Wednesday, 16 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 in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That we the undersigned who have great concern for the protection of the unborn child, call upon the Government to reject the Vinson Enquiry recommendation that an Abortion Clinic be established in Canberra. And your petitioners most humbly pray that the Senate in Parliament assembled will reject this recommendation. And your petitioners as in duty bound will ever pray. by Senator Reid (from 16 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia do respectfully showeth: That the Hawke Government's failure to correct the anomalies arising from the application of the assets test on pensioners, with the failure of the Australian Democrats to support Senator Messner's Bill to repeal the assets test, is causing unnecessary hardship for Australia's aged, particularly those living in rural areas. Your petitioners therefore humbly pray that the Hawke Government will itself take action to repeal its iniquitous and anomalous test. And your petitioners as in duty bound will ever pray. by Senator Chaney (from 88 citizens). To the Honourable the President and members of the Senate assembled. The petition of the undersigned respectfully showeth that . . . 1. The Watsonia Army Barracks contains electronic communications facilities, operated by Australian and American personnel, that gives the United States the ability to 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. And your petitioners as in duty bound will ever pray. by Senator Cooney (from 90 citizens). To the Honourable the President and members of the Senate in Parliament assembled; the humble petition of the undersigned citizens of Australia respectfully showeth: That we deplore the discriminatory tax proposals as outlined in the Government's `White Paper' and the Government's preferred option on proposed new and widened tax proposals as so outlined, namely: Capital Gains Tax Hidden Death Tax described as `Capital Gains Tax after death' Gift Tax Increased Company Tax Employer taxes on employees' employment benefits All such taxes will discriminate against and inhibit progress, growth and employment throughout the nation. They will attack hardworking people who have built up their assets; they will discourage thrift; they will inhibit development; they will treat unfairly all who plan for the future; they will cause trouble and expense in arriving at the value of their assets; they will discourage industry and punish achievement. Your petitioners therefore humbly pray that the Senate in Parliament assembled should reject these tax proposals. And your petitioners as in duty bound will ever pray. by Senator Sheil (from 75 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 Harradine (from 2,362 citizens). To the Honourable the President and members of the Senate in Parliament assembled: This petition of concerned citizens of Australia respectfully sheweth that: Uranium mining and processing is dangerous to the health and well-being and ecology of the Earth and its citizens, By-products of uranium are toxic for periods of up to 500,000 years, and are an intrinsic part of the production of nuclear weapons, Existing safeguards are inadequate, and are not properly monitored. The policy of the Australian Government permits the entry into Australian territory of vessels and aircraft without the assurance that they are not nuclear powered or armed, Such vessels pose a threat to both the security and well-being of Australia and its citizens. The presence of foreign military and communication bases on Australian soil seriously endangers the health and well-being of Australia and its citizens. Your petitioners therefore humbly pray that your honourable Senators will take cognisance of the above and take immediate action to remove the above dangers. And your petitioners as in duty bound will ever pray. by Senator Vallentine (from 50 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth government: 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognise that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection, storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognise that any system giving `property' or ownership rights over seeds to individuals, organisations or enterprises is inappropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: i a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, ii subordination and/or curtailment of public breeding programmes, iii farmer unrest at seed prices, iv monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, v increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners, as in duty bound, will ever pray. by Senator Zakharov (from 28 citizens). Petitions received. Senator CHANEY(Western Australia-Leader of the Opposition) —On behalf of Senator Durack, I give notice that, on the next sitting day, he will move: (1) That the Human Embryo Experimentation Bill 1985 be referred to a select committee, and that the committee inquire into and report upon- (a) for the purposes of the in-vitro fertilization (IVF) program, whether it is: (i) necessary, or (ii) desirable to carry out research on relevant human embryos by manipulation, dissection or administration of drugs; (b) if it is necessary or desirable to carry out such research, whether any guidelines can be formulated to govern such research; (c) for the purposes of the IVF program, whether it is (i) necessary or (ii) desirable to freeze relevant human embryos; (d) whether it is: (i) necessary, or (ii) justified to discard relevant human embryos which do not appear to be satisfactory, and if so, whether any rules should be established to govern this procedure; (e) whether the Bill can be amended to preserve its general prohibition of research on relevant human embryos without halting the IVF program, and if so, what amendments should be made; (f) what sanctions, if any, should be imposed for the breach of any prohibitions contained in the Bill; and (g) whether legislation is desirable to control research on relevant human embryos, or whether that can be achieved by self-regulation, such as under the existing National Health and Medical Research Council ethical codes. (2) That the committee consist of seven senators, as follows: (a) three to be nominated by the Leader of the Government in the Senate, (b) two to be nominated by the Leader of the Opposition in the Senate, (c) one to be nominated by the Leader of the Australian Democrats, and (d) Senator Harradine. (3) That provisions relating to the powers and procedures of the committee be contained in a subsequent resolution. Senator COLSTON(Queensland) —I give notice that, on the next day of sitting, I shall move: That the following matter be referred to the Standing Committee on Education and the Arts: The education of gifted and talented children. Senator VALLENTINE(Western Australia) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) supports Australia's position as a sovereign and independent nation; (b) deplores the Government's lack of independence in stating that its policy on United States nuclear warship visits to this country is determined by the operational requirements of the United States Pacific fleet; and (c) calls on the Government to follow the McMahon Liberal Government and the Whitlam Labor Government from 1971 to 1975 in refusing entry to Australia of nuclear-powered warships. Senator TATE(Tasmania) —On behalf of Senator Robertson, I give notice that, on the next day of sitting, he will move: That the Senate- (a) condemns the illegal, dangerous and improper actions of the Northern Territory Chief Minister, Mr Tuxworth, the Northern Territory Public Service Commissioner, Dr K. Fleming, and the Northern Territory Police in circumstances surrounding the raiding of offices of the Northern Territory News and rifling the desk of a Northern Territory reporter, in an attempt to seize a document from that reporter, especially since all such actions were taken without warrant; (b) is concerned that such actions were motivated by purely political considerations, in that the raid was supposed to retrieve a document which clearly showed the Northern Territory Government as grossly hypocritical in that it recently supported the handover of Ayers Rock to its traditional owners but is now conducting a cynical political campaign costing over $300,000 against such a handover; and (c) condemns this action as being a gross and unprecedented invasion of the freedom of the Press in this country. Senator BROWNHILL(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate, noting that youth unemployment is three times higher than the adult rate with one in five youths under the age of 19 looking for work- (a) notes the criticisms of the President of the Federated Clerks' Union, Mr John Maynes, that the Federal Government's approach to youth unemployment would not solve the nation's unemployment problem; and (b) calls on the Government to actively investigate more appropriate rates of pay for youth workers and schemes to encourage employers to take on more apprentices. Senator BOSWELL(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes with concern the fact that the Federal Government's decision to outlaw legitimate business entertainment expenses has already cost 1,000 jobs in Queensland in the restaurant industry alone, and is expected to cost another 3,000 jobs in Queensland before the end of the year; (b) notes that this action makes a mockery of the Labor Government's stated priority to reduce youth unemployment as the majority of the jobs lost are young and unskilled workers; (c) condemns the Federal Government for its hostile and uncaring attitude towards the plight of the restaurant industry; and (d) calls upon the Government to abandon its total ban on entertainment expenses and to allow tax deductibility for legitimate and necessary business expenses. Senator RYAN(Australian Capital Territory-Minister for Education) —I table papers in accordance with the list circulated to honourable senators. With the concurrence of the Senate, I incorporate the list in Hansard. Leave granted. The list read as follows- 1. Economic planning advisory council-annual report 1984-85-pursuant to sub-section 27 (3) of the Economic Planning Advisory Council Act 1983. 2. Office of the Official Secretary to the Governor-General-1st annual report for the period 24 December 1984-30 June 1985-Pursuant to sub-section 19 (2) of the Governor-General Act 1974. Motion (by Senator Ryan) agreed to: That leave be given to introduce a Bill for an Act relating to employees of the Commonwealth. Bill presented by Senator Ryan, and read a first time. Standing Orders suspended. Senator RYAN(Australian Capital Territory-Minister for Education)(11.09) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill has two principal objects. Firstly, it amends the Commonwealth Employees (Redeployment and Retirement) Act to include inefficiency and loss of essential qualifications as grounds upon which redeployment and retirement action can be taken in relation to staff covered by that Act. This amendment is the result of a review of the Commonwealth Employees (Redeployment and Retirement) Act in which the ACTU, and the Council of Professional Associations have participated. Under the Commonwealth Employees (Redeployment and Retirement) Act staff can be redeployed or retired where their services cannot reasonably be used because they are surplus to their department or authority's requirements or are incapable of performing their duties as a result of physical or mental incapacity. At present the Act does not specifically provide for the redeployment or retirement of staff who are inefficient or who have lost essential qualifications. However, sub-paragraph 7 (1) (b) (iii) of the Act also enables redeployment or retirement of staff for any other pre- scribed reason. It was originally intended that inefficiency and loss of essential qualifications would be dealt with under this section. The Government believes it essential to have an effective but fair system for dealing with staff who are inefficient or who have lost essential qualifications. Equally, it believes that sub-paragraph 7 (1) (b) (iii) is too broad and imprecise and that a topic so fundamental as the grounds upon which Commonwealth employees can be redeployed or retired should be spelt out in legislation, rather than being left to regulations. Accordingly, this legislation repeals sub-paragraph 7 (1) (b) (iii) and specifically inserts inefficiency and loss of essential qualifications into the Act as additional grounds for redeployment and retirement. The provisions are carefully drafted so as to balance the need for management to deal with such cases as promptly and effectively as possible against the need to protect the rights of staff. Therefore both grounds are carefully defined and the criteria to which regard may be had in determining that an employee is inefficient are set out in detail. There will be access to appeal mechanisms already provided in the Act. Detailed administrative procedures to be followed in giving effect to the legislation, based on consultations with unions, will be published in the Gazette. The Bill will also require that, where it has not proven possible to redeploy an employee, the Secretary of the employee's Department is required to have regard to such factors as: the nature and duration of the employee's past service; the length of the employee's prospective service; the extent the employee is able or likely, with retraining or rehabilitation, to perform duties in the department before causing the employee to be compulsorily retired. It should be noted that this Bill will not affect the position of secretaries to departments and officers of the Senior Executive Service, who are already covered by special redeployment and retirement provisions inserted in the Public Service Act last year as part of this Government's Public Service Reform package. The second principal object of the Act is to introduce new employment provisions into the Public Service Act. The existing provisions in the Public Service Act have been used to engage staff for several quite different purposes including the engagement of short term and fixed term temporary assistance, the engagement of industrial staff on a continuing basis and the engagement of local staff by Australian missions overseas. Experience has shown the difficulties inherent in attempting to apply the present provisions to such different circumstances resulting, in some cases, in staff gaining tenure and other benefits not commensurate with the limited basis on which they were originally engaged. The new scheme set out in the Bill will create four separate categories of employees: continuing employees, short term employees, fixed term employees and overseas employees. By separating out these categories, the Bill enables more appropriate engagement and tenure arrangements to apply to each. The provisions seek to balance the need to give departments greater flexibility in day to day operations while ensuring proper central co- ordination and control to protect the integrity of the new scheme. Secretaries of departments will be able to engage persons as short term employees to meet temporary needs for periods of 3 months without reference to the Public Service Board. At the end of this period, the department will be required to examine whether there is still a need for that person's services and either to terminate the person's employment or seek an extension of their employment by the Board. Such persons will only be entitled to the rights of tenure given by the Commonwealth Employees (Redeployment and Retirement) Act 1979 if the Board makes a decision to extend their employment and as a result the employment exceeds 12 months in total. Staff will be selected from registers of applicants. The fixed term employment category will enable departments, with the Board's approval, to engage employees for up to five years for projects or tasks which require special skills, experience, qualifications and aptitudes not readily available from within the Public Service and where it is unlikely that there will continue to be work for the extra staff taken on for the project or task after it is completed. It will also enable departments to offer fixed-term engagements in the mainstream of public service work where a person prefers to come to work in the Public Service for a fixed period only. Thirdly, it will enable the employment of persons who are awaiting the granting of Australian citizenship before they can take up offers of permanent appointment. The continuing employee category recognises that for many groups of staff, particularly of industrial employees, engagement as an employee is a more appropriate mode of staffing than permanent appointment. Recruitment of persons as continuing employees will be limited to classes declared by the Board after obtaining the agreement of relevant unions. In selecting such employees, departments will be required to have regard to the skills, aptitude, qualifications and experience of applicants. Detailed guidelines on advertising and selection will be published by the Board. Termination of employment during the first year will be subject to notice along the lines of standard provisions in industrial awards. This first year will be regarded as a probationary period at the end of which, as is the case now, such employees will gain similar tenure rights to officers. The overseas employee category will cover staff engaged by Australian missions overseas. In engaging such staff the Commonwealth will continue to follow good employer practice in the local market. A special section is inserted into the Public Service Act to facilitate the engagement of staff under the Government's youth traineeship scheme, and other government schemes designed to enable persons to gain skills, qualifications, aptitudes and experience in order to equip them to participate in the Australian workforce. As part of the Public Service reforms, the responsibility for human resources budgeting became the responsibility of the Department of Finance. Following this change, it is no longer appropriate for the Public Service Board's approval to be required in relation to consultants engaged by various statutory authorities. Accordingly, the Bill removes the requirements for the Board to approve consultancy arrangements under the various Acts set out in the Schedule to the Bill. The Bill also contains a number of minor technical amendments to the Public Service Act, the Long Service Leave Act and other legislation. Details of these are set out in the explanatory memorandum. There are no identifiable costs associated with the amendments made by the Bill. The revised employment provisions are designed to ensure that the tenure and other benefits obtained by employees are commensurate with the service they are engaged to provide. The amendments to the Commonwealth Employees (Redeployment and Retirement) Act are expected to improve long-term efficiency of the Public Service. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Motion (by Senator Ryan) agreed to: That leave be given to introduce a Bill for an Act to amend the Pipeline Authority Act 1973. Motion (by Senator Puplick for Senator Missen) agreed to: That Business of the Senate, notices of motion Nos 2 and 3, standing in the name of Senator Missen, be postponed until Wednesday, 6 November. Senator PUPLICK(New South Wales)(10.11) —I move: That the Customs Regulations (Amendment), as contained in Statutory Rules 1985 No. 71 and made under the Customs Act 1901, be disallowed. The Senate has before it a motion which I have moved on behalf of the Opposition to disallow a regulation which seeks to make major increases in licence fees applied to Customs licensed ware- houses. It is necessary to put this matter in a little historical perspective and to indicate how these licence fees came to be established in the first place and how they have been developed over recent years. The Customs Act is one of the oldest Acts of the Federal Parliament. It goes back to 1901. As part of the administration of the customs system, it has been necessary to establish a series of bonded warehouses throughout Australia into which goods may be imported. When goods are imported into those warehouses the payment of customs and excise duty is deferred until such time as the goods are subsequently removed from the bonded warehouse either to enter into what is called home consumption or, in the case of operations such as duty free stores, to be re-exported, and at no stage is the relevant customs and excise duty paid upon them. For many years the cost of a bonded warehouse licence was $1,300. It was intended that this should cover a certain proportion of the costs incurred by the Commonwealth in the administration of customs warehouses. The report of the Auditor-General on an efficiency audit entitled `The Collection of Excise Duties and Deferred Customs Duties by the Department of Business and Consumer Affairs', a report which was made in March 1982, indicated: The fees payable by licencees had been intended, when established in 1969, to cover two-thirds of the cost of Inland Services surveillance. As I said, originally those fees were at the level of $1,000 then $1,300. In January 1983 they were increased to $1,900. It was felt by the Government, rightly, that the fees charged for the service, which is essentially permitting people who hold these bonded warehouse licences to defer the payment of customs and excise duties, ought to be increased in order to move more closely to some formula of cost recovery. Indeed, the then Department of Industry and Commerce was subject to criticism by the Auditor-General for not having increased fees over a period in line with changes in the cost to the Department. In the Auditor-General's report of September 1983 the Auditor-General, under the heading `Department of Industry and Commerce' commented: Review of Fees-At the time of the audit, fees had not been reviewed or revised since 1977. It also appeared that certain fees were charged on a basis which did not have full regard to the Department's cost recovery policy. Similarly, when the Joint Committee of Public Accounts presented its 224th report entitled `Collection of Excise and Deferred Customs Duties', the Joint Committee endorsed the comments made by the Auditor-General and indicated that these fees should be increased from time to time. It indicated that there were some 1,400 licensed premises in Australia of which 1,100 were customs warehouses, and it gave a number of recommendations. It is also interesting to note that the Joint Committee, at paragraph 7.17 in its report, said: According to information provided by Customs only 43 man-years were devoted to warehousing throughout the whole of Australia in the 18 months from January 1982 to June 1983. That will be apparent as a matter of some significance when I discuss the steps that were then taken by the Government to investigate the cost of administration of Customs warehouses. Following these criticisms from the Auditor-General and the Joint Committee of Public Accounts, the Government commissioned the firm of Price Waterhouse to undertake a study into the way in which warehouses and depots were licensed. The title of the Price Waterhouse study, which was produced in August 1984, was `Improved procedures for determining and recovering costs relating to warehouses and depots'. It is true that the Price Waterhouse study examined a large number of options about the way in which the Government should determine the fees to be applied for licensed warehouses and depots. I do not intend to go through the numerous formulae that were put forward by Price Waterhouse as suggestions as to the way in which the fees should be structured. It is entirely the Government's responsibility, it having received the Price Waterhouse study and recommendations, to pick the formula which the Government thought most appropriate to give effect to the policies that it was pursuing. It is, however, important to indicate one thing that the Price Waterhouse study rejected as an option. It rejected as an option any attempt to differentiate significantly between the types of warehouse which were involved and imposed differential charges depending on such things as the throughput of the warehouses, their size, or the precise nature of the warehouse business. I think to a certain extent that has been unfortunate, not the least reason being the report of the Auditor-General on his efficiency audit in March 1982. When dealing with the question of bonded warehouses, on page 13 of his report, the Auditor-General indicated that he believed that an ADP system should be developed to enable analysis of dwell time-that is the amount of time goods are held in these warehouses-and assists a discriminatory approach to the preparation of check programs based on age, value and previous risk history. So some support was given in a number of quarters, including the Auditor-General, for the development of a system which would have due regard to the differential nature of warehouse operations. Nevertheless, the Government proceeded to establish a scale of fees based on the recommendations of the Price Waterhouse study, modifying them on its own appreciation of what was required. I seek leave to incorporate in Hansard two brief documents, one being Australian Customs Notice No. 85/107 which sets out the scale of fees as indicated, and the second being a table prepared very helpfully by officers of the Department of the Minister for Industry Technology and Commerce (Senator Button) setting out the relevant charges which are to be applied as a result of the introduction of this new customs regulation. Senator Button —You are quite sure they are accurate documents, are you? Senator PUPLICK —They were supplied to me by you, Mr Minister, and so I accept that their accuracy is beyond question. Leave granted. The documents read as follows- Warehouse Licence Fees Customs Regulations 50/52 have been amended to prescribe a new scale of warehouse licence fees. Details of the amendments are contained in Statutory Rule No. 77 of 1985 published in Commonwealth of Australia Gazette No. S 169 of 20 May 1985. The new scale of fees comprises two elements: (a) A flat fee based on the initial issue or renewal of a warehouse licence; plus A variable element related to the purpose/ conditions of licence; less A deduction based on the recording systems of warehouses where computer recording systems maintained by warehouse licensees provide `real time' status reporting and/or monthly status reporting. (b) A transaction fee of $7 per Nature 30 entry/weekly settlement return. The new fee will operate on and from 1 July 1985. The prescribed scale of fees increases the flat rate element of the warehouse licence fee from the existing $1900 to approximately $6000. The Australian Customs Service has been concerned to recover, as far as practical, the administrative costs incurred in the administration of the Customs licensed warehouse system. An independent firm of Management Consultants, Price Waterhouse Associates Pty, was engaged to advise and report on the administrative costs to be recovered and to recommend an appropriate fee structure based on the principles of cost recovery. The increased warehouse licence fees now prescribed follow consideration of that report. The new scale of fees requires that an individual fee be calculated in respect of each warehouse. For example, the Regulations provide for an annual fee payable in respect of: (a) A warehouse licensed for the first time from 1 July 1985: a fixed fee of $6646 plus a variable element related to a: petroleum warehouse $340 private warehouse $240 general warehouse $210 spirit warehouse $310 manufacturing warehouse $160 duty free shop $300 warehouse approved for the storage of excisable goods under Section 5A, Excise Act $340 less where the systems used by the warehouse for the recording and accounting of goods include the use of a computer having a facility for: `real time' status reporting $100 (This can be accepted as meaning a computer facility that will provide `on line' and `immediate' or `instantaneous' access to processed information, e.g. a report that can be called up at any time and which will be completely up to date, including stock, underbond movement and invoicing details, and relevant N20 and N30 Customs entry identification. monthly status reporting $250 (A computer facility that will provide a monthly print-out of stocktake at, for instance, the end of each month, and which will accurately record all the `ins', `outs', and consequent balances of each commodity stored during the month to which the report relates, including underbond movement and invoicing details, and relevant N20 and N30 Customs entry identification.) (b) The renewal of a current warehouse licence from 1 July 1985: a fixed flat fee of $5346 together with the addition (or reduction) of the variable elements of the fee set out above. The Regulations will continue to allow the payment of the annual fee by instalments. (T. P. HAYES) Comptroller-General 20 May 1985 (Inland Services) Fee variables Initial fee Renewal fee Stat rule 71 of 1985 legislation $ $ Fee is calculated as follows:- A TOTAL OF: Licence application Number of licences established Time taken to process licence Mix of salaries (Assumed Band 4 salary level) 1300 . . Reg 50 (2) Licence issue/renewal Number of warehouses-1250 Mix of salaries Policy and planning costs Time taken to renew licence 1032 1032 Reg 50 (2B) Purpose of Warehouse Number of warehouses in each category 3964 3964 Reg 50 (2), 50 (2B) Licence Standards Real Time Status Reporting Nominal fee only Variations in investigating time 100 100 Reg 50 (2D) Monthly Status Reporting 250 250 Reg 50 (2D) 6646 5346 AN ADDITIONAL AMOUNT OF Purpose of Warehouse Reg 50 (2C) Bulk Liquids Duty Free Shops Manu- facturing Bond Variations in investigation time 340 300 160 Public Receipts and Delivery Private Receipt and Delivery Based on historic deployment of resources between major categories 210 240 Spirits High Volume Special Ops (personal effects) Ship Privodor Bond Container Bond Car Bond Project Warehouses 310 Nil Nil Nil Nil 340 Nil A DEDUCTION BASED ON COMPUTER FACILITIES USED BY WAREHOUSE: Licence Standards Real Time Status Reporting deduct $100 Reg 50 (2D) Monthly Status Reporting deduct $250 Senator PUPLICK —The import of these has been that the charges which were previously $1,900 have been raised in one hit to $6,646 for a licence to be issued for the first time, and from $1,900 to $5,346 for a licence to be renewed, something that is required on an annual basis. The one thing I am particularly concerned about is the extent to which this is an attempt in part by the Government to move to a system in which people will be discouraged from having their own small warehouses. In the report by the Public Accounts Committee it was clearly indicated that there was some concern that people should always be in a position to have access to their own bonded warehouses. The Committee indicates quite clearly in the section headed `Alternatives to the Bonded Warehouse System', that the Government, and, indeed, the Committee were not averse to the idea that small warehouses should be totally phased out. The Committee stated: The Committee also recommends that the perceived need for the bonded warehouse systems should be re-examined, including the implications of abolishing or modifying the system. It called for that matter to be referred to the Industries Assistance Commission. Senator Button, in a letter responding to some inquiries on this matter, stated: Some small private warehouses make use of the ware- housing system on an occasional basis. This raises the question as to why these small businesses would need their own private warehouse when the facility is freely available through the use of a general warehouse and charges would then only be incurred on a `use' basis. I think it is quite clear that underlying a great deal of this is the Government's hostility to the system of small bonded warehouses being operated by people in the private sector. Senator Button —Don't get silly. You were going well to this point. Senator PUPLICK —I am going well enough, I am sure, for the honourable senator to see the logic of the argument that I am putting forward. The impact of this enormous increase in charges has been to put small business in an extremely invidious position. I have received a large number of representations on this matter. I would like to indicate the thrust of those representations. The Small Business Combined Association of New South Wales in a letter relating to what amounts to a 247 per cent increase in government imposts stated: This was announced without any prior consultation with our member or other senior industry associations concerned. These increases are believed to be anti small business and discriminatory in some cases, will lead to the closure of bonded warehouses and the consequent loss of employment. The Australian International Movers Association wrote to Senator Button. It stated: The high volume operators in my industry will be forced to pass on this cost impost to our clientele who, in the majority of cases, are immigrants arriving in Australia as first time settlers. The low volume operators, having fewer customers upon whom to spread the fee, will be forced from the industry. Already some of our members have advised that they will not be renewing their Warehouse Licnce's. The New South Wales Transport Association in its submission to Senator Button protested that appropriate consultation clearly did not take place with the industry. It stated: We respectfully request that the Regulations be withdrawn and Licence Fees either remain unaltered or increased in line with the more normally accepted practice of aligning them with the Consumer Price Index. It is our view that the fees, as they stand, are anti small business. A small business operation in Queensland, P. R. Floors Pty Ltd, which has a small bonded warehouse into which it imports floor covering materials, from which it makes fairly small withdrawals from time to time, wrote as follows: . . . I am astounded to think that some person in the Customs department or the Ministers Office could have approved this enormous increase in fees. Such person could not have given any consideration to the samll business community or consider what effect a 294 per cent increase for any type of charge would make in the very tight economic situation that the Australian Community is living in Finally, the Distilled Spirits Industry Council of Australia made a submission to Senator Coates in his capacity as Chairman of the Senate Standing Committee on Regulations and Ordinances. It stated: It is our contention that such a view is totally inappropriate- that is the view of the user pays principle upon which these regulations were established- with regard to bonded warehouses, where the Australian Customs Service is merely providing an audit to insure that appropriate duties have been paid. The view completely ignores the fact that such special warehouses would not be necessary if the Government was not levying substantial taxes on the commodities being handled. It is, in our view, no different than asking the PAYE taxpayer to remit a handling fee each year with his tax return. The impost of this increase in charges on Australian small business ought to be one of the compelling reasons for this regulation to be disallowed. The Opposition does not in any sense oppose the principle of cost recovery for government services provided. We do not seek to substitute our judgment as to what these fees should be for the judgment that the Government has made based upon its assessment and the assessment of the Price Waterhouse study. What is at issue here is our request that these regulations be disallowed now and be brought back with a phasing-in operation attached to them so that cost recovery can be phased in over a reasonable period. I remind the Government that it has committed itself to the principle of the phasing in of cost recovery arrangements in two areas. Let me instance those. They are in regard to export inspection services and aviation cost recovery. When the Minister for Primary Industry, Mr Kerin, made a ministerial statement on 24 August 1983 on the question of export inspection services-I quote from page 170 of Hansard, under the heading `Basis for Future Charging of Inspection Services'-he stated: Another major development is the basis for future charging of inspection services. Present charging arrangements provide little financial incentive for individual companies to use inspection resources in a more efficient manner with the consequential effect of reducing their costs. I believe that this is an essential ingredient of any effective charging arrangement. Industry is entitled to be provided with an efficient inspection service if it is paying part of the cost. However, this service should be tailored to the specific level of inspection required, which in turn should be based on a company's approach to quality control and track record. In other words, quite clearly the Minister is indicating support for a differential type of arrangement. In a Press release of 21 August 1985 by the Minister for Primary Industry headed `Inspection charges for 1985-86' the Government indicated that its proposal on cost recovery would be 50 per cent for the coming year, that is, it would not move to full cost recovery in one hit, and that there would be a phasing-in period. If honourable senators look at the attachment to that Press release they will see that the anticipated operative date for various inspection charges is different throughout different sections of the industry to give those sections time to cope and adjust to these new arrangements. I will look at a more interesting example of cost recovery, this time in the aviation industry. Paragraph 8.3 of chapter 18 of the report of the Independent Inquiry into Aviation Cost Recovery, the Bosch report, presented in November 1984, states: The Committee recommends that the Department of Aviation should be required to develop a master plan for introduction in the 1985-86 financial year for phasing in full cost recovery over a ten year period to 1994-95. The Minister for Aviation (Mr Peter Morris) in a Press release of 14 August 1985, although not giving a full response to all of the recommendations of the Bosch inquiry, stated: The Government recognises that a gradual approach to achievement of the policy of full cost recovery will be necessary. Here again, in terms of the phasing-in arrangements, the Government, in the report which it received from Mr Bosch and in the statement put down by the Minister, has committed itself to an understanding that cost recovery ought to be phased in over a prolonged period or over a reasonable period. When one considers it, going from a licence fee of $1,900 to $6,500 or $5,500, as the case may be, is a very severe impost for many small businessmen to take in one hit. They have to renew their licences each year; their business depends upon their having their warehouse licences. It seems extraordinary that the Government cannot be persuaded to have a simple phasing in of these arrangements. Pages 32 and 33 of the Bosch inquiry indicate, in terms of aviation, that the Government always intended an eventual, rather than an immediate, move to full cost recovery. Government policy established in the Airlines Agreement Act 1973 was to seek recovery of 80 per cent of attributable costs within a five year period. So moves towards partial or full cost recovery have been phased in where they imply major additional imposts, particularly upon small business. Let me conclude simply by saying that the Opposition is not opposed to the principle of cost recovery. Indeed, it is not opposed to the principle of full cost recovery where that appears to be justified. What it does oppose and what it seeks to disallow is the movement to full cost recovery in one hit. Where cost recovery has been introduced by the Government, whether it be in the airline industry or whether it be in respect of export inspection charges, there has been either less than full cost recovery or a phasing in of cost recovery. This measure is yet another assault upon the position of small businesses and private entrepreneurs in Australia. It represents a real threat to them. I put it to the Senate that the Government would have no difficulty in fact in agreeing to a phasing in of these charges. Such action would not result in a major loss of revenue to the Government. It would not be a major inconvenience to the Government. It will be a tangible test of whether or not the Government and the Democrats are serious when the say that they support the position of small business in Australia. The Opposition is quite serious on this matter. We believe that this impost upon small business should not be handled in this fashion. We hope that the Government, the Australian Democrats and other members of the Senate will see their way clear to disallow this regulation. The regulation should be brought back in a more appropriate form. It should provide for cost recovery to be phased in over a reasonable period. Such a regulation would give some substance to the arguments which honourable senators opposite have put forward in the past about their support for small business in Australia. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.33) —The Government opposes the motion to disallow Customs Regulations Nos 50 and 52 which deal with warehouse licence fees and does not accept in full the arguments put forward by Senator Puplick. I suppose that Senator Puplick is really exposing the horns of a dilemma which any Opposition party faces-that is, the dilemma between a desire to appear rational in an economic sense and a desire to do something for the sorts of people whose letters Senator Puplick read into Hansard. I understand that difficulty. If I might say so, what Senator Puplick had to say on this issue displays his great talents as a raconteur, but his lesser talents in terms of industry administration. The Customs licence warehouse system which is used extensively by industry and commerce, as Senator Puplick said, allows the deferment-I want to make that clear-of customs duty on imported goods. The system in fact extends a duty credit to users until such time as goods that have been stored in a licenced warehouse are taken into domestic consumption or exported. The decision to defer duty payment by placing goods in a Customs licensed warehouse and the length of time for which goods are held in such a warehouse are decisions for the commercial interests concerned. Warehouse licence fees imposed by the Customs regulation are based on the policy of recovery of the costs involved in the control of warehouses by the Australian Custom Service. The Customs Act provides that licence fees expire on 30 June each year and are required to be renewed, if desired, from 1 July with payment of a fee which a licence holder may elect to pay in quarterly instalments. Licence fees were first imposed in 1901 at a very substantial amount for that time, equivalent to $400 per annum. Between 1901 and 1968 numerous adjustments were made to the level of fees to take account of costs involved in physically locating Customs officers at warehouses to control their activities. Those prior adjustments were made on the basis of costs of the service provided by Customs to allow this deferment of duty process to take place. In 1969 new strategies of commodity control, which essentially rely on the physical and documentary controls of the licencees, over operations in licensed warehouses were introduced and the full time presence of Customs at premises was discontinued. A licence fee of $1,000 per annum was imposed at that time and that took account of anticipated cost savings through the introduction of commodity control principles. The fee was increased to $1,300 in 1977-as a result of budgetary considerations, I point out to Senator Puplick-and further increased to $1,900 in 1983 to reflect movements in the consumer price index. Included in the 1977 increase was a $5 transaction fee applicable to each customs entry for goods entered ex-warehouse for home consumption. This fee was increased to $7 in 1983 and is intended to recover only the computer processing costs of this particular type of warehouse operation. It is against this background of the application of warehouse licence fees that I turn to the present fees imposed. Senator Puplick has pointed out that over the period 1979 to 1981 the Auditor-General undertook an efficiency audit into the collection of excise duties and deferred customs duties which included the Customs licensed warehouse system. The report by the Auditor-General, Efficiency Audit Report No. 4, tabled here on 11 March 1982, advocated review of the warehouse licence fee on the basis of a return to the principle of fees calculated on cost recovery. What Senator Puplick is arguing for today, contrary to the experience and actions of previous governments, is that on this occasion the principle of cost recovery should be ameliorated, watered down. It is an extraordinary position to fix a politician with, to say that he wants a principle watered down; but he is saying that the principle of cost recovery should be watered down on this occasion because it has been some time since the cost recovery principle has been in place. Senator Puplick —That is not what we are saying at all. Senator BUTTON —He wants it phased in, in a way which involves a subsidy to the user. Senator Short —It is not a watering down of a principle. Senator BUTTON —I see. That will go in the short book of record quotations, like his speech to the Liberal Party conference. It is not a watering down of the principle, just a phasing in of the principle-a half-pregnant situation. Senator Messner —That is absurd. Senator BUTTON —I beg your pardon? Senator Messner —That is absurd. It is the implementation of the principle. Senator Puplick —Are you watering down cost recovery in the aviation industry by phasing it in? Senator BUTTON —Senator Puplick has rescued Senator Messner from the very difficult thought that he launched into the chamber. The Auditor-General in his report to the Parliament in September 1983 further drew attention to the fact that the then warehouse licence fee of $1,900 had not been established on the basis of recovery of administrative costs. That is where it was abandoned. In response to the Auditor-General's comments the Australian Customs Service, following public tender, engaged Price Waterhouse to make an independent assessment of the costs involved in administering the system and to provide advice on the options available to recover those costs. The consultant's report was received in August 1984 and in May 1985, in response to a question by Senator Puplick, I indicated that the Price Waterhouse report would be made available on request. The consultants reported that they had made extensive inquiries, including inquiries of a number of industry associations representing warehouse licencees. Visits were made to 13 warehouse premises engaged in a range of different commodity operations and size of operations. The consultants canvassed nine options in their report which might be applied in establishing a new basis for warehouse licence fees and included points for and against each option. The recommended option, based on the cost recovery principle, was a formula comprising a flat rate and a number of various elements to take account of the various types of warehouses, the facilities provided and the recording systems utilised. The Government decided to revise the existing fee based on the Price Waterhouse recommendations of a flat fee with adjustment for variable elements. The fee structure that has been prescribed in Customs regulations follows this formula. I point out, however, that several minor elements of the consultant's recommended fee structure were not adopted because they could not be imposed in accordance with the provisions of the Customs Act. I also remind Senator Puplick, as I did by way of interjection, that it could have been worse if we had adopted the other formula prescribed by the Price Waterhouse recommendations. For example, the Government decided not to accept the consultant's advice to collect the total fee at the time of renewal or original issue, and preferred to continue to provide licensees with the option of paying the fee in quarterly instalments-as we have now done with provisional tax, in the interests of consistency with this. Senator Puplick —Consistency with this? Senator BUTTON —I am really trying to help the honourable senator by saying that he can look for intellectual props right across the spectrum of political endeavour. Prior to 30 June 1985 1,070 warehouse licences were in force. Since 1 July 1985 175 warehouse licence holders have failed to renew their licences. On the other hand, 17 entirely new licences have been granted and 34 applications for new licences are currently being processed. While the increase in fee is known to have influenced the decision by some licence holders not to renew their licences, overall it is considered that the fee cannot be interpreted as having significantly affected warehousing operations. It has not stopped requests for new licences. This is because considerable financial benefit is to be derived from the licensed Customs warehouse system by the users of that system in being able to defer their duty liability. The Government has received a number of representations, as Senator Puplick has, expressing concern at the implications for small business. I make the point that small business can and will continue to make use of the warehousing system. For some small businesses it might be more economic to forgo having their own private warehouses which are used only on an occasional basis and to store their underbond goods in a general warehouse where they would incur storage charges only on an as used basis. This is a commercial decision for the companies concerned but it is quite clear that it may be far more economical than some of the existing operations affected by this change. The Government believes that the users of the licensed Customs warehouse system should pay the costs involved in the administration and control of those warehouses. The warehouse licence fee set out in the Customs regulations under debate provides for the recovery of those costs. The principle of cost recovery has been adhered to in the past by previous governments and should be adhered to in relation to warehouse licence fees. The Opposition ought to support it in the interests of consistency and economic rationality, which is remote from the considerations of a number of members of the Opposition. The Government sought to establish the costs of administering the warehouse system by engaging, after public tender, one of the big eight auditing firms in Australia, Price Waterhouse, to provide the best possible professional advice on how those costs should be recovered. The recommendations by Price Waterhouse have in the main been accepted by the Government. For all the above reasons the Government rejects the motion to disallow Customs regulations 50 to 52 and opposes the motion moved by Senator Puplick. Senator MESSNER(South Australia)(10.44) —I just want to make the point that the Opposition fully supports the views of Senator Puplick on this matter. We will support him at a later stage. Senator COATES(Tasmania)(10.45) —I intervene briefly to record the consideration of this matter by the Senate Standing Committee on Regulations and Ordinances. We dealt with the matter, including a report from our legal adviser, Professor Whalan, on 22 August and decided to take no particular action about these regulations. The increases are large on their face, but the explanatory statement indicates that government policy is to attempt to recover the full cost of government administration of these warehouses, and the rises were not so large as to infringe either our principle (a) about being in accordance with statute or our principle (b) about trespassing unduly on personal rights and liberties. Therefore, the Committee does not recommend the disallowance of the regulations on the basis of its principles. I seek leave to continue my remarks later. Leave granted; debate adjourned. Debate resumed from 18 September, on motion by Senator Walsh: That the Senate take note of the statement and papers. upon which Senator Chaney had moved by way of amendment: Leave out all words after `That', insert: `the Senate condemns the Budget because- (a) it is only half a Budget which fails to outline any approach to the urgent problem of tax reform and tax relief; (b) it fails to remove the threat of new taxes on investment and jobs, such as a capital gains tax which will include death duties and gift taxes; (c) it condemns 750,000 Australians to higher marginal tax brackets during the year; (d) it fails to remove the fundamental problems facing the Australian economy, particularly high inflation, the lack of international competitiveness and the need for further cuts in Government spending; (e) it fails to provide clear direction on the Government's approach to discounting wage indexation for the effects of depreciation of the dollar, so potentially destroying its employment benefit; (f) it fails to move towards the deregulation of labour markets required to give all Australians a chance for a job; and (g) it burdens Australia with the threat of continued high interest rates which hurt not only home buyers but hit business investment and jobs'. The PRESIDENT —Order! Before I call Senator Morris, I indicate to honourable senators that this will be Senator Morris's initial speech in this chamber. I ask that the usual courtesies be accorded to him. I call Senator Morris. Senator MORRIS(New South Wales)(10.47) —Mr President, at the outset I congratulate you on your re-election to the presidency and at the same time on the very fine job you have done for the people of New South Wales as a senator over many years. I would also like to place on record my appreciation and thanks to the Australian Labor Party New South Wales Branch for endorsing me as a Senate candidate at the last election. I also place on record my appreciation of the people of New South Wales who supported me and voted for me in that election. At this stage I pay tribute to my wife, Jill. Jill and I were married 30-odd years ago. I think most members of the Senate would know that I come from the trade union movement and would understand that a full time union official spends many hours away from home. I am pleased to say that my wife, Jill, on many occasions had to play the role of both mother and father. That was saddening for me because I missed those young and tender years of my children growing up and missed some of those very important rewards that I now feel I have achieved through my wife's help in rearing those children over that period. John and Denise certainly are very proud today that I am making my first speech in this House as a senator for New South Wales. Denise is now married with three children. I am pleased that she and her husband have produced three grandchildren for Jill and me to have a wonderful time with. I hope that my son John in the very near future will also reward us with a child. I am very sorry to say that my father passed away some 20 years ago. When one looks back it is very saddening to think that he was not around to witness the experiences I had in the trade union movement, State, nationally and internationally, and also to witness my being in this House. I remember when, many years ago, my father sat me down as very young man and had a talk to me. He said I had a choice to make. He indicated to me that as I was entering the work force I should decide whether to follow the union of my calling. At the same time he suggested that I should join the party of my choice. I am pleased to say that I took that advice, and it was very good advice. I would also like to make reference to my mother, who is 83 years of age. I hope she is listening today. She is a very independent woman. She reared six children during the bad time of the Depression. I am pleased to say that my mother is still very active and independent. At 83 years of age she still walks to Mass every Sunday. The guidance of that woman during my tender years has certainly held me in good stead as I have moved through my working life. I now turn to my work history. I started work as a very young man at the meatworks at Homebush Bay. I was listed to become an apprentice slaughterman. Unfortunately-or fortunately-I broke my arm while playing football. In those days apprenticeships in the industry were so hard to get that I lost my slot on the list. It was not to be that I was to become a slaughterman, so I moved on and started work in the club industry. My trade union experience started at Beecroft Bowling Club, where I joined the union. Some three months after joining the union, the organiser who represented that area indicated to me that he believed that the union was not being run in the best interests of the rank and file members, and asked me whether I would attend meetings to ensure that the rank and file point of view was put. In 1965 I was elected to the Committee of management of the New South Wales branch of the Federated Liquor and Allied Industries Employees Union of Australia, representing the club workers in New South Wales. In 1966 I was elected as an organiser. It was not long after I became an organiser that I found that the union was being used as a political tool. When I say it was being used as a political tool, the leadership which had control of the union did not allow trade union members to play an active role in the union. I want to outline some of the experiences I had during that period. In 1968 a colleague of mine, Bill Wood, decided to use his democratic right to run for the position of Assistant Secretary for the New South Wales branch of that union. To my disgust, I witnessed one of the most shameful and undemocratic exercises that I have witnessed in my life. Bill Wood exercised his democratic right to run as Assistant Secretary, but he had no chance of winning because the ballot was rorted. Because Bill Wood had the audacity to challenge the matter in the Commonwealth Industrial Court, I witnessed, as I said, one of the most shameful things I have witnessed in the history of the trade union movement. A meeting was called in Sydney. Members, or so-called members, turned up at that meeting and they sacked Bill Wood for using his democratic rights. That confirmed in my mind that I had to do something in regard to the union. In 1969 I ran for the position of trustee in the union ballot. To my amazement, when the tickets came out my name was on both tickets. There was a ticket run by the CPA and a ticket run by Bill Wood. I did not have to run my own ticket because I was in a win-all position. I was No. 1. During the ballot I was placed in a very invidious position because the returning officer who was appointed by the committee of management made a suggestion to me that there was something wrong with the ballot. I indicated to him that if he believed that the ballot was being interfered with he should suspend the ballot immediately and hand it over to the Commonwealth Electoral Officer. He did not take that advice. The ballot was counted and I topped the poll. It is easy to see why I topped the poll, because my name appeared on two tickets. Before the poll was declared I told the Secretary of the union that, irrespective of the outcome of the ballot, I would challenge it before the Industrual Court, and that is what I did. At this stage I would like to thank some very fine persons in New South Wales. The first person I would like to thank and pay tribute to is Diamond Jim McClelland. I think everyone knows Diamond Jim McClelland. When I decided to take my case to the Industrial Court, I had a talk with Jim McClelland, who was then an industrial lawyer in New South Wales. Jim McClelland told me that if I was prepared to swear an affidavit, he would take that case before the court for me. I certainly want to thank Jim McClelland because as I tell this story honourable senators will see what he did for our union in New South Wales. I also place on record my appreciation of Neville Wran, who is now the Premier of New South Wales and who in that period was a practising Queen's Counsel in New South Wales. Neville Wran decided that he would take the case before the court for me. I also place on record my appreciation of the late Paul Landa, because Paul Landa acted as junior solicitor in that case. As everyone would understand, Paul went on to become the Leader of the Legislative Council and a Minister in the first Government led by Premier Wran. I also place on record my appreciation of Mr Michael Kirby, who was a junior barrister in that case. He is now Justice Kirby. The court case lasted for 31 days. It was one of the most traumatic periods of my life. There were 31 full sitting days during which all sorts of allegations were made. But I am pleased to say that the court decided that there had to be a reballot. It decided that that reballot would have to be conducted by the Commonwealth Electoral Officer. In 1970 for the first time members of the liquor industries union had the choice of voting for the officials of their union. Prior to 1970 every official was elected for life. There was no ballot in which rank and file members could vote. If member's wanted to vote in elections they had to attend an annual meeting. One other clause in the rules stated that if a member could not attend that meeting, and he asked in writing to be sent a ballot paper, he had the right to vote. I think every senator would understand that it is very difficult to get people to vote in a non-compulsory ballot, let alone making those people apply for a ballot paper. I am pleased to say that we were able to change that situation. I had the opportunity of leading the New Deal Team. The New Deal Team made some pledges to the rank and file while the election took place. We promised that democracy would be brought to the union, and at the same time we promised that if we were elected we would end lifetime appointments. I am pleased to say that the team led by me-the New Deal Team-was swept into office in 1970. It is very interesting that in 1973 Clyde Cameron, a Minister in the new Labor Government, the Whitlam Government, amended the industrial laws to ensure that no person could hold office for terms any longer than four years. That was very important. At the same time he ensured that all full-time officials had to be elected by the rank and file. He also made it much easier for the unions to use the Commonwealth Electoral Officer to conduct their elections. He amended the law to allow unions to apply to the Commonwealth Electoral Officer to conduct the ballot, and for the cost of the election to be paid for by the Government. At this stage I am pleased to say that a substantial majority of unions use that system in their rules. I believe the Opposition in this House should be ashamed that, unfortunately in 1976 because of pressure from the extreme Left and the extreme Right, and employers, the Fraser Government in 1976 changed the rank and file ballot system for top officials in this country, back to the collegiate system. It was a backward step for democracy in the trade union movement when the Liberal-Country Party Government passed the amending Bills under the then Minister for Industrial Relations, Mr Street. What the Minister did in amending the Act was to ensure that no rank and file union member in this country had the right to stand for a top position nationally and to be elected by the rank and file. Under the collegiate system, unless one is elected as a federal councillor one cannot nominate for the position of secretary, assistant secretary or any full time union position. That is why I say that the Liberal-Country Party Government in this place and in the other House took the trade union movement back some 50 years. Also in our campaign we ensured that there would be decentralisation of our union. I am pleased to say that we set up a network of offices right throughout New South Wales. We ensured that paid stop work meetings were inserted into our awards to allow rank and file members to attend union meetings to listen and to decide what their policies should be-what were the right things and what the union leadership should be campaigning for. We also had a very interesting period in 1971 when the then Australian Council of Trade Unions executive decided to campaign against the proposed Springbok tour. I am pleased to say that the Federated Liquor Industries Union was right behind the ACTU on that occasion. We were able to carry that situation because we went out into the work force, talked to our members and told them what it was all about. They endorsed our policies. The campaign started off with all of the trade union movement supporting it, but unfortunately, because of pressure, a number of trade unions dropped out along the way. I am pleased to say that the Liquor Industries Union was there at the finish and we have not seen any Springbok tour in this country since. I would like to say a few words about the International Union of Food Workers. In 1979 I had the experience and the opportunity of representing my union at an International Union of Food Workers conference in Geneva. At that meeting I was elected President of that organisation. I was the first non-European elected as an international President of the IUF Catering Trades Board, which represents internationally over two million people. As President of that organisation I was involved in a dispute at Guatemala. In relation to Coca Cola in Guatemala, there were speakers at the conference from Amnesty International and from the trade union involved who said that trade union members and officials working at Coca Cola had been assassinated. The IUF decided to take up that campaign in regard to the democratic rights of its affiliates in Guatemala. After very lengthy and sincere negotiations which took a lot of diplomacy, I am pleased to say that the head office of Coca Cola in Atlanta finally agreed to withdraw the franchise from the person who had it in Guatemala. Workers at that plant in Guatemala now have the freedom to organise without intimidation. In 1981 I was elected as the regional President of the IUF. That certainly gave me an insight into Third World countries. In my capacity as Regional President, the international secretariat asked me to attend a meeting in the Philippines with the regional secretary, Mr Ma Wei Pin. A dispute existed there which had lasted for 18 months. All the workers had been dismissed. After negotiations, they were all reinstated without loss of pay and without loss of conditions. That was a major breakthrough for people in the Philippines and in Third World countries generally. I would like to say a few words about my experience on the ACTU executive. In 1983 I was elected to the ACTU to represent the food group of unions throughout Australia. I was elected for the next three terms. However, in 1981, for reasons that I do not know and for reasons best known to those people who restructured the ACTU, the executive was restructured with the Federated Liquor Industries Union having no right of representation. When the executive was restructured, unions were grouped together. Our group included the Shop, Distributive and Allied Employees Association, with 140,000 members; the liquor industries union, with 95,000 members; the real estate salesmen, with 1,000 members; and one other union from South Australia, with 1,500 members. The liquor industries union nominated me as a candidate, for the fourth time, but I did not win. However, I am pleased to say that I was able to secure the support of my own union and the two smaller unions, but the weight of numbers from the Shop, Distributive and Allied Employees Union did not allow me to win. In 1985 the ACTU executive was again restructured. The position now is that our Federal Secretary, Mr Michael Boland, whom I congratulate, was elected in September to the ACTU executive after long negotiations with that body. It would be remiss of me if I did not say a few words about penalty rates. If I did not mention penalty rates there would be a lot of my members listening today who would be very disappointed. I want to mention the myth concerning penalty rates. A lot of people are convinced that if penalty rates were abolished tomorrow they could create more jobs and do all sorts of things. I seek leave to have incorporated in Hansard a document which compares tariffs for accommodation in international hotels throughout the world and which has been researched by my research department. Leave granted. The document read as follows- COMPARISON OF ACCOMMODATION RATES City Cheapest Single Room Cheapest Double Room $A $A INTERCONTINENTAL HOTELS Sydney... 100.00 100.00 Amsterdam... 180.57 240.77 Geneva... 132.95 172.84 Hamburg... 148.94 165.19 Hong Kong... 169.88 188.34 London... 233.64 274.28 Manila... 125.53 136.95 New York... 263.91 299.57 Paris... 271.19 344.91 San Francisco... 185.45 228.25 Singapore... 141.90 162.17 Tokyo... 110.72 137.56 REGENT HOTELS Sydney... 115.00 115.00 Auckland... 132.51 144.56 Bangkok... 132.23 132.32 Chicago... 228.25 256.78 Fiji... 142.82 142.82 Hong Kong... 164.34 164.34 London... 213.33 284.44 New York... 242.51 242.51 COMPARISON OF ACCOMMODATION RATES HILTON HOTELS Sydney... 120.00 135.00 Amsterdam... 163.72 204.65 Beverly Hills... 178.32 206.85 Hong Kong... 175.42 190.19 Kula Lumpur... 99.89 120.45 London... 253.96 294.60 Manila... 112.70 128.39 New York... 206.85 242.51 Paris... 159.37 222.40 San Francisco... 192.58 228.25 Singapore... 108.12 125.01 HYATT HOTELS Sydney... 115.00 135.00 Brussels... 128.49 153.63 Delhi... 111.62 124.03 Hong Kong... 121.87 151.41 London... 255.99 308.82 Los Angeles... 135.52 156.92 Manila... 107.00 122.68 Singapore... 128.39 148.66 1 October, 1985 Senator MORRIS —These tables clearly show that Australia has about the cheapest accommodation rates in the world. In almost every other country a service charge of 10 per cent plus a government tax is added, and that is to be added to those tables which have been incorporated in Hansard. For example, a night at the Manila Intercontinental Hotel costs $125 per night for room only, plus 10 per cent compulsory service charge and a 13.5 per cent government tax, which brings the total cost of the room in that hotel to $155 per night. In Manila a worker is lucky to receive $A30 per week. I am pleased to say that the Australian Hotels Association at no time has asked or called for penalty rates to be reduced. When we concluded the 38-hour week negotiations last year the AHA indicated quite clearly that it did not want penalty rates abolished. Prior to being elected to this House I had negotiations with the club industry in New South Wales. That industry is the second largest employer in New South Wales outside the State government. At the outset of those negotiations that organisation told us that it did not want to be involved in or discuss any deletion of penalty rates. For that reason, I congratulate those people. However, there are some people in the motel industry who believe that if penalty rates were abolished tomorrow there would be cheaper accommodation, that they would be able to create more jobs and that they would be able to do a range of good things for workers in Australia. That is a lot of hogwash and I make no apology for saying that. When honourable senators look at the tables which have been incorporated in Hansard they will find that Australia has some of the cheapest hotel rates in the world. Yet Australia is the only country which has penalty rates. I gave an example earlier regarding the rates of pay at a hotel in the Philippines of $A30 a week. The tariffs in that country are the same as those which apply in Australia. One chain of motels in this country has told us that it is not about interfering with penalty rates and that is Travelodge Motels. I am pleased to say that Travelodge has agreed to a 38-hour week by private negotiation and is now banking the extra days. The Liquor Industries Union is still negotiating with the motel industry for a 38-hour week. The people in the community who scream the loudest about penalty rates are the restaurateurs. I make no apology for saying that most restaurateurs in this country pay under the award rates and they do not meet their commitments. Yet they scream the loudest. Some suggestions have been made that if penalty rates were abolished restaurateurs would be able to open their restaurants on Sundays. That is rubbish. We all know that restaurants open from Monday to Saturday and that is when business people were able to have their free lunches. What do these people do on Sunday? People on expense accounts are out sailing their yachts or playing golf. Those are the people who would like to take penalty rates away from workers in the hospitality industry. In conclusion, I wish to thank the Usher of the Black Rod, the Clerk, the Assistant Clerk, the clerical assistants, the attendants, the dining room staff and the drivers for the very fine service and help they have given me since I have been a member of the Senate. I certainly could not have carried out the work on behalf of the people I represent in New South Wales without the support of those people. Mr President, when I finally retire from this place I hope that I will go out with the same respect and support that you enjoy, as a senator from New South Wales, which you have built up over many years. I thank the Senate. Debate (on motion by Senator Robertson) adjourned. Debate resumed. Senator COATES(Tasmania)(11.13) —Earlier I said that the Standing Committee on Regulations and Ordinances does not recommend that this regulation be disallowed because it does not infringe our principles. Senator MESSNER(South Australia)(11.14) —I rise briefly to indicate that the Opposition supports Senator Puplick's motion for disallowance. Senator Coates —You did that. Senator MESSNER —Yes, but on behalf of the Opposition, I want to congratulate Senator Morris on his maiden speech. We hope that he enjoys his time in this place. Question put: That the motion (Senator Puplick's) be agreed to. The Senate divided. (The President-Senator the Hon. Douglas McClelland) Ayes . . . . . . . . . . . 25 Noes . . . . . . . . . . . 33 —— Majority . . . . . . . . . 8 —— Archer, B. R. MacGibbon, D. J. Baume, Michael Messner, 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. Chaney, F. M. Sheil, G. (Teller)Collard, S. J. Teague, B. C. Guilfoyle, Dame Margaret Vanstone, A. E. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. Lewis, A. W. R. Aulich, T. Haines, J. Black, J. R. Jones, G. N. Bolkus, N. McClelland, DouglasButton, J. N. McIntosh, G. D. (Teller)Childs, B. K. Maguire, G. R. Chipp, D. L. Mason, C. V. J. Coates, J. Morris, J. Colston, M. A. Robertson, E. A. Cook, P. F. S. Ryan, S. M. 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. Knowles, S. C. Coleman, R. N. Kilgariff, B. F. Ray, RobertBjelke-Petersen, F. I. Reynolds, M. Missen, A. J. Elstob, R. C. Durack, P. D. Grimes, D. J. Short, J. R. McKiernan, J. P. Question so resolved in the negative. Debate resumed from 15 October, on motion by Senator Button: That the Bills be now read a second time. Senator BOLKUS(South Australia)(11.22) —Before the Senate adjourned last night, I had started my contribution on this tax package and had made a number of points in respect to it. The first and fundamental one was that I asserted that this tax package constituted a most comprehensive and significant reform of the Australian tax system, one which had been long overdue and which has brought equity into the system that now operates. In doing so I referred to the consultative process which preceded the tax package, a process that offered to all Australians a say in how tax revenue should be most fairly gathered. Going on from that, I made a number of points about the reduction in the new marginal tax rates and its impact on the average taxpayer in take home pay, and noted that for such people an income tax cut of about $6 a week would take place from September 1986, and more from July 1987. I then proceeded to discuss the corporate tax reform aspect of the tax package and made some comments about the mechanism of transfer pricing, whereby the corporate sector has a way out of shifting profits at the lowest possible tax rate. I now wish to proceed to another aspect of the tax package, and that is the part dealing with fringe benefits. I believe that the fringe benefits tax is a welcome initiative, and long overdue. For too long in our economic system the majority have been subsidising the social lives of the select few who have guarded fiercely their right to company cars, subsidised school fees, free lunches and low interest loans. The Minister for Finance, Senator Walsh, a couple of days ago mentioned that he thought the Liberal-National Party coalition in this place had put forward this new concept of a free lunch-led economic recovery. It is interesting to see to what extent this free lunch-led recovery has been embraced by Opposition spokespeople. Getting away from the rhetoric and the strident opposition from some aspects of the restaurant trade, we should be noting that the Government decision will bring equity into the system. We have outlawed what constituted outright tax evasion. Over the years there was an increasing shift of high income earners to perks rather than salary as their preferred form of income. This highlighted the unfairness of the system as it operated. Whereas a company executive could claim a business lunch as a tax deduction, people in the work force with children-and in this respect women were affected more than men-could not claim child care expenses. Inconsistencies such as this highlighted the urgent need for reform. The enormity of the reform is evidenced by the fact that approximately $600m will be returned to tax revenue in 1986-87 as a result of the fringe benefits tax. It is a telling comment on the enormity of the lurks that our friends in the Opposition wish to protect. Another aspect of the package which has been opposed by some members of the Opposition has been the capital gains tax. In the same way something had to be done about the enormous growth in the practice of converting income into capital gains to avoid tax. This practice has been behind the greatest tax avoidance schemes of the past 15 years. I believe that the cessation of this avenue of avoidance will raise more revenue than will the actual tax itself. The debate on the tax that has ensued since the Government made its announcement has ranged from the slightly unreasonable to the most totally absurd. On the latter end of the range the South Australian Opposition Leader, Mr Olsen, suggested that the introduction of the tax would mean no less than the total destruction of private enterprise in South Australia-inflammatory words, to be expected in a lead-up to a State election. However, when one looks at what the tax will raise in South Australia and makes an assessment based on the tax figures produced by the Government, one finds that South Australia's contribution to revenue from the capital gains tax will amount to only $2.5m after five years-not really the stuff of private sector decimation. Mr Olsen insults the South Australian private sector if he believes that it cannot bear the burden of $500,000 tax per annum. In this place the Opposition would have us believe that the capital gains tax is a creature bred recently in some socialist Treasury laboratory; obviously something that would not take place under the previous Secretary to the Treasury, John Stone. The truth is, however, that such a tax has existed for at least 10 years, and in many ways this new tax is an adjunct to the existing provisions. As honourable senators opposite well know, section 26AAA of the Income Tax Assessment Act provides that if assets are bought and sold within a 12-month period they are subject to a capital gains tax, at the full marginal tax rate. So the rhetoric that is being put forward in this place, and outside in the community, is misplaced. There is no justification for freedom from a capital gains tax. In fact, if equity is to be introduced into our system, such a tax is vital. What we have without such a tax is a system whereby income is not taxed equally. All income irrespective of source should be taxed equally, and this measure goes some way towards doing that. It should be noted that capital gains add to an individual's wealth and income and ability to consume and therefore they should be taxed accordingly. In many ways, however, as I mentioned earlier, the capital gains tax could have carried more clout. Most countries with such a tax make absolutely no allowance for the effect of inflation on asset values. The Government's tax will do so. What we are presented with is an extremely moderate tax by world standards. It will exclude the family home; it will apply only if the asset price increases more quickly than inflation; and there is no death duty component aspect to it. The whingers in the Opposition, in business and on the land are really only whingeing at a concept. If they look more closely, they will see that the deal they are getting is more than fair. Another important aspect of that tax package that I wholeheartedly applaud is the way the Government has handled the whole question of poverty traps. We have moved very decisively to alleviate the plight of those caught in poverty traps. It has been one of the greatest inequities in our system that pensioners, welfare beneficiares and low income earners face extremely high marginal tax rates when they try to earn just a little more for themselves and their families. This problem has been exacerbated over recent years when other benefits and entitlements such as, say, supplementary rental allowance, have also become income-tested. We then had a situation when many people on social security benefits found that they were paying an even higher tax rate than high income earners, many of whom were able to afford their tax obligations. This aspect of the tax package is aimed directly at those in greatest need; pensioners with children and those obliged to pay rent are met by this initiative. It will mean that pensioner couples will be able to earn $70 a week before their pension is reduced and pensioners with children will be able to earn an extra $12 per week per child. Senator Walters —On a point of order: This is a second reading speech on taxation. The honourable senator is dealing with social welfare benefits, which I do not see have anything to do with the taxation Bills at all. Senator Button — Senator Walters was clearly not listening to what Senator Bolkus was saying. There is no point of order. Senator Bolkus was talking about the way the tax package deals with poverty traps. I think the honourable senator ought to pay attention. The DEPUTY PRESIDENT —I do not uphold the point of order. Senator Messner —Mr Deputy President, on the point of order- The DEPUTY PRESIDENT —No, I have ruled on the point of order. There is no point of order. Senator BOLKUS —On the advice of Senator Foreman last week, the honourable senator should catch the next train to Tasmania. The DEPUTY PRESIDENT —Order! Senator Bolkus, there will be no discussion on this matter. Senator BOLKUS —The point I want to make is that we are dealing with a tax package which deals favourably with those caught in the poverty trap in the past. I think it is an important initiative and one that should be welcomed, not only by this side of the Parliament, but also by those on the other side, including Senator Walters, despite the fact that she seems to have a continual obsession with the rich doctors in this country. An aspect of the tax package which has been debated very strongly in the community and one which I believe will still be debated is the ID card proposal. What I want to say on this matter is not new. In the past I have said more than enough about the ID card proposal. However, I do wish to make some comments about the initiative of the Government and the way we should tread and proceed on this matter. It is quite clear that there are possible gains to tax revenue under an ID system. I think it is also clear that there will be costs. There is of course the inevitable cost to civil liberties which has to be weighed in the context of the whole debate. The DEPUTY PRESIDENT —Order! In view of the point of order taken earlier by Senator Walters, the honourable senator is straying from the purpose of these Bills. We are not discussing the tax package as a whole, they will come into the Senate later. The Bills before us should be the subject of the honourable senator's speech. Senator BOLKUS —We are discussing the tax package, and this is one aspect of it. The DEPUTY PRESIDENT —Order! The Bills before us are listed on the Notice Paper. They are not the ones which are presumed to be introduced in due course on the tax package. Senator BOLKUS —In that case I will jump over the aspect of ID cards, no matter how interested the Opposition may have been in what I wanted to say about it. Having gone for over 20 minutes, I will now come to my conclusion. At the end of the debate, at the end of the consultative process, we have, I believe, a re- orientation in the direction of our tax system. We have had in the past a system which has been protected by the irresponsibility of conservative governments, fortified by the criminality of the corporate sector and protected for too long by an irresponsible High Court. The reforms in this package are as substantial as they are essential. I mention the enormity of the tax cut of $4.5 billion to wage earners. The fact that they have been received so well in the community indicates to me how necessary they were. I believe that the tax package has addressed the urgent need to reduce marginal tax rates, to put a stop to the growing tax avoidance industry and, in so doing, to restore fairness to the taxation system. Economic growth is generated and encouraged by some of the measures and greater rewards for initiative are provided by the removal of distorted tax shelters. I believe that the introduction of a reasonable capital gains tax will help move capital from non-productive areas to more productive employment encouraging ones. I congratulate the Government for its courage in embarking upon such an ambitious program and, furthermore, congratulate it for actually doing something about tax, an area which has been neglected for too long by conservative governments in this country. Senator WALSH(Western Australia-Minister for Finance)(11.35) —I was not able to be present for most of either the first or second reading debate on the Taxation Laws Amendment Bill (No. 2) 1985, the Income Tax (Individuals) Bill 1985, the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Bill 1985 and the Medicare Levy Bill 1985, but I understand that Senator Walters and Senator Michael Baume both raised the question of the Medicare levy and drew attention to the fact that the Medicare levy was not actuarily based. That is, of course, correct. It was never intended that it be actuarily based any more than it was ever intended that the premiums charged by the private health funds be actuarily based. Indeed, the private funds insist on the community-rating principle. That, of course, is an explicit repudiation of actuarily based insurance premium assessment. The Liberal Party of Australia, as I understand it, has always been a strong supporter of the community-rating principle but finds itself apparently critical of the application of the same sort of principle for the Medicare levy. That is an inconsistency which I leave Opposition senators to explain. It is not my responsibility to do so. Senator Messner, at a more serious level, in his comments sought advice on a particular aspect of the non-leveraged finance lease measures. It concerned the type of expenditure on repairs to leased property which would, if incurred by the lessee, result in the lease being classified as a finance lease. In general terms, a finance lease exists where all, or substantially all, of the risks and benefits of ownership of property are transferred from the lessor to the lessee. One such risk of ownership is the requirement to repair property. The provision to which Senator Messner referred in relation to repairs is limited in its operation to leases for periods in excess of one year. Further, the reference to repairs is to those repairs that would usually be carried out by an owner of property if that property were the subject of a lease other than a finance lease; that is, they would generally be repairs of a capital nature. The concept of repairs does not extend to costs associated with general maintenance of the leased property. These costs could properly be borne by a lessee without the lease being classed, by that reason alone, as a finance lease. In response to the question as to when the package of legislation pursuant to the tax reform will be introduced, it will be done as soon as possible bearing in mind that there is a heavy work load associated with the preparation and particularly, as I understand it, pressure on the parliamentary draftsmen, but it is being given a high priority. Other issues that were raised in relation to the application of capital gains tax on disposal of leased property will be covered in the relevant legislation. Some comment was made in relation to the 10 per cent limitation on investment by an employer-sponsored superannuation fund in the employer's business. It was stated by the Government that that measure is for the protection of employees in the event of a business failing. The Opposition, however, suggested that it would prevent an employee sharing in an employer's success. There are other ways which an employer could devise of allowing employees to share in an employer's success if the employer chose to do so-for example, by direct acquisition of shares in the employer company. It should also be pointed out that the proposed rules are in accordance with the recommendation of the Commonwealth Task Force on occupational superannuation which stated: . . . not more than 10 per cent of the assets (measured at cost) of an employer-sponsored fund should consist of equities in or loans to the employer's business or a related company and/or associated persons that are not at arm's length from the employer. The provision in this legislation is consistent with the views of the Hancock National Superannuation Committee of Inquiry and, going further back, the Campbell Committee of Inquiry into the Australian Financial System and the Asprey Taxation Review Committee. The Hancock Committee recommended a maximum level of investment of 10 per cent. The Campbell Committee recommended only 5 per cent, though at market values instead of at cost, and the Asprey Committee recommended only very minor investment being permitted in the employer's business from employer-sponsored funds. The Australian Democrats have given notice of an amendment to clause 29 of the legislation which I will not address now other than to say that the Government will not be accepting the amendment. Question resolved in the affirmative. Bills read a second time. The Bills. Senator SIDDONS(Victoria)(11.40) —I move the following amendment to the Taxation Laws Amendment Bill (No. 2) 1985: Page 37, clause 29, paragraph (b), proposed new sub-section 159P (3A), paragraph (b), leave out `$1,000', insert: `$500'. Last evening when talking to this package of legislation on the Government's taxation amendments I made the point that the Australian Democrats applauded the initiative of the Government in abolishing concessional rebates. These rebates have become a farce. One has to spend at least $2,000 a year on such things as education or medical expenses before any rebate applies. Of course the rebate applies only to expenditure in excess of $2,000. So the rebates were meaningless to the majority of Australians and only the very wealthy benefited from them. In fact less than 6 per cent of Australians benefited at all from the rebates so we applaud the Government in abolishing them. However, in doing so the Government has rightly said: `There is a case for a rebate in the case of medical expenditure, particularly by those who are chronically ill, the elderly and so forth' and it has introduced a special medical expenditure rebate which applies after the threshold of $1,000 has been reached. The Democrats point is that that threshold is still too high to be meaningful. One has to spend $1,000 on medical expenses before one can get any rebate at all, and the rebate applies only to those expenses in excess of $1,000. If somebody spends $1,050 he or she would get a 30 per cent rebate on the $50. That is not a very generous gesture by the Government when one looks at it in stark terms. We applaud the fact that the Government has taken note of the special problems of the aged, the chronically sick and those with large families who have a run of sickness in one particular year. However, in a way that is not very meaningful when one looks at the fine print. For this reason we are proposing that the threshold for medical expense rebates be not $1,000 a year but $500 a year. We make the point that this will not blow government expenditure to the seven winds; it is a very reasonable and modest amendment. The Minister for Finance, Senator Walsh, has said that the Government is not prepared to accept our amendment. That does not surprise me but I appeal to the Opposition to support it as being reasonable and to put some pressure on the Government not only to make gestures which appear to be worthwhile but also to do something which is worthwhile. The Government will gain $80m-I stress $80m-from the abolition of concessional expenditure rebates. That is a fair increase in government revenue and will certainly help swell the coffers of the Government. It has also been estimated by the Government that the medical expenditure rebate with a threshold of $1,000 will cost the Government $20m in a full year. That is not a large amount of money in terms of total government outlays. Senator Walsh —It is more than that. Senator SIDDONS —That is the information I got from- Senator Walsh —I am not sure whether I heard you correctly, but if you were saying that the difference between a $1,000 threshold and a $500 threshold is estimated to be $20m, that is not correct. Senator SIDDONS —The Minister misunderstood me. Senator Walsh just made the point that he understood me to be saying that the difference between a $1,000 and a $500 threshold was $20m. I did not say that. I said that the total estimated cost to the Government of the $1,000 threshold is $20m. That is the figure I have and Senator Walsh now indicates that he is in agreement with it. This gesture by the Government, which we applaud, will cost