelling allowance per day paid to public servants within Australia? (2) Is this travelling allowance acquitted, if so, to whom; if not, why not? Senator Walsh —The answer to the honourable senator's question is as follows: (1) The daily rates of Travelling Allowance paid to Australian Public Servants for each complete day on which they travel within Australia away from their home base on official duty are as follows: Level 1 or above (Salary in excess of $45117 pa) Capital CityOther centres 10070 Below Level 1 Capital CityOther centres 76.4558.90 These daily rates which cover accommodation, meals and incidental expenses are reduced for part-day absences. The daily rates are reviewed annually by the Public Service Board following recommendations made by a Sub-committee of the Joint Council-a staff/ management consultative body established under the Public Service Act. These recommendations are based on data from an extensive survey of accommodation and meal costs at selected establishments of a reasonable and appropriate standard throughout Australia. The rates of Travelling Allowance for Secretaries of Departments and statutory office holders are determined annually by the Remuneration Tribunal. The last report of the Tribunal was tabled in the Parliament on 27 August 1984 and in respect of each overnight stay provided for a Travelling Allowance for Secretaries to Departments of $125 for travel to capital cities and $95 for travel to other centres. (2) The daily rates of Travelling Allowance are paid to public servants for the first 21 days of residence at a temporary transfer locality. Travelling Allowance payments beyond 21 days reimburse accommodation and meal costs actually incurred plus an incidentals component and are subject to regular review whilst the officer remains on temporary transfer away from home base. During the daily rate period (the first 21 days), public servants acquit Travelling Allowance payments by certifying that their travel was in accordance with the approved itinerary with a receipted acquittal where claims are made for expenses in excess of the allowance paid. The approach followed during the daily rate period is consistent with the arrangements for public office holders, Members, Ministers and Officer Holders of the Parliament and judicial appointees whose Travelling Allowance is determined/recommended by the Remuneration Tribunal. In circumstances where the Commonwealth itself directly provides accommodation and/or meals, payment of Travelling Allowance (including the first 21 days residence at a temporary transfer locality) is based on actual expenditure plus an incidentals component. (Question No. 136) Senator Townley asked the Minister Assisting the Prime Minister for Public Service Matters, upon notice, on 26 March 1985: (1) What is the rate of travelling allowance per day paid to public servants while overseas in the UK, USA, Canada, EEC countries, Japan and ASEAN countries. (2) Is this travelling allowance acquitted; if so, to whom; if not why not. Senator Walsh —The answer to the honourable senator's question is as follows: (1) The rates of Travelling Allowance in the nominated countries are set out in Schedule 2/C/A of Volume 9 of the Public Service Board Personnel Management Manuals as the rates are different in each country and also differ within countries. I would refer the honourable senator to the Manual, a copy of which is held in the Parliamentary Library. (2) Travelling Allowance advances are acquitted to the department which issues the advance. The daily rates of Travelling Allowance in Schedule 2/C/A are provided to cover meals and incidental costs, and are based on regular surveys. Accommodation costs are reimbursable, and acquittal requires production of evidence of actual costs incurred. (Question No. 157) Senator Bolkus asked the Minister representing the Minister for Communications, upon notice, on 27 March 1985. (1) What is the extent of the Australian Broadcasting Corporation's (ABC) real estate assets in Papua New Guinea and for what function are such assets used. (2) What is the income derived by the ABC from each such asset. (3) What is the extent of the ABC's ownership of real estate elsewhere within Australia and overseas and to what use is such property put. Senator Walsh —The Minister for Communications has provided the following answer to the honourable senator's question, based on advice provided by the Australian Broadcasting Corporation: (1) 10 residences: 1 residence used as ABC office 3 residences used by ABC staff 5 residences leased to Air Niugini 1 residence leased to National Broadcasting Com- mission. (2) ABC office Nil ABC staff $3328 p.a. Air Niugini $61,880 p.a. National Broadcasting Commission $4160 p.a. (3) AUSTRALIA Buildings, offices, studios, etc 38 Residences 42 Blocks of land 13 Use of such property: Office Buildings Radio/television/administrative departments Technical service departments Orchestral studios Regional studios Residence Regional staff-including 21 in Darwin and 3 in Alice Springs. Blocks of land Proposed developments. OVERSEAS Nil. (Question No. 159) Senator Bolkus asked the Minister representing the Minister for Communications, upon notice, on 28 March 1985: (1) Has Australia Post recently placed an order for 464 fully imported Ford Transit vans with a United Kingdom company. (2) What is the purchase price for each and for all of the vans. (3) What would have been the most competitive Australian tender for the supply of the vans. (4) What consideration, if any, was given to the maintenance of job opportunities within Australia if the contract had been let to an Australian company. (5) Was any estimation made of the number of persons who could have been employed in the production of these vans. (6) If either (4) or (5) above were not considered, why not. Senator Walsh —The Minister for Communications has provided the following answer to the honourable senator's question, based on advice from the Australian Postal Commission: (1) No. In June 1984, Australia Post let a contract with the Ford Motor Company of Australia Ltd for the supply of 464 Ford Transit vans for use on street posting box clearance duties. The Ford Transit van is to be manufactured by Ford in the United Kingdom but will have 30 per cent Australian content in internal and external fittings. (2) At the time of placing the contract, the price for the 464 Transit vans was approximately $6.38m. The price per vehicle varies according to the destination State. (3) The successful tender was from an Australian company. No tender was submitted by an Australian manufacturer for a production vehicle. Several design proposals for composite vehicles based on imported chassis were received, but none of these demonstrated that production could