Thursday, 7 November 1985 The Senate met at 10 a.m. The Clerk-Honourable senators, the President is unable to attend the sitting of the Senate today. In accordance with standing order 29, the Deputy President will take the chair. The DEPUTY PRESIDENT (Senator Hamer) thereupon took the chair, and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honorouble 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 assembed, 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 every pray. by Senators Giles (from 315 citizens), Robertson (from 89 citizens) and Walsh (from 172 citizens). To the Honourable the President and members of the Senate in Parliament assembed: Victoria Planning (Brothels) Act 1984 The petition of the undersigned citizens of Australia respectfully showeth: That whereas the Commonwealth of Australia ratified the UN Convention on the Elimination of All Forms of Discrimination Against Women in 1983, the Government of Victoria in passing the Planning (Brothels) Act 1984 is in breach of Article 6 of the Convention which says that `States Parties shall take all appropriate measures, including legislation, to suppress all forms of traffic in women and exploitation of prostitution of women'. That the Victorian Planning (Brothels) Act 1984 provides legal authority to brothel operators to traffic in and exploit the prostitution of women and to live off the earnings of prostitutes. That whereas the Federal Minister for Health has counselled citizens to shun promiscuity (The Australian 26/1/85) because of the serious and sometimes fatal heatlh hazards, the operations of legalised brothels encourages promiscuity and the spread of diseases, including AIDS. Your petitioners therefore pray: That the Government of Australia having ratified the UN Convention on Women remain consistent in its obligations to uphold the Articles of the Convention and request the Victorian Government to immediately repeal the Planning (Brothels) Act 1984. And your petitioners, as in duty bound, will every pray. by Senators Gareth Evans (from 497 citizens) and Short (from 231 citizens). To the Honourable the President and members of the Senate in Parliament assembed. The petition of the undersigned shows: That the proposed introduction of compulsory identification (ID) cards should be reconsidered and rejected because the system: (a) is not a cost-effective method of reducing tax evasion and social security fraud and, to the contrary, in the form proposed will facilitate such evasion and fraud; (b) will constitute an unwarranted infringment of individual privacy by the aggregation of a wide variety of personal information of a private nature; (c) will cause a further large and costly growth in the bureaucracy and burden on the taxpayer; (d) cannot be guaranteed against misuse for purposes other than for which their introduction is stated to be intended and in fact provide the opportunity for blackmail and other forms of misuse. And your petitioners humbly pray that the problems which identification cards are intended to reduce should be attacked by other, more effective and less obnoxious methods. And your petitioners, as in duty bound, will ever pray. by Senator Peter Rae (from 10 citizens). To the Honourable the President and members of the Senate in Parliament assembled: The humble petition of the understated citizens of Australia respectfully showeth-That we the undersigned have great concern for the future development and research of the IVF program and express that we are against `Senator Harradine's Bill' Human Embryo Experimental Bill 1985. The Bill threatens the provisions as a treatment for infertility because it defines as `prohibited experimentation': 1. Any manipulation of a relevant human embryo; 2. Any procedure undertaken on, or involving the use of, a relevant human embryo; 3. The creating of a relevant human embryo in anticipation that the development of the full human potential of the relevant human embryo will be interrupted or of using the embryo, or of having the embryo available for use, in any experimenting by virtue of sub-section (1) shall be deemed to be prohibited experimenting for the purposes of this Act; 4. Wilfully destroy a relevant human embryo; 5. Wilfully allow a relevant human embryo to die. by Senator Richardson (from 37 citizens). To the Honourable the President and members of the Senate in Parliament. We the undersigned express our concern over the sale of the Belconnen Mall due to the likely detrimental effect on the provision of community facilities presently existing in the Belconnen Mall. 1. In particular we seek guarantees that the present child care centre and community facilities be retained by incorporating the same into the conditions of sale of the Belconnen Mall and that the services will receive the same real level of funding and support currently provided by the Canberra Commercial Development Authority. 2. That a financial commitment to the Building of Stage 4 of the Belconnen Mall listed under Section 14C in the Ordinance of the Canberra Commercial Development Authority be undertaken. Stage 4 to consist of community facilities such as community hall, large glassed enclosed community park, exhibition space, health and fitness club, ice rink, amusement centre and office accommodation. Your petitioners therefore humbly pray that this petition be considered. by Senator Vigor (from 909 citizens). To the Honourable the President and members of the Senate in Parliament House assembled. The petition of the undersigned citizens of Australia respectfully showeth that we believe that our protected wildlife are not suitable subjects for laboratory experimentation and that repetitive and needless experiments should be prohibited. And your petitioners as in duty bound will every pray. by Senator Short (from seven citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of we the undersigned citizens of Australia respectfully showeth that: The unrelenting ever expending money extortion to which home purchasers are being subjected has exceeded the bounds of all logical reason. It is neither linear or progressive. It becomes transparently clear that the constant edging up of interest rates for investors by banks, lending institutions, and banking consortiums are collectively responsible for the monetary explosion, lack of employment and all that entails and is causing grave social disruption to hundreds of thousands. Behind it all, the absence of control that is now politically essential in the interest of justice and fair distribution of burden. No government, recent or future should tolerate this cruel, vicious procedure that shatters the existence of family life, together with all the well known disastrous repercussions that follow. Your petitioners therefore humbly pray that your House urge all politicians to unite nationally to do all within their power to reduce interest rates across the board and that: This country needs a five-year period to reduce this unwarranted absurdity by tackling its source, as follows: firstly a 2 per cent annual interest reduction on home loans, until it is down to 6 per cent. This to come into force immediately subject to the urgent necessary legislation. This would, or should curtail union demands, and cause no hazard for investors, who could reinvest in Government projects, or other worthwhile ventures. It would also certainly ease the burden on social securities. Your petitioners as in duty bound will ever pray. by Senator Bolkus (from 1077 citizens). To the Honourable the President and members of the Senate in Parliament assembled; the humble petition of the undersigned citizens of South Australia respectfully showeth that: Without any warning and at the worst possible moment, the Federal Government has abandoned the pensioner patients in South Australia's Nursing Homes. These people are suffering undeserving hardship and trauma as a result of the Federal Government's decision to freeze the nursing home benefit levels in South Australia. The pensioner patients and those on fixed incomes now cannot expect any relief from recent significant fee increases approved by the Department of Community Services and which have coincided with the decision to freeze benefits. 80-85 per cent of nursing home patients are pensioners and the majority are now required to pay in excess of their pension for their nursing care for the very first time. Some are paying over $5 per day on top of their pension. Many are looking for cheaper nursing care that doesn't exist. We request that the Federal Government: 1. alleviate the distress of South Australia's nursing home patients and their families by effective restoration of the principle that pensioner patients should not have to pay more than their pension for nursing home care 2. restore the review of the benefit rates in November 1985 3. resolve its concerns over health care costs with the South Australian Government rather than inflicting unnecessary suffering on nursing home patients. And your petitioners, as in duty bound, will ever pray. by Senator Jessop (from 109 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 programs, 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 31 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 communication facilities, operated by Australian and American personnel, that gives the United States the ability to pin-point Soviet nuclear submarines, hidden in the Oceans. 2. This would make it possible for US killer-submarines to destroy all Soviet nuclear submarines, while the US 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 US-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-US' electronic communication facilities in the Watsonia Army Barracks. by Senator Zakharov (from 54 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth that we deplore the proposed cut-back of funding for pre-school and child care in the mini-budget as the proposal adversely affects young families, women's employment prospects and children's development in their most formative years. We urge you to reverse proposals for cuts in children's services. And your petitioners as in duty bound will ever pray. by Senator Jessop (from 55 citizens). Petitions received. Senator PETER BAUME(New South Wales) —I give notice that, contingent on the moving of a motion of urgency under standing order 64 and the expiration of the time provided for discussion of the motion, I shall move: That so much of the Standing and Sessional Orders be suspended as would prevent the question on the matter of urgency being put forthwith. Senator DURACK(Western Australia) —I give notice that, contingent on the President proceeding to the placing of business on Friday, 8 November 1985, I shall move: (1) That so much of the Standing and Sessional Orders be suspended as would prevent paragraph (2) of this resolution having effect. (2) That the question on the matter of urgency moved by Senator Durack under standing order 64 on 6 November 1985 be put forthwith. Senator MESSNER(South Australia) —I give notice that, on the next day of sitting, I shall move: That in the interests of maintaining some modicum of confidence in the Australian dollar on overseas markets, the Prime Minister (Mr Hawke) prohibit the Treasurer (Mr Keating) from travelling overseas to explain how well the Australian economy is doing. Motion (by Senator Archer for Senator Lewis) agreed to: That leave be given to introduce a Bill for an Act to amend the Postal Services Act 1975 to allow for the continuance of postal services when the Australian Postal Commission is not able effectively to provide those services. Bill presented by Senator Archer, and read a first time. Senator ARCHER(Tasmania)(10.05) —by leave-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- Section 85 of the Postal Services Act gives Australia Post a monopoly on the carriage of letters weighing 500 grams or less. Breach of this monopoly carries a fine of $1,000. The consequence of this monopoly is that when Australia Post is unable to provide a service for the carriage of such letters Australians have no legal alternative means of having their letters delivered. This Bill amends section 85 to give the Minister for Communications a power to waive the monopoly provision at such times. An example when this power would have been of benefit to the Australian community was during the recent mail sorters' strike in New South Wales. In this respect, it is worth remembering that 40 per cent of Australia's mail passes through N.S.W. Articles weighing over 500 grams are unaffected by this monopoly and are freely carried by specialist courier services. At times (and particularly during postal disputes) courier services are circumventing the letter momopoly by carrying letters in large cardboard satchels weighing a minimum 500 grams. This questionable practice is inefficient, and is a service available only to the more affluent sections of the community. The principal reason for the Bill is that a legal monopoly is justifiable only if it enables a cheap and efficient service to be provided to consumers. When Australia Post is unable to provide a reasonably efficient service for whatever reason, there can be no justification for retaining that monopoly and it should be removed. In addition, the waiving of the monopoly to meet such an exigency would: force the Government and the Minister to be responsible for provision of postal services. At present the Minister is able to avoid responsibility by claiming that Australia Post is a Statutory Authority and should be protected from ``government interference''; put pressure on the Minister to exercise the powers conferred on him under section 8 (1) of the Postal Services Act to give to the Commission, in writing, such directions as to the performance of its functions and the exercise of its powers as appear to be necessary in the public interest; encourage militant postal workers to seek to resolve industrial disputes by negotiation rather than by strike action; encourage Australia Post to prevent and settle industrial disputes by forcing it to face loss of business and potential loss of revenue during strikes; reduce the incidence of breaches of the law by couriers using inefficient and artificial contrivances-breaches to which Australia Post currently turns a blind eye. The legislation provides that where the Minister, after consultation with the Commission, is satisfied that, by reason of an industrial dispute or for any other reason, the Commission is unable to operate its postal services in such a manner as will meet the social, industrial and commercial needs of the Australian people for postal services, whether throughout Australia or in a particular part of Australia, the Minister may suspend the monopoly provision. During the period of the suspension of the monopoly provision a letter may be carried for reward by persons other than the Commission from a place within Australia for delivery at a place within or outside Australia or from a place outside Australia for delivery within Australia. In the current climate it is clear that this Bill would have widespread support. The business community and editorial writers have indicated support. The Major Mail Users of Australia, representing more than 20 per cent-in excess of $200m-of Australia Post's revenue, is determined the Minister should face up to his responsibilities. It's Chairman, Mr Malcolm Overland, has been seeking to see the Minister and has been told by his office in no uncertain terms that the Minister would see him when he was good and ready. Australia Post management could be concerned that this might be the ``thin end of the wedge'' leading to complete removal of its monopoly provisions and a consequent erosion of its revenue base. This amendment is not likely to have significant revenue implications except in a prolonged dispute. At the opening of a new Post Office at Wodonga in March this year the Minister, however, acknowledged that ``. . . If service quality in New South Wales continues to fail then growth in demand for Post services will decline as dissatisfied customers go elsewhere. The consequences of such a decline could well be catastrophic for the whole organisation''. Australia's mail services are chaotic, and recent bans and strikes have been causing massive financial and personal hardship to businesses and private individuals around the country. Because it is not faced with competition, Australia Post cannot go broke, and this weak Government will not take action for fear of offending the ACTU. This legislation will enable a responsible Government to ensure that ``the mail gets through'' notwithstanding industrial problems. If that should happen there will be a massive sigh of relief around Australia. Debate (on motion by Senator Button) adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Button) read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(10.07) —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 seeks to make a number of important changes in a variety of fields relating to the health portfolio. First, the Bill proposes substantial amendments to the Commonwealth Serum Laboratories Act 1961, to increase the competitive ability and the autonomy of the Commonwealth Serum Laboratories. Second, it proposes significant reforms to the medi-fraud provisions of the Health Insurance Act. Third, it provides, under a sunset clause, for the Health Insurance Commission to undertake planning for the Australia card programme. Finally, it provides for a number of amendments mainly of a technical nature to various aspects of the health function. May I first draw the attention of honourable senators to Part II of the Bill which is intended to streamline greatly the day-to-day operations and to improve the commercial viability of the Commonwealth Serum Laboratories (CSL) Commission. The need for these important changes has become apparent since the CSL Act was last amended in 1980, following an independent inquiry into the Commission's operations and capital works. These changes are the most significant changes to the structure and operations of CSL in its sixty-nine year history. Clause 10 of the Bill seeks to enable CSL to make use of idle production facilities and resources when they are not being used for pharmaceutical production. The additional use of CSL's facilities in this way will, of course, decrease the overall cost of oper- ations to the Commonwealth. Clause 11 will allow the Commission to undertake a number of normal commercial activities such as forming a company, buying and selling of shares, or entering into a profit-sharing partnership. This clause removes a current constraint on CSL which is not imposed on its competitors and is intended to make the Commission more commercially viable in a highly competitive industry. I would point out that any transactions of this nature will require the minister's approval where CSL will have a controlling interest. Clause 20 provides for possible reimbursement to the Commission if, as a result of a direction given to it by the ministers, it suffers a financial loss. Other provisions in the Bill are designed to help the Commission improve its efficiency, effectiveness and accountability. I will briefly outline some of these matters: The current constraint which prevents any person with a direct or indirect interest in any pharmaceutical enterprise from appointment as a CSL Commissioner is to be removed; The term of appointment for commissioners is to be changed from the current four years to not less than three and not more than five years. These two changes will broaden the range of people eligible and available for appointment; A legislative requirement for declaration of interests by Commissioners is being introduced, formalising a practice which has existed for many years; The Commission's director, whose title is to be changed to managing director, will in future be appointed by the Commission itself, rather than by the Governor-General. Such changes recognise the importance of the chief executive officer and the controlling body of a government authority which is expected to be competitive and commercially viable and to play a leading role in public health in Australia; In relation to Commission staff, the requirement for Public Service Board approval of staff terms and conditions is removed-a necessary step to allow the Commission to be more innovative and competitive in the labour market-place; The Minister will be required to consult with the Commission before giving it any written direction which will affect its operations; such direction will have to be published in the Commonwealth Gazette within 21 days; The Commission is to be covered by the general provisions of the Audit Act 1901 in relation to its accountability; These are the principal changes proposed in the part of the Bill relating to the Commonwealth Serum Laboratories Commission-changes which will enhance the operations and the commercial effectiveness of the Commission. In relation to the financial impact of the changes, in only one area is there any possibility of a cost to the Government. I refer to the possible reimbursement to the Commission for any financial loss resulting from a direction given by the Minister. Such a direction would be given only as a last resort following consultation with the Commission and after other avenues of action in accordance with the legislation had been exhausted. It is impossible to quantify such a cost-it would depend entirely on the circumstances at the time. On the other hand, an increase in revenue for the Government is expected. The improved commercial viability of the Commission should produce increased dividends. In addition cost savings for the Government can be expected from the increased use of production facilities. These changes will further prove the advantages to Australian citizens of having a public window into the pharmaceutical industry. I now turn to a number of provisions in the Bill which propose amendments to the Health Insurance Act. Section 3B of the Act currently provides for the issue of a certificate by a medical practitioner stating that a person is in need of acute hospital care for a period of up to 35 days. The section ensures that full benefits are paid for long-term acute care hospital patients. Without this certification all patients are automatically classified as `nursing home type patients' after 35 days in hospital and their health fund benefits are reduced accordingly. Experience has shown that for various reasons, medical practitioners sometimes fail to furnish certificates at the appropriate time. As there is currently no retrospectivity allowed by the legislation, some acute care patients have been financially disadvantaged through reduction of their hospital benefits to nursing home levels. It must be pointed out however, that the health insurance industry has behaved most responsibly in this area, and has usually made ex gratia benefit payments in such circumstances. Clause 28 of this Bill proposes that retrospective certification be allowed; it has the support of the health insurance and private hospital industries, and of the Australian Medical Association. The amendment will correct a current anomaly under which the health funds cannot share the liability for ex gratia patients via the reinsurance arrangements. Commonwealth outlays will not be affected, as the Commonwealth bed-day subsidy continues to be paid whether the patient is classified as `nursing home type' or `acute care'. The Bill proposes a further change to this section of the Health Insurance Act-an amendment of the definition of `nursing home type patient' in sub-clause 26 (2) and a provision in clause 27-which together enable the Secretary to the Department of Health to exclude individual patients or classes of patients from the nursing home type patients arrangements. This would be done through a determination which would be subject to parliamentary scrutiny and disallowance. To ensure proper consideration of the medical circumstances of each case, the determination power would be delegated to senior Commonwealth medical officers within the Health Department. The development of a review process through the Acute Care Advisory Committee arrangements, plus monitoring of the nursing home type patient arrangements, has pointed to some justification for the exclusion of certain types of patients from those arrangements. These might include, for example, certain long-term acute care psychiatric patients and terminally ill cancer patients. The types of patients who might be covered by this amendment are to be discussed with the medical profession and the health insurance organisations before any individual or class of exclusion is declared. The purpose of this amendment is to provide an appropriate mechanism to allow an exclusion of general classes of patients, whereas currently only individual exclusions are permitted. Again there will be no effect on Commonwealth outlays, nor will health insurance organisations be affected as it is intended that any excluded class of patients would be those to whom section 3B certificates now routinely apply. There should be a small administrative saving through a reduction in the numbers of certificates issued by doctors and monitored by the health funds. Clause 37 will amend section 20 of the Health Insurance Act to empower the General Manager of the Health Insurance Commission to determine how Medicare benefits should be paid. The new provision is similar to one in the social security legislation. The Commission has always followed a policy of limiting cash payments for Medicare claims at its branch offices, with benefits above a certain sum paid by cheque and sent to the claimant within a few days. It has adopted this policy, which is similar to that of other health insurance organisations, for sound business reasons. First, the Commission's experience over many years indicates that for large amounts the use of cheques posted to a valid address acts as a deterrent to claimant fraud. Secondly, cash limits enable the Commission to estimate reliably a branch's cash needs for a day's trading, with advantages both to the Commission's clients and its own operations. Thirdly, the limiting of cash required to be held overnight at branch offices reduces their attractiveness as possible targets for robbery. The Commission believes its policy is soundly based and prudent, and through this Bill seeks to ensure that the policy is reflected and supported by legislation. At the same time it is very mindful of its responsibility not to disadvantage claimants in genuine hardship. Branch managers will continue to have the discretion of paying larger benefit claims in cash or by an immediate cheque. The Bill also facilitates the implementation of a Government commitment, foreshadowed in the 1984 election policy speech, to ``extend Medicare to provide reciprocal health care arrangements for countries with which Australia has close ties''. As Honourable Senators may be aware, negotiations to this end have since begun with the United Kingdom, Italy, Spain, Greece, Yugoslavia, Eire and New Zealand. Reciprocal agreements will allow short-term visitors from such countries to Australia access to hospital and medical services for medical conditions requiring urgent treatment, just as Australian visitors to those countries will have similar rights. The agreements will also provide full access, for Australian diplomatic and consular staff and their families, to the national health schemes in those countries with which agreements are reached. This Bill amends the Health Insurance Act so that diplomatic and consular staff and their families posted to Australia will be entitled to full access to Medicare. I turn now to those provisions of the Bill which propose changes in relation to the recognition of medical specialists in Australia. By virtue of clauses 29 and 44 the Bill seeks to simplify and streamline the arrangements whereby practitioners are recognised as specialists for the purposes of the Health Insurance Act. At present this is undertaken by ministerial reference to a Specialist Recognition Advisory Committee which takes into account an applicant's qualifications, experience and standing in the medical profession, together with the nature of his or her practice. Under the new arrangements, practitioners will, in general, be automatically recognised as specialists if they are fellows of specified specialist colleges and they have an appropriate qualification obtained by successfully completing a prescribed course of study; or if they are registered as specialists under the Laws of the States or Territories. The Minister will retain the right to refer applicants as at present to a Specialist Recognition Advisory Committee where automatic recognition does not appear appropriate. Among other proposed changes are the following: recognition is to apply on a national basis rather than be restricted to the State or Territory of residence or practice; there is to be a capacity to place a limit on the period of recognition of overseas practitioners temporarily requiring specialist or consultant physician recognition in Australia. The Bill provides that to offset administrative costs a fee-of $30, to be prescribed by regulation-should accompany each application. This fee will produce estimated annual revenue of some $16 500. The more streamlined handling of applications from fellows of specified colleges will result in some small savings. In relation to the $30 fee, I would make the point that recognition as a specialist or consultant physician entitles the practitioner to receive higher rebates for his or her services under Medicare. The Bill before the Senate proposes a number of changes to the penalty and disqualification provisions of the Health Insurance Act. These changes represent the most significant amendments contained in the Bill. Honourable Senators will recall that the present provisions were introduced three years ago as part of the previous Government's approach to medical benefits fraud-an approach which proved to be unreasonably rigid and insensitive and, in some cases, unnecessarily harsh. The proposed new arrangements address a number of the shortcomings of the existing provisions. Before outlining the major features, let me first reiterate the Government's firm view that it is only a minority of practitioners who abuse the Medicare system and bring dishonour to their profession. I have no doubt that the great majority of practitioners will support this initiative. Under the current legislation there is no distinction between the penalties applying to practitioners found guilty of medifraud offences regardless of whether the offence was intentional or the result of reckless or gross careless conduct. Whatever the circumstance, disqualification from participation in Medicare applies automatically for three years, where two or more offences are found proven. The Minister does have power to moderate such disqualifications. However, this power is limited only to situations where special circumstances exist, particularly with regard to patient welfare. Thus, moderation cannot be given where the facts otherwise indicate that it would be reasonable to do so. Another shortcoming relates to the recovery of benefits wrongfully paid. There is currently no specific provision in the Health Insurance Act relating to recovery and, as a matter of equity, the Government has been able to recover only those overpaid benefits paid directly to a practitioner. Recovery from innocent patients is clearly not acceptable. Further, the counselling of practitioners-a particularly effective means of ensuring that doctors fully understand their legal obligations-has been jeopardised by a growing belief that in the absence of privilege for their confidential discussions with medical counsellors prosecution could ensue. This Bill addresses each of these problems. It proposes a more flexible system for dealing with both wilful and innocent misstatements by practitioners with these major provisions: The recovery of wrongfully paid benefits from the person responsible for making the false or misleading statement associated with the claim; The introduction of a summary offence provision for the making of false or misleading statements and of an indictable offence provision for knowingly making false or misleading statements; and The establishment of a new, independent medicare participation review committee which is to determine whether the services of offending practitioners should continue to be eligible for medicare benefits. The new recovery provisions will apply in all cases where an overpayment has occurred as a result of misitemisation or other misstatement. It will also provide a means of recovery from the practitioner in cases where the practitioner is responsible for the misstatement but the claim has been lodged by the patient. Decisions to recover will be made at a senior level in the Health Insurance Commission. Wherever practicable, recovery will be achieved by negotiation between the Health Insurance Commission and the practitioner concerned, but the Bill does recognise the right to pursue or contest recovery of a debt in civil proceedings. The Bill also provides for interest to be payable on outstanding debts in cases where a practitioner either refuses after official notification of a debt to make restitution within a specified time or defaults on an agreement to repay. Similar provisions will apply where recovery becomes the subject of civil court proceedings. New offence provisions introduced by the Bill provide that the making of a false or misleading statement will become a statutory, but summary, offence. It will not be necessary for the Crown to prove intent, but a statutory defence is available to a defendant who can establish, on the balance of probabilities, that he or she did not know, and could not reasonably have been expected to know, that either the statement was false or misleading or was capable of being used for obtaining benefits. The Bill also includes a protection against double jeopardy, by specifically prohibiting the punishment of a person under more than one provision in the Health Insurance Act in respect of the same offence. Prosecutions could be commenced in circumstances where it is apparent that the Medicare arrangements are being abused, but not necessarily in a deliberate or intentional manner. Prosecutions under this provision can be instituted within three years of the commission of the alleged offence. This period is necessary to ensure that the offence provision is effective. Similar periods apply elsewhere in Commonwealth legislation. By their nature, offences involving abuse of the Medicare scheme may not be detected until much later, for instance where accounts spanning a considerable period of time are received. Naturally, as we are dealing with a summary offence, penalties are much less than those provided for in the provision dealing with indictable offences. I turn now to a new offence provision relating to persons who intentionally make a false or misleading statement which is capable of being used in connection with a claim for Medicare benefits. This is an indictable offence, and the onus will be on the prosecution to prove all elements of the offence beyond reasonable doubt. There is, of course, no time limit for prosecutions for indictable offences. Of course, the Director of Public Prosecutions will be responsible for deciding both whether a prosecution should be commenced and, if so, under which provision. I refer now to the proposed establishment of the Medicare participation review committees. They are to consider, following a successful prosection against a practitioner, whether the nature of the offence is such that the practitioner has so abused the position of trust conferred by Medicare that action affecting the practitioner's continuing participation in Medicare is warranted. Such action could entail counselling, reprimand, or disqualification from participating in the Medicare arrangements for a period up to five years. A practitioner will be referred to a committee in all cases where an offence under the Health Insurance Act or a related Crimes Act offence is found proven. The committee is to consider, first, whether in fact any action is warranted. If it decides that action is not warranted, the matter will be immediately disposed of. Where the committee decides that some action may be warranted, the practitioner will be able to appear before the committee and be represented. There is provision for partial or full disqualification. A partial disqualification would mean that a service, or perhaps some services, when rendered by the practitioner would be ineligible for Medicare benefits. A committee could consider a partial disqualification appropriate where, for example, a practitioner has abused the system in respect of one item in the schedule or where full disqualification may seriously disadvantage a particular community. The new arrangements provide for the issue of guidelines by the Minister to assist committees in the performance of their functions and ensure a consistent and even-handed approach. To this end, the guidelines are being prepared in consultation with the professional bodies. The guidelines will be subject to the normal parliamentary scrutiny and disallowance provisions. A right of appeal to the Administrative Appeals Tribunal from decisions by the committee will exist. It is proposed that the committees comprise: an independent chairperson with legal qualifications and considerable legal experience; a person, nominated by the Minister, who is a member of the same professional as the practitioner before the committee; and in cases involving medical practitioners, a person nominated by the Australian Medical Association; or in cases involving non-medical practitioners, a nominee of the relevant professional association. Relevant professional associations will be consulted when considering the appointment of chairpersons. As honourable senators can see, the committee will be an independent body which will be competent to determine, on the basis of evidence put before it, the matters referred to it. This Bill also provides for the extension of statutory privilege for information obtained by medical counsellors during interviews with practitioners. As I said earlier, there has been a growing belief that confidential discussions with counsellors can lead to prosecution of practitioners. This amendment, which will cover both oral statements made in interviews and any written records of them, will protect the frank and free discussion so necessary if the objectives and benefits of counselling are to be achieved. I should perhaps point out that counselling is intended to be quite seperate from the investigation of persons suspected of committing offences, and that the extension of privilege will enhance, rather than detract from, the effective administration of Medicare. Another aspect of the current legislation addressed by the Bill is that it is silent on who is to fill in the practitioner's account or receipt. It is clearly not appropriate for it to be the responsibility of patients. Hence the Bill amends the Health Insurance Act to provide that Medicare benefits are payable only where a practitioner or his staff includes the prescribed information on accounts. In summary, the information-to be prescribed by regulation-that will be necessary for the payment of Medicare benefits will be identification of the practitioner by name and either practice address or provider number; sufficient information to enable identification of the patient; and a description of the services provided, sufficient to identify the Medicare benefits schedule item, relating to those services. The new provisions will enable the Health Insurance Commission to have sufficient information to pay benefits. The less prescriptive requirements should meet with the approval of practitioners. It will be a matter for their own convenience if they continue to include item numbers with short descriptions of the services, as many do at present. Honourable senators will note that the transitional arrangements include a provision enabling practitioners who are currently disqualified to apply to the Medicare participation review committee for a review of their disqualification terms. The committee will have the power to moderate such terms-it will not have power to increase them. Perhaps I should emphasise that the Bill was drafted before the recent report of the Joint Parliamentary Committee of Public Accounts into pathology was released. This report is now under consideration by the Government. It is possible therefore that further amendments of the offence provisions of the Health Insurance Act will need to be made following consideration of the report. The measures I have outlined are the product of an extensive process of consultation with those professional associations whose members are most affected by them. The new arrangements have been endorsed by the Australian Medical Association, the Australian Optometrical Association and the Australian Dental Association. I believe the new scheme will provide a fair and effective framework for dealing with future cases of abuse and misuse of Medicare. As such they are a major advance on the present legislation which has done little to curb such abuse and misuse while at the same time antagonising the great majority of practitioners who are honourable and honest in the practice of their professions. I turn now to clauses 57-66 of the Bill which relate to another significant Government initiative-the introduction of a national identification system using cards to be known as Australia Cards. As honourable senators will be aware, the system is an important part of the Government's planned reform of the Australian taxation system, as outlined in another place by the Treasurer in his statement of 19 September 1985. As the Treasurer indicated on that occasion, the Australia card is a weapon in combatting tax evasion and reducing welfare fraud in the community. Because of its acknowledged technical expertise, it is intended that the Health Insurance Commission, which administers Medicare and Medibank Private, will under substantive legislation to be brought forward next year be given responsibility for administering the Australia Card program. In the meantime, in order to enable the commission to undertake the planning work necessary for the establishment of the Australia Card program, an amendment is required to the Health Insurance Commission Act. That is the purpose of this part of the Health Legislation Amendment Bill. Various methods of authorisation were considered, but none of them provided a completely satisfactory legal framework within which the Commission could carry out its planning role. It was important, therefore, to prepare this enabling legislation in advance of the substantive legislation. In his second reading speech in another place the Minister for Health emphasised that the proposed amendment to the Health Insurance Commission Act was to allow the Health Insurance Commission to do no more than the planning and development work necessary to enable the Government to prepare the legislation for the Australia Card programme. However, objections were raised to the amendment as introduced, apparently on the basis of a misunderstanding that the amendment might, by some means or other, permit the Commission to proceed with the implementation of the program. After discussions with the Australian Democrats and others, the Government agreed, in another place, to make a minor drafting change that would make it quite clear, as has been the Government's intention from the outset, that the Health Insurance Commission's responsibilities are strictly limited to the work necessary to enable the Government to bring forward the substantive legislation for the national identification system in 1986. The Bill before the Senate includes that change. The Government intends that the Australia Card program become fully operation from July 1989. As a first step, it is planned that the issuing of Australia Cards begin in March 1987. Thus the Commission has a period of 16 months from now to undertake the necessary planning and following enactment of further substantive legislation, to prepare for card issue. As now will be abundantly clear to honourable senators, this enabling legislation allows for no more than planning work. In addition, as I mentioned earlier, a sunset clause has been included that means that the legislation will cease to have effect after December 1986 unless substantive legislation providing for the establishment and administration of the Australia Card program has been enacted before that date. In accordance with the specific provisions of the Health Insurance Commission Act, which require a system of cost apportionment to be applied when determining the assets and breakdown of expenditure by the Commission with respect to its various functions, other machinery changes to the Act have also been included. These will ensure that correct and proper financial accounting takes place within the organisation. In support of this part of the Bill, let me simply say that the Government is convinced that the Australia Card program is crucial to ensure that everyone in the community contributes fairly towards the cost of providing Government services, and that no individuals or groups take more than their fair entitlement out of the community purse. Costs to the Government in 1985-86 on the Australia Card program will be confined to expenses which are absolutely necessary for the planning of the proposal by the HIC. Of course, this will require the Commission to spend sufficient funds so that thorough planning and research is carried out and that the purpose of planning to satisfy the needs of the Government and legitimate concerns of the public is properly achieved. The amount of expenditure in subsequent years is dependent upon the enactment and timing of substantive legislation providing for the Australia Card identification system. I commend the Bill to the Senate. Debate (on motion by Senator Peter Baume) adjourned. Senator BUTTON(Victoria-Leader of the Government in the Senate)(10.09) —I move: That, unless otherwise ordered, the order of General Business for consideration this day pursuant to Sessional Order be as follows- (a) Orders of the Day relating to Government Papers; and (b) General Business Orders of the Day: (i) No. 130 (Nuclear Weapons Prohibitions Bill 1985), (ii) No. 95 (Constitution Alteration (Democratic Elections) Bill 1985), and (iii) No. 12 (Rainforest Preservation Agreements Bill 1982. [1983] [1985]). Senator CHIPP(Victoria-Leader of the Australian Democrats)(10.10) —The Australian Democrats will not be opposing this motion but I point out that the time available for the discussion of private members' Bills by the Opposition particularly, Liberal, National Party and Democrat, is being diminished further and further. If this motion is carried, which obviously it will, the time today for my most important Bill, the Nuclear Weapons Prohibitions Bill, will be about an hour and a half. Already about five Opposition speakers have quite properly put their names down to debate this matter because it is extraordinarily important, but that means there is no way in which there will be a vote on that Bill, even on the second reading, in this chamber today. This matter has been on the Notice Paper for months now. I am becoming very concerned by the fact that on such an important day a debate on papers will take up an hour and will eat into the time when private members' Bills can be discussed. Surely we can organise the affairs of this place better than that. We are approaching the time, with four weeks sitting left, when the Government will come forward very soon with the proposition that private business be no longer heard this year and that Government business take precedence so that we can get through the program before the Christmas break. That is inevitable. Senator Archer has just introduced an extraordinarily important private member's Bill dealing with postal services to South Africa. When will that be debated? Will we have only one and a half hours to debate that? I believe that the time given to important private members' Bills-and both Liberal Party and Australian Democrat senators have several on the Notice Paper-is insufficient. We are given the privilege of deciding which of those Bills is most important, but I suggest that all those put forward by Liberal and Democrat senators are important to this nation and that one and a half hours per week is a ludicrous time to spend on such Bills. I ask the Government to take notice of this question. Senator CHANEY(Western Australia-Leader of the Opposition)(10.12) —I understand the point made by Senator Chipp and he is quite correct in saying that one and a half hours is a very limited time in which to deal with legislation which is of great importance and has widespread and proper interest in this chamber. The great difficulty for the Senate is the range of matters that we are called upon to consider in the time which is available. Part of the difficulty is to allocate a very limited amount of time among a series of very significant but competing functions. As I understand it, the arrangements that the Government has put in place are in accordance with the sessional order which, in turn, follows from discussions among the parties in the Standing Orders Committee and elsewhere. The particular sessional order was designed to try to ensure that senators would have a chance to debate the very significant papers which are tabled in this place. Over the years we have imposed a statutory requirement on many bodies to have their reports and so on brought into the Parliament so that we may comment on them. They are the creations and the creatures of this Parliament and often there are only limited opportunities for the Parliament to exercise its surveillance of them. The difficulty that the Opposition sees in this matter is one of balancing the disparate interests of senators. For example, today we will devote some time to reports from committees. At other times it has been argued that we put in hours and hours, days and months of work in committee and then the committee reports themselves do not get proper attention. Senator Chipp —There is always the Thursday lunch hour which is now not being availed of. Senator CHANEY —The difficulty with Thursday lunch hour is, of course, that it is a time when many people are distracted by having lunch. I accept the point made by Senator Chipp that there is a real difficulty-a difficulty that we will face, as he quite properly points out, in dealing with our private member's Bills. I simply say to the Government that I accept that the difficulties are real and not created by any malice or ill will. I indicate on behalf of the Opposition that we are happy to discuss the allocation of time further with the Government, the Australian Democrats and independent senators. I do not think there is any easy answer to the point that has been raised. Senator Peter Baume —The problem is that we sit for only seven months. Senator BUTTON(Victoria-Leader of the Government in the Senate)(10.14) —in reply-Senator Peter Baume made a pertinent and thoughtful interjection which I do not wish to debate now, but if I hear an intelligent interjection from the Opposition I always single it out because there are so few. I understand Senator Chipp's concern about this matter and, of course, I concede the importance of his Bills as issues in Australian politics and, indeed, the importance of the Bill that was foreshadowed this morning by Senator Archer. However, the Government is bound by the sessional order in arranging the program which is agreed between the parties at an earlier stage and Senator Chaney has already pointed that out. I would be happy to enter into any discussions with the other Party leaders about rearrangement of time, if we can make that available, and I certainly undertake to do that. I make the point that we had a discussion not long ago and we agreed that the number of matters of public importance should be limited, if possible. We have had three this week. Those sorts of things have to be the subject of-- Senator Durack —That shows the stupidity of the Government in having the Senate sitting by itself. Senator BUTTON —Is that right? That is a very interesting and revealing explanation of why we have had three MPIs this week. I could not see any other reason. Senator Chaney —If you look at the pattern of MPIs, they are mainly done on broadcast days; you know that. Senator BUTTON —If that is the importance the Opposition attaches to MPIs, I can follow that. I now understand the Opposition's views about MPIs. They are interesting. Certainly we will be happy to talk about these matters. Question resolved in the affirmative. Senator MISSEN(Victoria) —Mr Deputy President, I seek leave to make a personal explanation. I claim to have been misrepresented by the Australian media in connection with a report tabled this week. Leave granted. Senator MISSEN —I have prepared a short statement relating to the report on the exposure draft in the Constitutional and Legal Affairs Committee relating to a Bill of Rights, which report was extensively and falsely reported in the media. I released this statement to the whole of the media in an endeavour to have the matter corrected. No part of the media has taken any steps to do that so I will read the statement very briefly to the Senate. It states: Exposure Draft of the Senate Constitutional and Legal Affairs Committee relating to suggested proposals for a Bill of Rights for Australia. In view of the general misconceptions of the Australian media as to the purpose and intent of the Exposure Draft being a Report presented to the Senate on 5th November 1985, I desire to correct the following misconceptions. My Liberal colleagues on the Committee, Senators Hill and Puplick wish to be associated with this statement. 1. The Report is an Exposure Draft or Issues Paper containing no (repeat NO) recommendations that the Australian Parliament should adopt a Bill of Rights but analysing the arguments put before the Committee in some 168 submissions and evidence as to the purposes and possible content of a Bill of Rights if the Parliament sees fit to proceed to adopt one. 2. The Exposure Draft also considers the other bodies existing in the country dealing with human rights and considers the upgrading and development of personnel and powers of the Human Rights Commission as a possible alternative to the creation of a Bill of Rights. It also assesses arguments that suggest that a Bill of Rights, as already discussed in the community, might face constitutional difficulties in its implementation of Australia's obligations under International Covenants. 3. The Exposure Draft supplies a great deal of factual material that should assist the development of dispassionate debate on this subject in the Parliament. It does not deal with the terms of the particular Bowen Bill, presently before the Parliament, but is designed to inform and hopefully elevate the public debate on the important and real issue of effective implementation of human rights obligations in Australia. I add that a typical heading in the Press when the report came down was that of the Canberra Times, which stated: `Senate group plans toughter `Bill of rights'. Most of the reports were similar as though that was a recommendation of the Committee. That is not so. Furthermore, in the tabling statement by Senator Tate and in the speeches that I and other members of the Committee made when the report was brought down, the purpose of this draft was made abundantly clear. I say this by way of clarification because it is impossible to get the Australian media to recognise that they have made a mistake. Debate resumed from 5 November, on motion by Senator Button: That the Bill be now read a first time. Senator MICHAEL BAUME(New South Wales)(10.19) —The Australian public has been misled, not simply by the Government but by the fact that the Government managed to con the press gallery in this place and the media in general throughout Australia about the consequences for the ordinary Australian of its tax package, which is now described as the package of `nasties'. It was, Mr Deputy President, as you will remember, part of a deal that the Government did with the Australian Council of Trade Unions. It was the bribe to get the ACTU to agree to a genuine package of tax reform which involved reduction in personal income tax to be offset by rises in indirect taxes. The Treasurer (Mr Keating), having gone to the barricades over the importance of this whole tax package under instructions from the ACTU in a secret deal his Prime Minister (Mr Hawke) did with the unions, was forced to withdraw the important part of that package, the reform part of that package, and instead was left simply with the bribe. Let us examine the extent to which the people of Australia have been conned by this Government as a result of this Government having influenced, I believe improperly, the media, particularly the press gallery here. As an ex-journalist I am obviously sensitive about criticising the media. It may well be that the media has failed to respond to clear evidence of the way in which it was conned because it may well be embarrassing to admit that it is less than perfect. But let me stress the nature of this deception by this Government. The Government's booklet on the tax package contains a little table which shows the benefits-the so-called benefits-to the Australian taxpayer. The newspapers, on the day after the tax package was announced, ran headlines which generally stated: `There are nasty things, but you are still better off'. That is the important issue. The Government managed to convey through the media the impression that Australians would be better off as a result of tax reductions in this tax package. That is simply false. It is disgraceful that the Government should seek to con the media, but it is equally disgraceful that the media has not recognised publicly that it was conned. Let us see what the con was. As we all know, the deal done with the ACTU by the Government involved the Government reneging on an undertaking it made at Budget time that it would discount wages for the impact of the devaluation of the Australian currency. This was a proper undertaking that it gave at the time. The Treasurer pointed out that it was essential for Australia's health that wages be discounted at the next wage case-in fact, at subsequent wage cases-for the effect of the devaluation of the currency, because that devaluation showed that we had been living beyond our means, and we should not as a nation be compensated for living beyond our means because that simply perpetuates the problem. Having made that undertaking, he was forced, of course, as with his indirect tax package, to withdraw it when he was instructed to do so by the ACTU, through his Prime Minister, the former head of the ACTU and the man who, above everyone else, is responsible for the wages push in the 1980s which so destroyed Australia's competitive position and so damaged our balance of payments position. The reality is that this deal done by the Government with the ACTU involved, as I said, reneging on an undertaking to discount fully the impact of devaluation. A deal was then done with the ACTU which involved a discount next April which would be totally offset by a tax cut the following September. The ACTU said: `In that way the workers will not be disadvantaged'. In other words, there will be no effective discounting because it will be offset by a tax cut. Real take home pay will not be affected. In other words, the ACTU has won the battle to ensure that there is no real discounting and that we will continue to live beyond our means. That is an absurd and damaging decision. Whilst the media may not be able to recognise that that decision has resulted in a con by this Government, it is one which at least the money markets of this world recognise as a con. They have responded appropriately, particularly now that the Australian Conciliation and Arbitration Commission has established itself as a rubber stamp of deals done secretly between the ACTU and this Government. I want to put to the Senate very strongly that if the ACTU is correct in asserting that a $2 billion tax cut is the necessary offset to the 2 per cent discounting in the next wage case, clearly the Australian taxpayer is receiving no benefit whatsoever because the Australian taxpayer is the Australian wage earner. So we have the clear situation: The deal done with the ACTU by this Government does not bring any benefit in terms of a tax cut because it simply offsets next April's discounting of the wage rise. In other words, there is, I stress, no benefit whatsoever. Yet, when we had the announcement a few weeks ago we saw this Government putting out documents talking about a benefit without having the honesty to stress that, in fact, that benefit would be offset by the 2 per cent discounting next April. Where does that leave the remnants of the current tax package, the $800m of nasties that will belt the Australian people, particularly Australian small business and Australian farmers? According to a perceptive article in the Sydney Morning Herald this morning, it will belt the 40 per cent of Australians at work who are, as I understand it, involved in superannuation of some kind or another because superannuation funds will of course receive a disadvantage as a result of this tax package. It seems to me that it is inescapable that the $800m of `nasties' is an added burden on our community. They are there simply to pay the price of the deal this Government has done with the ACTU. We have established quite clearly that there is no overall benefit. The tax cut will be totally offset by the 2 per cent discounting of next April's wage rise, so there is no benefit there. All we have is the disadvantage-the $800m of cost of the deal done with the ACTU. How can the media perpetuate this rubbish that even though there are `nasties', overall one is better off? How can this Government sit here straight faced and put out official documents pretending that the people of Australia are better off when it knows darn well that they are not better off? The Australian people will be $800m worse off as a result of this deal, which, as I have said, was secretly done between this Government and the ACTU, which the Government has an extraordinary and unhealthy desire to get into bed with. Whilst the media may be reluctant to recognise the cost to the Australian people of this secret deal, the money markets of the world are only too well aware of it. It seems to me that when we are looking at what is happening to the Australian dollar we can relate that disaster directly to the consequences of government policy, of government attempts to deceive. Certainly the markets respond to that kind of deception in an appropriate way; they simply refuse to believe this Government. Its credibility has gone. The Treasurer has gone overseas to try desperately to hold up the money markets. Did he have any material or any significant facts to give overseas to bolster the Australian dollar? The simple answer is that he did not. The Treasurer's visit overseas in fact showed how bare and how lacking in comprehension this Government is of the consequences of its actions, how bare its intellectual cupboard is in the area of economics. The judgment of the world markets on the Australian dollar has resulted directly from this Government's own policies. Over the last couple of days the Minister for Finance (Senator Walsh) has been asked in the chamber whether there is going to be any revision of the Budget forecasts and, if so, when such revisions will come out. We have heard that the Government may be provided with revisions to Budget forecasts by next February, but who knows whether they will be made public. The reality, as I see it, is that this Government must come clean with this nation and the money markets reveal the extent of the downward revision in matters such as the current account deficit that must inevitably result from what is happening now. I believe that unless it comes clean on these vital areas, which have a terrific impact on Australia's inflation rate and have an enormous impact on our competitiveness and therefore are of great significance in terms of our future economic health, and indicates to the markets what the real consequences of these changes are as it sees them, uncertainty will remain over the fate of the Australian dollar and, therefore, over the fate of our economic future. It is all very well for the Government to pooh-pooh suggestions that unless we have better economic management this nation could be on a South American-type slide. We need that better economic management. We must remain at risk unless the private sector has greater confidence in this Government than it has now. Certainly it needs to have greater confidence in the Government's economic management skills. At last the bareness, the phoneyness and the deception involved in this Government's courting of business are being exposed by its actions and incompetence in the economic area. As I have said, what we need and need quickly from this Government is a revision of the current account deficit expectation. Last year our current account deficit hit a record low of $10.2 billion. This year the word is being spread around that it will be about $11.5 billion. In other words, the Budget forecast of the situation being only slightly worse will be shot by at least $1 billion. The Bureau of Agricultural Economics has forecast a fall in farm exports of about a quarter of a billion dollars. The level of imports has maintained a much greater rate than the Government forecast. This Government, if it wants to be believed, had better come up with some facts. The sort of nonsense that the Treasurer spoke overseas simply exposes the bareness of the Government's economic policy and the failure of its basic policies, such as the accord, to deal with the real problems facing Australia. Senator Sir JOHN CARRICK(New South Wales)(10.34) —This debate takes place against a background in Australia of a continuing significant fall in the value of the Australian dollar, significantly rising rates of inflation, record interest rates, a very serious adverse balance of payments situation, a record overseas debt requiring very heavy servicing to finance and a continuous chronic unemployment situation. On top of this the Government has brought in a tax package which will impact very seriously upon the business community and therefore tend to cause the shedding of labour. What has happened is that not just the American world but all the money markets of the world have looked at Australia, have looked at the management by this Government and have said, through the value they have put on the currency, that they believe that there is very bad management by this Government. The Government claims a tremendous success but all the factors here and overseas and the factors measured by objective judges condemn the Government and its policies. This led the Confederation of Australian Industry in its industrial review in August of this year to say: What now confronts this community is the distinct prospect of a continuing saga of devaluation leading to price increases leading to wage increases leading to further devaluation. In fact, that has gone on since that statement was made. The Economic Planning Advisory Council which advises that Government has said that Australia will have to learn to live with unemployment levels of 8 to 9 per cent over the next 10 years; not 10 months, but 10 years. The predictions under this Government are that the young will not be able to plan their careers and that the 20 per cent or more of the young who cannot get jobs must remain chronically unemployed. It is against this background that I want to make some very serious comments. There is a general projection by the Government of an argument that all this will be over, that somehow or other we will come out of the trough and we will all be right again. The fact of the matter is that Australia is being outcompeted right throughout the world. Australia today is in a situation where other nations are passing us by. Unless we do something, and do something quickly about it, and unless we take the people of Australia into our confidence and tell them what the problems are and seek their co-operation, their living standards will continue to decline and, indeed, unemployment will continue to rise. The fundamental thing is that the people of Australia have to understand that the world is passing us by, that we are being costed out of markets and that the very policies of the Hawke Government are doing this. The indexing of inflation by the support for the arbitration system is simply keeping us at a significant margin above the rest of the world. The Hawke Government has been posed as being the government that knows how to manage. I thought, therefore, I would refresh myself about Labor's economic statement contained in its policy speech of 1983. It stated: To ensure that recovery does not provoke any problem for the balance of payments by leading to growth of imports unmatched by increases in the value of exports, Labor will take action to maintain balance of payments equilibrium and exchange rate stability. The present system of determining the exchange rate will be maintained. Where is this balance of exchange payments equilibrium? Where is this exchange rates stability and where is the maintenance of the pre-existing system of fixing the exchange rate? All that has gone out the window. The policy speech states further: If at some point the balance of payments showed signs of deteriorating, Labor would initiate a program of public borrowing overseas, both by the Commonwealth Government and by public authorities. The simple fact is that the borrowing overseas and the borrowing generally is creating the very circumstances that we are now facing. The Hawke Government and particularly the Prime Minister (Mr Hawke) posed as the managers who could in fact control costs, keep them down, keep inflation down and keep wages moderate. Senator Button —Compared with you. Senator Sir JOHN CARRICK —Senator Button said compared with Liberal governments. I am delighted to compare the Labor Government with Liberal governments. We will take the Liberal governments for the first three years of the 1970s where in fact the consumer price index was 4.8 per cent, 6.8 per cent and 6 per cent. The consumer price index, under the Whitlam Government, was 13 per cent, 16.8 per cent, 12.9 per cent and 13.9 per cent. Senator Button —No, your Government. Senator Sir JOHN CARRICK —I will repeat that. Under the Whitlam Government the consumer price index was 13 per cent, 16.8 per cent, 12.9 per cent and 13.9 per cent. Under the Liberal Government of which I was a member the consumer price index was 9.5 per cent, 8.2 per cent and 10.1 per cent. Does the honourable senator want me to go on? Does he want me to compare the figures with those of his Government? What about reminding ourselves of the then President of the Australian Council of Trade Unions, the then Federal Leader of the Labor Party, Mr Hawke-no wonder Senator Button retires on hearing this-who in 1974, at the peak of inflation, said: We know inflation is at 16 per cent and we believe it's quite likely to reach 20 per cent in the next two quarters. But we will not indulge in a trade-off in wages for some conjectural reduction in inflation. That is the man who poses as the manager. What was the result of his actions? In 1973, 1974 and 1975 there was the greatest wage explosion ever in Australian history. This occurred at a time of a Labor Government, at a time when Mr Hawke was Federal President-- Senator Button —Tell us about your Government in 1982. Senator Sir JOHN CARRICK —Yes, I will. I will tell the honourable senator about our Government. I will give the honourable senator the figures. I am delighted that Senator Button has woken up. He has been hibernating in his portfolio and as Leader of the Government in the Senate for week after week and he cannot take it when I remind him-- Senator Button —You can't take it. You can't talk about your Government. Senator Sir JOHN CARRICK —I will talk about my Government. I will talk about it now. I hope the honourable senator continues to interject because, by contrast, my Government reduced inflation and, indeed, reduced the rate of increase of average weekly earnings. Under the Labor Government, with Mr Hawke in two positions of authority, there was the greatest wage explosion ever. Average weekly earnings increased by 15.9 per cent in the first year; 25.6 per cent in the second year and 13.7 per cent in the following year. The honourable senator wants some comparisons. Under the Liberal Government, average weekly earnings increased by 13 per cent, 9.6 per cent, 8.1 per cent and 9.7 per cent. The honourable senator has asked for it; he gets it. In 1973-74-- Senator Button —Ha, ha! Senator Sir JOHN CARRICK —The honourable senator grins. A 37 per cent wage increase in that time put 130,000-odd people out of employment in the manufacturing industry. Senator Button —Just half as many as you put out in 1982. Senator Sir JOHN CARRICK —This is an industry that the present Minister for Industry, Technology and Commerce (Senator Button), who is interjecting, presides over. He presides over its demise. In the last year 32,000 more people have gone out of the industry and the Minister is trying to make comparisons. Again, the Federal President of the ACTU, Mr Hawke, was the motivator of the wage upsurge in 1981-82. He was the great arguer then that wages should go up. It is astonishing that in 1982 the Labor Party emphatically opposed the Fraser Government's wage freeze. This was the only thing that has steadied inflation and that is demonstrable. The Labor Party, Mr Hawke and Senator Button said there must not be a wage freeze, it would be a terrible thing. What are they trying to do now? They are caught; they are hooked on this. They know that if wages simply go up by indexation, the dollar will go down. It has been said on the world scene in the last few days that Australia will devalue itself if this situation continues. The picture is very serious. The Whitlam Government and the present Government have built into the system record inflation, record increases in nominal wages and record shedding of labour. How can the Minister sit at the table and take any pride in his portfolio when he knows that, for the three years he has presided over that portfolio, manufacturing industry has continually shed labour? Senator Button —Don't be silly. Senator Sir JOHN CARRICK —I invite the Minister to give me the figures for employment in manufacturing industry for the three years he has presided over his portfolio. Senator Button —Tell me the year in which there was the greatest shedding of manufacturing employment. Senator Sir JOHN CARRICK —The greatest shedding of employment in any one year was in 1973-74, when 138,000 people went out of employment. It is interesting that the Minister has run away from what I asked him, which was to tell us what were the levels of employment, year by year, over the three years of his portfolio. The fact is that the real crisis that confronts Australia today-manufacturing is the one area in