Tuesday, 12 November 1985 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 2 p.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: That the Government did not honour its promise to consult with veterans before introducing the Repatriation Legislation Amendment Bill. Your petitioners most humbly pray that the Senate in Parliament assembled, should- Oppose any sections of the Veterans' Entitlements Bill which would have the effect of reducing veterans' benefits and particularly that section which seeks to change the onus of proof. And your petitioners as in duty bound will ever pray. by Senator Parer (from 132 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 Senators Reid (from 213 citizens) and Vigor (from 97 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned Australian citizens respectfully showeth: That human embryos deserve legal protection to enable the development of their full human potential. Your petitioners humbly pray that the Senate pass Senator Harradine's Bill to prohibit experiments involving the use of human embryos. And your petitioners as in duty bound will ever pray. by Senator Sir John Carrick (from 46 citizens). To the Honourable the President and members of the Senate in the Parliament assembled. The petition of the undersigned shows: That human embryos deserve legal protection to enable the development of their full human potential. Your petitioners request that the Senate, in Parliament assembled, should: Pass Senator Harradine's Bill to prohibit experiments involving the use of human embryos created by in vitro fertilization. And your petitioners as in duty bound will ever pray. by Senators Chaney (from 150 citizens) and Mason (from 2,562 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of the Commonwealth of Australia respectfully showeth: That the Hawke Government's intention to impose a Tax on Fringe Benefits, and so increase the level of taxation in Australia, will impose an unnecessary and harsh burden on many companies, a burden that could have an adverse effect on employment. Your petitioners therefore humbly pray that the Hawke Government will abandon this unfair and potentially job destructive tax. And your petitioners as in duty bound will ever pray. by Senator Chaney (from 402 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That in November 1978 more than sixty two per cent of the voters of the Australian Capital Territory in a Referendum rejected the introduction of Territorial Government or Local Government in the Australian Capital Territory. That until the Government's decision on the Commonwealth Grants Commission Inquiry into Australian Capital Territory finances have been made public and there has been a Referendum of the Australian Capital Territory as to their attitude to Territorial or Local Government. Your petitioners most humbly pray that the Government take no further action or legislation in respect of Territories or Local Government in the Australian Capital Territory. And your petitioners as in duty bound will ever pray. by Senator Lewis (from 57 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 U.S. killer-submarines to destroy all Soviet nuclear submarines, while the U.S. nuclear submarines launch their missiles in a `first strike' attack. This makes Watsonia a potential nuclear target. A nuclear attack on Watsonia would have a disastrous effect on Melbourne. 3. The `joint U.S.-Australian' bases in Australia endanger rather than protect us. They also add a new menace to nuclear arms race, that must be stopped. Your petitioners most humbly pray that the Senate in Parliament assembled should close the `joint Australian-U.S.' electronic communication facilities in the Watsonia Army Barracks. by Senators Cooney (from 108 citizens) and Zakharov (from 36 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth government 1. Uphold the principle that the seeds and cuttings of plants are a public resource and a common heritage to all and that accordingly seeds should be freely available to all, freely multipliable, able to be sold, exchanged, exported and imported by anyone who wishes. This is seen as a matter of national food security. 2. Recognise that plant breeding is a highly co-operative venture often involving private enterprise at the very last stages after basic seed collection, storage, and research has been publicly funded. 3. In view of the aforementioned paragraphs, recognise that any system giving `property' or ownership rights over seeds to individuals, organisations or enterprises is inappropriate and unjust. 4. Recognise that legislation establishing plant patenting schemes overseas has had serious adverse effects namely: (i) a slowing-down of scientific information exchange and exchanges in basic plant breeding materials, that is, germ plasm, (ii) subordination and/or curtailment of public breeding programmes, (iii) farmer unrest at seed prices, (iv) monopoly control of seed production and sales has passed into the hands of giant petrochemical and drug corporations also marketing crop chemicals, (v) increased uniformity of crop varieties leading to a vulnerability to pest and disease attack. 5. Reject any proposal to legislate for any system such as the drafted Plant Variety Rights Act, which gives exclusive ownership rights over seeds to individuals, organisations or enterprises. And your petitioners as in duty bound will ever pray. by Senator Zakharov (from 44 citizens). To the Honourable President and members of the Senate in Parliament assembled. The petition of the undersigned respectfully shows: That we urge that the Australian Government express its concern to Indonesia over consistent reports of widespread human rights violations in East Timor, as detailed by Amnesty International, and that the Indonesian Government be urged to take steps to prevent killings, torture and arbitrary arrest and imprisonment, as has been recently reported. We would further humbly request that the Australian Government use its voice at the United Nations to lobby strongly for the reinsertion of East Timor to the Human Rights Commission Agenda; that the above human rights concerns be raised at the General Assembly when the Decolonization Committee makes its report; and that steps be taken to initiate UN conducted negotiations between Indonesia, Portugal and representatives of the East Timorese people, including Fretilin. And your petitioners as in duty bound will ever pray. by Senator Cooney (from 39 citizens). To the Honourable the President and members of the Senate in Parliament assembled: Victorian Planning (Brothels) Act 1984 The petition of the undersigned citizens of Australia respectfully sheweth: 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 supress all forms of traffic in women and exploitation of prostitution of women'. That the Victorian Planning (Brothels) Act 1984 provides legal authority to brothel operators to traffic in and exploit the prostitution of women and to live off the earnings of prostitutes. That whereas the Federal Minister for Health has counselled citizens to shun promiscuity (The Australian 26/1/85) because of the serious and sometimes fatal health hazards, the operations of legalised brothels encourages promiscuity and the spread of diseases, including AIDS. Your petitioners therefore pray: That the Government of Australia having ratified the UN Convention on Women remain consistent in its obligations to uphold the Articles of the Convention and request the Victorian Government to immediately repeal the Planning (Brothels) Act 1984. And your petitioners as in duty bound will ever pray. by Senator Cooney (from 497 citizens). To the Honourable the President and members of the Senate in the Parliament assembled: The petition of the undersigned Australian citizens respectfully showeth that:- (i) The financial situation of students enrolled at Australian post-secondary institutions is already extremely difficult and any increase in the financial commitments of students would gravely worsen their financial difficulties. (ii) The imposition of post-secondary tuition fees of comparable levels to those imposed prior to 1971 would force many currently enrolled students to discontinue their studies and deter many persons willing and able at present to undertake post-secondary study from doing so. (iii) Those students and potential students from social groups currently under-represented and disadvantaged in the education system would be most severely affected by the reintroduction of fees for post-secondary education. Your petitioners therefore pray that: 1. post-secondary tuition fees not be re-introduced for any category of students. 2. any form of Stamp Duty or similar system of the ``user pays'' principle in education not be introduced. 3. emphasis should be on increasing access to education by, among other things, increasing student financial assistance. 4. the visa charges upon private overseas students be removed immediately. 5. the Minister for Education and Youth Affairs immediately clarify the government's attitude to the reintroduction of post-secondary tuition fees. And your petitioners as in duty bound shall ever humbly pray. by Senator Harradine (from 21 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens respectfully showeth: That the Australian Citizenship Act contains provisions for an Oath of Allegiance to Her Majesty Elizabeth the Second, Queen of Australia, Her heirs and successors, and an Affirmation of Allegiance, to Her Majesty Elizabeth the Second, Queen of Australia, Her heirs and successors. That the said Oath of Allegiance and Affirmation of Allegiance are supported by the overwhelming majority of Australians. Your petitioners humbly pray that the Members of the Senate in Parliament assembled: will ensure that the present Oath of Allegiance and Affirmation of Allegiance are retained, and will strongly oppose any attempts to remove all references to God and the Queen from the Oath of Allegiance and any attempts to remove all references to The Queen from the Affirmation of Allegiance. And your petitioners as in duty bound will ever pray. by Senator Lewis (from 14 citizens). Petitions received. Senator REYNOLDS(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate express its grave concern about the detention of Senator Georges in the Brisbane Watchhouse overnight on 11 November, thus preventing him from taking his place in this chamber, and indicates its strong disapproval of the way forced fingerprinting was threatened, solely for the purpose of identification. Senator HARRADINE(Tasmania) —I give notice that, on the next day of sitting, I shall move: That Remuneration Tribunal Determination No. 11 of 1985, relating to Entitlements of Members of the Parliament and made under the Remuneration Tribunal Act 1973, be disallowed. Senator REYNOLDS(Queensland) —I give notice that, on the next day of sitting, I shall move: (1) That the following matters be referred to the Committee of Privileges for urgent investigation and report- (a) The circumstances which led to Senator Georges's bail being conditional upon fingerprinting for identification purposes; and (b) the failure of Queensland authorities to notify the President of the Senate of the detention of a Senator in accordance with Paragraph 17 of the Fifth Report of the Committee of Privileges entitled `Imprisonment of a Senator', tabled in the Senate on 25 October 1979. (2) That, notwithstanding anything contained in the Standing Orders, the Committee of Privileges for the purposes of its inquiry and report shall have power to send for persons, papers and records. Senator GRIMES(Tasmania-Manager of Government Business) —I table papers in accordance with the list circulated to honourable senators and with the concurrence of the Senate I incorporate the list in Hansard. Leave granted. The list read as follows- 1. Defence Service Homes Corporation Home Insurance-Statement of Conditions-Pursuant to sub-section 38 (4) of the Defence Service Homes Act 1918. 2. Advance to the Minister for Finance-Statement on Expenditure for September 1985. 3. Snowy Mountains Council-Annual Report 1984-85. 4. Department of Finance-Annual Report 1984-85. 5. Treaties-(a) twelve Treaties which have been signed by Australia and which require further Treaty action by Australia before the Treaty can enter into force for Australia; (b) thirty-two Treaties to which Australia has become a party by signature; (c) nine treaties which Australia has accepted or to which Australia has acceded; and (d) three treaties to which Australia has become a party of ratification. Senator CHANEY —Is the Leader of the Government in the Senate aware that there is further pressure on the Australian dollar following the October balance of payments result, which is the worst monthly deficit on record? Given this further evidence of Australia's lack of competitiveness and in the interests of business and market confidence, will the Minister give an undertaking that if the devaluation continues the Government will review the accord with the Australian Council of Trade Unions, which permits discounting of only 2 per cent at the next national wage case? Senator BUTTON —I am aware of the trade figures announced at 11 o'clock this morning. I regard them as in some respects an indication of Australia's lack of international competitiveness in some areas. I do not necessarily see them as a factor leading to further pressure on the dollar, but it is quite possible that they will be so construed. With regard to the trade figures themselves, I make the point that, although total imports remained high in October, on a seasonally adjusted basis they were at the lowest level since last April. A 10 per cent fall in imports on this basis suggests that the depreciation may be causing some slackening in import demand; however, the performance on the export side was not as one might have wished. It is thought that reflects the beginning of the expected fall-off in rural volumes following strong stock run-downs in the June and September quarters. The October current account deficit was large, but seasonal factors were clearly a significant influence and too much weight should not be placed on one month's figures. An improvement throughout the year continues to be expected and the Government will certainly be looking to that. Senator Peter Baume —Whistling in the dark, Senator? Senator BUTTON —No, not whistling in the dark. Senator Peter Baume —It sounds very much like it. Senator BUTTON —It might sound like it to Senator Baume, but that is something he is probably expert at. It leads to one or two other considerations which may be regarded as important. First, I make the point, as was drawn attention to in this morning's Australian Financial Review, for example, by Sir Roderick Carnegie, that the problem of Australian lack of competitiveness goes back at least 15 years. It is in the current situation exacerbated by the practice of former governments in talking up mineral booms and concentrating exclusively on the rural and mineral sector-talking up Rundle shares, all those kinds of things-which happened in the period of the Fraser Government. It cannot be expected to be quickly reversed. It is wrong to see the solutions to the problems in terms of single issues. For example, Senator Chaney asks me about the effects on the accord and what undertakings I will give. The answer is that I will give none. The wage case is to take place in March next year and there will then be an agreed discounting of 2 per cent, and that is the basis of the present arrangements with the unions. It is not correct to see any one issue as appropriate for correcting what is an ad hoc and knee-jerk response to a particular month's figures in the trade balance in the context of a deregulated dollar and as being the solution to all the problems, and the Government does not. Senator TATE —My question is directed to the Minister representing the Attorney-General. Has the Government received representations from members of the community, including the Catholic bishops of Australia, concerning a feared impact of the Bill of Rights on the laws relating to abortions? Are these fears well founded? Has the Government conferred with any such groups and have any decisions been taken which might help allay their misgivings? Senator GARETH EVANS —The concerns expressed by the bishops and some others tended to focus on two main points. The first is that the inclusion of clause 9 (3) in the Bill, which at present states that the rights and freedoms set out in the Bill of Rights apply only for the benefit of natural persons, was specifically designed to offer no protection whatsoever to the unborn. I point out that Article 18 of the Bill introduced by Mr Lionel Bowen states: Every human being has the inherent right to life and no person shall be arbitrarily deprived of life. This follows Article 6 of the International Covenant on Civil and Political Rights which forms the constitutional basis for the Bill of Rights. It states: Every human being has the inherent right to life . . . No-one shall be arbitrarily deprived of his life. The effect of what the bishops were suggesting is that clause 9 (3) was included in the Bill in some way to limit the scope of operation of Article 18. Mr Bowen has both written to and, last Thursday, met with the Archbishop of Brisbane, who is the President of the Australian Episcopal Conference, and has unqualifiedly refuted that allegation. The Attorney pointed out in his letter that clause 9 (3) is intended, and always has been intended, simply to draw a distinction between individuals who, in this context, are customarily described by lawyers as `natural persons' and `artificial persons', such as companies, corporations, corporations sole and other bodies corporate. However, because of the continuing lack of clarity in people's minds about this issue and the desirability of assuaging what is clearly a concern that is based on inaccurate premises, the Government today decided to amend clause 9 (3) so that it will simply state that the Bill of Rights will not apply for the benefit of bodies corporate or politic. The second aspect of Senator Tate's question went to the matter of privacy. The worry was that the right to privacy conferred by Article 12 may be construed to provide a right to abortion beyond what may now be permissible under existing abortion laws. The bishops' concerns here appear to arise out of the decision of the United States Supreme Court in the very famous case of Roe v. Wade some years ago which involved the privacy protection construed to exist under the United States Bill of Rights. What I think is not understood in this respect is that the American Bill of Rights is a quite separate and distinct document from the International Convenant on Civil and Political Rights on which the Australian Bill is based. Further, as anyone who is familiar with this area will attest, the manner of interpretation of the American Bill of Rights is quite unrelated to the manner, style and substance of interpretation in Australian courts and under international law of the International Convenant. The more relevant jurisprudence is that, for example, relating not only to the Convenant but also to the similar European Convention of Human Rights of 1950. As far as the Attorney-General is aware-I can personally reinforce this-that jurisprudence does not provide any basis for the fears expressed by the bishops. It also needs to be remembered in this respect that the Bill of Rights, as presently drafted, will not have the capacity to strike down State criminal laws. Nevertheless, again I make very clear the position of the Government which is faced with continuing concerns of this kind. It has been decided, I discover from reading my brief-- Senator Durack —This is the first of hundreds of amendments you are going to make, is it? Senator GARETH EVANS —No, this is just the one about which people are being most extravagantly irrational, no doubt with some help from the honourable senator. We are concerned to restore that debate to the high plane of rationality which one expects in a chamber of this kind. Senator Chaney —Are you saying that the bishops are being extravagantly irrational? Senator GARETH EVANS —No, not the bishops but their advisers and one in particular. It has been decided to include in the explanatory memorandum to which the courts refer, under recent amendments to the Acts Interpretation Act, an explicit statement that Article 12 of the Bill of Rights is not intended to modify the existing laws on abortion in Australia. Senator Harradine —Pursuant to Standing Orders, I call for the documents quoted to be tabled. Senator GARETH EVANS —I am only too delighted to assist in anything that will contribute to Senator Harradine's education in this respect. The PRESIDENT —The Minister has tabled the document from which he has quoted. Senator MESSNER —My question is addressed to the Minister representing the Treasurer. I refer the Minister to his answer to me last week, when he said that he would check to see whether the Budget Papers contained any estimate of the effect on forecasts of movement in the exchange rate, given that the Budget is based on a trade weighted index figure for the dollar of 68 and that it has been well below that level for many months and is currently below 60. Is there any such provision in the Budget? Has the Minister noted a further fall in the dollar following today's worst ever balance of payments figures? Since he has not yet replied, as he undertook to do last week, or supplied information as to the effect on the Budget of the falling dollar, will he now please explain what effects the sustained weakness of the dollar is having on the Budget expectations? If not, how long will it be before he can provide a re-assessment of the Budget to the Parliament? Senator WALSH —I thought what I said last week was that I would check to see whether the Budget Papers had any reference to it. I suppose I should apologise for not having done that. If there is such a reference in the Budget Papers, Senator Messner really could have checked it himself. I have not yet asked the Department to prepare an estimate. The Department of Finance, of course, is only in control of the outlays side of the Budget. There could be some effects on the revenue side as well. Senator Messner, of course, is continuing the campaign which members of the Opposition first started early in 1983. They are, of course, economic quislings who are continuing with their campaign to talk down the dollar. For example Senator Messner made reference to the sustained weakness of the Australian dollar. Whether that is sustained or not is yet to be seen. I suppose it is easy to understand the frustration of members of the Opposition who, having just elected a new leader they thought was going to lead them back to the promised land, have found that instead he has led them down about 3 or 4 per cent in the polls. The Opposition is quite clearly desperately searching for some other issue, non-issue or pseudo issue on which it thinks it might be able to make a little political mileage. The PRESIDENT —Order! I draw the attention of honourable senators to the presence in the gallery on my right of former Senator Jean Meltzer from Victoria. On behalf of all honourable senators, I extend to Mrs Meltzer a warm and friendly welcome on her return to Canberra. Senator MAGUIRE —My question without notice is directed to the Minister representing the Treasurer. To what extent has the State of South Australia shared in the improvement in the national economy over the past three years under the policies of this Government? As with the national economic upturn, has the economic recovery in South Australia had implications for government revenue collections? Senator WALSH —South Australia has shared in the general economic recovery; indeed, in many areas South Australia has led the general economic recovery of the last few years. Nowhere is this more apparent, of course, than in the area of dwelling commencements. In the three years the Bannon Government has been in office, the rate of dwelling commencements has increased by a massive 70 per cent. The rate of dwelling commencements has almost doubled in the three years the present South Australian Government has been in office. Senator Chaney —How much have income tax collections increased? Senator WALSH —Employment has gone up by almost 4 per cent in that same period, and that translates into 21,000 more jobs. Motor vehicle registrations have risen by almost 14 per cent. Again, I am not sure whether that is the highest rate of increase in Australia but it is certainly among the highest. In conjunction with that spectacular 70 per cent increase in the number of dwelling commencements in the three years in which the Bannon Government has been in office, that has, of course, had very favourable effects on State revenue. Indeed, given that stamp duty is the second largest single source of State revenue and is paid on housing transactions, the enormous increase in the rate of dwelling commencements has obviously had a very big impact on the South Australian State Government's revenues. The Leader of the Opposition, I understand, has misinterpreted this increase in State revenue and said that it is due to an increase in charges. It is due to general increases in prices to some extent but is also very largely attributable to the expansion of the South Australian economy, which has taken place in the last three years, and not to increases in actual tax rates. Senator SANDERS —I address my question to the Minister representing the Minister for Transport. Is he aware that Australia now has one of the most stringent motor cycle noise laws in the world under Australian design rule 39? Is he further aware of the proposal to make the noise rules even stricter under the proposed ADR N1? Honourable senators interjecting- Senator SANDERS —I notice a lot of people in this place who are not interested in transportation for the masses. Does the Minister realise that major manufacturers such as BMW have stated publicly that they would no longer supply motor cycles for the Australian market and that a total of 62 per cent of all motor cycles now on sale in this country would not pass the new rules and would be banned in the future? Does he realise-keep laughing, folks-that 5,000 jobs are at risk in the Australian motor cycle sales and service industry as a result of ADR N1? If so, what steps willl be taken to eliminate the economically suicidal, environmentally unnecessary and totally discriminatory new law? Senator GIETZELT —I think honourable senators would be aware of Senator Sanders's penchant for riding BMW motor cycles, so we can understand his interest in the subject. I think it is a matter of concern for the whole community. The Minister advises me that he does not necessarily agree that Australia has the most stringent motor cycle noise laws in the world. Nevertheless, he concedes that they are somewhat strict. The Minister informs me that there are proposals, however, to make them even more strict. There is a push from the New South Wales Minister to reduce the level of noise by a further three decibels, which would amount to a 50 per cent cut, and I am sure that that would be a matter of some concern to Senator Sanders. Some manufacturers have already indicated their difficulty in producing motor cycles which comply with the proposed new rule, so the Government is well aware of the problems identified by the industry. However, it is a matter of consultation with the States and the States obviously would have to agree to some change in the current regulations. The matter has therefore been listed for the next meeting of the Australian Transport Advisory Committee and will be on the agenda for consideration, at which time the State and Commonwealth Ministers will have an opportunity to consider all the views, including the views of the honourable senator. That meeting, I understand, is scheduled to take place in Hobart, of all places, early in December. So if there is a lobby group interested in this matter the opportunity will present itself to the Tasmanian senator. It is the Minister's view that stricter standards should not be adopted before full consultation takes place or without some clearly identified public need. The Government is well aware that existing standards need to be enforced thoroughly, including those relating to motor cycle service and replacement parts. That, therefore, requires consultation with the industry and those who have pleasure in riding motor cycles, taking into account the overall public interest. Senator DEVLIN —I ask the Minister representing the Minister for Primary Industry whether he is aware of claims by Senator Watson that 3,000 jobs will be lost in the Tasmanian woodchip industry if recommendations by the Minister for Arts, Heritage and Environment, Mr Cohen, are accepted. Will the Minister reaffirm the commitment given by the Minister for Primary Industry last week that no jobs will be lost and thereby put an end to this fearmongering? Senator WALSH —Yes, I am aware of a totally irresponsible and false claim made by Senator Watson in the Senate yesterday about the alleged employment effects. The second part of Senator Devlin's question was whether I can reaffirm the commitment given by the Minister for Primary Industry last week. Yes, I can. For the edification of Senator Watson, assuming that he is interested in actually learning anything as distinct from throwing irresponsible allegations around the Senate, I will quote a few lines from the Press statement issued by Mr Kerin last week. Among other things, he said: As I have said before, no jobs will be lost in the forest-based industries. He continued: Mr Gray was misrepresenting Mr Cohen's recommendations. Mr Cohen had not recommended that there be no logging in the National Estate areas. He had rather recommended that the areas be reviewed to establish more precise and workable boundaries. He recommended that consultations on this be established between appropriate Commonwealth and Tasmanian authorities. A process of official level consultation regarding necessary information has already been held. In closing, I say again that the answer to both legs of Senator Devlin's question is yes. I am aware of the irresponsible and untrue claim by Senator Watson and I can repeat the assurance given by Mr Kerin last week. Senator WALTERS —What is the reaction of the Minister for Resources and Energy to the deal offered by the Australian Democrats to change their vote of last May when they opposed the Government's cash bidding for off-shore exploration legislation if the Government now accepts Mr Cohen's recommendation on Tasmanian woodchip export licences? Would the Government accept such an unprincipled, hypocritical deal which would destroy the Tasmanian timber industry? Senator GARETH EVANS —Would that it were that easy. The Government is not in the business of accepting unprincipled and hypocritical deals or, indeed, any deals at all in that context. Despite some speculation to this effect, I assure the honourable senator that there are no deals and no guarantees. There have been discussions, as one might imagine, about a whole range of Government programs and policies. The Government's commitment is to act in accordance with the precepts of strict rationality on all these matters. I am sure that that is also the way that the Australian Democrats approach them. If occasionally our perceptions of rationality coincide, that is unusual, but it is a wholly desirable state of affairs when it does arise. I hope it arises in this instance, but it will not be as a result of anything of the kind that Senator Walters so sordidly suggests. Senator SIBRAA —My question is directed to the Minister representing the Minister for Local Government and Administrative Services. How much did the Commonwealth Government lend to New South Wales for the Bathurst-Orange growth centre and the Macarthur growth centre? How much is now owing on each loan? Will the proposed restructuring of the growth centres recently announced by the New South Wales Government affect the arrangements for the repayment of these loans? Senator GIETZELT —The Senate will recall that during the years 1972-75 the previous Labor Government initiated a number of growth centre proposals for Australia. Senator Sibraa has asked me about two of them in New South Wales. That policy was continued by the coalition Government. Between 1975 and 1978 the Commonwealth lent New South Wales $16.12m for Bathurst-Orange and $28.1m for Macarthur. That means that the total amount owing to the Commonwealth as at 15 June this year represents $110.5m spread over the two areas. That is $70.5m to Macarthur and $40m to Bathurst-Orange. As Senator Sibraa has suggested, it has been arranged with the New South Wales Government that no moneys will be repaid to meet the repayment obligations of the State to the Commonwealth until such time as the growth centre produces an income commensurate with the amount of money owing on the loan. I understand that the restructuring announced by the State Minister for Industry and Decentralisation, Mr Eric Bedford, is currently being examined. I point out to Senator Sibraa and to the Senate generally that these arrangements do not in fact have an impact on the Commonwealth-State financial arrangements. We are currently awaiting the result of a reconsideration by Mr Bedford regarding the State's obligations in respect of these growth centres. Senator ARCHER —Has the Minister for Industry, Technology and Commerce seen a report in the Australian Financial Review of 11 November 1985 in which the Australian Information Industry Association is quoted as having said that the capital gains tax would reverse Government initiatives designed to encourage research and technology development? In view of the Minister's continued criticism of the level of the private sector commitment to research and development, how does he reconcile the Government's initiatives in this area with the stated negative aspects of a capital gains tax on research and development in the private sector? Senator BUTTON —I did not quite catch the name of the authors of that flash of wisdom. Senator Archer —The Australian Information Industry Association. Senator BUTTON —I do not think it matters who the authors of that flash of wisdom and light at this time happen to be. I do not agree with the analysis at all. Such an analysis does not stand up if we look at the tax benefits which are provided by the research and development allowance and the impact of the capital gains tax, feeble as it is. In discussions on the taxation package everybody is in the habit of making ambit claims in respect of his particular industry or problem. We have had a lot of that in the course of Question Time in the Senate. Let me say first of all that, while the research and development incentive is an incentive of general application to industry, it has particular applicability to the information technology industry. It should be-I hope it is-a big user of the incentive. I believe that in fact it welcomes that incentive. I do not see how there can be much hope for the sector if its spokesmen make the sorts of comments to which the honourable senator has referred in relation to the capital gains tax. A capital gains tax impost on an industry such as this, indeed on any industry, will be very minimal. One only has to look at the revenue anticipated to be gained from the capital gains tax at the end of five years to see what the likely impact will be. Of course, I have had discussions with various people in industry about the capital gains tax. Some are critical of it, just as some people would be critical of any change. Something such as daylight saving would arouse their considerable concern I suspect. The fact of the matter is that a wide range of people in industry accept the capital gains tax as indeed having some significant long term benefits for them. That is not only a view which has been articulated to me by various people in the industry but also a view which has received I think very favourable comment in journals such as the Australian Financial Review, which took some trouble to look at the long term benefits of the taxation package for industry. This is something which, I am sad to say, the Opposition has not done in its desire to make cheap political capital out of a few perceived differences in various sectors of the electorate. Senator McKIERNAN —My question is directed to the Minister representing the Minister for Territories. Has the Minister's attention been drawn to recent Press articles, including an item in the Canberra Times on 9 November, which reveal a strong upswing in the economy of the Australian Capital Territory and show private sector confidence and an increase in population which is occurring in the Territory? What are the major factors underlying this economic recovery? Senator GIETZELT —I think that honourable senators, certainly those on this side of the Senate, would be aware of the fact that when we came to office in 1983 Canberra was in the economic doldrums. Population growth was rather static; unemployment was high and there was a very marked scarcity of land available for residential purposes. As a result of the policies initiated by the Government, the situation has improved considerably. We are now in a position in which the population growth in Canberra is almost double that of the national average. It is interesting to read Mr Scholes's report which indicates that Canberra has an unusual mix in the public and private sectors. Fifty-seven per cent of the activities are in the public sector and 42 per cent are in the private sector. In the last 2 1/2 years private sector employment has increased by 13 per cent and public sector employment is up 5.3 per cent. In fact, Canberra now has the lowest unemployment rate in Australia; the rate is only 3.8 per cent. I think that is because the Government has taken specific policy decisions designed to activate the land market. To that extent the Government has been able to bring about a very dramatic increase in the amount of serviced land. By putting sufficient land on the market the average price of a standard block has gone down to $29,000 compared with $31,000 even as late as several months ago. Currently, Canberra is enjoying a massive boom in commercial development. All of this is contributing to an unparalleled growth in Canberra, which is to the credit of this Government. Senator SHEIL —Can the Minister representing the Minister for Aviation advise the Senate why his Government did not provide to local authorities, under the aerodrome local ownership plan, 50 per cent of the cost of routine maintenance despite the fact that this forms part of the standard agreement between the local authorities and the Federal Government? Can the Minister also advise whether there will be any supplementary funding? All local authority aerodromes in Queensland have been placed in this situation. If the signed agreements are broken, how can local authorities have any faith in the Government? Senator GIETZELT —The Senate will be aware that the Commonwealth has specific arrangements with bodies in the State and local government areas with respect to airfields generally, particularly those in outlying areas. They require constant monitoring by the Commonwealth so that a decent standard of air service can be provided. However, in respect of the specific question that Senator Sheil, who is a senator from Queensland, has put to me, I have just looked through the 15 briefs that have been provided to me by the Minister for Aviation and the specific matter which the honourable senator raises is not included. I will draw the question to the attention of the Minister to obtain an early reply. Senator JONES —Has the Minister for Finance noted that the November economic indicators point to Queensland again forcing down the national economic effort with a pitiful performance? Do those indicators show that in the 14 key areas, Queensland has Australia's worst performance in six and the second worst in another six? Can the Minister outline the reasons for the pathetic performance of the Queensland Government with specific reference to the Premier, Sir Johannes Bjelke-Petersen, since he also assumed the mantle of Treasurer in the National Party Administration governing in its own right in that State? Senator WALSH —As a point of clarification, Senator Jones referred to the November economic indicators. The actual figures, of course, are not all for the month of November. Indeed, none of them would actually be for the month of November. For the various categories of indicators of economic performance, the month in which the figures have actually been taken varies because some are taken quarterly, some are taken monthly, and so on. It would be more accurate to refer to the most recent available indicators. The 14 indicators of economic performance are unemployment, average weekly earnings, consumer price index, overtime, job vacancies, building approvals and commencements, new motor vehicle registrations, retail sales, household income, new fixed capital expenditure, bankruptcies, tourism, and industrial disputes. Out of those 14 indicators of economic performance, Queensland has the worst record of any State in six of them and the second worst in another six, as Senator Jones stated. To give a little further information in response to the question, I refer to a couple of the specific indices-unemployment, industrial disputes and bankruptcies-for Queensland compared to the national average and some other States. The number of people unemployed in Queensland has fallen by 6 per cent in the 12 months to October 1985. That is significantly below the national average of 7.9 per cent and vastly below the fall in the number of people unemployed in the Labor governed States of South Australia and Western Australia, where there have been 13 per cent and 15 per cent decreases respectively in the number of people unemployed. In Queensland the decrease was less than half that figure. Of course, Queensland also started from a higher base, because for the October 1984 period it had the highest level of unemployment of any State, with the possible exception of Tasmania, which is, of course, the other non-Labor governed State. Most spectacularly, in the financial year 1984-85 the number of industrial disputes in Queensland increased by almost 67 per cent. Nationally there was an increase of only 1.9 per cent. In regard to the absolute number of working days lost, Queensland lost 314,000 working days during 1984-85 compared, for example, to only 25,000 in South Australia. The population of Queensland is almost double that of South Australia, but the rate of working days lost per unit of employment in Queensland was more than six times as high as it was in South Australia. Finally, as an indicator of business performance or business conditions, in Australia generally the number of bankruptcies, according to the most recently available yearly figures, fell by 4 1/2 per cent. In Queensland the number increased by 23 per cent. So for almost all the economic indicators, as Senator Jones's question suggested, Queensland has either the worst record of any State or very close to the worst record of any State. Senator HAINES —Is the Minister representing the Attorney-General aware of the research put forward by a senior officer from the Australian Institute of Criminology at a national conference on domestic violence yesterday and also of the contents of a report on homelessness released at a poverty summit in Melbourne? Can the Minister say why church groups and other community groups in the Australian Capital Territory are being forced to cope with the problems confronting the victims of homelessness and domestic violence when that role properly belongs to government agencies and the Australian Federal Police? Does the Minister agree that there is a resource deficiency in the Australian Capital Territory, particularly with regard to staffing of the Australian Federal Police? Further, does he consider that the uniformity and adequacy of State and Territory legislation relating to homelessness and domestic violence should be discussed as a matter of urgency by the Standing Committee of Attorneys-General? If he does, can he say when the matter is likely to be placed on that Committee's agenda? Senator GARETH EVANS —I am not aware of the reports to which Senator Haines referred. I hope I was not supposed to be. Senator Haines —I thought you knew everything. Senator GARETH EVANS —I am indebted to the honourable senator for that contribution, but I am unable to honour it on this occasion. I will see what I can find out from the Minister and advise the honourable senator accordingly. Senator HAINES —Whilst I can appreciate that the Minister does not know the