it $20m. We are simply suggesting that the threshold be not $1,000 but $500. Unfortunately, I have not been able to get any worthwhile figures as to what this would cost the Government but, even assuming that it would double Government expenditure from $20m to $40m, the Government would still be $40m better off through the abolition of the rebate. I believe that this is something the Government could well give consideration to. The chronically sick and those with large families have a real problem in the community. The Government has acknowledged that by bringing in this special medical expenditure rebate. Our plea is that the Government address the very real problems in the community and fix the threshold at a figure that makes it meaningful to large families, the chronically sick and the elderly so that something worth while is achieved. They would get a rebate of only 30 per cent on expenditure in excess of $500 a year. There is no way that that could get out of hand; there is no way that that could seriously affect government revenue. Senator MESSNER(South Australia)(11.47) —The Opposition-soon to be the Government-will not be supporting the Australian Democrats' amendment on this matter. The reason is that Senator Siddons, out of his own mouth, has been unable to convince us of the real need for this measure. Indeed, he has indicated that he has no concept at all of how much it might cost. It is for the Government-this being part of its Budget legislation-to decide that the $20m cost which it is attributing to the introduction of this rebate is the figure which it is prepared to ride with as part of its Budget process. I believe that the Government has properly demonstrated its case in respect of that. That is not to say that the Opposition agrees with the principle that has been adopted with this legislation. We, of course, acknowedged this in the course of the second reading debate. A further point I would like to make is that we are opposed to the concept of the abolition of the previous $2,000 concessional rebate where it affects people paying money into superannuation funds, life assurance, council rates, et cetera. Consequently, the Government, having decided to go down that track and that this is its position, needs to make sure that it can carry its Budget in this place. I repeat that the Opposition will not be supporting the Democrats' amendment. Senator HARRADINE(Tasmania)(11.38) —I believe that the Australian Democrats' amendment has some merit. I am concerned about the effect that the abolition of the concessional rebate will have on large families. A family with a number of children could have a history of dental problems, for example. I know of families where children one after another have grown buck teeth-I do not know whether that is the professional word-and have had to go to orthodontists. It is a tremendous cost burden for such a family. At present I think the cost for orthodontal treatment is of the order of $1,400 or $1,600 a pop. Senator Messner —It will be taken as part of that rebate. That is fine. The $1,000 rebate will work in favour of that person for expenses in excess of that amount. Senator HARRADINE —I would have thought that not all of it is covered by medical benefits. I understand that only about half is covered. As I understand the argument thus far-I have only just entered the debate, having been absent-the proposal that has been put forward by the Australian Democrats would mean that any amount above $500 would attract a concessional benefit of only 30 per cent of the total amount that is paid. As Senator Siddons said, this arrangement will not get out of hand because of the inbuilt situation under which concessional deductions attract a rate of only 30 per cent. My real concern is for people with a number of dependent children. I suppose that is a concern which is felt right throughout the community. There is a considerable degree of concern by some people in the community, particularly by one-income families with a number of dependent children, that the Government has forgotten them in this Budget. It is not for me at the Committee stage to address that issue. I will leave such remarks until we deal with the supplementary tax statement of the Treasurer (Mr Keating) which I understand will be brought before the Parliament when we next sit. However, I believe that the Democrats amendment at least seeks to sweeten the pill a little and to ensure that the legislation has less effect on larger families than would be the case if the current proposal put forward by the Government were implemented. Senator SIDDONS(Victoria)(11.52) —I welcome Senator Harradine's support. I was very interested to hear his very genuine concerns about the plight of large families who strike a bad patch in terms of health. It was very sad to hear the blind support that the Opposition has given the Government in this matter. We see the Laborials in action again. Senator Messner gave no reasoned reply for the Liberals' opposition to the amendment. He said: `Oh, you know, maybe expenditure will get out of hand'. How can it get out of hand? The amendment provides for a 30 per cent rebate on medical expenses in excess of $500 a year. That is a very reasonable proposition. I have given the only figures that the Government has produced on this matter. The amounts are not very large at all. I cannot really understand why the Liberal Party is not prepared to address its mind to areas of real concern in the community, to the plight of large families that run into a series of sicknesses. I think its decision can be explained only by its blind desire to support the Government and to make sure that as little pressure as possible is applied. Senator WALSH(Western Australia-Minister for Finance)(11.54) —I acknowledge that the Opposition will not be supporting the amendment. I think there is a very good reason for that. I do not mean good in the moral sense, I mean good in the practical sense; that is, that the Opposition believes that one day it will have the responsibility of governing the country again and the responsibility of putting together a coherent Budget. Of course, the splinter groups which have moved in support of the amendment know that they can pander to every pressure group and play Santa Claus with public money without ever having to accept the financial responsibility for their actions. It is a matter of judgment what the appropriate level of the threshold ought to be. I acknowledge that. Government revenue will increase by about $80m because of the abolition of the general rebate. The partial replacement of the general rebate with a medical expenses rebate with a $1,000 threshold will reduce that $80m by about $20m. The acceptance of Senator Siddons's amendment would further reduce the revenue gains by up to $40m. So, if the amendment were accepted, as much as $60m of the original $80m revenue increase could be dissipated, and that is a significant amount which the Government cannot ignore. I said that it is a matter of judgment-and I will even concede, I suppose, a quasi arbitrary judgment-what the appropriate level of the threshold should be. However, it was never intended that either the previous rebate or the partial replacement of the general rebate which the Government has proposed would cover all medical expenses. It was proposed only that some provision should be made for exceptional and unexpected medical expenses which would occur only occasionally. The general policy of the Government, of course, is that the medical needs of the community will be covered by Medicare but that some allowance and concession would be made for exceptional, unexpected and, I suppose, sporadic very heavy medical expenses that some people might incur. This proposition, of course, is part of the Government's taxation package. If the revenue raising measures which constitute that taxation package are to be fretted away, as this amendment would to a significant degree fret away the revenue raising measure, it would not be possible for the Government to deliver the tax cuts in 1986 and 1987 which have been promised. Therefore, the amendment amounts to a proposal to reduce the tax cuts and the Government, for those reasons, will not accept it. Senator SIDDONS(Victoria)(11.58) —I want to make one very brief point on this issue. The undeniable fact is that the Government is concerned, as was said, about eroding its revenue base. However, it is also acknowledged by the provision of the special rebate that there is a genuine need in the community. Whether the cost of the amendment is $20m-and I believe that is the more likely figure-or $40m, which Senator Walsh suggested, inevitably an additional burden of that magnitude will be imposed on a section of the community that can least afford it. Those are the simple facts of the matter. Senator PETER BAUME(New South Wales)(11.59) —I am astounded by what Senator Siddons has just said. There is no issue of principle before the Committee at all; it is a question of money. Senator Siddons has made no case of principle. If a matter of principle is involved, why not start with the first dollar of net expenditure and seek a rebate from that? If the honourable senator wanted to make a case that a genuine need is not being met-although he has not made a case, I think one could be made-the obvious amendment he should have moved would have been to make all net medical expenses deductible. The honourable senator's amendment would have the effect of excluding from benefit all those who had net medical expenses between nought and $500. So let us not pretend that the honourable senator is arguing on a matter of principle. The Government has already admitted the principle, but has put a high price on it-a $1,000 level. The honourable senator is arguing about the money, the level at which the principle should cut in. That is what the honourable senator has to convince us of if he wants the Committee to accept his proposal. Senator HARRADINE(Tasmania)(12.01) —In respect of Senator Peter Baume's contribution, I believe that there is a major matter of principle here and that is that if a family, at whatever level of income, has dependants that should be recognised in the tax system. After all, it is recognised in the tax system so far as business is concerned, so why should it not be recognised in the tax system so far as the most important business in the whole of Australia is concerned namely, families? Senator Peter Baume —Why not start with getting rid of it? Senator HARRADINE —Why does not the honourable senator oppose what the Government is doing? That is the way to do it. I understand that Senator Siddons is trying to face the reality of the situation and is trying to bring in at least some alleviation for those families which will be afflicted by chronic ailments over the next few years. The Minister for Finance, Senator Walsh, has now revealed to the Senate that in order to give overall tax cuts the Government will ensure that families with grave illnesses help pay for those tax cuts, to the extent of $34m or $40m or whatever it is. Those tax cuts-that is another argument-will be across the board and those families without dependants will be able to benefit from them. Not only do we have this non-recognition by the Government of the need to ensure that families with dependants do not have a greater burden to bear, including a greater indirect tax burden, but also the Government has decided to attack those families with chronic illnesses. I say again that the mind boggles at the attitude that those families with a large number of dependants with chronic illnesses should have to bear an unfair burden to the extent, as the Minister said, of $34m in Government revenue. The Committee should consider what it is doing. The Government is treating in an unfair manner the family with a number of dependants who are unfortunate enough to have chronic ailments which require quite considerable amounts of money to be expended upon them. It is treating those families in a different way to those who are blessed with good health. I believe that that is not a fair proposition. It is contrary to what I thought the Government's policy was on Medicare. For example, one cannot claim orthodontic treatment on Medicare. Will the Government place families in a situation in which they will not be able to make a claim for their medical expenses for orthodontic treatment other than for amounts over the $1,000? Even that amount will, of course, be subject to a rebate of only 30 per cent. This matter ought to be reconsidered. I know we are getting into an area which is probably more appropriate to the debate which is coming up on the supplementary taxation paper, but this concern ought to be registered here. I believe that what Senator Siddons is proposing is at least a better deal than what is proposed by the Government. Senator SIDDONS(Victoria)(12.06) —I want to answer Senator Peter Baume's accusation that there is no matter of principle here. Senator Harradine addressed the point that there is a matter of principle here. Those who have large families who suffer a year of severe illness or those whose families have very large medical expenses not covered by Medicare-for example, chiropractor's expenses-are not subject to any rebate by the Government. Senator Messner —Why don't you start at zero if there is a principle? Senator SIDDONS —Because we are concerned about those families and those people who suffer very heavy expenditure in any one year. We are simply suggesting that $1,000 is an unreasonably high threshold. Senator Peter Baume —What about the principle? Senator SIDDONS —The principle is acknowledged by the Government. All we are arguing about is the fact that the threshold is unreasonably high and the principle that the Government obviously espouses is not really being effective. Senator WALSH(Western Australia-Minister for Finance)(12.07) —I think I should reply to that bit of bleeding heart humbuggery which we just heard from Senator Harradine. The general rebate which this is replacing was skewed against low income households. That was a major reason for the Government's change. Senator Harradine gave himself away by referring twice to orthodontic work. Low income households cannot afford orthodontic work. So let us dispose of this humbuggery that Senator Harradine is arguing for the low income households and low income families. He is doing no such thing. The logical extension of his argument is that the Government should pay 100 per cent and not 30 per cent of all the medical expenses not covered by Medicare or by private insurance arrangements. Question put: That the words proposed to left out (Senator Siddons's amendment) be left out. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 54 —— Majority . . . . . . . . . 48 —— Chipp, D. L. Mason, C. V. J. Haines, J. (Teller) Sanders, N. K. Harradine, B. Siddons, J. R. Archer, B. R. Hill, R. Aulich, T. Jessop, D. S. 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. Maguire, G. R. Brownhill, D. G. C. Messner, A. J. Carrick, Sir John Morris, J. Chaney, F. M. Parer, W. R. Childs, B. K. Puplick, C. J. G. Coates, J. Rae, PeterCollard, S. J. Reid, M. E. (Teller)Colston, M. A. Robertson, E. A. Cook, P. F. S. Ryan, S. M. Cooney, B. Sheil, G. Crichton-Browne, N. A. Short, J. R. Crowley, R. A. Sibraa, K. W. Devlin, R. Tate, M. C. Durack, P. D. Teague, B. C. Evans, Gareth Townley, M. Foreman, D. J. Vanstone, A. E. Georges, G. Walsh, P. A. Gietzelt, A. T. Walters, M. S. Giles, P. J. Watson, J. O. W. Guilfoyle, Dame Margaret Withers, R. G. Hamer, D. J. Zakharov, A. O. Question so resolved in the negative. Amendment negatived. Senator WALTERS(Tasmania)(12.15) —I have several questions to ask of the Minister for Finance (Senator Walsh). I know that he is very much aware of the disadvantage incurred through the tax system by single income families, and that a two-income family with a combined income of, say, $16,000 is at great advantage compared with the single income family with an income of $16,000 because the two-income family may be eligible for two tax free thresholds whereas the single income family has only one tax free threshold. That is the reason that our tax policy would allow income splitting for this family. However, I do not see why the Government's policy should be continued in the levy. I believe that the Minister should look at this disadvantage to a single income family and at the way the Government has estimated how the levy should be paid. If we consider a married couple with one dependent child on $16,000 a year we find that they pay a levy of $160, whereas a couple with no dependent children, on the same total income, with one earning $9,000 and the other $7,000, pay just a little over half that amount. They pay only $90. I could give many more examples. It seems to me that to disadvantage a one income family with a dependent child compared with a two-income family with no dependants, both on the same income is quite wrong. Will the Minister explain why that is allowed to happen? Senator WALSH(Western Australia-Minister for Finance)(12.17) —I have done some quick calculations which I cannot guarantee in precise detail but they give an indication of the orders of magnitude of the specific case that Senator Walters raised. She referred to two households, one with an income of $16,000 accruing to only one member and the other with two members receiving an income of $8,000 each. Senator Walters —And they have a dependent child and the other lot do not. Senator WALSH —All right, they have a dependent child. The household that has two $8,000-- Senator Walters —No, I did not say that. I specifically said that one was earning $9,000 and the other $7,000. Senator WALSH —Well, it will not make any difference. Senator Walters —Yes it does-quite a considerable difference. Senator WALSH —No, it will not because the incomes are based on the same marginal tax rate and they are both above the threshold. The figure is not precise. Whether there is an $8,000: $8,000 split or a $9,000: $7,000 split, the amount of tax paid would be of the order of $1,800. For a household with the same number of people, but a single income, the amount of tax paid in the first instance would be $3,050 minus $1,040 for the dependent spouse rebate, giving a net tax liability of about $2,010. Those figures are not precise because I just worked them out by hand but the difference in the liability of the two households is of the order of $210. It is quite small. However, it remains true that one household is advantaged, albeit to a small degree, over the other. From that it might seem to be fair and reasonable to split incomes. That belief persists only until one looks at the very much broader picture. An analysis of taxation statistics shows very clearly that households which claim the dependent spouse rebate-I do not have the precise figures-are heavily concentrated in the upper income levels; they are upper income taxpayers. So although what Senator Walters has proposed might seem superficially to be a fair and reasonable proposition, it would have very little effect on the low income households to which she referred. The adoption of the policy she has proposed would deliver benefits disproportionately to high income taxpayers, among whom at present those who claim the dependent spouse rebate are heavily concentrated. Of course, those who claim the dependent spouse rebate are, by definition, single income householders. Senator WALTERS(Tasmania)(12.21) —The Minister is not even answering the question I put to him. I asked: Why should that disadvantage be continued in the payment of the levy? If the Minister will please- Senator Walsh —The payment of what? Senator WALTERS —The levy. The Minister did not listen to me. Why would I be talking about the tax system and our policy in the middle of a discussion of the Medicare levy? If only the Minister would pay attention he would understand what I am talking about. I have said that there is already a disadvantage in the tax area. Why should it be extended to the levy? If the Minister will listen, I will repeat my question. A married couple with one dependant and with a single income of $16,000 pay $160 in levy. A two-income family with no dependants, with one income of $9,000 and another of $7,000-the combined income being the same; $16,000-pays just a little over half that paid by the first couple. It pays only $90 in levy. I am asking the Minister why this injustice should occur. Why should a married couple with a dependent child pay nearly double that paid by a two-income family on the same combined income with no dependent children? Senator WALSH(Western Australia-Minister for Finance)(12.23) —Senator Walters proposes that there is something unjust about the basic taxation law because the income tax unit is the individual instead of the household. Then she tacks on to that the effect of the Medicare levy and says that this is a matter of injustice and that something should be done about it. The first response to that, if one accepts her original proposition as valid, which I do not-a sort of fiddling about at the edges while leaving the heartland alone-is that the hypothetical household to which she referred, a household with incomes split in the proportion she suggested, if one exists at all, would be extremely rare. Secondly, I refer to the problems of writing and administering a taxation Act. The Income Tax Assessment Act, the last time I counted the pages, contained eleven hundred and something pages. To make allowance for the sort of proposition which Senator Walters is putting forward would be to add considerably both to the length of the Act and to the difficulty in administering it. If there are any households which meet the hypothetical conditions she has put down-I doubt whether there are any at all or any which approximate it-there would certainly be very few. Senator WALTERS(Tasmania)(12.25) —This is just not good enough. The Minister has his officers beside him. He is quite well aware that my figures are correct. If they were not he could ask the officers and I am quite sure that they would tell him that my question was-- Senator Walsh —I did not say they were not. It is such a trivial issue that it is not worth adding another 50 pages to the income tax Act. Senator WALTERS —Seeing that Senator Walsh believes that there is only one anomaly there, I will give him a few others. He says that it is such a hypothetical question, that there would not be any families with one income of $9,000 and another of $7,000. Let us look at another anomaly. Let us look at the couple with no dependent children and a total income of $16,000, one income being $10,000 and another being $6,000. That couple pays $100, not $160. They pay $60 less than the couple in the original example I gave, that of a one-income family on $16,000 with one dependent child, who pay $160 in the Medicare levy. I can go on and give the Minister more examples if he likes. There is no point in his telling me that there would be no families in Australia under these income limits. Of course, there are. The whole situation I am getting to is that a one-income family with a dependent child is disadvantaged against another family with two incomes and no dependent children. I would like a further explanation. The Minister has his officers beside him. His comment that the Australian Taxation Office has so many pages in its taxation legislation, et cetera, and that my proposition is far to costly to be equitable is not good enough. We must have a more equitable system. The whole levy business is rubbish anyway, but if we are going to have one we should at least try to make it more equitable. Senator WALSH(Western Australia-Minister for Finance)(12.27) —The Medicare levy is imposed, and always has been, in the same way as personal income tax. That is, it is imposed on the individual. Since the tax unit is the individual and not the household, the Medicare levy is imposed on the same basis. The other question Senator Walters raised became significant as she moved closer to reality and proposed the case of a household with a $16,000 total income split 10:6. Such a household would still be extremely rare, but the gap between the levy paid by that household and that paid by a $16,000 single-income household narrows to $60. If she likes to give other examples, the rule which will apply is that the closer she gets to the sort of income distribution which one might conceivably find in reality the narrower that gap becomes until it shrinks to vanishing point. As I mentioned earlier, given that the tax unit in Australia is the individual, the Medicare Levy Act allows release from payment of the levy for those on low incomes. It is clearly very necessary to do that for those households which have a single income only. If relief for low income earners were made available only in respect of family unit income, any relief given would have the same impact whether the family was an individual, a married couple without dependants or a couple with dependants. Senator WALTERS(Tasmania)(12.29) —I do not believe that the Opposition is prepared to accept the Minister's statement that because the Medicare levy is imposed on individuals the inequalities that result from that just have to be ignored. The matter is very simple. The Minister needs just to amend his legislation so that no couple on a single income would pay more than two-income families on the same income. It would be a quite simple matter and I believe that the Minister ought to take it into consideration. Bills agreed to. Bills reported without amendment or requests; report adopted. Bills (on motion by Senator Walsh) read a third time. Debate resumed from 15 October, on motion by Senator Gietzelt: That the Bill be now read a second time. Senator PETER BAUME(New South Wales)(12.31) —The Opposition does not oppose the Social Security and Repatriation (Budget Measures) Amendment Bill 1985. This Bill seeks to amend four Commonwealth Acts and serves mainly to adjust rates payable as a result of decisions made by the Government. The amendments are to the Aged or Disabled Persons Homes Act 1954, the National Health Act 1953, the Repatriation Act 1920, and the Seamen's War Pensions and Allowances Act 1940. The amendments generally effect rate changes in various benefits which are payable, and the Opposition does not oppose those. We note in passing that not all the rates have increased. I note that, with regard to the rates payable under the personal and respite care headings of the Aged or Disabled Persons Homes Act, although they are computed differently as a result of this measure, they do not represent any effective rate change. I make that observation for the record. I want to use this opportunity in discussing the social security Bill to comment upon some of the problems associated with the poverty traps in relation to those receiving social security benefits, and to say that there are some misconceptions about the ways in which people go about relieving poverty traps. The kinds of poverty traps which exist are quite horrendous. Some of them were drawn to the attention of the Australian public in the recent taxation statement made by the Treasurer (Mr Keating). I had occasion to look at some of the benefits and some of the withdrawal rates which applied to benefits when people earned some income. Effective taxation rates of well over 100 per cent-sometimes 112 per cent-applied. Indeed, following the August Budget and before the taxation statement was made, some of those marginal withdrawal rates had actually increased. I note that one of the rates after the Budget was 118.75 per cent. It was actually 112 per cent before the Budget was handed down. That means, of course, that of every extra dollar that a person earned, he lost not only the extra dollar but more than the dollar in terms of benefit to which he was entitled. That is the origin of the term `poverty trap'. One of the reasons why some people in receipt of benefits were simply not able to improve their circumstances was that they lost more by way of combined effect of pension withdrawal and tax than they gained from their earnings. I observe that if one attacks a poverty trap simply by raising the area of income which is permissible before the various withdrawal rates arise, it must follow that one has not attacked the poverty trap at all. All one has done is to raise the level which applies before the trap operates. If the withdrawal rate has not been changed and if the same number of cents are withdrawn for each extra dollar earned, the fact that that does not apply until a higher level of income has been achieved does not remove the poverty trap; it simply alters the level at which that poverty trap operates. Senator Walsh —And it affects a much smaller number of people. Senator PETER BAUME —It will affect a smaller number of people, but I put to the Minister, who acknowledges my point, that one therefore has to watch very closely the effects of rising benefit rates and rising income under various awards, because increasing numbers of people will be caught while inflation continues to operate. I want to draw attention to several of the effects of the taxation reform measures as they affect poverty traps. The decision to increase the income-free area from $30 to $40 for single people, and more for married couples, will affect the aged, invalid pensioners, and the recipients of widows' pensions and supporting parents' benefits. It will also cover the wives' and carers' pensions which we will have soon. It will affect the recipients of sheltered employment allowances and rehabilitation allowances. All of those people stand to benefit from the fact that they have a bigger cushion. But the effect of the measure will not in any way alter the effective marginal tax rate that will apply once they cross the barrier, even though it is a higher barrier. For those people the poverty trap will still exist, albeit at a higher level and, as the Minister for Finance (Senator Walsh) stated quite correctly, albeit that fewer people will be affected and many people will have relief at present. But the poverty trap will not have been touched. The Government has announced that it intends to increase the amount of income to be disregarded in respect of certain children. This will affect all pensioners and those in receipt of supporting parents benefits who have dependent children. The effect of this measure, again, will be to increase the margin of safety within which withdrawal will not occur. But it will leave in place the effective marginal tax rates which lead to the poverty trap. It will leave the poverty traps in place, but at a higher level. I acknowledge that a third thing the Government has done is to abolish the separate income test for rental assistance. Again, this will affect all pensioners, those in receipt of supporting parents' benefits, unemployment benefits and sickness benefits, who are eligible for rental assistance. There will no longer be a separate income test. Any income that they earn will be considered in the general income test. For those people, again, there will be an increased cushion. Fewer will be affected by the withdrawal rates, but the high effective marginal withdrawal rates that make up the poverty traps in Australia will remain. No one would cavil at what the Government has done in trying to improve the free income areas and what it has done to try to ease the number of people caught by the poverty traps. But I put to the Government that it has not, in regard to measures it has announced, ended the existence of the poverty traps. To that extent the problem has simply been put aside for another day. As I said, the Opposition does not oppose these measures. Senator Walsh —The maximum effective marginal tax rate for rent payers- Senator PETER BAUME —The rate for rent payers is the only one in respect of which the effective marginal tax rate has been reduced. But in regard to the major groups of beneficiaries which I mentioned, in the first two categories, the effective marginal tax rates remain the same. As I said, the Opposition supports this legislation and will be pleased to see it passed by the Parliament. Senator COATES(Tasmania)(12.39) —I say in response to some of the comments by the previous speaker, Senator Peter Baume, in regard to poverty traps that he used his time to speak about a Bill which has not yet been introduced. Senator Peter Baume —I was talking about the general problem of poverty traps. Senator COATES —Certainly, but this Bill-the Social Security and Repatriation (Budget Measures) Amendment Bill 1985-which we are dealing with today does not arise out of the tax package announced in September. It is a package of amendments arising out of the Budget announcements. It is an all encompassing Bill dealing with social security and repatriation changes, and a couple of matters affecting the portfolio of the Minister for Community Services. Perhaps the reason why Senator Peter Baume did not comment in detail on these matters is that they were so well received in the community, as was the Budget generally, reflecting the general satisfaction with the Government's economic policy and our reform program. As mentioned by Senator Peter Baume, there are other measures in the pipeline such as the attack on poverty traps as part of the tax package to be implemented next year. This Bill, affecting the Social Security Act and the Repatriation Act, increases expenditure on social security and welfare by $110m in this financial year and $245m in a full year. That is on top of expenditure automatically resulting from increases in the number of pensioners and beneficiaries and, of course, automatic indexation procedures. We have given substantial increases in assistance to people who are most in need, which is our priority-increases for low income families, single parents and those who are unemployed. They are very welcome measures, but, of course, they are not enough. We wish we could do more but I suggest that senators opposite are the last people to suggest such a thing to this Government because, despite the savings measures which were implemented by the Government in the May package, the Opposition is always clamouring for less and less government expenditure. I will mention a couple of specific new initiatives in this Bill. One is the carer's pension which broadens the previous spouse carer's pension to include those caring for invalid near-relatives and not just the husband of a female invalid pensioner. That new initiative will come into effect in November 1985. Again, a relatively minor matter in terms of overall expenditure involves special assistance for families which experience multiple births. Until now there have been act of grace payments for people with triplets and quads, but I think it is much preferable for there to be defined benefits rather than discretionary payments for such people which acknowledge the vast extra expenditure they have. It is important to put this sort of entitlement into legislation, as this Bill does. The amount to be paid will be $150 a month for families with triplets and $200 a month for families with quads. These payments will continue until the children involved are aged six. For those senators who might be interested, the number of families involved throughout the country is only of the order of six in the case of quads and 180 in the case of triplets. I now turn to changes in unemployment benefit levels other than indexation provisions, which do not need a Bill to implement them. This Government progressively has been moving to close the gap between the single unemployment benefit and the basic rate of pension and sickness benefit. It has been trying gradually to correct the unfortunate decision of the previous Government when it made a distinction between the entitlement of those who are unemployed and those receiving the sickness benefit or the age or invalid pension. As well as automatic indexation of the single unemployment benefit, the Government has been implementing special ad hoc increases to try to close that gap. This Bill provides an additional $3 per week above indexation. There needs to be specific changes to the junior unemployment benefit rate. This Bill provides an additional $5 a week for the junior unemployment benefit to bring the rate up to $50 a week, which is the same as it has been in recent times for those who have been unemployed for six months or more. An important initiative that will not take effect until May next year is the availability of rent assistance for those over 18 who are unemployed. Rent assistance of $10 will be provided to those who have been unemployed for more than six months. Sitting suspended from 12.45 to 2 p.m. Senator DURACK —My question is directed to the Minister Assisting the Minister for Foreign Affairs. Senator Gareth Evans —Representing him here. Senator DURACK —I never know quite how to refer to him in his many hats and so on. Senator Gareth Evans —A damn sight more than you will ever wear. Senator DURACK —I will enter into that competition with him privately on some occasion. I ask the Minister whether he is aware that the Acting Prime Minister told the House of Representatives yesterday: The action of the United States was fully justified and we support the action. Does the Minister agree with the Acting Prime Minister that the United States was fully justified in its actions to apprehend the hijackers of the Achille Lauro? Will he support the action of the United States? Senator GARETH EVANS —I said yesterday that the communication to President Reagan was consistent with what the Acting Prime Minister had said before in the House of Representatives. Yesterday the Acting Prime Minister confirmed that what he said was, in fact, consistent with the text of that message. I have nothing further to add. Senator ZAKHAROV —Is the Minister representing the Minister for Arts, Heritage and Environment aware of widespread opposition towards the setting up of a commercially operated dolphinarium in Victoria? What action can the Federal Government take, through import regulations or other means, to prevent the commercial exploitation in captivity of these intelligent mammals? Senator RYAN —As honourable senators will be aware, the Australian Government has a proud record in the international arena when it comes to the question of protecting cetaceans, including dolphins. At the most recent meeting of the International Whaling Commission held in the United Kingdom the Australian delegation, which was led by Professor Derek Ovington of the Australian National Parks and Wildlife Service, continued to push for a total ban on commercial whaling. As regards Senator Zakharov's more specific question with regard to a commercially operated dolphinarium in Victoria, honourable senators may not be aware that in October 1984 the Minister for Arts, Heritage and Environment, Mr Cohen, decided not to grant a permit under the Whale Protection Act for the capture in Commonwealth waters of live cetaceans which were intended for display at the Victorian dolphinarium. As regards the possible extension of legislative measures to protect cetaceans, the Government is awaiting the recommendations of the Senate Select Committee on Animal Welfare which has examined the question of cetacean capture and display. Senator MESSNER —Does the Minister representing the Treasurer share the views of the Commonwealth Banking Corporation, whose Board includes the Secretary to the Treasury and Mr Cliff Dolan, the former President of the Australian Council of Trade Unions, on the effect of the ceiling on bank home loan rates as expressed in the bank's annual report released yesterday? Specifically, does the Minister agree that the ceiling has `had the effect of limiting the interest rates that can be offered on deposits, restricting in turn the extent of funds the Commonwealth Savings Bank is able to allocate to its home lending program'? Senator WALSH —I have not seen the report. I knew that it had come out but I have not had a chance to look at it. Implicit in Senator Messner's question is the fact that he has a very high opinion of Mr Dolan which is contrary to my understanding of the Opposition's opinion of Mr Dolan or the organisation with which he was formerly connected. Apparently, once he changes hats, the Opposition changes its opinion of him. Senator Messner —He is another carpetbagger, is he? Senator WALSH —No, he is not a carpetbagger. The Opposition represents the carpetbaggers, the tax cheats and the free lunch specialists. The PRESIDENT —Order! Will the Minister come back to the original question? Senator WALSH —I cannot recall for certain whether the Commonwealth Bank is yet charging the interest ceiling of 13 1/2 per cent on housing loans. If it is so charging it has not been doing so for very long. Until the bank is charging the maximum permitted the point that is made in the report is not applicable, but at any time after the bank is charging the ceiling rate then, quite clearly, unless the bank is willing to cross-subsidise housing lending from some other areas of its activity-it may well have valid commercial reasons for doing so-the ceiling on the rates which may be charged, as a question of logic, imposes a limit on the rates which may be paid. Subject to those qualifications, I think that the statement is logically incontestable. Senator McINTOSH —I direct my question to the Minister for Resources and Energy. I understand that the Australian delegation to the ninth meeting of the London Dumping Convention in September played a leading role in securing a continuation of a moratorium on the ocean dumping of nuclear wastes. Did the Australian delegation give any consideration to supporting proposals for a total ban on ocean dumping of nuclear wastes? If not, why not? Senator GARETH EVANS —As Senator McIntosh has said, the Australian delegation succeeded in its basic objective at that conference of maintaining the moratorium on ocean dumping. As to why we were not able to secure some more substantial prohibition along the lines of that sought by, for example, the Greenpeace organisation-that is to say, a total prohibition of the dumping of nuclear waste at sea-essentially the reasons are as follows: This would have meant altering the annexes to the Convention. However, amendments under the London Dumping Convention rules can be made only on scientific and technical grounds and need approval by a two-thirds majority. An expert group was set up by the LDC in 1983 to consider the safety aspects of sea dumping. Its report, which was received this year, did not provide compelling scientific evidence in support of such a far-reaching amendment. A total prohibition was considered by Australia and other countries opposed to sea dumping as very likely to fail on the vote under those circumstances. In the event of it succeeding, however, there was a danger then of pro-dumping countries withdrawing from the Convention, in which case the international regime for controlling dumping of radioactive and other wastes would have been weakened. Based on this complex array of considerations, the Australian view was that continuing the moratorium would have significant advantages over trying to actually amend the text of the Convention and would provide the best practical outcome for the Government's policy of vigorous opposition to the dumping of radioactive wastes. This, in the event, was the view, as I have said, that prevailed at the LDC which carried a resolution, co-sponsored by Australia and 15 other countries, by a substantial majority-25 for, six against and seven abstentions. That resolution, for the record, called for an indefinite suspension of sea dumping of radioactive wastes pending the completion of further detailed scientific and other studies. The terms of the resolution will make it extremely difficult to resume dumping in the future. In addition, political, legal, economic and social aspects will have to be considered in the future as well as merely scientific aspects. Senator MASON —Is the Minister representing the Treasurer aware of a story in the current National Times entitled `An Australian success story (they pay no tax)' which states that the Swiss-based aluminium company, Aluswisse, has paid no tax at all on its alumina exports from Gove in the Northern Territory even though exports reached $US100m a year as early as 1976; the Australian Taxation Office estimates that between that year and 1979 the company's income was understated by $100m; the Department of Trade estimates that Aluswisse's 1984 exports differed from the lowest range of `fair and reasonable' export contracts by a least $34m, and overall it has been estimated that as much as $US550m may have been shaved from export values between 1972 and 1984 by the company through the use of transfer pricing? Is the Government optimistic that it will be able to recover the taxes already owed to the Australian people by this company and others which may be using similar methods? Most importantly, will the Government consider introducing a provisional taxation system for this type of mineral exporter so that considerable funds would be held by the Government while any taxation appeals took place? Will the Government also consider machinery-- The PRESIDENT —Order! The honourable senator's question is getting a bit long. I ask him to bring it to a conclusion. Senator MASON —I am dealing with the two points on which I want information from the Minister. The PRESIDENT —Order! I suggest that the honourable senator's question is getting a bit on the long side. Senator MASON —Mr President, I have four or five lines to go. Honourable senators-Oh! Senator MASON —I take it that the Minister has got my first question. If I can only give the Minister my second question without interruption, with all respect to you, Mr President-- The PRESIDENT —Order! If the honourable senator does not ask his question, I will ask him to resume his seat. Will the honourable senator ask his question? Senator MASON —Certainly, Mr President. The second part of the question is: Will the Government consider machinery by which guidelines for realistic export prices could be set in order to prevent the use of transfer pricing to avoid minimised tax? Senator WALSH —The Minister responsible for the administration of export controls is the Minister for Trade. His Department monitors prices, including transfer prices of multinational companies, in regard to exports of some resources, including alumina. Insofar as the question concerns the taxation laws, the secrecy provisions of the Income Tax Assessment Act, of course, prevent the Commissioner from commenting on the affairs of individual companies, including that mentioned in the National Times. However, the Commissioner has advised that within the Taxation Office there are specialist units which monitor international transactions by multinational companies or enterprises to detect profit shifting activities through what is commonly known as transfer pricing. For that purpose, information is obtained from a wide range of sources. Section 136 of the Income Tax Assessment Act and new provisions of that Act, introduced in 1982 and effective from May 1981, and provisions to the same effect in Australia's double taxation agreements, empower the Commissioner to deal effectively with arrangements involving the shifting of profits out of Australia through transfer pricing and other means. The operation of those provisions is being closely monitored by the Commissioner. In respect of Senator Mason's suggestion-and I do not want to sound pedantic about this-that a provisional tax be levied on these companies, I