which labour is intensive-started in the Whitlam era under the great pressure of Mr Hawke and the Labor Government, when prices were built into the system in an inflationary way and wages experienced a record upsurge. The Government is now caught by this. It talks about the Fraser Government, but it is very careful to talk only about the last year of the Fraser Government, 1982-83. By any kind of comparison at all the Fraser Government had a magnificent record of performance compared with the past and present situations. Senator Button —Tell us about the growth rates you attained. Senator Sir JOHN CARRICK —The Minister is interjecting again. I am glad he is alive. I am glad he has some adrenalin. Let us consider the unemployment figures, for example. Under the seven years of the Liberal Government the average rate of unemployment was 5.8 per cent. Under the three years of the Labor Government the average rate of unemployment has been 9.1 per cent. The Minister asked for comparisons. He will get them. He asked for comparisons of consumer price indexes. I read them out to him. There was a continuing fall in the CPI until the last year of the Fraser Government, compared with an absolute upsurge to nearly 20 per cent, on Mr Hawke's figures, under the Labor Government. What more tests does the Minister want on the question of management? What more tests does he want on the breach of promises? Does the Government argue that the Confederation of Australian Industry is wrong in seeing as a tragedy what is happening to Australia? Does the Government say that the world is wrong in its judgment of Australia at the moment? What kind of apologies can the Government have for a situation where day by day the money markets of the world are writing down Australia? Indeed, the Australian Financial Review is now talking about the Paris option. I commend it to the Minister, except that it is pretty tough on Paris. The fact is that this country is in a critical economic condition and that condition is directly related to the actions and inaction of the Hawke Labor Government. Senator JESSOP(South Australia)(10.48) —It is quite important that Senator Sir John Carrick should have reminded honourable senators and those listening to this debate of the records of the Fraser Government and this Government. I recall that many years ago when Mr Albert Monk retired from the position of President of the Australian Council of Trade Unions he was replaced by a Mr Robert Hawke. At that time Mr Robert Hawke said that he would get what he wanted for the Australian workers by direct action. Following that statement he presided over a record number of strikes which dragged Australia down considerably. I do not think we have ever recovered from those days. I recall talking to Mr Albert Monk and other members of the trade union movement, leaders whom I knew personally, about the appointment of Mr Hawke to the ACTU. They said that they disagreed with Mr Hawke's attitude of direct action. In fact, Mr Albert Monk smiled kindly and said: `Well, he'll learn'. I do not think he has learnt because, as I have said before, irreparable damage was done. At that time the downward trend in Australia's credibility overseas as a reliable trading partner began. Even today, we are frequently faced with demarcation disputes. Quite often these occur on the Australian waterfront, which means that shipping is held up inordinately and goods are held upon the wharves of Australia simply because of the irresponsible attitude of some militant trade unions. This is very serious because at the moment we are faced with difficulties with respect to increasing our export income. Can one blame other countries for looking at Australia and saying that they cannot rely upon delivery from Australia of coal and of other commodities that they require simply because Australia cannot be relied upon to deliver the goods on time? That has resulted in Japan and other countries turning their attention to countries such as South Africa, Canada, Brazil and others which have natural resources. We now find ourselves in a particularly invidious position with respect to our overseas trading. The parlous state of our dollar at present is also something to be concerned about. I heard this morning that our dollar had dropped to, I think, US66.3c. That is very bad. I am worried as, of course, most Australians would be that interest payments on our public debt have risen from $5.6 billion last year to $6.7 billion in the present Budget. That is an incredible record for the Government. I believe it ought to be ashamed that that situation prevails. That brings me to another point. Recently, the Government was very cagey when dealing with the Loans Bill 1985 during the second week of the last Senate sitting. The Government quite properly came to the Parliament seeking approval to raise about $4 billion by way of a loan. It made a very cunning move on that occasion. The normal practice for any government is for it to require that such a loan be available only for the current financial year. I noted in the Bill, and it was very important that Senator Peter Rae in particular and other Opposition senators recognised, that the Government had added another part to that Loans Bill which would have given the Government the capacity to raise loans for a much longer period without reference to the Parliament. In fact, the Government was asking the Senate to give it an open cheque so that it could raise overseas the money that it wished to raise without allowing the Senate recourse to an examination of any such proposal. Fortunately the Opposition and the Democrats combined in the Senate to amend that Bill to ensure that furture borrowings by any government would be applied only to the current financial year. That was a quite proper attitude for the Senate to take. I wish to refer briefly to a matter than will be dealt with in more detail in the second reading stage of this debate; that is, the question of parliamentary appropriations and staffing. Honourable senators would realise that a committee was established following the recommendation of a select committee that I chaired. Senator McClelland was Deputy Chairman and Senator Robertson was one of the representatives of the then Opposition. Also on the Select Committee on Parliament Appropriations and Staffing were Senator Mason, Senator Missen, who was a member of the Government party of the day, and the late Senator John Knight who, unfortunately and unhappily, was unable to meet with us for very long. Senator Sim was appointed in his place. That committee looked at the history of the appropriations and staffing arrangements that had been made in overseas countries and presented a report which we thought was desirable having regard to the fact that over a long period many people in the Australian Labor Party, as well as members on my side of the Parliament, were constantly agitating so that the Parliament would have more control over its own destiny and not be reliant upon the generosity of the Executive to gain funds for the running of the Parliament. Page 1215 of the Senate Hansard of 1982 records that Senator Douglas McClelland, who is now the President, made the following comments: I know that the notice of motion standing in Senator Jessop's name has now been adopted-as I understand it, unanimously-by the Senate. Therefore, in the near future the Senate will proceed to the establishment of a committee to bring down recommendations on annual estimates and additional estimates for the Senate. Page 3 of the statement by the Leader of the Government in the Senate (Senator Sir John Carrick) states: However the Government recognises that detailed control-That is, control by the Government . . . The Government therefore proposes that it simply approve overall figures, broken down into capital and a recurrent item, for each of the Senate, the House of Representatives and, as a group, the three joint departments. Senator McClelland went on to say that the motion that I put forward at that time was adopted but went further than the Minister's statement. He referred to paragraph (3) of the motion which was carried unanimously by the Senate at that time and which read; That the Committee- (a) in relation to the Estimates- (i) determine the amounts for inclusion in the Parliamentary Appropriation Bills for the annual Estimates and Additional Estimates, and (ii) report to the Senate upon its determinations prior to the consideration by the Senate of the related parliamentary Appropriation Bill; Time will not permit me to go into great detail concerning the history of this, but I hope that I will have an opportunity to elaborate further when the second reading debate ensues. I thought it was very important for me to set the stage for this debate. For the benefit of those members of the Senate who have not had an opportunity to read an article which appeared in The Parliamentarian in January 1983-it was written by me, as Chairman of the former Select Committee, and Peter Murdoch who was Secretary of that Select Committee-I seek leave to have it incorporated in Hansard. Leave granted. The article read as follows- Senator Donald S. Jessop Chairman of the former Select Committee and Peter N. Murdoch Usher of the Black Rod and Secretary of the former Select Committee AUSTRALIAN SENATE SELECT COMMITTEE ON PARLIAMENT'S APPROPRIATIONS AND STAFFING On 26 November 1981, the Australian Senate endorsed the conclusions and recommendations of the Senate Select Committee on Parliament's Appropriations and Staffing and specifically resolved that: (a) the Senate should establish a Standing Committee to consider the Senate's appropriations and staffing; (b) the estimates for the Senate, as finally agreed to by such standing committee, be submitted to the Minister for Finance for inclusion in a separate Parliamentary Appropriation Bill; (c) the government agree that the appropriations for the Parliament be removed from the Bill for the ordinary annual services of the government and included in the separate Parliamentary Appropriation Bill; (d) the expenditure administered by the executive departments on behalf of the Parliament be brought together in a Parliamentary Appropriation Bill and that provision be made for an advance to the President of the Senate on the same basis as the advance to the Minister for Finance; (e) the President arrange for discussions to be held with the appropriate executive departments to review those functions which are currently administered by them, and subsequently to plan the transfer of functions suitable for administration by the Senate; and (f) section 9 of the Public Service Act 1922 be amended to vest in the Presiding Officers, separately or jointly as the case may be, the power of appointment, promotion, creation, abolition and classification of offices, and the determination of rates of pay and conditions of service. This resolution was the virtual culmination of years of effort on the part of a number of Senators and Clerks. Appropriations history In 1965, the Committee appointed by government Senators on Appropriation Bills and the Ordinary Annual Services of the Government recommended that the appropriations for the Parliament should not be included in the Appropriation Bill for the ordinary annual services of the government. The Committee pointed out that it was inconsistent with the concept of separation of powers and the supremacy of Parliament for the Parliament to be treated as an ordinary annual service of the government. These views were reiterated by other Senators and subsequently were supported by the Senate House Committee in 1972 and by Senate Estimates Committee A in 1974. But there was no response from government. The funding of Parliament was again commented on in the 1976 report of the Joint Committee on the Parliamentary Committee System. It was suggested that the Parliament should not be dependent upon the government or upon Treasury decisions for the funding of its operations. The joint committee pointed to the greater level of financial independence of the committees of the British and Canadian Parliaments and to the inappropriateness of arrangements whereby parliamentary activity, including parliamentary committee activity, can be curtailed by government financial restriction. Still there was no response from government. Again, in 1978, Senate Estimates Committee A reported that it firmly held the view that the appropriation for parliament was not an ordinary annual service of the government. The committee stated that Parliament was a separate arm of government to which the Executive was accountable, and that it must be master of its own affairs. The committee suggested to the Senate that the time was long overdue for the appropriation for Parliament to be excluded from the non- amendable Appropriation Bill for the ordinary annual services of the government, and included in a Special Appropriation Bill which would be subject to Senate amendment. Still there was no response from government. The point was restated in the Estimates Committee A report of November 1978 and referred to yet again in its October 1979 report as follows: Any Parliament which claims, or aspires to, accountability of an executive government to the Parliament, must make such arrangements for its own resources and facilities as are necessary to achieve this constitutional relationship, in practice as well as in theory. The committee has previously stated . . . that the Senate must assist its President in his (and the Speaker's) efforts to achieve greater control over the expenditure and staffing of the Parliament . . . And still there was no response from government. Staffing history In relation to the staffing of Parliament, the Senate made amendments to the Public Service Bill 1902 to put beyond doubt the principle that all staff servicing the Parliament should be under the control of the Parliament, and not the Public Service Board (the government's personnel management authority). Consultation with the Public Service Board was considered appropriate only to protect the rights of the officers of the Parliament with respect to conditions of service. In no way could, or should, that examination by the Public Service Board of staffing conditions prevailing in the parliamentary departments be construed as either a detraction of the Presiding Officers statutory authority to act in all senses as the equivalent of the Public Service Board for the parliamentary staff, or an abrogation of the rights of the Parliament to determine its own affairs. However, despite these statutory provisions, over the years the Executive imposed upon the Parliament arrangements which have meant that the advice of the Public Service Board had to be sought on matters relating to parliamentary staff, be they position classifications or additional staff requirements. If the Public Service Board concurred with a proposal, it could then be submitted to the Executive Council for approval. More recently, staff numbers in the Australian Public Service became subject to a policy of Executive-determined levels, commonly referred to as staff ceilings, and the Executive extended these to include the parliamentary departments. The Select Committee's investigation It was against this background that, on 23 May 1980, the Senate resolved that a Select Committee be appointed to inquire into and report on Parliament's control of its own appropriations and staffing, and related matters. Due to the rather specialized nature of the inquiry, the Select Committee did not advertise in the national press for submissions. Instead, it made direct approaches to organisations and individuals having a particular interest in, or involvement with, Parliament's appropriations and staffing. The Select Committee also obtained from the Presiding Officers and staffs of the United Kingdom House of Commons, the Canadian Senate and House of Commons, and the United States' Senate and House of Representatives, information concerning their practice in funding and staffing their legislatures. The Select Committee's investigation showed that the common source of concern to all Parliaments is the growing imbalance in the relationship between Parliament and the Executive, the rapidly increasing power and influence of the Executive, the need for Parliament to strengthen its oversight and check of Executive activity, and the concurrent need for the Parliament to regain or assert greater independence and autonomy in regard to its own internal arrangements. The Select Committee found that for the majority of members of the Inter-Parliamentary Union, parliamentary budgets are not subject to Executive modification; the financial autonomy of these legislatures is thus guaranteed. The general pattern is that the estimates are drawn up by the directing authority of Parliament, or by a special committee, on the basis of figures prepared by the administrative authorities, and then approved by the Chamber as a whole. As to the involvement of the Executive, typically the Minister of Finance enters the sums required by the Parliament into the national estimates without questioning them or consulting the government about them. In relation to the United Kingdom, Canada, and the United States, specifically, the concept of each legislative Chamber independently maintaining control of its own staffing and funding is readily accepted in all three countries. The United Kingdom House of Commons has had such an arrangement operating for the last four years; the United States for the last 60 years; and Canada for the last 115 years! Governments, of course, are quick to point out the responsibilities they have to the electorate for overall budgetary policy and the level of public expenditure, and that they have the responsibility for raising the revenue to fund that expenditure. But, in the light of the arrangements operating in most countries, it is nonsense to suggest that government needs to maintain control over the total amount of funds available for expenditure by the Parliament. It should certainly be in a position to influence, but not to exercise total control. Despite the fact that most other Parliaments and Executives have made arrangements which provide for real autonomy in relation to parliamentary appropriations and staffing, the Select Committee understood the reluctance on the part of the Australian government go agree to an immediate total reform package. In addition, the Select Committee was aware that for its purposes the House of Representatives may find other arrangements more suitable. The Select Committee was therefore mindful of the need for an experimental approach to be adopted in making any new arrangements for appropriations and staffing. This is especially true in a bicameral Parliament and in one in which there is a sharing of certain services such as the Library, the Reporting Staff, and housekeeping functions. For this reason, the Select Committee did not choose to follow the example of the United Kingdom House of Commons as the creation of a Commission would involve legislation which would, of necessity, produce a rigid, structured approach rather than the flexible approach which is required at the moment. Accordingly, the Select Committee recommended that the Senate, and, where appropriate, the government, should agree to a trial of the proposed arrangements. The government response By 25 March 1982, the government had had the benefit of the views of the Select Committee members-the Select Committee having ceased to exist upon the presentation of its report-concerning its proposed response and had also discussed the Select Committee's report with the Presiding Officers. However, as some nine months had elapsed since the Select Committee presented its report and still the government had not given birth to its response, a motion was agreed in the Senate, without debate, appointing the Standing Committee on Appropriations and Staffing. The Standing Committee was charged with the task of inquiring into: (a) proposals for the Annual Estimates and the Additional Estimates for the Senate; (b) proposals to vary the staff organizational structure of the Senate, and staffing and recruitment policies; and (c) such other matters as are referred to it by the Senate. In relation to the Estimates, the Standing Committee: (i) determines the amounts for inclusion in the Parliamentary Appropriation Bills for the Annual Estimates and the Additional Estimates; and (ii) reports to the Senate upon its determinations prior to the consideration by the Senate of the related Parliamentary Appropriation Bill. In relation to staffing, the Standing Committee: (i) makes such recommendations to the President as it sees fit; and (ii) reports to the Senate on any matter it considers necessary. Finally, the Resolution establishing the Standing Committee provided for the committee to make an annual report to the Senate on the operations of the Senate's appropriations and staffing, and related matters. The government's response to the Select Committee's report was brought down in the Senate immediately after the Senate had agreed to establish the Standing Committee. The government clung to the position that it needed to maintain control over the total amount of funds available to the Parliament because of its constitutional responsibility for budgetary policy and for the level of public expenditure. This attitude, of course, continues to ignore the arrangements of other Parliaments and their Executives. But more importantly, it overlooks the constitutional responsibility that the Parliament has. This responsibility is reflected in the maxim: government proposes; Parliament disposes. The outcome of the situation where the Senate has empowered one of its committees to determine its appropriations and where the government continues to insist that it must have overriding control will be left for the future to determine. However, for those who believe in the sovereignty of Parliament, and the accountability of the Executive to Parliament, it is a fight worth winning. The government, however, did concede that detailed control over individual expenditure items was not necessary and proposed an overall figure for each House, and the service departments of the Parliament, broken down into capital and recurrent items. The government agreed to the Select Committee's other proposals concerning a separate Bill for the Appropriations for the Parliament and discussions are now under way concerning the transfer to Senate and House of Representatives administration of those functions currently administered by government departments. And finally, the government agreed to the committee's recommendation that the President of the Senate and the Speaker of the House of Representatives-separately in the case of the Senate Department and House of Representatives Department and jointly in relation to the Parliamentary Library, the Parliamentary Reporting Staff and the Joint House Department-be vested with the statutory power of appointment, promotion, creation, abolition, and classification of offices, and the determination of rates of pay and conditions of service. The government also withdrew its imposition of staff ceilings on the Parliament and handed over the responsibility for staff numbers to the Presiding Officers. In doing this, the government quite properly made the point that the ``. . . decisions of the Parliament in these areas should be subject to the same types of scrutiny, inside and outside the Parliament, as those of the government. It is up to the Parliament to prove its managerial ability in the same fashion as the government.'' These views, of course, accord with those expressed by the Select Committee in recommending that the proposed Senate Standing Committee on Appropriations and Staffing make an annual report to the Senate on its operations. The government's response has asked that the annual report include reference to the numbers, classification, and disposition of staff, as well as any variation in terms and conditions of employment. Summary Overall, the government is to be commended for its response even though it was a slow, painful process akin to extracting teeth. The nature of the government response no doubt owes a lot to the behind-the-scenes efforts of the leader of the government in the Senate (Senator the Honourable Sir John Carrick) and the Minister for Finance (Senator the Honourable Dame Margaret Guilfoyle). As mentioned earlier, what has been achieved represents years of effort on the part of a number of the Senators and Clerks. Their foresight and perseverance now enables the Australian Senate to embark upon an experiment which we hope will achieve the proper constitutional relationship with the Executive, in practice as well as in theory. The success of the venture depends upon common sense; on the part of the Senate as well as the government. Senator JESSOP —I thank the Senate. The question of parliamentary appropriations and staffing is an important one. I think it is also important for the executive of whichever government happens to be in charge of the treasury bench to recognise that the Parliament is responsible. I have been on the Committee for a number of years and during that time the Committee recognised the economic problems of the country. During the previous Government we reduced expenditure because we recognised that $70,000 or so was not appropriate to be applied to the estimates at that time. I believe that the senators on that Committee are extremely responsible people and are in a position to advise the President, who is the Chairman of that Committee, in a responsible manner concerning the staff requirements that are necessary to service our committees and also with respect to moneys that should be made available to ensure that members of the Senate are given the facilities and other assistance in the way of additional staff, which has happened over the last few years, in order that they can carry out the growing responsibility of their work more effectively. No government should disregard that most important function. Most executives, whether Liberal or Labor, sometimes tend to disregard the importance of the back bench and the work its members do in this Parliament. I know that some of us work harder than others. Senator Elstob —Do you think we should form a back bench union? Senator JESSOP —That is an excellent idea. There are many on this side of the House who would subscribe to that. We could perhaps have joint shop stewards to ensure that we are able to represent our electorates in a proper and efficient manner. Senator Puplick —I have never known a shop steward who did that. Senator JESSOP —It would be refreshing to have shop stewards from the Liberal Party because we would certainly attend to the duties in an astute manner. It is a serious matter, and I am sure that a majority of the honourable senators on the Government side would agree that we need to develop the Appropriations and Staffing Committee that has been established unanimously by the Senate. I would see tremendous advantages in a similar committee being established in the House of Representatives. For some reason or other, that House has not taken the progressive lead that has been given once more by the Senate. I introduce those thoughts and hope that they will be considered by members of the Government. I know that Senator Robertson has strong feelings on this matter, as do other Labor senators. I am certain that the Australian Democrats share my views, and I believe that if there is a sensible debate on this matter we might be able to reinforce the concern that many of us have in this important matter. Question resolved in the affirmative. Bill read a first time. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.05) —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- The purpose of this Bill is to appropriate amounts required for expenditure in 1985-86 from the consolidated revenue fund for the ordinary annual services of the Government. The expenditure program of the Government to which the provisions contained in this Bill relate was outlined in the Treasurer's Budget Speech. The amounts sought in this Bill for each department are detailed in schedule 2 and total $17,416,445,000; of this total, the Bill seeks authority for the issue of $10,231,883,000. The balance of $7,184,562,000 having already been authorised by the Supply Act (No. 1) 1985-86. An amount of $160,000,000 is also included in the Bill for the advance to the Minister for Finance, the same amount as was provided in the Supply Act (No. 1) 1985-86 which this Bill, when enacted, will subsume. Clause 5 of the Bill provides for the appropriation of the consolidated revenue fund to enable the Minister for Finance to issue amounts for the payment of increases in salaries and payments in the nature of salary arising out of awards, orders or determinations made under, or in accordance with, a law. Allowance has been included in the overall budget figuring for such prospective increases-$162 million in respect of persons employed under the defence function and $162 million in respect of other Public Service employees; that allowance is not, however, appropriated in advance of any increases being awarded. I commend the Bill to the Senate. [COGNATE BILLS: APPROPRIATION BILL (No. 2) 1985-86 APPROPRIATION (PARLIAMENTARY DEPARTMENTS) BILL 1985-86] The DEPUTY PRESIDENT —Is it the wish of the Senate to have a cognate debate on the three Appropriation Bills? There being no objection, I shall allow that course to be followed. Senator MESSNER(South Australia)(11.07) —There probably can be no better demonstration of the problems that exist in the Australian economy today than the front pages of this morning's newspapers with their continuing reports of the falling of the price of the Australian dollar in overseas terms. In the last few days we have seen a collapse of confidence in the Australian dollar from around a level of US70c to around US64 1/2c. On a trade-weighted index basis, which measures the Australian currency against the currencies of such great trading nations as Japan and Western Germany, one sees that the currency has collapsed even faster. Now, as of yesterday, the Australian dollar in trade-weighted index terms has been selling below the index number of 59.3. Surely this must give every Australian cause for concern. The reasons are quite clear, and this takes us right to the core of the economic management of this country under the Hawke Labor Government. Perhaps the figures are even more dramatic if we look at what has happened to the Australian dollar in US dollar terms since this Government came to power in March 1983. At that time the Australian dollar would buy 95c American. We all know what has happened successively. There have been falls in the value of the Australian dollar over the past two years to the point where it reached the then lowest point of 65c, a collapse of some US30c, around April of this year. It will be recalled that the reasons for that collapse were reasonably proximate. One recalls that they were to do with a collapse of confidence in the Hawke Government and its approach to things such as our relationship with the United States, the MX missile furore, the Public Service industrial dispute, concessions to the New South Wales doctors, and the Caucus rejection of the reintroduction of tertiary fees. All those things had bearings on the price of the dollar at that time. Since then the currency has just been sliding along in a narrow channel of around US66c to US70c, until we have reached the current situation which this week has seen the bottom fall out. Clearly there are reasons for this. The Treasurer, Mr Keating, has been overseas this week saying to the nations of the world that all is well with the Australian economy, that we have got wage costs under control, that things are going along well, that the growth rate in the Australian economy is 5.5 per cent and is faster than that of our trading partners. That might be very much so on the surface, but we need to look below the surface and examine how this has come about. The Government has prided itself on a high growth rate policy. The fact is that that high growth rate has been encouraged by the creation of more and more overseas debts by government, and of course by private firms as well. These are best exemplified by the fact that since the Hawke Government came to power the external debt of Australia has grown from $36.5 billion in the financial year ended 30 June 1983 to $68.5 billion. In other words, our foreign debt-debts owing to banks overseas and to governments overseas-has almost doubled. That creation of debt can be best exemplified as something akin to a family which, because its members feel their incomes are falling, decides that in order to maintain its standard of living it will borrow more. So the family goes to the bankers or finance companies and borrows more and more money, paying higher and higher rates of interest as its credit rating falls in such a way as it can spend that money it has borrowed to keep up its standards of living. That is an exact analogy with the situation Australia is in today. We are borrowing increasingly more and more money in order to fund growth in this economy. Mr Keating goes about telling the world that this is of great consequence, that this is a great achievement and that we are improving our position in the world. The fact is, of course, that that is quite unreal. The Australian dollar is showing that it is quite unreal because the rest of the world is valuing the Australian dollar down and selling it down very heavily in the overseas markets. If the Australian Government does not understand what is happening, the overseas markets do. They can see that there are gross problems with the Australian economy and consequently they are selling down Mr Keating's confidence very cheaply indeed. Probably the whole exercise of the last week has not been helped at all by Mr Keating, in a panic driven way, dashing overseas to make a speech to businessmen and bankers in New York City in order to give some confidence in the Australian currency. In fact, it appears that all his utterances have created greater doubts about the Australian currency and caused a further collapse in the Australian dollar. Senator Sheil —Isn't he the world's greatest Treasurer? Senator MESSNER —Yes, he is supposed to be the world's greatest Treasurer, but every time he goes overseas he causes a rundown of the Australian dollar. Surely we ought to be pleading with the Prime Minister (Mr Hawke) to try to keep Mr Keating home so that at least we can keep some semblance of confidence in the Australian economy. We should be saying: `Send him home before he wrecks the Australian economy in the eyes of overseas nations'. The other issue which coincided with Mr Keating's overseas visit was the announcement this week of the rubber stamping of the accord reached between the Government and the trade union movement which resulted in a 3.8 per cent wage increase for Australians. We know that this wage increase was agreed in a sweetheart deal under pressure from the Australian Council of Trade Unions on the Government at a time when the country simply could not afford it. This is at a time when Mr Keating, the world's greatest Treasurer, Mr Willis, the world's greatest industrial relations expert and Mr Hawke, the world's greatest Prime Minister, are telling Australians that this accord is the greatest thing since the invention of the internal combustion engine. In fact, the accord is providing a means by which the union movement can impose its will upon the Australian nation through this Government because this Government is totally beholden to the trade union movement. Through the accord, it is tied feet and hands to the trade union movement and that pressure, which will continue to be exercised by the trade union movement through the accord, is nothing more than a confidence trick against the Australian people. If the Australian people are not in the streets complaining about this now, they certainly will be. Senator Robertson —Get back to pensions, you do a better job at that. Senator MESSNER —Thank you very much, Senator Robertson. Let us just examine a little further the problem of wages in this country. Honourable senators know full well that the 3.8 per cent wage increase could not have been afforded and discounts should have been made for the effects of devaluation of the Australian dollar. But no, this Government had to take the word and the pressure from the trade union movement and look down the track another year before it even started to consider taking off wage discounting through the Arbitration Commission. That will not happen at least until April or May. On the other hand, the Government says: `even if that happens, we will give you a tax cut anyway.' This will be paid for by some kind of assumption that growth will continue in the economy. As I said earlier, that growth will be kept up at any kind of level, as it has since this Government came to power, only from more and more overseas borrowing. We are mortgaging ourselves into the future by this Government's simple proposition that we need growth and we will spend what we have not got in income by borrowing more and more overseas in order to keep up our standard of living. It clearly demonstrates the problem that this country will face by the time the next Liberal government comes to power in December 1987. By then this chaotic Government will have wrecked this nation and we will have to set about the task of rebuilding it again. Let us have a look at the wage structures as announced by the Government in the last few days. On 4 November we saw the announcement that there was to be an approximate increase in wages for the average wage earner of $15 a week. That will add to the costs of people in this country-the cost of living and the cost of every good and every service that we buy-a total of $4.2 billion in this financial year. This Government is asking Australians to pay that bill; it is asking Australians to pay an additional $4.2 billion arising out of this wage decision. As we have demonstrated, that decision has been read overseas as an absolute disaster. Coming on top of the absolutely destructive visit overseas by Mr Keating, this has been one of the major reasons why we have seen the Australian dollar collapse. We have demonstrated that the loans that have to be raised overseas are causing more and more problems with repayments. More and more repayments will be demanded from the Australian Government's budget. Already these repayments have reached $7,000m a year. In fact, we are paying more now overseas for the repayment of loans and interest than we are spending on defence, health or education. This is to pay for what the Hawke Government claims to be growth at higher rates in the economy. Are we living beyond our means? The simple answer is yes, and this Government needs to address itself to the fundamental problems of the economy in order to ensure that confidence is rebuilt in the Australian dollar and in the economy to the point where real jobs can be created and we can put people back to work. One of the ways in which the Government has been seeking to ensure that the Australian dollar does not collapse right through the floor is to keep interest rates high. It is a deliberate part of this Hawke Government's policy, forced upon it by its inadequate approach to the economy as a whole, to make sure that interest rates are kept at the highest levels. Every day more and more evidence becomes available which demonstrates that interest rates are soaring. New home buyers are finding it more and more difficult to borrow money in order to buy their homes. Not only can they not get as much money as they might need to buy a house, but also every time they borrow they are forced to accept a contract in which their interest rates are going higher and higher. This situation is getting worse because the savings banks are running out of money and the growth rate of their deposits is falling dramatically. The figures announced only a few days ago show that the annual growth rate of savings bank deposits declined to 7.3 per cent in September. Yet that compares with a growth rate in the money supply, which is worrying in itself, of 16.1 per cent across the economy over the same period. So savings banks, the main source of housing finance, are not getting anything like their fair share of funds. This can lead to only one conclusion: Fewer and fewer people will be able to borrow sufficient money to pay for a new home. It also means that the interest rates they will pay in respect of those loans will get higher and higher and, consequently, squeeze even further families which will have their disposable incomes pressured by the higher repayments they have to make to banks and building societies. Is it any wonder that Australians feel their living standards are slipping under this Government? Their mortgages are rising but, if that is not happening immediately, banks, building societies and other financial institutions are extending the period over which people have to repay their loans. Having taken out a loan for, say, 20 years, as some people may have done in recent times, they will find that, involuntarily, the term of the loan will have been extended to 29 or 30 years. That means that the evil days of having to repay the mortgage will be extended into the future. Of course, this will affect their living standards. At the end of their working lives they would expect to have repaid the mortgage on their homes and to have a bit of extra money, because of not having to meet repayments, perhaps to take a trip overseas with their long service leave. Instead, they will find that they will have to continue to repay their morgages indefinitely. So that the little bit of cash that they might have been able to accumulate after repaying the mortgages will not be there. The effect of that on the living standards of Australians will be significant and will continue to grow as a result of the Hawke Labor Government's determined policies to keep interest rates high. This Government has no choice, in order to keep the Australian dollar under some kind of control, but to keep interest rates high. While the Government is committed, as it is, to a firm policy of the so-called accord with the trade union movement, which locks the Government into doing whatever the ACTU says should be done, this pressure on Australian families will continue. The Labor Government's sell-out to the ACTU will put a tremendous cost upon Australian families in the years ahead as their living standards fall. This is the conscious policy of this Government. It is obvious why it is committed to this policy; it is because of its relationship with the trade union movement. As was acknowledged earlier, the trade union movement is getting all that it wants by virtue of the accord and the Government's craven submission to the unions' demands. This ensures that the future will not be very bright for Australians, at least until they have a chance to re-elect the next Liberal government. That is something which we have to address urgently. The falling dollar and growing inflation will obviously feed more and more into the price of goods. In turn, because of the unions' relationship with the Government, they will feed more and more into the cost of goods and services which in turn will be transformed into rising wage levels, leading to more inflation and thus into a vicious circle of an increasing cost of living, a slipping standard of living and, consequently, more devaluation of the Australian dollar. It is a vicious circle which this Government appears to be incapable of handling. It has no policies to redress it. The problems are a direct result of the failure of the Hawke Labor Government to address the fundamental issues in the economy. How it can deem that it is on the right track and claim that Mr Keating is the world's greatest Treasurer is beyond me. It is interesting to note that more and more commentators in the Press are saying exactly that. Senator Peter Rae —They are now calling him the world's greatest discredited Treasurer. Senator MESSNER —I thank Senator Rae. It is very useful to remind ourselves that he is now probably the most discredited Treasurer in the world, having fallen from his star-like position very much more quickly than has the Australian dollar over the last eight or nine months. It is interesting that the editorial in today's Australian Financial Review states that the decline of the Australian dollar is not simply a matter of misplaced pessimism but is a response to deeper structural problems including the labour cost factor and unless we adapt to international realities our currency will end up as valuable as monopoly money. That precisely sums up the current situation. We have to recognise that to our north are developing economies of great power and enormous potential. Malaysia, Singapore, Hong Kong, Taiwan and Korea have enormous potential for growth. They are efficient, well structured in a technological sense and have huge opportunities to create jobs for their citizens. That potential is not being matched by developments in the Australian economy; in fact the reverse is true. Effectively, the falling dollar and the subsequent round of inflation that that will induce are exporting jobs to those countries. Unless we can start to meet the challenge of the emerging powers of Asia, clearly this country will become the cheap white trash of Asia. It is important that we address that here and now because the decisions that we take now will have an effect on all of us, including our children, for the next generation. We must take these decisions now and face the hard questions that are before us. The accord effectively puts off the evil day. While that is happening, the Australian community is not getting ahead. I venture to suggest that, if a poll were taken today, Australians would say that they are worse off than they were a year ago. This is a result directly of the Government's weakness and failure to address fundamental issues. I refer not just to the issue of taxation for which this Government claims great credit, but in which it has been an absolute failure, in terms of its actions to change the tax system. I refer more to the fundamental issue of how labour relations are conducted in this country. Cost structures can be established in such a way as to create jobs and in that way develop the best possible opportunities for industry. Alternatively, one can adopt the methods that this Government has adopted by which industry is held to ransom by the trade union movement in collusion with the Government. It is that central issue that is starting to seep through not only the minds of Australians but also those of our industrial companies. More and more concern is being expressed about the expansion of our wage structure. Companies in Australia are almost unanimous in their disapproval of the announcement of the 3.8 per cent wage increase last Monday. That clearly shows that industry is now realising that something fundamental has to be done about our wage structure and that the accord is really only just a means of putting off the evil day. Every time we buy goods overseas, the goods which cost, say, $100 two to three years ago, today cost about $155. We are finding significantly that we have to spend more to buy overseas made goods or to import equipment which can re-establish our industrial base and make it more efficient. The cost of everything in this country relative to the cost overseas has gone out the window to the tune of nearly 55 per cent since this Government came to power. That is the reality of the situation. Industry in this country is starting to appreciate that and is doing something about it. It is opposing more and more the wage decisions of the Conciliation and Arbitration Commission. Consequently, this Government will be under more and more pressure to look closely at the accord and at the options and alternatives being put forward by the Liberal and National parties which aim to provide for more flexibility and less rigidity in the wage structure. Individual companies will be able to make decisions and work with their employees in a co-operative manner to ensure that the employees' jobs are maintained and enhanced, through the development of the industry hand in hand with those employers. The classic case at the moment in which this has occurred is the Mudginberri abattoir dispute. In that case a small abattoir in the Northern Territory developed a new market overseas for buffalo meat. It made arrangements with its own group of employees for them to be paid wages at levels which were far in excess of the union award rates. Of course, as a result their productivity was significantly rewarded. Because of the lower unit costs generated by that productivity, the abattoir was able to sell more and more meat on the world markets. As a result it expanded job opportunities and improved the job security of its employees. But along came the trade union, which saw that the employees were not working for union wages. They were in fact getting more than the union rate. It said: `We cannot have that. You must work for lower wages and in accordance with the requirements of the union'. Consequently the little abattoir in the Northern Territory was picketed, its activities ceased, and the potential for job creation in the area was destroyed, all as a direct result of trade union activity, hand in hand, no doubt, with the Government. That is the kind of destruction, the kind of absolute nonsense and stupidity, with which we are faced because of the pressure that is imposed on this Government by the trade union movement. Those are the fundamental questions that must be addressed in this country. We must allow our industrialists to develop their markets, to improve productivity, to work hand in hand with ordinary workers to ensure that their jobs are made more and more secure and that, if possible, their wages are greater than union award rates, so that as individuals they can improve their financial security and thus their financial independence. That is what the Liberal Party stands for. That is the kind of wage policy we want to develop in this country and which represents the radical reforms that are necessary in order to cure the fundamental problems which this Government refuses to acknowledge. Senator MAGUIRE(South Australia)(11.33) —This morning we are debating cognately Appropriation Bill (No. 1), Appropriation Bill (No. 2) and Appropriation (Parliamentary Departments) Bill. Appropriation Bill (No. 1) is the major Bill. It provides $10,213m from the Consolidated Revenue Fund for the ordinary services of the Government. By comparison, Appropriation Bill (No. 2) appropriates $2,382m for expenditure on capital works projects and, notably, such items as payments to or for the six States of Australia. Together the Bills we are debating this morning constitute much of the expenditure side of the Government's 1985-86 Budget. Since the Hawke Government was elected it has turned Australia's economy from one of negative growth under the Fraser-Howard Government to one of the fastest growing in the Western world. Until September this year, in the period which has elapsed since the National Economic Summit Conference was held in April 1983, 487,000 new jobs had been created in Australia. With those figures in mind, we are certainly well on track to meet our pledge of creating half a million jobs in the first three years of office of this Government. It is very important to note that the great majority of the new employment positions being created in Australia are in the private sector. Between 80 per cent and 90 per cent of all the new jobs being created are in the private sector, and they are permanent long term jobs. At the same time as we have had such success in generating new job opportunities, we have also seen a significant reduction in the unemployment rate in our country. Unemployment peaked at a seasonally adjusted rate of 10.4 per cent during the recession. As at September 1985-the latest figures which were available up to 11.30 this morning-the unemployment rate was 8.1 per cent on a seasonally adjusted basis. So there has been a reduction in the unemployment rate of 2.3 percentage points since the peak figure which occurred during the recession. That is a big achievement by this Government. At the same time we have been able to wind down the Commonwealth's Budget deficit. After inheriting from the Fraser Government a prospective deficit for 1983-84 of $9,600m, the actual deficit was reduced to $6,700m in 1984-85. The estimate for this financial year is $4,900m. During the last financial year, 1984-85, non-farm economic growth in Australia was 5 per cent. That was our second consecutive year of high economic growth, one of the highest growth rates in the world in real terms. Clearly, it is a major reason for the continuing growth in job opportunities in our country. We have also had success in winding back the inflation rate, the rise in the consumer price index which was experienced under the Fraser-Howard Administration. In the last year of that Administration, 1982-83, inflation was running at double digit levels; in fact, the inflation rate was 11.5 per cent. The latest figures show that under this Government inflation has been reduced to an annual rate of 7.6 per cent. In May, prior to this Budget being brought down, the Government announced a number of cuts in expenditure on the Forward Estimates. For the financial year in question, 1985-86, the Government reduced total expenditures by $1,200m. The strategy behind the 1985-86 Budget is one of reducing the public sector stimulus to the economy. The Treasurer (Mr Keating) believes that this is now necessary to allow more room for the private sector to operate and to encourage private investment. The strategy has been designed within the trilogy commitments of the Prime Minister (Mr Hawke), that is, that government expenditure and taxation revenue are not to increase as a percentage of Australia's gross domestic product in the current financial year or over the life of the current Parliament, and that the Budget deficit also is to be reduced as a proportion of gross domestic product in the current financial year and over the life of the Parliament. In addition, a requirement has been imposed that the deficit is to be reduced in money terms in the current financial year. All of the Prime Minister's trilogy commitments have been honoured in the Budget Estimates for 1985-86. Of course, this has been made possible by the prediction of continuing high economic growth in Australia, because 1985-86 will be the third consecutive year of high economic growth in Australia. It is estimated that non-farm gross domestic product will grow by 5 per cent in real terms in the current financial year, making three years in a row of real economic growth in the vicinity of 5 per cent. At the same time the government has been slowing down the rate of increase in government expenditure. Expenditure or outlays are estimated to show a real increase-that is, an increase over and above cost increases-of only 1.3 per cent in the current year. That is a very low rate of growth in government expenditure in comparison with the figures for recent years. It is estimated that government expenditure as a proportion of Australia's gross domestic product will be reduced to 29.8 per cent in 1985-86, which is a reduction from 30.8 per cent last financial year. On the revenue side of the Budget it is estimated that 25.3 per cent of gross domestic product will be taken up by tax revenue. That is the same figure as the figure for 1984-85 and therefore it is within the trilogy commitment. As a result of the continuing strong economic growth in Australia, an 11.8 per cent rise in tax collections overall is estimated during the current financial year. That reflects not so much higher tax rates but rather the higher incomes of businesses, the higher surpluses of enterprises, which are in turn generating higher taxation receipts. It is very important to stress that the $4,900m deficit forecast for the current financial year will represent only 2.1 per cent of Australia's gross domestic product. That compares very favourably with figures of 3.3 per cent in 1984-85 and 5 per cent in 1982-83. So a very strong downward trend is now evident. That certainly will help the Government. It will greatly reduce the pressure of government borrowing on the financial markets of our country. It certainly will leave more room for borrowing activities for private sector investments. As a result of the high and continuing economic growth achieved in Australia in the last two years, and predicted again this year, combined with the expenditure cuts announced in the May economic statement, the Government has been able to increase outlays during the current financial year in its priority areas. We have been able to generate some expenditure in our priority areas. (Quorum formed) Before I was so rudely interrupted I was making the point that the Government, as a result of continuing high economic growth and the cuts it made in its May economic statement, has been able to increase expenditure in its priority areas. We have been able to set our priorities and expenditure for the current financial year. It is possible to identify major priority areas in the Budget. We certainly are giving top priority to youth training, youth education and income support, as my colleague Senator Cooney is well aware. We are giving priority to social welfare in general. There is also priority in the Budget for assistance to the rural sector. Taxation measures which will ultimately increase the impact of the Budget of course have been announced since the Budget was brought down. I turn to assistance for youth in the 1985 Budget. The Government is committed to reducing the high levels of youth unemployment in Australia. We have brought together a package of policies under the title Priority One: Young Australia to achieve this reduction in youth unemployment. I think it is very important to note that our attack on youth unemployment has three major arms: Firstly job training; secondly, financial support; and thirdly, education. In respect of job training the Government is supporting the creation of a new system of traineeships for young people. The scheme is to provide training for a minimum of one year with three months training off the job for trainees. Wages paid to trainees will be negotiated between trade unions and employers but are to be at least $90 a week. Government assistance will total up to $4,000 per annum per trainee. Some of that money will be paid directly to the employer engaging the trainee and some will be paid to the training institution, such as a technical and further education college, to cover the cost of the traineeships. Our target is the creation of 10,000 traineeships in the current financial year, with an ultimate target in 1988 of 75,000 traineeships throughout Australia. The Government is also negotiating with the States to achieve some remission in 1986 for payroll tax and workers compensation premiums for employees under 21 years of age. In regard to financial support for young people, the Government has a four-year plan to encourage young Australians to remain in education and to remove the financial incentive to go on the unemployment benefit. To summarise the Government's policy in this area, it is to pay the unemployment benefit more on the basis of people's age and less on the basis of what they are doing at the moment, whether they are in education or unemployed. In relation to 16 and 17-year-olds, secondary education allowances, which are of course paid to the parent, will be increased by 20 per cent in 1986. I repeat that there will be a 20 per cent increase next calendar year in secondary education allowances. There will be further increases. There will also be an increase in the tertiary education allowance next calendar year in line with rises in the consumer price index. Unemployment benefits for 16 and 17-year-olds will be from this month-November-$50 a week. There will be now no distinction in the payment of that unemployment benefit to 16 and 17-year-olds according to how long a person has been out of work. This rate will stay at $50 a week until 1987, by which time education allowances for 16 and 17-year-old Australians will reach the same figure of $50 a week. Thereafter, both the education allowances and the unemployment benefit will be increased and indexed annually. I believe that this will give relatively more encouragement than at present for young Australians to continue in education. That is a very big step forward over current arrangements in our country. For single 18 to 20-year-old Australians, there will be a new unemployment benefit rate. As of this month, the new rate will be $88.20 a week. That is a $3 increase compared with the previous arrangements. Both the secondary and tertiary education allowances will be gradually increased between now and 1988 for 18 to 20-year-olds. By that time eligible full time students living away from home and single unemployed of that age will receive the same payments each week. From 1989 these rates will be indexed for the cost of living. From May next year the single unemployed person living away from home will be eligible for the new rent assistance, which will be available for unemployed persons renting privately and that will be a figure of up to $10 a week. Since the Budget, we have announced in our taxation package delivered on 19 September that the separate income test for rent assistance will be abolished. So young Australians in the age group of 18 to 20 will be eligible for a maximum benefit rate of $98.20 a week. That is an increase of $13 a week over the current rates available. As I indicated earlier, overall the aim of our youth policy known as Priority One is to pay allowances more on an age basis than according to what the individual is doing-whether that individual is unemployed or in education. The third part of our youth package is to provide more places in higher education. That, of course, is to boost the supply of places to meet the extra demand generated by the youth scheme. There is no doubt that the higher youth benefits available will boost the demand for tertiary education. Between now and 1987 an additional 20,500 places will be provided in higher education institutions. The total cost to the Budget of these youth assistance initiatives is estimated at $70m in the current financial year, rising to $190m in 1986-87. The second major priority area in the 1985-86 Budget is social welfare. From Thursday of next week pensions and benefits will be increased in line with the rise in the cost of living. There will be a $3.60 a week rise in the standard pension rate and the single unemployment benefit rate and a $6 a week increase in the married rate of pension. Further, the Budget has allocated $110m in the current financial year and $245m in a full financial year for increased social security benefits over and above the existing cost of living indexation arrangements. These major measures include a $3 a week extra rise for the single unemployed over 21 years of age who do not have dependants. That amount will be in addition to the $3.25 a week rise from this month due to cost of living increases. The unemployment benefit rate for this group of Australians will be $91.45. It is very important to note that when this Government came to office this was one of the groups most discriminated against in the community. The level of benefit that such people received was far below that received by single pensioners. It is noteworthy that early in 1983 single unemployed persons over the age of 21 without dependants received only $68.65 a week. Under this Government they will be receiving $91.45, which represents a very large rise in the benefit. Most importantly, the gap between the single unemployment benefit rate and the single rate of pension has been narrowed considerably. When this Government came to office, a single unemployed adult received $13.70 a week less than a single pensioner. As a result of the measures in this Budget, that gap will be reduced to $6.45 a week. In respect of key poverty groups in Australia, from May next there will be a $10 a week increase in the income test free area for unemployment beneficiaries. The amount will rise from $20 to $30 a week. As I indicated earlier, there will be a new rental allowance for unemployed persons renting accommodation from private landlords of up to $10 a week. If I could just reiterate, since the Budget was handed down we have in fact abolished the separate income test for that rent allowance. From next week there will be a further $2 a week increase per child for the children of pensioners and beneficiaries. That amount will be increased to $16 a week. There will be a further $2 a week increase next week in the family income supplement per child. So this Government has introduced very important social welfare measures which highlight the Government's commitment to direct the benefits of Australia's high and continuing economic growth towards those Australians most in need-the unemployed and those households with dependent children which are receiving social welfare payments. The 1985-86 Budget contains a number of redistributive measures which involve the redistribution of incomes to the neediest sections of the community. In addition to the increases in the social welfare payments, which I have outlined already, and a comprehensive education and training scheme for youth which we have called Priority One, other redistributive measures have been announced in the Budget. For instance, the threshold for payment of the one per cent Medicare levy has been increased. A single income family with two children now will not be required to pay the Medicare levy if their income is below $15,564. That is quite a significant income; it is by no means a bottom income in Australia. At the same time, the ceiling on the top amount of the levy which was payable will no longer apply. The one per cent levy previously applied to incomes of up to $75,000 with a ceiling of $750 per annum. The ceiling has now been abolished and people receiving very large incomes will be making a larger contribution for their health care. This Budget contains some very important benefits for my State of South Australia. There will be continuing work on the long overdue $41m Commonwealth office centre in the central business district of Adelaide. There will be further expenditure and development of the Commonwealth office centre at Port Pirie in the mid-north of the State. That centre will be completed this financial year. Further assistance will be given to the motor vehicle industry. The Budget has provided $35m for the development of the Australian motor vehicle industry and, of course, South Australia, as a major producer of motor vehicles, will share in that allocation. A further revenue supplement will be made to Australian National, our national railway system. The allocation in this Budget of $72.5m is an improvement over the last financial year when an allocation of $87.9m was required to supplement the revenue flows of that organisation. This Budget provides major expenditure for water improvement programs in South Australia. A total of $7.9m has been allocated for water improvements in my State. I am pleased to say that of that total $7.9m, $5.6m has been allocated for water filtration works to improve the quality of water both in Adelaide and in the regional areas of the State. An allocation of $1m has also been provided for flood mitigation works along the River Torrens through the metropolitan area of Adelaide. The Budget contains very important benefits for South Australia. In the year ahead we are again expecting fast economic growth in Australia. During the three years of Labor Government, which will have ended at the conclusion of the current financial year, the economy will have grown by more in real terms than it did in the previous eight years under the Fraser-Howard Administration. There will have been more growth in Australia in three years under Labor than there was in eight years under Mr Fraser with Mr Howard as his Treasurer. A recent survey carried out by the Organisation for Economic Co-operation and Development, an organisation of the world's leading industrialised developed countries based in Paris, predicts strong economic growth in Australia 1985-86. It bases its assessment on a strong growth in private consumer spending and very strong growth in private investment spending. These very important areas of the economy will provide the economic growth that is expected to take place in the current year. There will be a further decline in the level of unemployment in Australia. Of course, that level is still far too high; it is unacceptably high. However, I am certainly encouraged by the inroads that have been made into unemployment this year as a result of the policies of the Hawke Government. The Budget itself forecasts that the pattern of Australia's economic growth will change during the current financial year. Last financial year over one-third of our growth in terms of gross domestic product actually was contributed by the public or government sector. In the current financial year it is estimated that less than one-sixth of Australia's economic growth will come from the public sector. Senator Cooney —One-sixth? Senator MAGUIRE —Yes, Senator Cooney. That implies that five-sixths of the economic growth in Australia in the current year will be generated in the private sector and it is therefore making a major contribution to the economic recovery now occurring in Australia. The Budget predicts that there will be a 2 3/4 per cent increase in total employment levels in Australia during the current financial year. On my calculations that indicates that between 170,000 and 180,000 new employment positions will be generated in Australia during the current year. Unemployment is estimated to fall to between 7 1/2 per cent and 8 per cent as at the middle of next year. I must say that with the September 1985 unemployment rate of 8.1 per cent we are well on target to achieve a level of between 7 1/2 per cent and 8 per cent by the middle of next year. I am certainly very encouraged by that downward trend in unemployment which is now evident in the labour market. The benefits of economic growth in Australia, I am pleased to say, are being shared in my State of South Australia. We are recording very strong economic growth there under the policies of the Hawke and Bannon governments. In the three months to September this year compared with the same three months of 1984 there was a 2.9 per cent growth in total employment numbers in South Australia. That is an average increase of 16,200 new jobs in South Australia compared with the same time last year. That increase in employment has been paralleled by a striking reduction in the total level of unemployment in South Australia in the same period. Between the three months to September 1984 and the three months to September this year the total number of persons unemployed in my State of South Australia fell by a very striking 8.5 per cent. That is a very large reduction indeed in total unemployment in South Australia as a result of the policies of the Bannon and Hawke governments. I think that growth came, importantly, from growth in the motor vehicle industry. Registrations of new motor vehicles are very strong indeed. There was a 7.9 per cent growth in new motor vehicle registrations in South Australia in the last 12 months. In the retail sales area, consumer spending is very buoyant and in South Australia retail sales are well outdistancing cost rises. There was a rise of 11.5 per cent in retail sales in South Australia in the last 12 months, and that is a very welcome increase indeed. Of course, the bottom line to the performance of the economy, I believe, is the level of bankruptcies. That is the acid test of how well an economy is going. It is really important to note that in the 1984-85 financial year the total number of bankruptcies in South Australia fell 14.8 per cent-a striking reduction in a 12-month period compared with 1983-84. Overall the 1985 Budget is a Budget for further growth but, of course, we in the Labor Party do not want growth for growth's sake; we want growth to enable us to create more jobs and to make more opportunities available to the needier sections of the community and to attack poverty in our country. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —Order! The honourable senator's time has expired. Senator MASON(New South Wales)(12.03) —Over the past five years the Australian people in three general elections have given a mandate to the Senate to be a House independent of two executive governments-the Fraser Government and the Hawke Government. The votes over that time have shown clearly that the Australian people want the Senate to be there as a control over the Executive. They want an independent Senate. I think that is probably the clearest single electoral message that has been delivered to this Parliament by the Australian people for some time. As a result of that the Senate is now very much a House where things happen. The Senate is in the news. I can recall that about a decade ago-about 1977-an opinion poll was taken which showed that the majority of the Australian people did not even know what the Senate was. Those days of the rubber stamp House, I believe, have disappeared and have disappeared forever. It is for those reasons that I am speaking in this cognate debate on three Appropriation Bills, one of which is the Appropriation (Parliamentary Departments) Bill. That Bill may sound boring and unimportant but in fact it is of vital importance. I speak in this debate because of the deep concern of the Australian Democrats over the tightening grip that the executive government is attempting to have over the business and actions of the Senate. Of course, this is a long, drawn out battle. It is not one that ever ends. It is one, I think, where battles are fought but the war itself goes on because it is the natural feeling of executive governments that they are always right and they do not like any curbing of their actions. As honourable senators know, much provocative talk has been coming recently from Senator Peter Walsh on this matter and, because he is the Minister for Finance, we have to take seriously what he says in this regard. Senator Harradine, as honourable senators will know because he has circulated this letter, wrote to the Prime Minister (Mr Hawke) and members of parliament last week pointing out a potential conflict of interest between the Senate and the Executive. He objected to what he called Senator Walsh's economic blackmail in refusing to guarantee that money would be available to set up a Senate select committee to look at Senator Harradine's in vitro fertilisation Bill. This is not the place to canvass that Bill one way or another other than to say that, like anything else that comes here, it should be susceptible to inspection by a committee. Certainly the Australian Democrats take with great seriousness this tendency by the Executive to fiddle with the Senate and to use what is, of course, the most obvious and easiest way of muzzling the Senate and that is by denying it the funds it needs to do its work effectively and properly on behalf of the Australian people. In 1980, a new era in Australian politics began when the Democrats were given the balance of power in this chamber. We have repeatedly said, and I say now again, that we have never believed or acted as if we had the right to run the country, because we hold that crucial and historic position. Far from it. We have considered that philosophically and we have considered our position with great care. We have attempted to support and assist governments in their normal, reasonable patterns of legislation over that period. The record shows that only a very small amount of legislation has been amended by us and even smaller amounts have been stopped dead in their tracks by us. Where legislation has been stopped dead in its tracks our action has had the obvious support of the Australian people, and for the best of reasons. We do, however, perceive a mandate from the Australian people, which they have continued and confirmed in three subsequent elections, to moderate the extremism which has always been the absolute basis of the old fashioned former system of two-party government, leading as it does to confrontation, conflict and violent veering of policy. The Australian people rightly perceive how damaging the two-party system has been to them and now they have established firmly in their minds that principle which Senator Chipp has expressed as keeping the bastards honest. We seven Democrats do not regard ourselves as the fount of wisdom. Far from it. However, we do perceive and have always perceived that the best tendency democracy can have in Australia is to give the Australian people a greater share in it and that is really what the committee system of the Senate is about. It is about giving to the people and to informed interest groups in a public setting the opportunity to bring facts and opinions to members of parliament of all parties who are meeting together in a non-confrontationist atmosphere. People can present a considered view of what is the best thing to do in a particular matter which has been referred to that committee. The Democrats, of course, would prefer to go further. We have pushed strongly for useful referenda and we have proposed a system of citizens initiative whereby a petition of half a million signatures would lead to annual referenda in which the people would decide on issues which are important to them, as occurs now in California, Washington State, Switzerland and a number of other advanced democracies. A Senate committee basically is an authority of the Senate, made up of senators who sit as a group and take evidence in sessions generally open to the people and to the media, which seeks input from the people and from all interested parties and which seeks to establish the broad sweep of informed public opinion on an issue. That is its principal value. It is not politicians telling people what to do; it is politicians seeking guidance from the people on what needs to be done. I think that, with the educated, more informed electorate we have now, that is a good and healthy situation and one which, incidentally, is firmly established, as honourable senators will know, in the United States Senate, which I see in many respects as the path this Senate must take. The committee system is valuable also because it does tend to break down that unfortunate, destructive and completely unprogressive system of party lines which has done this country so much damage and which is largely responsible for the appalling economic situation it is in now. We are basically a wealthy country. We have come to the pass we are at because of the ineptitude of the old parties and their inability to work together. Last year the Democrats took out some rather interesting figures. We found out that over 70 per cent of debate in the Senate was the Labor Party and the Liberal and National parties taking serves at each other. Barely a quarter of the time of the Senate was devoted to actual legislation and its proper concerns. That is a result of the two-party political system and that is why the Australian people do not like it and do not want it. The sooner we have a fair electoral system of multi-member constituencies in the House of Representatives where, indeed, the electoral wishes of the Australian people can be met and where they are truly represented by people they voted for instead of 49 per cent not being represented by people they voted for and the sooner we abandon that old fashioned, stupid, undemocratic system the better for this country and the people of this country. The sooner they realise that they should have input into the political process beyond what they have now and that they should be represented in both Houses according to the degree of their vote, the better it will be for Australia. As far as the Democrats are concerned, that cannot come too soon. We can see no argument against it other than the old parties trying to cling to their strange group collective mind attitudes which, to us, are absolutely obnoxious. Briefly, the Senate committee system is a most valuable step forward in the process of democracy. It allows something more to the Australian people who can put in submissions to Senate committees, can come and speak before that committee and allow their words to be recorded in the evidence than this business of just a forelock-tugging vote every three years for one political party or another. I have often felt that this is rather like a small town where there are only two firms of lawyers and where some person said: `I am tired of undertaking my affairs, I will just go along to that firm of lawyers `A' and give it my power of attorney. It can sell my house, my business, trade-in my wife and do whatever it feels is necessary'. At the end of three years, that firm of lawyers having failed dismally, that person can say: `Look, you have done a pretty terrible job for me. I am going to go to the other firm of lawyers and let it try for three years'. At the end of another three years when that person is still not satisfied he can go back to the first firm of lawyers and say: `Look, you did a bad job too, but won't you please try this time. I will give you another chance'. The Government spends something like 40 per cent of our money. If it is good enough for us to worry about 60 per cent of it ourselves, it is good enough for us to be more concerned with the other 40 per cent. The community considers that it is very important that there is some check and balance on the unfettered power of the Executive. It is for that reason that the Senate can now successfully claim to be the people's House, as indeed it is. The other place, with all respect to it, is a mere rubber stamp of the Executive. This is through no fault of its own. It is because of an antiquated, stupid and thoroughly unrepresentative system of electing members of parliament in single member electorates. As a member of the-- Senator Durack —Then why should it not deny Supply? Senator MASON —This House? Senator Durack —Yes. Senator MASON —That is a very lengthy argument. Perhaps we will look at that matter on Monday. I do not know, Senator Durack. What does the honourable senator think? I would not like to take up time on that point at the moment because there are a few other points that I want to make that are more cogent to the Bill. As the Democrat representative on the Senate Standing Committee on Appropriations and Staffing, I did not scream, disallow or vote against the estimates for the Senate for the next year partly because that objection, on my part, would have served little purpose when the majority of the Committee were in favour of them, and partly because the Government did make some concessions to the Committee in important areas. I think that was a valuable and useful thing to have happened. There are two things going on in parallel: The Government, to some extent, is trying to co-operate with the Senate Appropriations and Staffing Committee and, on the other hand, it is speaking with a forked tongue. It has tried to creep up behind and destroy or influence the powers of that Committee. I think it is worth making the point as to whether or not it is economic or reasonable for the Senate to be looking into matters through the committee system and what money is necessary for it. I will go back to my own experience briefly as a member of the Senate Standing Committee on Science, Technology and the Environment which looked into the problems of the effects of agent orange on Vietnam veterans. I found that a very intellectually demanding and challenging exercise because without expert advisers-I think any other members of the Committee who are in the chamber would agree with me-we would have made very little progress and we probably would have made some very false assumptions. I think it is necessary for the Senate committees if they are to do their work honestly and properly to have what advice is necessary to do that job properly. There is very little point in taking up the time of honourable senators, who are busy people, if indeed the Government cuts off the funds available to them to do that work properly. Plainly, such experts cost money. Is the money well spent? To determine that all we have got to do is to turn to the other principal means of inquiry available in a public sense. I refer, of course, to royal commissions. We have had a great number of royal commissions recently. It is sinking into the Australian public just how enormously expensive they are for a variety of reasons. It is enormously more expensive, to a factor of perhaps 100 to one, of what it costs a Senate committee to do a similar type of work. I understand that the annual operations cost of one of the Senate standing committees is on the basis of approximately $10,000. If all costs attributable to the committee, such as staff, salaries, et cetera, are added, the average figure might turn out at something like $100,000. It is a fact that some Senate committee hearings do take a year. Some might take more than a year; it depends on the complexity of the matter concerned. But it is also a fact that they rarely take that length of time. A select committee dealing with a relatively simple matter can sometimes do it in a matter of weeks, certainly in six months. One might well say that the average cost of a Senate committee is about $50,000 a hearing. I think that is dangerously and culpably low. Senate committees, compared with committees in the United States of America where very efficient work is done, have virtually no staff at all. They are run on a literal shoestring. Honourable senators should remember that this is the Federal Parliament. This is in an area which is seeking to review matters of national policy. It is absolutely inexcusable that Senate committees are called on to do the work that they do with an appallingly low staff situation. As I understand it, in the United States Senate, senators have a member of staff who deals only with their committee work. That is reasonable because committee work inevitably involves a huge mass of transcript, sometimes hundreds of thousands and millions of words of evidence. It is manifestly impossible for senators who have other work to do to go through every word of that evidence. Our staff members-the numbers are very small compared with those of the United States Senate-are over-burdened and that work cannot be done by them. Therefore we are tending, with the best will in the world, to get a situation where the report of that Senate committee is not as good as it should have been. That is not a criticism, far from it, of honourable senators because I have been in this position myself. It is simply that honourable senators can do only a certain number of things in a day, a week, a month or a year. It would be most desirable if each honourable senator had one staff member in the committee situation who could look at evidence and say `Okay, but there is this point and that point. We have not got that. It is not in the report and it should be', instead of leaving it to an overworked committee secretariat to do all these things. We are looking at a cost of $50,000 to $100,000 for an effective Senate committee which is going to bring our recommendations in an important area of policy. By contrast, the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union cost the Australian people $14,400,803-over $14m; the Royal Commission on Drug Trafficking cost $9,254,010; and the Royal Commission on Australia's Security and Intelligence Agencies cost $2,306,000. An interesting contrast is the Senate committee hearing with the Royal Commission on the Use and Effects of Chemical Agents on Australian Personnel in Vietnam. The committee came up with very much the same sorts of conclusions as the Royal Commission in that area. It is important to note that. The Royal Commission cost over $3.5m. The Royal Commission on British Nuclear Tests in Australia cost over $2m and the Royal Commission into the Australian Meat Industry cost over $1m. I think it is unconscionable that the Government should encourage a situation for purely political purposes, which is what it is doing-it is a matter of political clout of the Executive getting its way-and allow the Australian people to be let in for these huge costs which are met by the taxpayer which is an absolute Christmas for lawyers who get in there and get huge amounts of money as counsel in dealing with these matters when in fact in many cases those matters could be dealt with well by a conscientiously well-organised, reasonably financed Senate committee system, as is done in other countries. We know perfectly well-this is what Senator Walsh is on about-that the only reason the Government is prepared to perpetrate that deal on the Australian people, to cynically let them in for millions upon millions of dollars of expenditure unnecessarily, is that the Executive does not want the Senate to have any more power than it can help. The point is that the Senate is a body of parliament independent of the executive government. The executive government does not control it. It is up to the Senate to decide for itself its own affairs and what money it should get within reasonable parameters and guidelines. That must be done responsibly. Is there any suggestion that one of the two Houses of parliament would use that opportunity to feather its nest, to increase grossly its expenditure? Is the Government making that sort of dishonourable accusation or taking that sort of attitude towards this House? If so, I ask it to withdraw those imputations and not bring forward any such suggestion at all. It is rather interesting that there has been a 12.1 per cent increase in the estimates for the expenditure of the Department of the Senate for this year. In fact, the Senate Standing Committee on Appropriations and Staffing fought pretty much tooth and nail for every dollar we could reasonably get and for certain facilities for senators, such as computers, as honourable senators probably know. That 12.1 per cent increase may seem quite high, but when one bears in mind that the Government has increased the Parliament's size by 18.5 per cent, with an attendant extra strain on all its services, one can see that there has been a net drop in the Senate's money, not a net increase. That is a pretty bad situation and one we will have to look at very carefully next year. I do not see that members of this House can feel that we are undertaking our responsibilities to the people who elected us by allowing ourselves to be run around by the nose by the Executive Government and to be more or less cut back in a carping way over relatively small sums of money. As I said, when one compares those costs with those of royal commissions the case can be made quite abundantly that the Government has no right to economise in this area. It is not doing it to economise. It is doing it for political reasons-it wants to muzzle the Senate. Has the Senate committee system been useful? I will briefly go over some of the select committees we have had recently and the issues which have been dealt with by them so that people can make their own judgments. A select committee was appointed on South West Tasmania to investigate the future demand and supply of electricity for South West Tasmania and other matters. Manifestly, South West Tasmania was one of the most important issues with which the Australian community had concerned itself for many years. On a Democrat initiative a Senate committee was appointed on private hospitals and nursing homes, their conduct, administration and ownership. That matter, again, had been crying out for investigation year after year and continually had been brought up by responsible members of the community who said that it needed to be investigated. It has been investigated as a result. There is the Senate Select Committee on Animal Welfare, one of whose references is the export of live sheep from Australia. An enormous amount of publicity and interest has been attracted by that Committee's hearings, and rightly so. It is the first time in this country's history that animal welfare, cruelty to animals, cruel experimentation and cruel practices in regard to animals have been studied. It is an indictment on us a nation that it is the first time it has happened. However, it has happened only because a Senate committee was able to take on the matter. A committee was appointed to examine the classification and availability of video material in Australia. That committee, the Senate Select Committee on Video Material, as we know, has now collected a vast amount of material on what is probably one of the most controversial and important topics that has arisen in the community recently and one which has involved the Senate and the House of Representatives in fairly large amounts of debate. There is every piece of evidence, again, that the relatively small amounts of money spent on organising these committees and their results make the Senate committee system fairly valuable to the Australian people and something which should go on. On that subject I go back a few years. I recall that during the Fraser Government's era, when Mr Viner was Minister for Industrial Relations, a set of industrial relations legislation was introduced which was grossly confrontative and very bad legislation. As a result of our vote in the Senate with the Labor Party that legislation was referred to one of the standing committees of the Senate. A fact which we, and most people, already knew and which the Executive then should have known was revealed, which was that the legislation was opposed not only by the labour unions but also by employers in Australia because they perceived clearly just how dangerous and damaging it would have been and how it would have led to massive industrial confrontation and crippling strikes. We would have been a much worse off and poorer country than we are now. As a result of the committee's findings-honourable senators should remember that it was an all-party committee-the Government quietly dropped the legislation, and very rightly so. I suggest that that again demonstrates the very considerable value to the Australian people of the Senate committee system. Again it bears very much on the Senate's ability and willingness to run its own affairs. My primary purpose in speaking on this debate-one might say my bottom line-is to urge honourable senators, through you, Mr Deputy President, to support this House and its right to be a separate House which does things. For heaven's sake, honourable senators should not regard the political party or group as the thing which dominates or runs their lives in every possible way. That has been proved to be wrong and bad, not liked by the Australian people and an anachronism which will disappear. As honourable senators who have studied this matter will know, the party alliance system has become very blurred in the United States Senate for reasons which I have stated. United States senators will go right against their party policy when it comes to important matters concerning their own constituencies or merely matters which they think are important matters of conscience. That is the sort of House of review that a nation needs. It does not need a House of review such as the Senate used to be. I have studied past Hansards where the speeches made in the Senate were the same speeches made in the House of Representatives, almost word for word, and where the amendments that were brought up in the Senate were the same as those brought up in the House of Representatives. The Senate was purely a rubber stamp. If we are to evolve along healthy progressive lines, and if Australia is to be a modern democracy, this House must have absolute control over its own expenditure, as I said, within reasonable guidelines. But those guidelines must see the review powers of the Senate as being of some reasonable, rational value to the Australian community. I suggest that the comparison I made of the Senate's costs with the costs of royal commissions is very telling in that regard and might induce the Government to do something about the situation, in other words, to be more liberal and take a realistic view. The Democrats have discussed this matter and I speak with the authority of the members of our caucus. We believe that the Committee has not been unreasonable in its dealings with the Government over the matter of Senate funding-far from it. We believe that the Committee has tried to take a responsible and co-operative line in its dealings with the Government. However, as a general principle, the Democrats agree with the proposal which has been put to us by Estimates Committee A, which states quite categorically that the Senate should control its own expenditure. I believe that that proposal ought to be supported by the Senate. The Democrats and I are greatly worried by any suggestion, especially from any area in the Opposition, that the proposal ought to be watered down. I will deal with that matter a little more in a few minutes. We see Senator Walsh's present activities as being part of a Government attempt to muzzle the Senate by cutting back on its funding generally and its funding for committee work particularly. As I have said, that approach is completely unjustified, very wrong and goes very much against the normal tide of political events in this country that we should be following towards a better and more vocal democracy. As a group the Democrats warn the Government that if it, and particularly Senator Walsh, persists in these attempts, we will take a very critical view of next year's Estimates and will move whatever amendments are necessary to create what, in our view, would provide the funds and facilities to the Senate that would allow it to do its work in the most effective way. Senator Walsh —You are saying that your whims will be indulged but nobody else's will. Senator MASON —I am saying that this is an independent House of Parliament which ought to run its own affairs. Your Executive Government, as you know full well, does these things to the Senate for political reasons and allows the huge costs of royal commissions to conduct inquiries which could be conducted equally well here. That is what the Government is up to. Senator Walsh —Meanwhile the people leave them with no responsibility for raising revenue. We give $2,000 a day to Sydney QCs. Senator MASON —Senator Walsh should not bring up such hypocritical stuff with me. He knows he is being hypocritical. Leaving Senator Walsh, I should like to have a bit of a serve at the other side too. I will not be happy if the Liberals move to water down the Committee's view on this matter. We do not want a pale, wishy washy resolution of it, surely. We want something which will be effective and which will assert the Senate's rights to do what it wants, within responsible guidelines. Perhaps there are some members of the Liberal Party who feel that maybe that Party will become the Government again at some time and they would prefer to keep the Senate under their control. By watering down this proposal sufficiently, they would do that. Maybe they are among those members of the Liberal Party who are now planning for a Fraser Liberal-National government after an election in November or December 1987. Certainly, the Democrats believe that we are now seeing something of a rebirth of the Fraser phoenix from the ashes. I think that is abundantly clear. Those of us who were senators during the Fraser Government know only too well that Mr Fraser, as Prime Minister, adopted the principle that the best thing to do with the Democrats was to ignore the fact that we were here at all. He did not take our views into account and consult us. Of course, we were here and we increased our support steadily, while on the other hand the Fraser Government was abjectly defeated after a double dissolution, one of the issues of which was a Bill we stopped. We watch with great interest, purely as outside observers-we would not seek to interfere in Liberal Party matters; far from it-the tendencies within the Liberal Party. Mr Fraser is very much more in the news. I hear from the Melbourne business establishment that there could be some moves among the supporters of the Liberal Party for Malcolm Fraser to return. A return to Fraserism would make it all the more essential that the Senate take the sensible, responsible view of its own rights and positions and assert that view strongly. The time to do that is now. I suggest that the Senate take up this proposal from Estimates Committee A. I know that other senators will discuss this matter during the debate, and it is very important. It is something which concerns every Australian ultimately. Although it may seem to many Australians when they listen to us in the Senate that a lot of the time what we do is pretty fuzzy, and I can understand that, eventually when a Bill is passed it becomes law that is imposed on all Australians. Therefore the powers of the Senate, as in the environment legislation case I mentioned earlier, are crucial. Because of that, I hope other senators will take part in this debate. I hope they will support the Australian Democrats' view that anything we can do within responsible guidelines to assert the authority, independence and financial independence of the Senate is very well justified. Senator MacGIBBON(Queensland)(12.33) -The Senate is dealing cognately with three Bills which deal with total appropriation this year by the Government of about $69,000m. The important part of the estimates of expenditure that are presented is the bottom line, which shows that we will spend $5 billion more this year than we will take in in income. I believe that $5 billion is a very conservative estimate. Given the policies this Government is following, that amount will blow out, and it will probably blow out to $6 billion or $7 billion. There is a belief in Australia that deficits do not matter, but running a country is exactly the same as running a business or a family household. One has to earn the money to pay one's debts. Somehow or other, under the big spenders of the Australian Labor Party, the belief has been sold year after year, so that it is now entrenched in Australian folklore, that we can spend up big, it does not matter, there will never be a day of judgment. It did not matter in the past when Australia had a lot of money in the bank after good Liberal administration; but after three years of the incompetence of those opposite we do not have any money in the bank and money has to be found somewhere. Under the brilliance of the boy Treasurer, Mr Keating, we are spending $13m a day more than is coming in. That is roughly $100m a week. The only good thing that can be said about this 1985-86 Budget is that the projected deficit is a little lower than it was last year. Last year, according to the Treasury documents, the actual figure was $6,700m. The year before that, though, we had the record for Australia of $8 billion. I refer to the point that has often been made by Senator Walsh, and it was made this morning by Senator Maguire. I do not know whether it is done out of dishonesty or stupidity, but they talk about the losses-- Senator Messner —Both. Senator MacGIBBON —It might be both, as Senator Messner says. The biggest loss under the Fraser Government was $4.4 billion. That figure happens to be on page 396 of one of the documents brought down this year by Treasurer Keating. The year before that, the loss was $0.5 billion. The average loss for the seven Fraser years was around $2.5 billion, but in the three years of the Hawke socialist Government we have seen losses of $8 billion, $6.7 billion, and now, hopefully, we will have a loss of only $5 billion. The Australian public and the children of the Australian public have to pay off these debts. The very great problem we face is that the members of the Australian public do not realise that those debts are hanging like lead weights around their necks. They do not realise that this Government has been borrowing to the hilt overseas to pay for the debts it has run up, and that is the real killer. We now owe a huge amount of money to overseas bankers and to overseas institutions. We have simply lived beyond our means. We have spent money we do not have. We have not spent that money on building new Snowy Mountains hydro-electricity schemes or in developing any income-producing assets. We have spent that money on soft living. We have met our daily living expenses by borrowing. The Australian public does not realise this and it does not realise the extent of this $68 billion debt that hangs around our necks. Mr Deputy President, do you realise that only 15 years ago Australia owed $3.5 billion? Today, it owes $68 billion. That debt has risen by 43 per cent since this Government came to power. Roughly one-third of all our export earnings this year will go on paying the interest alone on overseas borrowings. On the projections the Department of the Treasury has made, working on an exchange rate of 70c to the United States dollar, it has been estimated that by the end of this financial year 43 per cent of our export earnings will be going just to pay interest-not to paying off the capital and not to paying off the borrowing-but just to pay the interest on what we have borrowed. As Senator Messner so eloquently said earlier this morning, the exchange rate is collapsing and although we are now paying one-third of our export earnings in interest and it is projected that we will be paying 43 per cent by the end of this financial year, we could be looking at a figure in excess of 50 per cent of all our export earnings going to pay off the profligacy of the Labor Party. That leads me to the crux of the matter. It is not so much the amount of money we have borrowed as our ability to repay it that is the real killer. Under the policies of this Government, and partly due to the overseas markets, our ability to repay is poor, and it is declining day by day. We have borrowed money for soft living and our ability to pay it off and to service it, to pay the interest on it, is diminishing day by day. How has all this come about? I guess that, historically, the true origins go right back to the Whitlam years when, like a bunch of kids getting into a sweet shop, members of that Government took off on a wild spending spree. They lacked the ability to control the unions. We had the notorious blowout of over 10 years ago-- Senator Messner —Who was President of the trade union movement then? Senator MacGIBBON —It was a fellow called Mr Hawke. I was just coming to the point of quoting what Mr Hawke's economically responsible views were. In August 1974, when Mr Hawke was President of the Australian Council of Trade Unions, after an approach had been made to him to moderate his wage claims for his greedy unions, he said: We know inflation is at 16 per cent and we believe it's quite likely to reach 20 per cent in the next two quarters. But we will not indulge in a trade-off in wages for some conjectural reduction in inflation. The legacy of inflation took unemployment figures from the 1.8 per cent that the Australian community had enjoyed under a succession of Liberal-National Party governments preceding the Hawke regime, up to the 9 to 9 1/2 per cent levels that we have seen since. The level has now fallen to about 8.8 per cent. Under the Fraser Government we had seven years of responsible policies-gradually winding back the debt position of Australia and gradually improving the competitiveness of Australian industry. That was blown out by the wild men of the Hawke Government because the Cabinet and the Caucus of the Hawke Government still contain the big spenders. They are unable to learn the lessons of history. They are unable to learn the history of all Labor administrations in Australia since Federation; that is, they are big spending, big borrowing, irresponsible governments in an economic sense. This Government is the biggest borrowing and the biggest spending government in Australia's peacetime history. I return to the point that there are chilling portents for Australia in the diminished ability we have to service the great debts that this Government has dumped upon the Australian people and the Australian economy. Despite what those on the other side say, the internal economy is not in good shape. The strategy of the Government has been to run a series of expansionist Budgets but, unfortunately, the rest of the world has no confidence in them. That is the real reason the exchange rate now is so disastrous. It is because the informed community overseas does not value the Australian dollar at much more than about US60c to US65c. I believe, regret- tably, that the dollar will go down even lower. To try to solve the problem the Government has had to follow a tight monetary policy. Australia now has the highest real interest rates since the Depression. The real interest rate, of course, is the difference between the inflation rate and the nominal rate that is charged. With the reduction in the inflation rate that has taken place through diminished economic activity, we now have these huge real interest rates that make it very difficult, if not impossible, to stay in business, let alone expand, and make it very difficult for the Australian taxpayer to buy a house. The situation will get worse because, as the dollar goes lower and lower, the Government will tighten the screws, as its socialist comrades have done in New Zealand, increasing interest rates as the Australian dollar goes down to lower and lower levels. What went wrong? Firstly, Labor overspent wildly. Secondly, the Government failed to make Australia competitive by freeing up the labour market and doing something to get down the extraordinarily high costs of labour. The third thing the Government did wrong was to seek a soft and easy option by floating the dollar through a covert devaluation. The fourth thing the Government did wrong was to provide no incentive at all to business, and I use the word `incentive' in its broadest sense. I have dealt with the overspending side of the Government's strategy-the $5 billion deficit and the average $6.5 billion deficit which it has been running since it got into power. The second point I raise is Australia's competitiveness in the manufacturing industry and the need to control labour costs. The cost of employing labour in Australia today is probably the highest in the world. We have very high wages, but it is not the wages that pose the real problem; it is all the add-ons that follow-workers compensation, holidays, statutory holidays, sick days and the superannuation that is now coming in through the unions, covertly, which is a deferred payment. The add-on cost to employing labour today would approach 50 per cent of the nominal weekly pay. Quite simply, we cannot afford it. We have to free it up. What we have to do in this country is not legislate for and support more and more union power, as this Government is committed to doing, but unleash the great human resources in Australia. An enormous number of people in Australia are prepared to work, and work efficiently, if only they can get to the work place. If they can get to a situation in which they are happy to work under terms which suit them and which, at the same time, suit an employer. What we have in Australia at present is a domination of the economy by the big unions. The big unions are running a monopoly on the supply of labour. This fits in very well with the doctrine of the Government, because its holy trinity is that we need big government, big business and big unions but we do not need small entrepreneurs, small business people and, above all, individuals because they just clutter up the scene which is dominated by the big three. I seek leave to continue my remarks later. Leave granted; debate adjourned. Motion (by Senator Walsh) agreed to: That, unless otherwise ordered, until 2 p.m. today, matters of public interest may be discussed by senators, provided that no senator shall speak for more than 15 minutes. Senator COLSTON(Queensland)(12.45) —Today I intend to raise a matter which is a Queensland State Government responsibility, not a Commonwealth one. I consider, as a senator for Queensland, that it would be remiss of me not to advise honourable senators and those listening to the broadcast of a disgraceful incident in a government school in Queensland last week. The fact that a vast amount of Commonwealth Government money finds its way to Queensland schools gives me an additional reason to air this matter. Government schools in Queensland, normally referred to as State schools, are established and administered under the provisions of the State Education Act and the regulations to that Act. The matter which I wish to raise today is concerned with the wearing of school uniforms. Nowhere in the Act is there any provision to compel students to be clothed in any special way. Despite the lack of compulsion, school uniforms are worn by a great number of students in Queensland's State schools, both primary and secondary. The wearing of a school uniform is not universally accepted by parents and students in Queensland. Nevertheless, there are concerted moves in many Queensland State schools to force students to wear uniforms even though principals and teachers do not have any legal power to enforce their own policy of a uniformed school. Detentions and other punishments are not unknown for those students who arrive at school without a uniform or with their uniform incomplete. A form of punishment which most recently has been used has been the exclusion of students from school photographs and extra-curricula activities. This authoritarian behaviour continues despite its complete illegality. I should indicate that it is not only my interpretation of the State Education Act and its regulations that students in Queensland's State schools may not be compelled to wear uniforms. For example, the State Minister for Education, in a letter to me in March this year, stated: There is no legal requirement that students who attend State schools should wear school uniform. In spite of this statement, a compulsion to wear uniforms is condoned, if not encouraged, by the State Minister for Education. For example, in last Saturday's Courier-Mail, Mr Powell was reported to have said: If the school has a uniform it is expected that children will wear it. That statement is in line with comments that Mr Powell has made to me by way of correspondence even though he recognises that there is no legal requirement. Let me at this stage refer to a particular incident which occurred in a Queensland State school. After I made some comments on this matter earlier this week I received numerous telephone calls which indicated that the incident to which I am about to refer was by no means an isolated event. Basically, the facts are that a teenage girl was not wearing the full school uniform, had a note from her mother outlining the reason for her daughter's mode of dress that day and was forced to strip and don an old second-hand uniform. The report in last Saturday's Courier Mail records the incident in detail and I therefore intend to read it to the Senate. The article, headed `Mothballs in ``filthy'' uniform started rash, mother claims', states: An epileptic schoolgirl said yesterday she was forced to strip to her underwear in an empty classroom on Thursday because she was not wearing full school uniform. Cherrie Grant, 14, a student of Kedron High School, said she was also forced to put on an outsized, `filthy, smelly', used uniform by a female teacher which caused an inflamed rash over the top of her body. Cherrie's mother, Mrs Cathy Platt, of Wavell Heights, said doctors who had examined her daughter at Royal Brisbane Hospital yesterday told her mothballs and bacteria in the old uniform had probably caused the rash. She said Cherrie had worn a new white T-shirt with her sports skirt to school on Thursday because she had recently outgrown her school T-shirt. She had written a covering note to explain this to teachers. According to Cherrie, the teacher, Miss Anne Stoodley, had ignored the note and insisted Cherrie take off her clothes in an empty classroom and put on an old second-hand uniform. Cherrie's request to change in the girl's lavatory was refused, she said. Cherrie said she felt embarrassed and humiliated all day by her appearance in the outsized tunic and had hidden during breaks to avoid being seen. Mrs Platt, who is a nurse, said she arrived home on Thursday afternoon to find Cherrie slumped in the bathroom, still wearing the old uniform. `I was very worried that she may have had a fit and swallowed her tongue. She was ill and incoherent and by the next morning had broken out in a red rash', she said. `Cherrie has never had any problems at the school and gets good grades. The T-shirt she was wearing was new and plain white. `She was forced to wear this filthy, smelly one around all day and all the way home.' Miss Stoodley said last night that she has instructed a student who was not properly attired to change into a school uniform. The uniform was supplied from a stock of spare uniforms held for that purpose. Miss Stoodley said she had acted in accordance with the school policies in the matter. The school's acting principal, Mr Chas Walker, yesterday defended Miss Stoodley and said he tried to ensure all students were reasonably dressed and tidy. He said the school's Parents and Citizens group fully supported his attitude to uniforms. `The school and the students' future jobs depend on the image of the students. I expect teachers to have reasonable control,' he said. He said Cherrie Grant was not a `troublemaker' at the school. The Education Minister, Mr Powell, confirmed last night that school uniforms had never been compulsory in Queensland. `But if the school has a uniform it is expected that children will wear it,' he said. He said Mrs Platt's claims would be investigated if a formal complaint was received in writing. So there we have it. This student had a note from her mother which was ignored; she was ordered to strip to her underwear by a female teacher; then she was forced to put on an ill-fitting, secondhand uniform which was filthy and smelly. The girl's mother deserves to be commended for taking the matter to the newspaper. To have made a formal complaint would have resulted in the sort of whitewash that inevitably follows such complaints in Queensland. The student herself is to be commended for allowing the story to be made public. Hopefully, her actions may prevent a similar incident from occurring to another student in future. On the other hand, the actions of the teacher and the acting principal who supported the action are to be condemned. But the real villain in the piece is the Minister for Education. He should have known that a parents and citizens association does not have the authority to enforce the wearing of uniforms. Individual P and Cs may make a decision to have a school uniform but their decision can in no way be binding on students. Mr Powell says that if a school has a uniform it is expected that children will wear it. What would he do if they do not comply-suspend them or gaol them? The truth is that Mr Powell can expect what he likes but neither he nor the teachers he directs have any power to enforce their school uniform expectations. In conclusion, I support a comment made by Mrs Beverley Galtos, the Secretary of the Queensland Council of Parents and Citizens Associations. Earlier this week she said that Mr Powell should issue a stern instruction to principals who punished students who did not conform. One would hope that a little tolerance for opposing points of view would be a personal quality of a Minister for Education. If that quality does exist, he should show some leadership and issue the type of instructions suggested by Mrs Galtos. Senator KILGARIFF(Northern Territory)(12.55) —Today's Dateline, the news digest prepared by the Commonwealth Parliamentary Library, refers to two matters relating to the Northern Territory which arose yesterday. The first was a statement at the Northern Australia Development Conference in Darwin by the Northern Territory Chief Minister, Mr Ian Tuxworth, who indicated that work would start on the Alice Springs-Darwin rail link in 1987, although formal agreements were yet to be signed. This is a very interesting concept of private enterprise and a combine which will finance it. However, it is not that matter that I wish to discuss today but the item which states: The Federal Treasury and Finance Department would be asked to look at grants to the Northern Territory to make it more responsible in spending taxpayers' money, according to Finance Minister Senator Peter Walsh. This statement has emanated from a question asked yesterday relating to Ayers Rock and recorded on page 1651 of the Senate Hansard. That has received some attention in the media, such as today's Australian and possibly other newspapers. In light of the statements that have been made and the tone in which some remarks have been made recently, I think some opportunity should be provided for some of those statements to be corrected. I have here a paper from the Northern Territory Executive entitled `Response to Senator Walsh's answer to Senator Bolkus's question in the Senate on 6 November 1985'. As time does not permit me to go through this paper, I seek leave to have it incorporated in Hansard. The DEPUTY PRESIDENT —Is leave granted? Senator Walsh —There were two documents. I agreed to have one incorporated, but not the other. Senator KILGARIFF —I think Senator Walsh agreed to the incorporation of the smaller one. Senator Walsh —I agreed to the incorporation of a four-page document, but not a 20-page one. Senator KILGARIFF —I seek leave to have incorporated the document of four pages. Leave granted. The document read as follows- Senator B. Kilgariff 7 November 1985 RESPONSE TO SENATOR WALSH'S ANSWER TO SENATOR BOLKUS'S QUESTION IN THE SENATE ON 6 NOVEMBER 1985 (a) The Casinos were acquired following the failure of Federal Hotels to honour a commitment to sell under an executed contract which provided for a price to be set by an average of 2 valuations. This occurred at a time when the N.T. Chief Minister had expert independent and still uncontested advice that Federal Hotels were experiencing severe, possibly catastrophic, financial problems and faced receivership. Subsequent events bore this prognosis out. The acquisition and the generous price paid saved Federal Hotels. (b) Failure of the Federal Treasurer to grant F.I.R.B. approval to the arrangements with the new operators, when the F.I.R.B. had itself recommended the approval forced the Northern Territory Government to settle with Federal at a price $2.5m higher than it would have paid but for the blatant political interference of Paul Keating. The delays also caused an interest overrun which the Territory was obliged to pay. In any event the N.T. Government is confident that these amounts will be recovered eventually. (c) The projections, which are yet uncontested, show that whilst gambling tax was less in the first few years, the gross return to the N.T. over a 15 year time span was in the order of $30m higher. (d) If these projections prove optimistic, the primary reason will lie in the failure of the Federal Government to honour its promise to build the Darwin Airport. Speaking of scandals-what about the $20m plus spent by the Commonwealth on the Darwin Airport redevelopment and now abandoned-$20m the price of a cheap political playback orchestrated by Senator Walsh himself. (iii) Guarantees and Contingent liabilities on other projects (Yulara/Sheratons). (a) The N.T. Government has performed a political rarity by disclosing the full extent of its difficulties with these projects. It has rationally discussed the source of the problems and has outlined its proposals to fix them up. (b) Look at page 4 and 5 of the statements-the majority of the assumptions upon which the commitment on Yulara and the Sheratons were based involved the Federal Government honouring its own commitments-airports at Darwin and Alice, facilities at Kakadu and Uluru, and some control (the Commonwealth's responsibility) over real interest rates. (c) The proposals in the statement, of Ian Tuxworth attached, to remedy these problems are already yielding success. The measures announced in the 1985 N.T. Budget include the Territory acquiring infrastructure at Yulara that in every other major development of this kind would be provided by Government-e.g. Government services, township, water, sewerage etc. (d) The panel of independent advisors has been working closely with the special N.T. Government task force called the Tourist Infrastructure Advisory Group and progress is solid with real optimism that a range of initiatives under discussion will dramatically reduce the N.T. Governments exposure. (e) The Sheraton Alice is open and operating-initial results are better than forecast and this together with optimum financial structuring will result in this development being successful. (f) In all this what is the Federal Government doing to help-nothing-non stop criticism, budget cuts, failure to provide vital and promised Commonwealth infrastructure upon which much of the N.T.'s tourist development strategy was based. Should not Senator Walsh be careful than an inquiry might well become one into Commonwealth deception, expenditure scandals, interference with F.I.R.B. (g) The N.T. has had considerable support from the financial and banking communities. Support for the N.T. is high because they trust the N.T. to sort out its own problems; if they have any concerns at all they are that Senator Walsh, in his moments of pain and madness, and his Labor colleagues are determined to undermine the N.T.'s efforts in this regard. (h) In any event, with courage, a commitment etc etc the N.T. would not have obtained such magnificent world class assets which are a credit to the N.T. and Australia and will be profitable. (iv) Senator Walsh talks about $300m. This figure assumes that all the guarantees will be called on the same day. Even a high school level examination of documents tabled in the Legislative Assembly show that such an acceleration of indebtedness is impossible. This is scandalous scare tactics, more productive of hatred and divisiveness than the N.T. Government's position on Uluru which Labor's own G.N.O.P. Poll showed 76% of Australian's supporting, and designed by Senator Walsh maliciously to denigrate the Northern Territory's financial reputation. (v) RE: The Uluru campaign advertising costs. It would cost a State the same or lesser amount to run the same campaign and it is intellectually dishonest to draw comparisons based on per capita calculations. It costs the N.T. more to run a campaign because of the inordinately high cost of airfares (which is a direct of morally bankrupt Commonwealth policy)-but then the Commonwealth should know this because it spent $400,000 or more on a party at Ayers Rock which less than a quarter of all Australians supported and which the Prime Minister and most of his senior Ministers were too embarrassed to attend. Senator Ryan was there sitting next to Mr Holding at the Press Conference but she looked pretty embarrassed and uncomfortable about it also. Regarding Senator Walsh's comments that the N.T. Government attempted to incite racial hatred and prejudice in Australia, it might well be observed that if the Territory sets the fire it is Walsh and the Federal Labor Government which pours petrol on it and no way can they talk about inciting racial hatred and prejudice. (vii) Finally, will Senator Walsh show his even handedness and also inquire into contingent liabilities in the States; will he control the fiscal irresponsibility of N.S.W. that subsidises unprofitable railways to the tune of $1 billion of taxpayers money per annum, or inquire into the Adelaide Hilton, or the North West Shelf project, or the scandal of Labor's own Bicentennial excesses, or the $20m wasted on Darwin Airport, cost overruns on the FA-18 and other defence purchases; the National Superannuation Debt, the level of Commonwealth overseas borrowings; the destruction of the Northern Territory's meat industry by blatant Commonwealth support for the B.L.F. of the meat industry, the A.M.I.E.U. and the incompetence of the Minister for Primary Industry, Mr Kerin. Senator Walsh has an open hatred for the N.T. which is affecting his judgment as a Minister of the Crown. Nonetheless if he wants to clean up what he calls fiscal irresponsibility there are some bigger houses to get in order first-or will he attack the Territory because it is not a State-would the other States tolerate this-definitely not. This is a State's rights issue. Senator KILGARIFF —I thank the Minister. I do not need to refer to the document. I believe that it answers the various matters that were raised in the answer to the question and I suggest that people who are interested in this matter should avail themselves of today's Hansard so that they may see the situation. I have before me another document, a statement to the Northern Territory Legislative Assembly by the Chief Minister, the Hon. Ian Tuxworth, about three weeks ago, I do not have the exact date. It concerns the Government commitment to tourist development projects in the Northern Territory. As honourable senators realise, various comments have been made within the Press and throughout Australia as to what is the true situation relating to Ayers Rock, Uluru, the Sheraton group, the Federal hotels and such. Many charges and counter-charges have been made against the previous Chief Minister and the present Chief Minister and I believe that, all in all, until this statement was made to the Northern Territory Legislative Assembly, many people did not understand the truth of the situation and what was happening. I believe that is still the case. The question that Senator Bolkus asked yesterday and the remarks that have been made in various places indicate that perhaps people do not understand the truth of the situation. This document, produced by the Chief Minister and tabled in the Northern Territory Legislative Assembly, gives a complete outline of all the ramifications of the matter and the negotiations that have taken place between various private enterprise groups, the Northern Territory Government, the Yulara authority and such. I believe that this statement is to be commended. It is a quite courageous statement because it opens up completely, from A to Z, all those matters that have occurred and it perhaps answers the criticisms. Perhaps there is room for criticism, but at least this document opens the book completely to all those who are interested in the true facts of the situation relating to tourist development projects in the Northern Territory. It refers to so many things. The consultants' studies, the feasibility studies for Yulara and the Sheraton investigations in Alice Springs and Darwin are conducted, it says, by well regarded professional accounting firms. It relates to all the various matters that make up the financial arrangements and how those financial arrangements were arrived at. It covers statistics and the investigations that took place to bring about all these negotiations which, I believe, will ultimately bring a successful conclusion to the whole situation. The aim of the tourist development projects in the Northern Territory is to have one million tourists visiting the Northern Territory annually, the target being the year 1994. Time does not permit me to go through this document completely, as we have only a limited time in which to speak in this debate. So that all honourable senators and people who read the Senate Hansard will have the opportunity to understand the matters that have received so much criticism from the media and others in the last few weeks, I seek leave to have this speech incorporated in Hansard. Leave not granted. Senator KILGARIFF —I regret that leave has not been granted, because this matter has been discussed throughout Australia, within the industry and within governments. Charges have been levelled at the Northern Territory Government, and so many things have been said in the Senate in which the characters and the names of people involved have been attacked. These people have not been given the opportunity of responding in this chamber, and they have had the courage to produce this open document, which covers all those matters that have been criticised. All those matters that have been criticised are dealt with in this document. I would have thought that, having in mind the seriousness of some of the charges that have been made, for the sake of the people within this Parliament and Australia generally having an adequate understanding of what has happened, the Government would allow the document to be incorporated in the Hansard. I do not think that is very much to ask. The Minister has said that it cannot be incorporated in Hansard, but he is one of those who have been attacking the people who are endeavouring to have this matter cleared up. Surely this is the time when the Federal Government should show some grace and allow the document to be incorporated in Hansard. I ask the Minister to reconsider the matter and, having in mind the explanation that I have given, to agree to having this document incorporated in Hansard. Leave not granted. Senator KILGARIFF —Mr Deputy President, I do not have to repeat myself, but this document will be available from my office for those who wish to understand the problems and the way in which the Territory is endeavouring to get out of them. At some stage, as much as I wish not to hold up honourable senators at a late hour, I will have to read it in an adjournment debate. To bring some continuity to what I have said and to the document that I have had incorporated in Hansard, I seek leave to table this document. Leave granted. Senator KILGARIFF —The Minister is most gracious in acceding to my request, and I thank him for it, but of course there is a difference between tabling a document and having it incorporated in Hansard. Whilst I, not begrudgingly, thank him for allowing me to table the document, I think it would have been much fairer if the matter could have been incorporated in Hansard. I would ask people before they listen to any more criticism of this matter relating to the Northern Territory, which has caused a lot of problems in the Territory because of the misreporting and misrepresentation, at least to look at the document that I have tabled. However, if that is not possible, I can assure them that there are many documents available from my office. Senator VIGOR(South Australia)(1.07) —I rise to outline some of the ruses used by some people in the Public Service who I believe want to turn freedom of information into freedom from information. In the last annual report on the Freedom of Information Act, covering the financial year 1983-84, the Attorney-General (Mr Lionel Bowen) wrote: . . . while some problems in administration have been identified, the Act is working well and achieving its stated purpose of extending as far as possible the right of the Australian community for access to information in the possession of the Australian Government. I would like to deal with some of these problems in administration. It is clear from a reading of the annual report that the figures given for the cost of freedom of information are highly inflated not to say spurious, and that we have no clear idea of where our money is being spent. At page 126 of the report it is revealed that the figure of 88 per cent used for on-costs is based on an extract from a Public Service Board publication. The footnote on that page points out that if a figure of 60 per cent were used-that is the more usual figure-the assessed cost of freedom of information legislation would be reduced from $17m to under $14.5m. So around 15 per cent of the stated cost has been arrived at just on the advice of the Public Service Board and the Department of Finance. Before we can calculate the on-costs, however, we need to know the staff years spent on freedom of information matters. The 1983-84 annual report tells us that agencies were required to submit estimates of this time. At page 124 of the report it goes on to say: No account was sought for any cost which an agency was able to absorb by greater use of existing resources, or a minor reallocation of official duties to meet FOI responsibilities. We are in fact being given figures that need not necessarily correspond with what actually happened in practice. Further, in paragraph 6.6.8 on page 136 of the annual report, we find the following comments about agencies: . . . they were not requested to provide, and therefore did not provide, separate details of the costs of all review and appeal procedures under the Act. Obviously, internal review procedures will cost a lot more, because more senior officers are involved. What does the record show about internal review? I think this is very significant. Of 501 requests for internal review in 1983-84, 222-nearly half-resulted in some concession by agencies to the applicants. We need to know the costs of these wrong decisions, and I ask the Government to give us this information. We need to know what agencies are doing to ensure that the officers who first deal with requests actually understand the spirit of the legislation. These officers should seek to make information available wherever possible instead of looking for costly excuses for not doing so. The next step up from the internal review procedure is an appeal to the Administrative Appeals Tribunal. There were 203 such appeals during 1983-84 plus 50 carried over from the previous year. In 46 cases the agency withdrew from the case by conceding the material. In a further six cases the agency decision was set aside or varied by the Administrative Appeals Tribunal. That means that there were 52 cases of clear errors. What other errors in treating requests were made by people who might have been more timorous in not following through the full appeals procedure? This is where a lot of the cost to the community comes from. In fact, this is where the real money that we are paying for the freedom of information is coming from-in the time of very senior personnel being involved in the review procedures because the original personnel were not sufficiently trained to understand or because there is some policy at a high level of not providing the information. Huge savings can surely be achieved in the operation of the Freedom of Information Act through departments and other bodies not clinging irrationally to material. I ask everyone here: Is this open government? I draw the Senate's attention to a letter I received from the Public Interest Advocacy Centre in Sydney pointing out an alarming trend towards secrecy. The Public Interest Advocacy Centre said that some departments were refusing to disclose documents until the applicants actually found themselves on the doorstep of the Administrative Appeals Tribunal. By that time the applicants had already incurred substantial costs and worry and the Department had spent a good deal of time on the particular case and had probably briefed legal counsel at substantial public expense. This game of bluff is, I believe, disgraceful when so many departments complain of being underresourced. With that letter, which came to me in May, the Public Interest Advocacy Centre enclosed a copy of a letter sent to the former Ombudsman complaining about the practice of pushing the public to the law or to appeal procedures. It gives specific examples. I seek leave to have that second letter incorporated in Hansard. Leave granted. The document read as follows- 3rd May 1985 Prof. Jack Richardson Commonwealth Ombudsman, Prudential Building, London Circuit, CANBERRA ACT 2600 Dear Professor, Re: Commonwealth Departments' Administration of Freedom of Information Act As you are intimately aware, the Public Interest Advocacy Centre has for some time been actively involved in conducting litigation on behalf of its clients under the Commonwealth Freedom of Information Act. We have developed a significant expertise in the area and have prepared publications and conducted seminars to assist both bureaucrats and members of the community to understand the benefits and operation of the legislation. It is becoming too clear in the conduct of our litigation that the attitudes adopted by a range of Commonwealth agencies to applications for documents under the Act are misguided and, to say the least, quite inconsistent with the spirit of the legislation. Whilst we can relate some examples, one of which we request you to formally investigate, we suggest these cases are evidence of a wider practice being adopted by agencies whereby they ultimately grant requests for documents, but not until proceedings have been commenced in the Administrative Appeals Tribunal seeking review of decisions refusing to disclose documents. Such a practice is, in our view, highly undesirable and only goes to maximise the costs of administering the legislation. It also seriously penalises applicants who are forced to either appeal against agencies' refusals to disclose documents or forego their rights to documents which may not, in law, be exempt under the Act, although agencies initially claim that they are. We acted in a matter on behalf of Ms Betty Hounslow, a community worker with the Marrickville Legal Centre, who sought access to three documents from the Department of Immigration and Ethnic Affairs. The conduct of that Department in non-compliance with the technical requirements of the legislation is a cause for some concern. The Department failed to comply with the deadlines imposed by the Act and once our client had appealed to the AAT, it failed to comply with its obligations under the Administrative Appeals Tribunal Act in providing S.37 statements within the required or indeed a reasonable period until the Tribunal made a direction requiring it to do so. Those are matters of perhaps minor concern compared with our complaint about the practice which we believe is of the greatest concern to the proper administration of the FOI legislation and the Department itself. As it turned out, at the hearing before the AAT on 10th April, 1985, the Department advised that it would provide to our client all of the documents sought by her, other than those parts of some 12 pages out of a total 226 pages. Our client had already conceded at a Directions Hearing on 31st January that she no longer sought access to the documents referred to in Clauses 17, 18 and 19 of the affidavit of Mr Ian Simmington of 15th January 1985, a copy of which we attach, marked ``A'' for your attention. Without canvassing in great detail the facts leading up to the hearing, until the 4th of April 1985, we were led to believe that the Department persisted in its refusal to disclose either of the two documents the subject of the application to the Trtibunal for review, namely the ``Grant of Resident Status Handbook-Review of Family Migration Policy-Admission of Spouses and Fiancees'' (the ``Spouse Paper'') and the ``Review of Australian Procedures for Determining Refugee Status'' (the ``DORS Review''). On the 4th of April 1985, we were advised by the Australian Government Solicitor who was then acting in the matter, that the Department had agreed to concede much of the two documents although it was unclear precisely what remained in issue. On the morning of the 10th of April 1985, having briefed Counsel and having summonsed a witness at considerable expense to our client, the Department advised that it was prepared to concede all of the two documents but for parts of pages referred to in clause 17-19 in the said affidavit of Mr Simmington along with some six other pages in respect of which it claimed, for the first time, an exemption under s.33 of the Freedom of Information Act. On the undertaking by Counsel for the Department that evidence was available to satisfy the exemption under s.33 (2), our client instructed us to withdraw her application in respect to those six pages. Whilst that satisfactorily disposes of the matter, insofar as our client has now been promised access to the great bulk of the documents she sought, the problem remains that she was promised access only after some ten months after her initial request and after having incurred considerable expense in doing so. In addition, the expense and time consumed by this legal aid office, which we and our clients consider to be of considerable value, as well as the time expended by a barrister whom we instructed, was significant. Of even greater concern are the resources devoted by the Department to resisting disclosing these documents until the date of the hearing. In our view the Department's conduct is particularly deserving of criticism in view of the fact that one of its own legal officers, Mr Russel Patrick, indicated in a Minute to his superiors in the Department that the document was largely innocuous and the claim for exemption was unlikely to succeed for the most part. We enclose a copy of this Minute which was provided with the ``T'' documents dated 21st December 1984, to which is attached the comment from one of Mr Patrick's senior officers whom we understand was the decisionmaker on the internal review decision, Mr Simmington, where it is said somewhat glibly: ``this is not legal judgment!''