contents of the report, could he give me an answer to the second part of the question relating to the need for uniformity and adequacy of State and Territory legislation, particularly that relating to domestic violence? Senator GARETH EVANS —I would not dare to offer a comment on anything to do with policy in my former portfolio without referring to the present Attorney-General. I will do that with all deliberate speed and build that into the answer that is given back to the Senate. Senator FOREMAN —I refer the Minister representing the Minister for Health to a report in the Adelaide Advertiser on 6 November in which the Australian Consumer Association claimed that certain types of skin tanning pills could lead to health problems. It was further reported that the South Australian Health Commission would investigate this matter and report back. Will the Minister seek a copy of this report and evaluate what action should be taken at the Federal level in regard to this matter? Senator GRIMES —I am afraid that I have no knowledge of the matters raised by Senator Foreman. I will certainly seek a copy of the report and an early reply from the Minister and the Department about the problems he has raised. Senator DURACK —My question is directed to the Minister representing the Attorney- General. I refer to the decision of the Privy Council, which was announced today, to uphold Clive Lloyd's appeal from the Supreme Court of New South Wales, restoring his award of $100,000 damages for defamation. Although wishing Clive Lloyd the best of luck, I ask the Minister: Is it not a fact that the Premiers Conference in June 1982 unanimously agreed to abolish the remaining rights of appeal to Privy Council and that the British Government agreed to facilitate a request from the Commonwealth Parliament for the passage of legislation to give effect to it through the House of Commons? Why has it taken the present Government three and a half years to get to the stage where it has only just listed legislation for possible passage in this session to give effect to the agreement to abolish appeals to the Privy Council? Does the Government intend to proceed to the passage of that legislation in this session? If not, can the Minister tell us when the Government intends to give effect to this decision? Senator GARETH EVANS —I agree with Senator Durack that the Lloyd case graphically demonstrates, whatever one thinks of the verdict, the absurdity of matters of this kind being dealt with in British courts. It remains a very strong preoccupation of this Government to remove those lingering absurdities, to remove the residual links, and to remove, once and for all, in particular, the capacity of the Privy Council to hear appeals from any Australian court. Why has it taken three and a half years to move from the initial principled agreement of the Premiers to legislate to produce this state of affairs? The short answer is because of our passionate commitment to the principles of co-operative federalism and the way in which we have been unmercifully mucked about by the States in reaching agreement as to the chapter and verse way of doing it. I am very pleased to be able to report, as I have on earlier occasions, that complete agreement was reached a few months ago as to the precise language of the various enabling pieces of legislation in each State parliament in the Commonwealth and in Britain that are necessary to bring about this state of affairs. The last report I heard, a short time ago, was that the relevant and necessary legislation had been introduced in every Australian State parliament except Tasmania. If Senator Walters could use her well-known capacity for stirring the possum and get her colleagues down there off their respective tails to get that legislation passed I am sure that her colleague, Senator Durack, would be indebted to her, as would we all. I may be doing them an injustice. Conceivably, they may have introduced the legislation by now. I hope that is the case. Senator Lewis —You could zap down in an aircraft and fix it up. Senator GARETH EVANS —Senator Lewis is all class. He is so subtle. We have not been able to take the necessary action at the Commonwealth level until the State legislation has been passed. The Commonwealth request and consent legislation is ready for introduction at any time. It is our hope that the relevant Commonwealth legislation can be passed this session, to wrap it up at the Australian end, thus making possible the passage of the relevant British legislation very early next year. The British Government has indicated its willingness to go along with that timetable. So it does remain only for all the various pieces of the jigsaw to fall together in the way that I have indicated. Senator REYNOLDS —Is the Minister representing the Attorney-General aware that, despite a Queensland magistrate's ruling this morning that Senator Georges was to be released on unconditional bail, Queensland police for a second time attempted to impose fingerprinting as a condition of that bail and there was a further referral within the Police Department before Senator Georges was finally released? Can the Minister comment on this extraordinary chain of events, which seems to suggest that the Queensland Government is prepared to flout even its own legal system to victimise its political opponents? Senator GARETH EVANS —I am afraid that I have no information on the matters to which Senator Reynolds refers. I am entirely willing to accept her description of the course of events as extraordinary. That would be a highly usual description for things that happen in Queensland, and it is usually an appropriate one. I will see what further information I can establish on this matter. To the extent that it bears upon the position of a member of this place, it would seem to be a proper matter of concern for this place even if the domestic criminal law in Queensland is otherwise a matter for the State's jurisdiction. Senator BJELKE-PETERSEN —Has the Leader of the Government in the Senate seen the statement by the National Farmers Federation that the recently awarded wage increase of 2.6 per cent to workers under the pastoral industry award and the 3.8 per cent national wage rise mean that for every employee working under the station hands award, farm employers will have to pay an estimated wage increase of $14 a week? What action does the Government intend to take to assist the farm employers to meet these additional costs in view of the fact that this Government removed the freight equalisation subsidy on fuel, which has meant increased transport costs for all employers and, indeed, all people who live in rural Australia, particularly as there is a forecast fall of 26 per cent in the net value of rural production next year following the 19 per cent drop in 1984-85? Senator BUTTON —I do not know why I am honoured with this question. I suppose it is because it links two matters which are totally unconnected and I have to answer in some sort of portmanteau role which- Senator Bjelke-Petersen —That is right. You are so capable. Senator BUTTON —I thank the honourable senator. These flatteries will have to stop. I am grateful to Senator Bjelke-Petersen for advising me of the wage increases that apply to the pastoral industry award. I accept her calculations about what that may mean in terms of a wage increase for pastoral industry employees. It is very easy to single out any particular rise in costs and associate it with the general problems of the rural community of Australia. Those problems which are represented by the figures which she referred in relation to declining farm output, are, of course, very much related to Australia's capacity to continue to supply in export markets which have been, to some degree, foreclosed from us. With the greatest of respect, the two things are very different problems. I understand the skill of the National Party of Australia in putting all of these matters together. However, this really makes it a very difficult question to answer. I do not intend to try to do that in the terms in which the question has been asked. We have been very conscious of the question of farm costs because of the situation which is revealed in the production figures. On a number of issues the Government has met with the National Farmers Federation and has made some commitments about farm costs. It will continue to address those questions. However, in the context of the national wage case, the farming community cannot be exempted from a centralised wage fixation system which in the broader perspective we believe brings great benefits of stability and continuity to the wage fixing system of this country, which we have argued about in another context. Yes, we are aware of the problem of farm costs and we are aware of the problem of farm exports, and in a wide range of matters the Government will continue to address these problems. Senator RICHARDSON —Is the Minister representing the Minister for Health aware of a report in the Sydney Morning Herald of 21 October 1985 in which an allergy doctor comments on the unknown effects of pesticides? Is it possible that blanket tests for all ages might indeed be unsatisfactory? Does the Minister consider that, as more doubts are raised, there is a case for a more thorough investigation of the whole area of pesticides and exposure to chemicals? Senator GRIMES —Yes, I have seen the report in the Sydney Morning Herald referred to by Senator Richardson. The report describes cases of illness in people who have been exposed to pesticides and discusses the very real difficulty that the medical profession has in detecting whether a particular pesticide has in fact caused certain symptoms or illnesses. The simple fact is that there are no blanket tests for assessing such effects. The reference in the article to the existence of such tests was incorrect and quite inappropriate. The possible adverse reaction by humans to exposure to chemicals, including pesticides, is a matter for concern, and has been for some time. For this reason the Government established a toxicology unit in the Department of Health which, amongst other things, services three major committees of the National Health and Medical Research Council which regularly investigate a wide range of poisons, pesticides, agricultural chemicals and, in particular, food additives. The Council itself conducts annual surveys of the Australian food supply. The sur- veys, which analyse a wide variety of foodstuffs for heavy metals and pesticide residues, are proving to be a successful means of monitoring the safety of the food supply. These surveys will continue in 1986-87. We intend to bring into the Parliament in 1986 legislation to establish a comprehensive chemicals notification and assessment scheme to expand the existing controls over chemicals such as pharmaceutical drugs. Once in place, the scheme will ensure that all chemicals currently in use in the community are subjected to surveillance and control. It will also exercise control over new chemicals so that before they can be introduced into use either in industry or the community generally they will be subject to stringent safety evaluation and, thereafter, their use will be monitored. This scheme constitutes a firm and positive response by the Government to its concern and the community's concern about a wide range of chemical substances and their potential effects on human health. We, with other comparable countries, believe that by careful surveillance, monitoring and testing we can keep under control what is obviously a tendency, and that is the production of diseases or the production of symptom groups by new chemicals which are, as Senator Richardson and others realise, being introduced every day for the benefit of mankind. We want to make sure that they do not cause too much of a hazard to mankind. Senator VANSTONE —My question is directed to the Leader of the Government in the Senate. I refer the Minister to daily Press reports over the past week outlining the extent of trade union opposition to the Priority One: Young Australia program and in particular to the concept of a trainee wage. Firstly, is it true that, since the multi-media announcement by the Prime Minister of Priority One prior to the Federal Budget, only one agreement has been concluded with a private sector employer under this scheme? Secondly, does the Minister agree that the range of union misgivings, together with the fears for the future of the program expressed recently by Mr Peter Kirby, indicate that the Priority One program was announced prematurely and lacked adequate prior consultation with employer and union groups? Thirdly, in light of the uncertainties surrounding the program and the high expectations raised among Australia's unemployed youth, will the Government now recognise that the Department of Employment and Industrial Relations is not equipped to handle this important area of public policy? Senator BUTTON —Since this Government came to office the Department of Employment and Industrial Relations has handled a number of areas of public policy with singular success-areas of public policy which eluded any previous Government in this country. I saw the comments made by Mr Peter Kirby reported in yesterday's media. I believe that at this stage it is correct that the only agreement that has been concluded is one with Ansett Airlines of Australia, and I am aware from my own discussions with trade union leaders at the ACTU level that there are some misgivings in certain unions about the traineeship program. I think one should not be surprised at those misgivings. The program involves preparing an integrated package of policies in the area of education and training, income support and youth services. The Government is currently consulting further with business, unions and representatives of young people about the implementation of those programs. The youth traineeship system, apart from the qualifications to which Mr Peter Kirby referred in relation to particular unions, has the full support of the ACTU and business groups. The Government is continuing to discuss implementation with the ACTU, businesses, and now individual unions. As I indicated earlier, such a fundamental change to the system of vocational training in this country would inevitably involve some difficulties of implementation as those involved in the system-business, the TAFE sector and unions-adjust to new roles, but the Government regards the Priority One program as a very significant achievement-an achievement which will be carried out. We have emphasised, as I have in this answer, our commitment to see that it is carried out-and carried out in the spirit of a continuing process of consultation with those sectors of the community which might have some concerns about the details of the program. Senator VANSTONE —If I may ask a supplementary question, Mr President, can the Minister, having acknowledged the difficulties that still exist, say why the Government chose to announce this package before achieving the required consensus and in doing so unfairly raise the expectations of young Australians? Senator BUTTON —The Government announced its intentions in relation to this matter. As I said in my answer to Senator Vanstone's first question, it was a question of implemen- tation of particular aspects of the traineeship schemes, which is being negotiated with the various interests to which I referred. That is a process which is inevitably likely to happen. It is a process that not only involves the trade unions but also involves an interface between unions and various other groups in the community concerned to see the traineeship programs implemented. I have myself witnessed or been involved in discussions between various groups, including unions, about the implementation of this particular program. I do not think it is a question of raising aspirations and then not honouring a commitment to those aspirations. I think, with respect, that those involved in the discussions understand this perhaps better than Senator Vanstone does and perhaps better than I do. Senator VALLENTINE —I address my question to the Minister representing the Minister for Defence. I refer to the answer given by the Minister to a question from Senator Chipp on 11 November concerning the role of United States bases in Australia in which he replied: `Pine Gap and Narrungar are not part of the United States war fighting machine'. In spite of the questionable nature of this response, I ask the Minister: Is the fact that he avoided making mention of the United States base at North West Cape an implicit admission by the Government that this base has a nuclear war fighting role, especially with the introduction of the Trident II submarines in 1989, which will receive orders via North West Cape to initiate a first strike, in the event of a nuclear war with the Soviet Union? If so, will the Government immediately begin procedures for the dismantling of this nuclear war fighting base at North West Cape? Senator GARETH EVANS —No, there was nothing remotely significant in my exclusion of a reference to North West Cape in my answer to Senator Chipp yesterday. The purposes of the facility at North West Cape were again spelled out quite explicitly by the Government in the Prime Minister's statement on 6 June 1984. Let me once again put that explanation on the record. It appears at page 2987 of House of Representatives Hansard for that day. The quotation is as follows: The purposes and functions of the joint defence facility at North West Cape have already been made public. It is a communications relay station for ships and submarines of the United States Navy and the Royal Australian Navy and serves as a key element in a complex system of communications supporting the global balance. It goes on to talk about these circumstance which have been agreed between the Australian and United States governments to enable full participation by the Australian Government in what occurs there. I think the honourable senator will probably be well aware that the kind of communications capacity that exists in North West Cape is not such as to make it technically appropriate for targeting or anything else that is directly or immediately associated with the kind of war-fighting capacity that she seems to have in mind. Senator VALLENTINE —If I may ask a supplementary question, I refer to the second part of the question; that is that in 1989 the Trident II submarines which will be on line will have a first strike capacity. In view of that, I want to know whether the Government has any plans for dismantling the operation, because it will become a first strike operation at that time. Senator GARETH EVANS —I will be only too happy to refer that aspect of the question to the Minister for Defence and get a considered answer for the honourable senator. Senator VIGOR(South Australia) —I seek leave to move that the Senate take note of all the papers on the list incorporated earlier by Senator Grimes. Perhaps I may explain why I seek to do this. The papers tabled today were only available to us some half an hour before this period. In regard to such important reports as those of the Department of Finance, the Snowy Mountains Council and a number of treaties which I have not had a chance to look at at this stage, it seems that the Senate is not being taken very seriously if we are expected to speak on these within half an hour of receiving the papers. I am quite happy if any members of the Senate wish to speak on these papers, but I would like to make certain that proper consideration can be given to each of the papers and that they are added to the list that is going to be considered on the next day of General Business. The DEPUTY PRESIDENT —Is leave granted for a motion to be moved to take note of all these papers simultaneously? Senator Grimes —What is the situation with other senators? Do any of them wish to speak to some of these papers? Senator VIGOR —It does not stop them. Leave granted. Senator VIGOR —I move: That the Senate take note of all the papers. I seek leave to continue my remarks later on the next day of General Business. The DEPUTY PRESIDENT —Is leave granted for Senator Vigor to continue his remarks later? It would adjourn the debate on all the papers. Senator VIGOR —No, Mr Deputy President. I am quite happy that anybody else should speak. Senator Grimes —Senator Vigor may be quite happy, but the effect of seeking to continue one's remarks later is to adjourn the debate on all the papers. Senator VIGOR —Then I will not seek leave to continue my remarks later. Senator Chaney —Since I am sure that Senator Vigor is simply trying to be helpful to all honourable senators, Mr Deputy President, could you call on the papers one by one and, if no one rises, Senator Vigor could then move the adjournment motion. The DEPUTY PRESIDENT —That would be more sensible, but Senator Vigor sought, and has been granted, leave to- Senator Chaney —I think Senator Vigor would be happy to follow that procedure. The DEPUTY PRESIDENT —Senator Vigor, you sought and were granted leave to move a motion to take note of all of these papers simultaneously. Do you wish to pursue that course? Senator VIGOR —And that they be discussed. The DEPUTY PRESIDENT —The motion that they all be taken note of allows them to be discussed. The question is: That the Senate take note of all the papers. Senator Chaney —Could I ask Senator Vigor to withdraw his motion? Senator VIGOR —I would be prepared to do that. Motion-by leave-withdrawn. Senator VIGOR(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator SANDERS(Tasmania)(3.13) —I move: That the Senate take note of the paper. This is a most cavalier fashion in which to discuss matters which are of fundamental importance to Australia's international relations and to the present and future directions of our foreign and defence policies. Fifty-six treaties are involved in the paper which has been presented and honourable senators have only five minutes in which to discuss them. Included in the 56 treaties is the South Pacific Nuclear Free Zone Treaty, a treaty which the Australian Democrats and Senator Tate-he is not in the chamber at the moment-believe places some obligations on the Australian Government to introduce legislation for a nuclear weapons free Australia. One would think that this item on its own would be important. It should rate a major debate but, of course, honourable senators have only five minutes in which to debate all of the treaties. Treaty No. 27 on the list-it came into force on 2 August this year-is between Australia and the United States of America on the peaceful uses of nuclear energy. Again, this is another major treaty. Given the changes to the string of treaties with the United States of America on the so-called peaceful uses-if there are any such things as peaceful uses-of nuclear energy, each of which is more complex than and more different from the previous one, the time devoted to debating and discussing such vital matters is patently absurd. Treaty No. 29 is an agreement between Australia and France on classified information including, according to the agreement, defence information between Australia and France. It boggles the mind. Did Australia really know in advance about the Rainbow Warrior connection? This is something which should be investigated. But no, we have only a few minutes in which to debate it. How did Australia come to sign such an agreement with the French? Everyone knows that France's policies in this region are an absolute disgrace. The French willingly go into sovereign nations and blow up the ships of people who are ideologically different. France blithely blows up ships, explodes bombs in the South Pacific and tests nuclear weapons against the wishes of everyone in the whole Pacific basin, including Australia, although Australia does not say much about it, and here we are signing agreements with France. This is a disgrace and why we do it is an enigma. Parliament should be looking into the matter. Honourable senators have five minutes in which to speak on these agreements. Other agreements which we have not found in this paper-they probably do not exist in it-are those which bind us to the United States in respect of its bases in Australia. These are the most serious agreements of all and they are not even considered by the Parliament; only the Executive considers them. The Prime Minister (Mr Hawke), the Cabinet and the Governor-General sign agreements which lock us into bases such as Pine Gap, which is a Central Intelligence Agency base, pure and simple; it is a spy base and it is aiding and abetting the United States war effort. It locks us into Nurrungar, a base which is used for detecting Soviet missile launches and is the first step to star wars. With the new satellites going up it will be even more completely tied in to star wars. We have bases such as North West Cape which are communication stations which enable the United States to communicate with nuclear submarines and aircraft which could be engaged in United States first strike activities. We have the base at Watsonia, right in the heart of Melbourne, which transmits data from four high frequency direction finding stations scattered around the southern south-west Pacific to the United States Navy headquarters in Hawaii. It is essential to the United States war effort. We have the Omega base at Sale which is a prime nuclear target and a navigational aid to United States military ships and planes. A number of agreements do not come to light at all. When a few agreements do come to light, as they did today, we have five minutes in which to speak on them. I hope that in the future the Government will wake up to its responsibility to the Australian people and that it lets them know the truth about all of our agreements with foreign powers. Senator VIGOR(South Australia) —I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator VIGOR(South Australia) —I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. The DEPUTY PRESIDENT —Pursuant to the provisions of the Audit Act 1901, on behalf of the President I present the report of the Auditor-General on financial statements prepared by the Minister for Finance (Senator Walsh) for the year ended 30 June 1985, together with the financial statements, and certificates of the Attorney-General (Mr Lionel Bowen) and the Minister for Foreign Affairs (Mr Hayden) relating to exempt accounts. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I move: That the Senate take note of the report. I seek leave to continue my remarks later. Leave granted; debate adjourned. The DEPUTY PRESIDENT —On behalf of the President and pursuant to section 9B (2) of the Public Service Act 1922, I present a report on the operations of the Department of the Parliamentary Library for the period 1 July 1984 to 30 June 1985. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I move: That the Senate take note of the report. I seek leave to continue my remarks later. Leave granted; debate adjourned. Senator COONEY(Victoria) —I present the 234th report of the Joint Parliamentary Committee of Public Accounts. Ordered that the report be printed. Senator COONEY —by leave-Report 234 of the Joint Parliamentary Committee of Public Accounts is entitled `Excise and Deferred Customs Duties-Response'. This is the Government's response, in the form of the Department of Finance minute, to the Committee's 224th report which dealt with the collection of excise and deferred Customs duties. Report 224, which was tabled on 10 October 1984, was based on the concerns expressed in the Auditor-General's report of March 1982, which examined the procedures used to collect excise duty on beer, distilled spirits, tobacco products and petroleum products and hold goods, including imported goods, in bond pending payment of duty. In particular, the audit was designed to check that controls and procedures used by the relevant authority-then the Bureau of Customs within the Department of Business and Consumer Affairs-were adequate to protect the Commonwealth Government's revenue. The Auditor-General's report found that the checks on documentation tendered by producers to Customs, and indeed Customs' ability to make independent assessments of the revenue which was due, were inadequate. For its part, the Committee considered the Auditor-General's comments and recommendations and discussed the issues raised with both government officials and industry representatives. The Committee also received submissions from participants in the various industries concerned. The Committee's report recommended action to improve security over this important revenue source. The Committee recommended that Customs-which was by that time part of the Department of Industry and Commerce-improve specific controls over particular excisable commodities and improve their general management operations. I should state here that the Australian Customs Service is now an independent statutory body reporting to the Minister for Industry, Technology and Commerce. In its report the Committee recommended that authorities in addition to Customs also play a part in ensuring that the fundamental costs and benefits of the present excise system and possible changes to it were fully considered. The Committee recommended, for instance, that the issue of the perceived need for the bonded warehouse system and the implications of its abolition be referred to the Industries Assistance Commission for inquiry. The Committee also canvassed some quite radical modifications to the excise collection system. In the interests of streamlining the process of accounting for losses the Committee discussed shifting the point at which excise is collected and applying an automatic fixed percentage adjustment to the assessed quantity of excisable product. The Committee considered that such initiatives should be indicative of those to be given careful consideration by the Department of Industry and Commerce and other appropriate departments in consultation with industry. The Committee accepts the action undertaken in some areas, particularly the strengthening of Customs' general management strategy, with the formulation of a detailed planning document, the review of staffing requirements and training programs, and action to improve controls over end users in the distilled spirits sector. However, the Committee does have difficulty with aspects of the response to the report. Of particular concern is that issues impinging on bodies other than Customs were not addressed. The Committee expects that where agencies involved in the implementation or consideration of suggestions or recommendations are identified, those same agencies provide direct and clearly attributable written responses. No response was provided by agencies such as the Industries Assistance Commission or the Department of the Treasury to the Committee's relevant comments. The Committee had requested that possible alternative methods of excise collection should be given careful consideration by the then Department of Industry and Commerce and other appropriate departments in consultation with industry and that the bonded warehouse system should be referred to the IAC for inquiry. No comment was provided on possible alternative methods of excise collection, nor was there any indication from the relevant authority regarding a reference to the IAC on the bonded warehouse system. In addition to these omissions, other features of the Finance Minute make it an inadequate response to the Committee's 224th report. Customs rejected each of the recommendations relating to improved computerised inventory control in bonded warehouses and gave only cursory treatment to recommendations 3 and 25, which suggested improvements and economies in the excise and bond system. The Committee has decided to present this report and concurrently seek further information from the Minister for Industry, Technology and Commerce (Senator Button), the Minister who is responsible for both the Australian Customs Service and the Industries Assistance Commission. The Committee has expressed its disappointment at the defensive attitude which permeates the response to its report and at the narrow interpretation which has been placed on several of the Committee's recommendations. Specifically the Committee asks for supplementary information on its recommendations concerning controls in, and possible alternatives to, the bond system; a reference to the IAC on bonds; information on the level of additional resources for investigation and control of the petroleum freight subsidy scheme; evidence that controls embodied in the diesel rebate scheme are adequate to ensure its efficient implementation; and on the matter of simplified loss standards, to receive advice on the outcome of the spirits working party study. I trust that the Committee can report a satisfactory conclusion to the inquiry on receipt of this information. I commend the report to honourable senators. Motion (by Senator Grimes) agreed to: That, unless otherwise ordered, at 8 p.m. this day intervening business be postponed until after consideration of Government Business, Order of the Day No. 5, Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 [No. 2]. Debate resumed from 11 November, on motion by Senator Button: That the Bill be now read a second time. Senator HAMER(Victoria)(3.26) —When I spoke last night I referred to the fact that Australia is in serious economic difficulties. It is not all our fault. The terms of trade have turned against us. Nevertheless, we must recognise that we live in a real and highly competitive world and adjust our policies to fit reality. We are trading with the world at an annual loss of more than $10 billion. Depreciation-almost a free fall-of our dollar is the assessment by the rest of the world of our new trading position. We must direct all our efforts to becoming more competitive, both in our export markets and in our import replacement. Unfortunately, as I pointed out last night, we are doing exactly the opposite. For a country trading at an annual loss of more than $10 billion to grant itself a 3.8 per cent pay rise-probably about 6 per cent when on-costs are counted-is lunacy. The fact that this action is held to be necessary to avoid serious industrial disputes is a clear sign of what a disaster area our industrial relations system is. I also pointed out last night that there were two areas we must reform. The first is our 80 year-old industrial relations system, which is clearly one of the worst in the world. We must free it up if we are to become competitive and survive in the world as it is. Secondly, I pointed out that key areas of our infrastructure-communications and transport-are predominantly operated by government-run businesses. This may have been necessary 100 years ago but Australia has developed since then, though Australian Labor Party politicians do not seem to have changed much. We must examine all these activities to see whether increased competition or in appropriate cases privatisation, would not provide equal or better services more economically. We will never be an economic, efficient country while our communications and transport infrastructure is dominated by inefficient, feather-bedding, monopolistic and unimaginative government-run enterprises. I turn briefly to the other area in which action is urgent and where the Government is doing almost exactly the wrong thing-the area of taxation. The Government has done nothing to shift some of the load on to indirect taxation, which is economically and socially highly desirable. In fact, the Government has opted for a tax mix which was strongly criticised by its own Treasurer (Mr Keating) at the Tax Summit. There are, of course, some good things in the tax package. The promised reduction in personal income tax rates is welcome. In particular, the matching of the maximum marginal tax rate with the company tax rate is sensible. It will remove the incentive for a lot of highly undesirable tax manipulation practices. I must point out, though, that the tax rates are not indexed, so inflation will steadily push taxpayers into higher brackets. We may finish up with a flat tax at a rate of 50 per cent. Another good aspect of the tax package is the elimination of the double taxation of dividends. But what of the defects? The Liberal Party of Australia is not against a capital gains tax if it is economically justified. We have supported the taxing, at marginal tax rates, of capital gains realised within a year of acquisition. But a capital gains tax is never going to be a big revenue raiser, particularly if it is-as in fairness it must be-adjusted for inflation and if capital losses are permitted to be offset against gains. The present new Labor capital gains tax is expected to raise only $25m a year in five years time. Why, then, have such a tax? The motive behind the present proposal seems to be envy and spite. But there can be a responsible reason for such a tax: To prevent the distortion of investment which may either damage the economy or perhaps enable people to get social security benefits to which they are not morally entitled. How well does this new capital gains tax meet these objectives? It will not do anything about the social security problem because the Treasurer has said specifically that he will exempt such investments and, as for the elimination of investment distortion, the new capital gains tax will make it worse through the exemption from the tax of the family home and also because it will apply only to investments entered into after 19 September this year. The results of these decisions will make for even more distortion of investment than there would have been if the new tax had not been proposed in the first place. The other undesirable tax is the new fringe benefits tax. I have no difficulty with the decision to tax fringe benefits. I have watched for years the blatant use of fringe benefits as a means of avoiding tax, but a tax on fringe benefits must, in my view, have two features: It must not treat legitimate business expenses as fringe benefits, and it must be paid by the recipient of the benefit. This tax, in the way the Hawke Government is planning it, fails on both these counts and should not be proceeded with. The Government well knows that union power in some industries, such as mining, will force employers to pay the tax themselves, thus increasing the cost of labour and reducing our international competitiveness-the thing I said we must avoid at all costs. This is, of course, the pay-off to the Australian Council of Trade Unions, as is the decision not to count fringe benefits as fringe benefits if they are in an award. The whole thing is an outrageous rort. But this is typical of this Government. As I said last night, we are confronted with a most serious economic situation. The Government is carrying on like Neville Chamberlain in the face of the nazi threat. Government members seem to believe that they can appease their way out of danger and that if they ignore a problem totally it will go away. To cap it all, they wave a piece of paper called the accord which they claim will give us industrial peace in our time. It should have been drafted in Munich. We must face reality, and for this country to face reality requires leadership, determination and guts from this Government. I am sure that, if the Government can provide these, the Australian people will react sensibly and effectively, but there is no sign of any of this type of leadership from this lowest common denominator Government. Senator MISSEN(Victoria)(3.34) —I rise to speak in general to the Appropriation Bills and particularly to conclude with some remarks about the Appropriation (Parliamentary Departments) Bill, which relates to appropriations for and applicable to this Parliament. This debate enables us to make some general comments upon the economic situation in which this country finds itself. I agree with many of the remarks which Senator Hamer made. I think we are finding that the Government is not facing up to its real problems. The real problems are being evidenced today very substantially by the $1,600m deficit in our overseas balances in the month of October, indicating a very serious problem for Australia which the Government's present plans do not appear to contemplate or in any way to overcome. One recollects that there was a tax summit earlier in the year which appeared likewise to be very disappointing and very unsatisfactory. I do not blame the Treasurer (Mr Keating) particularly for that. I believe that he went forward with a fairly definite program, but in the end he was dumped by his own Government, by the unions, by business circles and by others who did not give him the support which might have meant a substantial change in the tax arrangements whereby the excessive demands made upon wage and salary earners, which lead to so many people going into the top taxation bracket-this will be more so than ever now-were to be offset by a consumption tax or some other tax that would spread the burden of taxation. Instead we are left, as evidenced in this year's Budget, in the Appropriation Bills and in the proposals for tax reform which are now floating about, with a solution which is not really a very full-blooded one and which is not likely to make the most positive contribution to improvement. We in the Opposition, I believe, are entitled to criticise, and criticise severely, the failure of the Government to face up to these matters. We, in turn, must put up positive solutions, and I hope that speed will be used in finding them. I think we can indicate, where we are seriously opposed to such measures as are put forward, that we will remove them and replace them when we return to government. If matters are particularly serious and if the alternatives are well thought out, an alternative government should do that. At the same time, I think it is a matter which requires caution, because we do not know what the economic situation will be when the new government comes into power. We do not want to face the situation where we have made promises and cannot keep them. I do not believe, however, that it is the duty of an opposition to replace a government's own measures and to try to reform its financial program. I believe that, in doing that, an opposition only leads itself to accepting responsibility for the mistakes which the government has made. An opposition can set out its criticisms quite severely and should not worry if it is attacked by people who say that it should immediately try to defeat this or that, terminate something else and thereby redevelop the whole of the government's economic program, because that is not, in my mind, the role of an opposition or of a Senate. Senator Hamer has spoken at some length on some of the proposals that have been put forward as part of the tax package which will, in due course, no doubt be processed through this chamber as it will through the House of Representatives. The capital gains tax proposal is getting a great deal of coverage. It seems to me that it is not a very big proposal and that it will not substantially alter the financial affairs of the Government. But it is essentially, of course, part of its financial program. The Government must therefore accept responsibility for it if it is a poor or inadequately expressed proposal, but I do not think it is the role of the Opposition to try to replace it at this time. A tremendous campaign is going on in the community in respect of perks, business lunches, entertainment and things of that sort. We have all received a great number of letters from people who will be hurt by these measures. Very often they say to us that we should throw them out. To my mind this approach mistakes the role of the Senate. One can feel a great deal of sympathy for those who have restaurants for which they have been expecting profits and have become dependent upon trade and they suddenly find that trade cut off. But the more I see of the campaign that is being waged and the more I hear allegations that something like $350m in revenue will be lost if tax is imposed on these business lunches, the more I am satisfied that this is very substantially a rort for which the ordinary taxpayer, the salary earner and the wages earner, is paying. I do not find it persuasive that they should be expected to pay. I am sorry that so far the Government has not been able to find measures by which it can discover which expenses are legitimate and necessary business expenses. The Government had a choice. It decided to impose this tax. The Australian Democrats are not in the chamber but it is they who are ready to fall for the quick and popular remedy. We should not do the same thing. We should not see the satisfaction people may get by voting against such measures, perhaps knowing that the measures will not be defeated, but making a gesture. I say that this is not the way that such