Tuesday, 28 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: Human Embryo Experimentation Legislation 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 virto fertilisation. And your petitioners as in duty bound will ever pray. by Senators Archer (from 92 citizens), Button (from 904 citizens), Chipp (from 857 citizens), Coates (from 147 citizens), Cooney (from 956 citizens), Dame Margaret Guilfoyle (from 956 citizens), Hamer (from 935 citizens), Lajovic (from 474 citizens), Mason (from 167 citizens), Missen (from 836 citizens), Primmer (from 995 citizens), Robert Ray (from 961 citizens), Scott (from 127 citizens), Townley (from 112 citizens) and Watson (from 187 citizens). To the Honourable President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That the Pharmaceutical Industry in Australia views with concern the failure in Government policy to recognise sufficiently the importance of brand-name products, developed by research-based companies; Since the progress in development of new, safe and effective pharmaceuticals is vitally dependent on the economic viability of a research-based Pharmaceutical Industry. Since the economic viability is a pre-condition for the continued employment of our well educated and skilled workforce in all aspects of the industry activity. Since full information and reliable technical back-up can only be provided in easily accessible form from product information available from the research-based companies which are product originators. Your petitioners most humbly pray that the Senate, in Parliament assembled, should initiate policies which ensure that continued access of Australians to safe and effective pharmaceuticals is secured through encouraging growth of a research-based Pharmaceutical Manufacturing Industry in Australia. And your petitioners as in duty bound will ever pray. by Senator Missen (from six corporations). To the Honourable the President and members of the Senate in Parliament assembled. The petition of certain citizens of Australia respectfully showeth: That we are greatly concerned with the extent to which serious crime including murder, major drug financing and massive tax frauds have penetrated into the highest levels of Australian society as shown by the investigations of various Royal Commissioners and in particular by Mr. Frank Costigan Q.C. That we are concerned that the National Crime Authority has too many restrictions and possible lines of veto placed upon it for it to be an effective successor to the Costigan Enquiry and that this will allow major criminals to avoid prosecution. And your petitioners humbly pray that the Federal Government negotiate urgently with the Victorian Government on the reactivation of the Costigan Commission and to extend its term to at least the 31st March 1985 and also to provide the Costigan Commission with whatever resources it may need to successfully conclude its investigations into organised crime in Australia. Further we believe that the issue of organised crime in Australia is so important that the Parliament should not be dissolved until at least the interim Costigan Report has been received and fully debated in both Houses of the Parliament. And your petitioners as in duty bound will ever pray. by Senator Robert Ray (from 16 citizens). To the Honourable the President and the members of the Parliament assembled. The humble petitioners of certain undersigned Australian and overseas students respectfully showeth that: 1. The overseas student program brings in a multitude of cultural, political and educational benefits as well as a net financial gain of A$5 million p.a., in foreign exchange. (Ref: Goldring Report) 2. Overseas students are under financial constraints. Most depend on their families for this financial support. The Goldring Report found 62% of overseas students come from families with annual combined parental income of less than A$15,000. 3. The imposition of high overseas student charges will deprive many overseas students from getting a tertiary education and qualification in Australia despite their academic abilities. High charges will determine education in Australia for overseas students on economic grounds. 4. The imposition of sudden and drastic increases in visa charges will also particularly disadvantage those current students, many of whom will be forced to discontinue their studies. 5. Overseas students do not displace local students. They represent a mere 3.4% of tertiary students. (Goldring Report) 6. The fluctuations and uncertainty in overseas students policy has led to uncertainty, stress and fear in overseas students. Your petitioners in duty bound will ever pray that: 1. The Government re-affirm a commitment to its policy that supports the social and economic development of people and institutions in developing countries through access to Australia's education and training resources. 2. The Government formulate a consistent and considerate policy concerning overseas students. 3. The Government reconsider, as a matter of urgency, the legislation of such a high increase in visa charges. And your petitioners as in duty bound will ever pray. by Senator Georges (from 231 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That we strongly oppose the 'A.C.T. Smoking and Tobacco Products Advertisements Prohibition Bill' introduced by Senator Jack Evans, because it will adversely affect sporting organisations and small businesses in the A.C.T., it reverses the onus of proof, and represents an unnecessary intrusion by Government into the private affairs of individuals and other groups. Your petitioners most humbly pray that the Senate, in Parliament assembled, should reject this Bill. And your petitioners as in duty bound will ever pray. by Senator Reid (from 138 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we the undersigned who have great concern for the protection of the unborn child, call upon the Government to reject the Vinson Enquiry recommendation that an Abortion Clinic be established in Canberra. And your petitioners most humbly pray that the Senate in Parliament assembled will reject this recommendation. And your petitioners as in duty bound will ever pray. by Senator Reid (from 73 citizens). To the Honourable, the President and the members of the Senate assembled: The petition of the undersigned respectfully shows that to pose a broadly-based consumption tax would mean a proportionately greater burden on low income groups and increase proverty stricken victims already existing within Australia. Petition against the proposed issue of indirect consumption taxation. So 'help' we pray! And your petitioners as in duty bound will ever pray. by Senator Cooney (from 11 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 Senator Zakharov (from 38 citizens). Petitions received. Senator COATES(Tasmania) —In accord- ance with notice of intention to withdraw, given on 27 May 1985, I now withdraw Business of the Senate notice of motion No. 1 standing in my name for this day of sitting relating to the disallowance of certain words in the Crimes (Amendment) Ordinance 1985. Senator LEWIS(Victoria) —I give notice that, on the next day of sitting, I shall move: That the Senate notes the Government's commitment to impose self-government on the Australian Capital Territory in 1986 without referendum and condemns the Government for allowing a number of Ministers to lock in a future self-government to their particular philosophies by restructuring of authorities and making long-term appointments, and in particular condemns: (a) the Minister for Health in relation to the Capital Territory Health Commission; (b) the Minister for Education in relation to the ACT Schools Authority; (c) the Minister for Territories in relation to the National Capital Development Commission; and (d) the Government for its failure to consolidate all administrative functions under one Minister as a first step towards self-government. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators. With the leave of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- (1) Radioactive Waste Management 1983-84 Review-Report by the Australian Ionising Radiation Advisory Council (2) Australian Ionising Radiation Advisory Council-Report 1983-84 (3) Commonwealth Schools Commission-Annual Report 1984-Pursuant to section 17A of the Commonwealth Schools Commission Act 1973 (4) Commonwealth Tertiary Education Commission 1985-87 Triennium-Supplementary report for 1986 and 1987 (5) Senate Standing Committee on Education and the Arts on a National Language Policy-Interim Government response to the report (6) Australian Security Intelligence Organisation- Report to Parliament 1983-84 Senator REYNOLDS(Queensland) —Pursuant to order, I table the report of Estimates Committee D on the processes involved in the appearance of witnesses before, and presentation of information to, Estimates Committee D by the Department of Aboriginal Affairs and the National Aboriginal Conference during the Committee's consideration of the proposed additional expenditure for 1984-85, together with the Hansard record of the Committee's proceedings. Ordered that the report be printed. Senator REYNOLDS —I also table additional information received by Estimates Committee D and seek leave for it to be incorporated in the Estimates Committee Hansard. Leave granted. Consideration resumed from 27 May. Clauses 1 to 4-by leave-taken together, and agreed to. Clauses 5 and 6-by leave-taken together. Senator HARRADINE(Tasmania)(10.08) —Mr Chairman, the reason I opposed the Social Security Legislation Amendment Bill being taken as a whole in Committee is that, quite clearly, this Bill has two clearly defined purposes. One is to amend the Nursing Homes Assistance Act, which now has been dealt with by the Committee, and the second is to amend the Social Security Act 1947 for the purpose of abolishing family allowance payments for certain student children over the age of 18 years. During the Committee stage I am not able to rehearse everything that was said last night during the second reading debate and I do not intend to do that nor would I be permitted to do so by you, Mr Chairman. However, I do wish to have clarified for me, for the Senate and, indeed, for the people of Australia what the precise effect of this proposition will be. As I understand the situation, the effect will be to take away family allowance payments made to the mother of student children over the age of 18 years and to make adjustments in the same fashion as would be the case if those children became employed or were entitled to receive unemployment benefits. To take the example I gave last night, that would have the same effect on the payment of the family allowance for other children in the family as if the two oldest children became employed or were eligible for unemployment benefits. If that is the case I believe that this proposition is unjust. Last night I made out a case which indicated that the measure was unjust and contrary to the principle of horizontal equity. I remind honourable senators of the example that was given last night of a person who is earning only about $1,700 or $1,800 above average earnings per year and who has five children, the two oldest daughters being at the Australian National University. That family could lose $84.55 a month. It could lose $55.35 because of the operation of this measure in respect of the two students at the ANU. However, because of the operation of the principal Act-that is, the Social Security Act 1947-the mother will lose an additional $29.20 per month because the three remaining children in the family will go on to lower scales of family allowance. One could understand that situation if the two oldest girls were employed but in this situation the two oldest girls are still dependent, notwithstanding the fact that the mother will not be eligible to receive the family allowance in respect of those oldest children. I wonder whether I am reading the legislation correctly. If I am reading it correctly I think that some amendment ought to be considered by the Government in respect of this matter. I will put it another way. Were the two oldest children in this case the only children of the family, come November, the loss would be $55.35 per month. That is bad enough because those children would still be dependent, but why should the family concerned incur an additional penalty of $29.20 per month simply because it is a larger family? I feel that the Government should take that on board and if it is not prepared to recognise the principle of horizontal equity-and a lot of members of the Government are prepared to recognise it-at least it should consider the matter and come up with some adjustment to this scheme in August. I point out that I do not quibble about the abolition of family allowances in respect of children who are employed or eligible for unemployment benefit. Obviously those children are no longer dependent and therefore the mother is not entitled to receive family allowances. In fact, in most cases those children are able to make some sort of contribution to the home finances. But in respect of the people we are discussing now-the two girls who are over the age of 18-they are unable to make a financial contribution to the family budget and, in addition, because they are students, the family must make direct and indirect adjustments. Not only must the family support those children in respect of the payments of fees, union dues, book costs, transport and so on, but it must also make adjustments in the home itself. In many cases quite substantial alterations must be made to the home, particularly if there are five children as there are in this case. This must be done in order to create an atmosphere that is conducive to the successful achievement of those children in the tertiary or secondary spheres of education. If I am correct in my assessment, I believe that this measure is contrary to the principles of horizontal equity and common sense. It is also contrary to the stated policy of the Government to encourage families to keep their children at school so as to ensure their successful completion of the higher school certificate in the secondary sphere and their continuation to tertiary education. Senator GRIMES(Tasmania-Minister for Community Services)(10.19) —As I said last night, I appreciate Senator Harradine's position on this. In general, I support the payment of family allowances for the reasons that he has outlined-that they are the only demographic indicator we have. They provide horizontal equity and they are a tax measure. But we have to weigh up the situation. Not only is the maintenance of some sort of horizontal equity important, but also we must consider equity generally across the community of payments of this type. Governments have to make decisions on the basis of priorities, particularly in times like this, and the decision was made that the removal of family allowances for those aged 18 and above, who are adults in our community-with the exceptions that I have mentioned here-was an equitable thing to do in the light of the May statement. Let me comment on the examples that were given by Senator Harradine. I always find that difficult in this place because we never know all the details. However, I will put some suggestions to him. First of all, if someone is on average weekly earnings with two children at the Australian National University and three other children at home, those children must be getting at least a part tertiary education assistance scheme allowance. If they are getting TEAS they are not getting family allowances now because the family allowance is absorbed into TEAS. There may be other circumstances. Maybe the income is not as high as Senator Harradine implied, but I think in Canberra it is likely to be. If the maximum adjusted family income is $400 a week-with five children, two at university and three at school-and the two at university are not getting either full TEAS or part TEAS, they have not applied for it; but they are certainly eligible for it. Therefore they would not be getting the family allowance now as the family allowance is absorbed into the TEAS payment. In the specific case that Senator Harradine mentioned I cannot see that that will make a difference. I think that every member of parliament has had complaints from families particularly very large families, in the situation of having a child reaching the age of 16 or a child over the age of 16 going into employment which results in the family allowances being removed under the existing legislation because the family allowance is calculated on the number of people in the rest of the family. It is the large amount, up to $7 or $9, which is removed. That is the way in which the system has operated since the introduction of the family allowance. I believe that is fair and equitable. If we are talking about horizontal equity we are talking about relating the same payment to each family, depending on the circumstances of the family. If a family has three dependent children, whether that family originally consisted of five or seven children and the kids have grown up or whether it consisted of three children all along, it should get the same family allowance as any family with that number of children. As Senator Harradine has suggested, I will certainly take the matter up with the Minister for Social Security (Mr Howe) to see what inequities may arise. In theory-I stress 'in theory'-those who are eligible for TEAS are not affected because they are not getting the family allowance now; the family allowance payment is subsumed in the TEAS. I know that begs the question of whether the TEAS income test is reasonable or whether it is too harsh. I would be inclined to believe that it is too harsh, but to raise those income levels would cost a considerable amount. The people on the family income supplement whose children are not attracting TEAS-kids with double orphans' pensions, those on the handicapped children's allowance or the children of parents receiving an additional pension or benefit-will continue to get the family allowance under these circumstances as will Aboriginals and those under the isolated children's scheme. Sure, there are some people whose family income will be reduced. They will be primarily, as Senator Harradine pointed out in his speech, people with children at tertiary institutions. I remind honourable senators that university students-this all came out in the recent kerfuffle over university fees-are in a particularly advantageous situation in our society. They receive a considerable subsidy from the public purse for the costs of their training. In many cases they receive TEAS and after training, on the average, they receive a higher income than the rest of the community. So I believe we have to consider the arguments about that type of equity as well as the pure argument of horizontal equity that Senator Harradine is talking about. As I said, the Government did not like making this decision and I, in particular, did not like making this decision. But I believe there is some argument that students from the age of 18, particularly those in tertiary institutions, are not treated as badly as they sometimes say they are. The Government made the decision it did with a heavy heart and with some difficulty. However, I will certainly refer the matters raised by Senator Harradine to the Minister for Social Security and the Treasurer (Mr Keating). Senator HARRADINE(Tasmania)(10.25) —I wish to ask a question relating to another point. If, for example, the student concerned was eligible for part benefits under the tertiary education assistance scheme, as I read it, the mother of that student would be eligible to receive the family allowance. Senator Grimes —No, that is not the situation now. Senator HARRADINE —That is the point that I am coming to. There is therefore a cut-off point. In the case I mentioned the cut-off point is $22,280, which is $1,800 above average earnings, plus $450 for each child, which adds up to $24,080. The student child of a person with five children who is on a single income and receiving that amount is not eligible for TEAS, and although the child is still very substantially dependent on the mother and on the family the mother is not eligible for the family allowance. I acknowledge what the Minister has said and I understand the situation that he is placed in. I am grateful for the fact that the matter will be again considered by the Government. Clauses agreed to. Title agreed to. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Debate resumed from 22 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator LEWIS(Victoria)(10.28) —The Senate is about to debate the Local Government (Personal Income Tax Sharing) Amendment Bill 1985. Many of us on this side of the chamber feel very bitter about this piece of legislation. This legislation has been introduced by the Government as part of its mini-Budget package. The legislation destroys a major Fraser Government initiative which guaranteed a fixed share of Federal income tax for local government. In 1976 the first Fraser Government placed local government, municipal councils around Australia, on a very firm footing by guaranteeing it 1.52 per cent of revenue raised by the Federal Government from personal income tax for general revenue purposes. In other words, it was not directing local government where or how it should use the funds. Those arrangements were seen as a breakthrough in resources for local government and they were widely supported by all local governments around the nation. It was seen as tangible evidence that the Federal Liberal-National Party recognised the importance of local government in a wide range of public services. The flexibility of the scheme was welcomed as it allowed councils either to expand services or projects, especially those which may have been unacceptable if they had to be financed via increases to property rates, or to use the grants to supplement expenditure on existing functions, thereby alleviating increasing rate burdens. Subsequently, the Fraser Government went to the extent of increasing the percentage share of the revenue to 2 per cent of personal income tax raised by the Federal Government. Again, this was greeted with widespread support by local government bodies. In effect then, since 1975 councils have been able to rely on a fairly steady proportion of the annual revenue being provided by the Federal Government by way of a share of personal income tax. These grants, of course, have now become a very important part of the fiscal processes of local government and councils have come to depend upon their continuation and their maintenance in real terms and in fact frequently have been seeking increases. The fact that councils have been able to rely on this revenue has created a great deal of expectation in councils. Many councils and local government instrumentalities around Australia have been providing new services for people in need in their communities. These new services have arisen particularly in regard to trying to help the unemployed, trying to assist with child minding facilities and other general areas which local councillors can see would be of assistance to people living in their towns. It is clear that there needs to be a decision as to whether local government will continue to provide these services. In many cases, of course, councillors have sought kudos by providing services which perhaps State governments ought to have been providing but have not been providing. So councils have come to spend this revenue on services in respect of which, perhaps one may think in some ways they are exceeding their general responsibilities. Nevertheless, having once provided these services, members of the local community have become dependent upon them, and clearly a need has been seen for the services to such an extent that many councillors wish to expand these services. The question which then arises is whether councils will continue to provide these services and whether they will expand them. I know that many councillors thought that under an Australian Labor Party government they would get more funds to enable them to expand into these services. The reason that they were thinking along those lines was the ALP policy. I quote the ALP policy from its 'Platform Constitution and Rules'. At paragraph 51 on page 227, it states: Provide financial assistance for local governments, including- an annual allocation of at least 2 per cent of Federal personal income tax receipts as a general revenue grant to local government; the allocation in any year to be not less than the real value of the previous year's allocation. Many ALP candidates in the last election campaign went around espousing that policy to local government and assuring local government bodies that they would probably get more funds from an ALP Federal government to implement these new services which councils are now providing. Of course, what is happening through this legislation is a major breaking of that promise by the ALP Government. Local government has very little opportunity to increase revenue from its own sources. Rate increases in recent years, in most cases, have already exceeded the consumer price index, and other options which are available to local government are indeed very limited. There is no doubt that many complaints are being made by rate payers around the nation about the size of the rates and the expenditure by local government. During the last election this Government certainly did not make it clear to ratepayers or councillors that it would be doing anything to increase the burden on property owners. It most certainly did not say that it would not follow its platform of continuing the payment of 2 per cent of personal income tax receipts to local government. In fact, what will happen now is that either local government will have to cut back on the services which it is currently providing or it will have to raise revenue from the rates source that is available to it. That would mean increased rates at a time when the community is already suffering the burden of rates imposed by local municipalities and land taxes imposed by State governments. Now, this Federal Government in this legislation is about to put further burdens on local government. In May of 1984 this Government established the National Inquiry into Local Government Finance under Professor Self. Professor Self and his committee of inquiry are due to report in September. This Government is not even prepared to wait until it receives Professor Self's report. It seems that this Government has so mismanaged its budgeting and financial arrangements-I refer to its current mismanagement on the question of the returns which were estimated at $800m in excess of what it will actually receive-that it has told us in its mini-Budget that it needs $52m from local government. It is not prepared to wait until it receives the report of Professor Self before it deducts that $52m from local government. The Government is quite prepared to disrupt the long term fiscal planning of local government, and by grabbing this amount of money hopes to spread the mess so that in some way or another people will not recognise its mismanagement but will complain about local government instead of complaining about the Federal Government. I point out that local government has expended enormous effort in co-operating with Professor Self's inquiry. It seems that that effort may have been totally wasted. At the appropriate time we shall move an in principle amendment condemning the Government for its broken promise to local municipalities around Australia. Where to now? The Liberal-National Party Opposition is in a position where it would be damned if it does and damned if it does not. This legislation is presented as part of the mini-Budget package. As I have said, there are many people with bitter feelings about this Government taking away a Fraser Government initiative, but this proposal is presented, in effect, as a financial Bill and we recognise that at the last election the ALP was elected to govern, not the Liberal and National parties. If this Government says to the Parliament that it needs to save this $52m because of its mismanagement and if the Liberal and National parties are to remain a responsible Opposition, they are obligated to accept the Government's decision. In saying that I draw the Senate's attention to the many occasions when the ALP in opposition refused to adopt that principle. On many occasions the Labor Opposition joined with the Democrats to prevent the coalition Government from raising revenue or cutting expenditure. I draw attention to that point because this is an occasion when we could join with the Democrats to prevent the Government from taking this step. The Democrats do not have to be responsible or to be seen to be responsible as economic managers. They will never be in government. The Democrats will continue their current policy of seeking votes from anywhere and everywhere by opposing all increases in revenue and all cuts in expenditure. Last night the Democrats were seeking votes of ex-servicemen around the country by opposing Government legislation in that area. Today, the Democrats will be seeking the votes of local municipalities by taking an irresponsible economic course. But we will not be joining them in that course. We recognise that the ALP was elected to govern and if the Labor Government has so mismanaged its affairs and needs to save $52m by cutting the grant to local government for this year as part of the mini-Budget package, the Opposition will be accepting that proposal. Senator VIGOR(South Australia)(10.42) —The second reading speech of the Minister for Community Services (Senator Grimes) does not hide the hurt and dejection suffered by the Minister for Local Government and Administrative Services (Mr Uren) as a result of the breaking of yet another promise by this Government. Mr Uren has been a driving force in lifting local government from the Cinderella era. The Australian assistance plan arose from his work. Councils have been encouraged to believe that the Federal Government will keep its end of the bargain if councils provide the human services program that the community and the Federal Government ask of them. Now Mr Uren is being forced-under duress if yesterday's report in the Australian is correct-to preside over something that will make local government forever suspicious of future Federal Government undertakings. This is all in the name of doctrinaire, small 'c' conservatism which puts 'talking up the falling Australian dollar' before 'looking into the effects of arbitrary decisions on ordinary people in Australia.' The Minister is entitled to feel that he has been betrayed by his more pragmatic colleagues. He is entitled to believe that the Labor Party platform has been sacrificed on the altar of economic slavery and, unfortunately, with little success so far. The Australian people have been sacrificed to the interests of foreign financial speculators and banks. In the Labor Party local government platform under the sub-heading 'Financial Relations', there appears the following undertaking: A Federal Labor Government will in co-operation with State, Territory and local governments provide financial assistance for local governments, including- (a) an annual allocation of at least 2 per cent of Federal personal income tax receipts as a general revenue grant to local government: the allocation in any year to be not less than real value of the previous year's allocation; (b) specific purpose grants and loans to local governments; and (c) support of local governments borrowing capacity. These are undertakings made in the Labor platform on which this Government was elected. We have been elected and we have said that we will keep this Government honest. We are doing our best. Last year there was an expansion in specific purpose grants. However, in the personal income tax area there was an increase in Federal Government collections of only 5.9 per cent. That compared with an inflation rate of 6.9 per cent for 1983-84. So the second part of that first plank was not complied with, just as local government's increase in the previous year had been less than the inflation rate for 1982-83. I seek leave to incorporate in Hansard a table setting out these comparisons since the inception of direct grants to local government in the time of the Whitlam Government. Leave granted. The table read as follows- PERSONAL INCOME TAX SHARING GRANTS TO LOCAL GOVERNMENT AND SELECTED INFLATION MEASURES Public Gross BTE Road Consumer Fixed Capital Construction Price Expenditure Price Index Personal Income Tax Index (a) IPD (b) (c) Sharing Grants (d) % Change % Change % Change $m % Change 1971-72 6.8 7.4 8.7 . . . . 1972-73 6.0 8.2 7.0 . . . . 1973-74 13.0 14.4 13.4 . . . . 1974-75 16.8 27.3 28.5 56.3 . . 1975-76 12.9 15.7 15.6 79.9 41.8 1976-77 13.9 11.3 13.3 140.0 75.2 1977-78 9.5 8.5 9.7 165.3 18.1 1978-79 8.2 7.0 8.0 179.4 8.5 1979-80 10.1 12.1 15.9 221.7 23.6 1980-81 9.4 12.2 15.5 300.8 35.6 1981-82 10.4 12.5 12.8 350.9 16.6 1982-83 11.5 12.9 12.6 424.5 21.0 1983-84 6.9 6.3 6.1 459.3 8.2 1984-85 n.a n.a n.a 486.5 5.9 n.a-not available. (a) Six State Capital index (Base 1980-81=100.0). (b) Implicit Price Deflator for Public Gross Fixed Capital Expenditure. (c) Bureau of Transport Economics Road Construction Price Index (Base 1969-70=100.0). (d) Includes General Revenue Assistance Grants to Local Government in 1974-75 and 1975-76 as determined by the Commonwealth Grants Commission. Local Government (Personal Income Tax Sharing) Act 1976 provides for the payment of a fixed percentage of net personal income tax collections in the previous year to Local Government. Initial share allocation was 1.52%, share was increased to 1.75% in 1979-80 and 2.0% in 1980-81. Senator VIGOR —I thank the Senate. I do not blame the Minister because one part of the platform was not sustained last year. By and large, local government had been expecting only the 2 per cent of personal income tax and it had planned on that basis. In the debate last May on an amendment to the Local Government (Personal Income Tax) Sharing Act the honourable member for Hughes, Mr Tickner, said at page 2083 of House of Representatives Hansard: The Commonwealth Parliament is to be complimented on what I hope is bipartisan support for the concept of a guaranteed level of untied grants to local government. I stress that the commitment to the continuing grant to local government of 2 per cent of personal income tax is a bipartisan commitment. It appears now that its abolition is a bipartisan commitment. Only the Australian Democrats are standing up for local government. I am sure that the honourable member for Hughes has worked just as hard to try to have this commitment kept and that he is just as dejected as the Minister for Local Government and Administrative Services because his colleagues have thrown principle out the window. Let me turn now to last year's general election. The Local Government and Shires Association of New South Wales wrote asking the various parties to put their policies and promises on paper. In a brochure published for the information of councils and the general public we find this contribution from the Minister: The government is committed to allocating annually at least two per cent of personal income tax receipts to local government as a grant for general purposes. Later on in the same contribution Mr Uren spoke of the Government being keen to examine both the report released last July by the Advisory Council for Inter-government Relations on the responsibilities and resources of Australian local government and the report of the Self National Inquiry into Local Government Finance, mentioned by Senator Lewis, which is due to be handed down by 30 September this year. The Minister assured us that the Government would be closely examining the findings of these reports. He went on to say: However, I should stress that no decisions or changes to Commonwealth financial relations with local government will be made until full consultations have been held with all parties concerned. The government is also responding to the initiatives of local councils to take up additional functions in response to community needs. For example under the Community Employment Program, the new Commonwealth-State Housing Agreement, the Children Services Program and the Home and Community Care Program. That is from a written statement made by the Minister. Little wonder then that the Minister is so distressed by what his colleagues have now forced upon him. They have virtually dismembered his undertaking and have stomped on the parts that remained intact. The Government is keen now to dress up this swindle by claiming that local government is still getting an increase in personal income tax money. When we look at the overall picture we find that, apart from the claimed $52m or $62m shortfall-depending on whether we believe the Minister's estimate or the estimate of the Treasurer (Mr Keating)-local government is also facing cutbacks in the moneys available for arterial roads in the States and the children's services program, and it will face extra costs due to the petrol products freight subsidy being reduced or eliminated. So the situation is somewhat less rosy than what we are being led to believe. Taken in conjunction with the puny increases in untied grants in the past few years-it is useful to bear in mind that a lot of the costs faced by local government rise much faster than does the consumer price index and that more and more functions and duties are being passed on to local government as can be seen in the table I have incorporated-there will be real pressures on many councils not just to forget about expanding employment opportunities in their areas but also to cut jobs. In this regard I quote from the evidence given to the Self Inquiry into Local Government Finance by Mr Alan Morse, Chairman of the New South Wales Local Government Grants Commission. Mr Morse is a distinguished authority on local government matters. He does not mince words or exaggerate. He is well aware of the effects of the decisions by the New South Wales Government to introduce rate pegging, to shut down the local government assistance fund, to increase fire fighting levies and to make councils pick up half the tab for pensioner rebates on rates. Concerning rate pegging in combination with other policies, at page 813 of the transcript of the Self Inquiry, Mr Morse said: Now, this is now starting to bite; and I would say that local government in New South Wales would be facing a financial crisis in the year ahead-in the years ahead-and unless something is done that will happen. It will be relieved to some extent in this coming year because, if the Commonwealth's forecasts are correct, and if PIT does return 19.98% . . . above last year, then councils are going to get some short-term relief inasmuch as a greater-sum-than-inflation rate, so that they will get some relief from that. But had personal income tax collections for 1984-85 produced a figure comparable to the two preceding years, in my view, local government would have been right-in New South Wales-it would have been right on the brink of a financial crisis. This is what the Commonwealth Government is now proposing. It is proposing to hit New South Wales Local Government with a cut in its percentage of personal income tax. One of the other things it fails to realise is that New South Wales local government uses the calendar year for budgeting purposes. In other words, councils would have already spent between one-third and one-half of their productive funds for the year. In the cases where they have taken the Government at its word, they will have to adjust. That will mean shedding jobs, tightening criteria for access to human care services and postponement of projects that are vitally needed in their communities. The option of increasing council rates to an extent which will ensure that vital community services will be provided is not an option available to councils in New South Wales, because of New South Wales rate pegging. That means hardship will be inflicted on a lot of communities, unemployed people, the aged, single parents and the homeless. Let us look at some of the specific examples and bear in mind the general impact of the Government's mini-Budget announcements, which include winding down the community employment program, removal of petrol cartage subsidies, reduction of funding for roads and reneging on funds for operating pre-school centres and local aerodromes. We find that the personal income tax sharing money alone will be approximately $1.5m down in the electorate of Hunter and over $1m down in the marginal rural electorates of Calare and Eden-Monaro. Will honourable senators on the Government side be visiting those parts to explain to people whose community employment program jobs have vanished, or who have previously been able to arrange affordable child care while they worked, that they will have to wait until the Australian dollar stops falling and that, even then, the trilogy might not leave room for them to find work or assistance? Is the Government seriously putting forward that a drop in grants entitlements of over $0.5m in the municipalities of Blacktown, Wollongong and Lake Macquarie will not result in growth being stifled, especially where there is a crying need in those areas for community infrastructure expenditure? The rural shire of Inverell looks like losing about $150,000 of what it quite reasonably expected to have this year. I have had several representations from that Shire Council. It fits into New South Wales Region 2 which covers about 93,000 square kilometres, has a population of 178,000 people and is divided into some 20 councils. Last year Region 2 received just over $12 1/2m in untied grants. It expected to get about $15m this year, if the Government had kept its word. It will be down by $1 1/2m unless we reject the Local Government (Personal Income Tax Sharing) Amendment Bill. I quote from a letter I received from the Inverell Shire Council on 15 May this year: Obviously this-- that is, the reneging on the 2 per cent of PIT commitments- would require the Councils to totally review their current programmes. Such review would possibly result in reduction in employment. Some 104 jobs could be lost if these reviews were carried out on a basis of 65 per cent labour content in the programmes with average wage of $15,000 per annum. This effect would be even more far-reaching if the Councils decided, as a cost-cutting measure, to curtail their involvement in CEP and JOLOR programmes. When employment is already a great problem within our society, this would be a retrograde step. I will deal specifically with the Shire of Inverell itself. Its share of the cutback will remove about 1 1/2 per cent of its general fund revenue. The Council has budgeted some $75,000 for the CEP and jobs on local roads program this year. Based on a 20 per cent contribution, that represents $375,000 worth of work, direct employment for 16 people, with its spillover effects on the rest of the community. I am sure that the Minister for Local Government and Administrative Services was well aware of these problems when he fought so hard to keep the Cabinet and Caucus on the straight and narrow. I share his disappointment. One of the things that have arisen spontaneously right around the country at the public hearings of the Self National Inquiry into Local Government Finance has been concern about the chaos in the children's services area. Last year there was an injection of Federal funds to encourage local government to establish child care centres. The theory was that local government would find the cash for land and the bricks and mortar and the Commonwealth would take care of the recurring costs. The Government was going to create 20,000 new child care places over three years, a most praiseworthy goal. A very large proportion of the money was going to Victoria where local government bodies take responsibility for the provision of many children's services. An amount of $12.8m was available to Victorian councils in 1983-84 and $18.6m this financial year. Forty-two new child care centres were scheduled for opening this year because councils believed that the Commonwealth would not leave them in the lurch. Now we really do not know what will happen. If the Government persists in its overall approach to local government, I would not be surprised if in years to come the Government's word is not trusted at all. I would not be surprised if the councils showed great reluctance to get involved in the provision of new services that the Commonwealth Government undertakes to finance, especially if councils are left holding the baby, or the child minding centres, with no way in which to fund them. Stop-go decisions of this nature are undermining councils' willingness to plan for progressive change. Victorian councils, as well as those in rural parts of Queensland, have approached me about the possible loss of jobs in the roadworks sector and about the job opportunities that just will not be there. Funds will not be available to put the local component into the CEP and other schemes. Earlier this month the Municipal Association of Victoria held an emergency meeting on tax sharing arrangements. My colleague Senator Chipp sent a strong message of support, the terms of which are set out in a Press release of 6 May. I seek leave to have this Press release incorporated in Hansard. Leave granted. The document read as follows- DEMOCRAT SUPPORT FOR LOCAL GOVERNMENT Senator Don Chipp today sent a message of support to the Local Government Emergency Meeting on Tax Sharing Arrangements called by the Municipal Association of Victoria at the South Melbourne Town Hall. Senator Chipp's statement expressed strong support for the retention of Local Government's 2% share of Personal Income Tax. ''There should be no changes to the current revenue sharing arrangements affecting Local Government before the Report of the National Inquiry into Local Government Finance is available and Local Government has had an opportunity to analyse it and to respond to its recommendations. ''To enable this to be done, it is clear that the Local Government allocation for the financial year 1985/86 must remain at 2% of Personal Income Tax. ''Secondly, it is the position of the Australian Democrats that the current level of 2% of PIT should be treated as a basic minimum benchmark and that future allocations should take full account of the growing responsibilities of Local Government Authorities. ''The Australian Democrats believe that Local Government will face increasing responsibilities in the areas of economic and social development. In particular, we would expect Local Government to play a much greater role in generating increased local employment opportunities as more jobs disappear under the impact of advancing technology. ''Hence it is important that Local Government is enabled to develop the financial resources to cope with these responsibilities at local level where diverse needs of local communities can be met most efficiently. ''However, in the long term it may well be in Local Government's own best interests to vary the present formula to take account of the foreshadowed move away from PAYE collection. ''The Democrats are monitoring closely the proceedings of Professor Self's Inquiry to ensure that the capacity of Local Government to carry out its important role is not undermined in any way. Senator VIGOR —I thank the Senate. Following further contact, the Metropolitan Municipal Association again wrote to Senator Chipp last Friday outlining the types of projects that are under threat as a result of the announced cutback in local government's share of personal income tax collections. I seek leave to have that letter incorporated in Hansard. Senator Jessop —Is that the breakaway municipal group? Senator VIGOR —It is a group of metropolitan councils, yes. Leave granted. The letter read as follows- METROPOLITAN MUNICIPAL ASSOCIATION Private Bag No. 3P.O. St Kilda 3182Tel: (03) 536 1333DX32057 Caulfield 24 May, 1985 Senator the Hon. Don Chipp,Parliament House,Canberra, 2600 Dear Don, Federal Government Funding Cuts to Local Government In response to your request for more concrete examples of services or projects most in jeopardy due to the recently announced reduction in Local Government P.I.T.S. grants, I have contacted a number of metropolitan Councils in an attempt to obtain specific details. Most Councils are at this stage understandably reluctant to 'go public' on which specific services or projects are most likely to be cut. Almost all however, have said that the 'human services' area is the one most likely to suffer as expansion in this area in recent years has been directly enabled by the Federal Government P.I.T.S. grants. Most Councils stated that it will be services introduced in recent years which will be the most in jeopardy. Examples would include such things as: (i) Children's Services generally and in particular child care services. Many Councils have recently begun to expand these services but, in an atmosphere where continuity of Federal funds cannot be relied upon, these Councils will certainly be reassessing their plans. (ii) Youth Services. This is another area in which Councils are recently beginning to take on an expanded role and, although State grants are available, they represent only a part-contribution towards Youth Worker salaries. The remainder of salary costs and all of the associated programme costs (which tend to escalate once a worker has been employed for a year or two) are all picked up by Local Government. Many Councils are directly dependent upon P.I.T.S. allocations to fund these programmes and will, therefore, be reassessing in the light of the present situation. (iii) Employment. In a time of such severe unemployment rates, especially among young people, Local Government has accepted more than its share of its responsibility for job creation. Over one third of all C.E.P. funds have been utilised by Local Government, and a great many staff employed on a temporary basis via this scheme have been kept on and given permanent positions by Councils. In attempting to cut costs to keep running important community services, these positions are likely to be amongst the first to go. (iv) Libraries. This is probably the best example of a service which is grossly under-funded by the State Government and in which Local Government is picking up an ever-increasing share of the costs. Several Councils commented that Library opening hours could be reassessed, given cutbacks to the Federal funds which are presently used to supplement costs. (v) Other Community Services. Some Councils also indicated that small scale but important community services, such as the home handyman service and expanded community bus services, will also be amongst the first considered for cuts. (vi) Increased Charges-General. Decreased Federal funds to Local Government will also certainly mean a review of charges for many Local Government services. This will apply in particular to child care and domiciliary services, but also to such things as use of sporting grounds which has in the past been free of charge generally but which Councils will have to consider revising in the light of increasing maintenance costs and decreasing income from the Federal Government. In essence, this just represents another form of tax which Local Government will have to introduce in order to ''subsidise'' the Federal Government's promised tax cuts. In general, it is clear that the Commonwealth Government has led Local Government into providing a wide range of community services and is now rapidly abandoning any responsibility for ongoing support and assistance. As stated in our submission to Senator Walsh on this issue, Local Government has been expanding its income from rates in recent years far in excess of the rate of inflation. Ratepayers will certainly not tolerate further increases of recent levels, and Local Government has, therefore, been forced into an impossible situation. In conclusion, may I express on behalf of the Metropolitan Municipal Association my sincere appreciation for your efforts for Local Government. I hope this information is of use. Yours sincerely, BRIAN JONES Secretary Pro Tem. Senator VIGOR —I thank the Senate. I wish to take just a few more examples to alert honourable senators to the impact of the Government's proposals. The Shire of Flinders writes: The low growth in personal income tax collections over the last two years has meant the local government's share of Commonwealth revenue has been close to the rate of inflation-but below the rate of the increase in cost of providing the majority of local government's services. The proposed change comes at a time when local government will have the chance to make up for the last two years by gaining an increase in real terms. A fixed percentage share of revenue has many advantages for local government in that it can plan ahead. In growth municipalities such as the Shire of Flinders, the Loan Borrowing Programme is based on future capacity to repay and the predicted revenue share from the Commonwealth has been taken into consideration in determining the appropriate level of loans raised annually. Flinders Shire will have to put off 11 people who have funding under the employment relief pro- jects. It will also have to terminate contributions to aged persons housing and to terminate or reduce council contributions to aged persons welfare services. This will happen by increasing charges for Meals on Wheels, Home Help and so on. It is no wonder that the Shire of Flinders has taken the trouble to put its case to us most forcefully. The City of Knox, with an annual population increase of 4,000 or 5,000 people, has increased its rate revenue over the past 10 years by an average of 14.1 per cent per annum. No one can deny that it is maintaining its rate effort properly. It says that a significant reduction in personal income tax funds would require an immediate rate increase of 12 to 13 per cent to maintain current standards. Alternatively, it would have to forgo money to the tune of $180,000-roughly the cost of a new oval, club rooms, a pre-school, an infant welfare centre or a senior citizens club. What is the sense of foisting more social problems on to such an expanding community? The Shire of Ballan, which is one hour's drive out of Melbourne, has for many years grown at over twice the average annual State growth rate. Demands placed on it for additional welfare services and for improved road maintenance and street infrastructure are increasing all the time. This is what the Council says about the announced cutbacks: Council has urgent needs in the expansion of the Meals On Wheels, Home Help and Day Care services. These will not be expanded now, but will be held at current levels. Likewise, road maintenance and construction programmes will be curtailed and will suffer in real terms. This will impact in the future upon road safety and the standard of the environment. Later, in the same letter, it adds: Council also objects most strongly to the ad hoc manner in which this reduction was made, coming at a time when the Federal Government Inquiry into Local Government Finance has not yet made any report. These examples can be and have been multiplied many times from all States. I wish to consider briefly my home State of South Australia, where the Secretary of the Local Government Association, Mr Jim Hullick, warned last April that rates would have to go up astronomically if councils picked up the tab for the services for which Federal government money was expected. In this financial year, South Australia was entitled to nearly $42m. Therefore, the cutback will mean a loss of $5m in what councils were expecting. For instance, the Riverland region, which is having difficulties with the dairying, viticulture and dried fruit industries because of overseas dumping and increased salinity in the area, stands to have $200,000 knocked off its entitlements. The growth areas to the north and south of Adelaide look like being half a million dollars behind what they might reasonably have expected. The City of Henley and Grange has mentioned the awesome choices of retrenching staff, of contemplating massive rate increases or of abandoning-not pruning-community services. The point will have got through to honourable senators by now that there will be very serious hurt and dislocation if the iniquitous proposals embodied in this Bill are hustled through. The question remains: What has local government done to deserve its punishment at a time when the Federal Government is happy to walk away with its own vastly increased share of taxation revenue? The total expenditure cuts announced on 14 May will prune only 2 per cent of the Federal Government's total outlays. They will take about 10 per cent of local government's untied grants and, all things considered, a substantial part of the tied grants. So the axe is falling disproportionately heavily on local government. The examples that I have cited give the lie to assertions that local government rating effort has not kept pace with land values or with the capacity of the community to pay. During the adjournment debate on 27 March, Senator Peter Rae produced a table that showed that local government was maintaining its taxation as a proportion of gross domestic product. Senator Walsh undertook to have these figures examined and to make the analysis available to Senator Rae. A similar response was forthcoming the next day when I asked a question without notice dealing with a quite different local government financial issue. I am still waiting for a reply, despite a further letter and telephone messages which indicated how keen I was to get the information. I have also not had answers to my specific questions. I can thus present no material that is gentle to the Government's case. When we look at public sector outlays, net of inter-government transfer, we find that the Commonwealth was responsible for 51 per cent of the growth between 1978-79 and 1982-83. The States were responsible for 44 per cent and local government for only 5 per cent. Of the $4.7 billion increase in public sector deficits over the same period, local government was responsible for 3 per cent, the States for 64 per cent and the Commonwealth for 33 per cent. So the major problems in the economy cannot be sheeted home to local government. It is recognised as the most efficient dispenser of services. Lip-service is paid to the importance of encouraging local government to plan and to play a role as a partner in Australia's development. Yet we still find the rug being pulled out from under its feet without rational explanation by both major parties in this Parliament. Even with a $50m or $60m saving the deficit will not be markedly reduced. Job opportunities and taxation revenue will be foregone. The trust built up over the years since the early Whitlam initiatives to give local government proper funding will be shattered. Councils will be forced to borrow more heavily if they decide to maintain services. They will be competing with the private sector, which the Government claims is already crowded out of the money markets. The irony is that the Self National Inquiry into Local Government Finance is in progress. That inquiry has probably consulted more people and groups than any other inquiry, except the Royal Commission on Human Relationships. It has travelled around the country, held many public hearings and conducted many informal meetings. The incisiveness of its members' questions makes its recommendations, due by the end of September, well worth waiting for. There should not be any rush to pre-empt its findings. There is still time for the Government to recognise its blunder, to apologise to local government for undermining over 10 years of work and to withdraw this quite unacceptable legislation. There is not one shred of justification for imposing the hardship on the unemployed, on those without community services and on the communities in need of funds for upgrading facilities. Equalisation, in fact, determines what most councils will receive, even though there is a notional per capita component in calculations. A reduction in untied funds will therefore hit hardest those sectors of the community in greatest need. The Labor Party, at various stages in its history, would not have contemplated the folly of dealing most harshly with its closest supporters. It is sad that it is prepared to do so now. I am also aware that the 2 per cent real increase on funds for last year, which the Government proposes, is easily confused with the 2 per cent of personal income tax that local government was promised and should be given. We are not fooled and nor is local government. I call upon the Senate to stand up for this country and for honesty. As Democrats, we will be voting against this Bill. In the meantime, as we understand that the Opposition will be voting with the Government, we will support the words of censure which it is proposed to add at the end of the motion for the second reading. However, I invite all honourable senators to do the decent, Australian thing and reject the Bill. Senator JESSOP(South Australia)(11.12) —At present we are debating the Local Government (Personal Income Tax Sharing) Amendment Bill 1985. My colleague the shadow Minister, who is in charge of the Bill from the Opposition point of view, foreshadowed an amendment. I now move: At end of motion, add: ', but the Senate is of the opinion that this legislation represents a further breach of the Government's election commitments.'