. We are aware of no change in law or practices affecting the Department which resulted in its complete turn around in respect to this request. We submit that the proceedings could have been avoided entirely had a reasonable consideration been given to the request in the first instance or at least on internal review. The absence of such reasonable consideration resulted in enormous expense not only to the parties but also to the AAT as a result of the Tribunal having to unnecessarily preside over what became, at the last minute, a non-issue. Whilst our client is concerned personally at the expense which she has incurred to date in the proceedings and which includes the cost of bringing Mr Patrick to Sydney from Canberra to appear as our witness both she and we are gravely concerned that this practice is common to Commonwealth Departments in their reactions to FOI requests. We are aware personally of two other AAT matters, Michael Rae v the Department of Arts, Heritage and Environment and Lianos v the Department of Social Security in which we were personally involved where similar ``settlements'' occurred on the ``door step'' of the Administrative Appeals Tribunal. In the former case, the Department conceded that all of the documents in issue should be disclosed the day before the hearing was to take place. In the latter case, the bulk of the documents in issue were provided only a day or so prior to the hearing. We are also aware of a matter which has received public attention, McGregor v Department of Defence where we understand from media reports that that Department agreed to disclose all of the documents only just prior to the date for hearing before the AAT. This suggests to us a pattern of behaviour on the part of Departments which is insidious. The practice would appear to be even more widespread according to the Freedom of Information Act Annual Report 1983-84, in which 46 of 253 applications made to the AAT are described as ``withdrawn after agencies conceded''. In our submission, this behaviour on the part of agencies resembles the conduct of commercial insurance companies which frequently seek to ``call plaintiffs' bluffs'' by forcing them to pursue their litigation until the commencement of the hearing before offering to settle matters. The effect of such conduct is to effectively discourage a great many litigants from proceeding with their claims for financial and/or emotional reasons. Precisely the same effect is achieved by Departments behaving in this fashion in respect to FOI requests. The inappropriateness of departments employing such delay tactics to resist disclosure of documents in this jurisdiction is self-evident. In our respectful submission, it is appropriate for your Office to conduct an investigation as to the extent of this practice with a view to persuading agencies to discontinue it. We by no means suggest that agencies should be discouraged from providing maximum access to documents where appropriate. However, if agencies ultimately decide to provide access to documents only after applications to the AAT have been lodged, there is nothing to prevent them from providing access when the initial request is made or on internal review. The costs to the public and the applicant can thereby readily be minimised. Implicit in the conduct of the Departments in the abovementioned matters is a clear failure to properly consider requests for documents initially and on internal review in accordance with the Act. To bring about greater compliance with the legislation as suggested, ought to, in our view, significantly reduce the costs to the Commonwealth for its administration. We note such costs were some $17 million for the year 1983/84. Your attention is drawn to chapter 6.6 ``Details of Costs Incurred in the FOI Annual Report'' which clearly demonstrates the enormous additional costs burden arising from applications for documents which proceed on review to the AAT. We would be happy to provide any further information or assist in your investigation in any manner which you may consider appropriate. We look forward to hearing from you at the earliest opportunity regarding your reactions to firstly, our clients complaint against the Department of Immigration and secondly, our proposal that you conduct a wider investigation as outlined above. Yours sincerely, Public Interest Advocacy Centre per: Mark Lynch Solicitor Encl. c.c. Auditor-General Registrar, Administrative Appeals Tribunal Senator VIGOR —I thank the Senate. I think I have established conclusively that when a Senate committee examines the Freedom of Information Act after the three years of operation as is provided for in that Act, it will have a considerable amount of work to do. This work will be necessary to disentangle the financial web and the mystique that has been set up around freedom of information. When we look at the total number of staff years needed to administer the freedom of information legislation in 1983-84 we see on page 340 of the last annual report that the average all-round cost of each staff year was $50,000. By back calculation to clear the on-costs component, we can see that the average salary for each staff year was $27,000. Once again we have clear evidence that senior officers are being dragged in far too often. Some departments had really noticeable problems. Both the National Capital Development Commission and the former Department of Territories and Local Government had staff costs much higher than the average figures. For instance, the Attorney-General's Department and the Department of Territories and Local Government spent virtually the same number of staff years, yet the Attorney-General's Department had salary costs $130,000 lower than those of the Department of Territories and Local Government. I believe that this must show some problem of administration. Otherwise, what does it show? Maybe the Government can answer us. Agencies, I believe, should be made to justify their performance publicly. That is part of what open government is about. Not all time spent on freedom of information matters is spent on the processing of requests. Allowing for that, and also for the variation in complexity of requests, I believe that an interesting measure of the performance of each department is given by the average cost per request. Departments such as Veterans' Affairs which apparently have a genuine freedom of information outlook and handle many requests to look at individual files have required $213 per request and, mind you, that includes the artificially inflated on-cost factor of 88 per cent proposed by the Finance Department and the Public Service Board. However, other departments obviously believe much more in secrecy. The Commissioner of Taxation and the Departments of Social Security, Defence and Immigration and Ethnic Affairs averaged around $1,000 per request or less. These were next in cost. At the other end of the scale quite a few agencies-I could name them but they would probably recognise themselves-came in at over $5,000 per request. Even allowing for vexatious and voluminous requests, that is an enormous disparity over the whole output of a given department. I believe that either some of these estimates are inaccurate or there are serious structural and attitudinal problems that have to be sorted out within those departments. These problems will not be tackled by increasing fees and generally discouraging people from making requests. They will be solved only by looking at the absolute structure of the departments and by Ministers getting to know what is going on within their departments. In fact, what we have to do is overcome the Yes Minister syndrome. Some of the evidence emerging from the most recent practices is alarming. One example drawn to my attention was that of the Department of the Prime Minister and Cabinet in releasing a document with 85 per cent of its content blanked out. The Privacy Committee in New South Wales had sought information about the proposed national identification system. It received a useless document which ran to 202 pages and cost over $100. I seek leave to have incorporated in Hansard the short account of this matter that appeared in the Sydney Morning Herald of 16 September 1985. Leave granted. The document read as follows- FOR $100, YOU GET 15PC OF WHAT YOU ASKED FOR The NSW Privacy Committee is not impressed. It has just paid more than $100 for a request under the Freedom of Information Act concerning documents about the proposed national identification system. Of the 202 pages it received under the Act, about 85 per cent of the material was blacked out. Mr Jim Nolan, the committee's executive member, said last night that the actions of the Department of the Prime Minister and Cabinet in censoring most of the material had confirmed the committee's worst fears. His statement comes on the eve of tomorrow's full meeting of the Labor Caucus which is expected to decide the issue. ``All we can conclude is that our initial suspicion that there was not a great deal of substance in the proposal has been confirmed,'' Mr Nolan said. He said that of the readable text not deleted under exemptions in the FoI Act most of it was ``salutations'' and ``bland'' introductory paragraphs. ROSS DUNN Senator VIGOR —I thank the Senate. That document, according to the fee schedules which operate, would have taken more than three hours to locate and retrieve. Recently I have read of requests that caused demands for deposits of hundreds of dollars. Agencies are allowed to charge a flat $20 administrative fee and $30 per hour for time spent. To quote the regulations, this is for `searching for or retrieving the document'. The agencies are not supposed to charge for time spent examining the document before release. We have the case of the Wilderness Society being quoted $980 to obtain further documents detailing the use of rainforest timbers in the new Parliament House. We are talking about 32 staff hours for search and retrieval. If that is happening there is a massive problem in the agency's filing system. Agencies should not pass on their inefficiencies through exorbitant costs to the public of Australia. However, that is another matter which I hope to examine more closely when the freedom of information legislation is reviewed. I have shown that the claims for freedom of information administration are quite rubbery and that the agencies are not yet accountable for their attitude and performance. I close by drawing the Senate's attention to an answer I received during the Estimates committee hearings. The Government spent over $20m on just plain advertising between 1 October 1984 and 30 June 1985, and only a rubbery $17m on FOI over a longer period. I believe that this is a much more useful service to the public in that it actually gives people the information they want rather than information they do not want. If the Government is fair dinkum about open government, if the Public Service wants to be a real Public Service, reviewable by the public and by the people of Australia, these problems must be solved. All the costs of FOI need to be justified openly and the departments organised more effectively. Senator TOWNLEY(Tasmania)(1.21) —Today I want to address the Senate on a matter that I think is of increasing national importance. It is one on which several other people have spoken recently. Of late the Government has told the people of Australia that the financial house is in order. Many of my colleagues, even over the last few hours, have pointed out that there are many weak points in the way this country is going. I do not have to elaborate on their criticisms. I want once again to point out the long term damage that is being done to this country by this Government. It is because of our deficit that this damage is being done. I think to describe our deficit as a monster would not be going too far. Several indicators are available which display the present Government's considerable additions to the nation's expenditure, to the deficit and to the public debt. There is no doubt that we are experiencing a big spending Labor Administration and, as I said, we have heard about that already today. But there is an aspect of our Government's behaviour which most alarms me. It is the apparent indifference to when and how the extravagant expenditure by this Government will be faced up to and when it will be repaid. I argue, and I have said on several occasions, that a close examination of our national debt is needed. I am sure that such an examination would clearly display the Government's weak performance concerning the finance of our public debt. I have with me some figures which indicate the magnitude of our debt problem. One has only to look at a couple of them to see just what is happening with the amount of public debt interest that is having to be paid. Last year it was predicted that the public debt interest would be $5,601m. When the figures eventually came in by the end of the year it was $55m more than that. There was quite an error in the estimates. Let us look at the report of the Minister for Finance (Senator Walsh) on the Forward Estimates of Budget outlays and staffing which was presented in May this year. In May the Government predicted that the public debt interest that would have to be paid to people both within and without Australia was $6,467m. When the Budget came out in August the figure was $300m more than that. In other words, the interest payments, which were already bad, had increased by a considerable amount in the short time between the printing of this document in May 1985 and when the Budget figures were brought out in August. What is alarming is the way interest payments have been growing. In the 1974-75 Budget 4.4 per cent of the outlays was to be spent on public debt interest. In the 1987-88 Budget, conservatively-the word `conservatively' is stated in the Forward Estimates of the Minister for Finance-almost 11 per cent of Budget outlays is projected to be taken in interest payments on the public debt. That is a frightening figure. If we draw a graph of the figures that are available and include the Forward Estimates from the Minister for Finance's own Department, we find that there tends to be an exponential increase in interest payments. Anybody who knows anything about mathematics knows that, if we get into an exponential increase in one area when other areas are staying stationary, we are looking for long term trouble. For instance, defence expenditure represented 8.4 per cent of the Budget in 1974-75 and is expected to represent just over 10 per cent of the 1987-88 Estimates. Interest on the public debt is clearly pushing its way into a large proportion of our Budget expenditure. This year for the first time it is more than we are spending on defence. We are now spending more on public debt interest than we are spending on health, education or defence. It is something that I believe the public should be made aware of. It is a complicated matter, but it is something that I note more of my colleagues are starting to take note of. I hope that eventually more Government members will take note and acknowledge just what a serious situation this country is getting into. It is my feeling that the Government is trying to ignore this situation. It is certainly not admitting that things are as bad as the international monetary people obviously understand them to be. Back in May Senator Walsh, when answering a question by Senator Maguire, said: . . . it follows inevitably that when an economy is in the depths of recession, as this economy was when this Government came to office, it cannot be turned around overnight. I think the Minister for Finance was then clearly avoiding the importance of the debt issue. If we have experienced the recovery that this Government keeps talking about-every day it seems to talk about the wonderful recovery that it says is going on-why has there been no improvement in our liabilities, particularly in this area of the public debt? As I indicated earlier the interest payments are increasing whether or not that local recovery is a matter of fact, and I do not really think it is a matter of fact. The Minister refuses to explain to the people of Australia why this Government is unable to reverse the public debt escalation. Earlier this year I pointed out to the Minister the sad fact that Australia already has a debt per head which is greater than that of such economically disastrous countries as Argentina. We are more in debt per head than Argentina, Brazil, Mexico, Poland and Chile. They are some of the very bad economic countries of this world, the ones that have a very low rating. I just wonder how long it will be before our international banking rating is reduced. Senator Kilgariff —We are down the drain. Senator TOWNLEY —I think that, as Senator Kilgariff says, this country is heading down the drain. I believe that we are economically in a very serious situation. If for any reason the prices of our exports collapse or we cannot get them out of the country because of a strike or something of that nature, I can see a very bleak future for Australia. Earlier this year, when I pointed our indebtedness figures out to the Minister, he responded by avoiding my question. By his actions he indicated that the Government seems to take no worry or responsibility for the public debt's future. I believe there is reason to believe from my questioning of Senator Walsh that the Minister has a fairly weak grasp of the economic consequences of such a large public debt. He tried to suggest that the debt is acceptable for two reasons. He said first that the debt is mainly internally financed-he seemed to think that was a very good thing-and, secondly, that internal financing has no effect other than to restrict the options that government has available to it in the spending area. I agree with the Minister that most of the public debt is internally financed. However, the external financing of the public debt is becoming increasingly important, particularly with the way the dollar is going. Interest payments are increasing as a debit on the current account, and by the Minister's own figures-they are conservative figures, as I said-they are going to get worse. It is clear from the trends that our public debt interest repayments will continue to put the current account in deficit by more and more. Economic theory suggests that, everything being equal, such a deficit will continue to keep our dollar down and force it down further while it is floating. We all know that a lower dollar means a lower standard of living now and, more importantly, in the future when the public debt interest repayments will go up as they have been predicted to do. The future of our dollar is grim. When we consider interest repayments with a floating dollar it is possible to predict a multiplier effect because a lower dollar means that we have got to pay more interest on international loans, so loan repayments must continue to increase at an increasing rate when our debt payment contracts are made in foreign currencies and our dollar continues to fall. The result of all this, as I have said, is a lower standard of living for all Australians. If honourable senators want a good example of how we are being affected, I take the example of somebody who has saved up all his life to have one overseas trip. He now finds that whereas a year or so ago he would get $US1.12 for $A1, today I think he would get something like 66c-almost half. So wherever in the world Australians go they will have to pay approximately twice as much as they would have done. So many people are wondering whether they can afford that overseas trip that they may have wanted to take. That is just one example of how our standard of living goes down the drain when the dollar goes down the drain. I believe that the Australian Labor Party, as the present government of Australia, should be ashamed that it is selling Australia's future down the drain and also that, as it appears, it is unwilling to acknowledge the problem. A look at our poor Tasman neighbours, New Zealand, will show us how bad things are for Australia with respect to our public debt. New Zealand's public debt interest as a percentage of its total government outlays in the year ending March 1984 stood at about 11.5 per cent. The Finance Minister's own conservative Forward Estimates put Australia's public debt as a percentage of total outlays at nearly 11 per cent by 1987-88, and I would say that it will amount to more than that 11 per cent. When New Zealand public debt hit the 11 per cent mark, several of the United States lending institutions downgraded its credit rating. I think that we can predict such a downgrading for this country in the near future. The effects of the downgrading will be immediate. The Australian Financial Review pointed out last year when New Zealand was downgraded: Since most major US lending institutions would bid for tenders only from AAA or AA plus rated countries, Moody's downgrading (of New Zealand) was likely to restrict the range of lenders and result in a slightly higher rate. Therefore Australia will be able to find credit only at a higher interest price and we will probably have access to smaller amounts of credit at a time when we need more. It is clear from all this that we must reduce our government spending, and reduce it now before, like New Zealand, our living standard has to decline in order to pay for the excesses of government spending. This Government just has to recognise that its responsibility to the future generations of Australia is paramount and that it must reduce spending. It must curb its irresponsible spending and reduce it in a significant way. That means that it must reduce the real deficit of this nation, not by shaving the edges off small amounts but by really cutting into the actual deficit that otherwise, as I have said, will reduce the living standard of every Australian and make it a lot harder for the young people of this country ever to enjoy a standard of living such as we have. Sitting suspended from 1.35 to 2 p.m. Senator CHANEY —I refer the Minister representing the Treasurer to his answer to my question yesterday when he made the ludicrous assertion that a major factor in the decline of the Australian dollar over the last week was the movement in wages in 1981 and the inflation rate inherited by the present Government. In view of the new all-time low of the Australian dollar established in the last 24 hours, is the Minister seriously suggesting that no policies or actions of the current Government are in any way responsible for the continuing currency crisis? If he does concede some responsibility for the present situation, what actions or policies have contributed to the drop in the dollar? Senator WALSH —What I said yesterday was that the wages explosion engineered by the discredited former Treasurer was a major factor in the destruction of the international competitiveness of the Australian economy and therefore in the present perceived weakness of the Australian dollar-perceived by some people. Another major factor which I should have mentioned yesterday and neglected to do so was the record current account deficit over which the discredited former Treasurer presided in 1981-82 when the current account deficit equalled 6.1 per cent of gross domestic product; 6.1 per cent of GDP was the current account deficit over which the discredited former Treasurer presided during his last full year as Treasurer. It is ironic to hear humbugs in the Opposition asserting that the present current account deficit, which is substantially lower than the record 6.1 per cent over which Mr Howard presided, is, first, catastrophic and, secondly, unprecedented. It is very substantially lower than the record current account deficit over which the discredited former Treasurer presided in 1981-82. Senator Chaney asked what the Government intends to do. The Government made the decision in 1983 to float the Australian dollar. Some people may argue that the decision was unwise; some certainly argued it at the time, although some of those have changed their minds rather remarkably since, and indeed some of those who were opposed at the time have suggested since that they were in favour of it and indeed tried to claim the credit for it. One of the few things to the credit of the discredited former Treasurer was that when the decision to float the dollar was announced in December 1983, he endorsed that decision. Having made that decision to float the dollar, the Government intends to stick with the decision to float the Australian dollar and allow the exchange rate to be set by market forces, even though some of those market forces, some people would argue, including many members of the Opposition evidently, that those market forces are ill-informed about what is happening inside Australia. It is ironic that the apostles of the free market who populate the Opposition benches shriek and recoil in horror whenever the free market is given the opportunity to operate. Senator CHANEY —If I may ask a supplementary question, may I point out to the Minister by way of preface that the trade-weighted index for the dollar was 80.8 points in January and by Tuesday was down to 60.3 points, which seems to be a rather remarkable fall. I again ask the Minister: Is he suggesting that there are no policies or actions of the current Government which are in any way responsible for the continuing decline in the Australian dollar? I did not ask him the question that he purported to answer. I asked him: Is he saying that any of the policies are relevant to that decline? Senator WALSH —There are time lags in the currency markets, and there are also animal spirits running around. If Senator Chaney wants to quote-and I think his figures are correct-what the trade-weighted index was in the early months of this year, at 80 or thereabouts, and point out that it has now declined by 20, that is certainly a decline in the order of 25 per cent and is a very major decline. There is nothing that has happened in the Australian economy in that period to justify a fall of that magnitude. Indeed, even when this Government came into office and we had an inflation rate in double figures, due principally to the mismanagement of the discredited former Treasurer and the flirtation with a deregulated labour market and collective bargaining, which he decided to embark upon in the middle of 1981 and which touched off a wages explosion of 11 per cent in 1981 and 14 per cent in 1982, even at that time when we had an inflation rate of above 11 per cent, the Australian-United States dollar exchange rate was somewhere in the nineties. If one looks at the matter dispassionately, it is clear that the 80 trade-weighted index to which Senator Chaney referred or the 90 Australian-United States exchange rate or 90-plus which prevailed throughout most of 1983, was higher than the objective situation justified. Likewise, a dispassionate examination will reveal that the present figures are lower than an objective assessment of the situation justifies. There are lags; there are also from time to time irrationalities in international currency markets. A government, I suppose, could make a decision that it will attempt to control the exchange rates through direct interventions, but this Government made the decision in December 1983 that the dollar would float. Senator ROBERTSON —My question is directed to the Minister representing the Prime Minister. The Minister no doubt has examined the latest unemployment figures. Do they indicate that the Government's policies in this area are on the right track? Senator Chipp —I bet that comes as a surprise to you. Senator BUTTON —It does come as a bit of a surprise to me. I thought that Senator Sir John Carrick, who takes such an interest in these matters, might have asked a question; instead it came from Senator Robertson. The October labour force statistics were released at 10.30 this morning. For the first time since September 1982-that is, in the last three years-the unemployment rate has dropped below 8 per cent. It is now 7.8 per cent, having broken through the 8 per cent barrier. It is a significant achievement and deserves to be welcomed by all Australians. Briefly, unemployment dropped by 28,300 during the month of October. It is now 2.6 percentage points below the peak that it attained in September 1983-some six months after the end of the wage freeze which has been claimed by some Opposition spokesmen as a factor very relevant to the employment situation. Although clearly there is a long way to go, the breaking of the 8 per cent barrier is a significant landmark in the recovery of the labour market. I should also add that there was more good news on youth unemployment. Unemployment dropped by 9,100 during October and is now at its lowest level for 3 1/2 years. The unemployment rate among teenagers is down to 20.8 per cent from 21.6 per cent in September. I remind honourable senators that two years previously it was about 28 per cent. That is not good enough, of course; it is not anything to be satisfied about, but it is again on the right track. There is clear evidence of a reversal in the long term decline in teenage job opportunities. Senator Michael Baume —Of course, employment fell. Senator BUTTON —As Senator Michael Baume reminds me by way of interjection, a disappointing aspect of the figures for this last month was the fall in employment of 26,600. That is not particularly surprising, given the very large increase of 56,000 in the month of September. If one looks at the figures over the past few months, one sees that pattern of fluctuation. That means the participation rate declined by 0.1 or 0.2 of a percentage point. Senator Chaney —It was 0.5. Senator BUTTON —A figure of 0.5. Senator Chaney —That is a very large drop. Senator BUTTON —No, it is not a large drop, if one considers the fluctuations over the past two or three years. Despite monthly variations in the figures, the employment growth trend remains strong, employment having increased by 76,000 this financial year, which means we are well on target in respect of the Budget projection of 180,000 new jobs in 1985-86. Furthermore, the Government remains on target for its goal of 500,000 new jobs in its first three years of office. I hope these figures will be welcome to all honourable senators as being indicative of a trend which the Government welcomes and which has been taking place for some time. With employment, as with other matters, I simply make the point that a lot of the issues related to this are fixed in past policies of previous governments. There has been talk in the Senate this morning about these matters, but if one looks at a number of structural issues in the Australian economy one finds that they date back over a long time and are of concern in respect of employment as well as the matters to which Senator Walsh has referred to in answers to questions today. Senator MESSNER —My question is directed to the Minister representing the Treasurer. In light of the continuing free fall in the value of the Australian dollar as financial markets understand and pass judgment on the straitjacket of the accord with the trade union movement, will the Government seek to vary its agreement with the Australian Council of Trade Unions in the interests of a more productive arrangement between employers and employees? As the Minister rightly pointed out yesterday, the Opposition supports a floating exchange rate, but does he agree that a free currency market cannot operate to maximum effectiveness and economic advantage unless the labour market is free of the inflexibility imposed upon it by the accord? Senator WALSH —Senator Messner has been using words like `free', `flexible' and `inflexible' with respect to the labour market. I think what he means by `free' is a deregulated labour market-that is, one in which there is no centralised wage fixing mechanism-and he assumes that that will lead to more flexible wage rates. Indeed, there is some historical evidence to support that conclusion, providing one does not stipulate whether one means flexibility upwards or downwards. As I said earlier, when the discredited former Treasurer had his first flirtation with a deregulated and decentralised labour market and allowed collective bargaining, and commended that as the appropriate wages policy to follow, he did it at a time of more moderate, though short-lived, economic growth. Certainly it produced wage flexibility; wages went up 11 per cent in 1981 and 14 per cent in 1982. That was the sort of flexibility that that free labour market produced. Unfortunately, despite the evidence of their own experience and despite evidence from the United States and the United Kingdom, the Liberals cling to the illusion that a free labour market-that is, one without any centralised wage fixing mechanism-will either cause money wages to fall or cause them to increase by less than they would otherwise have done. People may believe whatever they like, but the evidence from Australia and from abroad, even in times of economic growth significantly lower than that which Australia has experienced in the past 2 1/2 years, is that that sort of freedom does not necessarily produce a lower growth in money wages. Indeed, in our case, with significantly lower and less sustained rates of economic growth in 1981-82, it produced a much higher rate of wages growth. In the rhetoric with which he introduced his question, Senator Messner also made some reference to financial markets understanding Australia. He assumed that the financial markets understand what is going on in Australia right now whereas at some point in the past they did not. Since the Opposition has put forward the proposition-I dare say it will restate it ad nauseam during the matter of public importance debate later today-that the 3.8 per cent national wage case judgment announced at the beginning of this week has precipitated a significant decline in the international traded value of the Australian dollar, the financial markets concerned certainly did not understand Australia very well if the Opposition's hypothesis and diagnosis are correct. Since 19 September at least, anybody who knew anything about the Australian economy would have known that a wage increase of that magnitude would be awarded. Therefore, there should have been no surprise and any rational reaction to that decision should have taken place seven weeks ago and not this week. Senator ROBERT RAY —Under standing order 98, I direct my question to Senator Macklin as the sponsor of the Constitution Alteration (Democratic Elections) Bill 1985. I ask Senator Macklin: If, as a result of his legislation, a constitutional amendment were carried, would it have the effect of eliminating such blatant malapportionment and gerrymandering as occurred in the recent Queensland redistribution? Secondly, would such a constitutional change have inhibited in any way recent redistributions which have occurred in Victoria, South Australia, New South Wales and nationally? Finally, would such a constitutional change prohibit placing a community in an electorate with which it has no analogous boundaries, such as occurred with the Wujai Wujai Aboriginal community in the recent Queensland redistribution? Senator MACKLIN —The Constitution Alteration (Democratic Elections) Bill, which I introduced on 17 April this year, is aimed at providing two things: One is a guaranteed right to vote and the second is that every citizen's vote should be treated equally. With regard to the Queensland redistribution, the method occasioned if a referendum under my Bill were carried by a majority of people in the majority of the States would be that an objection would be lodged with the appropriate court and there would be a court hearing as to whether it met the constitutional requirements. I believe that in any such court hearing the blatant operation that has just occurred in Queensland would undoubtedly fail any test and hence there would be a requirement passed by the court back to Queensland to redraw the boundaries in keeping with the Constitution. The second part of Senator Ray's question deals with recent redistributions in three States-Victoria, South Australia and New South Wales-and, of course, the Commonwealth redistribution. I am unfamiliar with the details of those and I have only looked at the State redistributions in general terms. I have looked in more detail recently at the New South Wales redistribution with regard to what has happened in Queensland. Each of the State redistributions could have some objections raised to them but I doubt whether any of those objectives could be sustained in court since each redistribution was done by a relatively similar method and each has been done at a 10 per cent variation or less. I believe that any court would uphold that as being a reasonable redistribution. Of course honourable senators know of the Commonwealth redistribution. I am sure that all will claim it as being one of the fairest redistributions in Australia's history. Almost every Commonwealth redistribution has been fair; and it is to the credit of the Commonwealth Parliament, whether it be with a Liberal-National Party government or a Labor government, that there have been fair redistributions and fair electoral laws. The third part of the question refers to the situation in the particular part of the State electorate of Barron River and the Aboriginal community of Wujai Wujai which probably voted, in local polling booth terms at least, about 60 per cent for the Labor Party. This has been made into a small island all on its own and it has no boundary connecting it to the electorate of Cook. The Cook electorate is a Labor electorate, so this is a fairly interesting and blatant example of rorting the system of which everyone in this country should be ashamed. Recently I was overseas at the European Parliament and was bailed up by some person who, when I was talking about South Africa, mentioned to me: `Well, you can't talk. What about the State of Queensland?' I did not tell him that I was a senator from Queensland because at that point I was ashamed to do so. I took the course, as I always do when I am overseas, of not criticising any part of Australia and I managed to turn the conversation on the subject to a different point. However, I do not believe that we can continue with some part of the Commonwealth suffering under such rorted democratic laws. Senator SHEIL —My question is addressed to the Minister representing the Treasurer. Does the Minister stand by his comments on Tuesday about over-indulgences in alcohol at business lunches? Has he seen the comments of Mr David Abba of the Sydney Chamber of Commerce describing his comments as `unfair, innaccurate and uncalled for?' Is he aware that in the same report in today's Daily Telegraph a spokesman for one of his ministerial colleagues is quoted as saying that the Minister `went right over the top' in his comments? Has he established which of his colleagues is so concerned? Will he now apologise to the vast majority of businessmen who do not conduct their lunches in the manner referred to by the Minister? Senator WALSH —Let me deal with the last part of the question first. I have seen that report in the Daily Telegraph. With regard to the anonymous alleged spokesman for one of my Cabinet colleagues, given the record for accuracy and journalistic ethics of the Murdoch Press in general and the Daily Telegraph in particular, I suspect that that is pure fabrication. If it is not, I invite the couple of journalists who have their byline on the story to name the alleged person. With regard to my comments the other day, yes, I do stand by them. They were reported not entirely accurately; at least the context was not accurate. I drew attention to the advertisement inserted by Business against Non-Deductibility, the acronym for which is BAND, which said, among other things, that there would be catastrophic losses of employment in the restaurant industry and that, of course, would not stop there, that there would also be catastrophic losses of employment in the laundry industry, the wineries and the breweries. So it was BAND which drew attention to the alleged alcoholic nature of the business lunch, not me. If Mr Abba and the Chamber of Commerce are unhappy about the connection which has been drawn between the business lunch and a high consumption of alcohol, I suggest that Mr Abba repudiate those advertisements which have been inserted by that pressure group. Senator REYNOLDS —Is the Minister representing the Attorney-General aware that, because there has been extensive community reaction against the Queensland National Party's blatant gerrymander as referred to earlier, there is already speculation that civil liberty groups and others may in fact be forced to appeal to the United Nations because the Australian Constitution is not able to safeguard democratic elections in all States? How can the Federal Government maintain its credibility as a democracy when Queensland is prepared to disfranchise up to 65 per cent of voters in that State? Senator GARETH EVANS —As Senator Reynolds's question implies, and as Senator Macklin made explicit in his answer, it is quite evident that the malpractice in the State of Queensland does nothing for Australia's international reputation. Therefore, it is not surprising that reports should now emerge of reaction from not only the National Party of Australia's political opponents, which of course in Queensland include the Liberal Party of Australia, but also from a range of apolitical sources, including civil liberty groups, political scientists, the media, concerned citizens-- Senator Chipp —And churches. Senator GARETH EVANS —I include churches. It is not surprising that, in addition to all of that, there is now talk of action being taken in international forums. At the moment there are not many such avenues available. The only one even technically available is through the United Nations Economic and Social Council resolution No. 1503 which does provide a more or less informal mechanism whereby complaints can be made to the United Nations and considered on a confidential basis. I guess it would be open to civil liberty organisations to use this process, if they wish. The more obvious route by which to raise a question of a blatant and manifest breach of Article 25 of the International Covenant on Civil and Political Rights, such as the Queensland exercise seems to be, would be in the context of the machinery created under the United Nations Human Rights Committee which allows for concerned citizens, if they have exhausted available domestic remedies, to make an appeal to that body. That mechanism is available only once a country has become a party to the Optional Protocol to the International Covenant on Civil and Political Rights. I simply mention that that is not the case with Australia at the moment, but it is a course of action to which the Government is giving and has for some considerable time given close consideration. Needless to say, the only State which has so far strongly objected to Australia's becoming a party to that optional protocol is, would you believe, the State of Queensland. Senator JESSOP —My question is directed to the Minister representing the Minister for Foreign Affairs. Has he noted this week's Bulletin which contains an article on Mr Ali Kazak which states that Mr Kazak was appointed Palestine Liberation Organisation representative for Australia and the Pacific in 1981? Also repeated in the article is Mr Kazak's threatening claim that Mr Hawke's emotional ties to Israel are putting Australia and Australians at risk. He further suggests that the Israelis may bring Middle East terrorism to Australia. Having regard to the Minister's reply to my question on 15 October in which the Minister said that the Government did not recognise Mr Kazak as a PLO representative and that his views did not reflect official PLO thinking, can the Minister say, firstly, who appointed Mr Kazak as Australia's PLO representative in 1981? Secondly, which official PLO sources has the Government been in contact with which enabled the Minister to declare that Mr Kazak's views do not reflect official PLO thinking? Lastly, by what logic can Mr Kazak suggest that the Israelis may bring Middle East terrorists to Australia, which recognises Israel's right to exist? Senator GARETH EVANS —I think the starting point should be my repetition of the proposition I advanced to Senator Jessop the other day but, with Senator Jessop being Senator Jessop, it takes a while to sink in. Mr Kazak is an Australian citizen and has in fact been a resident of this country for something over 15 years. Any views expressed by him are those of an Australian citizen. Although he talks about Palestinian matters, he is not recognised by this Government as a representative of the Palestine Liberation Organisation, nor does the Government recognise his Palestine Information Office as in any sense a PLO office. I also repeat what I said in the chamber the other day that the Australian Government has received no suggestions from any official PLO sources-as I understand it, we have not sought information from PLO sources on this basis but we are certainly able to receive information if such information exists-that the views expressed by Mr Kazak about the threats faced by Australian citizens abroad reflect official PLO thinking. I am told that we have investigated a claim that two Austrians were singled out among the Achille Lauro passengers in the belief that they were Australians. The assertion that Australian citizens travelling abroad are in some way at risk is unfounded. Australian Embassy officials in countries where the PLO is represented are in frequent contact with representatives of the PLO. That is the key point to be made in this context: If claims were being made by Mr Kazak which did represent any official PLO position, and if he was acting in that capacity, we would know about it. With regard to the other things that are reported in the original article in the Bulletin to which Senator Jessop referred, Mr Kazak has since said in an article in the Bulletin of 6 November that he had been reported too enthusiastically. He said that although Australia's image in the Arab world had been damaged, he did not want to give the impression that Australians abroad would be kidnapped. He also said that he thought Mr Hawke would not be a Palestinian target, which has no doubt cheered up the Prime Minister no end. Senator Ryan —And us. Senator GARETH EVANS —And us, as my colleague says. There is much more I could say on the question of Australia's preparations for anti-terrorist attacks or threat potential: That would not, however, be directly pertinent to Senator Jessop's question. If he wants to ask me anything else, I will be only too happy to ruffle through my notes and see what else I can find. Senator JESSOP —Mr Deputy President, I ask a supplementary question. I take it from what the Minister has said that there has been no denial that Mr Ali Kazak is a PLO spokesman. Senator GARETH EVANS —That may be the way in which Mr Kazak chooses to describe himself. That may be the way in which some others describe him. All I can say on behalf of the Government is that he is not recognised as such and he is not in the country by virtue of any such status. The views that he expresses are simply those, as I have said now on two occasions, of an Australian citizen. Senator ELSTOB —My question is directed to the Minister for Veterans' Affairs. Has the Government been able to reach agreement with all the States on the veteran home services program which was successful as a pilot scheme in the 1983, 1984 and 1985 Budgets? Senator GIETZELT —The Government is committed to a program of keeping aged persons in their own homes for as long as possible. To that extent the responsibility for that area falls largely within the jurisdiction of my colleague the Minister for Community Services, Senator Grimes. His Department's home and community services program has been conducting simultaneously with my Department the transference and co-ordination of certain community services designed to provide the option to aged persons to remain in their own homes for as long as possible. To the extent that negotiations have proceeded between Senator Grimes's Department and mine, there have been some unavoidable delays because each State has had in place separate arrangements affecting their responsibilities, which are to be added to by the responsibilities of the Commonwealth. However, we have reached agreement in Tasmania, Victoria and, more recently, in New South Wales. Negotiations are still proceeding in respect of Senator Elstob's State of South Australia and in Western Australia. The veteran home services program already operates in Tasmania and in metropolitan Melbourne. Services have recently commenced in Ballarat and Geelong in Victoria. The earlier pilot scheme which was commenced by my Department in the 1983 and 1984 Budgets has proved to be such a success that we have allocated $3.5m for those services on a permanent basis to be used for the benefit of all veterans who are eligible for such assistance. A pilot scheme commenced on the Gold Coast in Queensland several months ago. If that is successful we are hopeful that the scheme will be integrated with the Queensland system and will then be extended throughout Queensland. Several weeks ago I discussed the matter with the New South Wales Minister for Youth and Community Services. It is anticipated that by Christmas all schemes will be in place and veterans will be provided with the services as a result of the success of the home help scheme which commenced in 1983. Senator MACKLIN —My question is directed to the Minister for Education. In light of the importance of the prices and incomes accord to the economic and social policies of this Government, will the Minister indicate what consideration the Government has given to the resolutions of the recent Australian Council of Trade Unions congress on the provision of new places in private schools, the maintenance of effort by private schools and the funding of private schools, particularly relating to accountability? Will the Government introduce legislation to give effect to the Commonwealth Schools Commission's recommendations on accountability for private schools which are similar in most details to those proposed by the ACTU? Senator RYAN —I point out to Senator Macklin that, although the Government is, of course, very interested in the views of the ACTU congress on education, education policies are determined by the Government and not by any other body. Resolutions from the ACTU congress have been sent to me and they cover areas which are already matters of existing Government policy, as Senator Macklin has pointed out. But any decisions that the Government makes in regard to education policy will be made as a result of very wide consideration of the issues and not simply in response to resolutions that might be made at the ACTU congress. At this stage we have made no decision regarding the new accountability provisions recommended by the Schools Commission in its 1986 report. The reason for this is that the legislation enacted last year for the funding of government and non-government schools contained a very wide range of new accountability provisions. The Government is now in the pro- cess of implementing those new procedures. It is my view at this stage that those procedures are wide ranging enough to ensure that taxpayers' money is being properly accounted for both in the narrow financial sense and in the broader educational sense. However, after we have implemented the procedures that were laid out in the legislation last year we will be in a position to assess whether any further accountability procedures are required. At this stage, if we can get the kind of information that is set out in last year's Act, we will be acting in a very responsible way in terms of our accounting for the expenditure of taxpayers' money on government and non-government schools. Senator McINTOSH —I direct my question to the Minister representing the Minister for Foreign Affairs. Has the Government received a full report from the delegation of the Australian Embassy in Jakarta which visited East Timor in October? If so, I ask the Minister specifically what were the findings of the delegation on the role of the Catholic Church in East Timor, and what were the findings on the trials of political prisoners in the territory? Finally, when will the findings of the delegation be made available to the Parliament? Senator GARETH EVANS —The Government has now received a full report from that delegation on the subject of its findings in relation to the role of the Catholic Church in East Timor. During his visit, the Australian Ambassador, Mr Bill Morrison, met the Apostolic Administrator, Monsignor Belo. Other members of the Embassy had discussions with several other local priests. It was found that, in terms of membership, the Catholic Church is expanding-in size, I presume-and is now greater than it was under the Portuguese Administration. Ambassador Morrison observed that because Indonesian civil authority had been extended to areas in which the church had previously been the effective secular as well as ecclesiastical authority, the influence of the church in this respect had declined somewhat since Portuguese times. There was no suggestion, however, of the church being hampered in the discharge of its pastoral responsibilities. As elsewhere in Indonesia, the Government is committed to religious freedom. Co-operation between the church and government at an administrative level is good and the Government plans to provide considerable assistance for the construction of a new cathedral in Dili. Mr Morrison also made human rights a principal focus of the visit. He discussed the subject of human rights with the Governor of East Timor, senior military and police officers and the chairman of the Dili District Court, Judge Siregar. According to the judge, all the East Timorese detainees charged in connection with Fretilin activity had been tried and sentenced between December 1983 and August 1985. A list has been passed to Amnesty International. With regard to the findings of the delegation being made available, it is suggested by the Minister for Foreign Affairs that, if the honourable senator wishes to avail himself of the information contained in the report, he should make that request in writing to the Minister. I presume that that applies to all other senators. Senator PETER BAUME —My question is directed to the Minister for Community Services and relates to the announcement he made today about new arrangements for child care and child care subsidies. Did his announcement include an approximate halving of the subsidy levels for long day care from $30 to $16? Did it involve income testing of families and withdrawal of subsidy for rises in income? Is it a fact that at the announced withdrawal rate no subsidy will be paid for families with an income of about $340 a week, that is, about the level of average weekly earnings? Who will administer the income testing? How much money will be saved by these new measures? Will the extra costs for families run as high as $25 a week for each child care place? Senator GRIMES —I will try to draw the questions together in a couple of answers. Child care will involve an income test, as is involved in child care subsidies now and has been for many years. Secondly, the savings will be about $10.4m a year on existing child care expenditure, but I remind honourable senators that in the next three years there will be an increase in child care expenditure of $107m to fund 20,000 new places. Thirdly, there will be increased child care costs for many people. At the bottom end of the scale the increase in costs will be 5c an hour or, if people have children in weekly child care, about $2 a week. At the top end-those in receipt of above $30,000-some people will have to pay up to a $29 a week increase in child care expenditure. This means that there has been a redistribution of child care costs so that those people who can afford to pay will have to pay more. Senator Baume asked whether the Commonwealth subsidy has been decreased from $30 to, I think he said, $15. The implication was that it has been halved. That is not so. What happens now is that we have a salary subsidy. We are changing that to a per capita subsidy for each child in child care. For those up to three years of age it will be $16 a week. For those over that age it will be $11 a week, recognising the difference in costs involved in looking after children in this age group. That does not mean that the amount of funds available to the child care centres will be halved because they will be made up by the changes that have been made to the fee relief system. All in all, we are making a small change to funding of child care as far as total expenditure is concerned. We are redistributing the subsidy so that there is a more equitable system. We are laying the basis for the future whereby we can continue to expand children's services as we have done in the past, but in a way that is affordable by the whole community. Senator PETER BAUME —Mr Deputy President, I wish to ask a supplementary question. The Minister mentioned that there may be some fee increases for those in receipt of incomes over, I think he said, $30,000. Is it not a fact that his Press release states that under the fee relief system people earning over $225 a week-that is, about $11,000 a year-will in fact start to pay higher fees because they will suffer under the income testing as it applies to fee relief? Is it not a fact that once their incomes reach $350 a week, which again is below average weekly earnings, the amount of withdrawal may well remove the entire subsidy from those people? Senator GRIMES —I think I can best clarify the matter this way. About 48,500 families using child care and family day care centres in this country-that is, about 58 per cent of the people using child care centres-will pay no more than an extra $2 a week. Most of them will pay considerably less than that because they do not have children in care for 40 hours a week. About 5,000 families-that is, about 6 per cent of all users-with incomes of around $26,000 and above may have increases up to $10 a week, but for most of them the increase will be considerably less than that. About 9,000 families, or about 10 per cent of users, mostly on incomes which are greater than $30,000 a year, may pay between $10 and $20 more a week but, depending on how many hours they use child care, they may pay considerably less than that. A very small percentage of families-a total of about 1,600, or less than one per cent-who have incomes of $36,000 a year or more will pay between $20 and $25 more a week. I make no bones about it. They will be paying those increased fees. They are very small numbers of people. In fact, some people-about 2,500 families, or about 3 per cent-will be paying less. They will be those on incomes of between $26,000 and $32,000. Under the system as it existed for the last few years, people on $28,000-plus received the same amount of subsidy. They did not pay any more for their child care. We considered that this was not an equitable system. It did not encourage child care centres to get people to pay what they could afford to pay. It did not encourage them to cut costs. We are about making the system more equitable and building the basis of a system which can be expanded in the future at reasonable costs for all. Senator VALLENTINE —I ask the Minister representing the Minister for Defence: Why are the computer and ground facilities at Nurrungar being expanded and where is the money coming from for the latest expansion? What are the new functions of the defence support program satellites-that is, the DSP 2 Block 4 satellites? Is it a fact that the new facilities are already monitoring, or are intended to monitor, transmissions from DSP 2 Block 4 or any other new versions of the DSP satellites which may be related to the strategic defence initiative, commonly known as the Star Wars program? Are DSP 2 satellites being equipped or due to be equipped with new mosaic technology to determine precisely where missiles lift off and land, information that is crucial to a first strike capability and an integral part of the SDI nuclear war fighting strategy? Senator GARETH EVANS —I am afraid that when I hear expressions like DSP 2 Block 4 satellites I go to pieces unless I have had advance knowledge of the question. In this instance I am only too happy to seek an answer from the Minister for Defence and bring it to the attention of the honourable senator as soon as possible. Senator MacGIBBON —Is the Minister for Finance aware that Queensland's oldest restaurant, the Camellia, holder of restaurant licence No. 5, will close its doors on Saturday night? Is the Minister aware that this is solely the result of the tax changes brought in by the Government, which have caused a 47 per cent drop in trade in this formerly very successful venture? Now comes the important part of the question. In view of the fact that at no time has either the Treasurer or any other member of the Government blamed restauranteurs or their employees for tax evasion, why is the current legislation so unjustly directed to removing the livelihood of innocent people? Senator WALSH —I was not aware that the Camellia will be closing allegedly because the free lunch has been abolished. I know another restaurant very close to here which I am told is full most of the time lately. There is no perceptible difference at all in its patronage. It has, however, brought down its prices significantly. I do not know whether the Camellia has tried that remedy. If the Camellia did try that remedy and still did not get any customers I can only assume that the food was so crook nobody would go there if they actually had to pay for it. I am also aware of a restaurant proprietor in St Kilda, whose name I fear I have forgotten-- Senator Button —Slattery. Senator WALSH —Was it? He was reported in the Melbourne Herald one day last week as saying that, surprisingly, his luncheon trade on a Sunday had dropped off by 30 per cent. The proprietor was quoted as having said that he can only assume that businessmen were taking their families out to Sunday lunch on the company credit card. That is not my statement; that is what the proprietor of a restaurant said. I have noted also that the Leader of the Opposition, in a speech delivered in Adelaide yesterday, in respect of this question expressed the view that `there is no excuse to arbitrarily disallow one category of expenditure simply on the grounds that it is too hard for the Australian Taxation Office to separate the legitimate from the illegitimate'. He was explicitly conceding, of course, that to some degree the business lunch was being rorted. However, he claims that some of it was legitimate. Nobody that I know of in the Government has ever denied that some of that expenditure could quite legitimately be counted as expenditure incurred in the earning of income. There is, however, another area of expenditure unequivocally incurred in the earning of income; that is, expenditure on travel to work which is not deductible from taxable income, which never has been deductible from taxable income and which Mr Howard in his five years as Treasurer at no stage ever suggested should be deductible from taxable income. So I suggest to the Leader of the Opposition and to Senator MacGibbon that, if they are going to apply what they call a principle in what they themselves admit is a very flawed situation-that is, where the Opposition Leader explicitly acknowledges that some, at least, of the expenditure incurred on the business lunch was illegitimate as a tax deduction-they ought to re-examine the consistency with which they apply and misapply these alleged principles. Senator FOREMAN —Did the Minister for Education see the article in the Sydney Morning Herald of 6 November in which it was reported that Mr Peter Shack, the Opposition education spokesman, suggested the creation of places in tertiary education on a full fee basis for those lucky enough to afford them? Will the Minister state what such a proposal would amount to in terms of equity, and what effect such a proposal would have on educational standards if money could overcome educational entrance requirement? Senator Peter Baume —Mr Deputy President, I take a point of order. In his question Senator Foreman purported to say that Mr Shack, a member of the other place, had made a statement which included the words `fees for those lucky enough to be able to pay them'. I put it to you that Mr Shack said nothing of the kind. If the honourable senator is purporting to ask in his question what may have been said by one of our colleagues, it is incumbent upon him to quote the member accurately. The DEPUTY PRESIDENT —Order! I cannot judge the accuracy of the statement. However, Senator Ryan should not assume that that statement is correct when she is giving her answer. She may answer the general thrust of the question. Senator RYAN —Mr Deputy President, I think Senator Baume would agree that Mr Shack has made a number of statements recently advocating that Australian students have access to full cost places in Australian universities. I do not think there is any disagreement about that. The particular language in which he chose to put this suggestion forward is, I guess, not a matter of certain record. But he has certainly been advocating that Australian students ought to be able to get places simply by purchasing them. If that suggestion were ever to be implemented by any government, and it has certainly met with outright opposition from our Government, it would have the effect of creating a situation where standards in education would fall dramatically because no longer would places be allocated on merit, as they are under our system, but they would be allocated on the basis of wealth. Whether one wants to say that a person is lucky or unlucky to get a place under these circumstances is, I suppose, a matter of opinion. However, the implementation of Mr Shack's proposal would certainly undermine the high standard merit-based system which we have in this country. I point out to Mr Shack and all those who might be superficially attracted by his idea that the decision by our Government to make extra places available at full cost to overseas students does not involve any lowering of standards because those positions-- Senator Walters —The Finance Minister is not listening. Senator Withers —Get on to Senator Walsh and tell him. The DEPUTY PRESIDENT —Order! There are too many interjections from the Opposition. Senator RYAN —Mr Deputy President, I realise that the Opposition has minimal interest in the question of education and even smaller interest when it comes to arguments about access and standards. But the fact of the matter is that, if institutions provide extra places to overseas students on a full cost recovery basis, those places will not be created at the expense of Australian students because they would not exist unless they were paid for by the overseas students. So that arrangement does not undermine either the merit-based system for Australian students or the extensive subsidised overseas students program which we run and which is also merit-based. I also point out that the demand in our region for Australian university and college places is a demand that has arisen because of the high standards of Australian education. It is not a demand for cut price courses run by some fly- by-night private institution. It is a demand for the kinds of tertiary education which are available to Australian students. It is my very strong view that any tampering with the standards and any tampering with the merit-based system by suggestions such as Mr Shack is fond of throwing around would not only cause serious disadvantage to Australian students but also destroy the demand that exists in our region for participation in the system that we now have. Senator CHANEY —My question, which is addressed to the Minister for Education, follows the answer which she has just given. I note that the Minister has confirmed that the Government proposes to allow overseas or foreign students to purchase additional places in Australian tertiary institutions. I take it from her answer that she and the Government are not prepared to extend the same privilege to Australian students. On what basis does she discriminate against Australian students, preventing them from purchasing additional places in the way she is about to permit foreign students to purchase places? Senator RYAN —We run in this country a higher education system which is merit-based. It is not the Government's intention to undermine that. There are a number of places available. In fact, since our Government has been in office we have created in excess of 20,000 extra places. There is growth in the system. There may still be some unmet demand. But there is no doubt that there has been enormous growth in the system under our Government. An enormous number of new places have been created. Students get access to those places on the basis of merit. They get allocated a place if their tertiary entrance score or its equivalent is high enough. They then may qualify for assistance for their living and studying expenses under the tertiary education assistance scheme which, as honourable senators will know, is strictly means tested. We believe that that system has served education in this country well, has served students well and fits in very well with the principles of equity to which our Government is totally committed. Senator Chaney —It is miserable discrimination. Senator RYAN —Some overseas students may negotiate with some institutions for extra courses. If Senator Chaney wants to promote policies whereby Australian students can pay $14,000 a year to undertake an engineering course, he is welcome to put up those policies and just see how much electoral support there will be for them. There is not general support in our community for the idea that a university place is something that one buys. There is extensive support for the existing system and there is to be some development in relation to overseas students. However, I should say in conclusion that it is our Government's expectation that the majority of overseas students studying in this country will continue to be under the subsidised program which we administer. Senator Chaney —That is discriminating in favour of Australians. Senator RYAN —Senator Chaney likes to suggest that there is some sort of discrimination; yet it was his Government which brought in the overseas student charge, thus already discriminating between local and overseas students. We have maintained that charge. We think that it is not unfair. Senator Chaney on the one hand in government brought in a system of charging overseas students and on the other hand is now trying to suggest that there is some inconsistency. The DEPUTY PRESIDENT —Order! There are too many interjections. Senator RYAN —I do not think I will continue on this train. I simply say that if Senator Chaney thinks it is going to attract young people and their parents to support him and his policies by advocating that they should get places only if they can pay for them, let him try it. Senator CHANEY —I ask a supplementary question. I point out to the Minister that it was never advocated in my question that that should be a substitute for the existing university places. I ask the Minister why she should extend to overseas students a privilege that is not available to Australian students who are not able to get an education within the places provided by her Government? Senator RYAN —I do not know how often I have to say this: First of all, I do not believe that it is a privilege to have to buy your way into higher education. I think the privilege is to get on the basis of merit a place which requires no tuition fees. They are the policies that our Government has pursued. We will continue to pursue them and I am totally convinced that they are electorally popular. Senator GRIMES —During Question Time Senator Peter Baume asked me a question concerning the new child care arrangements. I understand that he suggested that a family earning $350 a week or more would get no subsidy in addition to the operational subsidy. Under the new fee relief scales, families earning this income will pay fees of $30 a week for one child in care. As the new average maximum fee will be $70 a week, the subsidy in addition to the $16 or $11 a week subsidy provided for operational subsidy will be between $30 a week and $40 a week. Senator Peter Baume's suggestion, as I understood it, that people earning $350 a week or more will not get any subsidy is in fact not so. The DEPUTY PRESIDENT —I have received a letter from Senator Chaney proposing that a matter of public importance be submitted to the Senate for discussion, namely: The growing evidence that the Accord is undermining the economic welfare of Australia. 