Wednesday, 11 September 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: Pre-School and Child Care Services: Funding To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of we, the undersigned citizens respectfully showeth our concern at the drastic and untimely reduction of funding to early childhood services in our State. And your petitioners as in duty bound will ever pray. by Senator Georges (from 15 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: `No Cuts for Kids'! We deplore the proposed cut-back of funding for pre-school and child care in the mini-budget as the proposal adversely affects young families, women's employment prospects and children's development in their most formative years. Your petitioners therefore humbly pray that the Senate in Parliament assembled should: Reverse proposals for cuts in children's services. And your petitioners as in duty bound will ever pray. by Senator Jessop (from 101 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: We deplore the proposed cut-back of funding for preschool and child care in the mini budget as the proposal adversely affects young families, women's employment prospects and children's development in their most formative years. We urge you to reverse the proposed cuts in children's services. And your petitioners as in duty bound will ever pray. by Senator Maguire (from 27 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The petition of the undersigned citizens, teachers, parents and students working in and for the interests of government schools and TAFE colleges showeth that: 1. We oppose the proposed cuts of 75 teaching and 40 ancillary positions in ACT government schools and 28 teaching positions in ACT TAFE colleges. 2. We deplore the cuts to public education and the harm caused to the opportunities of thousands of Canberra's youth. 3. We call on the Commonwealth Government to honour its primary obligation to public education and its commitments to increase participation and equity in education by not implementing staffing cuts in ACT government schools and TAFE colleges. by Senators Robertson (from 35 citizens) and Ryan (from 114 citizens). To the Honourable the President and members of the Senate in Parliament. The petition of the undersigned shows that because it will cause serious harm to the community, the Parliament will not legalise the possession, sale, hire, or supply of any publication or video tape, video disc, slide or any other recording from which a visual image can be produced, which displays degradation of any person, particularly women and children, or animals; scenes of explicit sexual relations showing genitalia detail; acts of violence and sex; sexual perversion such as sodomy, mutilation, child pornography, urolagnia, coprophilia, necrophilia, bestiality; or the use and effect of illicit drug taking; explicit fellatio and cunnilingus; explicit nudity including touching genitalia, erect penis. Your petitioners pray the Senate, in Parliament assembled that you will give this matter earnest consideration. And your Petitioners, as in duty bound, will ever pray. by Senator Robertson (from 20 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That we consider the Federal Government's petrol price increase will have a widespread and adverse effect on the people of the Northern Territory and other outback areas of Australia; That the Territory's mining and pastoral industries will suffer as a result of the price increase; That the Territory's tourism industry will suffer as a consequence of increased air fares flowing on from the petrol price rise; That the already high cost of freight to Territory residents, business and industry will increase even further because of the fuel factor of freight charges; That the price increase will generally disadvantage the people of the outback, to whom petrol powered vehicles and equipment are a necessity. Your petitioners most humbly pray that the Senate, in Parliament assembled, should urge the Federal Government to give further consideration to the people of the Northern Territory and other outback and isolated regions of Australia in the matter of this petrol price rise. And your petitioners, as in duty bound, will ever pray. by Senator Kilgariff (from 21 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That whereas the Commonwealth of Australia ratified the UN Convention on the Elimination of All forms of Discrimination Against Women in 1983, the Government of Victoria in passing the Planning (Brothels) Act 1984 is in breach of Article 6 of the Convention which says that ``States Parties shall take all appropriate measures, including legislation, to suppress all forms of traffic in women and exploitation of prostitution of women''. That the Victorian Planning (Brothels) Act 1984 provides legal authority to brothel operators to traffic in and exploit the prostitution of women and to live off the earnings of prostitutes. That whereas the Federal Minister for Health has counselled citizens to shun promiscuity (The Australian 26/1/85) because of the serious and sometimes fatal health hazards, the operations of legalised brothels encourages promiscuity and the spread of diseases, including AIDS. Your petitioners therefore pray: That the Government of Australia having ratified the UN Convention on Women remain consistent in its obligations to uphold the Articles of the Convention and request the Victorian Government to immediately repeal the Planning (Brothels) Act 1984. And your petitioners, as in duty bound, will ever pray. by Senators Missen (from 233 citizens) and Walters (from 718 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That the Hawke Government's failure to correct the anomalies arising from the application of the assets test on pensioners, with the failure of the Australian Democrats to support Senator Messner's Bill to repeal the assets test, is causing unnecessary hardship for Australia's aged, particularly those living in rural areas. Your petitioners therefore humbly pray that the Hawke Government will itself take action to repeal its iniquitous and anomalous test. And your petitioners as in duty bound will ever pray. by Senators Crichton-Browne (from 22 citizens), Knowles (from 198 citizens) and Robertson (from 12 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That in the light of the Labor Government's failure to act to correct the anomalies in the Assets Test on pensions bring to its notice and due to have effect from the 21 March, 1985 the Labor Government's legislation should be repealed before it has an unduly unfair impact on pensioners, and calls upon the Australian Democrats to support Senator Messner's Bill for the abolition of the Assets Test. Your petitioners most humbly pray that the Senate in Parliament assembled should immediately seek the passage of the Social Security and Repatriation Assets Test Abolition Bill to repeal the Labor Government's iniquitous and unfair Assets Test. And your petitioners as in duty bound will ever pray. by Senator Kilgariff (from 68 citizens). To the Honourable the President and members of the Senate in Parliament assembled. Your petitioners urgently request the Honourable Senator Grimes, Minister of Community Services, to include Communication Aids on the equipment list funded through the `Provision of Aids for Disabled People' program. And your petitioners as in duty bound will ever pray. by Senator Missen (from 126 citizens). To the Honourable the President and members of the Senate in Parliament assembled; the humble petition of the undersigned citizens of South Australia respectfully showeth that: Without any warning and at the worst possible moment, the Federal Government has abandoned the pensioner patients in South Australia's Nursing Homes. These people are suffering undeserving hardship and trauma as a result of the Federal Government's decision to freeze the nursing home benefit levels in South Australia. The pensioner patients and those on fixed incomes now cannot expect any relief from recent significant fee increases approved by the Department of Community Services and which have coincided with the decision to freeze benefits. 80-85 per cent of nursing home patients are pensioners and the majority are now required to pay in excess of their pension for their nursing care for the very first time. Some are paying over $5 per day on top of their pension. Many are looking for cheaper nursing care that doesn't exist. We request that the Federal Government: 1. alleviate the distress of South Australia's nursing home patients and their families by effective restoration of the principle that pensioner patients should not have to pay more than their pension for nursing home care. 2. restore the review of the benefit rates in November 1985. 3. resolve its concerns over health care costs with the South Australian Government rather than inflicting unnecessary suffering on nursing home patients. And your petitioners, as in duty bound, will ever pray. by Senators Bolkus (from 162 citizens), Jessop (from 140 citizens) and Vigor (from 119 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That the confinement of laying hens in battery cages is cruel and unnecessary and totally ignores the welfare of the birds. The aviary system of egg production approved by R.S.P.C.A. allows the birds to exercise, socialise, lay eggs in nests and move quite freely. Offers protection from the elements and predators, permits excellent disease and parasite control and enables easy supervision. Your petitioners humbly pray that the Senate, in Parliament assembled should: Request the Government to introduce a Bill to phase out the battery method of egg production within five years and where appropriate offer tax deductible incentives to producers to do so. And your petitioners, as in duty bound will ever pray. by Senator Robertson (from 97 citizens). To the Honourable the President and members of the Senate assembled. The Petition of the undersigned respectfully showeth that: 1. The Watsonia Army Barracks contains electronic communications facilities, operated by Australian and American personnel, that gives the United States the ability to pinpoint Soviet nuclear submarines, hidden in the Oceans. 2. This would make it possible for U.S. killer-submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a `first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the `joint Australian-U.S.' electronic communications facilities in the Watsonia Army Barracks. by Senators Chipp (from 90 citizens) and Cooney (from 180 citizens). To the Honourable the President and members of the Senate in Parliament: The petition of the undersigned shows that there is a need to end the current discriminatory application of sales tax on confectionery and to end the other anomalies existing in sales tax law. Your petitioners therefore humbly pray that the Senate in Parliament assembled supports a change in existing legislation so that this tax can be replaced by a broad-based consumption tax with a uniform ad valorem rate without any exemptions whatsoever. And your petitioners, as in duty bound, will ever pray. by Senator Short (from 1,488 citizens). To the Honourable the President and members of the Senate and to the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's `White Paper' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains tax Hidden Death tax described as `Capital Gains tax after death' Gift tax Increased Company tax Employer taxes on employees' employment benefits. All such taxes will discriminate against and inhibit progress, growth and employment through the nation. They will attack hardworking people who have build up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. We ask that the tax proposals be rejected. by Senator Boswell (from 25 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 deplore the discriminatory tax proposals as outlined in the Government's White Paper and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains Tax Hidden Death Tax described as ``Capital Gains Tax after death'' Gift Tax Increased Company Tax Employer taxes on employees' employment benefits All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject these tax proposals. And your petitioners as in duty bound will ever pray. by Senator Kilgariff (from 68 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: 1. That governments have a responsibility to maintain standards acceptable to society's wishes. 2. It cannot be guaranteed that X rated video material will not be viewed by children. Your petitioners most humbly pray that the Senate, in Parliament assembled should: Not adopt the X classification for films and video tapes, nor category 2 for printed material. Further, that tighter restrictions be applied to R video films and video tapes and category 1 printed material. And your petitioners as in duty bound will ever pray. by Senator Walters (from 76 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: 1. They are completely satisfied with the design of the existing Australian National Flag. 2. They are aware it properly reflects the immutable characteristics of Australia, namely: (a) The Union Jack-itself the creation of 3 Christian crosses represents the nation's historical origin and the source of its language and law. (b) The Southern Cross on an azure blue background signifying its place in space. (c) The large star depicting the advent of Federation in 1901 and each point depicting a State and the Territories of the Commonwealth. 3. They know the flag has been a source of inspiration to generations of Australians in peace and war. 4. They recall that millions of native-born Australians and newcomers to these shores from other parts of the world have become united under its proud symbolism. 5. They are certain that any change to its form or to its acceptance as the sole Australian National Flag will produce division in the Australian community. Your petitioners most humbly pray that the Senate, in Parliament assembled, should ensure that the existing Australian National Flag remains sacrosanct from change and remains the sole National Flag. And your petitioners as in duty bound will ever pray. by Senator Walters (from 294 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned shows that human embryos deserve legal protection to enable the development of their full human potential. Your petitioners request that the Senate, in Parliament assembled, should pass Senator Harradine's Bill to prohibit experiments involving the use of human embryos created by in vitro fertilization. And your petitioners as in duty bound will ever pray. by Senators Boswell (from 2,958 citizens), Sir John Carrick (from 40 citizens), Crowley (from 245 citizens), Elstob (from 38 citizens), Georges (from 1,019 citizens), Harradine (from 670 citizens), Jessop (from 48 citizens), Kilgariff (from 19 citizens), Missen (from 705 citizens), Puplick (from 86 citizens), Robert Ray (from 1,065 citizens), Reynolds (from 960 citizens), Richardson (from 72 citizens) and Robertson (from 3,083 citizens). To the Honourable President and members of the Senate in Parliament assembled. Humble Petition of the undersigned citizens of Australia respectfully sayeth: That we the undersigned are totally opposed to any taxation change which involves a tax on Health Fund contributions or benefits. That we are already required to pay a 1 per cent levy to partly finance the Medicare scheme and that we would regard any further taxation of our health insurance arrangements as unfair and unreasonable. That therefore we urge the Government to ensure that there is no taxation on illness and no special taxation on those who seek to insure themselves against the cost of private health care. And your petitioners, as in duty bound, will ever pray. by Senator Georges (from 4,420 citizens). Senator MISSEN(Victoria) —by leave-I present the following petition from 122 citizens of Australia which is not in conformity with the Standing Orders: We, the undersigned, urgently request the Hon. Senator Grimes, Minister Department of Community Services, to include communication aids on the equipment list funded through P.A.D.P. Petitions received. Senator MASON(New South Wales) —I give notice that, on the next day of sitting, I shall move: (1) That a select committee, to be known as the Select Committee on Proposed Army Training Facility, be appointed to inquire into: (a) the need for an area of land in New South Wales for the purposes of the relocation and collocation of the army's School of Artillery and Infantry Centre, and for army manoeuvres, having regard to strategic and training requirements appropriate to Australia's Defence Force, existing defence facilities and army training practices in comparable countries; (b) the suitability of the areas of land at Bathurst/Orange and Cobar presently under study for the purposes of aquisition, having regard to the army's needs and any countervailing public interests; and (c) whether machinery should be established to hear persons affected by future proposed acquisitions and to investigate the need for such acquisitions. (2) That the composition and powers of the Committee be contained in a subsequent resolution. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate calls upon the Government to- (a) take note of the views expressed by thousands of Australians who are opposed to the granting of ownership of Ayers Rock to the Mutitjulu community; and (b) take steps to ensure that Ayers Rock remains the property of all Australians, with local Aboriginal people taking an active role in the management of the Ayers Rock and Uluru National Park. Senator JONES(Queensland) —I given notice that, on the next day of sitting, I shall move: That the Senate- notes with disdain, comments made by the Queensland Premier, Sir Johannes Bjelke-Petersen on the ABC radio programme AM on this day, September 11, regarding the Federal Government's proposal to consider the introduction of personal identification cards for the purpose of helping bring tax evaders and avoiders to justice, and for many other reasons designed to streamline the process of good Government and- Totally refutes suggestions that information on such cards, if introduced, would specify criminal or other such recorded information, or identify the political affiliations of holders of the cards to be used against them in situations such as job interviews, as stated by the Premier on the radio programme. Senator TOWNLEY(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the Senate- (1) conscious of the rapid way Australia's overseas debt has been building up, particularly over the period of the Labor Government; (2) recognising that Australia's debts per head will result in the Government having to pay almost $7,000m in interest in on that debt this financial year; (3) noting that the interest that the Government is budgeting for is already almost $300m more than predicted just a few months ago in the Department of Finance report on the Forward Estimates of Budget Outlays and Staffing; (4) taking into account that without increased exports Australia's economic future in the long term is under a serious cloud, calls upon the Government of Australia to issue a statement showing just how it intends to solve the debt crisis situation. Senator KILGARIFF(Northern Territory) —I give notice that, on the next day of sitting, I shall move: That the Senate, In view of the conclusions reached by the Strategic and Defence Studies Centre at the Australian National University, in its study of the defence implications of a railway from alice springs to Darwin, and the preliminary report on the economic viability of such a railway which has been prepared by Canadian Pacific Consulting Services Ltd, calls upon the Government to undertake a further inquiry into the viability of a railway from Alice Springs to Darwin, taking into account its defence implications and the findings of both the Strategic and Defence Studies Centre report and the Canadian Pacific Report. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- 1. A.C.T. Milk Authority-Annual Report 1983-84 2. A.C.T. Nominal Defendant-Annual Report 1983-84 3. A.C.T. Registrar of Co-operative Societies-Annual Report 1983-84 4. A.C.T. Building Standards Committee-Annual Report 1983-84 5. Canberra Commercial Development Authority-Annual Report 1983-84 6. Australia's Trade with China-Text of a statement by the Minister for Trade made in the House of Representatives on the 22 August 1985 7. Western Australian Local Government Grants Commission-Report on Recommendations for grants to councils for 1984-85-pursuant to section 10 of the Local Government (Personal Income Tax Sharing) Act 1976 8. Local Government Grants Commission New South Wales-Annual Report 1984-85-Pursuant to section 10 of the Local Government (Personal Income Tax Sharing) Act 1976 9. A.C.T. Apprenticeship Board-Annual Report 1984-pursuant to section 47 of the A.C.T. Apprenticeship Ordinance and Regulations 1936 10. Advance Australia Foundation-Annual Report 1983-84-pursuant to section 18 of the Advance Australia Logo Protection Act 1984 11. Chichester Water Treatment Plant-agreement with N.S.W.-pursuant to section 6 of the National Water Resources (Financial Assistance) Act 1976 12. Army and Air Force Canteen Service Board of Management-Annual Report 1984-pursuant to regulation 23E of the Army and Air Force Canteen Service Regulations 1981 13. Department of the Prime Minister and Cabinet-Annual Report 1984-85 14. Australian Federal Police Objectives and Priorities-revised charter 15. Second Report submitted by Australia in accordance with Economic and Social Council Resolution 1988 (LX) concerning rights covered by articles 6 to 9 of the International Covenant on Economic, Social and Cultural Rights 16. Cox River (Alawa/Ngandji) Land Claim-Report by the Aboriginal Land Commissioner 17. Aboriginals Benefit Trust Account and Related Financial Matters in the Northern Territory Land Rights Legislation-Report 18. Australian Safeguards Office-Annual Report 1983-84 19. River Murray Commission-Annual Report 1984-pursuant to section 14 of the River Murray Waters Act 1983 20. Advance to the Minister for Finance-Statements on expenditure for April, May, June and July 1985 21. Study of Returned Servicewomen of the Second World War-Report 22. The Review of the Repatriation Hospital System-Final Report June 1985 Senator GRIMES(Tasmania-Manager of Government Business) —by leave-I inform honourable senators of the extension of the appointment of Mr Evan D. Cameron as Independent Auditor for the Auditor-General's Office for a further three financial years commencing 1984-85. Mr Cameron is a partner in the accounting firm of Hungerford Hancock and Offner and has held the appointment for the past six years. I take this opportunity to express appreciation for the way in which Mr Cameron has performed this important office. Senator GRIMES(Tasmania-Manager of Government Business) —For the information of the Parliament I present a document entitled `Portfolio Program Statements-1985-86'. I seek leave to incorporate in Hansard a statement relating to the progress of the Government's budgetary reform measures, in particular program budgeting. Leave granted. The statement read as follows- The document I have just tabled presents program statements for the agencies adopting program budgeting for 1985-86 on a trial basis. These are the portfolios of Employment and Industrial Relations, Industry, Technology and Commerce-including the newly created Australian Customs Service-and Finance. The information it contains is intended to assist Parliament in its examination of the 1985-86 estimates for these agencies and to aid the general public to reach a better understanding of their activities. The program statements set out the Government objectives being addressed, why the program or sub-program exists and the activities undertaken to achieve the objectives; the estimated costs involved; and a brief discussion of performance indicators. This format closely follows the proposal in the report of the House of Representatives Standing Committee on Expenditure Parliament and Public Expenditure and endorsed by the Joint Committee of Public Accounts. As the approach is further developed in these agencies, and as they gain more experience with its operation, the relevance and quality of this information can be expected to improve considerably. This document is a companion volume to Budget Paper No. 6 Portfolio Program Estimates which presents staffing and financial information on a program basis for each portfolio. Honourable senators, may recall that the Government policy Paper `Budget Reform' published in April last year identified a number of potential advantages from the introduction of program budgeting. Briefly these included: more efficient and effective management practices through the requirement to more systematically consider objectives, the development of management reporting systems to allow financial planning, monitoring and control and assessment of results to be linked to objectives. Program budgeting would substantially reinforce the work being undertaken through the Financial Management Improvement Program; secondly, more informed budget decision-making resulting from clearer identification of program objectives, program costs, and the relationship between resource input and program achievement; thirdly, a more useful presentation of information to Parliament and the public. This would allow Parliament in particular to concentrate less on the quantity and type of input and more on the relationship between the funds sought by the Government and the expected program output and outcome. In recognition of the wide-ranging issues raised by the introduction of a formal program budgeting system the Government has adopted a staged approach commencing with a pilot study. This involved testing of the approach by several departments and wide consultation with many other departments and agencies, relevant unions and State Government bodies as well as Parliamentary committees. This document represents one product of that study. The Government expects shortly to be in a position to consider further the nature and timing of an extension of program budgeting. Honourable senators will know that, following the Senate's acceptance of a report from its Finance and Government Operations Committee, the program budgeting pilot departments have presented their explanatory notes to Senate Estimates committees in program format on a trial basis this year. I await with interest the further report on the results of that trial. I might add, however, that the Estimates committees have an important role to play in the development of the Government's budgetary reforms. In the relatively short period since coming to office, the Government has implemented a number of related budgetary reforms which are supportive of a program budgeting approach. The integration of decision-making on human and financial resources has ensured that consideration is given to all major costs associated with programs. This helps to assist set Budget priorities. It has been accompanied by additional flexibility for departments in the management of their staff budgets. The number of annual appropriation items has progressively been reduced, from some 1800 in 1982-83 to some 1200 in 1985-86. This has given departments and agencies greater flexibility for more effective funds and program management. A major step was taken in this area last year with the consolidation of administrative appropriations into two items and the application of cash limits. The experience with this arrangement during 1984-85 was most successful. Managers made full use of the opportunity to reallocate funds in this area as their needs and priorities changed during the year. Budget supplementation required for these items was significantly lower then for the previous year. All these developments are underpinned by the Government's Financial Management Improvement Program. This program is designed to improve program administration by encouraging better management practices. It seeks to develop in managers a concern for objectives and results and to foster the development or supporting systems and processes. A comprehensive report on progress will be completed later this financial year. The Government has also sought actively to improve the availability of information on its plans and financial administration. Most notably, the forward estimates of outlays have been published each year and the Government has committed itself to publishing these soon after the Budget from now on. This year, for the first time, a reader-survey of the Budget documents is being undertaken as part of moves to make them more relevant and useful. The publication of the Portfolio Program Statements document and the information it contains goes to further underline thiss Government's commitment to improve the efficiency and effectiveness of its administration and to bring about open and accountable government. Senator GRIMES —by leave-I move: That the Senate take note of the paper and the statement. Senator MESSNER(South Australia)(10.11) —The paper which the Manager of Government Business (Senator Grimes) has put down is a most important document. I have not yet had an opportunity to read it in detail. The paper follows on from the Government's proposed reforms to its financial budgeting system and it will deserve close examination. For that reason I seek leave to continue my remarks at a later time. Leave not granted. Senator SIDDONS(Victoria)(10.12) —I too have just received a copy of the ministerial statement on program budgeting which has been incorporated in Hansard by the Manager of Government Business (Senator Grimes). I have had an opportunity to read the statement only quickly but I must say that I am delighted that the Government is introducing an attempt at program budgeting and I support this initiative wholeheartedly. As a practising industrialist coming into this Parliament, it became very obvious to me that there was no real accountability and control over the efforts of the Government to run the business of the country. The situation is analagous to a large enterprise trying to control the flows of large amounts of money without any costing system. If we are to get accountability into the way our country is run it is vital that some measure of the output of the bureaucracy be established. That is the only way in which we can achieve accountability. It seems to me that the aims which are set out in the ministerial statement are to be commended. For instance, the statement indicates that program budgeting will `allow financial planning, monitoring and control and assessment of results to be linked to objectives'. That is what costing and accountability are all about. If the system that is being introduced now by the Government on a trial basis is successful we will see a quantum leap forward in the efficiency of the vast enterprise that runs our country. I commend the Government for its initiative. I will read with great interest and care the details of the pilot study that is being introduced in one or two departments. I hope to get the opportunity to debate this initiative in some detail at a later date. At least it is a very important step in the right direction. It is a step towards accountability in government matters. It is a step towards measuring the output of the bureaucracy and that will be a vast improvement on what we have had in the past. Debate (on motion by Senator Grimes) adjourned. Motions (by Senator Grimes for Senator Ryan) agreed to: That leave be given to introduce a Bill for an Act to repeal the Student Assistance (Loans Guarantee and Subsidy) Act 1982. That leave be given to introduce a Bill for an Act to amend the Student Assistance Act 1973, and for related purposes. 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 the Bills being put in one motion at each stage, and the consideration of such Bills together in the Committee of the Whole. Bills (on motion by Senator Grimes) read a first time. Ordered that the Bills may be taken through all their stages without delay. Second Readings Senator GRIMES(Tasmania-Minister for Community Services)(10.17) —I move: That the Bills be now read a second time. STUDENT ASSISTANCE (LOANS GUARANTEE AND SUBSIDY) REPEAL BILL 1985 The purpose of the Student Assistance (Loans Guarantee and Subsidy) Repeal Bill 1985 is to repeal the Student Assistance (Loans Guarantee and Subsidy) Act 1982. The Student Assistance (Loans Guarantee and Subsidy) Act 1982 provides for the giving of guarantees and subsidies by the Commonwealth in respect of certain loans made to eligible students. However, since the Act was assented to on 31 December 1982, no loans have been made and no guarantees or subsidies given in pursuance of the Act. Furthermore, the Government has made a commitment not to proceed with the student loans scheme proposed by the Fraser Government. The present Bill fulfills that commitment. The Bill has no expenditure implications. I commend the Bill to the Senate. STUDENT ASSISTANCE AMENDMENT BILL 1985 This Bill seeks to amend the Student Assistance Act 1973, which provides the legislative basis for the tertiary education assistance scheme and for the postgraduate awards scheme. The Bill does not raise any major policy matters and is confined essentially to questions of an administrative nature. The Bill proposes to restructure the student assistance review tribunals-SARTs-which at present consist of a number of tribunals each with a chairperson and two other members. It is proposed to have a single Student Assistance Review Tribunal, comprising a panel of convenors and a panel of other members, with the SART at any particular hearing being constituted by a convenor and two members. This is similar to the structure of the Administrative Appeals Tribunal and will streamline administrative arrangements, such as those involved in the appointment of SART members. It is intended to re-appoint all present chairpersons and members of existing SARTs as convenors and members of the new tribunal. Other amendments concerning the SART will enable the appointment of acting convenors, will allow the SART to remit matters to the Department for reconsideration in accordance with the SART's directions or recommendations, and will provide for a more flexible procedure in cases where it is not possible to give a student the necessary notice of the SART hearing. An amendment is also proposed in relation to the protection of Australian Taxation Office and other confidential documents made available to the SART. The amendment will insert a new provision, proposed section 29B, which will substantially repeal the existing provisions at present contained in section 25 (2), with the following modifications: It will be clarified that documents are to be protected during a SART hearing as well as at the pre-hearing stage; oral disclosure of a document's contents will be prohibited where disclosure of the document itself is prohibited; and the restriction on the disclosure of a document dealing with a person's affairs will not generally apply if the person agrees to the disclosure. I should perhaps add that the Government appreciates that it is necessary to balance privacy considerations with open access to documents, and that it is recognised the proposed section 29B may need to be re-examined in the context of future reviews of non-disclosure provisions in Commonwealth legislation or of the confidentiality provisions of the Income Tax Act. The amendments also include a provision, proposed section 34A, to enable the delegation to some ministerial powers. A delegation may be made in relation to arrangements concerning the assessment of applications for student assistance, the method of paying benefits, the giving of public notice of ministerial decisions and any powers conferred by the student assistance regulations. Delegations will be restricted to the Secretary to the Department, to Senior Executive Service officers of the Department or to an acting secretary or acting Senior Executive Service officer. As the Student Assistance Act at present makes no provision for a time limit for prosecuting offences, section 21 (1) (c) of the Crimes Act operates to require that prosecutions under the student assistance regulations must be commenced within one year of the offence being committed. It has proved very difficult to complete the necessary procedures of identification and investigation within this period and the Bill therefore includes an amendment, proposed section 35A, to enable prosecutions to be brought within two years of the offence being committed. This provision will not apply to offences committed before the amendment comes into force. The intention is to facilitate the prosecution of serious abuses only and the proposed amendment will not lead to a major increase in the overall prosecution activity under the student assistance regulations. The Bill has no significant financial implications. I commend the Bill to the Senate. Debate (on motion by Senator Chaney) adjourned. Motions (by Senator Grimes for Senator Button) agreed to: That leave be given to introduce a Bill for an Act to provide for the payment of bounty on the production of certain metal working machines, certain robots and related equipment, and for related purposes. That leave be given to introduce a Bill for an Act to provide for the payment of bounty on the production of certain tractors, tractor cabs and related equipment, and for related purposes. 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 the Bills being put in one motion at each stage, and the consideration of such Bills together in the Committee of the Whole. Bills (on motion by Senator Grimes) read a first time. Ordered that the Bills may be taken through all their stages without delay. Second Readings Senator GRIMES(Tasmania-Minister for Community Services)(10.23) —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- BOUNTY (METAL WORKING MACHINES AND ROBOTS) BILL 1985 This Bill proposes new bounty assistance arrangements for the metal working machine tools industry in Australia for a period of 6 years from 1 July 1985. The new arrangements have been determined by the Government following consideration of the Industries Assistance Commission, IAC, report on metal working machine tools and robots. The previous bounty scheme which expired on 30 June 1985 accorded assistance at a rate of 33 1/3 per cent of the Australian factory cost of power operated metal working machine tools if the tools had a minimum of 55 per cent local content. Assistance with design was also provided by way of an additional 25 per cent bounty on Australian design costs. The Government has accepted the IAC's major recommendations that bounty assistance for machine tools be continued and the basis on which the bounty is calculated be altered from Australian content to a value added principle. The proposed new arrangements do, however, incorporate a number of changes not recommended by the IAC. The major changes are: different rates of bounty for producers of high and low technology machines; an extension of the bounty to exports of high technology machines; the value added calculation to be based on factory cost rather than selling price; an extension of the bounty to machines such as computer controlled flame and laser cutting machines, flexible manufacturing cells and systems and programmable control panels; and payment of bounty on machine modification and retrofitting activity Under the scheme high technology machines, such as numeric controlled and computer numeric controlled metal working machine tools; robots; flame and laser cutting machines and their parts; flexible manufacturing cells and systems; and programmable control panels, will receive bounty at a rate of 40 per cent of value added as at 1 July 1985, phasing to 35 per cent after one year. Production of robots to 30 June 1985 has been assisted by duties ranging from free to 30 per cent, although in practice most imports have entered under by-law at 2 per cent because of limited Australian production activity. Low technology machines, that is, machine tools with standard controls; parts and accessories for use as original equipment in the production of all bountiable machine tools; and machine modification or retrofitting activities will become bountiable at 30 per cent of value added, reducing to 25 per cent after one year. Production of hand and foot operated machines has been, and will continue to be, assisted by a tariff of 25 per cent instead of being included in the bounty scheme. For bounty eligibility purposes, there will be a requirement for the value added by a manufacturer to be at least 20 per cent of total factory cost and, in the case of modifications and retrofitting, the bounty will not be payable where the cost per machine is less than $20,000. Provision of assistance by way of bounty rather than tariff is designed to ensure that the costs of completed machines to user industries will remain at world price levels. Preliminary results of a survey undertaken by the Department and the Metal Trades Industry Association, on the age of machines in Australian industry, support the view that Australian users have old and aging machines. Maintenance of prices at world levels is therefore considered essential to the facilitation of modernisation in these industries. The Australian metal working machine tools industry currently consists largely of producers of low technology machines or machines with standard rather than computer controls. Of the 120 bounty recipients in 1983-84 only about twenty could be described as producing advanced technology machines. Sales by these companies however accounted for nearly half of total sales of all bounty recipients. Sales have suffered in the general downturn in the metal trades industry in recent years and from increasing import competition. The number of advanced technology machines produced in Australia is however growing. The differential rate of bounty for producers of high and low technology machines is aimed at encouraging Australian machine builders to move into the production of the higher technology machines, in line with world trends and the Government's overall objective of encouraging the modernisation of Australian manufacturing industry. The proposed level of bounty to be accorded production of lower technology machines represents an overall reduction of 25 per cent over 12 months on the level previously accorded and is approximately equivalent to the average level of manufacturing coupled with industry assistance. This reduction in assistance coupled with the higher bounty rate for high technology machines is expected to result in a move to the production of more competitive advanced technology machines. The Australian robot industry consists of a small number of manufacturers producing largely simple pick and place machines. This industry is continuing to expand with a growing trend toward production of more sophisticated machines and the proposed bounty will provide a valuable incentive to the industry's further development. The Australian Science and Technology Council (ASTEC), in its 1982 report on robots recommended bounty assistance as the most apppropriate method of developing an Australian robot industry. As requested by the Government, the IAC took the Council's report into account during its inquiry. The Government's decision to accord assistance to robots at the same rate as that accorded the high technology machine tools is based on the close interrelationship of the two industries and their common market. Different rates of assistance could lead to a distortion in the allocation of resources and an unbalanced development between the two sectors. Extension of the bounty to exports of high technology machines including robots will provide further encouragement to move into production of more sophisticated machines. Access to the world market is necessary if companies are to recover the high costs involved in investing in the design and development of high technology machines, and to remain competitive in the long term. The IAC recommended that bounty be paid on the difference between ex-factory selling price and the cost of bought in materials. Several problems were seen with this basis of calculation including manipulation of prices and trade-in values and determining the `true' selling price of machines produced for in-house use. If calculated on the basis of selling price bounty would also be paid on the profit element. Should prices fall, this could lead to a reduction in assistance at the time when manufacturers most needed help. To avoid these difficulties it is proposed that in-house value added be based on total cost to make or factory cost, including attributable design, administrative and software costs. The extension of bounty assistance to computer controlled flame and laser cutting machines, flexible manufacturing cells and systems and programmable control panels, which were not covered by the IAC recommendations, is considered essential if rational development of the industry, in line with world trends, is to be encouraged. To exclude these machines from bounty assistance could lead to distortion in resource allocation within the industry and hamper future development. It is proposed that any existing import duties on these machines will be reduced to or be maintained at minimum rates as with bountiable machine tools. Payment of bounty on machine modification and retrofitting activities will provide a valuable incentive to modernisation where modification to existing machines is a more viable option than investment in all new equipment. Development of a robot industry and a modern and viable metal working machine tools industry is vital for a healthy manufacturing sector. These industries are sources of new technology and processes for the wider manufacturing sector and represent training ground for and a reservoir of vital engineering, metal working and software skills. To lose this capability would mean the loss of a vital ingredient in maintaining technologically advanced industries. The importance of new technology in the future of the metal trades industry was emphasised by ASTEC in its report released earlier this year on `Computer Related Technologies in the Metal Trades Industry'. In that report the council inter alia stated: New technologies have a major role to play in solving problems of the metal trades industry. They offer opportunities to moderate the effect of high labour materials and inventory costs, the problems arising from small and fragmented markets, inadequate quality assurance and the inability to respond to new challenges. The proposed new bounty arrangements scheme seeks to encourage the development of advanced, competitive metal working machine tools and robots industries and the modernisation of user manufacturing firms in related metal trades industries. The manufacturing processes of our major competitors incorporate a high degree of factory automation. If Australian industry is to remain competitive it must therefore adopt the latest appropriate technologies and integrate them into its production processes. Trends and developments in the production of robots and metal working machine tools domestically and world wide point to the growing importance of programmable computer controlled machine tools and computer integrated manufacturing systems in manufacturing industry. The adoption of technologies such as flexible manufacturing cells and systems which incorporate such machines into a reprogrammable manufacturing set up, offer a real chance to overcome traditional problems of a small domestic market. The proposed new bounty also meets defence requirements for the best possible population of machine tools and the retention of design and development skills to enable the modification and adoption of machines for defence purposes at times of contingencies. Unlike the IAC recommendations which provided no specific assistance or encouragement to the development of defence significant high technology machines, under the proposed scheme only activities of technology and defence significance will receive the higher rate of bounty. The pace of technological development in the field of industrial automation requires that the assistance arrangements be flexible enough to incorporate new machines and technologies as they arise during the life of the scheme. Inappropriate coverage or assistance would lead to unbalanced development of the industry and could perpetuate inefficient industry structures. The Bill therefore makes provision at clauses 6, 7, 8 and 9 for the Minister to vary the classes of equipment and other aspects of the bounty including the amount of bounty in light of industry developments and without further reference to the Industries Assistance Commission. Additionally clause 28 includes a provision for the introduction of registration criteria to be complied with by bounty recipients for the purposes of registration should this be deemed necessary. Ministerial declarations made for the purposes of clauses 6, 7 and 8 of the Bill are subject to the normal disallowance procedure. The Department of Industry, Technology and Commerce will monitor developments in the industry during the bounty period and a complete review of the scheme will be conducted by the IAC prior to the end of the six-year period. I mentioned earlier one aspect of the ASTEC report into computer related technologies in the metal trades industry. That report went on to say: The main task before government is to ensure that the environment imposes a steady pressure for change to more competitive structures, while at the same time providing forms of support which enable potentially successful firms to adapt rather than fail. In framing this bounty scheme the Government has been conscious of the need to provide an environment conducive to change whilst at the same time providing a level of assistance which will cushion the effects of structural adjustment. The Government believes that the new bounty will encourage the development of a modern competitive metal working machine tools industry, facilitate development of an Australian robot industry and assist modernisation of user industries. The monitoring, review, and from time to time variation of the scheme, are directed at ensuring that the assistance remains up to date with technological and other developments. Finally, the Government is satisfied that the scheme proposed by this Bill will provide a policy environment which will encourage health and efficiency in a sector vital to Australia's manufacturing industry. Financial Impact Statement The Government proposes to limit expenditure under the bounty scheme to $16m in the first year of operation from 1 July 1985 to 30 June 1986 and $14m in each of years two and three. A proportion of the $16m allocation in year 1 will be expended to meet payments outstanding from the previous bounty