be achieved within the appropriate time frame, given the lead time involved in design, development, testing and operational evaluation of prototype vehicles. (4), (5) and (6) The question of the maintenance of job opportunities in Australia did not arise as it was not feasible to source locally in this case. However, in accordance with normal Government requirements concerning Commonwealth purchases of goods and services which are substantially imported, an agreement has been concluded between the Commonwealth and the Ford Motor Company of Australia Ltd., on behalf of Ford UK, to place offsets work in Australia. This agreed work will be in the automotive industry and is valued at 30 per cent of the imported content of the Ford Transit vans to be purchased under the contract. (Question No. 180) Senator Brownhill asked the Minister representing the Minister for Primary Industry, upon notice, on 16 April 1985: Has the Federal Government developed a drought plan in light of deteriorating seasonal conditions around Australia affecting a larger number of primary producers; if so, what are the details of the arrangement; if not, why not? Senator Walsh —The Minister for Primary Industry has provided the following answer to the honourable senator's question: In the light of the recent major drought, the Minister for Primary Industry proposed the establishment of a body to review existing drought policy and to recommend alternative policy options. At the August 1983 meeting of the Australian Agricultural Council, the Council endorsed the establishment of a National Drought Consultative Committee (NDCC) for this purpose. The Committee comprises representatives of Commonwealth Departments of Primary Industry and Finance, State and Northern Territory Departments responsible for agriculture and the National Farmers' Federation. The NDCC held its inaugural meeting in March 1984 and identified areas which required further examination by the Committee. It met again on 22-23 November 1984 to consider proposals for future drought policy. The development of NDCC views on a drought policy package was in the context that prime responsibility rested with farmers to take steps to protect themselves from the adverse effects of drought. The NDCC agreed that drought policy should be based on the attainment of national objectives. Appropriate national objectives were considered to be - to encourage the efficient allocation of national, regional and farm resources; and - to minimise the economic hardship to individuals resulting from drought. Specific national objectives of drought policy were considered to be - maintenance of land resource; - maintenance of breeding herds at a level which would enable post drought recovery of livestock industries within a reasonable period; - enabling post drought sowing of crops and pasture; - maintenance of minimal living standards for farmers assessed as viable in the long term; - short term income support for farmers assessed as non-viable in the longer term; - minimisation of stock distress. The NDCC considered that drought policy measures should - be predictable, practicable and cost effective and be consistent with other Government policies; - encourage adoption by producers of drought mitigation strategies; - be equitable in their availability to individuals in like economic circumstances, irrespective of industry or region; - minimise distortions in input and product prices, thereby promoting resource use efficiency; - minimise inconsistencies between the interests of individuals and society in resource management use; in particular, in land degradation and national herd/ flock size. On the basis of these objectives, the NDCC agreed that a national drought policy should comprise Commonwealth and State/Northern Territory (NT) measures as follows Commonwealth/States and Northern Territory - concessional loans under the National Disaster Relief Arrangements; - freight rebates for transport of livestock, fodder and water; - soil conservation programs; - other measures agreed from time to time. Commonwealth - taxation related measures; - Income Equalisation Deposits Scheme; - household support and rehabilitation assistance under the Rural Adjustment Scheme. State - development and provision of information. In addition, the NDCC supported a reference to the Industries Assistance Commission (IAC) on crop and rainfall insurance. The NDCC agreed to establish a working party to examine the principles which have application to drought declaration. The working party was established in recognition of the desirability of introducing uniformity and the maximum degree of objectivity into the drought declaration/revocation process. The Government has considered the NDCC report and endorsed the drought policy package agreed by it. A reference has also been sent to the IAC on crop and rainfall insurance. (Question No. 261) Senator Puplick asked the Minister representing the Minister for Science, upon notice, on 8 May 1985: (1) What are the salaries and allowances paid to: (a) the Chairman; and (b) the other members of the Commission for the Future. (2) How many meetings is the Commission required to hold each year, or are there no formal requirements of this nature in its charter. (3) How many meetings of the Commission have been held to date and where and when were such meetings held. (4) In relation to meetings so far held, what matters were principally discussed at such meetings, and have any statements or publications resulted from these meetings; if so, what are the relevant details. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) No salaries are paid to the members of the Commission for the Future. The following allowances are paid pursuant to the Remuneration Tribunal: (a) the Chairman receives a sitting fee of $163.00 and is also eligible for a travelling allowance of $100 per day; and (b) the other members of the Commission, or their employers receive sitting fees of $131.00; they are also eligible for travelling allowances of $100 per day. Sitting fees are not paid to Dr Martha Cleary, as it is the policy of her employer, ICI Australia, to contribute freely to initiatives of national importance. (2) There is no formal requirement for the Commission regarding the number of meetings it conducts, however, to date they have met each month. (3) The Commission has held three meetings, these were: 12 February 1985 in Canberra; 21 March 1985 in Melbourne; 24 April 1985 in Sydney. (4) There is no requirement for the Commission to inform the Minister of matters discussed at its meetings. However, I understand that the main items considered have been: development of the Commission's work program; establishment of contacts with relevant individuals and organisations; and staffing and physical