. I have just listened to a speech by Senator Vigor which is typical of the Australian Democrats. They parade themselves as being the protectors of any section of the community from which they are likely to get votes. The only problem with the Democrats is that although they denigrate the Opposition-on this occasion both the Government and the Opposition-they fail to recognise that the people of Australia unfortunately elected the Australian Labor Party to govern this country for the next three years. It is the responsibility of the Government to raise revenue as it sees fit. It is not the job of the Opposition or the Democrats to do that. They will never have the responsibility to govern this country. The Democrats parade themselves and suggest that we are not offended by this measure at all. We are. The coalition parties of this Federal Parliament have stuck up for local government over the years. We have a government which is committed to the Federal system whereby the government in Canberra keeps State and local governments in their proper places. We believe firmly in the Federal system. We heard Senator Vigor extolling the virtues of Mr Uren. During the time of the Whitlam Government Mr Uren was Minister for Urban and Regional Development. He was dedicated to the destruction of local government by establishing some 40 regional councils throughout Australia with the ultimate objective of abolishing the State governments altogether. That was quite clear and ought to have been abundantly clear to Senator Vigor. However, the leopard has changed his spots and now purports to be the champion of local government. I support his feeble attempt to try to influence the Caucus of the Australian Labor Party. Unfortunately, he was unable to meet the strength of his Prime Minister (Mr Hawke), who warned Mr Uren to toe the line, or else. A report in the Australian states: Mr Hawke told Mr Uren a fortnight ago that he was 'finished' if he went to the Labor Caucus in a bid to over-turn a Cabinet decision on funding cuts for local government. The threat from Hawke reveals a tougher attitude towards his ministers and his determination to ensure ministers do not use Caucus as 'a court of appeal' when they are defeated in Cabinet. It looks as though the left wing was very weak in its defence of Mr Uren. If Mr Uren had his way, perhaps we all would have been happy about the measure we are dealing with today. I was interested to read the speech at the second reading stage made by the Opposition's spokesman on local government, Mr Everingham, in the House of Representatives on 21 May, in which he said: There are disputes as to whether the Whitlam Government or the Fraser Government first introduced the original revenue funding scheme whereby 1.52 per cent of revenue from personal income tax would be distributed to local government. I put on record that it was the Fraser Government which recognised the significance of local government. When my late colleague Sir Phillip Lynch introduced the Local Government (Personal Income Tax Sharing) Bill 1976 in the House of Representatives on 16 October 1976 he made the following point: . . . the tax sharing arrangements to apply between the Commonwealth, the States and local government were decided following extensive discussions between the Commonwealth and the States this year, and represent a central element in the Government's federalism policies . . . The inclusion of local government in the new tax sharing scheme accords it the status of a genuine partner in our federal system. This Bill recognises and foreshadows a new deal for local government. As we all know, there was a progressive increase in the amount of money available to local government until it reached the extent of 2 per cent of personal income tax revenue. I was very pleased about that because, as a member of the local council in Port Augusta in about 1959-a year or two ago now-and as representative of the Eyre Peninsula Local Government Association I moved a motion that a royal commission ought to be carried out into the method of financing local government in South Australia with the object of getting a share of the personal income tax revenue. That motion was carried. It takes an inordinate amount of time for these things to grind through bureaucratic and party political processes. Eventually, in 1976, it was achieved by the Fraser Government. I was appalled and wrote to the Minister concerned, Mr Uren, suggesting that it was premature to take any action with respect to local government financing until the report of the Self National Inquiry into Local Government Finance was provided. That report is not due until September this year. This is another example of where the Labor Government has failed to honour its commitments. I quote from a paper I have dated 15 May: A year ago the Prime Minister announced the establishment of a National Inquiry into Local Government Finance. Its terms of reference were to review the Local Government tax sharing arrangements and report on any changes required to improve the operation of the Local Government (Personal Income Tax Sharing) Act 1976. The Inquiry's brief included consideration of the level and form of funding for Local Government from Commonwealth sources. The inquiry is due to report in September. It is disgraceful and irresponsible for the Government to take any action such as we are dealing with now without the benefit of having that report. As far as I am concerned, the Labor Party's stand is a matter of regret and disgrace. We have to recognise that since the personal income tax sharing arrangement was made, local government has budgeted for a certain amount of money and been guaranteed that money-until now. Now the spirit of the legislation introduced by my late colleague in 1976 has been destroyed, so much so that it is contemplated that local government will be deprived of something of the order of $52m in the full year from 1 July. Recognising that local government had a bigger share of the cake, some State governments intruded and in some instances siphoned off road funds or introduced levies on local government to the detriment of that tier of government in our federal system. The Labor Government has failed to recognise that fact, which makes it even more culpable in introducing this measure now, and not waiting until September, when it would have the benefit of a proper report with respect to local government financing and the recommendations that may flow from it. I would like to think that the present Government is conscious of the importance of local government, to the extent that it will take notice of the Self committee report and recommendations. When we are dealing with public sector expenditure restraint, it is interesting to note that some people criticise local government. All I say is that if local government makes an equal contribution to the blowout in public sector expenditure it should simply share in the restraint. From a perusal of the financial estimates of the Australian Bureau of Statistics, the Australian Council of Local Government Associations understands that between 1978-79 and 1982-83 public sector outlays net of inter-government transfers increased by $30 billion. The Commonwealth was responsible for 51 per cent of that growth, the States 44 per cent and local government 5 per cent. In terms of the $4.7 billion increase in public sector deficits over the same period, local government was responsible for 3 per cent of that growth, the States 64 per cent and the Commonwealth 33 per cent. From an historical point of view, the 19.9 per cent growth in local government tax sharing entitlement is seen as a catch-up on particularly the last two years. That is what it could have anticipated if the Government had recognised the value of local government and had recognised the problems it has to deal with. Senator Lewis said, and I think it was repeated by Senator Vigor, that local government will now be faced with the problem of either increasing its rates and becoming a de facto tax collector for the ALP-the ALP shedding that responsibility and placing it upon local government authorities throughout Australia-or being forced to withdraw or reduce services in the communities it serves, which of course could mean unemployment in the local government sector. I recognise that some local government authorities may be less efficient than others. I recognise that over the years local government authorities have amalgamated in order to increase their efficiency and to increase their purchasing power, thereby increasing their service to the ratepayers they serve. However, the majority of local government authorities in Australia are efficient and I think act responsibly. We have given them added responsibilities for involvement in nursing homes and the like. For example, a complex was built at Port Augusta in co-operation with the South Australian Housing Trust, which built the residential section. The local government authority contributed to the administration block. Participation of local service organisations was also encouraged. I think that is a good thing, and it is the way we ought to go. Local government happens to be the government closest to the people. It is not a remote government like the government in Canberra. I think it is a great pity that we, as champions of local government, are forced to accept the negligence of the Australian Labor Party. We have to accept the fact that the Labor Party does not value local government in a proper way. All I can say is that when a Liberal-National Party government is returned in two and a half years I will be one who will urge that government to reintroduce the 2 per cent personal income tax share as economic circumstances permit. When we take over in government we will be faced with massive problems. We will have to take some very unpleasant decisions early in the piece. As far as I am concerned, and I am sure this view would be held by a majority of my colleagues, when we are back in government we will see that local government returns to its rightful place in the federal system and is provided with the funds that, unhappily, have been taken away from it by the socialist ALP Government, which really has as its objective the ultimate destruction of local government, the destruction of the States, and the putting in place in Canberra of an all-powerful, dominant, dictatorial, centralistic type of government, which I would totally oppose. Senator CRICHTON-BROWNE(Western Australia)(11.27) —We are debating the Local Government (Personal Income Tax Sharing) Amendment Bill 1985, which gives effect to the announcement earlier this month by the Treasurer (Mr Keating) that local government will not receive 2 per cent of personal income tax collections for the coming financial year. The present tax sharing arrangements provide that in any given year local government will receive revenue amounting to 2 per cent of the previous year's personal income tax collections. Under the new arrangements the local government share of revenue in 1985-86, rather than being 2 per cent of the 1984-85 personal income tax collections, in fact will be 2 per cent of the 1983-84 personal income tax collections, plus an increase in real terms of 2 per cent. When the Local Government (Personal Income Tax Sharing) Bill was introduced in 1976 with the purpose of providing for the sharing of personal income tax collections between the Commonwealth and local government, the benefits of the arrangements were clearly described by the late Sir Phillip Lynch, the then Treasurer, who said in his second reading speech: The level of general purpose assistance provided to local government in any year will be known with certainty very early in that year. Very importantly, the amount of such assistance will grow as personal income tax collections grow. And so they did grow. They grew from 1.5 per cent until ultimately under the Fraser Government they reached 2 per cent. The coalition Government thus clearly recognised the expanding role of local government and was prepared to provide a clear and constant means of support. The Labor Government also has made much of the importance of local government. In a speech to the Institute of Municipal Management in May last year Mr Hawke stated: Local government is at once a significant employer, provider of facilities, services and infrastructure, and consumer of goods and services. Our local government network is a significant element of the social fabric of our nation, and serves as a major catalyst in developing community resources and capacity. Mr Hawke went on to tell his audience: The Federal Government will be working for a durable strengthening of local government capacity. Now, only one year later, Labor is completely undermining one of local government's most important and reliable sources of income. As I have already pointed out, one of the benefits of the personal income tax sharing arrangements was that it gave local authorities plenty of advance notice of future levels of assistance and thereby facilitated forward budgeting. By the measure that is before us at present, local government authority budgets for 1985-86 will be thrown into complete chaos and even more so, because, far from being foreshadowed, the change in funding arrangements has arrived completely out of the blue, without notice, without signal and without any indication. It is completely contrary to the commitments that Labor has made with regard to local government. Immediately prior the election the present Minister for Local Government and Administrative Services, Mr Uren, spoke about the many initiatives the Government had taken in recognition of the important role local government does, and can, play in the Australian economy, including significant increases in funding for local government. Even as recently as March this year the Minister was talking about continuing 'our work which hinges on the Government's commitment to strengthening the capacity and raising the status of local government'. It might also be expected that one could find some indication of Labor's intentions in the ALP platform. Luckily this is becoming less likely these days and it is certainly not the case in regard to this issue because, according to the ALP 1984 platform, a Federal Labor Government would: Provide financial assistance for local government including . . . an annual allocation of at least 2 per cent of Federal personal income tax receipts as a general revenue grant to local government. The precipitant for this legislation is the increase in revenue that would have accrued to local government through the increase in personal income tax receipts for 1984-85. Under the current arrangements the allocation to local government would represent an increase of around 15 per cent in real terms. The increase in personal income tax receipts for 1984-85 would have caused local government's share to have risen by around 15 per cent. That was just too much for this avaricious Labor Government. Suddenly the rules had to be changed. It could see revenue going to local government, which properly needed and deserved it. It has suddenly, in mid-stream, in mid-flight, changed the rules. What really concerns me in this legislation is that the Government has shown itself willing to break the 2 per cent tax sharing agreement because it was a good year for local government. The precedent it sets removes all future certainty for local government funding while we have a Labor Government. Furthermore, it was clearly the purpose and the intention of the 1976 Act that assistance to local government in this form should increase in line with increases in personal income tax receipts. I am not suggesting for a moment that the 2 per cent formula is immutable, that it is set in concrete, that it cannot be subject to some sort of revision or review or that another formula cannot be provided. Whatever the formula, it ought to be one of growth and one of certainty. I am reminded that on 25 March 1985, in reply to a question on this matter, the Minister for Finance, Senator Walsh, implied that local government authorities could raise any shortfall in revenue through rate increases; he was taking what was rightfully theirs and they ought to make it up through some form of rate increase. As my colleague Senator Jessop said earlier, this would make local government simply an agent for revenue collection for the Federal Government. Senator Walsh was presumptuous enough to say: Local government authorities have not increased their revenue raising effort in the last decade or so in spite of rising property values. I love theorists because it really gives one a fair understanding of how the socialists think and what their mentality is. Senator Walsh has said that because property values have gone up rates automatically ought to go up, implying that because property values have gone up, the capacity of the owners to pay has gone up. What absurd logic! I think this sort of statement gives a misleading picture of the situation and casts local governments in an improper and poor light. Certainly rates have kept pace with increases in the consumer price index and, as a proportion of household income-which is a fairer, better and more responsible measure-have remained constant in the last 10 years, from 1.33 per cent in 1973-74 to 1.38 per cent in 1981-82. I believe that that measure provides a truer indication of people's ability to pay higher rates rather than using nominal increases in property values suggested by Senator Walsh. Certainly as far as local governments go, I would argue that practical rating capacity is not increasing; it is declining. The vast majority of major ratepayers, particularly in rural areas, are farmers. Many have been in precarious financial positions which have been inflicted on them after years of increasing costs and declining returns and they would be simply unable to sustain any further increases in rates. One has to look only at the rural sector, which the Labor Party if it is not ignoring it seems to be tearing away further revenue from it, and the parlous state of that economy to understand the rural sector's lack of capacity to pay increased rates. As a result of this legislation, in 1985-86 local government will receive an estimated $52m less than it would had the current arrangements remained. Thus, it will be much less able to meet community requirements. When I say that local government will receive an estimated $52m less, it depends on whether one listens to the Minister, the Government or the Commonwealth Statistician. The figures vary between $52m, $56m and $62m. Whatever the figure, it is a very significant reduction in revenue to local government. Because of the untied nature of revenue grants, different local authorities use the money in different ways-for example, to top up short falls in revenue for road building, for developmental projects or, perhaps, for community services. Each State has a responsibility to allocate a minimum of 30 per cent of the personal income tax sharing grant among its local authorities on a population basis. The remaining assistance is allocated according to the financial position of the respective authorities. Obviously, it is those local authorities which are least able to rely on alternative sources of revenue which are most dependent on the personal income tax grant and which, of course, will suffer most from any cut. Local government authorities must now be left wondering about the purpose of the much vaunted inquiry into local government finance and, in particular, Mr Tom Uren's promise that the recommendations of the inquiry 'will be fully discussed with the States and local government before any amendments to the Act are considered'. Just recently the Minister made that promise. What do we find? The legislation has been changed; the formula has been changed; an ad hoc basis has been introduced; and local government finds itself $56m short, without any notice being given, without consultation, without discussion and without the recommendations of the inquiry being brought down. The inquiry was specifically established to review local government tax sharing arrangements and report on whether changes to the present system were necessary. The Government has now completely pre-empted the outcome of this inquiry and by its actions shaken the faith of local government and shown it what its real intentions are. It comes as no surprise to us on this side of the chamber to see what is being done to local government. I would be surprised if local government is in a state of shock. One only has to recall the Whitlam days, as my colleague Senator Jessop said. It was the intention of Whitlam, and now is the intention of Hawke and the ALP, to abolish States. For practical purposes under the present construction local governments would be abolished and local regional governments set up, thus bypassing both local government and State government. Of course the funds that were to be provided to those regional governments were to be by way of tied grants so that there would be a centralised system in Canberra with no authority, no power and no distribution of decision making outside Canberra. Therefore, it should come as no shock to local government to find now that the formula, the base of revenue, the understanding and the legislation on which it had come to rely in the past has, at the stroke of a pen, been taken away from it. Senator PETER RAE(Tasmania)(11.41) —I will not repeat the arguments that a number of my colleagues have already put forward in relation to this shocking example of the Government's blatant dishonesty. It has gone to an election with a policy promise that was made clearly and unequivocally and now it has blandly breached that without even a beg pardon. I remind honourable senators that this is the highest taxing, biggest spending government in the history of Australia, yet it is quite prepared to plunder the public purse by taking large amounts of personal income tax without giving any sort of cut, deferring the day from which it intends to make the cuts until after it has had a tax summit and after it has had some other sort of inquiry, nevertheless pocketing the proceeds in the meantime. Talk about plundering the public purse! The Minister for Finance, Senator Walsh, talks about plundering the public purse, but could there be a worse example of doing just that than this situation before us now? We recognise the need to curtail public expenditure. We recognise that the public debt is rising rapidly in this country, that the first $35 a week paid in tax by the average taxpayer in this country goes simply towards servicing the public debt, which is rapidly rising. Of course it is necessary to have a curtailment of Government expenditure. As I asked in a recent debate in this chamber, what is this Government doing by way of giving a lead? It is doing nothing at all. It is increasing its own administrative expenses by anything between 15 per cent and 30 per cent on average across the board, through the departments. It is not cutting back in the area in which it could give a lead; it is imposing the cuts on war widows and local government. It is saying: 'It is necessary to curtail expenditure and you and you and you out there will be the ones whose expenditure will be curtailed; not the Government's'. There was the clearest possible policy commitment on the part of this Government to maintain the allocation of 2 per cent of personal income tax. It was an election promise that the Government would maintain that, but without a beg pardon it has simply reneged on the promise. There has been no cut in the personal income tax rate, which is accepted as being unduly high in this country. Without waiting for its tax summit, without waiting for any change in the personal income tax rate and without waiting for the report, due in September, of the Self National Inquiry into Local Government Finance, the Government is destroying the budgetary processes of local government. I believe that local government in Australia had every reason to budget upon the basis of anticipating that any changes to the policy of the Government that had been elected would be negotiated and discussed and that changes would not be imposed without fair warning or prior notice. Yet that is what has happened. The changes have been imposed without prior notice part of the way through the financial year. Local government had every right to budget on the basis of the expectation of the receipt of that share which the Government had promised it. What is clear from the hundreds of letters which I have from municipalities all over Australia, from local government associations as well as individual councils-I do not pause to read them but simply to indicate that I have a bundle which takes a very thick file to hold it-is the outrage, the shock and the horror that was felt by them when they found out what this Government intends to do to them. We believe they were entitled to budget on the basis on which they did. We believe they will probably now be forced to increase rates or, alternatively, to curtail expenditure. They will be forced to cut programs which they would otherwise have undertaken. In some cases, they will be forced to increase rates. If they increase rates, that will impose an inflationary pressure which will add to the cost of production of all the businesses which pay rates. It will impose an inflationary pressure in the community. If they curtail expenditure that will almost certainly increase the likelihood of unemployment growing at an even higher rate than it is at the moment. This legislation has destroyed the confidence which people may have had in this Government as a government of any form of probity or honesty, a government which was likely to keep its promises. I again emphasise that, whilst it is the highest taxing, biggest spending government in history, we believe it is necessary for there to be a major program of curtailment of expenditure. But it ought to be negotiated, it ought to be discussed, it ought to be across the board and it ought to include the Government's own expenditure, particularly in relation to its own administration. The Government has failed to await the outcome of the National Inquiry into Local Government Finance, it has failed to expedite that inquiry-if it is urgent that something be done-it has failed to honour the agreement which it made prior to the last election, it has failed to honour its policy promises and it has failed to negotiate to the benefit of taxpayers any arrangement whereby tax savings could be passed on by way of some form of rate remission, which would have been another alternative for the Government if it felt it was necessary for all of us to tighten our belts a little at this time to reduce the rapidly increasing rate of public debt and to get the Budget a little closer to balance. That could have been passed on as a form of encouragement to taxpayers. The Government has said that the amount of personal income tax collected is so high that it would increase by nearly 20 per cent the amount going to local government, and that that is an unreasonable increase. It has then said: 'But we will not pay it back. We will pocket that unreasonable percentage'. That is the part that gets me. That is the part that is most unreasonable in what this Government is doing. I would sum the legislation up in this way: Firstly, I believe it is a measure of the Government's preparedness to plunder the public purse; secondly, it is an indication of the Government's preparedness to pocket the plunder when it has plundered the public purse; thirdly, it is an indication of this Government's selfishness and complete lack of fairness towards local government; fourthly, it is an indication of this Government's indifference to the plight of property owners who already pay hefty rates and taxes; fifthly, it is a measure of this Government's lack of interest in those who have to rent property and to whom any increase in rates will be passed on. This legislation is a measure of this Government's dishonesty and disinterest. It is a measure of the extent to which this Government has, I believe, disqualified itself from being entitled to remain in government. It is just one more broken promise and one more example of what can be done by a government which has neither the capacity to govern nor the decency to honour the promises it has made. I wish that we were in the position which the Australian Democrats invite us to be in of being ambivalent and able to switch back and forth on what we have undertaken to do. We are not prepared to do that. The Democrats may be prepared to say on the one hand that they will not support the rejection of a Budget or Supply Bill, and all sign commitments saying they will not do it, and then when it suits them turn around and do it and invite us to do it. We are not like that. We are going to honour the promise we made, that whilst the Government is the Government it is entitled to have its Budget Bills passed, even though we are entitled to criticise them and point out the dishonesty with which the Government is approaching its job of governing the country. It is with great regret that I can do no more than say that I shall warmly support the amendment. We condemn this Government's breach of policy promises and its attitude of indifference to local government. We look forward to the day when we are back in government and able to negotiate some reasonable basis upon which local government can operate in this country. Senator RYAN(Australian Capital Territory-Minister for Education)(11.53) —A number of matters have been raised by honourable senators in this debate. In response on behalf of the Government I shall make a few points to put the whole matter back into some sort of perspective. The decision to change the arrangements for tax sharing with local government was necessary for the Government to make, given the need for restraint. It is worth pointing out that under the present arrangements for tax sharing with local government, grants to local government in 1985-86 would have increased by nearly 20 per cent or some $97m. The Government considered that, in the current circumstances, this increase was excessive. Senator Peter Rae —So you pocketed it for yourself. Senator RYAN —The Government has decided that local government authorities should share in the expenditure restraint. Senator Rae is interjecting but it seems to me to be an entirely fair principle that at a time of restraint all agencies should share in that restraint. The Government decided that local government authorities should share in the expenditure restraint in order to lay the foundation for continuing economic growth. Of course, local government, like any other authority in this country, will benefit from the continuation of the economic growth that has been achieved by the Hawke Government over the last two years. At present it is estimated that local government will receive an increase of $45m as compared with what they received in 1984-85. This increase, although it is below that which would have occurred had the Act not been amended, is still very substantial. In fact, it is the largest increase since 1982-83. I think that point needs to be emphasised, given some of the exaggerated claims that have been made by Opposition senators during this debate. A number of honourable senators have expressed concern about the current National Inquiry into Local Government Finance. It is important to point out that the amending Bill changes the grant arrangements for 1985-86 only. The arrangements to apply in subsequent years will be decided after the Government considers the report of the inquiry. This report is expected by the end of September this year. Before the Government finalises its decision on that report it will be fully consulting State and local government authorities. Contrary to some of the suggestions made during the debate, the inquiry's report will be fully considered. It will certainly not be wasted. In conclusion, I emphasise that the Government's commitment to local government remains firm. The changes made by this legislation reflect the priority the Government attaches to restraining economic growth. The changes do not indicate a weakening of our Government's intention to assist local government to raise its status and strengthen its capacity. The Government has already made considerable progress in this area. Senator Lewis —Oh, rubbish! Absolute rubbish. You are ignoring the facts. Senator RYAN —If honourable senators choose to ignore the facts, I suppose they can continue with this ignorant chain of interjections. But the fact of the matter is that we have increased by 50 per cent the total of tied and untied assistance to local government since 1982-83. That extent of increase means that there is now a contribution of about $1 billion to local government this year. Clearly, the commitment by the Commonwealth is still a very large one. The increases are still very large and local government still will be able to sustain an increased level of activity as a result, as well as benefiting from the general growth in the economy, which is the Government's main priority in terms of economic management. As well as these specific increases in revenue for local government, the Government will be continuing with other programs and policies designed to achieve the objectives of increased status and strengthened capacity for local government. I commend the Bill to the Senate. Amendment agreed to. Original question, as amended, resolved in the affirmative. Bill read a second time. Bill agreed to. Bill reported without amendment; report adopted. Motion (by Senator Ryan) put: That the Bill be now read a third time. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 58 Noes . . . . . . . . . . . 5 —— Majority . . . . . . . . . 53 —— Archer, B. R. Lajovic, M. E.Aulich, T. Lewis, A. W. R.Baume, Peter McClelland, DouglasBjelke-Petersen, F. I. McIntosh, G. D.Black, J. R. McKiernan, J. P.Bolkus, N. Maguire, G. R.Brownhill, D. Messner, A. J.Childs, B. K. Missen, A. J.Coates, J. Parer, W. R.Collard, S. J. Primmer, C. G.Colston, M. A. Rae, PeterCooney, B. Ray, RobertCrichton-Browne, N. A. Reid, M. E.Crowley, R. A. Reynolds, M.Devlin, R. Richardson, G. F.Durack, P. D. Robertson, E. A. (Teller)Elstob, R. C. Ryan, S. M.Evans, Gareth Scott, D. B.Foreman, D. J. Sheil, G.Georges, G. Short, J. R.Giles, P. J. Sibraa, K. W.Guilfoyle, Dame Margaret Tate, M. C.Hamer, D. J. Teague, B. C.Hearn, J. M. Townley, M.Hill, R. Vanstone, A. E.Jessop, D. S. Walsh, P. A.Jones, G. N. Walters, M. S.Kilgariff, B. F. Watson, J. O. W.Knowles, S. C. Zakharov, A. O. Evans, Jack Mason, C. V. J.Haines, J. Vigor, D.Macklin, M. J. (Teller) Question so resolved in the affirmative. Bill read a third time. Debate resumed from 22 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator DURACK(Western Australia)(12.05) —The Defence (Re-establishment) Amendment Bill is a rather petty piece of legislation. It is part of the Government's mini-Budget and for that reason the Opposition will not oppose it, although we have circulated an amendment. I therefore move: At end of motion, add: ', but the Senate condemns the further erosion in terms of service for servicemen and women that the Bill represents, and calls on the Government to act urgently to restore equity in those conditions of service and adequately reward servicemen and women for the service they render to Australia.'. The position is that for some time now there has been in existence a scheme, which will be removed by this legislation, under which some assistance is given to service men and women on their resignation or retirement. The scheme is known as the defence re-establishment loans scheme and was introduced in 1965 to provide loans for business purposes at a low rate of interest, repayable over a period of some years. The present amounts of the loans are $5,000 for ordinary business purposes, and $10,000 for assistance to those ex-service personnel who wish to go into some agricultural business. Last year 200 applications were made under the legislation. Although the sums of money are small and have not been increased for a number of years, nevertheless they are seen to be of value to the service community. The numbers of servicemen who have benefited from the scheme are considerable, even though the Minister for Defence (Mr Beazley) has played down the figures. This legislation represents a further erosion of the terms of service of men and women in the Services. This has become a distinct pattern of legislation and decisions by the Hawke Labor Government which, by a series of measures, has eroded the terms and conditions of service men and women resulting in a clear lowering of morale among service personnel. Not only is this a serious matter for those who are serving but, because of the discouragement it has given to those who are serving and those who might serve in our forces, clearly it is a matter of major concern to Australia, and it should be to this Government, although it shows no indication of understanding the problem. The Senate will recall the iniquitous legislation in 1983 to impose taxation on lump sum superannuation payments and its considerable impact on service personnel. They rely on taking their Defence Force retirement and death benefits in a lump sum for the purpose of getting into a business. Such personnel retire at a comparatively early age and seek to make another career for themselves. That was a very severe blow to their conditions of service. Despite some minor amendments that were made by the Government to meet the concerns of ex-servicemen it is quite clear that they did not ameliorate that iniquitous tax. The service community is suffering very much as a result of that move by this Government. On top of that, of course, we recall that the Government removed the income tax exemption on Reserve pay that had been enjoyed. That has had a devastating effect on the numbers of reservists and people prepared to volunteer for the reserves. The state that has been reached was highlighted at an Estimates committee meeting a few weeks ago in this Senate where it was indicated that the number of Army Reserve personnel has dramatically fallen-I think by some 10,000. A very serious situation has now arisen which at last this Government has been prepared to admit and to recognise. It now proposes to embark upon a major recruiting campaign for the reserves, but it will not succeed with that campaign while it continues to maintain policies which clearly indicate a lack of understanding of the needs of service men and women and which also indicate that the Government is simply not sympathetic in any way to them. We have in this piece of legislation a further indication of the Government's thinking about the service men and women of this country, its very negative approach to them and its lack of understanding of and sympathy for them. Even though this is a small and, one might say, only a pin-pricking matter, it is eloquent of the Government's attitude about which I have been speaking and, as our amendment suggests, it is a further erosion of the terms of service of service men and women. As I have said, the Opposition will not oppose this measure because we believe that the mini-Budget which was introduced by the Government a couple of weeks ago should come into force. We do not believe that it is appropriate for the Opposition to remake the Government's Budgets for it, whether it be the main Budget or the mini-Budget, or however one likes to describe them. The Government has to take the responsibility for its economic policy and it has to make its own priorities. In this mini-Budget it has chosen to make a number of cuts that it believes should be made. Those are the Government's priorities and we agree with the thrust of that cost-cutting exercise although, of course, we do not think that it is anything very unusual; it is the sort of thing that happens every year. We believe that the Government is acting responsibly in taking that step and we have supported it. That does not mean to say that the Government's choices necessarily would be our choices. Nevertheless, the Government should be taking the responsibility for each of its decisions and we in the Opposition will not tinker around with this measure and make any changes of our own. We will not oppose this measure but, as I have said, we think the Government's choice is a petty thing and is an indication of the Government's lack of understanding of and adequate support for the service men and women of this country. It is for that reason that the Opposition has moved an amendment to the second reading motion. Senator MACKLIN(Queensland)(12.15) — We are debating the Defence (Re-Establishment) Amendment Bill which, as the second reading speech of the Minister for Community Services (Senator Grimes) makes clear, is to abolish the entire defence re-establishment loans system. It is to apply from the date of the mini-Budget statement and means that those people who had intended to make application for these loans will be unable now to do so. The amounts of money, as the Government and Opposition have made clear, are small in today's terms; $5,000 for a business or $10,000 for an agricultural based business. They are indeed small amounts when one looks at the cost of business establishment today. I read a section from the Minister's second reading speech. It is here that one finds the non sequitur in this particular argument. The Minister said: The Re-establishment loan, at $10,000 for agricultural ventures and $5,000 for business ventures, is simply a cheap alternative source of a small part of the finance required to re-establish a serviceman or woman in civilian life. That is true. It is a cheap alternative source of a small part of the finance required, but it is still part of the finance which is required. To that extent, there have been, as is evidenced in the Minister's second reading speech, 200 such loans made each year. So there are 200 veterans each year who have sought this particular loan support in order to go into business and re-establish themselves in civilian life. I believe it cannot then follow that, simply because it is only a small support, it ought to be abolished. If that particular reasoning were followed, we would have the abolition of payments for children in families and the abolition of a whole range of support schemes that are provided by government to assist, at least in some small way, what are considered to be worthwhile causes. I do not think it follows that because such a loan is small and it is only part of what a person must put together to re-establish himself or herself in civilian life, it is of no use. Fairly obviously, it is of some use, otherwise there would not have been, as the Minister said in his second reading speech, 'about 200 loans approved each year'. The loan actually provides, for some reason that I have been unable to discover, that the first $100 is interest free, which seems to me to be a rather odd provision. The interest charged on the rest of the loan is 4 1/2 per cent reducible. That 4 1/2 per cent, as against the available interest rates at the moment, represents a considerable saving. Certainly, if a person got $10,000 for an agricultural venture, that would be of assistance in making repayments in the initial stages. I would have thought that is what one would be seeking to do. I do not dissent from the view that there could be better ways to spend this money for veterans, if that were the intent of the Government. However, it is not the intent of the Government to redirect this money to veterans in other ways. Therefore, I believe, one has to see it in the light of what the Government has proposed in the Minister's second reading speech; that it is a removal of entitlements from veterans so that their total entitlements are thereby reduced. It is, looked at in that way, a mean spirited piece of legislation. It is nowhere near as draconian as the exercise that the Senate went through last night, but it is a piece of legislation that is part of that general package of cutbacks in veterans' entitlements in a whole range of areas that were so evidently a part of the cuts which were made in the mini-Budget. The Opposition's amendment to the second reading motion, that 'the Senate condemns the further erosion in terms of service for servicemen and women that the Bill represents, and calls on the Government to act urgently to restore equity in those conditions of service and adequately reward servicemen and women for the service they render to Australia', I believe, represents a view that ought to be supported by the majority in this place. However, I do not think that it goes far enough. I think that in each of these areas we ought to have had a more adequate explanation as to what the Government was about in terms of these various pieces of legislation. As was made clear in the debate that we had yesterday, we also ought to have had consultation with the various ex-service bodies. That consultation had been promised by the Government. The Minister for Veterans' Affairs (Senator Gietzelt) promised that those discussions would take place where there was any contemplation of changing the entitlements of veterans. The Minister has made a very clear and unequivocal statement that he would discuss those changes prior to their tabling in this place. It is a pity that that promise of the Government has not been kept in this instance. It seems to me that it was a reasonable promise. It was a promise which would have enabled reasonable discussions to take place. I think that if the Minister were here he would be able to say that the ex-service organisations have acted in a reasonable way in their discussions with the Government over the past couple of years, as they have with previous governments. As a group they have particular interests. I see nothing wrong, in a democracy, in certain groups banding together to promote the interests of their fellows who have particular concerns. That seems to me to be, in fact, essential to the operation of this democracy since it is the very basis upon which political parties are formed to represent certain groups and certain propositions. When those various groups are consulted by government it is often discovered that the proposals they bring forward are extremely sensible ones, ones that can assist in the operation of government. They are not always ones, as is sometimes represented in debates in this place, which are self-serving. With regard to the cost of the loans, I think this is one area where considerable support could have been given to the Government as to how it could reorganise the defence re-establishment loan area to lower the administrative costs. I ask the Minister-I presume the information must be available because it is in the second reading speech-about the cost of administering loans, particularly in the financial year ending 30 June 1984. In the second reading speech the Minister alluded to the fact that it actually approached 20 per cent of the value of the loans issued during that year. I would be interested in the money figure in that regard and the amounts which were paid out during the financial year running up to 30 June 1984. I think that what we are seeing here is not so much a problem with the defence re-establishment loans scheme but possibly a problem with the way in which that loans scheme has been administered. I find it odd that one of the reasons given for terminating the scheme is the inefficiency of the bureaucracy to deal with it and to expedite it so that costs were not as high as is stated-that is, 20 per cent of the value of the loans unless the loans during that year were very small. I suggest to the Senate that there are institutions in our society which make profits out of lending money-it does not have to be an exercise in losing money-so, some simple mechanisms may very well have been found had the Government had the time and the inclination to discuss these with the ex-service community. Time could have been made available to look at ways of restructuring this process so that those sorts of costs were not involved. For example, one way could have been to use the method the Government is suggesting for the defence service homes, whereby it proposes to sell the operation to private enterprise. A way may have been found to remove from the Department the administrative cost burden. With some lateral thinking, an alternative may have been found other than the alternative which the Government has chosen, which is simply to abolish the scheme. The Government also suggests that the scheme is now out of date, although there is no elaboration of this in the Minister's second reading speech. I will certainly be interested in the Minister's reply as to why precisely it is out of date. For example, the only thing we find in his second reading speech is the statement: . . . because its objective as a re-establishment measure is not being met and it is inefficient to administer. I have already dealt with that matter. I will be interested in the comments of the Minister as to why its objective is not being met and whether the Government is contemplating any other method of meeting what I presume the Government also supports as a worthwhile objective, that is, helping veterans to re-establish themselves in that transition to civilian life which, after all, was the objective of the original legislation in 1965. If that is not able to be achieved, as the Government maintains, through this particular mechanism, does the Government have some mechanisms through which to seek that type of re-establishment or something by way of an alternative scheme that will assist to achieve the objective that the Government maintains this piece of legislation has been unable to achieve? Senator WALSH(Western Australia-Minister for Finance)(12.28) —The Opposition has submitted a humbug amendment to the motion for the second reading of the Defence (Re-establishment) Amendment Bill. I am surprised that Senator Durack has the gall to do so, even given that oppositions frequently have a lot of gall, because the figures of $5,000 and $10,000 for the business and agricultural loans respectively were increased by the last Labor Government from the $3,000 and $6,000 which previously applied. In the seven years and a few months that the Government of which Senator Durack was a member was in office, and during which the consumer price index more than doubled, that Government made no attempt to adjust upwards the amounts of those loans. Thus, I think it is fair enough to describe that as a humbug amendment. Senator Durack's amendment states: . . . the Senate condemns the further erosion in terms of service for servicemen and women . . . Senator Durack may not have noticed that in fact in the critical area of ex-service entitlements-that is, of housing loans-the Government has announced a decision not only to preserve the existing rights of serving members of the forces but also to offer to the great majority of the serving members of the forces an option which will be more attractive. That option is to take an up-front lump sum payment of comparable value with the existing loan interest subsidy or, alternatively, a smaller amount of subsidy on a much larger loan. For example, the present housing loan is $25,000 which, as anybody would know, falls well short of the amount required to buy a house almost anywhere. However, there is the ultimate sanction on the official Opposition that one day it will be in government. Those opposite know that one day they will have to deal with the problems of government. Of course, no such sanction applies to the Australian Democrats who are indulging again in the populist posturing which is typical of a group of opportunists and dilettantes trying to cobble together a coalition of vested interests large enough to get 10 per cent of the vote at election time, thereby ensuring their worthless political survival, knowing full well that they will never have to accept responsibility for anything they advocate or argue. The Democrats are for all tax cuts, for lower deficits, for all expenditure proposals and for reduced outlays. Regarding the one point of substance raised by Senator Macklin, the approximate total value of loans which were made last year and which would have been expected to be made next year, had the scheme continued, is in the order of $1.25m. The cost of administering that proposal is about $250,000, or 20 per cent. A scheme of this nature is innately managerially inefficient because all the requirements of legislation and public accountability must be met. It is innately inefficient for that reason, particularly when dealing with relatively small sums, as it always did, and better provisions can be provided much more quickly and delivered efficiently by the private sector. Question put: That the words proposed to be added (Senator Durack's amendment) be added. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 35 Noes . . . . . . . . . . . 28 —— Majority . . . . . . . . . 7 —— Archer, B. R. Lajovic, M. E.Baume, Peter Lewis, A. W. R.Bjelke-Petersen, F. I. Macklin, M. J.Boswell, R. L. D. Mason, C. V. J.Brownhill, D. Messner, A. J.Chaney, F. M. Missen, A. J.Collard, S. J. Parer, W. R.Crichton-Browne, N. A. Rae, PeterDurack, P. D. Reid, M. E. (Teller)Evans, Jack Sheil, G.Guilfoyle, Dame Margaret Short, J. R.Haines, J. Teague, B. C.Hamer, D. J. Townley, M.Harradine, B. Vanstone, A. E.Hill, R. Vigor, D.Jessop, D. S. Walters, M. S.Kilgariff, B. F. Watson, J. O. W.Knowles, S. C. Aulich, T. Hearn, J. M.Black, J. R. Jones, G. N.Bolkus, N. McClelland, DouglasChilds, B. K. McIntosh, G. D.Coates, J. McKiernan, J. P.Colston, M. A. Maguire, G. R.Cooney, B. Primmer, C. G.Crowley, R. A. Ray, RobertDevlin, R. Reynolds, M.Elstob, R. C. Richardson, G. F.Evans, Gareth Robertson, E. A. (Teller)Foreman, D. J. Tate, M. C.Georges, G. Walsh, P. A.Giles, P. J. Zakharov, A. O. Scott, D. B. Coleman, R. N.Puplick, C. J. G. Gietzelt, A. T.Carrick, Sir John Sibraa, K. W.MacGibbon, D. J. Grimes, D. J.Withers, R. G. Button, J. N.Chipp, D. L. Ryan, S. M. Question so resolved in the affirmative. Original question, as amended, resolved in the affirmative. Bill read a second time. The Bill. Senator MACKLIN(Queensland)(12.38) —I ask the Minister for Finance (Senator Walsh) a question with regard to the figures that he included in his personal abuse, which went by the notion of a winding up of the debate. Can he actually tell me where the expense of $250,000 is incurred? In other words, is that an expense which is incurred by the Department or is it an expense which is charged to the Department by any other administrative body, such as a State or a bank which is carrying out the activities under the provisions of this Bill? Senator WALSH(Western Australia-Minister for Finance)(12.39) —There are administrative expenses incurred within the Department. Loan applications take between three and six months to process. The viability of the proposal has to be investigated. The applicant's suitability and security have to be checked. The mortgage has to be drawn up and so on. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Walsh) read a third time. Sitting suspended from 12.41 to 2 p.m. Senator COLLARD —My question is addressed to the Minister for Finance. I refer to the Treasurer's statement yesterday attempting to explain away the Government's billion dollar Budget mistake on returns from provisional taxation. The Treasurer said that about half the revenue shortfall comes from primary producers, and I note his later comment: There is a possibility that the prospects of higher taxation due to the recovery of incomes in 1983-84 may have led to more widespread resort to tax avoidance and evasion. Is the Government suggesting that primary producers have engaged in large scale tax evasion? Is not the most likely explanation that increased outlays on deductible items led to a much smaller than anticipated net return from the farm sector? Does the Treasurer not realise that because of the Labor Government's disastrous policies affecting primary producers, an increase in gross income does not necessarily mean an increase in profitability? Senator WALSH —I have not read the Treasurer's statement and therefore I am not in a position to say whether the quotations, or claimed quotations, which Senator Collard gave are in context or are a fair and reasonable interpretation. However, I do know that the Australian Taxation Office had estimated that there would be an increase of 8 per cent, presumably in real terms, in deductible expenditure items from primary producers' income but that the current estimate in fact is that that 8 per cent has increased to 30 per cent or 40 per cent. I do not know on what particular items that 30 per cent to 40 per cent was spent. As to the latter part of Senator Collard's question, it remains an indisputable fact that agriculture, along with the Australian economy in general, was in the depths of the deepest recession since the 1930s, and in the agricultural sector the deepest recession since 1970, once again under a Liberal and National Party coalition Government. There has been a very large increase in agricultural profitability since then. Senator Lewis —You are not suggesting that that has anything at all to do with you? Senator WALSH —Yes, of course it has. It has a great deal to do with us because, when we came into government, inflation was 11 1/2 per cent and rising. Senator Lewis can ask any farmer what his greatest threat is and he will say that it is inflation. Inflation was 11 1/2 per cent and rising when we came into government. Within 18 months to two years it was reduced to, I think, 5 per cent. So we halved the rate of inflation in two years. Any farmer will say that there is no greater threat to the long term survival of agriculture than a high rate of inflation. Therefore, to a very significant extent it is due to this Government and the policies it has successfully pursued. Whilst this is not particularly relevant to the farm sector per se, although there are many part time farmers who supplement their incomes with off farm work, I might add that when we came into government the Fraser Government had achieved the unique record of having both inflation and unemployment in double figures, and both were rising. Senator COLSTON —I direct my question to the Minister for Finance and I refer to a full-page advertisement in today's Daily Sun in which the minority Premier of Queensland claims that Queensland is being discriminated against by the Federal Government. The advertisement lists alleged discrimination under seven headings. Are the claims by the Queensland Government correct and, if they are, how can it afford to place blatant propaganda such as this in the Queensland media? Senator WALSH —I have seen facsimiles of advertisements which the Queensland Government, I presume, has had inserted in a number of Queensland papers. The paper which I have here is, I think, the Townsville Daily Bulletin, but I am not sure of that. Evidently identical advertisements have been inserted in a number of papers. Unfortunately, I am not able to tell Senator Colston what the cost of those advertisements is. Some of the items in the advertisements are technically correct but the general picture is grossly distorting, misleading and dishonest. For example, a figure is quoted regarding the Australian bicentennial road development program. The fact is that Queensland has received slightly more from the bicentennial road development program this year than Victoria, and Queensland has about half the population of Victoria. So in regard to that item Queensland is in fact getting twice as much per capita as Victoria. In regard to tertiary education funding, Queensland started from an extremely low base in 1974. The reason it started from an extremely low base in 1974 is that until that time tertiary education had been funded jointly by Commonwealth and State governments and the Commonwealth governments of that time, and for a long time before that, required a matching contribution from State governments. Of course, in the case of Queensland the Bjelke-Petersen Government had refused to make the matching grants which both the Whitlam Government and the previous Liberal-Country Party coalition governments had required in order for the States to qualify for Commonwealth funds. Therefore, Queensland started from that very low base. The funding for tertiary education in Queensland has grown at a much faster rate in more recent years than in Australia generally. To take the 1985-87 triennium for example, the real growth rate in tertiary education funding to Queensland is 9 per cent compared with 6 per cent in Australia as a whole. Therefore, that area is another of the items dishonestly presented in that advertisement by the Queensland Government. In regard to the bottom line on payments to Queensland compared with payments to other States, the most recent Budget Papers show the simple fact that total Commonwealth payments to the six States averaged $1,277 per capita. Commonwealth payments to Queensland averaged $1,324 per capita. Therefore, Queensland's per capita total payments from the Commonwealth Government are some $47 per capita higher than in any other State. In absolute terms that would be of the order of $100m above the per capita average paid to Queensland from that source. It is well known of course that a Commonwealth Grants Commission report has been received recently and that the recommendation, amongst other things, will be considered at the Premiers Conference this week. The Grants Commission is an independent and objective agency. I think it is very important to note that. Perhaps it has passed judgment on the validity of the extravagant misrepresentations appearing in various Queensland newspapers today under the name of the Queensland Government and at the cost, in the first instance, of the Queensland taxpayers and ultimately, I suppose, of the taxpayers of Australia. Senator PETER RAE —I ask the Minister for Finance whether the Government's trilogy commitment to cut the money level of the 1984-85 Budget deficit next financial year will be based on the now discredited $6.7 billion deficit or yesterday's newly recalculated deficit of the order of $7.1 billion? Would the recently discredited Minister for Finance prefer not to make a commitment at this stage because of the possibility that further costly mistakes may yet be discovered and the final deficit figure may ultimately go much higher still? Senator WALSH —I thank Senator Rae for that question because it gives me an opportunity to set a few facts straight and to correct some misreporting in the Australian newspaper-which is not at all surprising-and, what is more surprising, misreporting in the Age. What was stated quite clearly yesterday is that it is now expected that in one particular revenue item there will be a revenue shortfall of the order of $1 billion. The latest estimate is that Budget estimates of revenue will be exceeded and also that outlays in total are likely to fall short of the Budget estimates. The net reduction in revenue on present estimates is of the order of $400m. Senator Peter Rae —That is the figure I used in my question. Senator WALSH —I did not say the honourable senator was misrepresenting or misreporting. I thanked him for the opportunity to correct a couple of newspapers which have misreported. Because of that reduction in revenue the increase in the deficit will be considerably less than $400m, probably of the order of $200m which is, in an outlays figure of almost $64 billion, an extremely small percentage. The Australian reported: Although the Government moved quickly to put an end to reports that the deficit could be $1 billion more than expected, renewed estimates put it at least $400 million higher. The Australian was maintaining its well-earned reputation for writing fiction as news. Somewhat more surprisingly, as I said earlier, the Melbourne Age also had the story wrong and said: . . . the gap could be about $400 million, taking the deficit this financial year to more than $7,000 million. No such thing was said and that report is also inaccurate. To return to Senator Rae's question directly, the undertaking which was given before the election is that the money deficit in the next financial year will be lower than the estimated deficit in the 1984-85 Budget. That of course means there will be a very significant reduction in the deficit as a proportion of gross domestic product. This year's estimated deficit in round figures of $6.74 billion on present estimates could rise as high as $6.9 billion, but the $6.74 billion was the relevant figure for consideration of the trilogy. Just to give some indication of the difference between a lower money deficit and a lower deficit as a proportion of GDP, a deficit of the same proportion of GDP as the $6.74 billion in 1984-85, translated in 1985-86 figures, would be approaching $8 billion. So there will be a very substantial reduction in the deficit as a proportion of GDP, and some reduction in the nominal deficit. Senator BOLKUS —I ask the Minister representing the Minister for Foreign Affairs whether he is aware of a report in today's Age which suggests a resumption in Indonesia of the policy of executing political dissidents. Did the report also allege that a trade union official and member of the Indonesia Communist Party, the PKI, Mohammad Munir, had been executed and that the execution by firing squad of three other PKI leaders was being planned? Can the Minister say whether this report is accurate and whether the Australian Government will respond to it? Further, did the same newspaper report carry a statement from Indonesian officials stating that they expected the Australian Government to prevent continuation of radio contact between East Timor and Australia? Can the Minister give an assurance that the Australian Government will not interfere with the transmitter which is located on Australian soil? Senator GARETH EVANS —It is with very deep regret that the Government recently learned of the execution on 14 May of Mohammad Munir, a trade union official and member of the banned Indonesian Communist Party. Munir was imprisoned in 1968 and sentenced to death in 1973. He made a series of appeals against his sentence, the last in 1984, to the President, which was turned down. The Australian Government is concerned that although the execution appears to have followed the formal observance of the Indonesian legal process, Munir was executed after having already served a very long prison sentence. Whatever one thinks of the death penalty itself, or the right of countries to impose it, it is very difficult to believe that the carrying out of such a penalty could ever be justified for someone who has been imprisoned for 17 years and under sentence of death for 12 years. The Government would hope that reason and compassion will prevail with respect to other former PKI members under sentence of death and awaiting execution. As to the second part of the question, I am of course aware of media reports that a radio transmission from a Fretilin leader in East Timor was received over the weekend near Darwin. The alleged transmission is said to have cited examples of abuses of human rights by Indonesian forces in East Timor. The Government has noted that illegal transmission may have taken place from Australian territory and this aspect of the matter will receive attention from the responsible Minister, the Minister for Communications. The Government is aware of reports from time to time concerning accusations of human rights violations in East Timor. We view these reports with concern but have no recent information to suggest increased levels of activity by either Indonesian or Fretlin forces which might have led to killings by either side. We follow the situation in East Timor with very close attention. The Government has raised its concern about East Timor, including, of course, human rights issues, with the Indonesian authorities on many occasions, most recently at the United Nations Commission on Human Rights in March 1985. Senator PARER —The Minister for Finance will have noted with concern that the dollar nose-dived again yesterday, closing at just above 66c against the United States dollar. Does the Minister agree that the revelation of a deficit