Thursday, 10 October 1985 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 10 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that: 1. The Watsonia Army Barracks contains electronic communication facilities, operated by Australian and American personnel, that gives the United States the ability to pin-point Soviet nuclear submarines, hidden in the Oceans. 2. This would make it possible for U.S. killer-submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a `first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the `joint Australian-U.S.' electronic communication facilities in the Watsonia Army Barracks. by Senators Chipp (from 90 citizens) and Zakharov (from 180 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 Senator Walters (from 301 citizens). To the Honourable President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully shows: That we strongly support `The A.C.T. Smoking and Tobacco Products Advertisements Prohibition Bill' introduced by Senator Evans, because it represents the first positive national step towards the eventual elimination of wide-spread serious ill health caused by smoking tobacco. And your petitioners as in duty bound will ever pray. by Senator Haines (from 195 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 Messner (from 132 citizens) and Teague (from 102 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of certain citizens of South Australia respectfully showeth: That the Australian flag symbolises the continuity between Australia's past, its present and its future; That the presence of the Union Jack on the flag represents not a subservience to Britain, but a reminder of our inheritance of the fruits of hundreds of years of struggle for individual liberty against the forces of tyranny and oppression; Nonetheless recognises the rights of Australians should they so wish to change the design of their flag. Your petitioners humbly pray that no change be made to the Australian flag except with consent of the people in a referendum. And your petitioners, as in duty bound, will ever pray. by Senator Messner (from 51 citizens). To the Honourable the President and members of the Senate in Parliament assembled. Your petitioners urgently request The Honourable Senator Grimes, Minister for Community Services, to include Communication Aids on the equipment list funded through the `Provision of Aids for Disabled People' programme. And your petitioners as in duty bound will ever pray. by Senator Missen (from 53 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned shows: That the proposed introduction of compulsory identification (ID) cards should be reconsidered and rejected because the system: (a) is not a cost-effective method of reducing tax evasion and social security fraud and, to the contrary, in the form proposed will faciliate such evasion and fraud; (b) will constitute an unwarranted infringement of individual privacy by the aggregation of a wide variety of personal information of a private nature; (c) will cause a further large and costly growth in the bureaucracy and burden on the taxpayer; and (d) cannot be guaranteed against misuse for purposes other than for which their introduction is stated to be intended and in fact provide the opportunity for blackmail and other forms of misuse. And your petitioners humbly pray that the problems which identification cards are intended to reduce should be attacked by other, more effective and less obnoxious methods. And your petitioners, as in duty bound, will ever pray. by Senator Peter Rae (from 29 citizens). To the Honourable the President and members of the Senate in Parliament assembled. This petition of concerned Australian citizens respectfully points out: That, for our survival, an effective Worldpeace Initiative needs to be established which will work towards mutual understanding, world disarmament, economic well-being for all and full employment. This Initiative will help to ensure a sustainable society conserving natural resources, and revitalising soils essential for growing a plentiful and healthy food supply and tree cover. By achieving these objectives, Australia can set an example for the rest of the world to follow. Your petitioners therefore humbly pray that your Honourable House will: 1. Propose to the United Nations General Assembly that 1989 be declared International Year for Repairing the Earth. 2. Implement action programs leading up to 1989 which will include: A. Actively supporting the International Year of Peace in 1986 by reallocating at least 10% of our military expenditure to fund environmental repair programs. B. Implementing national recycling programs to re-use water, and to compost into hygienic humus presently wasted organic garbage and sewage-sludge mixed with fine ground powder from mineral-rich gravels and rocks, to use as a natural fertiliser in revitalising impoverished soils; C. Developing national employment programs to give priority to the planting and growing of healthy forests, food-producing trees and other crops and vegetation to assist the greening of Australia. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 10 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 pre-school and child care in the mini-budget. We urge you to reverse proposals for cuts in children's services. And your petitioners as in duty bound will ever pray. by Senator Messner (from 44 citizens). Petitions received. Senator COATES(Tasmania) —On behalf of the Standing Committee on Regulations and Ordinances, I give notice that, 13 sitting days after today, I shall move: That the Electricity (Amendment) Ordinance 1985, as contained in the Australian Capital Territory Ordinance No. 20 of 1985 and made under the Seat of Government (Administration) Act 1910, be disallowed. Senator COATES —by leave-This matter is still under consideration by the Regulations and Ordinances Committee and there may need to be further correspondence with the Minister concerned. This explanation also applies to a number of other regulations and ordinances for disallowance of which I shall give notice of motion tomorrow, and at the same time I will give a fuller explanation about this one. Senator SIDDONS(Victoria) —I give notice that, on the next day of sitting, I shall move: That leave be given to introduce a Bill for an Act to encourage the introduction of employee participation in Australian enterprises through reductions in company tax for enterprises classified as employee participation enterprises. Motion (by Senator Missen) agreed to: That Business of the Senate, Notices of Motion No. 1 and No. 2 standing in my name be postponed till next Wednesday, 16 October 1985. Debate resumed from 22 August, on motion by Senator Button: That the Bill be now read a second time. Senator DURACK(Western Australia)(10.07) —I understood that the Government wanted order of the day No. 1 and order of the day No. 2 dealt with cognately. I wonder whether it could get its act together. The PRESIDENT —Is that so, Senator Grimes? Senator Grimes —We will debate them cognately as we frequently do. Either side can ask to do that. Senator DURACK —It is for the Government to decide how it wants its business conducted. Senator Grimes —What happened to you? Did you have a bad night? Senator DURACK —You seem to have had a bad night every day. The PRESIDENT —Order! Could we get on with the debate? I understand that it is agreed that the two Bills be debated cognately. Senator DURACK —Thank you, Mr President. The Liquefied Petroleum Gas (Grants) Amendment Bill 1985 and the States Grants (Petroleum Products) Amendment Bill 1985 deal with matters which were part of the Government's May economic statement which the Opposition did not oppose. We welcomed the efforts of the Government in that statement to reduce government expenditures, even though we make no judgment about the priorities the Government adopted. That matter is the responsibility of the Government. Certainly, it was not the Opposition's intention then nor is it its intention now to oppose measures which give effect to that statement. The first of these measures is the abolition of the liquefied petroleum gas subsidy which was introduced by the Fraser Government some time ago. It was introduced when the domestic price for LPG was very high and there were great discrepancies between those who were forced to use LPG and those who had access to natural gas and other cheaper sources of domestic heating. However, the situation has now changed. The domestic price of LPG is reasonably stable under the formula the Government has adopted, which we do not need to debate today, although the Opposition certainly would have some reservations about the Government's approach. Certainly some consumers will suffer as a result of this measure to abolish the subsidy. Under the present formula the benefit for consumers had fallen, but at least they were getting the benefit of something like $10 per annum at the wholesale level. As I said, it is estimated that the abolition of the subsidy will represent costs of that order for the average consumer. So it is a matter of some concern. However, the Opposition does not oppose this measure. The States Grants (Petroleum Products) Amendment Bill is also part of the May econ-omic statement, which emasculated the freight subsidy scheme and had a very serious impact on rural Australia. But as I have said, that is a priority the Government has adopted. It is no doubt consistent with the Government's general discriminatory attitude to rural Australia. That is the choice the Government has made about its expenditure controls. This Bill does not implement that change, but it is part and parcel of the Government's cost cutting arrangements. It is trying to tighten up what is left of that scheme which originally applied to some 4,000 locations around Australia where consumers received a freight subsidy. The new arrangements have reduced the number of those locations to about 1,650 and the Government estimates that it will save about $116m from this particular cost cutting priority which it has adopted. It is interesting to note that in this Bill, which is trying to tighten up the administration of what is left of the scheme, the Government has been unable to identify any direct financial implications. That is a rather strange comment on the competence of the Government in its management of financial matters. However, there is one aspect of the Bill which the Opposition welcomes. In the other place we moved an amendment to widen the application of the scheme to mini-refineries around Australia other than the mini-refinery at Roma. Originally the Bill applied only to Roma and that is certainly the only mini-refinery that exists at present. However, there are moves to establish mini-refineries in other parts of Australia and, with the development of on-shore oil discoveries in very remote parts of Australia, it is likely that there will be further mini-refineries. Apparently this had not occurred to the Government when it drew up this particular provision. That again is an indication of its general ignorance of what is happening in remote parts of this country. The Opposition moved an amendment in the other place to rectify that, the Government supported it and that provision is now incorporated in the Bill. The Opposition welcomes that and does not oppose this measure. Senator SIDDONS(Victoria)(10.13) —I rise to indicate briefly that the Australian Democrats are prepared to support the Liquefied Petroleum Gas (Grants) Amendment Bill 1985. As Senator Durack has said, this is a Bill to withdraw a subsidy that was introduced in 1980 for a period of three years. That time has lapsed. The withdrawal of the subsidy will bring liquefied petroleum gas into line with all other petroleum products and this seems to be quite logical from our point of view. It will, of course, slightly disadvantage some people and unfortunately some of those will be country people. However, the Bill is introduced to withdraw the subsidy during the summer months so there will be quite a period during which adjustment can be made if there is hardship in any specific cases. The problem with any subsidy is that the day of reckoning always comes. There was a very good reason for introducing the subsidy back in 1980. There was a very sudden rise in costs of LPG and many people had equipped their homes to run on LPG. Suddenly they were caught with very steep increases in running costs. The subsidy has served a very useful purpose, but we think the day has come when that subsidy should be withdrawn. We are prepared to support the Government's initiative in this area. Senator GRIMES(Tasmania-Minister for Community Services)(10.15) —I thank honourable senators for their support of the legislation and for their contributions to the debate. The Government believes that these measures were necessary and are an important part of rationalising the system of support in this country. We accept that there will be the same sorts of remarks about such legislation as those made by Senator Durack, but overall we are very pleased that we can get this legislation through. I thank honourable senators for their contributions. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Consideration resumed from 8 October, on motion by Senator Gareth Evans: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Debate resumed from 8 October, on motion by Senator Walsh: That the Bills be now read a second time. Senator Grimes-May I suggest that we debate these Bills and the Wheat Tax Amendment Bill 1985 cognately. THE ACTING DEPUTY PRESIDENT(Senator Colston) —Is leave granted? There being no objection, leave is granted. Senator COLLARD(Queensland)(10.18) —The Opposition will not be opposing these Bills. The Wheat Tax Amendment Bill is pretty well a routine one and, although the Grain Legumes Levy Bill introduces new levies, they are along the same lines as those in the research Bills that come through this chamber annually. The rate of wheat tax, which is levied to fund industry research, is being increased from the current operative and maximum rate of 30c per tonne to a maximum rate of $1.10 per tonne. The Australian Wheatgrowers Federation has indicated that it seeks an initial rise from 30c to 35c per tonne. I understand that the Minister for Primary Industry (Mr Kerin) has not yet indicated agreement to that 35c operative rate for the current season, but I understand that that should be forthcoming shortly if it has not hapened in the last few days. Australian wheat growers would like that finalised pretty shortly so that they know which way they are going. The Grain Legumes Levy Bill and the Grain Legumes Levy Collection Bill are new Bills. They currently pertain to lupins and field peas. These are fast becoming crops in their own right within Australia rather than just rotational crops used specially for nitrogen replenishment. The legislation provides for an initial levy rate of 75c per tonne and that rate may be varied to a maximum of $2.60 per tonne. In all instances expenditure will be met with a dollar for dollar subsidy from the Commonwealth Government. These research moneys are vital, particularly in the case of the wheat industry where the fund has run down because of drought in most of the major wheat producing areas. It is necessary that that fund be replenished. Research funds are used very much in the wheat industry, one of our great export industries; to identify and treat different types of soil deficiences. Research is carried out into disease, insect and rodent damage, plant breeding techniques, different plant varieties, storage, transport and so on. It plays quite a vital role in identifying problems and indicating treatment. It has the wholehearted support of the industry. I point out that currently very little has been said by this Government about one of the `diseases' affecting all primary industry; namely, the current high interest rates. They are higher, possibly, in real terms than they were in the Depression and they are possibly the highest since Federation. It was quite ironic that at the weekend the Minister for Finance (Senator Walsh) made a statement which was much publicised, particularly throughout rural Australia. In question time on Tuesday he alluded to the fact that he was in Western Australia at the weekend and met the rural Press. He said that the Hawke Government had given more benefits to farmers than any government for decades. That statement reeks of another famous statement from a previous Labor Prime Minister, Mr Whitlam, which has gone down in history in rural Australia. He said that the rural industries had never had it so good. With all the financial measures introduced by this Government-financial statements, mini-Budgets, Budgets, tax statements and all the rest-not one of them has not disadvantaged the rural sector in some way, shape or form. It is ironic that the Minister for Finance would make such a statement and expect the people in the rural areas to believe him. It must be said that if, as the saying goes, the people in rural areas were living off the fat of the land, they could expect to pay more towards the common good. The fact is that they are not. It is also a fact that they are contributing up to 45 per cent of our export earnings while we are running a current account deficit of around $10 billion. I suspect that an industry such as that should be shepherded and looked after a little rather than be treated harshly as it has been treated in every financial measure that has been brought down by this Government. Apart from that little homily, the Opposition supports these rural Bills. They are necessary. They are routine Bills. As I said, the grain legume Bills are new, but they are in the same vein as Bills relating to other rural industries. Senator HAINES(South Australia)(10.24) —The Australian Democrats will not oppose the Grain Legumes Levy Bill 1985, the Grain Legumes Levy Collection Bill 1985 and the Wheat Tax Amendment Bill 1985. In order to facilitate the passing of these Bills through the Committee stage, as I understand that there will be no amendments, I wish to raise a matter with regard to clause 12 (2) of the Grain Legumes Levy Collection Bill 1985 that I would normally raise in Committee. This matter was raised by the Senate Standing Committee for the Scrutiny of Bills with regard to some other pieces of primary industry legislation and, indeed, other legislation, in particular the Export Inspection Charges (Miscellaneous Amendments) Bill. The Committee found a problem in clause 20 of that Bill relating to the matter of self-incrimination. Clause 12 (2) of the Grain Legumes Levy Collection Bill) states that a person is not excused from submitting a return or providing information on the ground that it might tend to incriminate that person. However, it makes the qualifying comment that any return or information so submitted-that is, as required under the Act-or information which is provided under the Act is not admissible in evidence except in proceedings for the failure to submit a return or to provide information, or for the furnishing of information, or a return that is false or misleading in a material particular. The Minister for Primary Industry (Mr Kerin) has written to the Scrutiny for Bills Committee on this matter reassuring members of that Committee, presumably also members of this Parliament and people in the community who are likely to be affected by this clause, that indeed there will be no use of the evidence against people if that evidence is furnished to the Department through the sorts of forms and other information garnering processes that are required under the Act. I would just like to say to the Minister that we will be keeping a weather eye on this matter. On the very first occasion that it comes to our attention that in fact this undertaking is broken, we will be taking steps perhaps through the statute law miscellaneous provisions legislation, or through some other means, to ensure that the sort of evidence which may incriminate somebody through providing information under this Act is no longer able to be used as evidence against them in any other area. Senator GRIMES(Tasmania-Minister for Community Services)(10.28) —I thank honourable senators opposite for their support for this legislation. Apart from the fact that I grew up and still live in a semi-rural area, I do not claim to be the expert that my wheat growing colleague Senator Walsh is in this area. I listened with interest to what Senator Collard correctly described as his homily, which he usually gives during speeches of this type, even though he is not opposing the legislation. Perhaps I can give a little bit of a homily as a boy from the bush. I grew up in the post-war period when we heard from Senator-- Senator Haines —Is this going to be about your chooks again? Senator GRIMES —No, not my chooks. I have given honourable senators plenty of talks about my chooks. We heard from members of what was then the Country Party, and in fact still claims to be the Country Party, that all the subsidies and all the provisions that were provided by government over the years had the aim of keeping people on the farm and the aim of maintaining decentralisation and stopping us from becoming a terrible, urban-based country. In that time the percentage of people in the rural areas has halved and I think the number of farmers is down to about a third. So those policies, quite clearly, did not succeed. I also note with interest the debate recently amongst farmers and amongst people such as Mr Anthony and others, between the two wings of the rural movement at the moment-those who claim they believe in free enterprise and free markets, such as Mr McLachlan and company, and those who could be quite correctly described as agrarian socialists such as Senator Collard and others, who believe that all government expenditure is bad except government expenditure on farmers. I think it was Major Major's father in Catch-22 who used that definition. I think it is going to be interesting for those of us who are not directly involved to listen to the continuation of that debate. Senator Collard raised the matter of what will be the operative rate for the wheat levy shortly. I was under the impression-I will get confirmation of this from the Minister for Primary Industry (Mr Kerin)-certainly from one reading of the second reading speech and notes that in fact the Minister had agreed that the new operative rate would be 35c per tonne. I will check on that and make sure that that has been confirmed. Senator Haines raised, as she always does, an important issue-the issue of the problem of self-incrimination which the Senate Standing Committee for the Scrutiny of Bills and others raised in considering the Grain Legumes Levy Collection Bill 1985. As she said, clause 12 (2) has the effect of removing self-incrimination as an excuse for refusing or failing to submit returns or to provide information required to be submitted or provided by the Bill. The research schemes which have been developed by this Bill and other Bills, in consultation with the relevant industry groups I might add, provide for the collection of a levy to finance the research into new and important crops. The scheme relies absolutely upon the provision by receivers and the purchasers of grain legumes of returns containing true and correct particulars of deliveries made to them by growers. In addition, certain growers who process their own grain legumes are also obliged to submit returns. The amount of levy paid by receivers, purchasers and growers is checked against the information contained in the return. There is provision in the Bill for the receiver or purchaser to recover the amount paid on the grower's behalf. The alternative charging system of requiring each and every grower to submit levy payments and returns would not be administratively feasible or economically sensible. The Minister prefers that information be derived directly from the receiver or the purchaser. Virtually the entire revenue collection by the Department proceeds on this basis. If incrimination was available as an excuse in not providing the information, operations which infringed some provision of the Bill might not be recorded and returns would therefore be incomplete. To encourage the provision of complete returns and to provide a safeguard against prosecution on the basis of information required by law to be recorded and handed over to the Government, sub-clause 12 (2) makes the information inadmissible in evidence except in specified kinds of proceedings relating to the return itself. In the Government's view, this provides a safeguard against prosecution on the basis of information contained in the return, while allowing the revenue collection functions to proceed and it does not trespass unduly on personal rights and liberties. However, the Government takes Senator Haines's point. We take the warning that she and her colleagues will be observing the operation of this measure very closely. I thank honourable senators for their interest and for their support of the legislation. Question resolved in the affirmative. Bills read a second time, and passed through their remaining stages without amendment or requests or debate. Consideration resumed from 8 October, on motion by Senator Gareth Evans: That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without requests or debate. Debate resumed from 8 October, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator PETER BAUME(New South Wales)(10.35) —The Petermann Aboriginal Land Trust (Boundaries) Bill is a small Bill seeking to validate certain necessary changes to the boundaries of this area of land. Normally the Opposition would not give it too much concern or attention, but because it relates to the handover of the Uluru area of Ayers Rock to a local community, the Opposition has a view which it wishes to express. I will be moving an amendment to the second reading expressing our concern about the way in which the Government has gone about these matters. This is a Bill for an Act relating to the boundaries of the land held under the Petermann Aboriginal Land Trust, which is established under the Aboriginal Land Rights (Northern Territory) Act 1976. The Petermann Land Trust was established by the Fraser Government and its boundaries were gazetted on 21 July 1978 when my colleague Senator Chaney I think, was, the relevant Minister. The proposed Bill has two purposes; first, to rationalise the boundaries of the Uluru (Ayers Rock-Mt Olga) National Park and the land granted under the Land Trust to ensure that the description of the Land Trust does not overlap. What has happened is that the land given under the Trust and the land in the national park do overlap. Some error was made in surveying, which was brought to light in 1978 when the Surveyor-General conducted a general survey in preparation for Northern Territory statehood. The Surveyor-General became aware that the boundaries were not correctly drawn. This matter was referred to the Department of Administrative Services which, in its wisdom, did nothing. It did not advise the Department of Aboriginal Affairs; no action was taken to bring the boundaries into line as they should have been brought into line at that stage. The error has now come to light, and the Department of Administrative Services should explain why no action was taken for some five or seven years. If it was during the period of our stewardship and ministerial responsibility, it is for us to answer. Nevertheless, the Department of Administrative Services has let this go as something not terribly important. The area of land involved is very small-about two square kilometres-but the error was brought to light some years ago. No action was taken and we want to know why. The matter now has to be dealt with with some speed, not least because the handover of the Uluru area to an Aboriginal community is imminent. We understand that the handover of title is to take place on 26 October. It is necessary to get this Bill passed so that the Government can proceed to prepare the final documents which will be required for the handover to take place on 26 October. The Bill has only a few clauses. Clause 4, which seeks to validate the proclamation of the Uluru National Park, is not one that we wish to oppose. Clause 3, which is the significant clause of the Bill, seeks to determine the boundaries of the Petermann Aboriginal Land Trust. It raises anew the question of the way in which the Government has proceeded on the handover of Uluru, particularly in relation to the lack of consultation with the Northern Territory Government. Senator Chipp —Do you have your second reading amendment? Senator PETER BAUME —Senator Chipp has asked about the second reading amendment. I would be grateful if the attendants would circulate the second reading amendment now. I mention to Senator Chipp that we will be moving an amendment, to express our concern about the lack of consultation, as an attachment to the motion for the second reading of the Bill. Our opposition to clause 3, to which I have adverted, is consistent with the position we took when we debated the Aboriginal Land Rights (Northern Territory) Amendment Bill, which dealt with the transfer of title of Ayers Rock to a local Aboriginal community. We claimed at that stage that Ayers Rock was of significance to all Australians and that the transfer of title to a small community was inappropriate. We put our arguments at some length and the Senate determined its position. We said that the land should be vested in the Northern Territory with the provision of freehold title within the area as living areas for local Aboriginal communities. We said then that as a matter of principle the Northern Territory Government should have been consulted and we say again that it should have been consulted on any move to change the boundaries of the national park or of the Petermann Aboriginal Land Trust covering the area. If I may, I will say something about the proposed handover which is set down for the 26th and which is the reason for this Bill now being passed by the Parliament. It is probably an important event for certain Aboriginal people, but the Government is planning to spend an enormous amount of money celebrating it. I refer honourable senators to page 939, and a few following pages, of the Hansard record of the Senate Estimates Committee D hearing on 1 October. We asked officers of the Department of Aboriginal Affairs exactly how much was going to be spent in relation to the handover ceremony, and the answer was absolutely horrific. They advised that the catering for the ceremony will cost $22,000; that the co-ordination of Aboriginal arrangements for the ceremony will cost $30,000, that the assistance of a public relations firm to assist in media liaison will cost $80,000; that a pictorial book will cost $55,000; that pamphlets will cost $50,000 and that a public relations consultancy fee of $40,000 will be paid to Mr White. Those amounts make up the more than $277,000 which has been set aside specifically for the handover ceremony. In addition, we were advised at the Estimates committee of an amount of $150,000 which related to the preparation of a film, only some of which could be attributed to the actual ceremony; some of it would have been spent anyhow. The cost of the handover of Ayers Rock is wrong in principle. The Government is planning to spend over $277,000 on the event-under the headings which I have read out and which were given to us in the Estimates committee when we asked for them-plus a proportion of the $150,000 set aside for the film. It will probably total well over $300,000, which is an inordinately large amount to expend. Some of it comes under the heading of propaganda. It is bad enough to have the handover taking place but it is doubly bad to have these other matters added to it. On behalf of the Opposition I move: Leave out all words after `That', insert: `the Senate declines to give this Bill a second reading because of its concern that the Northern Territory Government was not consulted in relation to the alterations to the boundaries of the Petermann Land Trust or its effect on the Uluru National Park at any stage prior to the introduction of the Bill into the Parliament'. We believe as a matter of constitutional propriety, whether two square kilometres or 2,000 square kilometres is involved, that some consultation between governments was appropriate. Of course, if that consultation had taken place the amendment would have no force. We condemn the Government for its failure to transfer ownership of the Uluru National Park to the Northern Territory. As Ayers Rock is a national symbol, it should not be vested in any section of the community but should remain the property of the nation. We express our regret-nothing stronger than that-that the office of the Governor-General is to be involved in the transfer of title to Uluru National Park in the full knowledge which the Government has, from survey evidence, that this transfer does not have the support of Australian people. Our amendment goes to proper constitutional practice and proper need for consultation. If the Government is determined not to consult with the Northern Territory, let it say so. That information will be noted in the Northern Territory. That is a matter for the Government to determine. Apart from our concern about clause 3, we have no objection to clause 4 of the Bill. Senator CHIPP(Victoria-Leader of the Australian Democrats)(10.46) —The Australian Democrats are happy to facilitate the speedy passage of the Petermann Aboriginal Land Trust (Boundaries) Bill 1985. As the Minister for Resources and Energy (Senator Gareth Evans) has explained, the Bill is designed to rectify a long standing misdescription of the boundaries of land granted to the Petermann Aboriginal Land Trust under the Aboriginal Land Rights (Northern Territory) Act 1976. The misdescription, although minor in terms of the amount of land involved, had the effect of creating inconsistency between the common boundaries of the Petermann Aboriginal Reserve and the adjoining Uluru National Park. The Government is rightly concerned to remove any doubts or uncertainties which may arise as a result of this discrepancy before the historic handover ceremony of the Uluru National Park on 26 October-which, as I understand, the Liberal Party of Australia has announced that it will boycott. I think that is a shameful act, if that is true. It is an act which I would have thought could not have been more divisive at this time in the history of Australia. As my colleague Senator Macklin in describing the Bills effecting the handover, said: Not only is this step of vital importance to the Aboriginal people themselves. It will be symbolic to the entire Australian community that we have started down a road which for this nation is historic-a road which ultimately will lead to a just settlement of the entire land rights issue. I am surprised that Senator Peter Baume should be adopting this attitude, because his record as Minister for Aboriginal Affairs was a distinguished one. He was one of the few Ministers who, along with Senator Chaney, showed real compassion and real understanding of the Aboriginal problem. Yet to bring in a divisive, petty little amendment like this I am sure is not of Senator Peter Baume's making or liking. It is one dictated by his political party which has got to pay some obeisance to those strange people who pose as Ministers in the Northern Territory. I find it ludicrous that the Liberal Party, at Federal level in this chamber, should move an amendment to the second reading of a Bill which states: The Senate declines to give this Bill a second reading because of its concern that the Northern Territory Government was not consulted in relation to the alterations . . . Good heavens! We are talking about a stretch of land only nine kilometres long by 200 metres wide. That is all this is about. I pay Senator Peter Baume due credit. He did not answer my interjection, because there was no answer to it. He is asking the Federal Government to consult with this mishmash of Liberal politicians in the Northern Territory about a matter like this. Did the Northern Territory, with the same mishmash of Liberal politicians, consult with the Federal Government when it was mishandling and misappropriating millions of dollars in buying out a private enterprise casino? Was there any consultation with the Federal Government? Virtually all the money came from the Australian taxpayer. One would have thought that, out of sheer courtesy, the Northern Territory Government would have said to the Australian Treasurer or the Federal Parliament: `Look, we are going to do this with your money. Do you approve? Have you any fine tuning you wish to be made on this deal?' As I understand it, there was not one word of consultation. Yet one has to say this about the Liberal Party: It is loyal to the incredibly stupid people who pose under its name as politicians in other States. Here we have an Act by the Northern Territory Government, by the Country-Liberal Party, that borders on the improper. It did not consult the Federal Government about it. Yet in this debate, when we are about to do something perfectly logical and proper, simply to correct an earlier oversight-bearing in mind that an incredibly important occasion concerning the Aboriginal people is to take place on 26 October, namely the handing over of the Uluru National Park-all the Liberal Party can do is to say: `We will kill this Bill'. It does not even have the guts to say: `We disagree with it and we will vote against the second reading'. It is trying to bring in the subterfuge that it will decline to give the Bill a second reading only because there has been no consultation. Senator Peter Baume —We will vote against the third reading. Senator CHIPP —I am glad to hear that. It will at least be an honest manifestation of your feelings. I compliment you on it. It is a fair manifestation of your feelings. The amendment is a divisive and pathetic attempt to kill the Bill before the handover of the park on the 26th of this month. The Australian Democrats stand by the view expressed by Senator Macklin. We are pleased to support the correction of a minor technical discrepancy which might have adversely affected the handover of Uluru National Park. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(10.53) —We are witnessing an attempt by the Opposition to delay and amend what is clearly a popular move by the Government to accept its responsibilities in respect of this project in the Northern Territory. It is clear that the Opposition, bereft of positive policies in respect of a whole range of issues, has seized upon this technical Bill, the Petermann Aboriginal Land Trust (Boundaries) Bill 1985, for the purpose of belabouring an issue which clearly does not enjoy majority support either in the Northern Territory or, for that matter, in Australia. The Bill is designed to do no more than make a minor variation of the description of the boundaries of land granted to the Petermann Aboriginal Land Trust under the Aboriginal Land Rights (Northern Territory) Act 1976. I remind the Opposition that during that period the legislation enjoyed the support of the Opposition. At that stage it was sympathetic to the rights of Aborigines in Australia. We can look back on that period and say that today the Opposition has an attitude different from the attitude it had when it was in government. Whilst it is conceded that part of the role of the Opposition is to oppose, there are certainly, and surely should be, areas which are common ground in respect of a whole range of issues, particularly our obligations to the Aboriginal people. Yet we see what can be described only as a cheap and nasty attempt to belittle the endeavours of the Government to accept what should be a national obligation to the indigenous people of our continent. In effect the legislation deals with one section of the boundary, approximately nine kilometres long, which will be shifted some 220 metres north of its present location. This involves a total area of about two square kilometres. One would think we were dealing with an important country somewhere else in the world judging by the clamour and hysteria that have characterised the statements of Mr Tuxworth and the Opposition, in the House of Representatives and in this place, to this important area. The Opposition is taking advantage of a very important but minor piece of legislation in the sense that it seeks to vary in a very small way the land area that surrounds this project. The Bill will also confirm the validity of the proclamation and the description of the Uluru National Park which was proclaimed in 1977, again a proclamation that was made during the Liberal-National Party coalition Administration. That again emphasises the point I made earlier about the inadequacy of the Opposition to take a positive position in respect of this issue and many other national issues. The debate on this Bill should be constrained and limited, given the technical and narrow objectives of the Bill. Yet that has been ignored in the debate. On the contrary, we have had attempts by the Opposition to rock the boat and take advantage of the misconceptions, prejudices and racism that exist in the community in order to score some cheap political point against the Government. That is to be deplored and rejected as I hope it will be when the Senate deals with this matter. Of course the Senate is entitled to debate the pros and cons of granting title to the Aboriginal beneficiaries of the Petermann Land Trust which has already taken place. The Opposition has made its position known during not only this debate but also the previous debate. Its attitude to Aboriginal matters has changed markedly in recent times. One can presume only that that change has been part of a political ploy to gain favour amongst the prejudiced section of the community that unfortunately exists. The Opposition seems unprepared to limit the scope of the debate but seeks again to trot out the now discredited allegations that in some way Aborigines are about to deprive other Australian citizens of the enjoyment of the Uluru National Park and other arguments in blind support of the Northern Territory Government. I interpose that even in the Northern Territory one has to say that the attitude being taken by the Chief Minister does not enjoy anywhere near the amount of support one would expect to find having regard to the stand he has taken and the exploitation of this issue by the Opposition parties in the House of Representatives and the Senate. It can be conceded that newspapers generally take an objective view, but certainly not necessarily a pro-Labor view, on matters. Nevertheless, one newspaper says: The NT Government has misjudged public opinion on the Uluru National Park handover to Aborigines. According to a mid-week Territory street poll, the government lacks support for boycotting the October 26th ceremony, to be attended by Governor-General, Sir Ninian Stephen. Thirty people were asked: `Should the NT Government boycott the handover ceremony on October 26?' Eleven people agreed with the boycott decision, but 19 said the government had made the wrong decision. Many indicated they were normally Country-Liberal Party supporters. It seems strange that the Opposition parties, who are always so vociferous about the important role that the monarchy plays through its representative in this country, should take the step of suggesting a boycott and causing embarrassment to the very important office of Governor-General and the very important person that Sir Ninian Stephen is. One would have thought that the attempts being made by the Northern Territory Government and the support that has been given to it in this place would be seen as an embarrassment and a negative attitude to take to that important office of Governor-General. One can only say that this is cheap political point scoring, an attempt to whip up public opinion and to exploit prejudice and racism at the expense of Her Majesty's representative. That is to be deplored. Yet that seems to be the sole motivation of the Chief Minister of the Northern Territory, Mr Tuxworth, who lacks policy, credence and alternative proposals and seeks therefore to create division where division should not exist. Senators will know that Mr Tuxworth has been appearing on television. On one such appearance he was confronted with the indisputable fact that his predecessor, the former Chief Minister, Mr Everingham, who is now a member of the national Parliament, representing the Northern Territory, had supported the granting of title to the relevant Aboriginal groups. The Northern Territory Conservation Minister, Mr Hatton, had said that he has no objections to the granting of title to Aborigines and Mr Tuxworth himself had at that time offered support for the Everingham position. So we are entitled to ask the motivation of the Opposition. What is the motivation of the Northern Territory Government? It can only be described as despicable, unnecessary and disruptive. When he was asked why he had now changed his mind Mr Tuxworth suggested that there was now a matter of principle at stake, that principle being whether Ayers Rock and its surrounds should be controlled by the Commonwealth or the Northern Territory. What a specious and totally unacceptable argument, when we know that almost 20 years ago in a rarity of referendum decisions the Australian people decided that responsibility for all matters associated with Aborigines should rest with the Australian Government. I would have thought that the least we could have expected of the Liberal Party in this Parliament was that it would have respected that view of the Australian people and would have taken on board the essential prerequisite for that responsibility, which is a unified position between the Commonwealth and the States. Of course, as that did not suit Mr Tuxworth's political position, he has launched an advertising campaign which would suggest something very different. That campaign improperly, mischievously and wrongly suggests that a small Aboriginal group is about to deprive the rest of Australia from the use and enjoyment of what is a national monument. I suggest that that is a matter of great regret. The Northern Territory Government has once again-as we have seen since the Hawke Government came to office-reverted to its most common tactic of attacking everything national, of kicking the Aboriginal can in order to drum up political support for its argument that the Commonwealth should have less power in running Uluru National Park. Not only is that view shared by what I would hope to be the majority of Australians, but the Northern Territory News also said in a recent editorial: Chief Minister, Mr Ian Tuxworth's $200,000 publicity extravaganza over the Ayers Rock hand-over is a waste of public money. Mr Tuxworth left yesterday on a crusade to make the Australian public aware of the injustice of the Federal Government's decision to give Commonwealth title of Ayers Rock to the Aboriginal traditional owners. I recall that once, several years ago, there was common ground in the Parliament on this issue. The editorial went on to say: Like most crusades based on missionary zeal, it is pointless. He well knows his chances of making any changes to the ceremony planned for October 26, less than three weeks away, are zero. Not only do we have that view- Senator Chipp —On a point of order, Mr Acting Deputy President: I hesitate to interrupt the Minister, but the fact that he is speaking in inflammatory terms about a most delicate subject is worth mentioning. However, it is beside the point the order that I wish to raise. The Petermann Aboriginal Land Trust (Boundaries) Bill 1985, which is before the Senate, is not about the handing over of Uluru to the Aboriginal people. It is a Bill that concerns a very small matter. It is to clear up a discrepancy that has been discovered relating to a block of land about nine kilometres long and 200 metres wide. That is all the Bill is about. If you intended to allow the Minister to encroach into a very inflammatory and delicate matter-and he is entitled to do that-you will have it on your head because other people, particularly those on the Liberal side who feel equally strongly and equally genuinely about this matter, will become just as inflammatory. With great respect, I warn you of the dangers that are inherent in your allowing the Minister to proceed on this course. The ACTING DEPUTY PRESIDENT(Senator Colston) —I must admit that it is the first time as occupant of the chair I have received a warning. I do not see any point of order and I ask Senator Gietzelt to continue. Senator GIETZELT —The debate has ranged over a wide area and I was seeking to respond to what has been the objective nature of this debate conducted both in the Parliament and in the public arena. I have been attempting to suggest that these tactics may have some impact on certain elements within the Northern Territory community. They will not have the desired effect on the vast majority of thinking Australians because they already know that similar arrangements exist for the Kakadu National Park in the Northern Territory. That is one of the great national parks of the world and it has been successfully administered and run as a national park, notwithstanding that much of the land on which it is situated is owned by the Aborigines. The title to that land was handed over by the Fraser Government in 1978. Kakadu has been operating as a national park and the public has not been denied access to it. The present Opposition parties have never suggested that these arrangements should be overturned. Thus one wonders why we are being subjected in the debates, both in the other place and in the Senate, to the principles that have been raised by the Opposition parties. The argument that Mr Tuxworth is seeking to generate is nothing more and nothing less than a regurgitation of the old Northern Territory versus the Commonwealth argument as to who should control the two major national parks in the Territory. The coalition administration under Malcolm Fraser did not concede the right of the Territory to take control of either Kakadu or Uluru. Nor does this Government. One would hope that we would have a common position in respect of that principle and that policy which has existed over time. What the Fraser Government appreciated and what the present Government knows is that the Northern Territory Government does not have the confidence of Aboriginal people in the Northern Territory. That Government has consistently opposed Aboriginal land claims, it has sought to frustrate the making of land claims and in a dozen other ways it has generated situations in which the Government and Aboriginal citizens of the Northern Territory are in confrontation. These actions do not give rise to the sort of confidence that Aboriginal people must have if they are to be encouraged to co-operate with and seek the participation of the Northern Territory Government in areas that affect Aboriginal affairs. Of course, this Government wants co-operation; it does not seek confrontation with the Northern Territory Government. We seek co-operation not only with the Northern Territory Government, but also with all other State Governments where there is a need to achieve common aims. I recall the debates that have taken place over many years, when present shadow Ministers were in government. I was pleased and prepared to give support-and did so-to the common view that they expressed in those times, particularly when they had responsibilities for Aboriginal affairs, and I thought that we had achieved a much more common position than has been expressed in debate on this matter. The Government, of course, opposes the proposals put forward by the Senate Opposition and asks the Senate to agree to the legislation and reject the amendment to the second reading motion moved by the Opposition. To that extent we hope that we will move back to a more rational position, a position where we will not have differences of interpretation, differences of objectives and differences that I think only harm the cause of the Aboriginal people in our country. The ACTING DEPUTY PRESIDENT(Senator Colston) —Before I proceed I would like to go back to the point of order that I received about five or 10 minutes ago when the Chair was warned. I think it is most inappropriate for an honourable senator to warn the Chair. I ask that that type of point of order not be raised again. Senator JESSOP(South Australia)(11.12) —I would like to speak for a few moments on this Bill because we are all interested in it and in the welfare of the Aboriginal people of Australia. I think it was quite appropriate that Senator Chipp should have drawn attention to the rather inflammatory remarks made by the Minister for Veterans' Affairs (Senator Gietzelt) because there is no need for that. It could conceivably inspire people on this side of the chamber, who are equally concerned about the subject before the Chair, to engage in similar tactics which I think are unnecessary. We are dealing with an important issue and the Opposition I think has quite properly drawn attention to the fact that the Northern Territory Government was not consulted. I think that is uncalled for. Had the Northern Territory Government been consulted the Government may have modified its attitude to the question of this national monument which is part of our national heritage. Sometimes we lose sight of the fact that in Australia today something like 159,000 people claim to be Aborigines. Of that number, probably 35,000 to 50,000-it is pretty difficult to put a figure on it-could be regarded as traditional tribal Aborigines. With respect to this Bill I understand that of the order of 200 traditional owners have been identified. I just make that point because this area is of great significance and interest not only to the Aboriginal people but also to the 15 million other Australians who regard it as part of our national heritage. In particular, those people who have lived in the Northern Territory all their lives, probably fourth or fifth generation Australians, also should have been regarded as a little more important than the Government has chosen to regard them. I would like to refer to Senator Kilgariff, who is unable to be here due to an unfortunate accident he had earlier in the week. As he has taken a great interest in this matter, I draw attention to some comments he made as recently as 9 October. He referred to a claim by Mr Clyde Holding, the Federal Minister for Aboriginal Affairs, that Ayers Rock would remain accessible to all Australians after its handover to the Mutitjulu Aboriginal community. He claims that that is very misleading and simply does not stand up to an examination of the facts. Senator Kilgariff referred to an incident on 28 September when Mr Irwin Chlanda, of Chlanda Pty Ltd Television and News Services in Alice Springs, was requested by a ranger of the Australian National Parks and Wildlife Service to leave the precincts of Uluru National Park. Senator Kilgariff pointed out that, prior to this incident, the Director of the Australian National Parks and Wildlife Service, Professor Ovington, had stated that only those persons involved in filming for the purposes of producing entertainment or dramatic features need apply for a permit to film and that filming for news or documentary purposes did not require a permit. Senator Kilgariff went on to comment that on 28 September Mr Chlanda informed rangers of both the Australian National Parks and Wildlife Service and the Northern Territory Conservation Commission that he intended to undertake filming for news purposes. He informed the rangers out of courtesy, as under Professor Ovington's guidelines he was not required to inform anyone. Later that day Mr Chlanda was approached by Mr Hicks of the ANPWS who said that in his judgment Mr Chlanda was filming a commercial and should therefore stop filming and leave the park. I think Senator Kilgariff was quite justified in making that comment publicly, as he did in a Press release yesterday. He ended by saying: . . . this was just another example of an increasingly common complaint from persons wishing to film within the park. If this attitude is supposed to reflect Mr Holding's assurances on the continued accessibility of the Park, it does not augur well for the future. Those are the sorts of things that would concern everybody on this side of the House and that is the reason we drew attention to the fact that the Northern Territory Government was not appropriately consulted and that these rules and regulations concerning the filming of news items such as were referred to in Senator Kilgariff's comments could not have been clearly understood by everybody. It is clear from the statement he made that Mr Hicks of the ANPWS was obviously uninformed. Certainly the referendum to which the Minister referred not only gave Aborigines an entitlement to be enrolled and to vote but also gave the Commonwealth powers to introduce legislation for their benefit. There is no dispute about that, but when we are dealing with sensitive Federal-State matters in this regard and with a national monument which is of interest to 15 million Australians as well as 159,000 people who claim to be Aborigines, I think it is incumbent on the Government to consult carefully and closely with the Northern Territory Government or any other Government where the Federal Government seeks to intrude its powers in relation to national parks of this character. I think it is very sensible and appropriate for the Leader of the Opposition (Senator Chaney) and the Opposition generally to support this amendment to decline to give this Bill a second reading because of its concern that the Northern Territory Government was not consulted in relation to alterations to the boundaries of the Petermann Land Trust or its effect in the Uluru National Park at any stage prior to the introduction of this Bill into the Parliament. Senator CHANEY(Western Australia-Leader of the Opposition)(11.19) —I had not intended to participate in this debate as the Bill is in the hands of my colleague Senator Peter Baume, but as the Minister for Veterans' Affairs (Senator Gietzelt), who is at the table, gave me an honourable or a dishonourable mention-I am not sure which-I thought I would respond and put a view on the amendment which the Opposition is putting forward. We are suggesting that this Bill not be given a second reading because of our concern that the Northern Territory Government was not consulted at any stage prior to the introduction of the Bill into Parliament in relation to the alteration of the boundaries of the land trust or its effect on the Uluru (Ayers Rock-Mount Olga) National Park. We are concerned about the importance of consultation in this area. I wish to place that concern in a slightly wider context so that the Minister who is at the table will quite understand the position which I adopt and which, I think, fairly reflects the position of the Opposition. The present situation of Aboriginal people in Australia can give rise to very little satisfaction. It seems to me that in terms of the level of public support which can be expected or which has been received by the Aboriginal people, we are going through a period of steep decline. The unfortunate fact of the matter is that there is a high degree of impatience in the community with some of the demands which have been made in the recent past by representatives of the Aboriginal community. These demands are squarely in line with the pre-election promises of the present Government. The Minister made a plea for a return to bipartisanship or to a common position, which is what applied in the mid-1970s. That is correct: there was a very high degree of bipartisanship in this Parliament in the period 1975 and 1976. I have picked two years; in one there was