arrangements for the Commission's Secretariat. No statements or publications have resulted from the meetings. (Question No. 38) Senator Puplick asked the Minister representing the Attorney-General, upon notice, on 26 February 1985: (1) What religious denominations have been registered under section 26 of the Marriage Act following the appropriate declaration made by the Governor-General. (2) How many persons have been registered as recognised celebrants of marriages within the Islamic religious community in Australia, by States. Senator Gareth Evans —The Attorney-General has provided the following answer to the honourable senator's question: (1) As at 1 March 1985 the following religious bodies or organisations have been declared to be recognised denominations for the purposes of the Marriage Act 1961 under section 26 of the Act- The Aborigines Inland Mission of Australia Aboriginal Evangelical Fellowship of Australia Ananda Marga The Anglican Church of Australia Antiochian Orthodox Church The Apostolic Church (Australia) The Apostolic Church of Queensland The Armenian Apostolic Church of Australia Assemblies of God in Australia Association of the Church of God in Australia Australian Christadelphian Ecclesia Autocephalic Greek Orthodox Church of America and Australia Baha'i Faith Brethren Byelorussian Autocephalic Orthodox Church in Australia and Abroad Baptist Bible Fellowship of Australia The Baptist Union of Australia Calvary Life Assemblies Christian Outreach Centre The Christian and Missionary Alliance of Australia Christian Brethren The Christian Church Christian Israelite Church Christian Revival Crusade The Church of Jesus Christ of Latter-Day Saints Church of the Mystic Christ Incorporated Church of Nazarene The Church of Scientology Incorporated Churches of Christ in Australia The Evangelical Presbyterian Church of Australia Fellowship of Congregational Churches Fellowship of Evangelical Churches of Australia Free Serbian Orthodox Church, Diocese for Australia and New Zealand Full Gospel Church (Gospel Light Ministry) German Evangelican Lutheran Church Church of the Foursquare Gospel in Australia Greek Orthodox Archdiocese of Australia Independent Baptist Fellowship International Church of the Four Square Gospel (Australasia) International Society for Krishna Consciousness Islam Jehovah's Witnesses Jewry The Latvian Evangelical Lutheran Church in Victoria The Liberal Catholic Church The Lutheran Church of Australia, Incorporated Macedonian-Bulgarian Eastern Orthodox Church Macedonian Orthodox Autocephalous Church The New Apostolic Church (Australia) The New Church in Australia New Testament Church of God Potters House Christian Fellowship of Australia The Presbyterian Church of Australia Presbyterian Church of Eastern Australia Presbyterian Reformed Church The Reformed Churches of Australia The Reformed Presbyterian Church of Australia The Religious Society of Friends The Reorganized Church of Jesus Christ of Latter Day Saints Revival Centres of Australia Roman Catholic Church Romanian Orthodox Church Russian Orthodox Church Outside of Russia The Salvation Army The Serbian Orthodox Church in Australia and New Zealand Seventh-day Adventist Church The Strict and Particular Baptist Churches of Australia Victorian Spiritualists' Union Ukrainian Autocephalic Orthodox Church in Australia and New Zealand Ukrainian Orthodox Church (Autocephalic) of Australia Unitarians United Aborigines Mission United Pentecostal Church of Australia United Spiritualism of Australia The Uniting Church in Australia The Welsh Calvinistic Methodist Connexion in Victoria The Wesleyan Methodist Church Westminster Presbyterian Church Worldwide Church of God (2) Islam is a recognised denomination under the Marriage Act and as at 1 March 1985, 37 marriage celebrants were registered by the Islam denomination pursuant to section 30 of the Act. The actual numbers of celebrants registered in the various States and Territories are: New South Wales 11 Victoria 9 Queensland 4 South Australia 3 Western Australia 5 Tasmania 2 Australian Capital Territory 1 Northern Australia 2 Ministers of religion attached to religious bodies or religious organisations which are not part of a recognised denomination may apply for authorisation as marriage celebrants under sub-section 39 (2) of the Marriage Act. Five celebrants have been authorised in this manner on behalf of Islamic organisations. The numbers in each State and Territory are: New South Wales 4 Victoria 1 Others Nil (Question No. 162) Senator Bolkus asked the Minister representing the Minister for Communications, upon notice, on 28 March 1985: (1) Has a series of questions been formulated and submitted by Australian Broadcasting Corporation staff representatives with regard to the Australian Security Intelligence Organisation Liaison Officer at the ABC. (2) Have security clearances been sought from ASIO on ABC news and public affairs journalists. (3) What is the reason for the ABC obtaining ASIO security clearances on its staff. (4) Do these security reports on staff remain within the ABC or are they provided to other people and/or security organisations. (5) Are the staff on whom security clearances have been sought informed of such clearances. Senator Walsh —The Minister for Communications has provided the following answer to the honourable senator's questions based on advice received from the Australian Broadcasting Corporation: (1) Yes. (2) No. (3) Two clearances only have been requested, both being for members of ABC security staff. Security clearances are a prerequisite for some of their responsibilities and associated training in protective security provided by the Attorney-General's Department. (4) The reports remain within the ABC. (5) Yes. (Question No. 236) Senator Kilgariff asked the Minister representing the Minister for Aboriginal Affairs, upon notice, on 22 April 1985: (1) Can the Minister for Aboriginal Affairs provide details of the new Aboriginal organisation which is proposed to replace the National Aboriginal Conference. (2) Will the new body be a completely new and independent organisation, or is it intended that it will have connection with its predecessor, the National Aboriginal Conference. (3) How will the new body's members be selected, by appointment or by ballot; if they are to be appointed, who will have the power of appointment; if they are to be elected, who will qualify as an eligible voter, and what sort of electorates are envisaged. (4) What will be the period of the term of office of the members of the new organisation. (5) What is to be the charter of the new organisation. (6) When will the members of the new organisation be selected. (7) What measures are to be taken to ensure that the obvious abuse of public funds and administrative