increase, poor production statistics and continuing concern that the Government has lost control of the money supply were the main factors in the slide? Does this latest dip in the dollar indicate that the mini-Budget has failed to convince the financial markets of the Government's ability to manage the economy? Senator WALSH —I suppose it is possible that the exchange rate was influenced by the news yesterday; it is possible that it was influenced by the misreporting of the news by the Murdoch Press to which I have already referred. Even taking the misreporting of the Murdoch Press as being news instead of the fiction that it was, a change in the deficit of that order of magnitude is an extremely small proportion of total outlays. Indeed, I think it requires a certain amount of luck to be able to budget accurately enough to produce a deficit close to the estimated deficit. For the first Budget this Government produced in 1983-84, if I remember correctly, the difference between the Budget estimate of the deficit and the actual outcome was of the order of $600m; it was $600m lower than had been anticipated when the Budget was put together. This is in marked contrast to the deficit outcome of the last Budget produced by the discredited former Treasurer. At Budget time 1982 he predicted a deficit of $1,700m and finished up with a deficit of $4,500m. That is a discrepancy of almost $3 billion. He finished up with a deficit almost three times as big as the one he had budgeted for. This Government has, in the one year which it has now completed in office and in this year which it is about to complete, come much closer to the mark than that. If the exchange rate was significantly affected by a minimal change in the estimated deficit, a change of the order of less than 0.3 per cent of total outlays, the money market is not behaving very rationally. I guess a number of things that have happened in the money market recently suggest that it has more to do with hocus-pocus and cargo cultism than it does with rational analysis. However, it is possible that the disclosure of a substantial shortfall in collections of particular types of revenue and the possibility that that shortfall was due to tax avoidance and tax evasion may be seen as a more significant matter. I suggest to Senator Parer that if he wants to restore the confidence of people in the money market and elsewhere in the ability of this Government to recover the revenue which ought to be recovered, he should persuade his colleagues to behave differently in the Senate from the way in which they have behaved in the past when voting on legislation. It is a matter of record that half, or these days two-thirds, of the Australian Democrats, Senator Harradine and the Liberal and National parties have consistently frustrated the attempts by this Government to make people pay the taxes which they ought to have paid. The attitude of the Opposition parties to tax evasion can be summed up by this analogy: If one has had one's fist in the till all the week and one is caught on Friday, one has to pay back the money that one pinched on Friday but one does not have to pay back the money that one pinched on Monday, Tuesday, Wednesday or Thursday. That is the attitude of all the Opposition parties. The attitude of this Government is that if one gets caught with one's fist in the till on Friday one must pay back what one pinched on Friday and on Monday, Tuesday, Wednesday and Thursday as well. Senator PARER —I wish to ask a supplementary question, Mr President. I wish to direct Senator Walsh's attention to the other points that I raised in the question. I did not refer entirely to the deficit increase. I also referred to the poor production statistics and the continuing concern that the Government has lost control of the money supply. I said that these were other factors which had brought about the further devaluation of our dollar. Senator WALSH —There used to be a simplistic theory that was popularised by Milton Friedman which I thought no one took seriously any more. There was a monetary equation that the money supply multiplied by the velocity of circulation equals the price of goods and the quantities of goods, and from this Friedman developed the simplistic and logically unsound theory that increases or decreases in the money supply were directly proportionate to changes in prices. That ignored the fact that there were two other variables, one on each side of the equation. I thought that no one took that equation seriously any more. Even beyond that, as a result of the changes in the financial system over the past 18 months, whatever value M3 may have had as an indicator of the true level of the money supply-something that is impossible to measure with precision anyway-it now has much less value because it is no longer as relevant to the financial system as it was before deregulation. Senator McKIERNAN —Has the attention of the Minister representing the Minister for Arts, Heritage and Environment been drawn to a page one report in today's Age newspaper headed 'Australia not only broke China's sword but misled her about paying for it'? The article refers to last year's Chinese Entombed Warriors Exhibition. Can the Minister say whether this report is accurate? Senator RYAN —The Minister for Arts, Heritage and Environment has provided me with the following information: Suggestions that Australian officials have been deceptive in dealing with the Chinese Government are unfounded. The level of compensation was agreed between Australian and Chinese representatives within the terms of the original agreement. The total value of the visiting exhibition which was brought to Australia by the International Cultural Corporation of Australia Ltd was $382m. The total indemnity paid to date-that is, for the cost of damage-is $299,521, a very small proportion by comparison with the total value of the exhibition. Damage also occurred to a painting during the Picasso exhibition at the National Gallery in Victoria and compensation is being negotiated in accordance with the agreement at present. Senator Chaney —Will the Minister please table the paper from which she has quoted? The PRESIDENT —Will the Minister table the paper? Senator RYAN —Yes. The PRESIDENT —The Minister tables the document. Senator JACK EVANS —Is the Minister representing the Minister for Employment and Industrial Relations aware of the findings of the Federal Government-funded study 'Young Australians Today' which says that 80 per cent of Australia's 2.6 million young people fear unemployment? Does the Minister realise that many young people saw the community employment program as one of the safety nets which might rescue them if they became part of the chronically unemployed category? How can the Government retain the confidence of young people in themselves and in their government when it signals in its May economic statement that the community employment program is to be chopped? Senator WALSH —Let us get one fact straight. The estimates in the May statement provide for the same level of new approvals in 1985-86 as there were in 1984-85. So the number of people coming into the CEP in the next financial year will be the same as it is likely to be this financial year. I suppose Senator Jack Evans could argue that the CEP should be funded at a higher level. One could argue that everything should be funded at a higher level. Indeed Senator Evans's Party tends to argue just that. Unfortunately, when it comes to raising revenue, Senator Evans's Party tends to do the opposite and to vote against measures which will raise revenue. Apart from the record of two-thirds of the Australian Democrats on tax evasion and avoidance, which I have already mentioned, I refer Senator Evans to his own record on the legislation to introduce cash bidding. The Government had estimated that significant revenue could be obtained through throwing open for cash bids petroleum licence areas. It believed that significant revenue could be raised from that source. Thanks to the ideological prejudice of the Liberal Party of Australia, and whatever it was that motivated the Democrats, that idea was rejected on the completely specious argument, if I may say so, that the Australian off-shore areas were not sufficiently prospective to carry a system of cash bidding. If the industry had come to that judgment it would have bid precisely nothing. Due to that actions of Senator Evans and his ilk the opportunity to make that assessment was denied to the industry and money was denied to revenue as well, money which may have been used to maintain a higher level of funding for the CEP or some other worthy purpose. Oppositions can have that luxury of saying that every area of expenditure should receive more funds but that nobody should have to pay any more taxes. Governments have to accept responsibility for the things they do. Senator REYNOLDS —I address a question to the Leader of the Government in the Senate. Further to the earlier question regarding the misleading advertising campaign of the minority Queensland Government, I ask the Leader of the Government whether he is concerned about the ongoing hostility of the Queensland Premier in continually blaming the Federal Government for Queensland's own mismanagement of its economy. Is the Minister aware that the Premier repeatedly threatens to secede and to sue the Federal Government if he cannot dictate his own terms at the Premier's Conference this week? What steps can the Federal Government take to reassure Queenslanders that they cannot rely on the extremist claims of a minority Premier but they can depend on the Prime Minister to fund Queensland fairly? Senator Peter Rae —Can you remember all of that? Senator BUTTON —I am not sure. I am aware of what Senator Reynolds calls the ongoing hostility of the Queensland Premier towards the Commonwealth Government. It appears to be no secret as even I am aware of that. He certainly blames the Commonwealth Government for a lot of matters which are peculiarly within the province of the Queensland Government in respect of Queensland's economic development. I suppose that is one of the things we have to live with in politics. All I am saying is that the Queensland Premier seems to have a somewhat exaggerated approach to his brief. I am also aware of the Queensland Government's threat to secede from the Commonwealth and I have on previous occasions answered questions about that. I think it would not be in the interests of the Queensland people for that to happen, but he may get a majority for such a move in some other States. Insofar as the extremist claims about Federal government funding of Queensland are concerned, they have to be dealt with in the context of a forthcoming Premiers Conference. In the leadup to a Premiers Conference all Premiers tend to make claims which are somewhat exaggerated, but that does not ignore the fact that the Commonwealth Government has to deal with those matters when the Premiers actually meet. In an earlier answer in relation to Queensland Senator Walsh indicated that some of the suggestions made by the Queensland Government and the Premier in their advertising campaign were misconceived. I think it is not unfair to describe them as 'disingenuous'. I repeat that in 1984-85 the per capita payment to Queensland was $1,324, which was 4 per cent higher than the six-State average. Of course, there are particular payments which vary between States for many reasons, including State expenditure priorities and questions such as distance which determine payments in respect of roads. But even in relation to roads, which is a classic example much cited in Queensland, Queensland receives more funds under this program than the State of Victoria, for example, and more on a per capita basis again than the six-State average, which includes the other big States. One can go through a variety of programs and see the same pattern emerging. When the Queensland Premier comes to Canberra at the end of the week for the Premiers Conference he will no doubt seek to justify some of the outrageous claims that have been made. He will have to be better than he has been in his Press advertisements this week. While he may think he can pull the people of Queensland by the nose in respect of these issues, he will have a different task when he comes to Canberra to negotiate at the Premiers Conference. His views, of course, will be taken into account having regard not only to the requirements and interests of other States and the Commonwealth, but also to the facts, and that is an important matter which he will have to get over. Senator KILGARIFF —I direct a question to the Minister for Finance. Is it a fact that the Forward Estimates were prepared on the assumption that there would be no 2 per cent Commonwealth Public Service pay rise? What effect will the 2 per cent pay rise granted by the Australian Conciliation and Arbitration Commission, with the full support of the Government, have on Government outlays? Senator WALSH —The Forward Estimates were prepared on the assumption that there would not be a pay rise, because it had not happened at that stage. This figure is subject to check because I am only going from memory, but I think the effect of the pay rise on full year outlays is of the order of $100m. I will have that checked. Senator JONES —I direct my question to the Minister representing the Treasurer. Has the Minister's attention been drawn to a Press report that the State Government of Queensland could lose most or all of the deposit paid on a contract to purchase a new Lear Fan turbo-jet? Has the Minister also noted that the Premier, as Treasurer, paid a $250,000 deposit on a $2.1m contract to purchase this plane? Is it true, as reported, that the construction company, Lear Fan Aircraft Co., collapsed yesterday? Does the Minister believe that the Treasurer, Sir Johannes Bjelke-Petersen, should be accountable for the loss of outgoing funds which could be allocated to support job creation, welfare or education in Queensland? Senator WALSH —I have seen Press reports along the lines that Senator Jones indicates. Indeed, there is such a report in the Courier-Mail, I believe, of today's date. It appears that soon after the Queensland Premier had had delivered his jet aircraft, which cost the Queensland taxpayers about $8m in 1982, he ordered a Lear Fan turbo-prop aircraft which was to cost another $2.1m and paid a $250,000 deposit on that purchase. It now appears that the Lear Fan Aircraft Co. either has collapsed or is about to collapse in spite of very substantial assistance from the British Government, of the order of $100m. I suppose this action does help to give us a fix on the Queensland Premier's priorities in that, although an advocate of frugality for other governments and other people, he has never been backward in indulging himself, or indeed members of his family, with funds from the Queensland Treasury, which he now controls directly. I fear, though, that there is little that the Commonwealth Government can do about this sort of thing, other than endeavouring to ensure that the people of Queensland know about it, as they are entitled to know. One could only agree with Senator Jones that it would have been better to apply that amount of money to some worthy purpose than the purpose to which it was applied, even if the original intention of the policy had been fulfilled-that is, if the aircraft had actually been purchased. Senator MESSNER —My question is addressed to the Minister representing the Minister for Social Security. It concerns the belated changes to the pension assets test announced last Sunday. What steps is the Government taking to compensate those pensioners who have already disposed of their assets or are in the course of doing so under the rules existing before Sunday's changes? Further, will the Government pay backdated adjustments to pensioners who have had their pensions reduced or taken away since the introduction of the test on 21 March but who are now treated differently under these new rules? Senator GRIMES —The answer to the first question is none. People who were dealt with under the assets test- Senator Peter Rae —'Dealt with' is a good expression, too. Senator GRIMES —The honourable senator can suit himself. I thought that he would wait until the debate this afternoon, when we could deal with him. People who, under the assets test, had assessments made knew all along what the rules were at the time, and they also knew that the conditions under which the administration of the assets test was occurring in rural areas were under constant review. They were reviewed with care. Senator Messner may believe that the changes have been belated. We do not believe that they are belated at all. They are just administrative changes to cope with some of the difficulties that have been brought to our attention-not so much by the Opposition but by people who are more concerned about seeing a fair system than about making political points. People in rural areas, as I pointed out to Senator Walters last night, are treated under the hardship provisions of the assets test far easier than are people who are applying for special benefit, and far easier than those who were applying for special benefits when Senator Chaney and I were Ministers for Social Security. So the people knew. Nothing has received more publicity in recent months than the assets test. The few people who will be assisted by the changes will know about them and will get the benefit of them. There will be very few people whose position will be changed by the review who have not already appealed, because the changes affect primarily the hardship provisions, valuations, and a few people who have given donations to nursing homes. Of pensioners, 97.4 per cent will remain unaffected, as they did before. The 31,000 pensioners who crossed themselves off immediately the assets test was introduced, and did not even bother to fill in a form because they knew that they should not have been getting the pension, will not be affected; nor will those who, with the assistance of their accountants, have had their assets in artificial schemes contrived to get the full pension and full fringe benefits be affected, because they were already picked up. Senator MESSNER —I ask a supplementary question, Mr President. I thank the Minister for his answer, but I want to know specifically whether the assessments for those who have lodged appeals will be backdated to 21 March, and from which date the new rules will apply to those who have not appealed. Senator GRIMES —I think the new administrative procedures applied from Friday, when Mr Howe made his announcement. Senator Messner —Was it Friday or Sunday? Senator GRIMES —It might have been Sunday. I am sorry, I might be two days out. Senator Messner —What about getting it straight? No wonder there is confusion. Senator GRIMES —At least I can lie straight in bed, unlike some of the honourable senators opposite. With regard to the second part of Senator Messner's question relating to people who have already appealed, those who appealed some time ago about the revaluation of their properties will be paid back to the time they applied. Senator Messner —Will they be assessed under the new rules? Senator GRIMES —There are no new rules on the valuation of properties. The properties that were wrongly valued will be valued correctly this time. Senator Messner —Oh, come on. The PRESIDENT —Order! Senator Messner, you have already asked your supplementary question. Senator GRIMES —The difficulty, Mr President, is that this afternoon Senator Messner is having his fifth matter of public importance on the assets test. Senator Sibraa —Seventh. Senator GRIMES —The seventh, I am sorry. The questions he asks are always about a minute number of people; they are not about the 97.4 per cent of pensioners who will not be affected. They are never about the vast majority of pensioners in this country who have no assets, who have no money in the bank, who have no income, and who have been ripped off by the sorts of people who have been picked up by the assets test in this case. Senator Messner spent the time before he came into this Parliament manipulating people's affairs so that they could avoid tax and receive the pension, and he continues to do so in this place. We will treat him with the disrespect he deserves. Senator AULICH —I refer the Minister for Industry, Technology and Commerce to a newspaper report published today which predicts job losses of 4,300 in Tasmania should the Commonwealth Government implement recommendations made in the Commonwealth Grants Commission report. Were any of the Grants Commission members appointed by the current Labor Government? Does today's estimate accord with other estimates made about alleged employment losses in Tasmania? Senator Peter Rae —You just want to see the cuts made. Senator Walters —Why don't you stand up for your State? Senator Peter Rae —That is the same as kicking the dairy farmers. Senator BUTTON —I am sorry that that question has aroused so much parochial ire in the chamber. Senator Lewis —It is a parochial question. Senator BUTTON —It is more than a parochial question because the question of unemployment concerns the Commonwealth Government very much. That is why we have given so much attention to addressing the problem and that is why we have been so relatively successful compared with the previous Government. Let me say that the figure of 2,700, which some report in the Launceston Examiner identifies as being the number of potential disemployed persons as a result of the implementation of the Grants Commission program, was presented in that newspaper on Friday or Saturday of last week. That figure has grown to 4,300 today, according to the front page of that same newspaper. Senator Walters —It is a different report. Senator Watson —It is an independent report. Senator BUTTON —It may be a different report. I have seen the newspaper, and it may well be, as Senator Walters and Senator Watson interject, a different report. In terms of the political purpose of the articles and the concern which articles such as this engender, I draw attention to the two headlines in the newspaper on the respective days. The Grants Commission report and the allocation to be made to each State as a result of revenue-sharing arrangements is a matter for the Premiers Conference, and I can say nothing by way of prejudging the issues and the discussion at that Conference. It is a pity that the Launceston Examiner does not take the same care in dealing with this issue. I was also asked by Senator Aulich whether the members of the Grants Commission were Labor Government employees- Senator Chaney —Appointees. Senator BUTTON —Yes, appointees. Senator Chaney —They are your employees, but not your appointees. Senator BUTTON —I stand corrected on all these technical issues, but the point of Senator Aulich's question was, I suppose, arising from irresponsible allegations that have been made that the members of the Commonwealth Grants Commission are Labor Government appointees and therefore would bring down reports prejudicial to the State of Tasmania. Senator Watson —The report doesn't say anything about that. Senator BUTTON —I did not refer to that newspaper report; I said allegations which may have been made. The fact is that all members of the Grants Commission were appointed by the Fraser Government. They reported to this Government, and the question of what is in their report requires objective analysis, and it should not be influenced by the sort of scuttle-butt that goes on of the kind suggested. Senator TEAGUE —My question is directed to the Leader of the Government in the Senate. I refer to the parliamentary Labor Party's division into at least three factions and to the Cabinet's division into at least four factions, and to the statement which the Minister made this morning about this factionalism in the Australian Labor Party when he said that he found this situation 'boring', despite the considerable concern about this factionalism expressed by others, such as the Minister for Foreign Affairs and the National Secretary of the Party. Accordingly, I ask: While the Minister also said this morning that he is not wishing to provoke any retaliation from powerful faction leaders like Senator Richardson, and noting the Minister's admission of some degree of fear about the power they wield, does the Minister believe that the effectiveness of the Government and public confidence in the Government are being impaired by the existence of such formalised factions? Senator BUTTON —I want to answer this question very truthfully and directly. I was lying in bed at about 7 o'clock this morning contemplating my day, and I thought: 'One thing that is likely to happen to me today, because it has not happened for a week or two, is that I will get an awfully boring question from Senator Teague'. Sure enough that turned out to be right. I tried to head him off on the AM program this morning by saying that a lot of the discussion about factionalism within the Australian Labor Party was pretty boring, and it is. Senator Withers —We love it. Senator BUTTON —I know the Opposition loves it. Senator Chaney —Tell that to Senator Cook. Senator BUTTON —I am telling it to Senator Cook now through this microphone, and anybody else who is concerned. Senator Teague's question has a freshness about it in one respect. He now identifies four factions in the Cabinet, which is upmarket on any previous estimates. There are three factions in the Liberal Party of Australia and five, if not six, in the Australian Democrats; there are no factions at all in the National Party of Australia; which says something about the intellectual capacities of members of that Party and nothing else, and, of course, there are factions in the Australian Labor Party. If the Press had its way by its kind suggestions to all political parties about the degrees of factionalism that exist in those parties, we would all be reduced to the intellectual stature of the National Party because there would be no factions at all. We would all have exactly the same views about every conceivable topic. The point I have made on numerous occasions is that any government, and any political party, will have a diversity of views in the councils of the Party about particular matters. I am saying that it is sometimes boring to hear those views expressed widely in the media about every conceivable topic. I am asked whether this limits the effectiveness of the Government. Those who write that sort of thing are in exactly the same category as the Liberal Party representatives in this Senate who, day after day, ask questions with mock horror about what might happen in 1986 in regard to a particular matter or what might happen to discounting of wages in 1986. Senator Chaney —No, we are interested in 1985. Senator BUTTON —Or in 1985; it does not matter. All sorts of questions are asked in this chamber that commence with the words: 'What might happen if . . . '. As far as I am concerned, I do not propose to oblige the Opposition about what might happen if a certain set of hypothetical circumstances come to fruition. Ultimately, what a government and a political party are judged on is what they do, not what individuals in that government or party happen to say at any time. I think that is the important point which I was seeking to make this morning. I hope that Senator Teague understands it even if nobody else on the other side of the House does. Senator TEAGUE —Mr President, I wish to ask a supplementary question. At 7 o'clock this morning and now the Minister answered only part of the question. The other part of the question was that matter about which the National Secretary of the Party was concerned-that is, the enormous undermining of public confidence in the Government. Does not factionalism answer for the appalling state in which the Government is now in the public opinion polls? Senator BUTTON —No, I think it plays a very limited role in the undermining of confidence in the Government. Basically, I think it is Senator Messner, single-handedly, who has undermined the confidence in the Government because of his persistent references to wine tax and the assets test. Senator CHILDS —My question is directed to the Acting Minister for Veterans' Affairs. Has the new repatriation determining system been fully implemented? Is there any sign that delays in the processing of claims and applications are being reduced? Senator RYAN —It is hoped that, once the system has settled down, it will be possible to achieve an average time taken of 90 days from lodgment of a claim to receipt of a decision by a determining officer. I have indicated to my Department that every effort should be made to achieve this average time by June 1986. Senator Grimes —The Department of Senator Gietzelt. Senator RYAN —I was referring to Senator Gietzelt, Senator Grimes. I indicate this on behalf of Senator Gietzelt. However, given that outstanding claims at the first level of decision totalled over 25,000 when the new system came into effect, it may be some time before this target is achieved. It is hoped that the average time will be reduced at the initial stage of decisions to approximately 150 days by December 1985. For reasons it is not easy to understand there is a substantial increase in claims lodged at the first level of the determining system which is currently running at 38,000 a year. Senator CHANEY —My question, which is addressed to the Leader of the Government in the Senate, follows the answer that he gave to Senator Aulich in which he said that there may have been allegations that Commonwealth Grants Commission members were Labor appointees. Did the Minister simply drag that possibility out of the air or does he have some evidence to suggest that such allegations have been made? Is he suggesting in his answer that there has been political bias on the part of the Grants Commission in the reports that it brought down either recently or earlier? Senator BUTTON —I dragged that possibility out of the air because I was asked whether they were Labor Government appointees or Liberal Government appointees. I dragged it out of the air in my response because I wanted to make it quite clear that I did not understand the point of the question, unless that allegation was floating around somewhere. I did not state that I had heard the allegation myself or anything like that. Senator CHANEY —Mr President, I wish to ask a supplementary question. I take it that the Minister is not suggesting political bias? Senator BUTTON —No, I am not suggesting political bias on behalf of the Grants Commissioners. Senator GILES —Can the Minister for Education comment on the progress of the participation and equity program and the possible effects of the recent decision to extend funding over four years instead of three years as originally intended? Is it fair to describe that program as a phantom education program as suggested by a correspondent in last week's National Times? Senator RYAN —I do not think that a program which to date has been funded by amounts of $77m in 1984 and $82m in 1985 can be described as a phantom program. I have had my attention drawn to the correspondent who wrote about the program in the National Times last weekend. I was gratified to read of the extent of support that there was for this initiative. That correspondent, at least, has seen a great deal of practical effect from the program. The program has been progressing at a very high level of allocation-as I said, $77m in 1984 and over $82m this year. The Government has decided to spread out the remaining funds, which initially were going to be spent in 1986 but which will be spent also in 1987; that is, $41m will be spent in each of the years 1986 and 1987. By any reckoning, these are substantial sums of money which will enable substantial progress to continue to be made towards the objectives of increased participation and increased equity in education. Senator LAJOVIC —My question is addressed to the Minister for Education. Is it a fact that the Macquarie University in Sydney will no longer receive an earmarked grant from the Commonwealth Tertiary Education Commission for the triennium 1985-87 for its School of Slavonic Studies, despite the fact that the student numbers are well above the target figures set in 1982, at the time when the School was established? Can the Minister inform the Senate why such an important and, as far as I know, unique development in the study of cultures and languages of a considerable part of the Australian population will not be supported by the Labor Government? Senator RYAN —I will have to seek detailed information to respond to Senator Lajovic's question. I am not aware that a decision has been taken to discontinue that program. I point out to Senator Lajovic that decisions about particular courses within universities are usually taken by the councils of those universities. When decisions are taken about overall levels of expenditure to universities within a State, the decision makers take into account advice from the higher education co-ordinating body of that State. Final decisions about allocations of tertiary grants are taken by the Tertiary Education Commission. That series of decision making processes, none of which I have direct involvement in, can result in programs being set up or discontinued. I simply point that out to explain why at this point I cannot answer in detail Senator Lajovic's questions. Certainly, I have taken no such decision. I do not know whether such a decision has been taken, but I will seek the information for Senator Lajovic from the Tertiary Education Commission. Senator ZAKHAROV —Is the Minister for Community Services in a position to give details to child care centres and centre users as to how the current changes in child care subsidies will affect their budgets? Senator GRIMES —No, I cannot give exact details to each child care centre. Senator Messner —Not even to a dorothy dixer. Senator GRIMES —I can say that it will affect them very little. I hear Senator Messner's interjection; but I can assure centres that there will not be a year of consolidation and review like we had under Senator Chaney, in which no one was funded, no one received any more funding and no new child care services were delivered. We will maintain the high standard of Commonwealth funded child care which we have in this country, maintain the system whereby people have access to children's services across a whole range and maintain our determination to increase the number of child care places. Since we came to government we have increased the number of places by 60 per cent. We will continue to increase the number of places by at least 20,000 in the next three years. In the funding of children's services we have a very generous fee relief system, but there are some inequities in it. For instance, families earning $50,000 or more a year pay the same subsidised fee in child care centres as families earning $28,000 a year. I do not believe that is an equitable system. All people receive up to $30 or $35 by way of an operational subsidy, regardless of income. What we intend to do by these small savings off the Forward Estimates is to rejig the fee relief system and the operational subsidy system, so those who are on high incomes will have to pay a bit more of their share. But we continue with our determination to build 20,000 new places in the next few years. The changes that we are to make will not be introduced until 1 January. This will give us an opportunity to be sure that we do not make such changes, as has happened in the past, where the very wealthy are charged such high fees that they move right out of the system and the system is left as a second grade system just for the low income people. We want to maintain a balance of people across all groups, with our preference that particular disadvantaged groups will get priority of access. On looking at children's services in this country I have found that there has been some anxiety in that people who are extremely well off have been paying too little. There has been a general appreciation that the number of services has increased and the fee relief system has been very generous. I know that if a government suggests cutting $1m or $2m off any program there will be people who protest and organise themselves immediately because they fear that there will be a general slashing of funds across the board. I dare say those are the sorts of people who protested against the Prime Minister last night. Despite his and this Government's record in the last two years, they were willing to stand outside the function he was at last night and describe him as Judas and all sorts of things. The answer is that the children's services program will continue. It will expand. The changes to individuals in child care centres will not be great. Certainly, some people on higher incomes will have to pay a little bit more. By the time we have finished this term of government we will have more than doubled the number of Commonwealth funded child care places in this country in less than two full terms of government. That is a record of which I think we can be proud. Senator HARRADINE(Tasmania) —By leave-Mr President, I claim to have been misrepresented by a Press report today. Today the Australian Associated Press put up a story which said that the Social Security Legislation Amendment Bill 1985 was passed without opposition. I have received irate phone calls about that. I would like to make it clear to all concerned that anybody who had heard the debate last night at the second reading stage and had read the transcript would have seen that the measure was strongly opposed by me and, I believe, by others as well. This morning we considered the Bill in Committee. At the Committee stage one adopts a slightly different approach. As you would appreciate, Mr President, in Committee one cannot deal with the matters in the way that one can in a second reading debate. There was a quieter consideration of the matter this morning. Nevertheless, I do not know what one needs to do in this place to show that one opposes legislation-whether one stands on one's head on the table- Senator Peter Baume —Have your vote recorded. Senator HARRADINE —It was pointless to call for a division this morning as the Opposition had made it clear that it was a Budget Bill and that it would not oppose the Bill. I therefore take up the suggestion made by Senator Baume and seek leave to have my vote recorded in opposition to clauses 5 and 6 of the Social Security Legislation Amendment Bill 1985. Leave granted. The PRESIDENT —I have received a letter from Senator Messner proposing that a matter of public importance be submitted to the Senate for discussion, namely: The failure of the Government to make other than cosmetic changes to its harsh and inequitable pensions assets test. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator MESSNER(South Australia)(3.06) —This very important matter of public importance apparently has the interest of everybody in Australia, including the Opposition, but certainly not of the Government. During Question Time today the Minister for Community Services (Senator Grimes) said: 'Look, this boring subject has been brought up seven times in the Senate by the Opposition'. That is only a little more than once for each time that the Government has changed its mind over the assets test since it was first introduced in August 1983. There is only one reason why this absolutely, may I say, obstinate but certainly stupid Government has maintained the so-called assets test. The Hawke Government appears to be determined to hold on to a fragment of the original test to maintain the myth that it is a government which can take hard decisions. That is the only explanation that one can put upon the mess that it has developed, the muddle that it has perpetrated on the Australian people since August 1983, the confusion in the minds of Ministers as evidenced even here today by the Minister for Community Services, who in Question Time could not even tell us the date from which the new provisions announced last Sunday would apply. Those are the latest conditions and he, the Minister representing the Minister for social insecurity, could not tell us when those provisions would begin to apply. How can the Government expect the people of Australia to understand the assets test when the Minister cannot even tell them, when questioned, when the provisions will begin to apply? Let us just consider what has occurred since August 1983. First of all, it was claimed that the original assets test would bring in some $320m. In fact, the evidence now is that some $80m will be brought in by the assets test. That is the measurement of the changes that have occurred over those 18 or 20 months. But against that the Government has spent $65m to set up the scheme and has employed an extra 1,500 public servants to do the work. The cost of running the assets test is of the order of $30m a year. Is it any wonder that the people of Australia are pressing the Opposition to discuss this matter even more and more urgently as time goes by? Whether the Government has in mind any further changes to the assets test, God only knows. At this time all we can suggest is that the Government must have some hidden agenda for the assets test to which we, and certainly the Australian people, have not been party. As we said during the election campaign, we see the assets test on pensions as only part of, or the first foot in the door towards, the introduction of death duties, a capital gains tax or both. Let us consider very quickly the history of the assets test. Firstly, there was the Hawke assets test mark 1, announced on 23 August 1983. Its features were: A deemed income rate of 10 per cent, and exemptions for pensioners' homes, two motor cars, personal effects such as jewellery, furniture, antiques and paintings on the wall, caravans, boats and so on. Then, in November of that year, we saw the Hawke assets test mark 2, and the introduction of a lifestyle package that included a $30,000 exemption for things such as holiday homes, bush blocks, boats and so on. Hawke assets test mark 3 followed in January 1984 when we saw the introduction of certain provisions to alleviate hardship for the self-employed and for farmers. Of course, that was most inadequate as was demonstrated later as the result of persistent pushing and questioning on the part of the Liberal Party and the National Party of Australia. During this time a growing tide of public opinion was rising against the assets test and it was only in a flash of inspiration that the silver-haired messiah, on his way back from Japan by air in February 1984, suddenly decided that the assets test was not good for people in Australia and that he would do something about it. He even admitted the error of all his ways by saying: It has become clear that there is continuing and justifiable uncertainty about whether the Government has yet found the best way to implement legislation on an assets test in a fair and equitable way. I can tell honourable senators that the people of Australia still have that opinion. It is 15 months on from that flash of brilliance of the Prime Minister (Mr Hawke). I would like to bring home to those opposite who are complaining about the assets test within Caucus or within their own factions, or wherever they meet in their mouseholes, that, had the Opposition not opposed this legislation in September 1983, the original assets test would have been law by now. The irony of that, of course, is that, had the original legislation been passed, the Labor Government would probably have been swept from office in the election last December. Because of persistent pressure from the Opposition there has been a great deal of modification of the assets test, to the point that it has reached today. Back in May 1984 the Government decided to appoint Professor Fred Gruen to investigate what kind of assets test should be introduced for Australians. He reported at the end of May 1984 and his main recommendation was that the family home should be included in the assets test. Of course, the Government did not accept that, so we had the Hawke assets test mark 4. Senator Grimes and the Prime Minister, in joint statements, introduced then what was called the modified tall poppies test. This has now been in existence for about a year with growing concern being expressed in the community about the unfair and discriminatory impact, especially on small businessmen and farmers, and those in rural situations. The community has been bringing forward cases of discrimination. There have been protest meetings all over the country attended by hundreds, in some cases thousands, of people, all protesting about the hardship caused by this law. The media is constantly bringing to our attention cases of individuals who have been unjustly treated, which have been most pertinent, poignant and in every way absolutely descriptive of the hardship that this Hawke Labor Government has wrought on the community. The Opposition's position has been clear from day one. We oppose the assets test. We stand for the repeal of the legislation upon being elected to government. Even within the Government's back bench, 22 rural Labor back benchers are concerned; and concerned they might be because surely they will lose their seats at the next election as a result of the assets test and other lack of rural concern by this Government. Let me put to honourable senators the words of Mr Barry Cunningham, the chairman of the Caucus committee that investigated the assets test. He holds the seat of McMillan in Victoria. He was quoted in the Border Watch, that famous journal in the south-east of South Australia, saying that-- Senator Colston —Senator McLaren's bible. Senator MESSNER —Yes, former Senator McLaren knew that paper very well. Mr Cunningham claimed that the farmers had been diddling the tax system for years. This kind of theme has been picked up in the last day or so by no less a person than Mr Keating, the Treasurer. In seeking to explain away his own mistakes in estimating the Budget revenue for the current financial year, he blames it all on the farmers. He claims that they are tax evaders and tax avoiders; that they are trying to manipulate their incomes to avoid taxation. Of course, this is typical of the attitude of this Government to the situation of rural people. On a television program on Sunday we heard the National Secretary of the Australian Labor Party, Mr Bob McMullan, saying that the Labor Party is perceived as being anti the aged in the community and that the Party will have to overcome that image in order to survive electorally. We come to the decision of last Sunday, which was, of course, the Hawke assets test mark 5. In the latest changes we get a revision of the pension pay as you die scheme. We will have a minimum of $100,000. That is a good step forward. I believe that in that area the Government has done something which is of great value to people. The second point is the doubling of the amounts with regard to the hardship provision. That decision is certainly not adequate. It is a puny attempt to redress the problems in that area. Senator Teague —A few thousand dollars. Senator MESSNER —As my colleague Senator Teague says, it is a very small amount which will be of very little value. The next point is that people who have lived on a property for 20 years will not be expected to sell that property. I will return to that point because I believe that to be a fundamental mistake in the Government's thinking. There is to be a recognition of the payment of forgone wages in determining the value of a property. Again, that is a good point, but no guidelines have been provided. Nobody knows how that will affect pensioners. Consequently, we cannot form a valued opinion about that. I will come back to that point in a moment. There will be certain other cosmetic changes such as the change to the deemed rate of income derived from property. There is to be a process of speeding up the valuations, reviews and appeals under the present assets test provisions. Let us consider some of the difficulties that come immediately to mind as a result of the Government's decision. Consider the 20-year rule. The Government says that if a person has been on a property for 20 years he will not have to sell the property; the Government will pay him the pension anyway. I hope that is the correct interpretation of what Mr Howe, the Minister for Social Security, was saying on Sunday. We are certainly left in the dark about some aspects of that. Let me put to honourable senators what I have found to be the cause of the greatest hardship in the rural community. People who have inherited a property face very substantial death duties under the provisions of the laws that have applied in this country since before 1978. In many cases, those duties could amount to hundreds of thousands of dollars. Those people may be forced to sell the property in order to pay the duties and then move on to another property. Many of them will not be helped by the Government's 20-year rule. Yet that is the very group of people who will suffer most. Those who will be affected are those who have been hit most seriously by death duties in the past and who have reduced rural holdings in the way people have been complaining about for years. So the Government has not helped them in any way. In fact, that is the kind of situation in which the Government's needs based principle, or whatever it is the Government professes, just falls apart at the seams. Senator Coates —You have not read the Press release. Senator MESSNER —I remind Senator Coates that there are many other examples. One might consider compulsory acquisition as being a problem for people with regard to the Government's 20-year rule. Let us look at the matter of the forgone wages. Certainly, this is a most valuable point. Where a son has inherited a property and has worked on that property for many years with little or no wages, those wages are to be calculated and taken into account in assessing the value of the property. The Government does not tell us whether that is to be done in 1985 money values or the money values that applied in the past. We do not know what effect it will have in real terms. However, the most important question is whether, that money having been declared to the Department of Social Security as wages forgone, those people can expect a bill from the Australian Taxation Office for the tax that has not been paid in respect of those wages. Senator Grimes —What a wondrous imagination. Senator MESSNER —The trouble with the Minister is that he never bothers to think through these questions and find out the answers before he blunders into this place. That is why he is left with egg on his face in regard to the assets test and has been for the last two years. He fails to appreciate the problems involved with the assets test. We need an assurance from the Government that the tax that might be charged by the Taxation Office will not so reduce the amount of the valuation as to put people back into the same position they were in before the announcement the other day. We need to know how many extra staff are to be employed by the Department to speed up the review process for valuations and appeals and how quickly people can have their cases heard. Again, we had confusion about this matter from the Minister at Question Time this afternoon. There was no clear indication as to where people stand in relation to appeals. All of this adds up to the fact that the assets test as it is now, irrespective of the various changes made to it over the last two years, is virtually the same as it was. It is different only in that it is creating new problems, new anomalies and new difficulties for people. The basic question still remains as far as rural people are concerned, and I do not know how many more times we have to repeat this to the Government to get it to see the point. A person who lives in the city and who may have a house worth $200,000 and $50,000 in other assets can get the pension, but a farmer who has a house worth $50,000 and a farm worth $200,000-in other words, in both cases there is exactly the same total value of assets-cannot get the pension. Why is that? Senator Coates —You would agree with including the family home? Senator MESSNER —No. Senator Coates misses the point entirely, as he always does. The point is, as we said right from the outset, that the assets test is unworkable, illogical, and does not work in favour of people. I do not know why Senator Coates cannot see this. He is obviously tied into some great, obstinate point of view. The Government says that it has a great deal of money coming from the assets test with which it can help the needy. Let us see how the Government is to help the needy. It cannot raise the pension to 25 per cent of average weekly earnings without it costing more than $1 billion. It will get a puny $80m out of the assets test. On a television program this morning the Minister for Social Security said: 'We have the beautiful home and community care program. That will be a revolution. It will change everything'. What has the Government done? One of the greatest election tricks of all time took place during the election campaign last year. The Government said that it was going to spend $300m on the home and community care program, but we find, under questioning, that only an extra $10m is going into that program. That is the sort of trick this Government has been perpetrating upon the people. The Government is now trying to switch the argument to what we are doing about things such as the home and community care program. That has caused only disillusionment in the public mind already. Obviously, this Government has no idea of what it intends to do. Let me turn briefly to the role of the Australian Democrats in this situation. Many times the Liberals and the National Party have brought forward Bills in both the House of Representatives and the Senate to get rid of the assets test. We looked to the Democrats to support us. They have let us down on every occasion. Consistently, all the way they have opposed our trying to get rid of the assets test. Mr Acting Deputy President, you would know that in your State of Queensland Senator Macklin is going around claiming that the Democrats have been trying to get rid of the assets test time and time again. Before the assets test was voted upon in the Senate, Senator Macklin said to the pensioner groups of Queensland: 'I am not going to support an assets test'. What happened when the vote was taken in here? He would not even come into the chamber and vote. He stayed out. He would not vote against the legislation and he would not vote for it. That is what sort of courage he has. You consider the case of Senator Jack Evans in Western Australia, who- The ACTING DEPUTY PRESIDENT(Senator Jones) —Order! Senator Messner, will you address your remarks through the Chair. Senator MESSNER —I thought I was, very directly, Mr Acting Deputy President. I make the point that in a similar situation in Western Australia Senator Evans made the point that he believed that the Liberals had let him down in seeking changes. As we all know, of course, the Democrats never put forward any amendments in public to change the legislation. The Government has failed again with the assets test. It will continue to fail until it realises that it is wrong. It is wrong in principle because the assets test can never be established in such a way that it is not discriminatory and does not affect people unfairly and inequitably. The Labor Government's assets test does discriminate against people and for that reason it should be abolished. The sooner the Government realises that, the better. Senator GRIMES(Tasmania-Minister for Community Services)(3.26) —We are dealing yet again with another matter of public importance put forward by Senator Messner on the assets test. Today's wording is: The failure of the Government to make other than cosmetic changes to its harsh and inequitable pensions assets test. It seems to me that in times which everyone admits are economically difficult and in times when great changes are being made to the economy, it is very surprising that once a week there seems to be an urgent desire by the Opposition to raise these alleged matters of public importance and perhaps an even more urgent desire by Senator Messner to get up here and have his 20 minutes worth on the assets test and to throw in a few other things to pad out the time, as he did today, like giving the home and community care service a forehander and giving Senator Haines, Senator Macklin and Senator Jack Evans a backhander. He gradually filled out his time with his usual emotive and nit-picking speech which I am afraid we are all getting very used to and which, to use the expression of the Leader of the Government in the Senate, Senator Button, we are all getting very bored with. To take up Senator Messner's final point, that Senator Macklin said one thing and did another and that Senator Evans is alleged to have done something which he said he did not do, I remind Senator Messner of his good friend and supporter, Mr Alex Downer. What seat is he in? He was one of the most vocal supporters of the assets test ever seen on television or heard on radio anywhere in this country, but he was suddenly transformed in order to get pre-selection for the Liberal Party of Australia. There are others, like Mr Julian Beale in Victoria, who make no bones about the fact that they support an assets test. We wonder why Mr Howard is so silent, why we never hear anything from him. We know that Mr Howard supports an assets test. We know that in the past Senator Chaney and Mr Peacock and a whole swag of people on the other side have supported the needs based principle. In a very articulate speech in this place which I have quoted several times, Senator Chaney demonstrated his belief in the need for an assets test at that time. Why do these people on the other side of politics take this view? Senator Teague —Never me. Senator GRIMES —Never Senator Teague! Never would Senator Teague believe such a thing! The reason they take this view is that they believe it is quite simply unfair and inequitable that someone who retires from the New South Wales Government railways and gets a small weekly superannuation payment, someone who gets a small income from investment, someone who gets a small benefit from someone who has left it to him or someone who earns a small amount of income in his spare time, should be income tested, whereas someone who has the capacity to put his worldly wealth into what is termed assets or capital in this country and gets a gain from it and is able to live on it, should be able to get the full pension and the full fringe benefits. That is why they believe in an assets test. That is why they believe it is quite unfair to penalise people because they receive a small income and let people go scot-free if they have large assets from which they could acquire income and, indeed, from which they sometimes do. That is why the assets test was introduced. Senator Messner's first complaint about the assets test, which I note he did not bring up today for a change, was that it is an invasion of people's privacy; that in fact it is absolutely outrageous to ask people what their assets are but perfectly legal, respectable and all right to demand to know from people, as governments of all persuasions in this country have done since before the Second World War, what their income is. He says it is okay to ask people what their income is but that it is wrong to ask people what their assets are. The simple fact of the matter is that it is now known very clearly that a considerable number of people, although a very small proportion of pensioners, were in fact so manipulating their affairs as to defeat the letter and the spirit of the law in this country in order to get a full pension and full fringe benefits despite the fact they were very much better off than most other people in our community. They were saying to people on low incomes, perhaps with children: 'You should contribute extra income for me through your taxation despite the fact that I am very much better off than you. They are saying to the vast majority of pensioners in this community who have no assets apart from their own home, if they are lucky, and who have no income apart from the pension: 'Your pension should be held down so that I can get the same pension as you. I am the same age as you and I deserve a pension because I have lived in this country all my life'. This is the usual sort of argument we hear. Both sides of politics in this community believe in a needs based social security system. If we have a needs based social security system we inevitably must have means tests or incomes tests. If we have incomes tests without assets tests and means tests they are inevitably unfair, as the system was. Of course, we knew that if we changed the system and introduced an assets test there would be great political furore. We knew it would be easily misrepresented. We knew that the sort of scare tactics we have heard from Senator Messner day after day and week after week in this place would be used. We accepted the fact that in order to do something in this area we had to do the right thing; we had to make decisions because they were right for the country and right for the people of this country and we had to cop the political flack for it. That is what we have done. That is the distinction between this Government and the Government which preceded us. I repeat that 97.4 per cent of pensioners in this country are not concerned about the assets test at all because the assets test does not concern them. In the short time the assets test has been operating there has come to light-I am not going to list them again-a large number of cases of people who have assets, in some cases amounting to hundreds of thousands of dollars, which had not been used to produce a reasonable income but in many cases deliberately manipulated in order for them to get pensions and fringe benefits. I remember the highest level of assets which I saw involved a person who had $580,000-odd in a cheque account. That was done through ignorance and through stupidity. We had many examples-some of them drawn to our attention by members of the Institute of Chartered Accountants in Australia-of accountants who had deliberately manipulated people's affairs so they could get into the taxation system and the social security system. Even worse, in some cases accountants themselves were the recipients of interest free loans from such pensioners so that they could then have the advantage of manipulating people's assets, and salving their consciences for doing that in some way because they knew that the people would get the pension and fringe benefits and everything would be all right. Last time I spoke on this matter in this chamber I pointed out that at that time 12 millionaires were receiving a full pension and full fringe benefits in this country. I am told that the figure is now 34. A total of 160 people out of 31,000 had their pensions cancelled because their assets were too high and most of them cancelled themselves out. They said 'Look, we know our assets are too high. We know we should not have a pension', and they cancelled themselves out. Another 23,562 had their pensions reduced and 13,498 lost their fringe benefits. Only 2.7 per cent of pensioners were affected. It is not an issue to the vast majority. This is because of the extremely generous limits which are indexed annually. These are-I repeat again-$70,000 plus a home for a single person or $120,000 if no home is owned. For a married couple the corresponding figures are $100,000 and $150,000. To have no entitlement to a pension a person must have assets, apart from his home, of $117,250, or $179,000 if married. Where a home is not owned, the figures are $167,000 and $229,000 respectively. Those figures may not mean much to Senator Messner or Senator Teague, who are representatives of wealth in this country, but they are beyond the dreams of the vast majority of pensioners in this country who do not get a very large income. Senator Messner —But they are paper assets. Senator GRIMES —Senator Messner says that they are paper assets. If they are worth that much they can be sold and produce that amount. The honourable senator knows that. We are not only talking about farmers; we are talking about wealth beyond the dreams of the average pensioner in this community. Senator Messner does not say 'We will abolish the assets test for farmers'; he says: 'We will abolish the assets test for everybody. We will let the 12 or 34 millionaires get the full pension and fringe benefit'. Senator Teague nods, indicating that that is fine. Senator Teague —Because there are only 34. Just for the sake of 34 you have all that apparatus. Senator GRIMES —It is not only for the sake of 34; it is for the sake of $150m of revenue each year. Senator Teague —You are talking