things should be done. We may do something different when we come to office but we should not now say that this substantial amount of $350m or whatever should not be recovered by the Government. Clearly, the Government has to balance moneys and expenditure. There is a great gap between its revenues and the amount which it spends. The gap is worrying and it is not a matter to which we should substantially add. When looking at a tax package, at what are called nasties by some people and the good parts, one cannot ignore any part. We cannot ignore that money must be raised to pay for certain expenditures, for example, for reductions in taxation. This must very much concern the Opposition. I remind honourable senators of the statement made by Senator Dame Margaret Guilfoyle about two years ago on the Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983. It appears on page 1758 of Hansard of 19 October 1983. She set out, after much consideration by the Opposition, the only conditions under which we would interfere with moneys that are part of the financial program of the Government. She said: I should say that this legislation is, coincidentally, brought before the Senate during the Budget session and, in some sense, there would be those who would describe it as Budget legislation. In general terms, I believe that it is accepted that a government is entitled to expect the passage of normal Budget and Budget-type legislation and other legislation that is an essential part of its financial program. However, there will be rare occasions when an opposition will feel compelled to reject or substantially amend such legislation, within the Constitutional limitations of the Senate, where it is demonstrated to be capricious and arbitrary or vindictive legislation or where it creates new tax burdens of a retrospective kind. She pointed out that in that case it was clearly so. It was clearly a new tax which was retrospective and in every way it came within the capacity of the Opposition to oppose-and we did. We had opposed it in May and when it was brought forward coincidently at Budget time we again opposed it successfully. We should not be confused by people talking about `Supply' as a matter by itself, or about a Budget as though Budget Bills are somewhat sacred and other legislation is not. They are the financial programs of the Government for which the Government must accept responsibility and which we may criticise, I hope cognately and successfully, and where necessary promise to repair when we get into government. When dealing with Appropriation Bills such as these, we should bear those principles in mind. I want to deal with one other matter. I wish to deal with the Appropriation (Parliamentary Departments) Bill, as this is a joint debate. This Bill has arisen as a result of deliberations of this Senate through the Senate Select Committee on Parliament's Appropriations and Staffing, of which I was a member in 1980-81. As a result, we set up separate appropriations for the parliamentary departments. There was great discussion with the then Fraser Government over the matter. I regret that ultimately the Government put a ceiling on the amount that could be contained in such a Bill. That amount would be determined by the Treasurer. I think that it was a great mistake by the Senate and the House of Representatives that they accepted that they should be limited in this way. I happen to know that at present there are considerable problems. Problems were raised very recently by Senator Walsh when we were dealing with the setting up of a committee on human embryo experimentation. The Senate decided to do so. I was not well and was absent at the time. If I had been here I would have opposed the appointment of that committee, as being unnecessary. But it was not for me or Senator Walsh to determine that matter. It was determined by the Senate. It decided to have such a committee to bring together information and report later to this Parliament. On that occasion, Senator Walsh said: I am opposed to this motion, not because I am opposed per se to the referral of this Bill in particular to a committee, but because the motion seeks to establish a select committee. I think there are already far too many Senate committees. Far too many people have had their fads, their obsessions and their indulgences gratified by setting up a number of committees which have both strained the available resources and added substantially to costs. I do not accept the proposition, which was accepted by the previous Government, that the amount of money appropriated for Parliament is a matter for the Parliament to determine. I could not be more in disagreement with that sentiment. We have had recommendations from Estimates Committee A which deal with this matter. But it is very important that we should re-establish beyond any doubt the right of this Senate and the House of Representatives-if it only had the courage to take it-to determine what committees we will have and what are necessary expenses. The heads of these departments, the President of the Senate and the Speaker of the House of Representatives, should take responsibility for the fact that we act responsibly and with minimum expenditure. It is not for other people such as Ministers to determine. This matter does not concern one of the `ordinary annual services of the Government' with which the first Appropriation Bill deals. It concerns the running of the Senate and the running of the Parliament has nothing to do with the services of the Government. It involves the services of the people of Australia. The members of this chamber should take responsibility and determine these matters. I hope that they will do that in the near future. This Bill can be amended by this House. It can take into account, as I understand, allegations made by Senator Walsh about the rise in salaries which will come in the next year. They are accepted by some 26 or 28 departments and the Government and will be added on to their expenditure, but the Senate, the House of Representatives and the other parliamentary departments are apparently expected to take this rise out of their own moneys and thereby reduce the other services that they provide. Only this House can stand up for its rights. In the interests of the people it must determine the forms of investigations it will use and what committees shall exist. This should not be determined by governments. I hope that we will take a strong stand when this matter comes on for debate and vote. I make these comments on the Bill. I will not go into the details of the Bills which have been dealt with by Estimates committees. But I make these strong propositions today because they are matters in which I believe. I believe that it is important for this Senate to be able to stand on its feet and have the financial means to conduct its affairs. I believe that this Senate should not misuse or overestimate its powers and should not use them to act as a government in exile. In that way, in balancing what we do, we should be very careful that we do not move excessively and do things which are beyond the powers and the needs of this Australian Parliament. Senator MICHAEL BAUME(New South Wales)(3.50) —Today in the debate on Appropriation Bill (No. 1) 1985 I want to raise the problem of the consequences of the Australian Government's economic policies in as much as they have played a major role in the balance of payments problems that are revealed today. There can be no questioning that these balance of payments problems are a direct consequence of governmental economic policy, of which the Appropriation Bills play a part. I think it is important to recognise the details of the present balance of payments problems. The figures that came out today show a deficit of $1,600m-odd for the fourth month of this financial year. In Question Time today the Leader of the Government in the Senate (Senator Button) mentioned that this was simply the figure for one month and therefore not a figure on which one should necessarily place a great deal of importance. Obviously, though, not even Senator Button could pretend that it was not a disastrous figure. The reality is that when we look at deficit figures for the first four months of this financial year we see far more than a one-month figure. We get a clear pattern of very serious problems emerging for Australia on the balance of payments front. For the first four months of this financial year the deficit on current account is around $5,000m. That is a rise of 25 per cent. That figure is 25 per cent worse than the figure for the same period of the previous financial year. That represents not just an inconsequential one-month figure; that figure reveals a clear trend that has been proceeding this financial year. When we look at the components of this disastrous 25 per cent worsening we find that it is despite an increase of 19 per cent in exports and is due to a 23 per cent rise in imports. About half of the worse current account figure is due to a trade balance disadvantage and the other half is due to other factors. If we look at the trade situation for the same four months of this financial year it is clear, as I mentioned, that we have an enormous blow-out in the deficit, despite the fact that there was something like a 19 per cent rise in exports. The depressing element of that-it might sound curious to describe it as depressing-is that there was an 18 per cent rise in rural exports during that first four months. The reason I describe that as depressing is that it necessarily means that rural exports must fall sharply in their level of contribution to our balance of payments for the remainder of the year. The reason that must happen is that the Bureau of Agricultural Economics has forecast that its previous hopes of something like a 2 per cent rise in rural exports this financial year will not now eventuate. The Bureau of Agricultural Economics has now reduced by 2 per cent its forecast for rural exports and expects that they will remain at about the same level as that for last year. I think that even the mathematical geniuses on the Government side will recognise that, if there has been an 18 per cent rise in rural exports in the first four months of this financial year and yet the total for the year will be no greater than that for last year, rural exports in fact will make a much lower contribution to our exports for the remaining eight months of the financial year than they have done in the first four months. In other words, it will require a very significant increase in other exports even to hold this line; that is, of course, unless there is a dramatic reduction in imports. Unfortunately, when one looks at the prospects for our trade balance it is very difficult indeed to be confident about what will happen for the rest of the year. That is why it is not simply doomsaying or talking down the dollar to reveal what are the basics; the fundamentals; why we are seeing these figures. We have to face the fact that we have a fundamental imbalance in our current account. We are, in fact, in some severe difficulty. It is not simply a question of the Australian currency fluctuating because, in the terms of the Prime Minister (Mr Hawke), the money markets are silly, or because, in the terms of the Treasurer (Mr Keating), the money markets are stupid; it is because we have a serious and real problem which this Government must face up to. In these figures we can see that in the first four months of this financial year, with imports for example, fuels and basic materials had falls of about 10 per cent and 5 per cent respectively, despite the fact that there was a substantial increase in imports. I have raised the matter of fuels to make the point that there has been a temporary benefit to Australia on this front because we have been exporting a fair amount of our own fuel production. However, this will simply be a temporary situation. I expect that in a reasonable time we will go back to being a much larger net importer of our fuel requirements, particularly over the longer period as our self-sufficiency diminishes. So there is not much of joy on the import front and certainly there is not much of joy on the export front at present. If the Government is determined to talk up the money markets and is determined to ignore this massive $5,000m deficit so far this year, surely the people of Australia are entitled to a revision in the Government's forecasts of what it thinks will happen to this vital element in our economy. The markets are going to depend on their own estimates of what will happen if all we hear from the Government is a continual chatter about the J curve, which appears not yet to have discovered where its own bottom is. It would seem to me that, if we have had a $5,000m deficit in only four months and the Government is still forecasting something like a $10,000m deficit on current account for the full year, we will have to see a sudden and massive reversal of the present figures, otherwise we will miss by a very considerable amount the Government's target of $10,700m for the current account deficit. That is what the money markets fear. It was pointless the Prime Minister saying just the other day that he still expected the current account deficit to be down to representing something like 4 per cent of gross domestic product by the end of the current financial year if in fact that figure is not based on any effective revision by his economic advisers in the light of recent events and certainly in the light of the latest figures on the balance of payments. There is no doubt that there will have to be a revision. I think we are all entitled to ask: Does the Government, in the light of these figures, stick by its forecast or does it not? If it does stick by its forecast of $10.7 billion for the current financial year, what are the changes in imports and exports that it now expects after the first four months? From where will we get these major increases in exports? From where will we get the massive reductions in imports that are needed to meet this prediction? From where will we get the major changes in invisibles? I certainly cannot see from where they will come, and neither can the market. Such a situation would require for the rest of the financial year an average current account deficit of something no larger than, say, $750m a month. We have compared that with the fiture of $1,600m for the latest month. We would have to have something like $750m a month in order to reach the Government's ultimate target of around $10.7 billion for the full year. It seems to me that if the Government has not revised its forecasts it darn well ought to. It is totally irresponsible for any government to keep trying to talk up money markets by giving false and misleading forecasts about the likely balance of payments. It is false and misleading to do so. The Government is recklessly indifferent to the truth if it fails to revise those figures and fails to seek official revision of those figures. If it is still simply relying on its Budget-time forecasts, it seems to me that it is misleading the Australian people and deliberately seeking to mislead the money markets, which it spends more time insulting than informing. If the Government has made no revisions, I think it is quite right for the Senate to require of it that it does make these revisions and that it does inform the Australian people. It may be that my guess that it has made no revisions at all is wrong. Maybe the Government has done these revisions and is keeping them secret, in which case that is totally improper as well. The Government has a clear responsibility to come clean with the money markets instead of insulting them. What are the economic policies that have brought about this kind of difficulty? We can look very clearly to one major factor that prompted the first bit of a run on the Australian currency in recent times, and that was the full 3.8 per cent indexation of wages. As I have said, at that stage the markets were insulted by the Government for behaving in a silly, emotional and irresponsible way. I hope that the Ministers in this place who made that kind of comment will now apologise to the money markets. Anyone who took the advice of those Ministers of this Government and regarded it as silly to mark down the Australian dollar and who bought Australian dollars on governmental advice would now be losing a packet, just as would be the case for those people who believed this Government, this Prime Minister and this Treasurer when they forecast that interest rates would fall. Anyone who had taken that advice and acted on it would now also be losing large amounts of money. This kind of irresponsibility by this Government and those Ministers indicates, I think, a desperation to try to talk up the currency no matter what the facts. As I have said, the facts behind this balance of payments problem and, as a result, this foreign exchange problem relating to the currency are clear. Following today's announcement, we have seen the Australian dollar fall further. No doubt those involved in the markets will be making their own assessments when they study thoroughly overnight the details of this very depressing balance of payments situation which has been released by the Commonwealth Statistician. What we have to recognise is that the fundamentals in the Australian economy are looking particularly unhealthy. We have a situation in which our costs are rising at something like twice the rate of those of our trading partners. This is due largely to the Government's own economic policies. It had a chance, when an economic recovery emerged at the time the drought ended and the world economy improved, to underline a sound and secure period of economic growth for Australia. Instead, its own pressures forced it to seek much quicker, much more once-off and much more unsustainable growth than was in Australia's best interests. I suggest, as I have before in this place, that the Government's willingness to accede continually to the demands of the Australian Council of Trade Unions-that is, the union bureaucracy with which the Government bureaucracy deals, in particular the head bureaucrat, the Prime Minister, who has experience in both of these bureaucracies-the extent to which they find each other's company comfortable and the extent to which the union bureaucracy can dominate and determine the policies of the present Government are clearly to Australia's major disadvantage. The fact that the Government renegued on its undertaking at Budget time to discount fully the impact of devaluation on Australian wage rises has, I think, set the scene for continuing problems in our balance of payments. It underlines the fact that our costs will rise and will continue to rise at a far faster rate than will be the case in other nations. It astounds me that people in this chamber continually say: `But we really are discounting wages by 2 per cent next year. We are holding costs down'. As I have pointed out continually, that is utter bunkum. The tax cut that will come into effect in September of next year is aimed entirely at offsetting that 2 per cent discount. It is, as was demanded by the ACTU, a $2 billion tax cut in September next year to offset the discounting of wages. So it is a phoney discounting. In net terms, the take-home pay of Australians will not be affected even though the Government has said that there will be discounting. The Government now tries to claim the credit for this absolutely phoney discounting which has to be paid for by these tax nasties, some of which are in front of this chamber and many of which have yet to be introduced. I will get on to that issue in a moment. It is clear, particular to the money markets, that this Government has been waging a phoney war against cost pressures that face Australia. It has waged that phoney war because it has one hand tied behind its back by the dominance that the ACTU has over it by using the prices and incomes accord as a tool for blackmail. The Government has to do what the unions want it to do; otherwise the trade union movement continually says that the accord will not survive. As the accord is the only piece of economic policy that this Government really has, the Government certainly cannot afford to have that accord to fall apart. As a result, it will do anything, particularly what it is told by the ACTU, to keep that accord in existence. The general thrust of the Government's economic activities has been to increase Australian costs. The huge deficits of the last three Budgets demonstrate that. It is incredible that the Government seeks to get any public accolade whatsoever for allegedly cutting its deficit in the latest Budget to which these appropriation Bills refer. The cut is only from an absurdly high level that it itself introduced. One cannot justify the accumulated deficits of the last three Labor Budgets, all of which were far higher than any deficit produced by the previous Government. When the Government reveals that it has cut the deficit from the previous Government's level, it will be entitled to some applause, but only some applause, because we have to recognise that the previous Government's last deficit of about $4 1/2 billion was a deficit in a disaster period when we were suffering from the worst drought in something like 50 years, along with an international recession. It is a nonsense for this Government to claim purity on the grounds of the deficit being not as bad as it was last year or the year before that. It is still appalling. Its level of expenditure is unsustainable. Its policies are pushing the Australian dollar and the Australian balance of payments down the gurgler. It is about time that the Government stopped fooling itself. When Ministers go into their own cabinet meetings and say the sorts of things at those meetings that they say here-the policy decisions are made in the Cabinet room-then it is grievously misleading itself. The consequences can be seen in the balance of payments and in the foreign exchange markets. If the Government does not impose sufficient discipline on itself now, there will be one clear way in which the consequences of that lack of discipline will be revealed, and that is in our external relationships. Let me deal with the question of the tax measures that are to pay for the tax cut next year, which as I said is no more in 1986-87 than the offset of the failure to discount wages for devaluation, which is, of course, a reneging of an undertaking given at Budget time. I think we can express a fair degree of concern, not simply at what is happening but at the manner in which it is happening, the manner in which the Government is introducing these taxes to pay for this so-called tax cut. Because the business community, particularly the small business community and the farming community, has to pay the bulk of the $800m tax cost in these tax nasties, let us not pretend that Australia's cost structure is somehow being saved by the tax cut next year. The tax cut is being paid for largely by the very sections of the community which have to try to compete in world markets and which have to try to contribute towards an improvement in the disastrous balance of payments figures we are now looking at. Let us look at the disgraceful manner in which the Government is adding to the cost burden of the Australian community. I refer to the technique used by this Government of announcing a planned change in the tax system-a policy change-as being applicable from a specific date, and not intending to introduce the legislation for about six months. That is an intolerable situation. The capital gains tax was introduced from 20 September according to Government fiat. The Senate will not have the opportunity to vote on that legislation until some time in March. Senator Messner —We won't even know what is subject to tax. Senator MICHAEL BAUME —As the shadow Minister says, we will not even know what is subject to tax. This is a most appalling style of government. This is the way in which the rights of the Senate and of the Parliament as a whole are being subverted by a government which has no concern for those rights. It is all very well for people outside to say to the Opposition: `What are you doing to oppose these things?' It is very difficult for an Opposition to oppose something when, firstly, it does not know what that something will really be; and secondly, when it will not be brought before it to give it the opportunity to oppose it until it has been in place for so long that it has gained de facto acceptance. If the Opposition manages to defeat the Government's proposals six months after the event, it will mean that for six months people in the community will have made commercial decisions on the basis of something that ultimately does not happen. They will have been hoaxed, if you like, by this Government. They will have been pushed into a situation where many of them will have gone broke as a result of the falling property values that emerge from some of the asinine governmental decisions which will not come before the Parliament for debate until February or March next year. That is not a sustainable position. This is not some new tactic. The Government introduced this disgusting approach to legislation in May 1983 when, from memory, the lump sum superannuation tax was introduced in this way. These are specific changes in policy. They set new policy directions. They are something that the Senate is entitled to discuss and has the right to reject. Yet this Government seeks to trample over that right by cementing in these things before it gives the Opposition the opportunity to oppose and, hopefully, in many instances to defeat these proposals. I remind the Senate of the different and honourable way in which the previous Government introduced major changes in tax policy. For example, in 1981, when the previous Government sought to extend the indirect tax system to cover what were described-and wrongly described-as necessities, such as clothing, footwear and so on, in this chamber the then Opposition, now the Government, objected strongly to those measures and, in line with its continued policy, from which it pretends occasionally to depart, it was successful in defeating those proposals. Let us see how the mechanics worked. On that occasion the Treasurer announced the decision in the Budget and introduced the legislation on 25 August 1981, to be effective from 1 January the next year. In other words, about four and a half months were to be given to allow the legislature to examine the proposals before the changes took place. That is the honourable and decent thing for a government to do. Is it too much to ask this Government to be honourable and decent in these matters? Instead we find this Government adopting this totally different approach. This Government, which is so concerned about principles that it tries to maintain a synthetic rage-it tried to do so again last night-is not concerned with the reality of the attack on the rights of this Parliament by introducing this kind of tax measure de facto so far ahead of the date on which the Senate is to be given an opportunity to vote against and to reject it. It does the Government no good to claim that when the previous Government was in office it closed many tax loopholes on the basis of making an announcement that a tax loophole would be blocked and that subsequently legislation would be introduced to support that blocking. The reality is that the blocking of a loophole did not involve making any change at all in policy. It involved the blocking of a loophole under which tax avoiders had got around a clearly stated and existing policy. Senator Messner —That is right. Senator MICHAEL BAUME —The former Minister, who had an involvement in this matter, quite properly supports the point I make. The fact is that there was no change whatsoever to existing policy. What was proper and what had a consensus of support from the Opposition was that these devices which got around the existing law had to be blocked off and blocked off quickly. But there was consensus. In this present situation I assure the Government that there is no consensus and there is no continuing policy. This is a major change of policy. It is the sort of measure which it is totally improper to introduce before the legislation is introduced, particularly when the legislation will follow up to six months later, after people have made commercial decisions. I simply ask the Government to examine any conscience it may have on this matter. If changes to the legislation are made when it is introduced in the Senate and if, as a result, the financial situation of many people is changed, in effect retrospectively, it will be because of the improper exercise by a government of an authority which I do not believe it has the right to exercise. It cannot de facto introduce laws unless it introduces the legislation itself. Senator WALTERS(Tasmania)(4.l9) —In the past fortnight as the Treasurer, Mr Keating, tripped around the world telling the overseas money markets that he was the greatest, the value of the Australian dollar fell. The further he went the further the dollar fell. As he went from country to country, the Australian dollar fell further. Back in Australia, Senator Walsh and Mr Hawke were telling the men who keep one hand on the telephone and make millions as the United States dollar and the United Kingdom pound rise that they did not understand the Australian economy. They told them that if they did they would be showing confidence in and buying the Australian dollar. Still the Australian dollar fell. Who does not understand the Australian economy? Perhaps it is the Government. Certainly, the kings of the money markets understand it. They understand that Australia is simply spending more than she is earning. These are the facts. Let us look at the increase in interest rates. I have a table which shows the real interest rate on small trading bank overdrafts from June 1960 to June 1985. Just after the Liberal-National Party Government left office the nominal rate was 14 per cent. It is now 15.5 per cent. The real interest rate was 2.5 per cent in 1983. It is now 8.2 per cent. Under this Government the average real increase in government spending is 4.9 per cent per year, more than double the Fraser Government's average. Government outlays in 1985-86 are estimated at 29.8 per cent of gross domestic product, the third highest in Australia's history. The first and second highest rates were in the first and second Budgets of the Hawke Government. This year's outlays are equalled only by the last of the Whitlam Government's outlays. Our overseas debt has increased. I have some figures from the Parliamentary Library. In 1983 our external debt was $36,493m, 22.1 per cent of gross domestic product. This year, under this Government, it is $68,466m, 33.1 per cent of gross domestic product and the highest on record. Let us look at what we are paying for this external debt. After all, it is of vital interest to Australians. Interest payments on our external debt were $2,630m or 1.6 per cent of gross domestic product in 1982-83 when we left government. They have virtually doubled. They have increased to $4,815m or 2.3 per cent of gross domestic product. What a wonderful Treasurer we have! Mr Hawke told us that Mr Keating is the best Treasurer in the world. Mr Keating has been saying: `I am the greatest.' The Reserve Bank of Australia commented in its annual report that by the end of 1984-85 most interest rates had risen substantially with many rates at historically high levels, both absolute and relative to the rate of inflation. So much for the pre-election promise of Mr Hawke and Mr Keating that interest rates would fall in 1985. Is Mr Keating the greatest Treasurer? He is still saying: `I am the greatest.' He is still saying to the world money markets: `Have faith; I will not panic, I will not budge. Just buy; have faith in us.' The money markets are turning the other way and the Australian dollar is falling. Per head of population our overseas debt grew from $1,571 in June 1983 to $3,326 in June 1985. The situation is incredible. For every man, woman and child in June 1983 our overseas debt was $1,571. It is now $3,326. Interest rates are the highest ever recorded, at a time when we need export dollars urgently. What is the Government doing about it? There is no doubt that high interest rates work against businesses borrowing to build exports. With very high interest rates and bad industrial relations, what hope has business got of competing on the open market? We have only to look at the Mudginberri dispute. The Mudginberri abattoir lost millions of dollars just because it and its employees came to an agreement between themselves which suited them both. It gave the workers more money and enabled the boss to export more. Yet the union decided that the agreement was not in the union's best interest. It put a ban on all exports. Mr Hawke did not direct his inspectors to cross the picket line. He allowed the situation to continue until the company lost its export market. I was part of a delegation to Japan not so very long ago which was looking for longer term trade commitments. I was there primarily on behalf of Tasmanian companies which wanted such commitments. The Japanese said to me very clearly, everywhere I went, that they would not dream of giving us longer term trade commitments. They said: `You are not a reliable supplier.' The operators of the woollen mills said that never again would they close because our storemen and packers were holding up their wool, as they did in Melbourne. The Japanese woollen mills closed then because we were not able to fulfil our commitments. Now the Japanese deal with many other countries and will never again, they assure me, import only from Australia. They deal with many other countries so that they have reliable sources of import. Mr Keating has decided, when we have problems with high interest rates and a falling dollar, when we need exports and when business needs to be confident, to tax business. His timing is incredible. I cannot imagine how he could have dreamt up such a stupid thing to do when the economy is in this situation. He has told us that he will introduce a capital gains tax. He is going to tax the employer for benefits that are paid to workers. A 3.8 per cent wage rise which has resulted from a sweetheart deal between the Government and the unions has been rubber stamped by the Australian Conciliation and Arbitration Commission. At a time when our economy is screaming for more exports our greatest Treasurer of all time has decided to tax further the employer. It is good rhetoric for the Labor Party to say: `The employer pays the benefits and we will tax the employer'. That is wonderful stuff! If the Labor Party had the courage of its convictions it would say that the person receiving the benefit is the person who should pay the tax. But, no, the Government goes around the Labor Party branches saying: `Comrades, we will make the boss pay; we will not make you pay the tax'. This is jolly good rhetoric. The Labor Party needs jolly good rhetoric because if we cast our minds back not so very long ago we will remember the rather unsuccessful Tax Summit. Mr Keating told us that there would be no compromise and that he would not budge from his tax White Paper. Late one night in a hotel room Mr Hawke did a deal with the Australian Council of Trade Unions and sabotaged the Treasurer. He whipped the rug from under Mr Keating's feet. So the Tax Summit collapsed. As the news- papers said, the Government's tax package crossed the finishing line with all wheels off. Mr Keating and the Labor Party have to take to their branches around the country rhetoric which suggests that some new tax legislation is on the way. It is good rhetoric for the Government to say to left wing Labor Party branches in particular: `Comrade, we will not make you pay but we will make the bosses pay'. We have not yet seen the legislation to give effect to these changes. As Senator Michael Baume just said, how can business possibly plan when such legislation has not been introduced? The Treasurer made several announcements several months ago. He has been tripping around the world trying to sell what he is about to do as something that is very responsible. The overseas countries are saying: `You are kidding. What you are doing is murdering your business and we are not going to show confidence in you'. As I said, the further Mr Keating went, the further the dollar fell. How can business plan when such legislation will not be introduced until next year? How does business know what is going to be in that legislation? How will it know how far the legislation is going to be watered down and what will be charged? Yet business will have to make decisions in the next three to four months. The Government is hoping that business will be able to boost the economy a bit. However, as I said, there is no way that business can plan for that at the moment. The balance of payments figures were released this morning. We know that exports fell by 4 per cent while imports rose by 9 per cent. The balance of payments figure has reached an all-time record-minus $1,641m. It has gone up by $575m since September 1985. What an incredible situation! Yet the Government is saying that people should be confident, that people should show their confidence by boosting the dollar. The only body that is liable to boost the dollar is the Reserve Bank of Australia as it hops in every now and again to try to save face for the Government. One of this morning's papers carried the headline `The dollar is set for a further slide'. If the Government does not change its allegiance with the ACTU, if the Government is not going to govern with a responsibility to all Australians, not just the ACTU, we will soon be bankrupt. There is no doubt that so long as we continue to earn less and pay ourselves more this country and its economy will just not survive. Another newspaper carried the headline `Low dollar pushes up house building costs'. The cost of building homes is rising out of all proportion. For instance, electrical fittings showed a spectacular 17.9 per cent rise in the year to August. The ordinary men and women are gradually finding it quite impossible to fulfil their dream of owning a home. As I say, unless the Government changes its allegiance with the ACTU under which that organisation calls the tune, this country will slowly but surely go bankrupt because it will not be able to pay the interest on its overseas debts. Senator BJELKE-PETERSEN(Queensland)(4.37) —I wish to use this opportunity in speaking on the Appropriation Bills to discuss some of the problems that are facing various sections of the Australian community as a result of the economic policies of the Labor Government. Last week the Senate discussed by way of a matter of public importance the destructive effects that the proposed capital gains tax will have on incentive. Since then I have received some letters in the mail from various organisations relating to taxes on fringe benefits and entertainment expenses. A letter from the Bundaberg Wide Bay and District Activity Therapy Centre Inc. referred to what it called perks and fringe benefits. The Centre finds it difficult to understand how the money that it receives from sponsorship can be taxed. Various organisations in the Bundaberg district help the Centre to raise money. However, the sponsors now say that they cannot assist by donating prizes because the Government is going to tax all perks, fringe benefits and gifts that organisations are willing to give. As a result, groups such as the Bundaberg Wide Bay and District Activity Therapy Centre are not going to be able to continue to help those who are in need. I received a similar letter-I have no doubt that other honourable senators would also have received one-from the Queensland Deaf Society with which was enclosed a copy of a letter that the Society had written to the Treasurer (Mr Keating). The Society cannot understand why charities affiliated with churches are exempt from paying the taxes that are being imposed but non-denominational charities are not. The Society, which is struggling to help people who are less fortunate in the community, feels that it is being discriminated against. In fact I was told that under this present arrangement the organisation could have to pay up to $20,000 in new taxes. It was also pointed out to me that Senator Grimes made a promise to the disabled community of Australia that the Hawke Labor Government would not permit a tax on disability. These are just some of the problems that can arise because of the new-type taxes the Labor Government says it will bring down. Apart from that, there is the tax on entertainment. We have heard quite a lot from various restaurants about the problems they are having, with people having to close establishments down. I heard Senator Boswell speaking about the Camelia Restaurant in Brisbane that had had to close its doors. I know for a fact many other restaurants which are having lots of trouble and which are losing business. It is not so much the restaurants themselves with their loss of business, but the effect on the jobs attached to these restaurants. I refer to young people in particular. The Labor Party is very concerned about the jobs and job opportunities for young people. The restaurant and tourism area provides many opportunities for young people to get work. It seems to me that by hurting the restaurants in this way, it is hurting jobs and job opportunities. In one of the papers today there was a very big advertisement that said: Most business meals are legitimate business expenses. But Mr Keating has decided that all are now illegitimate. He seems to have concluded this is the only way to beat tax evaders. Much the same principle as throwing out the baby with the bath water. The just alternative requires taxpayers to prove the legitimacy of the expenditure. I think that this is a point that should be taken into consideration and that legitimate expenditure should be allowed. There will of course be costs to audit the system, but nothing like the cost of jobs lost in the food, service, tourism and hospitality industries. These are some of the facts that we should keep in mind when thinking about these new taxes that are being proposed by the Government. The rural industries have also suffered under this Government. Australian agriculture is in a serious economic decline, and it will certainly need a greater degree of sympathy and positive action from the Government before our own economy and world trading circumstances are in better order. It used to be that Australia could be reliably called upon to supply Britain's primary production requirements, until she joined the European Economic Community. Now, the EEC supplies Britain's requirements, and I suppose Britain these days is providing quite a lot of her own requirements. Unfortunately, over there they use a series of subsidies to overproduce in grains, sugar, dairy products and beef. These surplus products are then dumped on world markets at subsidised prices. This depresses the world prices. Judging from what I saw when I was over in the European Parliament and when I went to Brussels and spoke to the people in the EEC, I do not think they are likely to change their tactics. Therefore, we must try to find some cure here. I am sorry to have to say that the value of rural production fell 19 per cent for 1984-85. Record interest rates, exorbitant fuel prices, high wages and now the new tax liabilities that are proposed are sending hundreds of farmers broke. The Bureau of Agricultural Economics has predicted a further 26 per cent fall in the value of rural production next year and, coupled with the low value of the dollar which is increasing interest rates and inflation, I would say that this could indeed spell disaster for Australia. Our rural and mining industries have faced a steady increase in costs during two years under this Government. Under Labor, country people and industries have been treated with contempt. The effects of rising costs and declining markets have been to reduce the viability of our rural industries to their lowest level. The tax changes of which I have spoken have not helped. The Hawke Government is certainly the highest taxing government in Australia's history. These proposals that are being brought forward as a tax reform package have dealt a further blow to the men and women on the land. The tax debate thus far has been most noticeable in the fact that it has ignored the people and industries outside the major cities. It has ignored the industries which provide 80 per cent of our export income. But tax reform does affect people living in the country. Indeed, these people are hit hard by the vagaries of taxation, protection, regulation and economic distortion. Taxation