a Labor government and in the other there was a Liberal government. It is a fact that it was the Liberal Government which put the Aboriginal Land Rights (Northern Territory) Act through this Parliament, with a high degree of bipartisan support. It is important to remember that the legislation which we put through, in common with the legislation put forward by the Whitlam Labor Government, was federalist in its nature. It dealt with the position of Aboriginal people in the Northern Territory and it did not purport to extend land rights on a national basis. As I recall it, the legislation was put forward on the basis that it might well provide a useful precedent for other parts of Australia. In fact, a State Liberal government in South Australia enacted legislation which has much in common with the Northern Territory legislation, with the very important distinction that the South Australian legislation did not give an unlimited right to claim land where that land was vacant and where Aboriginal traditional ownership could be proved; rather, in a move which, with the wisdom of hindsight, I now see as having been very sound, the South Australian Government in its two pieces of legislation, defined the extent of land which would be affected. Going back through the history of the land rights legislation, what the Liberal Government predicted in 1976 would be the impact of that legislation was really inaccurate. We predicted that a certain proportion of the Northern Territory was likely to be claimed. We underestimated the extent of the claims. As I understand it, the reality is that virtually all of the land which was available to be claimed has been claimed, and a substantial proportion of the Northern Territory stands to become Aboriginal land-more than was predicted by Mr Viner on behalf of the Government in these early days. Senator Peter Baume —That is presuming the Land Commissioner and the Minister make-- Senator CHANEY —Of course. All I am saying is that things have worked out slightly differently from what was predicted. Another item I draw attention to is the fact that in those early years of the land rights legislation, as was predicted by Mr Justice Woodward, certain difficulties emerged. It was novel legislation and difficulties emerged which had not been anticipated. Mr Justice Woodward suggested in his second report that we would need to review the legislation after a few years of its being in operation and be prepared to amend it in the light of experience. It was my fairly unhappy experience and, I think, the unhappy experience of my successors Senator Peter Baume and Mr Wilson- The ACTING DEPUTY PRESIDENT(Senator Colston) —Order! Senator Vigor, would you either go into the gallery or stay out? Senator Chipp —Mr Acting Deputy President, I raise a point of order. For many years it has been the custom in this place, and I would have thought you would have caught up with it, that members of the Liberal Party and members of the Labor Party freely converse with their advisers outside the chamber. With the agreement of the President of the Senate, four years ago I made similar arrangements for the Australian Democrats to do exactly the same thing in that part of the chamber behind me which is not the public gallery. That is the Democrats' advisers box. I am amazed that you would make such a ruling and embarrass one of my colleagues. I will take this up with the President unless you rule differently now; that it is our right to converse, to receive from and give papers to our advisers in the advisers box in the same way as it is the right of the Liberal Party or the Labor Party to do that with their advisers. The ACTING DEPUTY PRESIDENT —I take your comment, Senator Chipp. I was asking Senator Vigor not to lean over the Bar. It is my understanding that it has not been acceptable behaviour to lean over the Bar. He should either go into that part of the gallery, which you rightly say has been set aside for the Australian Democrats-- Senator Chipp —By the President. The ACTING DEPUTY PRESIDENT —I am not arguing with that, Senator Chipp; I am saying that as far as I am concerned it is not acceptable behaviour to lean over the Bar. It is much better for the senator involved to go into the area where the advisers are. I will not rule otherwise. If you wish to take the matter up with the President that is your prerogative. Senator Chipp —I certainly will. It is intolerable. Senator CHANEY —Mr Acting Deputy President, I do not wish to address you on the point of order. I shall resume my speech. I was pointing out that it was my unhappy experience, and that of my successors as Minister for Aboriginal Affairs, that trying to obtain amendments which I thought might have appeared necessary given difficulties in the Act, proved very difficult. There was a very unco-operative attitude on the part of the then Opposition-the Labor Party- to amending the Act. We entered into what seemed to be almost endless rounds of discussion with the various land councils. We did not succeed in removing some of the difficulties which emerged with respect to the administration of that legislation. The fact that the expression `land rights' is, in my view, now quite a counterproductive one from the point of view of the Aboriginal people and most of the Australian community in part relates to the fact that we were unable to remove some of the difficulties from the Northern Territory legislation. As an ex-Minister for Aboriginal Affairs, I regret my failure to do so. I think that my successors also regret that. As the Opposition indicated in its policy before the last election, it is committed to making amendments to the Northern Territory legislation to remove some of those difficulties. In my view, the real difficulty that has arisen is that the Labor Party post-1976 chose to move away from the bipartisan position which was very firmly rooted in the political administrative and legal realities within which we were working. When the Labor Party opted to go from having a fundamentally federalist approach, certainly with respect to land matters, to promising the Aboriginal people national land rights legislation, I believe a significant error was made. We are currently living with the results of that error. As I understand it, it remains Federal Labor policy to enact Federal land rights legislation. On examination of the proposal, I say that that would be a very difficult thing to do. It would be a very difficult policy to effect. I am confident that it would cause enormous difficulty. Constitutional, legal and administrative challenges would be mounted against it. My conclusion is that it is not a practical or feasible policy. In any event, in my view, that policy represents a very important element in the continuing difficult and very destructive debate which is still going on in Australia. The reality is that States, both Labor and Liberal, would stoutly resist the imposition of the Federal Labor policy. It is my belief that there is no real prospect of the Government introducing national land rights legislation. But the unfortunate fact is that while the possibility remains alive, the debate remains alive and the difficulties continue. I think that the Aboriginal people are going backwards as a result. What I have said is not something that I have not said before. I wish to incorporate in Hansard about 700 to 800 words I wrote which were published in the Australian newspaper on 24 May 1985 in the form of an open letter to Mr Hawke. I sought a return to bipartisanship by the Government and the Opposition. I make that request because I regard the current difficulties with great seriousness. I seek leave of the Senate to incorporate that letter in Hansard. Leave granted. The letter read as follows- AN OPEN LETTER TO MR HAWKE COMMENT: SENATOR FRED CHANEY I am pleased that you, Prime Minister, finally agreed to see a delegation of Aborigines on the difficult question of land rights. I very much regret that subsequent to the visit there has been further reporting of confusion about the Government's intentions and objectives in this very sensitive area. If it is true that the Government is going to postpone its decision-making for yet another year in favour of further consultation, then I urge you to rethink your position as soon as possible. The last thing Aborigines and other Australians need is another year of doubt and another year of strident argument among the disparate interest groups who are concerned at what your Government might do. You are very remote from the Australian community if you do not understand what harm that is doing to Aboriginal people and to race relations in Australia. It is my own assessment that your Government will eventually do little or nothing in this area. The opposition to national legislation is widespread and reaches across the political spectrum. The path of national legislation is strewn with obstacles, constitutional and legal difficulties, administrative nightmares and enormous cost. The end result is likely to be no action or token action and while it is difficult for you to climb down from the bold promises made in opposition and repeated in feebler form since assuming government, it is far better to sort the position out now than to continue this uncertainty. The widely varying arrangements made in the different States for dealing with the land needs of Aboriginal people do give rise to some uneven treatment across State boundaries. The differences, however, also reflect the widely varied circumstances of the Aboriginal people. To impose a uniform Commonwealth approach is unlikely to be successful in any sense. Inflame Nor can you avoid facing up to the very real difficulties which exist in the Northern Territory. In the years following the enactment of the Territory legislation by the Fraser Government, difficulties emerged. That was not surprising. The legislation was novel and the Woodward report suggested review would be necessary in light of practical experience. Successive Liberal ministers for Aboriginal affairs in the Fraser Government sought agreement for changes to the Northern Territory Land Rights Act to remove some of the difficulties which have tended to inflame the public attitude against land rights. A major obstacle to our achieving that objective was the obduracy of your party in opposing change and its announced determination to extend land rights on the Northern Territory model Australia-wide. No one in your Government would seriously advance that proposition today. Again, it is in the long-term interests of everyone, including Aboriginal Australians, that the Northern Territory legislation be revised to remove some of the obvious problems which have damaged the fabric of race relations and greatly reduced public support for Aboriginal policies generally. No one comes to this debate who has not a history of mistakes. But you are in government now and your maintenance of mistaken stances does great harm. Now is the time to re-write Aboriginal affairs policy to set achievable and realistic goals so that we can resume positive work in an area that has become far too negative. At a minimum the Government should make it clear that it will not pursue national land rights legislation and that it will work in co-operation with the States to meet the reasonable aspirations of Aboriginal Australians. Decisions in this regard are now urgent. If you fail to declare your position we can expect: CONTINUED opposition by the States to possible national legislation. CONTINUED agitation by the mining industry. CONTINUED agitation by some Aboriginals and their supporters. Total reconciliation of these viewpoints is not possible. What will satisfy the States will not meet the Labor platform and policy. What will satisfy the miners will never satisfy the Aboriginal land councils. What will satisfy the land councils will not satisfy most non-Aboriginal Australians. But it is possible to reduce tension if you give a realistic lead. You must set achievable objectives and you must achieve them. The past two years have been a damaging farce. Please do not prolong it. Senator CHANEY —It is really in that context that one has to examine the transfer of Ayers Rock. Ayers Rock is a national symbol as well as a site of significance to Aboriginal Australians, a point made by previous speakers on behalf of the Opposition. It is, in my view, in the current state of debate in Australia quite inflammatory to be going about this in the way that the Government has done. I have met with some of the people who were claimants of this land in the original hearing before Mr Justice Toohey. I respect their position. I think that the move which was made by the Government to acknowledge Aboriginal title and to obtain a lease back has, in fact, been taken at a very difficult time which makes it a very unwise step for the Government to take. I have earlier expressed the view in this place that the Australian community is unlikely to understand and certainly unlikely to agree with a rental payment being made to the Aboriginal people. I think that the Aboriginal majority on the board which I understand is being provided is also a mistake. The failure of the Government to be sensitive to the feelings of the broader Australian community and to the ease with which that community is turning against the Aboriginal community and away from its interests should receive much greater consideration. I do not for a moment suggest that the Government should not pay close regard to the needs of Aboriginal people. I had a number of days in the central reserve last week. Revisiting places such as Warburton, Jamieson, Blackstone and Waraburna is a salutary reminder of the very significant and difficult tasks which lie ahead of us. I believe that this Government is successfully dividing the Australian people on this issue. We have gone from a position where there was massive public support for Commonwealth involvement in Aboriginal affairs in the mid-1960s when the referendum was passed to a stage where it has become a political millstone around the neck of the Government. What is more important, it has become a destructive element in the propositions that we would all support, namely, that the position of the Aboriginal people needs to be improved and advanced. This is a small example. The failure to consult with the Northern Territory Government is a failure to acknowledge the concerns that exist in the rest of the community. To fail to consult in those circumstances is to provide a further cause of alarm, unrest, disputation, argument, unhappiness and resentment. This Government is doing the worst possible job, with whatever motives, in handling this difficult and sensitive portfolio. I regret to say it, but I believe that in a party which has many people who are deeply concerned about Aboriginal affairs we have a Minister who is totally insensitive to what is happening in the community and the contribution that he is making to reducing the situation of Aboriginal people in Australia. If this Government has any sense at all it will revert to a federalist approach in Aboriginal affairs and it will put into the position of Minister for Aboriginal Affairs somebody who has some regard for getting a return to public support for doing something about the serious problems that Aboriginal people face. This is symbolism of the worst sort. This is a symbolic gesture which may give people a warm glow when they are out there making big fellows of themselves in the presence of a few hundred Aboriginal people who, I am sure, will be very pleased. In terms of the total job which is to be done this is a very thoroughly destructive exercise and it is typical of too much of what this Government has done in this area. I agree with the spirit in which the Minister for Veterans' Affairs (Senator Gietzelt) made his comments in terms of the desirability of having a bipartisan position. I think that would be a great step forward for Aboriginal affairs. But I say to him very seriously that until the Labor Party acknowledges the reality which is, in fact, governing its actions at the moment, that the States have a very significant role in all this, a role which cannot and must not be taken from them, we cannot get back to the level of agreement that both he and I think should exist. I wished to take part in this debate because in a period in Australia where, perhaps, more attention is being paid to issues of taxation, the vexed issue of returning to a higher level of employment and all those issues which are burdening the broader Australian community, inadequate parliamentary time and thought is being given to an issue which has bedevilled us for generations and which will go on bedevilling us for many more. I think it is time for the Government to think again about its approach to Aboriginal affairs. I ask the Minister for Veterans' Affairs who is at the table and who is a man of goodwill in these matters to think about whether the approach of his Party is correct. I think it is fatally wrong and it is doing enormous damage to the Aboriginal people. Question put: That the words proposed to be left out (Senator Peter Baume's amendment) be left out. The Senate divided. (The Deputy President-Senator D. J. Hamer) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 30 —— Majority . . . . . . . . . 5 —— Baume, Michael Messner, A. J. Baume, Peter Missen, A. J. Boswell, R. L. D. Publick, C. J. G. Carrick, Sir John Rae, PeterChaney, F. M. Sheil, G. (Teller)Collard, S. J. Short, J. R. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. MacGibbon, D. J. Aulich, T. Grimes, D. J. Black, J. R. Haines, J. Bolkus, N. Jones, G. N. (Teller)Button, J. N. McClelland, DouglasChilds, B. K. McIntosh, G. D. Chipp, D. L. Mason, C. V. J. Coates, J. Morris, J. Colston, M. A. Richardson, G. F. Cooney, B. Robertson, E. A. Crowley, R. A. Sibraa, K. W. Devlin, R. Siddons, J. R. Evans, Gareth Tate, M. C. Foreman, D. J. Vigor, D. B. Georges, G. Walsh, P. A. Giles, P. J. Zakharov, A. O. Coleman, R. N. Archer, B. R. Ryan, S. M. Knowles, S. C. Maguire, G. R. Kilgariff, B. F. Cook, P. F. S. Bjelke-Petersen, F. I. Reynolds, M. Lewis, A. W. R. Ray, Robert Reid, M. E. McKiernan, J. P. Parer, W. R. Brownhill, D. G. C. Elstob, R. C. Question so resolved in the negative. Original question resolved in the affirmative. Bill read a second time. Clauses 1 and 2-by leave-taken together, and agreed to. Clause 3 (Boundaries of the Petermann Aboriginal Land Trust). Senator PETER BAUME(New South Wales)(11.44) —There is no need to rehash the arguments which I advanced during the second reading debate. The Opposition believes that clause 3 should be opposed and we will oppose it. Question put: That the clause stand as printed. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 25 —— Majority . . . . . . . . . 6 —— Aulich, T. Grimes, D. J. Black, J. R. Haines, J. Bolkus, N. Jones, G. N. (Teller)Button, J. N. McClelland, DouglasChilds, B. K. McIntosh, G. D. Chipp, D. L. Mason, C. V. J. Coates, J. Morris, J. Colston, M. A. Richardson, G. F. Cooney, B. Robertson, E. A. Crowley, R. A. Sibraa, K. W. Devlin, R. Siddons, J. R. Evans, Gareth Tate, M. C. Foreman, D. J. Vigor, D. B. Georges, G. Walsh, P. A. Gietzelt, A. T. Zakharov. A. O. Giles, P. J. Baume, Michael Messner, A. J. Baume, Peter Missen, A. J. Boswell, R. L. D. Publick, C. J. G. Carrick, Sir John Rae, PeterChaney, F. M. Sheil, G. (Teller)Collard, S. J. Short, J. R. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. MacGibbon, D. J. Coleman, R. N. Archer, B. R. Ryan, S. M. Knowles, S. C. Maguire, J. R. Kilgariff, B. F. Cook, P. F. S. Bjelke-Petersen, F. I. Reynolds, M. Lewis, A. W. R. Ray, Robert Reid, M. E. McKiernan, J. P. Brownhill, D. G. C. Elstob, R. C. Parer, W. R. Question so resolved in the affirmative. Remainder of Bill-by leave-taken as a whole, and agreed to. Bill reported; report adopted without amendment. Motion (by Senator Gietzelt) proposed: That the Bill be now read a third time. Senator PETER BAUME(New South Wales)(11.50) —The Opposition sought to amend the Petermann Aboriginal Land Trust (Boundaries) Bill in the Committee stage by removing clause 3. As I indicated during the second reading debate, having failed in that, the Opposition will oppose the third reading. Question put. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 25 —— Majority . . . . . . . . . 6 —— Aulich, T. Grimes, D. J. Black, J. R. Haines, J. Bolkus, N. Jones, G. N. (Teller)Button, J. N. McClelland, DouglasChilds, B. K. McIntosh, G. D. Chipp, D. L. Mason, C. V, J. Coates, J. Morris, J. Colston, M. A, Richardson, G. F. Cooney, B. Robertson, E. A. Crowley, R. A. Sibraa, K. W. Devlin, R. Siddons, J. R,Evans, Gareth Tate, M. C. Foreman, D. J. Vigor, D. B. Georges, G. Walsh, P. A. Gietzelt, A. T. Zakharov, A. O. Giles, P. J. Baume, Michael Messner, A. J. Baume, Peter Missen, A. J. Boswell, R. L. D. Puplick, C. J. G. Carrick, Sir John Rae, PeterChaney, F. M. Sheil, G. (Teller)Collard, S. J. Short, J.R. Crichton-Browne, N. A. Teague, B. C. Durack, P. D. Townley, M. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. MacGibbon, D. J. Coleman, R. N. Archer, B. R. Ryan, S. M. Knowles, S. C. Maguire, G. R. Kilgariff, B. F. Cook, P. F. S. Bjelke-Petersen, F. I. Reynolds, M. Lewis, A. W. R. Ray, Robert Reid, M. E. McKiernan, J. P. Brownhill, D. G. C. Elstob, R. C. Parer, W. R. Question so resolved in the affirmative. Bill read a third time. Debate resumed from 18 September, on motion by Senator Grimes: That the Bill be now read a second time. Senator DURACK(Western Australia)(11.56) —The Export Market Development Grants Amendment Bill, to amend the Export Market Development Grants Act, contains a number of quite significant changes to that legislation. The legislation is part of the Government's May economic statement which had the objectives of expenditure restraint. As I have said already in another debate this morning, the Opposition does not oppose that and in fact welcomes the approach of the Government to economic expenditure restraint. Nevertheless, I want to make it clear that each government makes its own determinations of priorities in this regard, but that does not mean that the Opposition supports or does not oppose the particular priorities chosen by the Government. In our view the Government has been elected to govern and it makes its priorities in this regard. Although we welcome and support the overall objective, that is not to be taken as an indication that we support each and every one of the Government's proposals. The May economic statement was a package of proposals. We are not in the business of remaking the Government package; therefore we are not opposing this measure, although we have a number of difficulties with it and would have moved in a different way in some respects. The Opposition has, both in government and since it has been in opposition, a sympathy with, and a practical commitment to, export incentives. Certainly we support initiatives designed to improve the effectiveness and efficiency of the export market development grants scheme. In the debate in another place we have suggested several changes to the amendments that have been proposed to the scheme by the Government. Those changes have been particularised in the debate in the other place by my colleague who spoke on behalf of the Opposition. Certainly we want to see more encouragement given to Australian exporters. In particular, the Opposition is concerned that in this legislation the Government has not provided sufficient notice and consultation with exporters. It introduced the legislative changes only six days after announcing the proposals. The Opposition is concerned also that difficulty will be caused for most businesses in finalising their accounts by terminating aspects of the scheme on 19 May and creating a broken period separate from the remainder of the financial year. We are concerned also at the failure of the Government to recognise commitments under the original scheme to provide grants on the original basis up to 30 June 1987. Despite those commitments, in respect of a number of exporters who otherwise looked forward to receiving grants up to 30 June 1987, the scheme will cease to do so from the cut off date of 19 May 1985. The Opposition is also concerned that this legislation fails to recognise the role of small business, which would clearly be disadvantaged in competing for grants under the revised arrangements provided for in this legislation. In order to give expression to those concerns I, on behalf of the Opposition, move the following amendment to the motion for the second reading of this Bill: At end of motion, add ``, but the Senate condemns the Government for- (a) its lack of notice to and consultations with exporters in bringing in the legislation and making it effective 6 days after the announcement; (b) its failure to recognise the commitment of the original scheme to provide grants on the original basis to 30 June 1987; (c) the uncertainty caused by dividing a year into parts and not recognising the normal year ending at 30 June; and (d) its lack of understanding in disadvantaging small business from competing for grants. I register our strong opposition to clause 10 of the Bill, which gives the Minister the power to make a determination in writing, published in the Commonwealth of Australia Gazette, declaring the Republic of South Africa to have been, with effect from 19 August 1985, a proscribed country. It spells out in detail what provisions may be included in such determinations. Policy in relation to sanctions being imposed on South Africa has already been the subject of considerable public debate, both in this chamber and elsewhere, by colleagues of mine. I reiterate that the Opposition does not believe that trade sanctions are in general appropriate and we do not believe that a provision of this kind should be included in the Bill. We will not support any determination made by the Minister in the exercise of the powers contained in this legislation. The Opposition has received many representations from industry expressing widespread concern about the adverse impact on them, particularly on small business, as a result of the proposed amendments to the export market development scheme which are contained in this Bill. Unfortunately the Government does not seem to have registered such a level of concern nor has it been responsive to this level of criticism. We believe it would be most unfortunate and against the national interest if export industries were left to languish until the Opposition is returned to government and meets these concerns. We have an overwhelming commitment to the expansion of trade and an understanding of the importance of exports for Australia. I give the Government its due as I am sure it also is concerned about that. Senator Button —Thank you. Senator DURACK —I have acknowledgement from the Minister at the table that he shares that concern. I welcome that. Perhaps the debate is really about how best to achieve this. The Opposition registers its concern with the way the Government is going about that generally and particularly in relation to the matter that we have in hand this morning. The Ferris report, the report of the National Export Marketing Strategy Panel, resulted from a major study into Australia's export performance and the role of government in lifting that performance and an examination of a broad range of areas, including this scheme. Its finding is that the manufacturing and service sectors have been poor export performers. It notes that primary products, both agriculture and minerals, account for about 80 per cent of our export revenues. In this regard it is disappointing that the Government is moving to reduce the international competitiveness of these sectors by extending export controls and introducing new taxes. The Ferris report also notes that the maintenance and expansion of existing exports should continue to be a linchpin in export development policy; that is, building on existing strengths and reputations. It makes 65 recommendations which it considers are the minimum changes needed, including 14 changes to the export market development scheme. However, we should recognise-as does the Ferris report-that marketing and incentives can form only part of a wider export strategy. It is imperative that Australian exports be price competitive and that Australia be a reliable supplier-I emphasise that-as no amount of marketing incentives will overcome deficiencies in this area, particularly on the question of reliability. That is probably an area in which the Government has been most vulnerable in its policies because of the prices and incomes accord and its readiness to give in to union muscle. It is in that area of reliability where we have been-- Senator Button —You would be the one to talk about that. Have a look at what happened in 1982. Senator DURACK —What about coal? I particularly have that in mind. I suggest the honourable senator also should have had it in mind, or his colleague the Minister for Resources and Energy (Senator Gareth Evans) should. Senator Button —You look at your own performance. Senator DURACK —We are looking at the Government's at the moment and it has not been too good not only on maintaining reliability but also in meeting solemn promises that were made in particular to Japan by the former Minister for Resources and Energy, particularly in relation to coal. As I have said, the way the accord has worked and the Government has been so partial to union pressures is very worrying, and it will continue to concern us and large sections of the community. The accord, which has involved increasing labour costs, higher inflation and delays in fully discounting wage increases for the effects of depreciation will certainly lead to second round inflationary effects and will further erode the possibility of increasing Australia's export performance. The Opposition has very clearly stated policies in relation to what should be done about these matters. I do not intend to repeat them now. I have already indicated that the coalition will not oppose this Bill-because of its support for the principles of expenditure restrain and also, as I have said, because the Government has included this as part of its priorities in its program of financial restraint-although we are opposed to certain aspects of it. I have covered most of the points that we have in mind. If further matters arise during the Committee stage perhaps I will comment then, in particular in regard to the clause dealing with the power of the Minister over South Africa and some of the other deficiencies that arise in these proposals. As I have said, I do not propose to move any amendments to change the nature of these proposals because of the overall attitude we are adopting to this measure. Senator VIGOR(South Australia)(12.10) —It is unfortunate that the changes made by this Bill to the Export Market Development Grants Act 1974 will have the major effect of cutting by some $80m the amount the Australian Government is prepared to allocate to the promotion of Australian exports. I know that the report by the National Export Marketing Strategy Panel, the Ferris report, recommended changes to the scheme following its detailed investigation. The scheme has been abused. Claimants have been receiving grants despite having generated little or no export income. Some of the larger companies that have benefited from this scheme are subsidiaries of multinational companies which could use their own substantial funds in seeking contracts to open up export markets. It was necessary to make some changes to the scheme, yet I cannot but believe that the Government's primary aim in making these changes is to cut government expenditure. Indeed, it was part of the mini-Budget. The expenditure cut was proudly announced by the Government in the May economic statement. It must have sounded familiar to Australians who have been involved in the export industry. In 1983, following recommendations by the Fraser razor gang, the export expansion grant scheme was abolished. Like its Liberal predecessors, this Government has decided that it is politically acceptable in Australia to reduce assistance to our exporters. In the short run that is probably right. Exporters are unlikely to take to the streets to gain maximum publicity for their cause. Yet a closer examination of the world economy and of Australia's external economic problems makes it clear that Australia's future prosperity is very closely linked to the potential and the performance of our export industries. World trade is increasingly threatened by moves towards protectionism. We are living in a time of massive unemployment, oversupply of commodities and shrinking markets. This is all due to sluggish economic growth and accumulated foreign borrowings. The European Economic Community subsidises its farmers to the point where they can sell agricultural products for less than Australian farmers who are very much more efficient producers. It has been estimated that the European Economic Community's agricultural trade policy is costing the Australian economy $950m per annum. In the United States of Australia, the overvalued United States dollar has generated a congressional clamour for protection. I am not comforted by the fact that President Reagan and his advisers are all that stand between that congressional protectionist sentiment and protectionist legislation which can lead us on to a depression. If the Unites States dollar remains overvalued, American politicians will seek to protect themselves by protecting American industries. Those who have unbounded faith in the American President and Congress resisting protectionism should read Time magazine of 7 October this year, which states: As the bill moved through Congress, formal protests from foreign countries flooded into Washington, eventually adding up to 200 pages. Both houses voted aye nonetheless. While the legislation sat on the President's desk, 1,028 American economists called for a veto. Herbert Hoover made it the law of the land anyway, swallowing his own reservations and, on June 17, signing the Tariff Act of 1930. Known as Smoot-Hawley after its legislative sponsors, the bill promptly fulfilled the worst fears of critics. A new panic seized the already battered stock market; the slide continued for two years. In raising import duties on scores of items, in some cases to 50 per cent, the measure provoked angry retaliation by 25 of the nation's trading partners. US exports fell by nearly two-thirds in just two years. We were in a depression. That is the type of situation we are faced with. Yet our Government is ignoring it. The United States Government has already introduced the farm export bonus scheme. Under this scheme countries which agree to buy agricultural produce from the United States will receive bonus tonnages on top of the amounts they contract to buy and pay for. The sum of $2 billion has been earmarked for this over the next three years. Senator Walsh —Would you like to incorp- orate that? Senator VIGOR —I was quoting the article. Therefore, while the EEC and the United States of America are increasing subsidies to their exporters, the Australian Government congratulates itself on cutting $80m off the export assistance grants. This brief world trade background sets the scene for a closer examination of Australia's external economic problems. Despite the devaluation, there is no evidence that our current account can be moved from its heavy deficit. While we still wait for devaluation to show its benefits in our balance of trade, our current account deficit widens. Our invisible payments burgeon as we meet repayments of interest on our accumulated foreign debt. Interest rates in Australia skyrocket in order to attract the foreign funds needed to balance the current account. In effect Australia's homebuyers are paying for the reckless foreign borrowing encouraged by this Government and its predecessors. Australia's real interest rates are amongst the highest in the world, yet still the current account deficit widens and our dollar sinks lower in value. The devaluation is helping our exports, but our external problem is so chronic that it is only a short-sighted, false economy for a government effectively to reduce assistance to our export sector. Between 1973 and 1983 Australia's share of the total value of world trade fell by about 30 per cent. While world exports rose by 12 per cent, Australia's exports rose by only 8 per cent. In that time the value of our exports fell in 48 out of 65 of our main markets. I do not blame this Government for those figures. This Government is not responsible for the current state of the world economy or for the inefficiencies that protectionism has built into our manufacturing sector. However, it can do something to protect our exports against the effects of this type of attitude-indeed, to protect us against the common agricultural policy of the EEC and the massive invisible drain caused by past foreign borrowings. I understand that we cannot change any of these situations overnight. However, it seems obvious that we should be doing everything to encourage and assist Australian enterprises in maintaining our export markets and also in creating new markets. We cannot afford to lose our export markets to countries that are prepared to subsidise their export industries, otherwise our trade deficit will continue to grow and our foreign debt will continue to grow even more as we make more and more foreign borrowings. We will need more money to pay back our past borrowing commitments and our currency will continue to weaken. Interest rates will remain high and living standards in Australia will continue to fall. If increasing our exports requires greater government assistance, governments must be prepared to allocate funds to subsidise exports. A surge in exports will reduce our current account deficit, create jobs, put confidence back into our dollar and reduce our dependence on foreign borrowings. It is in this climate that the Bill, with its amendments to the export market development grant scheme, has been introduced. What do these amendments do? They cut $80m off our aid to exporters, and in a very rough and blunt way. I wish to go through the salient points of the amendments that are being made to the Act. The maximum grant entitlement for any one person remains at $200,000 per year. New claimants have a two-year no-export period of grace meaning that they can expend the money to develop the market without actually having the exports. This, in fact, departs from the recommendations of the Ferris report which recommended $300,000, that is a higher level of grant entitlement, and no period of grace. After the period of grace expires for the remaining five years of the scheme's applicability, maximum grants received will be the lesser of the $200,000 and a percentage of export earnings which are calculated on a sliding scale. We have no objection to that particular aspect of the Bill. Grants will not be payable to firms with export earnings of more than $20m. This will discriminate against exporters of capital machinery. There is no carry over or averaging of export earnings and therefore there is positive disincentive for large exporters or exporters in the $20m region to increase their export earnings beyond the cut-off threshold for grants. In fact, we will introduce an amendment during the Committee stage of the Bill to make certain that exporters whose exports are still expanding will be able to continue to gain advantages from the export market development grants. I will say more about that in the Committee stage. The tourist incentives have been excised from the EMDG legislation and a separate tourist overseas promotion scheme, TOPS, has been established administratively. This scheme resembles the scheme that we are trying to introduce for small exporters. It is a pre-declaration scheme in which the expenditure against which a grant can be obtained must be declared before the claim can be made. Under the changes there is a very unreasonable cut off for small exporters. The grants will be paid only where expenditure eligible for grants exceeds $5,000. This means that people who are investigating a market and starting off in the area will get no help at all under the current scheme. This provision very effectively excludes from government help all small businesses that are just starting to get under way. We support the proposals of the Ferris report for a new exporters grant. Ferris suggests that $3m should be set aside for a scheme to help new exporters. We will move amendments in the Committee stage to introduce such a scheme, which I believe will address a notable problem. We will also oppose the $5,000 cut-off point on the grant because we believe that this is deleterious to the small exporter. Proposed new section 38 has been introduced to curb abuses and prevent manipulation of the scheme. The net in this area is cast far too widely, but if the scheme is administered with reasonable sensitivity by the Department, this section gives it the teeth to be able to exclude people who are using the scheme for overseas travelling junkets or personal benefit rather than effectively carrying on an export business. As such, we will not seek to amend that area. The amendments that the Government is making to the Act will allow it to stop grants to any exporter who has markets in a country which has fallen from favour. Originally, this was a very general clause but as a result of discussions between ourselves, the Liberal Party, the Government and the Department of Trade, it has been narrowed down to the case of South Africa. I applaud the fact that it has been narrowed down to South Africa because we deplore the political situation that exists there. We will not move any changes to the Government's proposals in this respect. The transitional provisions in the proposed legislation will cause a great number of anomalies and difficulties and may result in many exporters who have contracts over the transitional period being put into some difficulty. One reason for this is the fact that the scheme was introduced with only six days warning-as Senator Durack has said-and it has cut the financial year into two very strange segments-up to 19 May and from 19 May to 30 June. However, I am told by the Department of Trade personnel that this will result in a saving of $20m. Although we do not approve of this arrangement, in line with the Government's need to restrict expenditure and recognising that a number of rorts within the scheme needed to be handled immediately, we will not move any amendment to these dates. We will also not support the Opposition's addition to the second reading, because the question of dates is the main content of that particular amendment. I wish to say something about the problems that will be caused and the reasons why we will move certain amendments during the Committee stage. Before that, I want to get some idea, which I have not been able to get so far, of the actual surveys that were made by the Department-I am sure that the Minister for Trade (Mr Dawkins) will have the details-to determine the number of rorts that were being carried out under the scheme. The evidence that we have been getting from the vast numbers of people who have written to us is that the surveys were conducted in a haphazard way. I would like to know how these surveys were conducted, how many claimants were contacted and what the term `non-exporter' means in the context of the survey. It is important to note that in the survey results it was stated that there were a number of drop-outs. In my understanding the drop-outs included rearrangements of corporate structure, such as a sole trader becoming a partnership or a company or some other recombination of groups in the course of action; a business undertaking being suddenly purchased by another entity and being incorporated into that entity; or possibly name changes. I understand that a number of the cases where businesses have disappeared have resulted from name changes. It seems we have not been able to get hard, factual evidence of the drop-out rate under the scheme and I would certainly like to know how many prosecutions have been launched for fraudulent abuse of the scheme. The Government has justified its side of the argument by saying that the escalating costs of the scheme were getting out of hand. This is in fact a structural fault of the scheme. The scheme is not targeted to a product, to a market or to a product-market combination. If it were it would be much easier to control. It is an open-ended invitation for people who are involved in the export market to get support. There has been no change to that aspect of the scheme and it will still be regarded as a production subsidy instead of as a scheme for export incentives. Admittedly there is a sliding scale which encourages people to increase their exports in order to maintain the level of grants. As I said before, this is something that we support. However, I am not convinced that the percentages in that scheme are the best for the export industries. I turn now to the problems that will accompany the scheme and give honourable senators some idea of how the amendments which we have proposed will attack those problems. I understand that we will not be supported in this by the Liberals who are basically saying: `Look, it is the Government's problem. It is a money Bill. We are not going to do anything about it'. The proposal that I put to the Opposition was that I would divide my amendments, and I will be doing so. I will be dividing my amendments into two groups-one which costs nothing and which improves the scheme, and the other which will cost money and will correct the problem for small exporters. This will give the Liberal Party a chance of reviewing its activity. I understand that the Liberals' reason for not voting for the amendments is that they would be changing the Government's revenue-raising capacity. The amendments which do not change the total revenue that the Government requires will be moved separately. The only one which costs money is amendment No. 2. We believe that the export grants should have been continued in their current form until 1988, which was what the Government promised. It is very difficult for people to exist in an environment of continually-changing laws and continually-changing rules in the community. The Government puts an enormous strain on business by continually changing the ground rules under which it operates. This is one thing that we deplore. I have received letters from a number of people, including one from the Australian Chambers of Commerce Export Council, which supports the type of views I have put forward. I seek leave to incorporate in Hansard a letter from the Australian Chambers of Commerce Export Council which sets out its view, a concerted view, on what should have been done with the legislation. Leave granted. The letter read as follows- THE AUSTRALIAN CHAMBERS OF COMMERCE EXPORT COUNCIL PO Box 63, Caulfied South, Victoria 3162 Telephone: Office (03) 211 1088 Home (03) 211 8810 Telex AA31561 PEFRA PF/cs...17 July 1985 Senator David Vigor, 10 Pitt Street, Adelaide, S.A. 5000 My dear Senator, I am writing to you again as Chairman of the Australian Chamber of Commerce Export Council and aware that you are the spokesman for Trade for the Australian Democrats in the Senate. I felt that it would be appropriate to inform you of the views of exporters with reference to changes that the Government has already announced and which will be debated very early in the Budget Session. Briefly the situation is as follows: The Minister for Trade has announced changes to the Export Development Grants Act. These changes mainly refer to the first $5,000.00 of expense not being grantable. The maximum remain at $200,000.00 however. The Grant to be phased out when a company exports 20 million dollars. The Grant year is to be changed for this particular period to finish for 1984-85 on the 20th of May, and then run from the 20th of May to 30th June 1986. The Grant percentage however of 70 per cent has remained with some qualifications which reduces the Grant if the exporter wishes to travel first class instead of business class on overseas trips. The National Export Committee of which I am Deputy Chairman, and which represents the majority of exporters in Australia through their national organisations has decided unanimously to support the Minister and again with his commitment however that the legislation would be put through the House as quickly as possible. The Minister has agreed to introduce the changes in the House in the first week of the Budget session and endeavour to have it passed by the House at maximum speed for it then to be debated in the Senate and the changes then to become effective. The reasons for the agreement by the National Export Committee were quite clear. (1) There is a commitment by the Government to maintain the Grant for five years and that there will be no further changes. (2) The need to accept the fact that Australia is undergoing certain budgetary restraints and while they should not be placed upon exporters at this present time the changes were felt to be reasonable with one exception which we will refer to. (3) The absolute need for the legislation to be passed quickly so that exporters awaiting their grants for the 1984-85 year can make their claims forthwith and receive their payments as quickly as possible. This is especially important to small and medium sized firms. The Minister was asked to agree that the claims forms however would be available before the introduction of the Bill in the House so as to avoid any further delays to which he has agreed and I am now advised that the forms will be available on the 22nd of July. The Minister also agreed and has in the meantime made adequate arrangements that funds be placed at the disposal of the Grants Board to pay as quickly as practicable any outstanding and overdue amounts. Fifty-four million dollars have been transferred to the Grants Board for that effect. The Minister has also agreed, and I am advised that this has been done that further staff be placed at the disposal of the Grants Board to process applications at a much quicker rate than before. For all those reasons the National Export Committee has agreed to support the Minister. The one question that arose was the limit of 20 million dollars because of the reduction of the Australian dollar in its value against the American dollar only represents approximately US$12 million, which may be too small a threshold, even for small or medium sized companies. Nevertheless agreement has been reached with the Minister that the 20 million may remain subject to further discussion during the Grant year and the Minister has accepted that if the proposals are made to him and reasons given to him to change the amount are reasonable and in the interest of the National Economy he will be flexible in his approach. It is our feeling therefore that the Minister has complied with all the arrangements made with him. We have as a body expressed confidence that if the need arises for further discussion during the Grant year, because of the need for further incentives to exports he certainly could be available for substantial discussions in depth to review the decisions made and agreed to, always taking into account the over-riding national interest that our exports have to rise by a substantial percentage to overcome our current account deficit. The other matter is the Australian Trading Commission with which we have agreed across the Board, and want to give it a chance to operate as planned by the Minister and his Department. It is therefore important that both Bills be passed without delay. The Grants Bill should really go through all its stages, latest after the first two weeks recess after the first week of sitting. It would be enormously detrimental to small and medium sized businesses if any delay would result in deferment of payments. Our organisation is confident that Mr Dawkins will adhere to all the arrangements as he has done so far, and we want to give him an opportunity to test out his views and we are furthermore totally confident that should the need arise he will prove to be flexible if proof can be given that the National interest will be served by further discussions and revisions of the legislation. May I therefore respectfully request that the Australian Democrats support the Government in these two pieces of legislation and assist us at the same time of a speedy passage of both bills. I am Deputy Chairman of the National Export Committee and therefore you can rest assured that the reflection of my views in this letter are totally in accordance with admiration of that body. If you however wish to discuss the matter further with me or with the Chairman Mr Don Monro who resides in Melbourne, you can rest assured that either, or both of us will be available to you when you come to Melbourne next and we will be able to provide you with as much information as you may require so as to enable you to recommend to the Australian Democrats to give total support to those two groups. I very much appreciate your interest in this matter and remain with kind personal regards. Sincerely yours PETER FRANKEL Chairman Senator VIGOR —I thank the Senate. I also have a letter from a Mr Denver Davies of Grant-Aid Pty Ltd. In his letter he sets out admirably a number of specific cases which I have taken into account in proposing the amendments that we will put forward. I seek leave to incorporate in Hansard that letter from Grant-Aid Pty Ltd which contains cases which I believe will be of immense interest to honourable senators. Leave granted. The letter read as follows- GRANT-AID PTY LTD Unit 214 ``West Point'', 396 Scarborough Beach Rd, Osborne Park 6017 P.O. Box 57, Mt Hawthorn 6016 Telephone 444 0366 1 August 1985 DBD/PM Senator David Vigor, 10 Pitt Street, Adelaide, S.A. 5000 Dear David, Thank you for affording us the opportunity of speaking to you on the proposed changes to the Export Market Development Grants Scheme. During our discussions, you mentioned that you would like further information in respect of; (i) The conventional wisdom that the EMDG Scheme has been widely abused, and (ii) Some case histories on the effect of the proposed changes. Page 31 of the January, 1985 Report of the National Export Marketing Strategy Panel (the Ferris Report) states, ``according to an evaluation recently completed by the Department of Trade, at a conservative estimate, 14 per cent of claimants were non-exporters and doubts existed about either the export performance or commitment to export of at least a further 5 per cent. Moreover, indications are that almost half of all claimants drop out of the scheme by the end of the third year. Evidence was also provided by other sources of some fraudulent abuse of the Scheme''. The first page of the Minister for Trade's May 15 Press Release on Export Incentives contains the following statement; ``The Government's consideration took place in the light of the recommendations of the Report of the National Export Marketing Panel (the Ferris Report) and an evaluation of the scheme prepared by the Department of Trade. The Department's evaluation, which was based on a random sample survey, disclosed major deficiencies in the scheme. Almost 50 per cent of claimants drop out of the E.M.D.G. Scheme after three grant years having generated little or no export sales. Significantly under the Scheme an export earnings test does not apply for the first three grant years but for their fourth grant year claimants must have export earnings of at least $25,000 or $10,000 in the case of claimants in respect of industrial property rights or know-how. Indeed, as the Ferris Report pointed out, it is possible under the scheme for a claimant to receive up to the maximum grant of $200,000 a year for three years without ever producing any export revenue. This finding points to the fact that the scheme is either being aimlessly or frivously used, or being abused by a large number of claimants''. Taken together, the above two statements lead the average person to believe the scheme is being ``ripped off'' to a very significant degree. I would dispute that assertion. Management Consultants Export Grants Research Grants Other Government Grants As the Ferris Report preceded the Minister's Media Release, I assume that the Minister used that Report as the basis for his opinions. The points that he seems to have seized upon are; (i) 14 percent of claimants were non-exporters and doubts existed about a further 5%. (ii) Indications are that almost half of all claimants drop out of the scheme by the end of the third year; and (iii) Evidence was also provided by other sources of some fraudulent abuse of the Scheme. (i) It would appear that the Department of Trade random sample survey revealed the 14% and 5%. Questions that need answers in this respect are; How was the survey conducted? How many claimants were contacted? What does the term ``non-exporters'' mean? Is the Department saying that 14% do not exist or had no intention of exporting, or are they saying that 14% tried to export and failed? I would submit a 14% failure rate to be neither surprising nor a cause for alarm, however, I would strongly disagree that 14% were non-exporters and had no intention of exporting. Our practice has in excess of 100 clients claiming EMDG Grants and everyone of these is genuinely trying to export. (ii) Where did the ``indications'' come from that showed half of the claimants dropping out after three years? Was it a result of the Department of Trade survey or was it from numbers supplied by the Export Development Grants Board? If the figures come from the EDGB, then I think the so-called ``drop-outs'' would include re-arrangements such as; (a) a Sole Trader becoming a Partnership or a Company, or any other combination of the above changes; (b) a business undertaking being purchased by another entity; (c) or possibly merely a change in name of the claimant. Can the Minister provide factual information to show precisely what percentage of the half said to have dropped out are attributable to the above reasons. (iii) Who are the other sources providing evidence of fraudulent abuse? A few case histories on the effect of the proposed changes are; 1. A manufacturer of ladies swimwear has sold their products in South East Asia and New Zealand for some years. Their grant entitlement is always in excess of 7 1/2% of their export earnings because of high promotional expenses. Immediately prior to the Minister's Press Release, the directors of the Company made a decision to invest $100,000 in a campaign to promote their goods in California. They made this decision on the basis that if their campaign failed, they would receive back 70% from the Government. With the 7 1/2% limitation, they are now faced with the prospect of not being entitled to any rebate on the $100,000, they have therefore cancelled the promotion in the U.S.A. 2. A small premium wine maker receives small EMD Grants and sells small amounts of premium wine to Europe, South East Asia and New Zealand. They can meet a reasonable export earnings test, but the disallowance of the first $5,000 will exclude them completely. Why should a small business such as this be penalized? 3. A major ship-building company promote heavily overseas and receive significant EMD Grants. The resultant export earnings are received intermittently and in some years their export earnings are minimal. There should be a provision allowing the carry forward of eligible expenditure which does not attract a grant. This company is the very type of industry the Government wants to encourage and now this company has indicated if the proposed changes are legislated, they will cease attempting to export. 