scheme. I commend this Bill to the Senate. BOUNTY (AGRICULTURAL TRACTORS AND EQUIPMENT) BILL 1985 This Bill proposes to continue the bounty assistance for certain agricultural tractors and tractor cabs until 31 December 1992, and extend the bounty arrangements to original equipment parts and accessories for tractors. The proposed new assistance for the local tractor industry in this Bill replaces the temporary measures under the Bounty (Agricultural Tractors) Act 1966 and the Bounty (Tractor Cabs) Act 1983, which were in place from mid-1983 until 30 June 1985. That temporary assistance, which took the form of a doubling of the then existing rates of bounty for tractors and a temporary bounty on cabs fitted to imported tractors, was designed to enable the local producers of tractors and cabs to meet severe import competition until a report from the Industries Assistance Commission (IAC) could be made. The new bounty arrangements for the local tractor industry which are included in this single piece of legislation provide for a bounty on tractors having a nominal engine power of 15kw and above and on tractor cabs to be paid at the rate of 40 per cent of the value added by the manufacturers for the period from 1 July 1985 for one year, reducing to 35 per cent in the next year and to 25 per cent thereafter for the life of the new scheme. The rate of bounty on parts and accessories for tractors is to be paid at the rate of 25 per cent for the period of the scheme. For bounty eligibility purposes, a threshold will apply whereby bounty will only be payable if the value-added equals at least 20 per cent of the factory cost of the manufacturer. The Australian tractor industry has experienced severe difficulties in recent years. Drought conditions reduced demand for tractors and, at the same time, local producers were faced with increased competition from imports as overseas manufacturers sought to maintain sales volume in a declining world market. Although the easing of the drought was followed by increased tractor sales, local producers continue to face difficult conditions due to oversupplied world markets, falling commodity prices and increased costs. In its report the IAC found that local tractor producers had lost market share, the market being substantially supplied by imports, and that employment in the industry had declined considerably, particularly following the closure in Australia of International Harvester's production facilities. The Commission also found that local manufacturers of cabs and parts had been affected adversely by a trend to import fully built-up tractors. The level of bounty applicable under the Bounty (Agricultural Tractors) Act 1966 varied with the power rating of the tractor and with local content. The IAC concluded that continuation of bounty assistance was justified but that a change was desirable because the previous arrangements had provided an unpredictable level of assistance due to vagaries in the scheme and they discriminated against the small producers of very large tractors as a result of the ceiling on bounty for tractors of 150kw and above. The import price index used to adjust periodically the rates of bounty for tractors was not, as far as the Commission could ascertain, accurately reflecting movements in the prices of imported tractors, resulting in an erosion of the effective rate of the basic bounty assistance-a situation which, it was anticipated, would deteriorate. The Commission favoured a new bounty scheme which would provide a relatively stable level of assistance over time and would be more uniform in its impact on different activities in the tractor industry. It also proposed an effective level of assistance of around 15 to 20 per cent in line with that accorded similar production activities. To achieve these objectives the IAC recommended a bounty based on the value-added by producers, which offered a solution to the two main problems of the existing scheme-how to adjust payments to account for changes in tractor prices and how to vary payments according to the existing mix of tractor types and tractor prices. Such a bounty could also support directly, at known levels, the production of eligible components. The Commission recommended a bounty of 25 per cent of in-house value-added, from the date of implementation until the end of 1990. It also recommended that an eligiblity threshold for bounty purposes should be adopted, suggesting that it be set as a minimum value-added of 20 per cent of factory cost. Before making a decision on the IAC's recommendations the Government had discussions with interested parties on the long term future of the industry. In the light of those discussions the Government decided that assistance for local production of tractors and cabs should be phased down over two years from the temporary assistance levels to a long term bounty rate of 25 per cent of value-added. This will, in the Government's view, enable the local industry to complete its restructuring satisfactorily, to become more competitive, and to achieve and maintain an economically viable structure in the longer term. Additionally, and for the first time, it is proposed that direct bounty assistance will be paid to producers of parts and accessories for tractors at the rate of 25 per cent from 1 July 1985. To provide a stable assistance environment and give the local tractor industry the necessary degree of confidence to plan its future, the Government has also decided that the new assistance arrangements will remain in force until 31 December 1992. The arrangements will, however, be reviewed by the IAC before the end of this period. The Bill before the Senate includes provisions designed to promote the orderly development of the local tractor industry and to avoid fragmentation of production. The registration provisions require that any applicants for registration that were not in production of bountiable goods on 6 June 1985 (the day the proposed new scheme was announced), will only be able to obtain registration if, in the opinion of the Minister for Industry, Technology and Commerce, such registration would permit the orderly development of the industry in Australia. A number of administrative provisions and definitions in the Bill have been modelled on similar provisions in recent bounty Acts. The Government expects the new assistance arrangements to result in major improvements in the competitiveness of the local tractor industry which should strengthen its position in the domestic market and enhance its opportunities for improving export performance. Financial Impact Statement It is estimated that the new arrangements will cost approximately $8m in 1985-86, reducing subsequently to an average of about $6m per annum when the phasing is completed. I commend the Bill to the Senate. Debate (on motion by Senator Chaney) adjourned. Senator GEORGES(Queensland) —by leave-I present the 236th report of the Joint Parliamentary Committee of Public Accounts on the Committee's medical fraud and overservicing inquiry into pathology. Ordered that the report be printed. Senator GEORGES —by leave-This is the third report tabled by the Joint Committee of Public Accounts from its medical fraud and overservicing reference. Since the commencement of this inquiry in early 1982 evidence had come before the Committee indicating that this particular area of medicine-pathology-has been and is growing rapidly in terms of services rendered, Commonwealth Medicare benefits paid, and the number of pathology providers. Many serious concerns about pathology have been expressed to the Committee by the major medical associations, senior Commonwealth administrators, the Royal College of Pathologists of Australasia, pathology corporations, specialist pathologists and their technicians, other practitioners and, perhaps most importantly, the patients themselves. The Committee's report reflects, analyses and discusses these concerns. The report's findings relate to two broad areas-the changing nature of the pathology industry in Australia, and the difficulties and deficiencies in the Commonwealth's administration of the approved pathology practitioner scheme, the Medicare benefits schedule and other associated responsibilities related to the Health Insurance Act. This report is a prime example of the Committee discharging its traditional duty of scrutinising public moneys. In this case we are talking about an analysis of Medicare pathology benefits, currently worth some $300m a year. The report is also an example of how useful parliamentary committee reports are as a reliable information source. This pathology report provides an insight into an industry which the Parliament and the public appear to know very little about. This is despite the somewhat ironic fact that most Australians are users of pathology services. The four chapters of this report reveal, firstly, how concentrated the private pathology industry is, an idea of the general cash flows involved, and the location and number of practitioners who may render pathology. For example, the top 25 pathology groups received just over 50 per cent, or $44m, of Medicare pathology benefits during the March quarter of 1985. The top seven pathology groups received 26 per cent of Medicare pathology benefits during the same three-month period. Secondly, they reveal severe problems with the administration of the approved pathology practitioner scheme and the urgent need to review all pathology practitioners, and their laboratories, for accreditation. Thirdly, the report deals with the overwhelming and questionable dominance of pathology services rendered at high specialist pathology benefit rates as opposed to the very few services rendered at the ordinary rate. Fourthly, it deals with the way in which the infiltration of entrepreneurs into the industry has the potential to jeopardise the provision of universal health care in Australia. This last point, the development of medical entrepreneurs, is undoubtedly the most difficult and serious problem confronting the profession and the Government at present. These entrepreneurs work just within the bounds of the law, pay lip service to professional ethics, and vigorously scrutinise regulatory measures, both professional and governmental, for loopholes and areas of imprecise specification. Put bluntly, they rank the pursuit of profit and market control over and above patient care. All 41 of the Committee's recommendations are geared to combat the operations of these medical entrepreneurs as far as pathology is concerned. It is clear from the report that further improvements need to be made to systems in the Department of Health and the Health Insurance Commission. Undoubtedly the most disappointing aspect of this inquiry concerns a continued lack of suitable effective structures to handle cases of overservicing. Current remedies to combat pathology overservicing based on the medical services committee of inquiry system are completely unsatisfactory, inefficient and need urgent reform. Three years ago the Committee recommended that this system be scrapped and replaced. Yet to date, despite what appear to be the best intentions of government, in consultation with the profession, there has been no change. This situation needs to be remedied immediately. The provision of quality health care in Australia needs to be both publicly accountable and cost effective. In commending this Public Accounts Committee report to the Senate I place on record the work of the sectional committee under the chairmanship of Mrs Ros Kelly, a member of the House of Representatives, and the project team which drew together the information necessary for the preparation of the report. In particular, I wish to give credit to Mr Peter Mason for his work in this connection. I wish to add one or two remarks of my own in regard to this report. This morning I sent a letter, together with a copy of the report, to Dr Repin, the Secretary-General of the Australian Medical Association. That letter reads: My Committee is most concerned about the variety of serious problems-in both the Commonwealth's administration and in the private pathology `industry'-that are yet to be overcome. While the recommendations of this Report will improve matters, the Committee believes that continued co-operation and consultation between the profession and the Government and its administration is essential. I appeal to the Australian Medical Association to read this report carefully and to do whatever it can to cover the malpractices which the report reveals, because it is very much in its interests to do so. An inquiry is being conducted into the medical benefits schedule. I believe the schedule is one of the factors leading to this abuse and these malpractices. I suggest that the AMA should do everything possible to construct the schedule. I do not doubt that the inquiry will bring down recommendations which will lead to these reforms. I need to refer to one of the chapters in the report in order to outline the extent of the malpractice which occurs in the industry and which needs to be corrected. In the preparation of this report we received a great deal of information and we analysed much of it. Various charts are available which will explain clearly to honourable senators what the problem happens to be. The Committee received that information by requesting it from the Department and the Health Insurance Commission. We endeavoured not to identify the people concerned and the report does not identify any person in particular. I inform the Senate that there is one instance in which the identity of the person concerned ought to be made known to the Parliament. In fact, there may be more than one, but there is one person in particular who needs to be named because the malpractices which are, I believe, the responsibility of this person are malpractices that ought to cease and the person ought to be brought to account. The Parliament will have to determine whether one of its committees investigating fraud and overservicing and the discovery of malpractices should report fully to the Senate on the extent of that activity. We have a problem in that the sectional committee, having asked for information from the Health Insurance Commission, saw areas where the Medicare system was misused. It may have been in a position to identify people but it hesitated to do so and did not do so in this report because it felt that someone else-perhaps the Parliament-ought to make the decision whether people who have been identified as misusing the system but who have stayed barely within the law, ought to be named in the Parliament. If information gathered by the Health Insurance Commission and information as to incomes received by medical practitioners is made known publicly I do not doubt that there will be an outcry. I do not believe that doctors' incomes should be made known publicly but the amount of moneys paid to doctors from the public purse should be known. That view is reinforced by an example given on page 90 of the report. I will read it quickly because I do not want to take up too much time of the Senate. I do not doubt that Senator Watson, who is a member of the Committee, would like to make one or two comments. I am attracted to a remark by Dr Thompson, the then President of the Australian Medical Association, who stated: Unless one was very careful-- he was talking about entrepreneurial developments in medicine- One could end up with a `depersonalised' sort of situation in medical practice. But provided that such activities were conducted legally, the people employed had a proper contract which protected their interests; there were no kickbacks, the referral process did not abuse the national health scheme; and people behaved ethically, it was very difficult to object. The area is one which must, and will, be examined. 4.9 The Committee believes that many of the entrepreneurial medical schemes currently in operation violate these last two conditions outlined by Dr Thompson, i.e. they abuse the national health scheme and involve unethical behaviour. 4.10 An example of a `medical entrepreneur', whose corporate medical marketing operations, general practice style and professional ethics are currently of serious concern to both the profession and the Government, follows. This particular general practitioner (referenced as Dr X in the examples below) operates a large complex commercial practice which, among other things, includes several suburban clinics. Each of these clinics refer almost all of their pathology tests to Y Pty Ltd-a pathology company owned and operated by Dr X. 4.11 Investigations of this `entrepreneurial' doctor have found that, among other things: Dr X has a high incidence of collecting blood for pathology (MBS Item 955, fee $3.40), in May 1984 there were 232 cases where the collection of blood by Dr X had been itemised but no pathology had been subsequently requested or performed; virtually all Dr X's pathology tests were performed by Y Pty Ltd; Medicare benefit payments to Y Pty Ltd in May 1984 totalled $144,667 for 9,904 pathology services, this represents an average cost of $114.91 per patient and 7.87 services per patient . . . Medicare benefit payments to Y Pty Ltd during May 1984 resulting from Dr X's requests totalled $86,363.87 for 5,723 services, this averages $130.26 per patient and 8.63 services per patient; the balance of pathology services performed by Y Pty Ltd for which Medicare claims were processed in May 1984 were requested by 16 other medical practitioners, of which 13 were practice partners of Dr X; perhaps because of tax reasons Medicare benefits paid to pathology laboratories in June 1984 as a result of tests requested by Dr X fell dramatically to $605.70, of which $122.80 was paid to companies other than Y Pty Ltd; in July 1984 Medicare benefits paid to Y Pty Ltd as a result of pathology tests requested by Dr X totalled $284,020.35 for 22,553 services, this represented a cost of $125.67 per patient and 7.98 services per patient . . . Dr Z, a practice partner of Dr X's also requests all his pathology tests from Y Pty Ltd, for the two month period May-June 1984 Medicare benefits totalling $20,314.10 were paid as a result of Dr Z's requests for 1,370 services, this represents an average cost of $75.24 per patient and 5.67 services per patient . . . I give these details because I wish to arrive at this point. The report continues: a review of pathology services ordered by Dr X and Dr Z has revealed abnormally high instances of certain services, these included the apparent routine ordering of Item 1401 (SP MBS fee $23.00), this test is restricted to one per annum for proven cases of an unusual medical condition known as hyperlipidaemia and was one of an apparent routine series of tests ordered by both Drs X and Z; similarly Item 1313 estimation of glycosylated haemoglobin (SP MBS fee $20.50) appears to be routinely ordered, this test is restricted to 3 services per annum for patients who require management of established diabetes; and generally the review revealed numerous instances of pathology tests attracting benefits in excess of $500.00 being ordered by Dr X for each patient on the same day. 4.12 This doctor, his various practices, partners and associated companies are under detailed investigation at present as part of an intensive joint effort by the HIC, DoH, AFP and DPP. 4.13 Perhaps the most disturbing thing about such a case as the one above is that, instead of being a lone example, it is symptomatic of a relatively new breed of `medical entrepreneurs'. There are numerous examples in this report of such practices. The report gives numerous examples of the splitting of fees and numerous examples of doctors seeking out and offering all their pathology work to particular laboratories. This report is an exposure of massive problems within the pathology area. It needs to be examined and the decision needs to be made that identification is necessary of one doctor in particular and perhaps one or two others. That decision needs to be made especially since the doctor concerned is in the process of spreading that sort of operation from New South Wales to other States and the Australian Capital Territory. Senator Peter Baume —And he is using standover tactics too. Senator GEORGES —Obviously the honourable senator knows the doctor to whom I refer. This doctor has sought to use the freedom of information facility to probe into departments, and even indirectly into the Public Accounts Committee, to discover what action is likely to be taken against him. Although this report does not name the doctor it can clearly identify him. One matter needs to be cleared up. The Committee received information which identifies a whole number of doctors. It must be appreciated that the doctor about whom I am talking is not one of the top 25 providers of pathology. He is one of the lesser providers. Senator Walters —Why do you allow bulk billing? You would overcome it if you did not. Senator GEORGES —I do not want to get into a debate on that matter. Possibly bulk billing is used as a means to manipulate the system. However, that is not an argument against a proper use of bulk billing. What we are seeing is a manipulation of the system and the schedule. This manipulation is an affront to the medical profession, and the medical profession accepts it as such. This doctor can be identified by a clear and careful reading of the report and the appendices. If I were asked a question about this matter at any later stage I would find it very difficult not to name the person concerned. I really believe that it is in the public interest to name the person. However, the Committee has placed constraints upon itself in that it would not identify any particular person in this report. The real problem with that is that unless the person concerned is identified the activities of some other doctors who are engaged in this profession may be brought into question in some way. I commend the report to the Senate. I remind honourable senators that the example I have given is only one of a number of examples that could be given. Although this example is a massive exaggeration of the problem, there are others who seek to follow this doctor's example. The sooner that these abuses and malpractices are brought to an end the better. The Committee has made some 41 recommendations which will go some way to solving the problems. However, they will not go the whole way. Senator WATSON(Tasmania) —by leave-Report No. 236 of the Parliamentary Joint Committee of Public Accounts is the third report on aspects of medical fraud and overservicing. Throughout the course of some of our earlier inquiries into medical fraud and overservicing pathology emerged as an area for serious concern and examination by the Committee. In fact, there has been a rapid growth in the pathology industry over recent years in terms of the number of services rendered, the volume of Commonwealth benefits being paid and the increase in the number of providers. I would like to emphasise two things at this point. Firstly, while the activity of some pathology practices may be suspected of being fraudulent, there remain many pathologists of unquestionable integrity who provide a high standard of care. The majority of professional pathologists and those allied to the profession would welcome the introduction of a high quality and nationally consistent pathology accreditation program. However, pathologists operate in an environment where for the unethical the possibility exists to make extra money. It is up to the Parliament-it is up to the Government-to ensure that those loopholes are closed. Philosophically, the Liberal Party of Australia endorses and encourages entrepreneurial endeavour, but in the sense that it is applied in this report, that activity, I must emphasise, is indeed repugnant. While we may support entrepreneurial zeal, my Party recognises that where such practices involve exploiting the public purse there must be some looseness in the system. Such entrepreneurship must be controlled by a greater degree of vigilance on behalf of or through the Government agencies. Where there is significant outlay from the Commonwealth without commensurate benefit to the consumer we need to exercise caution. While doctors continue to be reimbursed from public moneys I believe the Opposition will continue to be concerned about how those costs are incurred. Quite a lot of publicity has been given lately to the almost supermarket or shopping arcade approach of extravagant palatial premises or medical centres with pathology attachments to those centres. While it is true that these pathology practices, with their improved facilities, attract patients such clinics cannot be allowed to offset unnecessarily high overheads by overservicing. This is the crunch. The current legislative arrangements tend to encourage fee splitting of pathology services and while those arrangements stand, overservicing and poor quality treatment of patients in some cases will continue. I think the Health Insurance Act should be amended specifically to prohibit fee splitting. In the course of its inquiry the Committee became aware of a disconcerting development in pathology. Section 16C (1) (b) of the Health Insurance Act provides for the corporate status of pathology practices. Some service problems are now emerging with the infiltration of entrepreneurs and commercial laboratories into the pathology industry. I will quote briefly from the report in which one pathologist has described the emergence of depersonalised medicine. I think this is significant. The report states: It was only when the automated machines came on the market that a few very clever, let us not denigrate their intelligence, a few extremely clever medical entrepreneurs saw their opportunity. They had a vision of buying some expensive machine, putting a person in front of it making a million dollars-and they did. The little people will get squeezed out because they do not have that mentality. You probably know, I do not have to tell you, that all the big commercial laboratories are owned by non-pathologists. There is not a one that is owned by a pathologist. They are owned by medical entrepreneurs and I guess there is a place for them if that is what the public wants. The Committee has been greatly concerned that these pathology laboratories, operated by commercial non-pathologists who value profit maximisation and market control over the care of their patients, may perpetuate and even institutionalise overservicing. This, I believe, is indeed serious. Another disturbing element has been the tendency for pathology services to be performed either by the approved pathology practitioner or on his behalf. The Health Insurance Act allows for legalised fee splitting whereby an approved pathology practitioner effectively sub-contracts tests to another approved pathology practitioner, a laboratory or some other establishment on return for fee splitting the medical benefits schedule fee with that other organisation or person. The fee splitting situation was described to the Committee in the following terms: The proliferation of unregisterd laboratories which perform the work for doctors who have registered as APPs is only just beginning. These laboratories perform the work for 60 per cent of the MBS fee, leaving 40 per cent for the doctor who decided the test was necessary. The Committee has recommended that the Health Insurance Act be amended to prohibit such fee splitting. There is no benefit to the Commonwealth and there is certainly no benefit to the customer or the client in these situations. This substantial 40 per cent discount offered by some private laboratories to other approved pathology practitioners indicates that Medicare fees for many pathology services may be inappropriately high. The widespread application of advanced technology, I believe, has greatly reduced pathology costs but Medicare benefits do not appear to have been proportionately reduced. Strict penal provisions incorporated into the Health Insurance Act would also limit the practice, which appears to be widespread at present, of incorrect itemisation of specialised pathology rates being charged, instead of the Medicare rate accorded to the OP-other pathology-rate. In conclusion, while some pathologists run their practices as if they were money factories, it is doubtful that the welfare of their patients is their uppermost concern. Overservicing appears to be a profitable means in some cases of paying for extravagant types of premises. I believe that the whole system needs review and cleaning up and I commend the report to the Senate. Senator PETER BAUME(New South Wales)(10.58) —by leave-I move: That the Senate take note of the report. That makes the procedures a little easier for us. I have listened with care to the statement made by Senator Georges on the Joint Committee of Public Accounts report on Medical Fraud and Overservicing. The report deals with my profession, the medical profession, and with the question of fraud and overservicing. I want to make only a few comments because until I have studied the report in some detail I am dependent entirely upon the statements made by Senator Georges and my colleague, Senator Watson. Those comments give me the greatest concern. I will try to set was has been said in some kind of context. First, I have no doubt that there have been costs and benefits in the systems of public subsidy which have come in over a generation. Certainly, there have been benefits. Services have become available to people who might not otherwise have had them. We have to acknowledge that, but there have been very great costs as well. One of the costs is that the public subsidy of private transactions has made possible the kind of fraud and overservicing that we are discussing today. If we were just concerned with the fraud we might look at the whole basis of the public underpinning of what essentially is a private transaction. Let me say that I do it against the basis- Senator Georges —That would happen in private insurance as well. You would still support the system. Senator PETER BAUME —That is still a form of underpinning. I acknowledge that the benefits include services being made available to people where they might not otherwise have been available. I do understand that. The system was designed for operation by honest practitioners. It was designed for use by a profession which I am proud to belong to, which I was proud to practise in and which I would go back to if I ceased to be a member in this place. Most of the people who practise in it are honest and honourable. Another observation is that two groups of doctors seem to be emerging: Those who are not making a fortune-those who are working the system properly-and a small group who are milking the system unmercifully. We should recognise and acknowledge that most Australian doctors are not ripping off the system. I understand that has been said, but it has to be said again and again because a lot of the media reports will be about doctors as a class ripping off the system. That is not the case. That is not what Senator Georges nor Senator Watson said. I agree that it is a small percentage. We are talking about bad apples in the profession who have sought to divert a system planned for honest operation and use it for their advantage. There are different judgments which I or any other doctor could make about the case which any person needs. These judgments are made all the time in the consulting situation. A judgment is made as to whether there should be another visit by the patient. A judgment is made as to whether a procedure should be performed. A judgment has to be made as to whether some tests have to be ordered. A judgment has to be made as to whether a referral to another doctor is needed. In a consulting situation these judgments are being made all day long. Each of these judgments has a cost implication. Under the system of health subsidy we now have, each of those judgments may well attract a further payment from the public purse. That is the problem. Where those judgments are being made with the proper interest of the patient foremost, they are likely to be justifiable judgments. Where they are being made on the basis of commercial advantage, we have the kind of situation arising which has been described to the Senate today. I have no doubt from what I know and from what I have heard today that there is at least a small minority of doctors who are out to make judgments for commercial and not medical reasons. If that happens not only will it destroy the funding basis of Medicare and the subsidisation of medical practice but it will destroy the profession itself. That is what concerns me. I was Minister for Health for a short time. I was shown, and had some knowledge of, the fraud and overservicing detection system which operated then. I thought that system was a useful system. It sought to identify by way of profiling the norms of practice. From that one could detect gross departures from the norm. Of course, an arbitrary judgment had to be made as to where one drew the line and decided that anything on one side of the line was crook and anything on the other side of the line was okay. Nevertheless, at the extremes there was no doubt- Senator Watson —It is the nature of your practice, though. Senator PETER BAUME —It depended on lots of things. At the extremes one could certainly identify those profiles which warranted further examination. Of course, some of those doctors might turn out to be quite justified in what they were doing. In spite of that arbitrary judgment, one could zero in on the kinds of practitioners who might be playing- Senator Georges —The report does so. Senator PETER BAUME —Yes, the report does so. What worries me, and what should worry the Public Accounts Committee, is that the people about whom it is concerned will spend part of their time in the next few months designing their activities so that the profiles may not continue to pick them up. Whatever system is used, such doctors may be able to avoid being picked up on computer profiling because their goal is not a medical goal; it is a purely commercial goal. I agree with Senator Watson that the unit costs of many of the tests and procedures investigated have dropped remarkably. What has gone wrong is that the volume of those tests and procedures has increased remarkably. The increase in the volume has caused the problem. Because those decisions have been taken not with the interests of patients at heart but with the commercial advantage to be derived in mind we find a lot of people having unnecessary tests, examinations and referrals and, of course, we find the whole system being placed in jeopardy. Once again I say that there are some grey areas in deciding whether tests are necessary. I was in a medical practice and able to do certain examinations which involved passing a telescope into the interior of the body which enabled me to look around. There were occasions when that was absolutely needed. However, there were occasions on which I was not quite sure. On those occasions I frequently would not do the procedure. There may be some people who would go ahead and do the procedure because there is a subsidy attached. I want to finish by saying that my profession is an honourable and honest profession. It should welcome this report. I understood Senator Georges to say that he had sent the report to Dr George Repin and the Australian Medical Association. Senator Georges will receive concerned support from the AMA because that organisation wants to see the profession survive. What is at issue is how we get at the few bad apples because not only do they threaten the whole system of subsidy of medical care but also they threaten to change the whole profession. Unless we can get to them my profession will be corrupted by those bad apples and the present system will be corrupted by those bad apples and the present system will be destroyed. I suppose the only other thing to say is that we have a duty as parliamentarians-Senator Grimes has a duty as a Minister, quite apart from his background as a doctor-to protect the public revenue. What the Committee has shown today in its report-as a doctor I thank it for the report-is that the public revenue is being put at risk in a calculated and determined way by certain medical practitioners. I could not buy a Victorian football league team, no matter how long I stayed in practice. One has to wonder what certain people are doing. I simply say that when this report is debated and its implications are considered in public it will be done against the background of great support from the medical profession because the profession thinks that what the Committee is describing is fair. We as doctors have as much concern as anyone in seeing these abuses stamped out and these medical practitioners encouraged or forced to adopt a more reasonable way of practice. I look forward to reading the details of the report. I thank the members of the Public Accounts Committee for what they have done. Senator SIDDONS(Victoria)(11.08) —I was most concerned to hear the comments of Senator Georges in tabling the report of the Joint Committee of Public Accounts on Medical Fraud and Overservicing in regard to Pathology. He spent some considerable time in instancing the case of a medical practitioner, well known to the medical profession, who had used standover tactics and all kinds of illegal devices to defraud the public. Senator Georges further said that in his opinion it was in the public interest that this person be named. We have heard also from the Opposition that there are one or two bad apples in the medical profession who are giving the whole profession a bad reputation. In view of these comments, I ask Senator Georges whether he will name the medical practitioner to whom he was referring. Debate (on motion by Senator Sheil) adjourned. Senator GEORGES(Queensland) —by leave-Senator Siddons directed a question to me. In leading up to that question he said that I stated that a doctor had been guilty of standover tactics. I am not aware of that, but I am aware of all the other matters for which this doctor is responsible. Senator Siddons asked me to name the doctor concerned. I think that sufficient has been thrown around this chamber to identify the doctor and I think now it would be idle to avoid doing so. I did refer to an example on page 90 of the report. In that example the report refers to `Dr X' and `Y Pty Ltd'. It is my opinion that the doctor described as `Dr X'-this is information which I deduced from the scrutiny of the report by the sectional committee; it came from no other source-is Dr G. Edelsten and the firm referred to as `Y Pty Ltd' is Omniman Pty Ltd. I think the matter needs to be stated clearly because both Dr Edelsten and the firm concerned, I believe, have much to answer for. 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)(11.12) —I move: That the Bill be now read a second time. I seek leave to incorporate the second reading speech in Hansard. Leave granted. The speech read as follows- This Bill will amend provisions of the income tax law enacted last year to change the taxation treatment of lump sum superannuation and kindred payments to clarify and reinforce the operation of the law in line with the Government's announced objectives. First, provisions in the Bill will eliminate a possible avenue of tax avoidance in relation to eligible termination payments by ensuring that an amount received on the assignment or transfer after 23 May 1985 of a right to receive a superannuation pension or annuity will give rise to a taxable eligible termination payment. Another amendment, effective from 23 May 1985, will ensure that where a payment may be included in more than one category of the statutory definition of an eligible termination payment it is taxed in accordance with the relevant specific rule. A further amendment is consequential on one made last year to tax benefits obtained under so-called `cherry-picker' schemes of tax avoidance. This will prevent such benefits from being treated as eligible termination payments. Yet another measure will provide that consideration paid in respect of an eligible termination payment in the form of a transfer of property will reduce the taxable amount of that payment. The Bill will, effective from 23 May 1985, amend the law to make it clear that payments made by an employer as superannuation contributions or to purchase an annuity for an employee do not reduce the taxable amount of the ultimate payment to the employee. Mr President, the Government has decided that the premature retirement test in the law that determines whether certain early retirement or redundancy payments qualify for concessional tax treatment is unduly restrictive. Amendments being made by the Bill will, from 1 July 1983, provide access to that concession where termination of employment occurs before the taxpayer's 65th birthday and before the date on which the employment would necessarily have had to end. Another measure related to the early retirement and redundancy payment provisions of the law will provide that, for relevant payments made in respect of termination of employment after 23 May 1985, the value of retirement benefits forgone in favour of redundancy or early retirement may be taken into account in determining the amount that would have been received on ordinary termination of employment. Under the existing law, the rules of an approved deposit fund must provide for the repayment of deposits no later than when the depositor attains 65 years of age. It has been suggested that if a depositor dies before turning 65, the deposit can be left in the fund accumulating tax-free income until the date on which he or she would have turned 65. That was unintended and the law is to be amended to require deposits to be paid to the estate of a deceased depositor within 90 days of probate or letters of administration being granted. Where a depositor has died prior to the Bill becoming law, fund trustees will be expected to repay deposits within 90 days of the later of the date of royal assent and the date on which probate or letters of administration are granted. Existing funds will be given adequate time to alter their rules to retain their tax-exempt status. The law will also be amended, with effect from 1 July 1983, so that a deposit fund may, where appropriate, retain its approved status despite a failure to satisfy the establishment tests laid down in the law. The Bill will also give effect to the proposal announced on 18 February 1985 to close a loophole in the law that allows recipients of lump sum eligible termination payments to escape tax by converting those payments into an annuity and subsequently cashing-in that annuity. It will prevent an eligible termination payment that is used to purchase an annuity from being treated as substantially tax-free if the annuity is commuted after 18 February 1985 or its residual capital value becomes payable after that date. Those measures will apply also where a superannuation pension acquired with a lump sum payment is re-converted to a lump sum after 23 May 1985. In addition, the Bill will close off another possible avenue of exploitation in relation to annuities. It will ensure that an eligible termination payment used to purchase a deferred annuity after 23 May 1985 is not freed from tax unless the annuity is purchased wholly from eligible termination payments. The Bill will also provide that payers of annuities and supplements to pensions and annuities will be required to make PAYE tax instalment deductions. This requirement will apply from the second month after the Bill becomes law. The first $50,000 of the post-June 1983 component of an eligible termination payment received by a taxpayer aged 55 or more is taxed at a maximum rate of 15 per cent-any balance being subject to the standard rate of 30 per cent. By oversight, the law as presently drafted operates to deny the application of the 15 per cent rate in the case of a payment to the trustee of the estate of a deceased taxpayer even though, had the deceased lived, he or she would have been entitled to that rate. The Bill will correct that oversight with effect from 1 July 1983. On 22 January 1985, the Acting Treasurer announced that the Government would correct a drafting error in the rule that recognises a person's period of service prior to July 1983 where only part of a lump sum termination payment is preserved. This Bill will make that correction. Where none of the pre-July 1983 component of an eligible termination payment is preserved, no part of the relevant service period accruing before July 1983 will, as was intended, be recognised. Mr President, some of the measures in this Bill will prevent the exploitation of the eligible termination payment provisions of the income tax law. The likely revenue effect of any prior exploitation cannot be determined at this stage, but it is likely these measures will prevent the future loss of significant revenue. At the same time, the Bill will ensure that the existing provisions of the law do not result in a greater liability to tax than was originally intended. A detailed technical explanation of the provisions of the Bill is contained in a comprehensive explanatory memorandum that is being made available. I commend the Bill to the Senate. Debate (on motion by Senator Archer) adjourned. Motion (by Senator Grimes) agreed to: That, notwithstanding anything contained in the Standing and Sessional Orders and unless otherwise ordered, the Order of Business for Thursday, 12 September 1985 and Friday, 13 September 1985, be as follows: (1) Petitions (2) Notices of Motion (3) Formal Motions-Discovery of Formal Business (4) Questions (5) Ministerial Statements, by leave (6) Presentation of Papers (7) Adjournment Debate resumed from 16 May, on motion by Senator Grimes: That the Bill be now read a second time. Senator ARCHER(Tasmania)(11.14) —I wish to speak to the Snowy Mountains Engineering Corporation Amendment Bill 1985. Having read the Hansard record of the debate in the other chamber and having read most of the information concerning the history, development and operation of the Snowy Mountains Engineering Corporation, one can only come to the conclusion that the Corporation is a very great organisation. Since its inception the Corporation has performed many functions. It has produced many great works. It has achieved considerable international recognition and has been officially rated No. 60 in the top 200 international design firms in the world. It has been a top participant in an age of top development in civil engineering works. In Mr Doug Price, the Corporation has very much a top Australian and a top engineer. I wish to acknowledge him very generously. Considerable maturity and enormous experience reside in the Corporation. It is one of the really strong cores of highly specialised engineering talent in Australia and, in fact, in the world. The 1983-84 report indicates that 27 states or foreign countries were subject to assignments of SMEC during that year. However, by reading the legislation, the explanatory notes and the annual report of the organisation, it is clear that everything is not ideal. The report, in fact, spells out some of these things quite clearly. I have made a thorough investigation to assess whether there are any advantages that the authority has in being a government controlled authority. I have looked at how it would be differently operated were it not for government participation. I have looked to see whether the government association has been used to gain better prices for the work that has been done, to secure contracts that would not otherwise have been available or to secure skilled technical staff who may not otherwise have been available. I have looked to see whether the Government has not been the heavy hand on the shoulder of the authority and whether it may not be holding it back. I have looked to see whether there have been special requirements on the Corporation that would not be required of a non-government sector. I have looked at the borrowing aspect, the terms and conditions of employment, superannuation, severance and matters such as that, as well as the various management practices. The Minister for Housing and Construction (Mr West), in another place, seemed to demonstrate some of the handicaps of the association very thoroughly. At page 1871 of Hansard he listed six areas that require change. The first change was to: remove existing restrictions on the range of engineering activities open to the Corporation; By requiring that that now be changed this clearly indicates that there have been handicaps and obstacles. The second change was to: include in the statement of functions a specific reference to the government's intention that the Corporation shall, as far as is practicable, involve Australian organisations in the performance of overseas work and promote overseas the interests of the Australian engineering industry; I think that to include the words `as far as is practicable' only demonstrates that it is now allowing the opportunity for this to be done with overseas firms but to be done, as may be said, with a wink and a nod. The third change was to: allow the Corporation, with ministerial approval, to form companies or other legal arrangements where this is necessary to assist the progress of involving Australian engineering companies in joint ventures overseas and for other commercial purposes; Again, we are demonstrating clearly that these sorts of constraints prevent the Corporation from operating in a manner in which similar firms do. It also demonstrates the necessity that is being found of having other people with other skills to co-operate in these sorts of works. Apparently it is now found that it is necessary to include private sector firms to assist in building up the viability of the Corporation's operation in other places. The fourth point was to: replace the present `corporation sole' by a five-member board of directors, to give the Corporation access to a range of management talent from the engineering, marketing, finance and trade union sectors; That in itself is a reflection on the operation of the Corporation. It is a quite regrettable reflection, but it indicates that the existing operation is not satisfactory. The fifth point states: ensure that the Corporation acts in accordance with sound commercial principles. Again, that is a direct reflection on how it has been operating. Finally: update the financial provisions of the Act to accord with current Government policy regarding statutory authorities. That is another financial matter to which the Minister had to draw attention in the debate in the other place. There is no doubt that the Corporation has operated very satisfactorily for a number of years. It did extraordinarily well in the great days of construction of civil works but there now seem to be problems in two areas. Firstly, as I have already