about millionaires. Senator GRIMES —I am talking about $150m of revenue each year. If Senator Teague does not think that is much money, all I can say is that he has not been in a Budget Cabinet of any political party in Australia trying to make the books of this country balance. We have always said, and I have said in this place repeatedly, that the biggest and most difficult area in applying an assets test in this country is the rural area. It is not only because, in Senator Messner's words, these people own properties worth large sums of money which are only of paper value. If they are only of paper value there would not be the concern there is now, because they are of much more than paper value to the people to whom they are going to be left. They are of great sentimental and personal value to the people who are living on them and, in many cases, who have worked on them all their lives. They are of much more value to those who are waiting at the other end of the line for those farms to be passed on to them, to inherit them and get the benefits. We are talking about an assets test which affects only 2.7 per cent of pensioners, and which gains for the revenue of this country $150m a year-a significant amount of money. Of that 2.7 per cent, a small number of people are very difficult to fit into the assets test. That is why we said we would monitor and change it. Yet those people are allegedly the source of the debates of Senator Teague, Senator Messner and others who we hear in this place and who cause so much excitement. Why is that so? It is so, first of all, in Senator Messner's case, because he cannot help himself. As I said in Question Time, before he became a member of this place he spent his time fixing up people's books and accounts so that they could avoid tax and get pensions and things like that, and he cannot stop going on the way he is now. Secondly, those people are a politically attractive group to people such as Senator Messner and Senator Teague because those senators can get up here and tug at the heart strings in a way they cannot do about some of the other people they are trying to protect, such as those they tried to protect when they voted against the legislation which would have got into the tax evaders in this country. In that case honourable senators opposite threw away $700m of income. It always fascinates me that honourable senators on the other side of the chamber say: 'You've got to cut the Budget; you've got to cut government expenditure; you've got to cut waste in this community'. Yet they are perfectly happy to come here and advocate wiping out $150m worth of revenue by wiping out the assets test. They vote to exclude $700m from the revenue through bottom of the harbour legislation. They do this because, in the second case, that is where the support comes from and, in the first case, one can get plenty of heart strings and plenty of bleating from the pseudo-Christian moralists who sit on the other side. Senator Teague —Both of them are very unfair. Senator GRIMES —What is more unfair than someone with assets worth $500,000-I pluck a figure out of the air-getting a full pension and full fringe benefits when someone with a weekly income of $100-odd, or less, loses his fringe benefits and most of his pension? Where is the justice in that situation? Where is the fairness in that situation? There is no justice or equity in that sort of situation. However, Senator Teague will always take the attitude: These things happen, but to be really fair we have to look after those people because they have acquired all of those assets, they are worth looking after, we do not want to be unjust to them, and the person with $500,000 worth of assets may wonder where his next meal is coming from. It is a strange sort of morality, I suggest-- Senator Teague —Do you want them to squander the assets? Do you want them to give them away? Senator GRIMES —I do not want those people to squander their assets. I want someone who has $500,000 worth of assets to provide himself with an income from those assets which is higher than the pension. Why not ask him to do that? If he will not do that why should the ordinary taxpayer in the community-not Senator Teague and I-be propping up such a person? This is the situation which we have been trying to get over, and we have got over it. I am not going to go through the details of the changes that the Minister for Social Security, Mr Howe, announced on Sunday. Senator Teague —They are too many. Senator GRIMES —They are not too many; there are only six of them. I will comment about two of the things Senator Messner said here today. The hardship provisions have been increased so that people can come under consideration if they have more than $6,000 if they are single or $10,000 if they are married. Senator Messner told us that that was outrageous and unfair. We provide in this country a special benefit-it is at the same level as the pension-for people who are in great need who do not get into the system, who fall out of it as it exists now. We have provided it for years. It has been administered by Labor governments and Liberal governments. If one has more than $300 in the bank one cannot get a special benefit. I have never heard Senator Messner bleat about that-either in government or in opposition. Senator Haines —Wrong end of the spectrum for him. Senator GRIMES —Yes, it is the wrong end of the spectrum to complain about. In Queensland, that great and glorious State of Queensland, where the National Party complains about the vicious assets test, State community care services are provided. The Queensland Government provides aids for the disabled and other community care services. My colleague Senator Colston wrote to Mr Austin, the Minister for Health in Queensland, and asked what the income test was on these benefits. Mr Austin wrote back and said: 'No, we cannot tell you. We keep it a secret. If we told you people would start to manipulate their affairs so they could get the community care services'. So we found out what the test was. If one has more than $5,000 worth of assets in Queensland one does not get any services from the Queensland Government. The gist of all that is this: Everyone knows why the assets test was introduced; everyone knows that it will not affect most people; everyone knows that it will gain us $150m plus in revenue as the years go by; everyone knows that we had a system which was basically unfair and inequitable and everyone knows that what the Opposition is about is desperately casting around for something to give it some headlines. Of all the issues in this country, this seems to be the only one that Opposition members can repeatedly talk about on matters of public importance in the Senate. It may provide an interesting afternoon for some; it certainly provides an easy afternoon for some of us, but it is a pity that we are not doing something more substantial for the good of this country. Senator HAINES(South Australia)(3.47) —Anybody listening to Senator Messner earlier today would be forgiven for thinking that no one other than he had ever complained in the years since the Labor Government first took office about the various assets test plans that it has thrown up before us. In fact, I recall-and I am sure the Minister for Community Services, Senator Grimes, recalls-that I confronted him in the corridor of this place the day after the original announcement was made in 1983. In fact, I followed him into his office and, with my voice raised slightly, I complained about the list of anomalies that we had come up with in a couple of hours thinking about that first announcement. These anomalies included holiday houses, lifestyle packages and all sorts of other things that would make the original test highly inequitable. It was not just the official Opposition's complaints about that 1983 package that caused the about-face by the Prime Minister (Mr Hawke) in February of the following year; it was the combined outcry from all of us who felt that that package would significantly and inequitably affect a large section of the population. Nor has it only been Senator Messner in the last few months who has raised the problems of anomalies in this assets test legislation. Again it was I and not Senator Messner who raised the problem facing some people who were living in aged persons cottages. That anomaly was raised by me in this place in the first week the Parliament sat following the election. Senator Messner does not have a monopoly of concern about people in the community who are affected by this legislation. He attempts valiantly to give that impression and in doing so he flies in the face of the fact that a large number of people in his own political party support, and have said they support, assets test legislation. In this matter of public importance before us today Senator Messner claims that the test is harsh and inequitable. I presume that that means that he thinks that any system which applies a means test should be equitable. The previous test, of course, was not equitable; it affected only those people who were income earners. It did not affect another large section of the population. In fact, some people who are complaining about the effect of the current legislation on farmers are not being particularly equitable in their complaints either. I have a transcript of an Australian Broadcasting Corporation program which interviewed a number of farmers. One farmer complained that he and his wife had retired to the coast on the proceeds of a cashed in insurance policy but they have now lost their only source of income, namely, the pension, because they still own several hundred acres of land on which their son and daughter-in-law live. I remind honourable senators that this applies equally to people who retire to the coast but who have a family home in the city, even if that home is lived in by members of the family. It also applies in reverse if they live in a home in the city and have a holiday home on the coast that they let some member of their family live in. So if we are talking about equity we ought to talk about equity right across the range and not limit it just to people in rural areas. Senator Grimes pointed out in his speech that there is a strange form of schizophrenia operating in Senator Messner's mind with regard to who should and should not have access to certain information about people in this country. As he pointed out, it is apparently all right, as far as members of the Liberal Party of Australia are concerned, that people should have to declare their income, but it becomes strangely wrong when they have to declare details of their assets. I have memories, as I am sure many people in the community do, of the way in which officers of the Department of Social Security behaved under the previous Liberal Government over the cohabitation rule that then applied. It was fondly known around the traps as the size 10 thong and bed sniffing brigade, which may not have been a very delicate way of putting it but which was accurate enough. It describes exactly what the purpose of visits to people on pensions and benefits was all about. Following Senator Walters's comments last night, Senator Messner took an opportunity to have a swipe at Senator Macklin, who deliberately and quite clearly abstained from voting when the first assets test legislation was brought before us. He did so in honouring a pledge to the pensioners of Queensland that he would not support the legislation. Indeed, in abstaining he did not support the legislation. Any other criticism is pure sophistry but it pales into insignificance when we consider the number of occasions on which Liberal members and senators have cried buckets of blood over the damage a piece of legislation is likely to do to the community and then voted for it. I remind the Senate that on 10 separate occasions this year the Liberal Opposition cuddled up with the Australian Labor Party Government in support of legislation which was demonstrably damaging to people that it classifies as its constituents. A number of primary industry levy Bills last year, the wine sales tax legislation, superannuation legislation and tax changes were all cried out against by Liberal members and senators but voted for when the Australian Democrats called for divisions. What happened? We were then accused of grandstanding. It seems to me that grandstanding is defined according to the number of people who do it. If only six, seven or eight do it, it is grandstanding, but if 30 do it, it is a matter of deep principle. The Liberals may believe that but I can tell them, from the telegrams that we have received today over their appalling behaviour last night in relation to the Repatriation Legislation Amendment Bill, that their little bit of grandstanding has gone down very badly indeed with the veterans in this community, many of whom, I remind honourable senators, live in rural areas. They are soldier settlers. They have been disowned by the Liberal Party and the National Party of Australia, which colluded quite clearly with the Labor Government yesterday, after trying to do it last Thursday night, and sold those veterans down the drain by voting to bring into operation the Repatriation Legislation Amendment Bill, which will have a dramatic and possibly tragic effect on many veterans in this country, some of whom, I repeat, are soldier settlers, the very farmers that Senator Messner is allegedly concerned for in the matter before us today. Of course, these soldier settlers again may be on the wrong end of the economic spectrum. Perhaps it is only the farmers who own very large tracts of land and who have been caught by this assets test, who complain that they were not allowed to rearrange their assets in order to get out of the effects of this legislation, that Senator Messner is concerned about. The Government, under pressure from senators and members not only from the Australian Democrats and the Liberal and National parties but also from within its own ranks, has been forced to alter the manner in which it administers the assets test. It has altered only the manner in which it administers the test. There is no legislative requirement here; it is purely a matter, as we have said all along, of administrative determination. In doing so the Government has made some quite significant changes which will correct or mitigate most of the problems facing people on farms. According to the Australian, the seven-point plan has made administrative changes in five main areas-the pensions loans scheme, the transfer of assets, the hardship provisions, the appeals review process and accommodation for the aged, the last of which does not seem to have made it into Senator Messner's motion. Among the changes, interest under the pension loans scheme, which allows people to receive pensions which are later repaid, has been reduced from 13 per cent to 10 per cent. The loans scheme will also be available for income support during periods of financial readjustment due to the assets test. The new arrangements include doubling the amount of available funds a pensioner might have and still be considered to be in hardship. Furthermore, the Department of Social Security will accept that a pensioner will not have to sell a farm or large building block if he or she has lived on the property or has been a farmer for 20 years. If a close relative has been working the property for 10 years and relies on it for a living the Department will accept that the pensioner could not sell the property. Farm transfer provisions have been changed so that where a pensioner farmer has legally transferred a property to a close relative the value of the relative's contribution, such as forgone wages, will be deducted from the property value. Finally, the income that could be expected from leasing a property is expected to be halved to 2 1/2 per cent of the property value, without taking into account the house and home paddock. The Liberals have come in here today showing unmitigated gall in carping even further about this matter. Clearly, they do not care that their demented attempts to return to the old income-only system would cost Consolidated Revenue at least $100m a year and at the same time return us to a highly selective, inequitable and anomalous income-only test. I am tired of the double standards applied by members of the Opposition, on the one hand refusing to join us in voting against things such as the wine sales tax legislation, Bills to increase primary industry levies and the repatriation legislation because, they say, they are money or Budget Bills and therefore somehow sacrosanct, while on the other hand being prepared to make political capital when the Government tries to save $100m by introducing equity into pension eligibility. Their behaviour is pathetic and does no credit to the Parliament. Indeed, I suggest that behaviour such as we have seen from the Opposition in the past few months brings the tone of this place to an all time low. Anybody who wants to check the statistics on when the Liberals have voted with the Government in the last year or so should do so, because it is an extremely interesting exercise. It is almost as interesting as the spectacle that we were treated to on AM this morning and again on the 11 AM program with Senator Grimes and Senator Chaney doing a tweedledum and tweedledee act about the repatriation legislation, jointly holding the knife that has stabbed hundreds of veterans in the back. It was a nauseating display and I hope that we do not have to see too much more of it. The Opposition talks about cosmetic changes to the assets test. I wonder, then, what Opposition senators call what they did yesterday in colluding with the Government over the repatriation legislation. There is nothing more cosmetic than the attempt they made yesterday to postpone until the Budget session further discussion on that legislation. I ask them now: What will they do when the repatriation legislation is finalised, when the sunset provision runs out? Will they introduce another of their useless repeal Bills in this place and then try to convince the veterans, as they have tried to convince farmers, that somehow repealing the legislation in the Senate would make the Act inoperative? I am not quite sure that they have even thought that far ahead, or whether they have thought of it at all. For a group of people who constantly complain about Australian Democrats grandstanding, they have not done too badly in the last little while in doing a bit of that themselves. I think it is about time they realised that all elected members of parliament have a responsibility to the people who elect them. Either we sit back in this place and allow the Government to do as it chooses, treating money Bills differently from anything else, or we treat all legislation the same-look at it and the way it impacts on various sections of the community and act accordingly. It seems to me that at the moment we have an official Clayton's Opposition. It picks and chooses the areas in which it will oppose. It suffers from terminal double standards, and it has failed to confront in this particular issue the question whether we have a pensions eligibility means test or whether we do not. Personally, like a lot of people, including some members of the Liberal Party, I presume, I would prefer that we did not have any sort of means test. If we are not prepared to confront the fact that means tests ought not to operate, and if we are not prepared to come to terms with the need for a national portable, contributory superannuation scheme, we must also accept that, in having a means test at all, it must be as equitable and as anomaly-free as possible and not simply affect one group in the community-namely, income earners-while letting massive asset holders off scot-free. Senator JESSOP(South Australia)(4.02) —I rise to support Senator Messner's matter of public importance. I believe that the changes to the assets test that have been effected by the Government are no more than cosmetic changes. The mark 4 version of the assets test was supposed to have saved about $96.8m in its first full year of running. The present mark 5 assets test is expected to save $80m per year. It seems to me quite incredible that the Minister for Community Services, Senator Grimes, talked about having to penalise the rich for a miserable 75c a week per pensioner, which is what is represented in the cosmetic changes that have taken place as a result of pressure that has been exerted relentlessly by Senator Messner and the Opposition since this iniquitous matter was embarked upon by the Government. It is quite amusing for me to listen to Senator Haines, who voted for the assets test. Listening to her, one would almost think that she is trying to model herself on Senator Ryan. I recall that not long ago Senator Walters drew attention to a reply from Senator Haines to a pensioner, in which she said: Those anomalies which exist in this assets test are limited to people in aged cottages and people on unproductive land. The Australian Democrats constantly display irresponsibility with respect to the monetary measures we discuss in the Senate. They came into this Parliament with the proud boast that they would never reject Supply. Yet repeatedly the Democrats vote against parts of the Government's Budget and claim that they are not voting against Supply. When one adds up the niggling little measures that the Democrats have supported here and there in a desperate attempt to please sectional interests in the public, to curry favour, while desperately thrashing around trying to get the votes that that Party needs in order to survive, it makes one wonder just what credibility it has. There was another party in the Parliament called the Democratic Labour Party. It had some good policies. They were attractive and that Party made them attractive, well knowing that it would never govern. The same will happen to the Australian Democrats, but they do not have any good policies. Half the time they cannot decide among themselves what course of action to take. They come into the Senate and berate Senator Messner, who, together with other members of the Liberal-National Party Opposition, has been trying desperately to persuade the Government of its errors. There is some evidence of success in the Government's latest, although miserable, attempt to change the assets test. Headlines of an article in the Adelaide Advertiser of 27 May suggest that the National Farmers Federation believes that the assets test switch is not enough. The article states: The National Farmers Federation yesterday criticised the latest changes to the controversial assets test for failing to remove the discrimination against pensioner farmers. When we look at the rural situation at the moment-the average income is about $9,000 a year-by no stretch of the imagination can we regard the farming community as being wealthy, although, over the years, the Australian Labor Party has traditionally regarded the landed gentry, as it habitually calls the farming community, as being wealthy people. They certainly contribute a lot to our export income, but by no means can it be suggested that the average farmer in Australia is a wealthy person. A pensioner, living in the Adelaide hills, made representations to me not long ago. He was invalided out of work and is on a pension. He lives in a comfortable but humble home on a two-acre block of land. His block was valued at something like $65,000. That is unproductive land. There is no way that he can get any assets from it because the local government authority's developmental by-laws state that he is not able to cut that land up and sell it off. So he was penalised for living on that block. The Leader of the Opposition (Mr Peacock), in a Press statement in support of Senator Messner, drew attention to anomalies which still remain. He cited the following examples and said: . . . the changes do not: Remove the anomaly between the pensioner who lives in the country and the city. Both may own property and have assets of equal value, but the country-dweller loses the pension and the city-dweller keeps it. The second point he made was that the changes do not: Resolve the problem of those who lose their spouse and then get re-classified under the Assets Test, forcing them to perhaps sell some of their property. He also pointed out that the changes do not: Resolve the problems of those who have bought land, which is now highly valued, often on city fringes, but which is not income-earning. Address itself to those people who have been deprived of part of their pensions because they pursue hobbies which are imputed to be 'valuable' under the Test. Resolve the discrimination against pensioners who rent their homes. Or resolve the discrimination against those who because of illness are forced to sell their homes, but choose to live in 'granny flats' with their families, rather than entering nursing homes. Those are a few of the examples caused by the erratic and arbitrary nature of the assets test introduced by this Government. The test, said Mr Peacock in a Press release on 27 May, is 'full of illogicalities'. He said that these included treating 20 years as a magical figure for the period a person has to live in a farm residence, making the process of valuation implementation and administration of the hardship provisions even more difficult. He continued: This approach will put more power into the hands of administrators, while creating a tangle of conflicting judgments as to how to assess individual cases. At the same time, after no less than five changes to the assets test, pensioners are going to find it harder than ever to understand where they stand under the assets test guidelines. This can only create more confusion and anxiety. Senator Messner has already stated that the Government will have to come up with $1 billion to fulfil its election promise to raise the pension to a quarter average weekly wage. The Government will have to turn elsewhere to make up this difference. I return to the rather ludicrous argument used by Senator Grimes earlier in the debate when he referred to the poor pensioners and how they are being robbed by the rich pensioners. Yet they stand to gain less than 75c a week-the price of a can of beer or a small bottle of coke. That is all that the so-called poor pensioners, with whom we all sympathise, will receive as a result of the Government changes in the assets test. Another Press comment made on 27 May suggested that the new package does not go far enough. This seems to me to be very significant. Under the headline 'Changes a small step, say the farmers', the article states: The asset test changes were only a small step in the right direction, according to the Victorian Farmers and Graziers Association. The Association's senior vice-president, Mr Frank Drum, said: . . . rural pensioners affected by the test would still get only half the income that city pensioners received. The article continues: Mr Drum said many farmer-pensioners were in a 'dreadful position' because they could not make money with their assets. 'The fact is that $250,000 in assets in agriculture won't make you a living', Mr Drum said. He said many of the rural pensioners affected by the assets test had farms valued at around $90,000 that were in poor, hilly or uncommercial areas. I am not sure, but I think I remember Senator Haines talking about living on unproductive land. Senator Messner —She said that was the only problem. Senator JESSOP —That the only problem was people living on unproductive land; I think that is an incredible attitude for a Democrat to take. Mr Peacock in his Press release went on to say: One group particularly affected will be those who have already been forced to sell their property or who are half-way through the legal process of doing so because of the changes that have been made. One asks: What happens to those people? The birth of the assets test, mark 5, which is what we are now criticising, is destined to be as painful, as unfair and as confusing as the previous four miserable attempts at the test by the Labor Government. Mr Peacock went on to point out that it is outrageous now that a few Labor back benchers, who failed to vote against the original test and who again failed to vote for the Opposition's Bill to abolish it, should declare themselves content with this latest fiasco that we are criticising today. Mr Peacock went on to say: Assets Test, Mark V, which gives even more power to the administrators, is bound to be even more intrusive and more costly to implement than any of the other previous attempts. The changes will further reduce Mr Howe's so-called savings from the Test and boost his army of interfering anomaly jugglers . . . I gather that initially the Department of Social Security had to employ something like 1,500 people to supervise this assets test and I believe that the Department of Veterans' Affairs had to employ between 300 and 500 additional public servants to police the assets test. Of course, this is typical of a Labor Party government. This Government does not believe in reducing public expenditure by keeping the Public Service under some sort of control. The Liberal-National Party Government tried to do that. We kept a ceiling on Public Service staff levels, but not this Government. This Government has had to employ an additional 2,000 public servants, on very high incomes, to deal with the assets test for a miserable contribution of 75c a week to the pensioners of Australia. Senator Messner —Which they haven't given yet either. Senator JESSOP —Which this Government has not given the pensioners yet. I would be very surprised if this Government does anything more for the pensioners. Its promise to raise pensions to 25 per cent of the average weekly wage is a pipe-dream when we have regard to the economic chaos that is taking place in Australia today due to this Government's mismanagement. Senator COATES(Tasmania)(4.17) —I suspect that not only honourable senators in this chamber but also most people are heartily sick and tired of the debate about the assets test. But members of the Opposition keep stirring about it with matter of public importance debate after matter of public importance debate, somehow thinking that it assists them politically to advertise their policy of wanting to perpetuate the inequity that existed between 1976 and 1984-those seven or eight years when there was not an assets test, not a full means test but only an incomes test. I think it is generally acknowledged that the inclusion of assets in determining and assessing people's means is entirely justified because of the way in which the income test was being manipulated by people. This matter of public importance debate, brought on by Senator Messner, is the Opposition's reaction to the announcement of the Minister for Social Security, Mr Howe, on Sunday modifying some aspects of the administration of the assets test. First, let me remind the Opposition that the Government has said all along that the reintroduction of the assets test would be monitored, that there would be a constant review of its administration, the way in which it was affecting people and the way it was working. That review has produced these modifications and that review will continue. Members of the Opposition have tried to claim that somehow this is some completely new creation that they are calling the assets test mark 5. Of course, they have said that they would prefer that no changes were made, but the proposed changes are not as major as they have suggested. I acknowledge that these changes are not major but they could by no means be described as cosmetic as the Opposition described them in the wording of its matter of public importance. If these changes were cosmetic no one would benefit. In fact, a substantial number of people will benefit. They will keep their pension or they will not lose as much of their pension as they would otherwise have done. Primarily, it is just those people who are affected by the scheme because of the assets that they have who are in the categories identified as needing particular attention-for example, the people in rural areas. The changes that are being made will make the test even more reasonable than it was. The Government is bending over backwards to be fair about this matter. It is ludicrous for Senator Messner and Senator Jessop to suggest that the assets test is either harsh or equitable. The Minister for Community Services, Senator Grimes, covered that aspect well and I will not go over the points he made. There is clear justification for the need for an assets test. Even the Hobart Mercury-not a wild Labor sympathiser-made the following comment in a recent editorial, which is worth quoting: There is widespread acknowledgement among all political parties that measures must be taken to bring greater equity to the welfare system and to contain its growth. There has been a sense of urgency about restructuring the system of old-age pensions as government is confronted with the difficult situation of an increasingly ageing population and the necessity to lift pension payments. In this context, the principle of an assets test, to enable the government to concentrate its resources on those most in need, should not be objected to. An incomes test alone is insufficient measure of need as it offers the temptation to convert income into assets and thereby claim benefits. I point out that the Hobart Mercury seems to be under the impression that it is only age pensioners who will be affected. That is not so, and that is only fair. Senator Messner talked about the mess and confusion that had been created over this whole issue. The Opposition has helped to create the confusion in this whole matter by misrepresenting the provisions of the test. Senator Messner referred to the 1983 proposal and how 'their pressure' had altered. I was happy with the proposal at that time. I was pleased to go out and defend it; it was quite a reasonable proposal. But the test as implemented earlier this year is in fact very generous; even more generous than the reasonable test which was proposed originally. The recent modifications announced by Brian Howe make it even more so. The point has been made by the Opposition and by others that there is an unfairness to people in rural areas who have large holdings, compared with people in the city with expensive family homes. I can see that point, but if the Government had implemented an assets test without exempting the family home, I can just imagine the outcry there would have been from the Opposition, affected pensioners and the Melbourne Herald in particular, which has been carrying on a campaign about the sanctity of the family home being affected. The family home is not counted in the assets test, so there has been much objection from people in rural areas about the claimed relative unfairness to them, compared with city people who have expensive houses; hence some of the changes that have been made in the administration. I make the point that no one is forced to sell his or her assets. The hardship provision and the loans scheme mean that no one is forced to sell his or her assets. This is the sort of phrase the Opposition has been using all the time-that these people are forced to sell assets. That is not so. They have the option of coming under the pension loans scheme, if that is their wish, or the hardship provisions which will ensure that no one is badly done by. The various changes that have been made to the administration are as follows: Firstly, the interest rate for the pension loans scheme has been altered. The interest rate was 13 1/2 per cent compound interest, the going rate in the market place, which meant that people could make a neutral decision about whether they entered into that scheme, or disposed of assets. That rate has been changed to 10 per cent simple interest-that is, the interest does not accumulate-so now there is actually an incentive for people to use the loans scheme. The provision will remain that at least $100,000 will be left after recovery. So it is not as if every last cent of a person's estate will be lost if the pensioner opts for the loans scheme. I think that it is very reasonable for people to opt for this scheme. This proposal encourages them to do so. It does not just leave it as a neutral economic decision for them to make. It will make it quite attractive to those with even sizable non-liquid assets who need income support and will reduce the repayments of pensioner loans for surviving relatives. Secondly, the hardship provisions are to be relaxed. The limit of available funds a pensioner may have and be counted, taking into account severe hardship, has been doubled to $6,000 for a single pensioner and $10,000 for a married couple. I emphasise that these are liquid assets, not total assets. They are the assets which pensioners are able to put their hands on. A major criticism of the test has come from people with liquid funds of a little over the $3,000 and $5,000 that did apply. Hence the Government has seen fit to liberalise these provisions, not by a major amount; it is not by an amount of tens or hundreds of thousands of dollars because to do that would be to alter the whole principle of the assets test. But it will make a decisive difference to those who are on the edge of entitlement; that is, the most deserving ones. The next aspect of the changes involves those who have lived on a property and farmed that property for at least 20 years or-for Senator Messner's information as he claimed that there was not such a statement-a person who has been a farmer for more than 20 years, even if not on that property. At the same time the deeming provision will be cut in half to 2 1/2 per cent of the value of the property. The term 'living on a property' means that if a close relative has been working the property for 10 years or more and relies on it for a living the Department of Social Security will again accept that the pensioner cannot be expected to sell. It was always the Government's intention that there be a concession along these lines. This has not been given a great deal of prominence nor put into practice until now. On the basis of the experience of the last few months this is being made a clear criterion for the test. This change will be of special benefit to farmers. It is not a cosmetic change, but rather a compassionate response to people's attachment to their properties and to the needs of those with children who have worked on those properties. Where a pensioner farmer transfers property to a close relative the Department of Social Security will accept that the value of the contribution by that relative through, for instance, forgone wages should be deducted from the value of that property transfer. This change will take account of the traditional practices of those in rural areas where farms are worked and then transferred from one generation to the next. It ensures that the relative's contributions to the pensioner's property are recognised. I happen to think that people ought to adjust their affairs over the years to take into account these contributions, but this proposal ensures that even if they do not do that those contributions are recognised. Senator Messner —How will it be calculated? Senator COATES —In answer to Senator Messner's interjection, the amount will be equal to the current value of the wages lost. Under the deeming provisions, any income a pensioner could reasonably be expected to get from leasing a property will continue to be taken into account as deemed income, but the amount has been cut in half to 2 1/2 per cent of the value of the property. So once again there is an incentive to ensure that leasing is possible. If pensioners can show that they could receive less than this 2 1/2 per cent, the lower amount will be taken into account. This will more accurately reflect levels of property leases and will assist many needy pensioner farmers. Valuations, reviews and appeals will be speeded up, as announced by Mr Howe, to ensure that any uncertainty is dispelled as soon as possible. Of course, there have been worries and concerns by affected pensioners about some of the valuations with which they disagree. Now they can have a free on-site valuation by the Australian Taxation Office within eight weeks. Appeals through the Social Security Appeals Tribunal are to be hurried along. The final part of the package of changes in administration involves pensioners in aged persons homes. These people who have contributed a lump sum or made a donation or loan to secure accommodation have until now been regarded as home owners and therefore were subject to a lower threshold. Under the new arrangements only those who have bought an interest or right to accommodation which can be sold or redeemed will be regarded as home owners. Others who make a loan to such an aged persons home will be regarded as non-home owners and thus will receive the benefit of the extra $50,000 asset exemption. Obviously, this change will remove an anomaly and make a significant difference to the pension entitlements of the bulk of residents affected by the previous provisions. That change can in no way be described as cosmetic. These changes will resolve many of the problems identified with the assets test, especially those affecting rural areas. We are not pretending that they are major changes to the scheme because we believe in the principle involved and do not intend to back off from that principle. But they are designed to assist those most deserving people who have been affected by the assets test. They remove a few of the anomalous provisions identified in the early stages. They will make a decisive difference to those on the edge of entitlement or those few pensioners who have been unfairly affected by a strict legalistic interpretation of the assets test. As stated right from the very beginning, the Government will continue to monitor the assets test to ensure that it continues to fulfil its goal of directing assistance to those most in need. Senator BROWNHILL(New South Wales)(4.32) —I support Senator Messner's matter of public importance this afternoon on the failure of the Government to make other than cosmetic changes to its harsh and inequitable pensions assets test. That description is just the way I see it. Over the last couple of years we have witnessed widespread confusion and concern amongst pensioners and beneficiaries at the intrusiveness of and the many unfair aspects and numerous anomalies contained in the assets test legislation. While many anomalies have been exposed, none has yet been corrected by this Government. The long and sorry history of this legislation indicates that the Government has continually refused or failed to act unless pushed to the limit. Obviously this afternoon in Question Time the Minister for Community Services, Senator Grimes, must have been pushed to the limit because he appeared very confused and worried. In reply to a question from Senator Messner about pensions, he implied that because only a few people were disadvantaged it really was not a problem. Obviously, the Government has shown again its scant regard for aged people. The National and Liberal parties are opposed to the assets test in principle because it is designed to encourage people to become more dependent on government by discouraging them from accumulating assets in order to provide as much as possible for themselves. The Labor Government's assets test will not catch the really rich whom it claims are taking unfair advantage of the pension system. On the contrary it is the person who has, through thrift, modest enterprise, and in some cases involuntarily, built up moderate levels of savings who is more affected. The Government allows pensioners who swim as a recreation to have a swimming pool and this is not considered as an asset. On the other hand, pensioners who want to fish may not own a small boat because the Hawke Government decrees that a boat is an asset. A pensioner couple may sell both their home and weekender and buy a luxury home. That is not considered an asset, but they are denied the right to opt for a modest home and retain their weekender as an economic way of holidaying. A car is considered a luxury asset. Stamp and coin collections are considered assets. Pensioners are unable to cope with the rate of change or with the details and technicalities of the assets test, and are having trouble all the time with it. This Government is having trouble understanding the implications of the assets test, which has been intrusive, inequitable, unfair, costly and complex to impose. The assets test has penalised those people who have worked hard during their working lives to put away a nest-egg for their retirement. The savings in the pensions budget of some $8 billion is minimal when taking into account the heartbreak it has caused. The assets test has effectively imposed a gift and death duty on pensioners. Senator Coates said a while ago that he believes in death duties by default. Again there has been an attack by the Hawke Labor Government against country people and the small family farm which those on the other side of the House probably would not know about because they seem to live under the wing of the Australian Council of Trade Unions in the confines of the jungle of the cities. As I have said before in this place, we should give encouragement and incentives for people to save for their retirement, but the Hawke Labor Government really is kicking in the teeth those who have pursued that course. I quote from the editorial in the Australian on 27 May: Mr Howe's announcement of changes in the way the assets test will be applied may limit the damage which the ALP has done to itself by introducing a test. Combined with its tax on lump-sum superannuation and, far more importantly, with its abiding fascination for capital gains taxes and death duties, the assets test has created for the Government an unenviable reputation. For an increasing number of Australians, the Hawke Government appears indifferent, and even hostile, to the efforts they have made to establish their financial security. To make matters worse, these people are being prepared by the Government for an era of high indirect taxes which will further whittle away the resources of those on fixed incomes. Labor back benchers, particularly those in marginal rural seats, are worried about the electoral consequences of the assets test. Well might they be worried about it. Do not spare too many thoughts for them, however. We should spare the sympathy and the concern for the people that the assets test affects. I will quote again from the Australian of 27 May, which states that Mr McMullan, the National Secretary of the Labor Party, said that the assets test was: . . . contributing to a perception of the Government being anti old people. For once the Labor Party is right in its perception. The article continued: One MP-- obviously a member of the same Party- said the 50,000 pensioners affected by the test hardly constituted a threat. Those are unfeeling words which do not show much compassion. I will read from a letter which I received recently from a constituent: I enclose a copy of a letter I wrote to the Department of Social Security when we received notification that our age pension ceased with the introduction of the assets test on 21 March. Some months ago, under great moral protest on our part we completed and sent in the iniquitous assets test form-if ever there was an invasion of privacy, that form was a perfect example. Not a word was heard until 8 March when the verdict came that our last pension cheques were paid the previous day. The guillotine seems gentle by comparison. Later we received notice to surrender our pharmaceutical benefits cards. The reply to my letter was merely a pamphlet 'Hardship Provisions of the Assets Test' and the advice 'If you feel you qualify . . . lodge a claim for payment by advising this office in writing'. The conditions as set down are ridiculous. Do they really expect us to mortgage our farm at our age! We'll battle on as we've done all our lives but it means that we will draw on our savings more and more. Let's hope they last the distance! Would you please add our protest to the many others you have surely received. I received a copy of another letter which the same lady had written to the regional office. It stated: I accept your letter but only with the strongest possible protest against the inequitable assets test. To say the least it discriminates against rural people. My husband and I own a small farm 450 acres. I will be 74 years of age in May and my husband is 80. He had serious major surgery in 1983 and 2 hip replacements in 1984. A victim of arthritis as well as circulation and embolism problems, his ability to work is now very limited. Our home is a very old weatherboard house, badly in need of repair, as are fences, sheds and yards. Our son, a motor mechanic in a local garage, helps as much as he can. We are certainly not in the position to employ labour. 15 years ago we were confident that we would be able to support ourselves in our old age, but the spiral of costs triggered by the Whitlam Government in 1972 has changed all that. With income greatly diminished and certainly harder to acquire, costs are still soaring: Shire rates, road rental licences, insurances, telephone rental, electricity standing charge etc. All these and more must be met before we start to live: To eat, clothe ourselves, buy a newspaper, post a letter. I ask you-are we being penalised for choosing to spend our remaining few years on a property that has been home for 40 years? Are we being penalised for having worked hard all our lives to provide for a worry free retirement? As I see it, the answer in both instances is yes. That letter quite moved me and I hope that it moves some people on the other side of the chamber. Will the changes announced at the weekend help these true blue people? I do not believe they will, but they should. The Government introduced the assets test changes and it has caused the hardship and heartbreak. The assets test changes announced over the weekend do not remove the anomaly which exists between a pensioner who lives in the country and one who lives in the city. Both own property and have assets of equal value, but the country dweller will lose the pension and the city dweller will keep it. I will quote examples that have been quoted numerous times. A pensioner in a town or city with a house worth $200,000 and $50,000 in other assets will get 100 per cent of the pension. A farmer on a small farm worth some $200,000 where he has lived for years and years, as in the case in the letter I have just quoted, and who probably has $50,000 in other assets, will get no pension. Is that fair or is it another case of discrimination by the Hawke Labor Government against country people and against country pensioners in particular? The assets test changes do not remove or resolve the problem of those who lose their spouses, are reclassified under the provisions of the assets test, and then are forced perhaps to sell some of their property. The assets test changes announced last weekend-the assets test mark 4, mark 5 or whatever-will not resolve the problems of those who have bought land which is now highly valued. This land is often on city fringes-for example, around Dural in Sydney-but is not earning these people income. The changes announced on the weekend do not address those people who have been deprived of part of their pensions because they pursue hobbies which are imputed to be valuable under the provisions of the assets test. They do not resolve the discrimination against pensioners who rent their homes. The assets test changes do not resolve the discrimination against those who, because of illness, are forced to sell their homes but choose to live in granny flats with their families rather than enter nursing homes. Nothing has been done to overcome the hardships created by the assets test. I conclude by quoting again from the last two paragraphs of the letter I received: I ask you-are we being penalised for choosing to spend our remaining few years on a property that has been home for 40 years? Are we being penalised for having worked hard all our lives to provide for a worry-free retirement? As I see it, the answer in both instances is yes. It is time that the thinking members of the Government showed some compassion and understanding. Senator GILES(Western Australia)(4.46) —I would be doing less than my duty if I left unaddressed the last statement of Senator Brownhill. This afternoon we are debating a matter of public importance entitled: The failure of the Government to make other than cosmetic changes to its harsh and inequitable pensions assets test. They are the words of the Opposition which proposed this matter of public importance. In response to Senator Brownhill, might I say that it is because we are deeply concerned for pensioners of every sort-the aged, the invalids and the poverty-stricken young families-that we have taken this extremely difficult step and introduced an assets test. We take a highly responsible approach to the whole question, unlike the previous Government which talked and talked about the possibility of a needs-based approach to pensions but which never produced any of the goods. If the recently announced changes to the assets test are a cosmetic range of changes-I remind honourable senators that the assets test was fully introduced in only March of this year-might I ask, cosmetic to whom? It certainly has targeted the groups who have been shown to be at a disadvantage. They include certain rural pensioners those who have opted for the loans scheme in association with the assets test, those whose circumstances are so anomalous that they claim hardship and those who have made a donation in order to enter an aged persons home or hostel, yet who have no interest or right to accommodation which is salable or redeemable. These are the groups of individuals whose plight has been drawn to the attention of the Government. I might add that we have dealt with these problems very swiftly indeed. There is some inconsistency, one would have thought, in labelling these changes as cosmetic and then proposing a matter of public importance to occupy two hours of the Senate's time just when there seems to be inter-party agreement that we should not waste these hours but should deal expeditiously with the legislation on the Notice Paper instead of re-hashing something which has been dealt with seven times at great length and with enormous tedium in this place. We do not know how many people are likely to be affected by the recent changes to the assets test, or what the cost will be. We do not know this because, of the 28,844 individuals whose pensions had been cancelled by mid-April, 18,751, or 65 per cent of pensioners cancelled their pensions themselves. Therefore, the Department of Social Security has no details of their financial circumstances. Among them there may certainly be some individuals whose problems are covered by the more recent changes. However, information is available on the 10,093 individuals, that is, the 35 per cent, whose pensions were cancelled on assessment by the Department of Social Security. If this income distribution is extrapolated to those who self-cancelled-and this is an extremely conservative assumption to make-763 of the total number of previous pensioners held assets of $500,000 or more. I know that the Opposition has quaint ideas about what constitutes deprivation, but was it those who were down to their last half a million dollars who were the subject of all of the crocodile tears we have seen since the Labor Government took the hard decision and introduced an assets test? What does the Opposition have in mind? Does it intend to eliminate all means testing for pensions? If it does, it is about time it said so. That would hardly accord with the widely reported comments by all prominent spokesmen of the coalition, especially when it was in government. References to the truly needy and the essential nature of a needs directed pension system were falling like autumn leaves when I first came to this Senate in 1981 and they were falling like autumn leaves in the House of Representatives at the same time. No matter how closely we questioned the coalition's intentions, there was never any more than these pious statements of intent. As recently as 1983 Mr Howard told us that he was personally in favour of a needs approach to the payment of welfare, and I quote: It is time for us all to recognise that the real issue is not whether we should have an assets test, but what is the fairest and best form of the assets test. We have had no contribution from the Opposition to assist us to develop the fairest and best form of assets test. In the absence of anything constructive from the Opposition-we have been waiting for four years to hear how it should be done-I must agree with Professor Gruen, who said: Those who argue for smaller government and needs based welfare, whilst rejecting concrete administrative moves in that direction, deserve to be regarded as supremely opportunistic cynics. Despite these recent adjustments which are of considerable significance to small numbers of deserving people, mostly in rural areas, there is no major backdown by the Government on its assets test and the test continues to qualify for the approbation of many diverse organisations. The Secretary of the Australian Council on the Ageing was glad to acknowledge that the figures vindicated the Council's support for the assets test since it was proposed in 1983. The Secretary was particularly pleased, of course, that: . . . the order of savings in expenditure should enable the Government to keep faith with the poorest pensioners who rely on the pension payment as their sole income. The Confederation of Australian Industry, a strange bedfellow for the Australian Labor Party, was quoted as giving support: . . . in principle to the Government for tackling this unavoidable and increasingly urgent issue. The Business Council of Australia was quite happy to acknowledge that: . . . the Government deserves support for attempting to tackle this politically difficult problem now. It is a politically difficult problem that the previous Government managed to avoid very successfully for a very long time. The Australian Financial Review of 6 May this year acknowledged: While it would seem self evident that it is senseless to pay benefits to the comparatively wealthy, this message is hard to convey. It is not particularly hard to convey to that 97 per cent of pensioners who are simply not affected by the assets test. It must, I admit, be acknowledged that it is hard to convey to some of those opportunistic cynics on the other side of this House who, in the words of the Australian Financial Review, have waged a 'campaign of stupid denigration of the assets tax on pensioners'. This Government should be congratulated on its swift and sensitive response in modifying the assets test to accommodate the needs of small groups as identified by the Department of Social Security and by alert and responsible parliamentarians from both sides of the House and from both Houses amongst whom many have been involved in drafting the changes. Details of the changes have been discussed by my colleagues several times in the course of this debate so I will not list them again. However, the Department of Social Security has prepared three new booklets dated May 1985 to distinguish them from those prepared in February of this year. Those booklets are entitled: 'A summary of the assets test', 'The Pension Loans Scheme-How does it work?' and 'Hardship Provisions of the assets test'. They are clear and concise descriptions of the changes that are now about to be implemented. These booklets are now available from all regional offices of the Department. For those people who do not have access to regional offices, I suggest that they try the offices of their Federal members or senators. In winding up this debate I stress that 97 per cent of aged Australians are not at all affected by the assets test, and for those who are these recent measures should iron out apparent anomalies. Let us have no more of this supremely opportunistic cynicism from those who were not prepared to grasp the nettle. Senator JACK EVANS(Western Australia)(4.56) —I rise to use a few moments of the Senate's time available in this debate because for the last several weeks and, in particular, this week I have been the butt of a number of vitriolic attacks by honourable members who seem to feel that this is the way to carry on debates in the Senate. It occurred today when this matter of great public importance should have been the subject of debate. However, instead Senator Jessop followed the lead of Senator Walsh at Question Time today in setting out on a vendetta against the Australian Democrats and against me. I want to set the record quite straight: The accusation against the Australian Democrats is that we base our moves in the Senate chamber and our decisions on our endeavours to appeal to minority groups. I believe that our decision on this assets test- The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Order! Senator Evans, would you relate your speech to the matter before the Chair? Senator JACK EVANS —Mr Acting Deputy President, I was in the process of doing so when you called my attention to it. Our approach to the assets test and the Government's amendments to the assets test has been in an endeavour to help the minority groups in this country. It is about time that these minority groups were represented in the Senate. It is because of the Government's position and, incredibly, the Opposition's position that there is only one economic criterion in this country, which is the deficit; the deficit has to be reduced, no matter who gets hurt. That is why minority groups in this country are having to suffer. It is because of that pressure on the Government over the assets test that changes have been made to the test. I am very proud to represent the people who would not otherwise be represented in this Parliament by the Australian Labor Party, the Liberal Party of Australia or the National Party of Australia. These are minority groups. Mr Acting Deputy President, I make it quite clear in responding to an earlier part of this debate, which was allowed, and which consisted of attacks for 10 minutes on the Australian Democrats for representing these groups, that it is appropriate that there be a political party in the Senate to represent those groups. I represent them very proudly, as I did earlier this week in representing the returned service people who were left in the lurch by both the Labor Party and the Liberal-National Party Opposition. Consistently, with my colleagues I have represented the farmers who, again, are subject to this assets test amendment. I make it quite clear once more that ethnic communities who have no other representative party in this Parliament- The ACTING DEPUTY PRESIDENT —Order! Senator Evans, the matter before the Chair is: The failure of the Government to make other than cosmetic changes to its harsh and inequitable pensions assets test. It is not a debate of your personal views. You are speaking either for or against the proposal. Senator JACK EVANS —Mr Acting Deputy President, I am speaking about the matter of public importance. Is that in order? The ACTING DEPUTY PRESIDENT —You must make your remarks relevant to the matter before the Chair. Senator JACK EVANS —I am doing so. I repeat that the people who have been hurt by these changes to the assets test have been those to whom I have just been referring-those people who have no other representation in this Parliament and whose pleas are conveyed to this Parliament, in this debate and in other debates on the assets test, by the Australian Democrats. This debate comes about simply because no alternative approach to the assets test proposals has been put forward by either the Liberal Party or the Government. Senator Jessop —We would abolish the darn thing. Senator JACK EVANS —Yes. Senator Jessop tells the people that if ever he is re-elected to government he will abolish the assets test, just as during a previous election campaign he promised his electors that Medibank would not be touched and he then did absolutely nothing about it. We keep on hearing from Senator Jessop of what will be his future endeavours to influence the future government, of which he presumes he will not be a member but simply a back bencher. He says that he will plead with it to do something about the assets test. What will happen is that the assets test will simply continue under any future government because it is the only fair way that people who really need pensions can get a fair share of those pensions. Senator Messner —That is a load of rubbish. Senator JACK EVANS —The other way of doing it would be to allow the deficit to expand a little, which I have been propounding for quite some time, but that has been vigorously opposed by the