mismanagement which has taken place in the National Aboriginal Conference will not occur in the new organisation. (8) What steps will be taken to ensure that the traditional land owners and the 'old men' of the tribes will be granted representation on the new organisation. Senator Ryan —The Minister for Aboriginal Affairs has provided the following answer to the honourable senator's question: (1) The Aboriginal organisation proposed to replace the National Aboriginal Conference is the subject of detailed consultations with Aboriginal organisations. The final structure of the organisation has not yet been determined. As Mr Holding indicated in his press statement of 2 April, the Government remains committed to the view that Aboriginal Australians ought to have a national independent representative political structure capable of advising the Government and putting forward a national perspective on Aboriginal issues. (2) It is envisaged that the new body will be a completely new and independent organisation. (3)-(6) See reply to question one. (7) The new organisation is expected to be a responsible managing organisation with appropriate financial guidelines. (8) The new organisation is expected to be firmly based on Aboriginal communities and their organisations. Senator Button —On 17 April 1985 (Hansard, page 1136-37) Senator Vigor asked me, as Minister representing the Minister for Trade, a question concerning possible action that the Government could take to defend Australia's interests should a trade war develop as a result of proposals from the United States Congress to impose a surcharge on imports into the US. The Minister for Trade has provided the following information in response to the honourable senator's question: The Government is closely monitoring developments and the implication of the proposals before the US Congress to impose a surcharge on US imports. The imposition of such a surcharge would almost certainly precipitate retaliatory action by others. As a relatively small trading country and exporter of a substantial proportion of most of its agricultural and mineral products, Australia has a vital interest in the effective functioning of an open and predictable multilateral trading system. There is little doubt that Australia would again be amongst the most affected countries if there was a repeat of the disastrous beggar-thy-neighbour trade policies adopted by governments in the 1930s. It is for these reasons that we have viewed with concern the growing protectionist pressures in the US and some possible responses to these pressures now before the US Congress. Our concerns have been firmly registered with key US Administration officials on a continuing basis both by Australian Embassy officials in Washington and during a number of recent visits by Australian Ministers and senior officials. We are encouraged by the responses we have received and recent statements by the Reagan Administration reaffirming their commitment to an open multilateral trading system and their continued strong rejection of any import surcharge proposals. In addition the US Administration is aware of the implications for an early new round of multilateral trade negotiations of the implementation of an import surcharge, no matter how limited. We are encouraged that the growing momentum towards the launching of a new round should help to counter rising protectionist pressures in the USA and elsewhere. Senator Grimes —On 18 April 1985 (Hansard, page 1214) Senator Messner asked a question about revaluation of assets. The Minister for Social Security has provided a supplementary answer. The answer is as follows: The current market value of assets is taken into account under the assets test. Consequently, if the market value of a pensioner's asset or assets is reduced, for whatever reason, that lower value will be assessed in determining the rate of pension payable. It is open to a pensioner to seek a review of his or her entitlement at any time. In this situation any increase in pension payable because of the reduced value of assets is paid with effect from the first pension pay-day after the pensioner's request for a review of entitlement. In addition, the assets of all persons whose pension is assessed under the assets test will be revalued annually and if the total value of their assets has varied the rate of pension payable will be adjusted accordingly. The annual review will be conducted with effect from the first pension pay-day in May each year. The first such review will occur in 1986 and will, of course, also reflect the indexed allowable asset limits. (Question No. 58) Senator Kilgariff asked the Minister representing the Treasurer, upon notice, on 28 February 1985: (1) Is the Treasurer aware of criticisms concerning lengthy delays in the processing of proposals made to the Foreign Investment Review Board; if so, are the reports of processing delays fair and accurate and, if so, what steps are being taken to facilitate speedier processing of these proposals. (2) Would delays in the processing of proposals made to the Foreign Investment Review Board lead to a reduction in the amount of foreign capital available to encourage development and provide much-needed employment opportunities. (3) Will the Treasurer provide statistics showing the number of proposals put to the Foreign Investment Review Board in 1983 and 1984 and the time taken to process these proposals. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) I do not agree with assertions that the processing time for foreign investment proposals is lengthy. In 1983-84 the average processing period for proposals was 41 days and about 65 per cent of proposals were processed within 30 days. The Government is concerned to see that decisions on proposals are taken within as short a time period as possible. Where, in the case of particular proposals, the parties have commercial or other reasons for wanting a decision within a certain time period, every effort is made to expedite processing of the proposal. In 1983-84, for example, 73 proposals were processed in less than 10 days because of such considerations. There are, nevertheless, some proposals which, because of their size and significance in terms of foreign investment policy, require extensive deliberation and involve wide consultation with relevant Government agencies and discussions with the parties. Such proposals can involve a longer than normal time period to process but that is largely unavoidable if the Government is to be satisfied that proposed investments are consistent with the policy guidelines. While the average time taken to process foreign investment proposals has increased in recent years, part of that increase can be attributed to the increasing incidence of cases where foreign