said, profitability seems to be very questionable, for a variety of reasons. Secondly, the Minister seems to have difficulty in making an assessment of whether the corporation is profitable, unprofitable, or will be profitable, because each time he mentions it he refers to it in slightly different terms. It would be more desirable if we could be given some forecast of progress. It seems that the Minister was rather reluctant to make projections on this basis. I wonder sometimes whether it may just be a lack of motivation, or inertia, that has produced the uncertainty. There is certainly no lack of capacity to achieve in the organisation. There is no doubt that Australia needs the Snowy Mountains Engineering Corporation. We need it as a strong, free, vital and fully profit-oriented operation. How do we get that? On the present basis I cannot see that the amendments before us today are likely to change anything in the basic philosophy and motivation of the business. On the present basis we are backing the Corporation into a corner. It cannot be deficit funded indefinitely in spite of the solid performances it has had previously. On the basis proposed, the people of SMEC face almost certain closure of the business they operate in the not too distant future unless there is a really substantial change in the motivation and operation of the Corporation. We need to look only at such matters as redundance liability, which will almost certainly arise again in the 1984-85 figures. From the last annual report, it seems that the figure is now approximately $25,000 for every employee who leaves, and there have been substantial reductions from 600-odd to 300-odd. This leaves us with a contingent liability in the order of millions of dollars if SMEC continues to wind down and I hope that it does not. My view is that an opportunity to become involved in their own business, through their own private ownership, may provide the added stimulus for all the Snowy Mountains officers to participate in the organisation, management and profitability of the Corporation. I would like to see an opportunity for this to happen. I have been told that some staff are concerned that if the structure is changed the headquarters will move from Cooma and that on that basis, any such suggestion should be opposed. Clearly there is no need for that to happen. Cooma is very much the home of the Snowy Mountains Engineering Corporation. I hope that it always remains there. The Minister's approach was singularly unconvincing. One way in which the Snowy Mountains Engineering Corporation could be encouraged to become more commercial is by enabling the staff to buy all, or at least some, of the enterprise. The Opposition opposes the legislation. Senator COONEY(Victoria)(11.25) —The Snowy Mountains Engineering Corporation Amendment Bill deals with the machinery by which the Snowy Mountains Engineering Corporation will function hereafter and the scope of its future operations. Senator Archer touched on this when he said that until now the Corporation had been successful. He is concerned about its future. He hopes that it will continue to operate at Cooma and is concerned that in the future it will not have the motivation and the will to get ahead that it has had until now. The lack of motivation he perceives the Corporation to have he believes will be overcome by selling it to its members. One difficulty with that proposition is that since the Corporation was set up by a coalitiion government in 1970 it has operated very well. Only in the years 1983-84 and 1984-85 has it not made a profit. The evidence is that the Corporation has been very successful. Until recently it has made a profit and has provided skills and experience to Australians and to people overseas who are looking for Australian services, and has provided them very well. Now, along with similar interprises around the world, it has had a downturn in profit. In fact, it has made a loss. This has become a debate about privatisation and what should happen to corporations which have been conducted by government. When a question arises as to what should happen to them in the future it is answered by saying that there should be privatisation. That is the issue opened up by Senator Archer. The debate is not so much about the machinery and the scope of the Corporation but about how it should be conducted in the future. The issue of privatisation opens up questions such as the areas in which government enterprises should and should not operate, whether a government enterprise should be restricted to accommodate the activities of private enterprise, and whether it should surrender an activity to private enterprise and allow private enterprise to acquire the will and the ability to run the organisation. I do not think Senator Archer said that but he certainly put the proposition that if a government enterprise suffers a downturn and there seems to be a lack of motivation amongst those running it, it should be privatised. In a sense, that is a matter of creed. That is the question he proposes. Whether government enterprisis should be sold to the private sector is a matter of creed. In other words, it is a self-fulfilling wish: If an enterprise can be privatised as a matter of course, as night follows day, it will be more successful. But does that follow? That is the question with which we will be struggling today and no doubt over the next months and years we will debate it. The other issue this Bill raises is whether the Government has an obligation to facilitate the development and preservation of the skills and experience needed for the well-being of the community. The coalition Government in 1970 said that governments have that obligation. The Government of the day under Mr Gorton introduced a Bill which set up this Corporation. Another question in this area is whether private enterprise has any obligation and, if so, what obligation to facilitate the development and preservation of the skills and experiences needed for the well-being of the community. It is a question of whether private enterprise has that obligation just as government does. My submission is that that question should be answered in the positive. Just as government may have a duty to facilitate, set up, maintain and develop skills and experience in the community so that that community can function well at all levels, so has private enterprise a similar obligation. It has to be noted that during the 1970s the government conducted this Corporation. It, rather than private enterprise, preserved the skills and experiences that had been established during the operation of the Snowy Mountains scheme. The Bill before us proposes to amend the Snowy Mountains Engineering Corporation Act 1970. The Corporation was set up under section 6 of the principal Act. It had to carry out certain functions which are expressed in section 17 of the Act. As I said before, the original Bill was introduced by a coalition government. The Minister for National Development, Mr Swartz, introduced the Bill. In doing so he spoke of the great skills and extensive experience of the engineering staff which was then, and had been for some years prior to 1970, involved in the construction of the Snowy Mountains scheme. Mr Swartz said that the people involved in the investigation, design, scientific services and supervision of that project-that is the Snowy Mountains scheme-had `more than paid their way in effecting major savings in the cost of the works'. He went on to say: In recent years- he was talking about 1970-- they have been in a position to provide similar valuable services towards the problems of major engineering projects in Australia and overseas. Fees from such services already amount to $3 million a year-- that was in March 1970- It is this important component of the Snowy which we propose to retain. The specialist staffs will form the basis of the engineering consulting corporation. In my view, Mr Swartz expressed a very sound proposition based on sound policy and philosophy. That philosophy is still as sound now as when it was proposed by Mr Swartz on behalf of the coalition Government in 1970. To put his speech into context, the Minister said that it was not his Government's intention to `set up an organisation which will compete directly in all fields with Australian engineering consultants'. He said: . . . most of the jobs the Snowy will undertake will be those which up to now have been done by foreign consultants or will be in fields not adequately serviced by Australian consultants. The Corporation was set up in that situation and was successful. The present Bill ensures that that success will continue in the future as a flagship for Australian science, engineering ability and the skills and experience in Australia. Hopefully it will also be a profitable flagship. The Corporation was set up primarily to preserve in Australia those skills which had been built up in this country through the Snowy Mountains scheme. Those skills included skills in engineering, design, the provision of scientific services and construction. It is fortunate for Australia that that Corporation was set up because too many skills have been lost to Australia during the 1970s and 1980s-for example, skills in ship and plane construction, manufacturing industries and trade. It is necessary for Australia's economy, for its social well-being and for both the present and future generations that skills be maintained in Australia and increased. This Corporation has been a very significant institution in maintaining that skill and experience in Australia which is so essential for its development. In 1970 it was clearly recognised that the government had a responsibility to maintain those skills in this country. Besides maintaining skills, the Snowy Mountains Engineering Corporation was a profitable exercise until 1983-84. I think Senator Archer acknowledged this. He cited quite generously, I think, the position that it held in the overall list of world institutions in this area. The Engineering-News Record of 1 August 1985 listed the top international design firms. The top 10 international design firms were those with foreign billings totalling $50m or more. The next 22 were those firms with foreign billings totalling $30m a year. The next 30 were those firms with foreign billings totalling $20m to $29.99m a year. The ninth of those firms with billing totalling $20m to $29.99m a year was the Snowy Mountains Engineering Corporation. It was numbered 41 in the overall list of international design firms attracting foreign earnings. It is to be noted that it was not the only Australian firm in those listed. Another Australian firm, Rankine and Hill Pty Ltd, a private company, was listed 154 in the overall ratings. That is very creditable too. That illustrates two things. First, it illustrates that the government Corporation can operate successfully in world competition. It also illustrates that the Corporation did not block at all the efforts of a private company, Rankine and Hill, which also operated in the same area. They both operated successfully. In 1970 the Snowy Mountains Engineering Corporation was set up by a coalition government and thereafter traded successfully and profitably up to, but not including, the year 1983-84. I think it is likely that it will not have traded profitably in the 1984-85 period. The trend in the markets within which it operated reversed in that period when it started to experience its downturn. Not only operations carried out by the Corporation but also operations generally in this area were not so profitable in that period. Something had to be done. The Bill presently before the Senate is the machinery which the Government intends to use to do something about it. The Minister for Housing and Construction (Mr West), in introducing this Bill in the other place, said: This Bill provides for the restructuring of the Snowy Mountains Engineering Corporation to put it on a more commercial footing and to allow it to participate more effectively in the international engineering market. The Bill does this by increasing the area within which the Corporation can operate. It enables the Corporation to help involve the Australian engineering industry as a whole in overseas work. It enables the Corporation, with approval from the Minister, to enter into legal relationships with other entities. For example, it can form companies with other entities. This is to encourage and make possible the participation of Australian engineering companies as a whole in projects, including overseas projects. The Bill makes it possible for the Corporation to obtain managerial assistance from sources outside the public sector. So the Bill enables a wedding of the private and the public sectors. It does not advance some hard and fast policy but says what can be the most effective conglomeration of institutions in order to see that Australia is well served at home and abroad. In effect, the Bill aims at preserving the professional skills and experience built up in the Corporation, following on from those engendered by the Snowy Mountains scheme and, at the same time, making the Corporation a profitable commercial entity. It is true, as Senator Archer has remarked, that advice was sought from a management consultant firm when difficulties were experienced. The firm of Peat Marwick Mitchell Services was engaged to see how this Corporation could be made more commercial. It is in this light of advice received from that company that this Bill has come before the Senate. The arguments against this Bill, and indeed against Bills of this nature, and in favour of privatisation, include the proposition that the work of such a corporation should be left to private enterprise, that the Government should not bolster such a corporation with loans and guarantees, and that the purpose of the 1970 Act has now been accomplished and should no longer be kept in operation or, as Senator Archer said, the Corporation should be privatised or at least people within the company should be given the opportunity to obtain shares. I wish to set out some criteria which I regard as pertinent in the light of those arguments. These principles can be debated not only in this debate but also in the coming months. Certainly these arguments should be examined. The first is that the Government should be loth to support enterprises which make a loss and which do not perform a service to the general community justifying that loss. That is certainly not the case with this Corporation, which has been most worthy in all senses. Secondly, there is no inherent vice in a government enterprise which could appropriately be conducted by the private sector. This again is illustrated by this Corporation. It is a corporation that could have been conducted in the private sector, but it has in fact been conducted by government in a way that has made it successful. I am sure that it will continue to be successful in future as a result of the amendments contained in this Bill. Senator MacGibbon —That does not mean that it has been successful. Senator COONEY —It has been successful up to now. Senator MacGibbon —Oh, come on-three years of losses. Senator COONEY —Many a private enterprise organisation has losses, too. One does not look at a particular corporation or institution within a confined time scale. One looks at it over its whole period of operation. If one looks at this Corporation over the whole period of its operations, it has been very sucessful indeed and deserves the chance that this Bill will give it of returning to commercial success in the future. It continues to be successful in maintaining engineering and other skills of which I have spoken, and it will maintain those skills in future. If given a chance, it may return to profitability. In fact, the evidence to that effect is there. In other words, there is no natural law against governments carrying on businesses that are capable of being carried on by the private sector. If the evidence shows that a particular institution, organisation or corporation no longer functions correctly and should not be kept alive as a commercial proposition or for some other reason, certainly consideration should be given to it, but it should not be abolished simply because it is conducted by government. There is no creed, law or natural proposition that an entity should be abolished simply because it is run by government. The third proposition I put is that government should encourage private enterprise, but in a context where both it and private enterprise have a responsibility to the overall community. Again, that is the sort of thing this Bill will enable to happen. The next proposition is that government in particular but also the private sector has a responsibility in maintaining and developing skills and experience in Australia consistent with the requirements of the community. Australia does have requirements for engineering and designing skills-the sorts of skills which this organisation in Cooma provides and which hopefully, private enterprise will also provide. That is a significant factor to take into account when deciding what to do with this Corporation. Government should not abandon a successful enterprise on the sole ground that the private sector has acquired the ability and will to perform it. It is said that people in this enterprise could take it over. Perhaps they could; perhaps they could not. It does not follow that because they have the ability to do so they should do so when government has conducted it so successfully for so long. To hold otherwise would be to accept as immutable a principle that government should surrender its enterprises whenever a private individual exhibited an ambition and ability to carry out their functions. As a matter of philosophy that should not be the case. There is nothing against it if the occasion invites that situation, but when that is not the case the occasion should not be jammed up, switched round and made to fit into a strait-jacket simply because a particular creed or philosophy is abroad. Privatisation should not be seen as a self-evident creed. If in any particular instance privatisation is to be instituted, that should be done only after proper evidence of social, economic and general community benefit in doing so. So far in this debate no evidence has been presented to show that this successful Corporation should be left in any other state than is presently suggested by the original legislation and by this amending Bill that is now before the Senate. A central issue in deciding whether a government should initiate an enterprise or continue with it is the service it provides to Australians as a whole. This Corporation has a proud history in that regard. Overall, if the Snowy Mountains Engineering Corporation is measured against these criteria, then it appears as a highly successful organisation that is more than worthy of preservation. Since 1970 it has served this country well, both at home and overseas. It has served as Australia's engineering flagship abroad. It has given the nation foreign earnings, and has kept in this country skills and experience which otherwise would have been lost. The Corporation has not set up a monopoly. It has not put aside private enterprise, as has been shown by its actions in respect of Rankine and Hill Pty Ltd, of which mention has already been made. Generally, given the Corporation's record, it is entitled to be given the chance to continue to flourish-a chance that will be given by this Bill. In those circumstances I commend the Bill. Senator SIDDONS(Victoria)(11.47) —On behalf of the Australian Democrats, I support the Snowy Mountains Engineering Corporation Amendment Bill 1985. I do so with a great deal of pride. The Opposition has made it clear that it will oppose this piece of legislation. Therefore, without the Democrats' support, this legislation will not pass through the Parliament. I am proud to be able to support the legislation because over a large number of years I have had fairly close association with the Snowy Mountains Authority, or SMEC as it is now affectionately known around the world. During the 1960s I had occasion to visit the construction site in the Snowy Mountains when a virtual United Nations of top engineers gathered together in the construction of that mighty project, as the time the largest engineering feat in the world. Senator Parer —That is in the past, Senator. Senator SIDDONS —I am coming to the future. At that time, as an Australian, I was proud of the way an Australian authority had been able to gather together the engineering talents of such a diverse group of people and produce an engineering feat of world standing, indeed one that led the world. It produced the scheme on time and on budget, thus taming and preserving our precious water resources. Many an evening I would sit with the engineers on the Snowy Mountains project and discuss with them what would happen when the project was finished. Those engineers comprised some of the leading people in their profession from various countries around the world. They were wondering about their future when the project was completed. They wondered whether the government would see the benefits of what had been achieved during the 1960s and turn that great band of expertise to engineering projects around Australia-water projects aimed at taming our rivers and turning them inland. There were so many things that needed to be done in Australia. There was a hope at that time that the Snowy Mountains Authority would move into this area and get something done in our large continent. Of course, that did not happen. The future of the Snowy Mountains Authority became a political football. It was tossed around by politicians from the various parties. In fact, very little was done. But the Authority did manage to retain at least a nucleus of expertise. In 1970 the Bill which set up the present Corporation was passed. Its record from 1970 to the present is amazing. There is no other word for it. It has undertaken 1,100 projects in 35 countries. Those of us who travel around Asia know that right now SMEC is supervising the construction in Malaysia of a very large dam which it designed. It is involved in engineering works in Burma and in other countries in South East Asia. Its reputation as an Australian engineering firm is second to none. We have heard a lot from the Opposition about the fact that the Corporation has suffered losses over the last two years. There is no enterprise that does not come up against hard times. There is no doubt that civil engineering has been going through a very serious recession, not only in Australia but around the world. When losses started to occur two years ago, SMEC management took immediate steps. It reduced the number of employees in the organisation from about 600 to 387. There is no doubt, from information that has been given to me, that the organisation can look forward to and budget for a period of quite spectacular growth. I think that this organisation has amazing potential. We have heard a lot about the fact that it has an unfair organisational advantage over its opposition. The fact is that since 1970 SMEC has paid $40.7m, in current values into government revenue in the form of dividends. It has been an extremely profitable enterprise with a very good record. That has been achieved essentially by a small band of engineers with virtually no resources behind them. Admittedly, it has had the advantage of government funding. But it is essentially an organisation which is as good as the people involved in it. This small band of engineers has been able successfully to conclude projects around the world and at the same time pay $40.7m into government revenue in the form of dividends. It is a great achievement. Senator Parer —How much of that is foreign aid? Senator SIDDONS —It seems to me that it is very important for Australia to have an engineering firm that can seek out projects in the highly competitive international field, quote for them and undertake their construction. SMEC is doing that. It is doing so essentially without any direct government assistance. Our foreign aid projects, for instance, are not tied to Australian enterprises. SMEC quotes for jobs in other countries on an equal basis against international competition, wins the contract and successfully conducts the work. I take the opportunity to pay tribute to SMEC's very proud record and to the engineers who have managed the enterprise over the years and who have made a very valuable contribution to civil engineering work in this country. The Opposition has stated that such a company should be privatised, that the capital should be sold off to the employees and that there should be a profit motive. At present there are 300-odd employees. I believe it is nonsense to suggest that those few people would have the resources to acquire the capital that is necessary to undertake major civil engineering projects. The thing that is needed is access to large amounts of capital for short periods. It is very unlikely that the 300-odd civil engineers, who are currently employed by SMEC and whose whole career has been directed towards achievement, not towards making money, would have anything like the resources required to take over the company. Senator Button —Some people do not think that those things are different; they think that making money is the only achievement. Senator MacGibbon —I think the argument is running at your level, Senator Button. You will be able to follow it if it keeps on this way. Senator SIDDONS —When I move about amongst bands of dedicated engineers-there are such people in this country, both civil and production engineers-whose concern is to do a job well, and then I see the multi millions of dollars made tax free by speculators on the stock exchange, the difference is quite amazing. There are still people in this country-the people involved in SMEC are a good example-who are prepared to devote their lives to achieving a worthwhile end, to using their technical expertise as best they can and to being paid a reasonable wage for doing so. I think that, when a Bill comes before the Senate which seeks to reorganise such a company's structure so that it can compete more fairly with other construction and consulting firms in Australia, it is not unreasonable for us to pay tribute to the job that has already been done. SMEC has taken on projects overseas in association with engineering firms which are privately owned in Australia. I refer to the Leighton and John Holland companies, and so forth. It is laid down in the company's guidelines that it should seek to co-operate with other engineering firms in the undertaking of large projects. It has done so. It is not seeking to compete with existing privately owned firms in Australia. It is seeking to co-operate with them. This Bill seeks to structure the authority in such a way that it can do so more readily. The Democrats will support the legislation in its current form. We will not seek to move any amendments to it. We hope that this legislation, which undoubtedly has been drafted in consultation with the management of SMEC, will give it the opportunity to reach the great potential that the organisation undoubtedly has. Senator MacGIBBON(Queensland)(11.58) —The Opposition opposes the Snowy Mountains Engineering Corporation Amendment Bill 1985 because it is wrong. It is wrong because it opens the way for tens of millions of taxpayers' money to be spent unnecessarily to provide a service, both within Australia and overseas, that is already available at no cost to the taxpayer. It is wrong also because it provides a threat to the great civil engineering companies of Australia. Not only will it threaten the ones in the civil engineering field but, because of the great powers the authority will receive by way of this Bill, it could really challenge and put at risk the companies which operate across the whole spectrum of Australian engineering. Honourable senators should not ever lose sight of the fact that it is the private companies, not the Government, which create wealth for this country. I find it very surprising, at a time when we are reeling under the biggest spending, biggest taxing and biggest borrowing government in this country, that we are legislating for things which will increase the deficit. Ten per cent of the Federal Budget this year will be spent on interest payments on overseas borrowings by the Federal Government alone. I am not talking about the billions of dollars that are tied up in State government and local authority borrowings. Ten per cent of all Federal outlays-more than we are spending on defence this year-is going on interest payments for money that this Government has borrowed. Some $20 a week of every taxpayer in this country is now going on interest payments. Everyone who files a tax return pays for the profligate borrowing of this Government. More importantly, in terms that everyone can understand, one-third of all the exports that this country will make this financial year will go on interest payments for the borrowings that we have made. It is against that background that we are legislating blithely to increase the run on the public purse. It is my intention this afternoon to deal with the history of the Snowy Mountains Engineering Corporation, the justification that the Minister for Housing and Construction (Mr West) made for it in his second reading speech when he introduced the Bill and to explain why it is wrong. Before I do that I will deal with the two opposing speakers who have spoken in support of the Bill. Senator Cooney made a traditional and impeccable defence of the Bill within the terms of Australian Labor Party ideology and, of course, that is simply that governments are entitled to be in any commercial field they like. We on this side of the chamber do not agree with that. We believe that governments should not be in commercial enterprises that can be successfully run by private industry. While we have a policy commitment to privatisation, I would like to put it a little more clearly for Senator Cooney and other members of the Labor Party. What we are primarily about is breaking up the monopoly position in Australia and it does not matter whether it is in private industry or government owned enterprises. We believe that monopolies inevitably lead to an increase in price for the consumer. Our primary concern is to get costs down by fostering competition. The second point is-it bears very heavily on this argument against SMEC-that if people are providing a service in private industry it is pointless going into that field with government money. As one would expect, Senator Siddons gave the Australian Democrats support very heavily to the Labor Party which is just what one would expect from one of the registered factions of the ALP. His speech dwelt largely on the past and the undeniably great achievements of the Authority since it was founded. We have no argument with that. We think it has been a wonderful star in the Australian engineering firmament but we have built the Snowy Mountains scheme and there is no longer any justification for keeping an authority, which does something quite different from what it was founded to do 20 or 30 years ago. SMEC was founded in 1970 by a Bill which stated in its preamble that it was to retain the engineering skills built up during the 25 years it took to investigate, design and construct the Snowy Mountains scheme. At that time the Bill confined SMEC to operations in Australia principally in areas where it had built up its expertise. In 1973 the Labor Goverment lifted some restrictions and gave more discretion to the Minister as to what fields SMEC became involved in. This Bill extends that liberalisation even further. It takes all the restrictions off SMEC as to what it can do. It can compete with private enterprise right across the whole of the engineering field in Australia and overseas. That would not be so bad but the really bad point is that SMEC has an open slather with respect to financing. By appealing to the Minister SMEC can get as much money as it wants from the public purse. It is under no compulsion to repay that money. It repays it as and when the Minister demands, or desires it, and there is no compulsion to make a profit or service the capital which it has. Under those terms anyone could go into business, even the Labor Party. I now turn to what the Minister said in his second reading speech on this Bill. In introducing the Bill the Minister stated: This Bill provides for the restructuring of the Snowy Mountains Engineering Corporation, to put it on a more commercial footing and to allow it to participate more effectively in the international engineering market. The changes are extensive, but simple and easy to understand. They are designed to allow operational flexibility to the Corporation in Australia and overseas, to improve the Corporation's competitive capacity in a wide range of engineering works, to maximise its flagship role overseas and to ensure that it acts with commercial prudence, . . . The key changes are to: remove existing restrictions on the range of engineering activities open to the Corporation; That is our major point. We do not believe that the Corporation should have a licence to operate against the Australian engineering profession. The Minister continued: . . . include in the statement of functions a specific reference to the Government's intention that the Corporation shall, as far as is practicable, involve Australian organisations in the performance of overseas work and promote overseas the interests of the Australian engineering industry; We have no quarrel with that, if we can agree with the earlier part. The Minister continued: . . . allow the Corporation, with ministerial approval, to form companies or other legal arrangements where this is necessary to assist the progress of involving Australian engineering companies in joint ventures overseas and for other commercial purposes; The Minister also mentioned other administrative things. Later in his speech the Minister stated: Unlike private enterprise, the Corporation did not have the capacity to quickly shed staff, at minimal cost, to an appropriate level. That leads me to one of the crippling liabilities of this body. As a Public Service operation it lacks the flexibility to cope with changes in the market as they occur. In business we always have good and bad times. When things get bad a business, if it is to stay alive, simply has to have the ability to alter its operations, to get rid of staff, to put on new staff, and to get out of fields that it is in. But a public service body with committees meeting and superannuation payments for staff who work from 9 to 5 or 10 to 4 hanging over its head cannot function in this way. Senator Tate —That is what it has done. Senator MacGIBBON —And end up losing $10m the way this Corporation has in the last few years. The Minister went on to state: I shall, of course, be able to direct the Corporation- I hope that the Labor Party has a Minister other than Mr West to do this- as to the exercise of its powers and the performance of its functions. Any such directions will be included in the Corporation's annual report to Parliament. It would not be the Government's intention to seek to intervene in the detailed activities of the Corporation, but rather to ensure its compliance with overall government policies and sound financial principles. The implication in the phrase `sound financial principles' is that somehow or other one can magically legislate for corporate profitability. One cannot legislate for corporate profitability or financial success any more than one can legislate for morality or longevity. It just does not happen that way. Further the Minister in his speech stated: On balance, private Australian engineering organisations are sure to benefit. They will experience stronger, but fair, competition from a revitalised Snowy Mountains Engineering Corporation. Very clearly, it is a declaration of war on the Australian engineering profession to talk about experiencing stronger, but fair, competition from a revitalised Snowy Mountains Engineering Corporation. There simply will not be fair competition when one is dealing with a body that does not have to show a profit, that can get money on demand from the Government and which does not have to make repayments or pay interest on borrowings. There has been some discussion about the profitability of the Corporation. Senator Cooney and Senator Siddons talked about this. It is not true, as a report claimed, that last year was the first year that the Corporation did not make a profit. If one goes back to 1982-83 one finds that it lost about $310,000. Admittedly, that is not much when one is dealing with millions but it is still a loss. Taken over recent years we are down quite a lot of money and the statements in the report are quite misleading. The 1983-84 report stated that total turnover showed a sharp decrease of 23 per cent from the previous year to $44m, and despite the implementation of cost cutting measures, the Corporation was unable to avoid its first ever operating loss. I suggest that whoever wrote that report should read the one for the year before and get the accurate figure. What sort of cost cutting exercises have been taking place when in the same report we find that administrative expenses have gone up by 20 per cent? They have gone up from $11.6m to $13.9m-an increase of 20 per cent. It is quite misleading for a director of the company to make a report saying that cost cutting measures have been taken when there has been a 20 per cent increase in the face of a 23 per cent drop in the turnover and activities of the company. The Minister in his speech said that the Corporation will make every endeavour to break even, and the 1983-84 report to which I am referring expresses the anticipation that the Corporation will be operating on a profitable basis by 1985-86. I do not think that is likely to come about. Senator Tate —What if it does? Would that change your mind? Senator MacGIBBON —I do not think that is a possibility, if the Corporation is going to shed the number of staff anticipated and pay them superannuation. I am glad Senator Tate brought up this matter because, as the Auditor-General has noted, no funding for superannuation is mentioned in this report. One of the unusual items is the payment to about 50 people to which Senator Archer referred. If the Corporation is to get rid of a few hundred staff, that liability will go up into millions of dollars. The problems with SMEC are very simple. It is a Public Service body and it simply cannot react to change quickly enough. It is fine if it is running in a stable environment and everything is going well and in place but, as I said before, things go up and down in the commercial world and we have to be able to react to them. Put in its simplest terms, one of those reactions has to be to acquire new staff and to get rid of the redundant ones. SMEC, as it is constituted, will never have that capability. Secondly, by its very nature it cannot attract the people with current commercial skills and judgment, and if it does not have current commercial skills and judgment it cannot stay in business and make a profit. All of this is costing the taxpayer a great deal of money. The Minister said that at July 1984 the Government had already put $6m into the Corporation. The Corporation's accounts show that in comparison with the $2.6m with which it started, Government funds now stand at $6.6m. Certainly the Corporation has been profitable in earlier years, but I make the point that in the early 1980s some of that profitability came from a revaluation of assets. In other words, the Corporation sold some of its real estate and made a handsome profit on it. If it had not done that it may not have made a profit at all. However, its general area of operations is a non-competitive environment. It does a lot of in-house work for government departments, principally for the Department of Housing and Construction and for the Snowy Mountains Hydro-electric Authority. This work is really undertaken on a cost-plus basis. It is not competitive. The rest of the country does not compete for the work and, even in these very favoured circumstances, the Corporation still loses money. We on this side of the Senate are opposing the Bill because we just do not see the need for this Corporation. We know very well that these facilities are provided in great number by the engineering profession in Australia. The original reason for setting up SMEC-the preservation of skills-is no longer applicable. Nobody in SMEC today was with the Snowy Mountains Authority when it started nearly 35 years ago. It is 15 years since the last of the Snowy Mountains scheme was put into operation and the expertise that was built up then has gone. The people have retired, died, or gone into very senior management, where they have no bearing at all on the actual operations. The overwhelming majority of SMEC staff today are relatively recent recruits. So the argument that the retention of skills is an important factor from a national point of view is not sustainable. Anyway, we are not in the business of running the massive Snowy Mountains civil engineering type of scheme for which the Authority was founded. We are now moving into the whole range of general engineering, and the relevance of what the Authority did 35 years ago simply is not applicable. We are also opposed to the Bill because the Corporation uses public funds not only to compete with but also, I believe, to hammer the private companies in this country. As I said before, it is the private companies, whether in the engineering field or the manufacturing field, that generate the wealth that keeps us at the standard of living we want. The Corporation has a very unfair advantage insofar as it can get funds from the government on demand-funds which, as I said, it does not have to repay. Quite a deal of comment has been made about the Corporation's involvement in overseas contracting. Overseas contracting has been of great value to us from the point of view of general international public relations. I think that is very important but, again, a lot of that contracting is in-house. I have very good links with Australian consulting engineers and consulting surveyors and I am very conscious of the activities overseas of these two groups. Some of the principal and most creative and dynamic characters live in Queensland, and Queensland companies have taken a leading part in operations around the region we live in, the South East Asian region. Their common cry is that they can get little support from an Australian government in their overseas operations. These companies have the skills and the ability and are competitive enough to win these jobs. Not only do they get a lot of money from the performance of their contracts but also, indirectly, through feeding work to Australian sub-contractors, they earn a great deal of money for this country. They got very little support from the Fraser Government and they are getting active opposition from the Labor Government. The Labor Government is acting against private contractors operating overseas. It is channelling all the work through the Australian Development Assistance Bureau and SMEC, and I think that is wrong. These people have the flexibility, the skills and the expertise, and they should be encouraged. Instead of putting funds into bodies such as SMEC, the Government should be talking to consulting engineers, engineering contractors, and consulting surveyors and offering them what support it can. It is not necessarily financial support they want; they want diplomatic support. They want support through the Department of Foreign Affairs. They want doors opened for them, they want invitations, and they want to be seen in the field as operating with the support of the Australian Government. They are not getting this at present. The Opposition does not support this Bill. It does not support the expenditure of millions of taxpayers' dollars on a service that is obviously uncompetitive and clearly non-essential to Australia. We believe that the skills that are inherent within the private sector of Australia, which can be provided in the national interest and at no cost to the taxpayer, should be the direction the Government follows. We see no need to support this Bill. Senator TATE(Tasmania)(12.19) —This morning we have had a display of the barbaric, dismantling mentality which is possessing members of the Opposition as they gather force behind the discredited former Treasurer, now Leader of the Opposition, Mr Howard, in their mania for destroying some of the greatest corporations which are owned by and serve the Australian people and which have been created by visionary leaders, both Labor and Liberal, over the past several decades. They have taken as their vehicle for mounting their first campaign in the war against these great enterprises owned by the Australian people the Snowy Mountains Engineering Corporation Amendment Bill, which is designed to modify the functions and structure of the Snowy Mountains Engineering Corporation. The Corporation is a consultant engineering corporation which is obviously derived from one of the greatest and most beneficial national engineering projects and teams put together for the Australian people by a Labor government in the face of virulent hostility from the then Liberal leader, Mr Menzies. It is interesting to note, nevertheless, that the Snowy Mountains Engineering Corporation was established by a great Liberal Prime Minister, John Gorton, who, because he had a vision of Australia which was greater than that of the State branches of the Liberal Party which destroyed him, was finally forced from office. He had a vision for Australia which allowed him to build on the great success of the Snowy Mountains project which will, as I say, be regarded as one of the greatest and most beneficial engineering enterprises ever undertaken in this country. It is not right to say, as Senator Parer said, that that was a long time ago. Many of those who took part in the inaugural activities of the Snowy Mountains teams are, of course, no longer with the current Engineering Corporation. However, should we not take into account corporate ethos and pride? One finds that people who enter private enterprise are influenced by a spirit of achievement, enterprise and excellence which has characterised those who have preceded them. We are saying that the Snowy Mountains Engineering Corporation falls into that category and has inherited the skills, the ethos and the excellence built up in the early days of the Snowy Mountains Hydro-Electric Authority which it succeeded. Indeed, that achievement has been recognised. The Governor-General made three awards for export performance to acknowledge the activity of Australian organisations or private enterprise firms that had engaged in export activity over the past decade, one of which went to this organisation. The distinguished United States publication Engineering News Record put the Corporation on its list of the top 200 most significant engineering consulting firms in the world. So we are not talking about some bureaucratic enterprise which has- Senator MacGibbon —You are giving us a history lesson. Deal with the present. Senator TATE —I am coming to the present. I am saying that these are acknowledgements by the Governor-General and an eminent United States publication of the current status of this Corporation. It is not true to say either, as Senator MacGibbon has said, that the Corporation has a very seedy management. This was his defamatory comment about the people who put in the effort for the Corporation. Senator MacGibbon —I never said `seedy' at all. Senator TATE —The honourable senator did. If he looks at the Hansard he will find that that is what he said. `Very seedy management' is what he said. Senator MacGibbon —I said `senior'. Senator TATE —The honourable senator said that it cannot attract people with current market skills and judgment. In fact, Mr Liebelt, a former group executive director of Conzinc Riotinto of Australia Ltd, has been appointed interim chairman of the Corporation. I would have thought that he would bring all his skills and experience at CRA to bear in the operations of the Corporation. I am sure that that will be well reflected in the activities of the Corporation. The Corporation has acted magnificently and has paid dividends and taxes to the Australian people. Senator Siddons pointed out that, in current Australian dollar terms, $40m has been paid over the last decade by the Corporation to the Australian people by way of dividends and taxes. However, because the Corporation is going through a rough period the political vultures on the other side of the chamber have decided to swoop and dismember and remove this Corporation from the Australian scene. Senator Lewis —If it were big business you would not hesitate to swoop. I never heard you say that you would keep BHP alive or any other private company. They would be bankrupt and you would be laughing. Senator TATE —The fact is that we have a corporation- Senator Lewis —Why don't you be sensible? Why should the taxpayers carry a company that is in trouble? Senator TATE —The fact is that the reason for the trouble has not been analysed. Senator Archer talked about the lack of motivation on the part of the members of the Snowy Mountains Engineering Corporation teams. The reason is very simple. Senator Lewis —The reason is that it is building up an enormous superannuation debt. Senator TATE —Mr Acting Deputy President, will you protect me? Senator Lewis —That is the reason why it is in trouble. Senator TATE —Will you protect me against this outrageous intervention? The reason is that over the past two or three years there has been a substantial loss of oil revenue to many of the members of the Organisation of Petroleum Exporting Countries which have financed a tremendous amount of engineering activity in Third World developing countries of the kind which the Snowy Mountains Engineering Corporation used to undertake. With the lowering of the level of those sorts of activities in respect of Third World and developing countries, caused in large measure by the cessation or diminishing of the flow of recycled petro dollars into the development projects of those countries, there has been- Senator Lewis —Yes, but the private sector has to cope with that sort of cutback. The ACTING DEPUTY PRESIDENT(Senator Jones) —Order! I ask Senator Tate to direct his remarks through the Chair. I ask Senator Lewis to cease interjecting. Senator MacGibbon has had his say and I now ask that Senator Tate be allowed to have his say. Senator TATE —The fact is that the development projects previously undertaken by Third World countries and in which Australian enterprises such as the Snowy Mountains Engineering Corporation used to participate are not as common