Opposition. There are alternative ways of ensuring that people get a fair pension, which members of the returned services in particular, and other people, are being denied. They are being denied it by this Government and they will be further denied it by the Opposition should it get back into power. I am simply making the point that the Government has introduced some changes to its pensions assets test with the obvious intent of remedying some anomalies which were drawn to its attention by the Australian Democrats on behalf of a number of minority groups and individuals who, apart from the Australian Democrats, are not represented in this Parliament. I am proud to be representing minority groups. Senator Jessop may criticise; he may fling off and think that there is some capital to be made as a result of the Australian Democrats representing people who otherwise would not be represented in this Parliament. He may take great joy from the fact that he represents big business and that it looks after his election campaign funds. The Australian Democrats represent the little people in this community and it is only because the voice of the Australian Democrats is heard in this Parliament, through this Senate, that the little people have an opportunity to have their problems debated in this Parliament, just as we are debating some of their problems today. The Australian Democrats would be recognised throughout the community as being the sole defenders of the Australian people who have been ignored for decades by the Liberal Party and by the Labor Party, whoever happened to be in power at the time. Let us not have any more humbug, particularly from those who speak for big business, big business unions and- Senator Peter Baume —Mr Acting Deputy President, I raise a point of order. Is it right for the honourable senator, in his last week in the Senate, to distort the truth in this way when he voted for the assets test and he helped bring it in? Is it right for him to offer such untruths in this debate on what might be his last occasion to speak in this Parliament? Can he not at least go out with a little bit of honour? The ACTING DEPUTY PRESIDENT(Senator Scott) —Order! There is no point of order. Senator Mason —Mr Acting Deputy President, I raise a point of order. My point of order is that Senator Dame Margaret Guilfoyle made a comment a few moments ago, by way of interjection, that what Senator Jack Evans was saying was a pack of lies. I call on you to ask her to withdraw that statement. The ACTING DEPUTY PRESIDENT —I did not hear the alleged remark. Senator Mason —Her colleagues are saying that it is true. The ACTING DEPUTY PRESIDENT —There is no point of order. Senator JACK EVANS —It is interesting that when the truth comes out it not only hurts but also people such as Senator Baume, who has been a member of this place for a zillion years and who obviously does not yet know the Standing Orders, raise a point of order which, quite obviously, is a bogus point of order and one has the sort of language to which Senator Mason has just referred. It is hurting because there is a party which is willing to represent honestly and fairly the people in this country who would otherwise not have a voice in the political processes. I do not retract one word of the accusations I made this afternoon because they are on the record and the people of Australia know that they are true. The ACTING DEPUTY PRESIDENT(Senator Scott) —Order! The time for consideration of the matter under discussion has expired. Senator JESSOP(South Australia)(5.06) —I move: That the Senate take note of the papers. The Australian Ionising Radiation Advisory Council report for 1983-84 is an important report. It gives a lot of detail as to the activities of the Council which consists of eminent specialists, geneticists and scientists who deal with matters concerned with biology, public health, nuclear physics, radiological physics, radio biology, human genetics, animal genetics, biostatistics, geology, mining and engineering. A number of interesting references in the report come under headings such as 'Nuclear Tests' and 'British nuclear tests in Australia'. Page 5 refers to the indoctrinee force and states: Since publication of the report 'British nuclear tests in Australia-a review of operational safety measures and of possible after-effects' (AIRAC No. 9), the United Kingdom Ministry of Defence has made available revised information (D/DSc 3/5/8/1, 3 April 1984) relating to the exposure of Australian servicemen to radiation during the Buffalo series of nuclear tests at the Maralinga test range in 1956. The information related to the stationing of men at closer range than that normally allowed for persons witnessing nuclear tests, during the first two tests of the Buffalo series. These men, referred to as the 'Indoctrinee Force', included some Australians. The discussion of this matter, in sections 8.11 to 8.13 of AIRAC No. 9, was based on the material available at the time of publication, and needs to be amended in the light of the new information. The amendments relate to numbers of men and their precise locations at the firing times and provide more precise information on their dosimetry, but do not affect the conclusion that these men were not overexposed to radiation. Page 6 of the report states: The radiation dose limits prescribed in the Safety Regulations and applicable to everyone at Maralinga were not to be exceeded, and the doses received by members of the Indoctrinee Force were well within those limits. In no sense could these men be described as 'guinea pigs' used to assess radiation effects. The project was intended to give the indoctrinees some experience, at a safe distance, of the flash, heat and blast effects of nuclear weapons, and subsequently, an opportunity to see the effects of the explosion under safe conditions. The levels of blast, shock and optical or thermal radiations experienced were not in any way sufficient to cause injury or ill-health. That is a very important section of the report. It also refers to secondary malignancies following radiation therapy. Here it suggests: Of considerable relevance is the finding that new cancers are up to 10 times more likely to develop in the survivors of cancer therapy than in healthy controlled subjects of comparable age. I visited the nuclear medicine section of the Flinders Medical Centre not long ago and I was very interested to observe the work that is being done in respect of ultrasound technology. I believe that these sorts of reports are very helpful in guiding medical technologists in a proper direction in order to minimise the possible effects of radiation through X-rays. I think the report is most interesting. Other important subjects are covered and these, I believe, warrant the attention of the Senate. Senator MASON(New South Wales)(5.12) —I rise to address the same section of the Australian Ionising Radiation Advisory Council report as that addressed by Senator Jessop but I am afraid I am not able to agree with his soothing conclusions. This report has the same faults of AIRAC reports in the past of inadequacies in what it does not say. I quote from a passage in the report which says: After the test conducted tours were held over a 4-day period to inspect the effects of the explosion; these tours included some contaminated areas. There is no doubt whatsoever that the decision to put 283 men, including 100 Australians, very close to these tests and to take them afterwards on a tour was one of the most stupid, inane and irresponsible decisions taken by anyone anywhere and it may well have serious consequences in the future in ways that this report is very careful to avoid mentioning. This report, after all, talks about X and gamma radiation and the dosimeters recorded that. It makes no mention whatsoever of the likely effects on the soldiers and other people of the very short alpha radiation. This is the very short wave length radiation which is conveyed to the human body in the form of dust. Dust which is ingested into the lungs or other internal organs as alpha particles is known to cause cancer and ironically that cancer starts to occur 30 or 40 years after exposure. Therefore, if there is to be trouble we can expect it now. If any of those 100 Australians who were present at Buffalo I can hear me now I would like them or their relatives to tell me now or at any time in the future if they do contract cancer. I hope with all my heart that they do not, but if they do there is every likelihood that it was related to this particular occasion. Why? Because we have been told in both the Kerr report of the Expert Committee on the Review of Data on Atmospheric Fallout arising from British Nuclear Tests in Australia and the present Royal Commission into British Nuclear Testing in Australia between 1952 and 1963 that the whole of that area was a sea of dust. The test was held in inland Australia where it does not rain and the whole area was afflicted by the most appalling dust contamination. When those men went in there after that test there is no doubt that they would have breathed in large quantities of dust. Anyone who suggests that there would be no alpha radiation in that dust is either a lunatic or irresponsible. It is very easy for AIRAC, and therefore the Government, to wash its hands of all responsibility for any future illness experienced by any of these men. I take it very deeply to heart that AIRAC should come up with a report such as this which does not anywhere, in my reading, canvass the possible effects of the alpha particles on these people. It does not properly indict-as it should have indicted-those who carried out these tests for allowing them to be carried out under those circumstances. According to page 6 of the report the intention was to give the indoctrinees, as they are called: . . . some experience, at a safe distance, of the flash, heat and blast effects of nuclear weapons, and subsequently, an opportunity to see the effects of the explosion under safe conditions. It is that last part in relation to the first Buffalo test that we must draw attention to particularly: After the test conducted tours were held over a 4-day period to inspect the effects of the explosion; these tours included some contaminated areas. That is an admission by AIRAC that if there was X and gamma radiation present of course there was alpha radiation. The alpha radiation would have been conveyed in the form of dust. On page 7 AIRAC talks in detail about radiation doses received by Australians, and states: The X- and gamma radiation doses were indicated by the personal film badges issued to all . . . members, but the three components are not available separately. There are several paragraphs after this which do not make any reference at all to dust or the issue that I have raised. I also note briefly that on page 17 of the report there is a discussion on the ocean dumping of radioactive waste. AIRAC does not emerge as being in favour of this disposal method for waste. I urge all honourable senators to think carefully about this and support my Environment Protection (Sea Dumping) Amendment Bill to prohibit this sort of dumping. As I said in speaking to that Bill, coastal waters are the most productive areas of our oceans and ought to be protected from that type of contamination. Senator McINTOSH(Western Australia)(5.17) —I am very pleased that Senator Jessop can take a lot of comfort from this 1983-84 report of the Australian Ionising Radiation Advisory Council. I agree with some of the remarks that Senator Mason made but I move a bit further on to page 10 of the report, which mentions the visit of nuclear powered ships. I note that in February AIRAC went to Perth to review arrangements for the visit of the nuclear submarine USS New York City to HMAS Stirling, Garden Island. Senator Jessop —They reckon the Western Australians are pretty good about safety measures. Senator McINTOSH —Yes, I am concerned about Western Australia and I am particularly concerned about the last paragraph on page 10 which states: AIRAC considers that the facilities and plans to cope with any radiation emergency during a visit by a NPW to Western Australia are effective and should be used as a model for visits of NPWs to other Australian ports and berths. I do not know what the report means by the word 'effective'. It is adequacy which concerns me. If other States are not as effective as Western Australia I would like to see not just a tenth report but an eleventh report from AIRAC on what precautions are being taken by the States and just how adequate they are in case there is an emergency such as a nuclear accident. The Senate should take note of the fact that AIRAC, in all its reports, has not reported on what would happen in the event of such an accident. Senator PETER BAUME(New South Wales)(5.19) —In speaking to the 1983-84 report of the Australian Ionising Radiation Advisory Council, I wish to refer first to page ix, on which the Council draws attention to the work done on behalf of Australia and on behalf of AIRAC by the late Professor Bob Walsh. I would like to draw attention to the obituary and eulogy to Professor Walsh on that page and to say that many people who worked with him and knew him well would agree with every word AIRAC has written there about his contribution to Australia, about his eminence, about his commitment to what he did and about the very great contribution he made in so many areas. I knew Professor Walsh first as a medical student and then as a doctor. I knew him, of course, as Dean of the Faculty of Medicine in the University of New South Wales and had the very good fortune to work with him on a number of the committees which are listed in the report, but most of all I was privileged to talk to him as he worked to ensure that proper standards were applied in the area of ionising radiation on behalf of all Australians. This report is particularly important in that the Council attempts to discuss some of the material relating to the exposure which Australian serviceman might have met during the period of certain nuclear explosions carried out in Australia from 1952 to 1957. As honourable senators will know, this matter has become one of considerable concern, with a royal commission being conducted at present and with concerns being expressed about the health of the servicemen involved. Senator Mason, who spoke earlier, has asked us to accept him as the expert and to set aside what AIRAC says. The Council identifies exposures received by servicemen and the extent of the exposure. It is worth while identifying the extent to which it sets this down. Senator Mason —Read me the piece about alpha radiation. Senator PETER BAUME —Either Senator Mason is the expert or he is a crackpot. I say that the people on the Ionising Radiation Advisory Council not only are honest but also attempt to be thorough. They are not attempting to lead people up the garden path. As to what is an acceptable dose, the report states: . . . the highest dose recorded against any Australian member of the party-- that is the party exposed- in the shelters at 1829m at Marcoo-- the centre of the explosion- was 6.5 millisieverts. No more than about 0.3 millisieverts of these doses can have come from exposure during the detonations; the balance comes from the visit to contaminated areas before or after the tests. The dose limit allowed at the time for the 13-week operation was 30 millisieverts, and the present annual limit for occupational exposure is 50 millisieverts. The recorded doses are well within these limits. Obviously, it is correct to have considerable concern about whether Australian servicemen were properly protected and whether they did not meet undue exposure during these explosions. It is quite proper that these matters should be tested, but I think it is highly undesirable for honourable senators to accuse this Council of having worked from a predetermined conclusion and having selected its evidence. I believe that the Council has acted with honour and propriety and has presented the findings as far as it can. These findings suggest that the exposures recorded against Australian servicemen were, first of all, modest and secondly, well within the safety limits that were laid down at that time, and they are well within the limits laid down even today for the same kind of exposure to radiation. Finally-I say this as a doctor-it is quite outrageous for Senator Mason to say that any malignancy which people develop later on may well be due to the time they spent at Maralinga. That is medically incorrect and quite outrageous. It just illustrates the length to which the Australian Democrats will go to mislead the Australian people when it is to their political advantage so to do. Senator McINTOSH(Western Australia)(5.24) —I should like, Mr Acting Deputy President, to speak to Paper No. 1, Radioactive Waste Management 1983-84 Review Report. When I was speaking earlier, I thought that it was on the basis of Papers Nos 1 and 2 being taken together, and I chose to speak on Paper No. 2, but I should like to speak to Paper No. 1. I seek leave to do so. Leave granted. Senator McINTOSH —I should like to deal with the intractable problem of nuclear waste disposal. 'We've been accumulating wastes since 1942 and we have yet to dispose of a pound of the stuff'. That was said by United States Congressman Morris Udall, speaking in the Congress to a 1981 Bill on waste management. Most so-called methods of disposal are not disposal at all, but are storage-a short term shelving of a problem which lays an unacceptable burden on the natural environment and bequeaths the difficulties of nuclear waste management to future generations, who, for all that we can predict, may have lost the science of radiological protection, but who might badly need it. In the United States of America alone there are currently 70 million gallons-that is like an area of 22 hectares covered 2 metres deep-of high level wastes left over from reprocessing to isolate plutonium for military purposes. With each year of reactor operation the problem of accumulating wastes grows. While kept in storage, high level wastes, whether isolated or remaining in the spent fuel, must continuously be cooled for 300 years until most of the fission products have decayed. Thereafter, the main source of radioactivity becomes the more slowly decaying transuranics, some of which remain radioactive for up to a million years. One of the major problems in the storage of nuclear wastes is that the storage tanks corrode and leak. So far in the United States of America, 500,000 curies of radioactivity have leaked into soil surrounding storage tanks. Another method of waste storage is vitrification. This is the process of immobilising nuclear wastes in borosilicate glass, a procedure which was devised originally as a means of greatly reducing the volume of high level liquid waste. In this way, one year's output of waste from a large reactor may be reduced to about one cubic metre. This is a relatively small volume but it carries an enormous lethal potency, retaining 12 million curies of radioactivity 10 years after discharge from the reactor. It has been demonstrated, however, that the glasses will disintegrate in contact with groundwaters at quite low temperatures and pressures, resulting in leaks of radioactivity. A draft report of the United States President's Executive Office of Science and Technology, in 1978, outlines the problems of underground storage: The task of accurately predicting the fate of radionucleides-radioactive isotopes-emplaced in a repository over . . . several hundreds to many thousands of years is unprecedented. The principle earth science disciplines involved in such a task-namely, hydrogeology, geochemistry and rock mechanics-are relatively young sciences with little experience in making or evaluating predictions that cover time frames even as short as a few decades. In an attempt to overcome the difficulties and shortcomings of deep geological disposal, work has begun on developing a synthetic rock which would incorporate nuclear wastes in much the same way as borosilicate glass, but which would overcome the problem of disintegration. Synroc consists essentially of three rare titanite minerals. It has proved more durable than glass under some conditions, but it disintegrates in the presence of salt solutions. This process is still in the early stage of development. It is proposed that the Synroc wastes be disposed of in deep drill holes up to 2.5 kilometres in depth. So far, $1.512m has been committed to research by the Australian Atomic Energy Commission, the Australian National University and Griffith University. The Commonwealth Government is currently funding the project with $2.754 to be spent over three years for a pilot plant. The project raises some important points to be considered. The first of these concerns the rarity of the minerals involved. These must be presumed to be very expensive, and informed sources concur with this view. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator McIntosh —Mr Deputy President, I seek leave to incorporate the rest of my speech in Hansard. Leave granted. The remainder of the speech read as follows- The second is the proposal to drill holes to a depth of 2.5 kilometres. Experts in the field quote the cost of this in the order of $3m to $5m if drilled through igneous rocks. Each hole is considered sufficient to take the waste of one year from 100 atomic reactors. Lastly, as the Australian Government is currently funding the development of this material, some disquiet must be felt as to the possibility that atomic wastes may at some later date be stored in our 'safe' geologic structures. Long term studies are needed before there can be any assurance that the radioactive material would not leak into the environment. Pediatrician Helen Caldicott has said: Even the most brilliant scientist may honestly think he's developed a container that will remain intact for a half-million years. However, he's going to be dead in 30 years; he will never live to verify his hypothesis. The implications for Australia as part of the nuclear cycle are clear. As an exporter of uranium we are already part of the nuclear proliferation cycle. The peaceful and military aspects of nuclear energy are intrinsically linked. We export our uranium to Japan, Germany, United States of America, Sweden, France-under suspension-South Korea, Belgium and Finland. The United States and France are nuclear weapons producing countries. Sweden, Japan and Germany have wastes reprocessed at Windscale, so that the end product of some of our uranium ends up contaminating the Irish Sea. We can by no means be sure that Japan will not dump high level nuclear waste in the Pacific, and South Korea will not give any categorical commitment that it will never develop nuclear weapons. We are shortly to be faced with our next problem-the reprocessing and storing of spent fuel. The government funding of the development of Synroc, if the process turns out to be viable, will not end there. Already can be heard the softening up whispers of a 'moral obligation' to reprocess and store spent fuel; yet none of the hazards, dangers or problems have been solved. If this is allowed to happen, it may only be a matter of time before we are enriching uranium before export. We have only one moral obligation: The elimination of the nuclear danger-whether waste or weapons-for the safeguarding of our future generations. Question resolved in the affirmative. Senator TEAGUE(South Australia)(5.29) —It is still a useful practice for the Commonwealth Schools Commission to produce an annual report. It is only a recent practice. It is pointed out at the very beginning of the report that given the large number of reports, particularly with regard to the Government's guidelines for the allocation of the moneys, there is still need for the activities of the Commission as an administrative body, in terms of its personnel and its function and powers. In that respect I welcome the continuing practice of there being an annual Commonwealth Schools Commission report, I do not feel in any way satisfied that we have arrived at any stable basis for the existence of the Schools Commission in the years ahead. Looking back on the history of the Schools Commission over the last 12 years, I see that what was a supplementary initiative to bring public funding to schools, both government and non-government, to a higher level to achieve more for Australia's children, has now been largely achieved. It is certain that there are still deficiencies and areas for new initiatives, but the targets set by Professor Karmel relating to the resources to be made available to Australian schools have been met for all the government schools. Resources are under the targeted standard only in some independent schools, which are currently receiving additional public moneys to make up for that deficiency. Where have we come to? The Commonwealth Schools Commission has supplemented the work that the State education departments and private schools have been doing for school children in Australia. This supplementation has meant that targets have been achieved. This report gives an assessment of the Commission's standing as an administrative body in 1984. I am not happy that we might infer from this report that a new foundation has been laid for the Commission for the years ahead. I believe, particularly in the steady atmosphere that had been achieved by 1984, that this is still a body which duplicates and does not sufficiently involve representatives from the State and private school organisations that already exist. In that sense, there is nothing to assure me in this annual report that we have a body which is phasing itself out by passing on the initiatives that it has generated to the responsible bodies that actually conduct schools in the States, be they government or non-government. Appendix B and Appendix C of the report contain an extract from the Commonwealth Schools Commission Act that was proclaimed in June of 1984 on the functions of the Commission and the Curriculum Development Council. These functions are set out in the most general fashion. There is reference to the Commission and the Council consulting, co-operating and furnishing information and advice. The Curriculum Development Council and the Commonwealth Schools Commission have no direct responsibility to put into operation the initiatives that the Commission brings before the Government. I am not satisfied that we have yet achieved a proper organisation of the administrative side of education in Australia. I would rather see representatives from the States involved in the Curriculum Development Council and in the Schools Commission. This would make those bodies not Commonwealth institutions, but rather the Commonwealth would be facilitating representatives from the States to become part of a national body, which would be an interstate or Federal representative body of the actual organisation that put Curriculum Development Council and Schools Commission decisions into practice. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. I call Senator Macklin. I warn Senator Macklin that he is allowed to speak for only two minutes. Senator MACKLIN(Queensland)(5.35) —In that case, Mr Deputy President, I shall raise one item only concerning the professional development program. The professional development program in 1976 had committed to it $31m, in 1980 the figure was $18m, and in 1985 it has $10m. Essentially, the professional development program is crucial to all the other types of programs one wishes to see run. If they are supposed to be implemented through the schools, I believe that there will have to be in-service training, upgrading courses, and a whole range of matters to provide the teachers with the skills and wherewithal to be able to undertake all the other types of activities of which the Government has spoken. The recommendations of the Commonwealth Schools Commission have been very clear. Those recommendations have not been followed by the Government. I think that one of the uses of the Commission is to put forward these propositions time and again, even though they may not be met by the Government, to call attention to the fact that the Government should not raise expectations in the way it has done and then dash them so conclusively and severely as it also has done in its recent cuts, particularly to areas such as the priority accorded to the participation and equity program. The erratic directions coming from government have to be put aside at some stage or another if we are to expect anything to be done in schools and in technical and further education to undertake the types of activities the Government maintains it wishes to be pursued. Due to the fact that time is no longer available for this debate, I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TEAGUE(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TEAGUE(South Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator DURACK(Western Australia) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TATE(Tasmania) —On behalf of the Senate Standing Committee on Constitutional and Legal Affairs, I present the report entitled 'Conscientious Objection to Conscripted Military Service', together with the transcript of evidence. Ordered that the report be printed. Senator TATE —by leave-I move: That the Senate take note of the report. It is with a sense of satisfaction, and even some pride, that I present the report of the Senate Standing Committee on Constitutional and Legal Affairs entitled 'Conscientious Objection to Conscripted Military Service'. This report is signed by all six members of the Committee-my colleagues Senator Barney Cooney, Senator Nick Bolkus, Senator Alan Missen, Senator Robert Hill, Senator Chris Puplick and me. The unanimous support of its recommendations indicates a bipartisan awareness of the total inadequacy of the statutory provisions which have so far purported to protect freedom of conscience in relation to conscripted military service of Australians. I thank those present members of the Committee, and indeed those who were initially members of it, for persevering with a project which may have appeared anachronistic, and certainly took a long time, some two years, almost to the day, to complete. After all, the reference of a private member's Bill on this topic was made on 31 May 1983. I said at that time, in moving the reference, that: . . . Some may ask why the Committee should accept a reference to do with compulsory military service at a time when it is not a live issue in the Australian community . . . And then I answered my own question: I believe it is precisely a time when there is none of the hysteria associated with a military campaign that is most suitable for a careful look at the issues involved. Not many Australians realise that the provisions of the National Service Act 1951 still lay on the statute book, though suspended in operation by an Act of the Whitlam Government. The Defence Act 1903 is operative and provides the legislative framework for, amongst other things, conscription in time of an actual or feared invasion of Australia. Whilst evidence was taken during 1983, the Committee's work was disrupted by demands on its members during 1984, principally occasioned by the urgent need to report on a proposed national crime authority and to consider evidence on a matter relating to State parliamentary privilege. This perseverance was justified by the inherent importance of the project for the resolution of matters of vital concern to any democratic society. There is a tension and apparent conflict between the obligations flowing from the community's right to exist and the right of the individual person to act in accordance with conscientiously held beliefs. By keeping firmly in mind the sort of democratic society Australia is, and aspires to remain, the Committee, I believe, has provided a solution consistent with an abhorrence of authoritarian and, even more, of totalitarian political systems. I now read the recommendations and conclusion: Recommendations 1. The Bill should be redrafted so that it will provide a framework for dealing with conscientious objection to compulsory military service whenever there is lawful authority to compel such service and whatever the source of the lawful authority to compel such service (paragraph 1.9). The next paragraph, paragraph 2, is the core recommendation. It states: 2. Parliament should add to its present recognition of absolute conscientious belief, recognition of specific conscientious belief so as to grant exemption from participation in a particular military conflict where to be compelled by law to do so would violate the individual's sense of personal integrity (paragraph 2.19). 3. The Bill should not seek to limit the grounds upon which conscientious belief can be based and proved before an appropriate tribunal. The Bill should be redrafted so that it indicates neither an exemplary nor exhaustive list of grounds for the conscientious belief. Section 29A (4) of the Bill should be deleted (paragraph 2.29). 4. The determination of applications by individuals for exemption from conscripted military service on the grounds of conscientious objection should be in proceedings which are, as far as possible, informal and non-adversarial before a tribunal with at least three members (paragraph 3.11). 5. The Tribunal should be chaired by a Judge or retired judge (paragraph 3.9). 6. The other members of the tribunal should be mature citizens able by their background and expertise both to elicit the facts by other than adversarial process and to enjoy credibility in the general community (paragraph 3.11). 7. Decisions of the tribunal should be subject to appeal on the merits to the Administrative Appeals Tribunal. The Tribunal should also be subject to the possibility of review by the courts through the Administrative Decisions (Judicial Review) Act 1977 (paragraph 3.12). 8. The individual claiming to hold a relevant conscientious belief should carry the onus of demonstrating the existence of such a belief (paragraph 3.16). 9. The standard of proof to be discharged by the applicant should be proof on the balance of probabilities (paragraph 3.25). Conclusion Australia, as a democracy, even when engaged in armed conflict, is well able to accommodate the proposed extension of the recognition of conscientious belief in order to protect the integrity of the individual against the coercive power of the State (paragraph 4.22). In addition, in an annex to the report, the Committee shortly comments on some matters not directly encompassed in the terms of reference, but which arose naturally both in submissions and in our discussions around the table. These include the issues of conscription itself, of both sexes being subject to conscription should it be introduced, of alternatives to military service and of conscientious objections formed after an individual has become a member of the defence forces. I believe that the views of the Committee on these issues will be of value. What needs to be emphasised is that it is the unanimous view of Committee members, though not the subject of formal recommendations, that any future Federal parliament faced with a perceived military necessity to introduce conscription, should do so absolutely 'from scratch'. There should be no resurrecting or implementing of provisions left lying on the statute book for years. If any such statute providing for conscripted military service were to be passed, its provisions should protect the consciences of individual Australians in the way recommended by this Senate Committee. I said earlier that I took some satisfaction in the tabling of this report. I think it has demonstrated the way in which the Senate committee system provides a mechanism for calm deliberation after the taking of public evidence. It has provided a mechanism for consideration of a matter which has been close to my heart since my contemporaries, and later my students at the University of Tasmania, were subjected to the provisions of the National Service Act during the Vietnam war. I hope this report not only helps prevent such overbearing of conscience as occurred then from ever occurring again in Australia, but I hope it will also help heal some of the wounds still carried by many Australians as a result of their traumatic experience in conscientiously dissenting from military service in that war. This report is, in a sense, dedicated to them. I ask the Senate to bear with me while I quote from one of my own speeches in this place. Honourable senators will concede I do not burden them with that very often. But in my maiden speech given on 23 August 1978, I had this to say: I believe that this chamber should be encouraging the exercise of moral discernment in the use of force and should provide for it. It will not be easy. Some will view as anarchic the proposal that a citizen could conscientiously disagree with his government's conduct of an armed conflict and be relieved from participating in it. This point may seem remote and not grounded in any crisis presently facing Australia, but I believe that not to act now, in this chamber, in a time of relative tranquillity without an atmosphere of hysteria, will be to condemn future generations of Australians to cultural genocide, such that acting on individual conscience, the most potent insight of our Judao-Christian and Western tradition, will be as remote a possibility as it is in most of the world . . . we as legislators ought to be reinforcing the individual conscience as that which culturally makes us what we are-a society where the common good cannot be secured by means which destroy the individual personality. I believe that if this report is taken up by the Parliament, in whose members I have the greatest faith, historians will record that we as legislators reinforced 'the individual conscience as that which culturally makes us what we are-a society where the common good cannot be secured by means which destroy the individual personality'. I commend the report to the Senate. Question resolved in the affirmative. Senator Dame MARGARET GUILFOYLE(Victoria)(5.47) —I present report 232 of the Joint Parliamentary Committee of Public Accounts-the report of the Auditor-General of May 1983. Ordered that the report be printed. Senator Dame MARGARET GUILFOYLE — by leave-Report 232 examines the report of the Auditor-General for May 1983. Honourable senators will be aware that each year the Committee examines recently published reports of the Auditor-General. Following the tabling of the report of the Auditor-General for May 1983, the Committee sought written submissions from 13 departments and authorities in respect of 15 items. This report analyses the responses by departments and authorities to the Public Accounts Committee, explaining the criticisms raised by the Auditor-General in his report. Previous Auditor-General's reports have referred to overpayments of pensions, benefits and allowances by the Department of Social Security, and proposed improvements to the system for the recovery of such overpayments. These matters have been raised again in the Auditor-General's reports of March and September 1984 and April 1985. Statistics on overpayments refer to amounts identified by the Department as having been paid out in excess of entitlement-$63.7m in 1983-84-brought about by either incomplete or inaccurate information supplied by the payee at the time entitlement was assessed, or by a change in the payee's circumstances not immediately notified to the Department. The Department advised the Committee of initiatives to improve the recovery of overpayments and of administrative reforms to be carried out under the control of the performance monitoring branch of the Department. Nevertheless, the Committee was particularly concerned that the Auditor-General had found that the Department is still facing serious problems in the identification and recovery of overpayments. The Committee believes that the system for prevention and detection of overpayments is crucial and that delays in identifying overpayments reduce the likelihood of recovery. The Committee firmly believes that the adoption of the direct credit method of payment of benefits and allowances positively reduces the opportunity for duplication and fraudulent negotiation of cheques and strongly recommends that the direct credit method of payment be the principal means of payment of all benefits, with only exceptional cases being paid by other means. The Committee is also very concerned that beneficiaries are properly identified prior to becoming entitled to, or continuing to receive, benefits. The current amount of unrecovered overpayments is in excess of $100m and is increasing each year. As the report shows, the addition to the amount unrecovered was $28m last financial year. While the amount is small, compared with the total payments of $13,000m in 1983-84, it is material and must be reduced. The Committee does not accept that the current level of overpayments identified is satisfactory, but does acknowledge that the high level of overpayments raised is partly a result of the Department's success in identifying cases. What concerns the Committee is the level of undetected cases. The Committee also did not accept the arguments put forward by the then Department of Education and Youth Affairs on the use of the direct credit mode and believes that Department has not addressed itself fully to the identification and recovery of overpayments of student assistance. The Committee is concerned that this issue continues to be raised in Auditor-General's reports. The Committee again recommends that the direct credit method of payment of benefits and allowances be the principal means of payments to all recipients, except for those who do not have access to regular or direct facilities with banks, credit unions or building societies. The Committee is concerned that there still appear to be many problems in the Department of Education and Youth Affairs' administration of student assistance programs. The Committee recommends that departments should ensure that specific legislation is drafted for major programs; that is, those with a budget of at least $10m and with an expected life of at least five years. The report comments on a number of other issues which I have not raised here. I commend this report to honourable senators. Senator PRIMMER(Victoria) —by leave-I table additional information received by Estimates Committee C and seek leave for it to be incorporated in the Hansard record of the Estimates Committee's proceedings. Leave granted. Debate resumed from 20 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator PETER RAE(Tasmania)(5.53) —The Opposition does not oppose the Ministers of State Amendment Bill, which is simply a Bill providing for the application to Ministers of this Government of the increase in salary which has been applied across the board. The amounts involved are relatively small. They accord with the determination of the Australian Conciliation and Arbitration Commission. The only reason they are not applied automatically is that ministerial salaries are subject to special legislation, whereas the remainder of the parliamentary salaries are subject to the determination of the Remuneration Tribunal. Whilst we would prefer to see a situation in which those receiving the increase were members of the present Opposition in government, we cannot disagree with the fact that the Ministers are entitled to the increase. We support the Bill. Senator GRIMES(Tasmania-Minister for Community Services)(5.54) —in reply-I thank Senator Rae for his support for the Ministers of State Amendment Bill. I agree that it is for a very worthwhile cause. I urge that we pass the Bill as soon as possible. Question resolved in the affirmative. (Quorum formed) Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 7 May, on motion by Senator Button: That the Bill be now read a second time. Senator PETER RAE(Tasmania)(5.56) —The Representation Amendment Bill 1985 is a relatively straightforward Bill the provisions of which are consequential upon certain changes which, although we did not support them, have taken place. The number of senators from each State was increased from 10 to 12 by the Representation Act of 1983; that is, two additional senators from each State were to be elected. Thus, in the election of December 1984 there was an opportunity for extra senators to be elected if they were given high enough priority on the ballot papers. I do not propose to deal with that in detail. That Act also increased the number of members of the House of Representatives. However, it provided that those members were to receive their salary entitlement from the date of the election. But under the legislation the new senators were not entitled to receive their salary-although they were required to work as senators, and were entitled to have staff as senators and to have all the other provisions as senators-until some three months- Senator Missen —Their employees did though. Senator PETER RAE —Yes, I said that they had staff and everything else but they were not entitled to a salary. As I understand it, members of the various parties were concerned that justice be done and that there not be a difference between the new members of the House of Representatives and the new senators. It was felt that equality should prevail and that legislation should be introduced to correct what amounted to an omission in the original legislation in 1983 so that the new senators were entitled to be paid from the time they were declared elected to this chamber. The Opposition does not oppose the Bill but we point out that it should not have been necessary. It resulted from an omission by the Government in the original legislation. We did not support the initial legislation. We did not support the increase in the size of the Parliament. But, that increase having taken place, it is only fair that those new members and senators should be treated equally irrespective of the House in which they serve, and that the new senators should receive the same entitlement as the new members of the House of Representatives. We therefore do not oppose the Bill. Senator MISSEN(Victoria)(6.00) —I speak in favour of the Representation Amendment Bill. It corrects an anomaly which arose because the Government provided that members of the House of Representatives who were elected on 1 December would be paid from that date whereas senators doing the same work would not be paid as senators until 21 February this year. This seemed to be a complete injustice. In the second reading speech on this Bill the Minister for Industry, Technology and Commerce (Senator Button) drew attention to this in these words: This difference between the additional newly elected members of both Houses was drawn to the attention of the Government following a question asked in the Senate in February in the context of the nexus requirement between the two Houses. I raised that question. Without going into detail, because the number of people elected to the House of Representatives at the time of the last election in December was not as nearly as practicable twice the number of senators and, in fact, the number of representatives who took their seats then was many more than that, doubt was cast on the validity of the election of the House of Representatives. At least this Bill also cures that problem in that it removes doubt about an improper election of the House of Representatives on 1 December last year. More importantly, it corrects an injustice which should not have been done. If the Government had seen the precedent of 1948-49, when the Houses were last increased and when, quite properly, senators were paid from the date of election, it would not have made this mistake. It made the mistake on this occasion and will now, rightly, repair the omission. The position is a just one for senators, who naturally have been doing the same work since they were elected in December as have members of the House of Representatives. They have had staff and have been involved in all operations. Of course, neither House sat during that period and, therefore, there was no difference whatsoever between the work of members and that of senators. This legislation accords with justice and common sense in that any doubt as to the validity of the House of Representatives that would have sent its members to the people and forced them to repay all money received-a nasty consequence-will be removed. I am glad that that has not been put to the test and that the Government has accepted this legislation as a wise compromise. Debate (on motion by Senator Button) adjourned. Debate resumed from 20 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator PETER RAE(Tasmania)(6.03) —The Opposition does not support the Australian Shipping Commission (Additional Capital) Bill. It is a Bill to provide the Australian Shipping Commission, otherwise known as the Australian National Line, with additional capital of $70,541,000. This additional capital is required to provide the Commission with a capital structure which is regarded by the Government as appropriate for commercial enterprise and marks a further step in the Government's program of revitalising Australia's shipping industry. That is according to the Government. All I can say is that that is garbage. It does nothing of the sort. I will explain why I do not believe that this legislation will achieve its objective. According to the ANL annual report for the year ended 30 June 1984, it has a negative capital on the balance sheet of $3.65m. In other words, it is bankrupt. However, in a note to note 14 to the financial statement-I emphasise that it is a note-at the bottom of page 30, in relation to provisions, there is this quiet little statement: An actuarial valuation at 30th June 1983 estimates the deficiency at that date as $55 million. That is the deficiency in the ANL's contributions to the Commonwealth Consolidated Revenue in respect of employers' contributions towards superannuation. If one adds $55m, as at 30 June 1983 to $3.65m one comes out with a figure which is close enough to $60m. That is what ANL is down the tube for at the moment. That is not exactly a great start for a great, wonderful, national shipping line. I do not want to be taken as being a knocker of the service ANL has provided. I want to point out that it did a lot better in shipping goods to Tasmania than it did in running as a company. One of the problems is that it has been structured as a statutory authority rather than as it ought to have been-as a proper, private sector-owned company which could have done a good job. I accept that back in the 1950s there was a case for it being a publicly-owned operation, as there was a case in the 1940s for Trans Australia Airlines being a publicly-owned operation. But that is a long time ago. Senator Button —Could you sell it to them? Senator PETER RAE —Unequivocally, yes. This is why we oppose the legislation. Let me give the Senate an example of some of the support for the view which I express. On page 65 of the report by the Senate Select Committee on Statutory Authority Financing entitled 'Statutory Authorities of the Commonwealth: Financing' there is reference to the ANL. The report states: ANL's performance over the period 1970-71-- that is, the beginning of the 1970s- to 1981-82 is second only to ANR as being the worst of all the authorities surveyed. Over that period it has only achieved a real rate of return on total assets of 0.9 per cent and while the cost of ANL's capital is unknown it seems certain that it was not as low as this. It is particularly significant that with the exception of 1980-81 negative real rates of return on total assets have been earned since 1979-80. In other words, its performance, when compared with that of the other statutory authorities which were surveyed by that Committee, was the second to worst in that period. The major business authorities of the Commonwealth which were surveyed included Telecom Australia, Australian National Railways, the Overseas Telecommunications Commission, the Snowy Mountains Hydro-electric Authority, Australia Post, the Australian National Line, TAA, Qantas Airways Ltd and the Pipeline Authority. I quote further from the report: Given the high debt/equity ratio (calculated on an historical cost basis)-- that is, not on a revaluation basis, but on an historical cost basis which gives ANL an advantage- it is not surprising that over the period ANL has received considerable benefits from the effects of inflation on its debt. It is clear that these benefits will not be received now that interest rates are significantly positive and likely to remain so, with the result that the true income of the owners is likely to become even more unfavourable in future years. As discussed in Appendix A, the valuation of ANL's fixed assets (and hence replacement cost depreciation) may have been overstated in the later years given the depressed state of the international shipping market, but until ANL's assets are independently revalued in current prices these estimates are the most reliable available. They will almost certainly be more reliable than the historical cost estimates shown in the annual reports. It is therefore more difficult with ANL than with the other authorities to be as confident regarding the accuracy of the rate of return on equity figures. To the extent that the real equity figure is lower than the estimates published here, (as a result of the depressed state of the international shipping market), the rate of return on equity will be correspondingly higher. However it is likely that this effect was strongest in later years, with the result that for earlier years the results shown in Table 3.3 should be reasonably accurate. As with a number of other authorities, the real financial situation confronting ANL is even worse than indicated by Table 3.3 given the difficulties with superannuation. In evidence to the Standing Committee employees of ANL revealed that the Commonwealth Actuary had calculated that at 30 June 1980, if the rate of contribution paid by ANL was 15 per cent of salary unfunded liability amounted to $57.2m-- that is, at 30 June 1980- if the rate of contribution was 23 per cent the unfunded liability is $36.6m; and if 37 per cent of salary, the unfunded liability is nil. It is therefore clear that the true income of enterprises before interest is overstated by the unfunded superannuation liability and that the equity figure is similarly overstated. That report was published in September 1983. Since it was published we have had the 1984 report of the ANL which shows that the deficiency as at 30 June was actuarially calculated at $55m. The ANL story is woeful. I believe that the ANL will not be helped by the proposed injection of funds at this stage. The injection of $70m at this stage to provide additional capital by converting a $50.5m Treasury loan into a grant and the provision of a grant to allow the repayment of a $20m overseas loan on 1 June will not do anything to overcome the real problems of the ANL. When one considers that the ANL has not only the problems I have already referred to but also the very real problem that, when the leases terminate-much of ANL's equipment including its ships, is leased-according to the Commissioner of Taxation, the ships must be sold in a properly advertised, fully arm's length sale at a public auction in which there is no opportunity for the ANL to exercise what would amount to an option to purchase the ships for next to nothing. Although the lease payments, as I understand it, have been calculated on the basis that the ANL virtually will have paid for the ships by the time the leases terminate, what will have to happen then is that the ANL will either lose its ships or will have to go out in the open market and pay market prices to buy them back. That is another impending disaster for the ANL. When one considers what has happened so far as Commonwealth superannuation and the ANL's debt-ridden structure are concerned, when one considers that a large part of ANL's assets are on lease-what I have just described so far as the Commissioner of Taxation is concerned will have to happen-one can see that there is a very real urgency to do something about restructuring the ANL. In restructuring the ANL we would propose to give it a chance to operate as it ought to operate, that is, as an efficient, effective private sector operation. There is no reason why the ANL should be saddled with the expenses of Commonwealth employment, Commonwealth superannuation schemes and other expensive aspects of Commonwealth interference. It would be much more effective if ANL were able to operate as a private sector shipping line. This can be done quite effectively. There are examples in various places, both in Australia and overseas, which show that it is possible to operate a shipping company on an effective, profitable basis and that it is not necessary for the Australian Shipping Commission to continue to operate unprofitably at a very considerable cost to the taxpayer. Insofar as it might be necessary for particular services to be provided, the Government could call tenders from shipping services which could provide those services to various parts of Australia. Tenders could be for what would amount to a subsidy or supplement to what would otherwise be the cost of operation. That could apply to some places. There is no reason why ANL should not compete with any other shipping company for the provision of such services on a supplementary basis by the Commonwealth. We do not have to have a Commonwealth-owned authority to provide services to particular areas which have a particular need and which may not be able to be served on a purely economic, profitable basis. I do not think it is necessary to take a long time discussing what we propose as the matter was debated in the House of Representatives. I have summarised the problems of the ANL. I have summarised why the provision of $70m will not give it a real capital base from which it can operate. It will perhaps give it some slight positive capital and that is all. That is a fairly difficult job to give to Mr Max Moore-Wilton or whoever is going to run the ANL. He has my sympathy. I am not in any way denigrating ANL individual staff who have been trying to make an impossible structure work profitably. The structure is just not suitable. It is not the way in which one would set out to run a shipping company if one had a choice. I see no reason why this Government and this Parliament should approve the continuation of something that is unsuitable, unlikely to be profitable, unlikely to be able to pay its way, unlikely to get out of the grips of its creditors, in effect, and unlikely to operate efficiently and effectively. It is debt ridden. It is overridden with problems of the future as well as of the past. I believe that the best thing that could happen is for the ANL to be sold on the open market, notwithstanding that the problems it has may affect the price obtained for it. In 1983 the Senate Select Committee on Statutory Authority Financing reported that ANL's performance was second only to the Australian National Railways' as the worst of all the authorities surveyed. Let us get away from that situation. That is hardly basis upon which we should be encouraged to pour more money into an authority which already has a very major problem, as it will not overcome its problems. Taking over the liability and debts of $246m in relation to superannuation for Trans Australia Airlines did not get TAA out of its problems. I do not think providing an extra $70m towards overcoming some of the debt problems of the ANL will enable that authority to operate as efficiently and as effectively as I would like to see it operate. I am sure that everyone connected with ANL would much prefer to have a proper capital structure, a company in which the Australian public could own shares, in which the employees could own shares and in which the people involved could work towards something that was likely to produce a profit. We would like to see that happen, and happen as soon as possible. Therefore, the Opposition does not support the action proposed by the Government because it will not succeed in what I read out as being the primary stated purpose for which the Government is introducing the legislation. Therefore, we oppose the Bill. Senator VIGOR(South Australia)(6.28) —It is unfortunate that Senator Peter Rae and the Opposition have not been along recently to look at exactly what has been happening at the Australian National Line. Because of the situation which the Australian Democrats have been put in, I have made a point of talking to the executive management at the ANL and I am fairly convinced that the bleak picture presented by Senator Rae is painted much bleaker than is the real situation. Senator Sheil —What about the history of it? Senator VIGOR —I support Senator Rae in respect of the history of the ANL, but I believe that it has restructured itself effectively and that this has been shown to be the case by a 1984 profit. The Australian Shipping Commission (Additional Capital) Bill 1985 will inject an additional $70.5m into the Australian Shipping Commission. Some $50.5m will convert existing Treasury loans to capital and $20m will enable ANL to repay an overseas Treasury loan that falls due in June. The effect will be to recapitalise the Australian National Line, assisting to put it on a sound commercial footing. I note, as Senator Peter Rae has, that this is the second time in two years that the Australian taxpayer has had to bail out ANL. In May 1983 ANL received an even more expensive lifebuoy, worth $90m. Senator Peter Rae —It is still $60m down the tube. Senator VIGOR —The Australian Democrats support this Bill which guarantees the survival of Australia's own shipping company. However, we have reservations. We believe that mere recapitalisation and a realistic corporate strategy will not automatically ensure ANL's survival. These reservations have led the Australian Democrats to seek from the Government a guarantee of performance for ANL-as much as the Government can give it-an assurance that an independent report will be completed in 1986-87. That report should be on the financial performance of ANL and its progress towards achieving its declared commercial aims. We accept that ANL needs to take tough decisions to improve its image. I now believe, after talking to ANL's chief executive, that it has developed a realistic corporate strategy based on sound accounting principles. However, our national shipping line is still in murky waters. It is still beset by a very poor image-as shown by Senator Rae in his speech. It is beset by a poor perception by Australians of its industrial management and economic viability. The report that we propose will allow ANL to vindicate itself and Parliament to have the real facts. It will allow ANL to provide a service as a sound commercial enterprise. ANL's progress in dealing with these problems must be monitored closely. The Australian people need to know that their good money is not being thrown after bad. The Minister for Transport (Mr Peter Morris) has recognised the importance of such an independent report and has responded positively to our request. We were delighted to receive the following undertaking from the Minister, when he stated: I welcome the Democrats support for the Government's proposal to inject $70.5m capital into the Australian National Line (ANL). Unlike the Liberal-National Parties' narrow and blinkered opposition, the Democrats have assessed the issue on its merits and recognise that the Government is moving constructively to ensure that ANL operates on a proper commercial basis. They have sought an assurance from the Government that an independent report be brought forward in 1986-87 on the financial performance of the ANL and its progress towards achieving its declared commercial objectives. The Minister continued: I consider this to be a sensible proposal and give the assurance that such a report will be prepared by a member of the Inter-State Commission. I believe that with this undertaking-I have been quoting the Minister's words-we can safely say that the Government will have an independent arbiter look at the performance of ANL. The evidence that we have before us now is that the Australian National Line showed an operating profit in 1984. The vital factor which we have to take into account is a commitment by the unions and ANL management to co-operate to ensure the commercial future of the Line. The unions must recognise the necessity of reductions in the ANL fleet and better productivity and work practices, both ashore and on board. Management must recognise ANL employees' concerns and interests and be prepared to consult employees when important decisions are being made. The management-union co-operation will have to be based on goodwill on both sides. The performance of ANL will depend on that. On the other