4. One of Perth's leading architectural firms has launched a major campaign to establish itself in South East Asia. Very shortly their maximum grant entitlement will be limited to around 10% of export earnings. This limitation upon providers of services is completely unrealistic because of their very high promotional expenses e.g. they have prepared very expensive feasibility studies for in excess of 20 projects in South East Asia, the cost of a couple of these submissions being in excess of A$50,000 each and have only been successful in receiving one commission. Because of the intense international competition, they cannot expect a success rate of any better than one in ten, consequently, their export earnings will never be sufficient to cover their promotional expenses with a 7 1/2% of export earnings grant limitation. What should also be borne in mind is that if architects are successful, then work flows on to engineers, builders, building materials suppliers, interior fitting supplies etc. as well as creating a favourable climate in that country for the export of other Australian products and services. This firm have already indicated they will cease their export efforts. 5. A manufacturer of simple, inexpensive electric hot water systems has penetrated overseas markets to the extent where 70% of his production is exported. Because his product requires continual promotion to gain sales, his E.M.D. Grant is always well in excess of 7 1/2% of his export earnings. He will now be caught in a vicious circle e.g. (a) Because of the 7 1/2% limitation, he will need to reduce his overseas advertising as his profit margin is insufficient to bear the whole cost. (b) As a result of reduced advertising, his export sales will fall, (c) With reduced export earnings, his EMD Grant entitlement will fall because of the 7 1/2% limitation, (d) The cycle will continue to be repeated until this successful exporting manufacturer is forced to cease exporting altogether. 6. Another of our clients manufactures conveying equipment and exports throughout Europe from a subsidiary company in the U.K. All components are manufactured in W.A. and then assembled in the U.K. Because of the 7 1/2% limitation, they are faced with exactly the same predicament as the electrical manufacturer above. 7. A firm in Perth manufactures commercial and industrial lighting and competes in Australia with multinationals such as Philips. In the past two years they have received small EMD Grants for visits they made to Malaysia and Singapore. As a result of those visits, they have sold in excess of $250,000 worth of Australian made light fittings. However, under the proposed changes, they will receive virtually no grant because of the $5,000 threshhold and they are considered by the Minister to be not worthy of support. 8. Similarly, a craftsman manufactures grandfather clocks of exceptional quality (and price of course). Because of limited demand for these products, his export earnings will never be high-however, his EMD Grants are also small because of the limited promotion he undertakes. Why should this man be excluded under the $5,000 rule? His products go to influential people and will obviously create in the purchaser a favourable impression of the capacities and skills of Australian craftsmen. 9. In your own industry of computers, we have a client who launched a major campaign into South East Asia for their software and services. To effectively promote in the region, they have had to establish a promotional office in Kuala Lumpur staffed by highly skilled and expensive Australians. Within the next year their grant entitlement will be down to 12 1/2% of export earnings. Whilst they are achieving sales and making progress, their export earnings will never be high enough to enable them to recoup 70% of their promotional expenses. Because of the proposed changes, they are now in the process of scaling down the Malaysian office and will probably cease attempting to export completely. These are the very people the Government should be continuing to encourage. 10. The change-over date of 20.5.85 will have disastrous effects upon many people. We have two firms who have been promoting the sale of plant in China for a couple of years. After much negotiating and visits, they managed to secure a substantial contract, the catch is that the plant and equipment they supplied (worth millions of dollars) was shipped out in June, 1985, thus not being eligible earnings for the 1984-85 year. Because that is their only earnings for that year, they will not have a grant entitlement for 1984-85. Similarly, a company has a manufacturing under license agreement in Malaysia. Under this agreement, royalties for the year are paid in June each year. Because their royalties for 1984-85 were not received until June, 1985, they will thus not receive a grant for 1984-85 because they will not have any export earnings. David, I could provide many more examples of the adverse effect these proposed changes will have upon exporters but believe the above is sufficient to give you an idea of the impact of the changes. Kind regards, GRANT-AID PTY LTD Denver Davies Senator VIGOR —I thank the Senate. In the same vein, I would like to say a few words about one particular exporter, a company which is a real success story for Australia. This is the story of Kimberley Seeds Pty Ltd. Part of the Managing Director's letter to me states: Our specific problem is that we are in the process of negotiating a sale to Iran of A$100m of machinery but the catch for us is, if the changes to the EMDG are enacted as proposed; (1) If we are successful in gaining the Iranian contract our exports for the next two years will be in excess of A$20m and will then be excluded. (2) If we do not gain the Iranian contract we will not be able to obtain a reimbursement of our expenses because of the 7 1/2 per cent of export earnings grant limitation. If we do not gain the contract our export earnings for 1985-86 would be made up of: Seeds-$300,000; Machinery, $200,000- making a total of $500,000. The letter continues: This $500,000 would give us a grant entitlement of $37,500-at 7 1/2 per cent- which is reading it from the Government's table- This equates to a total expenditure of $55,000. However, to pursue the potential sales in Saudi Arabia and Iran we have to appoint representatives in both these countries. We anticipate expenses in the vicinity of $200,000 per annum for our offices in these countries. In addition we will have our normal export promotional expenses such as air fares, brochures etc. In all our total expenditure for 1985-86 could approach $300,000 giving us a theoretical grant entitlement of the maximum of $200,000. As mentioned above if we are successful we will get nothing, if we are unsuccessful we get approximately $35,000. Surely the EMDG scheme-a scheme that is meant to encourage incentives-should be better than this. I believe this is only one example of the type of transitional problems which we get. We believe that our amendment, which would carry out an averaging over three years of the upper limit for eligibility for the export scheme, will actually overcome this problem. We have proposed it to the Government-- Senator Button —Is it a real problem? Senator VIGOR —It is a real problem for Kimberley Seeds. Senator Button —If you have made $20m in export sales are you going to be concerned about that amount of money? Senator VIGOR —I think you would be. The budgets for these things can be very tight when one is trying to be competitive in one of these countries, especially when one is trying to move into the sort of markets that Kimberley Seeds is working in. I think the Minister for Industry, Technology and Commerce (Senator Button) will realise just how tight the world economy is in these areas. I commend companies such as Kimberley Seeds Pty Ltd and I deplore the fact that we are not giving them the type of incentive that they should get. I ask the Minister and the Opposition to consider supporting our amendments, which, I repeat, would cost the country nothing but would allow companies such as Kimberley Seeds to get a reasonable incentive for their exports. They must make decisions now. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Senator BROWNHILL(New South Wales)(12.41) —The Senate is debating the Export Market Development Grants Amendment Bill 1985. I welcome the opportunity to speak on the subject of trade because it is an area to which I believe we as a nation are not paying sufficient attention. This legislation will amend the original export market development grants scheme which, over a number of years, has provided quite useful incentives which were necessary for our manufacturers and exporters to penetrate overseas markets. The Opposition's objections to aspects of this legislation are well known. They were fully canvassed in the other House when the legislation was debated there. I accept and I understand that if we are to improve our rather sorry economic state, we must start first with cutbacks at government level and so the changes to this Bill were suggested at the time of the May mini-Budget. However, I do agree with the concerns of other Opposition speakers with the timing of the introduction of this Bill. I believe that it will create budgetary and accounting difficulties for exporters who will be caught in the changeover from the old rules to the new rules. Another area in this legislation that concerns me relates to the new limits for grants. At one end of the scale a minimum of $5,000 must be expended before a grant will be paid. At the other end of the scale claimants with export earnings over $20m will also be excluded. The Tourist industry will be excluded completely from the scheme. On the question of the $5,000 minimum, I am not entirely sure why this figure was arrived at. There are, quite possibly, very valid administrative reasons. One industry that will be adversely affected by this ruling is the wine industry. I consider that the wine industry should be a worthy recipient of assistance such as that which is available under this scheme. I believe that the Australian Trade Commissioner Service has provided quite valuable assistance in the past in the promotion and sale of Australian wines in a number of new markets. Markets such as Japan and South East Asia are two that come to mind. Industries such as the wine industry and other smaller industries need all the help that they can get. With the range of government measures that have adversely affected the grape growers and wine makers, I would have thought it time that they had some good news from the Government. But, the wine industry is another example of rural enterprise and small business and is therefore an industry to be forgotten by this Government. What the Government fails to realise is that the Australian primary producers are responsible for over 40 per cent of Australia's overseas earnings. Despite enormous cost pressures that the rural sector has faced in recent years, it is important to remember that the increase of 24 per cent in exports in 1984-85 was due largely to our primary products, especially wheat and other cereals. I cannot emphasise too strongly just how important our overseas trade is to Australia. We are in an economic mess in this country at the moment, despite whatever rosy picture the Government tries to paint. Our overseas borrowings are enormous. It has been suggested that they are as high as $100 billion. The only way we can get ourselves out of this problem is to trade our way out. Over the past 30 years we have slipped in world trading figures, from being the eighth largest trader to being only the twenty-third. Countries such as Singapore, Taiwan and even Hong Kong are now ahead of us. Over the same period that we dropped as a world trading nation, our share of world export markets dropped from 2.6 per cent to 1.2 per cent. At the start of the century, Australia led the way in its standard of living. Eighty years on our standard of living is rapidly falling to Third World status. The international purchasing power of our exports has shown weak growth over the past 30 years. By comparison with other major trading nations, our purchasing power has declined. Why has our trade performance been so poor? First and foremost, it is caused by our lack of competitiveness on world markets. Rising costs, particularly for our farmers, are making our products more and more expensive and therefore harder to sell on international markets. This problem has been exacerbated by inflation, because Australian farmers are price takers; they are not price makers or price setters. The need for incentives and a low rate of inflation is stronger in the rural sector than it is in other sectors of the economy. Farmers are unable to pass on increases in farm costs. Mr Deputy President, I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Walsh) agreed to: That, unless otherwise ordered, till 2 p.m. this day, matters of public interest may be raised and discussed by senators, provided that no senator shall speak for more than 15 minutes. Senator COLSTON(Queensland)(12.46) —This afternoon I would like to use the opportunity to make some remarks about a person called Hubert Giesberts, often known as Hughie Giesberts. I want to make these remarks because Mr Giesberts, a pensioner from the suburb of Pinkenba in Brisbane, has circulated to many honourable senators copies of correspondence he has had with a South African newspaper called the Citizen. The Citizen is published in Johannesburg. When Mr Giesberts circulated his correspondence that he had had with the South African newspaper, he also provided some other information which set out his philosophy about Australia's position and South Africa. Mr Giesberts has had a letter of his published in the Citizen, and this letter is quite pro-South Africa and the apartheid policy that South Africa currently condones. As well as that, it is quite anti-Australian. The letter in the Citizen is headed this way: `Hayden Speaks with a Forked Tongue'. Then it goes on further and develops an argument that Australia is quite wrong in its attitude towards South Africa; Mr Giesberts believes that South Africa is one of the best countries in the world. Some of Mr Giesberts's comments in his letter would be quite libellous, I would think, if they were published in an Australian newspaper. Whether the libel laws of South Africa apply if libellous comments are made about an Australian in South African newspapers, I just do not know. But because of Mr Giesberts's correspondence with South African newspapers and his having letters published in a South African newspaper, and because of the comments that he had made in correspondence that he has passed to many senators, it is worth while saying something about this person and putting in context just what he has been saying and what sort of support he has in Australia. From the letters he has sent to South African newspapers, I would say he has very little support in Australia, and I shall outline shortly how little support he has had when he has had the wish to seek election in Australia. Mr Giesberts's letter and his comments attributed the South African crisis to a communist push of some sort in South Africa. He has accused Bishop Tutu and other clergy in South Africa of being communist agents for the KGB. He claims that the Minister for Foreign Affairs, Mr Hayden, condones communism. He admits to giving 100 per cent support to the South African Government in its endeavours to keep law and order. Typical of his comments is the statement that the South African people have `to endure communist organised boycotts, anarchy and terrorism'. Reading through Mr Giesberts's comments, one is obviously reminded of the phrase that we used to have in Australia: `Reds under the beds'. One would expect that Mr Giesberts would see those; but more than that, he seems to carry reds in his pocket. His writings are quite schizophrenic and sometimes unintelligible, but one does get the general drift of them-that he is quite pro-South African and quite anti-Australian. I would like to stress this afternoon, to Australians but more specifically to a gullible South African Press, that Mr Giesberts's meandering letters and comments are not those of a typical Australian. To indicate why they are not typical, I would like to mention something about this person's background. Mr Giesberts was originally a Dutch citizen. Perhaps the fact that he is a Dutch citizen has something to do with his support of the South African apartheid system. Mr Giesberts is now 74 years old. He migrated to Australia in 1953 from Holland. It was not until 1966 that he sought and gained naturalisation. That was after living for 13 years in Australia. I do not know why Mr Giesberts waited for 13 years, but he waited 13 years before he was naturalised. Mr Giesberts worked as a Brisbane City Council labourer for over 20 years. He has a reputation of being an eccentric stirrer. In fact, he likes to be called a stirrer. He says that is what he aims to be. He does not say that he is an eccentric stirrer, but it is my opinion that he is. Mr Giesberts has been aligned with various organisations, the most recent one being the `Get us out of the United Nations Campaign'. He has also been involved with the Pensioners Party of Australia, Social Credit, New Economics, and the Australian Pensioners Pressure Group. I indicated that he did become naturalised in 1966. Almost immediately thereafter, he started to seek election to the Brisbane City Council, the State Parliament of Queensland, or the Federal Parliament. I am not sure whether that is why he took out his citizenship after 13 years, but it is significant that almost immediately after 1966, when he became a naturalised Australian, he started to seek election. Since then, he has become a perennial election candidate. He had of course, as I said, sought election at the Brisbane City Council, State and Federal levels, but it is important to indicate that he has been unsuccessful on each occasion. The first time Mr Giesberts sought election was in 1967, for the Brisbane City Council. He stood as an independent candidate for the ward of Nudgee. On that occasion he received 518 votes out of total of 13,787 cast; so he received a very small percentage of the votes. Not worried about that, two years later, in 1969, he stood for the Queensland state election as a Social Credit candidate. The seat had the same name as the ward that he had previously stood for-the seat was Nudgee-and he received 335 votes or 2.4 per cent. I am indicating the size of the vote that Mr Giesberts has received to indicate that he does not have wide support; in fact, he has only very narrow support when he seeks election to bodies in Queensland. In 1970, a year after he had received 2.4 per cent of the vote in his bid to go into the Queensland Parliament, he again stood for the Brisbane City Council. On that occasion he called himself a Liberal Civic candidate. This time the ward was Sandgate. He improved his vote over the 1969 vote but he did not have the same vote as he had in 1967. He received 348 votes out of a total of 11,840 that were cast-again a very small percentage. In 1974 I had some close dealings with Mr Giesberts, as it was in 1974 that I stood for the Senate, for the second time. In the 1974 Senate election, Mr Giesberts was one of the ungrouped candidates and he received 832 votes. Putting that in perspective, there were over a million votes cast on that occasion and out of that million Mr Giesberts received 832 votes. I have not worked out that percentage, but it is fairly easy, and it gives an indication of the very narrow support that Mr Giesberts received- especially by then having become a noted candidate, having stood in 1967, 1969 and 1970. Most honourable senators will remember that in 1975 in this place we had a casual vacancy because of the death of Bert Milliner. The Queensland Government was charged with the responsibility of appointing a person to take Bert Milliner's place. Some might remember that a person called Field came into this place in place of the nominee of the Australian Labor Party, who was a high calibre and well respected candidate. Before that happened, however, Mr Giesberts contacted Mr Bjelke-Petersen, as he then was-now Sir Joh Bjelke-Petersen-and asked Mr Bjelke-Petersen to appoint him to the casual vacancy. Apparently Mr Bjelke-Petersen decided that he was not quite foolish enough and appointed Mr Field instead. Unfazed by being rejected on that occasion, Mr Giesberts stood again for the Senate in the 1975 election-I suppose I did too, but on that occasion I was successful. Out of well over a million votes cast, he received 634. Mr Giesberts has shown a lot of persistence. He would have stood for the Senate in 1977 but he could not raise the $200 deposit, and he made quite an impassioned plea that this could not be right because there was nothing in the Constitution that mentioned that one had to have a deposit. Perhaps Mr Giesberts should read the Constitution and see where laws can be made in this respect. He gave notice that he would stand for the House of Representatives in the seat of Lilley in 1984. He said in part of his policy speech that he would not take a salary because that was not needed; but it never eventuated. He did not stand in 1984, for some reason of which I am not sure. In 1985, this year, he wanted to stand again for a Brisbane City Council election, and he made a plea for people to help him raise his deposit of, I think, $250. He was going to run for the position of Lord Mayor, but as he did not have the money to nominate, he did not run. I am not sure whether Mr Giesberts is going to run again for public office. It is his right to do so of course. I would not be surprised to see him there again. The point that I would like to make is that every time Mr Giesberts has run, he has had a dismal failure in the polls. I would like those people in South Africa who read his letters in the newspapers, to understand that he is not representative of the Australian people, and certainly not representative of the Brisbane people and the suburbs from which he comes. There are a number of eccentric incidents that I would have liked to cover but I see that my time has nearly run out. However, they include Mr Giesberts charging admission to listen to his policy speech, and having five people come along to hear him, and refusing to lodge tax returns because he could not see that this was required within the Constitution. What I would like to say, in conclusion, is that those who read his letters and his comments should not take him seriously. The message to the South African Government's newspapers is that his letters do not reflect an Australian opinion; they are simply the opinion of an elderly, strange and, perhaps, eccentric man. Senator WATSON(Tasmania)(1.01) —Mr Deputy President, there is an unfortunate Australian tradition of seldom recognising artists or people of distinction as they progress along the journey of their chosen careers. Fortunately, there are exceptions or pockets of light where encouragement is given to Australians of national and international repute. Sale in Victoria is one such town which has become a mecca for artists, writers and other creative people. However, while much revenue is generated from this area, little is returned to the arts. To compound these difficulties, the Sale Gallery has not received funding from the Visual Arts Board of the Australia Council since 1976, despite annual submissions. However, a number of craft items on display at the gallery from time to time have been purchased with the assistance of the Crafts Board of the Australia Council. Fortunately, such financial or material matters have not dismayed people such as: Charles McCubbin, a painter and an expert in butterflies and a consultant to the Zoological Board of Victoria; writer Marion le Cheminant; and artists Marie Ingrouille and Annemieke Mein-to name but a few. Earlier this week I was one of a number who were privileged to be invited by Peter Synan, the Mayor of Sale, to attend a public reception given in honour of, perhaps, Australia's most talented artist, Annemieke Mein, in recognition of her creative genius in designing of the six bronze sculptures erected in the Sale Mall. Peter Synan is not the typical town mayor coming from the traditional backgrounds of the legal fraternity or the business community. Peter is a school teacher, with special interests in history. He envisaged the need for the council to acknowledge in an appropriate way the efforts of some of the district's early pioneers. It was Peter Synan's brainchild to erect a `Wall of Fame' on to which Annemieke's bronze sculptures were erected. I believe that the Mayor and the City of Sale are to be congratulated on their vision in supporting the installation of these six fine sculp- tures depicting such important local identities as Nehemiah Guthridge; Angus McMillan; the explorer, naturalist, scientist and anthropologist, Alfred William Howitt; Shire President, Premier of Victoria, and first member of the House of Representatives in Federal Parliament, Allan McLean; a royal command singer, Ada Crossley; and the well known author of the Billabong series and author of other famous works, Mary Grant Bruce. This artist, Annemieke Mein, who was responsible for the design of these sculptures, has skills in a variety of mediums, including sketching, painting, applique and machine embroidery. She has received both national and international acclaim. In fact, those who know her will remember her highly successful exhibitions, which have been held in Hong Kong, London and Edinburgh, and the frequency of her work appearing in Australian journals and other periodicals. Her work is held in such high regard that she was asked to prepare an exhibit for the permanent display in the new permanent Parliament House in Canberra, which is due to be opened in 1988, our bicentennial year. Unfortunately for Australia, government red tape imposed just so many restrictions on both her time and her creativity that she felt that she had to decline this invitation. Like so many other outstanding artists, Annemieke has found that the spark of creative genius stems from an empathy with nature. There is an obvious love of life-of all creation-in her work. Her brilliance is tied up with her attention to detail and her knowledge of what makes living things tick. So often the great achievers of this world are to be found not in the metropolitan areas but in the country, closer to the world of nature. I am sure that those bronze sculptures displayed in the Sale Mall will be much admired and cared for by the people of Sale and be a source of pleasure and inspiration to all those who take the time to stop and examine them. Mr Deputy President, I seek the leave of the Senate to table some notes regarding the inspiration, ideas, concepts, philosophy constraints and execution of the six historical bas-relief bronzes, so that the wider community can appreciate the genius and the meticulous attention to detail of a great Australian artist, Annemieke Mein. Leave granted. Senator WATSON —I trust that many may be inspired by her works of art. Sitting suspended from 1.07 to 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that the Minister for Education, Senator Ryan, will be absent from the chamber both today and tomorrow. She is attending the Australian Education Council meeting in Western Australia. Any questions which would normally be directed to Senator Ryan in relation to her portfolio, or to those she represents in this chamber, should be directed to the Minister for Veterans' Affairs, Senator Gietzelt. Senator PETER BAUME —My question, which is directed to the Minister for Finance, relates to the proposed tax on fringe benefits and to the Government's decision to limit exemptions from that tax to religious bodies only. Is the Minister aware that the non-cash fringe benefits tax will be payable by welfare agencies in relation to some benefits that cannot be considered either as tax minimisation or as tax avoidance. I give the Minister as examples accommodation provided to house parents, who may be getting salaries of $12,500, who are providing live-in care for people with disabilities; accommodation provided to staff members on 24-hour call; and small mini-buses used to pick up the disabled which are taken home by drivers who make the pick-ups on their way to work. As payment of this new tax by welfare agencies can be made only at the cost of cutting back on services to the needy, will the Government amend its proposal and overcome this anomaly-yet another anomaly-in the tax package which will hurt the most needy groups in the community? Senator WALSH —I am touched at the new-found concern in the Liberal Party of Australia for the welfare of the needy. Senator Peter Baume referred to what he called an anomaly. I think one of the problems that the Opposition has, and one of the reasons why it had such a disastrous record in economic management, is that it seems to be incapable of taking an overview. The Opposition sees the responsibility of government as responding to each individual pressure group as it appears and accommodating the wishes of each individual pressure group. Consequently, we have the Opposition fiercely defending the free lunches, the free car and any vested interest that cares to put its case to it. It is because the Opposition behaved in that way in government that ultimately, at the end of its disastrous seven-year term, we had double digit inflation, double digit unemployment, a contracting economy and 180,000 jobs destroyed in just one year. By contrast, of course, almost half a million new jobs have been created since this Government came to office. That is by way of general observation. Senator Peter Baume asserted that, in a number of quite specific cases, the employing organisations-he gave the hypothetical example of welfare agencies-would be liable to taxation. Frankly, I do not know whether or not they would be taxed in those situations but I will seek a definitive response from the Australian Taxation Office via the Treasurer. Senator SIBRAA —Has the Leader of the Government in the Senate seen the latest Australian Bureau of Statistics labour force figures for September? Do the figures underline the continuing success of the Government's economic and employment policies? Senator Chipp —That must be a surprise question to you! Senator BUTTON —It is not a surprise on this occasion. Of course I have seen the ABS figures on employment and I think they are encouraging. The September labour force figures, released at 11.30 this morning, are clear evidence of the success of the Government's economic policies and they are good news for the unemployed. Unemployment is now at its lowest level for three years. Employment grew by a massive 56,500 last month and the unemployment rate was reduced to 8.1 per cent-the lowest rate since September 1982. I make the additional point-I suppose this concerns the Opposition about as much as free lunches-that the participation rate stood at 61.1 per cent compared with 60.6 per cent in September 1984. In the last 12 months there have been fluctuating figures in the participation rate but there has been a general increase in that rate. I just make this point in passing: A one per cent increase in the participation rate is equivalent to 10,000 jobs. Since this Government came to office over 487,000 jobs have been created; that is, since April 1983. The Government is now close to achieving its target of 500,000 new jobs in three years. In fact, job growth of 103,500 since June means that we are now well ahead of the Budget prediction of 180,000 jobs for employment growth during 1985-86. Senator Crichton-Browne —How many in the public sector? Senator BUTTON —I am coming to that. Almost three-quarters of this job growth has been in full time employment. An important feature of the figures which will appeal to Senator Crichton-Browne is the growth in the private sector. Eighty-six per cent of employment growth over the year to August 1985 has been in industries operating in the private sector. Those are very encouraging figures to the Government; but clearly, there is a long way to go and the Government is not satisfied and cannot be satisfied with the position as it currently stands. The point I want to make is that very substantial progress is being made. I was asked by Senator Chipp by way of interjection whether I would be aware of the unemployment figures. Of course I watch for them every month and I think they are a very important indicator of the success of the recovery. In spite of the ideological carping of the Opposition, of which we have heard a lot in the last couple of days, they underpin the continued success of the accord and the results which are being produced. What this Government has to offer is jobs and continued growth. The figures demonstrate a lot of the nonsense which has been talked in opposition-calls for the abandonment of the accord and the Government's wages policy and a return to some half-baked smorgasbord of deregulated industrial relations systems and the sort of mess we had in 1982, presided over substantially by the present Leader of the Opposition. Once again one can say that there is cautious encouragement and optimism in these figures-probably a little more encouragement and optimism than we have received in the steady progression in increases in employment in this country and in reductions of unemployment. Senator Chaney —Mr President, I ask the Minister to table the paper from which he has quoted. The PRESIDENT —The Minister has been requested to table the paper from which he has quoted. Senator BUTTON —I table the paper. Senator TEAGUE —My question, which is directed to the Minister representing the Treasurer, refers to the Government's wholesale sales tax decisions which have increased the price of household items such as ovens, refrigerators, washing machines and vacuum cleaners. How does the Minister justify the decision to impose or increase these taxes on essential household equipment when in the Budget it decided to remove sales tax from imported thoroughbred race horses? Senator WALSH —There is at the margin, I think, always some room to quibble about items that should or should not be on the wholesale sales tax list or the rate at which they should be taxed. As to the specific items to which Senator Teague referred, a judgment was made by the Government that they were conceptually linked to a number of other items which were already in the Schedule and, therefore, ought to go in and at the same rate. If Senator Teague is really worried about essential household equipment being subject to tax or, indeed, about any extension of the wholesale sales tax at all, I wonder how he reconciles that with Senator Messner's tax policy? I am not sure whether or not this is the tax policy of the Opposition. It is very difficult to keep track of what is the current tax policy of the Opposition because it changes every day and it changes even within one day depending on whether one listens to Senator Messner or Mr Howard, or to somebody else. Senator Messner's latest will and testament on this subject, as far as I know, is that there would be an extension of the wholesale sales tax and the introduction of a services tax. If Senator Teague is concerned about items being subject to tax, I wonder how he reconciles that concern with the policy of his Party's taxation spokesman. I do not really think that I can add anything to that, other than to say that judgments at the margin are always involved in determining the schedule of taxable items and the rate at which they will be taxed. Senator COLSTON —I direct a question to the Minister representing the Minister for Communications. Did the manager of Australian Broadcasting Corporation radio in Queensland, Mr Bob Hailstone, formerly have a similar position in Canberra? If so, what was his position and was he fully or partly responsible for the decision to discontinue the racing service on Canberra radio? Was the Canberra ABC racing service taken off air while Mr Hailstone was in Canberra and what was the reason given after that decision? Was the service subsequently reinstated? Would it be appropriate to draw certain conclusions, or is it mere coincidence that the ABC racing service was discontinued in two cities at the time Mr Hailstone held a senior position with ABC radio in those two cities? Senator WALSH —I had a note on this matter but I seem to have misplaced it. I will try to give some information on it to Senator Colston at the end of Question Time. Senator CHIPP —I ask the Minister representing the Minister for Foreign Affairs: Is it true that a majority of Australians have been misled into believing that the United States would automatically defend Australia under the terms of the ANZUS Treaty in time of attack by a foreign power? Have successive governments, both Labor and Liberal, mortgaged our future by allowing 24 foreign bases on our soil which according to the Australian and Soviet governments make us nuclear targets? Was New Zealand, a member of ANZUS, attacked recently by a foreign power? Was that foreign power France? Did the United States refuse even to officially protest to France or to support New Zealand's claim for compensation? Is this not concrete and practical evidence that ANZUS is absolutely devoid of any meaning and useless to any of the signatories other than the United States of America? Senator GARETH EVANS —Senator Chipp's views on ANZUS are well known and have been articulated in this place on a number of occasions. They are not views which are shared by the Government, the Opposition or indeed by the overwhelming majority of Australians, who see ANZUS as being an extremely important security treaty demonstrative of an extremely important alliance relationship. It is not only important for its own terms but also important as demonstrating a solid component of the world-wide alliance of the Western nations which is a crucial part of the process of maintaining world peace in an unstable world environment. The rationale for ANZUS has a number of dimensions which are not entirely dependent on the strict letter of its potential application in any conflict. I do not think that even the most extravagant interpretation of the operation of ANZUS would suggest that the Rainbow Warrior affair in New Zealand represents the kind of hostility that gives rise to any obligation on the part of the United States or Australia, as co-partners in the ANZUS Treaty, to leap into their warships and come steaming to the aid of the beleaguered little battler of the South Pacific. That is a highly extravagant and fanciful interpretation which Senator Chipp articulated a moment ago in describing ANZUS in the coloured terms he did. Many more things could be said on this subject, but perhaps it is one that would be better debated at length rather than at Question Time. Senator CHIPP —I have a supplementary question. I asked one question in three parts; I plead with the Minister to answer just one of them. Was France the foreign power that attacked New Zealand recently and did the United States even officially protest to France or support New Zealand's claim for compensation for that attack? Senator GARETH EVANS —I do not see that that bears any relationship to the thrust of the question, which was about ANZUS. As to the United States reaction to the Rainbow Warrior affair, I recall that there was a reaction from the United States Government. I will have to remind myself of the terms of that reaction. Senator Chipp —You have had the question since 10 o'clock this morning. Senator GARETH EVANS —I have not had the question. I do not have it in front of me now. Senator Chipp —You had it in your office. Senator GARETH EVANS —I did not have it in my office and I do not have it now. I am sorry. If Senator Chipp wants some further information on any of these matters, I will dig it out and bring it to him. Senator ZAKHAROV —My question is directed to the Minister representing the Minister for Aviation. I refer to two aircraft accidents resulting in substantial loss of life in recent months and involving aircraft with engines similar to those widely used in Australia; namely, a Boeing 737 in Manchester, United Kingdom, and a DC9 aircraft in Milwaukee, United States of America. Will the Minister outline current information held by Australian authorities on the circumstances of the United States accident? Senator GIETZELT —Two major aircraft accidents resulting in substantial loss of life in recent months have involved aircraft with engines similar to those widely used in Australia. I refer to the Boeing 737 in Manchester, United Kingdom and the DC9 aircraft in Milwaukee, United States of America. In the Australian context, similar aircraft are used. Naturally, the Department of Aviation has been monitoring this considerably. We all have a somewhat vested interest in this area because members of parliament, as well as public servants and the community generally, use aircraft frequently. The Minister for Aviation has directed the Department to monitor the situation. We have sent an officer to the UK to be present at the inquiry being held. The Government is confident that all steps have been taken to monitor any weaknesses that exist in the Pratt and Whitney engines. Even though the engines were supplied by the same company, they are of a different variety. In no way can it be said that the failure of the engines arose because they were made by the same company because they were not the same engines and the reasons for the crashes were different on each occasion. However, the Government is aware of its responsibilities in this matter and is keeping the matter constantly under review. Senator BROWNHILL —My question is directed to the Minister representing the Treasurer. Does the Minister accept that quarantining farm losses discriminates against agriculture when compared with the negative gearing on rental properties, because the latter will apply only to investments from 18 July 1985? How can the Minister justify applying the quarantining provisions in respect of rural farm losses to existing investments, which has a retrospective effect in respect of farm property investments? Is this just another sign of the Government's prejudice against the people of rural Australia? Senator WALSH —It is correct that the quarantining of farm losses will apply to properties already owned. The reason for that and the minor distinction between the treatment of that and negative gearing of rental properties is that investment on agricultural land can continue for a very long period, whereas the negatively geared rental properties either are built or will be built and completed in the very near future. That is the basic reason for the different treatment of the two. Senator Brownhill said that it will penalise agriculture, or words to that effect. That is sheer nonsense. The existence of the farm losses tax shelter has pushed up farming land prices to extraordinarily and unsustainably high levels paid by city based investors-Pitt Street, Collins Street, St George's Terrace farmers and so on which genuine farmers could not afford to pay. I understand that Senator Brownhill has an agricultural background. Therefore he ought to know that anybody who either is and wants to remain or wants to become a farmer knows that lower land prices are advantageous and that higher land prices impose a penalty. Among the more absurd arguments put up by the National Farmers Federation on the taxation package is that because of taxation changes it will be extremely difficult to attract new capital investment into long term low yielding investments such as agriculture; begging the question as to why any sensible government would want deliberately to attract new capital investment into low yielding industries. It was disappointing that the National Farmers Federation backed such an absurd position. It is even more disappointing that the present Leader of the Liberal Party of Australia supported that, and for exactly the same reasons. Not even Malcolm Fraser would have done that. If the return on capital investment in any industry is extraordinarily low, that is a signal from the market place that the investable funds ought to be directed elsewhere. I find it particularly ironic that the Liberal Party, under its new allegedly ideological leadership-an ideology which is supposed to support market forces-cannot either recognise that simple proposition or translate it into policy. Senator BROWNHILL —Mr President, I have a supplementary question. Did I hear the Minister correctly? Did he say that the tax reform package would lower farm land values? Senator WALSH —No, I did not say that. I said that the existence of the agricultural tax shelter and the expectation of untaxed capital gains had pushed land prices up to levels which were unsustainably high. They had started to come down long before there were falls in Western Australia, probably of the order of 30 per cent over the last two years. Land prices were on the way down in any case from unsustainably high levels, to which they were forced by Pitt Street farmers, Collins Street farmers and their ilk taking advantage of the tax shelter provisions, which the honourable senator apparently still defends and pushing land prices up to levels which could not be afforded or paid by genuine, ordinary farmers, whom I understand the honourable senator purports to represent. Senator GILES —My question is directed to the Minister Assisting the Prime Minister for Public Service Matters. Has the Government yet examined the recommendations of the task force which reported on repetition strain injury in the Australian Public Service? If not, can the Minister indicate when the Government's response might be expected? Is it correct, as reported on the Australian Broadcasting Corporation this morning, that repetition strain injury victims returning to light duties are being paid reduced wages? Senator WALSH —In regard to the last part of the question, I am advised that the Commissioner for Employees Compensation has issued an advice to departments and authorities about payments to be made to staff including those suffering from RSI who return to work for less than full daily hours for a period. The Public Service Board, for which I have some responsibility on behalf of the Prime Minister, was not involved in that action. It is understood that it resulted from representations made to the Commissioner that cases were occurring where such staff were not receiving their full entitlements under the Act. In reply to the rest of the question, I have looked at the task force report and had some discussions with officers of both the Public Service Board and the Department of Finance. I am sorry that I cannot put a firm date on this, but I expect to lodge a submission to Cabinet before the end of this year. One thing which I think can be considered independently of the final government judgment on this is that under the present service-wide arrangements for staffing controls people who are away from work because of RSI or any other cause are still counted as active operating staff unless they are away from work for more than three months. So there is an incentive, in a desire to maintain staffing levels, to put people off for three months and then get replacements. That is certainly not in the interests of efficient management of total Public Service staff numbers and probably not in the interests of the individuals concerned. There is one other matter on which I wish to comment, which I think points to complexities of this question in dealing with that report and the information it revealed. In the same work designations and in the same departments, but in different cities, there are reported incidents of RSI which vary from 44 per cent to zero. Obviously such an enormous disparity in the reported incidence of the complaint is very difficult to explain and I think draws attention to the overall problem of dealing with this matter. Senator VANSTONE —My question is to the Minister representing the Special Minister of State. I refer to an article in yesterday's Age newspaper where it was reported that the Special Minister of State had agreed to review the rationing of free national flags. I ask: Firstly, in view of the widespread community demand for the retention and display of the Australian national flag, will the Minister now ensure that community organisations will once again have access to free national flags? Secondly, was the decision to limit the availability of flags made on purely budgetary grounds? If not, what other factors were taken into account? Thirdly, does the Government accept that the national pride and spirit that flourish when our flag is flown is worth to this nation far in excess of the relatively small Budget allocation that would be required to restore the arrangements to their former satisfactory state? Senator GARETH EVANS —I am delighted to hear Senator Vanstone on the wavelength of her generation and acutely conscious of the ebb and flow of the main issues of our time. Senator Durack —It is a pity you don't get on the wavelength of your generation, or any generation. Senator GARETH EVANS —I heard a geriatric squeak over there, Mr President, but I will not- The PRESIDENT —Order! Senator Chaney —Get your hands out of your pockets when you are talking to the headmaster. Get your hands out of your pockets, you naughty little boy. The PRESIDENT —Order! I ask Senator Evans to answer Senator Vanstone. Senator Chaney —What an undergraduate twit. Senator GARETH EVANS —I would like that to be recorded as demonstrative of the quality of the interjections we are now getting from the Leader of the Opposition. Senator Chaney —I would too, under my name, you failed Attorney-General. The PRESIDENT —Order, Senator Chaney! Senator Chaney —I am sorry, Mr President. To ensure that it is in the Hansard, I just interjected that he is a failed Attorney-General. The PRESIDENT —Order! I call Senator Evans. Senator GARETH EVANS —If we may move on from this adolescent extravaganza to which we have just been treated by the Leader of the Opposition I advise Senator Vanstone that the new arrangements-according to the Special Minister of State-were commenced following heavy demands by some members in the first two months of the financial year. Over 1,200 flags were issued in July and August. In order that the remaining supply of flags was available to members and senators on an equitable basis, Mr Young wrote to members and senators informing them of their entitlements for the remainder of the year. The new system also allowed members and senators to make their own decisions on distribution of flags within the government guidelines. However, following strong representations from a number of members to the effect that they preferred the previous system, Mr Young advises me that he has decided to revert to the old approach. He says that there has been no Budget cutback in the free issue program and that the same number of flags will be available this year as last year, requiring an increased financial allocation. If the demand continues at the present rate the Government may have to consider the matter in Additional Estimates. At that time we would, of course, take into account the Opposition's calls for restraint in government expenditure. Senator BLACK —My question is addressed to the Minister representing the Minister for Transport. In the light of Press reports today linking the Queensland Minister for Main Roads with the rerouting of Queensland roads for the benefit of his family and friends, and in view of the fact that last year the Federal Government gave $1.80 for every $1 the Queensland Government gave to road funding in that State, will the Minister assure Queensland taxpayers that Federal Government road funds for Queensland cannot be similarly misused by Queensland Ministers? Senator GIETZELT —I cannot comment on the validity of the Press reports. However, I am not surprised about the allegations that have been made about the way in which the Queensland Government distributes its road funds. On the evidence I have before me it appears that the Queensland Government distributes road funds, particularly those provided by the Commonwealth, in a very unbalanced and discriminatory way. That follows a pattern that some State governments have pursued over the years. The Queensland Government in particular has made it a matter of major principle. The evidence seems to indicate and the breakdown of funds shows that money that is allocated by the Commonwealth is directed to the south east portion of Queensland. If that is done on the basis of some form of patronage it ignores the basic criterion of the Commonwealth legislation which is that allocations should be based on the needs of the particular area. Directing the funds to the south east corner of Queensland is to the detriment of central and northern Queensland. Everyone appreciates the need for road works to be provided to meet the needs of communities. Nevertheless, funds for that purpose should be directed in a way that could be described as equitable and proper. That is not what is happening in Queensland. It is interesting to note that for several years now most of the funding for Queensland roads has been provided by the Commonwealth Government. The Queensland Government is paying less and less of its funds for road purposes. For example, the present Federal Government provides about 65 per cent of the total amount of money spent by the Queensland Department of Main Roads. In this financial year the Commonwealth will spend $257.6m on Queensland roads, which represents an increase of 84.8 per cent on 1981-82, the last full year of the Fraser Government. No other State has performed as badly as Queensland in matching the Federal road effort. With the recent reduction of the Federal Government's historic Australian land transport program, greater accountability in spending Federal money will be looked for by the Commonwealth to ensure that the Queensland Government makes its due contribution to the roadworks programs in that State. Senator Sir JOHN CARRICK —I refer the Leader of the Government in the Senate to his statement today about unemployment figures. I ask: Does he agree with the Prime Minister that at least 130,000 new jobs are necessary each year merely, in the Prime Minister's words, to provide for population growth without creating any new jobs at all for the existing unemployed? Does not this mean that at least 350,000 new jobs were necessary just to keep pace with the population growth during the two years and eight months of the Hawke Government? Does not this mean that no more than 50,000 new jobs at the very most, and probably much fewer than that, have been created in those almost three years? Has not the participation rate been almost continually lower during the Hawke Government's term of office than in the Fraser Government's term, thereby disguising the real level of high unemployment? Senator BUTTON —My recollection is that in the last year of the Fraser Government the participation rate went down considerably, as one might expect. Because there was such a crisis of confidence in this country people packed their bags and went home in terms of seeking employment. That is not surprising because close to 250,000 jobs were lost in that period. If I might use a term from an old story, Senator Sir John Carrick uses statistics like a drunk uses a lamp post-for support rather than illumination. The effect of the statistics he uses is to suggest that if one sets off jobs created against the requirement for jobs the net increase in actual employment has been only 50,000 since the Government came to office. That is not supported by the aggregate unemployment figures. If one looks at the percentage decline in unemployment one will find that it is not supported. I am not sure whether the figures to which Senator Sir John Carrick referred in particular are correct. I have not examined them. Senator Sir John Carrick —They were used in the Budget Speech. Senator BUTTON —Presumably Senator Sir John Carrick now quotes from the policy speech made by the Prime Minister. It is certainly true that, in order to accommodate the increase in the labour force which takes place annually, one has to create a significant number of jobs. Senator Sir John Carrick says that it is 130,000. Even on the basis of his own calculations he puts to me that 350,000 new jobs would have had to have been created by this Government to accommodate the increase in the labour force. The fact is that 484,000 new jobs have been created by this Government. The difference is a little more than 50,000, even if only on the basis of a simple mathematical calculation. I do not know the purpose of Senator Sir John Carrick's question. Is it to make some law moot debating point? I have not come into this chamber today at the start of Question Time boasting about the reduction in unemployment which this Government has achieved after the disastrous record of Senator Sir John Carrick's Government. I have not come in here saying that we are satisfied with the present level of unemployment. I never have. Repeatedly in this chamber I have said that the figures provide grounds for, perhaps, cautious optimism at the best. We cannot be satisfied as a government. However, we can be satisfied that we are going along totally the opposite route to the route Senator Sir John Carrick's Government went along. Unemployment is going down under this Government, whereas it was going up under his Government. We can be satisfied about those sorts of things. On the road which this Government has embarked on, which has seen high levels of growth rates such as were not attained in Senator Sir John Carrick's period of government-- Senator Watson —But you- Senator BUTTON —And such as Senator Watson also did not attain in his period of government, these sorts of employment figures are being produced. That is encouraging to the Government. It ought to be encouraging to every Australian who is concerned about this issue. I put it no higher than that. I am not trying to make debating points out of it. Perhaps Senator Sir John Carrick is. I want to be quite clear about the overall picture-the direction which this Government is following and the importance which we attach to the progress which is being made. Senator Sir JOHN CARRICK —Mr President, I ask a supplementary question. I remind the Leader of the Government in the Senate that in his statement earlier he stated that the participation rate in employment was some 61.2 per cent or 61.1 per cent. He claimed that it was higher and asserted that it was a sign of achievement and progress. I ask the Government Leader: Is it not a fact that during almost the whole term of the Hawke Government the participation rate in employment has been in the 60 point something per cent area, and below the participation rate achieved by the Fraser Government, therefore disguising the unemployment level? That was the question I asked. If the participation rate was such, then any suggestion of a fall in unemployment is related to wrong figures indeed. I ask the Leader to direct himself to that question. Senator BUTTON —I did not refer to the participation rate in my answer in any way saying that I was- Senator Sir John Carrick —It was in your first statement. Senator BUTTON —I do not know what the honourable senator is talking about when he says `my first statement'. I suppose that he means the answer to the first question that I gave today. That is what I am referring to. I referred to the participation rate as being 61.1 per cent. The point I was making about the participation rate is simply this: The figure of 56,000, which is the reduction in unemployment, is really much better than it looks if one takes account of the increased participation rate. That is all I am saying. The fact is that one per cent in the participation rate is equivalent to 10,000 jobs. I will put that in simple terms so that the honourable senator