investors are unable to supply timely and sufficient information to allow processing of their proposals to be completed, or change their investment plans from those initially submitted. Such proposals are estimated to have increased the average processing time for all proposals by around three days in 1982-83 and by about six days in 1983-84. The time taken to process proposals in this category is seldom of commercial significance. (2) No. Normally, foreign investors approach the Government with their investment plans well in advance of the proposed date for their implementation, particularly in cases where the proposals involve large and complex projects. In cases where an early decision on a proposal is vital for the commencement of a project, the Government sees that the decision is taken within the specified time constraints. (3) The statistics requested are set out below: Average Number of processing proposals time (days) Year decided per proposal 1982-83 1,170 33 1983-84 1,262 41 (Question No. 65) Senator Peter Rae asked the Minister representing the Treasurer, upon notice, on 28 February 1985: Have any conditions been imposed in respect of any of the 16 new banking licences issued in Australia; if so, what conditions have been imposed in respect of which of the licences. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: No new banking authorities, as yet, have been issued to the 16 applicants named in my press release of 27 February 1985. Discussions are currently taking place between those applicants, the Reserve Bank and the Treasury with a view to developing each application to a point where I could make a recommendation to the Governor-General for the grant of a banking authority under the Banking Act 1959. All new banking authorities, however, will be issued subject to conditions which will require banks to consult with the Reserve Bank and to comply with prudential requirements as notified by the Reserve Bank. (Question No. 115) Senator Chipp asked the Minister representing the Minister for Trade, upon notice, on 20 March 1985: (1) Did the Minister for Trade state, at a press conference announcing the Government's decision to allow the export of 100 short tons of uranium to France, that the Australian Safeguards Office monitors and records every movement of Australian uranium and that the ASO 'always knew the final destination of Australian uranium'. (2)Will the uranium referred to in (1) above be stored in France and reprocessed by the French company, Comurhex; if not: (a) which French company will receive the uranium; (b) will the uranium be reprocessed in France; (c) who is responsible for storage of the uranium in France; (d) what will be the 'end-use' of the uranium; (e) which country will be the 'end-user' of the uranium. (3) If the uranium referred to in (1) above is to be stored or used in France, how is this situation reconciled with the Government's policy which clearly states that it will refuse 'to allow the supply of Australian uranium to France until France ceases testing nuclear weapons in the Pacific'. Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question: (1) I said, in part, that 'the Safeguards Office always knows the final destination of Australian uranium. Every movement that Australian uranium makes is monitored and recorded by the Australian Safeguards Office'. Australia's network of bilateral nuclear safeguards agreements with other countries provides assurances that Australian material may be transferred for end use only to countries with which we have a safeguards agreement, and that such use will be exclusively for peaceful non-explosive purposes. (2) It will be stored at the French conversion facility, Comurhex, prior to processing. (3) The Government's uranium policy in respect of France is to not allow the supply of Australian uranium to that country until it ceases testing nuclear weapons in the South Pacific region. That policy is specific to the supply of Australian uranium for end use in France, and does not extend to preventing the toll processing of Australian uranium in France prior to its end use in another country with which Australia has a safeguards agreement. (Question No. 148) Senator Chipp asked the Minister representing the Minister for Science, upon notice, on 27 March 1985: (1) What research has the Commonwealth Scientific and Industrial Research Organisation done on the nuclear fuel cycle, including uranium mining and processing, uranium enrichment and nuclear waste disposal, in each of the financial years from 1980-81 to 1983-84 inclusive. (2) In respect of any such research undertaken in the period referred to in (1) above, will the Minister for Science provide: (a) the title and short description of each project; (b) the names of the CSIRO Divisions involved; and (c) the approximate funding, including salaries, for each financial year. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) and (2). The following are details of relevant research projects conducted by CSIRO in each of the financial years from 1980-1984 inclusive; 1980-81-Division of Mineral Physics (a) 'Improved Selective Mining Techniques for the Uranium Industry'. To develop new technologies in gamma-ray detection and field site computing power to improve selective mining techniques in the uranium industry. (b) 'Heavy Metal Seepage from Uranium Ore Dumps and Tailings Dams'. To determine seepage rates of heavy metals in ore dumps and tailings dams subjected to climatic conditions prevalent in the East Alligator Rivers Uranium Province, Northern Territory. (c) 'Radiometric Disequilibrium in Uranium Ore Bodies'. To improve exploration for, assessment and delineation of, uranium ore deposits by researching disequilibrium effects using radiometric techniques. Division of Mineral Chemistry (a) 'Selective Dissolution of Uranium'. To develop methods for the selective extraction of minerals applicable to processing of ores and flotation concentrates, including the removal of uranium residues from copper sulphide concentrate from the Olympic Dam deposit. (b) 'Chemical and Physical Stability of Narbarlek Leach Residues'. To predict the final volume of residues for several disposal options using soil physics techniques to measure sedimentation and drainage properties of Narbarlek leach residues. (c) 'Adsorption of Uranium in Carbonate Media'. To determine at what pH values uranium can be expected to be removed from solution from alkaline carbonate leach residue by studying uranium adsorption onto a clay mineral-Approximate funding: $112,000. 1981-82-Division of Mineral Physics. As for 1980-81. Division of Mineral Chemistry. As for 1980-81 (a) and (c) only-Approximate funding: $231,000. 1982-83-Division of Mineral Physics. As for 1980-81, (a) and (b) only. Division of Mineral Chemistry. As for 1980-81, (a) only-Approximate funding: $178,000. 