as they used to be. This has led to a diminution in the activity, and therefore the general profitability, of the Corporation over the last two or three years. That means, of course, that we must have a period in which there has to be a re-adjustment of the Corporation. That is evidenced by the fact that it has reduced its workforce from some 600 to 380 employees. As I have pointed out, it has taken into its top management area people with experience such as an executive director of CRA. In that way, I believe it is shaping up as an organisation which can operate profitably into the future. This debate is not really so much about the Snowy Mountains Engineering Corporation. It is about the destruction of many great public enterprises which, as I say, have so far served Australia very well. Mr Howard gave notice in his address to the National Press Club on 28 August and in his statements since assuming leadership of the Liberal Party of his intention to make this a key element in the Opposition's appeal to the Australian people. He said that he would not even take fright at some element of foreign ownership in the Commonwealth Bank. He is prepared to sell off elements of the Commonwealth Bank to foreign owners. He is prepared to do that because he recognises that if he tried to sell those elements on the Australian domestic market interest rates would soar as people competed to raise money to buy shares within Australia. That is the reason he gave at the National Press Club for wanting to sell part of the Commonwealth Bank overseas. This is the sort of madness which is now possessing the Opposition. Mr Howard says that he believes in a free market. Senator Archer, in opening for the Opposition in today's debate, said that perhaps we could sell off portions, if not the whole, of the Snowy Mountains Engineering Corporation to the Corporation's work force. He thinks it should be sold to the 380 members of the Corporation who, as Senator Siddons pointed out, are unlikely to have accumulated much in the way of great capital assets. These people would have been working for salaries and wages during the course of their working life. Senator Archer is supposing that somehow these 380 people could finance the acquisition of the Corporation which is worth many tens of millions of dollars. It would not be possible for them to do so unless we did what Mr Howard suggested could be done with Telecom Australia. Mr Howard said that we could sell off portions of Telecom-these would be only the profitable portions because, of course, the Government would leave the unprofitable portions in public hands-to the workers at a below market price. This is what has been suggested by the great marketeer from the other side of politics. By doing this he would be offering a bribe to the workers of Telecom to take out shares at less than the market price which they could then sell on a future occasion and make a capital gain. That is the sort of mess that the Opposition's ideological crusade is getting it into. We have got to the stage where in order to satisfy the cries and bleats of those who demand that organisations such as the Snowy Mountains Engineering Corporation be dismantled and sold to the private sector, we must sell overseas or sell to employees at a below market price in order to encourage them to abandon the present situation. The attack by the Opposition on this Bill is only part of the overall fight for privatisation which it is launching. I believe that the Australian people will see that there is nothing of value in that proposal. In fact, what will occur is that the services provided, particularly by Telecom, will become much more expensive for those who live in country areas. Senator Sheil is sitting here. I am sure that members of the National Party of Australia are as concerned as we are that persons in remote areas of Australia may be faced with the prospect of not being able to enjoy the considerable cross-subsidy that takes place at the moment in the provision of services to them through the Telecom organisation. It is quite clear that if Telecom were to be dismantled, what would be sold to private enterprise would be the very profitable inter-capital city trunk routes and the new technology areas which Telecom has so well pioneered, particularly the area of computer access to information banks. Of course, it is never mentioned by honourable senators on the other side that the postal services area is self-sustaining financially and does not cost the taxpayer a brass razoo. Telecom and postal services are under attack. Qantas is a target. The Commonwealth Bank is to be sold, part of it overseas, if Mr Howard has his way. The first off the rank as far as the Parliament is concerned is to be the Snowy Mountains Engineering Corporation. It seems to me to be a sad commentary on the Opposition that it has such a lack of patriotic pride in the quality and excellence of the work undertaken by that organisation, in succession to the traditions established by the Snowy Mountains Hydro-Electric Authority, that it should consider such a matter. When one looks through the annual report of the Snowy Mountains Engineering Corporation one sees that not only is it engaged in a number of very significant domestic and Australian projects but also it is involved overseas in Indonesia, China, Fiji, India, Bangladesh and Bahrain in the provision of engineering skills and management and the construction of projects which create extremely good focuses for countries in those regions for the appreciation of Australia and the skills it can offer. As is directed by this Bill, the Snowy Mountains Engineering Corporation, in undertaking many of those activities as a flagship for Australia, carries with it many private engineering firms and consultancies. In fact, in the list of functions set out in clause 6 of the Bill is a direction of the Parliament, if this Bill is passed, to ensure that the Corporation shall endeavour to: (b) so far as is practicable, involve Australian organisations in the performance of its functions overseas; and (c) promote overseas the interests of the Australian engineering industry.''; There is a very clear indication that if this Bill is passed, the Corporation is to do as it has been doing, but in a way sanctioned and required by the Parliament, and involve Australian engineering industry from the private sector in these activities to the greatest extent practicable. In that way, I believe many openings will be provided for Australian private enterprise which has the engineering skills to offer to complement and supplement the activities of the Snowy Mountains Engineering Corporation. I am really very pleased to be involved in this debate at such an early stage in the battle over privatisation that is to be waged by the Opposition. I believe that the Australian people, as they become more conscious that privatisation means selling off assets owned by all Australians to some Australians and some overseas investors, will reject the carrot that is offered of helping to pay off some of the overseas debt by the once-only gains that are made by these sales. I believe more and more too for that matter that Australians will become conscious, as the months proceed, of the nature of Australia's overseas debt and the small portion of it which can be attributed to and which is the responsibility of the Australian Government. Most of Australia's overseas debt is incurred by private enterprise going outside of Australia in order to raise money overseas for its activities, such as the non-productive takeovers we have seen cluttering the financial pages and even the headlines of our media over the past several months. However, that debate is for another day. All I wish to say at the moment is that the Government stands firmly behind this magnificent Snowy Mountains Engineering Corporation. We expect it to come out of the trough it has been in with a new management team, a leaner work force and a change in possibilities overseas as the effects of the depression in oil prices that I mentioned as a contributing factor to the lowering of development activity overseas in third world countries is remedied. I believe, with Senator Siddons and the Australian Democrats, that this Corporation, as the years progress, will be a great flagship for Australia overseas and I wish it well as it is set on its way by the Parliament in this amendment Bill. Senator SHEIL(Queensland)(12.35) —I too remember the history of the Snowy Mountains authorities. They have a proud record over many years. I can remember how when we were young chaps our chests swelled when the formation of the first Snowy Mountains authority was announced. It was big, it was clever and it brought together a body of expertise and technology the like of which Australia had never seen before. The engineering constructions that it built-the dams, tunnels, power stations, flumes and transmission lines-the whole production of the Snowy Mountains authority-was out of this world and something we were all very proud of. I recall that the whole idea of the authority was to harness the snow roof of Australia and to use the water from it to pass through hydro-electric power stations to provide the peak power load, which is very expensive, to Sydney and Melbourne and then to use the water for flood mitigation, irrigation, drought relief and all sorts of schemes. There were a whole lot of benefits. The main benefit was the peak power load to Sydney and Melbourne, although that did not advantage the people of Perth, Adelaide, Hobart, Brisbane or Darwin very much. The whole scheme was financed with a defence priority-a priority much the same as that used to fund the construction of a battleship. It was financed at cost plus 10 per cent, but it went on and on and a figure of #800m sticks in my mind. That may have been cheap but it seemed very dear. After the virtuoso performance of putting all these works together-engineering-wise they were really something-a few flaws appeared in the scheme. The first flaw was that the snow roof of Australia had droughts too, the same as everywhere else, and quite often there was not enough water. Also, the peak load of power was needed during the winter in the cities but, of course, the water was needed in the summer. Once the authority let the water go in the winter to provide peak power, it had no water to provide irrigation and flood mitigation and so it had to construct another lot of dams. I remember when that situation arose. The idea was that one passed the water through the transmission stations and then caught it in a dam so that one could hold it and use it again later. Although the engineering part of the whole scheme was good, the overall picture was quite a problem. A later development of the irrigation scheme was that water from the Murray River was leached, which created one of the greatest salinity problems in the world. Not only that, it poisoned the water of the Murray so much that the people of South Australia complained to the Victorian Government and Mr Bolte, who was the then Premier, had to negotiate the construction of an entirely new big dam, the Chowilla Dam, the sole function of which was to fill up and flush out the Murray River to get rid of all this filth. Of course, he was a very crafty Premier and he got the Federal Government to pay for the construction of Chowilla Dam, which was an additional expense. The whole Snowy Mountains scheme, while it has been an engineering triumph, has technical flaws that are very hard to overcome. A lot of expensive havoc has resulted from all these wonderful schemes. Now we have a new Snowy Mountains Engineering Corporation and the Government has decided to expand and extend the Corporation. The Government is removing the statutory restrictions on its operation. The Government says it is allowing the Corporation to compete with private enterprise. I submit that the conditions under which it is being allowed to compete are unfair. This is mainly because the Minister for Housing and Construction actually provides the funds to the Corporation. No other organisation gets that kind of provision. The Minister also can direct the powers and functions of the Corporation. He can waive interest payments on capital. No one else in private enterprise gets that benefit. The Minister controls the repayment of capital. He directs the application of any profits. I note that it was mentioned that the Corporation has made $40m over the last 10 years. However, in the last two years it has lost about $10m. The Minister can at his discretion direct the application of any profits. I know he would have trouble directing the application of any losses. While on the subject, I must say I do not see how one can say that this Corporation, which has been making losses for the last two years, is worth thousands of millions of dollars. It is not. The Corporation is worth exactly what it is worth. For this reason the Government has to prop up the Corporation. I do not want to turn this into a lecture on privatisation. However, privatisation would be the solution to just this sort of problem. In fact, about six commissions which the Government has recently created, compliments of the Australian Democrats, could easily be got rid of or privatised. This Corporation will be foisted on the Australian people in the same way as the Australian Sports Commission has been foisted on the Australian people by the Australian Democrats. That effectively will nationalise sport. I hope people have noticed that the Minister for Sport, Recreation and Tourism (Mr John Brown) already has given $4.8m for the construction of a sporting oval in his electorate. That shows the kind of patronage that can occur when a Minister gets that kind of control. The Minister for Housing and Construction also guarantees SMEC's borrowings. That does not happen in private industry. If the Corporation borrows money outside the Commonwealth Government area the Minister guarantees the repayment of that interest. The Corporation is not subject, as all other companies are, to State tax laws. For the purposes of the Audit Act it is a public authority, but it is not a public authority for the purposes of the Income Tax Assessment Act. Therefore, there are enormous differences between this Corporation and any private corporation. On top of all that, the Corporation's contracts would not be invalidated if it were not to comply with the Act under which it is constituted. We might as well tear up the Act if the Corporation does not have to obey it. We might as well privatise the Corporation and give its staff first option on its shares. I think this shows that the Snowy Mountains Engineering Corporation Amendment Bill will confer financial benefits on a small group. In effect, it is protecting a job protection cartel. It will provide conditions not enjoyed by its competitors. I mentioned before that the Corporation's losses amount to about $5m a year. I mentioned that its sales at the moment are down 23 per cent on last year's sales. However, the Corporation's overheads are up 20 per cent. That is despite the claim by the Minister. The Corporation cannot pay its bills, which then fall on the taxpayer for payment. Last year the Corporation's loss was $4m. The Corporation's accounts have had to be qualified by auditors for the last three years. Its asset reserves have been written back against operation losses. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Senator CHANEY —I address my question to the Minister for Finance. Is it a fact that a person with a housing loan of $40,000 taken over, say, 25 years and who has not accepted an extended repayment term is now paying about $10 a week more in loan repayments than was the case in April 1985 when the Prime Minister renewed his pre-election promise that interest rates would fall? Senator WALSH —I cannot remember what people were paying in April 1985. I do not know what they are paying now because I have not worked it out. I will get an answer on that. Senator CHANEY —I ask a supplementary question. I appreciate the Minister's undertaking to get an answer. On the basis of his general and, I understand, very detailed knowledge of these matters, does he agree that since the Prime Minister said in April 1985 that there would be a lowering of the level of interest rates, in fact, there has been a continuous increase in interest rates? Senator WALSH —I do not recall precisely what the Prime Minister said in April 1985 on this question, if anything, but in view of Senator Chaney's deep interest in this matter I can give him quite a few facts. I do remember that in April 1982, when the discredited former Treasurer was responsible for Australia's economic policy, 90-day commercial bills hit an interest rate of 22 1/2 per cent. Senator Chaney —Mr President, I take a point of order. It can scarcely be in order that the Minister can remember so clearly what happened in 1982 and remember nothing about April 1985. The PRESIDENT —There is no point of order. I call the Minister. Senator WALSH —In June 1982 the rate on two-year and 15-year Commonwealth bonds was 16 1/2 per cent. The highest interest rates that the country has ever seen for Commonwealth bonds, commercial bills and housing interest rates-when they were right up against the ceiling-were those which prevailed at the end of the dismal five years during which Mr Howard was Treasurer of Australia. Senator RICHARDSON —I ask a question of the Minister representing the Minister for Employment and Industrial Relations. Is the Government aware of a report in the Age on 20 August 1985 concerning the outrageous exploitation of unemployed youth, in particular by the encyclopaedia sellers, Crowell International Pty Ltd, against which over 50 official complaints have been lodged? Is the Minister aware that according to records held by the Victorian Commissioner for Corporate Affairs Crowell which began trading in 1980, had paid more than $7 1/2m of its $8.7m earnings to its parent company in America yet showed a net loss of $161,050? Can the Minister confirm the report which claims that deliberately selected young people were hounded and abused both physically and mentally by the company to sell its wares? Can the Government assure the Senate that young people will be made aware of their employment rights and that complaints of this nature will be pursued? Senator WALSH —My attention has been drawn to the report referred to. It is an indication of the fact that there are still unscrupulous businesses which will take advantage of the plight of young people. There are also unscrupulous politicians who will do the same thing if they can. These businesses are prepared to chase their profits by misleading advertising and by exploiting and mistreating the people who respond. The Government is active in making young people aware of their rights as to work and payment. Recently the Government funded the production and distribution of a pamphlet on exploitative employment practices. The pamphlet, which was the result of discussions between Federal and State departments in the labour field, sets out some of the pitfalls that school leavers and other young people might encounter when looking for a job. Copies of the pamphlet have been distributed to every secondary school and Commonwealth Employment Service office in Australia. Arrangements are in hand to make the pamphlet available in 12 other languages for non-English speaking persons. I have another page or so of information on this brief which I seek leave to incorporate in Hansard. Leave granted. The document read as follows- In the vast majority of work situations-that is, work arrangements which involve an employer-employee relationship-the employment is subject to awards of industrial tribunals, either Federal or State. These awards set out minimum standards of payment and conditions. They are enforceable through union parties and through Federal and State labour inspection services. Recent figures published by the Australian Bureau of Statistics show that in May 1983, 86 per cent of all employees were covered by an award, determination or collective agreement of a Federal industrial tribunal or a State industrial tribunal. The Conciliation and Arbitration Act provides the framework for the Federal industrial relations system under which employee organisations can seek the making of awards which have application to employers in respect of occupations covered by the rules of those employee organisations. The State and Federal departments responsible for labour law administration have established labour inspection services to ensure that the provisions of awards are observed. Offices of the respective inspectorates have been established in each capital city and some provincial cities throughout Australia. The staff of those inspectorates are available to advise enquirers of their award rights and obligations and to investigate complaints. Employees who are members of unions can also approach their union for advice and assistance if they believe that they are being subjected to exploitative practices or denied their rights under the relevant award. I would mention, finally, the Government's recently announced initiatives to help young people in the labour market. The policies we are putting in place will reduce the potential for exploitation by making available a range of employment and training opportunities for young people. Senator Chaney —Will the Minister table the balance of the document from which he quoted? The PRESIDENT —Does the Minister table the document? Senator Walsh —It has been read already. I will table the document as requested. Senator MESSNER —My question is addressed to the Minister for Finance. I refer him to reports of debate at the Australian Council of Trade Unions Congress yesterday during which speakers criticised the level of business profits and called for a tougher Prices Surveillance Authority. Has he noted the comment of Mr John Halfpenny that `the Government has to lift its game to protect people from the avarice of profit takers'? Does the Government intend to heed the call from its friends in the ACTU and strengthen the powers of the Prices Surveillance Authority, or is it satisfied that profit levels are reasonable and an important part of long term economic recovery? Will the Minister repudiate the ACTU's anti-profit campaign, which is aimed at increasing the real wages of those in jobs at the expense of creating new jobs for those 600,000 who are out of work? Senator WALSH —I did scan the reports to which Senator Messner has referred. He asked me about profits. I can tell Senator Messner something about profits. I can tell him that the current profit level as a proportion of national income has returned to the level which it was in the 1960s, a level which was not reached at any time during the 1970s, including the five years when Mr Howard was Treasurer. The Government recognises that it is necessary for some level-one cannot be too precise about it, but an adequate level-of profits to be maintained in order to provide investment for the generation of employment. This Government has restored the traditional share of national income which went to profits in the 1950s and the 1960s. That is something which, I repeat, the previous Government conspicuously failed to do. When Mr Howard was Treasurer we heard a lot of rhetoric about profits, economic growth, inflation control and generating employment, but all we ever received was the rhetoric. The previous Government failed to deliver in all of those areas. This Government has delivered in all of them. This Government has delivered, whereas the previous Government failed to deliver. Regarding the present situation, the Government, while recognising that an adequate level of profits is essential to maintain levels of investment that are required for employment, does not believe in profiteering. I gather, from Senator Messner's comments, that he does. Senator Messner believes in profiteering. There are opportunities for certain types of business, because of the devaluation of the Australian dollar, to take advantage of their enhanced competitive position by way of unjustifiable increases in prices. It is that anti-social practice to which the comments of the Treasurer have been directed recently. Senator MESSNER —I ask a supplementary question. The Minister for Finance has avoided the main point of my question; that is, that the whole point made at the Congress yesterday-indeed, it was the basis of the pact that has been made between the Government and the ACTU-was to increase the real wages at the expense of the private sector. Will the Minister answer that question? Senator WALSH —It would not surprise me if profiteering was considered to be a highly desirable activity by some members of the Sydney Stock Exchange and perhaps by the President of the Liberal Party who installed Senator Messner in his present job. He blackballed Senator Rae and put Senator Messner where he is now. That is what Mr Valder did. Honourable senators do not have to take my word for it. Senator Rae told us yesterday that he believes that is what happened and I believe that is true. In fact, I think we all know that it is true. The President of the Liberal Party, along with a number of other prominent business people, plotted to get rid of Mr Peacock and, having succeeded in doing that, then blackballed Senator Rae from the front bench and had Senator Messner installed in Senator Rae's place. Under those circumstances it is not surprising that Senator Messner is doing what he was installed to do, and that is acting as a mouthpiece for Mr Valder and some other interests in the Sydney Stock Exchange. Senator McINTOSH —I ask the Minister representing the Minister for Communications a question arising out of the decision by the Minister for Communications to refuse an application by the Australian Coalition of East Timor for a licence to maintain two-way radio contact with Fretilin in East Timor. Is the Minister aware of a report in the National Times of 23-29 August and a letter in the Age of 2 September, claiming that while facilities may exist, it is practically impossible for members of the Australian public, including East Timorese here with relatives in Timor, to ring East Timor? Can the Minister confirm that there are difficulties in making ordinary telephone communication with East Timor? If the Indonesian Government is restricting international access to Timor via telecommunications facilities, would this be inconsistent with international practice under the International Telecommunications Union convention? Will the Government seek from Indonesia an explanation for these restrictions and consider urging Indonesia to open up telecommunications with East Timor? Senator WALSH —That was a very long and detailed question about a matter of which I have little knowledge. I will refer it to Mr Duffy for an answer. Senator CHIPP —I ask the Minister representing the Minister for Defence whether he will confirm that the actual B52 bomber agreement-I am talking about the legally binding document-allowing B52 bombers to stage through Australia makes no mention whatsoever of the fact that the bombers were to be unarmed and carry no nuclear weapons. Will the Minister confirm that on 29 March 1981 the then Deputy Leader of the Opposition and shadow Minister for Foreign Affairs, Mr Lionel Bowen, said that he believed that the likely consequence of the agreement was the transit of nuclear weapons through Australia? On behalf of the Australian Labor Party, he declared the agreement deficient by not allowing verification. I have a copy of the Press release for the Minister, if he wants to see it. Does the Minister for Resources and Energy remember his reply to my question of 27 March this year? He said that the agreement not allowing the planes to be armed or to carry nuclear weapons cannot be verified by Australia. He said: It is enough that the United States is not in the habit of breaching agreements. Government senators interjecting- Senator CHIPP —The Minister said that. The Government's Minister said that. The PRESIDENT —Order! Will the honourable senator ask his question? Senator CHIPP —I was interjected upon, Mr President. The PRESIDENT —The honourable senator will ignore the interjections. Many honourable senators want to ask questions at Question Time. Senator CHIPP —The Minister will remember making that comment. Will Senator Evans tell us what the Government intends to do to enforce the intention of the agreement, at least from Australia's point of view, and to remedy the clear dissatisfaction which the Labor Party previously expressed with the agreement? Senator GARETH EVANS —I am indebted to Senator Chipp for giving me some short notice of this matter. It has given me some opportunity to check out the documentation. It may be possible to give a fuller answer at some later stage; I am not sure. The formal agreement of, I believe 1979 between Australia and the United States does not, as Senator Chipp said, provide for an express undertaking about the non-carriage of nuclear weapons over Australia. However, it was the subject apparently of an oral agreement between the United States and then Australian governments, as retailed by Mr Street in an answer he gave in the House of Representatives on 12 March 1981. On page 704 of the Hansard he said: It has been agreed between the Australian Government and the United States Administration that the aircraft staging through Darwin for the quite specific purposes of surveillance and navigational training will be unarmed and carry no bombs. It was on this specific point that I sought and received an assurance from the Secretary of State, Mr Haig. Mr Uren interjected: In writing? Mr Street replied: That document is not a signed document. It was an agreed form of words exchanged between us which is in the keeping of the Australian Embassy in Washington. The form of the words was agreed and exchanged before witnesses. So that is the basis on which the previous Government was satisfied as to the non-armed nature of these flights. That is the basis on which we in government have been prepared to accept that that is still the status of those flights. In a statement on 29 March 1981 Mr Bowen said, as he had also said in the House of Representatives on 11 March, before Mr Street made the statement to which I have just referred, that it would be preferable were the agreement formally amended to include language of the kind that Senator Chipp would prefer. As I read the statement, it is not the case that Mr Bowen said that he believed that the likely consequence of the agreement in its present form would be the transit of nuclear weapons through Australia. The fourth paragraph of Mr Bowen's statement said: A majority of Australians (62 per cent in the Gallup poll published March 13) oppose the likely consequence of the agreement-the transit of nuclear weapons through Australia. I make the point that Mr Bowen is reporting the results of the gallup poll rather than necessarily, as I read the statement, hanging his hat on that proposition. It is the unequivocal position of the present Government that we simply will not contemplate the transit of nuclear weapons over Australian soil by way of B52 bombers, pursuant to this agreement. That matter has been made perfectly clear to the United States and we have no reason whatsoever to believe that the United States has even contemplated breaching the clear undertaking given to the previous government. In that respect, I have no qualification whatsoever to make to my answer to Senator Chipp in Parliament on 27 March this year. Finally, our position in this respect is quite different from that of the Liberal Opposition, which through Mr Peacock, the late and unlamented Leader of that Party but still its spokesman on foreign affairs matters, said on 7 August that it was not only prepared to contemplate but in fact actually supported the installation and storage of nuclear weapons on Australian soil. Senator CHIPP —I ask a supplementary question. I am surprised and disappointed that the Minister did not quote the full text of Mr Bowen's statement because further down it says: The Opposition-- that is the Labor Party- reaffirms its belief that the B52 agreement is seriously deficient. As it stands, it reduces Australian sovereignty by not clearly and unambiguously stating that Australian consent and verification are necessary for transit of nuclear weapons over our territory. I ask the Minister: Can he or can he not totally rule out the possibility that B52 bombers are now armed or are carrying bombs over Australian soil? Senator GARETH EVANS —I repeat that there are no grounds whatsoever for any conceivable suspicion that B52 bombers are armed and carrying nuclear weapons over Australian soil. We have accepted absolutely the assurances of the United States Government in this respect and continue to propose to rely on those assurances. Further, Mr Bowen's statement, which was quoted back at me by Senator Chipp, does not, in the terms that he quoted, state the proposition that was put to me in Senator Chipp's original question that Mr Bowen believed that the likely consequence of the agreement in its present form was the transit of nuclear weapons through Australia. It is the case, as I acknowledged, that Mr Bowen said in 1981 that it would be desirable were the agreement formally amended. That was the position stated by him in Opposition. The present Government has not thought it appropriate to pursue the matter further because we accept the assurances we have been given by our allies. Senator BOLKUS —My question is directed to the Minister representing the Minister for Immigration and Ethnic Affairs. Is it true that one of the locally engaged staff members of the Australian Embassy in Santiago, Mrs Quena Jimenez, has a close working and personal relationship with the Chilean secret police? Is it also true that Australian immigration or embassy staff in Santiago have expressed concern at the potential breach of security which the continued employment of Mrs Jimenez represents? Is it possible that security leaks from the Embassy, should they occur, could endanger the lives of potential refugees seeking to come to Australia? In view of these concerns and the concerns of the Chilean community in Australia, will the Government take immediate action to remove this person? Senator GRIMES —The allegations repeated by Senator Bolkus about Mrs Jimenez were first raised with the Government, the Department of Foreign Affairs and the Department of Immigration and Ethnic Affairs in February 1984. They were investigated by the Government. They were investigated by the Australian Catholic Commission for Justice and Peace through its Chilean counterpart and were found to be unfounded. Mrs Jimenez has worked as a locally hired staff member at the Australian embassy in Chile for more than 10 years. She is a family friend of a CNI officer. Part of her duties in that embassy has been to undertake liaison with Chilean authorities, as officers in Australian embassies throughout the world do, as a routine practice to make investigations about people who are asking to migrate to Australia. There is no evidence in all the investigations that have been conducted that there have been any breaches of security by the Embassy in Chile. If people who make approaches to the Australian Embassy have cause to fear reprecussions from the Chilean authorities they do not have to submit their names or any other information for checking when they make inquiries at the Australian Embassy. As I have said, allegations have been made in the past. They have been investigated. It has been concluded on several occasions that the allegations are unfounded. The Minister and the Government have no evidence that any member of the staff of the Australian Embassy in Chile has made any such complaint at all. The connection of Mrs Jimenez with one member of the CNI is, in fact, an extended family connection. Having regard to the unsubstantiated nature of the allegations, the Minister has announced that he is not prepared to damage the career and livelihood of a long serving officer. As I have said, these allegations have been put forward by some members of the Chilean community in Australia since February 1984. I repeat that they have been investigated by the Australian Government and the Catholic Commission for Justice and Peace. Those allegations have been shown to be unfounded so far. While that situation exists the Minister has no intention of terminating the employment of Mrs Jimenez. Senator ARCHER —Is the Minister for Finance aware that letters have been sent to Bankcard customers announcing that the Bankcard interest rate has risen from 18 per cent to 21 per cent? Having in mind pre-election and post-election promises, can the Minister tell the people of Australia just when interest rates will fall and by how much? Senator WALSH —I have heard about the notified increase in the Bankcard interest rate. The Bankcard interest rate has been 18 per cent ever since Bankcard was introduced. I cannot remember precisely when that was but it was in 1977 or 1978. In other words, when Bankcard was introduced the interest rate charged was at least 50 per cent higher than the prevailing Commonwealth bond rate and probably as much as 70 per cent higher. It is not surprising in those circumstances, since interest rates are very much higher than they were when Bankcard was first introduced, that the interest rate should have been increased now, although I stress that since the financial system has been deregulated by this Government that is a decision for the financial institutions to make and not for the Government. As the Treasurer said the other day, this Government is a can-do government which does things. It does not talk about deregulating as Mr Howard did for five years. It does not talk about stimulating growth, as Mr Howard did for five years. It does not talk about reducing inflation, as Mr Howard did for five years. It does not talk about increasing total employment, as Mr Howard did for five years. The PRESIDENT —Order! The honourable senator is debating the question now. Senator WALSH —The Government does all of those things. Senator REYNOLDS —I address my question to the Minister for Education and Minister Assisting the Prime Minister on the Status of Women. Can the Minister comment on the outcomes of the recent conference on women's health in a changing society? What progress is being made in Queensland and when will the women's health service in Brisbane be funded on the same basis as services in other States? Senator RYAN —I can give Senator Reynolds some informaton about the women's health conference, which was held in Adelaide last week as one of our Government's end of the Decade of Women initiatives. However, it is a fact that although the Decade of Women has come to an end the Government's program for improving the status of women in all areas, including the all important health area, will continue permanently. As a part of our continued action to improve the status of women in areas such as health, there will be a number of initiatives such as the health conference. Resolutions, recommendations and advice from these conferences will form a part of the Government's national agenda for action for the rest of this century. The conference was very well attended and was supported by Commonwealth and State government's with, unfortunately, the exception of Queensland. All Australian governments other than the Queensland Government gave financial and other support to the conference. I think it is unfortunate that the Queensland Government did not involve itself officially in the conference, particularly as women's health needs in Queensland are not being adequately addressed. It is a matter of regret to our Government that the women's health centre in Brisbane is unable to secure the same treatment from its State Government as women's health centres in other parts of Australia are able to achieve. However, I assure Senator Reynolds that through our Federal initiatives in Queensland, such as the Women's Information Service, we are trying to monitor women's health needs and to take whatever action we can as a Federal Government to improve the health status of women in Queensland. Senator SHEIL —I address my question to the Minister for Finance. Does the Government's sweetheart deal with the unions for less than full wage discounting make any provision for review in the event of the further significant falls in the value of the dollar? Senator WALSH —Senator Sheil has not entirely accurately stated the facts. He said that a deal for less than full discounting had been made. That is not necessarily so. The agreement reached was that in the March case the discounting figure will be 2 per cent or the actual price effect of a devaluation, whichever is the lower. Whilst on present indications it seems likely that the figure will be higher than 2 per cent rather than lower, the possibility exists that it will be lower than 2 per cent. The rest of the question is very similar to a question I was asked yesterday by Senator Michael Baume which, I reminded the Senate, bore about the same relationship to reality as a Patrick Partners prospectus issued in 1970 or 1969. Indeed, it might have even been written by a former Patrick partner. The agreement with the Australian Council of Trade Unions on wages policy and wages discounting has achieved a cementing of the prices and incomes accord which has delivered this country the highest rates of year on year growth it has seen since the early 1950s, which has halved the inflation rate, which has created 400,000 jobs in just over two years- Senator Chaney —Mr President, I raise a point of order. The Standing Orders preclude debating the question. The Minister has been asked a simple question about whether, if there is further devaluation, the accord permits some adjustment. He is proceeding to debate the issues of whether the accord is a good thing. I respectfully suggest, Mr President, that he is out of order and should be asked either to answer the question or to sit down. The PRESIDENT —As honourable senators will realise, I am not in a position to tell Ministers how they should respond to questions. That is purely a matter for Ministers, provided their answers are within the Standing Orders. Standing Order 100 clearly says that a Minister in responding to an answer should not debate matters of substance. I ask the Minister in responding to take note of that standing order. Senator WALSH —Certainly, Mr President. I do not think I have much to add to what I said before. If we are talking about what is in order and what is out of order, I would point out that the economy was disastrously out of order when we inherited it. It is now in order. Senator McKIERNAN —My question is directed to the Minister for Veterans' Affairs. In the economic statement of 14 May an announcement was made that Veterans' Affairs beneficiaries would be able to consult directly with optometrists rather than being referred through a local medical officer. Has the Minister been pleased with the reaction to the announcement from the optometrists' profession? Senator GIETZELT —It is true that in the economic statement of 14 May the Government decided to permit the type of beneficiary covered by the Department of Veterans' Affairs to have direct access to optometrists rather than through the old system involving first a visit to a local medical officer and then reference to an optometrist, particulary in respect of the provision of spectacles. That decision was taken as a result of representations made to the Government by the Australian Optometrical Association, which pointed out that members of the general community were able to avail themselves of that service and that there was no necessity, except in cases of eye disease, for persons to be first referred by a doctor to an optometrist. Since that time-that is, from 1 July-just under 900 veterans have availed themselves of the new service. That means that the Government's projected savings in respect of about $100,000 probably will be achieved if the present usage of the service is maintained. It gives the entitled beneficiaries a freedom of choice. They can go to a local medical officer if they so desire, or they can go direct to an optometrist. There would then be substantial savings from the point of view of the Government. Senator PARER —I direct my question to the Minister for Finance. I refer him to the growing public debate about the size of Australia's overseas debt. As a constructive and practical response, will the Government consider eliminating or substantially scaling down present restrictions on foreign investment, thus facilitating a switch in the future from borrowing abroad to more equity investment from abroad as a method of financing projects? Senator WALSH —I shall put that proposition to the Treasurer for a response. I am sure that Senator Parer realises that it would be a very important issue if any such change were made. His question draws attention to the fact that a country which takes capital from abroad exposes itself to greater risk if the capital comes in the form of interest bearing loans rather than equity capital. Indeed, that is as true of a nation as a whole, as Senator Parer would know very well, as of an individual firm. To put the picture in perspective in view of the number of times it is misrepresented and misunderstood-I saw a glaring example in, I think, the Australian again today-there is no net Commonwealth overseas debt. The Commonwealth overseas debt is equal to the Commonwealth's holdings of gold and foreign currency. Something like $13 billion of State government and State government guaranteed debt is owed externally. The rest of the $52 billion is privately owned debt. To assert, for example, as Mr John Lard asserted a few weeks ago, `your Government has borrowed nearly $70 billion on your behalf overseas' is patently false. Senator AULICH —I direct my question to the Minister for Industry, Technology and Commerce. Is the Minister aware of statements by Tasmania's only shadow Minister, Senator Archer, indicating that the current Liberal Party position paper supporting freight equalisation and other economic and infrastructure measures vital to Tasmania `did not have great credence'? Further, is he aware that Senator Archer has been quoted as saying that he did not know what the policy contained and `It is of minuscule importance in relation to other factors for Tasmania'? Senator BUTTON —It is not entirely appropriate for me to comment on what Senator Archer said. He can speak for himself-or might I say that it remains to be seen that he can speak for himself. As a member of the Opposition front bench, he now has that opportunity to do so. He has a difficult role because he will be the organ voice of Tasmania, and will replace such distinguished luminaries as Mr Michael Hodgman, colloquially known by another expression. It is, however, appropriate for me to explain the Government's position in relation to the issues to which Senator Archer apparently adverted in the Press article to which Senator Aulich referred. The Government recognises the special difficulties posed by Tasmania's geographical isolation, and to overcome this the Government has done a number of things. First, freight equalisation has been continued in a revamped form. Secondly, we have given a grant of about $26m to enable the State Government to purchase and refit a major tourist vessel, the Abel Tasman. Senator Archer —Out of our money. Senator BUTTON —Thirdly, we have also committed about $60m to upgrade Tasmania's railway system over the next three years. Senator Chaney —Why are you giggling? Take this seriously. It is typical of you people and the way you treat Tasmania. The PRESIDENT —Order! I ask the Minister to respond to Senator Aulich and to ignore the interjections. Senator BUTTON —I plead guilty to giggling. I was giggling because Senator Archer's interjection indicates that his understanding of the subject is even more abysmal than I thought when I began to answer his question. Perhaps he will have the opportunity to raise those issues in a pro-active way as a shadow Minister in this House. Senator Sir JOHN CARRICK —My question is directed to the Minister representing the Minister for Defence. I draw the Minister's attention to the Budget statement that defence expenditure has risen from $5,941m in 1984-85 to $6,535m this year, which is claimed to be an increase of $594m or 10 per cent. Does not this nominal increase of $594m include substantial extra costs because of the severe effects of devaluation? Secondly, did not the Defence Department officers is the recent Senate Estimates committee hearings estimate that the cost of devaluation in a full year for that Department would be approximately $400m? In view of this fact, are not the Budget statements and figures illusory? Is not the true nominal increase barely 3.2 per cent, or $194m after devaluation is allowed for, and an actual decrease when the foreshadowed upsurge in inflation is taken into account? Senator GARETH EVANS —I do not think Mr Beazley would forgive me if I were to accept on the spot without demur the figures advanced by Senator Sir John Carrick and not refer them to the Minister for checking. I shall be happy to do so and to respond appropriately to the question. Senator Sir JOHN CARRICK —I ask a supplementary question. Is it not a fact that the Minister representing the Minister for Defence was present at the Estimates Committee hearing and heard the departmental officers put forward the figure of $400m as the cost of devaluation? If that is a fact, why does he need to refer to anything except his memory? Senator GARETH EVANS —Because my memory of the exchanges in which Senator Sir John Carrick participated before the Estimates Committee is well and truly overlain by the unutterable tedium of it all and I have no re- collection whatsoever of the precise circumstances, I shall be happy to check my memory with the Minister and reply accordingly. Senator GILES —I refer the Minister for Education to comments made by the Opposition spokesperson on education, Mr Shack, in an article in the Australian in which he said that 30,000 Australians each year had their applications to attend universities and colleges of advanced education turned down. Can the Minister advise how many Australians were refused entry to universities and colleges of advanced education in 1985? Are these students locked out, as Mr Shack insists? Senator RYAN —Now that Mr Shack is his Party's spokesperson on education matters I hope that he will make sure that he obtains more accurate information before he embarks on criticising the Government. In fact, the measure of unmet demand is very much lower than Mr Shack's comments suggested. I will be happy to offer Mr Shack a briefing by the Commonwealth Tertiary