might understand. The fact is that the unemployment reduction figure would have been larger-it probably would have been 66,000 or something of that order-if the participation rate had not increased. I only referred to the participation rate as being indicative of a sign of confidence in the community- Senator Sir John Carrick —And is a fall a sign of lack of confidence? Senator BUTTON —Yes, I think that would be true. The PRESIDENT —Order! Can we stop this chit chat and get on with Question Time? Senator BUTTON —Mr President, with the greatest respect I regret that my answer to a question should be referred to as `chit chat'. The fact is that any fall in the participation rate, if it continued over a long period, would be regarded as a sign of lack of confidence in the overall well-being of the economy. I think that is probably correct. If one looks at the participation rate over this period of government one sees that it has been reflected in fluctuations from time to time. Senator COATES —I ask a question of the Minister representing the Minister for Local Government and Administrative Services. Some time ago the Commonwealth offered to sell Tasman Island back to Tasmania for a nominal sum. Is there any reason why the proposed transfer has not yet occurred? Senator GIETZELT —I understand that in January 1983 the Commonwealth Government offered to sell Tasman Island, which is off the south-east corner of Tasmania, to the Tasmanian Government for $25,000. That was considered a fair and reasonable price but it was rejected by the Tasmanian Government. In May of this year the Minister for Local Government and Administrative Services, Mr Uren, offered it to the Tasmanian Government for $100 on the condition that the Commonwealth Government could maintain the existing lighthouse, that the island would be dedicated for conservation purposes and that the existing historical structures would be maintained. Correspondence was entered into between the two governments and as late as July the Tasmanian Government indicated to the Federal Minister that the matter was under urgent consideration. To date-that is, the first week of October-the Tasmanian Government has not taken up the offer and one wonders why this matter is still in abeyance and has still not been concluded when such a nominal sum is involved. One can only suggest that the Tasmanian Government is rather reluctant to accept the conditions which, I think correctly, the Government has imposed on the Tasmanian Government for the very nominal sum that has been suggested. I suggest to the Tasmanian Government that it hurry up and finalise the proposals or the Federal Government might be persuaded to sell the island to someone like Holmes a Court. Senator JESSOP —Is the Acting Minister for Foreign Affairs aware that Rotary International is a non-political and non-religious organisation of more than 800,000 members who provide community services to more than 148 countries? Is the Minister aware that the Minister for Foreign Affairs has refused visas to some South Africans Rotarians to play golf in Australia? If Rotarian golfers can be refused entry, is it the intention of this socialist Government to refuse the entry of South Africans or others who wish to engage in other Rotarian programs, such as group study exchanges and youth exchanges? Is the Minister prepared to assure Rotarians that they should continue to act as non-political and non-religious clubs? As these Rotarians from South Africa were assured initially that visas would be provided, will he reverse this decision which is viewed by a considerable number of fair-minded Australians as reprehensible? Senator GARETH EVANS —It is the case that the Government, not just the Minister for Foreign Affairs, made a decision last month not to allow certain South African nationals to come into Australia to take part in the Twenty-second International Golfing Fellowship of the Rotary World Championships to be held in Melbourne this month. It is also the case, as Senator Jessop says, that Rotary is an organisation of great and unblemished reputation and nothing in the Government's decision is to be taken as or was intended to reflect in any way on that admirable reputation. The decision was taken in the following circumstances: In 1983 the Government undertook a major review of policy towards sporting contacts with South Africa, whether they occured in South Africa, Australia, or third countries and whether they involved individual sportsmen or sporting teams. In October 1983 the results of that review were publicly announced. Under the policy, which is firmly based on the 1977 Gleneagles Declaration on apartheid in sport and the 1982 Brisbane code of conduct, all individual amateur South African sports men and women would be considered as representative of South Africa unless there were definite proof to the contrary and would not be allowed entry to Australia to participate in international sporting competitions. No South African sporting team would be allowed entry to Australia, but individual professional sports persons would be assumed to be non-representative unless there were proof to the contrary and would be permitted entry into Australia, the point being taken in that policy development that by and large professional sportsmen, particularly individual sportsmen such as golfers, tend not be participating in competitions in any representative sense at all. The Government's decision, as I stated in announcing it last night, was not based on the fact that the golfers are Rotarians. The decision was made in accordance with the Government's commitments under the Gleneagles Declaration and in accordance with that policy on sporting contacts announced in October 1983 and recently reaffirmed on 19 August this year. Our position is clear and it follows from our commitment to the Gleneagles Declaration whereby we undertook, as did our predecessor, to withold support from and take every practical step to discourage sporting contacts with South Africa. Let me make it plain that the decision is in accord with that Government policy and it is quite clear that, had entry been granted, South African nationals would have been taking part here in an international sporting competition-albeit one of not a very high level, but an international sporting contest, notwithstanding. That was perceived by us as a clear breach of Government policy. I conclude by saying that the Government's policy on sporting contacts is long-standing and has, at least hitherto, enjoyed strong bipartisan support. The policy as applied by Australia and other countries has been successful in strengthening the situation whereby South Africa has been isolated in international sport, and that has been a significant source of pressure in producing the recent events which have given some confidence for the longer term future of reform in that country. The sporting contacts policy has also been a strong and effective reminder of the international community's general abhorrence of apartheid. If, on occasion, the implementation of that policy seems in some quarters to be harsh that is the price we all have to pay to register with South Africa and every South African the international community's determination to see apartheid abolished. Senator JESSOP —I have a supplementary question. The Minister did not allude to the part of my question which asked whether it is the intention of the Government to prevent students who wish to engage in Rotary programs such as group studies exchanges and youth exchange programs coming here. Senator GARETH EVANS —I apologise for the oversight. It was so manifestly absurd an extrapolation from the decision in this instance that I did overlook it in my reply. Of course, it is not the Government's intention to act in such a way in relation to Rotarians or anybody else. The policy is a policy about sporting contacts and it has been applied and will be applied in that context. Senator MORRIS —The Minister representing the Minister for Aviation would be aware of the crash of a Pelair jet airliner at Sydney (Kingsford-Smith) Airport this morning killing the two pilots. In view of the curfew on jet aircraft at Mascot and the fact that it was a Pelair aircraft that has apparently been investigated in New Guinea recently in respect of possible drug trafficking, is there anything unusual in this crash? Senator GIETZELT —The Senate would be aware that a light aircraft crashed in Botany Bay in the early hours of this morning killing both pilots, as they have been described in the media. I think it would be true to say, as Senator Morris has suggested, and certainly it is my view, that it is rather unusual for a plane to be departing from Kingsford-Smith Airport at that early hour of the morning when most of the airport, I imagine, would be not particularly active. However, whether small aircraft are outside the curfew arrangements would be a matter that I would have to refer to the Minister for Aviation to see what the circumstances were in respect of the departure of that plane. According to the media, the plane was owned by Pelair, which is a company currently the subject of an inquiry by the Papua New Guinea Government. I am not in a position to make any judgment whether there is any connection with that, except that one of the principals involved in the inquiry being conducted in New Guinea was a Mr Aston, a Sydney solicitor, who, according to all the evidence before the various drug inquiries, was very actively involved in that trade. However, I appreciate that there is a curfew operating at Mascot airfield which certainly applies to large aircraft. I will seek information about whether it applies to small aircraft and convey it to Senator Morris in due course. Senator MISSEN —I draw the attention of the Minister representing the Attorney-General to the comment of Professor Jack Richardson on his retirement as Federal Ombudsman. Will the Minister comment on Professor Richardson's statement on the role of the Ombudsman in investigating complaints of public maladministration? He said: The big disappointment to me has been this Government's refusal to allocate sufficient minimum staff to perform these functions effectively. Because of the increasingly important role that the Ombudsman plays in administative law in this country, I ask the Minister: Firstly, when will a replacement be announced for Professor Richardson who has already retired and whose retirement was well anticipated? Secondly, will additional investigators be appointed to help clear the backlog of written complaints presently before the Ombudsman? Thirdly, will the Government give urgent consideration to increasing the resources of the Ombudsman's Office in order to reduce the enormous pressure under which its staff are currently working and also to ensure that its excellent record of efficiency is maintained? Senator GARETH EVANS —I suspect that that question is more appropriately addressed to the Minister representing the Prime Minister, but in either event I will ensure that an answer is obtained for Senator Missen as soon as possible. Senator FOREMAN —I refer the Minister representing the Minister for Trade to a slight on Australian wines which could severely affect sales of the product. The Japanese media have confused Australia with Austria where a component of anti-freeze was added to more than 300 wines as a sweetener. Taken in large quantities, the additive can cause brain and kidney damage. The Japanese media reported that Australian wines had been polluted. In light of this, does the Government intend to ask the Japanese Government to correct the mistake? Senator BUTTON —The confusion between Austria and Australia is an endemic problem which crops up in various ways. I remember being told by a Minister in the Austrian Government two years ago that it had done a survey of its profile as a nation in the United States and that some 60 per cent of the respondents in the United States confused Australia with Austria, with 70 per cent thinking that the kangaroo came from Austria. So we have a problem, and it has been reflected in the situation in relation to wine in Japan. This issue arose some time ago and I think it is true to say that the Australian authorities in Japan acted with some promptitude. There was, first of all, a general degree of confusion created by television and radio reports in Japan which referred to Australian instead of Austrian wines. Following those announcements the Senior Trade Commissioner in charge of marketing in Tokyo issued a media release expressing concern at the mistaken identities and containing assurances from the Australian Wine and Brandy Corporation as to the quality of Australian export wine. This was reinforced by direct contact with offending radio and television stations. Briefings were also given by the Senior Trade Commissioner to a number of Japanese newspapers and magazines on the contamination issues. At the request of the Senior Trade Commissioner, the Japanese Government, through the Ministry of International Trade and Industry, also made direct contact with several media networks expressing concern at the mistaken identities and also re-released the Embassy's media release to MITI Press contacts. A further initiative was a message put out by the Ambassador in Tokyo, Sir Neil Currie, on behalf of the Australian Wine and Brandy Corporation confirming that Australian wine shipped to Japan does not contain diethyleneglycol, which is the offending substance, as I understand it, to which Senator Foreman referred. Senator Morris will be able to tell me whether I am right. Most major media carried the story in some form. The Senior Trade Commissioner has also proposed a significant advertising campaign in Japan for Australian wine to help turn around the misfortune caused by the wine contamination issue to the advantage of Australian wine. I am pleased to say that the Australian wine industry, including a number of South Australian companies, which would be of concern to the honourable senator who asked the question, are vigorously supporting that campaign. The PRESIDENT —I call the Leader of the Government. I should say, the Leader of the Opposition, Senator Chaney. Senator CHANEY —I congratulate you on your prescience, Mr President. My question, which is addressed to the Minister representing the Minister for Communications, refers to the present Australian Broadcasting Corporation television news and current affairs programming which provides a mix of national and local news and current affairs in State editions of the National and a later night concentration on national and international issues in the centrally-produced Carleton-Walsh Report. Is the Minister aware of any plans to change this format by doing away with local current affairs segments produced as part of evening newscasts in each State? Does the Minister agree that any such plan would be a backward step by the ABC, particularly in more remote States like Western Australia, where he and I come from and where issues which might not interest a Sydney-based producer are nevertheless of great importance to hundreds of thousands of people living outside the major metropolitan centres of eastern Australia? Senator WALSH —I remember hearing what could be described as no more than a rumour to that effect some time ago and I did not follow it up. There may be plans, but I am not aware of them. I will see whether Mr Duffy is and get his response. Senator CHANEY —I thank the Minister for that answer. As a supplementary question, I ask him whether he agrees that this would in fact be a backward step for those parts of Australia which lie outside Sydney and Melbourne? Senator WALSH —I rarely see the Perth component of those programs. I do not think that I am in any position to judge. Senator CROWLEY —I refer the Acting Minister for Foreign Affairs to the recent third Nuclear Non-Proliferation Treaty Review Conference held in Geneva last month. Will the Minister elaborate on Australian Government participation in the Conference and its contribution to the outcomes? Senator GARETH EVANS —The third NPT Review Conference concluded on 21 September. It was an outstanding success, and it has to be said that the Australian delegation did play a major role in achieving that success. Unlike its predecessor in 1980, the Conference adopted by consensus a substantive final document. That document contains a number of statements of great importance to Australia and the international community. In particular, the Government welcomes: First, the support for International Atomic Energy Agency safeguards for the intensification of safeguards in nuclear weapons states and for an effective international system of plutonium storage; secondly, the clear call on non-parties to join the Treaty and to accept IAEA safeguards in all their nuclear activities, both current and future; thirdly, the call on all states for international nuclear co-operation specifically as a necessary basis for the transfer of nuclear supplies to non-nuclear weapon states to take effective steps to achieve an international, legally binding non-proliferation commitment and the acceptance of full scope safeguards by those states; fourthly, the welcoming of the South Pacific nuclear free zone treaty; and, above all, finally, the clear and unanimous commitment of all non-nuclear weapons states to the cessation of all nuclear testing by all states in all environments for all times and their appeal to the nuclear weapons states to participate in the urgent negotiation and conclusion of such a treaty. The Australian delegation was instrumental in achieving a number of these results as well as in defusing, through the intervention of the Ambassador for Disarmament, Mr Richard Butler, in some early morning shuttle diplomacy, a last minute dispute between Iran and Iraq which did threaten the consensus that had been reached. This Conference was probably the most important international conference to have been held this year, if not for the last few years. I think that it is a matter of pride to record the extent to which Australia's objectives were achieved and the role that Australia played in that Conference. Senator WALTERS —The subject of my question is finance and debt but I shall direct it to the Minister representing the Prime Minister because the sources I shall refer to refer to the Prime Minister and because I found the Minister's answer to Senator Sir John Carrick so interesting. I ask the Minister whether Australia is borrowing more money and has far higher debt than most people realise? Are Australians now beginning to grasp the dimensions of their economic difficulties and do they not like what they see? It has been stated that as a result of the Australian dollar being so unstable that it has fallen out of bed. The Prime Minister is losing his ability to control the left wing of his Party. Is the Minister aware that those damning accusations have been made by the bankers attending this week's meeting of the International Monetary Fund in Seoul and appear in the magazine International Investor. What is the Government doing about Australia's drop of 1.8 points in creditworthiness in the last six months alone and a fall of a massive 5.6 points since Mr Hawke came to office in 1983? Is the Minister aware that Australia's credit rating was the third worst performer in the Asian-Pacific group, with Sri Lanka and the Philippines being the only countries to report a bigger drop? Senator BUTTON —The question demands a less than simplistic answer; that is to say, the answer has to have a different character from the question. First of all, let me say that I am not aware of all those things which Senator Walters asserts. I do not have the capacities to be able to tell what the average Australian is totally concerned about. If Australians have any concern, they would be concerned about the prospect of a government ever being elected in this country which contained somebody who could ask a question like that. That would be the major concern that most Australians would have at present. Of course the question of Australia's credit rating is of concern to the Government. I am not in a position to agree or disagree about the precise figures which Senator Walters has referred to, but I do not think that the credit rating will be helped by the knowledge that we have that sort of level of political debate in Australia. Senator WALSH —During Question Time today Senator Colston asked me a question and I have found a note on that subject. Mr Hailstone was supervisor of Australian Broadcasting Corporation radio in Canberra. He was in no way responsible for the decision to take racing services off ABC radio in Canberra, although he was in Canberra at the time the racing service was dropped from the ABC's sport program when commercial station 2CA changed format to become a sports station with a very substantial commitment to race broadcasting. Mr Hailstone was supervisor of radio. Subsequently, commercial station 2CA again changed format after its ratings fell dramatically. The new format excluded all horse racing broadcasts. In view of numerous submissions to the ABC from Canberra racing interests, the decision was then made to return to broadcasting race descriptions on Saturdays and major public holidays only. It is pure coincidence that Mr Hailstone was in senior ABC radio positions in both Brisbane and Canberra when racing broadcasts were discontinued. As has already been pointed out, racing broadcasts were actually reinstated while Mr Hailstone was supervisor of radio in Canberra following the termination of the broadcasting service by the commercial station. Senator Colston —Mr Deputy President-- The DEPUTY PRESIDENT —I call the Acting Minister for Foreign Affairs. Senator GARETH EVANS —Yesterday Senator Vallentine asked me: . . . how many United States nuclear-capable ship visits to Australia are scheduled in 1986? Secondly, is there to be a significant shift to east coast visits? As to the first part of the question, the answer is as follows: Government policy on port visits to Australia by United States Navy ships makes no distinction between nuclear capable and non-nuclear capable. As has been stated many times here and in another place this Government accepts the US policy of `neither confirm nor deny'. As to the total of US ship visits to Australia scheduled for 1986, neither US Navy planning nor Australia-US planning is directed towards establishing a precise figure in advance for a calendar year. Some visits, such as those for combined Australian-US exercises can be estimated with reasonable certainty, but the general procedure for proposed visits by US warships to Australian ports is that the US requests approval for a visit some two to three months prior to the proposed date of a particular visit. This request and the processing of it is classified, in order to protect from potentially hostile nations knowledge of US ship movements and operating patterns. Similar procedures apply to Royal Australian Navy ship requests for overseas port visits. If the US ship visit is approved and the US requirement for the visit remains current, information concerning the proposed visit is declassified some 10 days prior to the ship's arrival and a public announcement of the visit is issued. As to the second part of the question, there is currently a disproportionate number of visits to Western Australia by US Navy ships compared with port visits to the Eastern States. The reason for this is that Western Australian ports are the first landfall in Australia for US ships returning to their home ports in Hawaii and the west coast of the US after extended deployment to the Indian Ocean. The port calls are for rest and recreation. When the Minister for Defence (Mr Beazley) visited the US in August this year he raised with US authorities the need to change this pattern. Ways of implementing this change are to be discussed on a navy to navy basis with any changes being subject to US Navy requirements and it would not be expected that a substantial change to the pattern could be implemented before late next year. Senator GIETZELT —Yesterday I was asked by Senator Jones a genuine question without notice about the possibility of some railway equipment being imported from South Africa. The Minister for Transport has provided me with this response: The Federal Government has direct responsibility only for the Australian National Railways Commission, known otherwise as AN, and therefore it has no knowledge of any dealings by State rail authorities in this regard. Australian National was advised on 21 August of the policy announced on 19 August by the Minister for Foreign Affairs on dealings with South Africa. AN has advised that no rail equipment originating from South Africa has been contracted for purchases since that date. However, it also advised that it contracted to buy 36 bogies from Bradford Kendall Foundries, a firm based in New South Wales, on 25 February 1985. Tenders were invited in 1984. AN understands that a South African firm called Woodmack Corporation was sub-contracted by Bradford Kendall to provide 72 axles and 300 rubber springs for the 36 bogies. These components represented approximately 6 per cent of the total contract price. As the contract was let for less than $2m the approval of the Commowealth Minister for Transport was not required. AN has advised that it is not aware of any other South African involvement. Therefore, the question of any Federal Government action should be taken up with the Minister for Foreign Affairs (Mr Hayden) as the Minister responsible for the Government's policy with respect to dealings with South Africa. I thank the honourable senator for raising the question. The matter will be dealt with expeditiously by the Minister for Foreign Affairs. Senator COLSTON —I seek your indulgence, Mr Deputy President, to inform you of why I was seeking the call. Very early in Question Time I asked a question. The Minister did not have the brief with him. Subsequently, he found it and gave the answer at the end of Question Time. I was going to seek leave to ask a supplementary question but now that the Minister has gone there is no point in doing so. Senator MESSNER(South Australia) —by leave-I wish to make a personal explanation. The Australian Financial Review last Tuesday carried an article claiming that there were differences between the Leader of the Opposition, Mr Howard, and myself on taxation policy. That proposition is just absurd and I would let the matter pass were it not for the fact that in the last day or so the Government has tried to use the article to misrepresent the Opposition's policies. Let me make the position clear. The Australian Financial Review's report of the interview, particularly the headline, failed to make the point that was clearly understood by the journalist from the outset. The policy of the coalition on tax is the policy laid down prior to the last election. That policy features income splitting for single income families with dependent children, a rebate for child care expenses, a broadening of the indirect tax base, and, I stress, no capital gains tax. That is the policy which Mr Howard and all Opposition members support. Against that fundamental point, all other discussion reported in the article was about the policy review process which the Opposition, through its various committees, is undertaking. The examples mentioned in the article were illustrative only, and were used for the purpose of demonstrating the problems in developing options in the various areas I will mention. For Government spokesmen to elevate such discussions to the status of policy is mischievous and plainly wrong. Let me deal with each of the main areas raised in the article. I am quoted as saying: `There would be no consumption tax.' This has been taken out of context from discussion about option C of the White Paper on the reform of the Australian Tax System, recently presented by the Treasurer, Mr Keating. The point I made was that the 12 1/2 per cent consumption tax as put forward by Mr Keating would not be acceptable to the Opposition. This mirrors the views expressed in our own policy which mentions gradual and predictable changes to the indirect tax system, and which canvasses options and provides substantial scope for offsetting reductions in personal income tax. The question of whether one or other of the various options canvassed in our policy might be adopted is a matter for policy development and later decision. In the interview I stated that the wholesale sales tax was a logical place to start to examine the options. Similarly, a tax on services is canvassed in our policy as an argument against the regressive nature of indirect taxes. These are quite sensible starting points in our review process. Mr Keating's hysterical imaginings about my discussions on section 26AAA can only be described as beyond the realms of any kind of reasonable comment, even from such a plainly cynical politician as the Treasurer. Again, the interview with the Australian Financial Review included a discussion of the effects of the application of the present law in sections 25A and section 26AAA. He relied on my expression `modification' in relation to the law. Those modifications were given sinister connotations. They were part of my discussions with the journalist in the context of possible avoidance of the present provisions and centred on the amendments introduced earlier to tighten them. In no way did I suggest that the present law would be in any way modified to extend them into a generalised capital gains tax, such as suggested by the Treasurer. Perhaps only one such as he could devise such a deceitful strategem. I repeat, the Opposition will not introduce a capital gains tax. We will abolish the Australian Labor Party's capital gains tax. There is no truth in the Government's assertions that the tax policy of the Opposition has been changed. Our policy remains in place and I am proud to support it. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I move: That the Senate take note of the personal explanation. I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 8 October, on motion by Senator Maguire: That the Senate take note of the paper. Senator SANDERS(Tasmania)(3.17) —I rise to speak to this paper because it is a very serious indictment of the state of the aviation industry-in fact, the whole aviation movement-in Australia at the moment. Of course, people outside the industry also fly aeroplanes. I refer specifically to the general aviation section of this paper. Page 23 shows that activity in all but the charter sectors of general aviation is less than it has been in previous peak times. This is directly attributable to the Department of Aviation. General aviation is a little recognised component of the whole aviation movement in Australia. General aviation actually has far more flights than the airlines and far more hours are flown. The general aviation sector is very important in rural and outback areas which rely on smaller aircraft for the movement of goods and passengers. General aviation has been hamstrung in recent years by a number of cost increases. One of the major increases is in the cost recovery program of the Department of Aviation, that is, the air navigation charges. I had a Cessna 180 aircraft which was costing $900 a year in air navigation charges. These charges were levied, supposedly, to pay for the costs expended by the Government for my benefit. These costs were not expended for my benefit but for the benefit of the Department of Aviation. I benefited very little from them. All in the general aviation industry are asked to pay for the very bloated bureaucrats in the Department of Aviation who merely wield rubber stamps. Another difficulty for general aviation is the very restrictive and complicated air traffic control procedures which are presided over by the Department of Aviation. In many instances, the Department's procedures are actually decreasing aircraft safety. All the control zones are in basins around the capital cities, surrounded by mountainous areas. The Department of Aviation, by design, makes it so difficult for a general aviation aircraft to fly into these control zones according to visual flight rules that pilots will often attempt to a avoid the zones in bad weather and, in so doing, will jeopardise the aircraft and the passengers on board with terrible results. Accidents take place often in the mountainous areas surrounding control zones. The other aspect of the Department of Aviation which is hampering general aviation is the complete lack of rapport between Department of Aviation personnel and the flying public-the general aviation sector. The DOA considers itself a policeman of the regulations-not a co-worker with the pilot in the cockpit-to make sure that the pilot is not in violation. It is well known in aviation circles that if a general aviation aircraft has an accident, it would be wise to have a solicitor draw up the accident report rather than the pilot himself because the Department of Aviation may actually take legal action against any pilot who has an accident. Another example is the reluctance of general aviation pilots to declare emergencies in flight. One would think that, given the skilled staff of the Department of Aviation-there are some left on the ground in the control towers-a pilot would be very eager to declare an emergency. But this is not so because the Department of Aviation requires a whole series of inquiries upon the declaration of an emergency which may then lead to the loss of licence for the general aviation pilot. I hope that the Department of Aviation takes a good look at its own report and that it takes my remarks to heart because it is stifling general aviation in this country. General aviation deserves to be given far more support than it has been getting. Question resolved in the affirmative. Debate resumed from 8 October, on motion by Senator Peter Baume: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.23) —This massive report, reviewing Aboriginal employment and training programs, opens with the comment: As we approach the year of Australia's bicentennial celebrations it remains overwhelmingly obvious that Aboriginal and Torres Strait Islander Australians have little cause for celebration. To say that their employment situation has reached a crisis point would be an understatement. Despite the gains that have been made in some areas, Aboriginal and Torres Strait Islander people as a group remain the most disadvantaged people in Australian society. I believe that we have to take note of this statement. It is a sad indictment that almost 200 years after European settlement on this continent a group of our citizens are faced with chronic long term unemployment, insurmountable health problems and a future that will remain bleak as long as the present out of sight, out of mind view prevails. This report is styled as a blueprint for government support for the Aboriginal people's ability to provide for their livelihood. It issues a severe warning that, without a radical change of direction in government policy and practice, Aboriginals will remain locked in an economic prison where they have been since the coming of European settlers. Since 1788 Aboriginal society has been confronted with social and economic upheavals. Traditional modes of sustenance, provided by hunting and gathering, have been replaced by sit-down money-a euphemism for government welfare handouts. The drain of these payments on the revenue of the Commonwealth is significant because many Aboriginals remain dependent on this sit-down money from the moment they are born to the moment they die. Presently, Aboriginal people are unemployed at a rate of some five to six times that of the total white Australian labour force. Not long ago, some 23 000 Aboriginal persons were registered by the Commonwealth Employment Service as seeking full time work. How many more Aboriginal persons are there in the community who know that the desperate hopelessness of their prospects of finding work means that they will stay on the dole for a long time and that they will have a guaranteed minimum income on the dole which is unsatisfactory but at level which they are willing to accept? I wish to mention briefly some historical aspects. Aboriginal society has suffered varying degrees of destruction of the viability of its traditional economy through the loss of land and subsequent dependence on a new economy created by European settlement. The work avail- able for Aboriginals was of a rural, unskilled nature, both seasonal and sporadic. Today the situation is much worse. This is because of declining rural fortunes which have meant that work prospects are non-existent in many areas where there is a large Aboriginal population-areas such as north Queensland, the Northern Territory and Western Australia. Work prospects in my own State of South Australia remain pretty bleak for Aboriginals. Of particular concern is the plight of traditional communities. These Aboriginals have remained in close contact with the country with which they have a strong cultural bond. To stay in their country they are totally dependent on government funding for wage employment. What solutions can be found to eliminate these problems? The report states emphatically that the short term solutions currently pursued by government, whilst welcome, are inadequate. The report also states: Far too little of this assistance was directed towards the enhancement of the long term employment prospects of Aboriginal people or to enabling Aboriginal people to establish and develop the economic bases of their communities. The report focuses on Aboriginal education. It suggests that flexibility and sensitivity are needed if the education system is not to continue to fail the Aboriginal people. I call upon the Government to implement quickly the recommendations in this review. Question resolved in the affirmative. Debate resumed from 9 October, on motion by Senator Coates: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.27) —As in the case of the Primary Industry Bank of Australia, which was established to finance and promote the rural sector of our economy, the Australian Industry Development Corporation's primary objectives are to promote Australian industry and Australian ownership in industry. Its operations are similar to a bank in that it borrows money, lends money and provides corporate advice. However, unlike a bank, the Corporation's Industry Development Division specialises in investment in industry by providing risk capital, especially for start-up situations and for projects involving major expansion or reconstruction. It also attempts to stimulate development in the more positive role of a catalyst and an active investor. I am aware that the Campbell Committee of Inquiry into the Australian Financial System concluded: The retention of the AIDC as a government-owned financial intermediary is not necessary for an efficient and competitive financial system. It stated further: The AIDC should be disposed of to private sector interests. With a government hell bent on deregulation and an opposition which seems to believe that privatisation is the solution to most of Australia's economic problems, I wish to put on record that the Australian Democrats support the role currently played by the AIDC. We believe in the importance of keeping government control over this Corporation. I do not believe that the private banks existing in Australia, or the 16 foreign banks which are now entering Australia, can provide the financial assistance that is needed for Australia to develop a strong trading, industrial and technological infrastructure. They are motivated by profit, not by long-term benefit for the Australian economy. Profit is not a dirty word but the blind pursuit of profit is not synonymous with what is good for the Australian economy in the long run. In a mixed economy it is appropriate for the Government to play a role in setting the pace and direction of economic development. In Australia it is especially important that we aim to reduce the level of foreign ownership of our resources. It is crucial to have an organisation like the AIDC which can foster Australian enterprise and ideas so that these are not sold to foreign companies. It is therefore pleasing to see in this report that Australianism is a significant part of the AIDC's activities. The Corporation has increased Australian equity in existing projects-for example, the Palm Valley natural gas joint venture, referred to on page 34 of the report, and the Hospital Corporation of Australia Pty Ltd, mentioned yesterday by Senator Coates. It is also involved with Mica Pty Ltd and Austek Microsystems Ltd, which are high-tech industries. It has also supported joint ventures to capitalise on breakthroughs in the development of a vaccine against malaria, referred to on page 36. All of these are admirable objectives. The Corporation makes a profit. It does not require massive government funding and it provides assistance and advice to new enterprises and industries. It has now adopted a new policy of allocating some of its resources to facilitating reconstruction of Australian industry and has set up a special industry restructuring unit to assist in this policy. I do not believe that it is a suitable candidate for privatisation. The AIDC provides assistance that would not come from the private banking sector. It can be directed to help achieve social and economic priorities considered to be important by the government of the day. I believe that it would be utterly short-sighted and disastrous in the long term just to go for a drive for profit or to try to sell the AIDC to the private sector as a banking operation. Question resolved in the affirmative. Debate resumed from 9 October, on motion by Senator Chaney: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.32) —In the short time I had available at the end of yesterday's consideration of this paper, I pointed out that the opinion of the Solicitor-General could not get to the political heart of the matter. The narrow terms of reference confined the nature of the work done by the Solicitor-General at the direction of the Prime Minister (Mr Hawke). The unavailability of all material documents and the inability to pursue recollection of oral undertakings forced Dr Gavan Griffith to qualify the applicability of his answers. It is not yet clear the degree to which the Department of the Prime Minister and Cabinet was monitoring the Australian Bicentennial Authority, although at last night's Senate Estimates Committee A hearing letters were incorporated in the record of proceedings. The Department's information collecting procedures and their accuracy do not appear to be without reproach. It is unclear the extent to which various options were put forward to the Prime Minister, along with the consequences likely to flow from them. This is the problem that pervades the whole matter. It appears that actions were frequently taken in haste with insufficient information. This is a major reason why large sums of money and staff time are being spent analysing the problem areas that remain, especially political ones. The bureaucrats claim that their requests for information were not properly met. Authority staff say that replies were given much earlier than the Department of the Prime Minister and Cabinet has acknowledged. The media have relied on leaks and recycled Press releases. Only with yesterday's Senate Estimates Committee hearings are we beginning to get at the matters of enduring concern. We need to know about the progress of getting corporate involvement in the funding of the 1988 celebrations. We need to know what efforts are being made to encourage voluntary input by fostering people-directed programs of a creative nature. We need to know what has been done and what will be done to involve the people and governments of countries such as Greece, Italy and Yugoslavia in the Bicentennial. We need to know what guidelines operate when consultants are considered or briefed. We need to encourage the Authority's Board members to seek organisational structures which will enable them to have early access to information. We need to make it the natural thing that people want to participate in community activities in 1988. It is important that all Australians feel that it is worth while participating in Bicentennial activities. I find it hard to see how one can make rock hard pronouncements two years before the whole process is due to come together. We have to keep a watchful eye on the structure of the Authority and the reasons why things are being done. It is very important that we have more than one body looking at what is happening in these areas. We must not discourage those employees of the Authority who are putting all they have into the work. We have to take the debate away from personalities, scapegoats and tired red herrings such as this exercise that an embattled Prime Minister (Mr Hawke) has belatedly foisted on the Solicitor-General. I hope that we can interest the media also in the thousand-million-dollar stories such as the shambles of Australia's purported offsets policy or the opportunity for Telecom Australia to use its buying muscle to foster an Australian electronic manufacturing industry, rather than just a quarter of a million dollar exercise which involves a couple of personalities and an Authority which is currently under siege. Senator Sir JOHN CARRICK(New South Wales)(3.36) —The Solicitor-General's opinion is dated 8 October. That is precisely eight weeks after the Prime Minister (Mr Hawke) told the Chairman of the Australian Bicentennial Authority to sever the employment of the Chief Executive, and six weeks after the severance was complete. The opinion has emerged only because in mid-September the Prime Minister was thoroughly embarrassed by the exposure of the amount of the settlement and has sought devices and contrivances to separate himself from the decisions. Whether or not the Solicitor-General's opinion is correct-that is a matter of disputation-it stands as a damning comment on the Prime Minister. It proves his dereliction of duty; that he has misled the Parliament and the people; that he has not been in contact with his own Department; and that he has been grossly inefficient in his administration. Let me put the headlands in a brief statement. On 15 August the Prime Minister told the Chairman of the Authority to sever the employment of the Chief Executive. The Chairman had no grounds for it and told the Prime Minister that there were no grounds for severance based on misconduct. He said that it would have to be by negotiation and a settlement would have to be negotiated. The Prime Minister told the Chairman to go ahead and do it. That is beyond dispute. On 19 August the Chairman sent a facsimile letter to the Prime Minister which stated that he had done what the Prime Minister had asked him to do. It said: `Here are the proposed methods of doing it'. It set out in detail the needs and ingredients in the settlement and the restraints to be applied. Then the Prime Minister, in a phone call, commended him for the letter and the details and told him to err on the side of generosity. The Chairman said: `I am glad you said that, Mr Prime Minister, because it will be expensive; it will be more than $400,000'. The Prime Minister confirmed that. On 28 August the Chairman sent a letter to the Prime Minister setting out the precise details and asking for the method of appropriation of funds-whether out of general funds or special appropriation. On 30 August the Prime Minister replied-not criticising one iota of the details-telling the Chairman to get on with the job and settle. That is precisely what the Chairman did. It happens that he has now discovered that at no time did the Department know about the letter or conversation of 19 August or the letter of 28 August. In other words, at every step the Prime Minister was instructing in detail what was to be done. Subsequently he came out and said: `I had nothing to do with it; it was the Chairman'. He recently said: `We never got a copy of the letter of appointment'. Last night we found out that of course he did, that it had been in the Department. Once again the Prime Minister was wrong. The Prime Minister, without giving any reasons why a man's employment should be severed, has not stopped even to find out the terms of employment or to get the advice of the Solicitor-General or anybody else, has not informed his Department and has totally misled the people of Australia. This opinion stands as a document pointing to the dereliction of duty of the Prime Minister, the complete inefficiency of his administration and the complete breakdown between his Department and himself. He has attempted to make a scapegoat out of the Chairman, a man who has an immensely high reputation in this country, but he has been caught in his own trap. It is not the Chairman who stands here convicted; it is the Prime Minister, convicted by the evidence which comes out day by day and which proves that virtually everything he has said is wrong and that he was the negotiator and the manipulator step by step of something that he tried to pass to others. Senator MICHAEL BAUME(New South Wales)(3.42) —Among the many interesting elements of this opinion is the fact that it explodes one of the excuses that the Prime Minister (Mr Hawke) used in making Mr Reid a scapegoat for his own disgraceful and incompetent behaviour in the matter of the Australian Bicentennial Authority. The interesting point that emerges here is that the Prime Minister said in the House of Representatives on 8 October that for a variety of reasons he formed the view that the only motive for `the composition of the settlement was tax minimisation'. That view is, of course, exploded by the opinion of the same date, which says that the Authority was in the view of the Solicitor-General entitled to act and rely on the advice from Allen Allen and Hemsley. When we look at this whole saga of the Prime Minister's actions-quite apart from the questions that Senator Sir John Carrick raised: The Prime Minister clearly misled the House; his Department was in possession of letters-we see that by having a belated reliance on advice the Prime Minister has in effect exposed his own lack of competence. The Senate will recall that the Prime Minister made no effort either to establish what was the basis on which Dr Armstrong was employed or to seek to gain any legal advice when this matter was settled, as I recall it, on 28 August. The reason he did not either seek advice or look at the letter which was in his Department of Prime Minister and Cabinet, for which he is allegedly responsible, is very simple. At that stage there was a hope that this deal would be kept secret and that it would not be available to scrutiny by the Senate until the next lot of hearings of the Senate Estimates committees and that the matter would by then have blown over. The reality is that it did not blow over and that the facts escaped. The Prime Minister then floundered around looking for a scapegoat. The impressive feature of this document is that it reveals that the Chairman of the Authority should not be the scapegoat but that the person who is responsible surely must be the Minister in charge of the Authority, and that of course is the Prime Minister. It is curious to read through the opinion as amended on the 8th-it was originally given to the Prime Minister on the 3rd-and to compare it with the Prime Minister's justification for objecting to what happened and trying to provide Mr Reid as the scapegoat. The claim that the only motive for the composition of the settlement was tax minimisation is an absolutely disgraceful allegation which cannot be sustained. I believe that the solicitors involved have today presented to the Board of the ABA their view of the Solicitor-General's opinion. The fact remains that the Solicitor-General's opinion does not support tax minimisation being the prime cause that the Prime Minister used to find a scapegoat for this affair. As Senator Sir John Carrick quite properly pointed out, there was no attempt to mislead the Prime Minister. His own incompetence misled him and this was evident from his failure to look at the letter of appointment that was in his own Department's file all the time. It had been there from the time the Prime Minister's Department took over the running of the Authority at the beginning of this year. That letter resided under his own authority. He was not sufficiently competent as an administrator to be aware of it and he has misled the House by saying that it was not in his possession. If he did not have it it was not because of any misleading by Mr Reid but because of his own incredible incompetence. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! The honourable senator's time has expired. Question resolved in the affirmative. Debate resumed from 8 October, on motion by Senator Watson: That the Senate take note of the paper. Senator VIGOR(South Australia)(3.48) —When the debate on the annual report of the National Debt Commission was adjourned I was saying that expenditure on debt sinking funds had grown exponentially. From 11 August 1923 to 30 June 1980 the total expenditure for debt redemption was approximately $8.7 billion-that is in 57 years. However, in the year 1980-81 it was $1.45 billion and in 1984-85 it was $1.125 billion. A similar pattern has developed in relation to the public debt of the States. The Commonwealth has to bear a proportion of these costs because of the financial agreements with the States. As large as Australia's public sector debt is, it is minuscule compared with the total domestic and foreign debt which Australia must bear in the future. The National Debt Commission is not responsoble for the billions of dollars borrowed at home and overseas by Telecom Australia, Trans Australia Airlines, the State electricity commissions and a number of other semi-governmental authorities, and that debt is enormous. The National Debt Commission's report makes no mention of the massive overseas borrowings made by Australian business in funding the non-existent resources boom during the Fraser Government years. It also makes no mention of the current boom in overseas borrowings by people such as Mr Bond, who borrowed from Hong Kong in order to buy out Australian companies such as Castlemaine Tooheys Ltd. Treasury figures estimate that foreign debt totalled $68.5 billion at 30 June this year. This is likely to increase. In these troubled economic times, with a limp unit of currency, borrowing money with no regard as to the capacity to repay is a foolish exercise. We must be careful not to saddle our children and their children with debts which will destroy their way of life and not allow them to beneift from the same advantages as we enjoy. While the public sector share of the foreign debt has dropped from 51 per cent to 38 per cent, this cannot be an excuse for complacency. The private sector debt is now much higher. We must remain vigilant and remember that finding money to pay for public debt and the Government's great programs may decimate the fixed interest borrowing market in Australia to the detriment of other borrowers in the market. This will particularly affect business borrowers who have been forced, and will be forced, to look overseas for more moneys which are not available on the domestic market. It is detrimental to all Australians for us to have a large public debt. It is detrimental to all Australians for us to have a large foreign debt. Every step of more borrowing by organisations within the Government sector takes us further along the slippery road to an Argentinian-type economy. Question resolved in the affirmative. Senator CHANEY(Western Australia-Leader of the Opposition) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 11 October 1984, on motion by Senator Hill: That the Bill be now read a second time. Senator WATSON(Tasmania)(3.52) —I commend my colleague Senator Hill on his initiative in bringing forward this private member's Bill on horticultural plant variety rights. Unfortunately, the Horticultural-Plant Variety Rights Bill 1984 [1985] is fairly restricted. It differs greatly from the Bill which was presented to the Senate several years ago by a then Liberal Government because today's Bill covers only horticulture-products such as fruit, vegetables and ornamentals. We have before us an amendment to be moved by the Australian Democrats attempting to further restrict the application of the Bill. I must acknowledge that I can see a minor problem with the Bill in that I believe that there is a lack of definition of horticulture as such. I think this is intentional because horticulture is both a generic and a scientific term. However, that must raise some questions as to the Bill's coverage, particularly at the margin. For example, of whether an item is a horticultural or a field crop type variety. My colleague Senator Hill, I believe, will be able to advise the Senate adequately of the reasons for this approach. I, together with others, have received hundreds of letters-many of which have emanated from South Australia, Senator Hill's State, supporting the establishment of a Commonwealth-wide scheme for plant variety rights in relation to horticulture. The Senate Standing Committee on National Resources concluded that plant variety rights was the most appropriate means of bringing access to overseas varieties and stimulating plant breeding in Australia. Unfortunately, plant variety rights is yet another blind spot in the Labor Government's attitude towards Australian agriculture. The benefits are quite clear, yet the Government continues to procrastinate on this important issue. I remind the Senate that I do not believe the issue to be entirely dead, even within the Australian Labor Party. I understand that in July of this year the Minister for Primary Industry, Mr Kerin, in taking note of the views expressed by the two dissenting Labor Party senators-in the senate report of May 1984, appointed the Vice-Chancellor of the University of Tasmania, Professor Alec Lazenby, a noted agriculturalist, to investigate plant breeding needs in Australia. I believe that the Government owes us an explanation as to the inquiry's terms of reference. They appeared to be fairly restrictive, according to what was reported in the Australian Financial Review in July this year. However, I am led to believe that the inquiry is well under way, with Professor Lazenby and his advisers already meeting interested groups in most States. Although two Labor senators on the Senate Committee's inquiry presented a dissenting report, even they recommended that a plant variety rights scheme be implemented to cover ornamentals. Therefore, this Bill should fit very neatly their needs and I would expect unanimous support around the chamber, including from the Democrats, for this important Bill introduced by my colleague Senator Hill. Unfortunately, much of the Opposition to plant variety rights appears to centre on the need for merit testing. Given the very significant differences in climate around Australia and the great variety of soil types and structures, merit testing might not always provide the sort of protection the promoters seek. Clause 24 of Senator Hill's Bill provides for test growing of plant varieties in circumstances where, on receipt of the application, the secretary could consider it necessary that there should be a test growing or a further test growing for the purpose of determining homogeneity or whether the variety grown in Australia would have particular characteristics. That should surely satisfy most of the doubting Thomases. Today's Bill will establish procedures to collect royalties on the sale of new plant varieties they develop which have the PVR required characteristics of uniformity, stability, homogeneity, and so on. Plant variety rights as such differ from patent rights in that the right is conferred only on the end product and not on the process by which it is produced. PVR legislation enables individuals, companies or institutions to gain property rights over propagating materials, seed cuttings, root stocks et cetera and provides the owner with the legal right to exclude others from selling seeds of that variety, reproducing them, except for their own use, and importing or exporting the product. A registered variety may be used freely for research purposes and can be sold or ownership transferred to another person, company or institution, as with other forms of property. To be registered, a variety must have been orginated by a person and not merely discovered and must be distinct from known varieties, uniform in population and stable over repeated generations. The horticultural PVR Bill embodies all these concepts, which is welcomed. Although there is a claim that PVR could raise the cost of certain seeds, I believe that, generally, buyers are very conscious, in making their acquisitions, of what we might term a cost-benefit analysis in that they will not purchase these seeds unless they produce significantly greater yields than other seeds. Much has also been said about multinational companies operating in this area acquiring a stranglehold in Third World countries. But most Third World countries do not have PVR. Further, most seeds sold by multinational operations to the Third World would result in increased productivity, which surely provides a benefit to all concerned. A matter of some criticism of plant variety rights is that they can also lead to genetic erosion in Third World countries. However, Australia imports only very small samples of Third World varieties for development in Australia. I digress to consider some of the wider issues. Although not covered by this Bill, broad acre crops, pastures, wheat and so on are also important to Australia. In the context of the erosion of the genetic base I mention that the Australian wheat collection in Tamworth amounts to some 20,000 varieties and it is increasing all the time. Furthermore the Australian Agricultural Council has examined proposals for genetic banks to maintain genetic resourses in Australia and I think that sort of argument refutes all the doubts arising in this area. A further concern of the anti-PVR lobby is the fear that the large corporations will breed varieties with a very high level of chemical dependency, thereby raising the costs for farmers. Such an argument ignores the relativity that it is far more cost effective to build in disease resistance to varieties than to undertake expensive testing of chemicals required before marketing. This ability to build in disease resistance is one of the very important features which could be afforded to Australian producers as a result of a proper plant variety rights scheme. The fear of the multinationals buying out the seed firms overlooks the fact that there are very few major Australian-owned seed firms. I suppose that the major exception would be Yates, but even that passed under the control of Cheetham Salt the other day. Most smaller firms operating in Australia seem to be able to co-exist alongside the multinationals. I raise those matters because I believe the answers that I have provided well and truly squash the arguments that our opponents are likely to raise against this Bill. Most developed countries, including Germany, France, the United Kingdom, the United States, the Soviet Union, Japan, Mexico and Israel, have instituted statutory rights for plant breeders. In fact, a plant variety rights Act was passed in New Zealand way back in 1973 and the following decade has seen a 500 per cent increase in private investment in plant breeding for that country giving access to new plant varieties which are developed overseas. Those figures spell volumes for the need for plant variety rights and, coming from Tasmania, I wholeheartedly support the need for such a measure. New Zealand has seen a continuing expansion in commercial plant breeding and this has given a boost to its export seed trade as well as bringing in royalties from the cultivars market overseas. It has resulted in increased co-operation between farmers, the commercial seed trade and the Government. Currently private breeding here in Australia is largely based on hybrid varieties which, by virtue of their characteristics, have an in-built protection. Breeding schemes for open-pollinated crops, such as wheat, are conducted largely through levies paid by the growers and in the public sector. Unfortunately in a wide range of crops and vegetables such levies do not exist and, also, public plant breeding programs have been neglected. This is one of the main concerns that we have in Tasmania, as our State is a major horticultural producer. At the same time, Australian growers have been hampered in that they have been denied access to varieties of fruit and vegetables that have been available overseas for years. In the absence of PVR legislation, vegetable seed companies have been forced to turn to hybrid seeds in order to protect their interests. Furthermore, important new varieties are being denied to Australian growers and, according to Mr Hugh Bishop of the South Australian Fruit Growers Market Gardeners Association Incorporated, it is clear that overseas institutions are adopting a far tougher stand to the extent that even the entry of material for research and evaluation has now been denied to us. That is an opinion from your own State, Madam Acting Deputy President. We are losing our competitiveness in both domestic and overseas markets by not being able to adapt to meet changing market demands and this is having a devastating effect on fruit and vegetable growers. To illustrate the problems associated with the lack of PVR legislation, I would like to remind the Senate about the problems facing Tasmanian pea growers. Pea growers are facing disastrous price reductions of up to 30 per cent for the 1985-86 season. In real terms, the reduction means cuts of more than 50 per cent in the profits from pea crops and thousands of tonnes of peas being ploughed back into the rich Tasmanian soil. Pea growers blame the reduction in profit and acreage on imports of cheap peas, particularly from New Zealand. To add to this, most of the seeds used by Edgells are bred in New Zealand and imported into Australia. Growers have no option but to use these seeds. New Zealand has PVR, of course, and we do not. The gross value of all vegetable production each year in our small State of Tasmania is close to $60m; so it is absolutely vital that these industries remain competitive and viable. Professor M. G. Mullins, Professor of Horticulture at the University of Sydney, has spoken of several new varieties of fruit being available in the United States that would greatly benefit growers in Australia. These include self-compatible cherries, genetic dwarf peaches and new grape varieties, including some high quality seedless table grapes. In addition, there are new varieties of grapes from Germany, cherries from the United Kingdom and garden beans, strawberries, pome fruits, peaches, nectarines and apricots from the United States that are being refused to growers in Australia because the owners of the new highly marketable varieties would have no protection as we have no PVR legislation. To accentuate the problem, fruit and vegetable improvement is among the least favoured areas of government-sponsored research because it is long term, speculative, labour intensive and therefore costly. The few varieties of fruit and vegetables that have been introduced into Australia recently have not lived up to expectations, being neither suited to our different climatic conditions nor able to resist plant pests and diseases as well as the locally developed varieties. For Australia to maintain and develop its horticultural industries it must invest massive amounts of capital, expertise and energy into its own plant breeding programs. However, Commonwealth funds for breeding and research have declined markedly since 1976-77. This also came out in the separate report of the Senate Standing Committee on National Resources. We have failed in the past to prepare for the future. In so many industries throughout this country we have ceased to be competitive on both the domestic and overseas markets. Some manufacturers have only themselves to blame for not keeping up with changes in technology. The dairy and sugar industries have fought and lost the battle, at least for the moment, with heavily subsidised dumped products from the European Economic Community. Lobbying for a plant variety rights scheme in Australia was initiated in the early 1970s. However, horticulturists have been sold short by successive governments' inaction on PVR legislation. Such legislation would allow them access to new and improved varieties of plants from overseas which would encourage the private sector to become much more active in plant breeding. The costs involved in plant breeding are considerable, as I mentioned earlier. A lack of private breeding in open-pollinated groups due to high costs has been cited as costing not less than $100,000. Unfortunately, with PVR the breeder loses control of the plant production after its first commercial release. The cost factor plus the loss of capital are seen as significant disincentives for private plant breeding and the Australian economy will therefore be the loser. I believe quite firmly that the evidence in favour of PVR is irrefutable. This new Bill, although it is based on 1982 legislation, and is restrictive in character in that it relates only to horticulture, incorporates many of the relevant recommendations of the report of the Senate Standing Committee on National Resources. It has the full backing of the horticultural industry. I would commend the Bill to the Senate. Senator ZAKHAROV(Victoria)(4.10) —The Horticultural-Plant Variety Rights Bill appears to be based broadly on the report of the Senate Standing Committee on National Resources tabled in May 1984. I say `broadly' because it is not as tightly worded as were the recommendations of that report. For example, this Bill does not clearly define `plant'. The Senate Committee report pointed out that the conventional biological definition includes fungi and algae. I doubt whether algae could be regarded as horticulture, but mushrooms might, and the Bill does not make it clear what it covers. The Senate Committee recommended: . . . in any PVR legislation the interpretation section include definitions of the words `plant', `cultivar' and `tree'. Neither does this Bill spell out clearly enough the criteria for determining novelty, surely very important when novelty is an essential ingredient of any patenting scheme. Of course, plant variety rights is a form of patenting scheme. The question of newness or novelty is very complex. In fact it occupies over a page of the Committee's report in summary form. As a result, that report recommended: . . . in any PVR legislation the criteria for determining `newness' or `novelty' be clarified. This Bill's title refers to horticultural plants, but I was unable-maybe I did not look hard enough-to find the definition of horticulture, at least in the interpretation clause of the Bill. The main reason for opposing this Bill, quite apart from any objections to the substance or purpose of it, is that the whole question of plant breeding needs in Australia is the subject of a current inquiry. This Government is committed under Australian Labor Party policy not to introduce any scheme for plant variety rights without an inquiry into Australia's plant breeding needs and all other alternatives to PVR. In fact I think it refers to a searching inquiry. It was considered by the Government and by the Committee, at least in the matter of public plant breeding and the more technical, scientific considerations involved in the PVR issue, that the Senate Committee inquiry needed to be supplemented by an independent expert inquiry. For that reason an inquiry was set up of which the specific terms of reference are these: Having regard to debate on the possible introduction of a Plant Variety Rights scheme into Australia, and the need to ensure that plant breeding remains responsive to industry needs and receptive to changes in technology, investigate and report by 31 January 1986 on Australia's plant breeding needs and all other alternatives to PVR. In carrying out its work, the Inquiry examination include the following specific areas- (a) the adequacy of the current plant breeding effort, both public and private; (b) any deficiencies and imbalances in the current programs; (c) where needs are identified under (a) and (b), the expected impact on those needs of the possible introduction of PVR; Surely that is very important. To continue: (d) options available to overcome any problems identified under (a) or (b); (e) what adjustments, if any, should be made to public plant breeding programs if PVR were introduced; (f) the desirability of public plant breeders being encouraged to compete with private sector breeders in variety development and, if desirable, the options available to effect this; and (g) the alternatives to PVR for stimulating private plant breeding activity. The inquiry is being conducted by Professor Alex Lazenby, Vice-Chancellor of the University of Tasmania, who has had a distinguished career in agricultural research, including several years research experience in the United Kingdom. As was mentioned just now, the United Kingdom is a country with some years experience of a plant variety rights scheme. The inquiry is technical in nature and thus has not advertised for submissions, but the inquiry does have access to the transcripts and submissions of the Senate Committee and will be able to contact those witnesses and any other individual or group who has expressed interest in plant breeding or in plant variety rights. Professor Lazenby has been asked to report early next year in time for his report to be considered by the Australian Agricultural Council which, of course, is a council of Ministers from the States as well as the Commonwealth, at its next meeting in February. While this inquiry is underway it seems to me that the introduction of a private member's Bill covering the same matter is either an attempt to pre-empt the report of that inquiry or-and I put the kindest interpretation on it-an attempt to gain publicity for the cause that Senator Hill is espousing. It is indicative of the degree of knowledge of many of those writing in support of the Bill that not one writer of letters I have received seemed aware that I was on record as an opponent of PVR. Senator Georges and I dissented from the National Resources Committee report. Had they read the report at all, they surely would have at least noticed who were the authors of the dissent, even if they were reluctant to read it. It follows from what I have just said that I am not going to debate the issues which are within the terms of reference of Professor Lazenby's inquiry. I will, however, speak briefly about some of the other matters which are regularly raised or have been raised in much of the recent correspondence in favour of the introduction of PVR for horticulture. I am assuming, in the absence of a clear definition in the Bill, that horticulture covers fruit, vegetables and possibly herbs. If it also includes ornamentals, I do not have any difficulty with plant variety rights for ornamentals, although I know that there is in some quarters a fear that that would provide the thin end of the wedge. However, I did not, as Senator Watson stated, recommend PVR for ornamentals. In fact I will read the actual recommendation in the dissenting report: We recommend that any PVR scheme be restricted to ornamentals and that other means be investigated (for example improved marketing procedures) to overcome the difficulties claimed as the rationale for PVR. There is a difference between those two statements. The main argument in correspondence I have received in support of Senator Hill's Bill-no doubt other honourable senators have also received correspondence-is that the introduction of new varieties would be facilitated and that new varieties would bring better efficiency and a larger market. New varieties are being developed in Australia. I certainly would support the maintenance and increase of breeding research, particularly public sector research. But that is a matter for the current inquiry, so I will not go further into it. Incidentally, some companies are successfully competing on overseas markets with seeds produced from varieties currently available in Australia. One Melbourne company told me that the seed export business could be greatly expanded with improved production and marketing techniques. Many varieties of fruit and vegetables available in the past and popular with consumers have disappeared from the market place or at least from the usual suburban shop or supermarket, not because they are inferior but because they do not keep or package well over long periods. The obvious example is the tomato. The Floridade tomato was produced for supermarket convenience and profit with no thought at all for taste. It is now very difficult to buy other varieties, at least in the cities. Senator Watson —What is wrong with that? Don't you want tomatoes that keep? Senator ZAKHAROV —Because they do not taste of anything. On the other hand, the locally bred varieties of tomato, some of the best of which were produced by the Burnley Horticultural Institute in Victoria, are keenly sought in seedling form by the home gardener because they taste like tomatoes. Unfortunately they are very hard to buy in the shops. The much-cited New Zealand nectarine supposedly sought by consumers is selling well through good marketing techniques and because they look good, but most nectarine lovers-and I include myself in those-buy them only once and then return to the better tasting, white flesh varieties-when they can find them. The New Zealanders are very good at marketing their products. Local growers took a while to take up the challenge of the kiwi fruit. The name change from chinese goose- berry was itself clever marketing. Perhaps we should be selling kangaroo fruit or even wombat berries. But the main problem, I believe, is a shrinking overseas market, not confined to horticulturals. The dairying and sugar cane industries have probably been worse hit by the virtual exclusion from the European market. New varieties will not help there unless we switch to the tropical and semi-tropical fruits which cannot be grown in Europe. The most commonly sold varieties of apple in Europe are still granny smiths and jonathans, but they are not ours. I can remember when we in Victoria used to look forward to the arrival of the Tasmanian apples, particularly the Cox's orange pippins, and I am sure that the market would still be there but is not being sought or exploited. Certainly this Bill is an advance on the 1982 Bill of the previous Government, but I cannot support it and the Government will not be supporting it. Senator VIGOR(South Australia)(4.20) —The Horticultural-Plant Variety Rights Bill introduced by Senator Hill is aimed at establishing an Australia-wide scheme for the granting of proprietary rights to plant breeders over any new horticultural varieties which may be developed in Australia. The issue of plant variety rights is a complex one and throughout the numerous occasions on which the issue has arisen in this chamber the Australian Democrats have shown that they recognise that complexity. In 1982 the Democrats decided to oppose the Plant Variety Rights Bill, but later in that same year we supported an investigation into plant variety rights by the Senate Standing Committee on National Resources. We recognised that the issue needed to be examined in depth. As honourable senators will be aware, the Senate Standing Committee on National Resources presented a lengthy report, with 22 recommendations. The major one was that the Commonwealth consider the introduction of a plant variety scheme in Australia. The Australian Democrats believed then, as we do now, that while the Senate Committee report considerably advanced discussions in this area, it did not provide the foundation for suitable legislation. We pointed out that the report had not established that the introduction of plant variety rights would provide a general benefit for most Australians. Indeed the Committee, while concluding that plant variety rights was the most appropriate means of improving access to overseas varieties, conceded that the funding and direction of public breeding activity under PVR were issues that had not been adequately addressed in evidence to the Committee. The Democrats' concern that the Committee's major recommendation could not be supported has been vindicated by overseas studies. The report by Dr L. J. Butler from the Department of Agricultural Economics at the University of Wisconsin, entitled `An Economic Evaluation of the Plant Variety Protection Act' was completed in the United States of America in 1983. It seems to be the only reputable statement upon which Australia could project what might happen here. The report states: The alleged benefits to be gained from PVR-namely, stimulation of cross-breeding research-have been realised only in soya beans and, to a lesser extent, wheat. There is no evidence that the Plant Variety Protection Act has triggered large investment in plant breeding research and development, nor of large improvements in either techniques or in plant quality. While benefits from PVR do not seem to be anything but extremely modest, the fact that Australia has relied on public plant breeding must be taken into consideration. If the introduction of PVR led to a reduction in government funding, significant detriment could be suffered by the wider Australian community, because we depend on government research for the development of many of our new breeding programs. The possibility of dividing basic research, to be conducted by the public sector, from practical plant breeding, to be conducted by the private sector, could very well lead to a disastrous situation for Australian agriculture. A statement by Dr D. H. B. Sparrow, reader in plant breeding at the Waite Agricultural Research Institute in my State, is illustrative of what might happen. He said: For example Australian soils are deficient in several trace elements. Recently, work at the Waite Institute has demonstrated some barley varieties are better able than others to obtain the trace element manganese from deficient soils. Because this ability appears to be heritable, a programme is now under way to determine the nature of this character and to attempt to transfer improved varieties to deficient soils. He continued: This needs a long term study which may or may not pay off and would not attract private investment. We must not allow the introduction of plant variety rights to cut down government expenditure on research into agriculture. Senator Hill —Who is arguing for that? Senator VIGOR —I am just saying that it could be a possible consequence of this Bill. The Democrats believe that the possible divorcement of practical plant breeding from teaching responsibilities and post-graduate research could well mean that the overall level of skill in research and development undertaken in Australia could be effectively reduced while the actual volume of research increased. In other words, the simple increase in research does not necessarily mean that there will be tangible benefits for the consumer or the grower. The Bureau of Agricultural Economics seems to agree when, with regard to the possible benefits of an increase in plant breeding research, it states: This argument assumes that increases in the research effort would generate net gains to society, however this point cannot be easily established by economic analysis. The evidence presented in the Senate Committee report in relation to the benefits that may accure to Australia seems at best to be ambivalent. The fact that the overwhelming majority of recently successful Australian patents have been held by overseas interests suggests that if plant variety rights are introduced it will be the overseas-based agricultural corporations that will have the most to gain from PVR in Australia and not the Australian community. The Democrats believe that the Government has the capacity to negotiate with overseas countries for the establishment of appropriate methods that will allow Australia access to overseas plant varieties which are alleged to have been denied to Australian growers because of the lack of PVR. The Democrats believe, as we did under the previous Government, that if the Parliament is called upon to address itself to legislation in this area, it ought to have detailed documentation and the right information to be able to make the right decisions in this area and not just be given assertions the Australia has been denied access. I have no evidence, and I hope that Senator Hill will be able to present us with some, of cases where this access to plants has been denied. There must be ways other than PVR to obtain access to those plants. The Senate Standing Committee's report failed to provide such documentation. Indeed, the appendices provided by the Department of Primary Industry are couched in identical terms to those of the previous Liberal-National Party Government when it brought before the Parliament its legislation, which was referred to the Committee on 15 September 1982. As the Democrats pointed out during the second reading debate on that legislation, simple checks on that material revealed errors of fact. It is not material upon which the Senate should be asked to determine the value of PVR. The documentation required ought to go beyond the citation of restrictions and ought to give details of the requests, the reasons for denials and under what legislation those denials were made. It was not until March this year that the Government responded to the Committee's report. The Government noted that the sensitivity of the subject was reflected in the fact that two members of the Committee tabled a minority report. In relation to the major recommendation of the report, to which I referred earlier, the Government decided to establish an inquiry to examine plant breeding needs in Australia and the options for upgrading the public plant breeding program. In July, the Minister for Primary Industry (Mr Kerin) announced-as was mentioned by Senator Zakharov-that he had appointed Professor Alec Lazenby, Vice-Chancellor of the University of Tasmania, to undertake an inquiry. This inquiry will be technical in nature and supplementary to the Senate Standing Committee inquiry. Professor Lazenby has been asked to report in time for the next Australian Agricultural Council meeting in February 1986. I might say in passing that in many ways this debate today is inappropriate. A much-needed inquiry is being conducted; yet we are debating the issue before the findings of the inquiry are available. I support Senator Zakharov's statements in that regard. However, the Democrats are not willing to go so far as to say that the baby should be thrown out with the bath water. This is why we have decided to support a pilot program which will actually show us some of the difficulties of administration with regard to ornamentals, which I believe are enormous. Unless we have the evidence, which we can find out only through practical experience by using the ornamentals as an example, we will not get anywhere. Many arguments have been put to us by supporting organisations to try to dissuade us from taking this course of action. I do not necessarily agree with all of those arguments. Rather than take up the time of the Senate, I seek leave to incorporate in Hansard a letter from the Australian Conservation Foundation which sets out admirably most of these objections. Leave granted. The letter read as follows- Australian Conservation Foundation 672B Glenferrie Road, Hawthorn, Vic. Australia 3122 Telephone (03) 819 2888 International + 6138192888 JGM:NR 31October 1984 Senator The Hon. Don Chipp Leader of the Australian Democrats The Senate Parliament House Canberra, A.C.T. 2600 Dear Senator Chipp, We are disturbed at reports which have reached us that the Australian Democrats have softened their stand against the introduction of Plant Variety Rights legislation to the point where it is considered that patenting may be acceptable for ornamental plants. This change of policy, if it has occurred, not only flies in the face of the total opposition to the concept expressed by the great majority of Australian farmers, and all the major conservation, church, overseas aid, and consumer groups, plus a host of miscellaneous organisations, including the Victorian Law Institute, and almost all informed Australians, but will be seen as a desertion of these extremely concerned people. Although it is known that there are policies of total opposition to PVR in most State ALP branches, until now the Democrats have been the only party to represent this point of view federally in a consistent manner. This change of policy also flies in the face of the general moral principle endorsed by an overwhelming majority of the nations represented at the United Nations, Food and Agricultural Organisation (FAO) conference on ``Plant Genetic Diversity'' in Rome in November 1983. This conference established an almost universally accepted view that it is unethical to support any legislation or practice which restricts the free exchange of material used to propagate plants, as such material should be viewed as the common heritage of all mankind. Of course the endorsement of this ethic has caused a great deal of embarrassment to those nations with PVR legislation, as PVR is in direct contravention of this, almost universally, accepted principle. The policy which the Democrats have evidently now accepted can only be seen as endorsing this immoral concept. It also ignores the power and persistence of the corporations which have been behind the lobbying for this type of legislation world-wide. If PVR is introduced, however narrow the initial legislative base upon which it is established, there will be a gradual widening of the plant types included. The Democrats new position also seems to ignore the practical difficulty defining what an ornamental plant is; an insurmountable difficulty given the multiple uses of many plants. Many plants are used in the production of food, fuel, lumber, medicines, fibre, or essential oils, as well as being ornamental. And this is only the beginning of the confusion caused by PVR type legislation. No parliament anywhere has had success in defining even what a `plant' is, or what a `variety' is, let alone what constitutes a patentable difference between one plant and another. Such difficulties surely stem from the impossibility faced by people who wish to control and exploit the infinitely variable plant world by trying to force it to fit into artificial legal and botanical categories, for the sake of unreasonable private profit. The fact must be faced that even the botanical definition which separates one variety from another within a plant species is only an artificial, man-made line of separation. In the wild (what's left of it) there is variety and sharp divisions. Within each variety there are infinite variations which may gradually change the overall appearance of the plants as we move from one area to another. However, where we actually draw the line to say this is a new variety is a fairly arbitrary process, and can by no stretch of the imagination be seen as the exact science required by PVR type legislation. This erroneous concept of distinct varieties has been reinforced to a large extent by the overwhelming influence man has had in destroying the majority of ecosystems, so that in very few localities is the whole spectrum of variation left intact. These difficulties of definition have spawned a multiplicity of legal mechanisms which have resulted in the extinction of thousands of useful food varieties in the ``Rich World'', for the convenience of PVR type legislation. PVR laws have further encouraged unscrupulous marketing practices by large corporations in poorer countries (as recognised in the Senate Standing Committee on National Resources Report (Ref.PVR)-P33), which in its turn has led to the extinction of thousands of varieties of inestimable potential value to the expansion and protection of the world's dangerously narrow genetic base for food crops. Australia's acceptance of PVR must add weight to the acceleration of both these processes of plant extinction. The World Wildlife Fund estimates that at present one plant or annual type becomes extinct every day and that by 1994 this extinction process will have accelerated to roughly one an hour unless decision makers have a mammoth change of heart in the intervening years. Surely the Australian Democrats should not be giving this form of patenting legislation any encouragement, even if heavily lobbied by sectional plant industry interests. The industries which have lobbied in the past represent only a tiny fraction of the Australian Primary Industry, and have consistently refused to acknowledge the wider issues, the dangers to their farming colleagues, and even the right of the rest of the Australian community to be concerned by Plant Patenting. They have therefore been fairly lax in their investigations of the possibilities for gaining access to the material they claim to be denied. Therefore, as a matter of both national and international urgency, I appeal to you to: (1) Return to your original policy of total opposition to the immoral and impractical concept of PVR. (2) Make representations to the Minister for Primary Industry to allow for the widest possible presentation of ideas at the inquiry which he has promised for next year into `The Australian Plant Breeding Industry, Plant Variety Rights, and its alternatives'. At present it is understood that he intends this to be a `closed' inquiry, meaning it will be by invitation only. Surely the `closed' nature of the inquiry is hardly appropriate given the concern shown with this issue by a multiplicity of groups and organisations within the community, and is inexcusable given that it may well set a precedent for the patenting of all life forms in Australia. (3) Support the Australian Conservation Foundation in their representations to the promised inquiry along the lines of the need for a National Seeds Marketing Organisation which would monitor the research needs of the various existing and potential primary industries, and act accordingly; help the industry with overseas acquisitions; and promote the sale and distribution of material produced by Australia's public research institutes, both here and overseas. (4) Support the A.C.F., conservationists in general, and the future plant breeding industries of Australia by helping promote the need for the expansion of our National Parks, etc., to the point where we can be fairly certain (the necessary research is largely complete) that we retain at least one example of every type of vegetative ecological niche so that, in turn, we can be fairly certain that not only have we a natural Gene Bank which contains specimens of almost all native plant genetic material, but we can be equally certain that almost all animal species are therefore catered for. Due to over exploitation many of Australia's ecosystems are in an absolute state of crisis. One only needs to contemplate the topical mouse and locust plagues to realise this. I doubt if anyone could rationally argue that it is not really only the starting point for the measures that will have to be taken in the near future if we are to remain in any way prosperous and spiritually at ease in this vast land. Yours sincerely, J. G. Mosley Director Senator VIGOR —To return to the substance of the debate, I reiterate that, as a matter of national food security, the Democrats uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all. On that basis, seeds should be available to all, freely multipliable and able to be sold, exchanged, exported and imported by anyone who wishes to do so. It may be possible to put some type of royalty in this area, but currently no suitable scheme has been devised to handle this. Senator Hill —Isn't there an inconsistency in what you said? Senator VIGOR —No, there is not. A number of things on which various private organisations collect levies are free to people. Senator Mason —It is prohibition where royalty is imposed. Senator VIGOR —It is not prohibition. Senator Hill's Bill cuts across that principle. However, the Democrats believe that ornamentals could benefit from plant variety rights, and there seems to be no reasonable public interest argument against that. Accordingly, I will move an amendment to Senator Hill's Bill to provide that the Bill apply only to ornamentals. However, this brings up the problem of the definition of an ornamental. It is much easier than the definition of a horticultural plant, because that depends purely upon current practices of agriculture. However, we believe that the Bill would be much tighter with our amendment. Another amendment we will move adds a new definition-ornamental plant-which means a plant which is not used for the production of energy, fibre, food, medicines or essential oils. This basically means that none of the essentials of life can be controlled by large multinational corporations or by monopolies able to distort the markets. We believe it is quite important that people who spend many years developing ornamental plants-things of beauty, objets d'art in the horticultural sense-should have the ability to sell these in the same way as artists are able to sell their products. I have problems which lead me to pose questions to Senator Hill about how he will operate his Bill, administratively. We would have no objection-I hope we will get support for this from both sides of the House-to ending up with a trial program on ornamentals so that these administrative difficulties can be taken out of the Bill. A number of important matters are not addressed in Senator Hill's Bill. I would like some clarification by future speakers on these matters. Firstly, there is more than one method of collecting royalties in the world. In the United States the onus for collecting the royalties is on the breeder; in the United Kingdom, the Government collects royalties and acts as a redistribution agency. The Bill is silent in this area. The administration of plant variety rights is complicated and expensive as there must be a number of administrative procedures and test requirements for novelty, for example. It will be very difficult to define these requirements and to police them. I would like to know how Senator Hill intends to do that. This brings us to the infringement of rights. The legal costs in a country like Australia are very high, and I would find it very difficult to consider how proof of novelty, among other conditions, could be handled. The returns to breeders in general would be very low unless the breeder embarked on expensive advertising campaigns of new products. Maybe that will develop in some way. I believe it will distort the markets for horticultural plants. How would one stop people from taking illicit cuttings, replanting them, propagating them in some way and then claiming that the plants just came up in their gardens? Levies on all plant breeders to support the administrative costs are a possible way out. I do not know whether the industry would be happy about this. The reason for restricting the Bill to ornamentals is that the nurseries have been one of the areas of breeding where people have been most active. I know the fruit growers have been active as well, but I believe that if we can set up a scheme that works for the ornamentals, we will be giving breeders a chance to present a much stronger case at a later stage when we understand a lot more about the processes that go on. Another area that I am worried about is the common heritage concept. How do we know what is the genetic heritage of any plant after it has been propagated a number of times? Such test are not easily available, although biotechnology is improving in that area. Large companies such as fertiliser companies have been developing plant varieties that are highly dependent on their types of fertiliser and food. This leaves us extremely vulnerable to those types of monopolies in an indirect way. There are difficulties and wasted effort in making varieties look unique. This is one of the major problems. We could possibly be much better suited in the food industry by not having this need to make things look unique. In the ornamental area it will not do any harm. In the food area it will waste effort which could otherwise go into just producing a good result, rather than a unique result which is required by Senator Hill's Bill. We need an unbiased group to assess the value of a new genetic development. There certainly is a problem in that community funded research can be diverted into private hands. How would one recognise how much of the research money came from the public purse, and how much came from private enterprise? It would stop co-operation rather than help co-operation. Senator Watson —Not in New Zealand; it is just the opposite in New Zealand. Senator VIGOR —It may be that we can learn from overseas experience, in which case we should wait for the report of Professor Lazenby and not try to get a system of our own inexpert devising. The Democrats will not support plant variety rights in any area other than ornamentals. If Senator Hill wishes to have his Bill passed through this Parliament with the Democrats' support, we hope that he will support our amendments because we will be going against the Bill if those amendments are not made. This brings me to the rest of my amendments, which will add something to the Bill. One of the problems that we have currently is the advent of biotechnology and cloning techniques which will replace the old fashioned method of plant propagation. We will have real problems of people doing genetic engineering on plants. We believe that this could lead to an enormous number of problems for the ecology. Senator Hill —Have you read the letters that horticulturalists have sent us? Senator VIGOR —Yes, I have read them. I am sure the honourable senator will be able to incorporate them. Senator Hill —They are not very high quality either? Senator VIGOR —I did not say that. I believe it is very important for this Parliament to take in hand the issue of responsibility as well as privilege. The fact that Senator Hill is willing to give private industry the ownership of seeds and varieties carries with it a responsibility for those people who have ownership. Ownership requires responsibility and by the third amendment we will put a responsibility clause relating to the owners of a plant variety. This amendment relates to liability for any damage or injury caused by a plant or a plant variety to people in the community by its being a weed, carrying or transmitting a disease or virus to other plants or being toxic in some way. I believe it is extremely important that we start thinking about what we are doing to the plant genetic pool in our country. We should also make certain this genetic pool is kept as varied as possible and that, in the event of people introducing plants which have a deleterious effect on the environment or the ecology, responsibility and liability for this can be sheeted back to those people. Senator Watson —What are you getting at? Senator VIGOR —It is not beyond current biotechnology to get almost any variety of plant to produce a particular substance through genetic engineering means. Let us take, for example, opium. It could be possible to get plants other than poppies to produce opium. I believe that we should regulate and make certain we can control it. Senator Puplick —What would you want to do it for? Senator VIGOR —I do not know, but some people might. I am suggesting that we have to make certain that this type of activity does not happen uncontrolled. My second amendment will achieve this second effect. We will actually have some type of parliamentary legal control over people who are producing plants which may have a deleterious effect. Some honourable senators may laugh now but maybe in a few years' time they will not. Senator Watson —Even the kids are laughing at you. Senator VIGOR —At least it is good entertainment. Senator Puplick —It has not got anything to do with the Bill, though. Senator VIGOR —It has an enormous amount to do with the Bill because the Bill is still trying to give people the right to own specific varieties of plants they have engineered with the privilege and the responsibility attached. The Democrats are willing for that to happen with plants that are works of art, if you like, such as ornamental plants, but we are not willing to hand over the total control of the food, energy, medical and essential oil producing plants of this country to unfettered private corporate ownership industry. Senator ROBERTSON(Northern Territory)(4.44) —I remind the Senate that we are debating the Horticultural-Plant Variety Rights Bill 1984 [1985]. The debate has ranged fairly widely this afternoon, although I suppose that this is to be expected in such a sensitive area. My interest in this area was heightened when the Senate Standing Committee on National Resources investigated plant variety rights. The Committee did this twice. In 1982 the PVR 1982 Bill was referred to it for consideration. It will be recalled that the Committee's investigation was not concluded when the elections were called. In 1983, with the election of the new Government plant variety rights was referred to the Committee as a full topic. I had the fortune of being a member of the first Committee and the somewhat doubtful privilege of being Chairman of the second Committee. We put down our report in 1984, as has been mentioned already by Senator Watson, and the Government's response to this came out in 1985. The Minister for Primary Industry (Mr Kerin) was kind enough in his opening statement to say: The Senate Standing Committee on National Resources has produced a lengthy and detailed report on this controversial issue. He went on to say: The sensitivity of the subject is reflected in the fact that two members made a minority report. One of those two members who made the minority report has already spoken this afternoon. I note that Senator Hill's Bill picks up many of the recommendations of the report. Let me say at this stage that the Government has no serious difficulty with the Bill. I think it represents a decided improvement on the 1982 version but I have to make the point at this early stage that the Government cannot support the Horticultural-Plant Variety Rights Bill 1984 and I hope that the debate will be adjourned at the end of this afternoon's discussion. I will explain the reasons for this later after we have had a little more discussion. I shall limit myself to dealing with those areas where there is agreement between the report and what I might call the `Hill Bill'-if I can use that term without being unkind-where there is partial agreement and where there are some problems seen by both the Committee and the Government. I will not attempt to meet the arguments raised by other speakers. Most of these have been covered in the report, to which I commend their attention. It is a rather slim document but it is well worth studying. I remind honourable senators at this early stage that the Bill suggests in its title that it is limited to horticulture. The Committee looked at the total picture of PVR. The basic recommendation that came out of our report was: . . . that the Commonwealth consider the introduction of a PVR scheme in Australia. That wording was arrived at after a great deal of discussion. Obviously, the discussion ranged around many of those sensitive areas that have already been hinted at, some of which have already been discussed. Whether Senator Hill's Bill relates only to horticulture will have to be decided by those people who will vote on it. Suggestions have already been made by some speakers that it goes beyond horticulture. My colleague Senator Zakharov indicated-as I will do later in my comments-that horticulture is not defined within the Bill and it might leave itself open to a wider range than perhaps its title suggests. I repeat that the basic recommendation of the Committee was: . . . that the Commonwealth consider the introduction of a PVR scheme in Australia. The setting up of the Lazenby inquiry, to which I will refer later, had nothing to do with the minority report, as suggested by two of the speakers; it followed quite clearly on the fact that the recommendation was that consideration be given to the introduction of such a scheme. Of course, there were a number of other recommendations flowing from the basic recommendation and these can be dealt with. Senator Hill's Bill suggests that the scheme should apply to: . . . new horticultural varieties discovered or produced by a deliberate program of breeding. In his Bill he suggests that the originator would be required to show that a new variety is distinct, uniform and stable-the normal conditions. It may be worth while for me to mention just how those have been defined. The DUS standard is normally defined in this way: distinct-can be distinguished from all known varieties by an identifiable characteristic uniform-members of a sample have characteristics which are consistent stable-characteristics of the variety are consistent over a number of generations Let us look at some aspects of the Bill to see where there are similarities and differences. According to Senator Hill's Bill, the species coverage is horticultural. The Committee's majority report went beyond this. Let me just quote recommendations 2 and 3 from the Committee's report. Recommendation 2 states: all plant species have the potential to be included in an Australian PVR scheme. However, the Committee also recommends that initially any PVR scheme have the potential to include horticultural, ornamental and fodder and pasture varieties only and that before a decision is made to include field crops the Commonwealth suggest to the States that the Australian Agricultural Council examine the possible impact of PVR on field crop breeding in Australia. Recommendation 3 states: in the drafting of any PVR legislation consideration be given to the automatic inclusion of all genera of ornamental plants. It would seem that, from what the minority report says, the authors would have no objection to this as long as there was a clear definition of `horticulture' and `ornamental'. The next aspect of the Bill I turn to is the advisory committee. The report came up with a recommendation which states: an Advisory Committee be established under any PVR scheme to assist in its administration. We have some reservations. The Government agrees that there should be an advisory committee-there is no doubt about that-but I do not think there is any doubt that there are some queries about its possible composition. Part IV of Senator Hill's Bill states: The Advisory Committee shall consist of the Secretary; 2 members representing users of horticultural-plants . . . Clause (4) states: The members referred to in paragraph (1) (b) shall be persons selected from a list, submitted to the Minister by the Australian Consumers Association, of persons considered by that Association as suitable to represent users of horticultural-plants on the Advisory Committee. Clause 43 (1) (c) refers to two members representing breeders of horticultural-plants. Clause (5) states: The members referred to in paragraph (1) (c) shall be persons selected from a list, submitted to the Minister by the Seed Industry Association of Australia or by the Australian Seed Producing Association, of persons considered by the Association that submitted the list as suitable to represent breeders of horticultural-plants on the Advisory Committee. The Bill then refers to various representations from the States. We believe that there is a problem there which would have to be looked at, either in amendment form or, as I hope, in the drafting of a new Bill. Mention has been made already of problems in definitions. Senator Zakharov mentioned the problem of the definition of horticulture and it is quite clear that this needs to be clarified in the Bill. That could be done. We see also some problems in the definition of a new plant variety. The Department of Primary Industry has made this comment: Another issue arises in the context of Clause 3 (1) (e) which limits definition of a `new plant variety' in terms of other varieties whose existence was common knowledge at the time of application. This would appear not to allow access to known overseas varieties as the existence of these is likely to be common knowledge at the time of application, thereby removing one of the major benefits of a PVR scheme. I mention in passing recommendation 13, which states: In any PVR legislation, the interpretation section include definitions of the word `plant', `cultivar' and `tree'. This was agreed to by the Minister in his response to us, subject to advice from parliamentary counsel. The report also covers extended criteria for determining novelty. This is an area where Senator Hill has been deficient in his Bill. The Government agrees with the report on that issue; we should have extended criteria for determining novelty. Senator Hill has suggested the provision of copies of statutory registered PVRs to all capitals. The report covered this aspect. The need was seen clearly for people in the States to know what was going on. This is covered by recommendations 18 and 19-although they do not use the exact words recommended by Senator Hill. Recommendation 18 states: Details of applications for PVR be available in all capital cities. Recommendation 19 states: As part of any PVR scheme an Australian Plant Variety Journal be published quarterly to provide information regarding the operation of the scheme. This would possibly meet the need, demonstrated to us by those who appeared before the Committee, and referred to by Senator Hill. The next comment made is that rights may be assigned or transferred. This has been mentioned already by one of the other speakers. We support the proposition, but I would suggest that the machinery will have to be different. Recommendations were put before the Committee as to whether the Department or an independent body should be the responsible group or whether the Patents Office should be the body to note and classify the variety so that it could be transferred in the same way as other property. Another provision referred to rights lasting for 20 years, subject to certain qualifications by the Minister, such as meeting of obligations and so on. The report supports this and the Government is happy with it. I turn to the reasons why we cannot support the Bill. As I indicated earlier, the Government undertook to have further investigations of PVR, not because of the minority report but because of the basic recommendations of the Committee to the Government. The inquiry has been initiated already under Professor Lazenby, the Vice-Chancellor of the University of Tasmania. To make Senator Watson happy, I have here a copy of the terms of reference in which he is interested and I seek leave of the Senate to incorporate in Hansard those terms of reference. Leave granted. The document read as follows- TERMS OF REFERENCE OF INQUIRY INTO AUSTRALIA'S PLANT BREEDING NEEDS The specific terms of reference of the Inquiry are: `Having regard to the debate on the possible introduction of a Plant Variety Rights (PVR) scheme into Australia, and the need to ensure that plant breeding remains responsive to industry needs and receptive to changes in technology, investigate and report by 31 January 1986 on Australia's plant breeding needs and all other alternatives to PVR.' `In carrying out its work, the Inquiry examination include the following specific areas. (a) the adequacy of the current plant breeding effort, both public and private; (b) any deficiencies and imbalances in the current programs; (c) where needs are identified under (a) and (b), the expected impact on those needs of the possible introduction of PVR; (d) options available to overcome any problems identified under (a) or (b); (e) what adjustments, if any, should be made to public plant breeding programs if PVR were introduced; (f) the desirability of public plant breeders being encouraged to compete with private sector breeders in variety development and, if desirable, the options available to effect this; and (g) the alternatives to PVR for stimulating private plant breeding activity.' Senator ROBERTSON —I thank the Senate. This report will be completed, if not by the end of 1985, by the beginning of 1986. It seems to the Government that it is inappropriate to go ahead with the consideration of a Bill such as Senator Hill's, or any other, until this report comes forward. Senator Watson, no doubt because Professor Lazenby comes from Tasmania, waxed forth on the qualities of that gentleman and the quality of the report that is likely to be presented to the Government. He did not suggest that it was in any way a deferral of the decision; rather a seeking of additional information. My plea to Senator Hill this afternoon is to adjourn debate on the Bill after today's discussion and bring it back for further debate after we have the Lazenby report in front of us so that we will have an opportunity to debate that here. Perhaps as a result of a Lazenby report the Government will be able to prepare a Bill which is somewhat broader in its aspect than Senator Hill's Bill. It may meet a wider range of the needs of primary producers than does his Bill. At this stage let me commend Senator Hill for his initiative in bringing forward this Bill for discussion. I have no doubt that his constituents in South Australia will commend him also. If not, the efforts will have been somewhat in vain. It seems to me that it is better to have a new Bill incorporating some of Senator Hill's recommendations than to send this Bill to the House of Representatives, amended or otherwise, for what would have to be massive amendments in the 1986 autumn session. I hope that the debate will be adjourned at this stage and I recommend that it is. I make the point that if it is not and we move into the Committee stage the Minister will respond to the amendments suggested by Senator Vigor. Senator BROWNHILL(New South Wales)(4.57) —The Horticultural-Plant Variety Rights Bill 1984 [1985], as introduced by Senator Hill, has my complete backing. I am sorry that Senator Vigor has intimated that the Australian Democrats will not support the Bill, because I feel that there is a misunderstanding and that he has not read the explanatory memorandum. This Bill proposes to establish an Australian-wide scheme for the granting of proprietary rights to plant breeders over any new horticultural varieties which may be developed. The Bill incorporates the following principles: All varieties of ornamental, cut and fresh flowers, fruit varieties and vegetable varieties are included in the scheme. Participation in the scheme will be voluntary. The grant of a right would be given only where a new variety could be clearly distinguished by one or more important characteristics from any other known plant variety. Ownership rights include the right to levy and collect royalties from other persons growing and selling protected varieties for commercial purposes. Protected varieties will be freely available for research purposes and to plant breeders for use in breeding programs. Protection of a right, once granted, will be the responsibility of the owner of the new variety through the normal legal processes. Appeals against decisions of the registration authority can be made