so-called `reforms' which do not take account of the concerns of country people and our rural and mining industries will be rejected by those people and those industries. The National Party of Australia certainly believes that tax reform must come, but not in the way that the Labor Government has proposed. A capital gains tax, a wealth tax and death duties-these are all totally unacceptable to the rural community and to the National Party which represents them and their best interests. But this Labor Government's desire for increases in pensions and/or benefits is of absolutely no help to the self-employed farmer. The net cost of government costs and charges, regulation and industry protection is $16,709 per farm. Unfortunately, the average person on an ordinary farm will, in 1984-85, have a personal income of just $6,500-roughly one-third of average wages. One of the biggest costs for country people is the freight component at the point of sale. Indeed, transport costs make up a major part of the total cost of almost everything they buy in the country. An accumulated farm debt of $6 billion is being compounded by record high interest rates due to Labor's Budget deficits and monetary policies designed to prop up the dollar. Returns to farm capital now average less than 2 per cent. In fact, it sometimes makes me wonder why anyone in Australia wants to be a rural producer-there are so many problems for the man on the land. If there is not a drought, there are floods and other disasters. When one bears in mind the returns such as those I have been speaking about, many problems beset the man and woman on the land. Labor's latest tax measures will take a further $150m to $200m a year from farmers in addition to the $442m Budget rip-offs since the Hawke Government came to power in 1983. The combined effects of capital gains tax and the quarantining of farm losses from off-farm income will accelerate the fall in farm land values throughout Australia. It is certainly very sad when people on the land are not able to use off-farm income greater than $30,000 to offset against farm losses. I feel that there is discrimination in this area, too, because Broken Hill Proprietary Co. Ltd can off-set losses in its steel division against revenue from its oil division. That does not seem very fair to me. There are already falling land values due to record farm indebtedness, record high real interest rates and low commodity prices. The state of the Australian economy under this Government is indeed a disaster. We have an inflation rate which is almost twice that of our major trading partners. We have the highest real interest rates since the Depression. We have an ever-growing national debt. We have a dollar which has depreciated by 20 per cent so far in 1985, and our current account deficit is running at 20 per cent higher than last year's record figure of $10.1 billion. It is not at all the rosy picture which Mr Keating would have us believe and I am sure honourable senators would agree. Soaring interest rates are contributing to the farm debt servicing problem. As a result of the Government's determination to hold down housing interest rates, business interest rates are higher than they should be. Interest rates in business areas, such as farm term loans and overdrafts, are carrying the brunt of this policy approach. The result is that they are higher by up to 5 per cent. Rural industries have not been assisted to the same extent as other industries in this country. Since the 1974-75 Budget, outlays for rural industries have fallen by a massive 29 per cent while assistance for every other sector of society has risen. Just recently Mr Hawke said that Labor must try harder for the rural vote. When speaking to delegates at the New South Wales Labor Party country conference he noted the turmoil and new militancy in the bush. He stated: . . . the party's traditional strength in country N.S.W. was one of the foundations of the Government's stability. I am certainly pleased that he feels there is a need for the Labor Government to try harder for the rural vote. After what I have said today, it is quite obvious why this is necessary. For many years the people of Australia have enjoyed a very high standard of living compared with that of other countries. This is due in no small way to the export earning capacity of our rural industries. The people of rural Australia have had to put up with a lot over the years. They are hard working, loyal and selfless in the way they approach their work. They have never asked for much and yet they have given their all to the country they love. I wonder how many people in the cities would like to get up before sunrise to begin their gruelling 15, 16 or 17-hour day which consisted of a lot more than just sitting behind a desk. I do not think too many people would be prepared to put in those hours for an income, as I mentioned earlier, of a mere $6,500 a year. So why, when the rural industries are asking not so much for assistance as for a reduction in the barriers which prohibit them from being commercially viable, do we have silence from the Labor Government? No one is more deserving, and no one less assisted, than the primary producer. While the ordinary wage earner is highly protected, the manufacturer shelters behind substantial tariff protection and social welfare recipients have their income guaranteed, the Aussie farmer, the most efficient in the world, is reduced to begging for some relief. Last week I spoke in a debate on a matter of urgency about the apparent policy of this Labor Government to reduce everybody to the same level, to stifle initiative and to reduce the incentive for people to get up, have a go and make a success of their lives. Once again, I say that by trying to cut down anyone who shows a bit of initiative, who might aspire to rise above mediocrity, this Government is condemning all Australians to a lower standard of living. The rural producers of Australia are not a mediocre bunch. They are solid, hard working, proud Australians who want nothing more than to be left unhindered by governments and bureaucrats to get on with the job of producing. We certainly do not need increased wages for workers in rural industries, about which I asked a question today. They got a 2.6 per cent wage rise on top of the 3.8 per cent rise that was given to all workers in Australia. This will increase wages in rural areas by $14 a week. I am sure that it will be very hard for farmers to meet these increased costs. Protectionist policies may have been appropriate for the 1960s but I certainly believe that the encouragement of free trade is the only way to succeed in the 1980s and into the twenty-first century. The positive encouragement of our export industries is the only way that Australia can look to reduce its massive deficit on the current account which is expected to exceed $10 billion this year for the second consecutive year. Excessive labour costs, union induced strikes and work to rule campaigns damage Australia's productivity and ruin any chance Australia has of proving itself to be a reliable supplier. It is sad to think that 80 years ago Australia was one of the richest countries in the world. We are now down to fourteenth and regrettably we are still falling. What our export industries-that also means our rural industries-need is the heavy hand of socialism lifted in order to enable them to compete successfully on world markets. If we could see the removal of government induced costs, we could once more become a viable exporter, able to match the EEC. This is very important because wage costs in our rural industries are high and this puts us at a great disadvantage compared with Asian and EEC countries which are heavily subsidised. We have to be able to match producers in the Pacific and Asian markets so that not only our rural industries but also all other export industries will be able to compete on a worthwhile basis. I am pleased to have offered these comments today as we are looking at the appropriation Bills. I certainly hope that this Government will take some actions that will help rural producers in Australia. (Quorum formed) Senator LEWIS(Victoria)(4.59) —I am pleased that Senator Ryan is in the chamber because I want to talk to her. I take advantage of the debate on the Appropriation Bills to talk about the young unemployed and the young people of this country who are being deprived of the opportunity of a tertiary education. Last year over 25,000 young Australians who qualified for tertiary education were unable to obtain places at tertiary institutions in Australia. At present over 25,000 young people in Australia are doing their higher school certificate examinations and it does not matter how good a mark they get; they will not get into the tertiary institutions of Australia because they will be kept out by the quota system. So it does not matter how good the result; it does not matter how hard they work; it does not matter how high their marks are; 25,000 kids must be excluded from tertiary institutions because we are at least 25,000 places short in this country. What is this Minister doing about that shortfall? I will tell you, Mr Deputy President, what she is doing about it; she is providing precisely 2,300 additional places. Some people have said that we ought to keep the foreign students out of Australia as that would help the situation. I think there are less than 2,000-about 1,800-foreign students in Australia. If we applied Senator Walsh's fees to these young people from other countries and kept them all out of Australia it would still not go anywhere near providing places for the over 25,000 kids who cannot get into the universities and the tertiary institutions of Australia because the Minister for Education is not prepared to do anything about it. She must sit there and listen to her mate Senator Walsh, who no doubt says that she cannot have any more than X dollars this year, and so the places are not available. The thing that really annoys me is that it does not matter how hard the young people of Australia work, it does not matter what their results are-if they all raise their marks up to enormous heights; if they all improve 10 per cent, 20 per cent, 30 per cent or 50 per cent, if they all got five Bs-25,000 or more must be excluded. For gosh sake, what is this nonsense that is going on in Australia at present? We are short 25,000 places. Let us look at some simple solution to that. What about the Government trying to use these institutions at times other than from nine in the morning until 3.30 in the afternoon. Would that not be a solution? It would be a partial solution. The Government sits on its hands and says that it cannot do anything about that at present; it is one of the economic problems of the nation and we have to put up with it. Senator Ryan and her colleague Senator Grimes, who used to make all these speeches way back in 1981 and 1982 criticising our Government for coping with the situation far better than this Government is coping with it, ought to be ashamed of themselves for allowing a Budget, as this Budget does, to provide an additional lousy 2,300 places for the young people of Australia when there are over 25,000 people presently excluded by the system. The Minister indicated by way of interjection that she did not accept my figure of 25,000. Let me just talk about the figures for last year. On 11 September at page 449 of Hansard, when the Minister answered a question without notice she said: In regard to the question of unmet demand, the current estimates-or the estimates that I am most familiar with from the Tertiary Education Commission-are that it would be similar to what it was last year-that is, nationally, in the vicinity of between 5,000 and 10,000. If it was between only 5,000 and 10,000 that would be a disgrace. If that figure was right, it would still be totally wrong that 5,000 or 10,000 young Australians who qualify to go to universities and tertiary institutions in Australia cannot get into those places. The Minister wrings her hands and says that the figures she has are only 5,000 or 10,000. Senator Peter Baume correctly interjected, and I quote the interjection from Hansard: Too low. That is not correct. It is 10,000 to 29,000. Senator Ryan responded: I have seen no evidence that that is the case. Senator Ryan might be listening to the TEC and it might be providing her with some figures; but let us have something of what the journalists of Australia were able to find out. I see that Senator Ryan is walking out of the chamber. No doubt she does not want to listen to what I am telling her about these matters. The Sydney Morning Herald on 2 February this year reported that New South Wales colleges and universities refused 13,500 applicants, according to preliminary figures supplied by the Universities and Colleges Admissions Centre. In New South Wales alone in 1985 there were 13,500 places too few. The Minister has the audacity to suggest that the unmet demand at present is only between 5,000 and 10,000. In 1985 in New South Wales the problem was 13,500. The Australian on 6 February this year also reported that figure of a 13,500 shortfall in New South Wales. Other reports indicate that more than 5,000 young people will get rejection slips in Victoria and 3,000 in Queensland. The Western Australian University reports that it had 5,933 applicants for 1,930 places, the Adelaide University reported that it had 4,700 applications for 1,680 first year places, and the South Australian College of Advanced Education reported that it had received 7,832 first preference applications but that the intake quota had been cut from 3,600 to 2,900-a total in unmet places for 1985 in excess of 25,000. I am saying to the Senate that the Minister for Education, who says that there are only 5,000 or 10,000 places unmet and is apparently satisfied to accept that, is facing a situation in Australia where over 25,000 young people-it does not matter what results they get in their examinations this year-will be excluded from tertiary institutions in Australia because of the quota system. The Government is providing an additional 2,300 places. No doubt Senator Walsh, who has now come into the chamber, is responsible for that because no doubt he has put his foot on any moneys the Minister for Education might have to increase the amount allowed for tertiary teachers and lecturers. So this Government, under Senator Walsh, who no doubt thinks it is a rort or something going on in the universities and tertiary institutions, is increasing the number of vacancies available around Australia by 2,300 when we have over 25,000 young people excluded. It is not just that higher education in Australia has fallen back. I am not saying that it has fallen back. What has happened is that Australia has not kept pace with other countries. In 1950, for example, about 3.5 per cent of Australia's labour force entrants had tertiary qualifications compared with one per cent in Japan. By 1980 the Australian figure had doubled to 7 per cent but in Japan the figure was 40 per cent. While Australia had managed to get up from 3.5 per cent to 7 per cent, and we congratulate ourselves and pat ourselves on the back, the Japanese went from one per cent to 40 per cent. That is what is wrong in Australia in tertiary education. The Commonwealth Tertiary Education Commission Supplementary Report for 1986 and 1987-that is the triennium 1985-87-states: For 1984 the Commission estimated that up to 10,000 additional places in higher education could have been filled with suitably qualified students; for 1985 unmet demand is at least of the same order. For the past three years, the entry scores required for admission have risen substantially, if not uniformly. This indicates that many of those who have failed to gain admission could have been successful higher education students. The Commission says that in order to keep out students who are getting better and better results every year, it has to keep raising the quotas all the time, raising the figure. The Tertiary Education Commission, looking at it overall, is saying that if students could have qualified in 1983 and they are being excluded in 1984 and even more are being excluded in 1985, if they could have qualified in 1983 they probably would not have been able to cope with their higher education. That is a very academic argument, Mr Deputy President. You and I would know-because we are old enough to recall, and Senator Walsh is probably just old enough to recall-that most of the people who qualified for their higher school certificate when there were no quota systems managed to get through their university degrees. I recall that a very good friend of mine, who struggled through his higher school certificate-in those days it was called matriculation-just managing to get 50 per cent passes, got into Melbourne University to do medicine. Nowadays he would not manage to get into any tertiary college or university. He realised within a few months of starting to do medicine that he had a chance of being a doctor in six years. He took that advantage by the throat and in six years he was a qualified doctor, having not failed one subject in the whole of that time. Yet, on the assessment of his matriculation examination results, he would not have got into any tertiary institution today. For the Tertiary Education Commission to be saying `If you got into the quota in 1983 you probably would have managed to pass the exams in 1985' is a very academic nonsense. Of course, kids doing their HSC do not work as hard as they will when they begin to see their future careers opening before them-the opportunity of becoming a scientist, an engineer, a lawyer, a doctor or whatever they might choose to be. Once they get that prospect in front of them and the opportunity to go ahead-when they realise that they are no longer just going to school, having to pass exams at the end of the year because the teachers want them to pass exams-and that they can pass exams and become qualified to practice in a particular job and get a job, the will grab the opportunity. Over 25,000 young Australians will be excluded from taking that opportunity because this Government is not prepared to do anything about it. I see Senator Button walking into the chamber. I remember a number of speeches that he made in 1981 and 1982, complaining bitterly about the fact that my Government-the Fraser Government-allegedly was not doing enough for tertiary education in Australia. What is Senator Button's Government doing for it? It has provided a pathetic 2,300 additional places for this year, notwithstanding the enormous increase in the number of children who want to get places in tertiary institutions. Why do they want to get places in tertiary institutions? It is because of the difficulty of getting jobs in this country under this Government. Let me now talk about jobs in this country. On 9 November this year the Prime Minister (Mr Hawke), addressing a Rotary conference in Sydney, acknowledged that there were 135,000 young men and 95,000 young women unemployed, seeking full time work. He said that these raw figures did not reveal what youth unemployment meant in terms of loss of human dignity and self-respect. They are words with which I thoroughly agree. He then went on to outline a traineeship plan designed, he said, to generate 10,000 jobs, with progressive expansion to an intake level of 75,000 jobs in the year 1988-89. This all sounds great and reads well in the newspapers when the Prime Minister says it but the truth is that this has managed to generate a promise of 300 jobs from Ansett Airlines of Australia. That is the only promise that this Government has with regard to this traineeship plan that is supposed to generate 10,000 jobs. It has managed to get a promise that Ansett will take 300 of these young people under this plan. On the same weekend that the Prime Minister was making this grand speech, getting all the publicity, talking to the television cameras and to all the journalists, Mr Peter Kirby, the fellow who worked out the scheme, was saying that he was `very pessimistic'-they are his words-about the chances of the program succeeding. He said that great divisions had arisen between the Government, the unions and employers about implementing the traineeship plan. Of course, the great problem is the union movement. I know that Senator Button at least understands that. The union movement does not want to do anything about providing these jobs because it is involved in protecting the people who are employed. The union movement is not interested in finding jobs for the young unemployed or helping the young unemployed to find jobs for themselves. We all know what the problem is. We all know that the jobs are available. Unemployment in Australia at present is standing at 8 per cent overall, but unemployment for young Australians is standing at 25 per cent. Senator Button —That is wrong. Catch up with the figures, for goodness sake. Senator LEWIS —Senator Button said it is wrong. Let him table the figures to prove to me that it is wrong. What are the figures? It is just on 25 per cent, anyway. It might be a little less, but it is just about 25 per cent. Why is that the situation? The answer is very simple. If the wages of the young people were reduced to a reasonable level they would get the jobs. I suggest that honourable senators go to a hotel to see who is available to carry in their bags. There is no one. There are such jobs available for young people. Senator McKiernan from Western Australia laughs, but many people who have risen to the top of the hotel industry in Australia started off carrying bags from a car at a hotel entrance. There is nothing wrong with that. That leads to all sorts of opportunities. People find out that there are other jobs in a hotel that they can do-that they could become accountants, receptionists, barmen or managers. There are all sorts of opportunities in the hotel trade but unless people start working in that trade they will not know what those opportunities are. Unless employers get an opportunity to meet young people and find out whether they are suitable and hard working the opportunities are not created. When I was a senior partner in my firm of lawyers I used to employ every year two young typists straight out of the fifth form. I did not wait for them to do their HSC; I would take them straight from the fifth form. Of course, they were of little value to me during the first year or two that they worked. Nevertheless, they learned the routines of the office. They understood where the papers had to go and what happened with the files. They got to know about the routine of putting documents away in the strongroom. They got to know where the court house was, how to serve a paper on someone, how to deliver documents and how to file documents at the court. They got to know all the simple routines, and by the time they had been with me for about 18 months they started to be-- Senator Elstob —You sacked them. Senator LEWIS —What nonsense! Not on your life. Senator Elstob is quite wrong. Believe me; he really does not understand employers. Those kids became the most valuable people that I ever had. Some of them became so good that when they wanted to move to Melbourne I was able to give them references and I had solicitors in Melbourne ringing me and saying: `Glory be, where do you get such great secretaries down there in Warrnambool? You are able to produce fantastic secretaries'. We were able to produce such fantastic secretaries because we took them young and let them find their way in the organisation and work as they wanted to work, developing and becoming good at doing the sorts of things that legal secretaries need to do. Senator Elstob should believe me when I say that it is not an easy job. When an employer has a good legal secretary he wants to hang on to her for as long as possible. For the information of Senator McKiernan, he pays her good wages, too. He makes sure that she does not leave because of the wages situation. Senator Elstob does not understand it. That is the problem. He has never been an employer and he has no idea about how marvellous it is for an employer to have great young people working for him. It is a tremendous situation. Let me tell the Senate what happens now. The wages for young typists are so high that the firm I used to be with before I came to the Senate cannot now employ a young girl. It will not employ a young typist. The typists have to be fully qualified because, from the day they start work, the work is of very high pressure. The firm will only take women-we do not have any male typists in Warrnambool-who are fully qualified, first class shorthand typists. Where do kids learn to become fully qualified, first class shorthand typists unless they get a job when they are young enough to do it? That must be clear even to Senator Elstob and Senator McKiernan. I come back to what Mr Kirby said about having grave doubts about the way the program was being sold to the unions and employers. He said that only a new approach would make the scheme work. But what has happened? The shop assistants union has rejected the plan and other unions are clearly very wary. The PM has placed great store on this proposal but, as I said before, all that it has managed to germinate up to now is a promise. We cannot yet see the 300 jobs. It is only a promise from Ansett which, no doubt, wants to curry favour with this Government. Sir Peter Abeles, a great friend of the Prime Minister (Mr Hawke), said to him: `Look, Bob, I will tell you what we will do. We will find 300 jobs to see whether we can keep this going for you'. How will that deal with the over 225,000 young men and women of Australia who are looking for work? Let us look at what some other people have had to say. In the 1984 E. S. Owens Memorial Oration, Sir Arvi Parbo said: Unwilling or unable to take corrective action, the expedient short term solution for closing the gap is to extract more from the wealth generating sector, even if this is at the cost of the sector's long term health. If I may borrow from a recent paper by my colleague, Hugh Morgan, the wealth generating activities have come to be much like the Mediterranean donkey which, as you may know, is an essential but much abused beast of burden in that part of the world. Ill treated, fly-blown, over-laden and ill nourished but always expected to carry more and go further, sagging at the knees and in danger of toppling over, its main preoccupation is necessarily with survival. One might add that its predators are this Government and the trade union movement. McDonalds is the well-known restaurant chain that so many members of the Government party want to attack as allegedly being an organisation which uses up the youth of this nation. On the contrary, it has an innovative youth training scheme and management training program. I have spoken to the General Manager of McDonalds in Australia. He has pointed out that when the kids reach the age of 18 or 19 they leave of their own volition to go on to tertiary courses at university. They probably work at McDonalds during their first or second year at the institution, but when they get to their third year they probably find that it is too much for them to be working at McDonalds. The General Manager wants them to stay on because McDonalds's problem at the moment is its shortage of management. It is not short of staff; it is short of management. If it could obtain management personnel it would be able to expand even further around Australia. So it is absolute nonsense for honourable senators on the other side to make statements that in some way or other an organisation such as McDonalds is using up the youth of Australia. It is clearly not so. The Executive Director of the Confederation of Australian Industry said: The issue is now dead. We saw the chance for 5,000 to 10,000 jobs for juniors, but in July we said the commission's decision would not work. (If an employer went before the Bench having reached a less than award agreement with a junior proved that it could not pay the award rate then it would consider sanctioning such agreement). One can only wonder at the attitude of unions which just keep saying to Australian youth: `You have to carry the burden of the higher wages that we want our employers to retain'. They are frightened to allow employers in this country to pay anything less than the highest possible wage that the unions can extract from the Australian Conciliation and Arbitration Commission, treating these young people as if they were fully qualified young adults instead of unqualified trainees. The union movement is saying to the youth of Australia: `You must carry the burden of these higher wages because we do not want you competing with the already privileged employed of Australia'. I believe that that would not mean that these people's jobs would be in jeopardy. The youth of Australia and the world are great spenders. If we got those young people jobs, I would bet that any money they got would go straight back into the system and would be turned over to provide a better economy and more money. More jobs would then become available. One of the most important results would be the reduction in the cost to this nation of the unemployment benefits which have to be paid to these 225,000 young people. If only they could get jobs. This Government can do something about it. I say to the back benchers that they will not be in government for ever. They should forget their Ministers. They should forget Senator Walsh with his tight money grabbing, saying that we cannot spend any more money here or there. Money should be cut in the areas where it can be cut and put into the areas where it is needed. Government back benchers can stand over their Ministers. They do not have to put up with them running the country this way. They are ruining this country. I am sure that Senator Button feels ashamed that there are over 225,000 young unemployed in this country. I am sure that you, Mr Acting Deputy President, are ashamed that you are in a party which has allowed over 25,000 young people who will qualify for tertiary education not to be able to get places because they will be outside the quota. The Government is not doing anything about it, as I said before, other than providing a lousy 2,300 places. On looking at the figures, that is an absolute nonsense. It will not matter what exam results those 25,000 kids obtain. It does not matter that they might all get four Bs and one A. About 25,000 of them will not be able to get into tertiary institutions. That is shameful and those opposite probably are ashamed. I hope that someone on that side-- Senator Townley —How many did you say will not be able to get in? Senator LEWIS —Over 25,000 young people- Senator Townley —In New South Wales 30,000 will not be able to get in. Senator LEWIS —There will be at least 25,000. The Minister is talking nonsense about the figures but the truth is that it does not matter what results these 25,000 young people will get-if all the students obtained four Bs and one A-the institutions around Australia would still have to exclude at least 25,000 of those young people. I hope that someone on the other side of the chamber is listening to this terrible fact and to the plea which I make today for them to do something for the youth of Australia. Senator TOWNLEY(Tasmania)(5.28) —I rise briefly to add to some of the comments made earlier today by Senator Missen. I believe that he made some very valid points to which I would like to signify my agreement. I have always suggested tax reductions for the average taxpayer. Years ago, I suggested that we have a 50c in the dollar limit for any personal tax. I always thought that a situation in which a taxpayer at a maximum rate had one dollar for himself and one for the Government was fair. Before the light struck the National Party in Queensland I was one of those people who suggested in this Parliament that we should copy countries such as Switzerland and Hong Kong, both of which have a flat tax structure. I think that the Hong Kong structure is that about 15 per cent of income is paid in tax and in Switzerland the rate is about 25 per cent. At the time that I first suggested this measure, a rate of about 28 per cent in Australia would have been satisfactory. Although I do not like a lot of the taxes and impositions that this high spending Hawke socialist Government is planning for the Australian people, the package that involves reduced personal income taxes should, in balance, be basically supported. As an Opposition, we have been asked by many people to save them from the impositions of Labor. Previous speakers have pointed out that some of the so-called business expenses that were put down as business lunches in the past should not have been fairly allowed by the Commissioner of Taxation. Even with the present tax legislation he could have taken action had he so desired. In its wisdom, Labor has decided to impose certain taxes, among them a tax on business lunches. I do not particularly agree with it but I want to look at the package of taxes. If a package is to offer certain reductions it must have some impositions. I believe that if we are going to have a lowering of personal taxes, which so many people in this country are agreed is desirable, we must accept some of the impositions that will come with it. This Labor Government has made its decisions and Labor will have to live with the package and the imposts applied by that package so we can move toward lower taxes for general taxpayers. On balance-this is a matter of judgment-I believe we must let the Government collect the revenue in order to allow that reduction in tax. I do not believe that as a Senate we can oppose some bits of the package and accept only the goodies, as they have been called. These days the realities of political life do not allow us that kind of financial freedom. The Government has its program; it must be prepared to face the problems that its programs cause. I do not intend to be one of those senators who oppose some elements of the Government's package-the nasties, the revenue raising measures and then say that the taxpayer can have only the goodies. I do not believe life is like that any more. Anyway, I also do not intend to be one of those senators the Government can blame later for its not having the money to finance the tax cuts. The Government has promised those tax cuts next year. My only worry is that by the time the next Budget is brought down the economy of this country will be so bad the Government may not be able to afford the tax cuts anyway. Is that the real reason why the tax cuts have not yet been brought in and why they are only to start late in 1986? I believe that by then our balance of payments-which is bad now-and our deficit will have increased by millions of dollars because extra dollars are needed to pay the interest on our national bill. This is due to the very high interest rates that prevail on money lent to Australia and the very low value of our dollar at the moment. There is no question that this country is in very deep financial trouble. As we have heard from several speakers in the debate today, our balance of payments situation is most serious. We have a deficit of some $5,000m so far this financial year. That represents an increase of some 25 per cent on the deficit for the same time last year. We have heard it said that rural exports will be reduced. In general I believe it will be very hard for this country to maintain its export level. I do not believe it will be long before this Government is forced to impose import restrictions to help solve the balance of payments problem. As I said before, Australia's overseas debts are huge. Those people who say that our dollar is floating are completely wrong; I believe it has sunk. Once more, I repeat that we are more in debt per head of population than countries such as Argentina, Brazil, Mexico, Chile and Poland. Senator Button —Don't talk rubbish. Senator TOWNLEY —Did Senator Button say that that was rubbish? Senator Button —Yes. Senator TOWNLEY —If Senator Button bothers to get certain figures from the Parliamentary Library-if necessary I will send him a set-they will show that our overseas debt per head of population is in excess of that for those countries I just mentioned. I do not believe that the Government will regain the confidence of the international money lenders-and that therefore the value of the dollar will increase-until our deficit spending is reduced. Unless some serious action is taken soon by this Government we will head the way of the South American banana republics. Let us just look at our interest payments. On page 9 of the May Forward Estimates of Budget outlays and staffing put out by the Department of Finance it was estimated that this year our interest payments would be $6,467m. That was then 9.5 per cent of estimated outlays. Of course, those figures were conservative. Senator Jessop —What was it last year? Senator TOWNLEY —Last year the figure was meant to be $5,601m but in fact it was $5,656m, due most probably to the lower value of the Australian dollar. Senator Jessop —It has increased this year? Senator TOWNLEY —Yes, it has increased by $1,100m this year. The important thing is that between May and August there has been an increase of $300m in expected interest payments on our debts. In the Budget it is estimated that that will represent 9.7 per cent of outlays. Interest payments are increasing more rapidly than anything else. I believe that that interest payment estimate was made when the Australian dollar had a much higher overseas value than it now has. I do not want to speak at length. As I said, I believe the Government must take immediate action. It must attempt to regain the confidence of the international money market before we lose our triple A rating. That means cutting the deficit. Until the Government does that we will continue to go down hill towards the status of a banana republic. This will be helped very rapidly by the big-spending Hawke socialist Labor Government. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(5.37) —in reply-I was not anticipating that the debate on Appropriation Bill (No. 1) 1985 would conclude so precipitately. I thought Senator Townley was going very well in the earlier stages of his speech. I want to say a few things by way of reply to a debate, half of which, of course, I have not heard. In this place one can normally predict what might be said. I often feel it would be a very good thing for politicians perhaps rather than making a speech to send a brochure of what they would have said if they had been here. I have not heard all honourable senators who have spoken in this debate but I have seen their brochures and I have a fair idea of what in fact was said. The burden of much of the discussion from honourable senators opposite has turned on their latest little flutter of joy arising from the relatively poor trade balance figures published this morning. It is a sad fact that we have come to an era in Australian history when when the dollar goes down the morale of the Opposition goes up. Senator Archer —Nothing of the sort. That is not fair. Senator BUTTON —It may not be fair, but it is perfectly obvious. Not only does Opposition morale go up but quite a few people spend quite a bit of time trying to talk it up. That has been quite apparent in the conduct of the debate in the Senate in the last week. I want to begin by setting these things in some perspective if I might because the Government is disappointed with the trade figures published this morning, although it is not entirely surprised. Two things were published this morning: The trade figures were published and the Australian Financial Review carried an interesting interview with Sir Roderick Carnegie of CRA Ltd. I was reminded of that interview published in the Financial Review when Senator Townley was speaking because he referred to what is sometimes called the South American syndrome-the possibility of this country going down the South American route. That was an expression which was coined, I suspect, in the language of Australian politics by Sir Roderick Carnegie when he talked about the possibility of this country becoming the Uruguay of the South Pacific. That was some years ago. I think he said, at the height of the success of the Fraser Government, that that was a distinct possibility. Of course, what he is reported this morning as saying is that he sees that possibility as considerably diminished, that he sees a much greater and more realistic acceptance of the tasks facing this country and that he sees a greater will to deal with such tasks than he has seen in the last decade. He is reported to have expressed the profound belief that many of those problems which would normally lead to a degree of gloom can be overcome, given time. It is a view which the Government shares. It particularly shares the view that a realistic approach to many of the problems of this country which are endemic in the situation of the dollar at present is a very important starting point for an assessment about the road which has to be taken in the future. When one looks at the political history of this country one sees that the Fraser Government set about the task-admittedly, it was a matter of pride-of dampening expectations in Australian public life, of getting politics off the front page. A variety of activities such as that adequately describe the gloomy souls of the Fraser Government. It was singularly unsuccessful in that. It perhaps reduced a few anticipations but it did not engender in the Australian people the sense of realism which is absolutely necessary in approaching some of the tasks with which we are confronted and the sense of realism to which Sir Roderick Carnegie referred in the interview in the Australian Financial Review this morning. I think that anybody approaching the question of the overseas trade balance for a country such as Australia, who approached that question with a degree of realism and looked at the political performance of governments in this country over the last 30 years, and particularly of the Australian economy over the last 30 years, would realise, first of all, if I might put it in somewhat technical terms, that the J curve inevitably operates in a slightly different way and at a slightly lower rate in the Australian environment than it might in those European economies, and particularly North American economies, where the idea was invented. The reason is simple. For years this country was led to believe that the road to El Dorado lay in exports of agricultural products. In the 1960s the principal area of export of agricultural products, Europe, gradually began to be closed off to us. Throughout the 1970s, in spite of that fact, which had been absorbed by most people-I think most intelligent observers-the road to Europe was beaten by various Ministers for resources and Ministers for trade flying straight over the South Pacific countries. No trade Minister visited Singapore or Thailand in the seven or eight years of the Fraser Government. I would not like to count the number of ministerial visits that were made to Europe, all of which were in pursuit of something which had gone in terms of a market for major Australian agricultural exports. Later we were told that the El Dorado for this country lay in mineral developments and exports. I remember the former Deputy Prime Minister, Mr Anthony, telling us that the development of uranium mining in Australia would lead to the creation of 500,000 jobs. I remember the late Sir Phillip Lynch telling the people of this country in 1980 and 1981 that $28 billion was committed in terms of developing mineral projects in Australia. These were the sorts of figures which were given to the Australian Parliament and the Australian community to lead people to the belief, as I said, that the El Dorado lay no longer perhaps in agricultural exports but in mineral exports. These were the things which were continually said to sustain lazy policies, incompetent policies and lack-lustre policies perceived by our predecessors in government. At the same time as those things were being said about the agricultural sector and the mining sector, little attention was being given to the problems of the manufacturing and service sector in this country. When a solution was provided, it was provided in terms of the old model of higher tariffs to protect the weakest industries. That introduced great distortions into the tariff structure in Australia. We had that bizarre spectacle of a government actually negotiating a motor vehicle plan in 1981 with a single major company. We had the bizarre spectacle of the managing director of that company sitting outside the Cabinet room to be consulted about whether it was making the right decisions about the future of the motor vehicle