1983-84-Division of Mineral Physics. As for 1982-83. Division of Mineral Chemistry. As for 1982-83-Approximate funding $200,000. (Question No. 68) Senator Chipp asked the Minister representing the Minister for Defence, upon notice, on 19 March 1985: (1) Would the Omega Base be used to measure wind speeds, as suggested by Dr Jim Falk, in the event of the United States testing MX missiles in the Tasman Sea. (2) Does the Australian Government have anything to hide on Australia's links with MX testing, and is the Government prepared to state quite unambiguously that Australia itself or US facilities on Australian soil would be in no way involved with the proposed testing of MX missiles. (3) Is the Australian Government prepared to undertake unambiguously that it would refuse to site LORAC transponders on Australian soil to assist US monitoring platforms to accurately observe the re-entry of MX missiles. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) No. (2) Australia will not be providing any assistance to the MX missiles tests, nor will the joint Australia/US facilities be involved, but safety of life services, including sea rescue assistance, provided by Australia to meet its international civil maritime and aviation obligations, are available to any ship or aircraft needing them. (3) Yes. There are no LORAN C transponders in Australia and there are no plans to install any. (Question No. 127) Senator Messner asked the Minister for Community Services, upon notice, on 26 March 1985: Under the Handicapped Persons Assistance Act- (a) how many new project applications were received in each State for funding in 1985-86; (b) how many of these applications could be considered by the Department of Community Services to be serious applications; (c) what would be the value of subsidy if all the applications received had been approved; (d) what were the numbers of applications actually approved in each State; and (e) what was the value of the approvals in each State. Senator Grimes —The answer to the honourable senator's question is as follows: (a) Approximately 800 applications were received Australia wide, the distribution of which appears below: No. of applications received 1985-86 NSW 370 Vic. 130 Qld 136 WA 34 SA 76 Tas. 52 ACT 13 NT 2 813 (b) The answer to this question is difficult to determine as it is not clear what the honourable senator means by 'serious applications'. However, if the expression is intended to mean projects that are eligible under the relevant legislation and therefore could be considered for funding, the number by State is as follows: No. of applications considered eligible 1985-86 NSW 215 Vic. 82 Qld 86 WA 31 SA 44 Tas. 40 ACT 10 NT 2 510 (c) If it had been possible to fund all applications mentioned in (b) above, in excess of $71m would have been required although not all projects had proper or current costings and the real figure could be well in excess of this amount. (d) and (e) The number of projects approved Australia-wide to date is 105 and involved Commonwealth subsidies of approximately $6m. Details of the number of projects per State and associated grants appear below: (d) No. of applications approved in each State 1985-86 NSW 29 Vic. 20 Qld 15 WA 10 SA 19 Tas. 4 ACT 6 NT 2 105 (e) Value of approvals in each State 1985-86 excluding salaries $ NSW 2,135,388 Vic. 1,575,681 Qld 930,010 WA 449,012 SA 477,760 Tas. 88,909 ACT 121,004 NT 176,300 5,954,064 I would also like to take this opportunity to advise the honourable senator that not all funds for 1985-86 have been fully committed and I expect to announce some further projects soon. (Question No. 164) Senator Vigor asked the Minister representing the Minister for Territories, upon notice, upon 27 March 1985: (1) At the Norfolk Island Legislative Assembly election on 18 May 1983: (a) how many ballot papers were set aside as informal during the scrutiny for the election; (b) how many votes were received by each of the candidates; (c) in regard to the votes received by each candidate, from how many voters were 2, 3 or 4 votes obtained as a result of a single ballot paper; (d) how many electors chose to exercise the full 9 votes available to them; (e) how many electors chose to exercise 6, 7 or 8 votes; and (f) how many electors chose to exercise each of the other smaller numbers of votes that it was their right to cast. (2) How many electors voted at the by-election for the Assembly on 25 July 1984, how many votes were received by each candidate who nominated and what was the administrative cost of the by-election. Senator Ryan —The Minister for Territories has provided the following answer to the honourable senator's question: (1)- (a) 23. (b) Phillip Arthur Page 555 Lisle Denis Snell 304 Chloe Barbara Gray 499 Alice Inez Buffett 671 David Ernest Buffett 1,294 Albert Fletcher Buffett 533 Eleanor Brenda Reed 637 Brian George Bates 709 Paul Kenneth Christian 13 William Winton Sanders 702 Thomas Leslie Lloyd 171 John Terence Brown 734 Gilbert Wallace Jackson 896 Raymond Thomas Brennan 66 Graeme Rex Woolley 154 (c) The counting of the number of voters from whom 2, 3 or 4 votes were obtained by each candidate as a result of a single ballot paper is not required and is not recorded. (d) 882. (e) and (f) Such votes would have been deemed informal as each elector was required to exercise the full number of votes to which he was entitled (in this case nine). No analysis of the total number of 23 informal votes is recorded. (2) 906, David John Rodgers 437 Edward Davenport Howard 440 Informal 29 The administrative cost of the by-election was $646.13. (Question No. 184) Senator Reynolds asked the Minister representing the Minister for Social Security, upon notice, on 28 March 1985: (1) Is the Minister for Social Security aware of complaints from pensioners and unemployment beneficiaries that departmental counter staff are not automatically identified for the purpose of following up enquiries or processing of applications forms, whether in person or by phone; if so, does this tend to encourage a casual attitude among some staff responsible for expediting action on inquiries. (2) Is there a requirement for departmental officers to identify themselves so that there is a better system of accountability at a personal level. (3) Will the Minister request all members of his Department to identify themselves and will he recommend to all members of the public that they are entitled to know the name of any departmental officer. Senator Grimes —The Minister for Social Security has provided the following answer to the honourable senator's question: (1) From time to time there have been minor complaints that departmental counter staff are not automatically