expect that under the tax reform package they will be subject to provisional tax, but I do not see how provisional tax per se will overcome the problem. If Senator Mason means a withholding tax, which I suppose could be regarded as a form of provisional tax, then that may be another matter. I shall refer that to the Treasurer for his comments. Senator BLACK —I direct my question to the Minister representing the Minister for Primary Industry. Has the Minister seen recent Press reports indicating that a farm rally in support of the National Farmers Federation fighting fund is being organised at Gympie, Queensland, for 25 October by a Mr Guenter Kath? Further, has the Minister seen Press reports indicating that Mr Kath's property at Wilwarrel, known locally as the `slave labour camp', pays farm workers $10 for a 95-hour week and is run along similar lines to the Hitler Youth movement, a movement formerly supported by Mr Kath? Does the Minister believe that Mr Kath's attitude to his workers fairly reflects the attitude of the National Farmers Federation to the rural work force? Senator Boswell —Good question! Senator WALSH —It should be noted for the record that Senator Boswell said: `Good question'. According to a report in the Courier-Mail of 2 October, a major farm rally in support of the National Farmers Federation fighting fund will be held in the showgrounds at Gympie on 25 October, as Senator Black said. According to the same report, one of the organisers is Mr Guenter Kath, of Wilwarrel, Gympie, who also chairs a regional fighting fund support committee. This is evidently the same Mr Kath who was reported upon in 1979 in the Melbourne Truth, which is not normally regarded as a journal of record, but I understand that in other interviews Mr Kath has confirmed what was published in Truth at that time. On 26 May 1979 that journal had an article on Mr Kath, who was managing director of Wilwarrel and ran a farm near Gympie which Truth described as a slave labour camp. It also reported that Mr Kath was a former World War II German Army officer and a supporter of the Hitler Youth movement and that he paid young people as little as $10 for a 95-hour week. One other comment I could make is that, if that is correct, action should be taken under State law to do something about it. As for the attitude of the NFF, one cannot be entirely certain whether the Federation supports Mr Kath's wages policy or supports the Hitler Youth movement. But I note with some alarm a statement by the Deputy Director of the NFF, who earlier this month listed the objectives of the NFF fighting fund as including opposition to any capital gains tax. That, of course, is a different way of saying that the National Farmers Federation does not believe in a crackdown on tax avoidance, because a capital gains tax is essential to an effective crackdown on tax avoidance. It also means that the Federation either is culpably ill informed or is more concerned with looking after the interests of people outside agriculture. As anybody who knows anything about it knows, real agricultural land prices do not in the long term increase. There is an excellent letter in today's Bulletin that draws attention to the fact that the very policies which the NFF is supporting-that is, the perpetuation of taxation shelters and the expectation that tax can be avoided through land purchases-is highly damaging to genuine farmers, whether they are existing farmers who want to remain farmers or genuine potential farmers who want to become farmers. The existence of those sorts of practices makes it extremely difficult, if not impossible, for genuine farmers to compete with the Pitt Street, Collins Street and other tax avoiders who are entering agriculture not for the income which they believe can be earned but for the tax avoidance potential which they believe it contains. I might refer to the then director of the Bureau of Agricultural Economics who, back in 1978, made public statements expressing the same conclusions-that is, that such practices were not in the best interests of agriculture; that any taxation laws which attracted capital investment solely for the purpose of taking advantage of the taxation shelters were not in the best interests of agriculture, let alone of the economy as a whole. Even more alarming probably-and again from Mr Farley's statement-is the National Farmers Federation's commitment to promote discussion with the objective of moving towards a flat tax. That is a formula for increasing the tax paid by the majority of farmers, because a majority of farmers, at least at this stage, have quite low taxable incomes. The NFF also proposes to support a wage freeze without giving any indication of how that would be achieved. The statement commits the NFF to a campaign to reduce farm costs and to remove anti-dumping duty on di-ammonium phosphate fertiliser. I do not know what the reaction of the honourable member for Corangamite to the proposal is, because he is also a director of the Pivot fertiliser co-operative-- The PRESIDENT —Order! The Minister is clearly debating the matter now. I suggest that he stick to answering the question. Senator WALSH —Certainly, Mr President. That co-operative applied to have the anti-dumping duty imposed. The PRESIDENT —Order! I ask the Minister to answer the question. Senator WALSH —In short, for as long as the National Farmers Federation advocates flat taxation, the perpetuation of taxation shelters and opposition to a capital gains tax, one would seriously have to question whether ordinary farmers are being betrayed by their leadership-a point to which my colleague Mr Kerin addressed himself very well in a Press release issued on 10 October. Senator ARCHER —Is the Minister representing the Minister for Science aware, and has he seen reports, that the United Kingdom is now contemplating withdrawal from the United Nations Educational, Scientific and Cultural Organisation? Will he advise the Senate of Australia's position at this time, the value that we achieve and the intentions of the Government on our remaining a member of that organisation? Senator BUTTON —I have heard radio reports of the United Kingdom contemplating a change in its position. The Government has no intention of changing the current position of membership. Opposition senators interjecting- Senator BUTTON —We have to think of something for all honourable senators opposite. As far as I know, there are no proposals to change the present Government's attitude on this question as a result of the debate which has taken place internationally, but I will check with the Minister for Science and provide Senator Archer with a detailed answer. Senator FOREMAN —Did the Minister for Education see in the Australian on 2 October 1985 the article by Christopher Dawson on the Opposition's proposals for deregulated education? If so, can the Minister advise the Senate what such a move would mean to education courses in general and what her views are on the obvious slur cast upon the present levels of teaching implicit in that article? Senator RYAN —Yes, I did see the article and I have heard some other comments from the new shadow spokesperson on education. I will be interested to see just how long Mr Shack is going to persist with this extreme right wing deregulation dry approach to education. I will be interested to see just how long it will take him, once he interests himself in education issues and has discussions with people who provide education in this country and people who get it, to realise that education is simply not a commodity like soap powder. He can have a free market for soap powder; he can put his soap powder on the shelves with other soap powders to see whether he can undercut his competitors and make a profit. That process may be relevant to some manufactured products, although we notice that the coalition partners of Mr Shack and the Liberals show no interest at all in having a free market for rural products or manufactured products. That process may have some relevance to manufactured and rural products, but we see it as having no relevance whatsoever to a process which takes the best part of a person's life. Mr Shack will find very quickly, as other dries from his side of politics have found, that the business of setting up education systems, be they at school level, tertiary level, in the technical sector or in research, are simply not processes which are amenable to this free market process. For example, for a tertiary institution to achieve high standards of teaching and research in a wide range of disciplines is a process that takes many years. It takes the training of many researchers and academic teachers; it takes expert administrators and it takes many things which simply cannot be turned off and on in the same way as a consumer can choose to buy soap powder from the shelf or not. Mr Shack also seems to be under the impression that our universities, colleges of advanced education and technical and further education colleges are full of staff who sit around all day and do nothing and that teaching standards and research standards as a result are very low. These are very ignorant views about what actually happens within our tertiary institutions. Australian institutions have a very high reputation internationally, particularly in research. Nobel Peace Prize awards have gone to Australian medical researchers and scientists of all kinds. Australian research is very much in demand in our region. Those honourable senators who have taken an interest in the Government's policy of exporting education services will be aware that there is great demand in our region for the export of research consultancy and teaching services. These things do not come about as a result of the operation of the free market, as Mr Shack in his very early days as shadow spokesperson of education seems to think; they come about because resources have been made available over a long period, policies have been implemented, skills have been developed and it has been possible to achieve a high standard of education. If Mr Shack thinks that he is going to attract votes to his cause by offering to dismantle this whole process, I think he is very much mistaken. When he has had discussions with the Australian Vice-Chancellors Committee, with the Australian Council of Directors and Principals, with the academic unions, with student organisations, or with TAFE directors, he will find no interest at all in the proposal to dismantle the system, which has achieved very high standards, and replace it with some crude voucher system. I am growing sick and tired of attacks on higher education standards in this country. It is very easy for slick journalists, slick media personalities or inexperienced Opposition spokespersons to insult- Opposition senators-Ha, ha. Senator RYAN —Yes, it is pretty laughable, I guess. It is very easy for these people to insult teachers, researchers, scholars and students in a way that really betrays their own ignorance. In conclusion, the great and growing interest being expressed in our region-I think this will be expressed, for example, by the Chinese Minister of Education, who will be visiting this country this week-for access to our education resources demonstrates that we do indeed have a very high standard product and that certainly the responsibility of our Government and of me as Commonwealth Education Minister is to make sure that those standards are maintained and enhanced. Senator LEWIS —My question is directed to the spokesperson currently representing the Minister for Health. I think that might be Senator Button. As a Victorian, I certainly hope it is Senator Button. My question is: Does this Government have any concern at all for the 25,700 Victorians currently awaiting urgent pain relief surgery, a situation undoubtedly created as a result of the current Medicare mess in Australia? If the Government does have any concern for these people, what is it going to do for them? Senator BUTTON —What a silly question to ask whether the Government has any concern about this matter. It is very concerned about it. It is a very complex issue. It is primarily a matter for the Victorian Government to resolve. A resolution of the matter is being sought in Victoria at this time. Resolution of the matter will not be helped by the honourable senator's silly question in the Senate. As soon as the matter is resolved I will give the honourable senator a special report on it. Senator SIBRAA —Can the Minister representing the Minister for Primary Industry inform the Senate about efforts being made at the State and Federal levels to assist sugar cane growers in northern New South Wales? Will the Minister compare the New South Wales Government's attitude with the Queensland Government's efforts to assist its cane growers? Senator WALSH —The Federal Government has moved quickly to make decisions on a package of support measures for the sugar industry following the submission of the report of the working party in August. Indeed, the Federal Government has offered over a three-year period possibly as much as $150m which will cover price support at a level higher than that recommended by the working party and also adjustment assistance and research funding. That offer is subject to some matching contribution being made by the States, or some contribution toward that possible total of $150m being made by the States. On 1 October, I am advised by Mr Kerin, the New South Wales Government announced its intention to participate with the Commonwealth in an assistance package for that small section of the industry-about 5 per cent-which is located in New South Wales and that it would contribute to the price support expense. I think it is commendable that the New South Wales Government-although in the context of the whole State the sugar industry is quite unimportant-has responded in that way. The New South Wales Government stands in stark contrast to the Government of Queensland which, of course, makes a lot of noise but has yet to put up any money. Notwithstanding the fact that 95 per cent of the industry is in Queensland and that on other occasions other State governments have made contributions to industry restructuring, to this stage the Queensland Government has refused to put up any money at all. This is notwithstanding the fact that it has stuffed away in a hollow log at least $30m to $40m of money previously lent to the Queensland Government, on-lent to farmers and repaid by them-stuck away in a slush fund by the Queensland Government to use for purposes which are not entirely clear. Whether the money is still in a hollow log or whether it has been transferred to some other slush fund is not even yet apparent. The Queensland Government has ample funds from that source alone to match the Commonwealth's offer. However, it has refused to do so. I think it is quite scandalous that the New South Wales Government has responded with commendable speed on a matter which is not of critical importance to the State of New South Wales while the Queensland Government is still dragging its feet offering nothing whatsoever except a lot of unhelpful hot air, a lot of noise, a lot of abuse, vilification and irrelevant politicking. Senator HILL —My question is directed to the Minister representing the Minister for Aviation. Radio broadcasts in Adelaide today indicate that the South Australian State Ombudsman, Mary Beasley, who is a member of the Board of Qantas Airways Limited, is being asked to explain a trip she took on a Qantas flight and, in particular, the basis on which the trip was paid for, the amount of the fare for her and a companion and how the fare was handled by Qantas. Has the Minister called for a report and, if so, has it been received? If such a report has been received, does it indicate any irregularity? Has the Minister discussed the matter with the Ombudsman and the Chairman of Qantas? Are Qantas Board members given any travelling privileges or air fare advantages not available to Qantas employees? Senator GIETZELT —Senator Hill asked me a question regarding a particular individual-the South Australian Ombudsman-who is a member of the Board of Qantas. I appreciate the fact that currently there is heightened interest in Australia in the issue of the discounting of fares but I am sure the honourable senator will appreciate that I do not have those sorts of details in my brief. I will take the question on notice and seek an early response from the Department. Senator JONES —Is the Minister representing the Treasurer aware of the very strong rumours and reports in political circles that the convicted tax cheat, Brian James Maher, through either his own name or that of a nominee, made at least one sizeable donation to the National Party's secretive Bjelke-Petersen Foundation? Does the Minister agree that, if these reports are true, it is desirable that the Commissioner of Taxation recoup such moneys together with other funds and assets earned by Maher through tax evasion? In such circumstances will the Minister recommend to National Party management officials that the Taxation Commissioner and/or the National Crime Authority-preferably both-be invited to investigate the Foundation's affairs to clear, or confirm, very genuine fears held by many Queenslanders that it has become a shelter and a favour-purchasing slush fund for tax evaders and the criminal fringe element? Senator Boswell —Mr President, I raise a point of order. Senator Jones's question is based on a premise of rumour and guestimates; he admits that in his question. I ask you to rule that the Minister cannot answer a question that is based on rumour. The PRESIDENT —Order! There is no point of order. Senator WALSH —I am aware of the rumours to which Senator Jones referred; that is, that Mr Maher-either directly or indirectly-made a sizable donation to the Bjelke-Petersen Foundation. I do not know whether that rumour is true but I would be surprised if he did not. I certainly agree that if the reports are true it is desirable that the Taxation Commissioner should try to recover those moneys. The third part of Senator Jones's question is whether I will recommend to National Party management officials that they open up their books, effectively. I am quite happy to recommend to the National Party that it should do that but I doubt that it will. However, I will ask the Treasurer to see what legal action can be taken, either by the Taxation Commissioner or by the National Crime Authority-as Senator Jones suggested-to see whether the Bjelke-Petersen Foundation has received from Mr Maher, or an agent of his, money which was effectively stolen from the Commonwealth, and if such a donation was received, to see what action can be taken against the Bjelke-Petersen Foundation to recover the money so stolen. Senator REID —Does the Minister representing the Special Minister of State acknowledge that as Minister in charge of the Australian Federal Police the Special Minister of State is also the relevant local police Minister in the Australian Capital Territory? It is correct that the Minister has refused to talk with the locally elected representatives of police serving in the Australian Capital Territory about their complaints? Senator GARETH EVANS —Mr Young is not normally notorious for refusing to talk to anyone. I do not know whether he has done so on this occasion. I will have to check it with him and I will give the honourable senator an answer in due course. Senator DEVLIN —Has the attention of the Minister representing the Minister for Employment and Industrial Relations been drawn to recent criticism of the prices and incomes accord between the Government and the Australian Council of Trade Unions? Is the Minister satisfied that, with the implementation of the provisions of the accord under this Government, Australia's employment picture is improving and will continue to improve? Senator WALSH —I am aware of criticism of the accord, almost all of which comes from members of the Opposition, who have a very confused policy on this question. At different times they argue for propositions which are not only conflicting but even mutually exclusive. For example, the Opposition has argued that there should be both decentralised wage fixing and a wages freeze. Of course in a decentralised system there can be no effective way of enforcing a wages freeze or wage discounting, which is what the Opposition has recently argued for. About a month ago the Opposition spokesman on employment and industrial relations advocated a deregulated labour market. About two weeks ago he advocated a modified regulated labour market and the last I heard, about a week ago, he again advocated a completely deregulated labour market. In this matter it is very difficult to determine what is Mr Brown's true preference. It is extraordinary that the Opposition should take that attitude because the runs are on the board, as a former Liberal Party Prime Minister used to say. The accord has delivered almost half a million new jobs and two years of real economic growth approaching 5 per cent. We are approaching a third year of real economic growth at about that level. The inflation rate has been almost halved. Half a million new jobs have been created, as I said earlier. We have had the lowest level of industrial disputes in the last 18 years and the lowest level of unit wage cost since the 1960s. Because of the agreement reached last month, negotiated with great skill by Mr Willis and Mr Keating with the Australian Council of Trade Unions, we have a guarantee that the accord will be cemented in place for at least another two years. I find it almost incomprehensible that, given that record of the accord, members of the Opposition, let alone the Opposition leadership, could seriously advocate that the policy which is the foundation stone for that record of achievement should be abandoned and, indeed, that the Leader of the Opposition gleefully anticipates as a replacement for the accord and all its achievements five years of industrial warfare. Not even Mr Fraser at his worst would have advocated that. Senator TEAGUE —I direct my question to the Minister for Education. When will the Government respond to two major reports of the Senate Standing Committee on Education and the Arts? The Government's commitment is normally to respond within a six-month period but the report on tenure of academics is now more than three years without a Government response despite some 40 important recommendations affecting all universities, institutes and colleges. The report `Towards a National Language Policy' was completed more than 10 months ago and sets out some 120 important recommendations relating to all aspects of Australia's language resources. Secondly, and briefly, I ask the Minister to clarify the current arrangements for undertaking the preparation of the Government's response and for ensuring that the responses to both reports are comprehensive and substantial in all the matters that senators and these inquiries have raised and recommended. Senator RYAN —I am sure that Senator Teague will be pleased to hear that a great deal of discussion and development has taken place in regard to both of those reports. There has been substantial discussion of the recommendations in the report surrounding the tenure issue with relevant staff associations and with the Vice-Chancellors Committee. The Caucus education committee, a body which gives advice to the Government on these matters, has also consulted with relevant unions and had discussions. The Government is aware of the many defects in the present tenure system. In particular, of course, Senator Teague will be aware that I am conscious of the defects of the present system in relation to employment and promotional opportunities for women academics whose career patterns are such that they have experienced what could be called structural discrimination by the present tenure system. So there has been a great deal of discussion and consideration of ways in which the tenure system could be improved. I think the Government will have a final response to the report after another report is available to it. I refer to our request to the Commonwealth Tertiary Education Commission to carry out a review of productivity in higher education. That report will be with the Government by April 1986. The productivity review will give CTEC and its Chairman, Hugh Hudson, the opportunity to look at tenure issues in the context of making a more productive use of resources which go into tertiary education. As Senator Teague would know, this is a complex question. The advantages of tenure are very widely appreciated within the academic community. Tenure gives an academic security to pursue his or her research and teaching free from interference of a political nature or any other nature. It is true that the pattern of the growth of Australian higher education institutions was such that a very large number of academics were tenured in the 1970s. That situation has meant that newly qualified academics coming into teaching and research simply have nowhere to go. In fact, they have very few tenured positions to go to. As well as the particular attempts we are making to find a better way of providing tenure in higher education institutions, the fact that tertiary institutions are now in a period of growth again inevitably means that more academic positions are becoming available and so the pressure on tenure is being released somewhat in that way. However, I would not conclude that growth alone will answer all of the issues that were raised by the report of the Senate Standing Committee on Education and the Arts. So we will continue to have discussions about the Senate Committee's recommendations. However, the final response from Government will come after the productivity review is available to us. Senator Peter Baume —You have had it for three years, Minister. Senator RYAN —Senator Baume interjects that it is three years. Of course, those three years have been interrupted by an election period and, as all honourable senators know, the work of Senate committees was suspended during that time. I would say that, even if it is three years, that is not a long time in which to sort out all the extremely complex issues involved in the matter of tenure within higher education institutions and which were very comprehensively discussed in the Senate Committee's report. The national language policy report to which the second part of Senator Teague's question related also raises very complex issues. They are under discussion in a systematic way both within the Caucus education committee and within agencies in my portfolio. Senator Teague will appreciate that policy issues raised by the Senate Committee's report impinge not only on my portfolio but also on the portfolio of the Minister for Immigration and Ethnic Affairs. In order to co-ordinate a government response, I have set up a portfolio committee within my Department which will consult with relevant departments and the Caucus education committee. I think that it will finally have a report ready to Government round about October of this year. Senator COLSTON —I direct a question to the Minister representing the Minister for Local Government and Administrative Services. Given the recent decision in the Administrative Appeals Tribunal upholding a Commonwealth employee's claim that smoking in the work place was a health hazard, what steps has the Government taken to protect the rights of smokers and non-smokers who work for Commonwealth departments and statutory authorities? Senator GIETZELT —I am aware that the Administrative Appeals Tribunal recently established that a public servant with a low tolerance to cigarette smoke and other pollutants was entitled to compensation as a result of working in a smoke filled and polluted environment in Canberra. Therefore, an important principle has been established in respect of the problems of smoking on which there has been a bipartisan view in this chamber for quite some time. I think we recognise that, more and more, mature persons are conscious of the dangers of smoking and of being in smoking areas. As a result of that, almost a year ago on 20 December 1984, the Public Service Board issued a memorandum entitled `Smoking in the Work Place' to all departments and authorities. This memorandum recommends a ban on smoking only in certain areas of buildings and that managers should consult with smokers and non-smokers alike with a view to taking into account their views and their environment rather than prohibiting smoking altogether. The responsibility to implement this memorandum lies with the management in each department. The Minister for Local Government and Administrative Services indicates that his Department is responsible only for those areas in Commonwealth buildings which are multi-occupied. These common use areas include lifts, foyers and cafeterias. It is my understanding that the Public Service Board has indicated that health risk areas include such places as canteens, training, conference, interview and waiting rooms, as well as reception areas, and that there should be a complete ban on smoking in those areas in order to protect the overall position of all people involved in either the work or the interviewing that is undertaken in Public Service establishments. However, as the court case has just been decided in favour of the public servant, I am led to believe that the Public Service Board will be re-examining its earlier memorandum with a view to taking into account this latest decision. Senator TOWNLEY —I ask a question of the Minister representing the Minister for Immigration and Ethnic Affairs. I refer to a recent article in the Hobart Mercury relating to our open door policy by which New Zealanders need only a passport to be able to travel to and live in Australia and draw social security benefits. Is it true, as stated by the Royal Melbourne Institute of Technology public administration lecturer, Mr S. Prosser, that jobless New Zealand immigrants cost Australia some $64m per annum in unemployment benefit payments? Is it also true that the unemployment rate for New Zealand immigrants in Australia is almost twice as high as the rate for the rest of the community? Finally, when will the Government recognise that Australia can no longer afford to accept New Zealand's unemployed and apply to New Zealanders the same immigration restrictions as apply to citizens of other countries? Senator RYAN —I do have some information regarding New Zealanders' access to Australia and on some criticisms raised in a newspaper article. I do not know whether it is the same article to which Senator Townley refers. The access of New Zealanders to Australia has been criticised on the basis that there are economic costs to Australia because of the high level of unemployment in New Zealand. I do not think the information I have relates particularly well to the matters Senator Townley has raised. It is true that New Zealanders have free access to Australia and are not required to go through the immigration procedures that nationals of other countries are. Senator Colston —And vice versa. Senator RYAN —And vice versa, as my colleague points out. It is the view of this Government that this policy is in the interests of Australia. As to the particular costs involved in the payment of unemployment benefit and so forth and the relative costs Australians may incur because they are entitled to social security benefits in New Zealand, I think Senator Townley's queries would be better answered if I referred the matter to the Minister for Immigration and Ethnic Affairs and sought information. Senator TOWNLEY —Mr President, I ask a supplementary question. When the Minister is getting that information will she be good enough to find out how much is being received by Australians in New Zealand by way of unemployment benefit so that we can relate the two figures? Senator RYAN —I will see whether the Immigration Minister is able to get that information, and I will provide it to Senator Townley. Senator BOLKUS —I refer the Minister representing the Treasurer to today's edition of the Australian Financial Review and particularly to the Canberra Memo comment and an item therein where it is claimed that the private sector is developing contrived schemes to evade the intent of the Government's recently announced taxation measures to cover the free lunch. I mention particularly that part of the item which refers to one major accounting firm which is reported to have paid an up-front fee of about $5,000 to a favourite restaurant and is now busily eating its way out of credit. Will the Government look at these sorts of alternative and contrived schemes in its framing of the legislation to cover this tax avoidance mechanism? Senator WALSH —I have seen the reports to which Senator Bolkus referred. Similar reports have been published over the last couple of weeks. The important thing to note is that they draw attention to the essentially fraudulent nature of the business lunch and of the beneficiaries of the business lunch. They are resorting to such practices as backdating the receipts, paying an up-front fee and so on. In saying that, I know that business lunches are not entirely fraudulent, but they are essentially fraudulent. It is that essential fraudulence which the Opposition apparently, from its statements, seeks to preserve. The Opposition, that group of economic Calvinists, as they would have us believe under its new leadership, is in fact backing a free lunch led economic recovery. It believes that a free lunch led economic recovery is a viable and sustainable basic economic policy. That is yet another of the contradictions which at least for the time being co-exist within the Liberal Party. For that minority of free lunches that should not be regarded as fraudulent a minor case can be made that such lunches are an expense incurred in the earning of income. It is impossible, however, to separate the two. If one is going to argue that expenses incurred in the earning of income, even though they are difficult to identify, must be deductible, one must also consider the question of travel to work. That is not terribly difficult to isolate, but no government has ever allowed it as a deduction from taxable income on the grounds that travel to work is unarguably essential for the great majority of people. As far as I know the Opposition is not arguing for travel to work to be a deduction from taxable income-the cost to revenue of doing so would be extremely high-but there can be no real doubt that for the vast majority of employees it is an unavoidable expense incurred in the earning of income. So there is nothing new about not allowing as a deduction all expenditure which could conceivably be regarded as expenditure incurred in the earning of income. In this case, as I have said, essentially the free business lunch is a fraudulent and contrived operation, a judgment which is confirmed by the sorts of reports to which Senator Bolkus referred. It is not feasible administratively, on either the pure grounds of what is possible or what is an acceptable cost to bear in pursuing the amounts involved, to separate that small component which might be regarded as genuine from the very much larger component which should be regarded as essentially fraudulent. Senator BOSWELL —While the Minister for Finance is pursuing a rumour and unidentified reports that Mr Maher has made a donation to the National Party of Australia, would he also make the same inquiries into whether Mr Maher has made any donations to the John Curtin Foundation or any other body that collects money for the Australian Labor Party and inform the Senate of the results of those inquiries? Senator WALSH —Certainly. I will write to all the State secretaries and ask them whether they have received any donations from Brian Maher, Esquire. Of course they are not obliged to tell me, but if they do I will make that information available. However, I would be as amazed if any branch of the Labor Party had received donations from Brian Maher as I would be if the Bjelke-Petersen Foundation had not. I do not see any particular reason why people like Mr Maher should be supporting the Australian Labor Party since we have argued, I think for five years, that this Parliament should pass a law to ensure that people like Mr Maher, who have effectively stolen money from the Commonwealth, from taxpayers, should have that stolen money recovered from them. I will not pass judgment on Mr Maher's morality; I think that that has already been done, but I am willing to put forward a guess about whether or not he has any common sense. I would say that he is not a fool and only a fool, if he were in Mr Maher's position, would donate money to the Australian Labor Party. Senator CROWLEY —The Minister for Education is no doubt well aware of the wild and wrong claims made by the Opposition that this Government has failed to address the issues of youth unemployment. Can the Minister, yet again, put paid to those claims by outlining the way in which the Federal Government's education policies have contributed to the alleviation of youth unemployment? Senator RYAN —Those Opposition senators who like to criticise our record with regard to reducing youth unemployment have very short memories and very thick hides indeed. Honourable senators need look only at participation figures for post-secondary education when our Government came to office and for 1985 to see how successful our policies have been in providing young people with a real and constructive alternative to unemployment. In 1983 when we came into office we inherited an abysmal situation for young people. Honourable senators might remember that participation of 15- to 24-year-olds in education was appallingly low. An Organisation for Economic Co-operation and Development report at that time indicated that Canada, Japan and the United States had participation rates of between 70 and 90 per cent for that cohort; that is, 70 to 90 per cent of 15- to 24-year-olds in those countries were in higher education or in school. In contrast, only 35 per cent of young Australians were in full time education. There had been a disappearance from the education and welfare statistics of about 60,000 young people; that is, in March 1983, we did not know where 60,000 young people were-but they were not in employment, not on unemployment benefit and not in the education system. Between 1983 and 1985 our Government has turned around those trends with remarkable success. By 1986, we will have expended an extra $392m on schools, compared with funds provided in 1983. Partly as a result, there has been a 12 per cent increase in retention rates in years 11 and 12 since 1983. In tertiary education, we will have provided additional funds of $260m in real terms over 1983 levels. In 1987 there will have been an increase of $360m on 1983 levels. This means that by 1987 we will have created in the vicinity of 28,000 more places in higher education than were available in 1983 and an additional 15,000 full time places in tertiary and further education. This adds up to the fact that since 1983 there has been a total increase in full time students in post-compulsory education of over 58,000. There are now over 58,000 more young people in post-compulsory full time education than in 1983. Of course, many of those would otherwise have been unemployed. In comparison there has been a decrease in unemployment of 76,400 for the age cohort about which I am talking. If we look at the reduction in unemployment during the period that we have been in office and the increase in the number of young people able to be in full time study in school or in higher education, it is quite clear that a major contribution to the reduction in unemployment has been made by our Government's education policies. Those statistics represent more than a mere statistical decline in the number of young people unemployed because those young people who are now able to continue their studies in school, higher education or TAFE are preparing themselves in the most constructive way possible for successful entry to the labour market at a later stage. They are acquiring the skills which our economy needs for regeneration. As individuals, they are developing their own capacities, self-confidence and ability to participate successfully in our society and economy. The record ought to be admitted by all who have observed it to be very good. Senator GIETZELT —Early in the week Senator Sanders asked me a question which I referred to the Department of Aviation. It has provided me with a detailed answer. The Department of Aviation is in the process of studying the manner in which aviation meteorological information is provided to the aviation industry, in consultation with officials of the Bureau of Meteorology and consistent with cost reduction principles envisaged in the report of the Bosch Inquiry into Aviation Cost Recovery. Current proposals envisage that it will no longer be necessary for Bureau officers to provide face to face briefing at the nine locations mentioned. Weather information will continue to be available from officers of the Department of Aviation. Similar arrangements exist already at 32 other locations in Australia. These arrangements have operated successfully for a number of years at locations which include important centres such as Coolangatta, Albury, Derby, Mackay and Coffs Harbour. In the context of the review of aviation meteorological services, it is not planned to close the Flight Service Office in Hobart at this time. The proposals will not affect the availability of weather information to pilots. Observations will continue at their present level. If pilots require elaboration of material, they will be provided with access to a professional forecaster. The proposed changes are being discussed with the representatives of the aviation industry. In a different context, the Department of Aviation is studying options for the rationalisation of air traffic services generally and it is possible that these options might include proposals to close flight service offices at some locations throughout Australia. The changes would take account of modern technology such as the features of the domestic communications satellite. The proposals will not alter, in any way, the quality of services available to pilots. Senator BOSWELL(Queensland) —I seek leave to make a brief statement. The DEPUTY PRESIDENT —On what subject? Senator BOSWELL —It is about a matter raised in Question Time. Leave not granted. Motion (by Senator Chaney) proposed: That so much of the Standing Orders be suspended as would prevent Senator Boswell from making a statement. Senator Chipp-I take a point of order. I indicate that the Democrats will support the Liberals and the Nationals on this. I suggest that reason prevail and Senator Chaney withdraw his motion, and that Senator Boswell ask for leave again, which I am sure would be granted. The DEPUTY PRESIDENT —The motion has been moved. It is in the hands of the Senate. The question is that Standing Orders be suspended. Question resolved in the affirmative. Senator BOSWELL(Queensland) —I have received assurance that neither Brian Maher nor any emissary of his has ever contributed to the Bjelke-Petersen Foundation. Perhaps Senator Walsh should inquire whether Brian Maher is a card carrying member of the Australian Labor Party and whether he contributed $1,000 to the campaign fund of the Labor Party State member for Woodridge, Mr Bill D'Arcy. Senator MacGIBBON(Queensland) —I claim to have been misrepresented and seek leave to make a personal explanation. Leave granted. Senator MacGIBBON —Yesterday, I made a speech in the Senate dealing with the peace groups in Australia. I was awoken this morning by a call from a representative of the Mike Walsh program in Sydney to be told that it had received a Press release from Australian Associated Press that began with the claim that a Liberal senator blamed the peace movement for the drug taking in Australian youth. I was named as the senator responsible. That statement is wrong. It falsely represents what was said. Through the morning my office has received numerous phone calls as a consequence of this AAP release. This incorrect statement has been widely repeated today on television, radio and in the Press. I would like to quote the relevant passage of my speech from yesterday's Hansard. I stated: Nihilism and the consequent effect on the psychology of the youth of this country is the most irresponsible act that the peace movement gets up to. This can be seen in the lack of success of scholastic attainment in the schools, with children who will not work; lack of career ambition, unemployment, drug taking and ultimately suicides in a number of cases. The peace movement must take part of the blame for this failure on the part of our youth. After my speech yesterday I issued a Press release outlining the salient points I had made in the Senate. Both in my speech and in my Press release I took particular care with my choice of words so that they would not be misrepresented. Such was not the case. This morning I visited the acting bureau chief of AAP in the Canberra Press Gallery, who agreed that AAP had been in error in the way it had reported my speech. I have been told that a corrected report will be released by AAP. I seek leave to incorporate in Hansard the Press release I issued after my speech. Leave not granted. Senator MacGIBBON —I will read the Press release. It states: The Peace Movements in Australia were strongly attacked in the Senate today in a speech made by Queensland Liberal Senator David MacGibbon. Senator MacGibbon said that if the policies advocated by the peace movements were followed the national security of Australia would be destroyed. The Labor Government, by its failure to counter, in public, the arguments of the Peace Movement was contributing to this threat to national security. ``There is no disagreement in Australia about the essential need for peace. The argument is all about the way it is to be attained.'' He said the Peace Groups suffered from five failings. Firstly they had a false view of humanity. They believed that peace between nations could be obtained by naive and simplistic gestures, such as the application of pacifist doctrines on disarmament. Secondly they had a false view of history because they failed to learn the lessons of this century. They had failed to learn the consequences of the pacifist groups actions in Europe in the thirties and the way they contributed to the Second World War. He said thirdly they were irresponsible because they targeted specifically the youth of Australia to whom they preached a nihilistic philosophy: `By telling the young that they were going to die in a nuclear holocaust, they were responsible in part for the lack of achievement in schools, and in career ambitions which characterised so many of the youths today'. The peace groups only promoted unilateral policies. `The members of the peace movement know that they cannot influence the Soviets, consequently their policies weaken solely the Western Democracies.' Finally their policies were irrelevant to the creation of a secure Australia . . . Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-Since Question Time we have followed two procedures which in my view are somewhat abnormal. First we had Senator Boswell seeking leave to make a statement on a matter which the Senate has ample arrangements to deal with under the existing Standing Orders without the apparent device of a sort of personal explanation being used. Senator Lewis —The only way you can deal with Walshie, and that's the truth. Senator BUTTON —That may be a fair comment. I do not want to argue about that, but I am not sure that it is a precedent which we should enshrine in the Senate for future behaviour. The second thing is that Senator MacGibbon approached me about incorporating in Hansard a Press release. I refused him leave in that regard because the Press release was a recycling of what he said yesterday in the Senate. I was here yesterday and I heard him say those ridiculous things. I refused him leave because I wanted to give him the opportunity of saying them again so that people know exactly what he is saying. I think a personal explanation was made in a quite proper form by Senator MacGibbon about a misrepresentation of him, but the incorporation of the Press release in the Hansard was in no way relevant to that personal explanation. For that reason, I do not think that sort of practice should be followed. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-Two procedures have been followed since Question Time this afternoon. One was what has been described by the Leader of the Government in the Senate (Senator Button) as a perfectly proper personal explanation and, with respect, I agree with that. It is quite clear that Australian Associated Press has put a misinterpretation on what has been said by Senator McGibbon. His request that the Press release be incorporated in Hansard was simply a way of illustrating quite clearly what he was saying yesterday so that it could be examined against the account which has been made. I do not think there is anything unusual or out of order about that. As far as the Opposition is concerned, if the Leader of the Government wanted that to be read into the record and over the airwaves, that is fine. As to the first point which was taken up by Senator Boswell, Question Time today consisted of a series of questions, which appeared to be dorothy dix questions, addressed by Government senators to Senator Walsh, which led Senator Walsh to make a series of attacks on people. He attacked a convicted criminal, Mr Brian Maher, and in the course of that he tried to roll up the National Party of Queensland. He attacked those who were involved in free lunches and grossly exaggerated the views which have been put forward by the Opposition. He savagely attacked the National Farmers Federation and he attacked accountants who are giving tax advice. It was a fairly typical Question Time performance from Senator Walsh. In that situation, it is the view of the Opposition that some opportunity has to be taken to respond to matters which are raised. A particularly strong attack was made on the political party of which Senator Boswell is a member. He went off to seek advice on the matter and sought, in a very brief statement, to put the view which was passed to him in response to his inquiries. This is the second time in two days that leave has been refused to Opposition members. Senator Shirley Walters, I think, was refused leave yesterday in a circumstance in which leave had been granted to other honourable senators. Leave is granted continually to members of the Government for the purposes of the smooth running of this Senate. I simply give notice that if leave is refused for Opposition senators to do things which we regard as reasonable, there is no reason why we should go on providing leave for the Government. Where we are refused leave in circumstances in which we think it is reasonable that leave should be granted, we will seek the other remedy which is available to us, which is the suspension of Standing Orders. I say to the Leader of the Government in the Senate that we will follow that procedure and I make no apology for it. The abuse which is put out during Question Time is a matter against which the Opposition has no protection. We will use the forms of this place as required to make our position clear. Senator VALLENTINE(Western Australia) —I seek leave to make a personal explanation. Leave granted. Senator VALLENTINE —I refer to the explanation that we have just had from Senator MacGibbon about the personal explanation that he gave today following the misrepresentation, as he called it. The DEPUTY PRESIDENT —Order! Senator Vallentine, it must be a personal explanation. We cannot have a debate on the matter. Senator VALLENTINE —It is, because I am a peace educator and a representative of peace groups, which he has maligned very severely. The DEPUTY PRESIDENT —That is not the basis for a personal explanation. The explanation must be about a personal matter. Senator Robertson —It didn't stop Boswell. The DEPUTY PRESIDENT —Senator Boswell had leave to make a statement. Senator Vallentine has requested leave to make a personal explanation. Senator VALLENTINE —Mr Deputy President, I seek leave to make a statement. Leave not granted. Senator VALLENTINE —I would like to move for the suspension of Standing Orders, Mr Deputy President, because the refusal of leave directly contradicts what the Leader of the Opposition (Senator Chaney) has just requested from the Senate. The DEPUTY PRESIDENT —You are entitled to move for the suspension of Standing Orders if you wish. Senator VALLENTINE —Mr Deputy President, I wish to do that in order to make a personal explanation. The DEPUTY PRESIDENT —Senator Vallentine, you have leave to make a personal explanation but you cannot extend the personal explanation to something else. Senator VALLENTINE —I wish to make a personal statement. The DEPUTY PRESIDENT —You do not have leave to make a statement. You may move for the suspension of Standing Orders to do it if you wish. Senator VALLENTINE —I wish to move for the suspension of Standing Orders in order to make a personal statement. Motion (by Senator Vallentine) agreed to: That so much of the Standing Orders be suspended as would prevent Senator Vallentine from making a statement. Senator VALLENTINE(Western Australia)(3.18) —As both a peace educator and a representative of the peace movement in this place, I personally find very reprehensible the kind of statements that Senator MacGibbon has made. In view of the statement that he made earlier, I do not think he was misrepresented one iota. He repeated exactly the same allegations, which are totally untrue. The students of the ages represented by the people sitting in the gallery of this chamber right now would be able to tell Senator MacGibbon that they do not need to be told by peace educators and people in the peace movement that there is a threat of nuclear war hanging over each and every one of us. It is very obvious to all of them; they know it very well. They do not need us to tell them; they need a response from adults who can help them through that depressing situation. It is indeed a depressing situation when children are being brought up with that threat hanging over their heads. What peace educators and people in the peace movement are trying to do is to give young people some hope for the future. That is what they need. They do not need preaching about doom and gloom from the likes of Senator MacGibbon. They need to know that there are alternatives to the insanity of the nuclear arms race. Members of the Liberal Party sit here and espouse totally unconditional support for the Reagan Administration's nuclear war fighting strategies, and Australia's involvement in them. It is totally untenable. The situation is that young people in Australia are seeing through that, as are many adults in Australia. They are rejecting that totally unconditional support for the Reagan Administration's nuclear war fighting strategies. We are trying to give young people and older people some hope for the future so that they know that there is an alternative to being involved in that alliance. There is a way of solving the world's problems other than by holding a nuclear threat over our heads. People of Senator MacGibbon's age did not have that threat hanging over their heads when they were growing up. They are very lucky not to have had that threat. Young people these days have the threat of nuclear war hanging over their heads. That is something that we need to eliminate from the young people's consciousness, because it is so damaging. I agree that the situation is one of despair for young people. We are trying to provide alternatives to that kind of despair. If we were to move away from the nuclear arms race, we would give people a lot of hope for the future. We need a new way of thinking about the world's problems. As Einstein said, since the splitting of the atom everything has changed except our way of thinking; thus we drift towards unparalleled catastrophe. The DEPUTY PRESIDENT —The President has received a letter from Senator Vanstone proposing that a matter of public importance be submitted to the Senate for discussion, namely: The failure of the Government to give real priority to the issue of youth unemployment. I call upon those senators who approve of the proposed discussion to rise in their places. More than the number of senators required by the Standing Orders having risen in their places- Senator VANSTONE(South Australia)(3.20) —It is with some regret that I raise this matter for discussion in the Senate today. As the youngest senator I felt compelled in my maiden speech to address the disillusionment of young Australians. Such disillusionment is one of the greatest problems facing this nation. Youth unemployment is an enormous problem. But the disillusionment created therefrom is, in my view, a greater problem. When the youth of a country lose direction, hope and spirit, a dark and gloomy shadow is cast over the fabric of that society. In my State the youth unemployment rate is the highest rate in the mainland States. There are 2,200 more young unemployed than there were when John Bannon, the Labor Premier, took office. The Minister for Education, Senator Ryan, in Question Time today gave us a dose of figures. But I assure her they are cold comfort to those young Australians who are currently unemployed. We all remember the glossy television announcement by the Prime Minister (Mr Hawke) on what is called Priority One. The silver budgie, as some call our Prime Minister, delivered a masterpiece of presentation. The program was produced by students of the Swinburne Institute of Technology. It was a hard sell, with all the sincerity of the Coca Cola commerical, but it was not the real thing; it was a mirage. It was a statesmanlike speech, but that was the easy part. The real work is yet to be done and, what is worse, it had not been done when the Prime Minister delivered his eulogy. Michelle Grattan, a well respected political commentator, obviously perceives the reality of this expedient Government-a government that has elevated pragmatism above principle in an attempt to ensure its political survival. In the Age of 19 August she stated: The Government is now looking expectantly to youth policy to strengthen its reform credentials when it goes to the next election. The headline of that article reads: `Government looks to youth for a revival'. It should have read: `Government looks to youth for survival'. This Government will do anything to win a vote. Six months ago its number one priority was to put the tax system in order. We all know what a mess it has made of that and how far it has gone with that goal. Whatever may be the personal evangelistic crusade of the Treasurer (Mr Keating), this Prime Minister and this Government embrace causes, not from any concern for the merit of the cause, but with a desire to generate publicity and headlines and to create an impression. They have sought to create the impression that the problems of youth unemployment are their number one priority. In fact, as an article in the Bulletin makes clear, the so-called Priority One program is a public relations exercise. It refers to it as the `Hawke strategy for survival'. We should ask ourselves why the Prime Minister chose to announce this program in a Sunday night spectacular prior to the Budget being delivered. The answer is simple. The Prime Minister has an insatiable appetite for media coverage and has sought to give himself precedence in this matter over his hard working Treasurer. How unkind to raise the expectations of young Australians when, at the time that the announcement was made, the groundwork in not one industry had been completed. Mr Peter Kirby, the architect of the scheme, expressed his regret that the announcement had been made without such an agreement. He went on to say that it would have been preferable for the Government's statement to have been accompanied by agreements between unions and industry. The unions have given only qualified support to this scheme. Mr Bill Kelty, the Australian Council of Trade Unions Secretary, warned that nervous unions would not support any erosion of junior award conditions. The unions have given only qualified support to this number one priority. This Government's dependence upon a compliant ACTU means that the silver budgie, trapped in his ACTU cage, will sing whatever song this vested interest dictates. If the ACTU backs off from its already limited commitment, so will this Government. Mr Dawkins, the Minister Assisting the Prime Minister for Youth Affairs, has some news at which, I understand, young Australians are expected to be ecstatic. He says: But I would be very surprised if we couldn't get agreement to a trainee wage of about the order of $90. Is that not wonderful news? He will be surprised if the Government cannot get that agreement. Let me assure him that if that agreement is not secured, young Australians will not be surprised; they will be more fed up, more disillusioned and more frustrated, and they have every right to be so. The Government has created the impression that the problems of young Australia are about to be taken in hand and solved. But young Australians are about to be disillusioned yet again. The Government has made extravagant claims. Lest anyone should think I am being unfair to a government that has good intentions, I ask honourable senators to turn their minds to a recent article in the Australian, headlined `Willis claims traineeships will halve youth jobless'. The text of the article indicates that Mr Willis said he thought the scheme would halve the unemployment rate amongst 16 to 17-year-olds. He did not say what would happen to 18, 19, 20 and 21-year-olds. How disgraceful to suggest to young Australians that their problems are nearly over. How deplorable to raise in their minds the expectation that instead of one in four being unemployed, it will soon be one in eight. Much reliance in the Priority One program is placed on formal technical and further education training. I ask what the Government has to say about the Organisation for Economic Co-operation and Development report into Australian youth policies and its comments on TAFE. I quote from the report: . . . the team . . . did not find convincing evidence that (i) TAFE was already effective in providing technical training and education . . . or (ii) expansion of TAFE capacity would yield more of a payoff than if, for example, the resources needed for such an expansion were devoted to secondary education or the support of enterprise-based training. Given those comments, the Government should now explain how TAFE will cope with the increased demand that Priority One will put on it before it invokes TAFE training as a panacea for unemployment. This is no way for a government to discharge its responsibility to young Australians. How cynical for this Government to announce this scheme when the groundwork has not been completed. Mr Michael Clohessy, the Executive Director of the Youth Affairs Council of Australia, is concerned that little has been said about supervising the traineeships. He stated: The Department of Employment and Industrial Relations has total responsibility for the traineeships and we know that Department has a very dubious record in actually delivering anything for young people. The Government has failed to appreciate the real problems of youth unemployment. If we acknowledge the real causes we can find real solutions. The Government seems determined to reject the suggestion that inflexibility in the labour market, particularly in youth wages, is a fundamental cause of youth unemployment. It is keen to say, as did Mr Willis, that the Priority One scheme is not a back door means of reducing youth wages. What is it, if it is not an acknowledgement of the cost to the employer of training young people? Surely we are not to believe that this cost is incurred only with formal on the job training. Surely, even Blind Freddy can see that there is a cost involved in employing people who have no experience or training, because they must be given some training even if only informally. This cost can be acknowledged by government subsidy, as under Priority One, or it could be done more simply, more efficiently and with less public sector interference by freeing up youth wages. Every government subsidy scheme is an admission that rigidities in the wage system are keeping our young people out of jobs. It is extraordinary for a government that denies that high youth wages are keeping young people out of jobs to write to the Premiers of the States, as the Prime Minister (Mr Hawke) did, to open negotiations on waiving or reducing State payroll taxes. If this is not an admission that the cost of employing young people is too high, what is? Another premature announcement was that Mr Dawkins, the Minister Assisting the Prime Minister for Youth Affairs, was reported as being hopeful-hopeful, all honourable senators will be pleased to note-that all State governments will agree to the remission of payroll tax and workers compensation charges for people under 21 years. I am somewhat at a loss to see how State governments can remit workers compensation charges which in reality are paid to insurance companies. I can only presume that the Prime Minister is hoping that the States will waive stamp duty as it applies in various States. I challenge the Government to release this correspondence to the Premiers and to make public the details of any responses it has had. How far down the track is the Government in getting the agreement it seeks with the States? This scheme, masquerading as a sincere move under the label `Priority One: Young Australia' is really just another scheme to subsidise employment in the public sector. It has been reported that government sources privately concede that the bulk of traineeships will be in the public sector. How far has this Government reached in agreements with private sector employers? I challenge the Government to come clean. How many employers have agreed to participate? How many traineeships have been established in the private sector? In which States and when did or when will those traineeships commence? The trainee schemes are meant to involve industries such as banking, retailing, tourism and hospitality. I ask: How is the small businessman and the small employer-the backbone of this country-going to be able to participate in these schemes? We are told that committees are going to be set up in each State. Eventually this will happen and these committees will provide training kits for these employers. I challenge the Government to tell honourable senators in which States and for what industries these committees have already been set up. I challenge it further to provide the names of the people who are the members and the date of appointment of each member. All this work has yet to be done. The resolution of the problems of young Australians is some way down the track. However, none of that stopped the silver budgie from grabbing the headlines, having his Sunday spectacular and unfairly raising the expectations of young Australians. This Government is lying to young Australians. It has packaged up some ideas and called the package Priority One: Young Australia. Senator Georges —I raise a point of order. I think there has been a reflection on an honourable member of the other place in what Senator Vanstone has been saying. The further point of order I am taking is that the speech is being read. Senator Walters —Oh, boy! Senator Georges —I am sorry, but I am going to raise it now because I wish to attract the attention of the Senate to a practice that is developing in this place of people coming in here with prepared speeches and reading those prepared speeches. The DEPUTY PRESIDENT —I have got your point of order. Your point of order is that Senator Vanstone is reading her speech. Senator Georges —Yes. The DEPUTY PRESIDENT —I do not need anything further. Senator Georges —Let me put the point of order on this basis- The DEPUTY PRESIDENT —There is no requirement for a speech. If there is anything further that you wish to draw to my attention, you may do so, but do not make a speech about it. Senator Georges —I suggest to you, with great respect, that I should be allowed to support the point of order I am making so that the Chair realises that I feel strongly about it. I just want to make the position clear that we have had developed in this new Senate the practice of practically everyone in this place reading their speeches. That is contrary to the Standing Orders, is not in the best interests of the senators concerned and is not in the best interests of the Senate. The DEPUTY PRESIDENT —Order! I have got the point of order. Senator Vanstone, it is not in order to call the Prime Minister a silver budgie and that remark should be withdrawn. You should not read your speech. I cannot tell from here whether you are or not, but by looking up fairly frequently you will indicate that you are not reading your speech. Will you withdraw your reference to the Prime Minister? Senator VANSTONE —Mr Deputy President, I withdraw the reference to the Prime Minister being a silver budgie. The Government would have us believe that the scheme that it calls Priority One is an organised and planned way of approaching the problems of youth unemployment. According to the Government this scheme warranted full page and double page advertisements in the major daily papers throughout Australia. What did we see in those advertisements? We saw the Prime Minister's picture and a message that was meant to assure young Australians that their problems had become this Government's No. 1 priority. Through you, Mr Deputy President, I ask honourable senators to turn their minds back to those advertisements. If they do so they will remember that there was no telephone number, no department and no place young Australians could contact anybody to find out the details of what the Government was prepared to do for them. It is my submission that this was a disgraceful waste of government money and it was a disgraceful thing to do-to advertise that the problems of young unemployed Australians are the Government's No. 1 priority when in fact its program is in such a mess and is so inadequately prepared that it cannot tell young Australians where to go to get the help that it is allegedly offering. The bottom line of this scheme is that it contains no ideas, no mechanism and no guarantee that jobs will be there at the end of these training schemes for young unemployed Australians. The net result of what the Government has done is to have raised the expectations of young people in a callous and brutal way. It has expediently chased electoral popularity and at the end of it all there is no guarantee of real relief for young Australians. Senator COOK(Western Australia)(3.37) —We have just witnessed the unedifying spectacle of a member of the Opposition trying to justify the patently false and ludicrous assertion, as set out in the proposal under standing order 64-the failure of the Government to give real priority to the issue of youth unemployment. I have no problem in admitting that I read the last few lines because I could not believe it even if I had to remember it. The proposition presented by the Opposition is patently false and there is essentially one argument only that needs to be expressed to prove it. That argument is simply that the Opposition's economic philosophy-that described as being of the dry variety-is a philosophy that one fights inflation first. During the whole of the period of the Fraser Government-a period when the Leader of the Opposition (Mr Howard) was the Treasurer and when the Deputy Leader of the Opposition, Mr Neil Brown, was Minister for Employment-we saw an overwhelming explosion of unemployment. The worst affected section was the young people of Australia because that Government fought inflation first by lengthening the dole queues to force down market rates of wage. That was the strategy that was employed during the Fraser years. That is the strategy that the Opposition is economically committed to now. Were it ever, God help us, to assume government in this country, we would be facing once again the spectacle of increasing unemployment while the Opposition applied its economically blinkered ideology about how the economy should be run. That is the proposition which comes from an opposition committed to that philosophy. It is ludicrous and it is patently false. We have heard in the speech by Senator Vanstone nothing at all that is new. It has been merely a carping criticism of a positive, progressive and inspired campaign by this Government to give the youth of Australia a role in society and to develop through the youth of this country a more diversified skill base in the work force and some hope for the future. We have developed a positive program. (Quorum formed) We have just witnessed opposition by assertion. The real priority of this Government is youth and youth programs. This Government has declared that as a priority and has introduced a positive program which will apply for the next three years. The program commenced as at the recent Budget. It is a program that gives real hope and a real future to the young people of Australia. It is assigned the highest priority by the Government. It is a program led by the Prime Minister (Mr Hawke) and supported by a task force of members of Cabinet comprising the Minister Assisting the Prime Minister for Youth Affairs, Mr Dawkins; the Minister for Education, Senator Susan Ryan; and the Minister for Employment and Industrial Relations, Mr Ralph Willis. It is a program aimed at giving careers, futures and hope to the young people of Australia. As I have said, this is the first year of the program. Since the 1960s at least, the level of youth unemployment has been two or three times higher than the general level. While overall unemployment was growing up until 1983, youth unemployment grew faster. Similarly, it is falling faster now that overall unemployment is declining. From August 1984 to August 1985 youth unemployment fell from 25.1 per cent to 21.6 per cent while overall unemployment fell from 8.9 per cent to 8.3 per cent. This indicates that even when unemployment falls to 5 per cent youth unemployment is still likely to be well over 10 per cent. The Government is not content with the improvement being brought about by its macroeconomic policies. Therefore, it has developed a series of other policies aimed at providing a balanced attack on youth unemployment in order that the real needs of the young unemployed are met. Our balanced attack consists of the Priority One: Young Australia program which has three major strands-an educative strand, which is aimed at encouraging higher retention rates, better targeting for skills, better targeting for all round education and a better qualified work force; a strand dealing with labour market programs, the key feature of which is the traineeship scheme and a number of other schemes; and a strand dealing with rationalising and bringing together the question of youth allowances to provide a better base and a better understanding of how youth allowances operate in this country. I will deal with each one of those strands as a logical component of the whole by providing some explanation about them. Our traineeship program is a genuine effort to come to grips with a hole in the labour market. Because of recession in the past, falling applications for apprenticeships, the emergence and change in the types of skills and the emergence of different types of industry, there are now gaps. There are not enough sufficiently qualifield or trained workers to apply for jobs, particularly in the retail, finance, tourism and hospitality industries. It is not appropriate to develop in those areas a fully fledged apprenticeship program at this stage. Therefore, the Government has supported, as the report of the Kirby Committee of Inquiry into Labour Market Programs recommended, a system of traineeships which is not a means of reducing youth wages but a system of providing a work based traineeship with off the job training through tertiary and further education for young unemployed. We target, by 1988-89, 75,000 traineeships in existence. In the first year our target is for 10,000 traineeships. As I have said, the industries involved are the growth industries of retail, finance, tourism and hospitality. The Commonwealth has undertaken to provide 20 per cent of those traineeships. We expect that the State governments will pick up their share as well. The traineeships scheme involves different categories of subsidies to employers ranging from $1,000 to $2,000 per year per employee. In 1985-86 this will also be backed up by increased course development grants and allowance for greater mobility of the work force. The value of the Government's contribution in this Budget is $15.7m. In rising to our target of 75,000 jobs for young unemployed under traineeship schemes in 1988-89, the commitment of the Commonwealth, in association with the States, will be of the order of $250m to $300m. So it is not a scheme that does not come to grips with the real dimensions of the problem. It is a scheme which transforms the fundamental labour market for the young unemployed and gives them a chance to compete with skills, training and experience which they need to hold their place in the general work force. On the education front, what this Government inherited was best illustrated by a comprehensive answer by Senator Ryan to a question in Question Time. Our participation rate was the worst in the Organisation for Economic Co-operation and Development. Of all the OECD countries in the period 1975 to 1980, Australia had a participation rate for 15- to 19-year-olds of 44.4 per cent when the OECD average was 57 per cent. In 1980, for that same age category, our participation rate rose to only 46.2 per cent when the OECD average went to 62.4 per cent. For the higher age group-20- to 24-year-olds-the discrepancies were even more remarkable. This Government inherited a situation in education in which people were dropping out of the system much more quickly. They were not holding their places. They were turning out into the work force undereducated for the demands that employers were placing upon them. Over the next three years this Government is committed to increasing funds for education with a new system of per capita recurrent grants which will increase school funding so that funding for secondary schools in the 1985-88 triennium goes up by 57 per cent in real terms. Funding for primary schools will go up by 16 per cent in real terms. There is a big commitment to improving the quality of education that is delivered. At the tertiary level, our programs mean that through TAFE there will be 15,000 extra places in the 1985-87 period. Through universities and colleges of advanced education 20,500 places, an increase of 7.6 per cent, will be made available, with special attention to disadvantaged groups. There is a commitment to curricula content and the development of curricula through the Curriculum Development Centre and to the participation and equity program within the Commonwealth Schools Commission. In the last two years of our Government we have improved participation rates significantly. I would refer to Senator Ryan's answer to a question rather than cite the figures. In terms of income support for young unemployed workers, when we came to government there were 37 different Commonwealth programs of support in areas of education, training and social security. We have embarked upon a comprehensive review of those programs and have identified the differences in the levels of payment. In the income testing arrangements we have made assumptions about what support parents are providing or are not providing for young workers, the independence of young workers from their parents, and assumptions about the needs of young workers in different activities. The basis for our rationalising of income support for young workers is that the age of the individual is important, rather than the type of activity, and that all of the allowances ought to be cast at such a level as to be adequate to meet their needs. This rationalised payment structure will be phased in over the next three years, commencing in 1986, with increases in all major educational allowances, particularly for secondary students, and most unemployment benefit payments. By 1989 the new age-related structure of allowances will be fully in place and thereafter will be indexed in line with movements in the consumer price index. Three basic common rates will be payable-for 16- to 17-year-olds, whether in secondary or tertiary education or unemployed; for unemployed 18- to 20-year-olds and tertiary students aged 18 and over who are independent or living away from home; and for students aged 18 and over living at home. Next year, the maximum benefits payable under the secondary allowance scheme will rise from $23 to $35 a week while the rate of unemployment benefit for 16- to 17-year-olds will be increased from $45 to a common $50 a week. Secondary allowances will then be allowed to catch up to the benefit rate and both will become subject to annual indexation from January 1988. A similar process of transition is envisaged for payments under the tertiary allowances scheme which, for those aged 18 years and over living away from home, will progressively approach what will become an intermediate rate of unemployment benefit for 18- to 20-year-olds. This is currently $85 a week. The net cost of these reforms is estimated at $35m in 1985-86, rising progressively to a full year cost of $250m in 1988-89. We have taken a positive and direct approach to the problems of youth on those three fronts in a comprehensive package marshalled under the leadership of the Prime Minister, with the input of the key Ministers responsible for education, youth affairs, employment and industrial relations. It is a three-year program. It is in its first year and answers a real need. That is our positive program. That program has been attacked by the Opposition with trite criticisms, carping innuendoes and a dog in the manger approach. What is striking about the Opposition's participation in this debate so far is: What has the Opposition put forward? In government its members presided over the highest unemployment rate this country has ever seen, and the highest unemployment rate for young unemployed. The Opposition has put forward the pathetic assertion that if one cuts youth wages, somehow blaming the young unemployed for their plight, one will increase the number of jobs. Opposition senators fail to recognise that even during the period of the Fraser Government Administrat- ion, the Bureau of Labour Market Research was enjoined by that Government to conduct a survey to try to make a causal link between cutting wages and creating jobs. That bureau, after a full and thorough study, was unable to make the connection. The assertion that if one cuts youth wages one will create more jobs is a piece of ideological claptrap that the Opposition believes, with no empirical evidence to support it. As long as the Opposition believes it, it will perpetuate the myth that if one blames the young for their plight, if one penalises the young by reducing the level of their income, one will somehow solve the problem. That is not the case. If youth wages are cut there might be a temporary change in employment patterns for the young at the cost of adults who will be pushed out of the system. When the young get to that age, they too will be sacked and dismissed. The sort of employment scenario that the Opposition wishes to propound is that one employs cheap labour, sacks adults who are bread winners and family supporters, and thus create a situation in which when the young get older they, too, go on the scrap heap. That is not a humane system and it has no future because it does not involve any commitment to the training of skills. The old approach of `Blame the victims' is the approach of the old government. It is not an approach that this Government in any way supports. I have said quite clearly that there is no empirical evidence to support the assertion that merely by cutting wages one will create more employment. Let me go to a quotation from the comment column of the Age on 23 January this year. Claude Forell, under the heading `Youth wages and unemployment', said: As the `Business Age' columnist, The Analyst, pointed out in a detailed examination on 31 December, international comparisons do not support the theory of a strong causal link between youth wages rates and unemployment. In France, for example, youth wages are much lower in relation to adult wages than in Australia, but the youth unemployment rate is higher. In the United States, on the other hand, youth wage rates are relatively higher but the rate of youth unemployment is lower than in Australia. That is empirical evidence. It would seem to be the obverse of what is being asserted by the Opposition. Once again I draw attention to the fact that merely to adopt the approach of blaming the victims, of trying to reduce wages and to change the cost component, does not answer the fact that employers want skilled, qualified labour with some experience in the operations required. Therefore, we have promoted the traineeship program to engender that sort of situation. We do not deny in any way that there is a severe problem with youth employment. We assert that it is not our fault; we inherited it. We have certainly done a lot to cause it to change. At present more than 19 per cent of teenagers in the labour force are unemployed; 23 per cent of those under 18 are unemployed. They participate in a secondary labour market-that is, in the low paid part time or casual jobs, jobs that can be easily replaced by technological change. That problem can only be addressed by equipping them with the skills to move into the first part of the labour market. With general economic recovery over the last two years, the Government has been able to increase teenage employment by 32,000 new positions or by 5.5 per cent-that is, since June 1983. It reverses the trend of the Fraser Government, and it means that at least half those 32,000 were new full time jobs. In the last two years apprenticeship placements have gone up 43 per cent. In concluding my remarks I make the point that in focusing directly on programs affecting youth and their employment prospects, what should be remembered as the bottom line is that one cannot solve the youth unemployment problem unless there is general economic growth and improvement. This Government has been able to achieve ongoing growth of 5 per cent year on year. The Government is in a position of being able to achieve, too, its target of half a million jobs in the first three years. It is well ahead of that target. It has been able to lift the investment patterns in the general economy and therefore, because the macro-economic settings are right, we are in a climate in which employment generally is changing and improving. The youth programs we have enunciated will target and deal with expressly those issues for youth unemployment. The Opposition proposal is preposterous and I do not believe, in any sense, can be supported. Senator SIDDONS(Victoria)(3.56) —We have just witnessed the depressing spectacle of honourable senators on both sides of this chamber accusing each other of causing youth unemployment. The facts are that youth unemployment has risen at a frightening rate over the last 10 years and both sides of this House, both Labor and Liberals, are responsible. During the last election one could not get a debate on youth unemployment because of an unholy alliance between the two major parties that youth unemployment was not a thing to be talked about. The fact is that there are 270,000 young people unemployed in our society today-that is, 15 per cent unemployed against an average unemployment rate of 8.1 per cent. If one looks at the age group of 25 to 65, the unemployment rate is only 6.5 per cent. It is clear that the young people are carrying the can for the malaise in our society. The fact that there are some 270,000 young people out of a total unemployment of 594,000 makes it very clear that the young people are indeed carrying the can. This is having a devastating effect on these people. They are being cast aside. They are applying for job after job and being told that they are not wanted. Their morale is destroyed; their outlook on society is affected for all time; and they are being forced into prostitution, drug addiction, alcoholism and are being abused in other ways by society. They are losing their self-esteem and being refused participation in our society materially, culturally and academically. Many reasons have been put forward in the debate so far, and no doubt many more will be heard, as to why youth unemployment is so high. The Senate has been told that youth wages are too high, and that is a reason. We have also been told that the education system is not coping, and that is a reason. We have also been told-or if we have not been told already we will be told before the debate finishes-that young people are too lazy and are not prepared to work any more. I suggest that none of these reasons is the true reason. Senator Peter Baume —Who will say that? No one has said that. Senator SIDDONS —I am sure that it will be said before this debate is finished. The true reason, without a doubt, is the way the economy is operating. One has to look at the economy to find the true reasons for youth unemployment. The facts are that employers today no longer need young untrained, unskilled people. If an employer wants an inexperienced person, he goes straight to school and gets a school leaver. Those who have left school and who were unable to get a job straight away keep applying for jobs. When they are asked `What is your experience?', they reply, `I have none', and are therefore told `We don't want you'. There has been a lot of talk. There has been virtually no action and there is still, as far as the Australian Democrats are concerned, no positive solution to this problem. Youth unemployment has got to be solved now, not in a year's time or two years time when the economy may or may not pick up. I am afraid that the much vaunted Government training scheme will still not solve the problem. There is nothing more devastating to young people than to be trained for a job and at the end of that training to be discarded again by society and to be told that there are no jobs available. The Government's initiative is not getting at the heart of the problem. In the short time available to me, I propose to outline a practical scheme that will solve youth unemployment problems straight away. This scheme allows the available work to be shared amongst the unemployed straight away. I have outlined this scheme in great detail. Later today, if the Senate allows me, I will table the details of the scheme that I will only briefly mention now. I am a little concerned that the Senate may not allow me to table this scheme. The reasons that I have been given are: `It is a little new. We have not quite seen a procedure for tabling details of a scheme like this before'. Senator Hill —Who said that? Senator SIDDONS —There have been discussions along these lines this morning. I will be seeking leave to table a practical scheme that tackles youth unemployment head on and solves it straight away. Later today we will see whether the Senate is prepared to consider a practical scheme that relates to the 270,000 people out there who have been discarded by our society. Four years ago I was approached by a social worker by the name of Bernie Geary who was concerned about motivating young people in the West Heidelberg area. He was living with them. These people had dropped out of society. Many of them were illiterate. They had decided that work was not for them. We decided that we would make a work station available to these young people which would be worked on a roster basis. Bernie Geary took the responsibility of manning the roster scheme. That scheme worked successfully for three years. Not one part of the roster scheme was missed in three years. That is an amazing record when we consider that these people were at the bottom of the heap. They had decided to give society away and never to work again. They found that a permanent part time job was all that was required to give them a completely new outlook on life. They had the discipline of working for a day or half a day a week. They became a part of a work force. They were doing a worthwhile job, not a make believe job or training job. They were performing a function that was necessary and the discipline and the opportunity to be a part of a team was all that was necessary to motivate these people to look for permanent work. Surely that approach, which has been proven to work, is an approach that can solve the problem straight away. We can, if we want to, offer permanent part time work, not work experience for two months. At the end of two months of training young people are looking over a precipice. There is gloom-nothing. We tell them to go back to school to learn new skills without giving them any guarantee that at the end of that time they will have employment. We simply have to say to business: `Before employing anybody else, we require you to make at least one position available to be worked on a roster basis'. Senator Crowley —Simply said, what guarantee is there that they will listen or do anything? Senator SIDDONS —The Government has powers under the corporations, powers of the Constitution and other powers to require enterprises to make a work station available to be worked on a roster basis before they employ anybody else. They could employ four young people instead of just one. If all enterprises did that throughout Australia at least everybody who is out of work and looking for work would find a permanent part time job. The scheme can work very simply through the local community youth support scheme groups. They can relate to young people. A supervisor of a work station should be put in direct contact with the local CYSS group. This means that he does not have to go through third parties or worry about personnel officers and the like. The supervisor should be sympathetic and prepared to listen to the problems of young people in their search for work that most suits their abilities. He should get them started. We have seen this scheme in operation in Victoria in quite a few industries. It is working very well in those industries that have taken the trouble to concern themselves about this very real problem in our society. There is no need for retrenchments of the people who are working. We are saying that as positions become available we should worry about the youth first. We are not trying to employ young people at lower wages; we are saying: `Employ them at the current rates for casual work applicable to the age group concerned'. So there is no need to try to break the law of the land and to