hand, attempts to improve productivity, both at sea and on shore in ANL's terminals, have met with less success. All parties are participating in discussions. However, to quote the ANL annual report for 1984: 'implementation has been disappointing'. Implementation cannot and must not be disappointing if ANL is to survive. The unions and management must combine to reduce costs and to make ANL more effective. Manning levels which contribute substantially to costs are of critical importance. New manning levels were agreed upon in 1983-84. The 1984 annual report expresses the hope that these new levels will be implemented in 1984-85. But the new levels of 25 to 26 people per ship, down from 31 to 38, will only be on new or replacement tonnage and not across the whole fleet. Those levels are still higher than those on other shipping nations. However, some of these nations exploit their crews mercilessly and we, in no way, expect ANL to follow these shameful examples. The economic need for reductions in ANL's fleet has been recognised. But as at 30 June 1984 we had the same number of vessels as at the end of 1983, namely, 33 vessels. Since then that number has been reduced to 27. Rationalisation of operations and services has also commenced. Coastal liner operations have been examined and rationalised. ANL's east coast services have been rearranged. Tasmania has taken over its own link with the mainland, with a new vessel, the Abel Tasman, supposedly coming into service soon. ANL vessels no longer trade north of Brisbane and that service lost more than $6m in 1983-84. ANL is adding new divisions of stevedoring and agency operations which it believes will be effective and commercial. I believe this is all moving ANL towards being an effective shipping line of which Australia can be proud. ANL has also begun to rationalise its services to foreign ports. The Pacific American Container Express Service to the east coast of the United States of America has been abandoned by the management of ANL because of general competition on that line. On this occasion the Seamen's Union of Australia, while not approving, has not taken disruptive action. ANL's management also attempted to withdraw the Allunga from trade on the west coast of North America after concluding that it was not commercially justified. Union action ensued and the service was retained for a further uneconomical six months on the west coast of North America. Short term considerations should not override the commercial imperatives confronting ANL. However, all of these things take time. The rationalisation of the Christmas Island phosphate transport will take some time. On each of these occasions the unions appear to have behaved sensibly in their longer term interests. The prospects for ANL's future must be considered in light of the fact that industrial relations were worse in 1983-84 than in 1982-83. I believe they have improved this year. A total of 287 ship operating days were lost at a cost of $7.08m. That was approximately double the cost in the previous year. However, I am told that this situation is being remedied. Two of the major disputes in 1983-84 were painfully pointless demarcation disputes and quite beyond the control of management. Co-operation between unions, and unions and management is essential if ANL is going to survive. For Australia's economic well-being the Australian Shipping Commission must also increase its share of Australian foreign trade. ANL must do better than the 4 or 5 per cent that it currently controls. The Government must be commended for the steps to increase ANL's share of liner traffic. ANL and the unions must be wise and work together to increase that share by making ANL economically attractive. Because of the Australian Democrats' support in the Senate, the ANL will get a chance to become more economically viable and attractive. But we have ensured that ANL's progress towards achieving its declared commercial objectives and its financial performance will be overseen by an independent person. A report will be brought forward and presented to this Parliament by people who understand the industry so that we can then check the facts. ANL's performance will be checked and monitored and the taxpayers' money will not be wasted. Sitting suspended from 6.30 to 8 p.m. Senator VIGOR —Before dinner I was explaining why the Democrats were going to support the Australian National Line and the Government proposal to let it have $70.5m to allow it to get its cash flow problems in order. I wish to continue by looking at a more global problem with our economy. Australia has negative net invisibles. Invisibles include the cost of services such as transport, insurance, exchange and money transfers provided both to foreigners-that is invisible exports-and by foreigners for Australia, which is invisible imports. The net invisibles figure is the sum of these two figures. Because Australia relies heavily upon foreign shipping services, foreign insurance and foreign banks our net invisibles are always negative. That means, even with a positive balance of trade, Australia ends up with a negative balance of payments on the current account. This is because nil invisible imports exceed net tangible goods export earnings. Another worrying factor for Australia is that invisibles are paid in foreign currency. That, in turn, reduces our national reserves, which are needed to pay for our imports. To maintain these reserves we have to borrow overseas or sell Australian assets to overseas people or corporations. If this happens ownership of Australia and influence over our destiny passes into foreign hands. Even though the Australian National Line historically has a bad image it is an Australian shipping line and can be paid in Australian dollars. If we use the Australian line we can decrease our dependence on invisibles. Further steps must be taken to instill in people who set up shipping, agents, confidence in ANL. Unions and management must realise that the confidence of shippers is crucial if ANL is to win a greater share of Australian trade, improve its performance and survive. Only then will ANL begin to effect our invisible payments favourably. Australia's foreign debt of $40 billion is increasingly difficult to service. Australia's foreign currency reserves must be used to service that debt, not to pay for invisibles. We must take steps to reduce our invisibles. Hence, it would seem rather stupid to obliterate ANL. The demise of the Australian National Line would increase invisibles and hence increase foreign debt. There is an alternative to greater foreign ownership and foreign indebtedness and that is for Australia to reduce its invisible payments for services. We must encourage and support Australian services not only in the shipping line but also in other areas. Retaining ANL as an Australian enterprise gives us a chance to reduce these payments. Senator Peter Rae —We have a whole policy on that. Have you? Senator VIGOR —Yes, indeed. If shippers and exporters use ANL in preference to foreign lines we will have to pay out fewer foreign dollars. On the other hand, if ANL disappears, the invisible costs will increase to our detriment. Senator Peter Rae —Not if it is owned by Australians. Senator VIGOR —We are in favour of privatisation in some areas but currently the structure of ANL is such that it needs this boost. With its debt structure, it would not be worth very much if it were sold on the open market. We have to let it trade out of its current difficulties and that is the reason why the Democrats are supporting this legislation. I commend this Bill to the Senate. Senator HAMER(Victoria)(8.05) —In the Australian Shipping Commission (Additional Capital) Bill we are considering a proposal by the Minister for Transport (Mr Peter Morris) to save, yet again, the Australian National Line. It is only two years since $90m was given to the ANL; now Parliament is to be invited to give another $70.5m to this ailing company-$50.5m for the conversion of existing domestic Treasury loans into capital and $20m to enable ANL to repay an overseas Treasury loan which falls due next month. By any reasonable standards the ANL is just about broke. Senator Peter Rae —It is broke. It is $60m down the tube. Senator HAMER —Senator Rae may well be right. There are various accountants' ways of looking at this. I said 'just about broke' because I was trying to be charitable. Last year the ANL lost $67m, and the latest report from the Australian Shipping Commission-the body that runs the ANL-showed negative capital reserves of $3.6m and outstanding loans of $114m. As the Commission said: 'now that our standing financial loss estimates are recognised, the total balance sheet liabilities amount to $407m'. The ANL is broke, or just about broke. Why is it broke? When we gave the company the last massive injection of capital I said that government-run enterprises seemed constantly to run into this problem of bankruptcy. The Government should not be in the business of shipping. Senator Vigor was talking about the difficulty of selling ANL. I do not think anyone would buy the company as it is but I think that its assets have value. The sensible thing would be to sell the assets and have them run efficiently by private enterprise. Why is the ANL doing so badly? It is only two years since the Minister was calling for a five-point plan to rescue the ANL with, as he said, 'a determined commitment by management and unions to greater productivity and joint action to improve ANL's performance'. Those were the Minister's words. A great deal has been made of the reductions in crew levels. Recent Press reports have claimed that the ANL had succeeded in reducing ship manning from between 31 and 36 crew members to between 25 and 28. This sounds fine until we remember that world averages, including those of countries that are more affluent than we are, are between 21 and 24 crew members and some new ships have crews as small as 17. In any case, these claimed crew reductions have not yet taken place. According to the latest ANL report, the Australian Council of Trade Unions put forward proposals in May 1984 for reduced manning levels of 25 or 26 for new vessels and replacement tonnage, not for existing vessels. The ANL report went on to say that the manning levels on existing ANL vessels-that is, the ones we are dealing with at the moment-varied from 31 to 38. It went on to say also that it was hoped that the welcome initiatives I talked about earlier would be implemented in 1984-85. One hopes these reductions will be implemented. To run our ships with up to 10 more crew members than those of other countries-including countries more affluent than we are, not cheap labour countries-is an extraordinary reflection on our management or our work practices or both. I ask the Minister what progress has been made in actually reducing these manning levels, rather than just talking about it. In any case, I must emphasise that when one looks at the problem one sees that it is not just the manning levels but the total manpower costs that must be borne in mind; and the total manpower cost of running an Australian ship is astronomical. Sweden has a standard of living, a standard of affluence, higher than ours. Yet to run an Australian ship costs twice as much in manpower costs as it does to run a Swedish ship. I give another example. It has to be a few years old because the up to date statistics are not available. In 1981 the average world cost of operating a 110,000 dead-weight tonne ship on the open registry was $1.8m a year. For the British the same ship would cost $2.4m to operate, and for an Australian ship manned by Australians-bearing in mind the average world cost is $1.8m and the British cost $2.4m-under our present Australian conditions it would cost $3.8m, double the operating cost on the open registry. The Europeans estimate that to run their ships on Australian manning standards would cost them an additional $1m a year. Senator Peter Rae —It costs more to send goods from Melbourne to Tasmania than it does to send them from Singapore to Tasmania. Senator HAMER —That is true. It is partly due to the cost of shipping and partly-this is an issue I will come to in a moment-due to the cost of our port facilities. Dealing with our shipping at the moment, the reason for our very high manpower costs to run our ships is partly overmanning, partly strikes and partly the extraordinary system whereby our voyage-on voyage-off system means that ANL must employ 2.3 men per berth. In other words, for every man on board the ship, there must be 2.3 men per berth somewhere. In other countries the manning figure is typically 1.5 men per berth. This is an industrial outrage, and we will not get efficient sea transport until the Government is prepared to tackle this outrage. One must remember that the whole Australian community and the efficiency of our economy are affected by our transport costs. As for industrial disputes, I read in the lastest report of the ANL this rather disturbing statement: During 1983-84 a total of 287 ship operating days were lost through industrial disputation at a cost of $7.09 million, which was more than double the cost of $3.50 million in the previous year. I seek leave to incorporate a table showing the operating days lost through industrial disputes in the ANL in 1983-84. They are the latest figures available. Leave granted. The table read as follows- Operating days lost through industrial disputation in the Australian National Line 1983-84: No. of Percentage Days of Total Shipping (e.g. ships crews) 92 32.00 Stevedoring ANL Terminals 131 46.64 Other 24 8.00 Other Shore Disputes (e.g. Bulk loading, transport etc.) 25 9.00 Ancillary Services (e.g. Tugs, Pilots, Linesmen) 15 5.00 287 100 Source: Australian National Line Annual Report 1984, page 17. Senator HAMER —One can see from the table that 131 shipping days were lost through strikes in ANL terminals. This points up another problem, the waterfront problem, which we must tackle if our sea transport system is to be efficient. But 32 per cent of the total days lost-92 shipping days-were lost through crew disputes. Here again, one of the real problems is the multiplicity of unions, and I ask the Minister what advances have been made to reduce the number of unions that go down to the sea in ships. I sum up by saying that it is very damaging to our whole economy that our shipping services are so enormously expensive-very much more so than in countries with higher standards of living than ours. We must take action rather than just talk about reducing crew levels. We must stop the extraordinary featherbedding by which one requires 2.3 crew members for each berth, and we must reduce industrial disputes. The obvious way to do that is to reduce the multiplicity of unions and thereby reduce demarcation disputes. Senator McIntosh —Do you support multinational unions? Senator HAMER —I would certainly support the amalgamation of unions into a single sea-going union as long as the unions who have members who go to sea are prepared to shed their members to provide a single sea-going union. The figure we must look at constantly is our total manpower costs to run our ships. We must not be headed off by some minor aspect of it. I repeat that, vital though it is we tackle this problem, we must also simultaneously recognise that governments cannot run efficient shipping lines. Only two weeks ago we heard that the Government was going to turn over the defence services home loan scheme to private enterprise. The Government, in a much publicised statement, claimed as a result that savings would be made, backlogs would be removed, 400 or 500 public servant positions would be saved and the effect of this would be carried by private enterprise at no cost to the community. Of course, it is true and obvious that private enterprise operates much more efficiently in this field than government does. That is what should be done with the ANL. The whole Australian community suffers very greatly from the inefficiency and high costs of our sea transport. We have only to look at the subsidies that must be paid to Tasmania because it is restricted to sea transport. Senator Peter Rae —To compensate them. Senator HAMER —This is to compensate Tasmania for the inefficiency of our sea transport. That should not be necessary. Sea transport, properly run, is the most efficient method of transport available to anyone, yet we have to compensate Tasmania for the inefficiencies of our sea transport and our Australian flagships which have a very inefficient monopoly of all traffic on the Australian coast. We must see to it that the whole community has an efficient shipping industry. It is important to our economic development and to the standard of living of all Australians that the Government takes some decisive action on our shipping rather than just tinker with the problem. Senator RYAN(Australian Capital Territory-Minister for Education)(8.17) —A number of points have been made in the second reading debate this evening on the Australian Shipping Commission (Additional Capital) Bill 1985, the purpose of which is to provide the Australian Shipping Commission with additional capital of $70.541m. This capital will be used to convert the existing domestic Treasury loans to capital-a sum of $50.541m-and to enable the ASC to repay an overseas loan of $20m that falls due in June 1985. During the debate a number of honourable senators made criticisms of the Government's decision to make a further capital allocation to the Australian National Line. But their criticisms are quite unfounded; they are no longer appropriate. For example, Senator Peter Rae drew a picture of a body which was historically true but which is no longer true. As Senator Vigor from the Australian Democrats pointed out, the picture has changed substantially over the past two years. The ANL has a new legislative charter to enable it to act competitively and commercially. The ANL has new management with a proven commercial track record. The ANL is rationalising its services, it is disposing of obsolete and inappropriate vessels, and it is improving its productivity and its efficiency both at sea and at its terminals. Some benefits have already appeared from this new management and new legislative arrangement. The ANL recorded an operating profit of $3.3m in 1984-85; that is, a $22m turnaround from the previous year. There might be Opposition senators in this place who would like to ignore that fact but I suggest that it is a very considerable improvement and certainly disproves the claim made by Senator Hamer, the last speaker for the Opposition, that it is impossible for a public authority or a government enterprise to act profitably in this regard. It is not. The figures prove Senator Hamer wrong. Of course, ANL does not face an easy task in the future to build on this promising initial response but the $70.5m capital injection which is provided by this legislation will be an important step forward. With the ANL on a more commercial financial footing and relieved of part of the debt which it faces, the ANL management will be better placed to move forward into sustained profitability. A number of points have been made during the debate, but I particularly want to respond to Senator Hamer's query about the manning of the ships. Senator Hamer suggested that the ships were overmanned and that this is one reason why the commercial performance was not as good as might be expected. I am happy to respond to Senator Hamer that in fact progress is being made in this respect. For example, the newest vessel introduced into ANL is a container ship, the Australian Trader. It has a crew of 25, which compares favourably with crews of 31 to 35 in existing vessels in the fleet. It is clear that ANL has turned around from the loss situation and is operating in a more commercial fashion. The new management, I suggest, has made a very promising start and progress is being made in respect of the problem of overmanning. The criticisms made by Liberal Party senators in particular during this debate are no longer relevant. I place on record my appreciation of Senator Vigor's remarks. He showed a very keen appreciation of the circumstances of ANL and of the positive and constructive developments which have taken place under the new management. Having refuted the unfounded criticism made by Senator Peter Rae and Senator Hamer, I now commend the Bill to the Senate. Question put: That the Bill be now read a second time. The Senate divided. (The President-Senator the Hon.Douglas McClelland) Ayes . . . . . . . . . . . 33 Noes . . . . . . . . . . . 29 —— Majority . . . . . . . . . 4 —— Aulich, T. Jones, G. N.Black, J. R. McClelland, DouglasBolkus, N. McIntosh, G. D.Button, J. N. McKiernan, J. P.Childs, B. K. Macklin, M. J.Chipp, D. L. Maguire, G. R.Coates, J. Mason, C. V. J.Colston, M. A. Primmer, C. G.Cooney, B. Ray, RobertCrowley, R. A. Reynolds, M.Devlin, R. Robertson, E. A. (Teller)Elstob, R. C. Ryan, S. M.Evans, Jack Sibraa, K. W.Foreman, D. J. Tate, M. C.Georges, G. Vigor, D.Giles, P. J. Zakharov, A. O.Hearn, J. M. Archer, B. R. MacGibbon, D. J.Baume, Peter Messner, A. J.Bjelke-Petersen, F. I. Missen, A. J.Boswell, R. L. D. Parer, W. R.Brownhill, D. Rae, PeterCollard, S. J. Scott, D. B.Crichton-Browne, N. A. Sheil, G.Guilfoyle, Dame Margaret Short, J. R.Hamer, D. J. Teague, B. C.Hill, R. Townley, M.Jessop, D. S. Vanstone, A. E.Kilgariff, B. F. (Teller) Walters, M. S.Knowles, S. C. Watson, J. O. W.Lajovic, M. E. Withers, R. G.Lewis, A. W. R. Coleman, R. N. Puplick, C. J. G.Gietzelt, A. T. Carrick, Sir JohnEvans, Gareth Reid, M. E.Richardson, G. F. Durack, P. D.Grimes, D. J. Chaney, F. M. Question so resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed. Senator RYAN(Australian Capital Territory-Minister for Education)(8.29) —I thank honourable senators for their contributions previously on the Representation Amendment Bill. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 20 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator PETER RAE(Tasmania)(8.31) — The Australian Land Transport (Financial Assistance) Bill 1985 provides for expenditure of more than $4,000m over the next five years. This is something of an anti-climax after the Representation Amendment Bill with which we have just dealt and which involved a minor amount of money. This Bill replaces the Roads Grants Act, which is due to expire on 30 June, and will become the major source of Commonwealth finance for road construction and maintenance over the next five years. The legislation provides some $810m for the first year, and this amount will be indexed to the consumer price index for each of the succeeding years. This, together with the $440m for 1985-86 from the Australian bicentennial road development program, will provide a total of $1,250m of which $1,245m will be available for roads after allowing the $5m for road and rail research. The Bill re-establishes a new trust fund for the receipt and distribution of this money and provides the certainty that the indexation consumption base-that is, 3.66c per litre-will provide some $810m over the first year. Combined with the other funds to which I have referred, this provides a great start for a road building program for Australia. The point I wish to make is that this is the continuation of a program which was started under the former Fraser Government. I congratulate the Government for continuing this program and the important development of Australia's roads. But we do not think it is appropriate for the Government to claim credit and full kudos for this program. The program is a continuation of the Australian bicentennial road development program which was started under the former Government; it is being carried on by the present Government. The 1984-85 Budget estimates, on the kindest interpretation, reveal that the amount allocated for this financial year, that is a total of $1,245m for road grants and the Australian bicentennial road development program funds, is actually a reduction in real terms of about 3 per cent on the figure for 1983-84, which was the Labor Government's first year and the first year of the former coalition Government's Australian bicentennial road development program funding. What in fact has happened is that, although the present Government is going ahead with a road development program of major proportions, for which we give it due credit, it is not going ahead in the proportion which had been planned under the former Government. The basis of the calculation is quite simple. The Budget document indicates a 3.4 per cent increase. If one then deducts from the consumer price index increase of about 6 per cent, one arrives at a decline in real terms. For 1985-86 the reduction will be at least 6 per cent greater than the figure for 1984-85; and the reduction will probably be greater, depending on the inflation rate. In anticipating that figure, it is regrettable that almost every step this Government is taking in economic management indicates that the inflation rate for 1985-86 will be substantially higher than it has been whilst the Government has been enjoying the benefits of what the previous Government was able to set in train and hand over to it. In two years of Labor Government there has been a reduction of over 9 per cent in real terms for road finance, construction and maintenance. Whilst the Government has seen in two years a real reduction of 9 per cent, it has been increasing expenditure on administration of its departments by anything between 15 per cent and 30 per cent. In some instances, up to 40 per cent of the increases in the past year has been on administration alone. The huge explosion in the Budget deficit is not because of expenditure on important infrastructure developments such as roads, but because there has been an extreme increase in expenditure on administrative costs of the Government. If the Bureau of Transport Economics road construction price index is used instead of the CPI, the reduction would probably be greater because of the significant increase in petroleum prices which is now occurring and which is accelerating the cost of bitumen. The new legislation basically follows the earlier Roads Grants Act but also incorporates many of the features of the Australian bicentennial road development legislation. The Opposition basically supports the concept of the legislation. There are several significant similarities to the Australian bicentennial road development program which the former Minister for Transport, the Hon. Ralph Hunt, introduced in 1982, to his credit and to the credit of that Government of which my colleague Senator Peter Baume was a member, and about which all who were involved can be proud. The first is the establishment of a trust fund to administer the Commonwealth grant. The Opposition supports this concept which has now been introduced but we have some doubts whether the Government is completely genuine about the trust fund concept. For instance, the Government indexed the Australian bicentennial road development program levy beyond 2c a litre but has not paid that into the trust fund. It has pinched the money; that is what has happened. It has plundered the public purse. Have honourable senators ever heard anybody talking about plundering the public purse? Once again the Minister for Finance (Senator Walsh), the fellow who talks about plundering the public purse, has been a member of a government which has been involved in plundering the public purse. It has increased the levy on petrol and indexed it and, instead of passing this money on for the development of roads, has pinched it and put it into Consolidated Revenue so that it can be spent on its excessive administration costs. That is the sort of thing that is happening. There is separate provision for rural and urban arterial roads, as is provided in the Australian Bicentennial Road Development Act; and the Opposition supports that proposal. Maintenance, as well as construction, is allowed. However, the Opposition is concerned that there has been a 5 per cent reduction in the total grant for arterial roads, which equals a 15 per cent to 18 per cent reduction for that category. The reduction is even greater when allowance is made for the optional use of rural arterial finance for railways. In the Australian bicentennial road development program, of course, up to 25 per cent is used for urban public transport from the urban arterial sector. The Minister for Transport (Mr Peter Morris) has indicated that, as with the Roads Grants Act, tendering will not be required for arterial roads-the opposite of the bicentennial program, which requires tendering. Generally speaking, the State Ministers and local governments are opposed to tendering because of the possible effect it could have on continuity of employment for their road gangs, particularly in regional areas. The States also say that this requirement would be unfair because they have to provide two-thirds of the arterial road money. The private road construction industry, however, supports tendering and wishes to see it extended further, believing that this is the most efficient use of taxpayers' money. The on-site and geographic advantages of regionally based State or local authority gangs should provide enough edge to win any tender which is really competitive, particularly in conjunction with exemptions to the tender requirements that are provided. The Opposition has decided not to move an amendment to require tendering at this stage. However, the Opposition will monitor the progress of this legislation very closely. We shall see that the Australian bicentennial road development legislation is reviewed for possible reconsideration upon the Opposition's return to government after the next election, whenever that may be-may it be soon. While the bicentennial road development levy has been indexed, the $500m plus which was gained from that indexation has not been paid, to the shame of this Government, into the trust fund and is not being used for road construction, as it should be. It is being used for administration expenses of the Government. As I said before, I believe that matter is shameful. The Australian road users, the people who are paying the levy, are being ripped off by a form of taxation which they should not be paying. The Consolidated Revenue funds should be gained by other taxation measures. The bicentennial road levy was to be used for road development and was not for Consolidated Revenue. My further comment concerns the matter of the cuts which we heard so much about in the recent mini-Budget. There was a claim than $60m had been cut out of the 1985-86 figures of this Government. The fact is that the Minister for Transport in his Press release and in his answer to the shadow Minister for Transport, Mr Lloyd, in the House of Representatives on 16 May last stated that the $1,245m, which is the total road program figure for the next year that was first announced over five weeks ago, will not be reduced. Yet in the mini-Budget the Government tried to claim that there had been a $60m road cut. The Government obviously put on that amount in the first place, took it off again and said that it had cut it. In fact, the Minister announced five weeks before the mini-Budget the amount to be expended. This cut is as phoney as the whole lot of other sleight-of-hand tricks which were engaged in by the Treasurer (Mr Keating) and others responsible for the phoney mini-Budget which pretended to show that this Government was dinkum about taking a hard line in relation to the necessary expenditure cuts. In fact, the average Australian, the Australian financial market and the world financial market have shown that they do not believe the Government is dinkum. I will not hold up the Senate by going into more detail in relation to that aspect of the phoneyness of the mini-Budget. I simply say that that $60m as well as all of the other items to which many of us have referred at various times were, in fact, phoney cuts. They were never real cuts. In this case the Minister had announced five weeks before the mini-Budget that the amount to be expended would be $1,245m in respect of the total road program, and that is what it will be. There is no $60m cut. Many of us may be relieved to find that, in fact, road development will be going on to a degree which we would like to see taking place. I would much prefer to see the $500m which the Government pinched out of the levy going into road development and not into Consolidated Revenue. That would be much more preferable as an honest approach by a government which genuinely is prepared to levy from the users an amount of money to be invested in the development of better roads for this country at a faster rate of development. That is what we need and that is what we regret the Government is not doing. The Opposition, with those reservations, will support the Bill. Senator VIGOR(South Australia)(8.45) —The Australian Democrats support the Australian Land Transport (Financial Assistance) Bill 1985. It is commendable in its recognition of the importance of and the need for guaranteed indexed funds to construct and maintain Australia's transport infrastructure. It recognises the importance of forward planning by establishing a trust fund and setting levels of funding for the next five years. The Bill also ensures in some measure that the user pays, that those who use the most fuel pay the most excise and hence have a greater input into the trust fund. The Bill also goes some way to making sure that road hauliers, whose trucks do the most damage to roads, pay for the necessary repairs to those roads. It extends Federal funding beyond the confines of the Roads Grants Acts which it must replace by 1 July this year. This Bill also goes beyond the Roads Grants Acts in another way, by attempting for the first time to establish a coherent and comprehensive approach to land transport. I agree with the Minister for Transport (Mr Peter Morris) about the importance of Australia's transport system. An efficient system has a major economic impact, both now and in the future. One area of impact is our success as exporters. However, a well organised and maintained and cost-efficient transport infrastructure is also of immense social importance, something that has not been sufficiently recognised in this Parliament. Road safety and road research are now to be funded by this program from moneys raised by the fuel excise-a commendable step. However, I am still disappointed that economic factors have been put above social factors, even in this Bill. The admirable concept of social audit, part of the Australian Labor Party's platform on transport, is absent from this Bill. But then, it was ignored when the terms of reference for the Hill inquiry into the Darwin to Alice Springs rail line were set. On that occasion the defence aspects were excluded as well. On this occasion the economic and trade aspects are the qualities stressed in the discretion given to the Minister when declaring appropriate projects to be of national importance. The funds created by the railways through the use of diesel fuel, we believe, should be returned to them to assist in the maintenance of their road; that is, the track on which the trains run and the switching gear which is used to protect that track. This provision could be criticised in the light of the large amount of funds which are already being provided to the railways. However, Australian National is not the only railway in Australia. Other railways deserve to have their fuel excise returned to the rail networks, by the same justice that requires that road users' excise is ploughed back into the road network. It is also just that road users pay for road safety programs, research into roads and road use. It is legitimate that Federal funds raised from excise and customs duties on fuel be used to pay for the maintenance work on roads. The addition of these new funding categories means that the Government's claim that it is maintaining road funding levels is possibly open to question. Not only have total funds been slightly reduced to $810m, but also the assistance must now be spread further over a greater number of categories. The fact that funds may be directed to both the construction and maintenance of national and arterial roads is a very significant change. It is significantly different from the Roads Grants Act 1981 as well as the Australian Bicentennial Road Development Trust Fund Act 1982, which directed funds solely towards construction work. Interstate mainline railways are as significant as national highways. They link major capital cities and provide a freight service which spans the continent. The coexistence of rail and road is significant to Australia's transport infrastructure and this has been recognised in this Bill. Funding for the upgrading of the interstate rail links may be provided from the allocation for national highways. We believe that this is very important. The possibility of funding rail from rural arterial categories, of course, recognises the important role that rail transport plays in our primary industry sector. What a pity it is, then, that the Minister has not seen fit to allow himself a degree of discretion and to declare an interstate mainline railway a significant project, similar to the way in which national highways are treated, and to put it in the 'developmental road' category. Clause 4 of the Bill covers this area. Developmental roads are equated quite properly by the Bill to national roads. As the definition in the Bill shows, they are roads of national significance. They are aimed at the development of particular industries or particular energy resources, including those in remote areas; at facilitating or developing interstate or international trade or commerce; and at facilitating significant tourist travel. The roads are, of themselves, of national importance. By comparison, the definition of 'interstate mainline railway' allows only the meagrest of ministerial discretion. A declaration may be made for intercapital lines, or any line of national significance in relation to interstate trade and commerce. This is a much smaller area of discretion than that available for roads. We would like to have this looked at in the long run. The Bill should allow a line that facilitates international trade in resources to be funded, for example, under the 'developmental road' category. Bulk resources freight is one category of freight that rail handles very efficiently and effectively. I am pleased to see that the Government has learnt from the Australian Road Research Board program and indexed, to the consumer price index, the specified share of customs and excise duty on motor spirits and diesel fuel that will be paid into the Australian Land Transport Trust Fund established by this Bill. To some extent indexation will maintain the value of the money set aside by the Bill. However, I hope that the Government does not show under this Bill the same contempt for trust funds as it has shown by cutting funding for the Australian bicentennial road development program by a claimed $60m. However, it will not prevent each excise and customs duty dollar buying less road over a five-year period. To some extent indexation will combat inflation, but the cost of road construction and maintenance escalates at an even greater rate. Road costs continue to rise at a rate at least 50 per cent higher than that of CPI increases. We support Senator Peter Rae's proposal of using the road construction cost index as a measure of inflation in this area. This would provide a more realistic indexing of Australia's land transport program. Indexation by the road construction cost index would more truly maintain the impetus and effect of this program. In my State of South Australia the use of that index and a formula approach would have helped us. South Australia has been discriminated against. Under the current arrangement, South Australia receives only 7 to 8 per cent of total road funds. However, if we had a formula based on area, population and road length, and not a formula based on expenditure, South Australia's share would rise to approximately 9 per cent of total road funds. I now turn to clause 32 (1), which requires that States invite tenders for categories of national highways and capital railway projects. The Australian Democrats have received a number of submissions to the effect that arterial roads should be subjected to the same tendering process. The Australian Democrats have decided that requiring the States to invite tenders for urban and rural arterial roads would be inappropriate. The Australian Council of Local Government Associations has calculated that 13,000 local jobs would have been at risk if full open tendering for arterial roads had been introduced-some 5,000 jobs in New South Wales, 3,400 in Victoria, 2,800 in Queensland and 1,800 in other States. By putting jobs at risk tendering would have a major disruptive social impact especially on communities that rely on the local road work for sustenance. This effect would be especially serious in remote rural areas. The economic reasons for favouring tendering, however, are substantial. The major reason is that tendering appears to provide the best value for money by a process of competitive pricing. However, the cost of tendering itself is eventually passed on to the Government. Tendering, however, means that there is public accountability. We believe that this public accountability is also available when public bodies such as local government are doing the road building. The Minister for Transport in his second reading speech sensibly recognised the administrative cost of tendering and said that it would be meddling in the traditional responsibilities of the States to change the current system. He pledged to require the simplest of administrative information in respect of the approvals for arterial roads. Tender preparation is a costly process that must be paid for. The investigation, design, documentation, supervision and administration for a small project of approximatley $20,000 could be as high as $1,000. We sought and found no conclusive evidence that the tax dollar built more kilometres of road through the private sector as opposed to the public sector. There is only a philosophical argument that somehow open tendering is better. This, however, did not justify a special amendment to handle this process. Therefore, the Australian Democrats are supporting the Bill unchanged. The Federal Government has a responsibility to ensure that the Australian land transport system is developed effectively and safely and that it will assist Australia's economic prosperity. The advances and benefits of the last few years must not be squandered. This Bill is a step in the right direction. The Australian Democrats support the Bill and will be watching the Australian land transport program's implementation with interest. We commend the Bill to the Senate. Senator CRICHTON-BROWNE(Western Australia)(8.58) —We are debating the Australian Land Transport (Financial Assistance) Bill which provides for continued Federal funding for roads following the expiry of the current Roads Grants Act at the end of this financial year. As a senator representing Western Australia I have of course a particular interest in and concern for road funding. Western Australia's road network of some 140,000 kilometres constitutes 17.8 per cent of Australia's total public roads. Some 28.88 per cent of Australia's national roads, that is, 4,562 kilometres, are within Western Australia. However, it is not without significance that our share of Federal spending in 1985-86 on these highways represents only 10.5 per cent of the total Commonwealth outlays on national highways. What gives me very real concern is that Western Australia's percentage has declined from an already low base in 1984-85 of 10.9 per cent, to the 10.5 per cent which I just referred to. To compound that inequity, while Western Australia has 17.8 per cent of Australia's total public roads, our share of total Federal road grants in 1985-86 is only 12.19 per cent of outlays. Again, that is a decline from the 1984-85 figure of 12.67 per cent. I might add of course that Western Australia occupies 33 per cent of the Australian land mass. The construction and maintenance of Western Australia's roads have played a vital role in the resource development in that State and have provided sufficient support to enable the development to continue. This reduction in funding is not just a matter of concern to Western Australia. Resource development in both the mining and agricultural sectors has enabled Western Australia to contribute 21.5 per cent of Australia's export earnings in 1984-85. The opening up of remote and regional developments has increased Western Australia's export earnings from $286m in 1963-64 to $5,334m in 1983-84, increasing its contribution to Australia's total exports from 10.3 per cent to 21.5 per cent. Under Labor's land transport program the amount of Federal funds allocated to roads in 1985-86 will be $1,245m, approximately the same in money terms as for 1984-85. Therefore, in real terms, after allowing for inflation, this will represent a decline in funding compared with 1984-85. It should be remembered that funding for roads in 1984-85 represented a decline compared with 1983-84. The 1984-85 Budget allocation for road grants to the States and the Northern Territory increased by only 3.4 per cent compared with last year to $1,245.2m. Allowing for last years inflation rate of 6.9 per cent, this represents a fall in funding in real terms of 3.5 per cent. The new legislation is similar in some respects to the Australian bicentennial road development program which was initiated by the coalition Government. A proportion of the revenue collected from the excise on motor spirit and diesel fuel-in fact 3.66 per cent-will be paid into the Australian Land Transport Program Trust Fund. In 1985-86, out of this fund, $5m is to be allocated for land transport research and road safety and $805m is to be allocated to national, urban and rural arterial roads and local roads. In addition, $440m is to be provided under the Australian bicentennial road development program. The $805m will be distributed among the various road categories on a percentage basis. For 1985-86, therefore, funding for national highways will be $380.8m and funding for local roads will be $204.3m. This involves an increase over 1984-85 allocations for these categories of 9 per cent and 10 per cent respectively. According to the Minister for Community Services (Senator Grimes) in his second reading speech, this increase in funding is intended to maintain expenditure on national and local roads in real terms. If that is the case, it gives us at least some indication of this Government's expectations of the level of inflation for the coming year. By contrast-this is the bottom line-funding for arterial roads is to be cut quite severely from a total of $263.2m in 1984-85 to $219.9m in 1985-86. That represents a cut of 16.4 per cent. As I have said, the trust fund concept of this legislation is based on the Australian Bicentennial Road Development Trust Fund. I suspect it is worth examining the Labor Party's record on that particular trust fund. The Bicentennial Road Development Trust Fund was established by the coalition Government as part of the 1982-83 Budget with the aim of upgrading roads in the States and the Northern Territory to reasonable standards by 1988. An excise surcharge was applied to motor spirit and distillate to provide revenue specifically for the road development program originally at 1c per litre until July 1983, when it rose to 2c per litre. Unfortunately we had an aberration in the voting pattern of the Australian people and we ended up with a Labor Government which in its 1983-84 Budget, introduced a system of half-yearly indexation of excise rates to include the new fuel levy. However, this additional revenue now flows to the Consolidated Revenue Fund, not to the road development fund for which the fuel levy was specifically originally intended. The consequent shortfall in revenue for the road development fund will amount to something like $491m by the end of the program. As we all know, the Labor Government was given ample opportunity to rectify this anomaly during the debate on the Australian Bicentennial Road Development Trust Fund Amendment Bill. In May 1984 the Liberal and National parties moved an amendment to the Bill to provide that the additional funds arising from the indexation of the fuel levy be paid into the road fund where they quite properly belong. The Labor Government showed how seriously it was committed to funding Australia's roads by combining with the Australian Democrats to defeat that amendment. Honourable senators will recall Labor's election commitment to 'continue the greatest road building and maintenance program in Australia's history'. What have we seen? We have seen a reduction in real terms. In particular, I refer to the famous promise of the Prime Minister (Mr Hawke): Within the next three years, the national highway system will be brought to an all-weather, dust-free and flood-free standard. Particularly in view of the conclusions of the National Association of Australian State Road Authorities study, it is very hard to have any faith in the ability of this program to fulfil those commitments. What is significant about this piece of legislation is not the level of funding, not the cuts, not the allocations between the main, arterial and local roads; rather it is the fact that it is consistent and in line with the legislation with which we have been dealing for the last two or three weeks in this Parliament, and it is another broken promise. Senator Peter Rae —Not another one? Senator CRICHTON-BROWNE —Yes, another one, and as Senator Rae quite properly said, it is very similar to the local government legislation we had before us this afternoon whereby revenues raised were pocketed. The moneys collected from the surcharge levy and indexation which was intended to go to roads has now gone into Consolidated Revenue. Senator Peter Rae —Plundering the public purse. Senator CRICHTON-BROWNE —That is right, the Government is plundering the public pocket and then splurging it on its crazy socialist schemes. We saw that with the legislation before us this afternoon in respect of local government, where the Government cut back on local government revenue and then asked that it increase its level of rates. We have a long litany of broken promises by this Government, of which I am quite sure the people of Australia will be very mindful at the next election. Senator RYAN(Australian Capital Territory-Minister for Education)(9.07) —Again, I thank honourable senators for their support of the Australian Land Transport (Financial Assistance) Bill 1985. I think that, in general, the Senate is in agreement with the legislation. Senator Rae in his contribution raised the record of the Australian Labor Party in its support for roads. I simply point out to Senator Rae that expenditure on roads in 1985-86 will be 82 per cent higher than it was for the last full year of the Fraser Government, which was 1981-82. Senator Peter Rae —It is our program you are implementing, be honest. Senator RYAN —I do not think there is any argument about that. Senator Rae makes the point that the program was started under the Fraser Government. Of course I do not argue with that, but I point out that the actual level of expenditure is 82 per cent higher now than it was in the last full year of the Fraser Government. We have implemented the Australian bicentennial road development program as enacted during the Fraser Government's period in office. The question of indexation has been raised, and I point out that the Opposition refrained from writing indexation into the legislation when it had the opportunity of doing so. However, our Government has written indexation into this legislation so that the very greatly increased funding will now be maintained in real terms. Senator Vigor, for the Australian Democrats, also supported the legislation and I thank him for it. I point out in regard to one of the matters he raised that the Government will require full compliance with its environmental legislation in considering projects for approval. Senator Crichton-Browne addressed the matter of Western Australia's share of road funds. Our Government has recognised the various State arguments for increased funding and accordingly we will establish an independent inquiry to recommend to the Minister for Transport the distribution of the unallocated 10 per cent share for arterial and local roads for years three to five of the Australian land transport program. I thank honourable senators for their support of the legislation. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time. (Quorum formed) The Bill. Senator PETER RAE(Tasmania)(9.13) — The Opposition had amendments to clause 34 which were moved in the House of Representatives and accepted by the Government. They have now been incorporated into the Bill as it comes before us. Therefore, we do not have a need to move any amendments in this chamber. I say that for the record so that it is quite clear that we moved amendments in the other place and these were accepted by the Government. We are now content that the Bill is in a form which we regard as acceptable. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Grimes) read a third time. Bills received from the House of Representatives. Motion (by Senator Grimes) agreed to: That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of all or several of the Bills being put in one motion at each stage and the consideration of all or several of such Bills together in the Committee of the Whole, and as would prevent the reading of the short titles only on every order for the reading of the Bills. Ordered that the Bills may be taken through all their stages without delay. Bills (on motion by Senator Grimes) read a first time. Second Readings Senator GRIMES(Tasmania-Minister for Community Services)(9.15) —I move: That the Bills be now read a second time. I seek leave to have the second reading speeches incorporated in Hansard. Leave granted. The speeches read as follows- BROADCASTING AND TELEVISION AMENDMENT BILL 1985 The purpose of this Bill is to implement a number of recent government decisions regarding the revision of broadcasting legislation to relate it to services rather than to technologies; the licensing of services to outback areas utilizing Aussat satellites-the Remote Commercial Television and Radio Service or RCTS/RCRS; changes to the Australian Broadcasting Tribunal's inquiry procedures additional to those passed in 1984; the extension of some rights of appeal against decisions made under the Act; and the deletion of some obsolete provisions of the Act. I shall be shortly introducing related amendments to the Broadcasting Stations Licence Fees Act 1964 and the Television Stations Licence Fees Act 1964, as well as amendments to several other Acts consequential upon these amendments to the Broadcasting and Television Act. The proposed amendments can be summarised as follows: in relation to the service-based revision, the Bill will implement a Government decision to change the basis on which broadcasting licences are granted from a technological basis to a service basis-in other words, services will be licensed, and not stations. This will remove the need for extensive amendments to cope with any new technological development-a situation which in the past has militated against the introduction of new services. Honourable senators will recall that amendments to the Broadcasting and Television Act were passed last year to streamline the Australian Broadcasting Tribunal's inquiry procedures by the automatic extension of licence periods pending completion of a licence renewal inquiry, and the formation of divisions of the Tribunal with power to make decisions on behalf of the Tribunal. The further amendments now proposed set out the framework of uniform procedures for Tribunal inquiries, with details to be prescribed in regulations. The Tribunal will be empowered to dispense with a public hearing where no substantive issues of public concern are raised. There will be provision for area inquiries so that the Tribunal may hold public hearings into the adequacy and comprehensiveness of licensed broadcasting services in an area, having regard to the diversity of interests of the area. As a consequence separate licence renewal hearings will only be necessary if substantive issues have been identified. The Administrative Review Council has reported on rights of appeal against decisions made under the Broadcasting and Television Act, and the Government has decided to bring forward amendments to implement two of its recommendations. The Bill will also delete obsolete provisions in the Act, which regulate the re-broadcast and publication of broadcast matter and the broadcasting of coded material. The amendments contained in this Bill will not greatly alter either the costs or revenues of the Commonwealth. Initially the Australian Broadcasting Tribunal will have to meet additional costs relating to changes in procedures and in complying with the new public access requirements, but in the long term the Tribunal will be enabled, by these amendments, to use its limited resources more efficiently and effectively. Likewise, the major revision of the Act to relate it to broadcasting services rather than the technological means of delivery of broadcasting signals will obviate the need to license subsidiary transmitters and translators. The savings in bureaucratic workload for applicants, the Tribunal and my department are obvious, but once again are difficult to quantify. There is expected to be an increase in Commonwealth revenue arising from the creation of additional categories of licences for remote radio and television services. However it is not possible to provide a realistic estimate of the extra revenue which may be obtained as the future revenues of remote licensees, which determine the amount of fees payable, is unknown. The other amendments which I have briefly outlined will not result in any significant costs, revenue or savings for the Commonwealth. Mr President, this Bill, and particularly the service based provisions are the culmination of a substantial period of development and consultation which commenced in November 1983. Last year my department distributed several discussion papers to the Broadcasting Council and industry organisations. Discussions ensued with industry bodies and representatives of consumer and employee associations. A number of the important provisions of the Bill will come into effect on proclamation and a significant amount of the procedural detail will be in regulations. Consistent with the consultation approach, my department will be conducting a seminar on the Bill, in the near future, to explain its provisions and to provide a further opportunity for public and industry input. I now turn to the detail of the proposed amendments. (a) Service-Based Revision I am sure I do not need to remind honourable senators of the complexity of the Broadcasting and Television Act. Indeed it is often referred to as one of the Commonwealth's most complex and difficult pieces of legislation. One of the reasons for this is that the legislation deals with difficult and often conflicting concepts of public interest and access to the limited public resource of the broadcasting spectrum for an industry of great influence in modern society. Given these circumstances, legislation must necessarily be complex and detailed to protect both public and private interests. The other reason why this act is so complex and imposes unnecessary burdens on all who attempt to interpret it is because it is technology based. It was originally drafted to cover radio, and has had successively added to it provisions for television, subsidiary transmitters, public broadcasting, supplementary licences, and so on. The result has been an act which is unnecessarily confusing and repetitive. The amendments contained in the Bill will go a long way towards removing much of the present unnecessary complexity. The Bill changes the basis of the legislation from technology to service. From its inception the Broadcasting and Television Act 1942 has been a technology based act directed towards licensing and regulating various classes of radio, and later television, stations, each defined by reference to their technical characteristics; that is, the stations themselves, not the services they provide are licensed. It has become apparent, however, that placing legislative emphasis upon licensing broadcasting (Radio and Television) services for defined areas will remove unintended planning impediments, simplify and make more coherent the provisions of the Act, and facilitate the introduction of legislative provisions for new services arising from new technology including satellite technology. The cornerstone of the service-based concept for planning and licensing is the service area for a licence; that is, the area containing communities which the Licensee is authorised to serve. From the licensing viewpoint, whether the broadcasting service is delivered by means of one transmitter, or a combination of transmitters, will be largely irrelevant. Emphasis will be placed upon the nature and purpose of the licensed service and the nature and interests of the communities in the service area. These concepts are already present in the licensing requirements of the Australian Broadcasting Tribunal. Broadcasting transmission facilities needed to provide adequate reception within the service area will be authorised merely as technical conditions on the operation of the transmission facilities. This change in the concept of licensing will remove the present duplication of planning and licensing procedures which places an unnecessary administrative burden on licensees, the Australian Broadcasting Tribunal, and my department. For example, under present arrangements, where a licensed station needs subsidiary transmitters to improve reception within its determined service area, translator station licence applications must be invited by the Minister and considered by the Tribunal. The existing Act in some circumstances prohibits translators even within a licensee's service area. This Bill allows changes to a licensee's transmitters to be authorised by the Minister as part of the technical conditions associated with the licence. The supplementary licence provisions of the Act are already based on the concept of licensing services to a specified service area. Every effort has been made in the drafting of the service based licensing provisions of the Bill to make as little change as possible to the policy effect of the current Act. As far as these provisions are concerned the objective of Government is to change from a technologically based licensing system to a service based licensing system and not to introduce changes which are not consequential to the adoption of the service based licensing system. The main features of the service-based amendments are as follows: Broadcasting (Radio and Television) is to be regulated by reference to broadcasting services provided to communities within service areas rather than by reference to broadcasting stations defined by their technological characteristics; The Minister will be empowered to designate (a) classes of licences by reference to the nature of the service, for example, commercial radio licence and commercial television licence, among others; (b) a service area or areas for the licence; and (c) all broadcasting transmission facilities necessary to ensure adequate reception by communities within the service area of the licence; the technical specifications for the service area, the transmitters, frequencies, and so on, are to be included in a warrant which is issued by the Minister; the licence to provide the service is issued by the Australian Broadcasting Tribunal. The Bill provides for a person other than a licensee to be authorised to operate one or more broadcasting transmitters specified on the licence warrant. However, I should emphasise that this third-party authorisation can only be given with the consent of the licensee. The effect of this provision is to shift responsibility from the licensee to the third party for a deliberate breach of technical conditions if the third party is not subject to control by the licensee. Mr President, service areas will be determined by the Minister and notified to the tribunal. Changes to service areas may be made by the Minister after the publication of a notice of intention which must also be served on the licensee concerned. The Minister will be obliged to take into account any comments received on the intended variation. Because of the perceived importance of this definition of these areas the Minister will publish and table, guidelines which will be used in the determinations of service areas. While the Bill does not specifically