industry in Australia. A range of decisions was made about the manufacturing industry which ignored what was happening in the rest of the world, which ignored the particular needs of the Australian manufacturers and which led to that crass imbalance in sectoral development of the Australian economy. The consequences of all those policies will not be got over by any government in one week, one month, one year or one term of government. That is why we will be looking for another term when the next election comes around. It requires persistence and determination to overcome these sorts of consequences of poor government which this country has suffered over many years. I read speeches made by Liberal Party politicians at their national conferences. The rhetoric at the last Liberal Party National Conference was extraordinary-indeed, flamboyant. Speaker after speaker discussed industry policy and pointed out-to put it in Senator Townley's terms-that this country had been going down the Argentinean route for 30 years. I agree with that. I think that is pretty right. For twenty-six of those years we had Liberal-National Party governments in Australia. I think that the analysis which is given in the confines of the Liberal Party conference about those things is pretty right. I share the views which were expressed on that occasion, I think, in May of this year. I think that the question of the current trading situation of Australia, the trade balance, the floating of the dollar and the recent fall of the dollar, are all issues which have to be seen in that sort of perspective. This Government will not be deterred from what we regard as the essential policy tasks by honourable senators here bouncing up and down with mock horror about the level of the dollar, interest rates levels and so on, in this month of November 1985. If we are deterred from the course which this Government has set itself upon by this mock horror and the flamboyant little speeches that have been made in the Senate, we will fall into the same trap as our predecessors; that is, ad hoc government, reactive government responding to the pressures of the day, rather than proactive government with some sense of direction. Of course, the latest thing which has been engendered into the debate is the view that as a result of the current level of the dollar, the Government should renegotiate the accord with the trade unions. That has the same degree of ad hockery about it. It is quite legitimate in political debate to attack the accord and to say that one would have done it differently. I shudder to think how one would have done it differently. We saw a bit of how the Opposition did it differently in 1981 and 1982. The consequences of that were disastrous for this country. Senator Crichton-Browne —Would you do it differently if you knew what you know now? Senator BUTTON —I do not think so. Perhaps there could be a few refinements-everything has rough edges-but, basically, no. The reason is that one cannot govern or engage in politics in fits and starts by responding to each pressure with a change of direction. What a government has to do is to achieve differences and results for this country over time. Over time it has to achieve, as we have achieved, lower unit labour costs. Over time it has to achieve a much better industrial relations record, as we have done and will continue to do. Over time it has to achieve much better co-operation between industry and unions in relation to changes and restructuring of industry. Over time it has to establish community awareness about the importance of these things. That is the task which must be pursued vigorously. Senator Lewis referred to his favourite company, the McDonald's hamburger company. I do not think that he said anything about the quality of the hamburgers, which is a good thing-he would not want to hang his reputation on that-but he said something about its employment of young people. Senator Archer —You will get a letter now. You will get a free sample. Senator BUTTON —I am sure I will get a letter. As long as I do not get a hamburger! That is the thing that worries me. The interjection is important, because if the Fraser Government had received a letter from McDonald's it would have changed its policy the next day. That was the reactive style of politics in which it was engaged. The point I am seeking to make-I had better get to it quickly or I might lose it-is that Senator Lewis referred to his favourite company, the McDonald's hamburger corporation. I invite him to read the corporate motto, the corporate credo, of that company. I cannot remember the exact wording, but it says something to the effect that the world is full of highly educated senators who are fools. That is perhaps a bit of a corruption of what it says; it is to the effect that the world is full of highly educated fools. What is important above all else is continuity and persistence in what one is doing. That leads me back to what has almost emerged as the theme of my speech, I like to think, which is that one has to embark on consistent courses of policy and must stick to them. As I said, I did not have the benefit of the wisdom of many honourable senators. Some honourable senators are aggrieved about the tax package and prophesy doom as a result of it. Some, like Senator Michael Baume, are concerned about the trade deficit. I have already referred to that point. Senator Bjelke-Petersen was concerned about the severe difficulties being suffered by the rural sector, and I agree with that observation. I do not see any simple, quick fixes to that problem. I do not think she suggested any, either. Senator Lewis was concerned about access to tertiary education institutions. One thing he did not give us was the figures which point to the vast improvement in participation rates in higher education in Australia since this Government came to power. I do not for a moment claim that our participation rates, our levels of access to tertiary education, are satisfactory. What I say is that they are much better than they were three years ago and they will continue to get better. Senator Lewis has fufilled a function in chiding us along the way about the importance of this process upon which we are already embarked. Senator Townley, with I thought unusual prescience and sophistication, made the point that when a government introduces a tax package, as he put it, it must live with it, which is something of which we are quite aware and which we are prepared to do. He made the point that one cannot oppose some bits of the package and accept the others. I would like to close on that note because it indicates a new sophistication in the Liberal Party which I have not seen until today. I am surprised-- Senator Dame Margaret Guilfoyle —You should come in here more often. Senator BUTTON —I might say that Senator Dame Margaret Guilfoyle, as distinct from her colleagues, has what I would describe as an old, mature sophistication, an elegant sophistication. Senator Townley displayed a new level of sophistication when he simply made the point that one cannot pick the eyes out of these things and say that one will keep the good bits because those constituent groups, such as McDonald's, the car dealers and the restaurateurs, are currently agitating the Opposition on some of their grievances. He said that one cannot pick out the good bits and say that one will keep them and throw out the bad bits. He said that that would lead the Government and the economy into grave difficulties. That is a position which is very much advanced on what we have heard in the past few weeks. It is a very responsible view of the world. I think that this debate has been helpful, if for nothing else because it has revealed Senator Townley's view, and I think that is encouraging. We must do a lot better and try to grapple with some of the real issues-I concede there are many-rather than devoting too much time to many of these ad hoc interest group type arguments that have been put in an important debate on the Appropriation Bills. I thank the Senate for its consideration. Question resolved in the affirmative. Bill read a second time. Motion (by Senator Button) agreed to: (1) that clauses 1 to 13 and Schedule 1 be postponed till after the consideration of Schedule 2. (2) that, unless otherwise ordered, the votes in Schedule 2 be considered in the same groupings and order as the departmental estimates referred to estimates Committees A, B, C, D, E and F, respectively as follows: Page in Bill Division No. Department Amount $ Group A 58 380-386 Industry, Technology and Commerce... 300,512,000 68 500-518 Prime Minister &Cabinet... 113,667,000 93 640-644 Trade... 222,687,000 75 540-554 Science... 494,972,000 Group B 24 220-221 Community Services... 369,264,000 55 360-365 Immigration and Ethnic Affairs... 160,346,000 79 560 Social Security... 503,265,000 48 325-329 Health... 658,437,000 Group C 39 304-305 Finance... 72,276,000 41 310 Advance to the Minister for Finance... 160,000,000 35 287-290 Employment and Industrial Relations... 718,056,000 97 670-678 Treasury... 588,503,000 65 490-497 Primary Industry... 213,276,000 22 200-202 Communications... 482,958,000 Group D 31 270-284 Education... 958,429,000 51 352-356 Housing and Construction... 696,217,000 30 245 Buildings &Works (Defence)... 229,498,000 30 246 Repairs &Maintenance (Defence)... 125,083,000 30 248 Housing for Servicemen (Defence)... 4,258,000 86 590-593 Sport, Recreation &Tourism... 78,946,000 12 130-149 Arts, Heritage and Environment... 179,898,000 9 120-125 Aboriginal Affairs... 231,924,000 Group E 72 520-525 Resources and Energy... 171,530,000 16 165-190 Attorney-General's... 217,792,000 81 575-583 Special Minister of State... 243,624,000 42 315-319 Foreign Affairs... 1,129,023,000 27 230-244 Defence... 5,739,612,000 Group F 100 690-694 Veterans' Affairs... 900,732,000 95 664-668 Transport... 176,363,000 20 193-194 Aviation... 443,734,000 89 620-628 Territories... 181,715,000 30 249 National Capital Development Commission (Defence)... 1,331,000 62 400-403 Local Government and Administrative Services... 535,978,000 30 250 Rent (Defence)... 70,776,000 252 Acquisition of Sites and Buildings (Defence)... 41,763,000 (3) That leave be given to senators to move motions expressing opinions or making recommendations based on the reports of the Estimates Committees; that such motions be moved when the appropriate vote is under consideration; that where more than one motion is proposed in relation to a particular vote, the motions may be debated together, but in all cases a motion or motions shall be disposed of before the question is put on the vote before the Chair; and that any resolutions be reported when the Chairman makes his report to the President at the conclusion of proceedings in Committee of the Whole. Schedule 2 GROUP A Department of Industry, Technology and Commerce Proposed expenditure, $300,512,000. Proposed expenditure agreed to. Department of the Prime Minister and Cabinet Proposed expenditure, $113,667,000. Proposed expenditure agreed to. Department of Trade Proposed expenditure, $222,687,000. Proposed expenditure agreed to. Department of Science Proposed expenditure, $494,972,000. Proposed expenditure agreed to. GROUP B Department of Community Services Proposed expenditure, $369,264,000. Proposed expenditure agreed to. Department of Immigration and Ethnic Affairs Proposed expenditure, $160,346,000. Proposed expenditure agreed to. Department of Social Security Proposed expenditure, $503,265,000. Senator PETER BAUME(New South Wales)(5.59) —I am sorry that the Minister for Community Services (Senator Grimes) is not present. I want to ask about the question of recoveries of overpayments and draw attention to certain criticisms which have appeared recently from my colleague the honourable member for Richmond, Mr Blunt, who has drawn attention to the fact that overpayments and improper payments within the Department of Social Security do not seem to be pursued with adequate vigour or care. Senator Button —I am sorry to interrupt Senator Baume. I will try to arrange for Senator Grimes to be here. I will take a note of the points he raises. Senator PETER BAUME —I understand that the Estimates are being debated fairly quickly and that it is not possible for all the Ministers to be here. But there is genuine concern by those who care about the social security system, not only that there should be payments to all those who deserve to be paid and that those who are entitled to benefits should receive them, but also that wherever there is an inappropriate payment or a fraud upon the revenue, people can be assured that it will be detected and followed up. We know of one person who was caught with, I think, 37 aliases. He was drawing 37 benefits from the Department. This incident was detected. That kind of thing should be pursued with vigour and detected. There is a concern abroad that the Department of Social Security sees itself as a benefits paying department-we applaud that-but does not place an appropriate priority upon the detection and prevention of depredations upon the revenue. Mr Blunt drew attention to this concern again. In the world of party politics people may wish to attack my colleague and say that he raised a political matter. But there is a genuine concern that the Department of Social Security should be able to demonstrate not only that it is paying where it should be but also that it is responding to overpayments or frauds where these occur. I put it to the Minister that there is a perception in the community that deliberate fraud is more widespread than officers of the Department would acknowledge when the estimates were examined and that it should be taken more seriously than we thought officers were taking it. I know many officers in the Department of Social Security. I understand that they believe fraud is infrequent. If that is the case, many of the anecdotes which people have told me about specific episodes must be untrue. When I am given such anecdotes I make a simple request to the people who tell me to give me the details so that I can ask the Deparment to follow them up. That is the only proper thing to do. Part of our duty is to protect the revenue. There is a concern that the Department of Social Security is not carrying out this function. I ask the Minister whether he has seen the comments of Mr Blunt and whether he has any response about the appropriateness and the vigour with which these matters, not the payment of benefits but the inappropriate payment of benefits, deliberate fraud and overpayment, are pursued and detected. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(6.03) —I very much appreciate the point which Senator Baume has raised. I am afraid that the Minister for Social Security (Senator Grimes) is not available at the moment. I will undertake to get an answer for Senator Baume. I have followed his point and will get an answer as soon as possible. I think that Senator Grimes is seeing a doctor, I am not sure. He is not unwell. Senator PETER BAUME(New South Wales)(6.03) —This problem is, of course, long-standing. It concerns us. In the end it goes to public confidence in the system. I did not raise it to try to hunt any witches. When I go into the community and talk to groups I am asked about this matter many times. I am grateful to Senator Button for the offer he has made. This matter will come up again and again at estimates examinations. I will be grateful to get whatever response I can from the Department. I think the Department is altogether too cavalier in the way it approaches this matter, as if there is no substance to it and as if it is a myth that goes around the community. I would like the Department to understand that many people are very concerned that something is wrong and that a number of people are cheating the system and getting away with it. People who are quite happy to pay their taxes and see a generous system of welfare become very angry if they think the system is being subverted and that they are paying for people who are cheating. Senator WALTERS(Tasmania)(6.04) —I have a number of questions on the Department of Immigration and Ethnic Affairs. The CHAIRMAN —The estimates for the Department of Immigration and Ethnic Affairs have been passed. Senator WALTERS —Can we go back to them? The CHAIRMAN —Senator Walters will have to seek leave to recommit them. I think it would be better if she did so after we have finished the Department of Social Security. Senator WALTERS —I have a number of questions on the Department of Social Security. If the Minister for Community Services (Senator Grimes) is unable to be here, what likelihood is there that I will get answers? Senator Button —It is not necessarily the practice for the Minister of each Department to be here. If Senator Walters indicates what her questions are I will take a note of them and then I will be in a position to respond one way or another. Senator WALTERS —We were told at the Estimates Comittee hearing that the Auditor- General's report had disclosed an extraordinary situation in regard to some social security overpayments in Western Australia. There are two alarming aspects to that report. One is that the Department's central office did not know about the overpayments until the Auditor-General drew attention to them. Secondly, the overpayments were never intended to be collected and their amount was not known. I note that Senator Grimes has now come into the chamber. Would he like me to start again? Senator Button —Just talk on. Senator WALTERS —I would prefer not to talk on if the Minister is not going to listen. Now that he is here, perhaps he will pay some attention. We were told at the Estimates Committee hearing that the Auditor-General's report had disclosed an extraordinary situation in regard to some social security overpayments in Western Australia. The Minister will remember, I am sure. There were two alarming aspects to the report. First, the Department's central office did not know about the overpayments until the Auditor-General drew attention to them. Secondly, the overpayments were never intended to be collected. The central office and the Western Australian branch have no idea how much was paid out in overpayments. When I asked what action would be taken I was told that it would be too expensive to take any action. I pointed out to the Minister then that we were given a Yes Minister answer: `We knew of the overpayments but we did not know the amount and it was far too expensive to find out'. I ask the Minister whether any action has been taken. Who has been sacked in the Department in Western Australia, in the central office or both? What is the situation at the moment? Taxpayers' money has been spent in overpayments. We do not know how much. It will cost too much for the Government to find out just how much of the taxpayers' money has been wasted. Senator GRIMES(Tasmania-Minister for Community Services)(6.10) —First of all, I must say that I cannot recall Senator Walters asking those questions, I think for the reason that I was not at that Estimates committee meeting. I think that was the situation. I think Senator Gareth Evans or someone else was sitting in for me because I was away. I may be wrong, but I think that is right. Secondly, I apologise for not being in the chamber when the estimates of the Department of Social Security were brought on. I recall the matter of the Auditor-General's report on overpayments, as I remember the matter of the Auditor-General's report on overpayments every year for the last 11 years that I have been a member of this Parliament. I understand that this year there was a particular reference to overpayments in Western Australia. As I recall it, the overpayments this year resulted from industrial action. Senator Walters may remember-I am certain that Senator Chaney would remember if he were here-that industrial action has been taken by the Administrative and Clerical Officers Association over the years. Unfortunately, as part of that industrial action, the Association has refused to verify, for instance, identification in respect of unemployment benefit and other things. As a result of that, overpayments have occurred. Overpayments inevitably occur in a social security system of the type that exists in Australia and it is inevitable that the Auditor-General will draw attention to them. However, I, Mr Howe, the present Minister for Social Security, Senator Chaney and Senator Dame Margaret Guilfoyle have pointed out that in fact, considering the system, the level of overpayments in the Department of Social Security is pretty low and the administrative efficiency of the system is very high. Sometimes it is just not worth while to take action in every overpayment case. In fact, I, as Minister for Social Security, used to get complaints from honourable senators opposite, from honourable senators on my side and from members of the House of Representatives when we did take action because it was considered that that action was unnecessary or that overpayments were the fault of the Department. All sorts of complaints used to come to me. Senator Sheil —How much is the overpayment in this particular case? Senator GRIMES —I do not know. I thought Senator Walters knew that. I am afraid I will have to look that up in the record of the Estimates committee hearing. From my reading of this matter at the time, a decision was made at central office that in some of these cases action should not be taken because it would not be cost effective to do so. However, steps are continually taken in the Department to tighten up procedures so that overpayments of that type do not occur in the future. I do not think I have any further details to those that were given at and after the Estimates committee meeting. Senator Walters can use emotive terms, such as `Yes Minister answers', as much as she likes. That does not concern me. That is the way she always talks. I would just remind honourable senators that the Auditor-General, the Australian Taxpayers Association and any organisation which has investigated the administration of the Public Service in this country have pointed out repeatedly that the amount of money forgone by the taxpayer in this country through tax evasion and tax avoidance far exceeds that of social security. Yet Senator Walters never gets up and talks about tax evasion and tax avoidance. She always gets up and harps on social security evasion and avoidance and always comes up with emotive terms, such as `Yes Minister answers', `Why has not someone been sacked?', `Why has not the Department taken action?' and `It is not good enough that it is not cost effective to take it'. If people in this place were to be sacked at any time because of inefficiency, I suppose half or more of us would be sacked. However, I just think that if we are to have a sensible approach to the Estimates, we should talk about facts and figures and not go on with this emotive nonsense that we have been hearing from Senator Walters. Senator WALTERS(Tasmania)(6.14) —The Minister for Community Services (Senator Grimes) is obviously fudging. He obviously is deliberately ignoring exactly what I said. I asked him how much of the taxpayers' money was paid out in overpayments. He came back with some stupid answer. He said that when we look at it a very small amount of overpayment is made by the Department of Social Security. He said that some of the cases are not worth following up and so on. On this occasion we are told that an amount of taxpayers' money was paid out in overpayments because of a situation relating to industrial relations. We are told that the amount is never to be collected, that there is no intention to collect it. I am asking the Minister how much was that amount. What amount of money was paid out incorrectly in overpayments by the Department of Social Security in Western Australia? I ask him again: Can he give me that figure? Senator GRIMES(Tasmania-Minister for Community Services)(6.15) —No, I cannot. Neither could the Auditor-General and, from my reading of what took place, nor could the officers who were present at the Estimates committee meeting that was attended by Senator Walters. If Senator Walters had got up and asked that specific question, she would have got that specific answer. But Senator Walters got up and waffled on about who had been sacked. She went on with all that nonsense and she got a political answer. She will get a political answer every time she acts in that way. Senator WALTERS(Tasmania)(6.16) —That was one of the questions I asked and the Minister did not answer it. That is why I asked it again. I then asked what action had been taken to ascertain how much taxpayers' money was wilfully and deliberately overspent by the Department of Social Security in Western Australia with no concern at all and certainly no intention of collecting it. What action has been taken to ascertain how much money has been lost to the taxpayers? Senator GRIMES(Tasmania-Minister for Community Services)(6.17) —I have no information at this time on what action has been taken to determine exactly how much money was overspent under the specific circumstances. I cannot find, on reading the record of the Estimates committee meeting, where Senator Walters in fact asked that specific question. As she has asked it now, I will seek the information from the Department. Senator WALTERS(Tasmania)(6.18) —I can probably give the Minister that. He will find that I asked just what was-- Senator Robert Ray —Don't tell me you are asking questions to which you know the answers? Senator WALTERS —No, I am not. If the honourable senator had been listening he would know that I said in the beginning that I was told during an Estimates committee meeting that it was going to be too expensive to find out how much money was overpaid. I am asking now: Is that what this Government is going to say? Is the Government going to say to the people: `We have lost an amount of money-we do not know how much-in overpayments sent out by the Department of Social Security in Western Australia. We have no intention of collecting it back. We have no idea how much that amount of money is. We are not going to do anything about it because it will be just too expensive to get it back'? Is that what the Government is telling me? If it is, what action has the Government taken? Has the Government sacked anyone? Has the Government taken any action to make sure that this will not occur again? If so, what action has been taken? Senator GRIMES(Tasmania-Minister for Community Services)(6.19) —The answer to the first question is that officers of the Department pointed out at the time to Senator Walters that to go through the exercise she mentioned would not be cost effective, even if it would have given her the satisfaction of having a figure in dollars and cents which she could throw around. Secondly, the Department has tightened up, and does so continuously, its procedures to prevent overpayments as much as is feasibly possible in a department that sends out 70 million cheques a year and pay out some $13,000m, I think was the figure last year, in social security benefits. There comes a time when it is no longer cost-effective, particularly in specific instances such as this, which I recall resulted from an industrial dispute, to spend taxpayers' money in that way-just as Senator Walters frequently claims that it is not cost effective to indulge in some of the attempts to find fraud or overservicing payments in the medical profession. It is just not cost effective to do so. As for the details of what action the Department has taken to tighten up procedures, I do not have the details here, and if I did I would not be publicly declaring them in this Parliament, because the whole basis of the details is aimed at ensuring that people do not get around the systems that we set up. However, I will seek from the Minister for Social Security (Mr Howe) some details of what is happening in the future. I believe that we can trust Senator Walters with those details and I shall see whether I can get them for her, perhaps on a confidential basis. Senator WALTERS(Tasmania)(6.22) —If the Minister for Community Services (Senator Grimes) turns to pages 411 and 412 of the Senate Hansard for Friday, 13 September, he will find the questions. May I ask the Minister: If he does not know how much taxpayers' money was lost, how does he know it will not be cost effective to find out? Senator GRIMES(Tasmania-Minister for Community Services)(6.22) —I said that the Department of Social Security had given the answer that it would not be cost effective to go through all the details that Senator Walters wanted to get such a figure. That was a management judgment which has to be made by State management and the central office of the Department of Social Security-in the same way, I suppose, as the Australian Taxation Office makes judgments about chasing tax evaders and tax avoiders, in the same way as the Attorney- General's Department in one famous case, strangely enough in Western Australia, decided that it would not proceed against bottom of the harbour operators and left the files in the bottom drawer for a few years. Sometimes those judgments would be right and sometimes they would be wrong. If Senator Walters has some evidence that in this case that judgment is wrong, I am certain that the Minister will follow it up, but that was the judgment that was made at this time. The Department does take action to ensure that things like this do not happen again. It is difficult in cases of industrial disputation to make sure they do not happen, but I know that when I was the Minister directly involved action was taken to ensure that in any future cases of industrial action this sort of thing was not repeated to the extent it was in this dispute. Senator WALTERS(Tasmania)(6.23) —So we are left with a situation that the Minister does not know how much has been lost but that it is too expensive to find out. Is that the situation the Government is adopting? Senator GRIMES(Tasmania-Minister for Community Services)(6.23) —The situation the Government is adopting is that the Department of Social Security has, and always had even in the great and glorious times of the coalition Government, a certain number of overpayments. In this case these overpayments resulted from a specific instance and as a result of the investigations of the officers of the Department, as I understand it, it was decided that to go through an exercise of trying to track down in detail every overpayment that occurred and to collect every overpayment that occurred would not be cost effective. To give an example of what used to happen in the past and what happens when one does not make proper judgments in this area, I would point out that many years ago in the late 1970s the Department, at the urging of the then Government, used to indulge in what were called saturation raids. This was an effort to cut down overpayments. They used to go out and run what were called big blitzes in postcode areas to detect all the overpayments, to put off benefits people who should not have been on benefits. This used to create great feelings of inner glow among certain members of the then Government and great satisfaction among certain officers of the Department who were that way inclined that they were actually doing something. When what they were doing was analysed, as we pointed out at the time, it was found that what happened was that a whole lot of people would be taken off benefits, 86 per cent of them would go back on benefits on appeal and get the benefits back paid. Very few overpayments were picked up and the whole thing was not cost effective. In fact, it was costing the taxpayer a hell of a lot of money to make people feel good. As a result of all those decisions it was decided, and quite sensibly decided, not by this Government but by the Department, under the previous Government, that the best way to go about it was to detect and prosecute large overpayments and fraud where they occurred, to crack down vigorously-not in the manner of the Greek conspiracy case-on those areas where they occurred. But the best way to make sure they did not occur and to limit their occurrence was to provide good administration, good policing and good control of the system. That is what the Department does now. It is not particularly this Government's policy. If Senator Walters wants to be emotive and pick up the Auditor-General's report and say `Look, there is an overpayment. The Auditor-General says that the Department has not done as much as it should. Therefore, the Government is to blame and is lax', all I can say is that that has occurred in the Auditor-General's report every year I have been in this Parliament. I suggest that it has occurred in the Auditor-General's report ever since the Auditor-General has been reporting to this Parliament. If it makes Senator Walters feel good to talk in that way and to finish her questioning in that way so be it. It is of no concern to me, I can assure her it is of no concern to the Government, and it is of even less concern to the taxpayer. Senator WALTERS(Tasmania)(6.26) —The Minister always knew how much the overpayments were, but if the Minister wants to leave it at that, so be it. I now ask the Minister: Did the Public Service issue American Express cards to officers of the Department of Social Security? Senator GRIMES(Tasmania-Minister for Community Services)(6.26) —It is my understanding that it did in all departments at a certain level. Certainly I believe that is so at whatever level was appropriate in the Department of Social Security. Senator Walters —Can he tell me what has happened now under the proposed new legislation? I believe that the Treasurer, Mr Keating, has intimated that American Express card holders among public servants will not have their membership renewed. Is this a fact? Senator GRIMES —Is Senator Walters referring to the legislation which has not yet gone through the Parliament. Senator Walters —Yes. Senator GRIMES —Yes, it is certainly my understanding that those American Express memberships will be withdrawn. Senator PETER BAUME(New South Wales)(6.27) —It is a brave senator who comes in and asks some more questions now! I am not now interested in overpayments which can be the result of genuine mistakes, cases where people's circumstances may change, or errors. I am interested in the question of fraud. Before the Minister for Community Services (Senator Grimes) came into the chamber, I mentioned the famous man who was drawing 37 benefits-in other words, plain outright fraud. The Minister was quite correct to say it is wrong if someone has an interest in fraud in the payment of benefits but could then be accused of not being interested in fraud in other areas. I make it clear to the Minister that if he and I can detect a medical practitioner guilty of fraud on the medical services, I would want to see that person punished as the law provides-and the same applies to tax evasion. The question of cost efficiency is not an appropriate test to apply to questions of fraud, so I draw the distinction from the point the Minister made in answer to Senator Walters and remind the Minister that I thought some of the officers appeared to be a little cavalier in the Estimates examination when the question of fraud was raised. I would like the Minister's assurance that in the pursuit of fraud as opposed to overpayment a different approach is taken and pursued. Debate interrupted. Sitting suspended from 6.30 to 8 p.m. Senator PUPLICK(New South Wales) —Mr Deputy President, I seek leave to make a personal explanation. I have been misrepresented. Leave granted. Senator PUPLICK —Following a speech I made yesterday relating to pathology services and to the business affairs of Macquarie Pathology Services Pty Ltd and Dr Geoffrey Edelsten, I have received a telephone message from Dr Wenkart of Macquarie Pathology Services and a telex from Dr Geoffrey Edelsten, both of which allege that reports have appeared either in the Sydney Press or on Sydney radio claiming that I said that Dr Edelsten had a financial interest in Macquarie Pathology Services. This is not correct. I simply draw to the attention of the Senate what I said about those two matters. On page 1914 of yesterday's Senate Hansard it is recorded that I said: One such entity is Macquarie Pathology Services Pty Ltd in which, when we look at the structure of it, we can see there are certain trusts which hold a 100 per cent share of companies, such as Tracknew Holdings Pty Ltd, which in turn holds interests in Richard Walter Pty Ltd. Those two do business under the names Macquarie Professional Services Pty Ltd and Macquarie Diagnostic Services--- I continued: Indeed, we see from evidence presented in public and from evidence presented regarding Macquarie Pathology Services that there is a sort of standing arrangement between that company and a company known as Omniman Pty Ltd, which is a company owned and operated by Dr Geoffrey Edelsten--- To this extent reports on the electronic media or in the Press alleging that I said that Dr Edelsten had a direct financial interest in Macquarie Pathology Services are incorrect and constitute a misrepresentation of what I said in the Senate yesterday afternoon. Debate resumed from 6 November, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator DURACK(Western Australia)(8.02) —This is the second time this year that we have been asked to consider the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985. The first time was when it was introduced by the Government in the autumn sittings and rejected by the Senate on the combined vote of the coalition, all of the then Australian Democrats and Senator Harradine. Despite this and widespread opposition by industry and the States-I emphasise `the States'-Senator Evans has reintroduced exactly the same Bill. He will not accept the practical arguments against his proposal. He has demonstrated a lack of commercial awareness and indicated little, if any, concern for the parlous position faced by the oil industry and Australia. Indeed, Senator Evans has maintained an unrealistic and theoretical stance on this issue and has used every devious method available, including threats and bribes, to achieve his revenue raising objectives. Clearly the end justifies the means. Industry has conducted satisfactory discussions, at least with the Department of Resources and Energy, over a modified work program system but Senator Evans still will not accept that this is workable for his so-called highly prospective areas. He will not even give it a trial run. Senator Evans continues to pursue his revenue raising objectives despite the reduction in Australia's oil self-sufficiency, despite the reduction in off-shore oil exploration and despite the increasingly unfavourable chances of finding major oil reserves in Australia. He continues to increase the cost and lower the return for oil exploration and production in Australia. Australia can ill afford a diversion of high cost risk capital from exploration and production to fund government revenue. It has become clear in the Budget that the prime object of the whole exercise, as far as the Government is concerned, is revenue raising. Honourable senators will remember that at the end of the previous debate on this issue Senator Evans indicated that the Government had not anticipated recovering something like $50m in revenue from cash bonus bidding. The Budget-surprise, surprise-included an estimated $50m, a very rubbery figure indeed, to be recovered in this financial year from some alternative to cash bonus bidding. It is clear that cash bonus bidding would have a significant adverse impact on the future of oil exploration and production on which government revenue depends so much. This short-sighted approach by the Government highlights its inability to recognise the wider implications of government policy. It was, to us, inconceivable that the Democrats, who in previous debates this year under the leadership of former Senator Jack Evans had stuck firmly to their position, could make the same mistake as Senator Gareth Evans. Why has this Bill been suddenly reintroduced now-it is a surprise-at a time when the Government's program indicated that it would proceed with an alternative scheme of raising money, such as signature bonuses or retention premiums? Senator Sanders —Would you support signature bonuses? Senator DURACK —It sounds as though I do not need to speculate, judging from Senator Sanders's interjection. Because we have not heard from the Democrats at this stage, nor have we been able to obtain any sense from them as to what they want to do on this matter, I can only speculate that if Press articles are correct they are about to welsh on their earlier commitments to a responsible attitude to oil exploration in this country, even though they will be totally divided amongst themselves about how that welshing will take place. No doubt Senator Gareth Evans thinks that he and the Government will be some unworthy beneficiaries of this apostasy on the part of the Democrats. There is no reason why the coalition or the Democrats should change their positions on this matter, positions which were clearly thought out and fully debated only a few months ago. The only possible new factor is the arrival in the Senate of Senator Sanders and perhaps the return of Senator Siddons. Whether he has any significant contribution to make on this matter has yet to be seen. I will quote what was said by Senator Mason, who is still with us and will no doubt be called upon to vote in this debate. Earlier this year, Senator Mason stated: In relation to cash bonus bidding, the government showed a remarkable predilection for killing the goose that laid the golden egg. What a perceptive statement that was! I hope that Senator Mason will stay with it tonight. As I have said, former Senator Jack Evans is no longer a member of this place but I will quote what he said in an earlier debate because he led the debate for the Democrats and as far as I can see he managed to keep them together on this issue earlier this year. He stated: Senator Sanders —Look at what happened to him. Senator DURACK —Look at what might happen to the honourable senator. Senator Jack Evans stated: In fact, if we were to proceed with this legislation, the very thing that I am sure this government fears most of all, as did its predecessor-the reduction of oil exploration in this country-may come about because we are looking at making the high risk area and more expensive area the first of the experimental cash bonus bidding system areas. The arguments against cash bonus bidding have been fully debated in the Senate and they remain as valid this evening as they were only a few months ago. Without going into any detail I will reiterate some of the major points. Cash bonus bidding is supported by some theorists on the basis that market forces should be allowed to determine the value of rights to explore. This assumes, however, as is the case in some other countries such as the United States of America-perhaps that is where Senator Sanders has got his experience in these matters-that there is a great deal of technical knowledge about exploration areas and that informed and rational judgments can be made about the respective values of specific acreage. Despite what may be the case in the United States, this is not the case in Australia, particularly in off-shore areas where geology is complex and exploration is very difficult and costly. The Jabiru experience highlights the uncertainty, risk and cost of oil exploration in off-shore areas in Australia. I think this is clearly demonstrated by that experience. Where is the perceived economic rent in this situation? The United States experience again has little to offer us in this case. Cash bonus bidding is just an additional tax on oil exploration, whether or not it is successful. Senator Evans is fond of stating that cash bonus bidding will not reduce funds available for exploration. He assumes in very simple terms that oil companies have unlimited access to funds, presumably at little or no cost. This is very strange coming from a government which has now pushed up interest rates to historically high levels and they are going even higher. Unfortunately, of course, this is certainly not the case, particularly for the smaller Australian companies that do not have adequate financial strength to raise such additional up-front funds. The oil exploration industry will be outraged if the Australian Democrats now turn their backs on the very Australians whom they have professed so strongly to support. It is doubtful that any company, apart from the largest international firms, would have sufficient cash flow to generate enough funds from internal sources to pay the sums expected by the Government. Most firms would thus have to compete for high risk funds on the capital market at extravagant rates of interest-rates which are likely to continue under this Government. This would impose an impossible financial burden upon current interest rate levels in Australia, which are, as I said, a consequence of the economic mismanagement of this Government. Perhaps the Government wants companies to borrow off-shore and bring funds into Australia to support the falling dollar. Perhaps Senator Evans wants companies to leave the oil industry as an excuse to introduce the Australian Labor Party policy of a hydrocarbons corporation and his national energy policy. Senator Evans is also fond of comparing cash bidding payments with farm-in arrangements. This is also a simplistic notion of the nature of such commercial arrangements. While some farm-in deals result in substantial payments, these would not be at government directive and would flow back to oil companies and not government coffers. In fact, many farm-in deals involve exploration commitments or other work-sharing arrangements which assist exploration and development. Such arrangements typically do not involve up-front payments. The coalition, of course, supports deregulation where there are clear public benefits to be gained. The imposition of an additional up-front tax impost, such as cash bonus bidding, will clearly act as another disincentive to oil exploration in Australia. This is not in the public interest and will not result in any significant public benefit. The Government is throwing away its responsibility to manage our resources in the best interests of all Australians. Senator Evans should not turn his back on industry efforts to develop an effective work program regime. Senator Evans has reluctantly, perhaps too late, begun to realise that oil exploration and production are falling. I seek leave to incorporate in Hansard a prospective oil production and government revenue table. I think this table is well known to Senator Evans. Leave granted. The table read as follows- PRODUCER FORECASTS-OLD OIL PRODUCTION AREAS, AUSTRALIA Year Total Production Gross Excise Receipts (ML/Year) ($m) 1980-81... 