get people working in conditions and for wages that are below the award requirements in Australia. Senator Giles —You should make some distinction between part time and casual employment; there are differences. Senator SIDDONS —I am simply suggesting that we want to give these unemployed young people a start in the real world-in the work force. That is all we are doing. Unless we have a practical scheme that allows this to happen these people will never get a job. What hope has a young person who cannot read or write? Unfortunately, for whatever reason, there are large numbers of these people around. They apply to the personnel officer. He says: `What is your name and address? Write it on this form'. They cannot, so they have got no hope. They are discards forever. People come with all kinds of hangups-maybe they are not physically attractive or they may have a chip on their shoulder about something. They apply to the personnel officer. He takes one look at them and says `They are not for us. My job is to pick the best, to get the best I can'. The personnel officer's job is not to concern himself about the youth unemployment problem. We have to break through the traditional ways of giving young people jobs. The only way to do that is to spread the available work and to put an organisation which is sympathetic to the problems of young people-I suggest most CYSS groups around Australia are sympathetic-in direct contact with a supervisor who is sympathetic to the problems of youth and prepared to give young people a go. That is the scheme. It could be applied overnight if the Government wished to do so. It would not cost the employer very much. The cost to the employer simply is that he has got to put a little more effort into training the young people. That is the only cost. Instead of training one person, the supervisor has to train four people. In an organisation with which I have very close associations I have seen this scheme work. The supervisor has been able to train these young people and to do his work as well. So there has been no additional cost at all. Senator Hill —Is that in your company? Senator SIDDONS —Yes, indeed, in our company. It has been working successfully for some years. Many of the young people who have started off as part time employees have found full time employment with our company but, more importantly, they have been able to go to people at the available jobs and say: `I have a job with company X. I am employed'. That is an enormous advantage to these young people. Senator McIntosh —Does that create more work? Senator SIDDONS —They have a permanent job. That is the important point. The ACTING DEPUTY PRESIDENT(Senator Jones) —Order! Senator Siddons, will you please address your remarks through the Chair. Senator SIDDONS —Thank you, Mr Acting Deputy President. I could not hear the remarks properly anyway. I am sorry I cannot answer the comment, but I was getting the impression that the Senate was genuinely interested in the scheme I was outlining and I was attempting to answer what I presumed were practical and genuine queries. I had the opportunity of outlining this practical scheme-which has been in operation for many years-to a large number of employees of the then Department of Employment and Youth Affairs in Melbourne, some 30 or 40 employees. I discussed the scheme and the ramifications of the scheme for over two hours. I answered their questions. They were sceptical when I started but after two hours their comments were very enthusiastic. I believe that if the Minister for Employment and Industrial Relations (Mr Willis) took the trouble to check with his Department he would find there is a great deal of support for a scheme of this sort; it is a practical scheme which solves the youth unemployment problem now. We cannot sit back any longer and congratulate ourselves-as I am afraid the Government is attempting to do-on the fact that unemployment is dropping. It is not dropping spectacularly amongst youth. We cannot allow ourselves to sit back and say: `Sooner or later the problem will be solved'. What is happening right now and what will happen increasingly between now and January of next year is that young people will try to get work. They will be knocked back once, twice or 20 or 30 times and by that time their outlook on society will be permanently damaged, their morale will be destroyed and they will not be prepared to join and contribute to society in general. Senator HILL(South Australia)(4.11) —I congratulate Senator Vanstone on raising the following matter of public importance today: The failure of the Government to give real priority to the issue of youth unemployment. Much in the recent spate of announcements of both Federal and State governments on youth unemployment smacks of political opportunism rather than genuine attempts to help young people. Youth unemployment remains a major problem. According to the August figures 21.6 per cent of teenagers were unemployed and looking for work. On my calculations that is 180,000 young Australians. It is a highly emotive problem and so it should be. Not only is this figure staying up but also the period during which young people remain unemployed is lengthening. The social and economic costs of a generation of young unemployed are enormous. In a country with a small population and the great natural advantages that Australia has, it should simply not occur. That it does occur is to the discredit of all of us. Instead of having sound policies for youth the Prime Minister (Mr Hawke), as honourable senators will recall, made a nationally televised address for the primary purpose of promoting his Government. We recall the circumstances after the farce of the National Taxation Summit when the Prime Minister demanded of his handlers an emotive issue, something which would touch people's hearts-and what better issue is there than youth unemployment? I will argue in the short time allowed for me to speak that he so compromised principle by political expediency-that is balancing the trilogy of big government, big business and big unions-that his package will fail to hit the target of those genuinely needing help. It is worth mentioning in passing the definition of a trilogy-a tragedy in three parts-because it seems apt to these circumstances. The Prime Minister's political opportunism pales into insignificance when compared with the political cynicism of State Labor Premiers in their desperate bid to hold office. In my State of South Australia Premier Bannon, who spent some $350,000 of taxpayers' money promoting a dressed-up portion of the Commonwealth package as his own initiative, must head the bill. The State Government called its adaptation `YES' and I suggest that, YES, it is a confidence trick at the expense of the young. As we know, the heart of the Federal Government's proposal is traineeships. The Government will offer employers $1,000 to train a youth for at least one year. The employee must take at least 13 weeks off-the-job training. If the unions will co-operate he will be paid less than the minimum award wage. I say `if the unions will co-operate' because the announcement was received only coolly by Joe de Bruyn of the Shop, Distributive and Allied Employees Association who said that there had been no consultation with the union by the Government. This is further evidence of the Prime Minister's rush to meet a political objective rather than a genuine need. Of course the SDA is the union for representing one of the largest industries for potential traineeships. Apart from the attitude of the unions which have shown little compassion for the young unemployed-we do not see too many applications for trainee wages in logs of claims-the real problem is that the traineeships are not targeted to those particularly in need. The report of the Kirby Committee of Inquiry into Labour Market Programs-it is a good report-saw a need to target the scheme to disadvantaged youth. Under the Government's proposal confident kids, kids with initiative, kids from higher socio-economic backgrounds, kids whose parents have some clout in the business world, will get the traineeships. They are the kids who would have got training in any event; they are the kids who would have got jobs in any event. But the taxpayer is now to subsidise their employment and their parents and further subsidise their training. As we know, resources are not unlimited so those most in need of training-the disadvantaged youth-will miss out again. The Government will continue the current six-month employment subsidy for the long term unemployed although we note from the Budget Papers that the figure will be reduced. That is very hard to follow. Why will the figure be reduced? Presumably it is because the Government wants the scheme to have the widest electoral appeal. Why pay employers? In Germany they are not paid. The dual system, where employers accept their responsibility for taking on trainees as part of their general social responsibility to society, works well. Presumably, the reason is to keep up the trainee wage in order to lessen union objection to a fear of trainees undercutting full time employment. We support the concept of trainee wages. However, we believe that if they cannot be negotiated between employer and employee according to circumstances-that is the ideal, the best system, because some employment circumstances may require one, two or three years; some may require more time away from work, some less time away from work-they should be written into all awards which give all kids the chance to compete for traineeships. The government subsidy should then be targeted to the disadvantaged, who would otherwise be unlikely to gain traineeships. The Government has been spending 70 per cent of the budget in this field on short term job creation and employer subsidies. We on this side of the chamber believe that the emphasis is all wrong. Some of the community employment program money might be fulfilling other social goals but it is not training kids or giving them a long term employment future. When I see CEP money spent in Adelaide to rip up a bitumen road and reapave it in brick, I despair. When I see money being spent on foreshore beautification in the Iron Triangle to help those who have lost their jobs in the steel industry as a result of structural change I think perhaps it is a worthwhile social goal but it is a confusion of goals if we are looking to give young people an opportunity for long term employment. I wonder why the Government cannot wake up. We would like to see much more of that money going into universities, colleges of advanced education, technical and further education and, when necessary, supporting kids to be trained to their full potential. Mr Deputy President, as you know, statistics show that the better educated, the better trained a young person is, the better is his job potential. Therefore, we believe that a great opportunity has been lost to assist the young of this country. This leads me to Mr Bannon and his attempt, at public expense, to woo the voters on this issue. Senator Crowley —Ah, now we know why you are on the speaking list. Senator HILL —Senator Crowley should just wait patiently. Mr Bannon has announced programs to provide an extra 6,300 jobs of which, he said, 70 per cent would go to young people. The publicity literature that followed stated that all of the jobs-6,300-will go to young people. The State Budget Papers state: Traineeships are an innovation to be introduced into South Australia in 1986. They are designed to enhance the long-term labour market prospects of young people by providing a period of integrated education, training and employment activities. Private and public sector employers will provide work placements and on-the-job training, while TAFE and other relevant bodies will provide a minimum of 13 weeks off-the-job training, generally on a two day week basis. Traineeships will be of about 12 months . . . If that statement sounds familiar it is because it is taken from the Federal Budget Papers. There is no State initiative in this at all. But for the State campaign Mr Bannon has picked it up and has turned it into what he has called YES, the State youth employment schemes. In actual fact, the 1,600 jobs that he says he is going to create relate to a Commonwealth project. As I have suggested to honourable senators, by virtue of the inherent weaknesses of the Commonwealth scheme, they are jobs that would go to young people who would get jobs in any event. If we go further through the State Budget Papers we see that Mr Bannon expects an extra 200 young people to take up benefits of the Commonwealth Government's program known as the experimental training program. That is surprising because the Commonwealth Budget figures show that the program is going to fund only 600 places for the whole of Australia. He talks about an extra 200 places for South Australia. One can be excused for having grave doubts about the reality of that situation. If one works through the programs, as I hope Senator Crowley has, one will see that Mr Bannon mentions in his Budget the steel regions assistance scheme, which, by the way, is being reduced; pre-vocational training; the group apprenticeship scheme; and the self-employment ventures scheme. All of these programs are Commonwealth funded or Commonwealth supported. Any objective analysis will show that what the South Australian Government is offering is grossly oversold. In fact, if one adds up the totals, as I have done, and one takes into account the private enterprise schemes such as those that have been promoted by Rotary International, one still finds that one is about 3,000 jobs short on what Mr Bannon says his Budget contains. What it amounts to is that the youth and unemployed are being used as pawns in the Government's electioneering strategy. There is very little the South Australian Government is contributing to the long term employment future of South Australia's young people. What South Australians will remember when it comes to a crunch on election day is that despite all the hype about skills, training and employment, the Bannon Government has cut the funding for technical and further education in real terms in 1985-86. It is not surprising that the highest level of unemployment of all the mainland States is to be found in South Australia at the moment-a level of 22.6 per cent. The South Australian handout says: What about me? YES is the answer. If you're young and unemployed and wondering where to turn, you'll be glad to know there's someone who can offer some positive answers. YES. YES-Youth Employment Schemes-is busy creating 6,300 new employment and training positions for young people. That is not true. It is time governments stopped misrepresenting the position. It is time they stopped using kids as political pawns. It is time they stopped wasting taxpayers' money on advertising campaigns for self-aggrandisement, particularly those which unfairly raise expectations. It is time they cut back on short term band-aid jobs which are primarily designed to improve the employment statistics. It is time that money saved went into greater educational opportunities, particularly in secondary schools and TAFE. It is time that greater support went to kids wanting to continue education but who are unable to afford to do so. To the extent that the Commonwealth package helps to do that, I applaud it. But it is too little too late. The Kirby report reminds us that despite free tertiary education, there has been no improvement in access of the lower socio-economic groups to university training. It is time we allowed particular employers and particular employees to negotiate training agreements for young people. It is not beyond the wit of man to draw into that registration procedure to provide for protection if that is not necessary. It is time that all appropriate awards provided for training wages, terms and conditions. It is time that training subsidies the Government is going to provide on an across the board basis were redirected to disadvantaged youth. It is time that governments met their responsibility to employ their fair share of youth, particularly in training areas. This is a matter which Senator Harradine has raised very validly in this chamber before. No doubt he will do so again today. It is time the private sector was educated to its responsibility in the training challenge. Fancy paying Ansett Airlines of Australia $300,000 to induce it to take on 300 young trainees. Notwithstanding all the State support that Ansett receives, that company has to be induced by this further massive payment of taxpayers' money. The Labor Government has not served Australia's young unemployed well. There have been too many promises, too many calls for praise, too little vision and too little achievement. What I have attempted to put very briefly in this short presentation is the coalition's alternative approach which we believe is more realistic and will at least give the young people of Australia an opportunity to be trained for the work which they so readily deserve to be able to undertake. Senator Crowley —I take a point of order. I notice that Senator Vanstone was attempting to interject from a place other than her own. The ACTING DEPUTY PRESIDENT(Senator Jones) —I noticed that. However, I did not know whether she was talking to Senator Peter Baume or interjecting. Senator Vanstone should remember that she should be in her own place. Senator HARRADINE(Tasmania)(4.25) —The question of youth unemployment is indeed a matter of public importance. It is a matter of concern which has been expressed by all sides of this Parliament. That concern, of course, is not only evident in terms of the strain placed on the Budget by the cost of unemployment but also in terms of the cost to individuals. The total cost to the Commonwealth of unemployment in 1985-86 will be in the vicinity of $5.5 billion. That amount will pale into insignificance when it is compared with the cost to the individual unemployed themselves, their families and the cost in terms of the social disruption and dislocation of Australian society. It is no wonder, then, that the Government has embarked on the program Priority One: Young Australia. I would have thought that a real test of whether the Government has made young Australians priority one would be to examine what the Government is doing in the area in which it can have the most effect, and that is in the area of the Commonwealth Public Service. After all, the Government has a direct responsibility for that area. The fact is that in this International Year of Youth in which the Government has said that young Australia is priority one, the most recent figures released by the Australian Public Service Board show that youth employment in the Australian Public Service has fallen to an all time low. The fact is, according to the latest figures issued by the Public Service Board, that young people under 21 years of age constitute only 6.3 per cent of Australian Public Service staff. That compares with 22.6 per cent in 1966. Clearly, this tragic state of affairs for youth has been brought about by deliberate policy decisions, which still remain in force, denying youth, particularly girls, their fair share of Public Service jobs. The fact is that if the Government is serious about Priority One: Young Australia it must do something in the area for which it alone has responsibility. I congratulate the Government for initiating Priority One: Young Australia. I look forward to some statement by the Government as to what it is going to do to rectify the tragic state of affairs that is taking place in each and every one of the departments for which each and every one of the Ministers are responsible. By the way, the statistic that I have just referred to puts paid to the main thrust of the Opposition's proposal to cut youth wages. Cutting youth wages appears to be the major thrust of its proposed solution to the problem. But the fact is that youth wages in the Public Service as a percentage of adult wages have hardly changed in the last 20 years. They have made no difference whatsoever. They have not contributed one iota to the serious decline in youth employment in the Public Service. As was said by Senator Cook earlier, the Opposition has not one scintilla of empirical evidence to show that the level of youth wages is contributing to youth unemployment. I go to the matter of shop assistants' wages. What does the Opposition expect young people to live on? A 17-year-old shop assistant receives a net pay of $128 a week and at the end of the year of course has to pay the Medicare levy. If one takes into account the fact that shop assistants have to dress for the public, take themselves to and from work and pay board, they are really hardly any better off than they would be if they were on the dole. Let us face the facts about this. It is a poor panacea to say: `Cut youth wages and we will increase jobs'. It is important that we concentrate on training youth because employers have been spoilt; they have been able to pick and choose in the labour market. It is also important to give young people work experience, and to that extent what the Government is proposing is important. I will be interested to see what Senator Siddons is proposing as well. The essence of the matter is that we have to recognise that youth unemployment has a social as well as an economic aspect. The plain fact is that there are more people in or seeking paid work than there are jobs available. As the Prime Minister (Mr Hawke) said in his John Curtin Memorial Lecture in September 1983: The plain fact is that no Government in Australia will now, or in the forseeable future, solve the problem of unemployment solely through the available methods of increasing the supply of jobs. At least equal attention must be paid to the question of reducing the demands for jobs by helping to provide socially constructive alternatives. What more socially constructive alternative is there than the care and supervision of children at home? Whether the wife or the husband provides that care and attention is beside the point. One of the major problems that we face today is that many families are forced to have both partners out in the work force because they cannot make ends meet. Budgetary policies must be designed to protect the one-income family and to ensure that that family has the true freedom of choice to engage in that socially constructive alternative of caring for and supporting their children at home. I have been limited to 7 1/2 minutes and I am afraid that that time is up. Senator GILES(Western Australia)(4.34) —We are debating this afternoon a matter of public importance, namely: The failure of the Government to give real priority to the issues of youth employment. This matter was proposed by the Opposition and has already been spoken to by a number of Opposition members. I waited in vain to hear the issue debated seriously by Senator Vanstone, the proposer, but I was unable to obtain from that contribution very much in the way of elucidation about what exactly the Opposition would do given the opportunity. Nor was I able to hear from that contribution any acknowledgment of the Opposition's role in developing the state in which we now find ourselves in Australia. We have a very serious social problem which sees up to 100,000 young people leaving school each year and seeking employment without the vocational preparation which is necessary for them to ensure employment. Rather than take the approach of the coalition, which when it was in government produced a number of ad hoc, hastily cobbled together, completely inefficient and inadequate schemes to try to boost employment, the Australian Labor Party has approached the matter very carefully and has finally put together a cohesive approach as a result of a number of very thorough studies which has been done in conjunction with the Organisation for Economic Co-operation and Development-a report by the Kirby Committee of Inquiry into Labour Market Programs and a review of youth support schemes, just to mention a few of the preparations which we made for this very important task. The Australian tradition of early school leaving ages compares very poorly, as we have heard this afternoon, with west European and Scandinavian countries, where the provision for education and other forms of support provide a safety net for young people until they are well past the ages of 15, 16 or 17, at which age in Australia it has been traditional for them to be cast out of the nest, as it were. In response to a question earlier this afternoon the Minister for Education (Senator Ryan) explained that in most western European countries and in northern America it is common for young people to stay at school until they are 18 or 19, but in Australia the record has been very poor indeed. By taking up the recommendations of the Kirby report on training, and rationalising youth payments, we have initiated a number of measures which we confidently anticipate will have a profound and positive influence on the life and career chances of 16- and 17-year-old young Australian people. Important elements will operate to achieve this. Firstly, we can assume that, with the increase of secondary allowances, secondary education participation will continue to rise towards the goal suggested by the Karmel Quality of Education Review Committee. Secondly, we have targeted 1988 as the date by which our traineeship system is to be fully developed. With a decline in this age group as a proportion of the population we anticipate that very few 16- and 17-year-olds need face the prospect of unemployment by the 1990s. In addition, there should be a noticeable reduction in the unemployment rates of 18- and 19-year-olds as the traineeship proposal is extended to older age groups. We were questioned earlier in this debate about the implementation of our new traineeship program and I remind the Senate that we really have not been very tardy about this. The announcement was made by the Prime Minister in mid-August. By 25 September agreement had already been reached with Western Australia for a proposal involving 500 trainees. By 2 October the Minister for Employment and Industrial Relations (Mr Willis) was able to announce a traineeship with Ansett Airlines of Australia. It will provide for an initial recruitment of about 80 young people as trainees, and it is expected within 12 months to employ 300 young people under the scheme. By 16 October, which is today-less than two months after the initial announcement of the scheme-we are told that already there are 36 group proposals before the Department of Employment and Industrial Relations, varying from some that are very small to some that are very large. I do not believe we have been dragging our feet at all on this and I imagine that we may in fact have created an all time record for the implementation of a program. From the outset, however, we are hoping that all school leavers will be eligible for this scheme although, as the Prime Minister said in his statement, 16- and 17-year-olds will have the highest priority, especially those young people who have not completed Year 12. We focus upon this group which is educationally and often socially and economically most in need of attention and most at risk. A traineeship involves an agreement between an employer and an employee for the provision of training to achieve particular skills. A system of certification is also included in the scheme. This does not replace the apprenticeship system but will cater for industries where on the job training can be greatly enhanced by approved off the job training. Initially, this will involve the finance, retail and tourism industries. I am taking this opportunity to explain the scheme, realising that many people will be interested to hear details of how it will operate. The trainee is to be paid by the employer at a wage agreed between trade unions and employers, but it will be at least $90 a week. I thank Senator Harradine for his contribution which very clearly analysed the position of poorly paid 16- and 17-year-olds, very many of whom have no security, no prospect of advancement and get very little in the way of training. These traineeships will run for a minimum of 12 months. In that period, at least 13 weeks must be spent in approved off the job training-usually one day a week. Training will be conducted by accredited authorities, predominantly in technical and further education, but private courses may be accredited if they satisfy the State Industrial Training Division, which is a tripartite organisation including representatives of TAFE and other training authorities. We were questioned earlier about how TAFE could possibly cope. It will cope very well. After years of neglect by Federal and State conservative governments, TAFE is beginning to bloom. This scheme will assist in the development of the real contribution that TAFE can make to the community outside its traditional role. The TAFE colleges will be substantially compensated for involvement in the scheme. The money awarded, $1,700 per placement, may be used for either capital or recurrent funding. A review is already under way to see what extra capital funding will be required in the event that the system is overstretched. In the short term, TAFE in my State of Western Australia is apparently capable of coping with the 1985-86 target number and is well on the way to filling the 2,500 traineeships included in a recently announced youth package for that State. I am happy to report that I have just discovered that Western Australia has the highest secondary retention rate in the nation. There are clear advantages for employers in the scheme. Every effort is being made to simplify procedures, recognising that the paperwork involved has acted as a deterrent in employment schemes in the past. State and Commonwealth governments have co-operated in this scheme so that one stop shopping caters for the requirements of both. Unlike apprenticeship formalities which, I understand, go to about 12 or 14 different pieces of documentation, only two forms need to be completed. One is an application to become an approved employer of one or a number of trainees and the other is in order for an agreement to be registered. Many employers will already have been approached and will know that the Commonwealth Government will provide training fees to the employer both for the training required on the job and for the off the job training part of the program. In many cases, employers have already responded. As I said earlier, I understand that 36 group proposals, ranging from quite small to large, are now before the Department. The Ansett Airlines proposal has been read about, I think, by all honourable senators and is seen as a model for a group training scheme. Young people who are interested in the scheme can get detailed information from the Department of Employment and Industrial Relations traineeship committees, the Commonwealth Employment Service, schools, TAFE institutions, colleges, CES careers reference centres, youth organisations and from State departments of labour. One very important feature of the scheme is that consumers or clients-the trainees and employers-will together make the decisions about the training components of this system, advised of course, by relevant trade union and education authorities as necessary. The scheme has the capacity to tailor the formal and informal training to the needs of the individual. Training may be broadly based and have transferrable as well as occupational skills, the aim being to enable young people to become adaptable as well as productive. Equal participation of women is an objective of the new system. Special attention is also to be given to particularly disadvantaged young people, including Aboriginals, the long term unemployed, those with disabilities and non-English speaking migrants. Up to 15 per cent of traineeships will be reserved for such special cases, who tend to have missed out badly in the less thoughtfully designed schemes established by the previous Government. Traineeships will help give young people a foothold in the labour market, enabling them to build up skills and experiences across a wider range of industries than do apprenticeships, and more equitably between the sexes. By developing a capacity to cope with change they will contribute to increased competitiveness in the longer term and a greater likelihood of achieving sustained high rates of growth which will, in turn, speed the reduction in youth unemployment. Senator PETER BAUME(New South Wales)(4.46) —Almost exactly one year ago, on 18 October 1984, the Senate discussed a matter of public importance relating to youth unemployment. I thought that it was a very balanced and constructive debate but now, one year later, the problem remains as a cancer eating at the hopes of our young and at their belief in the credibility of national structures. It is appropriate that my colleague Senator Amanda Vanstone should have proposed this matter of public importance before the Senate. Its terms are: The failure of the Government to give real priority to the issue of youth unemployment. It was proposed by Senator Vanstone and supported very ably by my colleague Senator Robert Hill. The extent of the problem is still frightening. Unemployment rates in Australia today are still high. At the end of August 1985, the unemployment rate for those between 15 and 19 years of age was still more than 20 per cent. The unemployment rate for those 20 to 24 years old was, in comparison, less than 12 per cent. As Senator Siddons pointed out earlier, the unemployment rate for those over 25 years is around 6 per cent. If one translates the figures which Senator Siddons and I have used it can be seen that in Australia today young people between the ages of 15 and 19 have a rate of unemployment that is about 170 per cent the rate of their older cohorts, the 20 to 24-year-olds. Those between 15 and 19 years have an unemployment rate about 250 per cent that of the general community, and an unemployment rate about 350 per cent that of their cohorts more than 25 years of age. Those are very serious figures. The effects of youth unemployment are well known. They were set out by the Prime Minister (Mr Hawke) in his August 1985 statement when he launched what he called the `Commonwealth Government's Strategy for Young People'. The Prime Minister said: In addition- to unemployment- too many young people are inadequately housed, too many receive inadequate health care, the welfare needs of too many are not being addressed, and there are too many alcohol and drug related deaths among young people. There is a growing sense of powerlessness, and of isolation from and rejection by, adult society. He estimated that at June 1985 about 130,000 young men and 95,000 young women-more than 200,000 young people-were unemployed. That is equivalent to about the total number of electors in four Federal electorates. About nine per cent of all young people in Australia were officially recorded as unemployed and seeking full time work. According to the Prime Minister, they were spending on average between 30 and 50 weeks out of work. There can be no more serious a national problem facing us. We discussed it last year and many of the points that were made during that debate need to be repeated. It was our concern at that stage that the Government was contributing to the sustaining of this high rate of unemployment and that young people themselves were losing hope about this society and the chance they had of participating in it. On that occasion I drew attention to a survey of youth by Australian National Opinion Polls Pty Ltd, commissioned for the Government, in which a number of views of young people had emerged. More than 80 per cent of young people believe that it is difficult to find a full time job in a city or in any area in which they live. A large majority-more than 60 per cent-of young people overestimate the level of unemployment among the young. In other words, they see the problem as so severe that they are despondent about it and overestimate it. They expect unemployment levels to continue. They do not expect improvement in the near future. The survey reveals feelings of helplessness, depression and boredom. It reveals that young people sleep in in the morning with nothing to do. The whole pattern is of people dropping out of society. The issue is not just one of jobs. It is the issue of a generation which wants to take part in our society and feels that it is unable to do so because it cannot find work and cannot get any sense of self-fulfilment. The response of this Government has been to announce that its priority one is youth unemployment, when clearly it is not, and to announce it in a way that serves the Government's purposes rather than those of young people. The Government's response is to have Senator Giles tell us that technical and further education is flowering at the moment. She did not mention that this year TAFE colleges turned away 60,000 people wanting to do no more than improve themselves and get access to jobs. She did not draw attention to the fact that this Government has cut in half the funds for next year for participation and equity which goes to improving the chances of those most disadvantaged. Is that the Government's priority for young people and their need for employment opportunities and training? The Government has cut PEP in half. If it wants to tell us that Priority One: Young Australia means the employment of young people it has to explain how that cut fits in to the attainment of that priority. We are concerned about the Government's whole handling of the Priority One program. The announcement was made before the program was ready. I say to Senator Giles that, in spite of the arrangements that have been made, I suspect that not one young Australian is presently in training as a result of that program. There may have been some arrangement, but I do not think any young Australian is benefiting from it. The program was announced before it was ready, before any immediate action was possible, before any apparatus to put it into effect had been set up and-very conveniently-just before the Budget, when the Government needed some good news. It served the purposes of the Government and it served the Prime Minister's own convenience and political ends to announce it then, before it could be put into effect. It did not help young Australians to have it announced in that way. The Government has called its program Priority One, but young Australians are not its first priority. They never have been. The Government's first priority is its own preservation in government. We have been told that the bulk of traineeships will be in the public sector. Senator Harradine made a very telling point this afternoon. He said that the Government could itself have become a major participant in Priority One. It could have given the lead. The Commonwealth Government, through its own Public Service, could have become the agency through which young people took part. It seems that that has not happened. I have heard this afternoon from Mr Jonathan Fowler of the Australian Small Business Association Ltd, who was listening to this debate and saw fit to phone in with the experience of his Association. He says that despite this program, Priority One, being launced on 20 August-a convenient pre-Budget announcement for the purposes of the Government-the first that his Association heard about it from the Government was on Tuesday of this week when an officer from the Department of Employment and Industrial Relations rang him and asked how his association was going in developing trainee proposals. Mr Fowler reported to us that he told the officer that his Association knew nothing about Priority One, much less about how it could make use of the provisions of the program for the benefit of young Australians. Following that one call the Department has sent a Priority One kit by hand delivery to the Australian Small Business Association and has arranged for a meeting with that Association on Friday, 18 October, this coming Friday. So much for consultation with business. There has been no consultation with one of the umbrella organisations for small business in Australia and very little action to put trainees on the ground. I refer to the advertisements which appeared when the announcement was made. They were large, double page advertisements in the best parts of our national Press. What were they headed? They were headed `We've just given Australia a new sense of priorities'. Whose photograph did they contain? They contained the Prime Minister's photograph, of course. Although the advertisements were allegedly about Priority One, they were really about advertising the Government. When I looked at those advertisements I thought: `Hello, this is interesting'. Let us see what the advertisements said about the program details. Of course, they said nothing. Let us see what they said about how one applies to take part in the program. They said nothing. Let us see what they said about how to make contact for further information. They said nothing. These advertisements had nothing to do with young people. Any honourable senator can look at the one I have here. They are self-aggrandisement statements by the Government making a good fellow of itself. They did not even give the information which young people would need if they were foolish enough to believe that this program was being put in place rapidly for them. Young people are not the Government's top priority. The Government's top priority is inward looking, itself. The advertisement was about the Government and the Prime Minister. It did no good for the young. Senator Cook told us that the Government will provide places. How many places have been provided to date? How many young people are in training today? We suspect that the answer is very few. Another point has to be made. Youth unemployment is an expression of the economic malaise in which Australia now finds itself. The resolution of youth unemployment will involve the restoration of business confidence and business capacity in the country. These are matters which have to be addressed. It is no good saying that because we are applying a band-aid here, whether or not it is a good band-aid, we are attacking the problem. All the Government is doing is pumping out water and doing what it can while the ship continues to leak. This Government has now been in office for two and half years. It has been in office through two elections and three Budgets. The level of youth unemployment today is the responsibility of this Government. We are looking to the Government, after two and a half years, for results, actions, and programs in place. Promises are not enough. If the Labor Party wants the people of Australia to believe that after two and a half years, in its third year in government, the situation we face is not its responsibility, or if it is not willing to take responsibility for the level of youth unemployment, let it say so. The time has now passed when Mr Hawke and the Labor Party can escape the consequences of their inaction and clumsiness. If they cannot act effectively after 2 1/2 years, they never will. Today's situation is Labor's-the result of Labor's stewardship and Labor's three Budgets. It has had the benefit of the improvement following the breaking of the drought. It has had the benefit of its great prices and incomes accord and its three Budgets. Youth unemployment is still 350 per cent higher than the unemployment rate for adults. There is still a crisis because the economic recovery has been insufficient to allow most employers to take on youth. This year, 1985, is the International Year of Youth. Youth are celebrating it in Australia with enormous rates of unemployment and with a lack of hope. It is not good enough. It was entirely appropriate and proper that Senator Vanstone should have brought this matter before the Senate today for discussion. Senator VALLENTINE(Western Australia)(5.01) —I share the concern expressed by honourable senators from all sides of the House today about the levels of youth unemployment and the consequent devaluing of young people in their own and in others eyes. It has been my experience that many young people feel helpless and hopeless in their short and long term views of their future. I agree with Senator MacGibbon that young people need to look with idealism towards the future. But I totally reject what he claimed in this place yesterday and again today as being the reason for the disillusionment from which they suffer at the moment. Young people are disillusioned because in the short term they are worried about the lack of jobs and in the long term they are worried that there will be no future due to the threat of nuclear war which hangs over us all. I will deal with the short term concerns first. This requires the redefinition of employment. Most economists agree that we can no longer look forward with any optimism to anything like 100 per cent employment in the future. Obviously, we need to look beyond the traditional definitions of work. We need to look at it in terms of doing something worth while and doing something which gives meaning to one's life. Unfortunately, there is still a perception of and a preoccupation with trying to solve unemployment within the existing economic structure; that is, we are still wedded to the fundamental precept of economic growth and consumerism. I believe that young people do not want to be slotted into this materialistically based system. The fact that it is not working, it is not solving the unemployment problems of youth and it cannot be solved within the existing structure, provides an opportunity for fundamental reassessment. The traditional ways of looking at youth unemployment are inappropriate. We need alternatives for youth, based on this new philosophy, that have meaning, creativity and a sense of shared purpose as their basis. Such an approach involves radical and creative alternatives-job sharing, co-operatives, emphasising small-scale, renewable, labour-intensive projects, rather than capital and energy intensive approaches. Again, as I said in my first speech in this place, we ought to listen more to young people, many of whom have creative ideas about useful expenditure of their time in ways that are socially useful and environmentally sound. If, as I have often heard said, youth appear to lack motivation actively to seek the jobs which are available, there is a very good reason-that is, 75 per cent of youth fear that there will be a nuclear war in their lifetime. No wonder a percentage of youth take a hedonistic cop-out when they see so many older people apparently unaware of the problem or consciously choosing to ignore it because they do not know what to do about it. It is very necessary for people like us to instil some hope into young people's view of the future, to work with them in helping to turn not only Australia but the world away from the insanity of the nuclear arms race and from the ever-consuming tentacles of the growth economy syndrome, towards a just, participatory and sustainable society in which there will be ample opportunities for all people to lead worthwhile lives. Senator CROWLEY(South Australia)(5.05) —It falls to my happy lot to sum up this debate. I remind the Senate and people who are listening that this debate concerns the following topic: The failure of the Government to give real priority to the issue of youth unemployment. That claim by the Opposition is a total nonsense. This Government came to office in March 1983, facing the worst economic