identified. All staff members are encouraged to identify themselves as a matter of courtesy when dealing with clients. There is no evidence to suggest that staff who do not automatically identify themselves exhibit a casual attitude in carrying out their duties. (2) It is the general policy of the Department to encourage staff to identify themselves to members of the public with whom they have contact in the course of their official duties. In particular, field officers are required both to identify themselves and also to produce proof of identity to clients prior to commencing an interview. It is not a requirement however, that staff should be compelled to reveal their names if on-the-spot judgment suggests that this is unwise, for example, for reasons of personal safety when dealing with an aggressive or belligerent client. Further, the movement of staff within departmental offices reduces the practicability of identifying a person by name with a particular function. Staff movements can have the effect of actually delaying enquiries if a client seeks information from an officer who has changed jobs and no longer has ready access to the required information. Accountability of the Department to its clients is provided through the various administrative law review mechanisms. (3) It is my Department's policy that staff should continue to introduce themselves as a matter of courtesy. However should there be any threat to the safety of a staff member, as is sometimes the case, identification would be considered unwise. The matter is necessarily therefore one which requires discretion and judgment. (Question No. 191) Senator MacGibbon asked the Minister representing the Attorney-General, upon notice, on 16 April 1985: Which Ministers in this or the previous Hawke Government have: (a) Taken legal action against a Government Department; (b) taken legal action against a Government agency; and (c) taken legal action against a Commonwealth statutory authority. Senator Gareth Evans —The Attorney-General has provided the following answer to the honourable senator's question: I have not myself taken any such action on my own behalf while a Minister of the Government. It is possible that my name appears in some action because of my official duties and I have assumed that the question is not directed to such matters. As to actions by others, no centralised record is kept which enables me to assist the honourable member. (Question No. 201) Senator Puplick asked the Minister Assisting the Prime Minister for Public Service Matters, upon notice, on 16 April 1985: (1) Do the 1981 census figures reveal that some 76,000 people listed their religious affiliation as Moslem, while some 62,000 stated it as Jewish. (2) Which Jewish holidays are recognised by the Australian Government as being days which should be regarded as public holidays for members of the Jewish faith in Australia. (3) Which Islamic holidays, holy days or days of special religious significance are similarly recognised. Senator Walsh —The answer to the honourable senator's question is as follows: (1) The religious denomination of 62,126 people is described in the 1981 census papers as Hebrew; and that of 76,792 people is described as Muslim. (2) and (3) The Commonwealth Government has no role in determining days which shall be public holidays except in relation to the Australian Public Service, the Australian Capital Territory and the external Territories. In relation to the APS the Public Service Board has determined that certain days each year are to be observed as public holidays. These are 1 January, 26 January, Good Friday and the following Saturday and Monday, 25 April, the anniversary of the birthday of the Sovereign, Christmas Day and the following day, and any day which in accordance with the law of a State or Territory is to be observed in lieu of any of these days. This provision enables staff in the APS to observe as holidays those days observed in the community in general. All staff, irrespective of belief, are entitled to a holiday on such occasions. It is considered reasonable that any staff who, because of their belief, wish to take leave to observe some other day or days in excess of those made generally available, should make their own leave arrangements accordingly. Several leave provisions exist for staff of the APS to meet such specific needs and, subject to departmental convenience, staff may be granted recreation leave or leave without pay to observe a particular feast or holy day. The widespread introduction of flexible working hours in the APS provides further scope for staff to combine their official duties with their various private commitments. In relation to the ACT, the Holidays Ordinance 1958 provides that the same days specified above for the APS shall be public holidays, with the addition of Canberra Day in March and Labour Day in October. There is also a provision that the Minister may declare any other day or part of it to be a public holiday in the ACT or in part of it. This provision has very rarely been used and does not allow the Minister to declare holidays specifically for members of particular faiths. The people whose religious denominations are described in the 1981 Census papers as Hebrew or Muslim do not include people in the external Territories. However, the Public Holiday Ordinances of Christmas and the Cocos (Keeling) Islands provide for the Muslim festival day of Hari Raya Puasa to be a public holiday. The Christmas Island ordinance also provides for there to be public holidays on the Muslim festival day of Hari Raya Haji and on the day of the Chinese New Year and the day following it. Other public holidays in both Territories include 1 January, 26 January, Good Friday, 25 April, the anniversary of the birthday of the Sovereign and Christmas Day and the day following it. These, and the Muslim festival days, are all holidays for the entire communities, not for members of any particular faith. The ordinances of both Territories provide for the Administrators to declare up to two other days each year to be public holidays. (Question No. 214) Senator Reynolds asked the Minister for Community Services, upon notice, on 16 April 1985: (1) Is the Department of Community Services planning to initiate specific child care programs directed to overcome the lack of child care services for nurses seeking to retrain, given the urgent need to ensure that nurses have full opportunity to take advantage of retraining, but are limited by lack of child care provision in or near major hospitals. (2) Which State Governments have recognised this need for such child care services and how much finance has been allocated by individual States. (3) What financial assistance has been offered by the Federal Government to ensure that