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 CHANEY(Western Australia-Leader of the Opposition)(3.03) —The Opposition brings forward this matter of public importance because of the events of the recent week and because of the events of the last year. In addition, we bring it forward because of the soothing words that we continually hear from the Government about the operation of the prices and incomes accord and because of our belief that the accord in fact contains very substantial dangers for the future economic welfare of Australia. Last Monday the Australian Conciliation and Arbitration Commission agreed to the distribution of some of the more recent fruits of the accord. Australian wage and salary earners received a general 3.8 per cent wage rise which reflected the arrangements which the Government had entered into with the trade union movement under the accord. Of course, nothing could be more effectively designed to support that soothing message that the Government has put out that the accord is looking after us all, that it has been a successful instrument of economic management and that it is delivering the economic goods to the people of Australia. We have been treated to a very illuminating illustration of the impact of the accord over the days since that decision was announced last Monday. The real impact of this bounty which is supposedly flowing from the accord has been demonstrated by what has happened to the Australian dollar over those few days. On Monday Australian workers received a 3.8 per cent increase on an Australian dollar worth US69.7c. Since then the dollar has declined on a daily basis. Today the most recent figures available show that the dollar was valued by the market at US66.15c and that is a 5 per cent loss in the value of the dollar over those few days. The situation is that the wage and salary earners of Australia have been handed a 3.8 per cent rise in a dollar which has deteriorated in its value against the United States dollar by 5 per cent already. Even that does not measure the full impact of what the Government is doing to the Australian economy. If we measure the value of the Australian dollar, not against the United States currency alone but against a weighted basket of currencies which represents our trade with the rest of the world, and if we look at the trade weight index we find that the dollar at the beginning of the week was marked at 63.2 and by Wednesday it had gone down to 59.3. In a matter of a few days the value of our currency as a means of purchasing the many goods that we buy from overseas-the far too many goods that we buy from overseas when one looks at what we export-has declined by more than 6 per cent. It is important that it be clearly understood that we have a situation where a 3.8 per cent rise last Monday is reflected in a massive loss of value in the dollar over the last year and a fall of 5 or 6 per cent, depending on how one measures it, in just a matter of a few days since that rise was announced. I do not think anything could more accurately prove that Treasurer Keating, who has been wandering around the world trying to sell the economic achievements of his Government, has been identified as a snake oil salesman rather than as a salesman of a genuine effort. We face that awkward situation where the Government's economic policy is being seen as a matter of trying to sell snake oil. It has been described as a matter of forced optimism by the Australian Financial Review as recently as this morning. The soothing message continues because, of course, the Government wants to collect the best possible news that it can. The Leader of the Government in the Senate (Senator Button) today talked about the latest unemployment figures. Of course, the Opposition welcomes the fact that there is some drop in the percentage of Australians unemployed. Senator Button very quickly skated over some of the main features of the recent employment figures which are in the publication of the Australian Bureau of Statistics and which show that in fact seasonally adjusted employment showed a slight decline in October 1985, with both employment and unemployment declining. With employment declining, why did unemployment decline? It declined because there was a 4.5 per cent drop in the participation rate. The news is not quite as cheerful as was suggested by the Leader of the Government in the Senate. In fact these figures show that there was a decline in employment of 43,900. The bulk of that decline was focused in New South Wales and Victoria, in those fine Labor States which have been trumpeted at us as models of economic management and models of Australian Labor Party achievement. The people of Australia need to know that employment fell. There was a reduction in unemployment because a significantly larger number of people were not seeking employment in the current environment. This fall of the Australian dollar is the most prominent of the warning signs which are being flashed at the Government and at the Australian people. This is the market's judgment of the accord and of the results that it has achieved for Australia. The other major warning signs lie in the continuing problems that the Government faces. Of course, they are not just problems the Government faces; they are problems that we as Australians face, of a massive balance of payments deficit. If we go on buying more and more without being able to sell enough to match it, we have a very significant problem. There is no sign of any solution to that major balance of payments deficit which is dogging this Government and its policies and which is dogging the implementation of the accord. Another judgment has been made on the accord. It has been made by our balance of payments figures and it is a very black mark indeed. The third really major warning sign that we face-and this will impact on many individual Australians, impact on many businesses and ultimately impact on employment-is the record high interest rates which the accord has delivered and which it will continue to deliver. That is another judgment on the accord and the results that it has brought for Australia. There can be no argument that these problems promise to impact severely on the Australian economy and on the Australian people. Naturally the Government has tried to focus the economic debate on the areas of improvement in the economy. The Opposition has consistently welcomed the areas of positive policy development that it recognises in the Government and it has consistently welcomed any improvements in the economic statistics. Let me mention some of those areas of improvement, but before doing so let me say that it is consistently so that the areas of improvement are grossly overstated by most of the Government spokesmen. Again I refer to the term used by the Australian Financial Review-that we have an air of forced optimism in what the Government is putting forward. It is true that there has been a lift in employment and a reduction in unemployment, which we welcome. It is true that there has been a reduction in inflation, although it is again rising. We welcome the reduction. It is true that there has been economic growth. We welcome that again. Any changes for the better will be welcomed by the Opposition. This debate, which is limited in time, is not one where we can debate in detail what are all of the causes of any improvements which have occurred. To the extent the accord has contributed, the Government's share has been bought dear, as is shown by our balance of payments situation and as is shown by the interest rate situation and the fall of the Australian dollar. The point needs to be made again that the accord was not the cause of the breaking of the drought in Australia and it was not the cause of the widespread international recovery which has been very useful to Australia. It was not the accord which accounted for the reduction of costs and inflation which was brought about by the Fraser wage pause. Even the Government would admit that they were major factors in the improvements which have occurred in the Australian economy. All of those improvements are independent of the accord. The fact is that we have a government which is unable to defend the accord in the face of the real measurable and identifiable problems of a declining Australian dollar, high and rising interest rates and a balance of payments situation for which no solution is in sight. That was brought out yesterday when we had the spectacle of Senator Walsh finally, when pressed at Question Time, saying that the steep decline in the Australian dollar was best sheeted home to what occurred in wages in 1981. I suppose one can go back and look at the sorts of long term structural factors in unemployment that were referred to by Senator Button in Question Time today. One can do that and one can go back to the Whitlam days and look at the enormous change in the structural situation under the Whitlam Government. One can probably say: `Yes, that was a contributor to the long term non-competitiveness of much of Australian industry'. One can point to areas of difficulty during the Fraser years and say: `Yes, that contributed to our long term structural problems'. But the critical point is that in looking ahead the accord locks us into many of the structural difficulties which exist in the Australian economy. It provides no escape route; it provides no relief; it provides for the maintenance of the structural difficulties which were referred to by Senator Button in this chamber earlier to-day. If the Government was genuinely concerned about doing something about the structural imbalances in the Australian economy, it is the view of the Opposition that it would certainly not be entering into an accord which, for example, provides for a 3 per cent productivity round next year which will further make the Australian labour force uncompetitive and the Australian economy uncompetitive in many of its sectors. The criticism that we make of the accord and the criticism that we make of the Government is not a criticism which is based on the Government not understanding the reality of the problems that it faces. Our criticism is that, having shown understanding of at least some of those problems, the Government has refused to face up to the implications of what policies are required to deal with those problems. Honourable senators do not need to go back very far to see the proof of that. If they look at what was said by the Treasurer in his Budget Speech they will find very clear statements about how important it was, if we were to have a competitive position in the world market and if we were to benefit from the decline in the value of the dollar, which was, in the Treasurer's words, `restoring our competitive edge', to have the discounting of wages to ensure that those benefits flowed through. The Leader of the Government in the Senate, to his discredit, has tried to indicate that that was a rather vague undertaking in the Budget, notwithstanding that in this chamber after the Budget it was confirmed by Government Ministers that what the Government was seeking was the discounting of wage rises for the consumer price indexes effect-- Senator Button —You know what the words in the Budget Speech to which you refer say. Senator CHANEY —Senator Button should look at the answers which were given in this chamber. It was confirmed by his colleagues that there would be discounting and that discounting would be sought at the wage hearing which has just ceased. This is typical of the slipperiness of the Leader of the Government in the Senate. He is not prepared to acknowledge what was said by his ministerial colleagues as to the meaning of those words and the subsequent backdown of this Government in the face of the Australian Council of Trade Unions. Senator Button —Have the guts to ask me a question about it on Monday. Senator CHANEY —The Leader of the Government has the ultimate capacity to set the business of this chamber and he is pleading for an opportunity to explain his position by my asking him a question. Mr Acting Deputy President, have you ever heard anything more fraudulent or more of a sham? The backdown of the Government with respect to its undertaking in the Budget that it would retain the benefits of devaluation for the Australian people and for the Australian work force stands as the most recent indication of this Government simply not living up to its own knowledge and to its own beliefs. We have a situation where the world can see that the Australian devaluation, which has already fed through into inflation in this country, has not, to this point, been discounted in the wage rises which are flowing through to the Australian work force. We see a plummeting Australian dollar as the prize for that particular piece of dishonesty and ineptitude on the part of the Government. There are a great many other things in this accord which I think stand condemned. The accord, in providing a deal between the trade unions and the Government, has in fact left the Government in the situation where it has very little room to manoeuvre. We have a situation where there are significant deteriorations in the economic position of the Government and yet it has, under the accord, already traded off a good deal of the room in which it has to move. The real irony in the position that the Government now finds itself under the accord is best explained by looking at the position that it now has with respect to interest rates. I understand that under the accord interest rates are a matter which should be kept down by the Government, but it is quite clear that the Government's policy and its deal with the trade unions leave it in a situation where it requires a high interest rate policy if it is to do anything to stem the run against the Australian dollar. The Government has put forward a Budget strategy which is based on increased private sector activity and increased private sector investment, and yet we have a government which is pursuing policies which are maintaining and will continue to maintain very high interest rates. Perhaps the Leader of the Government in the Senate, if he is going to speak in this debate, will let us know when he thinks there might be reductions in interest rates. When will there be the reductions in interest rates that were promised by his colleague Mr West? Of course there are not going to be any reductions in interest rates, because this Government has brought about a situation where only the maintenance of high interest rates will keep the Australian dollar from going into a free fall situation. It is ironic that this Government, which purports to stand for the people of Australia, is subjecting the people of Australia to a situation where, quite clearly, our balance of payments position is such that the value of the Australian dollar will remain under threat. Quite clearly, while the value of the Australian dollar remains under threat, interest rates must remain very high. The fact of the matter is that if the Government is to meet the very difficult challenges which it faces-they are challenges which are difficult, they are not challenges which can be met simply by some minor change of policy setting-it has to face up to the fact that the settings of the accord are not compatible with the long term economic health of this country. The sad fact of the matter is that there will not be the continued employment growth and there will not be the maintenance of the value of the Australian dollar which is necessary if there is to be any hope of price and wage stability in this country. We have a situation where the Government has condemned us to the very greatest series of difficulties under its precious accord. There is no lack of non-political comment to bear out the difficulties to which I have referred. I refer very briefly again to this morning's Australian Financial Review. One finds the suggestion that interest rates are soaring as the dollar keeps falling. I refer to the editorial which was put forward in the newspaper because it sums up very clearly a view which the Opposition has been asserting through the Leader of the Opposition and many other spokesmen. The article states: Put simply but frankly, the collapse of our dollar has been caused by the refusal of the rest of the world to believe all our forced optimism. In particular, it is not convinced that the maintenance of the accord, and with it the power of Mr Crean and Mr Kelty over our economic policy, really is in our best interests. We have been sold an economic policy pup by the mandarins of the ACTU and the Treasurer's Office. Contrary to what they continually claim, incomes policies are not some quick-fix solution of the problems of small, open economies like Australia. Unfortunately, the Government's economic and political strategy is predicated on that very assumption. Although it could never admit it publicly, the Hawke Government must be becoming increasingly concerned that its emphasis on the accord has turned out to have been a terrible mistake. That quotation summarises the view which the Opposition puts forward and which it believes requires very careful attention from this Government. It is the view of the Opposition that nothing could be more desirable than to see the continuation of the positive economic trends to which I have referred. It is also the view of the Opposition that the problems we face with respect to the value of our dollar, our balance of payments and the interest rate arrangements in this country are simply not compatible with continued progress. It is necessary for the Government to change its policy setting if the people of Australia are to be spared a great deal of unnecessary hardship. Senator COOK(Western Australia)(3.22) —The Leader of the Opposition (Senator Chaney) in the dying stages of his speech referred to non-political comment. I commence my address by referring to a significant non-political comment made just over a month ago: Contrary to conventional wisdom, the Australian experience over the past two years is proof that it is possible to put the economic house in order, in terms of reducing inflation and rigidities in the economy, while at the same time achieving a high state of growth and falling inflation and unemployment. So far the results of the Accord have been good-brilliant-in these terms. The Secretary-General of the Organisation for Economic Co-operation and Development, Mr Paye, said those words when he visited Australia in mid-October. The Organisation for Economic Co-operation and Development has lately assumed the role of international judge of the performances of the various economies of the developed world. His words are a considerable judgment of approval of the accord. Mr Paye went on to say that much of the success the accord had achieved could be attributed to the trade union movement which, he said, had been extraordinarily sensible and responsible. Anyone who has observed the economic landscape in Australia is bound to agree with those observations by the international head of the OECD. In the argument that has been launched in this chamber this afternoon several strands of view have been put forward to justify what is the somewhat laughable allegation of the terms of the matter of public importance, that is, that the signs are showing that the accord is damaging the Australian economy. A number of things Senator Chaney has said are nothing more than a cleverly cloaked and concealed attack on the union movement in Australia. It is the outworn rhetoric of the Fraser years. It is the rhetoric that, by virtue of abolishing a centralised wage fixing system and by deregulating then in some form or other the wages market will go back to what we saw in 1981-82 and early in 1983 when there was a wages explosion and when we saw Australians pitted against Australians. That type of approach was discredited then and it certainly is discredited now. One can merely ask Senator Chaney whether he ever learns and why he wants to advocate a return to that system. We have heard an attack upon the accord, when, of course, the accord is the foundation of the economic recovery this country has experienced since Labor assumed the Treasury benches in 1983. We have never said that the breaking of the drought and other factors did not contribute to that recovery. What is also undeniable is that the accord has achieved what in many respects is the economic miracle of enabling a government to run an expansionary economy and to achieve growth in employment while at the same time halving inflation, reducing industrial disputes to their lowest ebb for 17 years, and achieving a redistribution of wealth in this country from the share going to wages and salaries to that going to profits. We have seen an expanding economy take off on that basis. It was not possible to achieve those sorts of responses without there being an accord which maintained the responsible expectations of wage and salary earners in this country and which enabled the Government to run an expansionary economy and lift it out of the trough it was in. That is the proven record of the accord. They are the results that are on the scoreboard. They are the results which in part even Senator Chaney was moved in his address to applaud. But what has Senator Chaney put forward as a substitute? His whole approach has been to decry what he sees as current imperfections. Some of them are real, but not real for the reasons he asserts. If one considers his remarks in this debate and the remarks of other spokesmen in the economic field from his party over time one can see that there really is no positive, integrated view of what should happen, but merely a substitution of theory and ideology which, as we saw in the last great experiment of the Fraser years, brought the Australian economy to its knees. The accord was responsible for achieving an agreement with this Government to adjust wages every six months by virtue of increases in prices. The final arbiter of whether that should be the case is the Australian Conciliation and Arbitration Commission. It has been moved by the unity displayed and the results achieved by the accord once again-this time on Monday of this week-to announce a wage increase of 3.8 per cent which will increase wages to compensate for cost increases through the consumer price index for the first half of this year. Whilst one understands that increased wages are increased costs to the employers, if one looks at the level of redistribution to profits and the profit records racked up by companies operating in Australia, one sees that it is not a cost that is an unfair impost on those companies. That stands as a very reasonable economic statement. What the Opposition never does in attacking wage increases is to look at their two-dimensional aspect. As I have indicated, whilst wage increases are a cost they also provide purchasing power in the pockets of consumers. Wage and salary earners in this country are the main body of consumers. If there is not a market to purchase, there is not a market for manufacturers and retailers to sell to. Because the accord guarantees an enhancement and maintenance of real purchasing power it also guarantees a real and continuing market for producers of goods and services in Australia, as it does for imports into this country, which I will deal with in a moment when I go to the effects of the devaluation. The two-dimensional aspect is frequently denied by the Opposition. The effect on purchasing and demand is something that it never addresses. However, it is a very real economic need and without it the economy would contract. What the accord has achieved is that at long last it has got unions off the narrow-minded pursuit of wages, wages, wages. It has substituted for that an all-round ability for unions to enter into the mainstream of economic life in this country and deal with governments, employers and the other authorities that fix and deal with wages, prices and taxes. They have been able to come to a compact about living standards and engender into their behaviour a degree of security. The accord now enables them to look at the impact of prices, wages, taxes and the social wage so that they can, in the end, bargain for living standards. It has diverted the unions from being confined to the narrow pursuit of money wages to the real pursuit of living standards. Living standards mean full employment and a healthy, expanding economy. The record of the accord has been to achieve that. Over the last year we have seen growth in the economy of nearly 5 per cent. We are looking in prospect to a growth rate in the next 12 months also of 5 per cent. Again, we are looking at ongoing, sustained economic growth and expansion. Without that growth and expansion, job prospects do not exist for Australian wage and salary earners and for the young people who are coming on to the wages market. The accord has produced that security. It has led to a lack of industrial disruption as people are no longer placed in the position of not knowing whether their living standards will be maintained and forced out on to the wages market to maximise the price of their labour and to engage in industrial disputes. The alternative model the Liberal Party seems to be suggesting-I say `seems' because it is never quite clear which wages policy it supports from one week to the next-is more direct bargaining. Direct bargaining means more disputes. More disputes means more dislocation, more insecurity and more uncertainty as relativities between wage and salary earners are distorted and as groups set out to maximise the price of their labour. Thankfully, that is a scenario that Australia has got away from and, as a result, the economy has grown and expanded and job prospects are very bright indeed. What Senator Chaney also did today in speaking on this matter of public importance was to blame the accord for the devaluation of the Australian dollar. I am surprised that as an Australian he did not seek the opportunity in this debate to point out that the international currency traders have fundamentally misunderstood the impact of the 3.8 per cent wage increase and, as a consequence, have reacted on the basis of knowledge or information which is not sound. This temporary reduction in the Australian dollar is a reflection upon those traders, not upon the intrinsic health and well being of the economy. Let me reach therefore for today's Sydney Morning Herald. It deals with this point in an editorial headed: `What Keating should do'. It states: To the currency market in New York, Australia is just another small country with a balance of payments problem. When the wire services announce that some judge has just awarded every Australian worker a 3.8 per cent pay rise, New York sells the Australian dollar. Poor Mr Keating, who has been flying around the world explaining the subtleties of his Government's economic policies and generally talking up the Australian dollar, comes home to an exchange rate ``crisis''. What is the Treasurer to do? Preferably nothing. That is the advice of the Sydney Morning Herald. That editorial concludes with a paragraph or two that should be read into this debate. It states: Certainly, suggestions that the Government should seek a further cut in real wages for the additional depreciation are nonsense. If the trade deficit narrows as quickly as the Government predicts, and if the economy slows as quickly as we fear, the dollar could recover quite dramatically. Foreign exchange markets are notoriously volatile, and the market for the Australian dollar is thinner than most. This time last year, the dollar was grossly overvalued, having risen strongly against almost everything except the US dollar through the second half of the year. This time next year, business's main concern about the dollar could be that it is recovering too strongly and threatening to wipe out too much of the competitive gain of 1985. Floating currencies are like that. It would seem, in view of that analysis, that the honest, fair and reasonable thing to have done would have been to use the forum of this debate to explain the subtleties of the Australian economy to the international currency traders so that they would understand how intrinsically strong that economy is rather than use it to attack the Government and to try to break the confidence within the wider community in the handling of the economy by the Government and the faith that the wider community has expressed in the accord. I started my speech with a quote from the Secretary-General of the OECD, Mr Paye. It is interesting to reflect upon what he saw when he was in Australia in October. He would have seen that we were suffering now because our recovery has been too strong; in fact it has been too good. There are signs that the domestic recovery is overheating. There is currently a powerful demand for credit. Despite the record interest rates that Senator Chaney refers to, there is a strong surge and continual demand for credit. That is a sure sign of consumer confidence and a sure sign that people believe that the future is sound for their investments and that their borrowings can be repaid. In terms of the internal finance markets it is a sure sign too, unfortunately, that we are beginning to get to the stage of overheating. Another sign of possible overheating is the shortages that are now showing up in the labour force. During all the years of Liberal rule trade training and the training of key skilled workers languished because of the lack of a labour market program. We now find that with growth and demand key skilled workers are in short supply and employers are bidding up prices informally, as they try to attract workers from one company to the next. That is a problem that we are addressing, but it is also an indication of overheating in the labour market and something needs to be done about it quickly otherwise it will retard our general expansion. As a government we have been running a firm monetary policy, but not a monetary policy that is too tight, cracks down too much and chokes off the expansion that we have been able to generate. When Mr Paye came here and delivered his verdict on the Australian economy the accord and the prices and incomes policy were seen to be working. They were seen as having achieved real growth, reduction in inflation and reduction in unemployment. Those are the achievements that he saw. He saw also what this Government has been able to achieve since it took office. As I have said, for two years in succession, we have had economic growth of nearly 5 per cent, with a third in prospect, compared with an annual average growth rate of 2.1 per cent during the previous seven years when the Opposition, which has launched this matter of public importance today was in government. Since April 1983, we have had employment growth of 487,000 new jobs-that is a 7.8 per cent increase. That has been forecast as the highest rate of job growth in the OECD in 1985 and 1986 and more than double the OECD average growth for those two years. We have had the lowest unemployment level in three years. It stood at 8.1 per cent but, on today's figures, it is below the 8 per cent barrier. We feel that that trend will continue. Until the depreciation, there was a virtual halving of the rate of inflation and we had, through 1984-85 the lowest annual rate of wage increase in 22 years. There was a consequent reduction in real unit labour costs to below the levels of the late 1960s and early 1970s and, hence, a restoration of the profit share, as I have said. Mr Paye saw all those things achieved as this Government moved to turn the economy around, and he then delivered his judgment. I think that the Opposition lacks real nerve on the economic front. As Paul Keating said last month in an address to the Canberra branch of the Economic Society, the real situation is that Australia is troughing it out at the bottom of the J curve. With the devaluation there has been an immediate cost increase which has blown out the current account deficit by virtue of the higher impost on imports and the economy has sagged. The economy is sagging, but temporarily, and as it sags to the bottom of the J curve, Senator Chaney and the Opposition lose their nerve. The J curve, intrinsic to economic theory and practice in the world, means that after that lag, export contract prices will be renegotiated, export prices will rise, export volumes will go up, import volumes will come down and the current account deficit will reel back in a long sustained movement. In that sense, if we just hold fast to the longer range view and if we are not panicked by a skittish dollar, by momentary lapses or by a lack of understanding of the Australian economy by money dealers in New York, we will come out of the J curve and we will have that long sustained growth. Senator Chaney overlooked saying in this debate that compared with the present level of the current account deficit, when he was in government in 1981-82 the deficit on the current account was 6 per cent of the gross domestic product. In 1984-85 it was 4.9 per cent. It is a lower figure than the figure in 1981-82 when Senator Chaney's Party was in government. That is not to say that we are happy with that figure as a percentage of GDP but, nonetheless, it puts in perspective the qualms that Senator Chaney raised today. He overlooked saying in this debate that in this financial year additional exports generated by the depreciation of the dollar will mean a decrease in imports. It will add about 1.25 percentage points to the growth in GDP in this country and will directly create about 100,000 new jobs, half of which will be in the manufacturing sector. All of those things have been ignored and put aside in this panic matter of public importance that was brought forward by the Opposition today. The devaluation, I believe, has occurred because of the falling exchange rate. It is but a temporary blip and next week or the week after the rate is bound to go up again. I am reminded that the last time that the Opposition launched a debate in this chamber about the falling exchange rate, the next day or the day after the value of the dollar rose quite rapidly. One can think only that if the money markets were listening to the Government's side of the argument in that debate they took heart from the Government's remarks. The accord is, of course, the basis of the economic strategy that has caused economic recovery in this country. The accord will continue to be maintained. Without the accord, it would not have been possible to have achieved a discounting for the devaluations that have occurred. We have negotiated a discounting so that in the next wages round 2 per cent will be shaved off the increase that will be awarded through the CPI. It would not have been possible, in a situation envisaged by Liberal Party theorists as to how the labour market should be run, to achieve an across the board discounting of that nature. One only has to think about a deregulated wages market and a centralised discounting system to see immediately that it would not have been achieved. What also has been neglected is the question: What would have been the level of wage growth in this country had there not been an accord that guaranteed security for workers? When we moved away from indexation in March 1982 there was a 17 per cent increase in wages. In a climate of sustained economic growth and expansion, increasing employment prospects and a low inflation rate, as we have now, we would be looking at double that figure. We would be looking at double that figure if we abandoned the centralised wage fixing system. So no one can say that the accord has not held good; that it is not an important document in terms of regulating the economic health and well-being of this country; that it does not involve all of the social partners in concert with this Government in directing their attention to the basic ills in the economy to get the settings right, to create employment, to keep down inflation and to maintain an expanding economy with an export market for the manufacturing industry. Senator SIDDONS(Victoria)(3.41) —I rise to speak in this debate with great reluctance and I intend to speak only briefly. This is the third matter of public importance that has been debated this week. Each time the debate has taken place two valuable hours of the Senate's time has been taken up in debates which by no stretch of the imagination could be considered matters of urgency or matters of public importance, as was envisaged when this technique was introduced into the Senate. A very long list of urgent legislation is before us and thus far it has not been addressed to any degree at all in the whole of the current session. We have over 60 Bills still to debate. I estimate that we have about 60 hours of debating time left; that is, one hour per Bill. That is an impossible task. What are these Bills? We have a tax reform Bill to debate. We have the Appropriation Bills to pass through the Senate. We have a Commonwealth banking Bill to consider, a trade practices Bill, and a companies and securities Bill. We have a Bill of Rights to deal with, which by any standards should be debated for at least 12 hours. We are stopped from addressing this important legislation. We are fiddling while Rome burns. One cannot help but ask the question: What is the Opposition about? Is it trying to filibuster the Senate so that it can have a de facto blocking of Supply? Is it prepared to address the urgent legislation or is it not? At this rate, the Government will not get a chance to get its urgent legislation through the Senate. If that happens we can blame only ourselves for the consequences. By no stretch of the imagination can one say that a debate on the prices and incomes accord is a matter of public importance. The accord is in place. It was renegotiated by the Treasurer (Mr Keating) only three weeks ago. We had a debate in the Senate three weeks ago on that renegotiated accord. I spoke in that debate. I said that the Government had done a very good job in renegotiating the 2 per cent discount for the consumer price index and that it was amazing that the unions were prepared to go along with that. The Treasurer succeeded in that negotiation; the accord was in place for another two years. Yet today we are debating the accord as a matter of national importance. This is a device that is destroying the Senate's ability to look at urgent legislation and to give it the attention it deserves. It is not as though the Opposition has given any constructive alternatives to the accord. It has tried to draw red herrings along the lines that the accord is responsible for the devaluation of the Australian dollar. That is a very long bow indeed, I should have thought. The real problem with the Australian dollar is the international currency markets and the international currency speculators. I would suggest that it has very little to do with wage fixing in this country. Senator Michael Baume —Come on! Senator SIDDONS —What is the alternative? Back in 1981, when the present Leader of the Opposition (Mr Howard) was Treasurer, the then Government persuaded the Australian Conciliation and Arbitration Commission to abandon centralised wage fixing. It said that the Government and business had lost faith in that system of wage fixing. Senator Button —That's the alternative. Senator SIDDONS —That was the alternative in 1981. What happened when the alternative was put in place? The metal trades union, which was very powerful and was adept at all kinds of guerrilla tactics, was able to create such industrial chaos that it finally forced that Metal Trades Industry Association of Australia to negotiate with it directly, resulting in a 9.1 per cent increase in wages. That was a 9.1 per cent increase in one piece of negotiation. Of course, all other industries quickly followed suit and there was a wages explosion. Senator Michael Baume —Because it was too much of a centralised system and it flowed on. Senator SIDDONS —The whole thrust of the situation in 1981 was that they had lost faith in centralised wage fixing; they wanted decentralised wage fixing. The Opposition is calling for more and more decentralisation of wage fixing. Senator Button —That's the alternative over there and that would send the dollar down to 10c. Senator SIDDONS —At least we have a system in place now which is predictable. I will not defend the accord as the only approach to wage fixing, but at least in the present industrial climate it is the only practical approach we have. The Opposition has failed to put forward any workable alternative-any alternative that is within the realm of practical politics. The Opposition gives us the rhetoric that decentralisation of wage fixing would be a good idea. I do not know whether the Opposition has looked at what has occurred recently in the United Kingdom. The Thatcher Government has been moving for more and more decentralisation of wage fixing. There has been enormous bitterness and union confrontation, and wages in the United Kingdom, in spite of horrendous levels of unemployment, have risen at a rate greater than the consumer price index. At least in Australia the Government was successful in negotiating a 2 per cent discount in the CPI. That, I would have thought, is something that deserves congratulations. I do not intend to take up any further time of the Senate. I hope that our concerns about getting on with the legislative program are heeded and that the few hours of debate remaining in this calendar year-I estimate that 60 hours will be available for debating Government legislation-will be addressed to urgent matters. Let us get the Budget through the Parliament. Let us look at tax reform and decide what will happen there. Let us face up to some of the more critical problems that face the economy. The accord is in place; it is working; it has stabilised wages in this country in a predictable way, something that was noticeably absent in 1981 when the present Opposition introduced its alternative. Let us get on with the problems facing the country and let us stop wasting the Senate's time. Senator MICHAEL BAUME(New South Wales)(3.48) —I am glad that Senator Siddons stopped wasting the Senate's time by sitting down early, and I congratulate him. That was the only part of his speech with which I agreed. The reality is that the prices and incomes accord is now no more than the mechanism through which a government, headed by a former leader of the Australian Council of Trade Unions, is controlled by the present leaders of the ACTU. There is only one answer to the question `Who is running this country?' and that is the union movement, through the accord. The Government's economic policy, its retirement policy, its wages policy, even its foreign policy, are now controlled-we have seen all the evidence-by the ACTU. It is not only through the direct operations of the accord but also through the continual blackmailing of the Government-that if it does not toe the ACTU line the accord will fall apart-that this pressure is exercised. Obviously, the Government is very nervous and very determined to maintain the accord because it has no other basic economic policies. Let us look at what has really happened to establish this case. Apart from the fact that Mr Kelty has admitted that the accord has delivered higher wages than the market can justify-I draw Senator Siddons's attention to that-it is clear that the accord is the instrument through which the ACTU influences and controls this Government. Let us start right at the beginning. Let us recognise, for example, that it was the ACTU that brought pressure on the Government to repeal the Fraser wages freeze. It required the reintroduction of the assets test. Honourable senators might have forgotten the role played by the ACTU in requiring that. It tells the Government whom we are allowed to trade with. Senator Richardson —That's ridiculous. Senator MICHAEL BAUME —Did somebody say that that is not true? Senator Richardson —I said that. Senator MICHAEL BAUME —I am overjoyed. We will examine the reality of that because it was an alternative put up by the ACTU when there was great pressure in 1983. Senator Richardson —Hardly a requirement-`requirement' was your word. Senator MICHAEL BAUME —Indeed, the Government danced to the tune sung by the ACTU, and it goes on and on through a whole range. For example, we saw the extraordinary wage taxing system trade-off that took place this year. Senator Cook talked about discounting as if it were fair dinkum. We all know that is arrant nonsense. The discounting will be paid for in a very determined way. It will be paid for by a tax cut financed by the rest of Australia through tax nasties, and of course also through inflation, as we discussed this morning. The discounting that Senator Cook talked about is so patently nonsensical that he failed to note that the take home pay of people would not be affected in real terms at all, and this is the importance of this matter. The take home pay of employees in Australia will not be discounted because there will be an offsetting tax cut. That tax cut is part of the trade-off deal that the ACTU required the Government to do. There can be no argument about the requirement of the Government to do that because the Treasurer (Mr Keating) at the time had strongly asserted the absolute need for real discounting for the devaluation of the dollar. As I mentioned this morning, that real discounting did not take place. It was totally offset by a tax cut to be paid for by the rest of Australia through the $800m of nasties that are the remnants of the Keating tax package. Senator Aulich —How many times are you going to speak today? Senator MICHAEL BAUME —Well, one has to say these things again and again because Senator Richardson obviously still does not understand them, and neither does the Sydney Morning Herald whose editorial was so enthusiastically quoted by Senator Cook a little earlier. He thought it was very interesting and reasonable. Let me read this bit to demonstrate the intellectual competence of whoever wrote this editorial. He said: Certainly suggestions that the Government should seek a further cut in real wages for the additional depreciation are nonsense. What is this further cut? There has been no cut in real wages, as we have just demonstrated, and as the ACTU itself has demonstrated. Where is this real cut to have a further one? The fact is that it has been offset by that extraordinary reneging by the Treasurer of his solemn undertaking at Budget time that there will be full discounting. There has not been, and the Labor Party knows it. That is only one of the many things. Look at the way the ACTU instructed the Government to remove section 45D of the Trade Practices Act-instructed the Government. I do not hear Senator Richardson responding on that score. Yet we have in section 45D as proved in the Mudginberri situation the clear evidence of how one needs that kind of legislation to prevent blackmailing by the union movement of not only individual unionists who are getting a better deal out of management, but also management itself which is doing well and benefiting Australian exporting. I instance the Public Service where one has had the industrial democracy legislation, repeal of the no-work, no-pay provisions, for example, and all those matters. Under direct instructions from the ACTU, the Government has done what it is told. One has had the Superannuation Fund Investment Trust matter when the ACTU sought to insist-and it was blocked only by this chamber-on union control of the funds involved in that trust. One could go through a great list of these items. What happened to the Economic Planning Advisory Council when it wanted to keep reporting to the public and to this place what its economic projections were based on various possibilities? These caused some fuss when they were released-when they were leaked. As a result of the fuss-and it is natural that there was a fuss because it revealed the consequences of major increases in wages on the economy, and they were significantly damaging consequences-when those projections carried out by the EPAC were released, the ACTU went off its head. It instructed the Government-instructed, I use the word again-that it was not going to have that sort of thing. As a result the Government instructed EPAC not to involve itself in such projections. So the EPAC which was supposed to be the public extension of the accord-one of the greatest bits of phoney nonsense I have ever heard-was blocked from doing what it was supposed to be doing because it did not happen to suit the ACTU. In the whole Budget process, the ACTU has an extraordinary and incredible relationship with the Government. The Opposition parties sought to be advised of the sort of information the ACTU was given before the last Budget. We were told: `No, you cannot have access to that information; it is private'. It seems quite reasonable that if a large section of the community-that is, the ACTU-is to be given access to what was obviously confidential information about the economy, it is totally improper that other sections receive that privilege, that extraordinary benefit, of pre-Budget advice from the Government. We then, through the Freedom of Information Act, sought access to that. That application was rejected because the Government signed a conclusive certificate saying that it was not in the public interest that this information be revealed. If it is not in the public interest to reveal that information, why is it in the public interest to reveal it to a select, specific group like the ACTU which got a specific benefit from that knowledge? Let us look at the whole question of taxation reform, superannuation lump sum payments, and so on. In the taxation reform area we had the most extraordinary situation where the ACTU simply said that it was not prepared to put up with Mr Keating's proposals on indirect tax. As a result, those proposals sank before they even got to the National Taxation Summit. The list goes on and on. In prices policy, one can see the way the ACTU at its recent conference instructed the Government-I use the word `instructed' again-to tell the Prices Surveillance Authority to become more active in its surveillance of prices. In other words, a Labor government's natural tendency towards increasing control over the private sector was pushed much further by the ACTU because it said that the Government had not been effective enough through the Prices Surveillance Authority. As a result, that Authority is now having to upgrade and increase its intervention into the market place. Surely in this competitive environment the realities of the market place themselves should be the greatest controller of costs, not the artificial role of a government-dominated organisation. So across a whole range of activities one finds the ACTU expressing its view using its special relationship with the Government and its special capacity to blackmail the Government as a result of the Government's obsessive need to have the accord in existence. Senator Richardson denied that the assets test was in any way the result of any instruction from the ACTU. Let me remind him that in the mini-Budget of 19 May 1983 the Treasurer announced that lump sum superannuation payments which accrued after that date would be subject to taxation, in most cases at the rate of 30 per cent. The ACTU objected to this and so did many other people. The important point is that the ACTU argued for the re-introduction of the assets test to stop `double dipping' and that measure was subsequently adopted by the Government. On that issue let us recognise that the assets test is not the only way of making certain there is needs-based welfare and it is, of course, a totally inappropriate way. The fact is that the Government adopted what the ACTU instructed it to adopt on that occasion because it was one of the determining elements in the Government's decision. Senator Richardson —That is a very weak case. Senator MICHAEL BAUME —It is not a weak case because the ACTU continually tells the Government to do things and it continually does them. I have listed several of them, and I think the point-- Senator Aulich —You ought to write an opera. Senator MICHAEL BAUME —I thank the honourable senator. There is no doubt that the question of an opera is appropriate because there is no doubt that the Government is dancing continually to the tune of the ACTU. I commend the honourable senator for his perception. Let us examine the point that was made by Labor senators, that the accord has done something marvellous for Australia. The reality is that despite the accord Australia has recovered to a large extent economically from the results of the drought and the world recession-- Senator Aulich —And from the Fraser Government. Senator MICHAEL BAUME —The Fraser Government's wages pause gave the economy such a benefit by reducing the rate of inflation. It is incredible that whenever this Government talks about what the accord has done for Australia, it always omits to mention the key elements of that recovery. It is now evident that the one reason that our economy is now at risk, our balance of payments is at risk and our interest rates are going through the roof is that the accord itself is causing natural concern. It is involving wage rises that are higher than the market would justify, as Mr Kelty has already said. The ACTING DEPUTY PRESIDENT —Order! The honourable senator's time has expired. Senator RICHARDSON(New South Wales)(4.03) —I must respond to some of the remarks made by Senator Michael Baume who was allegedly speaking to the matter of public importance on the accord raised by Senator Chaney. In fact, he indulged in a 15-minute bout of union bashing, one of the regular bouts in which he gets involved. Like too many fighters who have taken too many punches, he has gone down for the count once again. The reality is that in Australia we have a work force which is 58 per cent unionised. That is the highest in the Western world. To think that anyone could suggest that we could run the economy-not just run it but turn it around from the shambles it was in when the Hawke Government came to power just 2 1/2 years ago, and make it function properly as it does now-and exclude the trade unions from any consultative process is nonsense. To use the phrase that Senator Baume used, it is arrant nonsense. The reality is that unless the trade union movement is consulted and unless it is prepared to take a responsible part in the running of this country, certainly a responsible part in terms of what the unions will do in terms of wage moderation, then all one can look forward to is disaster. Disaster was what was provided in the seven years of Fraser Government, particularly during those years when John Howard was Treasurer. There is a stack of evidence on that and it is evidence that I will take some delight in going into. The truth is that honourable senators opposite simply cannot handle the thought that the Australian Council of Trade Unions should ever have a role in being consulted about the way in which our economy should go. They cannot handle it because they have spent a lifetime ignoring and being hostile to the unions and trying to union bash. The more they did that while they were in government, the more the economy collapsed around their ears, not just because of wage explosions, as happened in 1981 and 1982, but because that sort of confrontationist policy inevitably leads to massive industrial disputation. All one is left with is strike after strike. It should be noted that when we are looking at the slide of the dollar and the problems our export industries are encountering at the moment it is proper to look at what happened when industrial disputation went mad in the Fraser years. There is no doubt that when strikes affect export industries in Australia the ripples are felt all over the world. While governments confront unions, refuse to talk to them, and bash them over the head with the empty words of Senator Baume, the end result is always that export industries are hurt. We have tried to reverse that process, to turn it around. We have tried by way of the accord to bring about a situation in which we could control inflation-something our predecessors could not do-moderate wages and, at the same time, make sure that industrial disputation was kept to a minimum. We have been successful on all fronts. The extraordinary part of today's matter of public importance is its wording. It says: The growing evidence that the accord is undermining the economic welfare of Australia. I submit that the opposite applies. The accord has brought much of the economic welfare that we have today and much of the recovery that we have seen in the last 2 1/2 years. It has brought it about because the ACTU was brought into the process. By bringing the unions in from the cold, as we did in 1983, we were able to achieve a wages growth that has been very moderate, and less than the consumer price index in some cases. Again, in contrast to the effort of our predecessors, we were able to keep our inflation rate low. Indeed, last year it was 5 1/2 per cent, the lowest it had been for many years. That was in marked contrast to the 11 per cent that it was when the Fraser Government left office. Let us take a few elements of the accord to make sure that Opposition senators can understand what it has delivered for us. Let us look first at the major reason why it provided a basis for an unprecedented period of wage moderation. Wage rises have been contained completely within the guidelines. For the year ending June 1985 average weekly earnings rose by only 3.2 per cent, the lowest rise in more than 12 years. That is what the accord has delivered. If honourable senators think that a problem has been caused by a 3.8 per cent increase decision by the Conciliation and Arbitration Commission, they should just imagine what would have happened if we had not kept average weekly earnings down so low. Had we allowed a wages explosion of the volume that occurred in 1981-82-and it must be remembered that at that time we were dealing with an economy that was dipping towards the bottom of a terrible trough caused by the economic policies of our predecessors-then the explosion today would be absolutely massive. That would make what has happened to the dollar in the last few days look pretty small and inconsequential. Senator Michael Baume —Did the wages pause do anything? Senator RICHARDSON —The Fraser Government's wages pause was announced two or three months before it went out of office in a desperate attempt to hang on to a by-election. It did that, but it convinced nobody and three months later it was thrown out. Senator Michael Baume has so much to say about this question that I wonder just how many speeches he made during those last few years of the Fraser Government. How many speeches did he make about the rise in interest rates? How much concern did he express then? If we searched the Hansard record I think we would find that the answer was nil. It would be nil because when it comes to Senator Michael Baume, he always looks at these things through blinkers. Those are blinkers of an hysterical, anti-union position which he has maintained all his political life. Perhaps that is why his political life in another place was cut so short. Of course, next year we have a discounting proposal which has come through and which we have been told today is not real. But the 2 per cent is real. It will be felt next year and I have no doubt that, when we project into that period, we will see the fate of the dollar-that it can turn around. The truth is that one does not react in panic and run for the hills every time there is some fluctuation in the dollar. The floating of the dollar was something that the previous Treasurer, John Howard, under the Fraser regime tried to do for a long time. In the end he could not face up to it, could not carry it through, could not get the numbers and did not have the basic courage to bat on when times got hard. Paul Keating showed that he had the courage and he delivered the goods. I add that it was a great decision. Keating has been rewarded with international awards for his efforts as Treasurer of Australia. Perhaps Senator Ray can help me, but I cannot recall at any time reading about any awards for John Howard. The only thing he did was to stand by as a spectator and watch the economy crumble. After watching that for a couple of years, he and his colleagues were thrown out. The real test of whether wages growth has been moderated is to look at real unit labour costs. After rising early in the 1980s, real unit labour costs have fallen back to their lowest levels for more than a decade. In real terms they fell by 3.3 per cent over the year to June. The reality is that this Government has delivered the goods with regard to unit labour costs. We have made sure that employers have a chance to plan for the future in a stable environment. The second reason why the accord has been successful is the relatively stable labour market that we now face. There will not be a wages explosion under the accord. Even three or four years ago no employer could be guaranteed that, because wages explosions happened for two years in a row. People know that wage movements will be in accordance with movements in the consumer price index; they will be slight and in some cases they will be less than the CPI. The third thing that the accord has delivered, as I mentioned earlier, is the level of industrial disputation which is now at its lowest for 17 years. Working days lost due to industrial disputes have fallen to and stayed at their lowest levels since 1968. There is no indication that that situation will change while the accord remains in place. As long as it is mantained, exporters can be sure that their position in foreign markets will not be undermined by industrial strife back home, as was so often the case in the early 1980s. Honourable senators opposite just do not understand the needs of business in that respect. Perhaps if they go out and check with some of their corporate sector friends, as I have done, they will discover that one of the things for which the corporate sector is grateful to this Government is that it has managed to create a climate in which industrial disputes can be limited. All of these factors have helped to contribute to the fourth thing which the accord has delivered and which has ensured that the Australian economy in the last two years has had the best performance of any of the Organisation for Economic Co-operation and Development countries. I refer to inflation which was at 11 per cent when we came into office and was at 5 1/2 per cent last year. The accord delivered the goods, again by restricting wage movements and ensuring that we had some moderation in them. That enabled Australia's inflation rate to be the envy of most of the OECD countries last year. While it has obviously increased this year with the immediate effects of the devaluation, it will be down again next year. All the projections for that are coming true. We have nothing to fear about the inflation rate next year. One thing is for certain: As long as the Hawke Government is in power the inflation rate will never go near the levels that were reached under the John Howard regime. The only alleged evidence that those opposite have come up with today of a problem with the accord is the falling dollar. The way they tried to talk up what they would do in response to that, if they abolished the accord, was to talk about some nebulous concept of deregulation of the labour market. Ever since John Howard became Leader of the Opposition and was thrust into prominence only a few short months ago, I, along with other senators on this side and no doubt a breathless public across Australia, have been waiting to find out just what the Liberal Party of Australia would produce-just what it would say about a deregulated labour market. In the end the answer has been nothing. First off, we had Messrs Howard and Carlton proclaiming deregulation as the answer. Then, when they discovered trouble and strife amongst their ranks, a split party and that too many people in the party room would not cop it, the Deputy Leader of the Opposition was given the job, which is often a job for hapless deputy leaders. Mr Brown had to step forward and say that the Opposition did not really mean complete deregulation but partial deregulation. Just what part would be deregulated we still have not been told. We are no clearer on this following the speeches by Senator Chaney and Senator Michael Baume. I have no idea what the Opposition has in mind. The sad, but clear fact is that neither has the Opposition. The truth is that when the Fraser Government tried an experiment in moving away from a regulated labour market in 1981-82, it got the inevitable result-a wages explosion of 17 per cent. It did not take Opposition members long to realise, when they again started talking about such a move immediately after John Howard's accession to the throne, that the business community just would not wear it twice in a row. The Confederation of Australian Industry promptly came out and said: `Hang on, boys. It's no go'. That is not surprising. What happened in 1981-82 would happen again if there were another foolish attempt to deregulate the labour market. Big unions would win big increases from big employers, from growth industries, and those increases would flow through to industries which just could not afford them. That was the reason that the economy fared so badly in 1981-82: The previous Government let it get out of hand. This Government has maintained some control and intends to continue to do so. I will quote from an article in the Sydney Morning Herald this morning by Ross Gittins, who is not exactly one of the great left wingers of our time. In talking about the falling dollar he stated: About the only thing the Government could do would be to tighten monetary policy even further, pushing interest rates yet higher. But this would be a panic move, made before the Government had time to gauge the effect of its earlier tightening. It wouldn't necessarily override market psychology . . . This Government will not be panicked. It knows where it is going. It is going in the right direction and I have no doubt that the dollar will recover. Senator COLLARD(Queensland-Leader of the National Party of Australia)(4.18) —We are told that this Government knows where it is going. I wish it would tell us and the Australian community because nobody knows, least of all the world. We are debating a matter of public importance, namely: The growing evidence that the Accord is undermining the economic welfare of Australia. Day by day we have mounting evidence that that is happening. I will first mention the contribution of the Australian Democrats to this debate. It lasted five, six or seven minutes and never once addressed the problem referred to in the matter of public importance. They said that the matter was not important and that the urgency motions that we have debated this week were not important, which implies that they believe that these matters are not relevant to the Australian community. I remind the Australian Democrats and the Australian people that on Tuesday we discussed the capital gains tax, which is something that should be discussed as it is a burning issue in this country which is so short of capital. Yesterday we discussed our ANZUS relationships; surely everybody understands that the defence of this country is of vital importance to us. We are now discussing the infamous prices and incomes accord and all that has happened. We have an inflation rate double those of our major trading partners and treble that of Japan which is our best customer. Yet the major contribution of the Australian Democrats was to say that this matter is not important. We have an overseas debt which now stands at $68.5 billion or 33 per cent of our gross domestic product or, if one likes, $4,000 for every man, woman and child in Australia. Yet the main contribution that the Democrats could make to this matter of public importance was to say that that is not important. We see the contribution that the Democrats make to this Parliament and to Australia. They seem to be hoist on their own petard. As Senator Siddons has said, and as everybody knows, they have made a deal with the Government over the tax package; they are now feeling the cold winds of the electorate breathing down their necks and are looking for all sorts of ways to get out of it. I wonder whether the Government will let them off the hook. The whole reason for the accord is tragic. We have a government and a Prime Minister (Mr Hawke) who claim to have a special relationship with the union movement. That is fair enough; I have no quarrel with that. Our country is a trading nation. Our survival depends on how we trade. The Prime Minister, who enjoys massive popularity with these people, had the chance to say to them: `We all have to tighten our belts. Let's do it at this time'. But no appeal to any sense of loyalty, the national pride or the common good was to any avail, even though he is a man who once led this group of people and who claims to have a special relationship with them. So we ended up with a sop to the union movement. The Government said: `We will do a deal, but go quietly. We have to dampen things down'. This sop has now become known as the accord. The accord does one or two basic things. It is an agreement between the Government and the union movement, as we have indicated, with no input from the business community, from employers. It is based on a principle of maintaining real wages, regardless of the economic circumstances of the time. In other words-the Government makes no bones about it; that is fair enough, but we differ with it-it is committed to full indexation. Part of the accord concerns 2 per cent discounting in the April-May wage hearing to allow for the effects of devaluation of the dollar. To make up for that 2 per cent discounting, the Government will offer tax cuts in September 1986 and 1987. The 4 per cent productivity case will not go ahead. Instead, a superannuation claim based on a 3 per cent productivity increase will be pursued. The Australian Council of Trade Unions says that that will add only about 2.2 per cent to labour costs. Of course, there are massive problems in the economy of this country. No amount of talk by the Government in debates in this Parliament and no amount of talk by Treasurer Keating as he journeys around the world will make any difference. The problems in our economy are now evident. The first problem, of course, is that everybody is locked into paying wage rises, whether or not he can afford to pay them. This has been reflected in our unemployment figures. It is especially true in regard to our export sector. As I indicated at the beginning of my remarks, we are a trading nation. Unless we can trade, unless we can export, we are in all sorts of trouble. That is being reflected now. Of course, our competitors have not pursued these policies. I have here a page from a brochure which has been issued by the Minister for Employment and Industrial Relations, Mr Willis, in regard to the accord. He uses this brochure to say to the union movement: `Look, we have done this and other countries have not'. Under the heading `The Achievements of Accord' the brochure reads: In following this course, in contrast to many other countries, the Australian Government is determined not to revert to the orthodox response to devaluation of using contractionary economic policies to reduce inflation. It also rejects calls for the dismantling or destruction of our wage indexation system. Wage indexation systems overseas have been recently interrupted or suspended, with no one system escaping unscathed through the 1980s. It then contains some sentences preceded by dot points. I will read a few of them: In Denmark, wage indexation has been frozen by legislation for four years. In Belgium, wage indexation was frozen temporarily and then discounted by 2 per cent per year for three years on a compulsory basis. In Greece, plateau indexation has only recently been introduced and since then it has been applied formally only in the public sector. In Ireland, indexation was abandoned in 1982 when centralised wage bargaining collapsed. In the Netherlands, wage indexation was suspended, and replaced by gradual moves to shorter hours accompanied by reductions in real weekly wages. In France, indexation has been formally banned through legislation since 1958. While it was common in collective agreements, its incidence is declining. In other words, it is stating that Australia is the only country in step; the rest of the world is out of step. It is a crazy situation, is it not, for a trading nation. These are the nations with which we want to trade or which we want to trade against. We want to get our exports into their economies or we want to compete with them in getting our goods into other economies. Australia is the only country in step and the rest of the world is out of step, but they are doing fine and we are not. Our export competitiveness is being reduced. That is indicated in the figures. Our exports have declined from 20 per cent of gross domestic product in the 1950s to 13 per cent of GDP now. But in regard to more up-to-date figures, the value of our exports has fallen from $3.003 billion in May to $2.700 billion in September. The Treasurer has told us on many occasions that devaluation will help our exports, but that is not being indicated in the figures that we are seeing. The mining and rural sectors are the only bright spots in regard to exports. They are already under pressure because of declining world prices. This week we have been able to see the Bureau of Agricultural Economics forecasts with regard to the rural sector. The forecasts are not good. We know already that the cost-push system is catching up with those two sectors of our economy.Things will not be very good for us in those areas. The floating of the dollar is probably the best thing that the Government has done, particularly for the Opposition and for the people of Australia. Senator Maguire —Mr Howard said he would float the dollar. Senator COLLARD —We intended to float the dollar; there is no question about that. We agree with that. I make the point that the Government's floating of the dollar is the best thing that could have happened to us and to the people of Australia, because we can see our performance in the same way as the rest of the world sees it. That is really what the figures that we are seeing now with regard to our trade weighted index and our relationship with the other currencies are all about. It does not matter what Senator Richardson talks about in regard to what a lone editorial writer has said. That is how the rest of the world sees us. Of course, the latest wage indexation rise of 3.8 per cent in accordance with the accord, as announced this week, has been responded to by the world. Our dollar is falling against the currency of all of our competitors and it is even falling against the falling American dollar. The trade weighted index, as announced this morning, is down to 59.3. This affects everybody, but I suppose it is fortunate that the home owner does not see that he is being affected-although it would be good if he did-because the banks and the building societies extend the term of his loan so that his monthly repayments are such that he can handle them. But it directly affects our interest rates. Business people-I include the rural producers-are directly affected. People who borrow money and work out their budgets so that they can handle the repayments and the interest rate on the amount that they have borrowed now have to go out of business and sell up for no other reason than the all-time high interest rates that are affecting this country. This is a direct result of the accord-the high costs, our current account deficit-as the Government must keep the interest rates at a high level to encourage money to be brought into the country; otherwise our current account deficit would go to blazes and the dollar would fall through the floor. It is having a direct effect on almost every family in Australia, but it is not as noticeable to the people. I guess that is how it should be, otherwise they would be in trouble. It is not as noticeable to the home loan borrower. One part of the accord refers to the social wage. For those who do not quite understand, I shall put it in simplistic terms: Our standard of living is based on government expenditure. That explains why government expenditure as a percentage of our GDP has gone up quite astronomically in recent times and is at an all-time high. It is going up more and more because the standard of living is being propped up by government expenditure. That is another nefarious part of that accord which many people do not necessarily realise. I think the Government should have learnt a lesson from the days of 1973 to 1975. We saw the most unprecedented wage rises in Australia's history. In those three years our unemployment more than doubled from, I think, 1.4 per cent to 3.1 per cent. Of course, our consumer price index or our inflation rate also went up. In 1974-75 it was at the highest level of 16.8 per cent. But I think for some quarters it was up to 18 per cent and was probably getting close to 19 per cent. A lesson should have been learnt from that. Once a government starts tampering and providing wage increases beyond those which the community and the economy can handle, it is in all sorts of trouble. That fact is being reflected possibly in different ways in this day and age, but it is being reflected nonetheless. The world community is delivering its judgment on a day by day basis, as it now turns out. As I said when I started my speech, this accord has been a sop to the trade union movement. I am quite sure that the Prime Minister, with his special relationship, could have used more of his influence, appealed to the national pride and the common good that does exist in Australia, and said: `Listen fellas, we have to tighten our belt. This country has to settle down, increase our productivity and increase our ability to pay before we can go down the track of any further wage increases'. But that has not happened. So, as a sop to the ACTU we have this accord and we have paid an awful price for it. Senator COONEY(Victoria)(4.32) —The whole thrust of the argument put by the Opposition today is that a scapegoat ought to be found within the Australian community, and that scapegoat seemed to be the Australian Council of Trade Unions. The call is a call to arms. Whereas this Government so far has gone forward with unity not only with the ACTU but with the whole Australian community, the call from the Opposition is that that should end, that the battle lines should be drawn and that the trade union movement should be made the scapegoat for the problems from which the Opposition perceives Australia is suffering. What could be a greater recipe for disaster than that? But that point has been put forward as a matter of public importance today. The Opposition thinks it is a matter of importance that the approach taken to the trade union movement through the ACTU should change. That is the whole purport of this discussion. The Opposition thinks that the approach should go from one where there is an attempt at co-operation, which is generally successful, to one where, it is declared, this Government should go to war, and if it does not go to war the Opposition will do so when it comes to office, whenever that may be. In my view, and I should think in the view of most listeners, that is a recipe for disaster and for the sorts of things that we experienced at the start of the 1980s under the old Government led by Mr Fraser. Senator Collard attacked the social wage. He said that that should be reduced. He said that the services provided by government to the Australian community should be reduced and that people should get less than they presently do. He said that this Government is a big spender and that expenditure on social wages is soaring. Senator Collard —You would not deny that, would you? Senator COONEY —Only in this way: We can look at the big government league table, which I have. I note that general government spending as a percentage of gross domestic product in Australia is 36 per cent. Those countries which spend more of the gross domestic product on government spending include the United States of America, Canada, Britain, Norway, West Germany, France, Ireland and Sweden, which spends 67 per cent. It tends to become a little worrying when people come into this chamber and purport to influence the Australian people by creating the impression, which is false, that this is a big spending government compared with those in the rest of the world. The simple fact is that is it not. Even Japan spends 34 per cent, which is only 2 per cent less than Australia spends. Nevertheless, that is too much for the Opposition. It cannot see that the services provided to this community are desperately needed. The Opposition has said that we should not spend on health, education and all those things which we, as a civilised people, have come to expect should be provided for us. Not only should they be provided for us but also they are essential in order for the sort of society in which we live to continue. Yet Senator Collard said that that spending should be cut down. He said too that the rest of the world is doing fine. In the Sydney Morning Herald of 17 October 1985 there was an article on an all-party committee report from the House of Lords about England, which Senator Collard said is doing fine; it is part of the rest of the world which is doing fine. The article stated: In a doom-laden but authoritative report on Britain's economic future, the committee-which includes three former ministers and eminent figures of industry and finance-concluded that the country's trading surplus in oil, which has so far disguised the underlying deterioration of the UK's balance of payments, will reach its peak this year, and will have virtually disappeared by 1990. From then on, the committee foresees: A contraction of manufacturing industry, to the point where the successful continuation of most manufacturing is put at risk. An irreplaceable loss of gross domestic production. An adverse balance of payments of such proportions that severely deflationary measures will be needed. Lower tax revenue for public spending on welfare, defence and other commitments. Higher unemployment, with little prospect of reducing it. The economy stagnating and inflation rising, driven up by a falling exchange rate. The article called for a change in the policy of the Thatcher Government, the very policy that the Opposition says it will bring in when it comes to government. So, if we follow Britain, which is what the Opposition purports we ought to do-it is described as doing fine-we will have disaster. We will have the same sort of thing as this all-party committee from