Education Commission so that he can be properly informed about the progress our Government has made in expanding places available to people in higher education institutions. I remind honourable senators that there has been a significant turnaround in the attitude of young people to higher education. Participation rates increased in 1983 and 1984 and, of course, that was in contrast to the rates applicable in previous years under the Fraser Adminstration when the rates were declining. We increased the annual intakes by 3,000 in 1984 and by 1,300 in 1985. We then announced that there would be an increase of between 1,750 and 2,250 places in each of 1986 and 1987. So these and previous intakes will result in total enrolment growth of 20,500 by 1987. In regard to the question of unmet demand, the current estimates-or the estimates that I am most familiar with from the Tertiary Education Commission-are that it would be similar to what it was last year-that is, nationally, in the vicinity of between 5,000 and 10,000. Senator Peter Baume —Too low. That is not correct. It is 10,000 to 29,000. Senator RYAN —Senator Baume interjects that it is 10,000 to 29,000 I have seen no evidence that that is the case. The figure for unmet demand is in the vicinity of 5,000 to 10,000. The Government is concerned about the level of unmet demand and we will be taking whatever steps we can to continue to increase the places available. I think it is important that false claims about unmet demand are not made because they are very discouraging to students who are currently completing their secondary education with the hope of moving on to a higher education. Certainly, the situation for those young people is very much better now than it was at the time when our Government came into office. Senator SANDERS —My question is addressed to the Minister representating the Minister for Primary Industry. Does the public statement made last week in Tasmania by the Minister for Primary Industry that export woodchip licences would be renewed, in spite of the fact that the final environmental impact statement for woodchipping has not yet been evaluated by the Department of Arts, Heritage and Environment, indicate that the Government has already made its decision on export woodchipping on the basis of incomplete data and preconceived notions? If so, is the environmental impact statement merely window dressing? Senator WALSH —I have no knowledge of the matters which Senator Sanders raised and I will seek a response from Mr Kerin. Senator CHILDS —My question is directed to the Minister representing the Minister for Aviation. Is the Minister aware of a decision by Qantas Airways Ltd to sell its Sydney headquarters? Will the Minister confirm that the price is in excess of $200m? Does the decision have the support of the Government? Senator GIETZELT —It is true that Qantas has made a decision to sell its headquarters for a reported sum of $200m. The Government did signal its approval of an earlier proposal by Qantas to sell its national headquarters-I think it was in 1983-for a reported sum of $150m. Qantas now believes that it can increase that sum by approximately 33 per cent. Of course, that is a commercial decision which the independent organisation, the statutory authority that controls Qantas, can make in its own right. The reason behind the decision is to use the funds that are tied up in its investment in the building for the purpose of a major fleet expansion. I understand that Qantas is in the process of acquiring about $1 billion worth of new aircraft which will put it on a par with international standards. This is essential for our national airline. I should point out to Senator Childs that since this Government came into office, as a result of the rather dramatic upturn in the Australian economy, both our national airlines, Trans Australia Airlines and Qantas, are reporting very satisfactory profitability on invested funds. This indicates that as public enterprises they are not only efficient and competent but also very profitable. Therefore, any decision made on a commercial basis to improve the efficiency of the organisation would, of course, be supported by the Government. I remind the Senate that Qantas, TAA and Ansett Airlines of Australia, as a result of the activities of the Department of Aviation, still maintain a very high record of safety in respect of aircraft movements. Senator PETER BAUME —My question is directed to the Minister representing the Minister for Social Security. Is the Minister aware of that part of the Auditor-General's report which identifies overpayments and fraud in social security payments as the two main causes of waste in the Department's expenditure? Is he aware of the very high amounts of money which the Auditor-General said are lost due to fraud and overpayment? Further, is he aware that Special Prosecutor Redlich, in his 1983-84 report, also highlighted those same problems and sought action by the Government? Will the Minister advise the Senate of the main types of fraud and overpayment that the Department has come across? What is his view of the extent of this fraud and the amount of funds that remain uncovered? What is the extra cost burden to be borne by Australian taxpayers as a result of these activities? Finally, what action has the Department taken to deal effectively with the problems of fraud and overservicing raised by Mr Redlich and by the Auditor-General, especially in light of the mini-Budget statement on 21 May to the effect that the Government had in mind a particular monetary goal in relation to recoveries in this area? Senator GRIMES —The matters raised by Senator Peter Baume are annual ones which are raised whenever an Auditor-General's report is issued. The Department of Social Security always gets a mention, and it always gets a mention in regard to the matters he raised. I will take up a couple of the points he has made and then give some detail about the specific matters raised by the Auditor-General. He talked about Special Prosecutor Redlich's report, and that arose from Mr Costigan's inquiry into social security matters. As a result of that report and the extraordinary claims of fraud and criminal activity amongst illegal social security recipients, the Department of Social Security, I believe with the approval of the previous Minister for Social Security, gave assistance to Mr Costigan and the Commonwealth police. The fraud and overservicing detection section of the Department assisted in order to cut down the amounts of money which were allegedly being ripped off the public purse. After a while it became quite obvious that the claims of Mr Redlich and Mr Costigan were grossly overstated. There was no evidence in regard to what they had put forward. The officers of the Department reverted to their normal activities and have done them since then. The second point is that every time the Auditor-General brings down a report, naturally, as is his duty, he reports on overservicing in the Department of Social Security. I believe we should put those things into perspective. During the year 1984-85 the Department detected some $60m in overpayments. That represents about 0.42 per cent of the total outlays-which are considerable-of the Department. During the same time the Department recovered $40.6m from people who were overpaid. The amount of $123.8m which the Auditor-General mentioned represents the total accumulated debts owing to the Department over many years. The Department will continue to seek the recovery of the amounts owing to it. This year it has recovered $40m. The Auditor-General also commented on some procedural breakdowns in the Department but most of his comments-unfortunately this happens each year-have been misinterpreted. The most glaring example of such misinterpretation was by the Opposition spokesman on public administration which was reported in this morning's Australian. He alleged that the Department of Social Security overpaid $350m and that this had been caused by the failure to apply identification procedures. Senator Chaney —I think you are reading one of my old answers. It is plagiarism at its worst. Senator GRIMES —As Senator Chaney says, this sounds like one of the answers he used to give and he is dead right. What happened was that the Auditor-General who used a small sample of the Department's 200 regional offices, was unable to be satisfied that the Department's identification procedure was strictly satisfactory. He did not conclude anywhere that this had resulted in the Department's overpaying 10 per cent of its clients. This cannot be extrapolated from the report and the Auditor-General did not state in his report that there were overpayments of $350m. The Department deals with 2 1/2 million clients each year. This year it will spend $15 billion on pensions and benefits. It is inevitable that there will be some overpayments but to put the matter in perspective even the highest estimates of overpayments amount to less than one-half of one per cent of the outlays. This is too high; everbody says it is too high. The main cause of this-this is what Senator Baume asked about-is difficulty with the identification procedures. The Department has introduced more rigorous identification procedures. I remember, and Senator Chaney will remember, that as soon as one does that the Department is criticised for being overzealous in this area. I say advisedly that maybe some universal identification procedure will assist in this matter. The Department has always believed-successive Ministers for Social Security have always believed-that the situation can be improved but I do not believe that the situation is helped by reports such as the one in this morning's Australian by the shadow Minister for public administration. There is no evidence from or any claim by the Auditor-General that overpayments to the extent of $350m have occurred. I suggest that the spokesman reads the report again, take a little more time and using the skills he had as a public servant, he will find the truth. Senator TATE —Is the Minister representing the Minister for Foreign Affairs aware of reported statements of Mr Malcolm Fraser, former leader of the parliamentary Liberal Party of Australia, expressing his long held abhorrence of the racism incorporated in the political and social structures of South Africa-I think he likened it to Nazi Germany in that respect-and his statements supporting the need to apply strong pressure against the minority regime in power there? Is it expected that Mr Fraser will brief the Foreign Minister on his return to Australia? Is it anticipated that the Department of Foreign Affairs will continue, in the non-partisan spirit that should characterise Australia's approach to this issue, to facilitate arrangements for Mr Fraser's visits to southern African countries? Senator GARETH EVANS —It has to be acknowledged that Mr Fraser's statesmanship has been of a somewhat selective character in the past but in the matter of southern Africa, racism and apartheid- Senator Chipp —That is not fair. Senator GARETH EVANS —With the utmost respect, it was not very apparent in 1975 and I think that is something which will long live in the memory of the Australian Labor Party. But willing as we are to be gracious and objective about all things, I make the point that in the matter of southern Africa, apartheid and racism Mr Fraser's record has been wholly consistent and wholly admirable and that is the point I want to place squarely on the record. In that respect his position has been in marked contrast to that of his former acolyte, Mr Howard, now the Leader of the Liberal Party, who has continued to demonstrate a massive insensitivity and a massive indifference to the dimension of the human tragedy in South Africa. That contrast has been made recently by Mr Fraser who, in what has been described as an exclusive interview in the Australian of 9 September, was reported, when dealing with Mr Howard's previous statements about South Africa and the Soviet Union, as follows: . . . Any such comparison was totally false and misleading. We might dislike what happens in both countries, but they are different and they require different responses, he said. People should stop making that kind of comparison or using it as an excuse for doing nothing about South Africa. Mr Fraser said the problem in South Africa was solely one of race. The whole system is based on race, and on that alone. If you're white you're superior. If you're black, you're inferior. The article continued: . . . South Africa was rather like a Greek oligopoly, and there's only one regime in this century that's been so steeped in racism as this regime . . . that's Nazi Germany. They are very penetrating and effective words and they should be borne very closely in mind by those who are minded to regard Mr Howard as someone who is sensitive and sensible on issues of this kind. The Government shares, unequivocally, Mr Fraser's expressed abhorrence of the apartheid regime in South Africa and his advocacy of economic sanctions to influence change. As is well known, the Australian Government has already taken a number of measures in this direction, including those which were announced on 19 August. We have said on numerous occasions that we stand ready to support and vote in favour of the comprehensive and mandatory economic sanctions imposed by the United Nations Security Council and observed by South Africa's major trading partners. I understand that in a few days' time Mr Fraser is likely to meet Mr Hayden in New York on the occasion of the United Nations General Assembly. No doubt they will then have an opportunity to consider what further contributions Mr Fraser might make, in co-operation with the Australian Government, for the resolution of this unhappy continuing tragedy in South Africa. The PRESIDENT —I call Senator Townley. Senator Cook —Tell us about South Africa. Senator TOWNLEY —I will tell the honourable senator about South Africa at some other time. Has the Minister representing the Minister for Aviation seen the transcript of the cockpit voice recorder of the ill-fated Japan Airlines flight which recently crashed en route from Tokyo to Osaka? Is he aware that the transcript shows that air traffic control frequently called the aircraft and diverted the attention of the pilot from trying to fly the stricken aircraft? This was done on many occasions. Will the Minister ask the Department of Aviation to examine its radio procedures so that if any such emergency happens-God forbid that it should ever happen in Australia-it will make sure that the radio requirements will not divert the pilot's attention from his main task and that is flying the aircraft? Senator GIETZELT —Senator Townley has asked me a question which clearly requires a response from the Minister for Aviation, not the Minister who represents him in this place. In view of the subject matter that Senator Townley has raised, I will be very happy to bring it to the attention of the Minister. Senator ZAKHAROV —Can the Minister representing the Minister for Aboriginal Affairs advise the Senate of any steps which have been taken to improve the health services to Aboriginal people suffering from trachoma? Senator RYAN —For some years now successive Commonwealth governments have supported the operation of specialist teams operating in those parts of Australia where Aborigines are most at risk from trachoma. The operations of this program have recently been reviewed and a report is now in the hands of the Minister for Aboriginal Affairs. The Department allocated $231,000 to the review exercise. It is gratifying to note from the report that the programs which have been operating for some years have had some effect in reducing the incidence of trachoma. Thus there is no intention on the part of this Government to decrease the efforts now being made. The Department has set aside $1m for 1985-86 for anti-trachoma activity and it hopes to see a similar rate of progress as that which has now been confirmed to have taken place in the past few years. Senator TEAGUE —My question is directed to the Minister representing the Prime Minister and the Minister Assisting the Prime Minister for Youth Affairs. Has the Prime Minister totally withdrawn Commonwealth financial support for the Ausflag '88 campaign to involve children in schools in a new flag competition? The postage bill for this campaign is being paid from grants given through the Prime Minister's Office of Youth Affairs. How is it that the Prime Minister is involved in the injection of political controversy into Australian schools, against the wishes of most schools and most parents-an intolerable situation? Indeed, how is it that the decision was made to fund Ausflag '88 at all? Finally, does it take the decision of the third State government-first the governments of Queensland and Tasmania and now the Labor Government of Western Australia announced yesterday by the Western Australian Minister for Education, Mr Pearce, to ban this campaign from schools, to induce the Prime Minister to withdraw the Commonwealth's support? Senator BUTTON —I am not fully familiar with the facts relating to the alleged funding or otherwise of postage for Ausflag. I have sent it a bit of money myself, but that is a very personal preference. I will deal with the other issues, the rhetorical issues, in the context of answering the question about the facts as soon as possible. Senator WALSH(Western Australia-Minister for Finance) —by leave-I wish to make a personal explanation. It is rather lengthy and I will seek leave in a moment to have it incorporated in Hansard. If I can just give the background, there is a story in today's Canberra Times regarding an answer to a question yesterday about public servants who had worked for Ministers and then been reintegrated into the Public Service. I would not normally bother to correct a misreport and misquotation, as this is, but it reflects also upon members of the Public Service committee which reviewed this matter. I should have given Senator Chaney a copy of this document before. It is not contentious in a political sense. I seek leave to have it incorporated in Hansard. Leave granted. The document read as follows- I refer to an article in today's Canberra Times, headed ``Walsh defends PS Parachute Promotions'' by Debbie Cameron. This story purports to report on an answer I gave yesterday in the Senate to a question asked by Senator Crowley. It comprises six paragraphs. Four of these paragraphs contain major errors. According to paragraph one I ``defended'' ``parachute promotions the quick drop by public servants from Parliament House into highly paid departmental jobs''. According to the second paragraph I said that ``public servants seconded to work under the Member of Parliament Staff Act were entitled to be elevated when they returned to their old departments''. Both these assertions are false. In no way could my answer to Senator Crowley's question be fairly interpreted along the lines of this report. What I did do was to describe the process of reintegration into the public service of officers returning after they had worked for a period with Members of the House of Representatives or Senators. I pointed out some of the details of the reintegration process which I thought it was known by now are prescribed in legislation. I also pointed out that the reintegration processes are designed to ensure that public service officers returning to the service after a period on the staff of MPs or Senators are not disadvantaged in their subsequent careers, and that they cannot be subject to any political interference. The Canberra Times report does quote my comments on these specific points. However, to suggest that I defended ``parachute promotions'', is misleading to the point of dishonesty, especially when I pointed out yesterday that a similar phrase was one used by Mr Alexander Downer in his press statement of 4 August. The Canberra Times report also claims that I `fired a parting shot at the Opposition spokesman on Finance and Taxation, Senator Messner.' That is an unfounded and false claim. What I did do was describe some of the details of the reintegration into the public service of a former staff member of Senator Messner. I did so simply to demonstrate that allegations by Mr Downer which amounted to claims of political favouritism and interference in the reintegration process of former Ministerial staff members were false. I want to make it quite clear that I did not suggest and I do not suggest Senator Messner was in any way associated with any of Mr Downer's allegations, or that he was in any way involved in any improper way in the reintegration of his former staff member. Finally, and most seriously, the last paragraph of the Canberra Times story purports to quote me as saying the following: `the public service officers who serve on the reintegration committee were apparently not at all disturbed by the case concerning Senator Messner's office'. What I actually said-and I understand that the reporter had a copy of the Hansard transcript of my comments-was the following: `Yet Mr Downer, who saw fit to smear quite improperly both Ms Moustafine and the public service officers who served on the reintegration committee, was apparently not at all disturbed by the case concerning Senator Messner's office'. In other words, the mis-report of my quote was both substantially inaccurate and thoroughly misleading. I cast no such reflections on the public service officers involved, nor would it have been proper for me to do so. In my view, this newspaper report is wildly inaccurate and misleading. It also wrongly and improperly reflects on both the members of the Reintegration Assessment Committee and those public service officers who have been reintegrated into the service as a result of the Committee's deliberations. For my own part, I intend to take this report up with the Press Council. I believe that, at the very least, the Canberra Times ought to print a correction and an apology to the public servants who were subject to this dishonourable report. The PRESIDENT —On 29 May 1985 the Senate passed a resolution directing that counsel be briefed to seek leave to appear on behalf of the President of the Senate at the 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. The resolution also required counsel to seek leave to withdraw thereafter and take no further part in the trial proceedings. In accordance with the resolution, counsel were briefed and successfully sought leave to appear at a pre-trial hearing of the Supreme Court of New South Wales on 3 and 4 June 1985 in the proceedings relating to Mr Justice Murphy. On my instructions, counsel made oral submissions to the effect that the law of parliamentary privilege prevented the cross-examination of witnesses or the accused on evidence which they gave to parliamentary committees. Counsel for the prosecution and the defence made contrary submissions on the matter. On 5 June 1985 the judge in the proceedings, His Honour Mr Justice Cantor, gave a judgment to the effect that the cross-examination of a person on evidence given by that person before a parliamentary committee does not necessarily breach article 9 of the Bill of Rights in its application to the Houses of the Australian Parliament under section 49 of the Constitution. Subsequently, witnesses and the accused were cross-examined on oral and documentary evidence which they gave to Senate committees, including evidence given in camera and not published, and submissions were made by counsel on that cross-examination. Bearing in mind the Senate's resolution, I nonetheless gave consideration to having Mr Justice Cantor's judgment tested in the High Court of Australia, but decided not to do so because of the disruption which would be caused to the trial of Mr Justice Murphy, which was to proceed immediately after the pre-trial hearing. Certain questions of law arising in the trial were reserved for decision by the High Court, including questions relating to the cross-examination of the accused on a written statement which he submitted to a Senate committee. I arranged for counsel to seek leave to appear before the High Court in relation to the relevant questions, but the High Court considered only two constitutional questions and remitted all other questions of law to the Supreme Court of New South Wales. On 5 September 1985, in accordance with the Senate's resolution, counsel briefed on my instructions successfully sought leave to appear at a pre-trial hearing in the Supreme Court of New South Wales in the proceedings relating to Judge Foord, and made written and oral submissions to the effect that Mr Justice Cantor's judgment was not in accordance with the proper interpretation of the Bill of Rights and should not be followed. The judge in those proceedings, His Honour Mr Justice Maxwell, without giving reasons, indicated that he intended to follow Mr Justice Cantor's judgment. I now present to the Senate the following documents: Transcript of the proceedings in the Supreme Court of New South Wales on 3 and 4 June 1985; judgment of Mr Justice Cantor, 5 June 1985; written submissions made on my instructions to the Supreme Court of New South Wales on 5 September 1985; and the transcript of the proceedings in the Supreme Court of New South Wales on 5 September 1985. Copies of these documents are available from the Senate Records Office. It should be noted that the court transcripts contain inaccuracies. I commend the reading of these documents to honourable senators, particularly the written submissions which were made on my instructions on 5 September. I draw the attention of the Senate to Mr Justice Cantor's judgment, particularly because, if it is accepted, it will mean that persons who give evidence before, or make submissions to, parliamentary committees may be cross-examined on that evidence in subsequent court proceedings, which until now has been thought to be prohibited by the law of parliamentary privilege. The judgment and the subsequent conduct of the proceedings before Mr Justice Cantor also appear to indicate that evidence or documents given by a person to a parliamentary committee, including unpublished evidence given during in camera proceedings, may subsequently be used against that person through cross-examination in criminal proceedings in which that person is the defendant. This would appear to be a complete repudiation of article 9 of the Bill of Rights. Since the judgment draws no distinction between witnesses and members of parliament, and as there is no rationale suggested in the judgment for any such distinction, it would also appear that members of parliament could be cross-examined in court on their parliamentary speeches and could have their parliamentary speeches used against them through cross-examination in subsequent criminal proceedings. It could be that even their contributions to in camera meetings of committees might be so treated. I therefore regard the judgment as having a serious impact on the freedom of speech in Parliament, a view with which Mr Speaker has indicated his agreement. For that reason I felt that I should make this report to the Senate. I will be giving consideration to what further action might be taken in relation to this matter. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(3.9) —by leave-I move: That the Senate take note of the statement. I express my thanks and no doubt those of the Senate to you, Mr President, for making the report in the terms in which you have. Secondly, I express my support, and I believe again the support of all honourable senators in this chamber, for the action you have taken procedurally in order to have these matters aired before the courts in the difficult circumstances that have prevailed. Thirdly, I simply express my agreement with the view expressed by you that the issues raised in this matter and in particular by the Cantor judgment are serious ones that manifestly require further consideration. I would not wish to be taken personally as necessarily endorsing every argument and every possible interpretation of the reach of article 9 of the Bill of Rights that was put forward by counsel for the Senate in the various proceedings to which you, Mr President, have referred. However, I take the view, which again I believe would be shared by most, if not all, honourable senators in this place, that article 9 of the Bill of Rights is and must be a very wide-ranging protection for parliamentary proceedings and affords greater protection to witnesses in parliamentary proceedings than His Honour Mr Justice Cantor seems to have allowed in his judgment, quite apart from the question, not addressed in his judgment, of the extent to which members of parliament themselves can be cross-examined on the basis of their contributions to parliamentary proceedings. My personal view, for what it is worth, is that the immunity of parliamentary proceedings from scrutiny in court proceedings is not absolute and that it would certainly be permissible to put in evidence before a court what was said in evidence in an earlier parliamentary committee proceeding, but only subject to certain very narrow conditions. My view would be that such evidence would be permissible only on the basis that that material is used in a very limited way; for example, as a basis for comparing the content of other statements and is not itself directly challenged, impugned or made the subject of exploratory cross-examination. There seem to be very great difficulties that flow from opening up statements of witnesses in parliamentary committee hearings to the kind of wide ranging cross-examination that was in fact endorsed by Mr Justice Cantor. I say that with a full appreciation of the manifest practical difficulties in the conduct of a trial which undoubtedly would arise if a more extensive view of the protection of article 9 were in fact endorsed. Senator Chipp —But did not this judge to some extent allow that to happen? Senator GARETH EVANS —What to happen? Senator Chipp —What you just outlined. Senator GARETH EVANS —He did allow substantial cross-examination to occur. What I am saying is that that is what creates very great difficulties. I think it is possible to put material in from parliamentary proceedings as evidence of what was said and to use that, for example, as a basis for comparison of what is said on some other occasion in order to impugn, perhaps, the credit of the witness in relation to what was said on that other occasion. But once we start going behind that which was said in the parliamentary proceeding itself-once we try to test and impugn that-there could be a very substantial erosion of article 9. Mr President, this is a complex issue. I do not honestly think it is appropriate for us to debate the merits of the Cantor judgment backwards and forwards in this Parliament at this stage. Senator Chaney —It is all subject to appeal, is it not? Senator GARETH EVANS —To the extent that questions of law are involved in relation to the treatment of the parliamentary proceedings, it is indeed the subject of appeal. For that reason, if for no other, I think any kind of full scale debate or any attempted resolution of this matter as distinct from just drawing it to each other's attention would be premature at this stage. I simply repeat, in winding up, that I support the President in his undertaking to consider the matter further. I would expect that we would, and, indeed, should, appropriately debate this matter later in the light of that further consideration by the President and any further report or recommendations as to an appropriate course of action that might be made by him. Senator DURACK(Western Australia)(3.13) —Mr President, I support the motion that has been moved by Senator Evans, who represents the Attorney-General in this place, that the Senate take note of the statement and the documents that you have tabled with it. I express the complete satisfaction of the Opposition with the way in which you have handled this matter. From the very beginning it has been, and remains, a very sensitive and very difficult issue as a matter of law for the Senate and for the Parliament. Mr President, I think you took a very wise course of action to engage representatives of the Government, the Opposition and the Australian Democrats in private discussion with you about the steps that should be taken. This action prevented a full scale and quite inappropriate debate taking place in this Senate on what was then a very difficult time with the trial of Mr Justice Murphy coming up early in June. Despite that trial having concluded and in view of the appeals that are on foot, it is clear that it is still a most inappropriate moment for the Senate to debate these issues. However, further steps will have to be taken from time to time and it may be desirable to continue the private discussions that have been held with you on an all-party basis. Certainly the Opposition will be happy to co-operate in those discussions. Mr President, the statements that you have made as to the implications of Mr Justice Cantor's judgment certainly are ones with which I entirely agree. Despite the qualifications expressed by Senator Evans, I take it that he also would agree that, of course, there are enormous implications in this judgment as far as members of parliament themselves are concerned. So it is not just a question of witnesses who appear before parliamentary committees. Important as they and their rights are, this judgment has very grave implications for what we all hitherto understood to be the rights of free speech of members of parliament. Therefore, if Mr Justice Cantor's judgment stands, clearly both Houses of Parliament will have to give the most major and urgent consideration to that question, apart altogether from the question of witnesses. I have some very firm views about the judgment of Mr Justice Cantor, but I do not propose to express them here. I think I must be on record as saying that I do not agree with the qualifications that Senator Evans has expressed in relation to the application of a Bill of Rights which has been the subject of a good deal of debate and discussion in the past. I just put on record that I do not accept what he said. Of course, this matter also has to be one for very considerable discussion in the future. The question of witnesses, though perhaps not as important as the rights of members themselves, is a very important issue for the future in case circumstances such as those which have been outlined ever arise again. This question may well have to be resolved by Parliament even if in the end the problem about the way in which the Bill of Rights applies to members of parliament does not need further consideration by Parliament or legislative action. Senator Chipp —If a Supreme Court judge can talk about our privileges, why can't we talk about his views on our privileges? Why should we inhibit ourselves when an obscure Supreme Court judge can say what he likes? Senator DURACK —If the Senate resolves to debate the matter, I will certainly be a very willing participant in that debate. However, I just do not see the purpose or wisdom of debating this subject at all at the moment. I think there is much more at stake in debating this matter here at the moment than simply saying whether we agree or disagree with Mr Justice Cantor. All I am saying is-and I understand that Senator Evans is saying the same thing-that such important matters are raised by the judgment of Mr Justice Cantor that we must give very serious consideration to it. Of course, this matter will be debated here in due course. I think there is no reason why we should not privately be giving a lot of consideration to these matters while the proceedings are still continuing. That brings me to the other point that I wish to make, namely, further representation of the Senate. Mr President, you may want to discuss this matter further privately but I would strongly support the continued representation of the Senate and submission along the lines that Mr Simos has already made. I think I ought to take the opportunity of also expressing the satisfaction that the Opposition and I have with the way in which Mr Simos has conducted this very difficult brief. Mr Simos had the opportunity of hearing Senator Evans's views. I think he has had a difficult task in making sure that he represents the spectrum of views on this subject. I think he has achieved that. This is a sensitive problem for Mr Simos as well. I hope that he or some counsel of equal standing will continue to represent the Senate at the appeal process which will be taking place in the Supreme Court of New South Wales and will seek to make those submissions. Of course, I am sure that he will be heard by that court. We do not know whether the appeal process will go further but, of course, the Opposition and I hold the same views with regards to representation during the whole of the appeal process. I think I have already expressed my views about the future in answer to the interjection by Senator Chipp. It is clearly a matter to which all honourable senators should be giving serious consideration now, substantially in private discussions amongst ourselves, in our parties and perhaps between yourself, Mr President, and representatives of the parties as has occurred in the past. We already have a very valuable report from the Joint Select Committee on Parliamentary Privilege before us. There is other material, including a private members Bill which is on the table. The problem we now face is one which demands urgent attention and we will have the assistance of the work that has already been done. Senator HAINES(South Australia)(3.22) —Mr President, I begin by endorsing the comments made by Senator Durack commending you for the actions you have taken and the attempts you have made in the past few months to protect the traditional privileges of the Senate and the Parliament as a whole. I have worked fairly closely with you for some time. You undertook with tremendous dignity and great impartiality what was essentially a difficult task for you personally and a sensitive task politically. For that the Senate should thank you most sincerely. Like Senator Durack, I do not want to debate the decision made by Mr Justice Cantor. However, you raise in your statement some fairly massive questions with regard to privilege and you comment that, essentially, there has been placed in jeopardy the protection of witnesses at what the Senate could certainly regard as a valuable contribution to the parliamentary process, that is appearances at committee hearings. That decision has also placed in question the protection of the rights of honourable members and senators with regard to what we say in this place. In fact it raises the whole problem of the possible denial of parliamentary privilege. Senator Durack said towards the end of his comments that there is some urgency in the steps that we must now take. It may well be that ultimately this place-and quite soon I would hope-decides to refer this whole matter to the Privileges Committee or to expedite legislation to correct what appears to be a quite untenable position that we now find ourselves in. It is ironic that the reason the Senate established the second inquiry in the form that it did was that the Government would not legislate or introduce the necessary legislation to protect witnesses appearing before the impartial inquiry that some of us in this place first wanted. To then find that the evidence of people making submissions to the Committee was not granted the privilege that we had assumed it would be given is, indeed, ironic. Therefore, I conclude by saying that I certainly endorse your comment that you regard the judgment as having a serious impact on the freedom of speech of honourable members and senators and I am pleased that the Speaker in the House of Representatives has agreed with you. I can only repeat that it is a matter of urgency that some steps, whether it be reference to the Privileges Committee or action through legislation, must be taken fairly soon or members will find themselves in a most awkward position when it comes to making comments from the floor of this chamber and in the other place. Senator MISSEN(Victoria)(3.24) —Mr President, I think it is time we shed some of the rubbish which has been said today and expressed this matter as it is. I have seen how Senator Evans has slid away from the proposition he originally argued. He has changed it. Senator Durack finds it very embarrassing to address the issue and does not want to do so. Senator Haines does not want to do so. Frankly, I think it is high time we talked about the way this Senate is falling into disrepute in the public eye because of the way it is pushing-mainly through the Clerks in this chamber-a view which is not the view held by learned judges of the New South Wales court or many other people. Let me remind honourable senators of the people who do not hold the view which is cosily held by the leaders of the parties in this chamber. There is Mr Temby, who makes it clear that he holds the view that it was within the power of the Senate to allow the petition to be granted that sought access to the evidence and that it should have allowed it to be granted. That is the view, likewise, of counsel who appeared before Mr Judge Cantor, counsel for both parties-the people who were concerned with the matter. I will not go into detail about those matters because I recognise that they are matters of appeal. However, that will not stop me talking about the central matter which is in issue before us today. Both those counsel took a view-- Senator Haines —Protection of witnesses-is that not the central issue? Senator MISSEN —You are concerned, Senator-- The PRESIDENT —Order! The honourable senator will address his remarks through the Chair. Senator MISSEN —The senator finished on the note of fear of difficulties to which some senators might be caused. I will come to that. She is not so concerned about witnesses-she is concerned that she might be affected. I want to reassure her about that because in the judgment it is clear-this is one of the things I want to start with, and in no way is it a criticism of you, Mr President-that this is the result of a constant propaganda campaign by Clerks of this Parliament who held the view, honestly and sincerely, that the power was as was thought by learned luminaries like Senator Evans and Senator Durack and which we now find, to our horror apparently, is no longer the situation. Senator Durack —What about legal privilege? Is that going to be swept away? Senator MISSEN —Senator Durack should not try to change the subject. He would not even talk on this subject, so I am not going to change it to something else. I am going to talk about this subject alone. I have read many times what is said-- Senator Haines —What are you going to do? Are you in favour of selective privilege? Senator MISSEN —Senator Haines will not silence me. She should not worry, I will keep on talking until I have said what I have got to say. The opinions which are expressed in the statement by the President we have seen very often in the statements put out by the Clerks in the last few months. Senator Haines —Does that make them wrong? Senator MISSEN —It does not make them wrong, but honourable senators should make the decisions and not the Clerks in this chamber. We are concerned with the good name of this Senate and we are concerned to know about what is happening. Senator Haines —I am making my own decisions. Senator MISSEN —I hope you are. I hope the Australian Democrats are making an honest decision. I hope the Democrats are trying to keep people honest in this chamber because I do not see it happening in this particular debate at all. Let me look at the statement of the President. It contains some crucial remarks. He said: I draw the attention of the Senate to Mr Justice Cantor's judgment, particularly because, if it is accepted, it will mean-- Why should we not accept what is decided by a court of law- that persons who give evidence before, or make submissions to, parliamentary committees may be cross- examined on that evidence in subsequent court proceedings, which until now had been thought to be prohibited by the law of parliamentary privilege. That was thought by some people in this chamber-not by Senator Cooney, Senator Georges, or many of my colleagues who were, perhaps, a little timid and did not get up in this debate earlier but who, I hope, will do so when the debate ultimately comes on again. The President continued: The judgment and the subsequent conduct of the proceedings before Mr Justice Cantor also appear to indicate that evidence or documents given by a person to a parliamentary committee, including unpublished evidence given during in camera proceedings, may subsequently be used against that person through cross-examination in criminal proceedings in which that person is the defendant. That is right. The statement continues: This would appear to be a complete repudiation of article 9 of the Bill of Rights. That is a complete repudiation of what the judge has said. The judge said that he would comply with article 9. He took a proper definition of article 9 and he said that it did not, in fact, include the wide definitions and wide interpretations which our Senate representatives had put forward. Why do we say it is a complete repudiation when the judge makes it clear that he was enforcing that particular article? The President then went on to say: Since the judgment draws no distinction between witnesses and members of Parliament, and as there is no rationale suggested in the judgment for any such distinction, it would also appear that members of Parliament could be cross-examined in court on their parliamentary speeches and could have their parliamentary speeches used against them through cross-examination in subsequent criminal proceedings. That is the sort of thing which upsets Senator Haines. She fears that this might be so. That is just not true. That is not a correct interpretation of the judgment. If we look at Mr Justice Cantor's judgment we will find that he referred specifically to this distinction. At page 4 of the judgment Mr Justice Cantor referred to Henning and Anor v. Ausn Consolidated Press Ltd, a defamation case which followed that of Uren v. John Fairfax and Sons Ltd. I will not give the references to those cases. Begg J. held in the defamation action of Henning and Anor v. Ausn Consolidated Press Ltd: . . . that to prove as a matter of fact that speeches were made in the House of Representatives would not involve a breach of the privilege of Parliament. Hunt J's decision was that a Hansard report is admissible in evidence to prove what a person said in Parliament and its tender does not constitute a breach of parliamentary privilege. He said `Parliamentary privilege is properly invoked to prevent any inquiry into the motives or intentions of members of Parliament in relation to anything they said or did in Parliament . . . but that principle . . . has nothing to do with the case where all that a copy of Hansard is tendered to prove was the very fact that it proclaimed to the world, namely the particular statement had been made by a particular member of Parliament.' It is made specific and clear that it is not a case of looking into the motives and intentions of members of Parliament. This is a different matter altogether. It involves the right of people to bring forward statements made in Parliament and to have them tested to determine whether people's recollections are different and whether, when appearing before a court, they are giving different evidence. This is a fundamental right of a defendant. It is more important than Senator Haines's privileges. That right is even more important than the possible embarrassment of a witness. It is more important that a defendant should have the right to have the matter considered and to be able to test the truth or otherwise of evidence. On the following page of the judgment Mr Justice Cantor refers to Comalco v. The Australian Broadcasting Commission over which Blackburn J. presided. Justice Cantor stated: A copy of Hansard was tendered to prove that a member of the Queensland Parliament made a certain statement in that House. The evidence was admitted. Blackburn, C. J., expressed the view, with which I am inclined to agree, that there is no rule of evidence that evidence of the proceedings in a Parliament is not admissible except with the consent of Parliament. Mr Justice Cantor, in this excellent judgment, goes on to talk about that matter. I suppose I think it is an excellent judgment because it happens to be what Senator Cooney, Senator Georges and I have said all along. Apart from that the judgment refers to the authorities and proves that the wide interpretation taken by the Senate is false and one which should not be taken. The judgment continued as to whether what takes place in Parliament can be impeached or questioned. Mr Justice Cantor stated: The word `impeached' would include affected prejudicially, hurt, impaired, challenged, attacked, discredited or disparaged. Senator Gareth Evans —But what is the test of adverse effect? That is what is left up in the air. Does it necessarily follow that cross-examining a member of parliament in relation to what is said is an adverse effect on Parliament? Senator MISSEN —Mr Justice Cantor said earlier in his judgment that a member's motives shall not be questioned. That was his first point. Secondly, Mr Justice Cantor said that Article 9 of the Bill of Rights merely means that one cannot question or impeach in this way. There has to be some intention to disrupt or destroy the evidence and the validity of the parliamentary statement. Mr Justice Cantor gives the example which Senator Cooney and I have used. He says that every day the Press says that so and so has said something stupid in Parliament. Why is the Press not up for contempt for saying that? Because it is not a questioning in a sensible sense. Therefore, the judge was perfectly right. He has been supported in exactly the same way by Mr Justice Maxwell, who has said that indeed there is no need to take this wide interpretation. The Senate has been shown by these judges to be wrong. We know we have been heavily criticised round the country for taking this cosy attitude in relation to the protection of our privileges and for sparing our witnesses from being criticised elsewhere. This Parliament should be more concerned with the rights of defendants and with the rights of people who want to check evidence given. We should be more concerned that people, whether rightly or with bad motives or whatever, can give such evidence before a court. We have had a lot of evidence and a lot of cases relevant to this matter of privilege. We have had a lot of instances of people appearing before committees of this Parliament and then appearing before the courts of this land. The courts