24,598 2,978 1981-82... 23,781 3,095 1982-83... 22,906 3,458 1983-84... 23,447 3,547 1984-85... 22,911 3,744 1985-86... (1)21,487 (1)4,088 1986-87... (2)18,167 (3),(2)3,216 1987-88... (2)16,264 (3),(2)2,673 1988-89... 14,712 (3)2,268 1989-90... (4)12,458 (3)1,689 1990-91... (4)10,679 (3)1,364 (1) As forecast in the 1985-86 Budget (2) Department of Resources and Energy (DRE) estimates for the financial years 1986-87 and 1987-88 are as follows: 1986-87 1987-88 Production... 20,628 ML 19,361 ML Excise... $3,788m $3,459m (3) Barrow Island and Mereenie production areas are assumed to remain exciseable for the period 1986-87 to 1990-91. (4) No producer data is available for Cooper Basin. Estimates represent DRE time series extrapolation from producer forecasts. Senator DURACK —All informed sources acknowledge that we have no readily available low cost fuel alternatives and that we must support oil exploration and production. I seek leave to incorporate in Hansard the conclusions of a recent review of ethanol production by the National Energy Research, Development and Demonstration Council which comments on the limited commercial viability of ethanol from renewable energy sources as an alternative to liquid fuel. Senator Sanders —No, read it. Senator DURACK —The honourable senator wants me to read it. Fine. Senator Evans has a great ally. If Senator Sanders wants to waste the evening, that is fine. The conclusion of that report reads: The NERD& Program has committed $5.55 million to production of ethanol R&, under this subprogram. It has demonstrated the technical feasibility of the production of fuel ethanol in Australia. As CSR and Shell concluded after their `petranol' trial, which indicated few technical difficulties with the use of a 10% ethanol/gasoline blend, the problem is that fuel ethanol is currently not economically viable, without subsidies such as provided in Brazil and the United States. Although no significant use of ethanol as a fuel in Australia has eventuated, the Zymomonas bacterial fermentation system offers promise of being a commercial success as a way to produce industrial alcohol. Feedstock agronomy and conversion processes could be refined, but further R& appears unlikely to be able to make fuel ethanol viable: this appears to require a sustained upward movement in crude oil and product prices. Ethanol appears to have only a limited role as an emergency fuel in overcoming short-term (6 to 12 months) disruptions to oil supplies, as it would take up to three years to make any significant contribution to gasoline requirements. Other measures such as emergency allocation schemes could be expected to bear the brunt of the adjustment process in such situations. Ethanol could have a more significant role in the event of long-term disruptions to supplies, but how significant will again depend on its titiveness with other options, such as enhanced oil recovery, energy conservation, and fuel substitutions. NERD& Program funded R& has enabled a sound assessment of ethanol's potential role to be made. On the basis of that assessment it would appear that further NERD& Program funding under this subprogram should be restricted to any particularly promising proposals in the areas of lignocellulose conversion and effluent treatment. In terms of the broad priority rankings, such projects might be regarded as having medium priority. As I said, all informed sources acknowledge that we have no readily available low cost fuel alternatives in the immediate future. I have just read from the report of the National Energy Research, Development and Demonstration Council, which is an example of what I have been saying. Unfortunately, Senator Evans and apparently Senator Sanders-he has already made his speech on this Bill while he has been interjecting on me, but I suppose we will have the misfortune of listening to him for half an hour repeating it all-appear stuck on a collision course with disaster. Senator Evans has promised to introduce the alternative impost-his own words-in the form of signature bonus payments and retention lease premiums if this present second attempt to obtain cash bidding through this Senate is defeated. The Opposition will maintain its consistent position in relation to this matter and will completely oppose this Bill. Senator PARER(Queensland)(8.17) —The Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 has now come up for the second time in a very short period. Senator Gareth Evans has the appearance of the cat that swallowed the canary. I can only presume that the Australian Democrats who so strongly supported us when we opposed this Bill last time have now decided that their adage that they are here to keep the so and sos honest has gone by the board. I think it is patently obvious from the interjections by Senator Sanders that a deal has been made, and the complacent look of Senator Evans supports that. It appears that Senator Sanders will probably draw on his limited experiences and his distorted view of certain companies that he did not like in the United States of America, and frankly I and every other Australian find this totally offensive. Senator Sanders —You are speaking about my experience; what is your experience? Senator PARER —My experience is that the venom that Senator Sanders holds for these companies indicates that maybe he fits the category of not working in an iron lung. Senator Sanders —I understand them full well. Have you ever worked with them? Senator PARER —I have worked with them for many, many years-longer than Senator Sanders has. Senator Sanders —It explains your position in the Liberal Party. Senator PARER —Well, it does not explain Senator Sanders's position, unless he could not work in an iron lung. Let us have a recap of the scenario in Australia today. In the absence of further major discoveries, Australia's capacity to supply domestic refiners' crude oil requirements is projected to decline from between 75 and 80 per cent to around 42 per cent by 1993-94. Government policy, we believe, should be to discover the maximum amount of oil possible in a situation made difficult by Australia's relatively low prospectivity, high costs and remote areas. Pursuit of this goal requires drilling sufficient wells to discover two billion barrels of oil in the next 10 years. The long term trend is for Australia's crude oil reserves to decline, and over the past 15 years Australia has been consuming more oil than it has been discovering. In the period 1970 to 1984 Australian consumption totalled 3,100 million barrels and discoveries in this time totalled 1,200 million barrels. The present light crude oil surplus is temporary because a significant decline in the main Gippsland fields is imminent. Federal Government estimates indicate that, in the absence of sufficient discoveries, Australia's crude oil self-sufficiency will fall from the current levels of 94 per cent to around 42 per cent by 1993-94. Australia's prospectivity for finding oil is rated as very low compared with most other countries. A United States geological survey estimates that Australia has a fifty-fifty chance of finding another 1.8 billion barrels compared with 28 billion barrels for the United States of America, 17.4 billion barrels for Canada, 15.4 billion barrels for the North Sea and 9.9 billion barrels for China. It is in that climate that this Bill is being reintroduced. I would like to make just a few comments. I do not intend to go over all the statements we made last time such legislation was before the Senate in support of the Opposition's case to abandon the Bill, but I will cover a few. The Minister for Resources and Energy (Senator Gareth Evans) said: The Government has major reservations about increasing government regulation . . . I have extraordinary difficulty with this because he has the same machinery in place. In another part of his second reading speech he goes on to say that the Government will satisfy itself as to the financial and technical capabilities of successful bidders. That is the prerequisite to work program evaluation. He goes on to say: In many cases government involvement promotes uncertainty, delays and unnecessary conflict between government and industry. I do not think that is a very good reason for introducing a front end payment. Then he goes on to describe the shortcomings associated with work program bidding. Let us look at this matter. Work program bidding is the system that has been used in Australia throughout every State and the Commonwealth as far back as we have allowed areas out for prospecting and leases. It is a system that has worked; there is no doubt about it. But the most important thing about it is that it enables every cent of money to be spent on exploration. I know that it is argued that it is not necessary for companies to drag up the money to make a front end payment. That shows a complete lack of understanding of how exploration works. I do not care whether we consider a big company or a small company. In the case of a big company, we can talk to any exploration manager we like and he will tell us the difficulties he has from year to year in getting a budget allocated. Once he has his budget allocated he has a requirement not only on his company but also on himself to perform. As people know, the discovery rate for any mineral and particularly for oil is not great. I think we can put ourselves in the position year after year of saying `I want some more money; I think I have a chance this year', being asked `How did you go in the last five years?', replying `It was lousy', and having, therefore, to fight for a budget. Having got his budget, the exploration manager then wants to use that money to put holes in the ground. The cash bonus bidding system takes away some of that money that he would definitely be putting into exploration, whether it be seismic exploration or drilling holes. As regards the smaller company, the difficulty, of course, is that there is a limited amount of money and the managers have to go back to the shareholders. I do not know how they can go back to shareholders and say: `We are going to put in a bid. We do not know whether we will be successful. If we are, we would like to come back to you and collect another thousand dollars or even X million dollars.' The other major point made by the Minister in his second reading speech is this: In deciding to bid for a particular permit, a company will design an exploration program that enables it to assess properly the petroleum potential and to estimate the expected return on investment in that program. The question we have to ask about that is: How on earth does the company know? These are not the highly prospective areas that we know exist overseas; these are wildcat areas. This is not just my evaluation, quite apart from my own experience in these things; it is also the evaluation of everyone involved in the industry. The company just does not know. Senator Cook —They have got seismic surveys. Senator PARER —Does Senator Cook mean seismic in the Northern Territory? There was seismic activity up there before Jabiru, too, and what potential Jabiru had. Everybody knows how much that has been downgraded. I think the honourable senator will agree with that. So even with the best of intentions- Senator Cook —So they will bid low. Senator PARER —I do not know what they will do. I think this is the confusion. The thing is, whatever they bid, the money will go to the Government and not into drilling for the oil that we so badly need to find in the next five to 10 years. The Minister goes on to say: There is no foundation whatever for the assertion that the Government's main motive in introducing cash bidding is revenue. I have difficulties with this because when this Bill was thrown out last time the Minister, Senator Evans, in a fit of pique, said: `You have just cost me about $50m, but I will get it back some other way. The Minister goes on further in his second reading speech to say that if this Bill goes through, the Government will no longer proceed with the signature bonus or the retention lease premium. That is the carrot. Senator Gareth Evans —We will if you like. We will do both if you like. Senator PARER —I do not think we want any. I do not think the industry wants any and I do not think the country wants any. The thing is that the carrot is being held out: `If you people are good boys and go along with this, we will not give you these other nasties.' It is just a matter of a choice of nasties. I have no doubt, and I do not think the oil industry has any doubt, that the main purpose of this legislation is to collect some front end payments for the Government. I do not think there is anything more I can add except to say that it is patently obvious that the Australian Democrats, who supported us last time, have buried their principles. They have made some sort of deal, which was alluded to in today's Australian Financial Review. It will be fascinating to see whether there is some trade-off in the form of an agreement by Senator Sanders in relation to the woodchip business in Tasmania. Senator SANDERS(Tasmania)(8.28) —I rise to support the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 (No. 2). I have noted the remarks of the Opposition. I have noted the remarks of Senator Durack, who seems to be a wholly owned subsidiary of the oil barons. In fact, he was reading verbatim from a Peco oil company telex sent to me, which shows that that is where he gets his material. No doubt he will get a pay-off from the oil companies. The DEPUTY PRESIDENT —Order! Senator Sanders, you will withdraw that remark. Senator SANDERS —I withdraw it, yes. Senator Durack says Australian companies cannot support cash price bidding. He says that there is not enough cash flow to support cash price bidding. Santos is an Australian company, and it has a very admirable cash flow. I am sure the honourable senator would be very proud of the cash flow of Santos-well up in the range of $30m to $40m. Certainly, it can afford a couple of million dollars for cash price bidding. It does not have to go overseas to borrow, as Senator Durack says it might. There is no problem there at all. Again, this is another red herring from the Liberal Opposition. Senator Parer says that our resources are declining. We know they are declining. Would this not then be the best time possible to account for these declining resources by turning to alternatives? Senator Durack read from a report by the National Energy Research, Development and Demonstration Council concerning ethanol. I found it quite encouraging because what the report really said was that ethanol was a long term solution to long term disruptions. It said that at present without subsidies it might not work. However, is not the oil industry itself heavily subsidised? Are not all of our other resources subsidised in some way or other? They are all subsidised. Why not subsidise ethanol? The reason is that it would break into the vertical integration of the oil companies. The oil companies have a wonderful thing going for them. They can pump something out of the ground, refine it in their own refineries, ship it and sell it at their own outlets, thus maintaining full price control. They can jack the price up to the disadvantage of everyone in the country and get away with it. That is vertical integration. Why do they not want ethanol? They cannot grow sugar beet or sugar cane and would have to have someone else do it. The oil companies might not be able to control that. There are plenty of renewable resources in Australia. We are told over and over again that we must produce more oil. I have telexes falling out of my paper clip here about how we must always produce more oil to keep ourselves energy self-sufficient. Will oil keep us energy self-sufficient? Of course not. Oil alone cannot do it. Not even the oil companies would admit, if we could pin them down to it and if they ever told the truth, that oil will serve our needs forever. Of course oil is running out. Why do we not take that into account right now? Why do we not look at the alternatives, such as solar power? Solar power is coming on at a great rate. We are getting to the point with amorphous film solar technology that we can actually produce solar cells with the limitation in cost being the cost of the sub-surface material and the sub-surface material can be the cost of garbage bags; in other words, plastic bags. The price of solar power is plunging. What about wind? Recently I had the good fortune to travel to Hawaii and other parts of the United States to view wind power at close up. I went to Kohala on the big island of Hawaii, which has 250 windmills. Of course, we are told in Tasmania that wind power simply is not viable. We have the Hydro-Electric Commission down there, another troglodytic, bureaucratic quango, which says that the wind does not blow enough and if it did it would not work anyway. I am here to tell honourable senators that wind power does work. The grid on the island of Hilo in Hawaii has 10 per cent penetration by wind. Ten per cent of the power on the island of Hilo is produced by wind. I was quite impressed with a wind farm in Hilo and I said so. The people there said: `If you get to the United States you must go to the San Gorgonio Pass because we have only 250 windmills here but there they have 1,500 windmills'. I did go to the San Gorgonio Pass and talked to the head of Southern California Edison's wind energy project. He said that the only thing that would stop the further development of wind power was nuclear war. Southern California Edison, which furnished about as much electricity to the grid as all of the electricity companies in Australia would furnish, has on contract 900 megawatts of wind power. A guy at San Gorgonio Pass said: `If you think we have windmills here you should go to Altamont because they have 3,000 there'. Wind power is here. It is being held back in Australia by the attitude of people such as Senator Durack and the other bomb them back to the stone age Liberals of the Opposition and by the oil companies and the people who do not want to break this beautiful licence to print money arrangement which they have with the oil industry. We have already discussed ethanol. What about sunflower oil, safflower oil and all the other oils that can be burned in diesel engines? The technology is known and proven. Once again the oil industry will not allow it to happen. What about wood? We can break down wood from ethanol. Wood is a renewable resource. We can burn it. In fact, we do burn it instead of oil in our heating apparatus. There are plenty of alternatives. What we need is a strategy to phase out oil completely to make us completely self-sufficient. I looked at the presentations of the Australian Petroleum Exploration Association. I noted that on every page of those presentations that organisation had statements to the effect that we must keep up our oil exploration and we must keep pumping oil or else we will freeze in the dark and have a very diminished lifestyle. That is the implication in all of this. I think this probably works with members of the Australian public because they have been brainwashed for so many years. At the moment the Australian public is being brainwashed. Look at the commercials on television. We see and hear of the big Australian exploring all over Australia-I might add, at great environmental expense-in order to produce oil for the masses. That company does not say it is in it to make a buck, which would be the honest way. It says it is doing it for Australia's future. What a lot of garbage! We have the quiet achiever doing the same thing. We see Willesee out there in his funny hat with `Esso' on it saying that the Esso company also has Australia's interests at heart. What Esso, BHP and BP have at heart are their bottom line profits. They do not care how they get them. They are brainwashing the Australian public into thinking it is good for the Australian public. It is not. It is good for the oil companies. Looking through these presentations we can see all sorts of pleas for self-sufficiency. Today I talked to two gentlemen from the Australian Petroleum Exploration Association Ltd-Terry Morahan and Keith Orchison. I said to them: `Will you tell me that cash price bidding will stop any oil company from bidding on the new leases in the northern part of Australia? Will oil companies fail to bid on these leases because of cash price bidding?' They said: `No, they will probably still bid'. I said: `Okay, if they bid will they drill for oil, will they explore?' They said: `Yes, they will probably explore for oil'. I said: `If they find a good show of oil will they produce it?' They said: `Yes, they will probably produce it'. I said: `Where is your shortfall of oil? What is your problem? Why are you worried about balance of payments? You have said to me that in spite of cash price bidding your clients will still bid on these leases'. They said: `Yes, but they will not be small Australian companies. They will be big overseas companies. they will be multinational and transnationals'. That is probably true, but does any honourable senator in this chamber tell me that any small Australian oil company can by itself get into a major off-shore development program? Can any honourable senator tell me that? Of course not, because they cannot do it by themselves. Senator Cook —As part of a consortium it can. Senator SANDERS —Exactly, as part of a consortium. In fact, it is the only way in which even major companies can function in such a highly capital intensive operation as off-shore exploration, as part of a consortium. Let us take a look at what happened in 1981 in regard to three leases in the Gippsland Basin. In the instance of lease 1, 54 companies forming seven consortia bid for a lease work program valued at $101m. In the case of lease 2, 43 companies formed eight consortia to bid for a lease work program valued at $92.5m. In the case of lease 3, 57 companies formed 13 consortia in relation to a work program value of $99m. All winning consortia had Australian companies as members. Every one of those consortia had Australian companies as members. Among those Australian companies were Mount Isa Mines, News Corporation and TNT Management Pty Ltd. These are good Australian firms all. I am sure that the Liberal Party would admit that. Where is the argument that somehow cash price bidding will exclude small Australian companies from participating? It is a nonsense. What are the oil companies and their willing friends, the Liberal Party, really afraid of? They are afraid of spending money. They are afraid of paying the Australian people a fair price for the oil they will pump out of the ground. They are afraid of spending money. I can understand that. If one goes into a store which is giving something away on one day but the next day it wants to charge $5 for it one will complain. At the moment it is a giveaway. We are giving away these resources. Cash price bidding will be a way to get a fair return from the oil companies before the resource rental tax can bite, because it bites only when there are profits made and that may be a long time down the line. How can it possibly inhibit exploration? It certainly has not done so in the United States. My experience is in the United States. I have watched cash price bidding operating in the United States. We do not hear the oil companies there complaining about it. The oil companies in the United States have immense political power. They have not tried to change cash price bidding. In fact, it works quite well. What the oil companies here are saying is: `We control the present situation and we do not want any change'. What is the present situation? The present situation is a work program which is under bureaucratic discretion. I was in Santa Barbara, California, when the Union Oil Company platform A blowout occurred. That blowout occurred because of a discretionary act by a bureaucrat in a United States geological survey. This discretionary act was to grant a permit to drill with insufficient casing. It was a kind of buddy-buddy deal between the United States GS person and the Union Oil company-between people who worked in the same industry. One of the difficulties with any controlling bureaucracy is that its members often come from the industry it is supposed to control. This happened in the case in California. The result was a massive blowout which blackened beaches up and down southern California. It killed 8,000 birds and ruined the tourist and fishing industries. It is only now that Santa Barbara is recovering. The hazards are great when one deals with bureaucratic discretion. Also it is unfair to the bureaucrats. One has to ask a bureaucrat to make a decision to grant a lease on a work program on the basis of his analysis of what that oil company may or may not be able to do. It is much fairer-in fact, I think that, if they were honest about it, the oil companies would prefer it-to have a cash price bidding system on which they could bid. In the free market-place which the Liberal Party should be supporting, the bids themselves will even out. If an area is highly prospective, if it does look good for oil exploration and production, the oil companies themselves will determine this and they will bid higher. If the area does not look good they will bid lower. No one forces the oil companies to bid high. They have control over the system. It is a very workable system. Incidentally, on looking through all the papers put out by Australian Petroleum Exploration Association Ltd I saw one statement which I found quite insulting to the Aboriginal people. Under the heading `Aboriginal Land Rights', at page 9 of one presentation, it says: APEA believes that State Governments should have responsibility for land rights legislation and should control access to land for exploration and development. In other words, APEA does not want to have Aboriginal control because Aboriginal control might mean that the oil companies would not have open slather as they do now. Therefore, they want to limit the rights of Aboriginal people, or anybody else who would try to inhibit in any way the production of this golden cornucopia of money concerned in the oil industry. Much has been made of local industry involvement. However, I am sure that if the Opposition really took a good hard look at what is happening in the oil industry it would understand that the Australian content in a production field has to be 50 per cent anyway. By law small Australian companies are involved in this process during the production phase off-shore. So there is really no argument that smaller firms will be disadvantaged in any way. They can continue operating as they always have, as members of consortia. What about the argument that the Australian Democrats' support for cash bidding at this time is some sort of repudiation of our former position? I suppose it could be seen as such. However, we have seen new data. We have decided that we can change our minds. Honourable senators will have to admit that the sign of an intelligent approach to a problem is that when one is confronted with new data one can change one's mind; one is not locked into a doctrinaire position, as seems to happen so often with the Liberals in this place. We can change our minds, and we did. At the time the cash bidding Bill was put to the vote, the Democrats were still looking at alternative ways of deciding who should get oil leases in highly prospective areas. We had not reached a consensus on the best possible way of doing it. Former Senator Jack Evans put forward the bank guarantee system as another way of approaching the problem. However, the industry did not accept that system. In turn, it responded with a modified `dry hole' work program which, at the time, was not fully acceptable to either the Australian Democrats or the Government. The vote against the Bill, therefore, was taken in the context of a further investigation of all the options. In the months since the Bill was voted on the industry has still refused to accept former Senator Evans's bank guarantee scheme. It still does not want it. It does not want anything. It does not want any control. It wants the complete right to rip oil out of the ground with no control at all. The modified `dry hole' work program which was put forward in draft form has been refined and the suggestions have been incorporated into work program bids for all areas other than those deemed highly prospective. But there are still problems with the modified work program, such as the discretionary powers to be given to the Minister to allow variance of the programs. It is this variance of programs that worries me. It worried me in Santa Barbara and it worries me here. In general, the Australian Democrats are not in favour of a Minister being given wide discretionary powers. We believe the Parliament should have these powers, not individual Ministers. After a further five months of negotiation, it is clear that no solution can be found taking the work program path. Therefore, the Australian Democrats have looked again at the cash bidding system. Former Senator Evans was concerned in May that, as the cash bid areas in the Timor Sea were very expensive, high risk exploration areas, the requirement for money upfront would discourage exploration. That is the oil company argument. That is what we were told by the industry. However, since May the interest of exploration companies in the Timor Sea leases has not declined. They still want to get in there. They are anxious to get in there. They hope that somehow the Bill will be either defeated or passed and they will be able to get their drilling ships in there and get into that area. They know that they can make a lot of money out of it. They are lining up for a chance to bid on these areas. They do not care what the system is because these are the most prospective areas available. Do not worry, they will go for it. Will cash bidding discriminate against local companies? I have already mentioned some of the reasons and I have pointed out that consortia are an accepted way to go off-shore. Local companies will be able to participate as members of consortia. They can raise the finance in the normal way by way of share issues and borrowings. They did participate in the Gippsland Basin exploration. There were multi-million dollar work program schemes in that area. It presents no difficulty to them. What about the argument that cash bidding is simply a revenue measure? In May the Government refused to provide us with any figures on the amount of money likely to be raised by this measure. We have now been told that, on the basis of amounts paid to buy into existing leases under the work bid program, the likely income will be between $20 billion and $50 billion. Senator Gareth Evans —Or more. Senator SANDERS —The honourable senator says: `Or more'. Senator Siddons —Billion, did you say? Senator SANDERS —It is million, not billion. Would that it were billion. One could run the whole Government on that for a number of years. That is a small amount in comparison with revenue from royalties, but it is a reasonable price for the country to exact for access to the best known oil fields left in Australia, as it will be some time before the Government receives any income, if oil is found, under the new resource rental tax system. I think that the facts are clear. If one eliminates all the propaganda and the scaremongering tactics of the oil companies, which in fact today were running around saying that the Bill would not even come on and they were waving a letter from the Minister for Resources and Energy, Senator Gareth Evans, which referred to an agreement to a work program-they said that this was an agreement to stop cash price bidding-one will see that they were trying to confuse people today. They constantly try to confuse people. The facts are that they can operate very well indeed with a cash price bidding system. It will not be a contemptible burden to them. They can operate with it. They can explore for oil. They can produce the oil. Australia will be able to obtain the benefits from oil. The arguments of the companies are specious. I urge honourable senators to consider my earlier contribution on renewable resources. I think we must look to renewable resources. We must bite the bullet. At the moment research funds are being swallowed up in other areas such as atomic energy and other big hit areas. I think that the Government would be well advised to put some of this new found revenue-$20m to $50m-into renewable resources so that when the oil runs out we will have some means to power Australia. The Australian Democrats support cash price bidding and we feel that all sensible people in the Senate should do likewise. Senator COOK(Western Australia)(8.51) —The Senate is debating the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 [No. 2]. The Bill arises because the Government, on behalf of the people of Australia, owns all of the off-shore acreage that is prospective. The issue that this Bill contemplates is: What is the best way of licensing various exploration companies to explore in those areas? It proposes to amend the existing system of work program bidding by introducing a system of auctioning those leases under a sealed tender system so that an amount of money is paid up front for the right to explore and later the right to develop those areas. This Bill was first introduced in March this year. It was defeated at that time. Since then the Government has examined the various suggestions put forward by the industry as to how the work program system can be improved. After that examination it has decided to reintroduce this legislation once more in the belief that what this legislation proposes, after an exhaustive canvass of the options, is the best course for Australia. In regard to the response to this legislation from the organised industry associations, there has been some criticism of the Government continuing to follow its original intentions. But I believe there is evidence to show that while, of course, at the industry association level a unified voice has been put forward, players in the industry are not necessarily as united as their association's voice might indicate and that there is support in industry for what the Government is doing. A number of exploration companies and those interested in pursuing exploration realise that cash bonus bidding is an attractive, intelligent, efficient, fair and simple system for determining the right to explore in various areas. The area to which this legislation would apply in the first instance is the Timor Sea area around the Ashmore and Cartier Islands. It is an area that is regarded as prospective. Although some speakers in this debate have said that it is a wildcat area, I think that by and large the industry regards it as being an area of eminent prospectivity in terms of what is available in Australia. Since I spoke in the last debate in March and mentioned in that debate most of the things that I would want to say now in support of this legislation, I propose this evening to content myself with dealing with a number of assertions that have been made by the industry since the Government tabled its legislation. I think one of the key starting points is that in the last debate the Opposition tried to rely upon the fact that not all State governments supported the Commonwealth in regard to this legislation. It referred specifically to the Western Australian Government. It was not true at the time at which the debate was held that the Western Australian Government did not support the Commonwealth, because it did. But earlier remarks by the Premier had indicated an opposition to the legislation. Senator Crichton-Browne —Where does he stand now? Senator COOK —The Western Australian Government, in a statement by the Minister for Minerals and Energy, the Hon. David Parker, on 7 November, stands truly in support of the Commonwealth's cash bidding legislation. Senator Durack —That is a change of heart. When did they change their tune? Senator COOK —That matter is known by anyone who has followed the debate. Senator Durack, as a Western Australian, ought to have done so. He would then know that that is the Western Australian Government's position. It was reported in the West Australian on 7 November. I commend to Senator Durack a reading of the daily newspaper in Western Australia to bring his lamentably poor knowledge on this subject up to scratch. So the criticism that all State governments, or in this case the relevant State Government, do not support it is not a criticism that can be made on this occasion. It was not a criticism that could be made on the last occasion. But a number of industry spokesmen have concentrated on picking up a few points which I think require some reply. Anyone who consults the second reading speech of the Minister for Resources and Energy, Senator Gareth Evans, will see that most of these points were answered when the legislation was introduced last week. But most recently an industry spokesman has said that this legislation is inappropriate because world oil prices are unstable. If prices fell, there would be less chance that an exploration industry would want to be very active in Australia and thus any extra imposition would be a burden to it. It is said as well that off-shore exploration in Australia has fallen over the last year. I will deal with those two arguments. The first concerned oil prices and it is certainly true that oil prices at this stage are volatile. The possibility is that after the meeting of the Organisation of Petroleum Exporting Countries early in October that OPEC may not be able to contain the aspirations of its member countries and some will start producing over quota. That may lead to a fall in oil prices world-wide. If that occurs, of course, the impetus for exploration world-wide will be less. That will apply irrespective of what this Government does and whether or not this legislation is passed. But if one looks at the Forward Estimates, even in expectation of the problems that OPEC is facing, one will see that over the span of at least the next decade, the prognosis is that the price of oil will remain about constant in terms of current prices and that with a fall in prospect in the near future that will provide a significant stimulus to the world economy. Because of that stimulus, world production will pick up and with that the demand for oil and other energy sources will pick up as well. In regard to the prognosis, despite what is a very interesting scenario with OPEC at present, the longer term suggests an increasing demand for oil at least by 1995 or beyond. Those exploration companies starting out to prospect are not putting their money on something that would be a failure in the longer or medium term. I do not say, therefore, that it is inappropriate in view of the OPEC situation for this legislation to come forward. That is not a factor. In the longer term it is a factor that makes this legislation more appropriate. The second leg of the argument concerns exploration. The argument is that exploration activity in Australia is declining and therefore it is an inappropriate time to introduce cash bidding. In fact, that is not true. Activity in 1984-85 maintained the momentum of the past two years. In 1984-85 a record level of exploration was achieved. Three hundred exploration wells were drilled in that period, 261 of them on-shore and 39 off-shore. That compares with 222 wells drilled in 1983 and 1984. Seismic activity showed some improvement over the 12 months to 30 June 1985 with a total of 78,800 kilometres of seismic surveying being undertaken, compared to 54,155 kilometres in 1983-84. The outlook for 1985 is pleasing. In January this year the Australian Petroleum Exploration Association released its survey of industry expectations for the year ahead. The survey indicated that the expectation is that 238 exploration wells would be drilled, 201 on-shore and 37 off-shore. More recent estimates by the Bureau of Mineral Resources suggest that drilling activity will be 10 per cent to 15 per cent higher than the APEA suggested would occur this year. That would mean that more wells than predicted would be drilled and more surveying would be undertaken. It is also estimated that exploration expenditure this year will be $791m, $378m on-shore and $413m off-shore. Whilst it is being asserted by the industry that exploration will decline, the activities of the financial year show that that is not true. The suggested prognosis for the rest of 1985 also shows that that is not true. In the climate of a stong and continuing commitment to exploration, despite the records that have been achieved over the last years, it is an appropriate time now to introduce this sort of legislation. The other major argument that has been put forward by the Opposition is that this legislation is merely a revenue raising device by this Government. Of course, that is not true. If it were true, we would fail in terms of the argument constructed by the Opposition. If Opposition senators believe what the industry says-they have relied upon industry forecasts to sustain their arguments so far-there will be less activity and, as a money raiser, the legislation will not be an effective device. We would, in fact, be backing a loser. I do not think it can be sustained in those terms that this legislation is purely a money raising exercise. It is not. What it will do though-this exposes the humbug of the Opposition-is allow the market to decide, in place of government regulation, which parties are to be allocated exploration permits. The Opposition, since the ascendancy of John Howard to the leadership of the Liberal Party, has stumped the country arguing for deregulation. However, it committed itself in the debate in this chamber a few minutes ago to voting for regulation and against deregulation in the terms that this Bill envisages. It has done that in direct and stark contradiction of the ideological commitment made by its leadership. I join with Senator Sanders in saying that one must well and truly speculate on the reasons why that is the case. Since the ideology of the Opposition is variable according to the circumstances, it is clear that on this occasion it prefers a cumbersome red tape machinery of government bureaucracy to determine the allocation of prospective areas and not to allow the market to decide. The arguments that have been put up, particularly by Senator Parer in his contribution to the debate, suggest that there are problems and, therefore, the legislation will not work and cannot work. If all the problems that Senator Parer has identified exist the value of the bids will be less than otherwise anticipated. The market mechanism will have worked because the bidders themselves will have assessed the risks involved