the House of Lords, including three past Ministers, said is a disaster. Do we want to go from a situation where we as a community-the ACTU being an important part of that community as well as the business section, the manufacturing section and all those other sections-go ahead in some sort of peace together and follow the recipe put forward today which will lead us to disaster because of the conflict that will be caused and because of the sorts of things that have happened in England? That is the sort of thing that is being put forward by the Opposition today. The Opposition has said again that the workers of this society should tighten their belts. One can well imagine the picture that is presented by that. Imagine the people who depend upon a wage tightening their belts as they look through the window of a restaurant-a cafe would not be grand enough-at people spending $250 or $300 on lunches which the Opposition says should be tax deductible. This Government is being criticised again for allowing a 3.8 per cent wage increase. The newspapers are talking about what the effect of that will be. They start with the people who earn $150 a week. That is $150 a week less than the amount of money that the Opposition says ought to be allowable as tax deductions for lunch. After tax, people on $150 a week will get an increase of $4.40. But the Opposition says: `No, the ACTU is wrong in pursuing $4.40 to be added to $150 a week for these people'. The fact of the matter is that it is very hard to live on $150 or $200 a week. It is very hard to live on $250 a week, which is the amount which, according to the Opposition, people should be allowed to deduct for a free lunch from the taxation they would otherwise pay. That is what the Opposition has been saying today. It says that the accord is wrong. It ignores the fact that as from September next year those most in need of help will be paying the lowest rate of tax of 24c in the dollar. However, under the Opposition's scheme they would have to pay tax of 30c in the dollar. That proposal does not worry the Opposition because it would not affect those people who go out after the free lunch. Those people will now pay less in tax and the Opposition is pleased about that. However, the Opposition cannot see any joy in the fact that the people in the lower part of the scale will have to pay only 24c. The Opposition says that they should pay 30c in the dollar so that free lunches can be made tax deductible. Senator Messner —What a load of rubbish. What about trade promotion and job creation? Senator COONEY —Of course it is a load of rubbish, and that is exactly what we are saying. We agree with the honourable senator entirely that it is a load of rubbish and we are very surprised that the Opposition should have put it forward. I am just quoting what the honourable senator has said. The honourable senator has called it a load of rubbish. I thank him for that. I would have thought that what he said is very unkind in respect of his colleagues who put this proposal forward. We on this side have understood it to be a load of rubbish. However, certainly the fact that the honourable senator has now joined with us and concluded that what his colleagues are saying is a load of rubbish endorses exactly what we are saying. Senator Michael Baume says that in spite of the accord, Australia has recovered from the drought. He said that the world is in recovery. He gave the impression that everything in the world is joyful. This is hardly the impression created by what we read in the newspapers. As Senator Collard said, the value of the United States dollar is falling. In addition, I have cited what is happening in the British economy. Senator Baume objected to the ACTU asking the Prices Surveillance Authority to do more than it is presently doing. I suppose that, in putting that forward, he objects to the Authority looking at the charges imposed by the Australian Telecommunications Commission and the Australian Postal Commission. The latest reports of the commissions reveal that this is what it has done. Why should not the Prices Surveillance Authority look at the charges imposed by Telecom Australia and Australia Post? Is the objection taken by the Opposition a preliminary to the privatisation of those bodies? Is the Opposition objecting to what the Authority is doing because if it gets the chance to privatise the telecommunications and postal systems it wants those bodies to be in a position to charge as much as they like? Is that what the Opposition's objection is all about? Senator Baume quotes the Economic Planning Advisory Council as an authority. He says that the Government should take more notice of EPAC and should publish what it says. I point out to Senator Baume that the Australian Financial Review of Friday 18 October 1985 contains a statement about EPAC. The publication states: EPAC backs Government on foreign debt. If the honourable senator wants a quotation in respect of what EPAC has said, I draw his attention to the statement that I have just read which shows that EPAC endorses what this Government has done and its plans for the future. Senator Baume asked the old question of who is running the country. I suppose one thing we can say is that it is very fortunate that the Opposition is not running the country at this stage. It is very fortunate that this Government-it has made a point of conferring with the various bodies that represent not only the workers but also the business community-is running the country. This Government, which refers to, talks to and listens to not only the ACTU but the Confederation of Australian Industry, the Business Council of Australia and all other business organisations is running the country. This Government runs the country on the basis of the advice it receives from and conferences it has with various bodies. It runs the country on the basis of a proper reference to these various bodies. The Opposition declared in this chamber today that far from conferring with these bodies, it will crush the ACTU, the representative of millions of workers in this community. It is fortunate that that situation has not eventuated. Let us hope that it never does eventuate while the Opposition has that attitude. Senator Chaney quoted from today's edition of the Australian Financial Review. He said that the editorial says some nasty things about Mr Crean, Mr Kelty and the ACTU. But he did not quote all of the editorial. Why quote part of the editorial? He is fixed upon quoting something which he seems to think brings comfort, but why not quote the rest of the editorial? That editorial states: But like the medieval concept of the `just price', no such simple tool is available. That is, no such simple tool as wage flexibility on its own. The editorial continues: However, overseas experience over the past decade shows two main things. The first is that wage flexibility is essential. The second is that such flexibility, while important, is not enough to guarantee smooth adjustment to external shocks. I say that the ACTU and the centralised wage fixing system have served this country well. However, Senator Chaney takes the opposite view and says that they do not. He quoted from the Australian Financial Review to support that assertion. It is reasonable that he should do so. But why does he quote only part of the editorial? If he comes in here purporting to put forward a case, which I take it he is putting seriously, why does he not quote all of what was written? The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable senator's time has expired. Senator MORRIS(New South Wales)(4.48) —I certainly was not going to enter into this debate. However, having heard what was said by the Leader of the National Party of Australia, Senator Collard, I feel that I must make a few remarks. To my disgust and amazement I could not believe that an ex-train driver could make such a speech in this place. Senator Collard asked workers to pull in their belts. I wonder what workers he was suggesting should pull in their belts in regard to the accord? The average blue collar worker is taking home about $230 a week after tax. Senator Georges —If he is lucky. Senator MORRIS —Yes, if he is lucky. Senator Parer —Not where Senator Collard comes from. Senator MORRIS —Maybe not where Senator Collard comes from. Certainly Senator Collard has asked those sorts of people to pull in their belts. I wonder whether Senator Collard would be prepared to pull in his belt and donate some of his salary of $800 a week. I congratulate the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating) on their very fine achievement in regard to the accord. It is amazing to recollect that the National Party leaders as well as representatives of the National Party and the Liberal Party did not even attend the Summit in Canberra to put their points of view. Yet, they have the audacity to attack the very good liaison that has been built up between the Australian Council of Trade Unions and the Labor Government. The Opposition does not know what it is talking about when it says that some secret deal is going on between the ACTU and the Labor Government. It does not understand that we have a tripartite situation. I know what employers would say to the Opposition if they were asked whether they would rather have an accord and wage indexation or go back to the good old days of the concrete jungle when one had to fight for the best one could get. They would say that they want the accord. That is why they are working so well together with the ACTU and the Government. I make those few remarks to let the people of Australia know about the cons on the other side of this House, who are trying to destroy something that has been built up and which those opposite know in their own minds they could not build up by negotiation or by dialogue with the ACTU. As other senators have mentioned today, the only thing they achieved over that period was the dismantling of the wage indexation system back in the early 1980s. We know what happened during that period. As honourable senators on this side have said, there was a situation where the strongest got the best and the weakest got nothing. Those opposite want to go back to that situation, but it will not be accepted by the trade union movement and it will not be accepted by the community. I suggest to Senator Collard and his colleagues who are pushing this bandwagon that they should go back and talk to the people who count-the people of New South Wales and the people of Australia. Senator ZAKHAROV(Victoria) —I table further additional information received by Estimates Committee E and seek leave for it to be incorporated in the Hansard record of the Committee's proceedings. Leave granted. Senator GEORGES(Queensland) —I table further additional information received by Estimates Committee F and seek leave for it to be incorporated in the Hansard record of the Committee's proceedings. Leave granted. Debate resumed from 5 November, on motion by Senator Collard: That the Senate take note of the paper. Senator PUPLICK(New South Wales)(4.52) —The report presented to the Minister for Arts, Heritage and Environment (Mr Cohen) by the Working Group on Rainforest Conservation was released to the public in September 1985. This paper has to be read in association with one prepared by the Standing Committee on Forestry of the Australian Forestry Council on a draft national forest strategy for Australia. Both those papers draw our attention to a number of very serious matters in the conservation of rainforests in Australia. Indeed, I am glad to observe that the report, in terms of rainforest conservation, is one which has the endorsement of all governments, including the Queensland Government and various other State governments throughout Australia. I want to make a point which is of some importance as far as my State of New South Wales is concerned. Just recently the Opposition parties in New South Wales released their own rainforest conservation strategy. The Shadow Minister responsible in this area, my colleague Tim Moore, the Member for Gordon, has produced and released a rainforest conservation strategy based upon these principles: First, a commitment has been given, not only on behalf of the Liberal Party in New South Wales but also on behalf of the National Party in New South Wales, that under a future coalition government in New South Wales there will be no logging in any of the New South Wales rain forests; secondly, there will be no changes made to any of the existing national and State park boundaries in New South Wales; thirdly, there will be compensation for disadvantaged landholders; and finally, my colleague Mr Moore will be the Minister responsible for the administration of the State's parks and of this forest policy in a government headed by Nick Greiner, who has publicly endorsed this policy. It is of some importance to indicate that there are a number of recommendations of very great significance in this report. The first occurs at page 100 of the report, where the working group recommends to the Commonwealth Government the `consideration of nomination of rainforest areas in Australia for World Heritage listing'. I believe this to be a matter of very considerable significance. The rainforests of this country are greatly endangered. The rainforests of the world are endangered. A recent article in the Sydney Morning Herald indicated that 11 million hectares of tropical rainforest-an area the size of Austria-is being destroyed each year. At this rate 225 million hectares of rainforest will be lost by the year 2000 and with it will disappear an estimated 10 to 20 per cent of the earth's animal species. This is a situation which cannot be tolerated. The genetic diversity of the rain- forests and the existence of the so-called Vavilo centres within the rainforests, which are the pools of genetic differentiation for animal and plant species, are matters of very great significance. There are a couple of other points in this report to which I think attention must be drawn. One comment in regard to the rainforests in Tasmania is of significance. Page 39 of the report indicates that the long term maintenance of Tasmanian rainforests depends on the exclusion of fire. One therefore reads with very great concern the reports from Tasmania of the recent fire at the end of October. Admittedly, it did not take place within a rainforest area, but it occurred as the result of a burn-off that was supposed to be managed by the Tasmanian National Parks and Wildlife Service but which got out of hand and did an enormous amount of damage, threatening forests, and endanger bird species. The last point I make very briefly is that it is most important that the Commonwealth re-examine the backdown in which it has been involved as far as the Daintree is concerned. Problems have been indentified there-for instance, the threat to the significant species of the gastric-brooding frog and a number of other wildlife species which need to be conserved and which are of enormous significance and of potential benefit from a medical and scientific point of view. I believe the problems that have been identified expose one of the great weaknesses of this Government in terms of the rather craven way it has handled the Daintree and the rather craven way in which it has not been prepared to take on an issue of national significance and to respond effectively to the legitimate demands that have been made for the preservation of that rainforest area. Senator MASON(New South Wales)(4.57) —This report on rainforest conservation is unexceptionable, even commendable, except that it has not saved a single tree. Indeed, in the course of its printing and publication I have no doubt that it has consumed paper that has destroyed a number of trees. The fact that this report is in the realm of words rather than action is its main fault. I could scarcely disagree with its recommendations since they are very much in line with my own private member's Rainforest Preservation Agreements Bill 1982-four years ago-which is listed for debate later today but which we all know will not pass because both the Government and the Opposition have expressed opposition to it. This in itself is an eloquent testimony to the double-talk with which this issue is approached continually by the Liberal and National parties and the Labor Party, which want to duck out for dimly perceived electoral purposes, especially in Queensland. Let us face the truth over that. The Australian Democrats for many years have been very concerned about the organised destruction of our rainforests and the extremely leisurely attitude of the Government to what in other nations would be properly regarded as national monuments. I refer to the 1000-year old giant trees in places like the Mount Windsor tableland in Queensland, the destruction of some of which I witnessed when I visited the Mount Windsor tableland a couple of years ago. Those big trees, which in other countries would be revered, almost worshipped, because of their age and value and the impossibility of replacing them, were destroyed so that they could become veneer on someone's furniture or boat. They have not added a single square metre of living space to an Australian home or business. They are there in the veneer business. It is about time we all got the word around that it is vulgar and in bad taste to stick rainforest veneers on the front of our furniture. What is wrong with good honest timbers which are solid all the way through? If Australians begin to realise that that timber is much more beautiful in the forest than on the front of their furniture, we might get a decent sort of attitude. Every time a big tree was brought down in that area-I had a look at this myself; I looked at the areas where the big trees had been brought down-a huge expanse of natural vegetation around was also damaged and virtually destroyed. It does not restore itself to its natural state. In the Mount Windsor tableland the areas around it became infested with a particularly nasty weed, the thorny Gympie weed or Gympie bush. Senator Collard —It is not thorny; it is stingy. Senator MASON —It is stingy; that is right. Most Australians do not now agree with the tradition that began all this problem-if it moves, shoot it and if it does not, chop it down. There is a general understanding in the community that we have one of the lowest rates of afforestation in the world. People now generally understand that we live in symbiosis with other living things-plants and animals-and that indeed that relationship keeps us alive. If growing things did not provide oxygen and use carbon dioxide we would all very quickly gasp ourselves to death in our own production of that waste. Forests also affect climate importantly. Elsewhere in the world this is understood. It is not understood in Australia and is particularly not understood in this place, judging from the response to a very reasonable Bill which is my own but which was not of my authorship. It was designed and drafted by Mr Justice Murray Wilcox who was then President of the Australian Conservation Foundation. It was the Australian Conservation Foundation's Bill and it was very reasonable and very good. The recommendations are confirming what that Bill said four years ago. It is an indictment of this Parliament that two governments over that time have done nothing about it. I would just like to make a brief, important contrast of Australia's situation with that of China, a much poorer country than Australia with much smaller resources. According to the People's Daily on 29 June this year, an enormous effort is being made to increase the forests of China. I saw some of this when our delegation was there a while ago. There has already been a 50 per cent increase in forest cover since 1949. In that year trees covered only 8.6 per cent of China; the figure is now 12.7 per cent. By the end of the century the Government of China intends to make it 20 per cent. By contrast, the most ambitious figure we can get for Australia is 5.5 per cent of forest cover. I suggest it is about time we got our act together, stopped the bad joke of subsidising the Japanese to take away our woodchips and gave this matter the serious consideration it deserves. Senator ARCHER(Tasmania)(5.03) —The report entitled `Rainforest Conservation in Australia' is, without doubt, a very useful document. Many areas appear to be covered on a rather incomplete basis at this stage and many areas stand out as requiring considerably more work. There seems to be little understanding of what various State authorities have done over the last decade or so and what they have in train to recognise the adequate differences between the various types of rainforest in Australia. The overall broad brush method is not really the way to solve these sorts of problems. The report shows very clearly that there is a need for much more data, especially an accurate inventory, and for considerably more objective research. The document will be very useful for debates and discussions, particularly in the wide area of preservation and conservation; and the need to appreciate that is in the report. Mr Thompson, in his letter to the Minister for Arts, Heritage and Environment (Mr Cohen), raised that matter when he said: Different interpretations were placed on the word `protect' in the recommended Commonwealth Rainforest Conservation Policy. The views of the timber industry and Queensland forestry authority representatives would have been better represented by the word `conserve', whilst the views of the conservation representatives would have been better represented by the word `preserve'. It is not possible to remove sociological and economic considerations from any investigation. Those who would try to ignore the importance of the reality of life-that man and the environment must co-exist-are preventing a reasonable and meaningful discussion on this subject. The report shows that no drop-outs, dropins, disruptionists, crackpots, sensationalists, headline hunters, or whatever they might be, should be allowed to get in the way of a reasonable discussion on this subject. I consider the recommendations listed in paragraph 7.2 of the report to be quite predictable and to cover very adequately a range of interests represented by the Working Group on Rainforest Conservation. The balance to be achieved will be interesting and not without complications, but with this document as a starting point I am sure that practical and reasonable solutions can be achieved. The Senate Standing Committee on Industry and Trade in its 1981 report on forests dealt with rainforest management and spent much time deliberating on rainforests, their management and conservation. Most Australians have a broad view of and very real interest in conservation, as they do in the nation as a whole. It must be looked at as to where it fits into the Australian nation. I commend the report as a very useful document from which research can be planned and from where a true inventory can be prepared. Those charged with the management of the country and of the forests can really settle in and start to do some meaningful work. Senator MISSEN(Victoria)(5.05) —I join with my colleagues who have pointed out the significant matter that the report entitled `Rainforest Conservation in Australia' discloses. The fact that this is a unanimous report is important, because it covers people coming from all parts of the country who are concerned with and are highlighting the problem which is before us. It is important, therefore, that it should not be allowed to pass this Parliament without great consideration. I believe there is a need for very urgent and extreme consideration of the problem. I agree with my colleague Senator Puplick that the world heritage application should be proceeded with with extreme urgency. For various reasons, it is a good idea and will bring the matter under proper control. The problem is that very little rainforest is left and very little is accessible to people. By `accessible to people' I mean not only to loggers, but also to Australians and visitors. I think the world heritage application will be important from the tourist point of view, quite apart from other matters. This is a serious problem. I would have thought that the Government would have shown more urgency in dealing with the matter. Mr Cohen expressed the Commonwealth Government's concern for rainforest conservation when opening the Rainforest Conference in Cairns in February 1984. As reported on page 77 of the report, he stated: There is no doubt in my mind that the national Government has a role in protecting a resource that is part of our national heritage. At present rainforests are one of the most threatened parts of that heritage. I do not think the actions of the Government have been other than dilatory. Recently we had an offer which shows that the Queensland Premier at least is prepared to look at. It is a fact that approximately 80 per cent of the total rainforest area has gone and very little remains now that could be logged. On page 79 of the report it is stated: The most significant of the areas liable to future logging are in northern Queensland, where 1986 will mark the end of an era of more than 100 years of virgin rainforest logging, as virgin areas available for logging will have been worked through. There are also substantial areas of virgin rainforest in Tasmania where logging has been deferred until 1988 pending a comprehensive inventory and assessment by State Government departments. It is very important that this matter is worked on very swiftly. Likewise, I think that the application for world heritage listing should be attended to without delay. I believe that the report, which I have not had the opportunity of studying completely, ought to be looked at. I know that the House of Representatives Standing Committee on Environment and Conservation is looking at the problem the road has caused to the Great Barrier Reef next to the Daintree Rainforest because the flooding of silt and other elements onto the reef has probably done permanent damage. I hope the Committee will report on that matter very soon. I hope that this Government will show much greater enthusiasm, the sort of enthusiasm it showed in regard to the world heritage in Tasmania a few years ago. That enthusiasm seems to have evaporated. The Government seems to think that it has done all that needs to be done and, therefore, does not need to bother; it is more conscious that it might upset somebody. I hope the Government will realise that a lot of people in this country feel very strongly about these issues and expect the Government now to protect and preserve what remains of our rainforest. Senator ROBERT RAY(Victoria)(5.10) —I did not intend to enter this debate but I must say that I think the Liberal Party is trying to have its cake and eat it too. One section of the Liberal Party is saying that the Government has not been diligent enough in the protection of rain forests while another section says that we go too far. What the Liberal Party is trying to do is to get the conservationists' vote on the one side and the red-neck vote on the other. I see Senator Collard looking at me. It is interesting to note that the National Party of Australia remains ominously silent today. Senator Puplick —Senator Collard has already spoken, that is why. Senator ROBERT RAY —He can, of course, speak again. In Senator Puplick's absence, we amended the Standing Orders. Honourable senators can speak more than once on papers. He can take the opportunity to do so again during the consideration of General Business. I would have thought that on such an important issue Senator Collard may have stood up to correct both Senator Puplick and Senator Missen; or does he agree with both those honourable senators? Is the Opposition just having two bob each way, like it always does? I agree with something Senator Missen said when he pointed out what a tourist attraction rain forests are. I was not a supporter of the building of the Daintree road. I have been up there and I believe that, if anything, a proper road should have been put down because one cannot hire a four wheel drive vehicle within 100 miles of the Daintree. Every conservationist and forest lover around-there are many of them-has hired them. They are all using that road, incidentally, although I would not accuse them of being hypocritical because it is one of the few ways to see the forest. The Daintree Rainforest is a major tourist attraction. People such as Senator Archer come into this chamber and start saying that one has to think about the social, economic and all the other consequences. The rain forest is an asset that will bring hundreds of thousands of people to Australia over the next decade and centuries to see these sorts of unique areas. It is no good wiping them off. Senator Missen asks us: `Why are you not more enthusiastic?' Every time this Government or any Federal Labor government takes on a State government, all the Liberals opposite, bar one I admit, say: `No, States' rights are more important than rainforests or anything else'. They all jump out from under their rocks and start pushing the States rights' barrel so we can do nothing. So we are a little more cautious in our approach these days. We do not jump in like we used to because we find-- Senator Crichton-Browne —Hear, hear! Senator ROBERT RAY —We do not jump in like we used to because we find that one can never trust what Senator Crichton-Browne's Party says. One moment it is supporting a constitutional amendment because it is in power. The next moment, the moment it is in opposition, it is opposing it. It has no consistency at all. That is because it is a pack of individuals without principle who just go on personality. I rose to make the point that the Liberal Party speaks with a forked tongue, that it is split on this issue and is trying to get the best of all worlds. Senator Archer and others are taking the gung ho, private enterprise, chop it down at all costs approach. Senator Puplick, Senator Missen and others are taking the approach that the Government has not done enough. I invite Senator Collard to tell us what the National Party's attitude is. It is the National Party State Government that is chopping down every tree it can find in Queensland. I would have thought that such a pragmatic person as Senator Collard would realise that in the end there is more money in tourism than there is in wood chipping. Senator Collard —Mr Acting Deputy President, I hope that you are as generous with the Standing Orders as Senator Robert Ray is. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! Senator Collard, is it your intention to speak on the same paper? Senator Collard —It sure is, Mr Acting Deputy President. The ACTING DEPUTY PRESIDENT — Under Standing Orders you are debarred from speaking twice on the same paper. Senator Collard —Mr Acting Deputy President, you are not as generous as Senator Ray. Senator Robert Ray —Seek leave to make a statement. Senator COLLARD(Queensland-Leader of the National Party of Australia) —Mr Acting Deputy President, I seek leave to make a statement, seeing I have been challenged. Leave granted. Senator COLLARD —I will not abuse the privilege the Senate has given me. Senator Ray has challenged me. Unfortunately, he was not in the chamber the other day when I offered a few words on the report entitled `Rainforest Conservation in Australia'. As has been pointed out by Senator Missen, the Queensland Government played a part in the report and, indeed, is quite happy with it. Undoubtedly, there would be areas of definition where we would probably differ with some of the conservationists but I say here and now that there would be a lot of common ground between me and the genuine conservationists. I have already found that to be true in some of my discussions with those who are genuinely concerned about conservation. I pointed out the other day-I suggest that Senator Ray read the Hansard-that a large area of the existing rain forest will not be logged for various reasons. It is in national parks and the Department of Forestry has set it aside. This is where I differ already with some of the conservationists. We believe that some of the areas that are being logged can be selectively logged and then locked up for 30, 40 or 50 years. Senator Robert Ray —But you agree with the point about tourism giving more money? Senator COLLARD —I do. I use this opportunity to mention the Daintree road which Senator Robert Ray so rightly mentioned. The Daintree Rainforest is not being logged except by one very small operator who has the ability to log about 700 hectares out of a total of 190,000 hectares. His allowed take is somewhere around 3,120 cubic metres per annum which he has not yet taken. A lot of the Daintree Rainforest is locked up in national parks. As far as Daintree road is concerned, when the Daintree area was made a national park it was in the full understanding by the National Parks and Wildlife Service that that bit would be excised for a road. Only one and a quarter kilometres of it-this is where I ended my speech the other day-actually runs through the `primeval, pristine rainforest'. Once one gets beyond that one is starting to get into eucalypts, hardwood ridges and open grasslands, the result of what happened when the Aborigines husbanded the earth by burning it every two or three years. The road only runs through that small area of rain forest. It is high stress rain forest area anyhow in that for aeons it has been subject to cyclones and knocked around pretty badly. The nearest of the areas which are considered by the Department of Forestry, the National Parks and Wildlife Service and the conservation movement as quite unique with unique flora would not come within 10 kilometres of the road. I agree with Senator Ray. The road should be better. The rain forest is a great tourist attraction for those people who want to go to Queensland to look at it. The road along the coast will be magnificent as is the road all the way from Cairns. I have advocated that the national highway should be extended through that area up to Cooktown and brough up to bitumen standard so that one does not get much run off and the road is properly made. That would allow people to see what is a magnificent area and what is some of the last rain forest in Queensland. The Queensland Government has a good record in regard to its national parks and forestry. It intends to continue that record. As I said, a vast amount, 66 per cent, of the rain forest in Queensland will not be logged. Senator GEORGES(Queensland)(5.19) —Let me inject my views into the debate on the report entitled `Rainforest Conservation in Australia'. Senator Gareth Evans —Oh, shut up! Senator GEORGES —Does the Minister have a complaint to make? Given the amount of time he takes up in this place, he ought to be generous enough to concede a few minutes to me. Senator Gareth Evans —It was a silent prayer. Senator GEORGES —The Minister should not start praying when I get to my feet. I wish to express a view that we ought not be considering roads, tourists or four wheel drive vehicles for areas such as the Daintree rainforest. It is an area which should be allowed to exist with as little impact by man as possible. I would have thought that that would have been the approach to many of these areas. They are quite unusual areas and should be permitted to exist as wilderness areas. For that reason one ought to question the building of roads so that people can race through these areas at 80 kilometres an hour and catch an occasional glimpse of greenery and, shall we say, quietness along with the other impressions one gets. That really is not good enough. That is the way we have tended to go for so long-getting fleeting glimpses of great beauty. I have a view that this area, and many other areas in Queensland and the rest of Australia, should not be misused in this way. I wish to put the counter view that tourism is not an absolute essential and in this case we should protect the forest. If we are going to have tourism, we will need facilities and we will need roads. If we have roads they will be travelled on by four-wheeled drive vehicles. Senator Mason —Senator Georges, would you agree that we should get Senator Robert Ray to put a pack on his back and walk through the area and that it would be good for him? Senator Archer —How about giving someone else a bit of a go, Senator Mason? You are rattling on like a pebble in a can. Senator GEORGES —I say to the honourable senators who are interjecting that they may carry on. If they wish to take up the next two minutes, they may do so. There are certain areas where people can enjoy the environment in the ways that have been suggested by several honourable senators. But there are some areas that ought to be protected from human intrusion and the Daintree is one of them. So we have to broaden our concept. Senator Walters —It seems to me that the Labor Party is talking with a forked tongue. Senator GEORGES —I am not like some people in this place who do not speak with a forked tongue but who seem to talk out of both sides of their mouths at once. I have noticed several such people on the opposite side of the chamber. I might even suggest that Senator Collard does that. If I remember rightly, Senator Collard was very close to nature at one stage of the game. His family was responsible for the introduction in the Maleny area of what is now known as Collard's curse. Senator Robert Ray —What about Archer's curse? Senator GEORGES —No, it was called Collard's curse. I am speaking about kikuyu grass which the honourable senator's family introduced into Maleny and which spread to the exclusion of practically every other type of growth in that area. When Senator Collard starts to talk about conservation he ought to consider that he places the needs of pastoralists and exploiters before the needs of the environment. Caring for the needs of the environment, in many cases, means that we have to exclude humans. I get back to the point that there ought to be a reduction in human impact on certain areas within Australia, and one area is the forests in the northern part of Queensland. Question resolved in the affirmative. Debate resumed from 5 November, on motion by Senator Collard: That the Senate take note of the paper. Senator COLLARD(Queensland-Leader of the National Party of Australia)(5.22) —On Tuesday I moved the motion that the Senate take note of the paper. I shall take up almost where Senator Georges left off in the debate on the report entitled `Rainforest Conservation in Australia'. I say to the honourable senator that kikuyu grass has stood us in good stead in many a drought. But he is right. We have to make up our minds whether we will provide food and fibre for this nation or whether we will not. I happen to be one who believes that there is a balance and that a lot should be preserved, but in those days much of the rainforest in Maleny was cleared. My farm is called Cedar Park. The bullockies called it that because of the good stand of cedar that was on it. Senator Robert Ray —There is none left. Senator COLLARD —It used to be there. The farmhouse was made out of one beech log. The stump of the tree is still there. It was all pitsawn in those days. It was hard work for the people who were opening up that country. Senator Georges —It would be better if it were still growing. Senator COLLARD —If it were still growing, we would probably be importing many more items and our current account deficit would be a lot worse off. As I have said, there has to be a balance. I am speaking on a report which, in case anybody who may be listening is unaware, is entitled `National Conservation Strategy for Australia'. It follows pretty closely the report on rain forest conservation in Australia that we have just talked about. If I do nothing else, I wish to read into the record the definition of conservation which is in both documents. They both have the same definition. This definition would probably help people to understand conservation, because currently it means all things to all people. The report states: Conservation is the management of human use of the biosphere so that it may yield the greatest sustainable benefit to present generations while maintaining its potential to meet the needs and aspirations of future generations. Thus conservation is positive, embracing preservation, maintenance, sustainable utilisation, restoration, and enhancement of the natural environment. Living resource conservation is specifically concerned with plants, animals and micro-organisms, and with those non-living elements of the environment on which they depend. Living resources have two important properties the combination of which distinguishes them from non-living resources: they are renewable if conserved; and they are destructible if not. That definition is written into both documents, and I could not disagree with it. It is significant that members of the committees involved in preparing both these reports were from all structures of society in Australia-from government departments and from the conservation movement-and they were all able to agree on that definition. Of course, there will always be argument on the interpretation of that definition, but it is not a bad definition. Senator Georges spoke with some passion, as he usually does, about excluding humans from a forest. I put to him that since man came out of the cave, man has always had an effect, for better or worse-- Senator Robert Ray —Half of the Liberal Party has not come out of the cave yet. Senator COLLARD —Senator Robert Ray may not have. But man, for better or worse, or just for his own use, has had an effect on the environment. Whether we like it or not, he has done so either directly or indirectly through the introduction of diseases, animals or whatever. I do not think that even the most ardent conservationist could see himself going back to the cave. So man has had and will contiue to have an effect on his environment. We have to get to broad agreement on how we can best look after the environment as we find it. Attitudes have changed already amongst farmers, loggers, governments and conservationists. There is a lot of common ground and a lot more than most people would realise. So I commend both documents to those who are concerned about this great nation of ours. The report that we are now debating does contain broad philosophies on which just about everyone would agree. Once again, there will always be differences of interpretation, but both of them are good, working documents and provide a good base upon which we may start. Senator PUPLICK(New South Wales)(5.28) —The final report of the Interim Consultative Committee entitled `National Conservation Strategy for Australia' is the culmination of one part of the development of conservation strategy in Australia which proceeded from an initiative of the Fraser Government. The interest which the former Prime Minister had in areas of conservation was well known. As one of the initiatives of his Government, in December 1981 the first seminar on this question was held. That lead to the publication of a report entitled `Towards a National Conservation Strategy', which was the basis for discussion at a number of meetings which were subsequently held and which culminated in a conference held in Canberra in June 1983. The chairman of that conference was Sir Rupert Myers. The conservation strategy conference laid down three principal objectives. They remain within the report which we are debating at the moment and they are as follows: Firstly, to maintain essential ecological processes and life support systems; secondly, to preserve genetic diversity; and, thirdly, to ensure the sustainable utilisation of species and ecosystems. The World Conservation Strategy 1980 expands on that third point and states its objective as being: . . . to ensure the sustainable utilisation of species and ecosystems (notably fish and other wildlife, forests and grazing lands), which support millions of rural communities as well as major industries. That goes very much towards the definition which Senator Collard mentioned in his speech a few moments ago. That conservation strategy, adopted on a world level, has been endorsed and modified to provide the national conservation strategy for Australia, and the final report of the Interim Consultative Committee is before the Senate at the moment. I think that it is important to indicate the section of the report on pages 7 and 8 which deals with the role of government. The report states: Australia has a complex, mixed economy where the private and public sectors are inextricably linked at all strata, nowhere more so than in regard to decisions and actions affecting the use of land, water and living resources. Governments in Australia have primary and recognised functions to protect the integrity of these national resources. It continues: To provide for sustainable economic development and growth in the nation's economy, the deterioration of Australia's living resource base must be reversed. For this to occur, governments at all levels must adopt a more cohesive and long term perspective and must work together with the community with more resolve, resources and consistency than in the past. The important thing arising from this statement, which I hope all honourable senators will endorse, is the clear indication that sustainable economic development and growth in the nation's economy require that that deterioration which has already taken place in Australia's living resource base must now be reversed. I think that the discussion which has proceeded on this report and the rainforest report which preceded it indicated the awareness in the minds of a number of honourable senators of the economic utility of conservation, its tourist potential and, indeed, the economic potential of conservation and conservation strategies. This report makes it clear that, in order to benefit in any sense, the current situation of the deterioration of our living resource base must be reversed. Therefore, those who take a view about the economic advantages to flow from pursuing conservation strategies must recognise that this document makes it clear that that does not mean continued exploitation at its current level. In fact, it means a reversal of the degree of exploitation of some of these resources which must be undertaken as a matter of urgency. I conclude by saying that I am very proud of the fact that the Liberal Party of Australia, at its last Federal Council meeting, became the first political party in Australia to formally adopt, by resolution, the national conservation strategy as the basis for its own conservation policies. I pay tribute to the former shadow Minister, David Connolly, for having introduced the resolution to the Federal Council and having the national conservation strategy formally adopted as constituting the basis of the Liberal Party's conservation and environment policy. Senator SANDERS(Tasmania)(5.32) —The paper entitled `National Conservation Strategy for Australia' is a good start. However, it is just a start. Unfortunately, Australian leaders still have a cowboy mentality concerning the environment. As many honourable senators in this chamber have expressed, Australian leaders follow the concept of rip it off; move on; she'll be right, mate; the future will take care of itself. Environmental concern is considered a luxury that one can have when one has a full belly, one's wallet is full, one's farm is doing well, everything is going well and one has a new Mercedes in the garage. At that stage one can go in for environmental concern. That is absolute rubbish. Environmental concern should start first, not last. The report mentions the need for environmentally sensible and sustainable development rather than the short term rip-off concepts which are now so prevalent in Australia. However, the report fails to bite the bullet. At page 47 it states: THE STRATEGY-A PRACTICAL APPLICATION Recommendations in Brief The Commonwealth should initiate discussions as soon as possible with relevant organisations with a view to commencing in 1986/87 a series of local, highly visible tree conservation and establishment projects to combat salinity and land degradation in selected catchments along the Murray and Darling Rivers and their tributaries. Fine! Planting trees is wonderful. It is very safe and it is not controversial at all. Everybody loves to plant trees. I am sure that many honourable senators have planted trees, perhaps in front of the media or in front of a school group. Why plant trees when we cut down so many every day? We lose many trees every day. We ship them to Japan in the form of wood chips. Why do we avoid this major issue? The report explains why. At page 48 it states: Despite its obvious good sense, the integration of development and conservation as advocated in the NCSA is still a novel concept to the bulk of the community. The report claims that environmental concern is a novel concept. It may be a novel concept in this chamber, but it is not a novel concept to the community. Two weeks ago Spectrum Research Pty Ltd did a poll on wood chips. It polled people in Melbourne, Sydney and Brisbane. It found that 82 per cent of the people polled were against wood chipping. Senator Aulich —They were ignorant. Senator SANDERS —A colleague from Tasmania, Senator Aulich, says that they were ignorant. He would imply that anybody who is against wood chipping is ignorant. I suppose that in his Tasmanian eyes, as he does support wood chipping, he would feel that anybody who was against wood chipping is ignorant. But these people have their eyes open. They know the dangers involved in wood chipping. They know what it is doing to our economy and our forests. Eighty-two per cent of the people polled in those major cities said there should be no wood chipping. Ten per cent joined our troglodyte friend from Tasmania and said that wood chipping is a good thing. Eight per cent said that they did not know. Why then do we not halt the wood chipping operations? Why does not the national conservation strategy take on wood chipping? It does not do so because it is afraid. It is afraid of the Senator Collards, the Senator Walterses and the Senator Aulichs of this world, those people who will preserve their right to rip off the environment at the expense of future generations. What is the magnitude of the wood chipping? We are losing some four million metric tonnes of wood chips to Japan every year at a cost to Tasmania of $20m a year in direct subsidies. The cost to New South Wales is $10m a year. It is hard to tell what these figures mean but, for the benefit of the average person, let us look at the size of the Victorian Football League park, which is in the southern part of this country. The park comprises 3.2 hectares. Each week 125 hectares-that is, the equivalent of 40 VFL parks-are wood chipped. That is what this national conservation strategy for Australia is not facing. Until reports and honourable senators face the wood chip problem we simply will not have anything approaching a national conservation strategy. Senator AULICH(Tasmania)(5.37) —The issue that Senator Sanders raised is a very interesting one for all of us. I was fascinated to hear his comments about the future of Tasmania. They come from a man who sat in the State Parliament one night and voted to bring down a Labor government which, in a courageous decision that turned around politics in Tasmania, saved the Franklin River. That Labor government found no support at all from the honourable senator on the other side of the chamber. In fact, he helped to put Robin Gray into power in Tasmania. Today he complains about the fact that wood chipping will continue in Tasmania. It will continue because the conservation movement at large in Tasmania, despite his particular protestations to the contrary, does believe that the wood chipping industry is necessary for Tasmania and is possible within an appropriate environmental arrangement. In other words, Senator Sanders is out of touch with his own constituency in Tasmania. Honourable senators will have noticed that when he talks across the chamber to Senator Tate, myself or others he often says `You Tasmanians', as if he has drifted in from the United States of America and still believes that somehow or other his loyalty is to that country and not to Australia or Tasmania. It may be Senator Sanders's viewpoint that he is an alien who is here under sufferance to tell the truth to Australians and Tasmanians. Despite the fact that he is bleating like a sheep on the other side-I refuse to listen to him because he has had his chance here and there to say a few things-there are people in the conservation movement in Tasmania who used to support Senator Sanders and who believe the wood chipping industry must go on, that it is essential to Tasmania and that the 4,000 jobs that are created, indirectly and directly, by that industry simply cannot be written off with one stroke of Senator Sanders's pen. Those people are quite prepared to stand up and be counted. They will do so when the final decision is made about wood chipping in Tasmania. I believe at this stage, from what I have heard, that Senator Sanders will be left on his little lonesome. The interesting thing that will come out of it is that Senator Sanders will be able to retreat to the mainland to go from seminar to seminar and from meeting to meeting. Honourable senators-Oh no! Senator AULICH —Yes, he will be visited upon the rest of Australia, and honourable senators cannot avoid it. He will become a national figure, thank God, because he will be out of Tasmania most of the time. That means that politics in Tasmania will benefit from his absence and he will find his true constituency-those ignorant people on the mainland who have no idea about wood chipping, who have no idea how it really operates in a proper environmental arrangement. Those people can say what they like to Spectrum Research Pty Ltd polls-which in many cases has been wrong-and Senator Sanders can stay there with them; but, in Tasmania, a very large proportion of the population supports wood chipping if it is done in the proper way. That encompasses people from one end of the spectrum, people in the conservation movement, to those who would regard themselves as strong pro-developers. Senator Sanders is out of touch, and I suggest that when people look at him and hear what he has to say in this chamber they will believe that there are other people in this chamber who represent Tasmania a little more accurately than he does on this issue. Question resolved in the affirmative. Debate resumed from 5 November, on motion by Senator Kilgariff: That the Senate take note of the paper. Senator KILGARIFF(Northern Territory)(5.44) —I have read the statement on immigration serving immigrants and Australia by the Minister for Immigration and Ethnic Affairs (Mr Hurford). The document is interesting and obviously the Minister is very keen on his portfolio. In looking at the paper he has produced, one commends him for it. As secretary of the Opposition committee on immigration and ethnic affairs, I have noticed that on numerous occasions the Minister has assisted the Opposition backbench committee and there is a good liaison between him and the committee. It is also to be commended that at times the Minister and the shadow Minister have put joint press statements on immigration. This indicates that both the Government and the Opposition have a real interest in immigration and migrants. I wish to speak briefly to the paper, which is a fairly general one. It points out that the Minister envisages and hopes that migration will be raised from some 80,000 a year now to a figure in perhaps a year or within a few years of 100,000. I support that statement for I believe that even though we have difficulties with the problem of employment-and I suppose these days most nations have difficulties-migrants have brought enormous value to Australia. They have developed the industries of Australia and have contributed in so many ways that have made Australia what it is today. This has been demonstrated by the fact that until now some four million migrants have come to Australia. They have come from a hundred countries or more. When one looks around Australia now, whether in the main streets of towns or in schools, one notices the various hues and colours of skin and the various nationalities that now make up this country. I believe that Australia has been greatly enriched by the migrants from these many countries. It is obvious that the Minister is concerned about illegal immigration. I do not say that he overstresses the problem, but obviously he wants to bring about a situation where he gets everybody to support him in taking strong measures. It almost sounds in the paper as if there is a plea for support for the taking of strong action against those who have come to Australia in various ways, but in any event they are illegal migrants. Illegal migrants must be found as much as possible. He or she must leave the country and, wherever possible, must be prevented from coming into Australia. I imagine every senator in this chamber would have some experience of people from overseas who, whether for family reunion or some other reasons, for a long time have been waiting to come to Australia. Illegal migrants are preventing, to some degree, those people from coming here. Therefore, I believe that the Minister has full support from all sections of the Senate in ensuring that illegal migrants are kept to a minimum. Senators move around the world and visit many countries. Last year I was fortunate to go to Indo-China in a delegation. I found there many migrants who wished to come to Australia. The ACTING DEPUTY PRESIDENT(Senator Elstob) —Order! The honourable member's time has expired. Senator GEORGES(Queensland)(5.48) —I wish to speak briefly on the paper since the matter of illegal migrants has been raised. Although I do not suggest that we should in any way encourage people to come into this country illegally, or having come here on a visa or for some other reason we should not extend their stay and allow them to become illegal migrants, I think the matter should be viewed with extreme discretion and with some sympathy. I can understand why people desire to come here from places where there is less economic comfort, why they try to get past the barriers that we have erected against immigration, and why they endeavour to take short cuts. I agree with Senator Kilgariff that the short cut for one person makes it a long process for somebody else, and we cannot tolerate that. When this does occur and when there are compassionate grounds that become associated with those cases, I believe that they should be dealt with with sympathy. I find it highly unacceptable that people who have committed this offence should be treated as criminals and be held as criminals. I believe that if there is to be some holding of people to prevent their absconding, they should be held not in criminal sections of gaols but in some other place. They should know that some progress is being made to have remand centres properly established for the holding of people and their families in reasonable comfort until such time as they are allowed to go back under their own efforts or are deported. Recently we looked at the conditions in the Brisbane gaol where people were held under warrants for being illegal immigrants. We discovered that because of the lack of facilities there they were held alongside people who were in that place because they had committed serious criminal offences. Sometimes illegal immigrants could remain in the gaol for five to six weeks. I suggest that should not be permitted. No person should be held in those conditions in custody because he or she has extended a period of stay or has endeavoured to come to this country with a desire to stay here. In Queensland the situation is so poor and conditions so overcrowded that I suggest to the Department that no person should be held in prison. In the circumstances the risk should be taken that the person may abscond and it may be difficult to pick him or her up again. Nevertheless, I believe that rather than imprisoning such people, we should give them that benefit and we should take the risk. As long as we keep up these very restrictive barriers, people will endeavour to get to Australia illegally. People will go to all sorts of extremes to enter Australia. I know of one person who, having been refused entry to Australia, went to Papua New Guinea, paddled across to the Thursday Island group, came across to the Queensland coastline and then travelled all the way down to Brisbane, only to be arrested and placed in gaol. I would have thought that we should have allowed a person with that sort of determination to stay. There are people with tremendous determination and desire to come here and to stay. The sooner we extend and relax the quotas, and take more people despite our unemployment position, the better. We would not then have to face the problem of dealing with these people in such a harsh way. Question resolved in the affirmative. The DEPUTY PRESIDENT —Order! There is only one minute left to discuss Government papers. I think it would be pointless to start discussion on a new paper in that time, so I shall rule that the time for consideration of Government papers has expired. We will now proceed to the consideration of other General Business. Debate resumed from 30 May, on motion by Senator Chipp: That the Bill be now read a second time. (Quorum formed) Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(5.54) —Senator Chipp's Nuclear Weapons Prohibition Bill 1985 seeks to prohibit the development, testing, manufacture, importation, transportation or storage of nuclear weapons in Australia by Australia or any other foreign power or company. The Bill is in all substantial details the same as the Bill with the same title which Senator Chipp lodged last year; it has not been redrafted or, apparently, rethought in the light of significant new commitments which Australia has entered into since that time. The essential starting point in our consideration of the Bill is our firm belief that it is not necessary in either the establishment of our nuclear weapons free policy or in demonstrating our bona fides in applying it, to express that commitment in legislative form. The general objective of ensuring that Australia is and remains a nuclear weapons free country is entirely consistent with Australian Government policy. Australia is committed to this position both under the terms of the Treaty on the Non-Proliferation of Nuclear Weapons, which is already in force in Australia, and more recently the South Pacific Nuclear Free Zone Treaty, in the drafting and acceptance of which we played the central role. No one can doubt, in the light of these treaties, the good faith of our commitment to Australia remaining nuclear weapons free. Our credentials are impeccable, and we do not need to support Senator Chipp's Bill or any other piece of legislation in this field to prove it. Under the Nuclear Non-Proliferation Treaty of 1968, to which Australia became a party in 1973, we are obliged: not to receive, manufacture or acquire nuclear weapons or other nuclear explosive devices, nor to seek or receive assistance in their manufacture, that is Article II; not to provide to non-nuclear weapons states source or special fissionable material or equipment for production of special fissionable material unless subject to safeguards, that is the obligation under Article III.2; to accept safeguards on all peaceful nuclear activities under Article III.1; to conclude a safeguards agreement with the International Atomic Energy Agency by virtue of Article III.4; to facilitate exchange of equipment, materials and information for the peaceful uses of nuclear energy, that is Article IV.2; to co-operate in the development of peaceful uses of nuclear energy, especially in the developing countries by Article IV.2; and to pursue negotiations on cessation of the nuclear arms race, nuclear disarmament and general and complete disarmament by virtue of Article VI. Under the terms of the SPNFZ Treaty Australia is again specifically and unequivocally obliged: not to manufacture or acquire any nuclear explosive device, nor to seek or receive any assistance in the manufacture or acquisition of such devices-that is Article 3; not to test or assist any other state to test such devices by Article 6; not to station nuclear devices within our territory by Article 5; to ensure that all peaceful nuclear activities within our territory shall be subject to full-scope safeguards-that is coverage of all facilities and nuclear material by IAEA safeguards, including regular inspections by IAEA personnel and materials accountancy procedures, that is Article 8; to ensure that the export of nuclear material will be subject to the international non-proliferation regime based on the NPT and IAEA safeguards, that is Article 4; and finally to accept verification of these obligations, not only under IAEA auspices but also through on-site inspections subject to a consultative committee established under the treaty, that is Article 8. The SPNFZ Treaty also records the strong opposition of the parties to the dumping of nuclear waste at sea under Article 7. Compared with the two treaties to which we are party, Senator Chipp's Bill is an ill-drafted and inappropriate means of achieving the objective of ensuring that Australia remains a nuclear weapons free country. There are a number of areas, for a start, where it may well be said that the Chipp Bill does not go far enough. For example, the Bill makes no provision for the effective enforcement of the obligations involved through systems of monitoring, surveillance and verification-none at all. Again, if one wanted an absolutely comprehensive legislative barrier erected, one would rule out-in a way that this Bill does not-the stockpiling or deployment of nuclear weapons from locations established within the territorial sea, not just on the Australian land mass. One would also rule out-in a way that this Bill does not seek to-the acquisition, manufacture or stockpiling of weapons by the Australian Government outside Australian territory. There are other areas where the Bill manifestly goes beyond what the Australian Government would be prepared to contemplate under its present nuclear policy. The Bill, for example, would not allow dry-docking of nuclear capable ships under any circumstances. Our policy, however, is one of considering each request on its merits, taking into account technical and safety factors and the strategic and operational factors obtaining at the time. Senator Chipp's Bill would cut directly across the Government's established policy that it will not in any way endanger the safety of any allied or friendly ship or crew in need of access to Australian facilities. Another entirely legitimate activity, consistent with our present non-nuclear policy, which the Chipp Bill, read literally, would appear to rule out, is the maintenance of the research capacity necessary for us to be able to monitor and assess nuclear developments elsewhere, particularly in our own region. There are other provisions in the Bill which the Government would find difficult to accept as it is presently drafted. The elaborate provisions, for example, relating to the seeking and issuing of injunctions, would seem to be, as a matter of strict law, wholly unnecessary, since such procedures are available under the general law for any breach of a statutory prohibition. Spelt out as they are, these provisions could well operate in practice as positive encouragement to the mischievous misuse of the legal process, with actions being taken for the sole purpose of embarrassing the Government of the day, whatever it is, in the conduct of its international relations. It can hardly be thought that in rejecting this Bill we are in any way resiling from our commitment-embodied in our adherence to the non-proliferation and South Pacific nuclear free zone treaties-not to acquire nuclear weapons by any means, or store them on Australian soil. We have committed ourselves to those and many other obligations by our unequivocal adherence to the NPT and the SPNFZ treaties. On the other hand we have also, of course, committed ourselves to allowing the access of allied nuclear- capable ships to Australian ports and the passage of such vessels through Australian waters. Our position on all these matters is unequivocally clear, and we do not need to spell it out in legislation for the nature of those commitments to be understood, or for their binding nature to be apparent. None of this is to say, however, that it is inappropriate under any circumstances to legislate in relation to any of the subject matter under discussion. It has been and remains the Government's intention to legislate to the extent necessary to implement our obligations under the Nuclear Non-Proliferation Treaty and the South Pacific Nuclear Free Zone Treaty. To the extent that domestic legislation is required under the Non-Proliferation Treaty, it either has been established, for example in the Customs (Prohibited Exports) Regulations, or is in an advanced stage of drafting, as with the comprehensive Nuclear Non-Proliferation (Safeguards) Bill which I hope to introduce into the Parliament later this session. In relation to the South Pacific Nuclear Free Zone Treaty, the Government has already decided that the Environment Protection (Sea Dumping) Act 1981 should provide for measures prohibiting dumping at sea of radioactive waste, and we will introduce, as soon as possible, further amending legislation to bring this about. Other possible measures on monitoring, surveillance and verification are being examined, including provisions for access rights, privileges and immunities for the inspectors provided for under the verification provisions of the treaty. We believe that this combination of binding executive commitments, together with legislative provisions where technically necessary, will provide a comprehensive regime covering every one of the concerns inherent in Senator Chipp's Bill, and much more as well. The nature and extent of our commitment to ensuring that nuclear weapons are not installed on Australian soil stands in sharp contrast to the position of the Opposition as stated by Mr Peacock on 7 August this year. He said that the South Pacific Nuclear Free Zone Treaty should not be accepted if it contained any provision banning the installation and storage of nuclear weapons on Australian soil. It was an extraordinary statement and an extraordinary demonstration of the gulf that divides the Government from the Opposition on these matters. There is not the same gulf dividing the Government and the Australian Democrats in our response to the subject matter of this particular Bill. We are committed to a nuclear weapons free Australia, but we do not regard this Bill, or any measure like it, as an appropriate vehicle for demonstrating and establishing that commitment. We cede to no one in the strength of our commitment to those principles and make no apologies for choosing to express and observe them in our own way, and not the way mapped out for us-no doubt in all good faith-by Senator Chipp. It is important that we in the Parliament not be diverted by a debate such as this from the fundamental and pressing objectives which I am sure the Australian Democrats share with the Government. This Government has made its position on nuclear non-proliferation unambiguous through its strong and active support of the NPT and the SPNFZ treaty. Our opposition to the acquisition, manufacture, development, testing and storage of nuclear weapons in or by this country is quite unshakeable. For this Government, our credentials on that issue cannot be questioned; our priority now is to use the arguments and approach that have led us to making Australia a nuclear weapons free country to advance the cause of arms control and disarmament internationally. Our objective in that area-the achievement of balanced and verifiable reductions in the nuclear arsenals leading to their ultimate elimination-will not be advanced by directing our energies and limited resources to enshrining in domestic law the principles of a nuclear weapon free Australia to which this Government has obviously already committed itself. Rather, the real challenge lies in working vigorously in all the international forums available to us and through our bilateral contacts with other countries to convince the international community that the reduction and elimination of nuclear weapons is a task demanding the highest priority and the strongest commitment. That task calls for carefully thought out policies and initiatives, persistent and effective diplomacy, and the courage of our convictions. It is worth while recalling what some of those policies and intitiatives have been, and what some of that diplomacy has involved. The Government has, for a start, made voluntary contributions to the world disarmanent campaign, the United Nations Institute for Disarmament Research, and the United Nations program for the International Year of Peace, in addition to Australia's normal contribution to the United Nation budget. Furthermore, the Government has enhanced Australia's capacity to contribute to peace research and disarmament diplomacy. Australia's disarmament diplomacy has been enhanced by the appointment of Australia's first Ambassador for Disarmament and a special disarmament adviser, and the the establishment of a disarmament and arms control branch and a peace and disarmament branch in the Department of Foreign Affairs. The Government has also funded a peace research centre at the Australian National University. So that Australia can contribute to a proposed international seismic network to monitor ongoing nuclear testing and to establish the feasibility of verifying a nuclear test ban by seismic means, funding has also been provided to the Bureau of Mineral Resources to link a number of seismic stations on the Australian mainland and in the Antarctic to a national monitoring centre. This initiative is a direct practical contribution to the achievement of a viable comprehensive test ban treaty, which Australia has actively promoted at the United Nations General Assembly, the Conference on Disarmament, and at the Third Nuclear Non-Proliferation Treaty Review Conference. At that Third NPT Review Conference, held very recently, in September, Australia sought to defend the treaty as a cornerstone of international efforts to achieve a safer world through nuclear arms control, to maintain its effectiveness and to strengthen its effect. In achieving these aims Australia gave the highest priority to disarmament issues, an Australian initiative on full scope IAEA safeguards, and recognition of the recently negotiated South Pacific Nuclear Free Zone Treaty. Agreement on a call for a comprehensive test ban treaty was undoubtedly the single most important achievement of the Third Review Conference that has just taken place. It was particularly notable because it had not been possible to agree on such a call at the 1980 review conference. In all the work of the conference, and in particular the achievement of a final agreed communique, Australian diplomats-especially the Ambassador for Disarmament, Richard Butler-played an absolutely crucial role. Again, under the Hawke Government, Australia