should not be denied the opportunity of testing the evidence. The very idea that we should now try retrospectively to change the law to what some honourable senators thought it was is an outrage. I would oppose that vehemently. Senator Macklin of the Australian Democrats has had the cheek to bring this forward in the form of a Bill. I gather that we cannot discuss the Bill, but the Bill is for the purpose of trying to reverse the law. Its purpose is to tell the judges that they are wrong. I think that is an outrage. Let me remind honourable senators- Senator Haines —What is wrong with reversing a bad law if that is in fact what we are doing? Senator MISSEN —Senator Haines has said it is a bad law. Senator Haines does not like such a law because it happens to interfere with her privileges. I think the members of the public will think very carefully before they let us change the law to suit our convenience. Senator Haines —And the witnesses' privileges. Senator MISSEN —Be quiet, Senator Haines; you talk like a jackass. The PRESIDENT —Order! I ask the honourable senator to address his remarks through the Chair. Senator MISSEN —I am sorry, Mr President. I should not say such things because I am a member of the Australian Conservation Foundation and a number of animal welfare organisations. I refer honourable senators to the New South Wales Council of Civil Liberties, one of the organisations which have shown very considerable interest in this matter. Unfortunately, members of our Press have disappeared today; they are not interested in this matter. The Council stated in relation to our first action-not our last action-in interfering in court proceedings: The Council strenuously objects to the interference by the Senate in the course of the proceedings for the committals of Lionel Keith Murphy and John Foord. The Council does not believe that the arguments of law proposed by Senators Evans and Durack have any validity and is astonished that the Senate should refuse petitions for leave to use evidence given before a Senate committee for the purpose of testing the testimony of witnesses in criminal proceedings. The council believes that it is not only an abuse of privilege to so interfere in those or any other criminal proceedings, but it is a denial to both the prosecution and defence of due process rights. Both the prosecution and the defence in these cases complained that these matters should be brought before the criminal courts. We sought to deny that. I thought it was a disgrace. If we go further and try to change the law to suit the injured pride of some honourable senators, I think we will rue the day we do it . The PRESIDENT —I simply respond to Senator Missen's remarks about the Clerks by saying that the submission to the court was made on my behalf and the decision to be represented was taken by me after discussion with representatives of the political parties in this House. I do not try to shelter behind the robes of the Clerks, who naturally are not able to speak for themselves in this House. Whilst Senator Missen clearly is entitled to make his comments, I must come to the defence of my advisers and say that if there is to be any criticism it is to be made of me and not of them. The Clerks have been giving me advice based on the long held beliefs of parliarmentary privilege so far as the parliamentary institution itself is concerned. Senator CHIPP(Victoria-Leader of the Australian Democrats)(3.38) —Mr President, I dissociate myself and my Party from Senator Missen's attack on the Clerks of the chamber. I totally support what you have just said about them. I join Senator Haines, Senator Durack and Senator Gareth Evans in complimenting you on the action you have taken. I enter the debate very briefly simply to explain an interjection I made during the speech of Senator Durack which he was good enough to answer. As a Victorian non-laywer I asked why an obscure Supreme Court judge should be able to put in doubt overnight a tradition or a convention held for centuries and then this Parliament not be able to debate it. I find some injustice or something silly about that. When I used the word `obscure' about the judge in mind I was not in any way being offensive. I was saying simply that the think seemed to be totally out of balance. The more I hear Senator Missen speak on this matter the more persuaded I am as to the justification for my interjection and my concern and the more persuaded I am that, notwithstanding events before the appeal court at the moment, this Senate ought to give urgent consideration to Senator Macklin's Bill, which will enshrine in law what has been the convention for centuries. I find it absolutely amazing that Senator Missen is saying it is a shocking thing to amend the law simply because we think it is wrong. I find that an incredible proposition. That is what we are here for all the time. I would have thought that one of the functions of Parliament was to correct laws which are found to be faulty or bad. Having been a member of several parliamentary committees in my career, I view this statement by you, Mr President, as very disturbing: The judgment and the subsequent conduct of the proceedings before Mr Justice Cantor also appear to indicate that evidence or documents given by a person to a parliamentary committee, including unpublished evidence given during in camera proceedings, may subsequently be used against that person through cross-examination in criminal proceedings in which that person is the defendant. Senator Missen, as is his wont-I commend him for it-came to the aid of the underdog in this respect. Surely a person who has the guts to attend voluntarily a Senate committee to give evidence should not be put in jeopardy by finding that he has no protection before a court of law before which he might be a defendant. If Senator Missen says that that is the law and it should not be amended, I find myself totally at variance with his views. In conclusion, I repeat what was contained in my interjection on Senator Durack, to which he generously responded; that is, I hope there may be some way in which this matter can be referred to the Privileges Committee or some other committee in the meantime so the work can proceed within this Parliament to correct the kind of apprehension that you, Mr President, quite rightly and properly, on the advice of your Clerks, made in your report. Debate (on motion by Senator Robertson) adjourned. The PRESIDENT —I inform the Senate that I have received the following letter, dated 11 September, from Senator Short: Dear Mr President, Pursuant to Standing Order 64, I give notice that today I propose to move- `That, in the opinion of the Senate, the following is a matter of urgency: The actions of those militant unionists whose defiance of decisions of the Conciliation and Arbitration Commission may force the Dollar Sweets Co. Pty Ltd into closing its operations in Australia, and the necessity for the Government to take urgent action to have the dispute resolved.' Yours sincerely, JIM SHORT Senator for the State of Victoria Is the proposal supported? More than the number of senators required by the Standing Orders having risen in their places- Senator SHORT(Victoria)(3.43) — I move: That, in the opinion of the Senate, the following is a matter of urgency: The actions of those militant unionists whose defiance of decisions of the Conciliation and Arbitration Commission may force the Dollar Sweets Co. Pty Ltd into closing its operations in Australia, and the necessity for the Government to take urgent action to have the dispute resolved. This motion deals with an industrial dispute which is now into its seventy-second day. It is a dispute which principally involves the Dollar Sweets Co. Pty Ltd, a small business in Melbourne, and a small and extremely militant union, the Federated Confectioners Association of Australia. But it is a dispute which goes much deeper than this. It is a dispute which could escalate to involve other firms and industries. It could undermine the authority of the Australian Conciliation and Arbitration Commission and it could destroy the wage fixing principles agreed between the Government and the Australian Council of Trade Unions. But the dispute has an additional element to it which could set it aside for record in the history books of this country, and that element is the lawlessness with which it is being conducted by the union and the terrorism which it is bringing into the industrial affairs of our nation. What is happening in this dispute is foreign to everything we care about and stand for in Australia. The union's actions have to stop, or be stopped. Neither the Government, the Australian community nor the trade union movement itself can afford to tolerate any longer the acts of thuggery, lawlessness and terrorism that are occurring. I will come to a detailing of some of these matters in a moment. Before I do I stress that this urgency motion, and what I and other Opposition speakers will say today, is in no way aimed as a union-bashing exercise. It is, indeed, the contrary. The trade union movement in Australia has a long, and generally proud, history. It has won for itself and its members many important rights. It will continue to have an important role to play within Australia's institutional environment. But along with the rights of trade unions, so too are there responsibilities. Those responsibilities include acting in a civilised manner within the rule of law. What we have with the Dollar Sweets dispute is an abrogation of trade union responsibilities by a few militant unionists belonging to a small extreme left wing union, the Federated Confectioners Association, or FCA. We are in danger of seeing other unions become involved, notably the extreme left wing Food Preservers Union of Australia. Let me outline the background to the dispute. The company involved is Dollar Sweets Co. Pty Ltd. It is a small family owned business. It employs 27 people and it operates in the Melbourne suburb of Glen Iris. The company has been in business in Australia for almost 40 years. The owners, the Stauders, are fourth generation confectionery manufacturers, bringing their skills to Australia from Austria. The company is best known for its production of hundreds and thousands, to which millions of Australians were introduced as young children. The company's 27 employees were all members of the Federated Confectioners Association. Until relatively recently relations between the owners and employees were excellent. The FCA has about 2,600 members in Victoria, all of them in the confectionery industry. The FCA is very closely linked to the much larger Food Preservers Union, of which the two best known members are Bill Hartley and Tom Ryan. In a speech in the adjournment debate in this place on 22 August 1985 I described in detail the relationship between the two unions and the apparent relationship between them and the Government of Colonel Gadaffi in Libya. I will not repeat those details today, other than to note that my calls for an inquiry into this serious matter have been totally ignored by the Government. The dispute between Dollar Sweets and the FCA was originally over a 36-hour week claim by the union. It has now widened. The origins of the 36-hour week issue go back to 1983. In November 1983 the union notified the Conciliation and Arbitration Commission of a dispute with Dollar Sweets over the 36-hour week campaign. The Union's claim was in contravention of the wage fixation principles established by the full bench of the Commission in September 1983. In his decision on the dispute, Commissioner Bain said on 6 December 1983: As to the matter of the union pursuing its claim for shorter hours, I point out that this Commission, through the principles laid down by my colleagues in the national wage case decision, has made its stand abundantly clear, and I stand four square behind those principles . . . I suggest the union take a good hard look at where it stands in this regard. Only two unions refused in 1983 to give undertakings that they would not pursue claims for wages and conditions, except in accordance with the wage fixation guidelines, until October 1985. The two unions were the Food Preservers Union and the FCA. However, the employees at Dollar Sweets, although members of the FCA, did give a written commitment in November 1983 to observe the wage fixation principles. The FCA itself followed suit on 26 September 1984. The FCA gave a written commitment on 26 September 1984 not to pursue a 36-hour week claim because the wage fixation principles do not provide for reductions in weekly hours of work below 38 hours. The employees at Dollar Sweets work 38 hours, even though their award stipulates 40 hours. There the matter rested until 20 May 1985, when FCA union officials convened a meeting with the Dollar Sweets management and demanded a 36-hour working week for employees of the company who were FCA members. The management refused this demand because it contravened the written undertaking the union had given in September 1984 and the agreement reached between the company and its employees on 26 November 1983. On 27 June, 4 July and 8 July this year, FCA officials held meetings with the company's employee's over the matter. Following the last meeting the employees went on strike. On 9 July the company notified the dispute to the Australian Conciliation and Arbitration Commission. In Commissioner Bain's decision of 15 July he said: In December 1983 I made certain very strong recommendations to the union, arising out of which they consulted with the ACTU and subsequently came before the Commission giving an undertaking that made it possible to process their award with regard to the indexation increases through the national wage . . . I would strongly recommend again to the union that no further industrial action should take place. The union ignored this recommendation and the strike continued. On 18 July, Dollar Sweets advised its 27 employees that they would be dismissed on 24 July-it gave them a week to think about it-if they were not prepared to agree to work in accordance with the customary terms of their employment. Twelve of them agreed to do so. The other 15 were dismissed and their positions filled from among the several hundred applicants who replied to an employment advertisement by the company. A picket line was imposed by the union at Dollar Sweets on 22 July. This picket line has not been officially sanctioned by the Victorian Trades Hall Council. The period since 22 July has been marked by violence, thuggery and lawlessness. A fire occurred at the factory-almost certainly arson. A bomb threat was received. There have been threats of violence against the owner, his wife and children. Members of the picket line severed telephone and telex services to the company after purchasing bolt cutters from a nearby hardware store. Senator Robert Ray —How come the police don't know that? Senator SHORT —The police are investigating it. I will come to the police and the police Minister in a moment. All the locks at the factory were rendered inoperative at very considerable cost to the company. Employees have been harassed at their homes. An employee of a taxi truck firm has been bashed by two members of the picket line. Police charges were subsequently laid against two individuals, including the union secretary Carlo Frizziero, who is due to appear in the Prahran Magistrates Court on 19 September. I understand that the union is planning a large, and possibily violent, demonstration at the court on that day. On at least one occasion police have been compelled to physically remove union officials obstructing and interfering with the carriage of goods by truck to and from the factory. As a direct consequence of this industrial lawlessness, the firm has had the insurance excess on its premises raised from $250 to $50,000. The insurance company has required that armed security be provided to the factory. The cost to the owner is $7,000 per week. The Minister for police in the Cain Government in Victoria, Mr Mathews, was made aware of all these facts on 27 August. Dollar Sweets sought additional police protection from the Minister-an understandable request, particularly given the precedent of the protection afforded during the Builders Labourers Federation obstruction of the establishment of lights at the Melbourne Cricket Ground. It was a perfectly reasonable request, given the cost being incurred by the company. Within 48 hours the Minister refused this request, despite the fact that investigating police had not even completed their report to the Minister on the recent violence at the factory. Not only that but, incredible as it may sound, the Cain Government actually made a $37,000 grant of taxpayers' money to the FCA in 1984 to help it expand its staff. The actions of the Federal Government have been similarly unhelpful, if not as wanton as those of the Cain Government. Although both the Prime Minister (Mr Hawke) and the Minister for Employment and Industrial Relations (Mr Willis) have expressed support for the management, they have done little or nothing to have the dispute resolved. The Leader of the Government in the Senate, Senator Button, admitted that he knew nothing about the dispute when I questioned him on it and sought his assistance in this chamber on 22 August, by which stage the dispute was two months old. The company advised the Minister for Communications (Mr Duffy) on 17 August that the telephone and telex connections had been sabotaged and that trade union action was preventing the restoration of these services. The company received no response from the Minister. It was only after I raised this aspect again at Question Time yesterday that any action at all was forthcoming. I am pleased to say that normal telephone services have now been restored-but no thanks to this Government. To top it all off, Senator Gareth Evans actually laughed-it is recorded in Hansard-and accused me of scuttle-butt and innuendo when I raised these matters in the Senate on 22 August. There is no scuttle-butt and no innuendo in any of these facts. These events have occurred, they are still occurring, and they are a blight on this nation. They do great disservice to the wider trade union movement. The actions of these militant unionists at Dollar Sweets must be stopped. The dispute is in defiance of the Conciliation and Arbitration Commission. It contravenes the wage fixation principles. The union's actions are alien to all that Australians stand for. If they are not stopped there is every risk that they will spread. If that happened our whole system of industrial law and order would be threatened. The consequences could extend even wider than that. As I said, the Federal Government has been very dilatory about the dispute at Dollar Sweets. The Prime Minister, Mr Willis, Mr Duffy and Senator Button collectively have much to answer for. Hopefully, it is not too late, but they must act forcefully and urgently because this matter is, as the Opposition has moved today, a matter of very considerable urgency, not just for one small company but for one large nation. Senator ROBERT RAY(Victoria)(3.59) —Senator Short began his speech by saying that he did not intend it to be a union bash. If that was not his intention it was a very novel speech from an honourable senator opposite. Not once have I heard Liberal Party members say that they support any industrial dispute. They all say: Yes, unions are a necessary and integral part of today's society. If a union leader has been dead for at least 20 years they will acknowledge what a wonderful old fellow he was, but I have never heard a Liberal come out and say that just one industrial dispute was justified. Traditionally and unfortunately, the Liberal Party has an obsession with industrial disputes. That is part of scapegoat politics. The Liberal Party needs something to hate. Most of the time its members hate each other, but when they can rise above that they need some common foe against which they can vent their hatred and try to rationalise their existence. We all know that apart from some ideological considerations the Liberal Party really does not have much philosophy. Therefore, what can bind its members together? The answer is simple-pick some group in society they can hate. Especially when they fail in government, when they have no political philosophy, when they have no economic management skills and when they have to explain why their record of economic management is so poor, the answer is simple-blame the unions. The Liberals when in government had an absolutely dreadful record in the field of industrial relations. In fact, they have never learnt to deal with unions, which is surprising to me. It was probably true to write 20 years ago that the Australian Labor Party was almost unable to deal with business and that the Liberals were unable to deal with unions. I think we have made strenuous efforts to try to understand the business community and its needs and to get on well with it. We do not always succeed, but we make the effort. On the other hand, the Liberal Party rarely makes the effort. It is very quick to condemn unions and to expose and attack them at all times. The attitude we have taken is to develop the accord and an industrial relations system which at this time is far better than anything that has preceded it. In some ways I pay Senator Short a compliment. The sorts of points he made were basically in support of the accord. He said that unions should not break ranks and break the principles of the accord. If that is what he is saying, I absolutely agree with him. When we came to office and put the accord in place the previous Government had left this country in a fairly severe mess. Unemployment was well over 10 per cent, we had double digit inflation at 11.1 per cent and economic growth was at minus 0.8 per cent. It occurred to us that unless all groups in society-the Government, the employers and the employees-got together we would not restore economic growth and the economy of this country. Therefore, from that emerged the accord. The old gloom and doom of the Fraser Government eventually evaporated. What is evident from the Opposition today is that the Liberals still suffer from some form of Liberal amnesia. I do not exempt Senator Short from this. Honourable senators opposite were in government from 1975 to 1983 when they had their chance to establish good industrial relations in this country, and they failed to do so. It is almost as though that era did not exist. It is almost as though Prime Minister Fraser never existed. I wonder where the Fraserites opposite are today? The two conservative people, who are so concerned about this issue that they have at least come into the chamber, were both members of the Government from 1975 to 1980. What did their Government do in that area? Did it solve all industrial disputes? The answer is no. The harder question is: Did it solve any industrial dispute? Probably the answer is no. We have established the accord and set many targets. Most of those targets have already been reached. Our first target was for increased employment. I think we have achieved record levels of employment. In the last 27 months 410,000 new jobs have been created. We are justifiably proud of that record. Essentially, a lot of the credit for that goes towards the development of the accord and good industrial relations in this country. The second commitment we gave was to decrease unemployment. Clearly, it has decreased from about 10.4 per cent to 8.2 per cent. Again, a government that is pledged to create jobs and to reduce unemployment will get a far more co-operative trade union movement than the old Fraser-type Government in which theory dominated all and it did not matter what happened in practice. Another improvement that came out of the accord was the improvement of the social wage by introducing Medicare, spending more on education, spending more on housing and improving the social security system, the union movement was interested in those sorts of developments. If one assists people in those ways they will not be as rapacious, as the honourable senator called them, in wage demands and industrial disputes. This Government has done so, much to the benefit of Australia. In the accord we promised to develop industry. There is no doubt that through Senator Button's Department of Industry, Technology and Commerce and other activities we have made major advances in that area. The key thing we promised was to improve economic growth. We have certainly done that. Even the Opposition acknowledges that, although it always puts up three or four reasons why economic growth has improved, none of which ever in any way acknowledges the activities of this Government. But we have had a 5 per cent economic growth rate in the two years in office and we have a further projected economic growth rate of 5 per cent in the current financial year. They are growth rates not matched by those of comparable countries such as the United Kingdom, France, Japan and Germany. Indeed, we will have a better economic growth rate this year than that of Singapore. That is rarely acknowledged by those opposite. But once we put that in place we will find that industrial relations problems are far easier to manage. Senator Short —Mr Deputy President, I raise a point of order. Not one word Senator Ray has said as yet bears any relationship to the motion before the Senate. It is a motion dealing with a specific dispute at a particular company and involving a particular union. I suggest that Senator Ray is not addressing his remarks to the motion at all. The DEPUTY PRESIDENT —The second part of the motion states: . . . the necessity for the government to take urgent action to have the dispute resolved. I have listened to Senator Ray's remarks. Although they are not directly related to the dispute they are generally related to the area of industrial relations and, therefore, are in order. Senator ROBERT RAY —As Sherlock Holmes once said to Dr Watson, it is a case of the dog that did not bark. Senator Short has raised one case. By putting the generality of how well industrial relations have worked in this country in the last 27 months we will establish that he is looking at the one aberration rather than the reality. By looking at just the one aberration the honourable senator is showing that he is a political isolationist with not much relevance to the current community debate. I will return to the general subject and be as relevant as I can. I would like to anticipate what sort of credibility those opposite would have if they were returned to government. Would we have any Dollar Sweets, Mudginberri or other disputes? Would it just be the new Camelot in which industrial relations were perfect? That is why I raised the record of the Fraser Government, and it was a pathetic record at that. We can look at how many work days were lost. Let us go back to one of the golden years of the Liberal Party-1981. Senator Short was not here at the time. Nevertheless, many Liberals would regard that as one of the golden years. In that year 4,192,000 work days were lost. Let us compare that to what happened in the last year for which there are statistics-1984-when only 1,302,500 days were lost in industrial disputes. That is the record-the number of work days lost has been reduced by something like 300 per cent in the current economic climate and the existing accord. We have to ask ourselves what would happen if the Liberals got into power, especially now that the new ideologues control the Liberal Party. For one thing, we can look overseas at some of their idols. We can look how well things are running in Britain under Margaret Thatcher who has taken on the unions time and again. There is lousy economic growth, high unemployment, a high inflation rate and, in spite of North Sea oil the country is going down the drain under Thatcherism, or the so-called dry philosophy that we hear of from time to time. The Liberals argue that if they are put back in power they will deregulate the labour market and allow the law of the jungle to take over. The Liberals are saying that militant or strong unions can do what they like. The Liberals are prepared to let those employees covered by weak or ineffective unions go down the plug hole and to let their standard of living drop in order to support profit levels or something else. If honourable senators opposite want to criticise a Labor government and its handling of industrial relations they have to come into the chamber and show that they can do better. There are two reasons why they will not-their quoted past record and their future proposals. Those future proposals in terms of industrial relations are an absolute disaster. I suggest that instead of sitting in this place maybe we should be generous, pair a few more liberals and send them to the Australian Council of Trade Unions congress so that they can meet some trade unionists and understand what their problems are and how they will deal with them now and into the future. But no, the Liberal Party prefers to use as scapegoats the union movement to blame for its own inadequacies. Senator Short raised a few matters. He said that two of the unionists involved happened to be prominent members of the Left. I also notice that the main adversary, Mr Mulcahy, who runs for the employers, founded the Socialist Left in Tasmania in 1972. It may be a case of old extremists falling out. I have never supported any of the people who were mentioned, employer or employee. Senator Short alleged that there have been bomb threats, a fire and intimidation and that telephone lines have been cut. He raised all those issues. That would never be a proper industrial tactic that we on this side would support. In no way could this Government ever support those activities if indeed those on the picket line were charged. He mentioned only one set of charges and, for obvious reasons, I should not explore them. But if it can be proved that people on the picket line were guilty of those offences, we as a government will condemn them and they will go the normal legal processes. There is no way that, in the honourable senator's view, the much despised Cain Government would not proceed on that matter. We have shown, and the Cain Government has shown, a fair deal of courage when there has been law breaking in the industrial area to take on those particular groups. Senator Short referred to his adjournment speech in which he criticised some of the officials for their overseas trips. The only thing I ever find in common with these people and the extreme conservatives who sometimes exist opposite is that they all like a trip. They just go to different spots. Some of these people may go to North Korea or Libya. I do not find that particularly offensive. Some honourable senators on Senator Short's side of the House go to South Africa and to every other right wing dictatorship in the world. The general Liberal Party on the extreme right has a lot in common with these people. Senator Short —Do you support the Libyan Government? Senator ROBERT RAY —Not at all. If I had to wait to be offered a trip to Libya by the Libyan Government, I would have to wait a long time. I would even have to wait longer than the time when Senator Short and his colleagues get back in government. In summing up, this dispute goes to compulsory conference next Friday in the Australian Conciliation and Arbitration Commission. One would hope that it can be settled there. It has never been the Australian Labor Party's view that just sacking employees in the middle of an industrial dispute will solve anything. I have never known that to occur, and it never will. The Government's attitude is that it will not support claims outside the normal guidelines. That has been indicated by the Prime Minister, Mr Hawke. Further, it was indicated by the Minister for Employment and Industrial Relations, Mr Willis, in a telex to the Dollar Sweets company and to the union that there will be no support in those circumstances. Senator Short —What have you done about it? Senator ROBERT RAY —I am asked what we have done about it. Are we supposed to solve every industrial dispute in this country? What a ridiculous proposition, especially considering the Liberal Party's record. The only record the Liberals hold is in stirring up industrial disputes, never in settling them. The matter is in hand and one hopes that it will be resolved. What we have done in this country in creating the accord, reducing working days lost by 300 per cent and developing economic growth is establish a far more viable industrial relations atmosphere. We have one more step to go in this industrial area, in my view, and that is in considering the Hancock Committee of Review into Australian Industrial Relations Law and Systems to bring about more and more reforms in the Conciliation and Arbitration Commission. When that is done, there will be a very harmonious atmosphere in this country. One will never stop one or two unions jumping the gun, but we as a government have indicated that we will not support them. We have not supported the Food Preservers Union on every occasion. That does not mean we should set out to destroy it or anything else, but we shall not support unions on every occasion. If Senator Short and others do not see this matter of urgency as a union bash, too many people, given the Liberals' past history as a party, will consider it so. That is a most unfortunate attitude, and I await just once in my lifetime to hear one Liberal come out and support one industrial dispute. I could be proved wrong because as a 12-year old I remember thinking: `Just for once I wonder what would happen if the Herald editorial came out and suported the Labor Party'. Two things happened. We only squeaked in and Opposition members squealed like stuck pigs. Senator SIDDONS(Victoria)(4.15) —In spite of the great eloquence of my friend Senator Robert Ray, I would point out that he has failed to established the case that the dispute at Dollar Sweets Co. Pty Ltd is just another industrial dispute. It is in fact a very special industrial dispute. It is an example of a rebel union, in this case the Federated Confectioners Association of Australia, using industrial muscle and intimidation against small business to make gains outside the prices and incomes accord. For that reason I have very much pleasure in supporting Senator Short's motion that the Government take urgent action to resolve this dispute. Before the accord was signed, this union, the FCA, managed to squeeze a 36-hour week out of the larger employers in the confectionery industry in Australia. It did so by using lightning strikes, and the workers walked out on machinery that was involved in continous production processing. They walked out when the machinery was still running and caused great damage and expense to the firms concerned. It was largely as result of these underhand tactics by the FCA that the confectionery industry today is largely foreign owned. The activities of this union so undermined the profitability of the larger confectionery manufacturers that they had no option but to sell out to overseas bidders. If this union manages to bankrupt smaller producers in Australia as well, the industry will virtually be totally foreign owned. This would be a tragic state of affairs for this country. The Confectioners Association and the Food Preservers Union were the only unions that did not sign the accord in 1983. That is significant. It meant that their members were not entitled to indexation wage rises, and so members of those unions were disadvantaged. To overcome the problem the employers in the confectionery industry negotiated with the workers a de facto accord which gave the members of the union indexation and prevented them going for pay rises outside the accord guidelines. Eventually, the FCA was forced to sign the accord because all its members were working under it anyway in a de facto sense. Early this year the union issued Dollar Sweets with a demand for a 36-hour week. This claim was both outside the wage indexation guidelines and ran contrary to the agreement signed by the workers with the management of the company concerned, Dollar Sweets. In fact, Dollar Sweets employees were already working a 38-hour week when the award specified a 40-hour week. The larger employer producers of confectionery in Australia were as a result of previous activity by this union working a 36-hour week. But the owner of Dollar Sweets said: `I am sorry, but I cannot afford to work a 36-hour week. We are working a 38-hour week and we should be working under the award of 40-hour week. My financial position is such that I cannot afford to finance a 36-hour week'. He offered to show the union the books of accounts setting out the company's position. The union refused even to look at them. It said: `Give us a 36-hour week or else'. The picket lines that were set up, as we have heard from Senator Short, have resulted in violence and intimidation. Telephone and telex lines have been cut. Telecom Australia has refused to fix these lines because a picket is in place. The net effect, as we heard yesterday, is that incoming calls to Dollar Sweets have ceased. The important point, I believe, is this: If Dollar Sweets had given in to the demands for a 36-hour week it inevitably would have spread to all small manufacturers of confectionery in this country. Dollar Sweets cannot afford a 36-hour week and it is very likely that most other small manufacturers of confectionery in this country could not afford it either. Essentially, Dollar Sweets has been placed in the position of holding the line for what remains of the industry that is owned by Australian investors of capital. The dispute is a perfect example of a militant union trying to pick off small business by isolating it and applying great pressure. Dollar Sweets is to be commended for withstanding the pressure so far. Union tactics in this case have not worked, and only because of the strength of the management. Next time things could well be different. It is essential that the Government take note of this dispute. It has serious ramifications. It is not just another industrial dispute. It is a dispute that involves small business and unfair tactics by militant unions against small business. If the Government does not take note of this and do something to protect the interests of small business people-entrepreneurs who are struggling to make a profit, notwithstanding unfair tactics by unions-the future of small business in this country will be very bleak. I do not believe that it is up to us to say what action the Government should take. I think the case has been established that so far the Government has taken virtually no action. Senator Robert Ray tried to establish that the Government should not interfere in each isolated industrial dispute. This is not an isolated industrial dispute. It is a dispute directed at small business. Small business needs some sort of special protection. It is not getting it at the moment. It is not receiving protection against the actions of militant rogue unions such as the Federated Confectioners Association. The Hancock Committee of Review into Australian Industrial Relations Law took up this issue to some degree. It suggested that it was necessary for some sort of sanctions to be applied to keep unions in line. There must be some better method than we have at the moment of ensuring that unions are not using underhand, unfair and unlawful tactics in industrial disputes. The suggestion that Hancock mentioned was that there should be easier provisions for deregistration of militant unions. That may be one action that Government could take. The fact is that small businesses are vulner able to being picked off one at a time by the actions of large and powerful unions. That is a fundamental issue that the Government should consider. It cannot rest on its record and say: `We have had no, or very little, industrial disputation in this country since the Labor Party came to office'. That may be true. But it is also true that unions such as the Builders Labourers Federation and the Federated Confectioners Association are using tactics that will have very serious repercussions if they are not stopped. The Government has not come forward with any constructive suggestion as to how these unfair and underhand tactics can be policed and brought to an end. Small business is the area to which the Government must look if it is to solve the unemployment problem in Australia. It is very significant that in the United States the nine million jobs that were created to lift that country out of recession were created by small business enterpreneurs establishing new enterprises. In fact, large business has been responsible for a net lowering of employment in the United States. The same thing undoubtedly will happen in this country. The Government must look at the problems facing small business, such as the problems of attacks by militant unions, the problems of financing, and the problems of on-costs, such as workers' compensation, payroll tax and superannuation. I suggest that these problems, these burdens which are placed on small business, are critically important in the sense that we must solve the unemployment problem quickly and we must look to small business to do that for us. Senator COONEY(Victoria)(4.27) —The matter of urgency that is before the Senate reads as follows: The actions of those militant unionists whose defiance of decisions of the Conciliation and Arbitration Commission may force the Dollar Sweets Co. Pty Ltd into closing its operations in Australia, and the necessity for the Government to take urgent action to have the dispute resolved. It would seem from what has been said so far by honourable senators opposite that in some way the Commonwealth Government should take police action and that it should direct the police-those people who traditionally have been independent of government-to take action in a particular situation. Presupposing that there is the lawlessness that the Opposition talks about, why does it say that that lawlessness, if it exists, should be answered by an equally unlawful act, namely, by the Government entering into the affairs of the police force an independent body and directing it to do things which are not in accordance with the way in which it would want to do things? The day a government-whether it be a State government or the Commonwealth Government-starts to direct the police forces of this nation in what they do, it will be time for us to become quite concerned about the matter. The supposed lawlessness that has been talked about has been talked about in language which is quite inflammatory. I am absolutely sure that this was not the intention, but that language has been the tendency to raise hatred and contempt of particular people. That is perhaps unfortunate when, as Senator Short said, the case will be hearded before the Prahran Magistrates Court on 19 September 1985. No good will be done in terms of industrial relations in this country by stirring up, as it were, sentiments of disgust, ridicule or hatred against those involved on one side of a dispute. Senator Siddons stated that the difficulty was that small business was involved. He said that small business should not be subject to the effects of unionism. That is a debate that no doubt will take place in the months ahead. Senator Cook —Did he say who was being discriminated against? Senator COONEY —He said that where small business was concerned unionism in effect should not exist. That is not perhaps a matter for debate now. However, it is certainly an issue which he has brought up. It indicates that there are concepts which will fundamentally change the way society has existed until now-for example, the areas in which unions have had to operate, and the way the police operate. The matter which has been raised here is quite revolutionary. The other point is this: An attack has been made on the union. To be fair, I should say that this is a union for which I have acted. Instead of making statements I shall read from an article in the Age dated Saturday, 7 September 1985. On page 5, under the authorship of a David Trounce, it is stated: The stalemate has been worsened by the hardliners on both sides, in both cases no longer the people directly involved. The once tame confectioners association has been transformed over a decade into a militant left-wing union closely tied to the Food Preservers Union. The confectioners association was the last to sign the national wage guidelines, the FPU- the Food Preservers Union of Australia- the second-last. Both unions have little credibility in the ACTU. The once troubled-free Dollar Sweets factory is represented by an equally intransigent employer group, the Confectionery Manufacturers Association Ltd, answerable to no one. It is headed by an ambitious business lobbyist, Mr Richard Mulcahy, who is out to impress his member manufacturers so they do not defect to rival employer organisations, as many of the bigger multinationals have done. Honourable senators may think that that is a statement by a fair-minded journalist. What he is saying is: Yes, perhaps there is a hard-line reaction from the union but there is equally a hard-line reaction from the employer. Where are we going to get if, when again and again we debate disputes in this chamber, we extrapolate from them one side and cast upon it all the opprobrium, all the hatred and all the abuse and leave out the other side? How can we get parties to negotiate? How can we do something if we in this Parliament continue to pick out one side of industrial disputes criticise it and ask it to do all that- Senator Lewis —What should they do-give in on the 36-hour claim? Senator COONEY —Senator Lewis asks whether they should give in on the 36-hour claim. Senator Lewis —That is what you are arguing. Senator COONEY —I am not arguing that. I think that is a fair point: Should the employers give in on a 36-hour week? However, that is not what the dispute is now about. The dispute certainly began over a 36-hour week. There is no doubt about that. That came from the negotiations that took place in 1982. At that time discussions were held between the Confectionery Manufacturers Association Ltd, which represented Dollar Sweets, and the union. Dollar Sweets Co. Pty Ltd, through the Confectionery Manufacturers Association, offered its employers a 36-hour week. It must be remembered in this context that 90 per cent of the members of this union work a 36-hour week. However, those people who worked for Dollar Sweets-I do not want to make a judgment at this stage; this is just factual material on the background of the dispute-work 38 hours a week whereas most of their fellow unionists, 90 per cent at least, work a 36-hour week. To put it fairly, the agreement that Dollar Sweets introduce a 36-hour week in June 1983 was part of a wider agreement between the two bodies and the Confectionery Association did not accept it. Nevertheless, the employees at Dollar Sweets expected to get a 36-hour week. Opposition senators have said that that is against the accord guidelines and so it may be, but that expectation was there. Employees at that factory had a secret ballot. They directed the executive of the union to take up the question of a 36-hour week with Dollar Sweets which then directed the union to the Confectionery Manufacturers Association. That body refused to negotiate. Following that, strikes occurred and Dollar Sweets demanded that the employees sign an agreement not to take industrial action. Senator Short has pointed this out. They went on strike in respect of the undertaking that they do not undertake industrial action. They were then dismissed. The dispute reached the point where the union said that it wanted to discuss the re-engagement of the sacked people. At that stage the 36-hour week issue was no longer an issue. That is what the dispute is about; it is about re-employing the people who have been sacked. Senator Lewis —That is just a slide, isn't it? Senator COONEY —There is no doubt that it comes from the original dispute. But the dispute now in existence is about rehiring the sacked people. I think Senator Siddons or Senator Short pointed out that the union called a compulsory conference. It was called at the insistence of the union. I am not saying that the union is completely free of blame. What I am saying is that Dollar Sweets should not be elevated, particularly in terms of its representation through Mr Mulcahy, as a pure white knight in shining armour. To get a settlement to this dispute-it must be settled somewhere along the line-the need for discussion is paramount and it needs to be recognised that both sides have sins which have to be forgiven before we go any further. It will not get us anywhere to say that police offences have been committed. What has that to do with the matter if the police are investigating it? As Senator Short has said, the police are investigating the matter. At this stage it would be wrong for anybody to suggest that the confectioners union, or any part of it, is to blame for any of the alleged acts of violence because that is very much a police matter. We in this Parliament should not prejudge any issues which may later go to court. I think that is a fundamental principle which is absolutely essential to keep in mind. As parliamentarians, we should not try to usurp the proper function of the policing authorities of this country. Senator Short asked the Minister for Police and Emergency Services in Victoria, Mr Mathews, why he had not done something about the matter. Mr Mathews is not in a position to direct police to take particular action in respect of alleged offences. That is a misconception of the way the police force operates. To suggest in the Parliament that that situation ought in some way to be changed has the following difficulties: Firstly, it is a State matter and, secondly, it involves a policy which has been pursued for many years, not only here but in England and elsewhere that the police should be kept above politics and away from the control of politicians. It has been said that the Federal Government should do something. It is all right to do something, but what should be done? Senator Siddons got over that point by saying: `I do not really know what the Government ought to do'. Senator Lewis —You claim some sort of a special relationship with the union movement. Why don't you exercise that? Senator COONEY —The special relationship with the union movement has worked very well, as the accord has shown. Senator Lewis —Only with those who are prepared to take the pay rises. Senator COONEY —With great respect, we cannot extrapolate one or two instances and make them the basis for a general proposition. We have to ask, when we look at all the evidence: What is the preponderance of the results? The results show that this Government has done very well indeed over the last