hospital based child care is planned to match the acceleration in nurse retraining programs. Senator Grimes —The answer to the honourable senator's question is as follows: (1) No. Services provided exclusively for nurses would be a matter for employers, and would not fall within the scope of the children's services programs. Funds available under the children's services program are allocated on a priority of needs basis to community-based organisations. (2) This is not known. Funds have been provided under the children's services program for child care facilities located conveniently for several major hospitals. In accordance with normal conditions of grant, these facilities will be available not only to nursing staff and other members of the hospital communities, but also to working and resident members of the general community. Similar applications have been received in several States and are now being examined in the light of normal program guidelines and having regard to overall priorities. (3) The Government is committed to provide 20,000 new community-based child care places over the next three years. The need for child care services at or near hospitals will be considered in the context of overall priorities. It should be recognised that in planning the distribution and location of child care services it is necessary to take account of the work-related child care needs of all categories of workers. (Question No. 220) Senator Jones asked the Minister representing the Minister for Health, upon notice, on 17 April 1985: (1) Is the Minister aware of a study by two senior researchers at the University of British Columbia in Canada which reveals that spa baths have the potential to carry a multitude of disease carrying and sometimes potentially fatal, microbes, and which indicates that among the threats included are deadly Legionnaires' disease, striptococci, vaginal complaints, rashes, flu-like symptoms, diarrhoea, headaches and backaches. (2) Is there any evidence of disease linked with spa baths in Australia. (3) What measures are in place to protect members of the public against possible risks from spa baths. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) I am aware that pathogenic organisms can be transmitted through the use of spa baths. The work mentioned by the honourable senator was published in the Canadian Journal of Public Health Vol. 75, 1984, pages 223-226 and suggests that many pathogenic organisms can exist in spas. However the only pathogens which have actually been shown to causes disease as a consequence of spa use are Pseudomonas aeruginosa and Legionella pneumophila. (2) Pseudomonas aeruginosa skin infection has been reported in health spa whirlpool users from two resorts in the Snowy Mountains area near Jindabyne, New South Wales. (3) My Department has no authority to introduce measures which might regulate the use of spa pools, this being the responsibility of State/Territory and municipal health authorities. Some State/Territory Health Departments have been investigating semi-private spas and related facilities such as whirlpools to ascertain the presence of disease causing organisms. However there appears to be insufficient Australian information at present to enable the States/Territories to regulate or control the use of these spas/whirlpools. Measures which have been undertaken overseas to reduce health risks associated with these facilities include: a requirement that users shower prior to using spa facilities design and maintenance of spas e.g. exclusion of wooden fittings which have a high disinfectant demand testing and control of disinfection measures regular cleaning of surfaces and surrounds of spas. (Question No. 229) Senator Crowley asked the Minister Assisting the Prime Minister for Public Service Matters, upon notice, on 17 April 1985: (1) How many employees in various Commonwealth Departments are suffering repetitive strain injury. (2) What steps are being taken by the Government to address this problem. (3) Will the Prime Minister consider referring the matter of RSI to the National Occupational Health and Safety Commission for further consideration and recommendations. Senator Walsh —The answer to the honourable senator's question is as follows: (1) A census conducted by the Public Service Board has indicated that at 31 December 1984 there were 3,029 sufferers of RSI in departments and statutory authorities staffed under the Public Service Act. (2) On 11 October 1984 Mr Dawkins, as Minister Assisting the Prime Minister for Public Service Matters, announced the formation of a Task Force on RSI in the Australian Public Service. The Task Force, with representation from unions and relevant departments and statutory authorities, is to report to the Government in June this year on all steps required to cope with the problem. (3) At its first meeting, on 30 October 1984, the National Occupational Health and Safety Commission established an ad hoc committee on RSI which is to report in mid 1985 on elements of an appropriate national strategy to deal with the problem. Senator Gareth Evans —On Thursday 16 May 1985 (Hansard, page 2069) Senator MacGibbon asked me a question concerning the use of Boeing 707s for in-flight refuelling. The Minister for Defence (Mr Beazley) has provided the following answer: The Government is aware that there are strategic circumstances in which an in-flight refuelling capability would be important, but we could expect substantial warning of such situations. It was this Government which in 1983 decided to acquire two additional Boeing 707 aircraft with a view to their potential for later conversion to in-flight refuelling if circumstances were to warrant that further investment. The conversion of the Boeing 707s to tankers could be undertaken relatively quickly if strategic circumstances were to alter in such a way as to give priority to increasing the FA18's already substantial range, noting that the aircraft is particularly suited to operating from airfields to be located strategically around northern Australia-Learmonth, Derby, Darwin and Tindal. The level of priority to be assigned this development is a matter on which we expect advice from the Dibb Review. Senator Gareth Evans —On Tuesday, 21 May, (Hansard, page 2213) Senator Sir John Carrick asked me a question about anti-ballistic missile research by the Soviet Union. On 22 May (Hansard, page 2336) I gave him a supplementary answer to my initial answer. I now have further information to provide as follows: The Australian Government regards the existing agreements between the United States and the Soviet Union as important to all countries, because the interests of all are engaged. It attached great importance to full compliance by both parties with all their agreements.