and made an adjustment to the financial commitment they are prepared to venture in order to win the bid to prospect. That would be a direct and proper operation of the market mechanism. I contrast that operation to one in which the joint authority is put into a situation of having to differentiate between work value bids that have been submitted. On the experience of the Gippsland Basin, referred to by the Minister in his second reading speech and by Senator Sanders tonight, if we were in a position of having to assess work value bids, we would not be at all sure that the bids put in for work programs would ever be fulfilled and that they were not over-inflated in order to win the contract so that an application for them to be amended could be made later. The judgment we would have to bring to the different exploration philosophies, technology and approaches of the various bidders would be directly subjective. It would be unable to be defended if the assertion were made that some unfair assessments were being made. This Government is concerned that a potentially valuable exploration permit should be allocated on a basis on which it can never be alleged that it was not fairly done. With the degree of subjectivity involved in the work value bids, given the recent record of Gippsland, that would be a hard assertion to defend were it to be made in any future allocation of licences. The market defends the Government absolutely from that assertion by making the determination. I believe, as I have said, that that is proper and responsible. Senator Crichton-Browne —Has Mr Parker any reservations at all about cash bidding? Senator COOK —Let me deal with Mr Parker in a minute. Since Senator Crichton-Browne is very interested in what Mr Parker might think about cash bidding, on behalf of his Government he has put forward views which have been taken into account by this Government and which are reflected in the Bill before the Parliament. Since they are reflected in the legislation, the answer to Senator Crichton-Browne's question is that he is quite happy and the Western Australian Government supports the legislation. Senator Crichton-Browne —Does he have no reservations? Senator COOK —He has expressed reservations and they have been taken into account. The legislation before the Parliament reflects those reservations. That is the end of the story. Senator Crichton-Browne —So he has no reservations about the present legislation. Senator Gareth Evans —He has considerable reservations. Senator Crichton-Browne —That is not what Senator Cook said. Senator COOK —If Senator Crichton-Browne wants to speak on this legislation I suggest that he put his name on the list of speakers. The point I made in answer to his interjection, which he wants to turn into a speech, is that Mr Parker has expressed reservations and those reservations have been taken into account. They are now reflected in the legislation and the Government of Western Australia is not opposed to it. That is the case. If Senator Crichton-Browne wants to pretend that fairy stories are reality he can do so. That has been typical of his contribution in this chamber in the past and I guess it will be in the future. The final point I make is that the Senate Standing Committee for the Scrutiny of Bills has constantly drawn attention in this chamber to delegating authority down the line in unspecified ways. In this legislation there is a considerable element of delegation of responsibility to a statutory body to make a decision. I suggest that in view of that the reasonable question to meet the standards required of us by the Senate Committee for the Scrutiny of Bills is: Is there a fair alternative method of making an allocation? This legislation says that there is and it reflects that method by providing for cash bidding. I could talk about a number of other aspects, all of which have been dealt with. I conclude by saying that this method has been proven as successful in the United States. It enables a fair value to be decided by the market for the privilege of exploring various areas off-shore in Australia. It enables small Australian companies to participate in the form of consortia. It enables proper decisions to be made about degrees of prospectivity because seismic surveys will show what are the chances of finding oil. The method will be of benefit to the Australian community as a whole. Therefore, I commend the legislation. Senator WALTERS(Tasmania)(9.09) —Tonight we are debating the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 [No. 2]. This Bill spells out very clearly that the Government has no idea about private enterprise. It has no idea of the need to support private enterprise, particularly that section which is willing to take enormous financial risks to explore off-shore for oil to keep this country largely self-sufficient. It is inconceivable that the Government would put barriers in the way of oil exploration. If we look at Australia's overseas debt we can, perhaps, understand why it is doing so. Does this Government need money! Despite what Ministers will say, this legislation taxes the people who are willing to take risks. It taxes the people before they make a profit. It taxes the people before they spend even a penny on the exploration. The Government wants the money and it will get it at a price. The need is indisputable. Let us have a look at the history of the Labor Government in the area of oil exploration because I think it is very interesting. Senator Gareth Evans —A very proud history. Senator WALTERS —I think Senator Evans will have a difficult time showing that that is the case. I know that all members of the Labor Party attempted to maintain their rage last night in the cold Senate courtyard. When Mr Whitlam came to power in 1972 there were 23 oil drilling rigs. By the time the people threw Mr Whitlam out of power that number was decimated and only two oil drilling rigs were operating. Indeed, in 1975, the final year of the Whitlam Government, only 25 holes were drilled in Australia. By 1982-83, when the Fraser Government left office, 230 holes were being drilled. We have improved our oil self-sufficiency by 10 per cent-from 67 per cent to 77 per cent-while we were in government. In 1975, when Whitlam left office, the level of self-sufficiency was 67 per cent. Our record of 230 drillings and 77 per cent self-sufficiency was not bad, but the Labor Government wants to change the system. We heard Senator Cook say that things were going pretty well. It is typical of this Government, and indeed of any Labor government, that when things are going pretty well they will change the system. This is what the Government is attempting to do at the moment. It is suggested that off-shore licences go to the highest up-front bidder instead of the most appropriate group. Senator Cook assures us that this method of making sure that the licence goes to the most appropriate group is cumbersome. Although such a system does not give the Government extra money at least it assures us that the licence is given to the most appropriate group. I believe that oil exploration has increased considerably under the present system. At the moment the licence goes to the group which has proven integrity, whose commercial and industrial reputation is the highest and whose background and experience is known, the group with the most stable record of long term solvency, whose technical capacity and expertise is indisputable, and whose other commitments are known. It can be acknowledged beforehand that the group can go ahead immediately with the exploration that is needed. It is not just a matter of money. Under the present system we are able to establish a group's expertise and its other commitments. We already know the position in regard to solvency. We know that it is the most appropriate group to undertake the task. This is, after all, the normal method of tendering, yet Senator Cook says that this system is cumbersome. Is the honourable senator willing to say that all other methods of tendering are cumbersome, because I believe that that is what he is trying to put across tonight? I should like to quote something that was said by former Senator Jack Evans of the Australian Democrats. Senator Evans put it pretty well when he said: Industry representatives have been trying to persuade the Minister-but from his comments, without much success-that they have limited budgets, that there is only a certain amount of money available for exploration in this general area, and that if the money is spent up front, and that money goes into government coffers, it simply means that less money . . . will be spent on exploration. I would have thought that if this country needed high risk investment in any area, it must be in the off-shore oil exploration area. What has happened to the Democrats that they no longer understand that simple statement? I can tell the Senate what has happened to the Democrats. They have decided that they are going to do a deal with the Government. I have never known anything quite so dishonest. I have never heard-- Senator Gareth Evans —Are you accusing me of telling fibs at Question Time today? Senator WALTERS —I have been in this place longer than Senator Evans. I have been here longer than Senator Cook and longer than both of the Democrats in the chamber at the moment. In all my life I have never seen such dishonesty from a Labor government or a Liberal government or a Labor Party or a Liberal Party when in opposition. Senator Gareth Evans —I am sorry, Mr Deputy President, but I feel obliged to take a point of order on Senator Walters. What she has said is a direct imputation of dishonesty, not to the groups at large but to individuals, particularly in the light of my answer to the question she asked here today. I ask that that be withdrawn. Senator Peter Baume —Mr Deputy President, Senator Walters was clearly not addressing that statement to any particular individual, in spite of Senator Evans's assertion. I ask you to rule that there was no breach of the Standing Orders. The DEPUTY PRESIDENT —I have previously ruled in this matter that reflections on individuals should be withdrawn. Collective reflections are not withdrawable. They are undesirable but they are not withdrawable. Senator WALTERS —Thank you, Mr Deputy President. I maintain that I have never seen such dishonesty by any party in this Senate in the 10 years that I have been a member of this place. It is hypocritical, it is shoddy, it is devious, and it is a dirty deal. I have seen negotiations done between parties on legislation where there has been a bit of give and take. I have never ever seen an attempt to change a vote on one piece of legislation as a pay-off for the Government to bring in recommendations that will without doubt ruin our timber industry. Senator Gareth Evans —Not true. Senator WALTERS —Senator Evans shakes his head and says: `Not true'. I asked him a question in the Senate today. I asked him whether a deal was being done. He said he would not be a party to a dirty deal. However, he went on to say that if by coincidence that should occur it would not be through a deal being done. I should like to read from an article which contained an interview with Senator Chipp of the Australian Democrats. The article stated: Senator Chipp, the Democrat Leader, confirmed the negotiations . . . saying his party always made their deals in public. The deals were above board, he said. The article quotes Senator Chipp as saying: . . . we're having a very close look before we give them an answer on cash bidding on their attitude to wood chips. Senator Gareth Evans —No deals there, Shirl. Senator WALTERS —If the honourable senator wants to say that we are doing deals, let him say it. He will be quite right because our deals are made in public. The article also quoted Senator Chipp as saying: . . . we're not going to let them chop down every bloody forest in the country and let them get their own way in everything. And if you read what Cohen (the Environment Minister) is saying and doing there is a great danger that this will occur. We already have destroyed 75 per cent of Australia's forests in 200 years. And Senator Chipp goes on. The article continues: Senator Norm Sanders, Tasmanian Democrat, said the Democrats agreed with most of Mr Cohen's advice but wanted five year licences. He said the Democrats were worried that Mr Kerin would ignore Mr Cohen's advice and give the woodchipping companies more freedom. I have never heard of any party doing a deal like that before. There have been negotiations on a piece of legislation where there is a bit of give and take, but I have never heard of any party saying `We will change our vote'-a vote that must have been right when they made it last May. Indeed, I have just quoted their shadow minister at that time, Senator Jack Evans. It is a deal done to change a vote in payment for a decision that the Government is about to make on Tasmanian wood chips. Let us make no mistake, this is the sort of party we have in the Democrats and the people of Australia will not tolerate it. We have heard from Senator Sanders, who got into this place on the preferences of the Labor Party. He certainly did not get the votes in his own right. Senator Sanders —How many primaries did you get? Not very many. Senator WALTERS —He got in only on the preferences of the Labor Party, and he can check up on that. He should check the number of votes I had when I led the Liberals and look at the number he got when he led the Democrats. Senator Sanders has said that we in the Tasmanian Liberal Party are a bunch of troglodytes. He should look up the dictionary because he is the one who lives in caves. We want development-he is the one who is prepared to live in caves. He is suggesting that 31 per cent of our State be tied up in national heritage and wilderness areas. Senator Cook —What has this got to do with cash bidding? Senator WALTERS —It seems to me, a great deal. I cannot imagine how it could possibly have, but it seems to me that the Democrats have made it a very major part of whether this piece of legislation will be voted through tonight or not. I have just quoted Senator Chipp and I will quote him again. Senator Chipp said: What we are doing is that we are having a very close look before we give them an answer on cash bidding on their attitude to woodchips. That is what wood chips have got to do with cash bidding, Senator Cook. It seems to me that what the Democrats are doing is having just enough of them voting to give the Government the legislation, so the Government has got a pay-off and it will have to pay up if it wants their vote not only on this issue but also on taxation issues. We will see. Let us look at what Senator Sanders was doing before he came into this place, because we must see how sincere he is. He was selling wood burning stoves. I wonder how many forests he has had cut down in the selling of his wood burning stoves? How many forests, how many trees, would the people who bought the stoves have to cut down for fuel? Senator Cook —On a point of order, I would point out that we are dealing with the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill. How many votes Senator Walters or Senator Sanders got in their respective elections or what the occupation of Senator Sanders was before he came into Parliament seems to have nothing at all to do with this legislation. I suggest, therefore, that Senator Walters be directed to address the legislation before the House. The ACTING DEPUTY PRESIDENT(Senator Tate) —Order! I do not think I need to direct Senator Walters. I believe that the link is made out in her own mind. I believe that it is becoming somewhat tenuous but it is still clear to the Chair. Senator WALTERS —Thank you, Mr Acting Deputy President. We have been asked to keep our speeches short tonight, so I will finish by quoting the Australian Financial Review which also quotes Senator Sanders: Senator Sanders did not deny a deal was being orchestrated he said, `Politics is the art of discussion and if you wish to call it that you can.' As he described it, there was something the Government wanted and in true political fashion the Democrats had simply required something in return that the Government should give anyway. Senator VIGOR(South Australia)(9.26) —My colleague Senator Sanders has set out the real reasons why we have taken the position we have with respect to the cash bonus bidding system. I would like to extend these with a few reasons of my own in this particular area. I am disappointed with Senator Walters because of the implications she has made in this House, but I do not believe they deserve any type of qualification, answer or even attention. The reason why I personally will be supporting the cash bonus bidding proposal is that the alternatives presented to us are not really as attractive. Last time the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill was before us we put forward a bank bond system, which has now been rejected by both the Government and the industry, even though I believe that it was a better option than the cash bonus bidding system. It was that system I supported last time. The current system of planned work programs managed by the Department of Resources and Energy has a number of obvious pitfalls and does not offer the immediate revenue raising potential to the Government which the cash bonus bidding system does. I believe that the system proposed for cash bonus bidding may have more than one reason for being introduced. We must note that it is being introduced in an area to our north, and I wish to concentrate on some of the problems of that region in the Timor Sea where the leases and the new blocks are to be introduced. I believe that we could well have as one reason for introducing it-getting our money now while we still can. In these times when we are squeezing veterans, the poor and needy in our society, I much prefer to raise money from the large oil companies which are exploring our North West Shelf than from these hard hit groups. Let us face it, cash bonus bidding is a revenue raising procedure set up by the Government. The money raised goes into Consolidated Revenue and hopefully will allow the Government to introduce tax concessions and allow added expenditure to flow into areas of need in the Australian community. It is also possible that the Government may see the light and put some money into developing renewable energy resources instead of just developing oil fields. I believe it is quite important to support reasonable fund raising measures. Oil companies will explore only if it is economically viable for them to do so. We are giving them access to a resource which is Australian, at this stage, and I believe that the companies should pay for it. I am quite happy that they should pay for it through a system like the cash bonus bidding system. As Senator Sanders said, we see no reason to suggest that this will stop exploration in any way, and I believe the arguments that he has put forward to support his thesis. When the Bill before us this evening becomes law, the Timor Sea will be a test case for cash price bidding. With cash bidding the blocks will be much smaller. It is estimated that the biggest area that will be offered in the Timor Sea is only 28 blocks. This will allow more people to be involved in the process. The issue which is of greatest concern to me in relation to the Government's oil policy is oil drilling in the Timor Sea. I digress slightly to look at East Timor and the way in which the Government has treated that area, because it is related to the fact that we wish to develop oil fields within 50 to 100 kilometres off the shore of that land. The invasion of East Timor 10 years ago is a matter of national disgrace for Australia. Both the Liberal Party of Australia and the Australian Labor Party have spent a lot of time, and made great efforts, to legitimise their past behaviour. All thought and concern for the civil rights of the East Timorese people, or their right to national self-determination, has been squashed. Australia's policy towards Indonesia has been one of appeasement, and the parallels between Munich 1938 and Australian-Indonesian relations in 1975-85 are quite alarming. Successive governments have vainly attempted to appease the Indonesians. They have said to the Indonesians: `You can have peace-you can have this piece, that piece and these pieces'. The reality is that Indonesia is expansionist and belligerent. It already has West Irian and Timor, and already it calls Papua New Guinea East Irian. I could go even further and mention Majapahit, which is the very old Indonesian belief that parts of northern Australia are already part of Indonesia. When will Indonesia be satisfied? Is it looking for some pan-Indonesian development, or maybe a Lebensraum-a breathing space-as was sought by Hitler? The drilling in the Timor Sea and the economic advantages to Australia are a balm to our guilty conscience-yet another reason to shut up on the subject of East Timor and the dreadful violations of human rights as well as the violence and oppression of the East Timorese people. While the economic advantages of the agreements between Australia and Indonesia to drill for oil in the Timor Sea are clear, I look forward to the day when it will not be at the cost of innocent people's lives and happiness. The Department of Foreign Affairs and the Prime Minister (Mr Hawke) have been bending over backwards to assure the Indonesians that we would do anything to keep them happy. I believe that the reasons for this are clearly economic. We can see some of the reasons we want the money from the oil developments up front in the Bill before us tonight. The recent announcement of the agreement in principle that a joint development zone in the Timor Sea is a precursor of a joint Indonesian-Australian authority to exploit the oil resources of the Timor Sea has been reported in the Australian Financial Review. Does this mean that the policy of appeasement will take on a new quality as yet unknown? I seek leave to incorporate in Hansard an article by Michael Byrnes in the Australian Financial Review of Tuesday, 29 October, entitled: `Timor-gap talks show ice has melted'. Leave granted. The document read as follows- Timor-gap Talks Show Ice has Melted The main lesson of last week's talks between the Indonesian and Australian Governments on the longstanding and delicate ``Timor gap'' border problem is simply that relations between the two countries seem to have warmed significantly beyond thawing point. A statement issued by the Australian Foreign Affairs department immediately after the talks concluded on Friday made the point that the talks progressed in a ``friendly and constructive atmosphere''-the sort of comment normally dismissed by most observers as routine diplomacy. In the case of the Timor gap talks, however, the Foreign Affairs statement seems to rather underplay the real significance of an atmosphere of growing constructiveness in Australia-Indonesia relations. Australia and Indonesia are yet to reach agreement on the toughest issues in the Timor gap problem-exactly where an eventual borderline is to be drawn, the specifics of how resource exploration is to be conducted in the area at issue, the geographical details of where an interim joint resource zone is to be located. Yet the fact that the two sides were able to reach positive agreement in principle that a joint development zone (JDZ) should be established is regarded as of more than normal significance. Furthermore, it now seems that both sides are clost to settling informally on the establishment of a joint Australia-Indonesia authority to administer the JDZ. An ultimate settlement of the Timor gap may never completely erase the culture gap that has contributed so greatly to frosty relations between Australia and Indonesia over the past decade. But the fact that negotiating teams from Australia and Indonesia were last week able to reach a level of constructive understanding on a matter sensitive enough to involve the eventual drawing of a borderline between Australia and Indonesia indicates something close to a breakthrough in relations between the two governments. Much is sometimes made of the view that mental perceptions are often of greater significance to Indonesians than the simpler reality of more obvious fact. Rarely is the same point made of Australians. Yet, in the overall context of Australia-Indonesia relations, it seems that the constructive atmosphere of last week's talks is regarded as of more importance than anything else by both sides. In the worst case, the talks held the potential for one side to dig itself in on an issue. There is no doubt that past problems between the two countries held a potential to colour negatively the tone of talks on the Timor gap issue. But the opposite seems to have occurred. Canberra now takes the view the talks were more positive than expected. Discussions on the Timor gap issue still have a long way to go. Last week's talks involved a wide range of interests from both Australia and Indonesia, with the Australian side including representatives from no less than a dozen government bodies and departments (Foreign Affairs, the Northern Territory and WA Governments, as well as the Departments of Resources and Energy, Attorney-General, Prime Minister and Cabinet, Defence, Treasury, Mineral Resources, Primary Industry, Arts Heritage and the Environment and Taxation). Still, the talks were angled mainly towards legal and jurisdictional issues. The Australian side was led by the international legal section of Foreign Affairs, which in itself says a lot about the nature of the discussion. The next round of talks, most likely to take place early next year, will focus on some of the more concrete sticking points. The main point still to be decided is the exact location and area of the JDZ and the nature of the zone. Other outstanding issues are widespread, involving not only whether the zone will be more to the north or to the south, but eventually whether BHP and Pertamina operate alone, whether BHP operates in the Australian ``partnership'', or even whether BHP might operate under licence from Pertamina on the Indonesian side. However, agreement for the establishment of a JDZ in itself has taken the two sides much closer to settlement. The possibility of a zone being split into two, along a north-south line, for example, now seems more remote. Much more likely is the eventual administration of the entire zone by a joint Australian-Indonesian authority. Still far from any decision is the way a line will eventually be drawn to fill in the missing 250km gap in the Australia-Indonesia border. Currently-agreed incomplete boundaries between Australia and Indonesia were set in negotiations sealed in 1971-72, when Timor was still under Portuguese rule and when Portugal held rights over the area in question. After Indonesia's annexation of Timor in 1976, problems arose in attempts to close the gap, with Australia arguing for a simple extension of existing borders and with Indonesia arguing that that the lines should be drawn mid-way between Australia and Indonesia. In subsequent negotiations, both sides have been able to back their conflicting arguments with a reasonable weight of law and logic. After last week's talks, Canberra's feeling seems to be that there is no need for haste on the drawing of a line and that in the meantime, a JDZ will at least get underway the exploitation of whatever resources are in the disputed zone. It is expected that informal contact between Australian and Indonesian Governments in the period before the next round of talks is held will begin to clarify some of the tougher remaining problems. Eventually, of course, the entire Timor gap issue will be decided by the two governments on political grounds. And it is here that the real payoff from the Australian-Indonesia thaw will hopefully be seen. Senator VIGOR —I thank the Senate. No doubt the present Government would like East Timor to go away and Fretelin with it. There would be no impediment to Australia's throwing herself at the feet of the Indonesians, and that is one of the problems. How far can we go down this path? I was quite surprised at Mr Hawke's statements on Indonesian television which, I believe, were yet another move to appease the Indonesians. Cash bonus bidding is a way of Australia getting revenue at this stage from the exploration in our northern oil fields before someone claims that they may be Indonesia's southern oil fields! Hence, I will support the Bill in a trial form, with a two-year sunset clause to be moved by the Democrats at the Committee stage. I believe it is important to raise in the Parliament these matters concerning East Timor. It is also important that we should have some exploration in that area which will produce reasonable development and a reasonable return to the Australian people for the resources which they are making available to the oil companies. I will support the Bill as amended. Senator Sir JOHN CARRICK(New South Wales)(9.36) —The Senate is debating the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 [No. 2]. It is an identical Bill to the one that was rejected in the Senate in May this year. It is identical in every form and its rejection was supported by the Australian Democrats. The purpose of the Bill is to replace the current method of granting leases-that is, a work program bidding system-with a cash bidding system. One must understand the nature of both systems in order to understand what is happening. I know of no system in Australia which has the form of cash bidding that is contemplated in this Bill. I say at the outset that cash bidding bears no relation at all to any tendering system for any project and no tendering board would use the principles that are embraced in this Bill. If one were to replace the work program method one would, of course, argue that it has been unsuccessful. Otherwise, why should we replace it? It is fundamentally important to say that the work program legislation has been superlatively successful. No one has put forward any argument to suggest that there has been any major defect at all or any degree of failure. On the contrary, to understand this situation it is important to recite the history of the matter. In both cases the Australian Labor Party's decisions in the past have proven very wrong indeed. The Labor Party, under the Whitlam Government, had a disastrous oil search program. At the start of the Whitlam Government there were 22 or 23 oil rigs in Australia and all but one, I think, were working. At the end of its term of office-in 1975-I think only one was left and it was not working. If my memory serves me correctly, in 1975 only 25 holes were drilled. The need to obtain indigenous oil in Australia was absolutely crucial. The incoming Fraser Government brought in import parity pricing. I remind the Senate that the Labor Party fought with all its might-led by Mr Keating-to oppose import parity pricing. It said that it was disastrous, that it would have all sorts of ill effects. Today the very man who tried to destroy it and said it would damage Australia is the flag bearer for it-Mr Keating. Import parity pricing, which was damned by the Labor Party but was the most successful policy in oil search in Australia, was brought in by the Fraser Government, administered by me as the appropriate Minister, and is now the flag bearer for the Hawke Government. One of the things that must be understood, and the Minister for Resources and Energy (Senator Gareth Evans) would be sensitive to this, is that what he is seeking to do is hide from the people the fact that this year revenue from import parity pricing has peaked at $4,000m and will fall steadily and very severely year by year. It will fall by $800m next year. These are the Minister's figures, provided at an Estimates committee hearing. In some four years time, the figure will fall to $1.3 billion, a fall of $3 billion in a matter of three or four years. In fact, what we are seeking tonight is not a program for oil search or oil development, but a program to get money by a snide or devious way. The fact is that if oil prices fall any further, the fall in old oil revenue will be much more vast. This, of course, is the reason why the Government had the so-called tax reform. It was not a tax reform at all; it was a back door method to put down a basement of taxes that could be accelerated to take up the fall in the price of old oil. Two factors worked together in the 1970s to overcome a disaster. In the mid to late 1970s the forecast was that the 67 per cent self-sufficiency of indigenous oil then existing would fall to 50 per cent by 1985, to 40 per cent by 1990 and to 10 per cent or 20 per cent by the turn of the century unless major oil discoveries were made. Australia could not afford to have a fall of anything like that magnitude. In those dollar prices every 10 per cent fall represented $1 billion that would be needed in import revenue. We could not afford to find $2 billion to $3 billion in the years ahead. So, it was absolutely vital that there should have been a successful oil policy and the combination of the work program bidding plus oil parity pricing was for Australia a revolution in oil exploration and oil development which is still continuing, but which is being threatened. In the recent Estimates debates in this Senate I asked the Minister for projections as to what the oil self-sufficiency of Australia would be in the years ahead. The figures given by him and broadly confirmed by the Bureau of Mineral Resources run something like this: The present self-sufficiency, which is in the order of 80 per cent, would fall by 1992-a handful of years away, some seven years away-to 42 per cent unless there was a major find of oil. They were the figures given in the Estimates. Indeed, if one looks at the address by the Chairman of Broken Hill Proprietary Co. Ltd in the Australian Petroleum Exploration Association Journal, he says that by 1995 self-sufficiency will be down to one-third. The situation is that unless major discoveries are made, and made very quickly, we will have a fall in self-sufficiency-a fall that cannot be coped with at all by imports. Today's figures on the balance of trade show that there is no way on earth in which we could afford to import more oil. Today's balance of trade figures are disguised by the fact that at this moment we are earning overseas export earnings by exporting some 20 per cent of our indigenous production. In other words, at this moment when we have a surplus, we still have a very adverse trade balance. If in fact it were to decline, and every 10 per cent decline below 70 per cent will cost us more than $1 billion, there is no way in which Australia could in fact pay for its oil. It gets worse than that. Every time that the dollar is devalued further it costs us more in world trade. In fact, as our trade balance gets worse, it would cost us more and more. The primary thing to do is to stay with the policies that have been successful. We should stay with import parity pricing because it has been superlatively successful. It is now acknowledged to be so by the Hawke Government which depends on it for the basis of its revenue and acknowledged so by the Treasurer (Mr Keating) who went around Australia blackguarding it and saying that it was a tragedy. I remember the Treasurer, then in the Opposition, going around Australia saying that it would be a terrible thing that, under the Fraser Government, petrol would increase in price to 40c a litre. It never did but it has got to 57c a litre under the Hawke Government. So much for the Treasurer and so much for the Hawke Government that blackguarded us. Let us have a look at this whole question of work program bidding. When I look at the cash bidding I can only think of a line out of one of the ballad poems of Kipling, and that line says: `He that hath the largest purse shall have the longest life'. In other words, he that pays the most gets the bid. I know of nobody in any business venture who makes that quantitative decision and stays with it. If one thinks about it, it is unreal. First of all, it is entirely quantitative. It gives to him who has the larger purse the longer life. Kipling was rather cynical about that form of justice or mercy. I commend the poem to honourable senators. This policy does not ask a person or corporation to submit any of the qualities of that person or corporation-any of the qualities of integrity, the financial solvency, the ability to perform in the past, the readiness to undertake the task or the whole question of whether it is the best of the persons or corporations to do the job. Any tender board of any kind of quality and integrity at all, before it looks at price, tests the whole quality of each of the corporations that bids. The questions must be asked: Is it of integrity? Has it got financial solvency? Has it got the equipment to do it? Is its performance of the past such that it shows that it can do it? Nobody would make a decision on price alone. The Government's concept is altogether an outrageous one. It is against every kind of commercial principle that one understands, but it is silly because it is not going to get the Government more money. Let us have a look at this situation. First of all the Government says: `We are going to take this front end bid from you whether or not your oil exploration is a success or a failure. In fact, that firm pays for the working expenses in the cash bid, and because it has got more working expenses it pays less tax. In fact, the income tax take or the company tax take is reduced. If the venture is successful and there is no front end cash bid, the Government gets the profit from the well. If the firm is successful and there is a cash bid it is put in as working expenses and the Government does not get that much; so there is nothing in it in the end for the Government. It comes down to a situation of fundamental principle. What it means is that the Government says that it does not care about the qualitative nature of the bidder at all so long as the bidder gives it the largest amount of money. I repeat: Never in my life have I heard of a business practice based on that principle. I have never heard of that in a tender board. In fact, if it were done in a tender board it would be regarded as corrupt. No tendering system can justify itself unless it is stated in the first place: `I have looked at the works program that these particular contractors have put before us. I have looked at their performance, their integrity and their equipment and this one is the best bid'. One does not give it to the person who bids the most. Australia is one of the least prospective countries in all the world, one of the countries where the chances of finding oil are less than most and where the prospectivity is larger off-shore than on-shore, but infinitely more costly off-shore. It costs $10m at least to drill one well. It is imperative that we continue to attract investment and re-investment in Australia. I reject the idea that it does not matter that leases go to the highest bidder-that `he that hath the largest purse shall have the longest life'. I had never thought that Kipling's cynicism would find its place in the Australian Labor Party and its decisions. That kind of situation is one of the ugliest I know. It means that very many Australian companies will not, of their own, be able to come into this. Someone has said that they will be able to get into conglomerates or into groups. The fact of the matter is that we need to encourage as many Australians as possible to invest. The following very significant statement is made in the Australian Petroleum Exploration Association report: `In Australia today we are using oil much more rapidly than we are finding it'. What are we doing at this moment? We ought to be maintaining the fundamental programs that were successful. I repeat: Has anybody criticised the work program? One of the interesting things about those who supported the cash bidding in tonight's debate was that none of them discussed the programs at all. They all talked of other things. What an extraordinary situation. We had a discourse from the Australian Democrats making claim after claim that was absolute nonsense, first of all attacking the oil companies and casting all sorts of aspersions, and then saying: `Is it not a good thing that the big foreign oil companies will have the money to make the bidding?' They then made what, I suppose is the most inaccurate statement I have heard in this Senate-a statement about the extravagance of the present state of research into solar energy and wind energy. In fact, the expert advisers to this Government and previous governments and the expert advisers around the world will say that whilst one should strongly encourage renewable energy, the fact is that at this stage of our development it will be insignificant. If every house in the world had a solar array on its roof it would save 10 per cent of energy. I do not want to destroy the concept at all, but the making of that solar array, with all its metal, copper pipes and vitreous materials, uses very considerable energy indeed, and it is therefore not a great net conserver of energy. If one wants to look at wind energy, one need not go to Hawaii. One can go to Rottnest Island in Western Australia and see the windmills there and the tests that are being run. One can go to Western Australia and see very good solar energy research going on. Australia in many ways in its universities is leading in solar research but it is absolutely wrong to suggest that these are alternatives. The Australian Science and Technology Council, ASTEC, has advised this Government that, at least for the next 30 years, there will be no alternative to an enormous growth in nuclear power generation throughout the world, that even with the expansion of coal and oil production and pollution from acid rain there will be no alternative and that the renewable energies will not take its place. Here we have somebody rejecting entirely the advice of ASTEC, the most prestigious scientific body in Australia, to catch a headline. I want to take this matter carefully and put it into position. The fact is that this Bill is the same as the one that was here before and rejected by the Australian Democrats. It seeks to replace a work program system which was the most successful system of lease arrangements that this country has ever seen. Nobody has said that this work program of lease arrangements has any major defects at all. If honourable senators vote against it tonight they will be voting for a cash bidding system which is unique in Australia. No Australian firm would use it at all for tendering and we would be rejecting the most effective program for lease arrangements that we have had in Australia. If honourable senators support this rejection they will be saying that when they examine the tenderers for a lease every one of them will want to know: First of all, is this a company of integrity? What does it bank think of it? Who are its financiers? What is its performance like? Can it guarantee to do the program? What is its equipment like? What has it done before? Is it a good conglomerate with Australians? Under this system, if we vote with the Government, we put away all those considerations and say, as Kipling says: `He that hath the largest purse shall have the longest life'. What honourable senators will be saying if they support the Government is that the fellow who has the biggest purse will get the tender for the lease, no matter what the other considerations are. Let us make no mistake about that. I speak as a former Minister who for three years operated that program in the most successful three years of oil research and development that this country has ever seen. If we start to experiment we are going against that situation. I remind honourable senators of the figures: Unless we make major oil finds in the next seven years we will have dropped from 80 per cent self-sufficiency to 42 per cent in 1992 and to 33 per cent in 1995, with absolutely no chance whatsoever of using import replacements to get oil in. Today we saw that we have a deficit of something like $1,640m in our trading balance. We could not afford the billions of dollars needed for replacement. This judgment is not some glib thing. It is this: Are we willing now to risk what was the most successful program for Australia, a program that changed Australia from being an oil hungry community, a country that was energy short, into a country that was energy efficient? Are we willing to take that risk? Are we willing to do that against the advice of reputable firms such as BHP who say that the cash bidding system will be devastating, particularly for Australian firms, since it will take from them the ability to act? What are we changing this system for? It