provide for the guidelines or their publication a further amendment will be considered if it is found to be desirable to formalise the guidelines. The forthcoming seminar could consider this question. The Bill creates a new category of licence to be called remote licences. These licences will enable licensees to provide commercial radio and television services to the estimated 650,000 people living in outback Australia, by means of the Aussat satellites, due for launch later this year. The licences to provide for remote commercial services will differ in a number of ways from the existing licence provisions. Firstly, these licences relate to broadcasting services which are to be provided by the use of an Aussat satellite. Secondly, the public interest criteria which the Australian Broadcasting Tribunal may apply to the granting or renewal of a licence are more widely expressed. The Tribunal is, for instance, obliged to take into account, when considering the 'public interest', factors such as the desirability that all Australians have the opportunity of receiving a commercial radio and television service, relevant government policy statements, matters prescribed in the regulations and such other matters or circumstances that the tribunal considers relevant. There is also the usual fit and proper person with the necessary financial, technical and management capacities concept as well as a prerequisite that remote licences may only be granted to an Australian company with a share capital or a consortium of such companies. There is no absolute prohibition on the concentration of ownership although the Tribunal must consider the need to avoid an undue concentration of ownership and control in the service area concerned subject to the objective of ensuring that all Australians have the opportunity to receive both a commercial radio and television service. Two other new categories of licence, re-broadcast licences and re-transmission licences, should also be noted. Re-broadcast licences will enable persons such as self-help community groups to install transmitters to obtain or improve reception of one or more existing broadcasting services, while re-transmission licences will enable persons to install cable distribution systems to provide improved reception. This Bill also creates the opportunity for licensees to provide a proportion of local programs and advertising on transmitters within their service area. Honourable senators should note that this amendment is a change to existing policy, in that at present all subsidiary translator stations are required to re-transmit the same signal as the principal transmitter. The proposed change is consistent, however, with the Government's policy of localism whereby broadcasting services should serve the needs of local communities. I expect that local origination will become an important part of programming for remote broadcasting services which will use the satellite to broadcast programs to widely separated communities. Some concerns have been expressed about local origination, and to answer these concerns I make these three points: The Tribunal will only approve of local origination for a licensee following application by the licensee and following the normal consultation process which will enable interested parties to put their views before the Tribunal; The fact that a licensee has not provided locally originated programs will not be a ground for censure of the licensee for not providing an adequate and comprehensive service; and The local origination provisions are subject to proclamation at a later date, and there will also be separate proclamation in respect of local origination for each licence category. This will allow the Tribunal time for consultation with industry and the public in the development of its policies and procedures. (b) Australian Broadcasting Tribunal Procedures As I mentioned earlier, two recommendations of the Administrative Review Council regarding Australian Broadcasting Tribunal procedures have already been enacted. These concern automatic extensions of licence periods pending completion of licence renewal inquiries, and the formation of divisions of the Tribunal with power to make decisions on behalf of the Tribunal. The Government now proposes to implement other recommendations of the Administrative Review Council on the Tribunal procedures. Significant features of the proposed amendments include: Inquiries into the exercise of any of the Tribunal's substantive powers will be conducted in accordance with a uniform inquiry procedure, the detail of which will be prescribed in regulations; The uniform inquiry procedure will allow the Tribunal to dispense with a public hearing where no substantive issues of public concern are raised; and There is provision for area inquiries so that the Tribunal may hold public hearings into the adequacy and comprehensiveness of licensed broadcasting services in an area. The principal purpose of an area inquiry will be to enable the Tribunal to assess the performance of broadcasting licensees in meeting their obligations firstly, to provide an adequate and comprehensive service to the area, having regard to the nature and the diversity of the interests of the community in the area. Secondly such inquiries will enable the Tribunal to consider the extent to which licensees providing the services encourage the broadcasting of programs wholly or substantially produced in Australia and the extent to which they encourage the use of Australian creative resources. To fulfil the first of these aims it is expected that the Tribunal will seek information from the Australian Broadcasting Corporation and the Special Broadcasting Service on their services in a particular area to allow the Tribunal to assess the total broadcasting services in the area. Area inquiries are linked to licence renewal inquiries as follows: Area inquiries will normally be held every three years, prior to the expiry of the broadcasting licences in a particular area; it will therefore be desirable for the expiry dates of licences (both commercial and public) in each area to be synchronised. However, this will take some time, and will not be possible in all cases, for example, where the Tribunal decides to renew a licence for less than the normal three year period. The Tribunal will normally commence an area inquiry after applications for renewal of licences in the relevant area have been received and after the closing date for submissions. All renewal inquiries will then be suspended until the area inquiry has been completed. The area involved will be any area that the Tribunal considers appropriate but would normally be expected to correspond to service areas which are defined by the Minister. The flexibility is necessary to cater for area inquiries which may be desirable prior to the definition of all service areas and to permit the Tribunal flexibility in the interests of efficiency. The Tribunal will not be empowered to exercise any of its regulatory or licensing powers during an area inquiry other than those which are necessary for the conduct of the inquiry itself. It cannot, therefore, determine whether or not, for example, a licensee has contravened a licence condition without holding a separate inquiry under the uniform inquiry procedure. Once the area inquiry has been completed, the renewal inquiries will be recommenced. If there are any substantive matters outstanding in relation to a licence the tribunal will hold a public hearing into the renewal of that licence. In other cases, the licence can be renewed without any further hearing. The Tribunal will have wide discretionary control over the conduct of area inquiries. Procedures will be similar to those already followed for inquiries directed by the Minister. The objective is a minimum of formality. Area inquiries will be held in public. The tribunal will be required to report to the Minister on each area inquiry, and may include recommendations to the Minister on any matter arising from the inquiry. These may relate to undertakings made by licensees, the need for new or different types of services, changes in service areas, or a need to improve reception. The provisions relating to area inquiries will be subject to a proclamation date separate from the remainder of the Act, to allow time for consultation with the industry and for the Tribunal to put the new procedures in place. The consultations will include the issue of whether there will be area inquiries into the adequacy and comprehensiveness of services provided before existing licences are made subject to the new licensing arrangements. (c) Rights of Appeal against Decisions made under the Act The Bill incorporates measures to implement recommendations by the administrative review council that appeals should be allowed to the Administrative Appeals Tribunal against ministerial decisions on two matters. These relate to the installation of beacon lights on transmitter masts, and the preservation of records of historical interest. Honourable senators should note that the Government has asked the Administrative Review Council to review its recommendations and that licensing decisions made by the Australian Broadcasting Tribunal should be subject to appeal to the Administrative Appeals Tribunal. The Government has sought this review because the Australian Broadcasting Tribunal's procedures have changed substantially as a result of recent amendments, and will change further if the amendments contained in this Bill are accepted. The introduction of this Bill's uniform inquiry procedure is expected to provide adequate safeguards against arbitrary decisions, or undue influence by particular groups. If the Government had accepted the Administrative Review Council's recommendations outright, there would almost certainly have been a far greater number of appeals lodged, many of which would have been unnecessary or intended to delay implementation of a decision for commercial, political or strategic advantage. The Government is committed to making the Tribunal's procedures as streamlined and efficient as possible. Communities throughout Australia are anxious for new or improved broadcasting services, but the implementation of such appeal provisions could have led to serious delays in making decisions about licences which would have been to the detriment of both the general public and the industry. The Administrative Review Council's recommendations that appeals to the Administrative Appeals Tribunal be allowed against ministerial planning decisions have been rejected by the Government because such decisions involve complex issues relevant to general broadcasting policy. It would be inappropriate to allow decisions concerning elements of major Government policies to be subject to such external review. Appeals on questions of law are, of course, available. (d) Deletion of Obsolete Provisions of the Act Sections 120, 121 and 123 of the present Act are no longer necessary, and it is proposed that they be deleted. Sections 120 and 121 regulate the publication or re-broadcast of broadcast material. Section 120 constituted an unnecessary restraint on freedom of communication as licensees cannot authorise publication of their broadcasts without Tribunal approval. In regard to section 121, the Copyright Act 1968 already provides adequate protection, and one effect of this section has been to make uncertain the Tribunal's power to use videotapes as evidence in its hearings. Section 123 of the present act regulates the broadcast of encoded material. This provision was enacted during the Second World War, and no longer serves any useful purpose. The Australian Broadcasting Tribunal's powers to make program and advertising standards have recently been thrown into doubt by a federal court decision. It had been the government's intention to bring forward amendments at this time to clarify and affirm the tribunal's powers to make standards. Because of concern about the possible effects of such legislation expressed by some sections of the broadcasting industry, I have decided not to delay the amendments I am now presenting by waiting for standards provisions to be finally settled. The Government considers that it is important that the provisions of the current Bill on service based licensing and the new uniform inquiry arrangements be introduced now to give some relief to the Australian Broadcasting Tribunal by providing for a more efficient system. Further, and most importantly, the Government considers that the new remote, or satellite licences should be provided for as soon as possible as the launch of Aussat's first two satellites are scheduled for launch in some 3 and 6 months respectively. To introduce new remote technology based licences in the absence of the service based system would be technically very difficult and wasteful. I now give notice, though, that it is the government's firm policy that the tribunal should maintain its powers to set both qualitative and quantitative broadcasting standards or conditions. I intend to bring forward amendments in the Budget sittings to give legislative effect to this policy. In the meantime, because of the government's commitment to a viable and flourishing Australian film and television production industry, I assure the industry and the Senate that the Government will take all necessary steps to maintain the industry. Should this require making the proposed legislation effective from the date of the minister's second reading speech in the other place, we will not hesitate to do so. The Bill provides a scheme for the progressive conversion of old system licences to the proposed service-based licences. The provisions of the present legislation will continue to apply to existing licences until they are converted, as it will take some time for service areas to be defined for all licences. When the service area has been determined, the Minister will direct the tribunal to grant a new licence without the need for a fresh inquiry. The expiry dates of existing licences will not be affected. Inquiries into the renewal of 'old' licences commenced before the commencement of these amendments will continue and be concluded under the provisions of the present Act. Special provision has been made to require the tribunal to grant a remote licence to persons recommended by the tribunal pursuant to the inquiry directed by the Minister on 7 October 1984. In the process of conversion of service areas, where the Minister proposes a service area not substantially co-extensive with the area presently served, the Minister will be required to publish a Gazette notice of the proposed service area variation, invite public and licensee comment and consider those comments. These amendments repeal provisions for repeater television stations, consistent with the service basis of the new arrangements. The repeater provisions will continue to apply, however, to existing repeater stations. It is expected that licences for repeaters will not be renewed when the remote radio and television services are broadcast by a combination of satellite and terrestrial transmitters. Honourable senators should also note a change to the ownership or control provisions resulting from the licensing of services rather than stations. The Act will continue to limit the services or licences which can be held in each State. Under present arrangements the location of a station is easily determined by the location of its principal transmitter. Under the proposed system, the Minister will publish a Gazette notice identifying the State of each service which overlaps State borders. In doing so, the Minister would have regard to the State of residence of the majority of people living in the service area. I commend the Bill to the Senate. BROADCASTING AND TELEVISION (CONSEQUENTIAL AMENDMENTS) BILL 1985 These amendments are purely formal and flow from amendments to the Broadcasting and Television Act. For an explanation of those amendments I refer honourable senators to my second reading speech on the Broadcasting and Television Amendment Bill 1985. The changes to other acts consequential upon proposed amendments to the Broadcasting and Television Act are terminological rather than substantive. Thus, for instance, references to stations are changed to licences, and the tautological 'Broadcasting and Television' is reduced simply to 'Broadcasting', which applies to both radio and television. I commend the Bill to the Senate. BROADCASTING STATIONS LICENCE FEES AMENDMENT BILL 1985 I foreshadowed this Bill in my second reading speech on the Broadcasting and Television Amendment Bill 1985. As I explained in that speech, amendments to the Broadcasting and Television Act Bill convert licensing and regulation from a Technology-basis to a service-basis. As a consequence references in this licence fees act to 'stations' will be anomalous. This Bill will amend the principal act to relate fees to licences for broadcasting services. Consistent also with the proposed amendments to the Broadcasting and Television Act, 'Broadcasting' will encompass both radio and television services, which, where appropriate, will be separately specified. The substantive provisions of the Act, that is, the levels of licence fees, will continue unchanged. As a transitional provision, the Bill provides for the existing licence fees Act to continue to apply to existing station licences until they are converted to licences for broadcasting services. I commend the Bill to the Senate. TELEVISION STATIONS LICENCE FEES AMENDMENT BILL 1985 I foreshadowed this Bill in my second reading speech on the Broadcasting and Television Amendment Bill 1985. As I explained in that speech, amendments to the Broadcasting and Television Act will convert licensing and regulation from a technology-basis to a service-basis. As a consequence references in this licence fees act to 'stations' will be anomalous. This Bill will amend the principal act to relate fees to licences for broadcasting services. Consistent also with the proposed amendments to the Broadcasting and Television Act, 'Broadcasting' will encompass both radio and television services, which, where appropriate, will be separately specified. The substantive provisions of the act, that is, the levels of licence fees, will continue unchanged. As a transitional provision, the Bill provides for the existing licence fees act to continue to apply to existing station licences until they are converted to licences for broadcasting services. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Community Services)(9.16) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- By this Bill the Government proposes to amend the National Health Act and the Health Insurance Act. The amendments to these two Acts are part of the package to settle the doctors' dispute in New South Wales. This Bill is a clear demonstration of the Government's conviction that disputes can only be resolved through consultation and negotiation, and not by confrontation. It is a substantial response to the concerns put forward by the medical profession about the impact of Medicare. Some of these changes would have been implemented as a matter of course in the coming months, as the Government assessed Medicare's operations over its initial 12 months. The community should deplore the actions of a militant minority of procedural specialists in New South Wales, who created considerable pain and suffering in pursuing their political aims. Fortunately they have not been successful. The changes put forward in this legislation are all sensible and rational changes to health insurance policy, and the basic principles of the Medicare program have not been altered. All Australians are still entitled to the 85% Medicare benefit for private medical services, and to free accommodation and treatment in public hospitals. The additional cost of the Medicare program remains substantially funded through the fair, income related 1% levy. Mr President, I believe that the package to settle the doctor's dispute in New South Wales will ensure that the public hospital system continues to provide the best care by the best health care professionals. The great majority of doctors clearly support the Medicare arrangements as well as the package to end the dispute. This is evidenced by the national 75.6% vote for a return to normal services in the AMA plebiscite of all doctors, and the number of doctors who have now returned to work in New South Wales public hospitals. One of the major points of contention between the Government an the medical profession in the past eighteen months, has been the existence and purpose of the amended section 17 of the Health Insurance Act since the Health Legislation Amendment Bill 1983. That amendment required that an agreement approved by the Commonwealth Minister for Health must be in force for Medicare benefits to be payable for prescribed services provided in public hospitals. The concern of the medical profession has generally not been what the Minister did with these powers, but the potential for what he could do at a furture date. Despite the excellent recommendations on this matter put forward by the Committee of Inquiry into rights of private practice in public hospitals chaired by Professor Penington, the continued existence of section 17 became a much misinterpreted symbol, around which unnecessary concern was generated. In substance the major provision implemented through section 17 was to oblige the charging of the schedule fee for prescribed radiology and pathology services provided in public hospitals. This was to be further modified by the specific Penington recommendations in relation to billing review committees that would have provided peer review of hospital doctors' billing practices. In order to assist in resolving a dispute that had become stalemated, at great human cost to patients in New South Wales, the Government is moving in clause 7 of this legislation to repeal all of the amendments to section 17 that were made as part of the Medicare legislation. Mr President, the Government greatly appreciates the work undertaken by Professor Penington and his committee of Dr Cashman and Dr Kearney, many of whose recommendations will be incorporated in the legislation or taken up in consultation over the Medicare agreements with the States. For example, negotiations are being conducted with the States to amend the Medicare agreements to allow for the automatic classification of privately insured patients as private patients unless they specifically opt to be Medicare patients. This will address the problems being encountered under existing hospital admission procedures regarding patient election for private treatment which were addressed in Penington's recommendation No. 29. Similarly, the Medicare agreements are to be amended to accommodate recommendation No. 32 which identified the need for new equipment in teaching hospitals. The Government's proposal to spend $150m over three years is clear evidence of its recognition of the position of teaching hospitals as the base of health care system. This injection of funds into teaching hospitals will help to correct the appalling legacy of inadequate funding left by the previous government when it abandoned the hospital cost-sharing arrangements and left no constructive arrangements in their place. States will be required to continue at least their current levels of capital funding to teaching hospitals and the public hospital system generally to ensure that the effects of additional Commonwealth support are not diminished by reduced funding by the States. At a time of severe economic stringency, this allocation of extra capital works funds underlines the Hawke Government's unshakeable commitment to upgrading our public hospital systems. At the heart of the dispute is the concern of doctors as to losses of income arising from the increased numbers of medicare hospital patients in public hospitals and reduced numbers of private patients. The Medicare compensation arrangements with New South Wales will incorporate proposals to share the cost of bringing the funding base for the payment of visiting medical officers on to a par with those enjoyed by other States under the former cost sharing arrangements. $10m per annum will be provided towards meeting 50% of the costs of sessional payments to visiting medical officers who currently provide honorary services without charge and for the extension of fee for service remuneration to country hospitals where there is no resident medical staff. The Commonwealth has also indicated that it is prepared to meet the additional costs flowing from the introduction of fee for service remuneration for the treatment of public patients, in all but teaching hospitals. The fee for service remuneration is to be offered at the following rates: 85% of the schedule fee, where there are no resident medical officers or registrars at a hospital. 70% of the schedule fee, where a hospital has resident medical officers, but not registrars. 60% of the schedule fee, where there are registrars in the same discipline at the hospital. Each of the broad disciplines of medical staff will be able to choose a remuneration method between fee for service and sessions. Within each of the major country and metropolitan district hospitals. The New South Wales Government has already offered a $12.50 interim increase in the sessional rate to $62.50 an hour. Any further increase in the level of the sessional fee can only be made through the established arbitration procedures. However, the New South Wales Government has an adequate fund available to provide an increased number of sessions for medical staff in recognition of the increased number of public patients. The total package provides the New South Wales Government with an additional $16m per annum from the Commonwealth for paying doctors, on top of the estimated additional $27m per annum provided for doctor remuneration under the Medicare agreement with New South Wales. The additional State and Commonwealth funding brings the total amount of remuneration available for the treatment of hospital (or non chargeable) patients in public hospitals in New South Wales to $105m per annum. I believe that both governments have acted fairly and decisively in addressing any reduction in incomes that could have occurred because of the shift from private to hospital patient status in public hospitals. Mr President, the Bill provides for amendments to the National Health Act for the introduction of a more comprehensive hospital table to replace the existing basic table. The new basic private table will cover: Accommodation charges in public hospitals as at present. The difference between the Medicare benefit and the schedule fee for private medical services in hospitals. Benefits for a defined list of surgically implanted items such as replacement joints, cardiac pacemakers and the like. A new 'single day' hospital benefit for patients not required to stay overnight in hospitals and certain day hospital facilities. The amendments to the National Health Act allow private health funds to offer insurance up to the level of the schedule fee for medical services provided in hospitals. This change recognises that people entering hospital for an operation as a private patient could be faced with a significant payment because of the multiple 'gaps' involved in a range of medical procedures. The medical profession regarded this as a significant disincentive for people to choose to be treated privately. The risks of this additional coverage leading to overutilisation and increased charges for medical services is much less in the hospital setting. Peer review of medical procedures is well established in many hospitals, and billing practices for hospital based services will be closely monitored. Both of the recent substantial examinations of aspects of health care in Australia-the Jamison and Penington Reports-have been clear in their opposition to the introduction of a general form of 'gap' insurance. It is viewed as undesirable because of its effect both on the utilisation of medical services and on doctors' billing practices. The authors of the reports would no doubt be less opposed to 'gap' insurance if it could be guaranteed that doctors would abide by a set level of fairly arbitrated fees. However in the Australian situation where doctors are able to set their own level of fees, 'GAP' insurance would in most cases simply shift the 'out of pocket' payment from the difference between the Medicare benefit and the schedule fee, to a payment for charges in addition to the schedule fee. For these reasons this legislation only permits 'gap' insurance for medical services provided in hospitals, and the government would strongly oppose its further extension to cover all medical services. The current medicare benefit arrangements, which provide for benefits at 100% of the schedule fee after 'gap' payments of $150 per person per annum are met, will continue in respect of non hospital medical services. Clause 12 of the Bill also provides for the inclusion of benefits under the new basic private table for specified surgical implanted devices. This provision was recommendation 33 of the Penington Report. Presently, implanted devices are provided free of any additional charge to public and private patients in public hospitals. For private patients, surgical devices are regarded as part of the 'all inclusive' public hospital accommodation fee whereas they are charged as additional items by the private hospital or the specialist concerned, where the procedure is performed at a private hospital. The Medicare agreements will be amended to allow public hospitals to raise separate charges for the specified implanted devices in public hospitals will be reduced. Because insured patients in private hospitals will be able to obtain benefits for implanted devices, a possible financial barrier to private hospital treatment will be removed. The introduction of the 'single day' hospital benefit within the new basic private table follows arrangements that already apply in South Australia and the A.C.T. Extension of these arrangements to all States should assist in stabilising contribution rates by encouraging free standing day care facilities and day care in existing hospitals. The establishment of surgical day centres has been a significant element of overseas strategies for reducing hospital costs, most notably in the United States. Until now this worthwhile innovation has been substantially discouraged by the insurance arrangements in Australia which provided benefits only to hospitals. The Government is also taking this opportunity to coordinate fund benefit payments with Commonwealth bed day subsidy payments for private hospitals. In future, the new fund day care benefit will apply to all non-overnight stays, while a full fund benefit and Commonwealth subsidy will apply to overnight stays. Mr President, those people who wish to have private hospital health insurance cover should be able to obtain it at affordable contribution rates and on reasonable terms and conditions. The only way this can be achieved is through the principles of community rating which ensures that the good risks assist in carrying the bad risks to equalise contribution rates. For this to occur there must be an adequate pool of good risks, and the costs of health care must be contained. The Government has been concerned that the principle of community rated health insurance under which organisation registered under the National Health Insurance Act are obliged to operate, is being steadily eroded by cheaper ''risk-rated'' insurance being offered to good risks by insurers not registered under the National Health Act. The threat to community rated insurance not only comes from the risk rating life and general insurers but also from registered funds opting out of community rated insurance because of their concerns at the loss of good risks. The Government recognises that in most areas of insurance, risk-rating is an appropriate commercial practice. However, health insurance has important social welfare implications that other forms of insurance do not have. The Government is committed to the concept of community rated health insurance, and for this reason clause 14 of this Bill requires all health insurers to comply with the requirements of the National Health Act. In clause 15 legislative changes are proposed to facilitate the registration of commercial insurers. In particular, they will retain the right to distribute profits to shareholders. Mr President, I do not believe that any existing risk-rated insurer who chooses to register will be disadvantaged in complying with the statutory requirement of maintaining reserves equivalent to at least two calendar months' contribution income. This should be well within the working capital capacity of any viable business undertaking. Similarly, I do not consider that the registration requirements of the National Health Act will place any administrative burdens on the insurers. If a body registers under the National Health Act, its health insurance activities will be subject to that Act only. The legislation also allows commercial health insurers to continue with contracts which are not cancellable and to discharge their normal liabilities. This will minimise any disruption to their policy holders. Mr President, I draw the attention of the Senate to the provisions of the Bill which will allow registered health insurers to offer front-end deductible tables as an option to the new basic hospital table. This will be particularly attractive to those who now have similar cover with non-registered insurers, and to those who wish to undertake to meet the first part of the costs of illness in return for considerably lower premiums. The lower contribution rates currently offered by commercial insurers derive from two major factors. Firstly, their membership is restricted to people below a certain age and those with chronic conditions are not admitted. The Government believes that these practices are discriminatory and totally undermine community rated health insurance. As I have indicated these practices will not be permitted following registration under the National Health Act. The second factor that gives rise to reduced liability for the insurer is that commercial insurers require policy holders to meet the ''first part'' of their health costs, as set out in the terms of the insurance policy. This is a reasonable insurance practice that could contribute to some overall reduction in health costs, and the Government believes that it should be open to all health funds to offer this type of cover. As this front-end deductible insurance will in future be offered through registered insurers, any profits that accrue from this form of business can be used to subsidise the basic table that most people will continue to insure under. In this way the benefit will not be lost of having the young and healthy contributing to the same risk pool as the elderly and the sick. Of course, it may be expected that some risk rated insurers will not seek registration. As part of the arrangements to minimise any difficulties for those persons transferring from non-registered insurance and to assist others who may wish to contribute to private health insurance, the Bill provides that the general two month waiting period for basic table benefits to new fund members will be waived for a period of three months from 1 September 1985. The current maximum exclusion from benefits for pre-existing illness will be reduced from two years to one year. Medibank private will totally waive the pre-existing ailment rule for three months to any of their former contributors who may wish to rejoin. Other health funds will be encouraged to do the same. Mr President, the main financial impact of the package to settle the doctors' dispute will be from increased payments to the States-$16m per annum to New South Wales for increased remuneration to visiting medical officers and $150m to be spent over three years to upgrade the facilities and equipment in Australian teaching hospitals. Additional costs of Medicare medical benefits will be incurred as a result of any increase in the numbers of private patients in public hospitals and a greater use in private hospitals. However, these will be more than offset by savings in Medicare compensation grants to the States arising from any shifts back from public to private status in public hospitals, largely because of the altered patient classification arrangements. It is not possible to estimate with any degree of accuracy because of the numbers of variables involved, however it could be expected that net savings to government would result from any substantial movement back to private health insurance usage. Moreover, savings arising from the 'single day' hospital benefit, and from increased numbers of good risk contributors, are expected to dampen any increases in private health fund premiums. Most health funds are achieving surpluses on their operations and nearly all have reserves in excess of the statutory minimum. Accordingly many will be able to absorb at least some of the additional costs stemming from the changes to the basic table. Mr President, I believe that the Health Legislation Amendment Bill and the non-legislative changes to the Medicare arrangements announced by the Prime Minister on 2 April 1985, provide the right balance between maintaining the fundamentals of Medicare and recognising the legitimate concerns of the medical profession. The overall package to settle the doctors' dispute allows flexibility of choice for patients, provides the opportunity for doctors to treat patients on a private basis, but ensures that there is no basis for discrimination against Medicare patients both in terms of the quality and availability of care in public hospitals. I commend this Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Grimes) read a first time. Senator GRIMES(Tasmania-Minister for Community Services)(9.17) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- Mr President, the Communications Legislation Amendment Bill 1985 will amend the Overseas Telecommunications Act 1946, the Postal Services Act 1975, the Radiocommunications Act 1983 and the Telecommunications Act 1975. Provisions of this Bill will allow Telecom and OTC to enter into currency hedging and financial futures contracts. It will also enable Australia Post, Telecom and OTC to lease property for periods longer than 10 years without the need for approval of the Minister for Communications, providing the cost of the lease does not exceed the current prescribed contract threshold-presently $2,000,000 in the case of Telecom and $500,000 in the case of Australia Post and OTC. The Bill also provides for amendments to the Telecommunications Act arising from recommendations of the Vincent Report and imposes a duty on Telecom to ensure its facilities are not used for illegal purposes. Other provisions of the Bill give effect to the recommendations of the Bowen Committee relating to the disclosure of pecuniary interests by members of statutory bodies. I will deal firstly with the currency and financial futures provisions of the Bill. In line with the majority of large business enterprises, there is a need for Telecom and OTC to manage their foreign exchange exposure in a prudent and effective manner. As will be appreciated timing is critical in the placement of forward cover financial and foreign exchange contracts. In the interest of efficiency, the Government believes it is inappropriate to require the Commissions to obtain approval for currency hedging or futures contracts when the main contract is either exempt from the requirement for Ministerial consent or has already received it. Currency contracts are negotiated and re-negotiated quickly in circumstances which make a requirement for Ministerial approval impractical. This Bill will enable Telecom and OTC to respond efficiently to changing circumstances in financial markets but, at the same time, will prohibit any element of speculation by requiring dealings to be in accordance with guidelines to be determined by the Minister. Such an arrangement provides the flexibility necessary for commercial efficiency while ensuring the appropriate level of Ministerial control. The Bill also repeals the requirement for Ministerial approval of property leases entered into by Australia Post, Telecom and OTC for periods in excess of 10 years. Where the consideration for such leases exceeds the prescribed contract threshold value the arrangements will fall within the contract approval provisions of the legislation and adequate control will continue to be exercised through that process. As appropriate, the Minister for Local Government and Administrative Services would continue to exercise approvals under provisions of the Lands Acquisition Act 1955. I now turn to the other provisions included in this Bill. In March 1984 the Government appointed Mr F. H. R. Vincent, QC to review certain allegations in regard to breaches of the laws of the Commonwealth, and impropriety or official misconduct by officers of Telecom. It is now a matter of public record that Mr Vincent concluded that the perception of substantial corruption within Telecom lacked anything remotely approaching an adequate evidentiary base and that any involvement by Telecom employees in SP betting was relatively minor. The Government's detailed response to the matters raised by Mr Vincent was presented by the Special Minister of State on 13 September last year and it is not my intention to repeat the Minister's comments on this occasion. However, as part of the Government's response, this Bill will implement amendments to the Telecommunications Act arising from recommendations of the Vincent Report. Consistent with those recommendations, it is the Government's intention to incorporate into the Act those offences currently in the By-Laws and Regulations dealing with the misuse of Telecom's network, including the supply, connection and maintenance of lines, apparatus, equipment or fittings, and the alteration or modification of approved private branch exchanges and private lines. The offence provisions in the Act are also intended to cover the use of the telecommunications service for the purpose of menacing another person, the sending of false information, the harassment of a person and the sending of indecent, obscene or offensive communications. The Bill substantially increases the monetary penalties relating to these offences. In a further response to the Vincent Report, the Bill provides that Telecom is under a duty, in performing its functions, to use its best endeavours to ensure that its network is not used in, or in the furtherance of, an offence under Commonwealth, State or Territory law. Other provisions in the Bill include amendments to the present disclosure of interest provisions in the Overseas Telecommunications Act, the Telecommunications Act and the Postal Services Act in order to bring the relevant sections into line with Government policy on the disclosure of interests by members of statutory bodies. It also amends the Overseas Telecommunications Act to allow persons over 65 years of age to be appointed and hold office as Commissioners. The age limitation will apply only to the office of Managing Director, the only fulltime Commissioner. Finally the Bill amends the Radiocommunications Act. It provides for an amendment to the present definition of 'radio transmission' in section 3 (1) by expanding the definition to include transmissions or emissions of electromagnetic energy of frequencies in the range 3 terahertz up to 420 terahertz. This amendment provides for the licensing of recently developed systems in the infra-red spectrum. Section 65 of the Radiocommunications Act is amended by the Bill to remove the need to make regulations which would otherwise be necessary to protect Royal Flying Doctor Service radio services from interference. This amendment was considered necessary as the role of the Royal Flying Doctor Service is different in kind to the other organisations and services specified in this section of the Act. I commend the Bill to the Senate. Debate (on motion by Senator Kilgariff) adjourned. Debate resumed from 20 May, on motion by Senator Grimes: That the Bills be now read a second time. Senator PETER BAUME(New South Wales)(9.19) —The Senate is debating three education Bills-the States Grants (Schools Assistance) Legislation Amendment Bill and two allied Bills-which are being taken together in cognate debate. These Bills are supported by the Opposition. They seek to supplement the grants made for universities, for colleges of advanced education, for technical and further education and for schools to take account of the price movements of the last six months, and the Opposition certainly does not object to this. The Bills seeks to correct certain minor typographical and drafting errors which were present in the Bills which went through this place at the end of 1984. The Bills seek to make minor changes to the principal Acts. They have no significant policy implications and, again, the Opposition supports the measures. Against the background of that support, however, I do wish to draw attention to a couple of matters concerning Australian education. On this occasion I will not talk about schools or issues relating to school funding but I will concentrate on some matters affecting the post-school area. The first matter concerns the funding for the participation and equity program. Mr Acting Deputy President, I draw your attention to the fact that one of the Bills before us is the States Grants (Education Assistance-Participation and Equity) Amendment Bill 1985, which deals with the participation and equity program and seeks to give it extra money. I remind the Senate that that program, which is the subject of one of the Bills before the chamber, was mentioned in the mini-Budget the other night when the Government announced that the funds available for spending under that program will be halved in 1986. The Government has sought to use subterfuge to explain what will happen. Let me explain that the participation and equity program is a continuation of a previous program, the school to work transition program. Together these programs have been operating for some nine years and they have supplied a number of very important services to unemployed youth. If we accept that the Government's intentions have been carried out in relation to the participation and equity program, over the last year special attention has been given to unemployed youth who have been disadvantaged in various ways-who are handicapped, who are Aboriginal, who are non-English speaking and who are isolated. In addition, there has been a special emphasis upon including women in the programs. Senator Teague —And mature students. Senator PETER BAUME —And mature age students; I thank my colleague Senator Teague for his interjection. This program and its predecessor, the school to work transition program, have both provided very important services. It would be the expectation of every senator that these programs would continue and that funding for these programs would continue for the foreseeable future. It is really not good enough for the Minister for Education, Senator Ryan, to say, as she has done in Question Time on several days, that the available funds have been spread between 1986 and 1987. We would have expected that the program would have continued into 1987 anyhow. Senator Ryan stated in Question Time that there has not really been a cut. She actually had the effrontery to say: So the amount of money available for the program over a two-year period will not be decreased at all-it will be a four-year program instead of a three-year program. Whereas in some respects that is to be regretted, it is inaccurate for Senator Baume to suggest that the money available under the program will overall be any less. It will not. That is not true. The easy way to test whether or not it is true is to ask some of the groups who depend upon the program what their perception is and to ask some of those who teach in the participation and equity program what their perception is. Do they believe Senator Ryan's statement that there will not really be less money or is it their perception that this was an ongoing program delivering essential services? The level of the services to be offered in 1986 will be cut probably by half and the level of services to be provided in 1987 will be maintained at that lower level of activity. All I want to get on the record is that in this mini-Budget, where Labor took certain steps which had to be taken to cut expenditure and where it said that in making those cuts it had due regard to protecting the disadvantaged and those in special need, it has managed to make one of the most spectacular cuts and to impinge disadvantage most particularly upon the powerless, uneducated, disadvantaged unemployed who have looked to this program as a special source of hope and some prospect of a future. I want to place on record my request that Senator Ryan at least come clean and say that. I want to make clear to the Senate that I can imagine the anguish she went through in Cabinet. I can imagine that she was rolled in Cabinet on this matter and that this cut was hung around her neck; but it is a cut and it is not possible to argue it in any other way. I am not saying that the Government should not have made cuts; not at all. I am merely saying that it should be pointed out that while the Australian Council of Trade Unions, we senators, the powerful and those who are employed have by and large been spared the effects of the cuts, those cuts have been targeted on these disadvantaged groups as an act of policy by this Labor Government. There is no doubt that within the technical and further education sector and the disadvantaged schools around Australia which have been the recipients of funds under PEP, there is a very clear perception of where the cuts have fallen and on whom they have fallen. I am reminded of the words of Kipling, when he said: The toad beneath the harrow knows Exactly where each tooth-point goes; The butterfly upon the road Preaches contentment to that toad. I would suggest that Senator Ryan is rather like the butterfly preaching contentment, but it is a bit difficult if she is the person beneath the tooth-point of the harrow. Those are a few words about the participation and equity program. I would also like to identify the real squeeze that is occurring in higher education in Australia and the effects it is having in limiting access and opportunity. Heady promises were made prior to the 1983 election, but in spite of those promises the last two years have seen a very tight squeeze applied to tertiary education funding; so tight that some of the people who are active in the higher education sector-academics and students alike-have declared that their sector is at risk. There is no doubt that the Government found it very difficult even to contemplate accommodating some of the recommendations made by the Commonwealth Tertiary Education Commission in its first volume report for the three years 1985-87. In that report the Commission made it clear that if Labor's avowed goals of participation and activity in the tertiary sector were to be met, considerable extra expenditure would be required. The Tertiary Education Commission set out what those levels of expenditure would have to be. The CTEC was responding to the program which the Government had laid down while soliciting votes in opposition; a program it said it wanted achieved. So volume 1 was in fact an attempt by the CTEC to spell out the financial implications and consequences of the Government's announced policies. The moderate nature of the CTEC recommendations is evidenced by the fact that they were very much less than the recommendations that came up from the universities councils, the advanced education councils and the TAFE councils; yet the Government has ignored the advice of the CTEC. The Government has provided only marginal funding increases for the higher education sector, and by the end of the triennial the Government's guidelines will provide allocations some $100m less than was recommended by the CTEC and some $210m less than those recommendations made by the councils. Of course, we all know that bids made to government are sometimes in the nature of an ambit claim and government has to assess whether the bids are reasonable and, in the end, has to make and be responsible for the final allocations. It is fair enough to ask what has been the effect of the funding provided to tertiary education for the triennial. The real impact of these inadequate allocations has been clearly expressed in the number of dollars available for every student place, because as the places are increased one would expect more money to be provided. The Government's proposals are for the funding of additional student places at about $4,500 a place, a figure which is far below the absolute minimums of $5,700 for universities and $5,125, which were the levels set by the Advanced Education Council and the Commonwealth Tertiary Education Commission. So even when the Tertiary Education Commission cut back what it saw as the bids and came up with what it considered to be the minimum level of funding for higher education, the Government still decided to fund extra places way below that. This means that new students will not be able to gain access to quality higher education unless academic staff work loads increase or unless other areas of expenditure within the sector-for example, the provision of library services-are further reduced. The marginal funding-it is really short run marginal funding-of new student places is a breach of faith by the Government. It will penalise precisely those groups on which the Government allegedly depended for support-young people, the socio-economically disadvantaged and Aboriginals, all of whom were supposed to be the recipients of special educational attention. So marginal is the estimated rate of increase in student numbers that, in fact, it is possible that participation rates could conceivably fall over the triennium. I remind the Senate that the Government promised that there would be an extra 25,000 students by 1990, but the guidelines under which we are working and to which some of these funds in the Bills refer are committed to an increase of only 1,400 in total student load in 1985. The pipeline effect-that is, the same number in 1986 and the same number in 1987-will mean that there will be an extra 4,000 new places by the end of the triennium. Any new places are welcome, but the Tertiary Education Commission advised the Government that a real increase of 1,100 a year in student load was required just to keep pace with demographic change-with the increase in population. An increase of 1,100 was required just to stand still. The Government is providing only 1,400 new places a year. As I say, the figure will be 4,000 at the end of the triennium. Only a slight reduction in the 1,400 a year will mean a negative real growth rate and a fall in participation rates. This will be accentuated by the fact that participation in the upper levels of secondary school education is increasing. The number of students presenting themselves for the final examinations to qualify for matriculation is increasing. The number of students qualifying for matriculation for university and college entrance is increasing and the number of extra places is not sufficient. The tragedy in Australia is not only that we are providing too few places but also that there are no alternative ways into the system for these people unless they leave the system and return later as mature age students. That is one very satisfactory way to go about it. I might say that in my family we have a mature age student doing very well after being able to get back into the system in this way. But it is still true that there are not enough places for those who complete their schooling and look for further educational opportunity as one of the chances to improve themselves and to participate in a modern Australia, a skilled Australia, an Australia where the acquisition of skills will help not only them but the whole community. This situation is impossible to reconcile with the Government's stated commitment to increased access and to increased participation. The Government is obviously embarrassed by this state of affairs because the Minister has actually attempted to comment on it. In talking about the increased numbers and the increased money she said: . . . The increase of $65.15 million for tertiary education in 1985 would allow for 15,000 extra places in higher education by 1987-- I repeat 15,000-they were the Minister's words- . . . (which) would enable increased participation by women and girls in higher education fields of study such as science and technology. This is simply not true. There simply will not be 15,000 new places. The Minister may say so, but it is not true. All one has to do is go around again and ask the institutions, in the same way as we asked them how many students were turned away and in the same way as they measured and found that this year 29,500 students were turned away from higher education, from colleges and universities. To put that figure of 29,500 into perspective, it means that two large university campuses of almost 15,000 students each do not exist. That many students were turned away, with no chance to participate and no other way into the system. As I have said, the Minister's figures have been refuted by the Federation of College Academics, which has pointed out: In fact 15,000 'extra' will not be created by 1987-the guidelines make provision for only an additional 4,000 places over the triennium. Moreover, it appears likely that even these growth projections are overly optimistic. Those are the words of the Federation of College Academics. We have had statements by Mr David Hester, the Chairman of the Joint Matriculation Committee of Adelaide and Flinders universities. He has suggested that funding within the faculty of law-I am not sure of which university-may have to be cut. Senator Teague —The University of Adelaide. Senator PETER BAUME —Funding for the University of Adelaide law faculty may actually have to be cut because of the squeeze on places and on resources. The University of Adelaide Law School actually voted to cut its quota by one-third because it was worried about the squeeze on places and on the student-staff ratio. What worries me is that the squeeze on funding will affect adversely current staff and students. David Hester points out that the faculty of arts at Adelaide University faces a large increase in the size of tutorial classes because of the lack of staff. He points out that it will have to discontinue employing part time tutors because, with the funds available, it will commence with a negative general teaching fund after the full time tutors have been allowed for. So, before it even starts, it cannot take on any part time tutors and will actually have to sack or otherwise lose some people who are employed full time. The problem is not an isolated one. For all of the 1960s and 1970s the student-staff ratio was never higher than 12 students to one staff. Now it is closer to 13 to one. This is a direct result of the funding squeeze which is going on and which has been exacerbated in the last couple of years. The situation in the areas of capital and equipment funding is no better. I will not go through those, but the figures are just as bad and the squeeze has allowed nothing new to happen. The squeeze has also been applied to academic salaries. Last year the Government took the appalling and unprecedented step of intervening for a second time before the Academic Salaries Tribunal, which led to the Tribunal overturning its previous decision to award a 5 per cent salary increase to academics and, instead, to delay some of that increase. So, for example, those academics who retired during the phasing-in period have for the rest of their lives lost part of a salary increase which was granted by a tribunal, in a properly argued case, after the Government and the unions had presented their cases and the unions had won. The Government used its muscle, in direct abrogation of a solemn election promise that it would abide by the decisions of the Academic Salaries Tribunal. It really showed a flagrant disregard for the independence of a tribunal which it had lauded so much before it came to office. Of course, the students have also been the victims of the squeeze. The Government has found sufficient funds to raise the unemployment benefit but it has not allocated new funds of anywhere near as much to raise the level of the tertiary education assistance scheme allowance for students who are 18 years old or over. This meant that the gap between the maximum TEAS allowance payment and the single unemployment benefit has more than doubled since Labor came to office. In addition, there has been little easing of the means test on parents. Those of us who listened to the mini-Budget the other night will know that parents have now been singled out as one of the groups to bear some of the brunt of the mini-Budget, with the family allowance having been abolished for students 18 years and over. It is not surprising that six education unions representing 200,000 academics, teachers and students have begun sustained campaigns against this Government-the Government they worked so hard to elect-because of the way it has treated tertiary education. This year we could see the unprecedented situation where these unions and students take industrial action on campus against a government which they supported before the election to try to reverse what they see as an intolerable squeeze on funds. I am concerned to see tertiary education healthy and flourishing because it is one of the avenues to a better Australia for everyone. This nation, by and large, is underskilled; its skills will provide the cutting edge and security to allow us to compete and succeed in what is an increasingly hostile world in the post-industrial era. For that to happen, we must be sure that no properly qualified Australian finds himself or herself unable to get access to any education or training when he or she finishes schooling. Sadly, that is not so at present and the funding policies of the Government, part of which are contained in this legislation, do not indicate that the situation will ease. The Opposition supports the Bills although it has some very real reservations about what is happening to education in Australia. Senator MACKLIN(Queensland)(9.42) —We are discussing a series of States grants education Bills. Such Bills come into the Senate twice a year to provide funds to State governments for schools, specialised programs such as the participation and equity program, and tertiary institutions. Various items in the legislation, as Senator Peter Baume has indicated, are somewhat overshadowed by the announced cuts in education funding. I want to look at some of those cuts that the Government has announced since they affect these Bills. In many respects, the cuts could be termed cheap. They are probably what the New Statesman called recently the 'grocerist deviation'. They bear no relation to the education policies announced by this Government. They have been supported by no analysis by the Minister for Education (Senator Ryan) of why they are necessary for education and they do nothing other than save a few dollars at great cost, especially to the youth of this country. I remember well an exercise that took place under the Fraser Government-the razor gang exercise-in which education decisions were also made that had no bearing on education, no support and no analysis. They were the amalgamation proposals, which also appeared in a cutting Budget. A post hoc rationalisation was then generated after is was discovered that this decision had been taken. It is a pity that these types of education policies are made and such decisions taken in an exercise of cutting costs rather than in an exercise of educational support. The instance of the participation and equity program illustrates this well. On 3 September last year the Prime Minister (Mr Hawke), in announcing the participation and equity program, said: One of the cornerstones of the Labor Government's education policy . . . That was what it was, one of the cornerstones of Labor's educational policy. Mr Hawke went on to say: addressing our concerns about equality of opportunities; about more equal outcomes for those traditionally neglected in Australian education and training systems; and about the relevance of schooling and curricula. That was, indeed, a very rousing statement. What do we have in the mini-Budget? We have that rousing program hacked by 50 per cent. The spurious reason given by the Government was that cutting PEP spending in half and spreading the original amount over two years will 'provide time for greater attention to the development of the program, especially in areas such as curriculum change and the