crisis and recession that seven years of Fraser could produce. Absolutely appalling economic conditions prevailed. The Government set about immediately to give priority to the turning around of the economy of this country, and any set of statistics shows that it has done so. The Government did not fail to give priority to youth unemployment. It addressed it, along with every question of employment concerning all ages, immediately upon taking office. It did this by promoting economic recovery. Its record is quite splendid. Now that it has dealt with the major macroeconomic issues it has turned its mind more specifically to focusing on youth unemployment. That in no way suggests that the Government has not given consideration to youth unemployment to this point. One has only to look at the Government's community employment program which has dealt with youth employment throughout this country over the last couple of years since it was introduced. It is nonsense to say that this Government has failed to give priority to the issue of youth unemployment. In fact, this debate has not addressed our Government's failure to give priority to this area. We have done so, and we will continue to do so. What we are debating today is a measure of the monumental disaster that was left to us from the Fraser years. We were left with not only double digit inflation, but double digit unemployment. That was the problem we faced when we came to government. That is what the Government has dealt with as a continuing priority. It has now this specific extra focus of the Priority One: Young Australia. I notice that Senator Harradine is about to leave the chamber. For his edification I wonder whether I could tell him, in answer to the points-- Senator McIntosh —He is on his way back. Senator CROWLEY —I thank the honourable senator for remaining to hear what I have to say. I will step out of sequence and tell him what I have had brought to my attention, for his information. As part of the Priority One project, in more recently released information, one of the aims of the Government is to establish 2,000 traineeships through the Commonwealth Public Service in 1985-86. It addresses directly the point that he raised. I can only say that we thank him for drawing it to our attention, but the Government beat him to the draw. Senator Peter Baume —How many have you in place already? Senator CROWLEY —I will refer to the remarks made by Senator Peter Baume in a moment. He was the last cab off the rank from the Opposition. I will deal with his remarks last, if he does not mind. Senator Harradine —May I leave now? Senator CROWLEY —Yes, you may, Senator. I have made the comment that I wanted to make. I simply remind the Senate again that the 11 per cent inflation rate we inherited when we came to office has now been almost halved. The rate of unemployment that we had on taking office has dramatically fallen. Although it is still very high, it is falling and it is continuing to fall at an increasing rate. The fall in the unemployment rate also covers youth. The fall in youth unemployment over the last 12 months-the figures were cited in this debate by Senator Cook-are of considerable encouragement. It is certainly not a matter of resting on our laurels. But they are an indication that the Government's efforts to this point are already bearing fruit. Senator Vanstone spent her time in leading off this debate mainly by abusing our Prime Minister (Mr Hawke). I commend Senator Georges for taking a point of order so that the honourable senator had to withdraw her abusive and unnecessarily offensive remarks. One wonders why she would want to raise a topic for debate in order to abuse the Prime Minister. Perhaps that is a good measure of the substance of her argument. The Prime Minister-and every member of this Government-has a long-time and clearly stated commitment to young people in this country. The Government has addressed the needs of young people in a variety of ways. At this point it has taken the extra step of specifically targeting youth unemployment by way of the Priority One project. But the programs for drug education and rehabilitation and education programs that have already been announced, as well as the macroeconomic recovery that I have referred to, indicate that the Government has had youth unemployment as a priority all along. Senator Siddons proposed the consideration of a new scheme. I must say it was somewhat sketchy and I did not really understand what he was proposing. In some ways what he was saying was that the lack of optimism, depression and gloom that young people can feel may be addressed, at least in part, by creating a job sharing program. He proposed that one job be set aside so that five people could each work one day a week in that job. While that is an interesting notion-and I suppose any step to create self-esteem and optimism amongst young people ought to be encouraged-it goes no way to addressing the question of youth unemployment, as the Priority One project does because it is so comprehensive in that it addresses the employment prospect, the educational needs and the income requirements. It is much more comprehensive, I think, than what Senator Siddons is proposing. However, I can speak of my own experience. When I worked in a community health centre it was quite clear that unemployment amongst young people was, as it remains amongst those who are unemployed, a considerable problem. Largely that problem stems from the lack of optimism, the gloom and the lack of self-esteem and self-confidence that continuing unemployment engenders in young people. Through our health centre we proposed a scheme of voluntary work placement through kindergartens for young people who cared to take up the opportunity of answering an advertisement from our health centre. A number of people did exercise that option and did say, exactly as we expected, that getting up one day a week and going to work, having to be dressed, on time, learning to ride buses and trains again and in short being where somebody valued their contribution did improve their self-esteem and did increase their self-confidence. In fact, the majority of those young people went through that voluntary work program to get full employment. To the extent that Senator Siddons's scheme might contribute in that kind of way, it is to be commended, but in no way do I think it would replace the proposal put up by the Government. I also take exception to Senator Siddons's claim that this Government is equally as responsible as the Liberal Government for youth unemployment in this country. I think that is a most unfair claim. In fact the already falling unemployment figures cited by Senator Cook earlier in this debate for people in the age group 15 to 19 in the last 12 months are an indication that the Government is addressing the problem and is already finding solutions to the problem. I might say that the Government does not hold itself fully responsible for youth unemployment. It can claim overall responsibility through the improved economic status and situation in this country. Both public sector and private sector are enjoying the fruits of that economic recovery and contributing to employment prospects for our young people. Next on the list of speakers was Senator Hill, who took the opportunity not so much to express his care about the unemployment of youth as to give Premier John Bannon, shortly to face an election in South Australia, a good spray. One would know exactly why Senator Robert Hill did that. Not too long ago, after wickednesses in the Liberal Party leadership in South Australia, Senator Hill was appointed State President of the Party. He has a particular and particularly pertinent interest in the forthcoming South Australian election, so up he got today to do what Senator Vanstone claimed the Prime Minister (Mr Hawke) had been doing. Whereas Senator Vanstone was wrong about the Prime Minister, I am right about Senator Hill. He was spraying the South Australian Government. (Quorum formed) I have the opportunity to get back into that wicked Senator Hill from South Australia, who was giving Premier John Bannon a nasty serve. The point that Senator Hill wanted to make was that Premier Bannon is not too serious about youth unemployment in South Australia because he has adopted a proposal with considerable similarity to the Commonwealth Priority One program. In fact, I am able to assure the Senate and the people of Australia that Premier Bannon is delighted to co-operate with the Federal Government in this initiative against youth unemployment. It is acutely aware of the difficulties of youth unemployment. South Australia, Western Australia and Victoria are the States that are best placed to take up the initiatives of the Federal Government in this Priority One program precisely because of the well matched enthusiasm and seriousness of their consideration of these issues. The other point of similarity that Senator Hill failed to draw to the attention of the Senate or the listening public was that Premier Bannon in South Australia inherited from the previous Liberal Government the same economic disaster on a State level as the Federal Labor Government inherited from the Fraser Government on the Federal level. The Bannon Government, when it came to office, found that the coffers were in a parlous state. In fact, the Budget was in the red. Premier Tonkin had been using capital funding to maintain the recurrent budget in South Australia. So dreadful was that situation that Premier Bannon has had to spend the last 2 1/2 years devoting his main efforts to getting the major overall economy of South Australia up and running. This he has achieved with massive and wonderful success. I am delighted to have the opportunity in refuting statements made by Senator Hill to give my points of praise to Premier Bannon for his achievements in the major economic considerations in South Australia and for his addressing of the problems facing youth in that State. It is precisely because he recognises those difficulties that he is so wholeheartedly co-operating with the Federal Government initiative as well as promoting his own. I point out to Senator Hill that the young people who have already been asked about this have said that they are delighted with the initiatives of Premier Bannon and Prime Minister Hawke. They do feel that people at last are giving them an interest, are taking them seriously and are providing some educational training opportunities for them. In the last minute left to me I would like to turn to an article in the Australian Society of September 1985 headed `Jobs for the Young'. The sub-heading is `The job prospects of young people look better than they have for a long time'. This article was written by Keith Windschuttle. There are two quotes in this article which do need to be put on the record. He says: . . . the traineeship programme is the most positive government move made in Australia on youth unemployment. The Hawke government received a good press when it announced the programme and the issue was obviously part of the August turnaround of the government's popularity dive. Senator Hill —Well promoted-that is the story! Senator CROWLEY —That is exactly the story. Senator Hill —Full page photos of Hawke and no details of the scheme. Senator CROWLEY —The point is that that scheme was announced. I come now finally to Senator Peter Baume's contribution to this debate, scintillating as ever. He spent his time abusing the Prime Minister along the lines of the interjections now crossing this chamber. He suggested that it was a funny thing to announce it at the time of the Budget because there was no good news in the Budget. What a nonsense. The Budget, like the tax announcements since, as well as the Priority One: Young Australia projects, are good news for this Government and for the people of this country. It was announced as part of the Budget precisely because it is part of the Budget. The allocation of funding under the various headings was required to be put into those Budget statements so that this Priority One project could be set in train and implemented with the 10,000 training places proposed in its first year set in place. That could not have been done without those Budget allocations. It could not have been done without that announcement at the time of the Budget. I think the Opposition quite clearly failed miserably on this matter of public importance. The DEPUTY PRESIDENT —The discussion is concluded. Bill presented by Senator Gareth Evans, and read a first time. Standing Orders suspended. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.20) —I move: That the Bill be now read a second time. This Bill amends the Pipeline Authority Act 1973 in accordance with Heads of Agreement negotiated recently by the Commonwealth with the Australian Gas Light Co., AGL, in relation to haulage of gas on the Moomba-Sydney pipeline, construction of a northern lateral pipeline to Bathurst, Orange and Lithgow and related matters. For some years the Commonwealth has been attempting to renegotiate the principal contract between the Pipeline Authority, TPA, and AGL-the 1974 haulage agreement-to overcome its lack of provision for recovery by the Pipeline Authority of unanticipated losses. These losses result from the Australian Gas Light Company's past and continuing inability to market gas at the levels it had nominated in the schedules to the agreement. At the end of 1984, the losses stood at $59m. Because of the structure of the agreement, this is an unserviced debt which by the end of the contract period, 31 December 2006, would exceed $1,000m and, depending on what assumptions are made about inflation, interest rates and volumes taken, could reach $2,000m in dollars of the day. Despite extensive negotiations and exchanges between the Commonwealth, AGL and the New South Wales Government for over seven years, and especially since April 1983, no real progress was made until late last year. But a settlement has now been reached between the three parties under which AGL and the New South Wales Government can receive the benefits they seek, while the Commonwealth will achieve full recovery by 2006 of all past and future costs of construction and operation of the Moomba-Sydney trunk pipeline, the existing lateral pipelines to Wagga Wagga and Canberra, and the proposed lateral to Bathurst, Orange and Lithgow. A revised formula for haulage tariffs over the next 20 years will-without increasing the real costs to New South Wales consumers-enable the Commonwealth to recover all of its past and future costs, provide compressors required along the trunk pipeline and extend a lateral pipeline to Bathurst, Orange and Lithgow. After 2006, haulage tariffs will cover costs of service, which costs will include a profit component. Extension of natural gas supplies to Bathurst, Orange and Lithgow will be a most important outcome of the new arrangements. Construction of the $35m pipeline from Young to the three cities will employ a substantial work force, both directly and indirectly, and should result in a major industrial expansion in this important area of Australia. Natural gas supply will offer security to existing industries and opportunities for establishment of new undertakings. As part of the new agreement, AGL will assume control of existing gas undertakings in the three cities and embark on a $20m expansion and refurbishing program of supply facilities. Rights and conditions of employees of existing undertakings will be fully protected. The retail price of gas to households in each centre will be no more than 10 per cent above prices in Sydney and will be uniform throughout the supply area. When these arrangements come into force on 1 January 1988, it is expected that future increases in the haulage tariff will never exceed increases in the consumer price index and will most probably be considerably lower. It is necessary that in future the Pipeline Authority and AGL work together co-operatively on the task of carrying gas to New South Wales and Australian Capital Territory consumers. Both parties need to use their best endeavours to ensure that gas is carried safely, economically and without supply failure, and that a viable natural gas market is maintained. To assist towards this objective, the Commonwealth has agreed to AGL's participation in the decision making of the Pipeline Authority by having a representative on the Authority. The amendments to section 6 of the Act will permit this to be done. The appointment of an AGL nominee will permit closer co-operation and mutual support in the planning and operational activities of the two bodies, each of which has much to offer by way of experience and expertise, not only in pipeline operations but also in other aspects of the natural gas industry. The Pipeline Authority and AGL already have a close commercial relationship through what is virtually a sole supplier-sole purchaser situation. Like other part time members of the Authority, the AGL nominee will of course be bound by all of the provisions of the Act affecting such members, including the conflict of interest provisions of section 9. The proposed amendment to section 15 removes the present requirement for the passage of specific legislation before construction of any new pipeline can be undertaken by the Authority. This amendment is sought for the following reasons: (a) Section 15 appears to require prior legislative approval for such essential elements of pipeline construction as route surveys, plan preparation and property and easement surveys, but also calls for inclusion in the enabling Bill of a detailed description of the pipeline route-which cannot be adequately prepared without some survey having been undertaken. The present provisions inhibit preparatory works of the kinds mentioned, and also such necessary preliminaries as stockpile site preparation and site office establishment. (b) This difficulty will be enhanced when there is a heavy legislative program. (c) All of the requirements of section 15 are applicable when any new pipeline, no matter how short, is proposed. (d) Separately from the provisions of this Act, there are adequate financial controls over the Authority through the need for ministerial approval for contracts involving expenditure exceeding $500,000-section 29-as well as Treasurer's approval for larger off-budget borrowings. (e) The Authority's accounts are subject to the Auditor-General's and Senate Estimates committee scrutiny. (f) Technical matters are properly the responsibility of the Authority which Parliament has established for that very purpose, and which possesses the necessary expertise. It is considered unnecessary and inappropriate for the Parliament to consider such matters as detailed descriptions of proposed pipeline routes and the limits of deviation, as is required by section 15 at present. Passage of the amendment to section 15 will permit the Authority to initiate preliminary work on the lateral pipeline project, including the ordering of pipe, valves and associated equipment to ensure timely commencement of construction, and so meet the construction target date of late 1987 for supply of natural gas to Bathurst, Orange and Lithgow. Industrial and domestic consumers and local government authorities throughout the central west area-as well as the State Government-are all anxious to ensure that this target date is met. Legislative provision for nomination of an AGL representative on the Pipeline Authority, and early commencement of the lateral pipeline to Bathurst, Orange and Lithgow, are essential Commonwealth contributions towards a renegotiation of the 1974 haulage agreement from which the Commonwealth stands to gain substantial financial benefits. I commend the Bill to the Senate. Debate (on motion by Senator Sheil) adjourned. Senator SIDDONS(Victoria) —I seek leave to present a plan for a Bill on youth unemployment and to move a motion in relation to the document. Leave not granted. Senator CHIPP(Victoria-Leader of the Australian Democrats) —by leave-The Australian Democrats are very disappointed that both the Australian Labor Party and the Liberal Party have refused leave to Senator Siddons because what he wanted to do was to get leave to introduce a plan for a Bill. It is a new technique. It is an interesting technique. It is not a Bill. The reason we brought in this technique was to save the parliamentary draftsmen and the Clerks of the Senate hours and hours of work in drafting something which has great constitutional difficulties. Senator Siddons brought this plan forward because 270,000 young Australians are out of work. Senator Siddons has had rare first-hand experience of running a company where this sort of part time employment actually works in getting kids off the street, out of unemployment and into work. I can understand the motivation of the Labor Party and the Liberal Party; it is not malicious. They are more concerned about the motive than the content of the Bill. I take this opportunity of thanking the Senate for giving me leave to speak. I ask the Government and the Opposition: What is proposed? What sort of timetable do they have? Will they be doing something to bring us back an early answer so that Senator Siddons can have an opportunity of bringing forward this very important Bill on this very urgent subject? Senator CHANEY(Western Australia) —Leader of the Opposition)-by leave-I have had an opportunity of discussing this proposal with the Leader of the Government in the Senate, Senator Button, and I think that he and I are in agreement. If what I say is not exactly what Senator Button's view is I apologise, but I think that we are in broad agreement about why we have refused leave on this occasion. The position is that the Democrats were seeking to institute a new procedure which would have entitled them or any senator to introduce a plan for a Bill and to have that dealt with by the speech being incorporated in Hansard, and so on. On the face of it, that seems an interesting and useful suggestion. The reasons for the reservations that were felt by the Opposition, and apparently also by the Government, were that we have a quite generous procedure in this place for dealing with private members' Bills. As the Democrats well know, because they frequently use the procedure, it is easy to bring a Bill forward and the Senate always permits it to get it to the second reading stage and to have the Bill on the Notice Paper for consideration. One then has an opportunity-this applies to the Opposition and the Democrats-to bring Bills forward in General Business. We have a quite generous set of procedures for dealing with Bills, and that is to the good. What is now proposed is a procedure which may be a useful adjunct but, on the other hand, it is difficult to see from the statement that Senator Siddons was good enough to circulate what the limits on that procedure would be. One could almost deal with any General Business notice of motion on the basis that it was a proposal for legislation and that therefore one was entitled to incorporate a speech and things of that sort. Frankly, I do not see what the limits are to this, and I think the Leader of the Senate, Senator Button, had the same difficulty. We could envisage it being a procedure which, though on the face of it reasonable, could be abused and used in a way that was counter-productive. For that reason, and I understand with the concurrence of the Government, I move: That the following matter be referred to the Standing Orders Committee for inquiry and report as soon as possible: The procedure proposed by Senator Siddons with respect to the introduction of Bills in the Senate. If the Senate would go along with that, it would give us a chance to give serious consideration to the limits that might be imposed on this procedure, whether we would wish to adopt it or not, and I think that it would be a more orderly way of going ahead. I have moved the motion in those terms, as I understand it is the wish of the Democrats and other senators to get an early response on the point. Senator SIDDONS(Victoria)(5.33) —I thank the Leader of the Opposition (Senator Chaney) for his explanation as to the reason for the delay in the procedure which would have enabled me to table a plan for a Bill on youth unemployment which, as we have just heard, is a critical issue. It is a practical plan. Unfortunately, Senator Chaney did not indicate what sort of time limit would be involved in referring this procedure to the Standing Orders Committee. I wonder whether he could address that question. If there is an extended delay in the procedure, I believe that some other approach will be necessary for the Democrats to get a practical plan on youth unemployment before the Senate. Senator ROBERTSON(Northern Territory)(5.34) —The Leader of the Government (Senator Button) has come into the chamber, but perhaps in supporting the motion moved by the Leader of the Opposition, Senator Chaney, I can confirm that discussions were held and that his account of them reflects the outcome. The content of the Bill had nothing to do with the discussions that were held. It was the procedure that was being looked at and which occasioned discussion. We see some problems associated with the way in which we might handle the putting forward of plans for Bills. I think in this place the appropriate technique is to refer the matter to the Standing Orders Committee. I think we should do so on the motion of the Leader of the Opposition, and include in that reference the implication that we shall be looking for a speedy response from that Committee. I support the motion. Senator CHANEY(Western Australia-Leader of the Opposition)(5.35) —in reply-The only reason I rise again is that Senator Siddons made an inquiry of me. In my motion I did not try to set a time limit, but simply said that it should be done as soon as possible. If there is any undue delay, there are, of course, other ways that the Democrats could bring this matter forward in a more conventional sense by giving some form of notice of motion in the normal way, making a speech on the adjournment, or using some General Business time. It is not the wish of the Opposition to obstruct the Democrats in any way in bringing forward for discussion propositions of this sort. We are concerned about the procedure and possible extension of this technique in a way that would be undesirable and which we would want to guard against. As a member of the Standing Orders Committee, I would be pleased to participate in an early meeting so that the matter can be considered quickly and a response given to the Senate. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I wish to make a few comments only because I had a discussion with Senator Siddons about this issue early this morning. I felt that we might have been able to resume those discussions at a later stage. That it has not been possible is probably largely my fault. I said to Senator Siddons this morning that I feel very conservative about this, and my approach is conservative. I fully support the reference and the spirit of Senator Chaney's comments. I do not wish to obstruct the blooming of what might be a very good idea. Senator Puplick —You are sounding a bit like Chairman Mao. Senator BUTTON —Well, why not? He did not have to wear a red tie to prove his radicalism, Senator Puplick. I was concerned about the precedent in all this as I believe are other senators. I support the referral to the Standing Orders Committee. Question resolved in the affirmative. Assent to the following Bills reported: National Crime Authority (Miscellaneous Amendments) Bill 1985 Grain Legumes Levy Bill 1985 Grain Legumes Levy Collection Bill 1985 Petermann Aboriginal Land Trust (Boundaries) Bill 1985 States Grants (Petroleum Products) Amendment Bill 1985 Wheat Tax Amendment Bill 1985 Export Market Development Grants Amendment Bill 1985 Senator LEWIS(Victoria)(5.38) —I move: That the Senate take note of the paper. I find this report a grave disappointment. The first annual report of the Economic Planning Advisory Council was made last year, and right from the word go EPAC indicated in that report that Council members were concerned with policies that bear on unemployment. Early in its report last year it said that it had arranged for a paper on alternative approaches to unemployment to be prepared by the Department of Employment and Industrial Relations and the report continued: Council agreed that labour supply side approaches were not an alternative to demand side measures . . . That jargon indicates that in 1983-84 this body was going on with the same sort of nonsense we have heard from members of the Australian Labor Party here today-that wages are not relevant to the employment situation. I would have thought that a body such as EPAC, with all its expert advisers and supposedly intelligent people, would have worked out by 1984-85 that in the previous year they had been on the wrong path and that it was time to come back to some sensible thinking on the problem of unemployment. In Australia at present unemployment is running at 8.1 per cent and with the recovery we have had-thanks to the Fraser Government's wages pause, thanks to the world economic recovery that started in the United States of America, and thanks to the ending of the drought-unemployment should be much below that figure. It is nonsense for members of the Labor Party to talk of the number of jobs that have been created in this country since Labor has been in office. The only jobs that have been created in this country since Labor got into office have been created as a result of the Fraser initiatives, the recovery in the world economy and the ending of drought conditions in Australia. What happened in 1984-85 is that the Economic Planning Advisory Council came out in its report saying the same sort of thing. I quote from page 8: . . . the most effective approach to the employment problem involves the adoption of appropriate macro-economic policies. Unemployment needs to be countered on a broad front. The Council was talking about macro-economic policies. I draw the attention of honourable senators to what it said in the previous sentence. It stated: . . . Council members have expressed concern that without sustained high rates of economic growth unemployment will remain a serious problem for some considerable time. I draw the attention of honourable senators in the chamber to what the Organisation for Economic Co-operation and Development has said. It stated: The OECD predicts that even if Australia experiences two more years of solid growth, as it expects, there will still be eight per cent unemployed at the end of 1986. Why? It is because the prices of labour are too high. That is what it is all about. Let me quote what Tim Colebatch said in an article in the Age on 7 June 1985. I have to change one word because he was telling a story about oranges. I will leave out the word `oranges'. He said: Most economists would agree that one crucial reason- I am not denying that other factors are involved. Certainly other factors are involved. Senator Button knows that the most important factor maintaining unemployment in this country at present is the high rate of wages being maintained by the union movement and the Government's famous accord. The article stated: Most economists would agree that one crucial reason why growth has not cleared our unemployment is that we . . . have set our prices too high. In the 12 years to the end of 1984, real wages in Australia increased more than 20 per cent. And this happened against a background of very high unemployment, intense import competition, and shorter working hours. Senator Button —Precisely. Senator LEWIS —Senator Button says `Precisely'. I accept that my case is proven. In the past 20 years-I acknowledge that we were in Government for eight of those years and I acknowledge our fault in those years- Senator Button —For eight years out of 20 years? Senator LEWIS —Well, 7 1/2 of those years, whatever it was. In the past 20 years wages have risen far too high. I acknowledge that we did not deal with that matter in government but, by gee, we will next time. Senator WATSON(Tasmania)(5.43) —The Economic Planning Advisory Council's annual report for 1984-85 is indeed a muted document. According to its charter the Council, under the chairmanship of the Prime Minister (Mr Hawke), is encouraged to provide its advice freely and without unwarranted influence. However, the report appears to be selective in its comments. Its statements are fairly full and free on taxation reform and, to a lesser extent, on unemployment, to which my colleague Senator Lewis has just referred. It states that without sustained rates of economic growth unemployment will remain a problem for some considerable time. That is a truism that was recognised well before EPAC-however, there is no published view in the report, despite the Council's fleeting references, to the economic conditions and the economic outlook. There is an acknowledgment in the report that a number of papers and information advices have helped keep the Council abreast of economic development. Having got those advices, what has it done? We are looking to the Council for inspiration. It was supposed to be the think tank. If this report was supposed to have had some sort of balance, I would have expected some sort of comprehensive report on the economic outlook for Australia. In its absence I think one can mischievously perceive that it must be bleak since it is absent from this report. I suppose its absence is not surprising considering that the Chairman is none other than the Prime Minister, Bob Hawke. Had that outlook been favourable no doubt it would have been lauded all over the pages of the report. The section directed to the medium term review of the Australian economy, while outlining the administrative functions and structures and saying that the major part of officers resources is devoted to this project, does not give any indication of the results of that work. I think that is a travesty. It is all very well to come out with bland phrases that a framework must be orientated to reduce unemployment, increase growth and have a managed structural change. But such matters have been known for some time and one would have expected a little more by way of positive response from this so-called high-powered organisation that boasts a membership of representatives from the Business Council of Australia, the rural industry, small business, the union movement and local, State and Federal government. I therefore submit that EPAC is failing to fulfil all those grandiose objectives that were promulgated by the Prime Minister following the National Economic Summit Conference of 1983. Unfortunately, I cannot commend this report to the Senate. I think it is a shocking report. Senator MAGUIRE(South Australia)(5.46) —I also wish to speak on the second annual report of the Economic Planning Advisory Council. In fact, earlier this year when I spoke on its first report I described it as a milestone because it was the first report of an authority established by the Australian Labor Party Government as a result of a promise made to the people in the 1983 election campaign to introduce economic planning machinery in Australia, albeit advisory machinery. It is a very significant step forward from the situation which existed previously in Australia on the economic front. I regret that two knocking and carping addresses have already been made this evening on this particular report because it is a very important report from a very important Australian organisation. The Economic Planning Advisory Council fills a gap which previously existed in Australia. Until the establishment of EPAC Australia was out of step with the rest of the developed world. We had no economic planning machinery in this country to speak of. That, among other factors, was reflected in this country's disastrous economic performance in the 1950s and 1960s when our growth in per capita income was among the slowest in the developed world. We had absolutely no economic planning machinery in this country. Other countries which were doing extremely well in increasing per capita incomes relied very heavily on planning mechanisms. They did not go in for rhetoric and nonsense about free markets. Countries such as Japan and the successful western European economies relied quite significantly on economic planning mechanisms to bring about high rates of economic growth. In the year under review EPAC spent much of its activities, in addition to its normal economic forecasting and providing economic advice, in preparing material for the National Taxation Summit which was held early in July this year. In fact, EPAC members prepared 13 papers on taxation in the lead up to the National Taxation Summit. In addition, the Economic Planning Advisory Council processed over 500 submissions for the Taxation Summit from members of the community. As a result of those submissions it prepared a summary document of representative views held in the community on taxation matters. Very importantly-it is long overdue-EPAC has now developed a facility to enable it and other organisations to examine the distributional consequences of taxation. Unfortunately, under previous governments in this country, very little attention was paid to the distributional or equity aspects of taxation; that is the fairness questions. It is high time that this aspect of taxation was examined. I am pleased to say that EPAC has now developed a facility to examine the consequences of tax changes. The Economic Planning Advisory Council is always involved in a review of the general Budget strategy of the Government. The annual Budget still remains the country's principal economic planning document, although I hope in years to come it will be downgraded as a planning document. There is far too much focus on the annual Budget of the Parliament. There should be more examination of other measures which also have a big effect on economic activity in this country. The machinery which has been set up, including EPAC, has had a profound effect on the economic performance of Australia. We are expecting a 5 per cent real growth this year on top of a 5 per cent real economic growth in the last two financial years. We are experiencing the most rapid, sustained economic growth in the Western world. To the present time over 480,000 jobs have been created in this country since the National Economic Summit Conference in April 1983. I remain convinced that there is only one issue in the community that is really grabbing the attention of the public and that is jobs. The public is interested only in jobs; it is not interested in the Australian Bicentennial Authority or what some Minister might have said about ANZUS. The real question is jobs, and 480,000 have been created in the last 2 1/2 years. Senator Sir JOHN CARRICK(New South Wales)(5.50) —The Economic Planning Advisory Council was set up by the Hawke Government as the major economic planner and adviser for the Government. The Government, in general, has commended the Council for its work and reports. Therefore, I take it that its central reports, which it has made in recent times, must have the support of the Government. The reports advise that unemployment in Australia will remain between 8 and 9 per cent for the next 10 years. The Government cannot have it both ways. It cannot say `I commend this Council for its good work' and then not say that it accepts its advice which, if true, paints a picture of dismal depression for Australia. It is of no use at all talking about a lot of other things. What has been said here is that something like three-quarters of a million Australians over the next decade, year by year, will be condemned to perpetual unemployment. Generation after generation will be so condemned. The simple fact is that in the seven or eight years of the Fraser Government most of the time unemployment was quite low. It was 4 or 5 per cent. In the two years 1981 and 1982 it was of the order of 6 or 7 per cent. But we are being told that for the next decade it will be 8 or 9 per cent and so far not one Minister or Government member has either rejected that statement or sought to point out that if this statement is true, it will destroy the very fibre of the young in Australia as they seek jobs. This afternoon we have had a debate on employment, a debate about the young and the ordinary desire of the young to study and to choose a job of their own choice. That choice has been virtually destroyed. What is being said is that that destruction will continue for a decade. There can be nothing more important before a parliament than that statement. If it is untrue let us have the evidence that it is not true-that next year or the year after there will be a significant decline in unemployment from 8 or 9 per cent. The truth of the matter is that the indicators suggest that not only will unemployment not decline but also it is likely to rise to 9 per cent and beyond. Indeed many analysts have pointed out that because of the low participation rate the true state of unemployment is not revealed. Many people have given up indicating that they want a job in the labour market and have opted out. Therefore, the true percentage of unemployment-this has been indicated by many economic analysts-is already at about 10 per cent. I cannot believe that a government faced with that advice from its main planning council has not made a major statement on unemployment, not made a major analysis of it and not rejected it. The key point to remember is that there has been no rejection of this statement. So we can assume that the Government accepts that for the next decade, year after year, the rate of unemployment will be 8 or 9 per cent and as we reach 1990, year by year, three-quarters of a million or more Australians will be unemployed, that generation after generation will be unemployed. There has been no rebuttal of that statement and no indication at all that the Government does not accept it or that it is wrong. If EPAC has done any one thing it is to place its finger on the one great issue for Australia-unemployment. It has made a projection which, if correct, is depressing for Australia and destructive for the generations to come. I can only hope that this cannot be true, that there must be constructive policies that will reverse this situation. Certainly the Opposition will be working towards that end. Senator COONEY(Victoria)(5.55) —I will follow on from the remarks which Senator Sir John Carrick has made. He took the Government to task on the question of unemployment. He said that the report of the Economic Planning Advisory Council gives a gloomy picture of the future of unemployment in Australia, that the Government accepts that and that, in effect, it intends to do nothing about it because no Minister or member on this side has said anything about it. Page 8 of the report, under the heading `Unemployment', states: At each meeting, Council members have received a comprehensive briefing on the labour market and on trends in prices and incomes from the Minister for Employment and Industrial Relations. Notwithstanding the strong growth in employment that has taken place since 1983, . . . The report emphasises there has been strong employment growth since 1983 when the Hawke Government came to office. It continues: Council members have expressed concern that without sustained high rates of economic growth, unemployment will remain a serious problem for some considerable time. The Government accepts that. It expresses concern; it does not, as Senator Sir John Carrick implies, express no concern. The Government, together with EPAC, expresses concern. It will seek to do something about unemployment and this report indicates what ought to be done. It states: It is accepted that the most effective approach to the employment problem involves the adoption of appropriate macroeconomic policies. Unemployment needs to be countered on a broad front. Rapid economic growth-- the Government goes along with that- with low inflation-- the Government has brought down in- flation-- an efficient labor market- which the Government has achieved through the prices and incomes accord-- strong industrial performance and rapid adjustment-- the Government has achieved this through the efforts of the Leader of the Government in the Senate (Senator Button)-- and a higher level of achievement by the education system are all important in improving the rate of employment growth. Work has been undertaken on these issues. Simply to say that this Government has done nothing about our employment, that this report is pessimistic about employment, that this side of the chamber is going ahead, as it were, in a callous and uncaring way is not so. The report makes it clear that that is not so and the Government accepts what this report says. To simply say that it ignores what will be needed to achieve growth in employment and a reduction in unemployment is just not correct. In a stirring address Senator Lewis said that unemployment must be reduced through an attack on wages and conditions. We ought to examine exactly what a reduction in wages and conditions means. It means that people will have less money to buy a home, they will not be able to afford mortgage payments that they otherwise might have been able to afford, they will not be able to buy cars and they will not be able to get the basics in life which they would otherwise get. It is one thing simply to say that wages ought to be reduced but it is another to analyse exactly what a reduction in wages means because a reduction in wages and conditions means a reduction in living standards. I understand from the Opposition that that should be imposed right across the board so every worker in Australia will be in a much worse position than he is presently. In these circumstances, is it not better to adopt the propositions put forward by EPAC, to adopt the Government's propositions and preserve wages and living conditions while, at the same time, reducing unemployment and taking this country forward? Senator VIGOR(South Australia)(6.00) —The striking thing about the latest annual report of the Economic Planning Advisory Council is its very blandness. Compared with the exchanges in the Senate Estimates Committee A, the report is quite unilluminating, particularly about the directions in which EPAC is heading. A variety of points have been raised publicly about the operation of EPAC over the past year. For instance, last December Colin Menzies of the Australian Council of Social Service and a member of EPAC was highly critical of the way EPAC was doing its job. He wanted EPAC to improve its performance in areas such as tax reform, unemployment and poverty. There was a need for radical changes if the economy was not to fall into malaise. This brings me to the purpose for which EPAC was set up in the wake of the National Economic Summit Conference back in 1983. Firstly, it was to provide a broadly based source and channel of information on economic matters to assist the Commonwealth Government in making decisions relating to economic policy and to assist State governments, local government and other bodies and even individuals in making decisions that are related to the economic policy of the Commonwealth Government. Next, it was to provide a forum for the participation of the community in the development and formulation of the economic policy of the Commonwealth Government. Thirdly, it was to facilitate the development and consideration by the Commonwealth Government of medium and longer term economic assessments and policy requirements. All three aims, if taken up in the national interest rather than for the sake of mobilising support for what the Government wanted to do, are very laudable. Structural matters and the overall framework in which trade policy, research and development policy, industry revitalisation policy and even transport policy are set are of critical importance to the nation. We need tackling these matters skilled people who do not have the narrow confines of a departmental position or a vested interest to protect. If the Australian people see only fiddling at the periphery in economic matters, and draw the conclusion that the tougher long term questions are not being handled at all by the Government, they cannot be blamed for refusing to make sacrifices for the good of the whole nation. I found it interesting that a task force on long term economic growth has been established to generate additional information for the Government on and to investigate, amongst other things, the performance of various sectors of Australian industry, Australia's international trading relationships and the impact of changes in them on the community, and the importance of technological change to the Australian economy. All of these things are essential if we are to get out of the economic morass in which are currently stuck. When that project is disbanded later this year, I hope that some of its work will be taken up on a continuing basis through the Economic Planning Advisory Council. Because high qualifications have been required of staff it has taken a while to build up EPAC's full time professional capacity. The Director, Mr Miller, has stated that the farming out of consultancies to the academic sector has been far less successful than getting the academics to work in EPAC's office, where they become acutely aware of the requirement that the research be applicable needs and of the direction of program policy. Mr Miller has also indicated that the EPAC office is approaching the final stages of developing its model for the Australian economy. Senate Estimates Committee A was told that this should enable a good look to be taken at what effect faster or slower rates of wind-back in the public sector borrowing requirements might have on the economy: that is indeed a very important matter for the next three to five years. In August we had the Australian Financial Review saying that the `release of an emasculated version of the suppressed EPAC paper on Medium to Longer Term Trends Affecting Australia's Economic Growth shows, without doubt, that EPAC has been stillborn'. I hope that that assessment turns out to be incorrect and that we can get EPAC fully and openly involved in examining and solving our serious long-term economic problems. The DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.05) —Mr Deputy President, I respond briefly to Senator Lewis's- Senator Lewis —Mr Deputy President, how can a Minister do this? Senator BUTTON —By getting up. The DEPUTY PRESIDENT —Are you taking a point of order, Senator Lewis? Senator Button is perfectly entitled to speak on this motion. Senator Lewis —I thought that you said that the time for the debate had expired. The DEPUTY PRESIDENT —I said that Senator Vigor's time had expired. There is not much more time left for debate. Senator Button has the call. Senator BUTTON —It is a common enough tactic in football to kick a ball out of bounds so as to delay the game, but not here, I would have thought. I respond only to Senator Lewis's passion on this issue. The honourable senator concluded his speech by saying: `We did not do anything about reducing real wages in the last period of Government, but by God we will next time'. Senator Lewis —I did not use the word `God', did I? Senator BUTTON —The honourable senator did; he used the word `God'. That is what brought me to me feet. The honourable senator should stop quivering. It is all right, I understand what I am saying. I thought he was invoking some divine support for his argument. Senator Sir John Carrick —You would need more than that. Senator BUTTON —I ask honourable senators to calm down. There is not much by way of divine support or any support for his argument because the real problem that this Opposition has-it has been agonising over it for a long time; there has been a lot of public concern about it-is how it will do that. The honourable senator gave us an assurance in the Senate and invoked God in support- Senator Lewis —You can have a debate on this subject any time you like. Senator BUTTON —The honourable senator really has very real difficulties about this problem. What he has to face up to, of course, is that it is not only the question of real wages- Senator Lewis —I take a point of order now. Mr Deputy President, I draw your attention to the fact-you are well aware of it because the Clerk has drawn your attention to it-that the time has expired for this Minister to be speaking on this subject. I am taking a point of order because of the fact that this is one of the few times when back bench senators and Opposition senators get the opportunity to speak in this chamber. If the Minister wants to make a speech in regard to the matters that we raised here today, he has all sorts of opportunities to do so. There is an hour of Question Time every day in which he has the opportunity to respond to dorothy dixers and to make statements about this matter., He can bring down a paper on unemployment which we will debate any time he likes. The DEPUTY PRESIDENT —Order! Senator Lewis —I am still speaking to the point of order. The DEPUTY PRESIDENT —Order! If the honourable senator's point is that the time for this debate has expired, he is correct. The time has now expired. Senator Lewis —Thank you. The DEPUTY PRESIDENT —This matter will be placed on the Notice Paper for consideration when General Business is called on tomorrow. Senator Button —Mr Deputy President, I can understand the Opposition's concern to stop me speaking. The DEPUTY PRESIDENT —Order! The time for consideration of papers has expired. Motion (by Senator Button) agreed to: That consideration of committee reports pursuant to sessional order be not proceeded with this day. Senator COATES(Tasmania) —On behalf of the Standing Committee on Finance and Government Operations, I present a report on the alterations to the list of statutory authorities between 1 October 1984 and 30 September 1985. Ordered that the report be printed. Senator COATES —by leave-I move: That the Senate take note of the report. This is a brief list of alterations to the list that we tend to publish roughly each year. I indicate, as the report does, that we intend to review our functional classification of authorities, improve the presentation of the list and table a full list of Commonwealth statutory authorities as early as possible next year. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator TATE(Tasmania) —I present the thirteenth report of 1985 of the Senate Standing Committee for the Scrutiny of Bills concerning the Bounty (Agricultural Tractors and Equipment) Bill 1985, the Bounty (Metal Working Machine and Robots) Bill 1985, the Export Inspection Charges (Miscellaneous Amendments) Bill 1985, the Export Inspection (Establishment Registration Charge) Bill 1985, the Export Inspection (Service Charge) Bill 1985, the Foreign Fishing Boats Levy Amendment Bill 1985, the Grain Legumes Levy Collection Bill 1985, the Interstate Road Transport Bill 1985, the Interstate Road Transport Charge Bill 1985, The Petermann Aboriginal Land Trust (Boundaries) Bill 1985, and the Taxation Laws Amendment Bill (No. 2) 1985. I also lay on the table Scrutiny of Bills Alert Digest No. 12 dated 16 October 1985. Ordered that the report be printed. Debate resumed. Senator COATES(Tasmania)(6.12) —Before the debate was interrupted today I had already mentioned some of the Government's new initiatives in social security reflecting our priority of assisting those in the greatest need. I had dealt with the new carers' pension, the special assistance for families with multiple births, the extra increases above indexation to single unemployment benefit recipients and the extension of rent allowances to the longer term unemployed over 18 years of age. I now turn to the other Budget measures in this Bill to which I draw the Senate's attention. The additional payment to pensioners, beneficiaries and family income supplement recipients with children will increase $2 a week to $16 a week per child as from next month. In May next year the mothers or guardians allowance will also increase by $2 a week to $12 a week. These small but significant increases will be of special help to supporting parents. This group will also be particularly assisted next year by the attack on poverty traps announced in the September tax package involving the removal of the separate income test on rent allowance, the doubling of the amount of income per child disregarded for the income test and the general increase of $10 for each child in the amount of income disregarded for the income test. I point out that in this Bill, to apply in May, the amount of income disregarded for the income test on unemployment and sickness benefits will increase by $10 so that it matches that applying to pensions. One other minor but important change in this Bill will involve the continued payment of the handicapped child's allowance for children who temporarily leave home for respite care. This will be available for a period of up to 28 days in any one year. I know it will be very welcome to those parents who have in their care a disabled child. To summarise, all of these improvements to the social security system and the equivalent veterans' affairs payments show once again this Government's commitment to combating poverty. These measures do not abolish poverty; nobody would pretend that. We remain concerned about the extent of desperate poverty in Australia but, with what funds are available and in the sort of budgetary environment which exists these days, those funds are clearly directed to those in greatest need. I support the Bill implementing the Budget measures in social security and veterans' affairs. Senator HAINES(South Australia)(6.15) —The Bill before us today is the Social Security and Repatriation (Budget Measures) Amendment Bill 1985. It is, in fact, an omnibus Bill dealing with Budget measures needing legislative amendments to a number of other Acts including the Aged or Disabled Persons Homes Act, 1954, the National Health Act 1953, the Repatriation Act 1920, the Seamen's War Pensions and Allowances Act 1940 and the Social Security Act 1947. I have in meetings and in this chamber, listened to Senator Coates valiantly defend what I believe is this Government's abysmal assistance to people on low incomes, including those families which are attempting to support the three-quarters of a million children in Australia living below the poverty line. He is to be commended for his efforts, for his loyalty to the Government and for the fact that he very frequently makes it all sound terribly plausible. But I am afraid that there are some people in this community who are rather disappointed with the speed with which the Government is honouring its election promises and its ideological and traditional commitment to people on low incomes, and in particular to people who are in receipt of social welfare benefits of one sort or another. In this Bill the Government has promised to provide for an increase in expenditure on social security and welfare of $110m in 1985-86, and $245m in a full year. It gives itself a bit of a pat on the back in the second reading speech of the Minister for Social Security (Mr Howe). The Government says that this is in addition to increases in expenditure that automatically result this financial year from factors such as the automatic indexation of pensions and benefits and the increased numbers of people on welfare of one sort or another. The Minister said in that speech that the actions that the Government is taking in this legislation demonstrate its commitment to improving the adequacy of assistance for those most in need. I think what we have to do when looking at this sort of legislation is ask ourselves whether the legislation really does this. Is it achieving a great deal at all or is it yet another minor band-aid measure? For example, the gap between the unemployment benefit and the poverty line has not decreased; it has in fact worsened since 1983. This legislation does not improve that situation. I, along with a number of others, consider this to be rather appalling. I know that there is a lot of prejudice in the community against people who are in receipt of the unemployment benefit but, despite anecdotal evidence to the contrary, there are people who are genuinely out of work-and often for long periods-through no fault of their own. Whatever their age-whether they are 18 or 48 and suddenly find themselves made redundant after a lifetime of being in the paid work force; a lifetime of believing that that is their right and indeed their responsibility-and whatever the circumstances, these people deserve some dignity and security, and what they do not need is stress additional to the pressure of being out of work in a society which assesses people on the job they hold and the income they earn. That additional stress is placed on them by their extreme poverty. We should not underestimate the sort of stress that falls on breadwinners, whether they be male or female, and their families when those people live below the poverty line-and live below the poverty line is what all but a very few families do when the breadwinner is in receipt of unemployment benefits. According to the statistics, where the head of the household is not in the work force the poverty line for a couple with two children is estimated to be $239.62 a week. They get, through the pension and through family allowances as of November 1985, something like $208.05-leaving them more than $31 below the poverty line. As the number of children in the family increases so the differential between the benefit and assistance that they get from the government and the poverty line widens. The same sort of statistics apply when single parent families are in receipt of benefits. A sole supporting parent with two children is estimated to have a poverty line of $193.62 per week. That person receives in benefits of one sort or another $152.65, leaving him or her nearly $41 below an acceptable but very basic standard of living-the accepted poverty line. The Government talks about targeting single parent families for particular assistance. I suggest that this is creditable but an increase of $2 per child per week, notwithstanding Senator Coates's comments to the contrary, hardly makes up for the decrease in real terms in the value of benefits since 1980. One wonders whether this Government has paid any attention to studies by the Institute of Family Studies with regard to the amount of money that it takes basically to feed and clothe children in various age ranges. Those figures have been cited in the past by me and other senators in this place during debate. There is a wide variation according to the age of the child and the economic status of the family but they are way above, in all instances, the limit that the Government puts on assistance to families. Perhaps the reason that the Institute of Family Studies has found its funds cut is that it is cutting too close to the bone in the sorts of recommendations that it makes with regard to such matters and in the statistics and hard data it has produced to show exactly how governments of one persuasion or another are deficient in what they are doing for the most needy in our community. It is an unfortunate fact of life that most sole parent families are headed by women. This has a particularly disastrous effect on them and their families. An article appeared in the Adelaide Advertiser in September this year headed `Women on Welfare. The Feminisation of Poverty'. That article states: Some call it the feminisation of poverty, others say it is a blatant form of discrimination against women. But the statistics tell the story in stark black and white . . . In the next year, 63p.c. of Australian women over the age of 15 years will be supported by social welfare payments. We have had debates recently in this place about whether the Government should take much more stringent measures to ensure that women who are divorced from their husbands and who have the custody of children should, in fact, be maintained by their ex-spouses. I certainly welcome recent comments from Mr Howe and others that the Government is looking at adopting a scheme similar to that in New Zealand in which maintenance payments are ensured and men cannot feel free to skip their responsibilities, secure in the knowledge that the Department of Social Welfare will pick up the tab. The article continues: This means that close to 4m women will be paid about $9,300m in pensions benefits and allowances. We need to remember that that includes the family allowance. It continues: Total social security payments in the next financial year will be $15,503m. But what is even more disturbing about these figures is that only 3m women in Australia can live without an injection of social security payments. At last count, there were 7.8m women-just over half our total population. . . . Women receive 77p.c. of all income main- tenance payments. . . . They account for 60p.c. of Medicare payments and about 55p.c. of pharmaceutical benefits. This is presumably because they take responsibility not only for their own health care but for that of their children. The article continues: In the next year, the Government will pay out $5,971,000 in age pensions. Of this women will get 69p.c. and 78p.c. of these women will be entitled to the full rate. The article then points out that to earn the full rate, private income must be less than $20 a week. That has recently been increased and I will say more about that in a moment. The article continues: Women make up the bulk of recipients for family allowances . . . and family income supplements . . . FIS is the basis of life for sole parents, the majority of which (92p.c.) are women. The article points out a few additional and equally appalling figures, but I think, Mr Deputy President, you and honourable senators in this chamber will get the point. Apparently the Government has acknowledged this problem, in particular the problem of poverty traps, and the until now unrealistically low figure that people can earn before their pension is cut, by taking some steps to alleviate this, steps which it announced in the recent statement `Reform of the Australian Taxation System'. Under the heading `Poverty Traps' the Government announced: The Government has decided to make certain changes to social security arrangements from November 1986, in the overall tax reform context, to alleviate some of the problems caused by poverty traps. The measures include: increasing the pension free area by $10 per week, to $40 per week for single pensioners and $70 per week for a couple; removing the separate income test on rent assistance; and increasing the income disregard for each child of a pensioner from $6 to $12 per week. * * * * . . . pension free areas (currently $30 per week) for single pensioners and $50 per week (combined) for couples protect pensioners from a loss of pension when they have only modest amounts of private income. The free areas have been increased only once since 1972. This is appalling and does not speak well of previous governments. The statement continued: The increases in the pension free areas to $40 per week for single pensioners and $70 per week (combined) for pensioner couples will protect about 140,000 social security and repatriation pensioners from any loss of pensions. The problem comes in giving those people not only the increased amount that they can earn before their pensions are cut but also access to that income. At the moment we have very limited access to such opportunities as part time work-and a pretty limited access to full time work-but governments of all persuasions, businesses, industries and unions have been very slow in coming to terms with the fact that we need a much more flexible employment system if we are to cope with the number of people who would like to work only part time and, indeed, under these sorts of regulations are only entitled to work part time. The Government, in the statement, under the heading `Removal of Separate Income Test on Rent Assistance' makes the point: Pensioners and beneficiaries renting in the private market receive a special payment (rent assistance) of up to $15 per week, It goes on to talk about eligibility. It concludes: Close to 300,000 will receive an increased payment of up to $15 per week. This is a consequence of its measures. It is all very fine except that access to accommodation is often very difficult for those on low incomes. I have commented on this matter recently. I will not go into it again but the Government needs to look at increasing funding for public housing in very real measures as well as assisting people in the private rental sector. It also needs to make quite sure that current negotiations to end negative gearing in the future and its imposition of a capital gains tax do not work to the detriment of people on low incomes. The Government in its statement talks about a November 1986 increase in income disregard for children, pointing out that at present $6 per week per child is disregarded in applying the pension income test. It proposes to increase that amount to $12 per week. I simply refer honourable senators to comments that I made a moment ago about the cost of bringing up children. I hope that those amounts will be indexed in the future so that we do not have poverty trap problems that are currently facing many people in the community. I think the Government also needs to be a little more enthusiastic about its proposals to increase the number of child care places available, again because lack of child care is a disincentive for most women who would like to get out into the work force. Again, it is a little pointless lifting the pension free limits and so on if people cannot take advantage of that by getting out into the work force. As I said, they need not only access to permanent part time work or job sharing capacities and so on but also somewhere to put their children while they take up those opportunities. I suggest that if the Government does not do that, and do it fairly quickly, it will indicate a fairly strange set of priorities. In the same statement which announced that these measures were to take effect as of November 1986, the Government abolished the sales tax on thoroughbred horses and exempted from the payment of taxation all horse and greyhound racing clubs. There was no waiting until November 1986 for that; yet it will be a revenue deficit, if you like. Senator Walters —We know that Bob Hawke loves the races. Senator HAINES —We certainly know what the Government's priorities are. I find it rather strange when the needs of such elitist industries as thoroughbred horse breeding and horse and greyhound racing take precedence of the millions of Australian families in this country. Senator Walters —Assistance for the unemployed, for instance. Senator HAINES —Indeed; that is quite correct. It is a sort of Sangster sales tax exemption legislation, or something like that. I am not quite sure what the purpose of it all is but I can say to the three-quarters of a million children currently living below the poverty line that perhaps in their next lives they ought to come back as a thoroughbred racehorse or a greyhound. Surely the Government is not as unaware as it seems to indicate it is of the huge cost, both social and economic, of allowing people to live in poverty. It need look no further than most of our daily newspapers to find exactly what the cost is in terms of health care, poverty traps, lost revenue raised through tax from people in the work force and so on. The Age only last month ran an article headed `Poverty and illness related, says survey'. The article, by Philip McIntosh, said: Single parents, long-term unemployed, older workers and housewives are more likely to be ill or seek medical help than professional people and the wealthy. People living below the poverty line report significantly more recent illnesses, chronic conditions, days off work and in bed, and mental illness, than more affluent people. It- the study referred to- found that women doing home duties reported about 1.5 times more recent illness, chronic conditions and mental illness than men in the higher status occupations. These women reported 1.7 times more days of reduced activity because of feeling unwell. When people are unemployed, are on a pension of some sort, are not in the position of being able to put their talents to good use and feel that their status in the community is low and that people are blaming them for their condition, it is no wonder that they suffer from these sorts of conditions. They are an expense on the government. People who are ill, who need to see the doctor frequently, who are not contributing as much as they could to the running of a family or to production in business and industry, are draining the resources of the community, and through no fault of their own. Until governments realise that these costs are real and act accordingly we will continue to have a divided Australia where too many people live in poverty, and the resources of the people will be lost to society as a whole. I suggest that, as a first step, the indexation of all benefits, including the family allowance, flexible work options, adequate child care facilities, ready availability of respite care for those who currently care for aged or disabled relatives, et cetera, must be put into place. If we do not do that soon we will have a situation in which we are spending far more than we need on the welfare sector, to no good purpose at all, and denying increasing numbers of people to what I believe is their right to feel and be useful and contributing members to the development of Australia. Senator WALTERS(Tasmania)(6.35) —Tonight we are debating the Social Security and Repatriation (Budget Measures) Amendment Bill which contains amendments to legislation in the social security and repatriation areas that have accrued from the Budget. I congratulate the Government on introducing some of the measures that it has introduced in the area of social welfare. It seems to me, like Senator Haines, to be extraordinary that in August and September the Government announced that rental assistance would be provided for many of the disadvantaged groups-the unemployed, the sickness beneficiaries, et cetera-but not until next year, not until May 1986. That seems to me to be the equivalent of having two bites at the cherry because, no doubt, we will hear a lot about it between now and next May. It seems to me to be an announcement of next year's Budget, which is a quite extraordinary way of going about things. However, I think that $10 rental assistance will be of great benefit when it comes in. The Government has made great play about the alleviation of poverty traps. The Treasurer (Mr Keating) in his taxation statement said: As part of the reform package, the Government has recognised that certain social security arrangements presently provide little incentive for pensioners and beneficiaries to earn extra income. Accordingly, the Government will take a number of steps to alleviate the problems caused by these poverty traps. `Alleviate' is the right word because although the Government's measures will certainly reduce the poverty that people are experiencing at the moment, they will not alter the poverty traps at all. They will not make one iota of difference to such people. All they will do is to shift the poverty traps from one area to another. Only a matter of an increase in the inflation rate will create the same poverty traps amongst the same people. I will come back to the poverty traps because I believe that this is an area that we really must look at. An aspect of the family allowance is to be withdrawn from 1 November, in just a few days time. The Government will preclude payments for children over 18 years of age, who are usually students. I am quite sure that Government members have had considerable correspondence from parents of those students who have already received notice that from 1 November they will no longer get their family allowance. The sad part about it is that a large family, even if it can afford to do so, will lose the top bracket. A family with, say, five children will lose $45 a week. It will not lose the first amount but the last amount. Therefore this measure, as the Government says, will mean a great saving for it. But it is very unjustifiable, in my opinion, for students who are still very much dependent on their parents. Let us look at just what the problem of poverty is in Australia. As I said, the Government has made a great deal out of the fact that it is out to alleviate the poverty traps. All the experts say that the lack of co-ordination between the Australian taxation and social security systems is a major problem area. I do not think anyone would deny that that is so. According to the Institute of Applied Economic and Social Research, in 1983-84 the poverty lines rose by 9.3 per cent, while the consumer price index rose by only 5.9 per cent. That is a very large increase. The figures show that thousands of low income earners and social security beneficiaries are now finding themselves poverty stricken. The monthly economic and social indicators refer to the most recent statistics available, which show a decline in the position of all pensioners and social security beneficiaries in relation to the poverty line since 1981. Now, in 1985, it is admitted that there has been a decline in the position of all pensioners and social security beneficiaries. The incomes of married pensioners are falling towards the poverty line and those of single pensioners are falling further below the poverty line, according to the monthly economic and social indicators. While the incomes of pensioners and beneficiaries have fallen in relation to the poverty line, the number of recipients of pensions and benefits have increased from 10.5 per cent of the population in 1974 to 19 per cent in 1983. This, of course, is of great concern to all of us, and it certainly should be. I draw the Senate's attention also to further facts outlined in the monthly economic and social indicators, because they show that since 1982 not only has the number of unemployed increased, but also the average period in which an unemployed worker remains unemployed has increased. So the amount of time that people are unemployed is increasing, and increasing all the time. In 1982 an out of work 35-year-old man, on average, was unemployed for 10 months. In December 1984 that figure had increased to 15 months. In 1983, 27 per cent of those unemployed were out of work for more than a year. In February this year that figure had increased to 36 per cent. Thirty-six per cent of unemployed people had been out of work for more than a year. In late 1984 Professor Henderson asserted that the growth in long term unemployment was one of the main reasons for the worsening plight of the poor. As Senator Haines has pointed out, the Government is not giving the $10 rental assistance until next year, in May 1986. The true poverty trap can be seen in some figures that I have before me. I seek leave to have them incorporated in Hansard. I am sorry that I have not already shown the Minister for Education (Senator Ryan) the document. Senator Ryan —What is the source? Senator WALTERS —It is a government source. It is entitled `Attacking poverty traps-Social security and tax reform'. Leave granted. The tables read as follows- BEFORE BUDGET-MAY 1985 RATES Effective Marginal Tax Rates Married Unemploy/Sick Beneficiary Couple-0 dependent children Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 0.68 157.30 157.30-157.98 0 0.68- 12.22 157.30 157.98-165.19 37.5 12.22- 20.00 157.30 165.19-171.03 25 20.00- 70.00 157.30-132.30 171.03-189.78 62.5 70.00- 202.30 132.30-0.00 189.78-189.78 100 202.30- 226.98 nil 189.78-208.29 25 226.98- 238.93 nil 208.29-214.86 45 238.93- 240.38 nil 214.86-215.94 26 240.38- 375.00 nil 215.94-308.82 31 375.00- 538.46 nil 308.82-395.46 47 538.46- 673.08 nil 395.46-464.11 49 673.08-1,442.31 nil 464.11-764.11 61 1,442.31 and over nil 764.11 and over 60 AFTER BUDGET-NOVEMBER 1985 RATES Effective Marginal Tax Rates Married Unemploy/Sick Beneficiary Couple-0 dependent children Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 5.93 163.20 163.20-169.13 0 5.93- 20.00 163.20 169.13-177.93 37.5 20.00- 59.56 163.20-143.42 177.93-190.29 68.75 59.56- 70.00 143.42-138.20 190.29-194.20 62.5 70.00-208.20 138.20- 0.00 194.20-194.20 100 208.20-240.38 nil 194.20-218.34 25 240.38-240.46 nil 218.34-218.40 30 240.46-253.12 nil 218.40-224.72 50 253.12-375.00 nil 224.72-308.82 31 375.00-538.46 nil 308.82-395.46 47 538.46-673.08 nil 395.46-464.11 49 673.08 and over nil 464.11 and over 61 BEFORE BUDGET-MAY 1985 RATES Effective Marginal Tax Rates Married Aged Couple Both Under 70 Years-0 dependent children Paying Private Rent of at least $40 Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 28.95 172.30-157.83 172.30-186.77 50 28.95- 30.00 157.83-157.30 186.77-186.90 87.5 30.00- 50.00 157.30 186.90-199.40 37.5 50.00- 73.21 157.30-145.70 199.40-204.48 78.125 73.21- 87.52 145.70-138.54 204.48-208.95 68.75 87.52- 89.36 138.54-137.62 208.95-209.64 62.5 89.36- 113.25 137.62-125.67 209.64-216.21 72.5* 113.25- 198.98 125.67- 82.81 216.21-247.93 63 198.98- 342.91 82.81- 10.85 247.93-295.79 66.75 342.91- 364.60 10.85- 0.00 295.79-301.65 73 364.60- 375.00 nil 301.65-308.82 31 375.00- 538.46 nil 308.82-395.46 47 538.46- 673.08 nil 395.46-464.11 49 673.08-1,442.31 nil 464.11-764.11 61 1,442.31 and over nil 764.11 and over 60 * Plus loss of Fringe Benefits after $102 AFTER BUDGET-NOVEMBER 1985 RATES Effective Marginal Tax Rates Married Aged Couple Both Under 70 Years-0 dependent children Paying Private Rent of at least $40 Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 26.00 178.20-165.20 178.20-191.20 50 26.00- 30.00 165.20-163.20 191.20-191.70 87.5 30.00- 50.00 163.20 191.70-204.20 37.5 50.00- 69.28 163.20-153.56 204.20-208.42 78.125 69.28- 99.32 153.56-138.54 208.42-217.80 68.75 99.32-104.52 138.54-135.94 217.80-219.75 62.5 104.52-129.83 135.94-123.28 219.75-226.72 72.5* 129.83-195.05 123.28- 90.68 226.72-250.84 63 195.05-354.71 90.68- 10.85 250.84-303.93 66.75 354.71-374.53 10.85- 0.93 303.93-309.28 73 374.53-376.40 0.93- 0.00 309.28-309.56 85 376.40-538.46 nil 309.46-395.46 47 538.46-673.08 nil 395.56-464.11 49 673.08 and over nil 464.11 and over 61 * Plus loss of Fringe Benefits after $106 BEFORE BUDGET-MAY 1985 RATES Effective Marginal Tax Rates Married Aged Couple Both Under 70 Years-0 dependent children Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 28.95 157.30 157.30-186.25 0 28.95- 50.00 157.30 186.25-199.40 37.5 50.00- 73.21 157.30-145.70 199.40-204.48 78.125 73.21- 87.52 145.70-138.54 204.48-208.95 68.75 87.52- 89.36 138.54-137.62 208.95-209.64 62.5 89.36- 113.25 137.62-125.67 209.64-216.21 72.5* 113.25- 198.98 125.67- 82.81 216.21-247.93 63 198.98- 342.91 82.81- 10.85 247.93-295.79 66.75 342.91- 364.60 10.85- 0.00 295.79-301.65 73 364.60- 375.00 nil 301.65-308.82 31 375.00- 538.46 nil 308.82-395.46 47 538.46- 673.08 nil 395.46-464.11 49 673.08-1,442.31 nil 464.11-764.11 61 1,442.31 and over nil 764.11 and over 60 * Plus loss of Fringe Benefits after $102 AFTER BUDGET-NOVEMBER 1985 RATES Effective Marginal Tax Rates Married Aged Couple Both Under 70 Years-0 dependent children Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 26.00 163.20 163.20-189.20 0 26.00- 50.00 163.20 189.20-204.20 37.5 50.00- 69.28 163.20-153.56 204.20-208.42 78.125 69.28- 99.32 153.56-138.54 204.42-217.80 68.75 99.32-104.52 138.54-135.94 217.80-219.75 62.5 104.52-129.83 135.94-123.28 219.75-226.72 72.5* 129.83-195.05 123.28- 90.68 226.72-250.84 63 195.05-354.71 90.68- 10.85 250.84-303.93 66.75 354.71-374.53 10.85- 0.93 303.93-309.28 73 374.53-376.40 0.93- 0.00 309.28-309.56 85 376.40-538.46 nil 309.56-395.46 47 538.46-673.08 nil 395.46-464.11 49 673.08 and over nil 464.11 and over 61 * Plus loss of Fringe Benefits after $106 BEFORE BUDGET-MAY 1985 RATES Effective Marginal Tax Rates Single Adult Unemployment Beneficiary Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 7.01 85.20 85.20- 92.21 0 7.01- 14.70 85.20 92.21- 97.02 37.5 14.70- 20.00 85.20 97.02-100.99 25 20.00- 70.00 85.20-60.20 100.99-119.74 62.5 70.00- 130.20 60.20- 0.00 119.74-119.74 100 130.20- 136.73 nil 119.74-124.64 25 136.73- 143.93 nil 124.64-128.60 45 143.94- 240.38 nil 128.60-199.98 26 240.38- 375.00 nil 199.98-292.86 31 375.00- 538.46 nil 292.86-379.49 47 538.46- 673.08 nil 379.49-448.15 49 673.08-1,442.31 nil 448.15-748.15 61 1,442.31 and over nil 748.15 and over 60 AFTER BUDGET-NOVEMBER 1985 RATES Effective Marginal Tax Rates Single Adult Unemployment Beneficiary Non-DSS Income Total Benefit Disposable Income EMTR ($/wk) ($/wk) ($/wk) (%) 0.00- 9.99 91.45 91.45-101.44 0 99- 20.00 91.45 101.44-107.70 37.5 20.00- 52.29 91.45-75.30 107.70-117.79 68.75 52.29- 70.00 75.30-66.45 117.79-124.43 62.5 70.00-136.45 66.45- 0.00 124.43-124.43 100 136.45-144.73 nil 124.43-130.64 25 144.73-152.35 nil 130.64-134.83 45 152.35-240.38 nil 134.83-199.98 26 240.38-375.00 nil 199.98-292.86 31 375.00-538.46 nil 292.86-379.49 47 538.46-673.08 nil 379.49-448.15 49 673.08 and over nil 448.15 and over 61 Senator WALTERS —These figures show the tremendous problems associated with unemployment benefits. As soon as people start working, we all know what happens. Once they have earnt over $20 and up to $70, they lose 50c in the dollar. From $70 to $202 they lose $1 for each dollar earnt, plus they lose their social security rebate. So once they earn between $70 and $202 they pay 100 per cent taxation, if all of those facts are taken into consideration. This is really what the poverty trap is all about. Once a person is in an income tax bracket, he loses the social security benefit at the rate of one hundred per cent. He loses it on a dollar for dollar basis and he is in the 100 per cent tax- ation bracket. Senator Ryan —That is inevitable in any means-tested scheme, is it not? Senator WALTERS —I am commenting on the fact that in the speech of the Minister for Social Security (Mr Howe) he stated that he is alleviating the poverty. Senator Ryan —That is right. They can be alleviated. Senator WALTERS —He is not alleviating the poverty trap; he is shifting the poverty trap. Senator Ryan —That is what `alleviation' means. Senator WALTERS —The poverty trap consists of that which is taken up by a combination of losing social welfare benefits and entering the taxation scale. That is the poverty trap. The Minister is saying that `alleviation' means merely shifting it to another place so that as soon as inflation takes over we will again have the same problem. That is not alleviating the poverty trap; that is shifting the poverty trap, and that is all that I am talking about. I think that the Government and any future governments must look at this area. They must look at the combination of the loss of social security benefits as income is earned and the taxation system. They must look at them in unison. I wanted to speak very briefly in the debate on this Bill. As I said earlier, I congratulate the Government on its intentions eventually to introduce rental assistance at the rate of $10. I wish that it had introduced it this year. It has taken away the children's allowance. It has been very quick off the mark in that regard. Indeed, it is taking away the family allowance for children aged over 18 in November this year. But it is rather reluctant about the $10 rental assistance. It is not implementing that measure until May next year. However, I am pleased that the Government has indicated that this will come to pass eventually, and I support the Government in this situation. Senator RYAN(Australian Capital Territory-Minister for Education)(6.48) —I thank honourable senators for their contributions to this debate. The Senate has been debating the Social Security and Repatriation (Budget Measures) Amendment Bill 1985, the purpose of which is to provide for an increase in expenditure on social security and welfare of $110m in 1985-86 and $245m in a full year. This is in addition to increases in expenditures that automatically result in 1985-86 from factors such as the indexation of pensions and benefits and the increased numbers of pensioner beneficiaries. The Bill provides for a range of increases for pensioners and unemployed persons in different circumstances. The details were set out in another place in the second reading speech of the Minister for Social Security (Mr Howe). I conclude the second reading debate by thanking those honour- able senators who have endorsed the Government's significant efforts to alleviate poverty in our community. I commend the Bill to the Senate. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. Motion (by Senator Ryan) proposed: That the Senate do now adjourn. Senator ROBERTSON(Northern Territory)(6.50) —I rise briefly on the adjournment to deal with a matter which is causing me some concern. I draw the Senate's attention to a paragraph in the Canberra Times today under the heading `Newspaper raid'. The article reads: DARWIN: Police have raided the offices of Darwin's only daily newspaper, the Northern Territory News, in search of a leaked confidential government document about the Aboriginal title to Ayers Rock. The police investigation was authorised by the Public Service Commissioner after the document was used as the basis for a report in Saturday's edition of the paper. The background very briefly is that Dr Anthony Thomas, who is the head of the Northern Territory Conservation Commission, prepared a confidential report for the Northern Territory Government on Uluru, Ayers Rock. Dr Thomas recommended as part of this report that the Northern Territory Government should support and be seen to support Aboriginal ownership. I quote from the document: Territory opposition to Aboriginal title would be a reversal of previous position, would alienate the Aborigines and their advisers and would be exploited by other parties. The report says in a latter part: The Commonwealth legally owns and controls Uluru. The report then went on to advise the Minister to take certain action and refrain from other action. The article from which I have quoted was published in the Northern Territory News on Saturday 12 October, last Saturday. It is an article which is embarrassing to Chief Minister Tuxworth, who is at present conducting a campaign alleged to cost $300,000 to condemn the handover of Ayers Rock to its traditional owners-a campaign which is, I see, unsuccessful and certainly wasteful of public funds. I am not concerned about that aspect of it. Dr Keith Fleming, who is the newly appointed Public Service Commissioner in the Northern Territory, initiated police inquiries to trace the source of the `leak'. I am referring to the document on which the article was based, the document supplied obviously by someone to the Northern Territory News. On questioning, Dr Fleming took full responsibility for initiating the police investigation but indicated that Chief Minister Tuxworth had not objected, rather interestingly, and again I quote the article, `over drinks on Monday'. Quite clearly the matter was discussed in a social situation and Chief Minister Tuxworth had no objection to that action being taken. The journalist claimed when he was spoken to that the police had stood over him and tried to force him to reveal the source of the document. When I drafted a notice of motion on this matter and gave notice of it this morning I made an error. I had been advised that the police had rifled his desk; in other words, had actually opened a drawer of his desk and looked for some material. I apologise for this because my latter advice is that the police did not open a drawer in the desk to look for the document, but certainly in what the journalist claimed to be stand-over tactics they demanded to know from where the journalist had received the document. I make the point that the police had no search warrant to look for the document and no warrant to make an investigation of the sort that was carried out. Again, that is not the matter that I am raising. It seems to me that the matter under discussion is either for the police or the public service. I suggest that it cannot be both. We have no place for jackboot tactics in the Northern Territory or in any other part of Australia. Let me make it quite clear that I do not support the leaking of documents. As a former public servant I deplore such behaviour. However, I must condemn the tactics adopted in this case to get the source of the document. I think it is generally accepted by those of us who sit around this chamber and those who work in the Press Gallery and in other places that journalists do not reveal sources of documents. Many journalists have been prepared to go to gaol rather than reveal the source of their documents. I have no reason to push the case of the Northern Territory News. As I have indicated in this place on a number of occasions, the Northern Territory News is certainly no supporter of the Labor Party, but this is a matter of principle and I think that the principle is one that concerns us here. I am ashamed that my Territory-the Northern Territory-is beginning to look more and more like a banana republic or something worse. I trust that we will see no more examples like this from a government which I have to say-and I make this in no political sense but as a Territorian, and I am proud to be one-has politicised the public service, which is most unfortunate, and which I believe has brought discredit on the institution of parliament, which is something of concern to us all here. Question resolved in the affirmative. Senate adjourned at 6.56 p.m. The following papers were tabled: Navigation Act-Marine Orders 1985-No. 4-Part 2 (Fees). Seat of Government (Administration) Act-Determinations made under the following Ordinances- Motor Omnibus Services. Motor Traffic. States Grants (Petroleum Products) Act-Amendments of the schedules to the subsidy schemes in relation to the Northern Territory, dated 10 October 1985. ADMINISTRATOR'S MESSAGES-ASSENT TO LAWS: Messages From His Excellency the Administrator of the Government of the Commonwealth of Australia were reported, informing the Senate that His Excellency had, in the name of Her Majesty, assented to the following Laws: 16 October 1985- Message No. 32- National Crime Authority (Miscellaneous Amendments) Act 1985 (Act No. 104 of 1985) Message No. 33- Grain Legumes Levy Act 1985 (Act No. 106 of 1985) Grain Legumes Levy Collection Act 1985 (Act No. 107 of 1985) Petermann Aboriginal Land Trust (Boundaries) Act 1985 (Act No. 109 of 1985) States Grants (Petroleum Products) Amendment Act 1985 (Act No. 105 of 1985) Wheat Tax Amendment Act 1985 (Act No. 108 of 1985) Message No. 34- Export Market Development Grants Amendment Act 1985 (Act No. 110 of 1985) ADMINISTRATOR'S PROCLAMATION-COMMENCEMENT OF ACT: A Proclamation by His Excellency the Administrator of the Government of the Commonwealth of Australia was tabled, notifying that His Excellency had proclaimed the following Act to come into operation on the date specified: Extradition (Commonwealth Countries) Amendment Act 1985-16 October 1985 (Gazette No. S 423, 15 October 1985).