has vigorously condemned French nuclear testing, suspended uranium exports to France, and participated with New Zealand and Papua New Guinea in a scientific mission which examined the environmental effects of testing at Mururoa Atoll. Australia has taken diplomatic and other measures to contribute to the development of a comprehensive chemical weapons convention, ratified the inhuman weapons convention, the Convention on the Prohibition of Military or any other Hostile Use of Environmental Modification Techniques, the 1954 Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict, and signed the Convention on the Physical Protection of Nuclear Material. Australia has pressed for agreements to avoid an arms race in outer space and proposed measures to protect from attack all satellites and groundstations which contribute to the preservation of strategic stability and the monitoring of disarmament agreements. Australia has taken an active role in the ad hoc committee on the Indian Ocean, affirming Australia's readiness to join a consensus to hold an international conference on the question of an Indian Ocean zone of peace. Furthermore, at the United Nations, Australia has taken a much more active role in the promotion and support of arms control and disarmament resolutions. Last year at the Thirty-ninth United Nations General Assembly, Australia supported a resolution calling for a nuclear freeze. This Government is, in short, in a whole variety of ways actively pursuing arms control, disarmament and nuclear non-proliferation in accordance with a coherent, properly thought out and realistic philosophy and policy framework. Australia is currently playing not only a very active but a very important role in international arms control negotiations and in encouraging progress in fundamentally important areas. The value of the contribution we are making is internationally recognised, and I commend our record to this chamber. This Government will continue to commit its energies to these challenges since we are firmly convinced that the measure of our success in those areas, rather than in distracting ourselves with sterile debate over unnecessary and inappropriate legislation, will be the real yardstick by which our effectiveness in contributing to the control of the nuclear arms race will be judged. Senator DURACK(Western Australia)(6.10) —The Opposition, in line with the Government, will certainly vote against the Nuclear Weapons Prohibitions Bill 1985 and will do so very substantially for the reasons which the Minister for Resources and Energy (Senator Gareth Evans) has already given. It was very revealing that Senator Evans spent a good deal of time in his contribution to this debate detailing the Government's so-called record in relation to matters of disarmament and, in particular, reduction in the nuclear arms race. Let me say at the outset on behalf of the Opposition that we, of course, are equally anxious to ensure that there will be effective nuclear arms reductions and controls, with proper surveillance verification and so forth. We must all give the greatest encouragement, as we do, to the efforts that are at present taking place and the new efforts that are being made by the United States, and the Soviet Union to come to some effective agreement in this direction. Let me also emphasise-and I am sure the Government would be of the same view, or at least that section of the Government that Senator Evans represents-that these efforts should be made on a mutual basis and not on a unilateral basis. That is really the nub of the argument that will take place in this chamber on this Bill. The Bill which we are considering was introduced by Senator Chipp and has been described, I think in some detail, by Senator Evans, and I do not need to go over that. It is founded fairly and squarely on a completely unilateralist approach to disarmament and to nuclear arms reduction and control. Senator Chipp made no bones about that in the reasons he gave for introducing this piece of legislation. But the division on this issue is between, on the one hand, the Australian Democrats and, on the other, the Government-as Senator Evans expressed it-and certainly the Opposition, in that we do not see a unilateralist approach as in any way appropriate or responsible in solving this major question of nuclear arms reduction and, for that matter, reduction of conventional weapons. That is what this debate is primarily about, although there are as well some other very serious questions which I will deal with later. If Senator Chipp's Bill became law it would, of course, mean the destruction of the ANZUS Treaty. Senator Chipp, of course, makes no bones about the fact that he does not- Senator Chipp —Why would it do that? ANZUS does not even mention nuclear weapons. Senator DURACK —If Senator Chipp waited until he hears what I have to say, instead of interrupting me, we might get somewhere. In fact, the approach taken in this measure would give the United States the clearest warning in relation to visits to Australia by its warships-which may or may not carry nuclear weapons-that they cannot visit our ports. Senator Chipp —That is right. Senator DURACK —Of course it is right. Why is Senator Chipp interrupting me and shouting his head off as he did a minute ago? Senator Chipp —That is not even mentioned in ANZUS. Senator DURACK —Senator Chipp wants to have another debate as to what ANZUS means. I will be very happy to debate that with him some day. If I have time, I will do so this evening. The fact is-it is accepted and we can see it with our own eyes if we are prepared to consider what is happening in regard to New Zealand and the United States-that that breach of relationship which has occurred between New Zealand and the United States in relation to ANZUS concerns that question. Therefore, one cannot consider the effect of Senator Chipp's Bill without giving consideration to the result it would have on the ANZUS Treaty. That does not worry Senator Chipp because he and the Democrats do not believe in the ANZUS Treaty. They do not want the ANZUS Treaty. Senator Chipp —That is right. Senator DURACK —Yes, of course it is. We have now got it straight. Fortunately, with the assistance of Senator Chipp's rather dramatic interjections, the issues before the Senate are fairly clearly defined, before we hear any further from the Democrats in this debate. I want to speak in more general terms, as I had commenced to do, before turning to the details involved in that type of argument. I want to make perfectly clear on behalf of the Opposition our complete agreement with, support of and deep concern for the success of the nuclear arms reduction program and discussions which are taking place between the United States and the Soviet Union. We believe that only by effective discussions of that kind will the world become a safer place and will we have, if not entirely removed, at least alleviated, the tremendous threat which has been of such deep concern to so many people throughout the world and, of course, in Australia. The Opposition fully supports that approach, that is, mutual reduction of arms; not the sort of approach which Senator Chipp and his Democrats believe in. Senator Vallentine will no doubt tell us where she stands on this matter; I will not anticipate what she will say in this debate. Where they differ from us on that issue is that they want to see us make some grand gesture of support for unilateral disarmament by Australia, regardless of what may occur between the super-powers. Let me also state, in light of the lengthy pleading by Senator Evans on behalf of the Government as to the so-called actions that it has taken in regard to these questions, that it was the coalition Government which signed the Non-Proliferation Treaty on behalf of Australia. Let there be no appropriation by this Government of all virtue in regard to that Treaty. Certainly, it was ratified by the Whitlam Government and certainly this Government has properly participated in the recent five-yearly review of that Treaty. But it was the coalition parties when in government which signed that Treaty and we have the strongest and firmest adherence to it. We wish to see the widest possible adherence to it by the nations of the world. It will be only by world wide support for this treaty that the people of the world will have some greater assurance of security from the threat of nuclear destruction. So clearly, we in the Opposition fully support that treaty. We welcome and are pleased about the success that the recent five-year review of that treaty achieved. That is today: There could be another debate on another day. Indeed, all reports-we have not yet had the opportunity to consider them fully-indicate that it was a useful and successful meeting. I come now to the very unpleasant and quite unjustified accusation made by Senator Evans in this debate today. It was a quite gratuitous accusation in the light of the sort of debate we are having on this important matter-namely, that the Opposition is completely opposed to the line the Government has been taking in relation to the development of the South Pacific Nuclear Free Zone and, indeed the then Leader of the Opposition indicated that it was the policy of the Opposition, presumably, even to encourage the storage of nuclear weapons on Australian soil. In the statement of 7 August this year, to which Senator Evans referred, Mr Peacock pointed out that one effect of the South Pacific Nuclear Free Zone Treaty which the Government has entered into was to raise the issue as to whether that treaty, if given full effect by Australia, would prevent home porting in Australia of allied warships and particularly United States warships. Mr Peacock said that such a situation may well be required if Australia were under the sort of threat to which the ANZUS Treaty would apply and if, in putting into effect the obligation of that treaty or of the American alliance on a broader sense, home porting of that nation's ships or any other nuclear powered warships in Australia were required for the defence of Australia. In fact, Mr Peacock said: . . . the Prime Minister must give a categorical assurance that the agreed nuclear free zone will not rule out any possibility of future United States home porting within the zone or Australia. That was because the provisions of the treaty will prevent the storage in Australia in any way of nuclear weapons. That brings me to the issue we debated at great length in this Parliament nearly two years ago about the dry-docking of the HMS Invincible in Sydney. We can recall the ambiguities, the confusions and the contortions that the then Minister for Defence as well as the Government, as represented in this chamber, were making about that very vital issue-namely, whether the Invincible could be dry-docked in Sydney because it had a major problem. Of course, the British Government was not prepared to say whether it was carrying nuclear weapons. That is a sort of situation that could occur at any time, even without a situation of conflict or threatened conflict. It could occur with our nuclear allies, either Britain or the United States. This is a problem which undoubtedly arises under the terms of that Pacific treaty and of any legislation, if the Government is going literally to give effect to the treaty, as Senator Evans has been talking about. It is a problem which, as I have already indicated, arises under Senator Chipp's Bill. That is certainly a concern which the Opposition has expressed. But to use that to indicate that somehow the Opposition is in favour of Australia becoming a storage point for nuclear weapons is quite unjustified and untenable and cannot be in any way concluded from the statement Mr Peacock made, to which I have referred. That is tantamount to alleging that the Opposition would, presumably, denounce the Nuclear Non-Proliferation Treaty. I do not know whether that is the extent of the allegation Senator Evans was making. If it is, let me nail it as a complete and utter misrepresentation of the Opposition's position. Mr Acting Deputy President, I am sorry that I had to divert from the terms of the Bill before us in order to deal with that unpleasant and, as I have said, unjustified accusation by Senator Evans on behalf of the Government. I must say that I was rather amused by Senator Evans's defence of the Government in opposing this Bill. He said that there did not need to be any legislation to give effect to the Government's high moral stance in relation to nuclear weapons. Senator Evans has expressed a somewhat welcome degree of maturity in this regard. Of course, until now he has always expressed the most tender faith in the solution of problems by legislation. It seems that he has had either a conversion or, for the purpose of answering his back bench disquiet in relation to the stance the Government is taking on this matter, he is having to put forward an argument which comes very strangely from his lips, at least on his past attitudes and performances in this chamber. We know of the very great division of opinion within the Government Party and particularly in the Senate over this whole question. We know that numbers of Labor senators-otherwise supporters of the Government-would be very much in favour of supporting Senator Chipp's Bill. We had the clearest revelation of that yesterday. I moved a motion to support the ANZUS Treaty, the American alliance and the maintenance of the joint facilities at the American bases in Australia. The Government, although it nominally supported my motion, as was evident from the remarks by Senator Evans, was not prepared to have a vote on it. Indeed, the Government squibbed a vote. I think that gives very great credence to the Opposition's concern that, whatever the rhetoric of the Prime Minister (Mr Hawke), the Minister for Defence (Mr Beazley) or Senator Evans might be on these issues, they are certainly not supported by very significant numbers of their back bench. I presume that the same issue will arise for the Government in relation to this measure. It will be interesting to see to what extent the rhetoric of Senator Evans in relation to this Bill will be supported by his back bench. Certainly it would be a pity if the sound reasoning, as expressed by Senator Evans, is not supported in that way. We as an opposition would certainly feel much happier for the future security of Australia if we knew that there was a solid bipartisan view on matters relating to the ANZUS alliance-in particular to the ANZUS Treaty-and to the principles of bilateral, not unilateral, disarmament and reduction of nuclear weapons in particular. Sitting suspended from 6.30 to 8 p.m. Senator DURACK —I turn now in some more detail to the terms of the Bill which has been presented to the Senate by Senator Chipp and which we are now debating. The Bill is really designed to make Australia a nuclear free zone-that is its object-and it prohibits, amongst other things, the testing, transportation or storage of nuclear weapons in Australia by the Commonwealth, corporations, or other persons on behalf of the Commonwealth. The Bill, which is drafted in the widest possible terms, no doubt is designed to do so and, having regard to Senator Chipp's approach to these things, it is clearly designed to prevent the sort of situation which I have already indicated could arise in the performance of our obligations under the ANZUS Treaty and our American alliance. I have already explained how that could occur. In general terms the Bill rather strangely does not prohibit anyone in Australia from storing, transporting or manufacturing nuclear weapons which seems to be an extraordinarily narrow view of the constitutional power. It prevents the Commonwealth, a corporation and so on from doing these things but not in the most general terms which I would have thought clearly would have been the desirable course to take and which clearly is within the Commonwealth's defence power. Senator Chipp has chosen to state it in somewhat narrower terms than the constitutional power would warrant, in my view, but that is by the way. The Bill also prevents the importation into Australia of nuclear weapons, or an arrangement with a foreign country under which a visiting force of that country is permitted to bring, to store or to transport nuclear weapons across or within Australia. The Bill prevents the Commonwealth from entering into an arrangement with a foreign country before or after this Act comes into force. Very clearly it applies to the sorts of situations that could arise in pursuance of the American alliance and the ANZUS Treaty. I do not want to go over all that again as we have had some discussion about it and it probably warrants a separate debate of its own. If this Bill were passed, we would have the same confrontation with the United States of America in relation to the ANZUS Treaty as New Zealand is having at present. For that reason and that reason alone-apart from all the other reasons I have advanced-the Opposition will oppose this Bill. As I said earlier, it is based fairly and squarely on a unilateralist solution to the problems that we face throughout the world and on a unilateralist approach to the problems of nuclear arms and disarmament. Senator Chipp made that perfectly clear in his support of the Bill. Of course, we totally reject that approach. It is a view which fortunately so far the Government, by its rhetoric, has rejected. The Minister for Resources and Energy (Senator Gareth Evans) on behalf of the Government today rejected that approach on those grounds. I think Australians, certainly those who would be broadly sympathetic even to the Australian Labor Party and its cause, would be most alarmed if they thought that their representatives in Parliament were sympathetic in any way to the proposals and objectives of this Bill. But, as we know, there are considerable numbers of Labor Party officials, members and senators who have a very basic sympathy with this legislation and the effect it would have on the ANZUS Treaty. I can only express the hope that we will not have a situation such as we saw yesterday when the Government supporters squibbed a vote on an affirmation of support for ANZUS because of the baleful influences within the back bench of the Labor Party and, I suppose, of some of the front bench closet unilateralists and left wingers who, because of the fruits of office, will remain there for no very honourable reasons. However, I think it is deplorable that this country faces a situation in which the Government is divided amongst itself, and this is probably the greatest threat to ANZUS. I am sorry to say to Senator Chipp that I think the Australian Democrats are perhaps not very significant as a party in this respect. But what is significant is the danger and threat to Australia's future defence security posed by the growing element in the Labor Party which sympathises with the objective of this Bill, which would be disastrous for Australia's future security and defence. For those reasons, the Opposition strongly opposes this measure. Senator SANDERS(Tasmania)(8.06) —I rise to support the Nuclear Weapons Prohibitions Bill 1985. Frankly, I find it shocking that there are so few honourable senators in the chamber when we are discussing a Bill of such monumental importance. Senator Elstob —To whom? To you. Senator SANDERS —Monumental importance to the world, to Australia and to my children. If the honourable senator does not care about his children, I feel sorry for him. I care about my children and I am sure many other people in this country care about their children. I am annoyed, as I think the people of Australia will be annoyed, that the Senate chamber is so empty at this moment when we are discussing this major issue. We heard the Minister for Resources and Energy, Senator Gareth Evans, present the Government's expected case, which basically amounted to a rather fatuous verbal tap-dance to cover the Government's embarrassment that in fact what the Australian Democrats have brought forward is Government policy, Australia Labor Party policy. Senator Chipp —Word for word. Senator SANDERS —It is word for word and I will get into that a little further down the line. The Minister talked about credibility, that somehow if this Senate and the parliament passed this Bill we would lose our credibility in overseas forums. I put it to the Senate that our credibility is at an all time low at the moment because of our lack of action on legislation such as the Bill now before us, because of our actions allowing nuclear armed and powered vessels of any nation into our ports and because of our support for foreign bases on our soil. That credibility would be increased markedly if in fact we passed this Bill. The Opposition also took a predictable tack. Senator Durack said that he would vote against the Bill, which I think was no surprise to anyone. He brought up the question of unilateral disarmament which he said was not appropriate. He also brought up the situation in New Zealand. If he actually took the time to study what has happened in New Zealand, I think he would find that his words would ring false in his own ears. The unilateral action of New Zealand has spread a message around the world that we do not have to go all the way down the road to nuclear war; that we can stop short of doing that; that we do not have to go over the precipice; and that we can take action which is a signal to the world that we do want to participate in this insane, devilish race towards destruction. Senator Durack also stated twice, so he must believe it to be so, that America would not like it if we adopted this Bill. He said that we would be in the same position that New Zealand finds itself in, that ANZUS would tremble if we in Australia exerted our independent sovereign rights and said that we did not want nuclear weapons on our soil. I think that is a firm commitment to the United States on his part-an unthinking commitment that rightly or wrongly he will go all the way with Ronnie Reagan. Senator Durack said that he is concerned about the dry docking of nuclear ships. I suppose that might be of concern to him. If we had our way we would not have those nuclear ships in our ports anyway to be ported or dry docked. Senator Durack concluded by saying that it would be a great threat to our defence and to the security of Australia if more people thought the way the people who are supporting this Bill think. I say it is just the opposite; the only way we will maintain a secure Australia is if all people completely turn their backs on anything to do with nuclear warfare. What is this Bill and why is it important? Some would say, and in fact Senator Evans said, that this Bill is just the formalisation of the already existing situation. There are no nuclear weapons on our soil right now that we know of. We are still not sure what the B52s are carrying into Darwin. Senator Chipp —That is right. We don't know. Senator SANDERS —We do not know, but we hope that there are not any nuclear weapons. We do not know for sure that there are not any. There is really no point in legislating not to have nuclear weapons on Australian soil if they are already here. This Bill merely rules out the presence in Australia of nuclear weapons now or in the future-a perfectly logical action in a rational society. I do not see how anybody could argue against that. Why should we have this statute? What about the South Pacific Nuclear Free Zone Treaty or the Treaty of Raratonga which this Government signed and supported, rather cynically insofar as this Government also refuses to adhere completely to the tenets in banning nuclear-armed and powered ships from out ports? We say that it is a nuclear free Pacific zone, but that it is an option for local governments, and this local government, namely the Hawke conservative government, to have the ships and bombs. The Treaty preamble says that: . . . convinced that all countries have an obligation to make every effort to achieve the goal of eliminating nuclear weapons. Eliminating nuclear weapons on own soil is an obvious starting point. Article 3 of the South Pacific Nuclear Free Zone Treaty states: Each party undertakes: (a) Not to manufacture or otherwise acquire, possess or have control over any nuclear explosive device by any means anywhere inside or outside the South Pacific Nuclear Free Zone; (b) Not to seek or receive any assistance in the manufacture or acquisition of any nuclear explosive device; (c) Not to take any action to assist or encourage the manufacture or acquisition of any nuclear explosive device by any State. Article 5 of the Raratonga Treaty states: 1. Each party undertakes to prevent in its territory the stationing of any nuclear explosive device. That is what the Bill is about. We say that each party undertakes to prevent in its territory the stationing of any nuclear explosive device, which is exactly what the Bill states. The word `stationing', as defined in the Raratonga Treaty, means: . . . emplantation, emplacement, transportation on land or inland waters, stockpiling, storage, installation and deployment. Article 6 of the Raratonga Treaty says: Each party undertakes: (a) To prevent in its territory the testing of any nuclear explosive device; (b) Not to take any action to assist or encourage the testing of any nuclear explosive device by any State. I will not go on, but merely point out that all these things explicitly spell out what is required under the Treaty. The wording of articles 5 and 6 is `Each party undertakes to prevent'. How does one undertake to prevent? Well, one does this by passing preventing legislation. We find that the Minister, our honourable senatorial colleague, Senator Gareth Evans, a Queen's Counsel, appears not to understand the law. In the second reading speech he stated: Compared with these two treaties- that is the South Pacific Nuclear Free Zone and the Treaty on the Non-Proliferation of Nuclear Weapons- to which we are party, Senator Chipp's Bill is an ill-drafted and inappropriate means of achieving the objective of ensuring that Australia remains a nuclear weapons free country. The Raratonga Treaty, which this Government is party to, actually requires that we pass this legislation. He says it is not required under this law. Article 12 of the South Pacific Nuclear Free Zone Treaty stipulates that the Treaty shall be subject to ratification, that is passed through the legislatures of each country. Once again, this is what we are trying to do. In so doing Australia undertakes to establish the international agreement in its own law. This is standard for United Nations international convenants. Article II states: Each non-nuclear-weapon State party to the treaty undertakes not to receive the transfer from any transferor whatsoever of nuclear weapons or other nuclear explosive devices or of control over such weapons or explosive devices directly, or indirectly; not to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices; and not to seek or receive any assistance in the manufacture of nuclear weapons or other nuclear explosive devices. This is all treaty stuff. It is all spelled out. It is the sort of thing that we should be doing if we really believed in our obligations under international law. What about Australian Labor Party policy? This Bill is consistent with Labor Party policy. In fact, it is Labor Party policy almost word for word. It is not consistent with what was Labor Party policy, or what ought to be Labor Party policy. Senator Tate —That is why it is not good enough. Senator SANDERS —The honourable senator says it is not good enough because it is Labor Party policy. He will have a chance to speak on this matter. I would like him to take the opportunity to explain that. Senator Chipp —He will have a chance to vote on it too. Senator SANDERS —Yes. The 1984 Platform, Constitution and Rules under the heading `Foreign Affairs' states: A Labor Government will . . . Oppose the development and acquisition of nuclear, chemical, bacteriological or other weapons of mass destruction for Australia's armed forces; nor permit any foreign government to station such weapons on Australian soil. Oppose the storage of nuclear weapons on Australian territory and the staging of operations involving nuclear weapons from Australian territory. The Nuclear Non-Proliferation and the Raratonga treaties do not provide sufficient guarantees. Governments change and all the assurances that Senator Gareth Evans gave about his Government's commitment to this matter will be as nothing if in fact his Government loses the next election. If this Government is really interested in its party policies and in the treaties it has signed it will put this into law so that it will not be able to be changed by any succeeding government. This Government will try to evade and avoid its responsibilities by saying, no doubt, as it has said and as it will say over and over again, that it has done more for disarmament than any other government in the world. We heard Senator Evans say that. What have we done? We are in the United Nations. We attended the United Nations conference on disarmament. Australia is involved in the United Nations study of nuclear weapons free zones. Why is Australia not then a nuclear free zone? The Government is all talk. Australia is involved in the 1986 International Year of Peace and is involved in peace and development and peace and disarmament reports and programs. It is tokenism unless we are prepared to act. The Australian Government voted for a nuclear freeze during the election campaign last November. What did it actually vote for? It voted for not only a freeze on production, but also a freeze on deployment. The Bill before the chamber today will stop any future possible deployment of nuclear weapons on Australian soil. What about the reality of the Government's peace and disarmament policies? We sell uranium. We are developing uranium in Australia. We are proposing to lower the floor price on uranium at Roxby Downs to make it more saleable. This Government has a policy of opposing uranium mining. We hide behind the pretence of safeguards. We have seen how uranium- Senator Tate —We would like you to speak about this Bill. There is a very short time for us to speak on it. Do you realise that? Senator SANDERS —The honourable senator has a point. I point out, however, that the Government's peace and disarmament policies are not being upheld. There is a genuine fear on the part of the Government and the Opposition about how the United States would interpret such action. Frankly, I do not think the United States would interpret it in as negative a light as our very timid Government and timid Opposition seem to think it would. It should be a matter for Australian sovereignty. It should be a means of expressing our concern, and let the United States adapt to it. If we make a noise like a rug we get walked on. We continually make noises like a fine Persian carpet and the United States walks all over us. It is time we took some action to show that we are a sovereign state. Do honourable senators think that the United States is now taking more or less notice of New Zealand than it did before New Zealand banned the presence of nuclear ships? It is taking far more notice. New Zealand is now on the map. Senator Walters —Shultz said that they had forgotten their address. Senator SANDERS —Shultz may have forgotten the address but I am sure that he has not forgotten where New Zealand lives in the world, and its significance in the example it has given to the North Atlantic Treaty Organisation countries and the rest of the world. Underlying any perception at all of Australia's defence is the fear of how the United States interpret such a move, which is not what we in the Senate chamber should be interested in. We should be interested in what is good for Australia and not in how the United States might perceive it. If the Government does not act on this issue, as looks likely, it is saying to the electorate and to the members of its own Party that the peace movement has no electoral clout, that there are no votes in the peace movement, and that the Government does not fear the electoral consequences. I am here to tell the Government that if it takes that stand it will be in big trouble. Perhaps the most realistic way to look at the Government's rejecting this Bill is that the Government has taken a calculated guess that, even though to vote for the Bill is the right thing to do, electorally the clout of the peace movement is not enough to motivate it into doing so. The last election should serve as a warning-the presence of Senator Jo Vallentine in this chamber should serve as a warning-that the Government is tampering with very great and deep feelings in the community and that it neglects them at its peril. The peace movement at the moment is completely underwhelmed by what this Government has done on peace. Honourable senators sitting here today know that many of them will be members of the unemployed after the next election, as will members of the other place. Senator MacGibbon —You will be with them. You will know all about it. Senator SANDERS —If I am unemployed it will be because I have done my job. I will no longer have to be a politician. This Senate will have seen the light and will then be taking up its responsibility towards the people of Australia. Over and over again in this chamber in the last few months we have seen the lengths the Government goes to to support its `All the way with LBJ' sentiments. We have heard the Geosat argument and the Trident II support. We have seen over and over again that this Government is not serious about disarmament, peace, or any of the other issues for which the ALP is supposedly famous. I conclude by quoting the Australian Minister for Foreign Affairs, Mr Hayden, at the opening of a conference on the future of arms control earlier this year. Mr Hayden said: Peace is the most crucial issue of our time, not only for this Government and for Australians but also for all human beings . . . This Goverment therefore intends to pursue its policy for peace in the knowledge that success will be won through small and careful steps and not miracles, with dedication to taking pains, with passionate concentration on what is possible . . . It is self-evident that the best way to get rid of nuclear weapons is to go the direct route . . . That is a very clear, concise statement of purpose. The passage of the Nuclear Weapons Prohibition Bill 1985 is a small step, but it is possible. It is the direct route towards the elimination of nuclear weapons from our planet. I commend the Bill to the Senate. Senator VALLENTINE(Western Australia)(8.25) —First of all, I congratulate the Australian Democrats for introducing the Nuclear Weapons Prohibition Bill 1985. I think it is very important to enshrine the hope that many Australians share that Australia will never become a nuclear weapons nation. I believe that this Bill has the broad support of the Australian population. All honourable senators would find that most of their constituents are in agreement with the provisions of this Bill, which states simply that Australia should not harbour nuclear weapons on its soil. Many other commendable Democrats' Bills on other aspects of Australia's involvement in the nuclear argument will be coming up for debate. This Bill, stating simply that Australia should not have any nuclear weapons on her soil, is one that most Australians would agree to, and that would cut right across the political spectrum. I would like to echo the suggestion of a question that Senator Sanders referred to-that there may already be nuclear weapons stationed on Australian soil. We do not actually know for sure that there are not nuclear weapons already on our soil. Although I am not a frequent reader of Playboy, it has come to my notice that earlier this year an article in that magazine indicated that at Pine Gap nuclear weapons were indeed stationed on our soil. Obviously, we have to improve our sources before we can state that with any clarity. This issue is one that needs to be beyond party politics. It should be dealt with in this chamber according to a conscience vote. It is fundamentally important that Australia should move away from the insanity of the nuclear arms race in which we are heavily involved at the moment. Sadly, as has been indicated to us very clearly by Senator Gareth Evans and Senator Durack, the Bill will be voted on along party lines. That is very disappointing indeed. Senator Gareth Evans said that there was no need for the Government to prove its good intentions on this issue, that its credentials cannot be questioned, that its resolve was unshakable and that the Government was totally committed to a nuclear weapons-free Australia. All of that sounds very grand, but why on earth are Labor senators in this place not prepared to support this Bill? All the grandiose statements that Senator Evans made really do not stand up in view of the fact that ships bearing nuclear weapons are so frequently in our ports. There is very little difference between having nuclear weapons tied up in our ports and having them stationed in silos on our soil. They create exactly the same dangers. Yet this Government, which says that it is for a nuclear-free Australia, is quite prepared to allow the frequent visits of nuclear-armed vessels to our ports. Senator Gareth Evans also talked about international recognition for the Australian Labor Party's efforts towards peace and disarmament. To a certain extent, some credibility must be given to that point of view. I think that it also highlights the Labor Government's hypocrisy on this issue, especially if we look at the South Pacific Nuclear Free Zone Treaty promoted by the Australian Labor Government to which Senator Sanders has already referred. It is very important that the Australian people realise that this so-called nuclear free zone treaty actually allows more nuclear activities in the region than it bans. Out of the 20 separate categories of nuclear activities or potential nuclear activities, it allows 13. One of the few things that it does not allow is the permanent stationing of nuclear weapons on our soil. Again it is very hypocritical of the Government to talk in very glowing terms about the fact that its credentials on this issue cannot be questioned while one of the few worthwhile proposals in the South Pacific Nuclear Free Zone Treaty will not be enshrined in this legislation if the Labor Party has its way in this chamber. All Labor senators ought to support this Bill because it is exactly in accord with their policy, and that was done with very good intention. If they do not vote for this Bill they will be seen to be voting against it merely because it is a Democrats' Bill. They will be seen to be putting party political point-scoring above an issue of fundamental importance to all Australians. That would be a great shame. However, I must admit that there are rumours of similar legislation coming forth from the Labor Party, because a group of Labor politicians for a nuclear-free Australia have talked about putting up similar legislation of their own. Senator Chipp —If that comes up, we will support it, and you will too. Senator VALLENTINE —I hope it comes up and that it comes up very soon. It should be in exactly the same terms as this Bill. Again that begs the whole question as to why Labor senators in this chamber cannot support right now this initiative of the Australian Democrats. I suspect that it is merely because it has come from them. Senator Durack needs to be challenged on many of the things that he said in his speech. He said that the Bill was based on a unilateralist approach. I believe that Senator Durack has never heard of independent initiatives. By criticising this sort of initiative, he is saying that Australia's role in the arms race should proceed unchecked. Is he saying that we should go on with more and more of the same? If everyone thought the same way there would be no hope of a breakthrough anywhere in the world. There would be no hope of a beginning to real nuclear disarmament. Individual nations must take independent initiatives. It cannot be called unilateralist by removing the threat of Australia ever becoming a nuclear nation. We are not saying that we support the Soviet Union going ahead full bore with its nuclear weapons program. We are saying that we are opposed to nuclear weapons of any nation. No matter from which nation they emanate, they are a threat to the survival of life on this planet. Senator Durack said also that the Bill represents an end to ANZUS. I do not know how on earth he came to that conclusion. The ANZUS Treaty says nothing about stationing nuclear weapons on Australian soil. In fact, the ANZUS Treaty says nothing about anything nuclear. I think that Senator Durack has introduced a red herring into his argument. Under the ANZUS Treaty we are not obliged to host the bases of foreign powers on our soil, to host the visits of warships or to have nuclear weapons placed on our soil. That is the provision of the Bill. It is merely against the stationing of nuclear weapons on Australian soil. So it is totally ludicrous to say that the Bill represents an end to ANZUS. I think that Senator Durack's speech was more important for what it did not say than for what it did say. There was no indication whatsoever in his speech that the Liberal Party opposes nuclear weapons on Australian soil. It is leaving the door wide open for that to happen. If one looks at the Liberal Party policy, I am afraid that one has to draw that conclusion. Liberal Party policy goes something like this: If requested, we will give appropriate assistance to the US in the development of (new) deterrent missile systems. It continues: We will . . . co-operate in the monitoring of the testing of MX and other missiles designed to strengthen the international deterrent . . . We will oppose any proposal for a nuclear free zone which restricts missile testing. The Liberal Party also supports the idea of home porting for US vessels bearing nuclear weapons. However, one good thing about the Liberal Party policy is that it does support an end to the testing of all nuclear explosive devices in the region. I suppose that is its one saving grace. The fact that the Liberal Party makes no bones about the fact that it is quite prepared to leave the door open for the stationing of nuclear weapons on our soil is indeed a very strong and convincing argument for the need to enshrine a ban on nuclear weapons in national legislation. We will not always have a Labor government. At some time in the future it is likely that we will have a Liberal government. This introduces the possibility of having nuclear weapons on Australian soil permanently, if they are not here already. I think that Australia needs to state very clearly a moral position in favour of survival rather than allowing itself to be implicated further in the insanity of the nuclear arms race. Even if we felt that we could trust the Labor Government implicitly on its stand, as Senator Evans seems to think that we should, its clearly stated intention, when the Labor Party can reject a Bill such as this, makes people uneasy. So all of the glowing terms are really worth nothing if the Labor senators in this place cannot support a Bill which is totally in line with their own policy. I strongly recommend this Bill to all honourable senators. Senator TATE(Tasmania)(8.35) —The core of the Nuclear Weapons Prohibition Bill is that it is a Bill to prohibit the manufacture and introduction of nuclear weapons into Australia. That is what it sets out to do and it is a political objective to which I believe this side of the chamber can give its fullest adherence and there is no sense of embarrassment in saying that. The exertions of our Foreign Minister, Bill Hayden, in bringing about widespread and mutual disarmament are well known. Unfortunately, I have not time graphically to describe the efforts he has made in this regard since we came to office. But the question remains whether this Bill best attempts to bind Australians to observe the desirable objective that is outlined by Senator Chipp in this Bill. The Bill not only sets an objective to which we can all adhere, but also has a machinery of enforcement and sanctions to ensure that that objective is met. It proceeds by way of injunction, enabling a person who lives nearby an alleged nuclear weapon, or a member of the Federal Parliament, to approach a court to seek an injunction. I will come to the significance of that method of the Bill's enforcement in a moment. I believe that very description of the people whom Senator Chipp would allow to try to enforce the Bill, namely members of this Parliament, shows that this is a highly political area and may not be one where the traditional judicial remedies and approaches to courts are the best solution and the best means of enforcement. Nevertheless, there is an attempt to put a political objective in place by this legislation and we have to address it seriously. The fact is that Australia in solemn international legal terms has given undertakings to the international community along the lines of the substance of the Bill. One would expect that particularly from an Australian Labor Party government, because our policy is very clear. Our policy says, as has already been mentioned in debate, that we oppose the development and acquisition of nuclear or other weapons of mass destruction, oppose their storage on Australian territory and certainly oppose the development of a nuclear component in our defence forces. So our international obligations are a simple translation into binding international law form of our ALP policies. I believe Senator Chipp and the Australian Democrats have been a little too clever in simply taking that policy and drafting it almost word for word into this Bill. I believe it is inadequate, as I said to Senator Sanders during this debate, because it refers only to nuclear weapons, whereas it is quite clear that in the international arena, for example, Australia and New Zealand have been extremely vigorous in pressing for the comprehensive test ban treaty negotiations and conferences to get under way. That treaty arrangement would embrace all nuclear explosive devices whether destined for supposedly war-like or peaceful or commercial purposes. In narrowing the range of what is prohibited in this Bill to nuclear weapons, I believe that there is an unfortunate narrowing of the range of nuclear explosive devices with which we should be concerned. It is not enough; it is not exhaustive to speak merely in terms of nuclear weapons. In fact, I believe one of the great achievements of Bill Hayden over the winter recess was to get the Treaty on the Non-Proliferation of Nuclear Weapons conference to endorse a call for a comprehensive test ban to embrace all nuclear explosive devices and to prevent their testing. I believe that if any Bill were introduced into this Parliament by this side of the chamber, it should carry that sentiment into effect and amend this Bill in relation to all nuclear explosive devices. The interesting thing is that the South Pacific Nuclear Free Zone Treaty which I have not time to go into in detail also takes the same wide scope. The South Pacific Nuclear Free Zone Treaty, as has already been pointed out, has been signed by Australia and will become fully ratified when eight signatories ratify the Treaty. Each party undertakes to prevent in its territory the stationing of any nuclear explosive device. Article 3 says: Each party undertakes not to manufacture or otherwise acquire, possess or have control over any nuclear explosive device . . . or to seek or receive any assistance in the manufacture or acquisition of any nuclear explosive device. I understand that Article 6 prohibits the testing of any nuclear explosive device in the territory of a party signatory to the South Pacific Nuclear Free Zone Treaty. I believe that, if a proper Bill were to be introduced into the chamber concerning these matters, it certainly should cover all nuclear explosive devices, not merely nuclear weapons. There is a further matter which the South Pacific Nuclear Free Zone Treaty opens up. A treaty was signed only on 8 August, in the latter part of the winter recess, after Senator Chipp introduced his Bill into this chamber in May. I believe it could be the case that his Bill could become absorbed within the framework of enforcement which is now provided for and in respect of which we have an international legal obligation under the South Pacific Nuclear Free Zone Treaty. Senator Chipp —Would that stop a future Liberal government allowing B52s to carry bombs? Senator TATE —I will come to that, Senator Chipp. I will deal with that but I have only 10 minutes. The fact is that the South Pacific Nuclear Free Zone Treaty provides, as this Bill does not, for a system of monitoring, surveillance and control which I believe would be an initial step in any enforcement process one has in mind-whether the matter goes to the courts or to some other forum for sanctions or enforcement to be applied in order to secure the observance of and adherence to the obligation which we all agree should be accepted by the Australian people. What this treaty does is set up a control mechanism, a monitoring mechanism. It provides, for example, that on the complaint of one party, on a suspicion that something is happening which is in violation of the treaty, an independent inspectorate can be dispatched to the country about which the complaint has been made. The inspectorate is under the control of the South Pacific Forum itself in a way which immunises it from any internal domestic law which might try to frustrate its inspection of Australian facilities in order to determine whether there has been a breach of the treaty. All this should be part of a wider arrangement which would overcome what I believe is too narrow and too simple a reliance on judicial enforcement, which is the feature of the Chipp Bill before us. In other words, I am suggesting that we go a step further in relation to providing for more realistic and comprehensive enforcement provisions in accordance with our obligations under the South Pacific Nuclear Free Zone Treaty. It has been said by Senator Sanders that the definition of `stationing' is much the same in the Bill as it is in the SPNFZ Treaty. That is probably correct. But the definition of `nuclear explosive device' under the Treaty is much wider and I would like to see any fresh Bill that is brought into the Senate cover all those matters. The question is how we, as Australians, should approach this obligation and how we should incorporate it into our social, political and legal arrangements. I cannot agree entirely with the tone of some of the Government's response if it is meant to suggest that the Australian Parliament does not have a proper role in relation to this matter. In my view, it is not simply a matter of the Parliament filling in, where it is technically necessary, some minor aspect of the SPNFZ Treaty. We should be full partners with the Government, on behalf of the Australian people as their elected representatives, in embodying in legislative form an affirmation of our adherence to the obligation with which we are all concerned. I believe it is very important that the Senate and the Parliament in general should not merely be seen as an implementing mechanism for some minor technical points in regard to the implementation of our treaty obligations. I do not go as far as Senator Harradine would like me to go. I do not believe-as I believe Senator Sanders misunderstood, but no doubt he was drawing on his United States childhood-that it is the case that the Parliament, particularly the Senate, should be involved in the ratification of a treaty. I believe that a government which has the confidence of the House of Representatives should be able to enter the international arena and undertake international obligations for Australia even if there were a hostile upper House or Senate which would oppose taking on the sort of obligations we are discussing today. To talk about full parliamentary ratification of treaties is not quite the point. However, I do believe that an obligation, having been undertaken on behalf of Australia in the international arena, should be enhanced-not detracted from-by us as parliamentarians. We should incorporate in a significant way our adherence to that obligation. I certainly do not accept any limitation, as has been suggested, on the power of the Commonwealth Parliament to direct the Executive in relation to the external affairs of Australia. All executive powers, from wherever they are derived, can be the subject of parliamentary direction. Senator Crichton-Browne —Including funding for the Senate. Senator TATE —I believe that too. In the Australian context, section 51 (xxix) of the Constitution makes it perfectly clear that this Parliament possesses plenary power in relation to external affairs and that includes a power over the Executive. Insofar as Senator Sanders's notice of motion suggests otherwise, I believe it to be wrong. I speak only of the possession of capacity to direct the Executive or to be involved with the Executive in these matters. Of course, how we would actually exercise that legislative power would be a different matter. I believe that, in relation to the sort of very major political international obligation that we are speaking about on this Bill, a mixture of non-justiciable, judicially enforceable sanctions and so on would be appropriate. That is why I say that this Bill is too narrow in its approach. As has already been mentioned, this obligation should find some sort of legislative embodiment because it would then make it difficult for any subsequent Australian government to renege on that treaty obligation. It is very important that we put as large a hurdle as possible in the way of a future government, should it be so minded, being able to go back on this commitment, solemnly undertaken not only under the Nuclear Non-Proliferation Treaty but also under the South Pacific nuclear free zone arrangements. I see much merit in putting a very high hurdle in the way of Australia's ever acquiring nuclear weapons or devices. Our obligations as elected representatives of the Australian people demand that such a step be subject to the fullest scrutiny in these chambers. If an incoming Liberal-National Party government were so minded-I do not think all those on the Opposition benches would be of that view, but if their government were so minded-it should be able to do that only by repeal of legislation along these lines and after full parliamentary debate. That would be the democratic way to go. Let me return to the Bill. I find the enforcement scheme proposed in the Bill too narrow in its reliance on enforcement by non-elected benches of judges by way of people approaching the court for an injunction. In this Bill people are given standing who are not merely those who would be directly affected by being resident near to the site where it would be alleged that a nuclear weapon had been placed. It also allows elected senators or members of the House of Representatives to approach the court. In that, there is already a recognition by the Australian Democrats that this is a very large political matter and not simply one that normally forms the subject matter of an approach to a court for an injunction. I am yet to be convinced that it is to the judiciary alone that we should look for the enforcement of this obligation. I do not believe that it should play the sole role in securing our adherence to that obligation. I have already indicated the matters which are of concern to me in relation to enforcement. I simply reiterate the point that the prior existence of systems of monitoring, surveillance and verification would be needed. It would give quite a false impression if that sort of machinery were not in place as a necessary proviso for the effective enforcement of the obligation. When we look at the nuclear free zone treaty, we find some control mechanisms which I believe should be in place in conjunction with or as a preliminary to something along the lines of the Democrats' proposal. I have already said that the Government should recognise fully and not begrudgingly acknowledge, the proper role of the Parliament in this matter. I think I speak on behalf of many colleagues on this side of the chamber and not merely those in the group to which Senator Jo Vallentine adverted and to which, for various reasons, I do not belong. I believe the Government should bring legislation into this place which affirms the Parliament's adherence to the very obligation undertaken by the Executive in various international forums, including the South Pacific nuclear free zone negotiations. That partnership should be forged between the Parliament and the Executive and should be apparent in legislative form. The Government should not confine Parliament to dealing merely with technical implementation provisions in jargon such as is technically necessary. I believe that would be altogether demeaning to us. I do not say that there has to be full parliamentary ratification for the reasons that I outlined to Senator Sanders. But we do have a role. A government enjoying the confidence of the House of Representatives ought to be able to ratify and assume the international obligation without the concurrence of the Senate which could be composed of a hostile political majority. But where it is possible, the Parliament should give its support in legislative form. Given the opportunity to affirm the sort of obligation which is in our party policy, and which in a much wider form is embodied in our international obligations, I would certainly be prepared to support the substance of a Bill of this sort which prohibits the manufacture and the stationing of nuclear weapons in Australia. It seems to me that so much is yet to be done. I do not think that it is years away. I believe it ought to happen during the autumn session of the Parliament. The South Pacific Nuclear Free Zone Treaty was signed only by several countries in the South Pacific Forum on 8 August and is yet to come into full force when the eighth ratification is deposited with the Forum secretariat. I believe it provides a good basis for producing a Bill. The Government should bring in a Bill which absorbs some of the better features of the Chipp Bill and marries the sentiment underlying the obligations in that Bill with those undertaken by the South Pacific Nuclear Free Zone Treaty. If that plan of action is carried out and such a Bill is passed during the autumn session next year, all Australians will be grateful that we took the time to deliberate and come up with a better expression of our will as parliamentarians than is presently before the chamber. I look forward to that day in autumn 1986. (Quorum formed) The DEPUTY PRESIDENT —The time allotted under sessional order for the consideration of General Business having expired, the Senate will proceed to the further consideration of Government Business. Debate resumed. Senator MacGIBBON(Queensland)(8.53) —Before the debate was interrupted earlier in the day I was talking about the faults of this Government, and what it had done wrong in a financial sense. I instanced four key things. The first was that it had overspent wildly; secondly, it had failed to make Australia competitive by freeing up the labour market and doing something about our high labour costs; thirdly, it had taken a soft and easy way out by the devaluation; and, fourthly, it had not provided any incentive to business. I said in relation to overspending that it had given us a huge deficit this year of $5 billion, that it had borrowed a great deal of money overseas and that a third of our export earnings this year, calculated on a higher exchange rate than we have at present, will go to pay interest on overseas borrowings. When the debate was interrupted I was talking about the Government's failure to make Australia competitive. I had said that the present Government believes in a holy trinity of big government, big business and big unions. I was interested to hear Senator Siddons take the Australian Democrats down precisely the same path during the debate on the matter of public importance this afternoon. He linked the Democrats with the big business, big government, big union thinking of the present Government when he refused to co-operate with the Liberal Party and the National Party in agreeing to their motion against the prices and incomes accord. I hope that we will be able to reduce the size of government in the years ahead. But we must look at the big unions. I see the labour force in Australia falling into three categories. There is the union movement that is formed by the Public Service, the union movement that serves big business, and the union movement which serves the small business community. Big business likes big unions. They like dealing with one another. I am quite sure that big unions like big business. It has been very clear in the history of Australia that unions do not like dealing with small businesses and individuals. I think it will be a fact of life for as far as we can see ahead that we will always have big unions that are related to the Public Service and to big business. I do not mind terribly much about that because I think they deserve one another and they certainly get on very well together. From a legislative point of view we have to bring all unions under the rule of law. We simply cannot tolerate a situation where we have laws for all the ordinary taxpayers, citizens and residents of the country, laws to which everyone is compelled to conform, yet have no legislation at all with respect to union members and unions. Unions can break contracts willy-nilly, contracts they have freely entered into in good faith, without any recourse whatsoever to penalties. That is clearly wrong and it is clearly something Australia cannot sustain in the future. For the third sector in the union field, that part of the labour force that serves the small business community and the individual entrepreneurs and is the creative force financially in the Australian commercial world, we need to introduce the right for individuals to negotiate their own terms of employment, subject to a realistic minimal wage. In this country it should be possible to unleash the great human resources we have by taking the dead and restrictive hand of unionism off that segment of the community. There is no reason at all why people cannot have, as an exercise of their basic human rights, the ability to set a mutually agreeable contract between employer and employee, provided that there is a genuine minimal wage-I do not mean an artificially high one-underpinning the whole. I cannot emphasise strongly enough that one of the key failings of this Government has been its inability to tackle the inflexibility in the Australian market that comes from our union system. People often think that unions only set wages. They do not do only that; they do a lot more. The unions dictate how many personnel will work on a job, or in an aircraft or in any sort of operation. They dictate for how long and under what conditions those people will work. Then they dictate what they will be paid. In other words, they tie up the whole in a monopoly on the supply of labour. They leave no flexibility, no opportunity to exploit circumstances as commercial opportunities arise. The tragedy is that under the Australian Labor Party we will never see any control of the union movement because the unions control this Government. The Australian Council of Trade Unions writes the Government's policy and it believes that what is good for the ACTU and the big unions is good for Australia. All of us know very well that nothing could be further from the truth. The unfortunate fact of life is that the unions are greedy and selfish. One has only to consider the way in which they do not spend five seconds thinking about the unemployment they have caused through excessive wage hikes in this country to see the truth of that point. The third thing the Government failed to tackle was the problems that come from devaluation. By floating the dollar the Government thought it could slip easily into a situation where it could knock down imports, drive up exports, and get out of the mess it got into through not being able to control labour costs. That did not work but, even worse, we ended up a lot worse off because the currency rate went down about 20 or 30 per cent, and it has not stopped falling yet. Given the fact that we have borrowed such a huge amount of money, we are in a very difficult position with respect to repaying. The floating of the dollar did not work because the Government did not break the rigidities in the Australian labour market. The overseas judgment on this is absolutely devastating. The overseas judgment is the reason we have a 65c dollar today. The overseas hard-heads in the money market see Mr Keating, the Treasurer of Australia, as a boy on a man's errand. They see him as just a mouthpiece for the union movement. There is justification for that. We are in the situation where we have lived beyond our means. The only way we will get out of it is by hard work and by taking a cut in our standard of living. Put in its bluntest terms, this means that everyone in the country has to accept less in wages to pay off the debt we have. But what does this Government do? Senator Georges —Everyone? Senator MacGIBBON —Yes, everyone, Senator Georges; the whole lot. Senator Georges —Profits as well? Senator MacGIBBON —Yes. The profit side of commerce has certainly been knocked about very severely in the last two or three years or longer. We have to take this cut in spending to get out of the mess we are in; there is simply no other way. But what does this Government do? It gets on the merry-go-round and indexes incomes and wages to the inflation rate. So we have this absurd situation of the cat chasing its tail round and round, locked into a perpetual spiral. As wages go up the inflation rate goes up. As wages go up people overseas look at us and will not have a bar of us; they will not buy our currency. That is one of the reasons why our currency is devalued in the way it is. Yet the donkeys on the other side come into this chamber on matters of public importance and things like this, braying and braying about how good the accord is and how great this unionised Government is. Why do they not start to look at Australia in the way people overseas look at it? If they do so maybe they will learn a little. The fourth area where this Government went wrong is that in no way at all has it understood the business community. It has provided no incentive for people to invest and take the risks that are an inherent part of business life. The cost of doing business has gone up right across the country ever since this Government got into power. We see that most acutely, of course, with respect to rural Australia. People have to sell on international markets, yet all their cost inputs have gone up many more times than the recovery value of the products they are producing. Fuel taxes, wages rises, the payments on cessation of employment and, finally, the new tax proposals that the Government has dropped on us-all these things operate against the business community of Australia. They do not encourage people to generate the wealth that we must have to get out of the mess we are in. What must be done? Legislatively, above all, we must free up the labour market. We must be able to unlock the great human resources we have in this country in the ways that I indicated earlier. Financially, since this is a Budget Bill, it is relevant to look at a few things that this Government should do as a matter of priority. It should cut the size of government. It should set priorities on its expenditure. It should cut duplication and improve efficiency. The size of government-- Senator Georges —Start with the Queensland Government. I am all for it. Senator MacGIBBON —Senator Georges's Government has boosted the expense of government administration by 37.3 per cent since it got in. It will have put 14,500 more public servants-as if Australia needs more public servants-on to the payroll by next year, an increase of 8 per cent on an already bloated contingent. Australia already has one of the highest percentages of public servants-9.83 per 100 head of population; I guess that 0.031 per cent is as good as one. It is one of the highest ratios in the world. We have to cut the size of government. The second thing that the Government might do is to look at priorities. It is a basic fact of economic life that, no matter how strong our interests or desires for something, we have to recognise that we cannot afford to buy everything. This Government has never recognised that first fundamental rule. If we accept that rule, we have to set priorities on our expenditure. A whole host of things that this Government is doing, has started and has inherited could well be dispensed with. One of the problems with government in Australia is that, once a program gets funded, it automatically keeps on being funded year after year and no one ever looks at it objectively. There is a whole bunch of demonstrably useless bodies in this country that we could knock out overnight to help our balance of payments and improve the life of the community. The Economic Planning Advisory Council could go, the Independent Air Fares Committee could go and the Human Rights Commission could go-just for starters. After that we could start to reassess the importance of all other agencies in the Government. I move to the matter of duplication. We duplicate a lot of functions federally and at the State level, and the fault lies on both sides. The Commonwealth Health Department vote is $6.7 billion, a bigger vote than for Defence. Yet, all States are very heavily involved in health. There are big savings to be made if the States and the Commonwealth co-operated. Education is another category. Senator Georges —I agree with you, for once. Senator MacGIBBON —I am talking only about named departments. When one gets into individual departments one finds that the picture is even more complex and more multiplied. Many functions carried out within departments and not identified by name are duplicated in the States. One good example is the Division of National Mapping which comes within the portfolio of the Minister for Resources and Energy (Senator Gareth Evans) and which is duplicated in all the States. I find it a nonsense that the various States are trying to run their own foreign services and maintain their own trade offices overseas. There is no point in that at all. Admittedly, the Federal Foreign Affairs Department is not perfect but our task should be to improve the Department to enable it to cater for the needs of the States. Another example of duplication, of course, is the Australian Broadcasting Corporation and the Special Broadcasting Service. No other country in the world runs two publicly funded broadcasting services. Some countries, like the United States of America, get by very well without any public broadcasting funding. Senator Georges —Keep the SBS and get rid of the ABC. Senator MacGIBBON —But we happen to run two of them. We will fund them this year to the tune of $395m for the ABC and $45.8m for the SBS. $1m a day. I remind Senator Georges that over $1m a day is spent on public broadcasting in this country. I see no reason why those two bodies cannot be combined and made a lot more efficient. The fourth point I wish to make refers to the efficiency of administration. The examples of inefficiency in the form of late replies from departments and, in many cases, an inability to get any reply at all, are too numerous to need expansion. In summary, these Bills characterise a Labor government-it is a big spending, big taxing government. It is a product of union thought; it is a product of a Treasurer who does not understand how to handle finance. The tragedy is that we no longer have the financial reserves in this country to underwrite this sort of deficit financing. The debts we have run up are enormous. The ability we have to repay them is very limited and is diminishing day by day. It is time the Government took cognisance of the very difficult financial position it has put Australia in. Senator COONEY(Victoria)(9.08) —Senator MacGibbon said that the Appropriation Bills characterise the Labor Government, and so they do. I take that as high praise because these Bills indicate this Government's thrust in the context of financial responsibility to give the citizens of this country the sorts of returns that they can properly expect from government. The reality is that this Government does not go about its task as Senator MacGibbon would if he were in charge-that is, cut everything to the bone, cast people into poverty, forget about the child welfare programs, forget about the moneys paid to educate our children, forget about the health facilities that are provided, forget about the needs of people who have to pay off their mortgages, buy their food and seek to live a reasonable and frugal life which is all many can do on the sorts of wages that are now paid. Senator MacGibbon would do away with all that. He would simply say: `Look, let us cut down expenditure on those things; let us save money; let us encourage the mythical entrepreneur who can only be encouraged if he pays nothing and contributes nothing to this country'. That is the proposition that is put forward. He would, of course, agree to tax people on the lower end of the scale at the rate of 30c in the dollar which is considerably more than this Government is in fact going to do. But that does not matter because they are not the sorts of people in whom Senator MacGibbon is interested. The reality is that this Government has concern for everybody across Australia, including those who produce the wealth. Those who produce the wealth are not only the entrepreneurs but also the people who work around this country. It is often put in these debates that the only people who ought to be considered are those who own the various factories and places of production around the country. Of course, they are very important people. However, also important and essential to the economy are those who get out and work. As soon as those people get a rise in wages and as soon as they are given a share in the wealth that they produce, there is an immediate outcry from the people opposite and terrible concern shown that so much money should be given to those people who in very large part are very near, if not on, the poverty line. They live most frugally. The Opposition has come in here today and said: `Look, here is a fall in the dollar'. It has presented the matter as if people in this country have suddenly had their purchasing power reduced by 30 per cent or some other ridiculous figure. The fact is that people who were able to purchase their goods yesterday will similarly be able to purchase their goods tomorrow. Senator Parer —He is not a great economist. Senator COONEY —Somebody says that I am not a great economist. What comes from across the chamber, from Senator Parer, is a remark which shows that he is concerned only with the economic elements that go into government. I think that deep down he probably is concerned. He is a man with some compassion, but because he feels compelled to put on the aspect of the hard and harsh economist, he