few years in terms of industrial relations. All I say-I am sure that Senator Lewis is the sort of man to take this up-is that we have to understand that there are two sides to a dispute. The way to work through a dispute is first of all to accept that fact and to get to a compulsory conference, as the union has done in this case, and see what comes of that. If we say `This is going to set a new trend, a new precedent, it is all hopeless', if we throw our hands in the air and say `Oh, Oh', where will we get? Senator Siddons said that this is an extraordinary strike and that it is different from the others. The only difference of any substance that he could show between this strike and others is that this one has been directed against small business. I certainly say, as I said earlier, that small business should be preserved and developed, but that is obviously a different question from the one we have before us now. In the light of the report of the Hancock Committee of Review into Australian Industrial Relations Law and Systems or any other report, if we are to change the way in which unions, small business or industrial relations operate in this country, let us debate it at a proper hour. Do not let us debate it in the context of a motion, a context in which we really cannot come to any proper conclusions because an attack is being made on a particular body, a context which produces a lot of heat and very little understanding. Let us debate those issues calmly. As I understand it, Senator Lewis is about to do just that. Senator LEWIS(Victoria)(4.42) —The Senate is debating that the following is a matter of urgency: The actions of those militant unionists whose defiance of decisions of the Conciliation and Arbitration Commission may force the Dollar Sweets Co. Pty Ltd into closing its operations in Australia, and the necessity for the Government to take urgent action to have the dispute resolved. I was quite staggered to hear Senator Robert Ray and Senator Cooney, both from Victoria, actually defending the union in this debate. I know that they have difficulties with the trade union movement because of the love affair currently being conducted between the Australian Labor Party and that movement, but I also know that both those honourable senators have professed in the past to be opposed to militant trade union action of the very type that is involved in this matter. Yet here they have publicly put on the record their defence of this militant union for its behaviour in this dispute. The interesting thing about that is that the behaviour of this union-I will be interested to hear what Senator Elstob has to say about this-is quite outside the Government's own prices and incomes accord. Of course, we know that it is contrary to the determination of the Conciliation and Arbitration Commission but, even if the Government were to ignore that fact, the truth of the matter is that what this union is doing is quite outside the Government's own prices and incomes accord, which I have said all along is a completely meaningless fraud. Even if one were to accept the Government senators' point of view in relation to the accord, here is a union acting outside the accord and Government senators are coming to that union's defence. That quite staggers me. I hope that when this matter is put to a vote they will call for a division so that their names can be recorded in the Senate Hansard as having supported the union in this matter. Let me refer to something mentioned by Senator Cooney at the very end of his speech. He said that the Government had done very well in keeping down union disputation in recent years, thanks to the accord. Of course the Government has done very well in keeping down union disputation because as a result of the accord unionists and union officials know that they have been able to obtain salary rises for which there was absolutely no justification. There is no other way in which they could possibly have got those salary rises through the community at a time when the world and Australia were suffering a recession, when there was a drought in Australia and this economy was down on its knees. As a result of the accord union officials were able to push through industry wage rises to which they were clearly not entitled. What has been the result of that? Clearly, there has been increased unemployment. I have to qualify that statement because, as a result of the recovery which has been brought about first and foremost by the Fraser wage pause, one of the greatest economic events to have happened in this country, as a result of Australia's recovery from the drought and as a result of the world recession recovery, this nation has started back into some sort of a recovery and unemployment should have fallen dramatically. But unemployment in this country has not fallen dramatically. It still stands at in excess of 600,000 people. Some 600,000 Australians are still unemployed, notwithstanding the recovery that has gone on all around the world. Australia is only staggering on, thanks to the Government's famous accord. Even worse, there are pockets in which in excess of 25 per cent of young people are unemployed. Honourable senators opposite should go to Newcastle and Wollongong and start facing up to those young people. If we are not careful, if we do not do something about giving these young people an opportunity of getting a job, we will have another Birmingham in this country. How are we going to give them that opportunity? By doing something about small business, by giving small business an opportunity to get up and do something for the nation. What has happened here is that an extremely militant left wing union is squeezing to death a small Australian company called Dollar Sweets Co. Pty Ltd. Some people seem to think, because of its name, that it is a United States company, but that is not true. The family happens to be of Austrian parentage, but that is not relevant. They have been in Australia and established in Victoria for over 40 years. Dollar Sweets is a small Australian business employing 27 people. That business is being choked to death by a union which is acting outsite the prices and incomes accord by demanding something the Government says it is not entitled to get. It is acting contrary to a determination of the Conciliation and Arbitration Commission. Because this union was in so much trouble, being totally outside all the Australian Council of Trade Union principles, or whatever they might be called, it has tried to slide. As I said to Senator Cooney, it has tried to say: `Now the employer is employing scabs and that gives us an opportunity to get back within the accord'. The truth of the matter, the fundamental principle here, is that this union made a demand for a 36-hour week and is trying to bankrupt this company, forcing it into either closing down its operation in Australia or granting a 36-hour week by militant action. The people on the other side of the chamber keep saying to Opposition senators that we are union bashers. Let me tell them right here and now that I am not involved in bashing the union. I am bashing the Australian Labor Party, the Prime Minister (Mr Hawke), his Minister for Employment and Industrial Relations, Mr Willis, and this Government. That is what I am involved in. Let me elaborate on those matters. This Government has done nothing to help Dollar Sweets. Mr Stauder, the Managing Director of this company, sent a telegram to the Prime Minister saying: Urgently seeking your intervention in current industrial disputes plaguing our company . . . The telegram went on at some length. What has happened? Mr Hawke has replied with a pathetic sort of nonsense, saying: `Yes, we understand your terrible burden. We will look at it and see whether there is anything we can do.' But the Government is not doing anything. As long ago as 24 July 1985 Mr Hawke sent a telegram in which he said: My Government strongly supports the wage fixing principles and is concerned that the claim by the Federated Confectioners Association of Australia be dealt with in accordance with those principles. In saying that I note that the principles do not provide for reductions in weekly hours of work below 38 hours. Regarding your request for Federal assistance, I am aware that the Minister for Employment and Industrial Relations has drawn this matter to the attention of the ACTU and has asked his Department to investigate the dispute. I will be taking a personal interest in the matter. Well, that is lovely from him. That is really marvellous; the Prime Minister is going to take a personal interest in it. But what has he done? He has asked his Minister to refer it to the ACTU. Let me just talk about the ACTU because I am concerned that it appears that a very wide sector of the community is worrying about the union movement. Let me quote from the editiorial of the Canberra Times of 10 September this year. The editorial states: Grave-diggers can refuse to bury corpses to protect the jobs of coffin-makers; hospital employees can refuse to staff hospitals; meat workers can deprive an abattoir of a multi-million-dollar export contract; transport and maritime unions can cost the country coal and wheat sales; feather-bedding can render public utilities-postal services, grain-handling facilities, State power industries, rail and shipping services-uneconomic; transport and maritime unions can delay exports of coal and wheat; the trade-union movement can resist penal sanctions yet refuse to condone the deregistration of the Builders' Labourers' Federation, and individuals can be prevented from working because they refuse to join a union. And yet according to the unions' way of thinking, it is all a matter of image and public relations. That Canberra Times editorial is absolutely devastating. I am concerned for the union movement. Even Australian Labour Party senators must realise that there is a declining morality within the trade union movement. This decline is very relevant to this Government. The truth is that there was a degree of morality in the trade union movement during the time of Mr Albert Monk. At that time there were agreements within the trade union movement and the employer organisations. This country was going down a decent path under Albert Monk. But what happened? A young fellow by the name of Hawke said to the extreme left wingers in the trade union movement: `If you elect me President of the ACTU I will ensure that the ACTU deprives itself of its power to control its own members'. That was one of the most significant powers that the ACTU was able to exercise over the trade union movement. I am sure that Senator Elstob, who is sitting on the other side of the Senate, knows that I am telling the truth. I can see that he knows that I am telling the truth when I say that the trade union movement was able to be kept under control by this power. That was the power that would have brought the union which is the subject of this debate under control. But, no, Mr Hawke promised the left wing unions that if they elected him to power he would get rid of that power; that he would in fact gut himself, just as the Government has with the accord. Mr Hawke won with the support of the left wing trade union movement, became the President of the ACTU, and took away the power that he had to control militant action by the trade union movement. Then, of course, he ultimately dumped the left wingers. They now absolutely hate him because ultimately he left them in the lurch. However, he still deprived the ACTU of the power which Mr Monk and his executive officers had been able to exercise for many years to keep unions, like this union, under control. Mr Hawke is now the Prime Minister. Almost his very first action when he became Prime Minister was to introduce a thing called the accord in respect of which the Government gave up further powers which it might have had over its own employees. It undertook to enter into some special arrangement with the trade union movement whereby it said: `We will all be lovey-dovey and kissy kissy'. Of course, under such an arrangement no one will exercise any degree of control over anyone. The trade union movement will be able to step right outside the rule of law and behave in the same sort of militant fashion that it is behaving in this dispute. The result of all that is that when a union moves outside and behaves in the way this union is doing, this Government and the ACTU are powerless to take any action. As I said before, the morality of the trade union movement of Australia has fallen completely since the time when Mr Hawke became President of the ACTU. The public of Australia clearly see that the trade union movement has to be brought under legislative control. The trade union movement is not regulating itself as it ought to be doing under ACTU principles. The trade union movement has stepped right outside the general expectations of the public of Australia. All it is concerned about is its image. In fact, this week it is discussing how to fix up its image with the people. When the trade union movement starts to show some degree of control over its members and some degree of sensibility and makes some contribution towards this nation and its economic future we will find that plenty of people from this side will be prepared to come to its defence. Senator ELSTOB(South Australia)(4.57) —Senator Short has moved an urgency motion which states: The actions of those militant unionists whose defiance of decisions of the Conciliation and Arbitration Commission may force the Dollar Sweets Co. Pty Ltd into closing its operations in Australia, and the necessity for the Government to take urgent action to have the dispute resolved. All on the Liberal side of the Senate who have spoken in this debate have condemned the trade union movement for being behind this dispute. They have said that it is the bad element in the dispute. However, one has to bear in mind that before this dispute began 90 per cent of employers in the confectionery industry had given their employees a 36-hour week. They have already been given that right. I believe that the person to blame in this dispute is the chief executive officer and federal director of the Confectionery Manufacturers of Australia Ltd who agreed with the decision to grant a 36-hour week in all the other industries. Incidentally, I am amazed at what Senator Siddons had to say because I considered that he had probably a better industrial relations brain than do some people in the Liberal Party. The amount of pressure on a union is astronomical when 90 per cent of firms grant their employees a 36-hour week and 10 per cent do not. The union is forced to implement measures to ensure that employees in that 10 per cent of firms also are granted a 36-hour week. Mr Mulcahy, the executive officer, must have agreed on behalf of the members of his association. The Confectionery Manufacturers of Australia said to the other companies `Yes, we will agree to a 36-hour week'. The Dollar Sweets Co. Pty Ltd is one of the 10 per cent of companies in that industry which have not got a 36-hour week, so what position did that leave the union in? What position did it leave Dollar Sweets in? If the company did not attend the meetings-and surely there must have been meetings for the Association to agree to a 36-hour week in that industry-do not tell me that that was because it was left out, that it was negligent or that it did not know what was going on. Maybe the confectionery industry wants to destroy the Dollar Sweets company. I do not know. I am not in that industry. I do know that the majority of disputes in industry are caused through either mismanagement or because people in the union movement have not had enough training. The basis of all disputes is one of those things. I admit from the trade union side that years ago many disputes were brought about by ignorance. Since the Trade Union Training Authority, the Clyde Cameron College, has come into being, union officials and delegates at the shop floor level have improved. They are better trained and consequently there have been fewer industrial disputes. That has not applied to the employers. This is a classic case of the employers not knowing what is going on. Why did the employers in this industry give workers in 90 per cent of the industry a 36-hour week? I do not know how that came about. Honourable senators opposite should be directing their venom at the person who decided that. They may be justified in doing that. It is too late just to blame the union. The pressure is on the union to get the 36-hour week for the other 10 per cent in the industry. What have the management people in the confectionery industry been doing? They are now screaming when 90 per cent of the industry has got the 36-hour week. I agree that this claim is outside the national wage guidelines and I agree that it is wrong. However, I do not know how 90 per cent of the industry gained the 36-hour week. That is why the trouble arose. It is no good honourable senators opposite shaking their heads. One has to be realistic in industrial relations. The Hawke Government has gone out of its way in the area of industrial relations. Senator Lewis said that the accord just came about. It did not just come about-many people in the Australian Labor Party went out and talked to unionists, to sub-branches of unions and to other people to get that accord in place. It was not easy. It is not easy to keep it in place. I am certain it will be kept in place but it is jolly hard work. The accord has given this country a great boost. The country was going downhill. I was alarmed at conditions in this country. We had high unemployment and inflation and everything was going wrong. Any Australian would have been disturbed about what was going on. It is slowly coming back together but only through continual consultation, not just between a few people but between many people-possibly more people than honourable senators realise. For the Opposition to bring up one dispute like this does not benefit better industrial relations or profits-things which are so essential to get people back to work. I think Senator Lewis said that some years ago I said that there has to be an improvement in profits. I was a trade unionist, but I understand that without profits we cannot employ the people of this country. We have to give the investors a reasonable return. But, why blame the trade union movement in this instance? I blame this dispute on bad management. There should be a college for business leaders. The college for trade unionists has improved the working class-it has improved the representations that the unions have made. The Clyde Cameron College has made a great improvement. I do not think anyone can deny that. It is very important now to train foremen and employers-all levels of management-in all areas of industrial relations. That will come about only when we have better employers and when they understand industrial relations issues. I was rather amazed at the comments of Senator Siddons. I have taken the trouble to look at the industry he controls. He is not one of those people who sit in an ivory tower and never talk to the workers. He does, and I give him great credit for that. However, what position would his industry, the metal trades industry, be in if it gave 90 per cent of its workers a 36-hour week and a $50 increase? What position would he or other people in that industry then be in? The unions would have to take on Senator Siddons because they would be left with no other course of action. When everyone else is getting it, you have to be in it. That is the reality of the situation. As I have said, maybe there is a move by international sweet companies in this country. Maybe there is a move to remove the Dollar Sweets company from the industry. I do not know. I have not looked at the matter but I am very suspicious about it. The trade union movement should not be blamed in this instance because it is not its fault. The union has been forced into this position because the members of the union have forced it into it. It is just not good enough for honourable senators opposite to blame the union. A lot of discredit and criticism should be aimed at the employer groups. I do not think it did Senator Short any good in saying that the dispute was all the union's fault. It is not. It is out of the union's hands. I think Senator Short should have looked at the situtation before he proposed his motion today. We live in a democratic country. What can this Government do? Can the Government force people to do things? Can it bring out the military or the police force? It cannot do so. It has to work through the industrial courts. It has to accept the situation that exists. There is no other way. It has to work within democracy. Democracy is very fragile. Many senators on the other side would like to get the big stick out and bring in more legislation. I assure honourable senators opposite that that is not the way. Senator Kilgariff —Like the rebel unions. Senator ELSTOB —In any organisation, whether it be an employer organisation or a worker organisation, there will always be rebels. There will always be such people in the honourable senator's Party or mine. In any organisation there will be people who will disagree. That is not unusual and it is not unhealthy. However, I would be very worried if people insisted on dealing with these measures by unfair methods. We must work within the courts and we must try to encourage people. In this case the union had no alternative but to apply the pressure that it did. It is not a situation of its making. It is now too late. Sweet manufacturers long ago should have made up their minds that they would resist the 36-hour week before 90 per cent of their industry was working it. That is where the trouble has arisen. It is not the unions' making; it is the employers. We cannot blame worker organisations for the industry's mismanagement. That is how this has come about. I believe Senator Short has not proved that this Government has been negligent in any shape or form. We have tried and we will keep on trying to improve industrial relations and to keep industrial relations agreements. I know that this country will go from strength to strength. I know that we will be able to reduce unemployment and bring inflation and interest rates down to achieve all those things beneficial to the nation. We will not be able to do so as individuals; it will be done collectively. There is still a lot of work to be done. I do not think that matters such as this urgency motion play any meaningful role. I think such motion should be very well thought out before they are moved in this place. Senator SHORT(Victoria)(5.12) —in reply-In closing the debate and exercising my right of reply in this urgency debate, I do not want to take up the Senate's time unduly but there are a couple of issues which I think should be raised. Firstly, I think the contribution to the debate this afternoon by honourable senators on the Government side has been very disappointing indeed. The reason those honourable senators' contributions have been disappointing is that they have walked around the issue which is the subject of this motion. This motion does not concern industrial relations generally; nor does it concern economic policies or the like, as Senator Robert Ray, in particular, tried to suggest. He really did not address his remarks to this dispute. Senator Cooney and Senator Elstob did address the matter a little more directly but they were still a long way away from debating the issues of this urgency motion. I remind the Senate that the urgency motion refers to two issues. The first issue concerns the action by militant unionists involved in the dispute concerning Dollar Sweets Co. Pty Ltd. The rights or wrongs of the dispute itself are really not at issue in this debate, although I would take great exception to the proposition by Government speakers, particularly Senator Elstob, that the dispute arose as a result of something that the employers had done. Nothing could be further from the truth. The dispute has arisen because a rogue union is trying to crush a small company acting in accordance with the rulings of the Conciliation and Arbitration Commission and the wage fixation guidelines of that Commission. Indeed, the company is acting under the principles of the prices and incomes accord. Therefore, we have had a situation today in which Government speakers tried to diffuse an issue concerning a union acting in complete defiance of the Government's own accord, the Conciliation and Arbitration Commission and the Australian Council of Trade Unions itself. Those are the facts which ought to have been debated this afternoon. Senator Elstob talked about democracy and said that we have to preserve our democratic institutions. I agree with him completely. That, too, is largely what this debate is about. The actions of the unions in relation to the Dollar Sweets company could not be more undemocratic and alien to the democratic standards and principles by which the overwhelming majority of Australians live and which, perhaps, represent the most important part of being Australian. Those values are under threat in this dispute. Secondly, the Government's action in trying to resolve this dispute was hedged about by Government speakers. I can only repeat what I said during the debate: Senator Button, when asked by me about this issue on 22 August, by which stage the dispute had been running for two months, knew nothing about it. He is the Minister for Industry, Technology and Commerce. The Minister for Communications (Mr Duffy) was advised the same day, or the day after, the telephone and telex connections were sabotaged at the Dollar Sweets company. That was on 17 August. The Minister did not even bother to reply to the request for assistance by the company. The Prime Minister (Mr Hawke) and the Minister for Employment and Industrial Relations (Mr Willis) have said-I accept this-that they support the company management. However, they have done nothing at all to further that support, which really is just paper support. So the story goes on. A few other things were said during the debate, particularly by Senator Elstob, which need some correction on the public record. I am advised that Mr Mulcahy, the Chief Executive Officer of the Confectionery Manufacturers Association of Australia, has never agreed to the 36-hour a week claim. Senator Elstob —He is in that Association. Senator SHORT —I know he is in that Association. However, the confectionery manufacturers were hopelessly crushed by the union movement. This is so, even of the bigger companies. I am not sure whether Senator Elstob is aware that there were 93 strikes at the Cadbury company's plant alone before an agreement on a 36-hour week was reached. The agreement on a 36-hour week came only because of crushing union pressure on a company which was employing many people and which, if it had not bowed to that union pressure after 93 strikes, would have had to close its doors. Exactly the same principle applies in the Dollar Sweets case. Exactly the same principle applies to all those other companies which have been involved in the 36-hour a week exercise. The companies which granted the 36-hour week claim did so also before the prices and income accord was arrived at. That is the point I make to Senator Elstob. What the union involved in the Dollar Sweets case is now going for is contrary to the accord which his government praises so highly. The point Senator Elstob made was quite irrelevant. For the Dollar Sweets company to accede to the union demand in this case would be to put it in contravention of the wage fixing principles of this nation, principles from which Senator Elstob, his Government and his Party derive such satisfaction. These are principles about which one could have very grave doubts in regard to their virtue and value. Nevertheless they are principles. What Senator Elstob has done in his contribution this afternoon has been to place doubt on whether he believes that the wage fixation guidelines of this nation and of his Government are good guidelines. If he did think they were good guidelines he would have no alternative but to support the first part of our motion. Senator Elstob —That Association was at fault. Senator SHORT —The Association was not at fault. The Association is supporting a small member company because that small member company-namely, the Dollar Sweets company-is being crushed by one of the most militant left wing unions. That left wing union is being supported, assisted and advised by another, perhaps the most, militant left wing union, in Australia, namely, the Food Preservers Union of Australia. That is a very lethal combination for a small company like Dollar Sweets. No wonder it called on the resources of the employer body of which it is a member, along with 128 other companies, most of which are small and medium size businesses. The Confectionery Manufacturers Association is its industry association. I can see nothing at all other than common sense in such an approach by a company. Why would a company not accept the resources of its own association in facing the threats and the problems that exist now? Those are some of the points that really need to be brought out. I regret Senator Cooney's comment that my remarks on the police action were inflammatory. I did not think they were. I do not want the police forces of this country to move into the industrial relations area. Rather, the point I was making was that there was a legitimate request from a company, which is being very heavily victimised and terrorised in a terror campaign-that is what makes this dispute so different-for police protection, and that protection was refused by the Victorian Minister for Police and Emergency Services before the investigation into the allegations of victimisation was even completed. A report was to go to him. That is the point I was making. I still find it extraordinary behaviour on the part of Mr Mathews that he should make that decision before he received a report on the matter. Probably there are many other things that one could say, but I will not. The debate has brought to light what is going on in this dispute. As I said, it is a very serious issue in this country. It is not just another industrial dispute. It goes far wider than that. That is why the Opposition has raised this matter of urgency today. I and the Opposition welcome the support of the motion by the Australian Democrats. We hope that we will have the support of the Government side of the Senate. If the Government does not support the motion it will be saying that it does not agree with its own wage fixation principles and that it agrees with activities of unions which are intolerable in a free society such as ours. Question resolved in the affirmative. Senator Lewis —Mr Deputy President, I raise a point of order. I want to know whether it is possible in some way to record the fact that all the Government senators refused to divide on this motion even though they said `No' when the question was put. We on this side of the chamber are happy to call a division because the Prime Minister has sent a telegram of support to this company. Yet the Australian Labor Party is not prepared to support the Prime Minister. I would like to have it in the Hansard record. The DEPUTY PRESIDENT —There is no point of order. There is no procedure by which that can be done. Senator Lewis, perhaps your remarks have done what you sought to achieve. The question has been resolved in the affirmative. (Quorum formed) Motion (by Senator Ryan)-by leave-agreed to: (1) That Senator Zakharov be discharged from further attendance on the Standing Committee on Regulations and Ordinances and that Senator Giles, having been duly nominated in accordance with standing order 36A, be appointed a member of the Committee. (2) That Senator McKiernan, having been duly nominated in accordance with standing order 36AA, be appointed a member of the Standing Committee on Education and the Arts. (3) That Senator Childs be discharged from further attendance on the Standing Committee on Foreign Affairs and Defence and that Senator Black, having been duly nominated in accordance with standing order 36AA, be appointed a member of the Committee. (4) That Senators Aulich and Coleman be discharged from further attendance on the Standing Committee on Industry and Trade and that Senators Cook and McKiernan, having been nominated in accordance with standing order 36AA, be appointed members of the Committee. (5) That Senator Cook be discharged from further attendance on the Standing Committee on Social Welfare and that Senator Morris, having been duly nominated in accordance with standing order 36AA, be appointed a member of the Committee. (6) That Senator Sibraa be discharged from further attendance on the Standing Committee on Disputed Returns and Qualifications and that Senator Aulich be appointed a member of the Committee. (7) That Senator Coleman be discharged from further attendance on the Senate House Committee and that Senator McKiernan be appointed a member of the Committee. (8) That Senator Maguire be discharged from further attendance on the Senate Library Committee and that Senator Robert Ray be appointed a member of the Committee. (9) That Senator Cook be discharged from further attendance on the Standing Committee of Privileges and that Senator Aulich be appointed a member of the Committee. (10) That Senator Colston be discharged from further attendance on the Standing Committee on Publications and that Senator Morris be appointed a member of the Committee. Senator RYAN(Australian Capital Territory-Minister for Education) —I table a paper relating to the defence co-operation program which is additional to the Department of Defence explanatory notes for the year 1985-86. Senator WATSON(Tasmania)(5.28) —I move: That the Senate take note of the paper. I welcome the recognition of the importance of Australia's trade with China and its future prospects because of its high growth potential. Historians will record the decision by the Chinese to open up their economy more to the outside world as one of the major economic events of this century. However, I think that few people in this country realise that significant trade between our two countries has existed for decades, principally in wheat, wool and some other commodities. We have to acknowledge that trading with China will never be easy. It will be frustrating. It will be a high risk. It will be subject to peaks and troughs from year to year as China grapples with the need to acquire foreign exchange and as it only slowly throws off the shackles of being a programmed society. I believe that government and industry must work hand in glove, not as joint venturers, but as industry taking the risks and as government offering advice in opening up new doors to the opportunities that exist in China. The Australian Ambassador to China, Denis Argall, said recently that Australian companies must take the bit by the teeth, make the front end investment required, and get into the China market. Apart from the opportunities provided by our valuable steel resources, the opening up of China's economy provides a not to be missed opportunity, particularly for our rural sector, because of China's planned rural reforms. Also, China is interested in the smaller entrepreneurial Australian companies which are keen to invest in China. Briefly, I should like to draw to the Senate's attention some of the initiatives that have been taken by Tasmanian businesses, and by our State Government headed by Robin Gray, in meeting this challenging opportunity. A recent trade mission headed by the Tasmanian Minister for Primary Industry, accompanied by a number of businessmen, was highly successful. The Chinese expressed their interest in a wide variety of venture projects. A number of Chinese have visited our State and have already placed orders. A significant rural company, Websters Ltd, has four people working with the Chinese in developing China's rural industries. In October, the first shipment of Tasmanian animals to three Chinese provinces will begin. The Chinese are very enthusiastic about the role Tasmania can play because we are a natural quarantine station for Australia. In fact, Websters has signed a $3m deal with the Zhejiang Province in China. China recognises Tasmania's leadership in dairy farming and processing. It is keen to purchase our expertise and product development. Websters anticipates that it will be involved in another project based on our grassland farming techniques. In such a venture, this Tasmanian company could be supplying China with seed, agricultural and dairy equipment, and livestock, as well as communicating our technical expertise to their farmers. Another company, United Milk, has recently signed a memorandum of understanding to establish a dairy program in Tasmania. It expects to sell equipment, milk powder and processing technology. One of our foremost building organisations, Trinity Projects Pty Ltd, was also represented on the trade visit to China. It has been invited to make submissions to the Chinese Government as joint venturers in projects, possibly for hotels in cities that have been recently opened up for foreign investment. The Chinese anticipate that such joint venture projects will take place at a small business level rather than with government involvement. China is a wide open market for our technological skills. For example, in many areas of China concrete is still mixed by hand. Tasmanian businesses as well as our farmers can expect to earn significant export revenue. China wants these projects to be joint ventures. It has raised the possibility of the Tasmanian Development Authority acting as an agent for payments between the Chinese and Tasmanian importers and exporters. Tasmanians are very enthusiastic about the trading opportunities offered by China. By gaining a foothold in the developing Chinese commercial and rural markets, as well as in the rural base, Tasmanian companies could create many more employment opportunities, not only in China but also in Tasmania. Senator COOK(Western Australia)(5.33) —This paper, Australia's Trade with China, is the text of a statement made by the Minister for Trade (Mr Dawkins) in the House of Representatives on 22 August. I am happy to follow Senator Watson, who has drawn attention to the fact that, while in this chamber there are many matters on which the various parties will divide, one matter on which we can unite is our bipartisan attitude to promoting Australia's best interests in developing a greater volume and diversity of trade with China. The paper before us is a statement issued by the Minister for Trade prior to his departure on a two-week visit to China on 25 August. It is important to note that this Government has followed in the wake of Gough Whitlam who, in 1972, as the Leader of the Opposition, took a specific initiative to open up the China market for Australia by personal contact. Our Prime Minister (Mr Hawke) has visited that country and Hu Yaobang, the Vice-President of the Communist Party of China, has visited Australia. The mission by the Trade Minister, Mr Dawkins, from 25 August to 3 September was to continue to develop at a personal level the contacts between our countries so that the trade in which we engage will flow from mutual understanding and support. This Government has established the China action plan as the model for promoting trade between our countries. We have increased the number of representatives of the Australian Trade Commission in Beijing and in other provincial centres in China to provide a focus for Australian business and Chinese interests to develop a two-way trade. We have appointed, with the rank of Ambassador, a special trade representative to North Asia, Mr Paul Barratt, who has the task of guiding not only the opening of the China market but also the markets in Japan and Korea. The Department of Trade has sold out the first edition of its publication `How to Trade with China'. Such is the interest of Australian business that there was an immediate rush to acquire that document upon its release. The important thing to know about Australia-China trade from the Australian side is that while China has pursued the policy recently of opening up to the West, it is the only significant new world market that has been opened in the last few years, and the only one likely to be. It is a market of one billion people. If there is just a small increase in the standard of living of those one billion people, countries such as Australia which are in the neighbourhood of that market can gear their industrial production to take advantage of that standard of living increase. They can find for us a whole new market, the like of which has not existed before. China has set itself the goal of increasing by four times the gross output of its industry and agriculture between 1980 and the year 2000. It is also looking to quadruple the volume of foreign trade between 1980 and 2000. We see for ourselves a particular role in achieving part of that quadrupling of foreign trade. In fact, the performance of Australia in trade with China in the last year has been remarkable. In 1984-85 our exports to China increased by 73.4 per cent. For the first time we exceeded $1 billion in the total value of our exports. The actual figure was $1.056 billion. China improved from being our tenth most important market to our fifth most important market in the space of 12 months. The main component of our trade has been wheat, but that now stands at 29 per cent of the total value of trade with that country. That is a smaller percentage than before, although the volume of wheat traded with China is greater than before. The important aspect is that our trade is diversifying. We are now trading in a whole range of other commodities. The main point I want to mention is the interest of my State of Western Australia in seeing that joint ventures, technical co-operation, and Chinese investment in Australian facilities are developed further. Western Australia is renegotiating the reopening of Broken Hill Proprietary Co. Ltd's Kwinana steel works with iron ore supplied from the mine of Koolyanobbing to develop a pig iron market with China on a joint venture basis. CSR Ltd, through Hamersley Iron Pty Ltd, is seeking to negotiate an agreement to open a mine to supply the China market with iron ore from the Pilbara at Mt Channar. Both those negotiations are important and have been going for some time. They are negotiations we are confident can be successfully concluded. The ACTING DEPUTY PRESIDENT(Senator Townley) —Order! The honourable senator's time has expired. Senator BROWNHILL(New South Wales)(5.39) —I commend the statement and the initiatives taken by this Government and previous governments in increasing trade with China. It is very important that Australia seek new markets in the light of continuing problems with the European Economic Community. The highly subsidised rural industries of the EEC make it very important that we move into a new area. I am pleased that Australia has expanded its trade representation in China. I compliment the Government on recommendation (iv) of the statement that the Department of Trade be given the necessary resources required to enable it to service effectively what may become one of Australia's major export markets. It is already becoming one of our major export markets. I believe that we have to continue to seek extra trade with China. Of course, the trade has to be a two-way trade between ourselves and China. We have to make sure that we give the Chinese their share of the trade cake as well. I am particularly pleased also that wool exports to China have trebled. I think the potential for even more expansion is enormous. Of course, this is because the Australian Wool Corporation has really worked at it. It has been an aggressive marketing source in Australia. The fact that there are trade officials in the new areas of China will make sure that Australia overcomes her lack of sales in traditional markets. Senator TEAGUE(South Australia)(5.41) —I take pleasure in joining other senators in welcoming the statement of the Minister for Trade (Mr Dawkins) made last August prior to his visit to China. I also commend the report on Australia-China trade which was produced by some members of the Senate. This is a bipartisan matter in Australia. I believe that all members of the Senate want to seek to maximise co-operation between Australia and China in developing prospects not only for trade but also for improved general cultural relations in discussions about every matter of mutal interest, including many matters on the agenda for discussion of international relations. The matter of trade illustrates the way in which throughout the 1970s and 1980s successive Australian governments have built foundation upon foundation so that we now have a quite strong base for considerable expansion in Australia-China trade in the future. The recognition of China, which I as a Liberal advocated in the late 1960s and early 1970s, was brought about by the new Labor Government in 1973. The foundations for better understanding were laid when the first Ambassador, Dr Fitzgerald, went from Australia to Beijing. The achievements of the Whitlam Government became a foundation for the very real enhancement of our relations during the Fraser Government period. Mr Fraser, as Prime Minister, visited China very successfully and he welcomed senior Ministers of the Chinese Government to Australia. During the period of the present Government Mr Hawke has been able to welcome to this country the most senior General Secretary of the Communist Party, Mr Hu Yaobang, and other senior representatives of China. We see in the statement before us that not only has the Minister for Trade gone to China. A number of other Ministers have gone to China-the present Attorney-General (Mr Lionel Bowen), the Minister for Primary Industry (Mr Kerin) and others. During the last few months a large number of members of this Parliament have visited China. All this augers well for us to be alert to the opportunities for developing Australia-China trade and every aspect of Australia-China relations. I emphasise the remarks that my colleague, Senator Watson, made. He said that however open the door is and how ever bipartisan and, indeed, unanimous is the view in this chamber that we welcome the opportunities China presents for Australia and Australia for China, things will not be easy just by stating that. My discussions in China recently lead me to the view that there may well be an average two-year period for the development of any constructive joint venture program between our two countries. We need to work out the technical knowledge and experience we have in Australia and how that can be taken forward with Chinese-like investment and Chinese labour in a program to meet the needs of China. If that hard work is done we have the prospect of seeing Australia-China trade grow to the dimensions of Australia-Japan trade of the last 20 years. We have before us that kind of dramatic prospect. We also have before us the prospect of Australia being involved in building a trade relationship in great contrast to the imperialistic and exploitative relationships of the last century which are too much in the minds of everyone who has had anything to do with China. We want to see that as being entirely in the past. There is a whole new future ahead of us. Question resolved in the affirmative. Senator KILGARIFF(Northern Territory) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator CROWLEY(South Australia)(5.47) —I move: That the Senate take note of the paper. I am pleased to take the opportunity to speak to this paper. I do not think I need to dwell on the achievements of the Department of the Prime Minister and Cabinet. I address my remarks to the comments in the report on the Office of the Status of Women within the Department of the Prime Minister and Cabinet. It is very interesting to note the achievements of that Office within the Department of the Prime Minister and Cabinet. As the report states, the Office has the task of co-ordinating and developing policies to raise the status of women and to monitor the impact of all government policies and programs on the status of women. I find it very interesting that the Office has set those goals and that outline of objectives for itself. It is not in the business of formulating and developing policies in specific areas but, in fact, has the task of overviewing the impact of all policies and co-ordinating and developing them for women in all departments. This is quite interestingly in contrast to what was reported in Nairobi at the recent conference where a number of government delegations reported different ways of proceeding to support the status of women in their countries. A number of governments have actually established a department of women's affairs. On hearing Senator Pat Giles's report on the achievements of the Australian Government and the development of the status of women in this country over the last decade and her report on the Office of the Status of Women and the preferred way of this Government in developing policies for women, a number of the other delegates were interested to seek out the Australian delegation for further elaboration and clarification. In some ways the office, with those objectives, has not been caught up in the immediate day to day considerations of all those issues, but has maintained for itself a slightly distant and, therefore, an overview role. People were very interested to discover that and I certainly find it a preferred option or way of proceeding. In particular this report highlights that on Budget night, 20 August 1984, the Prime Minister (Mr Hawke) tabled a document entitled the `Womens Budget Program'. In 1984 that Budget document for women provided reports on the major programs and assessment of activities from 13 departments. It was stated then that it was expected that a more comprehensive assessment of the programs of all Commonwealth departments would be provided in the 1985-86 Budget. I recall to the Senate the speech made by Senator Ryan on the occasion of Budget night when she was able to table the document about the women's Budget program for 1985-86, which has achieved its aim in one short year. There are reports now on achievements and progress in all government departments vis-a-vis women. What was promised in 1984 has been achieved in 1985. Another significant area the Office has been concerned with is the affirmative action pilot program, which was launched in June 1984 with a two-volume policy discussion paper, `Affirmative Action for Women'. To this Parliament during the recess, and certainly to my office this week, has come the discussion paper on affirmative action and a progress report showing where it stands at this stage. That report looks at the pilot program adopted by 28 major Australian companies and three higher education institutions which were invited to participate in a 12-month voluntary affirmative action pilot program. That pilot program has been very informative and important in formulating and developing programs and looking at continuing areas of difficulty for the affirmative action program, so that when the Government introduces legislation it will be based not merely on a good idea but on hard data from that pilot program. The significance of the tax summit this year also highlighted the importance of the Office of the Status of Women, not only in its contribution to the mini-tax summit or conference on women and taxation which was held here in Canberra and another that I held in Adelaide, but also in its contribution to tax discussion generally this year. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator HARRADINE(Tasmania)(5.52) —I move: That the Senate take note of the paper. This is the second report submitted by Australia in accordance with the Economic and Social Council resolution No. 1988 concerning rights covered by articles 6 to 9 of the International Covenant on Economic, Social and Cultural Rights. It is a curious document, to say the least. It deals with issues ranging from Aboriginal employment to ethics in medical research, family planning, various pensions, subsidies and so on. It is a report presumably made pursuant to that international resolution. There are a number of aspects on which I wish to focus but, in view of the time limit, I shall focus on only one aspect this evening. It is contained in page 49 of the report and deals with ethics in medical research. Under the heading `Ethics in Medical Research', without any explanation, the report launches into a statement that in October 1982 the National Health and Medical Research Council adopted the first report of the working party it set up on ethics in medical research. The NHMRC is a body which is able to set guidelines only in respect of those projects which are funded through it. For the report to indicate to the international body that that is the be all and end all of ethics in medical research in Australia is, to say the least, somewhat curious. I do not wish at present to detail the valid objections made to the Council's guidelines on medical research and experimentation on human subjects, nor do I wish to deal extensively with its current attempt to review certain ethics committees' procedures. But I do wish to say that there have been fundamental problems as a result of the Council's efforts in the past. It has approved human embryo experimentation projects which have been applied for by, for example, the senior lecturer of the department of obstetrics and gynaecology at Melbourne University. They have been approved by Dr Roger Pepperell, the head of that department, who then wrote to the ethics committee of the Royal Women's Hospital. And who was the chairman of that ethics committee? None other than Dr Roger Pepperell. He then wrote to the NHMRC saying that that committee gave its unqualified approval to that sort of human embryo experimentation, and the Council approved it. I believe that was an improper exercise of its function. My time has run out, but I shall have more to say about that matter and other matters at a later stage. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator KILGARIFF(Northern Territory) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator McINTOSH(Western Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator Sir JOHN CARRICK(New South Wales) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator Sir JOHN CARRICK(New South Wales) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator Sir JOHN CARRICK(New South Wales) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Consideration resumed from 22 August, on motion by Senator Elstob: That the Senate take note of the report. Question resolved in the affirmative. Consideration resumed from 21 August, on motion by Senator Jones: That the Senate take note of the report. Question resolved in the affirmative. Consideration resumed from 21 August, on motion by Senator Coates: That the Senate take note of the report. Question resolved in the affirmative. Debate resumed from 21 August, on motion by Senator Colston: That the Senate take note of the report. Senator Harradine-I understand that another senator who is attending a meeting wishes to speak on this subject and he has asked me to move that the debate be adjourned. Debate (on motion by Senator Harradine) adjourned. Motion (by Senator Ryan) agreed to: That consideration of General Business order of the day relating to committee report No. 4, Privileges Committee, be postponed until the next day of sitting. Consideration resumed from 23 May, on motion by Senator Sibraa: That the Senate take note of the report. Question resolved in the affirmative. Debate resumed from 15 May, on motion by Senator Coates: That the Senate take note of the report. Senator COATES(Tasmania)(6.05) —When this report of the Standing Committee on Finance and Government Operations was tabled I made some remarks about it and sought leave to continue my remarks at a later stage. Since that time the Minister for Finance (Senator Walsh) has written to me in my capacity as Chairman of the Finance and Government Operations Committee, advising me of the Government's response to that report. As the Bill concerned-the Superannuation Legislation Amendment Bill 1985-is listed for debate in the very near future, I thought it would be appropriate if I reported to the Senate the results of the Minister's letter to the Committee. Senator Walsh's letter reads: I wish to advise you that the Government had decided to accept the substance of three of the four amendments to the Superannuation Legislation Amendment Bill 1985 that were recommended in the report of the Senate Standing Committee on Finance and Government Operations tabled on 15 May 1985. I intend to move amendments to that effect. The amendments accepted by the Government further enhance the accountability of the Trust to the Parliament and to the contributors to the Commonwealth Superannuation Scheme. The amendments I will be moving are intended to: ensure that the Trust's annual report and any interim report will include particulars of any statements of Government policy provided by the Minister to the Trust during the year, the consideration given by the Trust to the policy and the action, if any, taken (Recommendation 1 of the Standing Committee); require the ACTU to nominate persons for appointment to the Trust only from those persons whose names have been submitted to the ACTU by relevant industrial organisations (Recommendation 2 of the Standing Committee); and require a copy of any interim report made by the Trust, together with interim financial statements, to be tabled in the Parliament (Recommendation 4 of the Standing Committee). For drafting reasons, the precise wording and positioning in the Bill of the additional provisions differ somewhat from the recommendations of the Standing Committee but their substance is retained. The Government has not, however, accepted the Committee's Recommendation 3 which seeks to provide that one or the other of the principal members of the Trust or the part-time government nominee is to have special qualifications in investment matters. The proposed structure of the enlarged Trust, and the duties and responsibilities imposed upon it under the legislation, indicate the need for it to have members with broad qualifications, not necessarily related solely to investment. These duties and responsibilities involve not only the investment of the Superannuation Fund, but also the exercise of prudential controls, determination of policy and liaison with relevant industrial organisations as well as the staffing, control and oversight of the office of the Trust. In short, management of the Superannuation Fund goes well beyond investment of the Fund. You remarked when tabling the Standing Committee's report on the Bill that the matters recommended for inclusion in the Bill by the Standing Committee would undoubtedly happen in practice anyway. The process of selection of Trust members, whether conducted to meet the requirements of the Minister or relevant industrial organisations as co-ordinated by the ACTU, would certainly have due regard to financial and investment expertise among the many qualities required of members of the Trust. The legislative specification of a requirement for such expertise would not only be redundant but would focus concern on only one aspect of the necessary qualifications, whether required of the principal member or the part-time government nominee, perhaps to the detriment of other, equally important concerns. The fifth recommendation of the Standing Committee is to the effect that the Government immediately seek the current opinion of the Attorney-General on the matter of the legal liability of Trust members and Trust staff and introduce an appropriate amendment to the Act defining that liability. The Government has not put aside the matter of legal liability which was first raised in the Monaghan Report and later canvassed in the Joint Working Party Report, both of which have been tabled in Parliament. Liability, however, raises a number of issues of considerable legal complexity. Resolution of these issues is being pursued with the Attorney-General's Department as expeditiously as possible so that consideration can be given to the matter and, if necessary, appropriate provisions included in the Superannuation Act 1976 when next it is amended. I also understand that there is some concern as to the impact of the changes to sub-section 159 (2) of the Act on the Northern Territory. The amendments proposed are not specifically directed at, or occasioned by, the Government's negotiations with the Northern Territory on its employer superannuation liability. The new sub-section 159 (2) of the Act proposed in paragraph 24 (1) (g) of the Bill was included so that the authorities, such as the ABC, CSIRO, etc, that prior to 1 July 1981, were treated as if exempt from making employer superannuation payments, could be relieved of the pre-1981 liability. As the Superannuation Act 1976 now stands the Northern Territory of Australia, which became an approved authority for the purposes of that Act on 1 July 1978, has a legal obligation to pay to the Commonwealth that part of the benefits paid under the Act that has accrued in respect of service by its staff since 1 July 1978. The Government is prepared to waive the liability of the Northern Territory that accrued in respect of service between 1 July 1978 and 30 June 1984. This liability could not legally be waived under the current legislation. it would, however, be possible to waive it under the new sub-section 159 (2). The intention of the Government is that the Northern Territory and its authorities reimburse the Commonwealth for their share of the pensions and other benefits paid under the Commonwealth Scheme on the ``emerging cost'' basis, ie the Territory would reimburse the Commonwealth only as benefits were actually paid to the Territory's former employees from the Consolidated Revenue Fund. Under this basis, payments to the Commonwealth will commence at a very low level and increase over time, giving the Northern Territory ample time to be able to finance the cost of its share of the benefits. The current legislation enables an authority to enter into an arrangement with the Minister for Finance to make an alternative series of payments to the Commonwealth to discharge its superannuation liabilities. The alternative adopted is known as the ``pay-as-you-go'' basis and the payments made assume funding of benefits as they accrue. Most authorities voluntarily adopt the ``pay-as-you-go'' basis of reimbursing the Commonwealth. Paragraph 24(1) (g) of the Bill also proposes a new sub-section of the Act, 159(2D), that retains this provision but also provides that the Minister for Finance may direct that an authority shall make payments on the ``pay-as-you-go'' basis. This new provision is a reserve power that would be used only where an authority had adopted the ``emerging cost'' basis for payment and was not, in the opinion of the Minister, making adequate provision to meet the future costs under that basis. Where ``emerging cost'' authorities are making adequate provision, or their ability to pay is not in doubt, as is the case with the Northern Territory, there would be no reason to invoke the reserve power. As indicated above, the proposed amendments to sub-section 159(2) are not directed specifically at the Northern Territory. Therefore, whilst the proposed amendments could have application to the Northern Territory, I do not consider that the Bill could be seen as anticipating the Senate Committee's report. I have read that letter from the Minister for Finance, Senator Walsh, into the record because of the importance of the issue and also because of the fact that this morning the Finance and Government Operations Committee held a further hearing on the Northern Territory superannuation matter. Thus it is particularly relevant for the Senate to be aware of the Minister's response to the Bill. I urge those who are concerned about some provisions of the Bill to accept the fact that the Minister has adopted the main aspects of concern that the Committee raised and, therefore, there should be no further problem about the Bill. Question resolved in the affirmative. Motion (by Senator Button) agreed to: That consideration of General Business, Order of the Day relating to Committee Reports, No. 1 (Allegations Concerning a Judge-Select Committee Report), pursuant to Sessional Order, be postponed till the next day of sitting. Senator JONES(Queensland) —On behalf of the Standing Committee on Science, Technology and the Environment, I present a report on the Australian Libraries and Information Council for 1983-84, together with the transcript of evidence. Ordered that the report be printed. Senator JONES —by leave-I move: That the Senate take note of the report. This report follows the Committee's examination of the annual report for 1983-84 of the Australian Libraries and Information Council-ALIC-at a hearing on 17 May 1985. ALIC's annual report formed part of the annual report for 1983-84 of the Department of Home Affairs and Environment, which was referred to the Committee on 21 March 1985, under Sessional Orders. This Committee had a particular interest in ALIC arising from its 1977-1979 inquiry into industrial research and development in Australia. In its report on that inquiry the Committee recommended that: The Government as a matter of urgency, collate the information already obtained through committees of inquiry into scientific and technological information services, bring it up-to-date, and present to Parliament a national information policy together with a scheme for the coordination and development of library-based information services. The then Minister for Science and Technology, the Hon. David Thomson responded to this recommendation on 11 June 1981, saying: Commonwealth-State Ministers having responsibility for cultural affairs are considering the establishment of an Australian Libraries and Information Council to advise Commonwealth and State Ministers on means of securing coordination and cooperation in library and information services. At the hearing on 17 May 1985, this Committee asked ALIC to indicate what progress had been made on the formulation and development of a national plan for library and related information services. The response to this question was that a draft of certain proposals had been prepared for the Cultural Ministers Council meeting scheduled for Brisbane on 19 April 1985, but that meeting had been cancelled. The Committee's attention was also drawn to the inter-departmental meeting-IDM-on the development of a national information policy which had been established on the initiative of the then Minister for Science and Technology, the Honourable Barry Jones, in December 1983. Subsequently on 20 May 1985 the Committee heard evidence from the Minister for Science, Mr Barry Jones. At that hearing it was learned that the guidelines for the IDM charged it to consider issues relating to social equity, access to informational sources, personal autonomy, privacy, economic development-especially the information industry and the provision of information services to industry, and national sovereignty as, for example, media ownership by foreign citizens. The IDM's scope therefore is not restricted to library-related information services. A discussion paper was being drafted for public release later in 1985. Options for the development of scientific and technical information services were also being investigated, and proposals for remedying inadequacies in the present system were being prepared for consideration by the end of the year. Several members of ALIC are also members of the IDM in other capacities, and there has been substantial formal contact between the two bodies on information policy. ALIC's functions in respect of information policy have a much narrower focus than that established for the IDM, the former being restricted to co-ordinated development of library and related information services. Also, a Commonwealth-State tertiary education body such as ALIC has only a limited capacity for policy development, as such bodies tend to be successful only when they are building on a body of policy in each of their constituencies. At the hearing on 20 May 1985, the Minister for Science stated that there were inadequacies in the present system of scientific and technical information services, and that options for their improvement were being investigated by the inter-departmental meeting on information policy. The Committee is pleased with the attention now being given by ALIC and the IDM on information policy to national information policy. It is, however, mindful that a Commonwealth-State tertiary education body such as ALIC which reports to a ministerial council, has only a limited capacity for policy development. Such bodies tend to be successful only when they are building on a consensus already achieved in each of their constituencies. The postponement of mere consideration of a draft plan for library and information services for eight months from April to November 1985, is an illustration of the constraints on ALIC's effectiveness. The Committee regards the establishment of the IDM on information policy as an admission by the Government that there is a requirement for the Commonwealth Government to accept responsibility for co-ordinating and guiding the development of library-based and other information systems and services in Australia, and that ALIC is not an appropriate body for implementing this responsibility. The National Library of Australia has also not been seen as an appropriate body for implementing the Commonwealth's responsibility. Any discretion on the part of the National Library to allocate funds to co-operating institutions could result in inequalities and could be used to coerce bodies holding divergent views. This kind of fear has been strongly expressed by State governments. There has been a strong feeling generally that the whole subject of properly developing and integrating information services and making them available is so complex, and the needs of interested institutions so diverse, that there needed to be an independent organisation that ensured that all competing viewpoints were properly considered before decisions were made on the provision of new resources and systems. Any body formed to advise on and implement a national information policy should not be constrained by a requirement to restrict its attention to library-based information services. The absence of a generally accepted strategy for the orderly development of information services has permitted unnecessary duplication or installation of incompatible services by different institutions. When this involves installation of expensive computer and telecommunication systems, the waste of resources can be very costly. The degree of informal co-operation which currently exists between institutions and organisations avoids these problems to a certain extent, but cannot substitute for the discipline of an agreed overall policy and plan implemented through a recognised authority. The longer the development of a comprehensive national information policy and an agreed system of information services is delayed, the greater will be the potential for unco-ordinated development and, therefore, wasteful expenditure by institutions on incompatible services. Also, the eventual task of achieving a co-ordinated and compatible system is likely to become increasingly difficult and expensive. The Committee has therefore recommended that the Commonwealth-State body, ALIC, be complemented by a representative Commonwealth body, charged with advising the Commonwealth Government, through the Minister for Science, on: (a) policies, guidelines, standards and priorities for the co-operative development of library and other information systems and services; (b) the means and costs of developing such systems and services; (c) the means of fostering co-ordination and, in accordance with approved policies, extension of such systems and services and to encourage participation by user organisations; (d) possible or proposed major extensions to existing systems and services of this kind and the introduction of new services to meet identified need; (e) matters, as required, on policy concerned with international co-operation in the field of such systems and services; (f) the need for public education and awareness in the use of such systems and services; (g) the need for research into such systems and services; and (h) other matters referred for advice by the Government, I commend the report to the attention of honourable senators. Question resolved in the affirmative. Senator TATE(Tasmania) —I present the tenth report of 1985 of the Senate Standing Committee for the Scrutiny of Bills concerning the Australian Airspace (Nuclear Weapons Prohibition) Bill 1985, the Australian Waters (Nuclear-powered Ships Prohibition) Bill 1985, the Australian Waters (Nuclear Weapons Prohibition) Bill 1985, the Building Industry Act 1985, and the Customs (Prohibition of Importation of Nuclear Hardware) Bill 1985. I also lay on the table Scrutiny of Bills Alert Digest No. 9 dated 11 September 1985. Ordered that the report be printed. Senator TATE(Tasmania) —by leave-I table a paper, Operation of the Senate Standing Committee for the Scrutiny of Bills 1981-85, which I presented to the conference of the Australasian Study of Parliament Group on The Legislative Process: How Relevant, held in Adelaide on 31 August this year. I seek leave to move a motion. Leave granted. Senator TATE —I move: That the paper be printed. Ordinarily a paper of this character would go to the Standing Committee on Publications for consideration as to whether it should be printed. On this occasion, however, the members of the Standing Committee for the Scrutiny of Bills thought it desirable that this paper be made available in printed form at the earliest opportunity. The Senate Standing Committee for the Scrutiny of Bills has now been in existence for over 3 1/2 years, and it has become apparent to the members of the Committee that there is a need for a readily available statement on the Committee's mode of operation and its interpretation of its terms of reference. It is hoped that the publication of this paper will enable the public, parliamentarians and those officers of executive departments who are responsible for the preparation of legislation to become better informed about the Committee's activities. I mention only one statistic. In the course of its deliberations during its 3 1/2 years of operation the Committee has commented on and alerted the Senate to some 550 clauses. I think that will be indication enough of the diligent and assiduous work that has gone into the preparation of its alert digests and reports. I believe that the existence of the Scrutiny of Bills Committee has enhanced the reputation of the Senate as a watch-dog and defender of the civil liberties of all Australians. Indeed, its operations provide a model for other parliaments within our Federal system. I believe that it has proved to be a constructive force for the improvement of the quality of legislation passing through Australia's Federal Parliament. It is in that sense that I commend the paper to the Senate. Question resolved in the affirmative. Debate resumed. Senator SHEIL(Queensland)(6.26) —Before the suspension of the sitting for lunch I was recalling some of the past glories of the Snowy Mountains Authority. I had no quarrel with their talent and expertise or with the results of its various construction activities. I pointed out that there had been problems following the construction of all the dams, flumes, tunnels, power stations and irrigation works in that, first of all, the snow roof of Australia had been found to suffer from droughts too, which meant that there was a lack of water for the power stations. Not only was there a problem in supplying the peak power to Sydney and Melbourne in winter, when peak power was needed, but also when the water was let go to create that peak power it meant that there was not enough water for the summer. So another set of dams had to be put in to hold the water for the summer. This was at an additional cost, funded on the defence priority in a cost plus 10 per cent deal. I said that the scheme had been of advantage to the south-east corner of Australia but had not been of any particular advantage to the rest of Australia. In addition, salinity problems had been created with the irrigation areas along the Murrumbidgee River and, furthermore, those problems had been passed into South Australia. I was trying to recall the name of the dam that had been constructed to flush out the Murray River in order to alleviate that problem. I think I mentioned the Chowilla Dam, but that one has not been built. I think that it was promulgated and there was a lot of talk about it, but another dam had to be constructed further up stream simply for the purpose of cleaning the salinity out of the Murray. These problems, of course, had little to do with the quality of the engineering work that had gone into the construction of the various Snowy Mountains facilities. I was moving on to some of the business problems involved with the Government putting more money into this new Snowy Mountains Engineering Corporation. After wreaking expensive havoc over the last few years, in which it has lost about $10 million, the Government now intends to expand and extend the activities of the Corporation by removing its statutory restrictions. I pointed out that I considered that the Corporation would compete with private enterprise on an unfair basis and that it had been given carte blanche for its overseas operations. As an example of this unfairness I pointed to the fact that the Minister for Housing and Construction provided funds for the Corporation, which did not happen in private enterprise, that he had the power to direct all its powers and functions, and that he could waive interest on the capital it generated. Also, he could control the repayment of capital and at the same time direct the application of its profits. On top of all that, the Minister could guarantee borrowings of the Corporation, provided that those borrowings were made outside the Commonwealth. In addition, I pointed out that the Corporation was not subject to any State tax laws and that, even though it was a public authority for the purposes of the Audit Act, it was not a public authority for the purposes of the Income Tax Assessment Act. There is another load to place on top of that. Contracts entered into by Corporation would not be invalidated just because the Corporation had not complied with its Act. One might as well tear up the Act if this kind of behaviour is to be entertained. This is the reason why the Opposition is suggesting that the Corporation should be privatised and the present 300 people who are engaged in it should be given first option of purchasing the shares. What the legislation actually does is confer financial benefits on a very small group and protect a job protection cartel. It will provide conditions that are not enjoyed by the Corporation's competitors. I mentioned before that the Corporation is losing about $5m a year. While its sales are down 23 per cent on last year's figure, its overheads are up 20 per cent, despite the claim by the Minister that they are not. The Corporation cannot pay its bills at the moment and, of course, this falls straight back on to the taxpayer. Last year that sum amounted to $4m. Over the last three years the Corporation's accounts have been qualified by its auditors and its asset reserves have been written back against its operation losses. Any liabilities that it has as bank guarantees have not been brought to account. I think there is a question as to the commercial and financial management of the Corporation. Even its superannuation scheme liabilities have not been brought to account. Indeed, this is one of the biggest liabilities that the Corporation has at the moment. On reading the history of the Corporation, it seems to me that the only money it makes is from the sale of its houses. In addition, it is the only tenderer for many jobs, it quotes on a non-competitive basis and it carries out its work on a non-competitive basis; yet it still loses money. I would like to bring to the notice of the Senate one more point that has not been mentioned so far. I refer to two items on page 38 of the Scrutiny of Bills Alert Digest No. 5 of 1985 which I think should be recorded. The digest states: The Committee is concerned that the proposed sections place no limitation on, and give no indication of, the attributes of persons to whom the powers of the Board or the Minister may be delegated. It therefore draws these provisions to the attention of Senators.... Secondly, the Scrutiny of Bills Alert Digest states: Proposed section 50 would provide that the Corporation is subject to taxation under the laws of the Commonwealth `and to such other taxation as the Minister specifies'. It appears that the section is a re-wording of clause 40 of the Snowy Mountains Engineering Corporation Bill 1985 to which the Committee drew attention in its Alert Digest No. 3 of 1985 (17 April 1985). That clause provided that the Corporation was not to be subject to State or Territory taxes except as provided by regulations. Proposed section 50 goes even further by removing the decision to subject the Corporation to State or Territory taxes from parliamentary scrutiny. The Scrutiny of Bills Committee draws that to our attention. I draw that to the attention of the Senate because I do not think it has been mentioned so far. I conclude by saying that the Opposition is opposed to the Bill. Senator PARER(Queensland)(6.35) —The Senate is debating the Snowy Mountains Engineering Corporation Amendment Bill 1985. In view of the fact that the debate has been somewhat interrupted, I think a short resume of the background is called for. The Snowy Mountains Engineering Corporation was established in 1970 as an independent consulting organisation to retain the engineering personnel and skills developed during the period of the Snowy Mountains Hydro-electric Authority. The original Authority, as everyone is aware, was established for a specific purpose. It must be remembered that it operated at a time when we as a nation did not have the expertise to engage in a large scale engineering operation of the size of the Snowy Mountains scheme. In the process, the Authority did a first class job. It produced great men of whom we all can be justly proud. I do not think there is any disagreement whatsoever on either side of the chamber as to that. Senator Sheil has already referred to the great earthmoving jobs, the great tunnelling work, the dam construction, the hydro work and so on. In the process the Authority also proved to be a great training ground for many very fine engineers who now work as consultants in the private sector. One of the other speakers in this debate mentioned that, of course, the great majority of the original people do not work for the present Corporation. However, the fact remains that the Authority was used as a big training ground. Many of the heads of engineering and consulting groups, as well as mine and port managers throughout Australia, had their origins in the old Snowy Mountains Hydro-electric Authority or SMEC. In more recent times, and with few exceptions, the Corporation has largely become an arm of foreign aid and has relied for its continued existence on such things as Australian Development Assistance Bureau projects. Even so, in the last few years it has shown that it cannot cope with the downturn and it is now relying on the taxpayers of Australia for its continued viability. It has been said that because SMEC is a statutory corporation it does not have the flexibility of the private sector. The Corporation has actually shed several hundred people in recent years, from a peak of 623 in 1983 to 400 by the end of 1984. However, this was achieved at great cost to the taxpayer in the form of very comfortable severance provisions. The private sector is expected to take hard decisions when things get tough, but the public sector has no such responsibilities. Again, this is not a criticism of SMEC per se; it is simply, I think, a definition of the difference between the private and public sectors and the ability of the private sector to move very rapidly when things change. I can understand the sentiment and nostalgia of those in this chamber about SMEC and their fears about the possible disbanding of that organisation. However, it must be recognised that times change. We now have a myriad of consultancy groups in the private sector which are more than capable of carrying out all the work done by SMEC over the past 15 to 20 years, without government protection or subsidy. I believe that any attempt to give an inanimate organisation a soul is false. An organisation is only as good as the people who work for it. Certainly the name `SMEC' is well known and well respected throughout the world. The question, however, is: Why should it continue as an arm of government, have Public Service conditions of employment and know that it can be bailed out by government at taxpayer expense when economic conditions go against it? What sort of incentive is that for an organisation and its people to continue to be successful and thus profitable? I am opposed to the Bill, as I believe that SMEC should be offered to the private sector, with first offer of shares being made to the employees of SMEC. I would like to correct some of the almost hysterical remarks that were made by some honourable senators who should know better. Senator Siddons, who is one of the champions of the private sector, remarked: `How on earth could these people pay for it?'. It is fairly simple really. They are offered first choice of shares and if it were done in a proper fashion it would enable the current management and employees of SMEC to organise themselves together and for the balance of SMEC shares to be offered to the various other consulting groups. If one talked to some of the consulting groups one would find that nothing would give them more pride than to be associated with SMEC in a private capacity. This should satisfy the sentimentalists among us and put SMEC squarely where it belongs-in the private sector of consultants. It would do a very fine job. It has been claimed that SMEC is a flag carrier for Australia and that, unfortunately, its colours in recent years have been lowered somewhat. The Corporation lost $5.5m in 1983-84 and the Minister for Housing and Construction (Mr West) has admitted that it will lose an additional $3.5m for the year ended June 1985. Sales turnover was down 23 per cent last year compared with the previous year. These losses occurred in spite of the Corporation's stated goals, as expressed in its 1983-84 annual report which stated: The Corporation is required to pursue a policy directed towards securing sufficient revenue to meet the expenditure of the Corporation as well as to make provision for income tax and pay a reasonable return on capital. In other words, the Corporation in its current form is failing to meet its own objectives. Let us look at some of the provisions of the Bill before the chamber insofar as they attempt to solve the Corporation's obvious current problems. Firstly, the Bill prescribes that the Corporation is to pursue sound commercial principles and practices. One can only wonder why legislation is required to make a government owned operation work more efficiently and effectively to meet the needs of its clients. Moreover, the provisions of the Bill relating to commercial principles are so vague as to be rendered almost meaningless. Further, the Bill gives the Minister enormous financial powers in relation to the running of the Corporation, moneys borrowed by the Corporation and rates of interest payable on loans, if any. These powers make nonsense of any claim that this Bill provides the Corporation with a genuine opportunity to conduct its operations in accordance with the needs of the market. The Minister's second reading speech to some extent lets the cat out of the bag. It states: The Board will be required to inform me of its policy decisions and provide me with regular reports on its operation. I shall, of course, be able to direct the Corporation as to the exercise of its powers and the performance of its functions. Not only does this Bill give the Minister great powers of control over the independence of the Corporation and, therefore, its commercial integrity, but also it places the Corporation in an extraordinarily privileged position with respect to its competitors in the private sector, who also pay a great deal in corporate taxation. In addition, of course, private firms have to pay interest on any loans and cannot secure guarantees on loan repayment from the Commonwealth. Private firms, in other words, do not have direct call on taxpayers' funds. They have to sink or swim on their own efforts. One cannot get a greater incentive than that. This Bill entrenches the worst features of both protection and monopoly, two of the most harmful aspects of government intervention in the running of our economy. The Opposition welcomes the opportunity provided by this debate to reveal a few hard facts of economic life that we face in Australia and to propose some real solutions. Clearly, some of the public sector dinosaurs need to be brought back to life by exposing them to the disciplines and the real opportunities that are provided by the free market. In the context of SMEC this means privatisation-giving the Corporation the opportunity, free from ministerial control and protection and exposed to a genuinely competitive market once more to become a great flag carrier for Australia. A lot of nonsense has been spoken about privatisation, particularly by the Australian Labor Party, but also by union leaders and other defenders of inefficient protected monopolies. The Prime Minister (Mr Hawke) has not been above spreading a great deal of fear in the community about the Opposition's plan of selling to people some of our more readily accessible government monopolies. Among the hysterical claims made are that privatisation will somehow take the control of government bodies out of the hands of the people, that it will cause massive unemployment, that it will mean a reduction in essential services and that it will destroy our most precious national assets. Claims such as these defy both economic theory and historical experience. They deserve rebuttal because the Australian people must be made aware of the enormous economic benefits that are proven to flow from rationalising state enterprises and exposing them to competition. The first point to be made is that the overriding criterion for privatisation is benefit to the consumer of the service. Too often, public enterprises serve the needs of their own employees at the expense of the public interest. Public sector unions have been able to extract rewards from governments that are simply not available to private firms because they cannot afford them. In fact, we have seen this occur even in areas like the sugar industry-an industry that is going down the drain-in which a prosperity bonus is still being paid. What is involved here is a massive hidden subsidy paid by the taxpayer without commensurate gains in the provision of service or efficient management practices. It is simply fanciful to suggest that government enterprises are owned or controlled by the people. They are in no way accountable to those who pay for their service. Privatisation is one way of achieving accountability-by giving or selling shares in our national assets back to the people and making managers perform to the requirements of the market. I am reminded of the definition of the private sector which states that the private sector is that part of the economy controlled by the government whereas the public sector is that portion controlled by nobody. The customer is never right when subject to a monopoly, particulary when a monopoly is given legislative protection against competition. There are more effective ways of providing subsidised services to groups than by creating and maintaining enterprises with no incentive to perform. There is nothing inherent in a government enterprise that makes it a national asset. Only the people who run that organisation effectively make it an asset worth preserving. The ruins of many sick economies are littered with decaying sacred cows which simply do not perform up to standard. In any case, selling the assets of an enterprise to the people who keep it going-its workers-is the best way of preserving our economic heritage. The final point is the myth of unemployment. For the same reason that make-work programs do not work in the long run, it is no good preserving institutions which have served their purpose and which in their present form are kept simply to maintain jobs. In an expanding free enterprise economy, demand is matched by supply, particularly in the labour market, by freeing that market from the bonds of centralised wage fixation. The next coalition government will ensure the free movement of labour between employers and from one job to another. Rather than destroying jobs, privatisation will help create them, particularly in the service industries. Attacks on rational economic policy are a new and debilitating form of luddism. The very economic problems in which Australia now finds itself are perpetrated by the tunnel vision of those who refuse to recognise the broader, larger term interests as against the short term gain of protected vested interests. We have seen the government commendably deregulate the financial market. The Opposition opposes this Bill and asks the Government to sell SMEC to the private sector, with first offer being made to SMEC employees. The question is: Do we need SMEC as a government corporation? It is a question which, regrettably, never seems to be asked, not only about a corporation such as this, but of a mind boggling myriad of other government functions. The answer, whichever way we look at it, is that SMEC belongs in the private sector. If SMEC goes into the private sector, it will thrive. Senator LEWIS(Victoria)(6.50) —The Senate is debating a Bill to amend the legislation concerning the Snowy Mountains Engineering Corporation. The Corporation remains, as a result of the Snowy Mountains scheme, one of the great Australian organisations. I confess that some of the fault for the problems of the Corporation has been ours because when the Snowy Mountains scheme wound up I believe we were in government and at that time we could have privatised and made it part of the private sector. However, for reasons which I do not know because I was not involved in the decision-making at the time, we created a statutory corporation entitled the Snowy Mountains Engineering Corporation. The question we must face up to in the middle of the 1980s is why the people employed in this organisation should still be public servants. It was certainly acceptable for government to be involved in the business of engineering when Australia lacked engineers of sufficient calibre to construct the magnificent Snowy Mountains scheme. At that time Australia was short of engineers, especially engineers either prepared or able to cope with the concept of the Snowy Mountains scheme. Now Australia is quite well endowed with a number of competent engineering bodies, including the engineering body we are speaking about. There is no massive government requirement now for engineers, as there was in the late 1940s and early 1950s. It has become clear to all of those people who have applied their minds to the subject that this Corporation is a perfect example of the sort of body which should now be part of the private sector and that the people involved in the Snowy Mountains Engineering Corporation should not still be public servants. When we look at the profit and loss statements in the Corporation's balance sheet we are able to see what has happened as a result of this body not being part of the private sector and accountable to shareholders. If it were in the private sector and made financial mistakes it would not be able, in some way or another, to pass any loss on to the Government but would have to pass it on its shareholders. It could not be cushioned from such blows. I do not intend, in talking about figures, to refer to the possible negligence actions which I have no doubt confront this Corporation. They are actions which probably are set on a particular legal course and about which no one, perhaps excepting the lawyers involved, could predict the possible results. However, I notice that in the statement of profit and loss there are very substantial commitments for insurance. As of 30 June 1984 the provision for insurance was $2,773,179. Clearly this body must be concerned about some risks. As I said, I do not propose to raise such matters now, during the second reading debate, or during the Committee stage of the Bill because I recognise that there is some commercial confidentially involved. I point out to the Minister at the table, the Minister for Industry, Technology and Commerce (Senator Button), that the Snowy Mountains Engineering Corporation annual report for 1983-84, which we have available to us, was delivered to him on 25 September 1984. The figures to 30 June 1985 should be available to us today, 11 September 1985. I ask the Minister to tell the Senate what the current trading position of the Corporation was as at 30 June 1985. When one looks at the statement of profit and loss for the year ended 30 June 1984 one sees an operating loss, before income tax, of $5.4m. That includes a so-called abnormal item of $1,229,402. When one looks at the explanation for this so-called abnormal item one sees that during the year ended 30 June 1984, some 53 employees were voluntarily retrenched and paid the so-called abnormal item amount of $1,229,402. That is under the terms and conditions prescribed by the Public Service Arbitrator and negotiated by agreements with the staff association and the Public Service Board. Therefore, we must assume that the current 600 employees of the body are entitled to some similar sum which, on the basis of the previous figures, would be roughly an average of $30,000 each. I understand that the organisation either has retrenched 300 employees during the past year or is in the process of doing so. Therefore, one can see that there is a liability of another $7m or $8m which is not shown in the figures at all. Even though the balance sheet discloses that the amount of money made available to the Corporation by the Federal Government was increased during 1983-84 by $4m in capital-from $2.6m to $6.6m-I am able to deduce that there must be another liability of about $7m owed to those who are in the process of being retrenched, and a further $7m or $8m owing to those continuing in their employment. Therefore, probably about $15m in liabilities is accumulating in this body to the detriment of the taxpayers of Australia. That liability is not to the detriment of any shareholders. We are talking about a body with liabilities of $15m and an operating loss, before income tax, of $5.4m. If this body were operating in the private sector the probability is that its share price would be at a very low level. Debate interrupted. The PRESIDENT —Order! It being 7 p.m., under sessional order, I put the question: That the Senate do now adjourn. Question resolved in the affirmative. Senate adjourned at 7 p.m. The following Papers were tabled: Administrative Decisions (Judicial Review) Act-Regulations-Statutory Rules 1985 No. 209. Air Force Act-Regulations-Statutory Rules 1985 Nos. 213, 216, 219. Air Navigation Act-Regulations-Statutory Rules 1985 No. 203. Australian Antarctic Territory Act-Ordinances 1985- No. 2-Medical Practitioners Registration. No. 3-Poisons and Narcotic Drugs. No. 4-Poisons. Australian Bureau of Statistics Act-Australian Bureau of Statistics-Proposals 1985- No. 5-Quarterly Survey of Australian Portfolio and Other Investment Abroad. No. 6-Survey of Superannuation Funds. Census and Statistics Act-Australian Bureau of Statistics-Release of Lists-Proposal No. 4 of 1985-List of Names and Addresses of Agricultural Establishments for Department of Primary Industry (Bureau of Agricultural Economics). Defence Act-Regulations-Statutory Rules 1985 Nos. 210, 211, 214, 217. Dried Fruits Levy Act-Regulation-Statutory Rules 1985 No. 220. Health Insurance Act-Regulations-Statutory Rules 1985 Nos. 205, 207. National Health Act-Regulation-Statutory Rules 1985 No. 206. Naval Defence Act-Regulations-Statutory Rules 1985 Nos. 212, 215, 218. Public Service Act-Regulations-Statutory Rules 1985 No. 208. Radiocommunications Act-Regulations-Statutory Rules 1985 No. 221. Radiocommunications (Frequency Reservation Certificate Tax) Act-Regulations-Statutory Rules 1985 No. 224. Radiocommunications (Receiver Licence Tax) Act-Regulations-Statutory Rules 1985 No. 223. Radiocommunications (Temporary Permit Tax) Act-Regulations-Statutory Rules 1985 No. 222. Seat of Government (Administration) Act- Ordinances 1985- No. 40-Crimes (Amendment) (No. 3) No. 41-Court of Petty Sessions (Amendment) (No. 3) Regulations 1985- No. 21-(Dog Control Ordinance) No. 22-(Motor Omnibus Services Ordinance). No. 23-(Electricity Ordinance). Superannuation Act-Regulation-Statutory Rules 1985 No. 204. Telecommunications Act-By-laws- Telecommunications (Charging Zones and Charging Districts) Amendment No. 59. Telecommunications (General) Amendments Nos. 43 and 44.