to the Administrative Appeals Tribunal. The scheme is to be administered by the Department of Primary Industry. This legislation is very clearly long overdue. The question of plant variety rights has been around for the past 10 years at least and certainly has been a very contentious issue. This is not the first time that legislation for a plant variety rights scheme has been introduced in to the Senate, nor is it the most all-embracing. However, absolute frustration at inaction by the Federal Government has brought about this private senator's Bill. The Bill unquestionably has the support of the entire horticultural industry. I am sure other senators have been inundated as I have been with representations from all phases of the industry-the Australian Wine and Brandy Corporation, the Orchardists and Fruit Cool Stores Association of Victoria, the Australian Horticultural Growers Council the Central Coast Citrus Growers Organisation, the Livestock and Grain Producers Association and many others. All have written seeking my support for the Bill. In fact I have not had one letter opposing this legislation. Plant variety rights was first discussed at Government level in 1977 when the issue was discussed and approved by the Australian Agricultural Council. However it was not until May 1979 that a draft PVR Bill was circulated to various appropriate government departments and various seed and nursery organisations. It was intended that the Bill would be presented to the House in 1980 but it in fact did not get introduced until 1981. It was then that the legislation and indeed members of parliament were swamped by a very well organised campaign of opposition from a number of groups, many of which linked PVR with increased genetic erosion, dominance of multinational corporations in seed and agrochemical industries and exploitation of agricultural industries in developing countries. All these arguments were presented to my former colleagues. From the sound of it I am perhaps glad I was not here at the time. However, looking at some of these arguments a number of years down the track, I am not sure that many of them were based on any hard fact. I can accept the argument that seeds and all other forms of genetic material are and should be a public resource. That argument is sound as far as it goes. But without protection for our plant breeders and plant breeders sending material to Australia we will not have available to us the very best that the world's breeders can offer, and similarly, our breeders will have no protection for any new strains which they may develop. This does not encourage the investment that is required to produce higher yielding, more virus and weed resistant strains of plants. There is an argument that farmers and others will or could be required to pay more for seed material. This perhaps could happen. But if in fact people are getting a better product for their money the additional investment will, in the long run, be more profitable and more cost effective. I believe the advantages of PVR far outweigh the disadvantages. The purpose of this legislation is to encourage horticultural plant breeding and research. It will do this because it will provide financial incentives to those breeders. Certainly the range of flowers and other horticultural varieties of fruits and vegetables will expand significantly. In the past overseas growers have been frightened to send any material to Australia because there would be no protection for them and no financial benefit. With this Bill, the range of horticultural products grown here will expand, and the quality of produce will also improve. I frankly cannot see what objections there could be to the passing of this legislation. Those most affected and involved in it-the growers in Australia-all want it. The fact that an Opposition senator has introduced the legislation shows the vacillating that the Government has shown over the entire PVR issue for a number of years now. The Senate Standing Committee on Natural Resources took some time to finally bring down its report. It came out with the conclusion that a PVR scheme should be introduced. The subject was referred to that Committee for consideration, and was duly considered. Yet the Government in its infinite wisdom chose to send it off yet again for yet another opinion. I have no confidence at all that if this latest report is also favourable to the introduction of a PVR scheme the Government will not find another stalling manoeuvre. This legislation is wanted by the industry and I do not believe we have the right to reject it. I support the Bill. Senator CRICHTON-BROWNE(Western Australia)(5.05) —We are debating the Horticultural-Plant Variety Rights Bill which has been introduced by Senator Hill. I say without qualification that I support the Bill. My view is that had it been based more exclusively on the report brought down by the Senate Standing Committee on National Resources it would have been a more comprehensive Bill. In fact if the Bill had ranged past the recommendations of that report and included wheat and the like, it would have been strengthened by those provisions. I believe the legislation is long overdue. Australia is one of the few developed economies which lack any form of plant variety rights legislation. Almost all Western European countries, the United States of America, Japan, New Zealand and several South American countries have plant variety rights legislation in place. Plant variety rights are a system of patents given to new plant varieties developed through cultivation which are used commercially in the agricultural, pastoral and horticultural industries. In essence they work in a similar fashion to the patents that have been available to inventors of new technology and products, although, unlike patents, the right is conferred upon only the end produce and not the process by which it is developed. This legislation will apply only to breeders of new horticultural plant varieties, who may apply to the Registrar of Horticultural Plant Variety Rights established by this Bill for sole ownership of the variety. Where granted, plant variety rights confer exclusive rights to the owner to sell and produce plants and propagating material of plants of that variety. The owner will thus be able to levy and collect royalties from growers purchasing protected varieties in a similar way as owners of copyrights. The scheme will be entirely voluntary and apply only to varieties which are distinctly different from all other varieties which are staple when reproduced over generations. Plant variety rights are far from being a recent concept. Vegetatively propagated plants were granted such protection in the United States almost 50 years ago. As I have already mentioned, many developed countries have had a plant variety rights system in place for a number of years. In Australia plant variety rights have been the subject of debate for the past 20 years. As Senator Hill pointed out in his second reading speech on 11 October 1984, the former Minister for Primary Industry, Mr Nixon, introduced a plant variety rights Bill in 1981. This was allowed to lie on the table for 12 months to facilitate ample opportunity for public debate before being finally passed by the House of Representatives with amendments. It was subsequently referred by the Senate to the Senate Standing Committee on National Resources, which, after being interrupted by an unfortunate change of government, reported in May 1984 on the need for and the implications of the introduction of a system of plant variety rights in Australia. As a member of that Committee I have a particular interest in this legislation and I find it extremely disappointing that the Government has delayed debating this Bill for almost 12 months despite the Committee's findings that: After considering the potential advantages and disadvantages of PVR and a number of alternatives, the Committee has concluded that PVR is the most appropriate means of improving access to overseas varieties and stimulating plant breeding in Australia. This recommendation, in my view, encapsulates the two most compelling arguments for a system of plan variety rights in Australia-the stimulation of plant breeding by Australian private breeders and increased access to overseas varieties, particularly those protected by plant variety rights in other countries. The submission of the National Farmers Federation on plant variety rights to the Senate Standing Committee on National Resources said: PVR should make possible for the Australian rural sector an input of inventiveness related to plants which the patent system has long made possible for the manufacturing sector by way of products and processes . . . The concept of limited monopoly which both PVR and patents imply is a recognition of the realities of the cost of inventing new plants, products or new processes. Those persons with the requisite skills and capital will not undertake the necessary research and development programmes which make up the process of invention unless, ultimately, it is in their interests to do so. The scope for restricting but not prohibiting access to new inventions makes possible a process of sharing of the costs of invention which allows some reward to the `inventor' for the resources and risks which he has committed to develop this product. The Bureau of Agricultural Economics has stated: The main economic premise underlying the proposed introduction of a plant variety rights scheme in Australia is that there are too few resources employed in plant breeding research and development . . . Despite government intervention in plant breeding research and development activities through such organisations as CSIRO, universities and the various State departments responsible for agriculture, expenditure in certain areas of plant breeding research in Australia has been inadequate. The BAE pointed out that there had been increases in private plant breeding in Denmark, New Zealand, South Africa, Switzerland, the United Kingdom and the United States of America since plant variety rights legislation had been introduced to those countries. In 1976 the National Council of Commercial Plant Breeders conducted a survey of private organisations involved in plant variety development in the United States. The results were summarised as follows: There is strong evidence that the commercial soy-bean breeding industry is a direct product of the Plant Variety Protection Act which has resulted in farmers having a greater choice of new and better varieties. There is strong evidence that the Plant Variety Protection Act has stimulated private investment in research. Enactment of the legislation has not only increased the number of firms involved in breeding new varieties but has also resulted in firms with already established breeding programs including other crops. The report of the Economics and Business Department of North Carolina State University, `Some Effects of the U.S. Plant Variety Protection Act of 1970', published in August 1983, confirmed these findings, stating that: Private research expenditures for breeding (soybeans and cereals) grew from essentially none in 1960 to about $8.5m by 1979. These data, plus comments offered by responding firms, leave little doubt that the Plant Variety Rights Protection Act was effective in stimulating private investment in the breeding of varieties of soybeans, cereals and vegetables. The report states that, with regard to the impact of soybean breeding, not only did the number of varieties being tested in university-sponsored trials in three States grow from about 30 during the early 1960s to nearly 150 during the late 1970s, but also analysis of the yields of these varieties indicated that during the 1970s new varieties released each year yielded about 0.12 bushels per acre more than varieties released the previous year, whereas there was no trend at all in the yields of new varieties released in successive years prior to 1970. This Bill, of course, relates only to horticultural plant varieties. But overseas experience with plant variety right systems indicates some of the potential benefits which will arise from the enactment of this legislation. In this respect, the comments of Mr J. R. McWilliam from the University of New England's Agronomy and Soil Science Department, in his submission to the Senate Standing Committee on National Resources, inquiry in to PVR are, in my view, particularly pertinent: In Australia worthwhile plant breeding by public institutions exists only for those cereals and field crops where finance from grower levies is available. In a wide range of other crops, especially promising new crops, vegetables, fruit and ornamentals where no such levies exist, public plant breeding work has either been neglected or never attempted. If successful, these programmes could increase export revenue both from direct sales of seed or propagating material and licensing fees paid by overseas producers for our protected cultivars. Without plant variety rights there is simply no incentive for private plant breeding in Australia other than hybrid varieties which have an inbuilt protection because their progeny do not grow true to type. Plant breeding is an extremely expensive and lengthy process. A plant breeder, including the necessary equipment and staff, costs an estimated $100,000 per annum to maintain, and new varieties take from five to ten years to develop to the stage of commercial release. I think it is worth quoting a paragraph from a recent letter I received on this subject from the Horticultural Association of South Australia, which I assume was sent to all honourable senators, but, in my view, the contents bear repeating: It is not nearly so simple to develop new horticultural varieties as it is to design a new machine with a particular desirable performance capability. It has to do with genetic manipulation and genetic combinations are almost limitless. For instance, in strawberry breeding, an ongoing program involving say 40,000 to 80,000 new seedlings per year over ten to twenty years might yield between one and ten new varieties with sufficiently improved characteristics to warrant introduction into commercial fruit production. Such strawberry breeding programmes in California for instance have been in progress for decades at costs measured in hundreds of thousands of dollars annually, and to date have given rise to a handful of new varieties considered by Californian strawberry growers as worthy of inclusion in their fruit growing industry. Little wonder that plant breeders very jealously guard their rights to reclaim some of their breeding costs from users of such new plants. In his submission to the Senate Standing Committee on National Resources' inquiry into PVR, Professor Mullins from the Department of Agromony and Horticultural Science at the University of Sydney stressed the urgent need for the development of new fruit varieties. He said: The `spray and pray' approach with its risks of toxic residues and damage to the environment, is outmoded and we urgently need new fruit varieties which are genetically resistant to pests and diseases. We need a massive investment in fruit breeding but fruit improvement is among the least favoured areas of government sponsored research because it is long-term, speculative, labour intensive and very costly . . . The prospect of a financial return will provide encouragement for this difficult work in both the public and private sectors. There is very little government-sponsored vegetable breeding in Australia, apart from that conducted by the Queensland Department of Primary Industries, and breeding programs in beans, tomatoes and potatoes conducted by the Victorian Department of Agriculture. In my view it is not without significance that many new vegetable varieties introduced from overseas have limited adaptation to Australian conditions and consequently perform poorly. Vegetable breeding programs in Australia could provide varieties which have the required genetic characteristics to produce economic yields under local conditions and to combat a range of plant diseases which are either unique or are of little economic importance overseas. For example, we have summer death in green beans and lettuce necrotic yellow virus. Submissions to the Committee suggested that plant variety rights would stimulate horticultural breeding in both the public and private sectors and could result in significant crop improvement. Furthermore, greater activity in the breeding of vegetables could also advantage vegetable growers by the adoption of improved technology in such areas as irrigation and harvesting techniques. A system of plant variety rights would also have the very important effect of enabling Australian horticulturists to have access to overseas plant varieties, which in many cases they do not have at present, in particular to those varieties which are protected by plant variety rights overseas. There is ample evidence that the absence of plant variety rights in Australia has resulted in Australian growers being denied access to overseas varieties, to the detriment of our indigenous growers. In 1976, the joint working party report on plant variety rights listed a number of plant varieties whose release to Australia had been refused because their overseas owners' rights would not have been protected, including varieties of grapes, rapeseed, ryegrass, cherries, garden beans, apples, peaches, nectarines and apricots. It was expected that this list would continue to grow if Australia did not introduce a PVR scheme and further that Australian rural industries would be disadvantaged by lack of access to many valuable commercial overseas varieties. The Department of Primary Industry's submission to the Committee stated that: Information gathered in 1982 indicates that access to varieties under PVR overseas is still being denied to Australia. Foreign holders of rights are explicitly refusing to release propagating material for commercial use. Agreement to release material to breeding institutions for scientific purposes, has, in some cases, been only on the condition that no commercial release would result. Obviously this leaves the Australian horticultural industry struggling under a tremendous disadvantage. On both the domestic and overseas markets suppliers who have the better varieties have a trading advantage. This was graphically illustrated by the Tasmanian Government's submission to the Committee. Tasmania produces something like 5 per cent of Australia's total horticultural output and in its submission the Tasmanian Government pointed out that the maintenance and development of Tasmania's horticultural industries are dependent on their remaining highly competitive in terms of both quality and price. Noting that difficulties had been experienced in gaining access to improved overseas varieties subject to PVR, the submission continued: Some patented varieties offer major cost advantages due to the ease with which they can be mechanically harvested. Varieties which allow an extension of the season and others which allow the expansion of industries into what were previously considered climatically unsuitable areas also provide economies in production costs. Without access to these new varieties Australia is falling rapidly behind with the Australian varieties of some species being years behind those available overseas. The Committee heard very considerable evidence that our lack of plant variety rights meant that Australian wine makers could not gain access to new German bred wine varieties of grape. The Borossa Wine Grape Advisory Council pointed out: These are used in making full flavoured white table wines. It is in the market for these wines that Australian consumption has shown the most dramatic increase in recent times. Yet these are the varieties to which Australia has been denied access. Clearly there are tremendous potential benefits to be gleaned from the introduction of plant variety rights in Australia. Other countries have clearly seen that advantage and they have received the benefits for many years-benefits which are presently denied to us. It is very unfortunate that this country finds itself so far behind on this matter. In my view this Bill represents our opportunity to catch up and I believe it deserves whole-hearted support. I will be very disappointed if this debate is adjourned because it is politically difficult for the Government. The Government has had this Bill before it, it has had the report from the Senate Standing Committee on National Resources and it has had the 1981 Nixon legislation. There has been more than 20 years debate on this subject in Australia and now, because of an ideological struggle between the Left and the Right of the Australian Labor Party, which was demonstrated in some respects by the division on our Committee in its findings, the Government finds it necessary to side-track this legislation off to another inquiry. Senator Hill —Yes, the two dissenters were both from the Left. Senator CRICHTON-BROWNE —I do not make any judgment about that, but it is true that the two dissenters were from the Left and that the majority of the Committee members brought down a very commendable report. I find it sad that the economy of this country should suffer as a result of political expediency. I trust that the Government will have the courage to deal with this Bill. Senator HILL(South Australia)(5.25) —in reply-I wish to thank all honourable senators who have contributed to the debate. I suppose I should begin by saying why we are debating this Horticultural-Plant Variety Rights Bill [1985]. It is basically because of the frustration and disappointment of horticulturalists who, as my colleague Senator Crichton-Browne has just pointed out, have for years sought legislation of this nature in order that they might compete effectively with those in other countries. Some 22 other countries in the world have plant variety rights legislation of various types. Time and time again there has been delay. I listened to what Senator Robertson said in an otherwise very fair contribution. He said that there was another inquiry presently under way and that the Government would want to see the results of that inquiry. I can recall a similar argument when the Australian Democrats and the Australian Labor Party sent the former Government's Bill off to the Senate Standing Committee on National Resources. They claimed that we needed further consideration, on that occasion by a committee. The committee brought back its report and it was a learned report covering the issues extremely well, but as has just been pointed out by my colleague, there is a political difficulty on the Government's side and it hopes to avoid the problems of factions by calling for yet another inquiry. Thus, the matter has been unfortunately deferred to another inquiry. I shall go through the stages of this highly important matter over many years and I shall explain in greater detail the basis of the frustration of those whom I am representing today-principally the horticulturalists of Australia. Their frustration is shown simply by the fact that they have approached a private senator and asked him to introduce a Bill. They can see no other way of putting sufficient pressure upon the Government in order to make it act. In this case I was approached by the South Australian Fruit Growers and Market Gardeners Association with the support of the South Australian Nurserymen's Association. They asked me to draft and submit to the Senate a Bill that could achieve for them what they very reasonably wanted to achieve. I do not want to go back through all the major arguments for plant variety rights in Australia. These have been stated by my colleagues in this debate and I set them out in detail in my second reading speech. Let me briefly summarise what a PVR system would do for Australian horticulture. It would help to encourage the development of horticultural plant breeding and research in Australia through the financial incentive provided by the operation of proprietary rights. I know that some senators on the other side cannot understand this financial incentive, and certainly Senator Vigor has made it clear today that the Australian Democrats cannot understand it. However, it is part of the real world. The financial incentive will enable research to take place in Australia, research that is not taking place at present and it will give horticulturalists a greater opportunity to compete. With better products they can more effectively compete in export markets; with better products they can more effectively meet export competition. For those who have said that there is no evidence that this can be achieved, that it will provide greater research into plant breeding, I simply repeat what Senator Watson said earlier, that when New Zealand introduced PVR legislation over a decade ago there was a 500 per cent increase in plant breeding. Further, the Bill will provide Australian horticulturalists with access to improved overseas varieties of vegetable, fruit and ornamental seeds, thereby enabling the Australian horticultural industry to become more competitive in both domestic and export markets. I will read into the Hansard in a little while a number of examples put by horticulturalists of their being unable to gain access to the best and most up to date varieties of their products from throughout the world because Australia is out of step. We do not have a PVR regime and because we cannot offer the protection that these producers of new plant breeds in other countries require, they simply will not take the risk of exporting them to this country and losing control of their product. Very simply, in those ways a PVR system in Australia would revolutionise horticulture for the benefit of horticulturalists and for the benefit of the whole community. The Bill is limited to horticulture. That has been done because we understand that there are still some areas of concern about fodder, pasture and field crops. There are still fears in some sections of the community that in some way the introduction of PVR relating to field crops could detrimentally affect public breeding. In logic I simply cannot see that that follows; there is no direct relationship whatsoever. But certainly, public breeding institutions continue to express fear that in some way governments may restrict their funding and therefore they may be able to contribute what they have in the past. That lobby remains strong. Rather than delay the whole subject matter while that debate is resolved, we decided to limit the Bill simply to that sector of agriculture in which there is no dispute, where there are not public plant breeding programs and where the plant breeding programs cannot be relevant in any way. That is why it has been limited to horticulture. I think I can say, with little fear of being shown wrong, that there is unanimous support from horticulture. Certainly, that has come through in the mass of correspondence that I and other honourable senators have received from horticulturalists throughout Australia, all asking for PVR and all failing to understand why this Government is not prepared to do what is necessary in their interests and in the interests of the community as a whole; that is, give them this instrument that will allow them to compete overseas more effectively. Therefore, we limited the Bill to horticulture. I refer to the question of definition. Horticulture was not defined because, as was said by Senator Watson, it is a generic and scientific term. To try to provide a more specific definition will only create more problems than it will solve. The advice of the Parliamentary Draftsman and of the scientists in the field is that what is horticulture is commonly known in the industry and no real problems will result therefrom. Let me briefly run through the history of PVR or the lack of PVR in Australia. Australia is one of the few developed countries still without any PVR system. There are some 22 other countries in the world with plant variety rights, and they are listed in the Senate Committee report. These countries include West Germany, which has had plant variety rights for more than a century, Argentina, Austria, Belgium, Czechoslovakia, Denmark, France , Hungary, Israel, Japan, Mexico, the Netherlands, New Zealand, Romania, the Union of Soviet Socialist Republics, South Africa, Spain, Sweden, Switzerland, the United Kingdom and the United States. Yet here today we have heard the Australian Democrats say: `Show us that it can work. How will you be able to solve the administrative problems with PVR?'-almost suggesting that it is something novel to the world. All we are really trying to do with this Bill is catch up with the rest of the world. Unfortunately there are those within Australia who are not prepared to let us do so. The debate about PVR in Australia has been in the public domain since the late 1960s. It was the subject of ongoing Australian Agricultural Council discussions during the 1970s. It was first placed in legislative form in 1979 with the preparation of a draft Bill by the Department of Primary Industry. It is interesting that those departments which found what they see as technical faults in this Bill have largely been responsible for the original drafts which have been refined over the years with experience. Of course, they should have supported the Bill. The former Government introduced a PVR Bill into the Parliament in early 1981. It was allowed to lie on the table for public consideration and comment. Then in 1982 the Bill was passed by the House of Representatives. In September 1982 the Senate referred the Bill to its Standing Committee on National Resources for consideration and report. It lapsed with the change of Parliament. It was reintroduced. The Committee brought down its report in May 1984. The principal recommendation was that the Commonwealth consider the introduction of a PVR scheme for Australia. In effect that is an endorsement by the majority of the Committee of PVR. I quote from the report: After considering the potential advantages and disadvantages of PVR and a number of alternatives, the Committee has concluded that PVR is the most appropriate means of improving access to overseas varieties and stimulating plant breeding in Australia. The report was brought down in 1984. In March 1985 the Government responded and effectively delayed the matter further by deciding that it should go for another investigation by Professor Lazenby from Tasmania. Meanwhile, the horticulturalists that I am representing here today continue to suffer from the absence of this legislation. What is happening now is that the Government is saying: `Wait until that report comes in. We want to have it ready for submission to the AAC by February 1986'. It may be ready then. If it is, it may be submitted and then it will wait for Australian agricultural bodies to comment and then it will go back for further consideration. The matter is obviously going on and on with constant delays. The only rational reason that can be given for that sort of delay is the factional problems within the Australian Labor Party, the embarrassment that they are going to suffer if the Left again will not permit them- Senator Zakharov —The majority of the National Conference was of that view. Is that the Left? I wish it was. Senator HILL —Is the honourable senator saying that the majority of the Labor Party is against PVR legislation for horticulture? Senator Zakharov —That was the National Conference decision last year. Senator HILL —The horticulturalists of Australia then do not seem to have much chance. That seemed to be somewhat inconsistent with what Senator Robertson said. I thought he seemed to indicate that he was reasonably hopeful. In the short time that I have let me remind the Senate of just some of the views that have been put to honourable senators on this critically important matter, partly because the Democrats do not seem to understand that the horticulturalists really want it or why they want it. I refer to submissions that have come from such bodies as the Horticultural Association of South Australia Inc. which says: Without plant variety rights the Australian horticultural industry has no chance of competing on the world markets, nor do we have the opportunity of maintaining viability and supplying the Australian consumer with a wider range of fruits and vegetables from high yielding, better quality varieties. There was a submission in similar terms from the berry growers section of the Horticultural Association of South Australia Inc. and from the Renmark branch which was concerned about the inability to get the latest root stocks for stone fruits from overseas sources. The potato industry committee of that body expressed concern about New Zealand's advantages because that country has PVR and can more effectively compete with better products that we cannot get into this country. The onion section of that body says that it wants to give this industry access to improved, high yielding varieties, but is simply denied such opportunities through PVR not existing in this country. A submission from the brussel sprouts-celery section in similar terms says that those growers cannot effectively compete in export markets. I would have thought that even the Democrats would have been interested in our industry being unable to compete more effectively overseas because of the lack of legislation in this country. The flower growers' section of that same body said: We are committed in our industry to floriculture. We believe that the evidence in favour of plant variety rights is irrefutable. The Sunraysia Districts Citrus Co-operative Society Ltd has written speaking of the advantages of some of the American products that it would like to get into Australia but cannot through the lack of PVR. I have a very sophisticated letter from the Wine and Brandy Producers Association of South Australia Inc. explaining the difficulties growers face in the advancement of different grape varieties in this country through the lack of legislation. I have a letter from the Western Australian Fruit Shippers Committee supporting the legislation. The South Australian Association of Nurserymen Inc. has written giving concrete examples, which I will be pleased to show to Senator Vigor, of why, because of the lack of legislation, it cannot get into this country the products growers want. I could go on. I have correspondence from the Central Coast Citrus Growers Organisation, the Western Australian Fruit Growers Association Inc., the Victorian Cherry Association, and the Cherry Growers of South Australia. I have also received letters from some plant breeders such as Phytotech, who have written explaining their difficulties. The plant breeders referred to the opportunities for markets in South East Asia that they cannot get into because we cannot compete effectively. I have had correspondence from the Tasmanian Apple and Pear Growers Association, the Apple and Pear Growers Association of South Australia Inc., the Eastern Metropolitan Fruit Growers Association, the Livestock and Grain Producers Association of New South Wales, the Almond Co-operative Ltd, Murray Citrus Growers Co-op. Association (Australia Ltd), the Australian Cherry Growers Federation, the Queensland Nurserymen's Association, all setting out arguments why they need this legislation. I have received not just brief two-line letters, but letters that explain each organisation's unique circumstances. The rights they seek are being denied to them by this Government and by the Australian Democrats. I have received letters from the Australian Berryfruit Growers Federation, the Nurserymen's Association of Western Australia Inc., the United Farmers and Stockowners of South Australia Inc. and Orchardists and Fruit Cool Stores Association of Victoria. I could continue. I do not wish to take up the time of the Senate for much longer. If I had more time I would go through the various arguments that were put by honourable senators who spoke in this debate. Perhaps during the Committee stage when we have an opportunity to consider Senator Vigor's proposed amendments, that will be the time to look at his arguments, which, I must confess, I found most strange. Senator Puplick —The Democrats would not have a science policy without a patents system, would they? Senator HILL —That is an interesting point. Patents seem to have been forgotten. I also want to talk about Senator Zakharov's arguments. No doubt I will have the opportunity to do so in the Committee stage. I commend the Bill to the Senate. It has been called for by the industry which has demonstrated why it needs it. It is for the benefit of Australian export and for the provision of better products in this country. It can result only in greater efficiency. I would have thought that that was what we were all about and were seeking from industries such as this. I therefore hope, notwithstanding what has been said by the Labor Party in this debate, that it will reconsider and give its support to this Bill. Question put: That the Bill be now read a second time. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 31 Noes . . . . . . . . . . . 25 —— Majority . . . . . . . . . 6 —— Baume, Michael Messner, A. J. Baume, Peter Missen, A. J. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Rae, PeterCarrick, Sir John Reid, M. E. Chipp, D. L. Sanders, N. K. Collard, S. J. Sheil, G. (Teller)Crichton-Browne, N. A. Short, J. R. Durack, P. D. Siddons, J. R. Guilfoyle, Dame Margaret Townley, M. Haines, J. Vanstone, A. E. Hamer, D. J. Vigor, D. B. Hill, R. Walters, M. S. Jessop, D. S. Watson, J. O. W. MacGibbon, D. J. Withers, R. G. Mason, C. V. J. Aulich, T. Giles, P. J. Black, J. R. Grimes, D. J. Button, J. N. Jones, G. N. Childs, B. K. McClelland, DouglasCoates, J. McIntosh, G. D. (Teller)Colston, M. A. Morris, J. Cooney, B. Richardson, G. F. Crowley, R. A. Robertson, E. A. Devlin, R. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Walsh, P. A. Georges, G. Zakharov, A. O. Gietzelt, A. T. Archer, B. R. Coleman, R. N. Knowles, S. C. Ryan, S. M. Kilgariff, B. F. Maguire, G. R. Bjelke-Petersen, F. I. Cook, P. F. S. Lewis, A. W. R. Reynolds, M. Chaney, F. M. Ray, RobertTeague, B. C. McKiernan, J. P. Parer, W. R. Elstob, R. C. Question resolved in the affirmative. Bill read a second time. The PRESIDENT —The time allotted for General Business has now expired. Assent to the following Bills reported: Rural Industries Research Bill 1985. Rural Industries Research (Transitional Provisions and Consequential Amendments) Bill 1985. Snowy Mountains Engineering Corporation Amendment Bill 1985. Debate resumed. Senator BROWNHILL(New South Wales)(5.49) —Before the debate was interrupted I was talking about why our trade performance has been so poor. There are a number of reasons for this. As I mentioned, there is our lack of competitiveness on world markets and rising costs for our farmers are making our products more and more expensive. Over the past five years farm costs have increased by 44 per cent, while prices receive have increased by only 12 per cent. Return to capital on the farm is averaging 1.5 to 2 per cent. Input costs have soared in such areas as fuel, excises and taxes. This has been exacerbated by inflation because farmers are price takers; they are unable to pass on increases in farm costs and must absorb them. This, of course, they have done to their disadvantage-more and more in the past 10 years. Yet, despite their increased cost pressures they have been able to lift their own performance enormously in the past 15 years. Another reason for our lack of ability to influence world markets has been the unfair trade policies of other countries. The European Economic Community was for many years a major importer of Australian primary produce. Over recent decades, however, the penetration of this market has become increasingly difficult. This has come about by the increasingly unfair protectionist policies enjoyed by farmers in the EEC countries. Clearly, if Australia is to improve its trade performance it cannot ignore such a large market as the EEC, but it is one area into which Australian governments must make inroads. I was interested to see that we recently had a visit to this country by Mr Andriesson, the Vice-President of the Commission of the European Communities responsible for agriculture and fisheries. Mr Andriesson had talks at both an official and informal level with the Government and farm leaders. The attitudes of the EEC and its officials should be of great concern to Australia. While he was here Andriesson gave a personal assurance that the proposed sale of the 800,000 tonnes of beef held in storage by the EEC would be monitored to ensure that it did not interfere with Australian sales. Additionally he said that there would be no subsidised beef exports to our markets-Japan, South Korea, Taiwan, Malaysia and Singapore. Additionally, when Australain officials expressed their worries over EEC policies he pointed to the cuts in the EC's internal support price scheme. He pointed up the introduction of the quota systems for sugar and milk. But while he said all those things he also made it very clear that he, and presumably the EC itself, do not recognise the argument of a traditional market. In other words, if it suits them, they can at any time release that great enormous beef pile or, indeed, any one of a number of primary commodities onto the world markets, especially those markets which we in Australia have for years regarded as ours. When one considers that the EC fluctuations in some commodities are more than our entire production one realises the David and Goliath situation we are in. But I do not believe it is beyond hope. The EC policies are changing, and the fact that Australian primary producers are among the most efficient in the world, compared with farmers in those countries which are among the least efficient, means that there is hope. The Senate recently discussed the release of a paper on trade with China. It is markets such as this in which Australia has a real chance of performing well. Our trade with China has, in recent years, been a promising light in a rather dark tunnel. Business with China has increased in the last few years by over 73 per cent. It is now worth over $1 billion annually. China has risen from being our tenth most important export market to our fifth, in just over twelve months. The biggest single item, with 28 per cent of the trade, was wheat. Here again we see the valuable importance of our primary products. Another item, which I believe is even more important, is our sales of wool. Sales of greasy wool have tripled. Sales to China alone are now worth over $144m. I believe this is due, in no small way, to the Australian Wool Corporation and particularly its Chairman, David Asimus, who has spent a great deal of time and energy in China and other overseas countries such as the United States. China is a market with enormous potential for both rural and manufactured products. With Australia's difficulties with the EC, we must be prepared to seek out and develop new markets. China is one of the few areas with both the population and the financial resources able to afford Australian goods. It is interesting to note that at about the same time as the Government was announcing our successful trade performance with China, the Bureau of Agricultural Economics issued a rather depressing report on the agricultural and economic policies of the EC. While we have gained an export market in China worth $1 billion, we lose that amount each year through exports lost because of restrictive EC policies. A third reason for our relatively poor trading performance is our atrocious reputation. We are considered to be an unreliable supplier. Our industrial relations record, especially as it affects the shipping and transport of products overseas, is disastrous. A recent National Farmers magazine article claimed that the typical Australian export farmer would this year face a bill for $2,000, courtesy of the waterfront unions. It claims that that bill will be for: A rising level of waterfront stoppages and delays for which Australia holds the unenviable title of second worst nation on earth. This year Australian waterfronts are estimated to lose over 250,000 man-hours. In the 11 months to 30 August, Australian ports lost loading time sufficient to load 1.5 million extra tonnes of grain, at a carryover cost of $30m. Delays, both industrial and operational, account for two-thirds of the time the average ship is alongside an Australian wharf. Australian produce is lucky to reach the customer's port within 24 days of schedule, whereas from the United States produce can be there within 24 hours of schedule. It is estimated that the wheat industry alone pays out $1,250 per grower each year in additional freight charges to cover the cost of delays and stoppages in Australia. Yet Australia this year is to rely on its export sector to contribute 3.2 per cent of the projected 4.5 per cent of national economic growth. I am a fair betting man, as I know other senators here are also, but I am not prepared to bet that with our appalling strike record the 3.2 per cent growth will be reached if we continue along the same disrupted strike path that we have been on. The performance of our trade officials is another area which could and should be improved. I am pleased that the Government is to establish the Australian Trade Commission to start next year. However, the May mini-Budget saw a cut-back in Department of Trade estimates of $2.5m for the current financial year, and it is hoped staff cuts reaching around 50 can be achieved. I am not, and never have been, a supporter of big government, but I do not believe the trade area is one that we can afford to cut back on. We need people with the highest level of marketing and diplomatic skills, people able to get into new markets and to hammer away at old markets. Overseas income derived from export trade is the life-blood of a nation. Those exports give all Australians our standard of living. It is, therefore, essential that any encouragement that can be given to exporters, through the export market development grants scheme or other assistance, be given. It is not just a matter of giving help to a privileged sector of our community. It is only through improved and increased trade performance that Australians can continue to enjoy a lifestyle to which we have all become accustomed. Senator PARER(Queensland)(5.58) —Today we are debating the Export Market Development Grants Amendment Bill which forms part of the Government's expenditure reductions in the May mini-Budget. We have reservations about some aspects of the Bill, and we certainly have great misgivings about the Government's performance generally in the vital area of trade; it is an area which the Government itself admits is a cause of some concern. The purpose of the Bill before the Senate is to revise and reduce the costs of the export market development grants scheme. This scheme has operated since 1974. The Minister in his second reading speech summarised the operation of the scheme. He said: It provides financial incentives in the form of taxable cash grants for eligible expenditure incurred on overseas market research and development such as advertising, overseas representation, the cost of participating in overseas fairs and exhibitions, overseas travel associated with trade promotion, and the cost of bringing agents or buyers to Australia. Presumably any entertainment of those buyers will not be a recognised business expense. The aim of the scheme is to encourage Australian exporters to develop overseas markets for our goods and services. This is a very laudable aim, yet the scheme is not without its critics, on both operational and philosophical grounds. An Industries Assistance Commission report in 1982 argued, in fact, that the whole scheme should be abolished. More recently, a report of the National Export Marketing Strategy Panel-the Ferris report-raised fundamental questions about the scheme and recommended major changes to the way it operates. The Government has estimated the cost to Australian taxpayers of export incentives over the last decade to be around $1.5 billion. Yet one Labor back bencher admitted on 13 September in the other place: Despite this enormous assistance from the public purse, Australia's export performance has been poor and our share of the world export market has continued to decline. Senator Button —That is not an admission that we have to make. It is an admission that you should make too. You were in government for most of that period. Senator PARER —It is an admission from one of the Minister's own back benchers in the other place. This gloom from the Government's own ranks is certainly borne out by our current relative economic performance. Our inflation rate over the coming year will be twice that of our major trading partners, and, of course, real interest rates are soaring. Clearly, all is not well. Hence a debate which simply focuses on incentive schemes will ignore the broader issues of trade just as reliance on make-work schemes cannot by itself create employment. Australia has always relied for its prosperity on overseas trade. Although we have a relatively small population, our major exports, be they minerals or primary products, represent 80 per cent or more of total production. We do not have the luxury of being able to cover our fixed costs with domestic consumption as is the case in heavily populated countries in the European Economic Community, in Japan and in the United States of America. There was a time when in the manufacturing sector we had a unique ability to produce high value items with small production runs. At one time, for instance, we were the pioneers in X-ray and electro-medical equipment. Not only are these sorts of goods no longer exported but also, in the main, they are no longer produced in Australia. This has been caused by wage demands which have rendered these goods uncompetitive. Senator Button —It is one of the best export sectors in this country. You ought to wake up to yourself. Senator PARER —What is that? Senator Button —Medical technology. Senator PARER —I can tell the honourable senator that, from experience, we no longer make one X-ray machine in this country. Over a period of 30 years we have gone from being the eighth largest exporter to the twenty-third largest exporter in the world, with manufacturing and services now representing only 8 per cent of total exports. In the manufacturing sector overseas countries have a smorgasbord of support systems for their goods, ranging from high volume domestic support to export-import finance at low interest rates and/or extended credit. Export incentives are provided in the Bill to encourage exporters to penetrate overseas markets and we agree with any attempt to lift our exports. I believe, however, that we should look more closely at the methods used by our more successful competitors to determine whether there are not more effective ways of increasing our exports, particularly of manufactured goods. It should be pointed out, however, that it does not matter what we do if lip service is given only by certain sectors of the trade union movement to the need to convince our customers that supply will not be disrupted by industrial action. Too often a few irresponsible unions see our Achilles heel as being our export industry. By disrupting those exports they are killing our markets and thus the future well-being of their own members and the nation as a whole. It is fair to say that export incentives have probably not affected one iota the level of sales of our mineral products. The only impediments to exports of our minerals are the plethora of Federal and State government charges, regulations and controls and industrial uncertainty. These artificial direct and indirect costs not only make us less competitive compared with others but also, in the medium to long term, will reduce the level of economically recoverable reserves and thus reduce the life of mines and employment. In times of overseas reduction in demand these costs also force high grading to reduce losses. By the use of regulatory methods we saw, in the days of the Whitlam Government, the development of mineral resources stopped by the quite improper use of export control powers. Penalties such as export duties were imposed and the vestiges of those penalties still remain in a most discriminatory way. Exporters have been further disadvantaged by the recent tax package, which now denies them the expenses they must incur in offering normal courtesies expected in transacting export contracts. To clinch an export contract can involve putting on functions and arranging visits of prospective buyers to resorts and so on. To those who have not had to carry out such chores it may seem like fun, but it can become very tedious, particularly as more often than not it entails giving up the time one would prefer to spend with one's family at weekends. Mineral exporters, who in recent years have become the backbone of Australia, have been singled out for special attack in the tax package. The new taxes on employee amenities such as housing and air fares will cost the industry an estimated $45m a year compared with the rubbery estimate of the Minister for Resources and Energy (Senator Gareth Evans) of $23m. These amenities must be provided to attract employees to remote areas. As compared with others, it is impossible for mineral exporters to opt out of these commitments. Compared with these assaults on our great mineral export industries, the removal of export market development grants is minimal. The effect of this Bill will be to remove those grants from the mineral industry. The Ferris report, which is to be commended and on which the Government relies, states in its summary of recommendations that the Government needs to recognise the benefits to Australia from increased direct investment overseas and to openly encourage such investment. It goes on to say that the Government should ensure that no change is made to current taxation affecting earnings generated by Australian direct investment overseas. What was the response by the Government? The tax package imposed a tax of 49 per cent on those overseas investments as from July 1987. In many cases investments have been made overseas because of tax incentives in the host countries. Resultant profits are export income to Australia. What is going to happen? I predict that these companies will desert Australia and to them Australia will become a branch office country. That will destroy any chance we had of becoming a head office country in this region of the world. Any incentive to export is welcome. Incentives alone, however, are not enough. From the few examples given it can be seen that, because of other factors, exporters have a tough task. It is these other factors that must be tackled. Governments must reverse their attitude in looking at successful exporters as prize milking cows and there must be a recognition by the few irresponsible union leaders of the devastation that will come to their fellow Australians if they persist in getting their kicks and measuring their success by the level of disruption they cause in key areas. Senator SHORT(Victoria)(6.08) —As has been said by other speakers on this side of the chamber, the Opposition does not oppose the Export Market Development Grants Amendment Bill. But, as Senator Durack said earlier, we condemn the Government for its lack of consultations with exporters on the proposals, for the rather indecent haste with which proposals have been made effective six days after their announcement and for the failure to recognise the commitment of the original scheme-the scheme to which this is a major change-to provide grants on the original basis to 30 June 1987. Whilst I do not oppose the Bill I would like to make a few points at the outset. The first is that the scheme should in no way be seen as a panacea for our export needs. I know that the Minister for Industry, Technology and Commerce (Senator Button) does not see it in that way. In terms of a general viewing of the Bill it would be highly dangerous for it to be seen in any way as a panacea. It will play a marginal rather than a seminal role in solving these export needs. The other point I make at the outset is that unless the Government takes other than more fundamental steps to put its economic house in order, the revised export market development grants scheme will have little or no effect in boosting our export performance. Surely no one can doubt the need for an improved performance in exports by Australia. Our trading position has slipped steadily and significantly since the mid-1950s. At that time were were the eighth largest exporter in the world; now we are the twenty-third. Our share of the world export market has dropped from 2.6 per cent to 1.2 per cent. Our current account position has deteriorated dangerously in recent years, accompanied by a staggering and even more dangerous increase in the level of our foreign debt and debt servicing commitments. At June 1985 Australia's gross external debt was $68.5 billion, which represented 33.1 per cent of our gross domestic product. Only five years ago our debt was only $13.9 billion, or 11.9 per cent of GDP. In a five-year period our debt has grown fivefold and has tripled as a proportion of our gross domestic product as a nation. In the two years to June 1985 our foreign debt doubled. Even more dramatic has been the increase in our interest and capital repayments. In 1979-80 the repayments were $1.8 billion, which was 8.3 per cent of our exports of goods and services. By 1984-85-the year just ended-that $1.8 billion had risen to $11.5 billion and the 8.3 per cent of exports had risen to no less than 33.6 per cent of exports. That is, for every $3 Australia earns from exports $1 is required simply to meet our debt repayments. Those figures show that Australia is at greater risk from its external account than at any time since at least the Second World War. I might add that this debt problem has been compounded in recent years by a substantial shift in the mix of private foreign capital inflow from equity to debt. There is no doubt in my mind that the existence of the Foreign Investment Review Board and the accompanying foreign investment policy has played a not insignificant role in encouraging this shift to greater reliance on debt financing in our capital account. If this debt capital is not used efficiently, the debt incurred will not provide a means of financing repayments. For this and other reasons the recent increased reliance on foreign debt financing places Australia at great risk. It is for that reason that I have been arguing for some time for the abolition of the Foreign Investment Review Board. The Opposition has announced that it will repeal the Board when it returns to government in two years time. I urge the Government now to look at the matter as a matter of urgency. The figures on our external debt position help to highlight the need for Australia to make a major leap forward in exports, of both goods and services. I have outlined already how our export performance has slipped. It has slipped for several reasons: Changing shifts in the pattern of world trade to our disadvantage; the development of regional trading blocks-notably the European Economic Community; a lack of export awareness, and in some cases the fear of exporting on the part of many companies, both large and small. Above all else, our export performance has slipped because we have lost international competitiveness. Again, one can cite many reasons for this loss of competitiveness. Government policies and actions can be important contributors, just as they can be important tools for improvement. The danger facing the Hawke Government, and therefore Australia, is that the depreciation of the Australian dollar-which in 1984 was greater than that of the currency