speaks only in economic terms. He does not speak in terms of the social cost of the policies which his party would put into operation and would visit upon the poor and the down-trodden in this country. I am sure that at the end of this speech he will be convinced the other way and that he will take back to Queensland that concept of social equity which is needed to make good government. In talking about the economy, let us look at this economy that the other side says is going so badly. What have we got? We have got a real growth in domestic production which is nearly 5 per cent this year; a growth that cannot be matched elsewhere in the world. Real private consumption expenditure has grown rapidly. There is a continued improvement in labour market conditions, as shown in figures released today, which shows that the level of unemployment has fallen below 8 per cent. I comment on that point that for anybody to be unemployed in this country is outrageous, is a scandal and is something that we all, not only polititians but also the whole community ought to move to correct. It is a dreadful thing that people should be unemployed. I simply put that forward as an indication that this Government is undertaking policies which are at least resulting in a downward trend in the unemployment situation. It is encouraging that there is certainly a turnabout in the unemployment situation so far as our youth are concerned. I think we all agree across party lines that the great tragedy is the unemployment that youth is experiencing. Certainly the statistics that came out today indicate that there is some reason for optimism there. However, our efforts should be renewed and be renewed again to counter the dreadful unemployment that exists amongst youth and the dreadful unemployment that exists amongst the community as a whole. They are the sorts of issues that should be considered, rather than the question of whether somebody should get a deduction for a lunch costing something like $200 which he has with somebody else, ostensibly to do business, or even if he were doing business. Are they the sorts of people that we should be primarily concerned about or should we be concerned about the unemployed and the situation of our youth? Should we be concerned about the average worker in this nation who cannot afford the $200 lunches that other people enjoy each day? The appropriation Bills provide an economic framework whereby the real concerns of this nation can be considered. For example, if one looks at the economic indicators for South Australia one finds that the employment situation in the three months to September this year compared with a similar period in 1984 has improved by 2.9 per cent. The total unemployment over the same period in South Australia has been reduced by 8.5 per cent. Registration of new motor vehicles in South Australia has increased by 7.9 per cent. The value of retail sales in the three months to August 1985 compared with a similar period the year before has increased by 11.5 per cent. Investment over the 12 months to June 1986 is expected to go up by a massive 43.4 per cent. Bankruptcies, which are a great indication of the situation, are down by 14.8 per cent. I take South Australia as an indication of how this nation is improving and going forward under this Government. But what happens? As soon as there is something that Opposition senators feel they can grab hold of, the first thing they do when they get out of bed in the morning, without doing the exercises that they normally do, is-- Senator Parer —Careful. Senator COONEY —Imagine Senator Parer forgoing the normal exercise he undertakes in the morning to race down to get the papers to see whether there is something he can glean from them which he can use in this chamber to denigrate a mighty effort put up by this Government. The one thing Opposition senators have found is the fall in the dollar, a dollar which is subject to market forces. It goes up and down because that is what happens on the market. Senator Parer —No, it has sunk. Senator COONEY —Of course it has sunk. But what I am saying to the honourable senator is that it is one element in a whole series of indicators about the economy. We simply cannot extrapolate one indicator from a whole series of indicators and say that the economy is going bad. I would have thought that that sort of statement follows as a matter of course. Senator McKiernan —Not if you are a National. Senator COONEY —There you are. Let us look at the sorts of things these appropriation Bills do and what this Government has done in the social security field. Rent assistance and the family allowance have increased. Senator Peter Baume —From when? From next November. Senator COONEY —No, from November 1985 the family allowance is to be increased for families with multiple births. Senator Peter Baume —Tell us about the poverty traps measured not coming in until November next year. Senator COONEY —I will take the honourable senator up on that. He asks about the poverty traps that the Government is going to remove. We are going to do that. The honourable senator says that it ought to be done as soon as possible and he is absolutely correct. Of course is should be done as soon as possible. Economic stringencies will permit it to be done later down the track, but it is going to be done, whereas the proposition which has been put from the benches opposite is that those sorts of things should not be done, that the big thing is to cut down on aid to those who are least able to withstand the economic rigours in this community. That is what the debate is all about. All these things should be done, as the honourable senator suggests. I pay tribute to the concern the honourable senator shows to those in difficulty in this community. I applaud the concern he shows for the proposals that the Government is suggesting to be implemented even more quickly than they are at the moment. But they have to be done within the economic context. This is being done with the compassion and spirit of concern for our fellow citizens which, unfortunately, not enough people opposite are showing. Opposition senators want to cut down on all these things so that money can be saved for a particular section of the community. It would be wrong for me to say, and I do not say that the entrepreneurs, the people who those opposite say produce the income, should in any way be denied their just rewards. Again, they should be given those rewards in a context whereby everybody in this community must take a stake in what the community has to offer. When talking about the falling dollar it is well to remember that the article in the Australian Financial Review from which the Leader of the Opposition, Senator Chaney, quoted during his address earlier this afternoon in the context of the fall in value of the dollar was an article about the Liberals and Australian Democrats hotting up their attacks on the tax package. Senator Siddons, who often shows in this chamber a most admirable approach to matters, now considers that entertainment expenses may be legitimate tax deductions. He says that it is too tough to cut them out immediately. Senator Peter Baume says that the people for whom we ought to have concern are those whose circumstances are very reduced. However, in spite of that, Senator Siddons and the Democrats want to deny those people the sort of help that everybody with any sort of compassion agrees they ought to have in favour of people who go out for a free lunch. I keep coming back to this point. I do not want to suggest for one minute that it would not be a good thing for people to discuss business over lunch. Indeed, it might be legitimate, were this economy able to stand it, to allow some sort of deduction for that. But, in circumstances where there is only a certain amount of money to go around and where there are all sorts of other needs, such as the need for family-based day care centres, the need for health services and education and the needs of people who find it very difficult to pay off the mortgages on their houses and who are not able to enjoy to the full the luxuries other people enjoy, it seems almost obscene that some people should be able to have a free lunch at their expense. Senator McKiernan —Why not breakfast? Senator COONEY —It is suggested that these people be given a free breakfast as well as a free lunch. It just shows how this sort of flow-on effect can occur. That is one of the problems. What will we be asked for next? If we concede the free lunch, next it will be free breakfasts and free dinners. A strong attack has been made on the Australian Council of Trade Unions and the union movement by Senator MacGibbon. I am the last person to declare that the union movement should not be subject to the law as everybody else is. I am the last person to suggest that, together with other units in the community, the union movement at times does not perform as well as it might. Senator Puplick —Does that apply to section 45D in terms of being subject to the law, like everybody else? Senator COONEY —Senator Puplick talks about section 45D of the Trade Practices Act. A problem arises here. What this community really needs is to pull together as a community, a nation and a group of people whether farmers, business people, workers, the unemployed, the unfortunate, or unionists. We should not be placed in a situation whereby the seeds of aggression or war are sown amongst us. The trouble with Senator Puplick's comment is that it suggests that there ought to be the big policeman, that the rest of the community should, as it were, gang up on a group of people-the unionists, the ACTU-and crush them and that all the sins and all that goes wrong with the nation should be visited upon their heads. That is just not right. Aggression in union affairs and aggression in business, between employer and employee, should be avoided at all costs. The difficulty with the way in which section 45D has been applied is that it creates divisions. Industrial relations matters could be better dealt with in other ways, for example, by amendments to the Australian Conciliation and Arbitration Act. That is the Act to which industrial relations amendments should be made. Certainly, the Trade Practices Act, the intention of which was aimed at other features, should not be used to create disturbances or to create more problems in the community than need otherwise exist. This afternoon Senator Chaney, the Leader of the Opposition, quoted from today's Australian Financial Review. What about the Australian Financial Review of yesterday which gives a better perspective on other problems that exist in the community? As I have said, the union movement is subject to the sort of criticism that we all make from time to time of any institution in the community, and I am willing to concede that. Why is the Opposition not willing to concede that entrepreneurs and people who run businesses also need to look to their laurels to see where they are going and to look for a proper basis for advancement? Yesterday's Australian Financial Review suggests that there is a complete lack in the business community of that entrepreneurial spirit that is so needed. The editorial states: Unfortunately, too few sponsors are prepared to bet on uncertainty in modern Australia. The desire to have government guarantees, tax write-offs and high protectionist barriers still pervades a significant area of Australian business. It goes on to say: If Australia's horse-racing tradition can establish a basis for business entrepreneurship or willingness to take well-calculated gambles on uncertainties, then it has at last begun to serve the country well. The Opposition ought to balance its criticism of the work place and stop blaming simply the good, hard-working, honest workmen who go out every day to battle for their families. If it wants to criticise them, which I certainly do not, it should balance that criticism by looking to the fact that it is about time that those people whom we seem to have to feed again and again with help from governments showed a little initiative and produced goods not for the sake simply of profits but for the sake of Australia as a whole. Things would be much better if that were done. But we hear no criticism at all of that section of the community from the other side of the chamber. When Government senators come into this chamber they are met with allegations that the Government must free up the labour market, cut the size of government and improve efficiency. Those are all lovely phrases and they might excite people. They all sound very good, but they also sound very glib and they show a very poor regard for the people that we are, the sort of culture that we live in and the values that we place in the community. Senator MacGibbon illustrated the Opposition's view well. He said that he wants to remove the Human Rights Commission. He wants to downgrade public broadcasting and the sorts of institutions that are central to the way in which we conduct our lives. He wants to remove an institution which protects our rights and our liberties and he wants to downgrade the broadcasting institution which sets the pattern for our cultural achievements, which helps to develop our concept as a nation and to establish the concept of unity. Those proposals are consistent with the cultural cringe, and they seem to be the sorts of proposals that Senator MacGibbon likes to develop. Senator MacGibbon talked about overseas judgments. He certainly talked about them in terms of our currency. Apparently, he feels that we in Australia cannot make judgments relating to our situation and that the only judgments worth having are those made overseas. Even though he used the phrase `overseas judgments' only in terms of the economy, certainly when he talked on behalf of the Opposition about the Human Rights Commission and similar bodies and the downgrading of the broadcasting service, he suggested that the Opposition was about devaluing the Australian tradition and, unfortunately, downgrading our values and our efforts. It is necessary for us to pull together as a nation, to see ourselves as a great nation determined to battle our way out of our present economic problems, insofar as they exist, to develop a concept of ourselves as a unified nation, and to go on to greater and greater things. Senator MacGibbon said that the Government has no regard for business; I pick up a headline in the Weekend Australian, which is not a paper given to praising the Australian Labor Party for anything it may do in its approach to the unions. The article by Andrew Kruger in New York, talking about Mr Taylor, who is our Consul-General there, states: American business leaders are enthusiastic about news that the Hawke Government has reached an agreement with the trade union movement over wage discounting to offset the devaluation of the Australian dollar. Here the Opposition is saying that we should look to the overseas evaluation of the Australian economy and the way the Government is running it. American leaders are enthusiastic about the Hawke Government because it has reached an agreement with the union movement about wage discounting to offset the devaluation of the Australian dollar. The article continues: The man most in touch with business leaders in New York is Australia's Consul-General Mr John Taylor, who said yesterday: `Certainly, when I arrived in New York just about 12 months ago, I had the feeling that whenever there was a decision, people said ``Well, that's a good decision, but what will happen next?'' Andrew Kruger goes on to say: His assessment of the reaction to the Government's wage discounting deal with the ACTU is based on conversations with such financial heavyweights. He cites the heavyweights, including Mr Rawdon Dalrymple, the Chairman of Citibank and other key businessmen in New York to whom he spoke. Mr Dalrymple says that the Hawke Government's entering into agreements with the unions is very sensible and much to be praised. So there we are. Senator Puplick —What would you expect our Ambassador to say? Senator COONEY —Honourable members opposite keep going back to this cultural cringe. They say `This Ambassador is not worth listening to; the Conciliation and Arbitration Act is not worth reading' and so on. Anyhow, the thrust of the matter is there. Senator Georges —Get stuck into them. Senator COONEY —I do not have to get stuck into them because the statistics that show how the Australian economy is running get stuck into them. The Opposition has run around looking for figures that indicate that something is wrong with the Australian economy. Having searched and searched, it has come up with one thing, and it has been talking about it all day-a fall of some cents in the Australian dollar. It says: `There we are; we will create a great campaign in this Parliament'. It is not the sort of campaign that will fool the Australian people when they look at all the statistics that should be considered, when they see the falling unemployment rate, when they see that overseas opinion about the way this Government is going is very favourable. Apparently what the Australian people think is irrelevant to the Opposition's consideration of how things go, and it has resorted to two things. Firstly, this alleged disaster in the fall of the dollar and, secondly, the trade union movement, which the Opposition hopes to use as a scapegoat, as an object of hate, to enable it to crawl back to power in some way. I think that the people of Australia who are listening to this will agree that it is a pretty poor effort that that is the way the Opposition goes about doing things. This Government, in contrast to how things were in 1981, 1982 and into 1983, is bringing back to Australia a sense of self-respect and an economy that is going forward. If anything is going forward too rapidly, it needs the restraint of interest rates. If that was not so the economy would overheat. A couple of years down the line, when the next election is held, the policies of this Government will be well and truly vindicated. Senator SHORT(Victoria)(9.36) —Mr Acting Deputy President-- Senator Georges —This will be good, if it's going to be another union bash. Senator SHORT —No, it will not be a union bash at all, Senator. First of all, I congratulate my friend Senator Cooney on his very enjoyable and entertaining remarks. He is a man of infinite legal experience and wisdom. I thought his remarks tonight made it patently obvious that, in gaining that legal wisdom, he had had a lot of experience in defending hopeless cases. He did it very well tonight! More seriously, I wish to pick up and comment on a couple of points which Senator Cooney made. It seemed to me that several of his remarks tonight epitomised the fundamental mistake that the Hawke Labor Government is making in terms of achieving the objectives that it says it strives to achieve. There is no point in Senator Cooney talking about compassion, social equity and social cost, implying that one political party has a concern for these matters and the other political parties do not, without acknowledging and recognising any feelings of that nature that any politician, political party or member of the community has. They are fine words only, if they are not achieved in the context of hard, rational, thought-out economic policies. We might say to ourselves that economics is a hard and a dismal science, but it has been proved beyond all doubt throughout history that an ignoring of economic rationality is the surest way to avoid bringing compassion, care and social equity to our people. One just cannot ignore economics in the way it was tonight. One cannot care for a growing community unless one has a growing economy. There is no alternative to that. Senator Cooney criticised the Opposition for having grabbed at an individual statistic over the last few days-he said that we plucked it out and cited it out of context-namely, a statistic reflecting the fall in the value of the Australian dollar. I put it to Senator Cooney that it was not an individual plucking out of a statistic. It was a highlighting of a statistic resulting from a combination of factors that affect our economy. If we had better achievements and better results in those other fundamental parts of our economy, we would not be seeing the falling dollar and, by definition, the day by day fall in Australian living standards that that falling dollar leads to. Senator Cooney spoke of housing costs and I agree with his concern, but there is no way one will get housing costs down unless one gets inflation and interests rates down. In a situation now where the Government is presiding over the highest level of interest rates in this country for a least half a century-and on some people's calculations for a century, one will do the people of this country a grave disservice in trying to enable them to get adequate housing and shelter. I want to use the occasion of this cognate second reading debate on the Appropriation Bills to do three things. I want to attempt to debunk the myth which has so skilfully and assiduously been developed by the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating), with a bit of help from their friends in the media, over the past two and a half years that this Hawke Labor Government has demonstrated itself to be an effcient economic manager, and a more efficient economic manager than the previous coalition Government. Secondly, I want to record my grave concern about where the Australian economy is at the moment and where it is heading. Thirdly, I would like to make a few suggestions as to what we should be doing about it. It is inevitable that the Government will portray anyone who raises concerns about the present level of performance and the likely future direction of the economy as just another prophet of doom. I guess I would do so, too, if I were in the Government's position. That is politics. But in my remarks tonight I hope that I will present myself as a political economist rather than just a politican, because the issues facing Australia are such that they should be beyond purely party politics. If they are not and if we do not reach some better measure of agreement as to which way this economy is going in identifying the present situation, heaven help us in finding the solution to our problem. It is about time that the Government started taking note of what economists in this country are saying. If it does not do so, the road ahead for all Australians will be even rockier than it will be in any case. Let me say a few words about the first issue I want to deal with, and that is the myth that has been so skilfully developed by the Government, with some help from its friends in the media, that it is an efficient economic manager. How do we judge whether a government is an efficient economic manager? It is not easy. One cannot just look at the results in terms of employment, inflation, interest rates, output growth and so on. These results are often influenced by events outside the Government's or the nation's own control. The Whitlam Government was obviously influenced, to its disadvantage, by the first oil price shock in 1973. The Fraser Government was equally obviously influenced to its disadvantage by the world recession and the Australian drought in 1981 and 1982. The present Hawke Labor Govenment's results have been influenced in the opposite direction-in a favourable direction by the growth of the American economy since late 1982 and by the breaking of the drought in early 1983. Measured economic results have to be treated very cautiously when used to assess the economic management efficiency of any government. But with those qualifications, there are certain criteria against which any government's economic management efficiency can be assessed. These criteria include at least the following: Has the Government been a prudent manager of its spending and taxation powers, bearing in mind that the only money governments have for spending comes at least eventually from taxpayers? That is an important criterion on which a government can be judged. Another criterion is whether the Government has taken action to maintain the value of our currency, both within Australia and against other currencies. Has it provided the right environment for the encouragement of lasting new job creation through economic growth? On each of these counts the performance of the Hawke Labor Government falls well behind that of its predecessor, the Fraser coalition Government. Let us look at a few facts for once and forget about the myths. What about good management in spending and taxation? In the seven years of the Fraser Government, government spending grew on average by 2.2 per cent each year. That is very careful and prudent management-in fact, it is the most careful and most prudent economic management displayed by any government in Australia's post-war history. In the first two years of the Hawke Government, the average annual increase in its spending was more than three times greater than the 2.2 per cent of the Fraser years. It is true that government spending growth has been pulled back this year, but the average is still much higher than that of the previous Government. Because of this lack of discipline over spending, the Hawke Government has had to pull more tax dollars from the pockets of Australians than any previous government in our history. The Hawke Government is the highest taxing government in Australia's history. It is that by whatever measure one wishes to choose. That is not the end of the story because, despite record taxation, the Government has still not taxed enough to meet its undisciplined spending. So it has had to resort to continual borrowing to balance its books. In three Budgets the Hawke Government has had to borrow no less than $20,000m just to meet this gap betwen its profligate spending and its taxation receipts. That borrowing equals about $1,250 for every man, woman and child in Australia. Per taxpayer the figure is closer to $3,000 each. That borrowing has to be repaid and repaid with interest. This year the interest bill, in a year when interest rates are at their highest ever level, and leaving aside altogether any repayment of the borrowing, is more than we Australians spend on the defence of our country and more than the Federal Government spends on education. This adds up to one very simple fact-that is, the Hawke Labor Government is living way beyond its, and therefore Australia's, means. The consequences for us all will be dire. They are already starting to surface and I will mention them in some detail as I proceed with my remarks. That leads me to the next of the criteria that I mentioned-namely, whether the Government has taken action to maintain the value of our currency. It is true that inflation, as measured by the consumer price index and most other price indices, fell during the first two years of the Hawke Government. Views differ as to the reasons for this. Personally, I believe the decline was due less to the policies of the Government than to other influences, including the wages freeze which the Hawke Government inherited from the Fraser Government. However, I do not wish to be churlish on this point; I do not need to be. Rather, I just wish to point out four facts. First, even during those two years when Australia's inflation rate was declining, it was still well above that of our major trading partners and, therefore, we were becoming increasingly uncompetive. Secondly, regardless of what happened in those first two years, inflation is now on the increase again in Australia and that is so quite unequivocally. Thirdly, interest rates, after allowing for inflation, are now at their highest level in at least 50 years and probably a century. Finally, the value of the Australian dollar against other currencies has fallen in 1985 more than virtually any other currency has. It has fallen by more than it has fallen in living memory, certainly in our post-war history. The Australian dollar is now on a slide that it will be very difficult to reverse. This year alone the value of the Australian dollar has fallen by more than one-quarter so that, whereas in January 1985 one needed $4 to buy something overseas, one now needs $5. I say to Senator Cooney that that means that the standard of living of every Australian has fallen. The fall in the Australian dollar this year has been the most significant contributor to the fall in our living standards which has occurred for quite a long time. The fall has been due very largely to the policies of the Hawke Government and to the perception of those policies by the rest of the world. In simple terms, the world is passing judgment on Australia through its lack of confidence in the value and stability of our dollar. My final criterion on judging of the economic management efficiency of the Government is whether it has provided the right environment for the encouragement of lasting new job creation through economic growth. The Hawke Government does score some points on this criterion, notably for its deregulation of financial institutions-a deregulation, however, which it essentially inherited from the previous Fraser Government. But the Government fails miserably on other aspects of the criterion, particularly in its blind adherence to the wishes of the trade union movement in wage fixation and its refusal to countenance any deregulation in the wage fixing area despite again the indisputable fact that some greater flexibility in this area would create new jobs and would assist in tackling the crime of youth unemployment in Australia. It is a crime that 25 per cent of our 15 to 19-year-olds are unemployed. It is a crime because it is unnecessary. The Hawke Government bears a very heavy responsibility for this crime. While I am on the subject of unemployment, in recent days we have heard much about the growth in employment that has occurred in recent times and for which the Government takes credit-credit that I believe is not justly its. But even if one looks at the figures over recent years for the growth in employment in Australia, the Hawke Government does not measure up adequately and comparably with the previous Government. For example, in the three years between November 1978 and November 1981 the average annual increase in employment was 2.2 per cent. In the period May 1984 to May 1985, the highest period of growth to date in the period of the Hawke Government, the increase was also 2.2 per cent. However, the big difference was that most of the employment growth in the period of the Hawke regime was public sector growth whereas under the Fraser Government public sector growth was very limited; by far the overwhelming amount of employment growth in that period was in the private sector. The myth that has been perpetuated that the Hawke Government has done a better job at employment creation than the Fraser Government is simply incorrect on the basis of very simple facts. Thus, on most of the criteria on which efficiency of government in its economic management can be judged, the present Government measures up very badly both in absolute terms and relative to the previous coalition Government. It is about time that the myth that the Hawke Government is a good economic manager is dispelled once and for all. It simply is not supported by the facts. I am extremely concerned about where the Australian economy is heading. The reasons for my concern, I guess, are implicit in what I have just said. The problems are there for us all to see. Let me reiterate a few of them. I do so in the presence, I might add, of not one member of the Government in the chamber. Senator McIntosh —Rubbish! Senator SHORT —There is now one Government member. Thank you, Senator, for staying. Senator Parer —Senator Cooney is still here. Senator SHORT —I apologise to Senator Cooney. This is a very important debate and there are two members of the Government present. There are now three. If I keep talking-- Senator Puplick —How many Ministers? Senator SHORT —There is no Minister at the table. There is no Minister in the Senate and there has not been for several minutes. I am, as I said, extremely concerned about where the Australian economy is headed. I have mentioned some of the reasons. I will reiterate a few of them. Inflation is again on the rise. Throughout the whole period of the Hawke Government the inflation rate in Australia has been considerably higher than that experienced by our major trading partners. The gap is widening. We have in this country a system of wage fixation through automatic wage indexation which has locked us into an economic inflationary spiral from which it will be impossible to escape unless that system is changed. There is no suggestion, not even a vague hint on the part of this Government, that that change will occur or even be considered. We face a major balance of payments crisis. Despite the largest fall in the value of the Australian dollar since the Second World War, our imports are still increasing while our exports are lagging. There are very good reasons to expect that this situation will continue. We hear from the Government that the traditional J curve effect of a devaluation is still to occur. The lag is longer than has been the case in the past. There are very good reasons to expect for a variety of reasons on this occasion that, that lag will grow longer and longer than we have ever experienced in the past. In the interim, even if the J curve does take effect in time, we will face a very severe mauling of our external account and the value of the Australian dollar. That in turn will further fuel the inflationary spiral and put great pressure on the Government's wages deal with the unions, a deal which was struck without the slightest regard for its effects on business, particularly small business. Interest rates, as I said, are already at their highest level for at least 50 years and they seem certain to increase further. We face a fundamental foreign debt problem in this country at the moment. Our foreign debt is of the order of $68,000m. At the moment the interest and capital repayments on our foreign debt consume one out of every three export dollars we earn. I am absolutely staggered to hear from the Treasurer and his representative in this chamber, the Minister for Finance (Senator Walsh), several times this week that we do not have a foreign debt problem. There is no more serious problem facing this country, and this Government is treating it in an ostrich-like way. Papers released yesterday by the Bureau of Agricultural Economics predict a fall of 26 per cent in the value of rural production in 1985-86, a very small increase in the price received by farmers for their goods and services and a very significant increase in the prices they have to pay for their imports. We have on our hands a rural crisis of considerable magnitude and again the Government seems not even to acknowledge that such a crisis exists. What should we do about the problems of which I have been speaking tonight? I would not for one second pretend that the government of the day has the answers to these problems readily in its hands. That would be to fall into the trap into which this Government has fallen in a massive way over the last two and a half years by saying to the Australian people: `She'll be right. We, the Government, know the problems; we will be able to fix them'. That is the greatest con and crime that has been perpetrated on this nation for a long time. It takes away from individual Australians the feeling that they need to develop their own enterprise, incentive and effort. Governments cannot solve our problems but they can set an environment in which we can better solve them. What would I do if I were advising the Government? The first thing that must be done is for the Government to take a closer account of its own spending. If the Government is not prepared to exercise greater discipline and restraint in its spending, none of the other problems of which I have been speaking tonight will be solvable. The Government must relook at its whole policy towards wage fixation. An added degree of flexibility must be introduced into the Australian wages system, otherwise our uncompetitiveness will continue unabated, regardless of what other measures we may take. If that occurs, we will go further down the road of economic decline. I was very interested to read this week a report of Professor Helen Hughes's first Boyer lecture for this week in which she said: Unemployed Australians would be looking for laboring jobs in rapidly growing Asian countries in another 30 to 50 years unless present trends could be changed . . . She pointed out: . . . Australia, which had the world's highest per capita income a century ago, had the slowest growth of any industrial country since 1900 and was now fifteenth on the wealth index of developed nations. Senator Bolkus —It is the long free lunch. Senator SHORT —It is a free lunch induced by those on the other side of this chamber who have conned the Australian public into believing that governments can do everything for them and that people do not have to do anything for themselves. Senator Bolkus —It is always the worker. Why do you not pick on anyone else? Senator SHORT —It has nothing to do with an attack on the worker. If Senator Bolkus thought a bit more about Australia and a bit less about Latin America his side of politics might be a little better. Senator Bolkus —Mr Acting Deputy President, I raise a point of order. I resent that inference. I am concerned about Australia. This man is here to represent only one faction within Australia-one elite group-and he has the gall to accuse me of not being representative of all Australians. I ask him to withdraw. The ACTING DEPUTY PRESIDENT(Senator MacGibbon) —There is no point of order. Senator SHORT —In future I will listen with interest to what the honourable senator says about the situation in Australia. I must have been missing something. The Government must look again at its tax proposals. The whole thrust of the tax proposals is anti-business; it is particularly anti-small small business and anti-incentive. If we as a nation think we will grow and provide the goods and services that we want to provide as a caring and compassionate nation and we do not provide the incentive for the creation of income and wealth in this country, we are sadly deluding ourselves. Above all, this Government needs to show some leadership and a sense of direction to this nation. The problems we are facing in Australia are not just the Government's fault in a policy sense, critical though I am of those policies. Even more important is the failure of the Government to show leadership and to say to the Australian people: `We want growth, prosperity and job creation in this country'. Until it does that and adopts policies which are in line with that sense of direction, the problems to which I have alluded tonight, which I believe are of greater concern to this country than we have had in a generation, the problems will not go away; they will worsen. Senator COOK(Western Australia)(10.05) —The Appropriation Bill (No. 1) 1985-86, the Appropriation Bill (No. 2) 1985-86 and the Appropriation (Parliamentary Departments) Bill, which are before the Senate tonight, are Bills of appropriation which give effect to decisions made by the Government in the Budget. Therefore, I think it is important to commence my remarks by referring to the Budget-a Budget which was previewed by the Opposition, before it was delivered, as a disaster for Australia. In fact, on the very day the Budget was brought down, the former Treasurer in the Fraser Government, now the Leader of the Opposition, Mr Howard, forecast that the Government would be lucky to get the Budget deficit under $6 billion. Senator Crowley —The discredited former Treasurer. Senator COOK —That is right, the discredited former Treasurer of the Fraser era, now the Leader of the Opposition and economic expert, who is charting the course for what the Government should do with the economy-a discredited course because it is no more than a regurgitation of the Fraser formula. He forecast on the very day of the Budget that the deficit this government would bring down would be above the $6 billion mark. Of course, to his chagrin and to the surprise and annoyance of the Opposition, the Budget deficit in the papers delivered by the Treasurer (Mr Keating) in August was $5.9 billion. That illustrates the paucity of economic forecasting and talent in the Opposition. Since the advent of the Hawke Government on the treasury bench in March 1983 we have seen a government that has been concerned to manage the economy by giving clear signals to the market. It has moved in a confident and assured way to deliver upon those signals, and on all the major indicators it has always over-achieved on what it has forecast as its direction. When the Government assumed power in 1983 it set out, in the midst of an economic crisis, to expand the economy and create growth by establishing a deficit Budget. It did so confidently, knowing that it had in place a prices and incomes accord which would enable it to run an expansionary economic line and to hold down wages by virtue of an agreement with the trade union movement, and to deliver, as it did in 1984, a halving of inflation, an increase in employment, a reduction in unemployment, an expanding economy, and a reduction in industrial disputes. It was on the basis of that economic performance that the Government was re-elected at the end of last year for yet another term. Whatever else is said by members of the Opposition, one fact remains true: Despite the whimperings of our opponents about the breaking of the drought and about international factors this Government has got itself organised on the economy and has managed to deliver growth rates year after year. So we are looking now at a sustained period of economic growth which will create jobs, provide employment for young school leavers and ensure that the Australian economy continues to expand, win new markets overseas, and regenerate itself. That achievement was recognised last month by the Organisation for Economic Co-operation and Development, when its Secretary-General, Mr Paye, visited Australia and complimented this Government on its economic achievements. In particular, he singled out the accord as being the fundamental premise upon which this government had built its economic strategy. However, quite apart from the general macro- economic framework put down in Budgets, this Government has not shrunk from the tougher and more courageous decisions on the economy. One of the most fundamental injustices perpetrated by many years of conservative rule in this country has been that the tax system was never reformed. What we had during the whole of the Fraser years, and the previous period of the Holt, Gorton and Menzies years, was a tax system that became more and more unjust. We had taxation scales at both average and marginal rates, which were designed to tax the wealthiest in the economy, being applied to ordinary average wage earners, and as inflation has bitten and wages and salaries have increased they have moved further and further up the scale into higher marginal rates. So now we are looking at marginal rates of taxation, which were envisaged for the most wealthy in society, being applied to the average. We have seen as well in the breakdown of the taxation system that increasingly the share of tax paid to public revenues has been borne by middle and low wage earners and that the wealthy have escaped their obligations to the public purse. In fact, it does not come to me to say it, but many commentators in both the economic and taxation fields have remarked that, under the regime of taxation that applied in this country, the contribution to tax by the wealthy was merely a voluntary one. Since the announcement on 19 September of the Government's tax package, we have heard complaints from the Opposition in which it has selectively chosen targets to pick off within a total symmetrical and balanced package. We know, of course, that in any tax package that is honest, fair and just there will be new areas of tax and that those who have escaped their liabilities will be brought into the tax net. I believe that the most disgusting thing that we have seen from the Opposition is its defence of those who have been tax avoiders, those who have excaped the net of paying their due worth in taxation and those who over the years have practised the art of avoiding their obligations to the community while imposing higher and higher burdens on ordinary average Australians. That defence of privilege is the most disgusting and obnoxious feature of all of the speeches that have come from the Opposition benches on taxation. I think this Government has taken the most courageous course in tax reform that we have seen from any government of this country. There have been some criticisms of the fact that the Prime Minister (Mr Hawke) and the Treasurer chose to publish their options and to select their preferred option from among them. They then chose to call the community of Australia to a summit and to consult with that community to see what the people of Australia thought about the various options. On the basis of the feedback delivered to it by unions, employers, the welfare sector and all other interested groups in the economy, the Government then modelled a package for reform which not only reflects Government priorities but also reflects the wishes and desires of the broader community. The tax package that this Government has brought forward does exactly that. Yet, we have not seen from the Opposition any comprehensive reply; we have not yet seen from the Opposition any comprehensive rebuttal; and we have not yet seen from the Opposition any alternative package. What we have seen from the Opposition is constant sniping, nit-picking and pandering to the emotions of small privileged groups in society which want to protect their particular tax rorts. That must fundamentally demonstrate the hypocrisy of the position taken by the Opposition. The tax package that this Government is bringing forward is a package which introduces some new taxes. We heard Senator Short say tonight that the capital gains tax envisaged in this package is reprehensible and attacks small business. Of course, the truth about capitals gains tax is that Australia is almost unique among the Organisation for Economic Co-operation and Development countries-an organisation of the most advanced industrialised and economically developed countries in the world-in not having a capital gains tax. It is to our shame that we have this major gap in our taxation regime. Yet this tax has been attacked tonight as being somehow a disincentive for small business. What Senator Short failed to argue, and what the Opposition has failed to argue, is that this tax seemingly is not a disincentive in West Germany, it does not deter the Japanese from re-investment and it does not fight back the private entrepreneurs in Canada from seeking to maximise their gains. A capital gains tax applies in the United States of America and that country's economy is burgeoning. A similar situation exists in France and Britain. Senator Crowley —Opposition senators are leaving the chamber. Senator COOK —It seems that the Opposition benches are being depleted at a fast rate. While this tax is not reprehensible, is not a disincentive and is regarded as a proper tax in comparable OECD countries, we hear from the Opposition that uniquely it is somehow a reprehensible tax in Australia. Of course, the truth about the capital gains tax is that there is no substance to the sort of emotional stampeding that the Opposition has engaged in trying to argue against the capital gains tax in the community, the fear campaign it has engaged in to pretend that it will encompass a wider area than it really will and the claim that it will affect ordinary people when in fact it will only affect a small elite group of investors. The capital gains tax that this Government has introduced will tax real capital gains, which is to say that the value of properties purchased after the Treasurer's announcement on 18 September will be indexed according to the consumer price index and any gains in value beyond the level of the indexation of the CPI will be taxed. Those gains will then be taxed at the average company and marginal tax rates. There will be provision for write-offs. The family home will be exempt. The family home on a farming property will also be exempt. Certain owner-use equipment that goes with the family home-furniture and other provisions-will also be exempt. We have in Australia a capital gains tax which by world standards is a soft tax but which by equity standards in Australia is a necessary tax. It is a tax that addresses the fundamental reforms that we have sought in the economy-reforms based on the concept that a tax system must be efficient, equitable and address the avoidance and evasion which has been occurring in the economy. It is a matter of fact that the coalition never bothered to do anything about avoidance and evasion until such time as it became a public scandal in this country. Because public sentiment was such that there was shock and outrage at the level of avoidance by a small group of privileged people, then and only then was it moved. The scandals that afflicted the Opposition during its period of government are now legend. The history of the rorts being worked out of the Perth office of the Attorney-General's Department and so on is now legend as typifying the sorts of things that were occurring in this country because the Opposition lacked the will to approach tax reform in any way at all, let alone in the comprehensive way in which this Government has approached it, addressing the basic precepts of justice, efficiency and a fair deal for all taxpayers. Senator Aulich —They left it in the bottom drawer. Senator COOK —They left it in the bottom drawer: that is right. The other thing that the Opposition has turned its fire on in recent times has been the wages accord. It is remarkable that it has chosen that as a target because the accord has underscored the basic economic strategy of the Government. The Government has achieved, as I said earlier, a halving of inflation, a reduction in unemployment, an increase in employment, an expanding economy year after year, a track of sustained economic growth and as well we have sustained an increase in profitability in the private sector. All of those things during the period of the so-called private enterprise government-the conservative government-were never achieved. In fact, the reverse was achieved and, indeed, in the last year of that government negative industrial growth occurred. We as a government have succeeded in achieving those things and we have achieved them because of the accord. The accord, of course, is a document that stands as a compact between the Government and the Australian Council of Trade Unions. It is a continually negotiated and renegotiated agreement. The accord mark 2 concluded earlier this year has reinforced the accord and has meant that we are now able to look forward to a continuing period of industrial expansion. Today's reports and yesterday's reports about the fall in the value of the Australian dollar have been trumpeted from the Opposition benches as if they somehow indicate a flaw in the economic management by the Government. The truth is that they indicate a flaw certainly, but the flaw does not lie with the Government; it lies with those on the international currency exchanges who do not understand how the economy in Australia works. As the Sydney Morning Herald reported in its editorial today, the fact that the New York currency exchange learnt that the Conciliation and Arbitration Commission in Australia has given a 3.8 per cent wage increase to wage and salary earners across the board and that our external debt is high was enough to panic the exchange dealers. What we have seen over recent weeks is the Treasurer of Australia travelling abroad, visiting New York, London and other international centres explaining that not only is the Australian economy strong but also that it is verging on overheating. That, more than anything, indicates that we have a sound economic future. The reduction in the value of the Australian dollar compared with the value of the United States dollar is a passing blip on the statistics of the exchange rate. As soon as the exchange markets learn to be more sophisticated in judging the performance of the Australian economy, as they will as this economy continues to expand over time, and realise its 5 on 5 per cent growth rates year on year, their judgment will improve and we will not see these wild fluctuations. The editorial in the Sydney Morning Herald counselled the Treasurer today. It asked what he should do. He should do nothing. He should hold firm and pursue the line of economic strategy that this Government has embarked upon. Indeed the Treasurer, just last month, at the Canberra Economic Society said that what we are witnessing in Australia is a troughing out at the bottom of the J-curve. That might be a peculiar Keatingism, but it does explain very succinctly the fact that what we have seen with the devaluation of the Australian dollar is the effect of the J-curve applying immediately. The effect of the J-curve is that with immediate devaluation the cost of imports rises straight away. We pay those higher costs and our current account deficit blows out as a temporary feature. That current account deficit blows out because of the higher costs of imports and the lag in the renegotiation of export prices and contracts. If we are not yet we are very close to being at the bottom of the J-curve there. We are now looking forward, with the renegotiation of export prices, to a sustained recovery and a reeling back of our current account deficit as not only the price of our exports increases but the volume of the sales of our exports increases as well. I now hear the barking and baying voices of Opposition senators who want to contest the facts and argue fantasy against reality. We are now approaching a time in which we will see the reeling back of that current account deficit as the J-curve goes on its long, sustained upward climb. Opposition senators have tried to harp on this matter and tried to pretend that we are not troughing out of the J-curve, as the Treasurer puts it. They want us to panic, they refuse to face reality. They want to run away from what is a responsible economic line and throw caution to the wind. This Government is not going to be panicked; this Government is not going to be stampeded. This Government is going to stick with its economic philosophies and reap the benefits of standing fast and not panicking. Senator Tate —Are we going up the little bit or the big bit of the J-curve? Senator COOK —That is a very good question. Senator Tate has asked whether we are going up the little bit or the big bit of the J-curve. Everyone is familiar with the shape of a `J'. We have gone down the little bit; we are at the bottom of the curve and we are going right up the big bit. We are going right up the big bit shortly in a sustained recovery and a reeling back of our current account deficit. If Senator Tate has any other questions about the J-curve, could he please put them on notice. The renegotiation of the accord mark 2 has also enabled this Government to achieve a quite unique approach to economic policy formulation. As soon as the Australian dollar was devalued following the float, we heard from the Opposition braying, panic-stricken calls and calls for the discounting of wages to offset the loss of the value in the Australian dollar. This Goverment has achieved a renegotiation in accord mark 2 to provide a discounting of 2 per cent in the next wages round. We have been able to negotiate with the Australian Council of Trade Unions to offset some of the negative effects of the devaluation and lock in its constructive effects. It has been a trade off. If one were to look at the winners and losers of the trade off one would find that there are precious few losers. The Australian economy as a whole is advantaged. The accord mark 2 puts very much on the agenda the introduction of a national superannuation scheme to provide the aging and greying population of Australia with security in their old age, the ability to retire earlier and, when they do retire, the ability to live at higher levels of income than pension rates would afford. I believe that the accord mark 2 will be an historic document in the sense that, once its full benefits are checked in, the population of Australia will benefit by having a superannuation scheme to which most contribute with a superannuation net installed under it by the Government. At long last the aging population of Australia can look forward with some security to the future. In the past and at present we have found that superannuation has been the province of the higher paid worker rather than of the blue collar and lower paid worker. At least 40 per cent of the population are without superannuation cover. However, in the next few years that situation will be wiped out and all will be covered. That will be a distinct achievement of the accord mark 2. Before the braying and carping criticism comes from the Opposition benches it should also be mentioned that the accord mark 2 confers tax cuts on the wage and salary earners of this country to try to redistribute the level of taxation which has to be paid by wage and salary earners, reducing it to a reasonable level. Average wage and salary earners can look forward in September of next year to receiving tax cuts of between $8 and $12, and, in 1987, of between $14 and $22. Those tax cuts, which are real value tax cuts, will also be conferred on wage and salary earners by virtue of the accord. Commentators on the Opposition benches frequently fail to recognise that those tax cuts, together with wage increases, put purchasing power in the pockets of consumers. We are then able to see ordinary wage and salary earners, most of whom spend all the money they receive, spending money again in purchasing goods and services produced in Australia and overseas. Every extra good or service that is sold by virtue of that enhances purchasing power in the end creates another job for another Australian, lifts our employment levels and provides a future and perspective for young Australians coming onto the wage market. That aspect of wages is always, in my experience, avoided. The Opposition has argued against all of these trends but what, in fact, is its record? What is its alternative? Almost weekly we hear of the changes in and different predictions about what the Opposition's wages and labour policy might be. If one over-arches all the comments that are made, the conclusion one comes to is that some sort of policy will emanate from the Opposition about the deregulation of the wages market. No one is quite sure to what extent. No one is quite sure how voluntary it will be. But in some sense and in some way there will be deregulation. If one goes back in history to consult the last occasion on which there was a walking away from wage indexation one finds that it was in 1981-82. In that period, the year ending March 1982, we saw a wages explosion in this country of 17 per cent, in a contracting economy of growing unemployment and negative industrial growth. Nonetheless we saw in Australia the embryonic possibilities of Australia following the British track, that is, a track in which there are high and growing levels of unemployment, wages and inflation. We saw that possibility being addressed in Australia in the recent period of Liberal-National Party rule. The accord has contained the reasonable expectations of Australian wage and salary earners, guaranteed them that their purchasing power will be retained and prevented the wages stampede that a deregulated market would have produced. Debate interrupted. The DEPUTY PRESIDENT —Order! It being 10.30 p.m., under sessional order, I propose the question: That the Senate do now adjourn. Senator REID(Australian Capital Territory)(10.30) —I am glad that Senator Gareth Evans, the Minister representing the Special Minister of State, is in the chamber because in a sense the matter I want to raise tonight is a question to him. Some comments need to be made, which make this matter inappropriate to raise during Question Time. I refer to the account which the organisers of the World Cup Athletics have received from the Australian Federal Police for about $250,000, representing the alleged costs of the police presence at the very successful World Cup Athletics. Canberra was awarded these games at a meeting in Jamaica in April of 1982, some 3 1/2 years before they were held. It is necessary to have 3 1/2 years to organise games of these dimensions. A lot of budgeting had to be done and many other matters attended to. It was not until 13 August 1985 that the organisers received a letter from the Commissioner of Police advising that the cost of the required police presence would be in the vicinity of $250,000. There is an issue involved as to whether or not the user pays principle ought to apply to the presence of police in any situation, and I shall come to that. If that were the case, I suggest that to raise the matter in August of 1985, only weeks before the event was held, was quite irresponsible. This Government had 2 1/2 years in which to come to this decision and to advise the organisers. They could then have budgeted for it and could have been in a position to pay the bill. That it was raised in August, long after the time that the price of the tickets was set and many had been sold, has put the organisers in a position where, I suggest, it is probably unlikely that they would be able to find that sum of money and, in any event, the request for payment should be withdrawn. I come to the question of whether or not we have moved into applying the user pays policy for police. It might be very easy to identify the World Cup Athletics as a suitable organisation to hit and to say that it should pay up. Will this apply to all sport? Will it apply to amateur and professional sport alike, in which case the World Cup Athletics may very well be excluded? It goes further than that. From time to time in Canberra there are demonstrations and marches. I believe that most people would think that those demonstrations ought to be allowed to take place and that it is a proper function of police to be there. On occasions, we have had nuclear groups marching. Quite recently, parents of school children marched from Civic to Parliament House in protest at the Government's cutback in education funding. It was a quite orderly affair. There was never any suggestion that it would be anything otherwise. Because of the numbers of people involved and the numbers of children accompanying them, it was inevitable, and appropriately so, that the police would be there. Are people to be charged if they want to march in this fashion? Will they have to pay the money up front, so to speak? What will happen if they do not pay? At present, we have a very unsightly demonstration outside the South African Embassy, which, as the Minister would know, is an illegal assembly on Commonwealth land. No one would doubt that there are embassies in Canberra which, because of the provisions of the Vienna Convention, require some police presence to honour that convention. Because of what the Government has allowed to remain outside the South African Embassy it has been necessary to have more police there than would normally be the case. Are the demonstrators there to be charged for what they have caused? These are serious questions and the community is entitled to know what criteria are used to determine who should pay for police presence. They should have been announced by now. I have not raised this issue before because I thought that we would have seen something from the Government as to the new arrangements and who would be affected by them. It is a serious question, and I hope that if the Minister is not able to give a full answer tonight he will do so at the earliest opportunity. Senator MAGUIRE(South Australia)(10.35) —Tonight I wish to make some remarks concerning a friend and colleague of mine, Jim Gale. Jim Gale died recently. His passing was most untimely. Jim was the endorsed Australian Labor Party candidate for the Federal division of Sturt last year and only last November fought a very energetic campaign for the Party in the Sturt division. He attempted very energetically to represent Labor in another place. Jim was endorsed by the Labor Party at very short notice to contest the Sturt division for Labor. He campaigned throughout the district very actively and energetically and at the election represented Labor supporters in the district extremely well. I certainly was very pleased and honoured to work with Jim in his Sturt campaign last November and December. Most importantly, Jim Gale was a tireless fighter in the community for peace and equality. He was known throughout Australia as the National Convener of the Campaign Against Racial Exploitation, known as CARE. His wife, Irene, was and still is its Secretary-Treasurer. Together they have dedicated themselves to the struggle against racism both in Australia and abroad. Jim and Irene Gale have worked selflessly towards the ideal of a world where all men and women are able to live as equals. Of course, all deaths are untimely, but Jim's was especially so, I believe, because the on-going struggle against racism and apartheid in South Africa is beginning to force changes there. I believe that it is a great pity that he will not see the ultimate results of that struggle. Jim Gale was born in New Zealand. He supported himself through university by working on the wharves and in the factories. Jim and Irene and their family came to Australia in 1971. He worked as a teacher in primary and secondary schools and at colleges of advanced education. Jim was a lecturer in English at the Salisbury College of Advanced Education in Adelaide. At all stages of his working life he was an active union member. His sincerity and commitment were apparent to everyone who met him. Jim's loss is felt by all in the Labor Party in Adelaide but most sadly by Irene, his wife, and the children, Roger, Jenny, Stephen, Linda and Owen. We shall all miss him. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.38) —I simply indicate that I will take on board the comments that have been made by Senator Reid and refer them to the Special Minister of State (Mr Young). As to the sad death of the late Jim Gale, I simply endorse on behalf of the Government the expressions of sympathy and condolence that have been made by Senator Maguire and record my appreciation, certainly, of the work that he did during his life for the cause of racial equality. Question resolved in the affirmative. Senate adjourned at 10.39 p.m. The following answers to questions were circulated: (Question No. 44) Senator Childs asked the Minister representing the Minister for Defence, upon notice, on 28 February 1985: (1) Was the Department of Defence responsible for the publication of the booklet `Nuclear weapons-their effects and your protection' which bears the Australian insignia and the words `Department of Defence Natural Disasters Organisation' on its front cover; if so, what was the cost of producing this publication and who were the authors. (2) Is the Minister for Defence aware that statements in this publication are directly opposed to the Australian Labor Party (ALP) platform, in particular, the view expressed on page 28, section 5.1, of `Nuclear weapons-their effects and your protection', which states that: `Australia is fortunate. In the event of global nuclear war, we would not have the risk that northern-hemisphere countries have of being at the centre of conflict or being blanketted with fallout,' and contradicts Section 6 of the ALP platform. (3) Does the Minister agree with the statement in the above booklet on page 28, section 5.3, that in any nuclear attack `. . . most Australians would not be directly affected'. (4) Does the Government, and in particular the Minister for Defence, support the statement on page 1, section 7, of `Nuclear weapons-their effects and your protection' that Australians who are concerned about the hazards of nuclear weapons explosions are `being hysterical and holding to exaggerated notions.' (5) Has the Minister seen or is he aware of work by such defence experts as P. J. Crutzen, R. P. Turco, Carl Sagan and A. B. Pittock, all of whom have concluded that, far from the effects of nuclear war being contained, they may well be catastrophic globally. Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question: (1) Yes. The cost was $9,370 for 42,000 copies. As acknowledged on the last page of the booklet, the contents are based on publications printed by Her Majesty's Stationery Office (UK) and the Oak Ridge National Laboratory (USA). Contributions were also received from the Commonwealth Department of Health and State and Territory Emergency Services. (2) As the ALP Platform recognises, it would be unrealistic to suppose that Australia would not be affected by a global nuclear conflict, and that is not being suggested in the extract quoted by Senator Childs. The Statement referred to sought to point out that the scale of direct damage which Australia might suffer in a nuclear war should be less than in northern hemisphere countries, because of our geographical remoteness from the areas in which such a conflict would most likely be focussed. That is realistic and compatible with the ALP position. The publication referred to was intended to provide the best technical information available at the time of printing. (3) The publication states `Any nuclear attack on a populated industrial area would result in many casualties, the number depending on precautions taken, the time of day or night and many other factors. In all probability, however, most Australians would not be directly affected', this accords with past and present strategic assessments of nuclear threat to Australia. (4) The sentence referred to by the honourable senator in fact states: `knowledge of the potential hazards of nuclear weapons explosions will also help dispel the more hysterical or exaggerated notions held by many people.' This does not imply that anyone who is concerned about the hazards of nuclear weapons explosions is either hysterical or holding to exaggerated notions. The Government treats these matters very seriously indeed. That is why it is important that the public should have access to information on this subject. (5) Yes. I am also aware that there remain many uncertainties in this area. For example, the US National Academy of Sciences has recently observed that `the pervasive uncertainties in the data and the limited validity of the atmospheric models used to date imply that some future study, conducted at a time when the data and models have been improved, could produce quite different analyses and conclusions'. The Academy also observed that `it is particularly difficult to assess the potential effects of the baseline war on the atmosphere of the northern tropics and southern hemisphere. Although southern hemisphere effects would be much less extensive, significant amounts of dust and smoke could drift to and across the equator as early as a few weeks after a nuclear exchange.' There are of course real grounds for concern, and as in all these matters, we would like to see more informed discussion. To this end, we are reviewing the publication referred to by the honourable senator to see how it can be improved. (Question No. 422) Senator Bolkus asked the Minister representing the Minister for Health, upon notice on 20 August 1985: (1) Is the Minister for Health aware that organochlorine pesticides such as aldrin, dieldrin, heptachlor and chlordane, which produce neurotoxic effects, are readily available for domestic use in Australia although they have been severely restricted overseas. (2) Is the Minister familiar with the wealth of overseas research, and the work of Australian organisations such as the Total Environment Centre, which indicates the harmful effects of such chemicals. (3) Can the Minister advise what action he intends taking to prohibit the distribution of the dangerous chemicals referred to in (1) above in order to protect the health of Australian citizens. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) The overseas restrictions on organochlorine insecticides, aldrin, dieldrin, heptachlor and chlordane, vary considerably. In Australia, restrictions on their availability and use are as determined by State and Territory authorities. All are classified as Schedule 6 poisons in the Uniform Poisons Standard of the National Health and Medical Research Council (NHMRC) in view of their hazard potential. (2) Organochlorine pesticides have been of concern to environmental health authorities for some time. My Department and the National Health and Medical Research Council support the long-standing policy of the Australian Agricultural Council that the use of these materials be phased out as alternatives become available. A further review of their potential health hazards, taking into account the most recent toxicological studies, is in progress. Information now provided by the Total Environment Centre will be considered fully in the current review as will other relevant information. (3) The question of further restriction of the availability and use of organochlorine pesticides will be considered when the outcome of the current review is known. Senator Grimes —On 21 August 1985 (Hansard, page 86) Senator Reynolds asked me, as Minister representing the Minister for Health, a question without notice concerning the location of the School of Public Health and Tropical Medicine within the Australian National University and the return of the Tropical Medicine Research Unit to northern Australia. The Minister for Health has provided the following information: The honourable senator will be aware that the School of Public Health and Tropical Medicine is now part of the recently established Australian Institute of Health. In order to best meet the objectives of the Australian Institute of Health, consideration has been given to the possible relocation of the activities of the School of Public Health and Tropical Medicine. One of the options considered was the relocation of a number of these activities to Canberra in association with the well established research facilities at the Australian National University and this matter has been discussed openly with staff in the School. However, no final decision on relocation has been taken. With respect to the question of the re-establishment of a Tropical Medicine Research Unit in northern Australia, I would draw the attention of the honourable senator to a statement by the Prime Minister on 24 September, 1985 following the meeting of Cabinet in Townsville which indicated that I have commissioned two consultants, Dr Kerr White and Mr Mick Reid, to undertake an independent review of the appropriate arrangements for public health and tropical health teaching and research requirements for Australia. The terms of reference include a specific reference to examine a proposal for the establishment of a Tropical Research Unit in Townsville. I anticipate that a report will be available for consideration by the Government at the end of this year.