targeting of schools'. I am not sure who wrote that but I think that person should be given a special Brownie point for thinking of that excuse for that exercise. We all know precisely what that decision will do to the various people who have been putting forward programs. Enthusiasm has been generated by this Government to get courses under way, particularly in technical and further education, in support of the types of things the Government has been talking about. People have been working hard in devising curricula. They have been going through the normal accreditation processes to have these courses accepted. They have been working on a variety of support mechanisms which are necessary for any course that is undertaken at that level. Now they have been told that the Government is going to spread out funding over a couple of years so that it can provide greater attention to the development of the program. That is a rationalisation which nobody in education accepts. That was suggested to a group of people who have been working in this area. After the laughter died down, they said quite seriously that that was the last time they would ever be conned by government. The Government, particularly in terms of TAFE, not only hacked about at the participation and equity program in regard to schools. Of course, $19m of the $41m comes from the TAFE sector. This is the sector which the Government has said will have to provide 75,000 new traineeships by 1988. Demands are made, proposals are set out, goals are laid down and then the money is cut. It is an interesting exercise in something not meeting. We are buying ourselves very expensive tertiary institutions. By that I mean that we have a base operation in our universities, colleges of advanced education and TAFE colleges which is necessary just to keep the institutions going. We have highly qualified staff who are necessary to support those institutions and who have been paid for, by and large, by Australian dollars. It is now proposed to put all of that exercise once again on the back burner. Of course, TAFE is easily the most under-resourced sector of the educational system. In addition to that $19m in terms of PEP there was another $12m or 9.3 per cent reduction in the TAFE capital works program. I raise the point-I wish at least to have this on the record-that one can look at the fire which occurred recently in Britain and the number of people who died. In the following few days people were saying that they had been warned. This is the third occasion on which I have raised this issue. Existing in our TAFE institutions, CAEs and universities in Australia are innumerable fire traps, each one of which has been documented, and that documentation has been provided to the Government. I fully expect that at some time in the future there will be a massive tragedy in one of our tertiary institutions. It is not a matter of if; it is simply a matter of when. When one looks at some tertiary institutions-I have travelled around every State and looked at them-one comes across lecture theatres with no access other than one door which leads into a narrow corridor. Often there are 300 or 400 people in those lecture theatres. I suppose that when we have such a massive tragedy the same types of excuses as those brought forward in Britain will be brought forward. Is it not interesting that probably we will have to sacrifice a few hundred tertiary students, who will be burnt to death in the most horrible circumstances, before any action is taken to get rid of these fire traps that the Government has had on record as existing for nearly two years? What do we get? We get a 9.3 per cent reduction in the capital works program, all of which could easily have been used simply in providing some safety for buildings, particularly those on TAFE campuses, but also those on the campuses of colleges of advanced education and universities. That is quite apart from any new buildings or proposals that would be necessary to take up the types of increases the Government has made. I refer to the last election when the Government said: 'Look at the new numbers who will be able to be accommodated in our tertiary institutions'. However, I will come to that matter shortly. Quite apart from the educational consequence of removing $20m from the TAFE budget, one wonders what the economic gains and benefits are supposed to be. Precisely what are we arguing here? Senator Button —That is a very good question. Senator MACKLIN —A very interesting article appeared in the Sydney Morning Herald. If the Minister is interested perhaps he might listen instead of reading his papers. The article reported an official linked with the program as saying: The PEP program, started last year, is a key tool in helping reduce unemployment and increasing the employment skills of the long-term young unemployed. That seems to be a fair proposal. It is the type of proposition and rhetoric the Prime Minister has been putting forward. The article continues: Between 50 and 90 per cent of youngsters taken into these programs have obtained work as a result. The decision to halve the program is a disaster for the young unemployed who need to acquire skills. The rationale given by the Government was precisely that it wanted to give these skills to young people. The Government has said that young people need those skills. Even the Prime Minister (Mr Hawke) has managed to carry out an exercise which I thought was confined to Liberal education Ministers, that is, to go on television condemning schools and saying that they really ought to pull up their socks-that they are probably one of the causes of unemployment. If the Prime Minister wants to run that line, that is fine. However, if he does not want to provide the resources it would be fair to say so on the same program. It is the Government which has raised the expectations. It is the Government which has been putting in the programs. It is the Government which now proposes to cut them back. There are not likely to be any benefits from these cutbacks. The long term disillusionment that will be created and the long term damage that will be done will far exceed anything like $20m in terms of the Australian economy. It could not possibly be limited to that amount. If one looks at the attempt to provide 75,000 new traineeships by 1988, one is confronted with the fact that what they could provide to the Australian economy would far exceed $20m. Yet if students do not have those types of skills, if they are not provided with those types of advantages, the cost to the Australian community will make $20m look like chicken feed. Quite simply, PEP was the Government's flag ship. It has just been sunk by the Government. What about the other types of promises that were made by this Government? Senator Baume raised the issue of the number of places available in tertiary institutions. The Government promised to increase the number of places in higher education by 25,000 by 1990. People may not remember that promise, as it is nearly three years old. That promise actually ended up being modified to an extra 15,000 places through that brilliant public relations work that went on. Again, I hope that the person who wrote that speech was promoted because I thought that was a brilliant piece of work as well. Of course, it did not fool anybody in the education institutions but it seemed to get a reasonable run in the Press, and I suppose that is all that matters. The Government now has clearly shown its hand. There are 4,000 new places for the next triennium. The target of 15,000 has been abandoned or wiped out. Not only that, but as we see from the report presented today by the Commonwealth Tertiary Education Commission-a very conservative report-10,000 demands for places were not met. Senator Teague —That is in higher education only. Senator MACKLIN —Yes. We have the very conservative report from the University of Queensland commissioned by CTEC. It discounted on every point. It came up with 4,000 places for the University of Queensland alone in the next five years. What we are looking at is certainly an absolute minimum of 10,000 places. I do not think anybody can disagree with that. The Australian Vice-Chancellors' Committee and the Australian Committee of Directors and Principals suggest that that is the bare minimum we are looking at. I would suggest that a more realistic figure is in the vicinity of 20,000 to 25,000. Even if we take the bottom line-even if we take 10,000 people-what an extraordinary waste by putting aside those people who could obviously contribute so much to the future growth of our type of economy. Senator Peter Baume —Even a hundred. Senator MACKLIN —Even 100. The Government also made a range of promises with regard to student assistance under the tertiary education assistance scheme. It was going to bring it up to the level of the unemployment benefit and liberalise the definition of independence under which a student who supported himself or herself could quality irrespective of the parent's income. The two main promises were to increase assistance to the level of the unemployment benefit and to liberalise the definition of independence. What do we have? The reality is that, far from increasing the level, it is now $14 less. The gap was $5 when the Liberal Government lost office. It is now $14. The gap has widened and not closed. Has the Government kept one out of its two promises? The provisions with regard to independence are now much more rigid. Last week's mini-Budget announced: Applicants seeking dependent status under TEAS and ASEAS on the basis of work experience will be required to provide evidence of the equivalent of two years full time work in the last three instead of the last five years at present. This change will result in the saving of $1.5m in 1985-86 and $2.9m in a full year. In other words, the Government's score on promises on TEAS is nil out of two. Senator Teague —Even nil out of three. Senator MACKLIN —If we go through all the promises made we find exactly the same thing. I will just run briefly through some of the other cuts. English as a second language, picked out as needing to be one of the priority areas, got a 4 per cent cut. Special education, picked out to be one of the special areas needing attention, got a recurrent 6.3 per cent cut; integration, a 6.6 per cent cut. Multicultural education, picked out to be one of the special areas to be looked at, got a 4 per cent cut. Of course, I have already mentioned the capital works program, a 9 per cent cut. What about research? The Minister at the table, the Minister for Industry, Technology and Commerce (Senator Button), has been a very strong advocate of research in Australia. This has certainly been demonstrated in his speeches in this regard over the years that I have been in this place. What is the Government's record in regard to research? The Government promised 300 post-doctoral scholarships; it has delivered none. Of course, the Government's contribution to the nation's research has been to cut-not increase-the budget by $24.9m. The Government has cut the funding for industrial research and development by $9.6m. Of course, we know that post-graduate students contribute on their own up to 50 per cent of all published research works in this country. Yet, we have cuts in two major areas-in the amount of money available and in the fellowships available. Those post-doctoral people are getting a smaller and decreasing percentage and attempting to support themselves and their families on allowances which are now below the poverty line in this country. Senator Button —Shouldn't you be careful to avoid getting an awful spray from me in the Budget session? Shouldn't you be worried about what will happen in the Budget context before you get too judgmental about it? Senator MACKLIN —What I am discussing are the Bills before the chamber. In fact, I am discussing the cuts announced by this Government, which are now included in these Bills. If we look at what I think has to be seen as the hidden cost of the exercise-Senator Baume alluded to this fact in his speech-we find that in every tertiary institution in Australia two things are happening. Firstly, we find that the normal contact hours available to any student have decreased alarmingly. For example, at the Canberra College of Advanced Education the hours in the two courses that I inquired about have been reduced from 21 hours to 10 hours and nine hours. That seems to suggest that it is something that is going on not only there but elsewhere. I have checked a number of universities and CAEs in my own State and in the State of New South Wales and I believe that that exercise is probably Australia-wide. There are hidden costs and hidden squeezes resulting from the fact that so-called new places are not being funded to the level that it is costing the institutions to keep the places open and filled by students. Hence, savings have to be made. If an institution has a certain number of permanent staff and a certain number of students the area where savings can be made is fairly obvious-part time, non-tenured and tutorial staff have to be cut. That means one thing-it is necessary to decrease the number of contact hours. Therefore, we find that in some professional courses in Australian universities the number of contact hours has been cut in the last two years by over 50 per cent. We are expecting those students undertaking such courses to meet the same level of proficiency without having the type of contact which has always been considered absolutely essential in the past. Secondly, we find a rise in the number of students in tutorials. It is now a commonplace expectation that a student will go into a tutorial with at least 20 to 25 other students. I think when a number of honourable senators went to university they would have expected to attend lectures with only 20 to 25 students. This is now the number of people in tutorials. Tutorials are supposed to be an adjunct to lecturers to enable an exchange between lectures and students, to follow up the thoughts, ideas and points raised in lectures, and to discuss them in some detail. That cannot be done in a tutorial with those numbers. It is impossible to do that. Basically the situation renders that exercise nothing more than a farce and no more than a mini-lecture which the students and staff have to go through because it represents the only contact hours which are available to them. That type of exercise does not appear in a balance sheet. It does not register in dollars and cents anywhere that we can actually get at, but it must register in the quality of the courses that are being conducted in tertiary institutions. Undoubtedly it has to. This means that the quality of those courses cannot do anything but suffer and the quality of the degrees cannot do anything but decrease. This is at a time when we are required to lift our game to compete in the international market and to compete as hard and as fast as we can in a basically information-based society. The exercise we are going through stems from a view that I know is not shared by everybody in the Government but I know is certainly shared by some because they have expressed it in this place often enough; that is, to view the education enterprise in Australia as a cost to the taxpayer rather than as an investment by the taxpayer. We come into this place and talk quite happily about spending money, investing money in our roads and railways. For example, today we provided another $70m to the Australian National Line, and we covered a number of other exercises. We see those as investment in Australia's future. When we look at the distribution of moneys in the Budgets of countries that are still doing well in the international market place it is interesting to find the percentage of total gross national product rising. I use that figure because I think it is the fair figure. I say it is a fair figure because Australia has a peculiar education system which is funded almost exclusively at the tertiary level from governments, and that is not the case in competitive countries. Private enterprise actually funds to a much greater extent in the United States of America, Great Britain, Japan, West Germany, the Scandinavian countries, and in almost every European country than it does in Australia. That is something which is peculiar to our history. It is not an excuse for the Government to say that other countries, in terms of government contributions, are necessarily funding at around the level we are doing in Australia, because private enterprise in those countries also maintains a role in these areas. It does not in Australia and it never has, for a variety of reasons. Hence I believe the obligation still falls very heavily on the Government in Australia to provide those types of resources for our young people and for their education. It is not only for them. I rejected the idea that was bandied around to a great extent during the last years of the Fraser Government, and seems again to have crept into the ideology of the current Government, that education is a private good. Undoubtedly, education does provide-certainly in Australia it provides very directly-goods to the individual; but it also happens to be a public good. If that is not accepted, I think the Government has to give some educational and economic rationale as to why it does not also seek to look at the schooling exercise and say: 'Why are we providing funds there? Why can't people provide their own funds for schooling?' If we start off by saying that we believe every citizen in this country ought to have a basic education as a right, we are doing it because we believe it benefits the country enormously. If we do it at that level, a fortiori we have to say that at the tertiary level it is also the case. I think these cuts were shortsighted. The Minister, by way of interjection, was urging me to wait for the Budget. I am not at all sure whether people in the community are all that willing to wait for the Budget, having seen this particular exercise. I think waiting for the Budget becomes a matter of fear and trepidation and not of hope. I think we now have an enormous amount of disillusionment in the education sector; we have a lack of morale in the tertiary institutions. All that we have is an increasing despondency that we are again back in those years through which we have suffered so recently of simply dawdling at the tertiary level. The advent of the Labor Government raised hopes extraordinarily in this area. The Labor Government made promises in 1983 and again in 1984 very clearly and very directly to all education sectors in Australia. The Labor Government made a number of promises which were clear, unequivocal and which would have worked well for the education community and for the Australian community as a whole. The fact that it has now not only reneged on those promises, but also engaged in further cuts in education has caused massive disillusionment. I think that the education community feels that the Budget will simply continue the trend which has now set in, that what we will see in the Budget is further cuts to tertiary education and a further contraction in the number of young Australians who will be able to undertake tertiary education in Australia and be able to develop their skills for the benefit of this country. Senator PARER(Queensland)(10.11) —I must say that I feared for a while that Senator Macklin was going to speak until the Budget was brought down; at least it seemed that way to me. Today we are debating the States Grants (Schools Assistance) Legislation Amendment Bill 1985, the States Grants (Tertiary Education) Assistance Amendment Bill 1985 and the States Grants (Education Assistance-Participation and Equity) Amendment Bill 1985. The purpose of the Bills is to provide cost supplementation for various education programs and to make some minor technical amendments to the relevant Acts. As such the Bills are not controversial and have the support of the Opposition. However, the passage of the Bills provides the Senate with an opportunity to examine some of the programs covered by the legislation and more broadly the overall effectiveness of our system of education in achieving its primary goal, namely, to give individuals the maximum choice and the necessary skills to pursue their chosen careers and thereby contribute in a meaningful way to Australia's economic performance. My comments today will largely relate to the government education sector since this sector has the responsibility for educating about 75 per cent of our population, although there has been a significant shift away from the government sector in the last decade, particularly in the secondary area. A cursory glance at our education system reveals that there is something rotten in the state of Denmark, despite the many claims of the Minister for Education (Senator Ryan) to the contrary. Associate Professor David Cohen of Macquarie University made the following statement: Secondary schooling is failing to educate. It is riddled with dissatisfactions and remains a disastrous, chaotic disjointed jungle. According to Bob Gottliebsen, a journalist with wide experience in both the business and education fields, it is now clear that the education system of some of our trading partners is producing students who have far greater skills than our own. Even more damning is the following claim: Whilst attention has been focused on our manufacturing industry, and the need for restructuring, we overlook other areas where performance has been lamentable. Australia has been very badly served by its education system, for example. How can we become competitive given the quite inadequate performance of this important sector. If manufacturing has to undergo a painful process of restructuring; if manufacturing has to be competitive; then we must also look at other areas where protection has led to lamentable performance. This statement comes not from the 'right wing' academics, such as Lachlan Chipman or Greg Sheridan, whose views are well known, but none other than the Leader of the Government in the Senate, Senator Button, speaking last year. Even more arresting is the following observation: In a hard, competitive world we do not do service to our young people by throwing them to the wolves completely unprepared for the responsibilities they are expected to carry. We must face up completely honestly to the question whether the present-day education system is adequate to the task: to whether it is of such quality that we can be confident of our children's future. Frankly I have my doubts. This statement was made by the Prime Minister (Mr Hawke) in September last year. Senator Button —I liked mine better. Senator PARER —I did too. There is ample evidence that such views damning our education system are shared in the wider community by teachers in universities and colleges who train the products of the system, by businesses which employ them and, more important, by parents who care for them. Senator MacGibbon —Is the Prime Minister still in the country? Senator PARER —I believe he is in the bunker. Parents are voting with their feet by increasingly sending their children to non-government schools, often at great financial cost. Recent surveys, particularly here in the Australian Capital Territory, reveal that many more parents would do likewise if they could afford it. Queues for private schools are growing. The problems we face are serious-youth unemployment of nearly 30 per cent in some States; low participation rates in tertiary education compared with our major trading partners; and low retention rates at the secondary school level, particularly in the government sector. Now we pay students simply to stay on at school, yet we cannot find places in our tertiary institutions for many of the young people who are persuaded to stay on until Year 12. Senator Baume tabled in the Senate some time ago a survey executed by the Australian Vice-Chancellors Committee and this indicated that, of 29,000 students, about 21 per cent who were eligible for places in colleges of advanced education were not able to find places. The system is suffering from inconsistency and overload. We are not giving our young meaningful life choices and our economy is suffering. Unfortunately, much of the education debate is couched in ideological terms which fail to focus on the issues which concern most parents-the value they are getting for their educational dollar, whether paid in taxes or school fees or both. They are rightly concerned about such issues as the move away from public examinations, one of the few means by which teachers can be held accountable to their customers. They are concerned about the disturbing move away from traditional subjects which teach skills which benefit all students in pursuing whatever careers they choose. Such a move has already been tried in the United States and it has failed. Parents are concerned about some of the activities of politically-motivated teacher unions. They are concerned about what their children are being taught. Let me list some of the courses which receive the benefit of participation equity program funding as provided for in one of the Bills before us today. These courses include child psychology, French for travellers, great mysteries of history, only one earth, self-esteem, coping with death and-believe it or not-growing up in the 1980s. In fact, in 1985 the New South Wales Board of Senior School Studies approved 1,100 OAS courses; that is, courses outside the traditional curriculum. Senator Zakharov —Do you believe those courses are all valueless? Senator PARER —I believe that they have a place, but they should not take a major role. I agree that people require a complete education, but these courses should not become the major part of the curriculum. Unfortunately, a lot of the rationale for these kinds of courses rests upon a misplaced egalitarianism which does no good to those students who are persuaded to pursue such courses. Even the left wing teacher unions are sceptical about the moves to decentralise curricula. The point is whether such courses advance the interests of our young people in being able to sell their labour in an increasingly competitive and highly regulated labour market. The disadvantages to the young in our system of unrealistic wage relativities are sufficient already without unleashing on the job market students who may feel good about themselves and who may know how to drive a car but will never be able to afford to buy one. Unfortunately, there seems to exist in Australia a widespread belief that by throwing money at a problem it will somehow go away. Also, in the education area there is the view that the education system is a means of removing inequality in society and redistributing benefits from one group to another. But the real point of the education system is to educate, with the emphasis on the fundamentals. The problem with our education system is not related simply to funding levels. It is more a matter of accountability. Put simply, the providers of education-teachers, textbook writers, and course designers-must be more accountable to the consumer, the parents and students; to the indirect users, such as the employers; and to the providers of funds, the taxpayers. Clearly, the non-government sectors do not have the same problem with lack of accountability. Consumers simply have more meaningful choices and less bureaucratic control, and hence there appears to be less dissatisfaction with the system. Senator Zakharov —And much less parental say in the schools. Senator PARER —That is not true. One can only view with some trepidation the Government's recent manoeuvrings in the area of parental choice in education. If what Senator Zakharov says is the case, why is there such a great demand for people to move into the non-government sector? Senator Zakharov —Mainly misleading advertising. Senator PARER —The honourable senator would believe anything. The tertiary sector is a classic example of lack of accountability between providers of the service and their clients. Instead, there is only the heavy hand of government and the education bureaucracies. The service is so bad that some young people-many thousands-who qualify for tertiary places just cannot get in. Again, academic departments, course designers and lecturers-all tenured, of course-are responsible, not to their students, who do not have to pay for the service anyway, but to the bureaucracy that provides the money. Political decisions replace what are essentially economic choices and the students, their parents and employers suffer. The education system is in trouble. The Australian economy is in trouble. We are wasting enormous talent by not properly training our young people. We are rendering meaningless their chances in life. Students are ill-prepared for higher education, many are forced on to the dole, and those who remain in the school system-not all of them but many-are encouraged to do courses which may well be of no use to them in later life, while neglecting other subjects that may be boring but which may offer many rewards, not just for those going on to higher learning. Such courses may make school more interesting, particularly for teachers, and temporarily may shorten the dole queues, but it should be remembered that the purpose of education is not simply to keep children at school for as long as possible, however good this might look on paper, but to provide our young people with usable skills and real choices of life. Senator TEAGUE(South Australia)(10.23) —In the seven minutes that remain for debate tonight on the States Grants (Schools Assistance) Legislation Amendment Bill and allied legislation, I want to support the remarks in part made by my Liberal colleagues-Senator Peter Baume, our shadow Minister for Education, and Senator Parer from the State of Queensland who has just preceded me-and indeed many of the remarks by Senator Macklin. All senators in this debate on these education Bills have felt that the provision for education in Australia is not adequate and is in need of being freed up to allow individuals and individual institutions to be creative to meet the needs of Australia, and to make an investment through education in the future of Australia. These Bills that are now before the Senate do not offer anything towards freeing up those structures to allow Australians to take the initiative free of the constraints to which Senator Parer has just referred in his analogy with the industrial system. Senator Parer rightly quoted the Leader of the Government in the Senate, Senator Button, who is in the chamber, on restrictions such as tariffs in industry and compared those with similar restrictions that occur when too many bureaucratic controls inhibit constructive decisions made by individuals and individual institutions. The Bills that are before us are in the regular format that we see every six months. They amount to some $235m, most of which relates to grants to the States for tertiary education. They almost follow an arithmetical formula. There is no creativity in these Bills at all. They are purely supplementary and are designed to catch up with the rises in costs for programs that have already been committed. In the calendar year 1985, 1986 and 1987, there are supplementary provisions for tertiary education of $60m, $80m and $80m. There is provision of an additional $1.5m for the participation and equity program and an additional $15m for schools. All those amounts are purely the outcome of costs formulas that supplement rises in costs for the three respective years. This illustrates that these Bills are routine, machinery Bills. There is no initiative in this legislation that relates to freeing up the structures and allowing initiatives such as my colleagues, and to some extent Senator Macklin, have called for. I predict that tomorrow or the next day when we complete this debate the Minister for Education (Senator Ryan) will summarise these matters in a couple of sentences and the Bills will be passed. Nobody in the Senate is seeking to block these grants of money to the State governments to provide for education at the secondary and tertiary levels in this regular, six-monthly machinery way. But this legislation gives us the opportunity to make remarks and I will conclude my remarks when debate on these Bills resumes tomorrow. My principal remarks will repeat what I was saying earlier today when I spoke to the annual report of the Commonwealth Schools Commission for 1984. In that report and in the actions of the present Labor Government there are initiatives as to administration and structure which have political goals in mind and which have an entrenching administrative effect. I do not believe that this is the way in which this country should go. I believe that the Commonwealth should be facilitating the meetings of representatives from the actual providers of education in the States-whether in the State education departments, in private schools, or, in the tertiary area, in the universities and colleges which are increasingly becoming autonomous institutions. They can implement good ideas and initiatives and, in taking a national approach, they should be able to gain curriculum ideas and programs which they can take back to their States and implement. To the extent that they represented in such a national or all Australian activity, they are not involved in a duplication of their efforts by the Commonwealth but in the Commonwealth facilitating their co-operation. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator GARETH EVANS(Victoria-Minister for Resources and Energy) —by leave-I give notice that, on the next day of sitting, I shall move: That the Senate resolves that counsel be briefed to seek leave to appear on behalf of the President of the Senate at the commencement of the forthcoming trials of His Honour Mr Justice Murphy and His Honour Judge Foord to make submissions as to the law of parliamentary privilege as it may become applicable to those proceedings, such counsel to seek leave to withdraw thereafter and to take no further part in the trial proceedings. The PRESIDENT —Order! It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator BOSWELL(Queensland)(10.30) —I rise tonight to put on the record the industrial problems being experienced in the Latrobe Valley in Victoria. I do this because I believe that the Electrical Trades Union is demonstrating very clearly that it is not abiding by the assurance that it has given to the Australian Democrats. The Australian Democrats sought and were given assurances by the Australian Council of Trade Unions and the unions involved in the power strike that they would accept the outcome of the conciliation or arbitration process and would abide by it, and, secondly, that they would allow the proper means of discussion and conciliation to resolve the dispute without resort to further industrial action. In agreeing to abide by the decision of the Australian Conciliation and Arbitration Commission, they in effect agreed to accept a no strike clause if the Commission decides that such a clause is necessary. Clearly, the ETU in the Latrobe Valley has broken that agreement even before the Democrats have voted for the Conciliation and Arbitration (Electricity Industry) Bill. The ETU has voted for a compulsory $5 a week levy for every ETU worker for a fighting fund to support the ETU campaign in Queensland. A number of people were opposed to the compulsory levy in the ETU, as they saw themselves being involved not in an industrial dispute but in a political dispute. John McNamara, an ETU worker, has refused to pay into a central fund but is willing to support a needy strike affected family directly. He has said also that he would be prepared to accept the results of a secret ballot on a $5 per week levy if the ETU were prepared to put it to their members. Of course, the ETU was not prepared to accept that. Mr McNamara has been declared black and has been told that he will have to accept a different job and be changed to a different work area or lose his job. Mr Neilson Duff, an ETU member, has refused to pay his $5 levy and he has been told that he also will be black banned. At the Morwell brickworks, 11 shift electricians also have been black banned as a group for non-payment of their levy. A notice was placed on the brickworks notice board stating that unless retribution was made by the 11 members, backdated to the first pay period after 2 May, they also would be declared black and lose their jobs. In contrast to the ETU standover tactics, all other unions involved in the electricity industry-the Amalgamated Metal Workers Union, the Municipal Officers Association, the Federated Ironworkers Association, the Australian Workers Union and the Amalgamated Society of Carpenters and Joiners-have agreed to a voluntary levy of $5 a week, but not the ETU. It has demanded the levy, threatening workers and their jobs and declaring them black if they will not pay the levy. Mr John McNamara sent a telegram to Senator Jack Evans, the industrial spokesman for the Democrats, seeking his support against the Government's Queensland electricity legislation while the ETU continues to black ban him and other ETU members in the State Electricity Commission of Victoria. I ask: Where do the Democrats stand on the issue of the Queensland electricity legislation? The Australian Democrats have sought assurances from the unions and they have been given to them; yet we find that in the Latrobe Valley in Victoria these assurances are being dishonoured already before the legislation has come before the Senate. I believe that the Democrats policy is not to accept compulsory levies on unions or black bans on workers; yet the ETU is doing both to its members in Victoria. I ask the Democrats to stand by their principles and oppose the Conciliation and Arbitration (Electricity Industry) Bill until this industrial problem is solved in the Latrobe Valley. In today's Courier-Mail there is a headline 'Delay in coal union action'. The Courier-Mail states that the workers are not prepared to go on strike lest they upset the Democrats' vote. I ask the Democrats to look very closely at the implications of this industrial dispute in the Latrobe Valley before they make their final decision. Senator VANSTONE(South Australia)(10.35) —I do not intend to keep the Senate long this evening. I use the opportunity of this adjournment debate not to make a point that I believe everybody should follow on apolitical lines but to raise a matter of concern that I think everybody in the Senate should be interested in and should watch closely. I refer to the impending development of a special school for black pupils at Elizabeth in South Australia. We have often heard in this chamber and in the Press of the notion of separate race-based schools and other social or governmental functions being of benefit to the race that is segregated into that school or government function. We have all made comments on those sorts of attitudes. It concerns me greatly as a South Australian to see this sort of development in South Australia. As a consequence of having been in Canberra for the parliamentary sittings I have not had the opportunity to speak with all the people involved, but I do want to raise the matter in the Senate to alert honourable senators who may be interested to what is happening so that the development of the school can be watched very closely. I say 'watched very closely' rather than 'opposed' because I am not convinced, from what I have seen in the Press, that at the moment the development of this school should be opposed; I am convinced that it should be watched very closely. The first Press report that is available to me is one dated 23 May. Under the headline 'Vote defeats school for Aborigines' it says: A plan for a separate Aboriginal school on the Elizabeth High School campus was narrowly vetoed by the Elizabeth High School council last night. Nonetheless, the school still proceeds. The Adelaide Advertiser of 24 May states: A separate Aboriginal primary school will be established on the Elizabeth High School campus despite opposition by the local city council, the Elizabeth High School Council, and some sections of the community. I want to highlight to the Senate that, irrespective of this opposition, the school is still going ahead. I accept quite happily the comments of Mr Arnold, who is the South Australian Minister of Education-a Labor Government Minister-that he feels it is inappropriate at the moment for critics of the school to draw comparisons between what is happening in South Africa and what is happening in Elizabeth; that that is using excessively emotional tricks, if you like, in debate, and that we would be better informed if we drew analogies with New Zealand schools. I accept that. He may well be right. All I ask is that the Senate give close attention to this matter to make sure that Mr Arnold is right and that what appears to be an apartheid type of measure, a separate race-based school, is not allowed to develop into one that continues in that way from the primary school into the high school area. Separate from my concern that this matter be watched so that education in South Australia, and for that matter Australia as a whole, is not allowed to develop on racist lines, is my concern that, despite the criticism that has been raised, the State Minister for Education has chosen to proceed anyway. In closing I cite a couple of comments from the Advertiser editorial of Monday, 27 May, which states: Unease, and even alarm, are the consequences of any marked deviation from the path of natural race integration. It is my position that integration is the way we should be going, not only with Aborigines but also with any people who choose to come to this country and that a separate apartheid-type system is inappropriate. I accept the comments that have been made by Mr Arnold that that is not the basis on which this school has been established. I simply ask that the Senate watch this matter and ensure that that is not the way in which the school is permitted to develop. Senator PETER RAE(Tasmania)(10.40) —I wish to speak briefly and in continuation on a matter which I have raised previously about the possible automation of the Swan Island lighthouse. On a previous occasion I raised certain matters and the Minister for Education (Senator Ryan), who is at the table, said that she would endeavour to obtain from her colleague the Minister for Transport (Mr Peter Morris) certain answers for me. I am looking forward to receiving those. In the meantime, I seek leave to incorporate in Hansard a Press release dated 12 May 1985 which begins: Those opposing the automation of the lighthouse at Swan Island are creating a public mischief, the Federal Minister for Transport, Mr Peter Morris, said today. It was dated 12 May and was published on 24 May after the debate had taken place in this chamber. I seek leave to incorporate the Press release. Leave granted. The document read as follows- 12 May 1985 MODERN TECHNOLOGY VITAL FOR OUR LIGHTHOUSES Those opposing the automation of the lighthouse at Swan Island are creating a public mischief, the Federal Minister for Transport, Mr Peter Morris, said today. 'It is vital that our lighthouses are equipped with the most up-to-date technology for the safety of all shipping dependent on that light.' Mr Morris stressed that the automation of a lighthouse does not necessarily mean that staff will be withdrawn. 'But Australia's shipping industry-which pays for the costs of our navigational aids in full-is entitled to the safest and most economical service that it can afford.' 'The Prime Minister has given a firm commitment to the Premier of Tasmania that we will consult with the Tasmanian Government before any decisions were taken that might affect the staffing of Tasmania's lighthouses.' 'We remain committed to that undertaking. When the Government has more specific plans beyond those announced to the Parliament last year, that consultative process will be initiated.' 'Until then, it should be understood that the equipment currently in service at Swan Island is old and may soon prove to be quite unreliable. Clearly, upgrading is required, and to that end modern, automatic reliable equipment has been acquired.' Senator PETER RAE —The Press release was issued with the formal ministerial Press releases in a group dated 23 May but it was published on 24 May. I also seek leave to incorporate in Hansard a letter dated 16 May addressed to me and signed by the Minister for Transport in which he makes none of the comments and none of the references which he makes in the Press release which was alleged to have been published four days prior to the letter. I seek leave to incorporate the Minister's letter in Hansard. Leave granted. The letter read as follows- MINISTER FOR TRANSPORT Parliament House Canberra, A.C.T. 2600 16 May 1985 Dear Senator Rae, Thank you for your letter of 24 April 1985 and your telegram of 3 May 1985 referring to Swan Island lighthouse. I can assure you that full consultation will take place with the Tasmanian Government and other interested parties in developing the lighthouse conversion program. The procedures that I outlined in my statement to the Parliament in October 1984 will be followed. At the time of the inquiry the Department of Transport made it clear in its submission that the equipment at Swan Island was approaching the end of its economic life. In the interest of safety new equipment to up date this important light has been purchased and is now stored at Hobart. No decision has been made regarding its installation. Following the resignation of the Head Lightkeeper at Gabo Island the Head Lightkeeper from Swan Island was transferred to replace him on the basis of his merits. He in turn has been relieved by the lightkeeper from Bruny Island and a replacement taken on to fill that position. These are normal movements that occur in the lighthouse service and are in no way intended to pre-empt the consultative processes I outlined to the Parliament. I will shortly be in contact with the Tasmanian Government and other interested parties, such as the Australian Lighthouse Association, to commence the consultative process recommended by the House of Representatives Standing Committee on Expenditure. Yours sincerely, PETER MORRIS Senator Peter RaeSenator for Tasmania,Parliament House, Canberra, A.C.T. 2600 Senator PETER RAE —I simply placed those documents in the record and I hope that the Minister will be able to obtain for me not only the answers which she promised to obtain previously but also some explanation of the obvious inconsistency between the two documents which I have incorporated. I thank the Senate for granting leave. Senator RYAN(Australian Capital Territory-Minister for Education)(10.42) —Senator Boswell raised matters and made some comments concerning the dispute involving the Electrical Trades Union and the terms of legislation arising from that dispute. His concern seemed to be mainly with the Australian Democrats and therefore it is not appropriate for me to reply. However, I will ensure that his remarks are drawn to the attention of the Minister for Employment and Industrial Relations, Mr Willis. Senator Vanstone raised some concerns about a proposed Aboriginal school at Elizabeth in South Australia. I listened carefully to Senator Vanstone's remarks. I have some difficulty in identifying the basis of her concern. I simply state that the matter of registration of schools, be they based on religious, cultural or any other particular philosophy, is a matter for State governments. It is not a matter over which the Commonwealth has any control. Once schools are registered, they are in a position to seek recurrent and capital funding from the Commonwealth Government. They must fulfil a number of criteria but the basis, be it philosophical, religious or cultural, of the organisation of the school is not a criterion which the Commonwealth takes into account. However, it is the case that the Commonwealth currently funds over 2,500 schools in the non-government sector, many of which are organised to promote a particular religious, philosophical or cultural view. Given the Commonwealth's willingness to fund schools on that basis, I cannot see any automatic problem with Commonwealth funding for that school should it secure registration from the State Government. I suggest that Senator Vanstone pursue the matter in more detail with the South Australian Minister for Education with whom will lie the power and the responsibility for the registration of that school. In arriving at a decision regarding registration, it is the responsibility of the State Minister to ensure that the curriculum, standard of teaching and standard of facilities available for the children are satisfactory in terms of the educational standards of that State. Question resolved in the affirmative. Senate adjourned at 10.44 p.m. The following papers were tabled: Lands Acquisition Act-Statements (3) by the Minister describing land acquired by agreement under sub-section 7 (1) of the Act, for specified public purposes. GOVERNOR-GENERAL'S PROCLAMATION- COMMENCEMENT OF ACT: A Proclamation by His Excellency the Governor-General was tabled, notifying that His Excellency had proclaimed a section of the following Act to come into operation on the date specified: Judiciary Act 1903-Section 88-31 May 1985 (Gazette No. S 177, 27 May 1985) The following answers to questions were circulated: (Question No. 50) Senator Chaney asked the Minister for Defence, upon notice, on 21 March 1985: (1) Has the Department of Defence any plans to reduce or close down its facilities at Singleton in New South Wales. (2) Have any studies been conducted about the desirability of centralising all Army facilities in non-metropolitan New South Wales at one location; if so, what recommendations have been made or are currently under consideration. (3) Has the Singleton area been considered as a possible site for the Army's training area. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) I announced on 9 May the commencement of detailed studies on the suitability of an area between Bathurst and Orange as a site for the Army's School of Artillery and Infantry Centre. I also announced that the Government would investigate ways to maintain a significant Army presence in Singleton. This would be in the event that the Government decided to move the Infantry Centre from Singleton to the Bathurst-Orange area. Such a move would be unlikely until well into the 1990s. (2) Such studies have not been conducted by my Department. (3) Yes. A potential training area near Bathurst-Orange is being studied, however, because the existing military area at Singleton is too small for planned artillery training. Additional areas recommended by the New South Wales Government at Singleton would be unsuitable because of their precipitous and heavily timbered terrain and inaccessibility to vehicles and artillery. Use of other areas near the existing base would conflict with economic and social development of the area, and could be much more costly than the Bathurst-Orange option. (Question No. 61) Senator Kilgariff asked the Minister representing the Minister for Arts, Heritage and Environment, upon notice, on 28 February 1985: (1) Is the Minister for Arts, Heritage and Environment aware of the poor condition of the road through Uluru National Park to the Olgas. (2) Does the Minister acknowledge the need to maintain the road in safe condition for motorists, given the heavy tourist traffic the road carries between two of the Northern Territory's major tourist attractions. (3) What does the Minister consider to be an appropriate level of upgrading needed to be undertaken on the road. (4) Does the Minister believe that the $100,000 currently set aside by the National Parks and Wildlife Service for upgrading the road is sufficient to bring the road up to a suitable standard to deal with the volume of traffic it carries. Senator Ryan —The Minister for Arts, Heritage and Environment has provided the following answer to the honourable senator's question: (1) Latest advice to me is that currently the road is in reasonable condition following maintenance work and the upgrading of certain sections. (2) Yes. (3) Planning is proceeding on a project to construct a sealed road to the Olgas and the proposal will need to be considered by the Parliamentary Public Works Committee due to costs involved. (4) The $100,000 for upgrading the road to the Olgas this financial year is adequate in view of the proposal to construct a sealed road on a new alignment as soon as funds are available. Over $1.4m has been spent since 1981 on upgrading, to a sealed standard, the more heavily trafficked roads in Uluru National Park, particularly the circular road around Ayers Rock. (Question No. 195) Senator Bolkus asked the Minister representing the Minister for Foreign Affairs, upon notice, on 15 April 1985: Has the Minister for Foreign Affairs seen a report from the Central American Health Rights Network claiming that United States of America backed contras fighting against the Nicaraguan Government have destroyed medical facilities and killed doctors and nurses in a campaign to terrorise the rural population; if so: (a) what is the Australian Government's attitude to these reported killings; (b) will the Government ask the United States Administration to use its influence to stop these attacks; (c) will the Government submit this report to the United Nations Committee on Human Rights for investigation. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer: I have seen the report referred to and am aware also of other more general reports dealing with alleged human rights abuses by anti-Santinista contra forces. This and other information available to the Australian Government suggests that contra forces have pursued a policy of destroying health centres and schools and have sought to intimidate and terrorise the population. Indiscriminate attacks also appear to have been carried out against civilians. (a) The Government has consistently opposed the use of military force in Central America and on a number of occasions has expressed publicly its concern about contra activity and conveyed its views on the subject to the United States Administration. Reports of human rights abuses by the contras, particularly those directed at civilians or medical personnel, are cause for added concern and are to be deplored. (b) I have made arrangements for the Government's views on this particular issue to be brought to the attention of the US authorities. (c) The Commission on Human Rights is an intergovernmental body which meets in February/March each year. The Commission will next meet in 1986. Under the procedures adopted by the United Nations, there are possibilities for private individuals and non-government organisations themselves to bring human rights matters to the attention of the Commission. In the case of the report in question, the most appropriate course of action would therefore be for the authors of the report, if they so wish, to submit the report through the established United Nations channels for consideration by the Commission. (Question No. 210) Senator Bolkus asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 16 April 1985: (1) How many projects under the Commonwealth Employment Scheme or the Federal Employment Creation Program has the firm of Trojan Owen and Associates of 189 Greenhill Road, Parkside: (a) proposed; or (b) been associated with. (2) Was a housing project in Thebarton, South Australia and a yabby farm project funded by the Federal Government's Job Program and was the firm referred to in (1) above involved in these projects. (3) What are the names of other projects with which the firm referred to in (1) above has been involved. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) (a) Nil-private companies or individuals are not eligible to sponsor Community Employment Program projects. (b) Trojan Owen and Associates are known to have been associated with 11 approved CEP projects and 6 approved Wage Pause Program projects in South Australia and 3 CEP projects in Victoria, 2 of which have been approved. (2) A project sponsored by Thebarton Council titled 'Kilmore Street Development' was funded under the WPP. My Department has no record of Trojan Owen and Associates being involved in this project. Yabby farm projects sponsored by the Gerard Reserve Council were approved under the WPP and the CEP and Trojan Owen and Associates were engaged by the sponsor as consultants. (3) Trojan Owen and Associates are known to have been involved in the following approved CEP projects: South Australia Gerard Reserve Council-Yabby Farm Development; Gerard Reserve Council-Yabby Farm Development Stage 2; Kuipto Colony Inc.-Redevelopment of Kuipto Colony; City of Burnside-Redevelopment of Chelsea Theatre; City of Burnside-Indoor Sporting Complex Construction; District Council of Victor Harbour-Indoor Recreation Centre; City of Noarlunga-Onkaparinga Estuary Conservation and Development; City of Port Adelaide-Linear Reserve Taperoo Beach; Development Adelaide Central Mission-Redevelopment of Mission House; Department of Fisheries-Aquaculture Research Station; Memorial Drive Tennis Club-Public Administration and Club Facilities. Victoria Murray Valley Aboriginal Cooperative-Development of Hydroponic Vegetable Production Facility; City of Footscray-Redevelopment of Footscray Swim Centre. The company is known to be involved in the following CEP project proposal in Victoria which has not yet been considered for approval: Sunshine Christian Community Service-Development of Counselling and Welfare Centre. The company is known to have been associated with the following WPP projects: South Australia Kuipto Colony Inc.-Redevelopment of Kuipto Colony; Gerard Reserve Council-Yabby Farm Development; Salvation Army-Warehouse Redevelopment; Henley Beach Sailing Club-Storage Shed for Reserve Craft; Memorial Drive Tennis Club-Public, Administration and Club Facilities; Royal Society for the Blind-Therapy Centre. (Question No. 211) Senator Bolkus asked the Minister representing the Minister for Foreign Affairs, upon notice, on 17 April 1985: Will the Australian Government collate all information relating to deprivation of human rights in South Africa and submit it to the United Nations Human Rights Committee for investigation in view of the recent killing of at least 19 black South Africans on 21 March 1985 when police opened fire on a funeral procession in Cape Province, South Africa. Senator Gareth Evans —The Minister for Foreign Affairs has provided the following answer to the honourable senator's question: The Australian Government's abhorrence of apartheid is on public record. It has been made clear in the Commission on Human Rights, of which Australia is a member. The Minister for Foreign Affairs made a public statement on 22 March expressing the Government's outrage at the deaths of Uitenhage to which Senator Bolkus has referred. The Government condemns the use of violence by the South African Government. The question of human rights in southern Africa is regularly on the agenda of a number of United Nations bodies, including the Commission on Human Rights. Member states take the opportunity to address the Commission in some detail. Australia made a statement at the last session in February 1985 reaffirming its opposition to apartheid. Each year the Commission examines the report of the Ad Hoc Working Group of Experts on southern Africa, a group set up by the United Nations to make enquiries and prepare reports of the kind that Senator Bolkus is seeking on human rights violations in South Africa. Furthermore, the Commission has mechanisms through which it receives communications about human rights abuses from individuals and non-government organisations. Additional and often first hand information on the situation in southern Africa is thus brought to the Commission's attention. In the light of these comprehensive arrangements, it does not appear to be necessary for the Australian Government to collate information relating to the deprivation of human rights in South Africa for submission to the Commission. (Question No. 244) Senator Reynolds asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 22 April, 1985: (1) Given that the Federal Government's Skills in Demand Program will fund re-training for over 900 nurses in New South Wales and Western Australia, what involvement is anticipated by other States. (2) Has the Queensland Government rejected the opportunity to re-train nurses under the auspices of the program referred to in (1) above. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) Most States/Territories are developing proposals for funding nurse refresher course training under the Skills in Demand Program administered by the Department of Employment and Industrial Relations. The development and negotiation of proposals are at varying stages in different States and Territories. (2) In Queensland discussions on the need for such training are continuing between the DEIR, relevant unions, hospitals and the Queensland Department of Health. No sponsoring body has been nominated. Consequently no proposal for SID funding has yet been received. (Question No. 268) Senator Mason asked the Minister representing the Minister for Science, upon notice, on 8 May 1985: (1) Is the Government currently funding some scientific publications in Australia such as Techlink, but has decided not to fund the National Journal of Science Search. (2) Does the Government already provide copies for high schools of scientific publications including Ecos and Sci-file, which report only on developments in the CSIRO, and the Atomic Energy Commission's Nuclear News. (3) Will the Government consider funding the National Journal of Science, Search to the extent of providing copies of the journal for Australian high schools; if not, why not. (4) Is the Government aware that in countries with similarly small scientific communities to Australia's, journals such as Search are subsidised by their governments, as is the case with Sweden's Ambio and India's Current Science. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) Techlink is produced by SIROTECH, a company set up by CSIRO to deal with technology transfer and commercial assessment. Search is the journal of the Australian and New Zealand Association for the advancement of Science. A Committee of the ANZAAS Council is currently considering the future of Search. Until a decision is reached by the Council, no consequential decision about government funding for Search can be taken. (2) The CSIRO quarterly Ecos is not supplied free to high schools, but high schools are among the subscribers to the magazine. The subscription rate is $7 per year. Sci-file provides schools with accounts of CSIRO research of relevance to teachers. It is issued free once a term. Sci-file is also available on subscription at $2 per copy a term to members of the public and teachers requiring additional copies. The Atomic Energy Commission does not fall within the Science portfolio, but I am advised that Nuclear News, a 4 page leaflet style publication, is distributed free to most high schools. (3) Refer to paragraph 2 of answer to (1). (4) The Government is not aware of the details of subsidisation arrangements for science publications in other countries. Senator Ryan —Senator Aulich asked the Minister representing the Minister for Arts, Heritage and Environment the following question, without notice, on 19 April 1985: I refer to attacks by the Tasmanian Premier on the register of the National Estate and its effects on Tasmanian development. Is the Minister aware that the Premier has described the register as a Commonwealth takeover, and land grab et cetera? Is the Minister aware of the open letter placed by Mr Cohen in the Tasmanian media outlining the truth about the register of the National Estate? The Minister for Arts, Heritage and Environment has provided the following answer to the honourable senator's question: There appears to have been a campaign, for some time, in Tasmania, to spread false information about the role and function of the Register of the National Estate. Heritage Week was considered a fitting time for the Commonwealth Government to provide some facts in the debate in Tasmania about the Register of the National Estate to prevent people being misled. The letter in particular stated what the Register is-a cultural inventory that has no direct effect on a listed place or on the obligations of private owners or occupiers of that place. The letter indicated that it is not a land grab or an excuse for conservationists to stop progress. The letter also reminded the public of the $10m that the Commonwealth has provided to Tasmania's heritage for both the National Estate and Port Arthur Programs. Finally the letter invited all Tasmanians to provide the Government with comments on the National Estate as part of a previously announced review of the processes of the Australian Heritage Commission Act.