of any other Western or Asian Pacific nation-for which the policies of this Government largely have been responsible, will precipitate a depreciation-inflation wage spiral. For that reason the Hawke Government's failure to argue for a permanent discounting of the depreciation from the consumer price index for wage indexation purposes is fraught with danger and is the height of economic irresponsibility. We have already a large enough inflation problem on our hands. Inflation in Australia has not been brought under control; it is on the increase again. The Treasurer (Mr Keating) forecast in his Budget Speech that Australia's inflation rate will reach 8 per cent during the current financial year. That rate of 8 per cent would be about double that of our major trading partners. My own view is that the Treasurer has underestimated the inflation rate in 1985-86. It seems to me there is every possibility that it will reach 10 per cent. Whether one picks 8 or 10 per cent, the fact is undeniable that despite the Government's posturing and preening, Australia is becoming progressively less internationally competitive under this Government, and that spells economic danger for every Australian. I repeat that exports are Australia's lifeblood. Without them our nation would be but a small fraction of what it is today, in terms of population and living standards, both in material and social terms. It is clear that I support the thrust of the Export Market Development Grants Amendment Bill because the Bill has as its objective the encouragement of Australian exports. I also give general support to the nature of the changes the Government is proposing to the existing scheme. There is no doubt that the existing scheme has had its imperfections, has been abused by some people and has not always led to increases in exports by grant recipients. The changes in the Bill reflect, in the broad, the recommendations of the report of the National Export Marketing Strategy Panel, chaired by Mr Ferris, about which others have spoken today. I simply add my congratulations to Mr Ferris and his team for their very good report. I do not agree with everything in it, but overall it was a very significant contribution to the consideration of Australia's export needs. I wish to comment on three main areas of the Bill: Firstly, the $20m export earnings limit, beyond which the grant will not be paid; secondly, the exclusion of tourism from the Bill; and, thirdly, clause 9 of the Bill. That clause has been changed from its original form when it was introduced into the House of Representatives on 21 August. It relates to proscription of countries and has been changed from a general proscriptive clause to one which relates solely to South Africa. They are the three areas in which I disagree with the Government's proposals and I hope that the Minister will extend me the courtesy of commenting on them in his reply, because they are important issues. The first issue is the $20m limit. The Minister said in his second reading speech: Grants will not be payable to claimants with export earnings in excess of $20m. The Government believes that, at a time when there is a need to reduce government expenditure- I agree with that- such large exporters are less in need of the support of a government export incentives scheme and that scarce government funds are better directed towards assisting committed small to medium size exporters. I also agree with the direction of the changes in the Bill towards the small to medium size exporters. The way the Bill is drafted seems to make no sense at all to me because an exporter who exports $20m worth of goods will be eligible for a grant of $200,000, but one who exports goods worth just $1 over the $20m will not receive 1c. This means that without a phasing-in period the Government has provided every incentive for companies not to expand their export earnings over $20m because to do so and still to be in front, given the rate of profit on exports, they would probably have to increase their exports by something like $5m to earn a profit of $200,000, which they would need to do to offset the loss of the grant. That to me is a major disincentive for any company to go out chasing exports, which is what the Bill is designed to encourage. I am not suggesting that the upper payment of the grant should exceed $200,000 but I am suggesting that it does not make sense for a company to be denied the whole of the $200,000 just because it goes $1 over the export earnings limit. That will have some significant effect in various ways. Another disadvantage of that proposal is that I think it will lead to companies trying to arrange their affairs, perhaps by splitting their operations into a series of $20m or less export earning groups, so that they will be eligible for the grant. This would be totally contrary to the spirit intended. It will have some general effects and also some specific effects on particular industries. For example, the wine industry will be particularly disadvantaged by this measure. As was said by our spokesman in the House of Representatives, Mr Braithwaite, that industry penetrates a market at a low profile, sets it up and in the following years exports build up. That is the same with many industries. The wine industry particularly will be very disadvantaged and will suffer the disincentive not to chase exports which, with its quality and expertise, could do well in the international market. The second criticism I have relates to the exclusion of tourism from the Bill. The Minister, in his second reading speech, pointed out that the Government, through the Minister for Sport, Recreation and Tourism (Mr John Brown): . . . recently announced the introduction of a new tourism overseas promotion scheme to be administered by his Department to meet the tourism industry's particular needs. To me that in no way is a sufficient reason for excluding tourism from this Bill. The Minister for Community Services said that the reason for excluding it from this scheme was: . . . tourism did not sit easily with some aspects of the . . . scheme. Obviously there were difficulties in applying an export performance test to the tourism industry. Accordingly, the tourism industry is to be excluded from the scheme. That seems to me to be the worst of all possible reasons for excluding anything from a particular scheme-because it does not easily fit in with it. I think the Government should have another look at that. The third point to which I draw the Government's attention and which is a matter of very considerable concern is clause 9 of the Bill. Clause 9 relates to the proscribing of South Africa as a country to which the Bill and the grants scheme will relate. When the Bill was introduced into the House on 21 August clause 9-as I think it was at that stage-was entitled `Proscribed countries'. It was a new clause giving a new section 10 to the export market development grants scheme and it was to read: The Minister may, by determination in writing published in the Gazette, declare a foreign country specified in the determination to be . . . a proscribed country. Between the introduction of the Bill in the House of Representatives and its arrival here that clause was changed. The change was agreed to by Mr Dawkins. Originally it has a potentially general application but it was cut down to relate only to South Africa. It was said by Mr Dawkins that that was done to fit in with the announcement in August by Mr Hayden, as Minister for Foreign Affairs, in respect of South Africa. Mr Dawkins said that the Government had reconsidered these proscribed country provisions and had recast them to limit their application specifically to South Africa. That point was also made by Senator Grimes in his second reading speech, when he said: This will enable the Government to implement the decision announced by the Minister for Foreign Affairs (Mr Hayden) on 19 August 1985- two days before, I point out, the first Bill was introduced into the House- to exclude majority owned South African companies from the scheme from that date. I do not believe that in any Bill of this nature, which is designed to increase Australia's exports, proscription has any place at all, but if it does, it should be a general proscriptive provision and not one which quite blatantly discriminates against a particular country. With those comments I reiterate my support for the general thrust of the Bill. As I have said, exports are the life blood of this country. We must strive to improve our performance in the field of exports. I think the Bill is along the right lines but I hope that the Government will address the three points I have raised. Sitting suspended from 6.29 to 8 p.m. Senator MICHAEL BAUME(New South Wales)(8.00) —I wish to discuss a portion of the export market development grants scheme changes that will affect the wine industry. As Senator Short mentioned before the suspension of the sitting for dinner, it appears that this industry will be specifically disadvantaged. As a result, some points should be made and I think it proper that I should request the Government to reconsider at least one element of the changes it has in mind. I rely on advice from the Australian Wine and Brandy Producers Association, which I must say that I believe, that, in its words, there is no doubt that our export companies will be placed at a distinct disadvantage. I do not want to suggest that there is any sound reason why a more rational approach to these matters should not be pursued by the Government. I am not one who says that major increases in spending or the failure to make appropriate cuts in spending should be pursued. On the contrary, I congratulate the Government on those elements of its policy which involve a more rational approach to the spending of other people's money. There is a degree of unfairness in the manner in which the wine industry is being dealt with in these changes. By way of background, it is worth mentioning that the wine industry has experienced a major degree of growth in the last 20 years. During that time production has increased by about 130 per cent and domestic sales by something like 400 per cent. Exports-certainly over the last ten years-have been no more than stagnant. This is evidenced by the fact that in 1983-84 exports of Australian wine were about 9 million litres, worth about $16m. There was very little change from the situation 10 years previously when I think exports were about 8.6 million litres. This has taken place despite the fact that there has been a collapse in the British market which provided the bulk of the market-something like two-thirds-20 years ago. In 1963-64 the British market took about 4.7 million litres. That figure is now down to about 533,000 litres. The point is that the industry has had to enter a period of immense effort to replace the lost British markets. The wine industry should be commended for the way it has used effectively the previous Government's incentives to diversify its markets and help keep the industry alive-certainly to maintain the volume of exports which, regrettably, has not been able to keep pace with the growth of the industry domestically, but which at least has been maintained. It strikes me as curious that we are obliged to suffer the consequences of the wine glut in Europe. Our own producers are being submerged in the European wine lake. Yet we are now telling them that we will not assist them, that the Government will not even look at a more reasonable, fairer way of withdrawing the support that has been so essential in assisting the industry. I must say that that support emerged in the policies of the previous Government. I have with me a telex from Brown Bros Milawa Vineyard Pty Ltd, a well known Victorian wine producer. Senator Haines —They make a delightful Cabernet Malbec too. Senator MICHAEL BAUME —They do indeed, even though there is no doubt that the general quality of Victorian wine does not match that of the Hunter Valley which is, of course, in my electorate-- Senator Haines —Or South Australia. Senator MICHAEL BAUME —There the honourable senator and I may be at cross purposes. Brown Bros sent a telex to the Minister for Trade, Mr Dawkins, and copies of it to various other people, including Mr Ewen Cameron, the very effective member for Indi in the House of Representatives. The telex outlines the difficulties the company will face. It is a company that has tried very hard to promote its wines overseas. I seek leave to incorporate the telex in Hansard. Leave granted. The telex read as follows- To: Hon. J. S. Dawkins The changes to the export grants scheme, now the detail is known, will have devastating results to our export program if implemented in its proposed form. The media release indicated changes were designed to continue to assist the genuine medium to small exporter. We fall into this category yet are completely disadvantaged by the changes. 1. We have been exporting for 7 years, developing probably the highest profile for quality Australian wine overseas. 2. We are pioneers in the export of quality Australian wine re-instating Australia's tarnished image of exporting poor quality product. This is a slow and tedious business and not yet profitable. 3. The only long term market areas for profitable export of Australian wine are at the quality end of the market. All other sales are quitting stock surplus to domestic production, with no long term goal of market development. 4. We have developed considerable expertise, professional resouorces and staff knowledgeable in exporting and overseas marketing which is budgeted to be self funding from 1989. 5. Our export efforts have been recognised by the Federal Government by way of an Australian award in 1983. 6. With the long lead times in the wine industry we have contracted growers to supply fruit for export market development. The results of the changes announced will put us out of the export market at a time when real progress from 7 years investment is evident. We request the legislation be changed in order that all exports be treated equally, i.e. even though previous claims have been made, 1985-86 stands as year one for future claims. ROSS BROWN Director/Marketing Brown Brothers Milawa Vineyard Pty. Ltd. 14th June, 1985 C. C. Mr E. C. Cameron-Member for Indi PRIMIN AA61616 BBWINE AA56150 Senator MICHAEL BAUME —I thank the Senate. The purpose of my incorporating the telex is to ensure that the Senate is aware of the fact that many wine producers in Australia will suffer-in this case the company says that its exports will be devastated-as a result of this change in the law. It is worth the Senate recognising that the international overproduction of wine calls for some kind of rationalisation. But I am not quite certain why the Australian wine producer should be the person who suffers the greatest degree of assault as a result of that overproduction and why we should remove the great bulk of assistance that we give to wine producers in the international market place. The reality is that many of the countries with which we compete provide incentives to their exporters. Many of the countries to which we used to export now place protective barriers around their domestic markets. The problem with the Europeans is very simple. Not only was Europe one of our major markets but also, as with so many agricultural producers, it now is a major competitor dumping surplus wine products on the export markets we are seeking to develop in the world to replace the markets in Europe that have been so unfairly closed to us. There is no doubt that trying to move into new markets is a very difficult process. As the Wine and Brandy Producers Association has pointed out on many occasions, considerable education is necessary for consumers in overseas countries to learn about Australian wine. To sell Australian wine on these markets, Australian wine exporters have to establish their own position and create a real awareness. As I understand it, in a submission to the Government the Wine and Brandy Producers Association has pointed out that this is a very expensive proposition. In these promotions advertising is not only costly but also must be sustained for a number of years in order to have any lasting benefit. The Wine and Brandy Producers Association said that changes to the EMDG scheme will adversely affect the overseas marketing plans of many companies within the Australian wine industry. Companies will now have to either increase prices in order to fund promotions or reduce promotional expenditures. Either alternative would lead to reduced export sales. The Association makes the obvious point that consumers' tastes for wine are constantly changing. This occurs in all markets. Consequently, wine export opportunities require substantial research and development work in each separate market. Many Australian wine producers are involved in many different markets. So the reduction of the EMDG scheme will lessen the amount of development of overseas markets which Australian wine exporters will be prepared to take and will have an effect on the value of Australian exports. Many industries could maintain that kind of view. I think it worth while that the complaint of the wine industry in general be recorded so we understand that the consequences of this change in the law will be to the disadvantage of an industry which has done the right thing by diversifying and taking advantage of the opportunities created by a sympathetic and supportive Australian Government which has changed to being a government which is not sympathetic or supportive. I understand and sympathise with the need for governments to be very selective indeed about the manner in which they support industries that cannot compete. To that extent I repeat my earlier comment that I do not wish to see governments becoming more involved in this kind of activity, of supporting enterprises that cannot succeed on their own. But neither do I believe that one should remove support in a manner which is unfair and discriminatory and which, in a sense, has a sort of retrospective impact. The way the scheme is being changed is in fact grossly unfair to those very wine exporting companies that have got off their tails and done the right thing. The sliding scale of diminution of entitlement discriminates against those very companies which have sought to maximise their exports and to use the scheme in the past. I strongly support the view maintained by Brown Brothers that the Government should adopt a different method of scaling down this kind of support, if indeed it is committed to the view that the support should be scaled down. The Government's scheme means that someone who receives a grant in the first year gets a maximum entitlement of $200,000. In year 2 that maximum grant remains the same, but in year 3 the limit is $200,000 or 50 per cent of export earnings, whichever is less. Over the years that diminishes and in the seventh year it is $200,000 or 7.5 per cent of export earnings, whichever is less. Of course that massively disadvantages those people who have already set out on a promotional campaign. I make this point very strongly, as does the Australian Wine and Brandy Producers Association: It takes many years to build up effective export markets in the wine industry. I cannot see why those people who have done preliminary work should be put at a disadvantage. For example, if they are in the fifth year of receiving export market development grants, why should they have their grant cut to 12.5 per cent of export earnings while someone who is starting off afresh and who has done nothing in the past remains entitled to a full grant of $200,000? It is simply unfair. The obvious way to resolve this matter is to bring every exporter or potential exporter into the scheme on the basis of being in year 3. That would save the Government money. I would be very grateful if the Government would provide the Senate with-or the Minister would seek to find out-the financial consequences of putting everyone on the basis of year 3 where the maximum would be either $200,000 or 50 per cent of export earnings, whichever is less. That would not disadvantage those people who had entered into a pattern of export and promotion which depended on a 3, 4 or even 5 year course of action. Those people entered into these arrangements in the expectation that this support would continue for another two years at least in the same way as it had existed in the past. It seems to me that changing the rules once one is well into the game is not a proper way to run the laws of this nation. I believe the Government is introducing a change which effectively has a retrospective impact on those people who were well and truly committed to a course of action before the Government changed the rules. I hope that the Minister will take very seriously my request that he advise the Senate of the financial consequences of putting everyone on the basis of year 3 so that no one is disadvanataged. I say this because, as I understand it, the industry has asked the Government to do exactly that. I think that the submissions to the Government did not just come from one producer. I know that I have received comments from at least three different producers who take exactly the same view-that they are being unfairly disadvantaged by the manner in which the Government is making the change. They recognised-and certainly I stressed to them-that there was merit in the view that the Government should cut its expenditure. I would not have entertained supporting their proposition had they simply opposed outright the whole question of the Government having the right and, indeed, the duty to hold down its expenditure and, where possible, to cut it. That is not the issue here. These wine producers are very responsible and sensible people who understand the political and economic imperatives facing the Government. Within that context they have said: `Okay, if you have to do it just do it fairly'. What distresses me is the fact that the Government is not listening to that message. The Government could not give a damn whether this is done fairly or not and that, I think, is the matter that the Opposition has every right to protest about vigorously on behalf of the Australian wine producers. Let us recognise that the wine industry has already been hit very severely by a change in the import arrangements whereby the degree of protection offered was removed by the Government last year. It is nonsensical for the Government now to say that this did not have a serious impact on the industry because of the increase in the volume of sales as a result. I assure the Government that if it wants to look at the volume of sales of Australian wine since then, it will find that the great volume of those sales has been at the cheaper end of the market. There has been incredible discounting and major companies which had been holding high quality wine for long periods in order to provide a premium end to the market-with red wines, for example, clearly the longer one holds them the better the product-are now entering into campaigns of removing their stock holdings. For example, Lindemans Wines Pty Ltd was quoted in the newspapers in the last couple of days as having to decide, because of the sort of treatment it is getting from this Government in particular, no longer to hold the stocks of good wines for long periods. Those people who wish to buy wines of some age-those who are interested in the quality end of the Australian market-will now be disadvantaged. If one wants to drink quality aged wines in Australia in future, one will have to buy them and put them down oneself, rather than buy them in the market place. That is one consequence of the changed arrangements relating to stock holdings. That situation has been worsened in the past year by the Government's removal of the 10 per cent element, which I imagine one could call a protective element, against European wines which, in effect, have been dumped in Australia, even though it is very hard to claim a dumping price. The capacity to object to real dumping is limited in a situation where the Europeans play ducks and drakes with the real cost of production and the real market prices under their quaint financing arrangements behind one of the most disgraceful barriers-not by way of tariff, but by way of exclusion from their own market. Senator Jessop —And inferior wines too. Senator MICHAEL BAUME —As my friend from South Australia quite properly points out, the stuff being dumped in Australia from Europe is far inferior to the high quality wines available in Australia, and it is absurd to say that the market place should determine which succeeds-the poor quality imports or the high quality Australian wines-because the price structures for the poor quality imports are absurd, although it is very difficult to establish what the real costs are because of the phoneyness of the European pricing and production structure. It seems to me to be a gross dereliction of duty by the Government to ignore the quite proper request by the industry to phase out this support in a way that is not unfair. All I am asking is that the Government re-examine this in a coherent and rational way, and I would be most grateful if the costs of doing what I ask could be presented to the Senate. Senator COOK(Western Australia)(8.21) —We are debating the Export Market Development Grants Amendment Bill 1985. Given the list of Opposition speakers on this piece of legislation, I thought it would be appropriate for a speaker from the back bench on the Government side to restate a few of the objectives of the legislation. It seems that we have had an exercise in special pleading on behalf of some industries. I think the comprehensive nature of this legislation and the way in which it has been designed should be restated so that it can be appreciated that the Government is responding to an inquiry into the effectiveness of this scheme and of our export performance. The legislation can then be seen in that proper context. Of course, I should also say that with respect to the tourist industry special measures are being considered or applied and a new scheme is in the offing. This legislation comes forward because the original scheme, the one it seeks to amend, is badly designed. That is a matter I do not think there is any contention about in substance. It proposes that we overcome, by virtue of these measures, the abuse and manipulation that have gone on under the old scheme and provide positive inducements for genuine exporters to export in a cost effective way. The aim of this legislation is to direct the scheme to committed smaller and medium exporters and we have excluded, by virtue of these measures, claimants with export earnings in excess of $20m and the tourist industry. It is proposed that the maximum grant be $200,000 for the first year of a two-year grant situation. The scheme started on 20 May 1985. It is envisaged that it will go to 30 June 1990. It is proposed that in the first year of its operation there will be significant cost savings. As I have said, the Government is concerned to see that the bad design of the original scheme is improved and that abuse and manipulation are overcome. Indeed, anyone who has read the report of the Ferris National Export Marketing Strategy Panel, by virtue of that very fine document will be convinced that there has been an extensive examination of the export market development grants scheme by a committee which included active exporters and which concluded that the design of the scheme was bad and that, because the Department of Trade showed that there were major deficiencies, the scheme required significant reform. So the Government is basing its approach in respect of this legislation on the findings of a report which has, I think, been hailed across the breadth of industry as a significant report in improving our export performance. Over the last 10 years some $1,500m has been paid out in taxable export incentive grants by successive Australian governments to claimants. Despite that, it is true to say that Australia's export performance remains less than satisfactory from a government or community point of view. During that time our share of world export markets has been declining and it is certainly true that we need to improve our export performance, particularly in the field of manufactured goods. This is one of the reasons why the Government is concerned to introduce amendments to this scheme in order to better target those entrepreneurs who could advantage themselves by a more efficient scheme. It is our concern not to attract people who would simply spend the money, but to attract people who can show, by the receipt of the grant, that their export performance has in fact improved in such a way that the grant has been well made. It is also not true to assert that the Government tightening up on the export marketing development scheme signifies in some way or other a lack of interest by the Government in exports. Anyone who has followed the course of the trade debate in this Parliament, particularly over the last three years, will have noticed many of the initiatives taken, firstly, by the current Deputy Prime Minister (Mr Lionel Bowen), when he was Minister for Trade, and now by Mr Dawkins in his capacity as Minister for Trade. Earlier this year Mr Dawkins put down a significant paper setting out the Government's objectives in the trade area. However, it is a time for the Government to exercise some budgetary restraint. In doing that, the inspired restraint that this scheme typifies shows that moneys in the public purse are spent in such a manner that they will advantage Australia's overall export performance. It is perhaps worth while going to some examples of why we believe the current scheme is not effectively targeted to the markets that we would hope to aim for. In the 1982-83 grant year, we received 6,535 claims for goods and services to receive an export development grant. But only 3,325 of them, that is just over 50 per cent, were processed by the end of 1983-84 and delays in payment of 18 months to two years after the expenditure had been incurred were not infrequent. I think just that statistic shows that much needed to be done to improve the efficiency of the operation. I am confident that this legislation will do that. Senator JESSOP(South Australia)(8.29) —I rise to speak briefly on the Export Market Development Grants Amendment Bill. I would like to support, first of all, what my colleague Senator Michael Baume said about the inadequacy and adverse effects of this Bill, in particular with respect to the wine industry. Senator Baume made a quite good contribution to this debate and pointed out the adverse effects that this Bill would have. As a South Australian, one who comes from a State which produces the majority of wine in Australia, I believe it is important for me to emphasise that this significant industry in South Australia has suffered repeatedly from actions, particularly, of the Labor Governments. I recall in the Whitlam years when the brandy excise was introduced. That devastated the wine industry as much as any other action that was taken. The removal of section 31A, for example, from the Income Tax Assessment Act caused wine makers to suffer. I believe that Senator Michael Baume mentioned the fact that quality wines, particularly red wine, have suffered as a result of that. I think that it is very important for this Government and future governments to consider the reinstatement of section 31A, which would enable better quality red wines to be offered to the consumers of Australia. Senator Michael Baume also mentioned the dumping on the Australian market of foreign wines which are of inferior quality. This has caused the Australian wine industry some consternation. Apart from that, the fringe benefits legislation that is contemplated will also affect the wine industry in Australia. So the industry's problems are being compounded by this piece of legislation. South Australia produces some of the best wines in the world and some of our wine makers are successfully penetrating world markets. This is due to the way in which they were given assistance under successive Fraser governments. One of the worst things that the present Government has done was to remove the export incentive scheme. Wherever I go, I am told by those in industries that are anxious to export commodities that removal of this scheme has had an adverse effect on their export capacity and potential. Just this morning I heard reference on a radio news session to Australian companies exporting to the Asian area. This area is the potential market for Australia. In order for Australia to recover from what it has become-I regard it as having become a Third World country with respect to the rest of the international scene-we have to increase our export markets. A comment was made on the radio this morning that there are many export companies which, because of the wholesale taxes that have been applied or will be applied in the future by this Government, will go to the wall and that the Asian market in particular will suffer. When we contemplate the disastrous position Australia is in at the moment with respect to its public borrowings, it is really quite incredible that any impediment should be placed in the way of export companies that want to increase our export income. Last year the Budget reflected a requirement to pay something like $5.6 billion in order to service the interest on public borrowings. This year that amount has increased to something of the order of $6.7 billion. It is very important that we encourage our export industries and I do not think this measure will help them at all. Mention has been made of the tourist industry, and that is another significant growth industry that will be seriously disadvantaged by the measure that we are contemplating at present. However there is another clause of the Bill that I find quite incredible. Clause 9 proposes to insert a new section into the principal Act. As originally proposed, this section was to be headed `Proscribed countries' and stated: 10. (1) The Minister may, by determination in writing published in the Gazette, declare a foreign country specified in the determination to be, or to have been, with effect from and including a day specified in the determination (which may be a day before the day of commencment of this section), a proscribed country and, upon the publication of the determination in the Gazette, that country shall be taken to be, or to have been and to be, as the case requires, for the purposes of this section, a proscribed country during the period to which that determination relates. (2) Where the Minister makes a determination under sub-section (1) in relation to a foreign country, the Minister may, in that determination, or in another determination in writing published in the Gazette, declare that expenditure of a specified kind incurred during the period to which the first-mentioned determination relates, being expenditure that relates, directly or indirectly, to trade with that country, is not, withstanding any other provision of this Act, eligible expenditure for the purposes of this Act, but the Minister shall not make such a declaration in respect of expenditure the liability to pay which arose under an agreement or arrangement entered into before the day with effect from which that country became a proscribed country. These two proposed sub-sections would have given considerable flexibility to the Minister. I cannot see any purpose in their being changed at all. In the amended Bill now before the Senate the heading has been changed to `Determinations in relation to the Republic of South Africa'. The proposed new section in this Bill goes on to enshrine reference to the Republic of South Africa. In the original proposed new section 10 headed `Proscribed Countries', South Africa could have been dealt with in any case. It seems to me that the proposal in the Bill now before us is a vindictive measure attacking South Africa for specific purposes. That country could have been dealt with in the original proposed new section, if the Government chose to be so vindictive. I wonder what the Government's action would be with respect to Russia, for example, which for the past five years has been spending millions of dollars systematically slaughtering thousands of Afghanistan citizens. I could mention that from time to time it brutally invades neighbouring countries, killing millions of people and transporting even more to infamous gulags. The European and Asian countries where this has happened are too numerous to mention, but Hungary, Czechoslovakia, Lithuania, Latvia and Estonia have been treated in a very extraordinary and inhumane way by Russia. Why did the Government need to alter those two sub-sections in a very discriminating way? Let us look at our trade with the Republic of South Africa. South Africa is twenty-second on our list of countries to which we export and is twenty-fifth among countries from which we import. Of more importance, in a situation of deteriorating balance of payments, is our favourable balance of trade with that country over the years from 1981-82 to 1983-84 has been increasing. The balance of trade with South Africa in our favour is quite considerable and could be improved. The Government with its vindictive attitude is saying: `We don't worry about trade with other countries. We can afford to wipe off $150m or a couple of hundred million dollars worth of trade with that country'. I heard Senator Jones say yesterday that whites are killing blacks in South Africa. He is obviously not informed on the situation in that country because the majority of black people being killed in South Africa are being killed by black people. That is the truth of the matter. If the honourable senator had been a bit sensible he would have realised that that is the case. Senator Aulich —We would not know because we do not get free trips. Senator JESSOP —If my dear friend wants a free trip, I am sure that could be arranged. Many people on his side of the chamber have had free trips to the Eastern bloc countries. I am sure that that is a very commendable thing for them to do because they go over there and learn a little more about the incredible supression that the citizens of the communist countries are subject to. If they had the opportunity to go to other states in Africa as I have- Senator Lewis —They can go to Libya and Saudi Arabia. Senator JESSOP —Exactly. Colonel Gadaffi is an incredibly humane person. The honourable senator can go to Libya and examine his attitude to human rights. I am sure that would be an education for the honourable senator. Honourable senators should go to Africa, as I have done on one or two occasions. Prior to going to South Africa I went to black African states and I assure the honourable senator opposite that there are problems- Senator Aulich —I found when I went to South Africa that I had to pay my own way. Senator JESSOP —The honourable senator can do what he likes. I will pay my own way too. A lot of his colleagues do not. Senator Chipp —Settle down, fellows. Senator JESSOP —I thank Senator Chipp for walking in and taking an interest in this debate. I am sure we appreciate that. If honourable senators go to black African states they will find that apartheid exists in every black African state which they visit. It is an apartheid of a different character. It is a question of black tribe versus black tribe. There is no question of one vote one value in those countries either. Senator Aulich —It does not indulge in systematic economic exploitation. Senator JESSOP —My dear friend refers to economic exploitation. He is ignorant of the black states in that very important country. I am not talking about South Africa. Black Africa is a very significant part of the world, and I am afraid that a lot of ignorance is associated with it. I doubt very much whether the African continent has ever been discussed in the Australian Labor Party Executive as a concept, as a continent of importance to Australia. It certainly was not discussed when the Fraser Government was in power. The question of Africa was disregarded. But I assure honourable senators that the one vote one value ideal that is put forward by the Labor Party is an impossibility in any African state. In African states such as Tanzania there is an elitist voting system. The military people and the elite in Libya have the vote. The majority of the people have no vote at all. They have to do what they are told. Most of those states are unitary states, or military dictatorships, and to hell with the peasants and the general population; their rulers could not care less about them. South Africa is a different matter. Trading with South Africa is important, not only with respect to the revenue that we derive from it, but also-- Senator Aulich —That is very important. Senator JESSOP —The honourable senator does not know what he is talking about so he should go and have a look for himself. Senator Aulich —I have been there. Senator JESSOP —Has he? Well, he has not taken much notice otherwise he would have been-- Senator Aulich —As I said, I paid my own way there. Senator JESSOP —I am glad of that. Obviously, he is a wealthy person. Let us examine the situation in South Africa. That country spends no less than $517m a year on supporting northern black African states that require international aid. It readily provides that aid. The ethnic situation in South Africa mean that 13 or 14 different ethnic groups have to be accommodated. Nobody seems to have any regard for the progress that that country is trying to make in the face of international criticism. We are all opposed to apartheid but we pay no respect to that country for eliminating apartheid in sport. That has happened. We can talk to any sportsman who goes there and he will tell us that. No regard is had for the fact that that country has come to grips with at last-I must say that I was impatient about that-the pass laws and the system of group areas that we all abhor. No credit is given to the fact that the immorality Act is in the process of being abandoned and other progressive moves are in train. How far do the South Africans have to go before they are at least recognised as trying to respond to the criticisms and the lies that have been promulgated in this House? Yesterday Senator Jones accused white people of killing blacks. That was very extravagant and a stupid statement to make. To entomb the South African Government in this Bill is a disgrace. I just cannot follow it or support it. The coalition parties oppose trade sanctions on South Africa. This is the thin edge of the wedge. Do honourable senators opposite know why we oppose trade sanctions? We do so because sanctions against South Africa will inevitably mean disinvestment. I suppose the effect of that does not enter their tiny minds. Three quarters of a million black South Africans are employed by multinational companies. I do not think the small-minded Labor Party senators have regard for the influence that those multinational companies have had in improving the quality of life of the black people they employ, or the influence that they had on the establishment-- The ACTING DEPUTY PRESIDENT(Senator Haines) —Order, Senator Jessop. Senator JESSOP —I am talking about trade and I will now talk about trade unions. It is largely the influence of these countries trading with South Africa that has been responsible for the establishment of trade unions. A tremendous amount of pressure has been exerted on the South African Government by those countries. This was acknowledged, of course, by Chief Buthelezi, who you would say is an Uncle Tom. The ACTING DEPUTY PRESIDENT —Senator Jessop will direct his remarks through the chair. Senator JESSOP —Chief Buthelezi is very interested in trading with Australia. I believe that the measure incarcerated in this Bill will affect trade between Australia and South Africa. That will affect the jobs of 750,000 black South Africans and 1.5 million black foreigners who are working in that country. Chief Buthelezi is very concerned about that, being the leader of six million Zulus, the largest ethnic group within that unfortunate country. Senator Aulich —Unfortunate for whom? Senator JESSOP —By African standards, South Africans are very fortunate. If what the honourable senator says is true and having regard to the trading advantage that we have had with that country over the years, which is referred to in this Bill, why did at least 80,000 black people from the north crash the borders to get into South Africa? Why did they do so if it is such a bad place in which to live? If honourable senators had any brains or any sense they would appreciate that. However, let us look at trade. Senator Jones —Madam Acting Deputy President, I raise a point of order. I believe that Senator Jessop is getting away from the terms of the Bill. I ask that he address his remarks to the legislation before the chamber. The ACTING DEPUTY PRESIDENT(Senator Haines) —Order! There is no point of order. Senator Jessop, I must say that I have been somewhat amazed at the patience exercised by honourable senators on my right. I ask you to consider the fact that we are debating the Export Market Development Grants Amendment Bill 1985 and to address your remarks to that topic. Senator JESSOP —Thank you for your guidance, Madam Acting Deputy President. I think the quietness on the part of honourable senators on your right may be because they have guilty consciences and they realise that what I am saying is from a position of knowledge rather than stupidity. I will return to the Bill. I think the Minister for Finance (Senator Walsh), who is at the table-he is one of the few members of the front bench who have a knowledge of natural resources and the resources development of this country-has paid a tremendous amount of attention to these areas and has made some very sensible speeches about them which I totally endorse. I am sure that the Minister would be concerned that the stainless steel industry in Australia will be affected considerably if we cut off our trade with South Africa because we buy no less than 1,000 tonnes of chrome-one company alone-for the stainless steel industry of Australia, which enables us to be competitive on the world market. If we could not get chrome from South Africa, in the spirit of this piece of legislation, I believe that the stainless steel industry would become uncompetitive and our export income would languish as a result. Senator Aulich —A blood and chrome foreign policy. Senator JESSOP —I think there may be occasions in the future when the honourable senator will live to regret that statement. I am opposed to the stupidity of this legislation. Flexibility was provided in the original Act. There is no need to remove section 10, which gave the Minister the ability to identify proscribed countries and to enable him, through the Commonwealth of Australia Gazette, to make announce- ments in that respect. I object to the discrimination against one country in this measure. I believe there are elements in the Bill that we are discussing that will be detrimental to the export industries of our country. Senator CRICHTON-BROWNE(Western Australia)(8.54) —I gave an undertaking to the Minister for Industry, Technology and Commerce (Senator Button), who has responsibility for this legislation, that I would be brief. Of course, that prevents me from ranging over a number of issues which are of consequence to me, the first concerning the limitation of the minimum requirement being export expenditure of $5,000, the inhibiting influence that that will have on small business and the disproportionate advantage which has been granted to larger companies which are expending a great deal more. I have some reservations about the upper limit being $20m when, as I understand it, no exporting companies in Australia fit into the $20m to $60m of export income bracket. For that reason I would have thought that we could raise the level to encourage companies to go into the higher bracket. I turn to proposed new section 10 of the principal Act. It was not touched upon by any speakers, other than Senator Jessop, in this wide-ranging debate. It refers to proscription of countries which in the past have not been defined but which have now been defined: It is limited to South Africa. The effect of that provision is to give the Government the ability to impose wider, greater and more embracing de facto sanctions in the future. I imagine that the intention of that is to provide a legislative process for the Government's determination as to how it views the contribution it can make to changing the political system in South Africa. As I have said on one other occasion, unfortunately in debating matters such as these one has to start by saying that one finds an abhorrence towards apartheid. One finds a total abhorrence to the separate development in South Africa, not necessarily only the separate development but also the facilities that are provided to blacks as distinct from the facilities that are provided to whites. It is not simply a question of a dichotomy of facilities available but a question of the difference in the standard of services provided to both. The Australian Government having taken the course that it has in this legislation to impose de facto sanctions, we have to ask ourselves whether or not we are seeking from a distance to impose our moral values and our economic capacity upon that community to the advantage of the blacks or the whites and whether it is likely to change the present political process in that country. This leads one to ask whether this legislation will have an effect on blacks or on whites. I thoroughly endorse any legislation that is introduced in this Parliament which will in the short, medium or long term improve the political, economic and social standards of blacks in South Africa. I have always had reservations in view of the United Nations resolution that matters of a domestic nature in some countries ought not, quite properly, to be the responsibility of other countries. Having said that, I feel the legislation being introduced to impose sanctions will not help the lot of blacks. It may ultimately help the lot of whites. In my view, it will significantly deprive black people of their political, social and economic goals. There are those who would say: The blacks could not be any worse off; therefore why not just take them down the road a bit further? To me that is a very pious view. It is a subjective view, a view which is divorced from reality, and a view which the people who make that observation would not impose upon themselves. I take the view that, if blacks have jobs as a result of foreign investment, as a result of multinational corporations in South Africa at present-- Senator Sibraa —They want to vote. Senator CRICHTON-BROWNE —I take the honourable senator's point. Of course they want to vote. I was going to come to this later on. As I understand it, the surveys that have been carried out so far by a whole range of people, including Dr Shlemmer, who by any standards is not a supporter of the Government, demonstrate that those blacks who have jobs do not want to see disinvestment. They have had the benefit of multinational corporations creating jobs for them and they have had the benefit of the Sullivan code, which now is likely to be threatened as a result of disinvestment. In my view, the current level of violence in South Africa has as an underlying base the political system which, sadly, is locked into that country as a result of the determinations and legislative processes of the 1950s. However, the real causes of the present violence are socio-economic factors. I do not think that it would surprise honourable senators if I drew the analogy between the problems in the black townships of South Africa and the problems which are manifesting themselves now in suburbia London. I believe that they stem from the same causes; high unemployment and low socio-economic opportunities. Some of those black townships have a 60 per cent unemployment rate and youths as old as 20 years are still in primary school or slightly above primary school level. The 300,000 or 400,000 black youths who are now boycotting schools, wandering around street corners, are accidents waiting to happen. It is easy for political agitators to incite these people to violence. I believe that the imposition of sanctions can only increase the level of misery and deprivation that is presently wreaking itself upon the black community in South Africa. One has to recognise that a demographic explosion is going on in South Africa. At the present time the population, by the best count, is 24.8 million. By the year 2000 it is expected to reach 50 million; by 2020, 80 million; and by 2040, approximately 138 million people. In my view that demographic explosion will turn into a political time-bomb, irrespective of who is running the country-black, white or both-unless job creation can run at a level which is approximately able to keep up with the growing number of entrants into the labour market. Adequate economic growth cannot be maintained unless there is a continuing inflow of foreign capital. It is no secret that foreign investment in South Africa accounts for approximately one-third of South Africa's economic growth. There are those who naively, foolishly and dangerously believe that the investment tap can be turned on and off at will. I put to the Senate that investment lost to South Africa now is investment that certainly will not return. The vast majority of foreign companies investing in South Africa comply with the Sullivan code. Reverend Sullivan of the United States proposes that certain minimum standards apply to employees of multinational companies. In my view, the code has very significantly influenced and increased the standards of living, both at economic and social levels, of the vast majority of black employees. Of course, it has had a spill-over effect into the corporations which are basically to be found in South Africa-not only the multinationals. It concerns me that, with the withdrawal of these overseas companies, that stimulation might falter and stall. It is not without significance to note that since 1970 the average, in real terms, black wage in the non-agricultural sector has increased by 95 per cent, while in the same period the average white non-agricultural wage has increased by a mere 11 per cent. Senator Morris —Ninety five per cent of what? Senator CRICHTON-BROWNE —We are talking about absolute terms, if the honourable senator follows the simple economic proposition I am putting to him. While in 1970 the average white wage was 6.78 times higher than the average black wage, by 1984 that figure had fallen to 3.86 times. No one with 20:20 vision, looking retrospectively, is able to change that which has taken place. So there is no point in sitting in judgment or indicting the Government for its past sins. I hope that we are seeking to look forward constructively, in terms of the achievements and improvements that are taking place and will take place for the blacks vis-a-vis the whites, in terms of the social and economic conditions now and for the future. My view is that if there is a stalling of the economy through sanctions, there will be an increase of political pressure upon the Government to protect the living standards of its constitutents. If there is a contraction of the economy, it seems inevitable that the whites will pressure the Government to ensure that they are quarantined and insulated as much as possible from the effects of disinvestment. Unless there is a political change overnight, the net result will be further violence, protests, suppression and chaos in that country, along with growing poverty. I suspect that is the logical conclusion at which one arrives in looking at the argument for sanctions, which certainly will improve the lot of the black elite but will lead to growing violence and ultimately to tragic black and white bloodshed and will plunge South Africa into a continuing downward spiral of poverty for decades to come. Whilst it is not easy to be precise about these figures, some very good surveys have been done which might be described as empirical evidence. It seems to me from the figures I have analysed carefully that in the event sanctions on future investment are 50 per cent effective-one could get into a further debate about the effectiveness of sanctions-it will deprive 56,000 black people of employment and will decrease their disposable income by $US130m. That is not likely to improve the lot of the blacks nor to cause a change in the political conditions of that country in the short or immediate term. As I said earlier, Professor Shlemmer, who is totally opposed to apartheid, has done a number of surveys amongst employed blacks, as distinct from the poor, wretched unemployed people who represent 60 per cent of the population in the black townships. His surveys show that over 70 per cent of those in work at the present time, of course, are opposed to sanctions. The reasons for that are not hard to understand. In my view, the threat of sanctions is probably more destabilising than the sanctions themselves. In the same way that in this country- Senator Button —That is an outrageous attack on the Reagan Government in the United States, and you know it, because that is what it is doing. Senator CRICHTON-BROWNE —I think President Reagan's judgment is that there should not be sanctions, but when he is faced with a hostile Congress, which comes up for election every two years, and when he has to get other legislation through Congress, he naturally bows to the pressure of Congress. He has a Republican controlled Senate and even the Senate is moving for pretty strict sanctions. Of course Ronald Reagan is a very pragmatic politician surrounded by very pragmatic advisers. He has made a judgment and he has had to give some ground, in the same way as Prime Minister Thatcher, who is totally opposed to sanctions, has also now had to give some ground. Senator Button —She will be giving a lot of ground shortly; you watch. Senator CRICHTON-BROWNE —She may be. I do not make judgments about that. The Minister is more informed than I am. It is not without consequence to note that 20 per cent of United Kingdom overseas investment resides in South Africa. If for no other reason, that is a very good reason for the United Kingdom Government to move slowly in its determinations. I always find it fascinating that it is so easy for governments who are losing nothing economically to talk about sanctions, but when it is going to cost them something they think twice about sanctions. I have not forgotten the debate on our imposing sanctions on the Union of Soviet Socialist Republics because of its invasion of Afghanistan; nor have I forgotten the results. First, they proved to be a failure and, secondly, they were going to hurt us, not the USSR. So we pragmatically reconsidered our position. I believe that the threat of sanctions is more destabilising. In the same way as mining companies have found that they do not know what government determinations and decisions are with respect to taxes, royalties and embargoes on the export of uranium, companies find themselves in the same difficulty with sanctions. Given some guidelines, they will make the judgments. I think the threat of sanctions is likely to be more destabilising to South Africa than the sanctions themselves. The tragedy of a failed economy in South Africa is that we will not have a political change by evolution; we will have a political change by revolution. There are the moderates, the Buthelezis and a whole range of black leaders who want a change by evolution, but that is not wanted by the African National Congress, the United Democratic Front and the radicals in South Africa. I do not remember an occasion on which a Marxist organisation, or an organisation influenced to a large degree by the Russians, ever won the hearts and minds of the people by way of evolutionary reforms in the political system. It always has to be by revolution. So it suits those people to have sanctions because they know that the more harsh they are on the blacks the more volatile they will be and the more susceptible they will be to revolution. That might seem naive and it might not be objectionable to some, but it is the reality, the truth, and it is a statement of history. Not only will the sanctions significantly affect South Africa; they will also affect the bordering states. One has to ask why, if things are so bad in South Africa, 135,000 people from the northern states in the proximity of South Africa are going to South Africa for work. Why are there 1.25 million illegal immigrants in South Africa at present, having fled from the north to the south? They are doing it because that is where the jobs are. But that is not to say in any way that either I or anybody else who puts that proposition is endorsing the political system in South Africa-quite the contrary. Senator Aulich —Oh, no! Senator CRICHTON-BROWNE —I am sorry. Is the honourable senator interjecting? If he is he must must articulate what he is saying and stop mumbling because I cannot pick up his points if he is not saying something constructive. I am giving it to him as it is; that is the truth. It is interesting that Bishop Tutu is calling for sanctions. He is quarantined, insulated and isolated. He gets a very comfortable cheque from the Anglican Church. He lives in very comfortable circumstances in Pretoria and Soweto. He managed to have his three children educated in the United States of America under what I would describe, without being too unkind, as doubtful scholarships. Yet he is calling for boycotts in the schools. We have Allan Boesak, the patron and founder of the UDF. Where are his children? They are in the Immaculater College, a private school. None of the private schools are subject to sanctions, or more particularly to boycotts. The tragedy is that the vast majority of these black students in the higher levels of education at government schools are on scholarships. One year of failing means that they lose forever that chance to improve their educational, economic and social standards. But because of intimidation at these schools these kids are no longer able to proceed with their education. To me that is the saddest thing. Last year the South African Government provided $2 billion-inadequate as it may be-for black education only to find that 325 schools were burned down. Perhaps the reason they were burned down was the political system. All I am saying that that makes it terribly difficult to increase the level of facilities for education in that country. Three years ago the ratio of expenditure on education in South Africa between blacks and whites was 7 : 1. In three years it has been reduced, as I recall it, to 3 : 1. Honourable Senators might ask why it is not equal today. I really do not have the time to labour through the reasons for that. One has to look to what political reforms are taking place in that country and at what effect sanctions and boycotts would have upon the black people. I find it tragic and sad that we sit here in Australia insulated from the inherent and intrinsic difficulties that will be cast upon these black people by way of our unilateral decision-despite their overwhelming opposition-to impose sanctions. Yet there are those who say that the black people cannot be any worse off. They should tell that to somebody who has a job now, at a time when there is 60 per cent unemployment in Soweto, to somebody who has a nice little home he is carefully paying off, or to a black man who is sending his children to a private school at great expense to himself. As honourable senators all know, the private schools are integrated-there is no segregation. Yet we are saying that the black South Africans cannot be any worse off. That, to me, is an indictment upon the intellectual level of commitment that we have made in respect of our political decisions. For a policy which aggregates to itself moral exclusivity in the battle against racism, disinvestment is in my view remarkably poorly thought through. Good intentions, as we all know, are the guarantees of paving the way to Hell. In my view of implied morality what really matters is the effect of that policy. Those who invoke morality of witness-which is what we are doing-should not impose the cost of their protest upon others. That is exactly what we are doing in Australia. Divorced and removed from the reality, we are committed by this piece of legislation, or what could be its effect in combination with others, to plunging the black people of South Africa further and further into poverty and deprivation and, in my view, to developing in the minds of the Boers a laager mentality which is certainly not likely to move them to a change in their political system. It is guaranteeing a change in the political system ultimately by revolution and not evolution. Everyone who cares for South Africa wants to see change by evolution. I do not think that there is a person on either side of this chamber who supports aparthied, separate development and a political system which gives fewer rights to one group than another, whether it be on the basis of colour, creed, class or religion. Senator Aulich —How do you stand on one person one vote? Senator CRICHTON-BROWNE —I am one of those who take the view that there ought to be one vote of equal value for everyone in South Africa. I qualify that by saying that it is a country of minorities. There are 10 quite disparate black groups. There are the Xhosas, the Tswanas, the Zulus-one can go through the whole list. They are all quite separate in their attitude towards each other. Then there are the coloureds, the Indians, the Chinese and the whites. I should like someone in this Senate to find for me a panacea which guarantees, through the political institution, security of rights for all those minority groups. When that can be done, that will be an answer to the problems in South Africa. In the meantime, by introducing legislation of the type before us tonight we are depriving the black people of South Africa of at least that minimal basic right which they have at present; that is, to work, to achieve, to receive, to gain, to benefit and to improve. We are seeking to remove that as a result or our unilateral arbitrary, sanctimonious, second-class morality, which we seek to impose upon them while we ourselves, as I said earlier, are insulated from the effects. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.22) —The Senate is, believe it or not, debating the Export Market Development Grants Amendment Bill. I thank honourable senators generally for their contributions to the debate. Earlier in the debate the contributions from both sides were quite relevant and interesting. But I suppose that it is inevitable that a long debate such as this deteriorates as it goes along. I want to return to the purposes of the legislation and to refer briefly to the speeches made by Senators Durack, Parer and Vigor. The purposes of the legislation are set out quite clearly in the second reading speech. Some criticisms have been made of the way in which the legislation was introduced and about the transitional provisions which apply. I must say that I think there is some validity in some of those criticisms. They are matters which the Government must examine, and those matters were raised seriously in Senator Durack's contribution, and by Senator Vigor. Senator Vigor made a very forceful speech, fortified by eloquent historical analysis of what happened in the United States of America in the 1930s-a speech which filled me with terror. In a sense, I was disappointed in it, because it was a fairly conservative speech for a senator who is rapidly emerging as a radical sort of chap. Senator Lewis —Fair dinkum, you would have to be the greatest con man in this place; a real con man, Button. Senator BUTTON —No. Senator Lewis —Oh, come on! Senator BUTTON —Senator Vigor made a very vigorous speech, but I thought it was conservative in its approach. I think that the sad note about it was that Senator Vigor really seemed to be offering what is sometimes a classic solution in this place: If one has a problem, throw money at it. Senator Lewis —That is the Labor Party solution, isn't it? Senator BUTTON —That interjection from Senator Lewis scarcely stands up, because that is precisely what this legislation is not about, and if Senator Lewis were aware of the contents of the debate and had heard the contributions from his own side of the House, he would know that one of the complaints is that not enough money is thrown at this problem. On the other hand, some honourable senators opposite congratulated the Government on the fact that it had curtailed what has been regarded as a bit of an unfortunate scheme, as it developed over a number of years. Let me refer to the report of the National Export Marketing Strategy Panel, the Ferris report. The panel was set up to look at the export market development grants scheme. I quote from the second reading speech because it gives a very explicit statement of what that panel found: The outcome of this examination was quite unequivocal. The Ferris Panel concluded that the existing EMDG scheme was badly designed and there was a need for significant reforms if the scheme is to provide a positive inducement to genuine exporters in a cost-effective and measureable way. The panel made 15 recommendations designed to make the scheme more accountable and `results orientated', to remove the backlog of unprocessed claims and to tighten up and streamline certain administrative procedures . . . Almost 50% of claimants were shown to be dropping out of the scheme after three years, having generated little or no export earnings. The scheme enabled recipients to obtain grants of up to $200,000 per year for the first three years without necessarily generating any export earnings at all. Thereafter, claimants had to have export earnings of only $25,000 ($10,000 in the case of industrial property rights and know-how) to be eligible for further grants. That was what the scheme was all about and that, basically, was what led the Government to cut back expenditure on the scheme by about $80m, I think. That view of the Ferris Panel was supplemented by a survey done by the Department of Trade. During the debate Senator Vigor asked, I think, what the Department of Trade survey involved. It involved a survey of 700 recipients of benefits under the scheme-about 10 per cent of the total recipients-and that survey was not very encouraging. Amongst other things, it found that a number of claimants probably did not exist. They could not be found registered in the corporate affairs registers, and so on. It was those things which led to the Government making the changes that have been made. We believe it is a much leaner and more cost-effective scheme than its predecessor. I do not wish to elaborate on anything else which was said in the course of the discussion, except to refer to Senator Durack's speech, which dealt with a number of other issues which are, I believe, unrelated to the Bill itself but which I suppose were designed to test out the Opposition's latest wages policy and latest taxation policy-the flavour of the week-and to see how they would go in this debate. They did not go very well, so there will be new ones next week. When the Opposition talks about the capacity of Australian industry to export, it must face up to three quite simple and fundamental facts. I know that they stick in the craw, but I shall say them again just so that Opposition senators will not forget them. Those three facts are that Australian industry is now enjoying the highest level- Senator Lewis —Thanks to the wages pause, the recovery from the drought and the recovery from the world recession. Senator BUTTON —Is that right? Senator Lewis —Yes; that's right. Senator BUTTON —That is a very simplistic view of the world. The honourable senator has been working very hard on that for a few years now but it really does not stand up. It might have stood up for the first six months, but not for two and a half years. Let me make the points I wanted to make: First, profit levels of Australian businesses are at a record level since 1971. Secondly, real unit labour costs are at the 1968 level. Thirdly, although the level of industrial unrest in this country is still not good-it is still bad-it is at its best level for 17 years. We have the lowest level of industrial disputation we have had for 17 years. I am not saying for a moment that any of those three things is satisfactory. I am saying that they are facts that members of the Opposition have to confront when they niggle about issues such as whether people should get an additional bit of export incentive and so on. Two basic criticisms of this legislation are inherent in the amendments which Senator Vigor has seen fit to circulate. One is his concern about the fact that people have to pay the first $5,000 of export promotion expense before getting the benefits of this scheme. The other criticism relates to people who enjoy $20m worth of export sales in a year and who Senator Vigor said should not be excluded from the benefits of the scheme. As I said at the beginning, we set out to reduce the size and scope of this scheme to make it leaner and more efficient. We believe that we have done that. I know that Senator Vigor has two amendments, the first of which the Government is not in any disagreement about in terms of its thrust and what it is trying to do. But we think that the second amendment is, in a sense, misguided. Senator Vigor read into the Hansard some letters which relate to this problem. I guess that one can always find letters like that. There will always be people who will be slightly less well off in a change of this kind. But I am afraid that we cannot cater for everybody in legislation of this sort. I commend the legislation to the Senate. The Government will not accept the Opposition's amendment to the motion for the second reading. It is a bit of carping. There is some validity in some of it and we will certainly look at some of the issues it raises. However, we do not think it is necesary to pass an amendment of that kind and we will oppose it. Question put: That the words proposed to be added (Senator Durack's amendment) be added. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 31 —— Majority . . . . . . . . . 6 —— Baume, Michael Missen, A. J. Baume, Peter Parer, W. R. Boswell, R. L. D. Puplick, C. J. G. Brownhill, D. G. C. Rae, PeterCarrick, Sir John Reid, M. E. (Teller)Collard, S. J. Short, J. R. Durack, P. D. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Vanstone, A. E. Hill, R. Walters, M. S. Lewis, A. W. R. Watson, J. O. W. MacGibbon, D. J. Withers, R. G. Messner, A, J. Aulich, T. Grimes, D. J. Black, J. R. Haines, J. Bolkus, N. Jones, G. N. Button, J. N. McClelland, DouglasChilds, B. K. McIntosh, G. D. (Teller)Chipp, D. L. Mason, C. V. J. Coates, J. Richardson, G. F. Colston, M. A. Robertson, E. A. Cooney, B. Sanders, N. K. Crowley, R. A. Sibraa, K. W. Devlin, R. Siddons, J. R. Evans, Gareth Tate, M. C. Foreman, D. J. Vigor, D. B. Georges, G. Walsh, P. A. Gietzelt, A. T. Zakharov, A. O. Giles, P. J. Archer, B. R. Coleman, R. N. Knowles, S. C. Ryan, S. M. Kilgariff, B. F. Maguire, G. R. Chaney, F. M. Cook, P. F. S. Bjelke-Petersen, F. I. Reynolds, M. Crichton-Browne, N. A. Ray, RobertJessop, D. S. McKiernan, J. P. Sheil, G. Elstob, R. C. Question so resolved in the negative. Original question resolved in the affirmative. Bill read a second time. The Bill. Senator VIGOR(South Australia)(9.41) —by leave-I move: (1) Clause 12, proposed new paragraph 14 (4) (a), leave out the paragraph, insert: `the export earnings of that person- (i) in that grant year exceed $20,000,000 or (ii) in the 3 grant years immediately preceding that grant year exceeded $60,000,000.'. (3) Clause 12, after proposed new sub-section 14 (4), insert the following sub-sections: `(4A) Where a person first submits a claim under section 13, that person shall elect, in that claim, to have that claim determined by the application of sub-paragraph (4) (a) (i) or by the application of sub-paragraph (4) (a) (ii). `(4B) Where a person makes an election under sub-section (4A), any claim submitted under section 13 by that person shall be determined in accordance with that election.'. The whole idea of the first amendment is to warn people that next year they will no longer be able to get a grant. Under the Government scheme, when an exporter reaches $20m in exports in one year his grant cuts out. We want to make certain that that person will know the year before that he has reached $60m over three years so that henceforth he will not qualify, and so not plan for that grant. This amendment will handle the case I mentioned during my speech in the second reading debate of Kimberley Seeds, where a very fast growing export income may cross the $20m threshold. Amendment No. (1) suggests that we offer two options: The exporter can either earn up to $20m in exports in one year or choose the option in which the cut-off point comes at $60m in the three previous years. Amendment No. (3) says that an exporter can choose to average his earnings; but, once he has chosen the option of averaging export earnings over three years instead of using the single year, he is stuck with that choice. Basically, this is a provision to give an exporter a choice of threshold type. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.45) —The Government does not support these amendments for reasons that I have indicated to Senator Vigor and to which I referred briefly in the course of the second reading debate. These amendments provide an option for the export earning cut-off point to be $60m averaged over three years immediately preceding the grant. This would involve additional expenditure in the early years of the scheme. I give as an example a firm with export earnings of, say, $25m. It could be eligible because its exports in the three preceding grant years did not exceed $60m. The Department of Trade has analysed the scheme and I am told that generally speaking firms with large export earnings are entitled to the maximum grant of $200,000, so it would not take many firms in this category to lead to a not insubstantial increase in the cost of the scheme. The Department's research showed that less than 5 per cent, or some 300 claimants-generally the large exporters-were receiving almost one-third of the total EMDGs. That was one of the factors leading to our amendments to the scheme. The very fact that these amendments are designed to allow some claimants to continue in the scheme when they would otherwise be excluded surely indicates that the amendments will add costs to the scheme. I refer again-quite apart from that example-to the administrative costs that would be added to the scheme because of the checking and validation of export earnings which would be required over three years rather than over one year as in the scheme proposed in the legislation. As I said in the second reading debate, in terms of allocation of Government resources and finances one is entitled to expect that a firm with export earnings of $20m or more can surely stand on its own feet. It will be less comfortable standing on its own feet under the revised scheme, but it is still surely possible for it to do so. I am told that the after-tax value of a $200,000 EMDG represents only 0.54 per cent of export earnings of $20m. Those figures are important in order to see the parameters of Senator Vigor's proposal. For those reasons the Government cannot accept these amendments. Question put: That the amendments (Senator Vigor's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 48 —— Majority . . . . . . . . . 42 —— Chipp. D. L. Sanders, N. K. Haines, J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Aulich, T. Hill, R. Baume, Michael Jones, G. N. Baume, Peter Lewis, A. W. R. Black, J. R. MacGibbon, D. J. Bolkus, N. McIntosh, G. D. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Missen, A. J. Button, J. N. Morris, J. Carrick, Sir John Parer, W. R. Childs, B. K. Puplick, C. J. G. Coates, J. Rae, PeterCollard, S. J. Reid, M. E. (Teller)Colston, M. A. Richardson, G. F. Cooney, B. Robertson, E. A. Crowley, R. A. Short, J. R. Devlin, R. Sibraa, K. W. Evans, Gareth Tate, M. C. Foreman, D. J. Teague, B. C. Georges, G. Townley, M. Gietzelt, A. T. Vanstone, A. E. Giles, P. J. Walters, M. S. Grimes, D. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Question so resolved in the negative. Senator VIGOR(South Australia)(9.54) —I move: (4) After clause 15, add the following clause: `15A. The Principal Act is amended by adding after Part II the following Part. `PART IIA-SMALL EXPORTERS GRANTS Grants to small exporters ``20A. (1) A person may submit to the Board a plan of proposed eligible expenditure, not exceeding $10,000 in any year, to be incurred by that person during one or more years. ``(2) The Board may approve a plan submitted under sub-section (1), or may approve that plan subject to such modifications of the plan as the Board considers desirable after consultation with the person who submitted the plan. ``(3) Where a person submits a claim under sub-section 13 (1), and the Board has, under sub-section (2), approved, or approved with modifications, a plan relating to the eligible expenditure which is the subject of that claim, this Act has application to that claim as if paragraph 14 (4) (b) were omitted. ``(4) Where a claim to which sub-section (3) applies is submitted after 1 July 1986, notwithstanding any other provisions of this Act payment of grant in respect of that claim may be made by quarterly instalments. ``(5) Where the Board has, under sub-section (2), approved, or approved with modifications, a plan submitted under sub-section (1), the person who submitted that plan submitted under sub-section (1), the person who submitted that plan shall provide to the Board, not later than 12 months after the Board approved, or approved with modifications, that plan, a statement of progress made by that person in exporting eligible goods.''. The aim of this amendment is to offer a possibility for grants to the small exporters who have been disadvantaged by the $5,000 limit. We have heard much crying and moaning from the Liberal and National parties about the problem of these people. We are trying here to solve that problem by offering a scheme which cannot be distorted or used as a rort. The idea of the scheme is that there be pre-notification of the type of expenditure planned, that this would apply to exporters who are not going to claim more than $10,000 in any year from the scheme and that these people, provided they have an approved plan for their expenditure, would have the $5,000 limit waived. We do not believe that they should have an automatic right to claim below that $5,000 level. We believe it is very important that the new Trade Commission should check their plans for export marketing and help them by making quarterly payments after they actually make the expenditure. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(9.56) —Senator Vigor has discussed this amendment with me and I understand the spirit and thrust of it, but unhappily, having made that concession, I cannot make any further concessions and the Government will be opposing the amendment. The proposed amendment is designed to cover claimants with eligible expenditure not exceeding $10,000 in any year and to introduce a prior approval scheme for these claimants. That is a nice thought, but based on the evaluation of the export market development grants scheme by the Department of Trade it is estimated that there would be some 3,900 claimants in that category. When we add to the large number of claimants there would be the fact that Senator Vigor is also proposing quarterly payments of the claims, we see the size of the administrative problem that would be created, involving an extremely large staff, particularly staff with the skills to evaluate marketing proposals. We would be establishing a very large bureaucratic structure to deal with that. I remind Senator Vigor of the Ferris National Export Marketing Strategy Panel's findings about the performance and success rate of many claimants who would fall, no doubt, within this category. Having said that, I say on behalf of the Government that we accept that there are some exporters who will be disadvantaged by the $5,000 expenditure requirement-exporters who have considerable export potential and would seem to be deserving of Government support. Amongst the many disadvantaged there will be some in that category. What the Government is in fact saying, I confess, is that we may be disadvantaging a few of those in order to lessen the cost of the scheme, the administrative over-burden which the scheme would involve, if it was amended in accordance with Senator Vigor's amendment, and so on. Senator Chipp —How do you know it is only a few? How do you know it is not many? Senator BUTTON —I think on the basis of past performance it is pretty safe to say that there would be less rather than more. I cannot put it any more precisely than that. I think it would be a relatively small percentage on the basis of past performance. Senator Vigor —Thirty-six per cent of people are in that category. Senator BUTTON —I always find it inelegant when people interject when I am making a point which is basically in agreement with them. I do not mind it when I am disagreeing with them; I am fair game then. I am trying to say that there is a lot of wisdom in what Senator Vigor is putting-just not enough! I was going on to say that the National Export Marketing Strategy Panel, chaired by Mr Bill Ferris, recognised this and to cover that point, it recommended the introduction of supplementary export funds. Because the Ferris Panel made such a recommendation and because Senator Vigor has moved this amendment and gone to the trouble to re-elevate the point, my colleague the Minister for Trade (Mr Dawkins) will be requesting the Australian Trade Commission, when it is established and operating as of 1 January next year, to come forward with proposals for export market development schemes tailored specifically to assist small new exporters and exporters of high technology products. I concede that the details of such arrangements would have to be worked out. They would not necessarily be of the detail suggested in Senator Vigor's amendment. I expect that they would be based on the Commission's prior approval of applicants' export promotional plans, and any such scheme would need to be very carefully developed to ensure its cost effectiveness and administrative feasibility. That is an area in respect of which we criticise Senator Vigor's suggestion. We recognise some merit in Senator Vigor's concern. We do not agree with the specific method that he has devised for trying to meet that concern. The Minister for Trade has asked me to state that he has undertaken to ask the Trade Commission, as soon as it is established, to seek a remedy to this problem. For those reasons, I do not think the Government is in a position to accept this amendment. The cost and the administrative burden would be such that it would run very much contrary to the leaned-down version of the scheme which we are currently advocating. Senator VIGOR(South Australia)(10.03) —I thank the Minister for Industry, Technology and Commerce (Senator Button) for his kind words and for his consideration of the deep problem that exists within the Bill. Because of this concern and the undertaking that the Minister has given that the Minister for Trade will introduce a scheme as soon as is practicable in a form administratively suitable to the Australian Trade Commission, I am delighted to say that the Australian Democrats will not be calling for a division. We accept the Minister's undertaking and thank him for his consideration in these matters, which I am sure will be a great consolation to those people who are planning to start exporting. Amendment negatived. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Button) read a third time. Debate resumed from 16 September, on motion by Senator Gietzelt: That the Bill be now read a second time. The ACTING DEPUTY PRESIDENT(Senator Colston) —I understand that it is the wish of the Senate to have a cognate debate covering this Bill, the Foreign Fishing Boats Levy Amendment Bill 1985 and the Fisheries Agreements (Payments) Amendment Bill 1985. Senator COLLARD(Queensland-Leader of the National Party of Australia)(10.06) —The Opposition supports the Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill 1985, the Foreign Fishing Boats Levy Amendment Bill 1985 and the Fisheries Agreements (Payments) Amendment Bill 1985. These tidying-up Bills are three reasonably minor Bills, although the voluntary adjustment scheme Bill is of some moment for the northern prawn fishing industry in Queensland. The levy and payments Bills relate to methods by which licences are issued to and payments received from foreign fishing vessels operating within the Australian 200-mile limit. These Bills are all consequential on agreements entered into after the 200-mile commercial zone was formed around our country. With regard to the levy Bill, it is pleasing to note that the Government realises the need to simplify the system of collecting levies and the administrative processes needed to exempt a foreign fishing vessel from levy charges where such a vessel generates significant benefits for Australia. The amendment proposed in clause 4 of the Bill, cuts across some of the complexities and delays in settling formal agreements and will simplify the processes of levy collection. The amendments proposed in clauses 5 and 6 really close a legal loophole which has been found to exist in the payment of foreign levies. As I understand it, where agreement was reached for a certain number of fishing vessels to enter the 200-mile zone and a lesser number entered, charges were levied only per fishing vessel and the total fee was not extracted. The amendments proposed in clauses 5 and 6 close that loophole. So no matter how many fishing vessels come in, the charge levied will be that pertaining to the original number of vessels permitted to enter the zone. The payments Bill complements previous amendments by extending power to refuse licences to cover fisheries agreements between Australia and one or more parties which are not necessarily foreign governments. This means that if licence fees are not paid and if a person or a company-not necessarily a foreign government-is liable, the Bill will tidy up that situation because the Australian Government can refuse to grant licences. The point should be made that licence fee collections are expected to go beyond the $3m this year. As I understand it, that money will just go straight into Consolidated Revenue. I think that it could be better used for research or something to do with the fishing industry in this country. I must mention a point made in the other place by my colleague the Hon. Ralph Hunt. When I was on the Senate Standing Committee for Trade and Commerce, as it was then called, we looked into the fishing industry. The idea of licensing and the different States and Commonwealth licensing requirements become almost ludicrous. An Australian motorist can have one driver's licence and that can take him anywhere in Australia. Yet a typical fishing vessel must have one Commonwealth and three State licences for the boat, one Commonwealth and three State licences for the skipper and, if there is a crew of ten, three licences for each member of the crew. There needs to be some tidying up of that situation. I cannot take the credit for the phrase because it was the Hon. Ralph Hunt who said that we were becoming rather bound up by licences and that Australia was becoming a `constipated' country. That is certainly something that could be looked at. It is crazy, ludicrous, whatever adjective we like to use, that such a situation could exist in this Commonwealth. The Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill recognises the over-capacity of the northern prawn fishing industry and guarantees a loan of $5m as an adjustment loan which will enable those people who want out to get out and to be compensated. The loan will be raised through commercial channels and repaid by those remaining in the industry over a period. That makes good sense. The Minister for Veterans' Affairs (Senator Gietzelt), in his second reading speech, noted: . . . the Government decided, in view of the particularly severe impact that fuel cost increases have had on prawn fisheries across northern Australia, to provide grants of $3m a year for the three years 1985-86 to 1987-88 for adjustment assistance. The full $3m of the 1985-86 grant is to go to the voluntary adjustment scheme for the northern prawn fishery. Fuel is, of course, a tremendous cost. I understand it is upwards of 40 per cent of the costs of those people operating in the northern prawn fishery. It must be said that the removal of the rebate on fuel excise was extremely damaging to the industry. The recent Budget decison to reverse this situation only righted wrongs which were caused by this Government in the 1983 Budget. With those few comments-I do not think anything I have said could be called even a homily this time-I indicate that the Opposition will support these three pieces of legislation. It empowers the Minister to declare foreign boats operated by, or on the instruction of, an Australian for the benefit of Australia, not subject to the levy. Senator HAINES(South Australia)(10.13) —The Australian Democrats have no objections to the Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill, the Foreign Fishing Boats Levy Amendment Bill or the Fisheries Agreements (Payments) Amendment Bill, with which we are dealing cognately. I simply say, at the outset, that the extraordinary titles for some pieces of legislation that the Parliament can dream up never cease to amaze me. The nine-word title-I presume that is the short title-of the Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill 1985 is a speech in itself. I suggest that maybe the Paul Hogan Prawn Bill would have been just as appropriate, particularly given what the Bill is all about. I have no comments to make on the Fisheries Agreements (Payments) Amendment Bill 1985. I turn my attention for a moment to the Foreign Fishing Boats Levy Amendment Bill 1985. This Bill drew the attention in several ways of the Standing Committee on the Scrutiny of Bills. The Bill amends the principal Act to provide clear legal authority for collecting the levies specified in agreements licensing foreign boats. It empowers the Minister to declare foreign boats operated by, or on the instruction of, an Australian for the benefit of Australia, not subject to the levy. The two clauses that were of some concern to the Scrutiny of Bills Committee are clauses 4 and 5. Clause 4 is criticised in Alert Digest No. 9 of the Scrutiny of Bills Committee because it contains an element of non-reviewable discretion. It is the habit of this Committee to draw the Senate's attention to things that we believe may not be justifiable, not necessary, or perhaps not beneficial to some people. The Minister can make under clause 4 a declaration for non- payment of the levy in the circumstances that I outlined a moment ago regarding foreign boats operated by, or on the instruction of, an Australian for the benefit of Australia. Those declarations will be tabled, but they will not be subject to parliamentary disallowance. The Parliament habitually takes a fairly dim view of allowing too many decisions to be made by Ministers which are not reviewable by the Parliament when they are made. This one is no exception. Of course, even if the Parliament were in a position to disallow the regulation or the decision, I am not sure that it would be particularly well placed to judge anyway what circumstances were appropriate and what were not for declaration of non-payment, as we are somewhat limited in our resources and knowledge of such arcane matters as foreign fishing boats. Nevertheless, it applies an additional review procedure for people to ensure that decisions are not arbitrarily made with no appeal provision following. Furthermore, in clause 4 there is no provision for review when the Minister refuses to make a declaration of any other sort; that is, there is no provision for a review of any other sort when the Minister refuses to make the sort of declaration that we are concerned with here. The Scrutiny of Bills Committee suggests that the review jurisdiction should be conferred on an independent quasi-judicial body like the Administrative Appeals Tribunal and, accordingly, drew the clause to the attention of honourable senators because, as it said, it may be considered to make rights, liberties and/or obligations unduly dependent on non-reviewable administrative decisions. Clause 5 is also criticised by the Committee on the basis of inappropriate delegation of legislative power. Where the Minister enters into an agreement with a person other than a foreign government, the amount of the levy is to be the amount specified in the agreement. The agreements are tabled in Parliament but are not subject to disallowance. Senator Grimes —Yes, they are. Senator HAINES —Was that information forwarded to the Scrutiny of Bills Committee? It has erred drastically if it was not. Senator Grimes —I will tell you about it later. Senator HAINES —I thank the Minister. I am duly appreciative. To the Committee, however, there was a problem of inappropriate delegation of legislative power with regard to these agreements and in review by the Parliament. The background, as I understand it, is that three kinds of foreign boats exist for the purposes of this Act. What is known, I gather, as the `foreign boat proper' is the most numerous. These boats apparently fish here and then go home with their catch, which seems a fairly reasonable thing for them to do. The Minister enters into agreements with the foreign government corporations and the amount of the access fee is the major item in the negotiation. The amount is a percentage of the estimated value of the catch on the fairly obvious grounds, I would have thought, that the Government does not get much of a chance to negotiate after the damn things have been caught because the others head for home as fast as possible-also with very good reason, I would have thought. Senator Boswell —They have monitors on board. Senator HAINES —Do they count fish? Senator Boswell —Yes. Senator HAINES —I cannot cope with that. Senator Collard —It is a bit late. Senator HAINES —Yes, it is too late at night to cope with the concept of people on foreign fishing boats counting fish. I much prefer the idea that they all do it by negotiation on the estimated value of the catch. Senator Boswell —The honour system. Senator HAINES —Can we trust a fish? I think we had better get back to the debate and the questions that the Scrutiny of Bills Committee raised. There are two other classes of foreign boats which I will not launch into in case they also have people on them catching fish. Senator Collard —Vessels, not boats. Senator HAINES —It says `boats' in the document, but I will take the honourable senator's superior knowledge. The Committee in its Alert Digest No. 9 also said: Clause 5 would insert a new sub-section 5 (2) providing that where the Minister has entered into an agreement with a person other than a foreign government with respect to the granting of licences to foreign fishing boats the amount of the foreign fishing boats levy- It says boats, Senator, not vessels- is to be the amount specified in that agreement. As a member of that Committee I implicitly believe everything that it says. The Committee stated further: The effect of this clause, taken together with the Fisheries Agreements (Payments) Act 1981 as amended by the Fisheries Agreements (Payments) Bill 1985- I can understand why Senator Macklin went overseas- is that the Parliament has delegated to the Minister the power to set, by agreement, the amount of the foreign fishing boat levy in certain cases. By virtue of section 9B of the Fisheries Act 1952 such agreements are tabled in Parliament but they are not subject to disallowance. The Committee recognises that a similar regime already applies in respect of amounts in lieu of the foreign fishing boats levy payable under agreements entered into by the Minister and foreign Governments. However the Committee queries whether the effect of these arrangements is that the Parliament delegates its taxation powers in this area without retaining any effective control over the exercise of those powers. That, I take it, is something that the Minister was disagreeing with a moment ago. The Committee also stated: The Committee draws the clause to the attention of Senators in that it may be considered an inappropriate delegation of legislative power. All that I would like to hear from the Minister is some reason why the Scrutiny of Bills Committee is wrong and why there is no need to take any action to amend clauses 4 or 5 so that there is some review or appeals mechanism for people affected by decisions made by Ministers, which apparently are not subject to parliamentary review, scrutiny or disallowance. Senator BOSWELL(Queensland)(10.23) —Tonight we are debating three Bills-the Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill, the Foreign Fishing Boats Levy Amendment Bill and the Fisheries Agreements (Payments) Amendment Bill. Foreign fishing vessels must pay a levy on the grant of a licence unless they fall under an exemption in the legislation. At present, exempted vessels are those licensed under an agreement with the governments of Japan and the Republic of Korea and those deemed to be Australian vessels as they are temporarily imported for use by and are under the control of Australians. Also excluded from paying the levy are those foreign vessels which, by formal agreement, are required to provide other benefits to Australia. The amendment of section 4 of the Foreign Fishing Boats Levy Amendment Bill simplifies the process for exemption from the levy of foreign vessels conferring benefits on Australia and also boats operated by or on behalf of Australian residents. This new process will involve a notice from the Minister in the Commonwealth of Australia Gazette of those boats exempted from the levy, a copy of which will be laid before the Houses of Parliament within 15 days of publication. The second significant amendment alters the levy imposed so that the amount payable is then clarified. The levy is calculated by dividing the total access fee by the agreed number of boats to be licensed. This amendment closes the possible loophole which arises when fewer boats are licensed, leaving a portion of the total sum unauthorised. The Fisheries Agreements (Payments) Amendment Bill which is being debated cognately today also relates to the Foreign Fishing Boats Levy Amendment Bill. It amends the 1981 Act of the same name by extending the right of refusal of licenses for foreign boats for non-payment from agreements with foreign governments to agreements between Australia and one or more foreign parties which are not foreign governments. The amount must be paid before the Minister or Secretary grants the licence. The Northern Prawn Fishery Voluntary Adjustment Scheme Loan Guarantee Bill relates to the Fisheries Levy Act which became law in 1984 and to the voluntary adjustment scheme of fishermen in the region of the northern prawn fishery. Fishermen working in the northern prawn area have shown a tremendous sense of responsibility by proposing a self-help scheme to allow the buy-back of the northern prawn fishing fleet. Overfishing of the northern prawn area occurred when a number of boats had to fish in the Gulf area because of poor seasons. I believe the fishermen deserve a lot of praise for bringing up this very positive fleet buy-back project. I commend the Government for its involvement because this project has been foremost in the fishermen's minds for, I believe, four or five years. The Government has come to the party and brought down this legislation. All fishermen in the northern area welcome this legislation. The fishermen are doing this off their own bat; this is a self-help scheme. Fishermen have not resorted to Government handouts as many other members of the community do. It is interesting to note that the licence fees for foreign fishing boats amount to some $3m. The fishing industry says that this should be passed on to support the northern fishing fleet, whereas now it is going straight into the Department of Primary Industry and Consolidated Revenue. The Government is guaranteeing a loan at purely commercial rates of, I think, around 20 or 21 per cent. This loan will be guaranteed by the Commonwealth Government but it will not be in the Commonwealth Budget. The loan will be paid back by the fishermen. This boat buy-back scheme will involve about $13m. The Government has imposed a levy on boats to pay for this. The levy has been calculated on various factors, such as the width of the net drag, the horsepower of the boats, the length of the boats and, I think, the crews of the boats. All the boats were unitised and an amount per unit was established to allow a buy-back price. The fishing industry endorses this scheme as the accepted scheme of future management of their resources in the Gulf area but acknowledges that it will be footing the bill totally for the rationalisation of this industry. It appreciates the Government's guarantee that this Bill proposes and accepts that commercial rates of borrowing do not go as far as the more direct government funding that other industries often receive. In other words, the fishing industry is not getting any government assistance at all, despite the $40m tax that it pays on fuel. Fishermen are doing their bit for the fishing industry. They are putting their money where their mouths are and they are putting their industry on a very good path for the future. The fishing industry contributes something like $450m through export earnings. It also employs a great number of people in country towns outside the metropolitan area right up and down the Australian coast. The $5m self-help program is what the industry asked for. Out of this $5m, however, has to come the cost of management. That is not within the control of the fishing industry. Management charges amount to 38 per cent of the entire cost of the program-a very substantial amount-which is for public service administration. I note that the fishing industry is very happy with the way public servants administer the whole of the fishing industry. Dr Bain certainly has the support of the Queensland fishing industry and I think he has the support of the fishing industries in all Australian States. He has a wonderful rapport with the fishermen and they totally respect him. The rationalisation for the industry paying for management is based on the user pay system. The fishermen do not have the advantage of running their own industry, as do people in the wheat industry which has the Australian Wheat Board or people in the wool industry which has the Australian Wool Corporation or people in similar rural industries. Debate interrupted. The PRESIDENT —It being 10.30 p.m., under sessional order, I put the question: That the Senate do now adjourn. Senator BOLKUS(South Australia)(10.30) —Over the last two nights in this place a matter involving Mr Don Chisholm has been mentioned. He is the preselected candidate of the Australian Democrats for the Legislative Council in South Australia. In response to my statements Senator Vigor on both occasions has come to Mr Chisholm's defence. I do not want to speak at length tonight, but I want to analyse what Senator Vigor said last night. In doing so I will make some demands on Senator Vigor. Last night Senator Vigor made a number of allegations and assertions and incorporated in Hansard two documents. In doing so I believe that he has mislead the Senate in an attempt to cover once again for his mate who is obviously in dire trouble in his battle to be elected in South Australia. I believe that Senator Vigor's responsibility is to the Senate, not to mislead it, and to present the truth to the Senate. Last night he claimed that an assertion had been made that Mr Chisholm was involved in the Board of Adelaide Community and Educational Television at the time Mr Chisholm was in its employ. This point is relevant because the assertion I made was that Mr Chisholm was involved in a decision-making process which gave him a grant under the community employment program at a time when he should not have received it for two reasons: Firstly his proximity and involvement with the Board and, secondly, the fact that he was not, under the guidelines for CEP grants, in one of the categories of people for whom that program was developed. In response Senator Vigor said very strongly that Don Chisholm was not involved with the Board at the time of his appointment to work for ACE Television. In doing so he tabled two documents. Senator Vigor —I think you should quote it. Senator BOLKUS —If Senator Vigor wants me to quote it, I will do that now. He tabled a letter from Mr Chisholm to the Chairman of ACE Television. In doing so he asserted that it was made very clear from that letter and the minutes thereafter that Mr Chisholm was not involved with the company. Let me quote from the letter, in the interests of honesty and truth. Mr Chisholm, in his letter of 27 April, 1984, states: This is to confirm my acceptance of the position of Executive Officer-- a position under the CEP scheme- I will endeavour to continue-- the letter does not make sense here- to the work we have all done towards Public Television. It is only proper that I should submit my resignation as a Director before taking up this position-- Obviously the decision had been made and recommendation had come through- and I trust that the Board will accept this as my resignation. It is quite apparent that the letter indicates that the person involved was involved in the decision-making process. I am amazed that Senator Vigor, who pretends to have some intelligence, cannot understand what is in these documents. If one looks at the minutes, one will see that at a meeting four days after this purported letter of resignation from the board of ACE Television, this resolution was passed: That Don Chisholm be employed as the Research and Development Officer, and that he begin work as soon as possible. Moved: R. Coy. The next item states: Donald Chisholm's resignation from the Board was accepted with thanks. It was quite apparent that at all relevant times decisions were being made as to who was to benefit from this Federal Government money, Mr Chisholm was very much a part of that decision-making process. Mr Chisholm's resignation was not accepted by the Board until after he had been allocated employment by ACE Television. In the interests of truth, if Senator Vigor wants to incorporate documents in Hansard, let him read them and try to understand them first. Let us not have a continuation of this bumbling buffoonery for the protection of one of his mates. The second point he made was that I asserted that Mr Chisholm had set up a trust to defraud people in some way. One can argue from that position, but the point I made was not that he had set up a trust with the direct intention to defraud people but that the trust was being used in a way that skirted around the unemployment provisions of the Social Security Act; that as a consequence, because of the way the trust was being used, and for other reasons, Mr Chisholm should not receive unemployment benefit; and that the whole matter of the trust and its operation should be investigated with a view to seeing whether the Commonwealth was being defrauded. The third and last point I want to take up tonight is that Senator Vigor said: Some rather strange claims were made concerning Donald Chisholm receiving unemployment benefit while campaigning. Senator Vigor might think that they are strange, but at the same time the people of South Australia are bewildered by the sorts of statements made by his close political ally in this whole sordid little saga. The Adelaide Avertiser of 23 September referred to a 49-year old successful businessman who runs a condom vending company in South Australia under a trust arrangement. The article stated: When asked whether he had been drawing unemployment benefits since June, he said he had been getting the dole but would stop doing so immediately. A great, honourable statement, if he had stuck to it. The next day the Adelaide Advertiser reported a change of heart. It stated: Mr Chisholm, who in an interview published yesterday said he would cancel his benefits for the rest of the campaign, has changed his mind and states the benefits are his only means of support. One wonders what is strange about my claim when this purported political candidate in South Australia has shot himself in the foot twice in 24 hours. The claim I made was based very much on what Mr Chisholm said. For Senator Vigor to assert that I am making strange claims when quoting his political mate does the honourable senator absolutely no good. In closing, I wish to draw the attention of the Senate not only to the newspaper comments and quotes from Mr Chisholm but also to the two documents tabled here, I believe quite dishonestly, last night. I wish to say that the matter needs to be investigated. Senator Vigor —On a point of order, Mr President: I believe that the honourable senator is reflecting on my honesty and I wish that to be withdrawn. Senator BOLKUS —Mr President, in the interests of clearing up this debate, I withdraw. The documents were incorporated in accordance with the Standing Orders, if I can assert that, but they were incorporated in a manner which did not give us an opportunity to check their accuracy. The last thing I say is that Senator Vigor purported to come here to keep us honest. Who will keep him honest? Senator BROWNHILL(New South Wales)(10.38) —It is not often in recent times that I have had the opportunity to speak in favour of the Australian Broadcasting Corporation. Certainly in Senate Estimates committee meetings recently I have had a number of criticisms of the ABC and its management. However, tonight I give credit to the ABC's rural department, especially to the producers of Countrywide, for their very important and encouraging moves in establishing tree farm awards. The program shown on television last evening was, I believe, a very important contribution to the improvement of the Australian countryside and the greening of Australia. The program depicted a number of families of varying size on farming operations and in a wide range of climatic conditions. The producers apparently received over 270 applications for the farm tree planting awards which in itself is a great step forward. Hundreds of years ago our forefathers came to this land and set about clearing it. Unfortunately, in many areas they went too far and we are now suffering from those mistakes. I know that the Federal Government has an active program to encourage more people to plant trees, a program that I support wholeheartedly. Whether one is a farmer or not, it is important to realise the important role that trees play in the environment. The soil is a very special resource and one that is also diminishing. Trees and responsible farming techniques are the only way in which we will keep hold of it. In fact, my interest in soil conservation is widely known through the Brownhill Cup-an annual competition in the north-west of New South Wales to award farmer and property where excellence has been shown in farming and soil conservation techniques. Any attempt that will encourage more Australians to plant more trees and take better care of our most valuable resource should have the support and encouragement of us all. I applaud the ABC for its initiative in highlighting this vital aspect of our agricultural heritage. Senator VIGOR(South Australia)(10.41) —I do not believe that the continued goading by Senator Bolkus deserves an immediate answer. I simply wish to say that I am utterly appalled at the tone and tenor of his statements. I am continuing to obtain the facts. Although I have tried again, I have not as yet obtained an answer from the Minister for Employment and Industrial Relations (Mr Willis) to Question No. 412. I have, however, managed to get more information, but have not as yet hard documents to back it up. I wish to make certain that the next time I make a statement on this matter I have all the necessary documentation. It is unfortunate that Senator Bolkus has taken a statement out of a newspaper without checking it back to its source. He did not give me any notice today-in fact he did not give me any notice on Tuesday last either-that he was going to speak on this matter. On the first occasion I was informed by somebody else that it was likely to happen, but tonight I was certainly not informed of Senator Bolkus's intention to speak. He took information out of a newspaper report of an interview. There was only one interview, but two articles, according to Donald Chisholm. As Senator Bolkus has raised this matter, I will check with the reporter. During that interview Donald Chisholm gave information whose context Senator Bolkus has quoted wrongly. I will obtain the chronology for the Senate, but I really believe if we are going to spend all our time on this type of operation it will be an enormous waste of the Senate's time and mental energy. Senator Bolkus —It is the truth. Senator VIGOR —If Senator Bolkus checked his `facts' before coming in here it would save us a lot of time and effort. Senator Bolkus —Why don't you learn how to read? Senator VIGOR —I think that that remark is quite uncalled for, Senator Bolkus. The PRESIDENT —Order! Will the honourable senator address the Chair? Senator VIGOR —I am sorry, Mr President. I understand that Donald Chisholm, whom I talked to today, was last registered for unemployment benefit on 4 May 1984 and that Wendy McPherson applied for unemployment benefit on 29 May 1985. Donald has, since that time, been dependent on Wendy, so there is obviously no problem in his campaigning at the same time as he is looking for work. Senator Bolkus's claim that Donald Chisholm is currently on unemployment benefit is not correct. Has Senator Bolkus in fact checked with the Department of Social Security whether that is true? I have my information from Donald Chisholm, but I will be seeking, with Donald Chisholm's permission, through an application under the Freedom of Information Act if necessary, to get records to back up Donald's statement, which I have no reason to disbelieve. This type of digging for dirt where it does not exist is quite uncalled for. I will return to the Senate when I have all the documents, the proof to refute the claims that Senator Bolkus has made. Question resolved in the affirmative. Senate adjourned at 10.46 p.m. The following papers were tabled: Public Service Act-Determination 1985 No. 80 Seat of Government (Administration) Act-Notice of Variation to the Plan of Layout of the City of Canberra and its Environs (86th Series), dated 9 October 1985. ADMINISTRATOR'S MESSAGE-ASSENT TO LAWS: A Message from His Excellency the Administrator of the Government of the Commonwealth of Australia was reported, informing the Senate that His Excellency had, in the name of Her Majesty, assented to the following Laws: 3 October 1985-Message No. 31- Rural Industries Research Act 1985 (Act No. 102 of 1985) Rural Industries Research (Transitional Provisions and Consequential Amendments) Act 1985 (Act No. 103 of 1985) Snowy Mountains Engineering Corporation Amendment Act 1985 (Act No. 101 of 1985)