can be for only one reason; that is, that it is a backroom way of grabbing money. There again, I remind the Senate that it does not do that because if we take the money by way of working expenses at the front, we cannot take it by way of tax at the other end. We can only have it once. I believe that the most important thing for Australia is that its energy self-sufficiency should be maintained. It is the most difficult country in the world for oil exploration. It is very interesting to watch the lobbying going on at this moment in this Senate. Indeed, the Minister for Resources and Energy (Senator Gareth Evans) himself knows that the arguments I am putting forward are fundamentally right and what the Democrats are now doing is spurious and totally wrong. They cannot have voted here in May against this Bill and now be turning around and voting for it unless there are other reasons. That is the fundamental point. Bearing in mind that all the reports say that we are using oil faster in Australia than we are finding it, that we have to find oil and that it is absolutely vital that we spur on exploration-- Senator Sanders —You are a tool of the oil companies in this chamber. The ACTING DEPUTY PRESIDENT(Senator Tate) —Order! I call Senator Sanders to order. I ask Senator Sir John Carrick to address the Chair. Senator Sir JOHN CARRICK —Mr Acting Deputy President, I was addressing the Chair. I will not waste my mind addressing Senator Sanders. I have already pointed out to the Chair that I have never heard so many inaccurate statements made in the Senate as were made tonight by Senator Sanders. Let us make no mistake at all-if the brain fever birds want to go on and on and act like larrikins it is for them to do so. It is not for me to respond to them. Fundamentally, I want to say to the Senate-- Senator Crichton-Browne —Mr Acting Deputy President, I raise a point of order. For the second or third time tonight Senator Sanders has demonstrated to the chamber what he is like. Some moments ago he described Senator Sir John Carrick as a tool of the oil companies in this chamber. Senator Sanders is nodding his head in agreement that he said it. I know you did not hear it, Mr Acting Deputy President, but it has now been confirmed. In my view, that is a reflection on the integrity of Senator Sir John Carrick. I ask that it be withdrawn. The ACTING DEPUTY PRESIDENT(Senator Tate) —I believe that is a reflection on the honourable senator. I ask Senator Sanders to withdraw. Senator Sanders —It may be a reflection on him. I am sorry if he considers it to be so. I do withdraw that statement, although I do believe that through the comments of Senator Sir John Carrick he has certainly shown a predilection to support the oil companies. The ACTING DEPUTY PRESIDENT — Order! I have asked you to withdraw, Senator Sanders. Senator Sanders —I will withdraw that particular statement. Senator Sir JOHN CARRICK —Let it be known that I would not have wanted any withdrawal from Senator Sanders. I regard his comments in this chamber as so debased that I would take no reflection upon myself of anything he said. I make the very simple comment to this chamber: Let the people of Australia and the Senate judge whether my three years as Minister produced for Australia-not for oil companies-the greatest upsurge in search and development and the greatest movement towards energy self-sufficiency that this country had ever had. In fact, by the time the Fraser Government lost office this country had become the enormous beneficiary of such policies. Certainly no one in Australia, other than Senator Sanders with his gutter language, would ever suggest that I was the tool of any company, any corporation, any person. In fact, I stand as my own man on these matters. I am enormously proud of the fact that import parity pricing-which Labor derided and which it now grapples to itself with hoops of steel-and the work program leases were the immensely successful programs that gave to this country a waterproofing in energy the like of which it has never seen and which has been carried over till now. Those programs are now being disturbed. I repeat that nobody has ever proposed a justification for naked cash bidding based on quantity alone; he that hath the largest purse shall have the longest life. Nobody has suggested that that bears any relationship to ethical tendering at all. Nobody has said that the work program leasing was unsuccessful. How could anyone say that? It was successful. Nobody has suggested that cash bidding will bring any qualitative value at all to the issue. In other words, what we have been asked to do tonight is to divide and vote for this Bill on the basis of some kind of deal. No kind of reason, no kind of rational argument at all, can support the argument for cash bidding. It can be done only for the short term purpose of Labor trying to raise money in the knowledge that its revenue from old oil will fall by $800m next year. It can be done only by the Australian Democrats not changing their arguments validly but making some arrangement with the Government. If the Australian Democrats do that this country will be the poorer, because it has had eminent success from a policy of work programs. It will face considerable dangers and, in my judgement, considerable unethical practices if indeed the only way it chooses a corporation by the size of its purse. Senator CRICHTON-BROWNE(Western Australia)(10.04) —I rise to speak for a couple of minutes as a result of an invitation by Senator Cook to speak on the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 (No. 2). I wish to speak in relation to an interjection I made when I asked Senator Cook whether the State Minister for Minerals and Energy in Western Australia, Mr David Parker, was supporting this legislation. Senator Cook's response was to ask why I did not read the Daily News of Western Australia because I would have discovered in that newspaper that Parker supported the legislation. Subsequently, when I asked whether Minister Parker held any reservations, Senator Cook said that he had some reservations but they were now accommodated and reflected in the present legislation. I refer honourable senators to an article headed `Compromise on cash bidding stands-Parker' in the West Australian of 7 November. The article stated: The Federal Government's re-introduction of legislation to establish a cash bidding system for offshore oil exploration is not expected to affect WA. To say the least, Parker certainly would not support the legislation's impingement upon Western Australia. However, he goes further than that. Senator Durack —You can't believe Cook. Senator CRICHTON-BROWNE —That is right. The article continued: State Minerals and Energy Minister David Parker said yesterday he understood the previous agreement between the State and Federal Governments would still apply. The article continued: The agreement was that cash bidding-which involves the up-front payment to the Government of funds which would otherwise be spent on exploration-would not be applied to offshore areas adjacent to WA for two years and then would be subject to further discussions. The article continued: Mr Parker said the State Government still had considerable reservations about the cash payment system. `We do recognise, however, that cash bidding is infinitely better than the alternative signature bonuses and retention lease premiums proposed by the Federal Government,' Mr Parker said. That article demonstrates that Mr Parker has grave reservations about this legislation, grave to the extent that he is not prepared to have it impinge upon Western Australia. Secondly, Mr Parker articulates that he has reservations about the cash bidding system in general. Senator GARETH EVANS —(Victoria-Minister for Resources and Energy) (10.08)-in reply-I thank honourable senators for their contributions to the debate on the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill 1985 (No. 2). We had a long and comprehensive debate on this subject in March and May. I made a substantial reply to the debate on 15 May and I do not believe, as a result, that there is any necessity to repeat more than a handful of the relevant points in reply here tonight. At the outset I say in answer to the recurring theme that this particular proposal, if enacted, will reduce off-shore petroleum exploration in Australia that I do readily acknowledge the need to maintain a very robust off-shore exploration program because of the depletion situation we will undoubtedly, as a nation, be confronting over the next few years as Bass Strait resources run down. We do have a significant potential liquid fuel shortage which synfuel programs of the kind Senator Sanders referred to in his contribution may or may not sufficiently pick up. I make the point that if I believed personally that the enactment of this legislation would in any way undermine the off-shore exploration program this country needs I would not support, promote or put forward this legislation. The situation is, however, that cash bidding is to be applicable only for what we have described as highly competitive acreage situations, highly prospective areas, where there is a real and undoubted commercial interest in exploitation and where there is a high level of commercial competition. We cannot see that there will be any less interest in exploration of those prospective areas as a result of the particular means of acreage allocation here proposed. Indeed, if Senator Sanders accurately records, as I am sure he did, the conversation he had with the Australian Petroleum Exploration Association representatives today, that point was very graphically made in the particular exchange to which Senator Sanders adverted. Even if one does accept, as I do not, the finite bucket theory of exploration budgets, that is to say, that there is only a certain number of dollars available for exploration and that it is a closed system with money neither coming in nor out, even if one accepted for the sake of argument that characterisation, the implementation of cash bidding would, at the worst, mean that there was some reallocation of exploration priorities away from the less exciting prospects, the less immediately prospective areas, to the more prospective areas. That is the worst that could happen with a stretching out over time of the exploration program that might otherwise have been contemplated with a lower priority being given to the less prospective areas. That is the worst that could happen. I think it can be readily seen, from thinking of it in those terms, that whatever one does in this respect it will not be harmful to Australia's long term needs. The whole argument about there being a limited bucket of money available is not one that is accepted by the Government, for reasons that I have spelt out often enough before and I do not think I need to do so again. There is a high level of external interest, particlarly in a cash bidding means of allocation, more so than with the work program bidding; as I can readily attest from my own conversations with international oil companies, a number of which have not been hitherto operating in Australian waters. It is the case that commercially attractive prospects will always attract investment. The proposal that we are promoting here tonight recognises that reality. We readily acknowledge that the amount of money that is in fact bid up-front in this respect will be a matter for the commercial judgment of the companies involved, making their own decisions based on their assessment as to the costs and the risks involved in the particular exploration program; that is to say, the chances of that expenditure producing a return. It is an option system but one in which a reserve price will not be set, as I said in my second reading speech. The Government will simply have to cop whatever the particular market throws up in that respect. As to the argument that this proposed system for competitive acreages is not necessary, that the existing work program bidding system is working perfectly satisfactorily, let me simply say this: The work program system, for all of Senator Sir John Carrick's defence of it, has not worked completely satisfactorily in the past. It has worked in a number of areas without difficulty but when acreage has been the subject of intense competition all sorts of difficulties have been experienced in making the initial allocation decision and making that decision stick. In the second reading speech, and in previous contributions to public debate, I have indicated a number of areas in the Bass Strait where that has been so. The greatest difficulty with the system is that it locks one into an unavoidable dilemma. On the one hand one has uneconomic expenditure being forced upon the holder of the work bidding licences or, on the other hand, one runs the risk, if one allows flexibility and does not require uneconomic expenditure, of undermining the integrity and credibility of the bids. One encourages blue sky bids at the outset and one does not have the fine tuning mechanism for initial allocation that one wants in these areas. Many points could be made about the success or otherwise of work program bidding as it has applied in the past. A lot has been made of alleged exploration figures in previous years. I simply note, in response in particular to Senator Sir John Carrick's assertion about a dramatic decline in off-shore exploration drilling during the Whitlam years followed by a resurgence of enthusiasm by off-shore operators once the tories came back to power, that the figures are as follows: In 1973, 36 off-shore wells were drilled by comparison with 39 in 1972. In 1974 there were 31-the same order of magnitude but a decline, I acknowledge-dropping down to 18 in 1975. I acknowledge that that certainly was a decline. Where lay the revolution with the return to government of the Liberals? In 1976 three wells were drilled off-shore. In 1977 but 13 wells were drilled out of a total of 21 in the country as a whole. Senator Sir John Carrick —Keep going-up to 230. Senator GARETH EVANS —Yes, but now the figure is substantially more than that. As far as off-shore exploration is concerned, it bumped along at those very low levels all the way up, in fact, to 1981, then things started taking off in 1982, 1983 and 1984 and they have continued at those sorts of levels. We can argue until the cows come home about the implications to be derived from that. I simply make the point that the explanations obviously have much more to do with larger economic considerations than simply who was in government; otherwise one would have expected a very quick turn up, if not in 1976-perhaps there was not time for that-certainly in 1977. I do acknowledge that work program bidding systems can be made more satisfactory than the one we have lived with for a number of years. A lot of effort has been put into trying to renegotiate with the oil industry a new work program bidding system to apply to off-shore exploration areas. At last we are very close, after months of discussion, to developing such a dry hole bidding system. The difficulty about that is that, while I believe it will work quite satisfactorily for run of the mill off-shore lease areas where there is not intense competition, it simply will not work as an effective discriminator between bidders when one is talking about highly competitive acreages. The dry hole bids, the guaranteed minimum programs that are submitted, are likely to be, for all practical purposes, more or less identical among the major players and it will become then a matter of applying a whole variety of discretionary criteria to distinguish between them. That introduces a level, we believe, of unacceptable bureaucratic intervention, regulation, which has not worked very well in the past and will not again-intervention, regulation, which is utterly at odds with the kind of deregulatory ideology which has been so assiduously and noisily promoted by the Opposition, particularly under the leadership of Mr Howard. As I said in introducing the legislation the other day, its introduction gives Mr Howard and the Opposition, under his new leadership, a chance to show their real colours on what is unquestionably a major proposal for industry deregulation. I hope that some of those vigorous free marketeers opposite will appreciate the significance of this legislation as far as free market values are concerned. We are prepared to let the market sort out these difficult allocation decisions for us. It was fascinating to hear tonight how few of those opposite are prepared to put their money where their mouths are when it comes to free market, private enterprise, ideology. As to the suggestion that this is and is nothing more than a revenue raising measure, I acknowledge that the measure will raise some revenue, but how much is a matter for speculation. It is a matter for the companies themselves. It is not a matter for governments to determine. The amount that is raised by this could be considerably more than the figure mentioned at the top of the range by Senator Sanders. It could also be substantially less. The Government acknowledges the uncertainty of that. As I mentioned before, it is a matter for commercial judgment as to what the balance of costs and risks is. We are prepared, on the application of good deregulatory market principles, to accept the judgment of the market in that respect in a way that the Liberals, the supposed bastions of free enterprise opposite, are simply not. However, the measure is not and never has been primarily a revenue raising measure. Of course, it will generate revenue. The lack of that revenue is something which we will have to contemplate picking up elsewhere if this measure fails. But it is not and it never has been a primary objective. If it had been a primary objective we would have made cash bids themselves deductible against both resource rental tax and company tax in a way that they are not. By making them non-deductible it is a disincentive to maximising the amount of the dollars that are bid. We would have provided for unlimited renewal of the areas in question. We would have made no provision to discourage speculators from participating in this market in the way that we have sought to discourage speculators by setting technical and financial threshold hurdles which they will have to jump over before they can get into a bidding environment. It is not designed to make money. It is designed to produce an economically rational allocation of scarce and valuable commercial rights. Finally, as to the support that this measure has generated elsewhere, the question of Western Australia's enthusiasm or otherwise for this measure has come in issue. I acknowledge that Senator Crichton-Browne was reading accurately from Mr Parker's Press release when Mr Parker said that the State Government still had considerable reservations about the concept of up-front payments, but that was in the context of a release the whole of which, when read together, makes it clear that the Western Australian Government is, in fact, prepared to support it, notwithstanding some initial suggestions rather vigorously put to the contrary by the Western Australian Premier. Senator Durack —They will not have a bar of it as far as Western Australian waters are concerned. Senator GARETH EVANS —Senator Durack has not kept up with current developments. The reality is that they do now acknowledge the economic rationality of this measure. They want to see this run as a test case, if you like, in the Ashmore and Cartier Islands area in the first two years. We are happy to accept it on that basis, as I said in my second reading speech. We will all be in a much better position to pontificate about what cash bidding is all about in a couple of years time than we are at the moment on the basis of that particular experience. I have no doubt that on the basis of that experience those opposite will acknowledge that they were wrong tonight in their blackguarding of cash bidding, in exactly the same way as I cheerfully acknowledge, in response to Senator Sir John Carrick's challenge, that we were wrong a few years ago in our opposition to import parity pricing. We can all be wrong. I would like those opposite to contemplate the truth of that nostrum and perhaps consider again the position they have taken on this in the period that lies ahead. I conclude by saying in answer to Senator Walters, if it needs an answer, that there has been no deal in this matter, despite some Press speculation inspired in various quarters to that effect. I simply draw the attention of honourable senators to what I said in that respect at Question Time today. I would not like the record of this debate to go unremarked in that respect. There has been no deal. It is a matter of all honourable senators in this place looking at this proposal on its own merits, and that is all I am asking honourable senators to do. I commend the Bill to the Senate. Question put: That the Bill be now read a second time. The Senate divided. (The Deputy President-Senator D. J. Hamer) Ayes . . . . . . . . . . . 34 Noes . . . . . . . . . . . 31 —— Majority . . . . . . . . . 3 —— Aulich, T. Jones, G. N. (Teller)Black, J. R. McIntosh, G. D.Bolkus, N. McKiernan, J. P.Button, J. N. Maguire, G. R.Childs, B. K. Ray, RobertChipp, D. L. Reynolds, M.Coates, J. Richardson, G. F.Colston, M. A. Robertson, E. A.Cook, P. F. S. Ryan, S. M.Cooney, B. Sanders, N. K.Crowley, R. A. Sibraa, K. W.Devlin, R. Siddons, J. R.Elstob, R. C. Tate, M. C.Evans, Gareth Vallentine, J.Foreman, D. J. Vigor, D. B.Georges, G. Walsh, P. A.Giles, P. J. Zakharov, A. O. Archer, B. R. Lewis, A. W. R.Baume, Michael MacGibbon, D. J.Baume, Peter Macklin, M. J.Bjelke-Petersen, F. I. Mason, C. V. J.Boswell, R. L. D. Messner, A. J.Carrick, Sir John Missen, A. J.Collard, S. J. Parer, W. R.Crichton-Browne, N. A. Puplick, C. J. G.Durack, P. D. Rae, PeterGuilfoyle, Dame Margaret Sheil, G.Haines, J. Short, J. R.Hamer, D. J. Townley, M.Hill, R. Vanstone, A. E.Jessop, D. S. Walters, M. S.Kilgariff, B. F. (Teller) Withers, R. G.Knowles, S. C. Coleman, R. N. Chaney, F. M.Morris, J. Reid, M. E.Grimes, D. J. Teague, B. C.McClelland, Douglas Brownhill, D. J. C.Gietzelt, A. T. Watson, J. O. W. Question so resolved in the affirmative. Bill read a second time. The Bill. Senator VIGOR(South Australia)(10.28) —I move: After clause 2, add the following clause: Cessation of operation of Act `2A. (1) This Act shall cease to be in force at the expiration of 2 years after the commencement of this Act. `(2) When this Act ceases to be in force by virtue of sub-section (1), the relevant Acts shall have effect as if those Acts had not been amended by this Act. `(3) A permit granted under section 22B of the Petroleum (Submerged Lands) Act 1967 as amended by this Act shall continue in force after this Act ceases to be in force by virtue of sub-section (1) as if this Act had not ceased to be in force. `(4) In this section, ``relevant Acts'' means the Acts amended by this Act.'. This amendment is aimed at putting a two-year sunset clause on the Bill, which will give this Parliament the chance to review the claims made by those on both sides of the House concerning this matter in two years time. I commend this amendment to the Committee. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.29) —Obviously the Government is not especially keen on a sunset clause. We have, however, indicated that we are prepared to give the legislation a two-year trial period, so to that extent it is not inconsistent with our position. On that basis we will give it surly and grudging acquiescence and not push the matter to a division. Senator WALTERS(Tasmania)(10.30) —I wonder why the Australian Democrats want that period of time. Is it that they do not trust the Australian Labor Party to come across with the deal? Consideration interrupted. The TEMPORARY CHAIRMAN(Senator Townley) —Order! It being 10.30 p.m., under sessional order I put the question: That the Chairman do now leave the chair and report to the Senate. Question resolved in the negative. Consideration resumed. Senator DURACK(Western Australia)(10.30) —The Opposition, which until a few minutes ago was not given notice of this amendment by the Australian Democrats, will support it, not grudgingly like the Government but simply because it- Senator Chipp —That is not true. We gave you notice. Senator DURACK —When did we get notice of it? We certainly did not. We got it in the dying hours of the debate. The first I heard about it was when it was circulated in the chamber. Unlike the Government, we do not support the amendment in such a grudging and ungracious way, despite the fact that we have been rather shabbily treated by the Democrats in relation to it. Clearly, we remain strongly opposed to the whole exercise. Senator Chipp —Do not start an argument. You do not need to. Senator DURACK —I will say what I like. I do not need to start an argument because I was shabbily treated in this matter. It is notorious that deals on this matter between the Government and Democrats have been discussed in the last week or two. Senator Chipp —You have had it now. You are politicking in a cheap way. Senator DURACK —Why does Senator Chipp not remain consistent? A few months ago he voted against this proposal. He is now protesting madly, having changed his vote within the last few months. I would have thought that he would have kept quiet. Senator Chipp —Only a moron would not change his mind. Senator DURACK —I am trying to explain that the Opposition remains strongly opposed to this measure but, clearly, we prefer a Bill that will have a life of only two years to one which would last indefinitely, as the Government proposed. The Government has talked about experimenting but it has sought this power to apply generally in off-shore areas. It is making a very major concession to the Democrats in agreeing to a two-year sunset clause. The Opposition is, in fact, pleased to see that the Democrats, who, a few months ago, voted against this legislation, including Senator Chipp and Senator Vigor- Senator Walters —They have done a deal. Senator DURACK —They have obviously done a deal. Now, to salve their consciences they have proposed a two-year sunset clause. If we have ever seen anything sillier that a two-bob watch we have seen the Democrats. We are quite happy to support the amendment. Senator WALTERS(Tasmania)(10.34) —I was appalled to hear Senator Chipp accuse Senator Durack of politicking. Perhaps now he is in the chamber he could describe what it is when he is quoted as saying: `We are having a very close look before we give them an answer on cash bidding at their attitude to woodchips.' What on earth do we call that if it is not politicking? He said that only a moron would not change his mind. He has not changed his mind on cash bidding. He has sold out on the woodchips and done a deal. He has said that he likes his deals to be made in public. It is obvious to the Senate that that is just what is happening now. He is doing his deals in public. How dare he accuse this Party of politicking. Amendment agreed to. Bill, as amended, agreed to. Bill reported with an amendment; report adopted. Bill (on motion by Senator Gareth Evans) read a third time. Senator GARETH EVANS(Victoria-Minister for Resources and Energy) —by leave-I give notice that, on the next day of sitting, I shall move: 1. That paragraph 1 of the resolution agreed to by the Senate and the House of Representatives on 28 February 1985 and 27 February 1985, respectively, relating to the appointment of the Joint Select Committee on Electoral Reform, be amended to read as follows: (1) That a joint select committee be appointed to inquire into and report upon- (a) all aspects of the conduct of elections for the Parliament of the Commonwealth and matters related thereto, including: (i) legislation governing, and the operation of, the Australian Electoral Commission, (ii) the provision of `free' radio time for political messages during election periods, (iii) the provision of the Commonwealth Electoral Act 1918 concerning the defamation of candidates for election, (iv) tax deductibility of political donations, and (v) the establishment of fixed formulae for determining the number of Senators and Members of the House of Representatives to which the Australian Capital Territory, the Northern Territory and other territories are entitled; and (b) such other matters relating to Australian electoral laws and practices as may be referred to it by either House of the Parliament. 2. That the foregoing Resolution be communicated to the House of Representatives by Message requesting its concurrence in the Resolution. Motion (by Senator Gareth Evans) proposed: That the Senate do now adjourn. Senator JONES(Queensland)(10.37) — Tonight I want to set the record straight in relation to notices of motion given by Senator Boswell and Senator MacGibbon. It appears that they attempted, in a very shabby manner, to attack the Government and put forward a whole lot of complicated facts to suit their argument. The first part of the motion, notice of which was given by Senator Boswell, stated: That the Senate- (a) notes with deep regret the demise of the Camelia Restaurant, Brisbane's oldest licensed restaurant, that will close its doors at 12 p.m. today, may it `rest in peace'; The principle behind the notice of motion given by Senator Boswell was to attack the Government and make out that the restaurant was closing because of the Government's tax package. He said that the restaurant would close its doors at 12 noon on Friday, but what he did not say, but what he knew, was that the restaurant would open its doors again on Monday morning with another name, the same licensee developing a bistro in the same area rather than a restaurant. Following the notice of motion given by Senator Boswell I gave notice of a motion stating: That the Senate congratulates the Camelia Restaurant on its endeavours to spend $1.5m in redeveloping in the Riverside development in Brisbane. Senator MacGibbon gave notice of a motion stating that I had misled the Senate. That is totally incorrect. Senator MacGibbon told only the part of the truth that suited him. On reading through his notice of motion one sees that he told only part of the story. What he did not say was that there had been three owners of the Camelia Restaurant that had been operating for 33 years. The first owner was a Mr Carlos, the second owner was Mr Platsis and the third owner was Jack Allen, who gave up the ownership when he closed the restaurant at 12 noon on Friday. Senator MacGibbon refers at the bottom of his notice of motion to Michael Platsis, the owner of Michaels Restaurant, who made the investment in the Riverside development, which he did. I did not say in my notice of motion that Jack Allen made the investment in the Riverside development, nor did I say that it was Michael Platsis. But I did not know those facts totally until after I looked into this matter. Senator MacGibbon, who was acting as Senator Boswell's apprentice, really knew those facts prior to giving notice of his motion in this place. I must say that, as an apprentice for Senator Boswell, he acted very badly. If I had his indentures, or if Senator Boswell had some say over his indentures, I think they should have been cancelled or removed at that time. Senator Boswell spoke in the adjournment debate last night and read a telex from Mr Allen in which certain claims were made. Mr Allen claimed that he was closing the Camelia Restaurant because of the Government's policy of catching all the people who were having free lunches in the restaurant. He also went on to point out-this is different from what Senator MacGibbon said-that the investment in the Riverside development was made by Michael Platsis. But he did not say that Michael Platsis had been the previous owner prior to him being the owner of the Camelia Restaurant. Let me take the matter a little further. Last week, on 3 November, an advertisement concerning the Camelia Restaurant was placed in the Sunday Mail. The advertisement under the heading `Closing forever' stated: From Saturday 9th November this famous dining location is closing forever . . .'. This is a total misrepresentation of the facts. The location was not closing. Although it was closing at noon on the Friday, on Monday Allen opened a bistro called Sardis. So he was again in business on the Monday. I think I would be inclined to have a look at the advertisement placed by Mr Allen and the fact that he closed the restaurant under these circumstances. I think it is worth mentioning that Des Patridge, in the column `Day by Day' in the Courier-Mail, said: The newspaper advertisement on Sunday said that the Queen Street dining landmark, the Camelia restaurant, was `closing forever' from this Saturday. But that's only as the Camelia, which opened 33 years ago, and which has already been a fashionable eatery. The owner for the past three years, James Allen, says a new venture with a new marketing approach will be opening on the site, with a new name too, next week. That's all he's saying at this time. They were the fact that were known to Senator MacGibbon. They were the facts that were given to him by Senator Boswell. Senator MacGibbon acted as a very poor apprentice in not accepting and putting down all the information. The Courier-Mail of 25 October 1985 contains a statement that Mr Michael Platsis certainly made the investment in the Riverside development. This fact is admitted. The notices of motion given by Senator Boswell and Senator MacGibbon claim that some damage is being done to the restaurant industry in Queensland. The Courier-Mail of 3 November 1985 carries the headline `Milano and Merlo part company'. The article states: Leading Brisbane restaurant Milano, in Queen Street, changed hands on Friday for a reputed $1,800,000. The notices of motion concerning this industry were put down in an attempt to attack the Government. However, the total truth was not being told. Senator MacGibbon and Senator Boswell attacked the Government and said that this industry was in a dire situation. An article in the Courier-Mail of 9 November 1985 headed `$17m restaurant expansion' stated: In the most substantial development of its type currently being undertaken in Australia, Denny's Restaurants plans a $17 million expansion program to develop outlets in all eastern States. The article continued: The expansion would make Denny's the fastest growing full service restaurant chain in Australia and would `enable us to sit nicely in the middle' of a market worth an estimated $3,800 million. Mr Deputy President, I ask why Senator Boswell and Senator MacGibbon, who was his agent in this particular little episode, did not lay down all the facts and make the position very clear to the Senate. Instead, they tried to say that I misled the Senate when in actual fact they did not put forward all the facts. Senator MacGIBBON(Queensland)(10.45) —There is an old saying that it is often better to be silent and be thought a fool than to open one's mouth and prove it. We have never had a more eloquent testimony of that than what was said by Senator Gareth Evans earlier tonight and now by Senator Gerry Jones. The reason the Camelia Restaurant closed was that the trade had fallen off 47 per cent since the tax proposals were announced. The Camelia Restaurant was one of the best restaurants in Brisbane. The restaurant operated in Queen Street and dealt with the lunch hour trade. Faced with a 47 per cent fall-off in trade, its owner, Mr James Allen, knew that he could not survive. He therefore closed the restaurant on Saturday of last week and opened a bistro. He went right down market. He moved out of a silver service operation where he was catering at the top level in the Brisbane or Queensland restaurant trade-catering at a level which was comparable to any restaurant in this country-and went really to a snack-bar, bistro or cafe-style operation. He did so because he could not survive in the face of the abolition of legitimate expenses generated for lunches. That was the truth of it. I knew that. Let me deal with the dissembling that was engaged in by Senator Jones. I do not accuse Senator Jones of malice. He was just ignorant. He did not have the scholarship, the intelligence or the energy to go into the matter and find the facts. Instead, he went off half-cocked. He just shot from the hip. He thought he was in a trade union meeting or something like that up at Trades Hall. He thought it was just a matter of giving a backhander to the teeth and everything would be all right. He thought he could fix it on the run. The point is that Mr Michael Platsis at one time did own the Camelia. But neither I nor Senator Boswell represented that he was the owner at the time of closure. Mr Michael Platsis is a principal and one of a large consortium that tendered for the new riverside development. He is not the sole person involved in this. While Senator Jones is telling us how great life is in the restaurant trade, I would be so bold as to make the submission that if the syndicate headed by Mr Michael Platsis had the chance to renegotiate that contract it would negotiate out because it does not see a future for itself in the Riverside development. The point that Senator Jones is hiding-if he had put any work into this he would know that this is the case; so he would be hiding it-is that that contract was signed six months ago or four months before the changes to the Income Tax Assessment Act were announced. We have heard talk about the sale of the Milano for $1.8m. According to the article which Senator Jones quoted, over $1m went allegedly for the wine cellar that Mr Gino Merlo had at the Milano. Again, if he was honest, he would tell the Senate that the sale of the Milano Restaurant is not something that has taken place since the boy Treasurer, Mr Keating, brought out his recent tax changes. The sale of the Milano has been the subject of litigation. It is public knowledge in Queensland that the Milano sale has been going through the courts and was recently settled out of court. However, the deal to sell the Milano for $1.8m, if indeed that was the price-it was the price that appeared in the Press-was set last year. It has not been set since Keating came out with his latest scheme. As to that final red herring relating to Denny's restaurant, I have never heard of that restaurant but I did read about it in the newspaper. It is quite obvious that it is a multiple outlet, chain-type operation. In no sense is it dependent on the lunchtime restaurant trade. It would not be affected in any way at all by the changes proposed by the boy Treasurer. Senator Jones is being quite dishonest in putting this forward in the way he has tonight. I would like to tell the few Labor people who are left here tonight that what they have brought up in their latest tax scheme is a failure. One of Queensland's leading restaurateurs told me three or four weeks ago that the takings he now has at the end of the day are down. Whereas once upon a time at the end of the day he had a large stack of Bankcard dockets and hardly any money in the till, he now has a till full of money and hardly any Bankcard slips. Senator Reynolds —Good. Senator MacGIBBON —In her naivety Senator Reynolds says `Good'. I will tell her a few facts of life. What is going on is that people are taking cash out of their businesses-writing it to petty cash and then going for lunch. We can bet our boots that if the money is in the till in cash form, the restaurateur is probably not paying the full dollar in tax for it. Senator AULICH(Tasmania)(10.52) —I would like very quietly to move away from the topic of restaurants, food and self-indulgence to some of the concerns that I and other people have about the current state of the Tasmanian wood chip debate. I will talk about it tonight because, due to some tactical bungling on the part of the Leader of the Opposition (Senator Chaney) last week, although I was only the second Labor speaker on that issue, I was unable to contribute to that debate. I have seen so much inane, irresponsible and cynical rubbish in the Tasmanian media over the period since that debate that I thought it time people from this side of the House were permitted to give their viewpoints so that people in Tasmania were clear in their own minds as to where we stood. First, I would like to express my concern about the cynical use by the Liberal Opposition of ordinary people in the forest industries in Tasmania. Over the last week a number of outrageous statements have been made by members in this House and by the Premier of Tasmania on that matter. They have caused particular concern to people in that industry. I am not talking about people who are able to withstand the ebb and flow of financial disaster here and there. I am talking about ordinary people who are making ends meet in their particular lifestyle-the people who own trucks, the people who work in sawmills, the people who work on the floor of places like Australian Newsprint Mills Ltd, Australian Pulp and Paper Mills Ltd and so on. I refer to the people whose voices are not often heard and who are not represented by people on the other side of the chamber who call themselves Liberal politicians. I am talking about one in seven of the Tasmanian working population who are employed in the forest-based industries in that State. I am talking about them because other people have used them as cannon fodder in the political debate so far. I wish tonight to indicate quite clearly the concerns of Labor Party members. I refer to statements made by the Premier, Robin Gray, Senator Shirley Walters, and the gentle giant, Senator John Watson. The last, generally speaking, has been a man of quiet reserve in this chamber and not used to using hyperbole, exaggeration and so on, but he has fallen into the general pattern set by his fellow senators and Premier Robin Gray. To put the matter in context, I wish to go back to an awesome period in Tasmanian political history. I refer to the Federal election of March 1983. I should like to refer to a headline in the Examiner which appeared in the last week of that campaign. It related to the intervention, presumably at the behest of the Tasmanian Premier, in the political debate of a Federal election by the top public servant in the Tasmanian Government at that time. I refer to the intervention by the Hydro-Electric Commissioner, Mr Ashton, who made statements in a letter circulated to the Hydro work force, and then direct to the newspaper the Examiner, to the effect that a thousand jobs would go-not may go, but would go-in Tasmania if a Federal Labor Government were to be elected in March 1983. That was a disgusting, irresponsible statement by the head of a government agency who should never have intervened in the public debate at that time. Many ordinary Hydro workers in that State were totally upset and concerned about their jobs as a result of that intervention by that individual, for which I will not forgive him. He was not doing it off his own bat, presumably. He was instructed to do so by the Premier of the State at the time, Robin Gray, who was prepared to make whatever political capital he could out of it. Where are those disappeared jobs? Can anyone in this chamber or anyone in the Tasmanian political network show me one group of jobs that would add up to that 1,000 total predicted by the Commissioner at that time if a Labor government were elected in March 1983? They cannot show me. There has been a deafening silence on the other side since then. One goes back to a similar type of headline that adopted the same old trick. If one put this sort of play on the stage nobody would turn up because they would have seen it before. I ask honourable senators to note this headline: `3,000 forest jobs may go-Premier hits chips controls'-a similar sort of story. Where are the 3,000 jobs? The Premier, using a similar tactic to that used by Senator Walters, has tried to indicate that the recommendations validly made by the Minister for Arts, Heritage and Environment (Mr Cohen) are a Government decision about the wood chip industry for Tasmania. That is not the case, but there are many ordinary people in Tasmania who believe that that is the case, simply because of the work that has been done by Opposition members in this place and by the Premier of Tasmania. For that they should be roundly condemned. Ordinary people in our State are entitled to understand that their jobs are secure unless there is very good reason to think to the contrary. People on the other side know that that is not the case. Senator Watson —Why can they not co-ordinate their statements? Senator AULICH —The Liberal senator on the other side, Senator Watson, is attempting to intervene at this stage. He has already had his say. I am having mine now. I quote: The Commonwealth is now seeking to control the use of about 2 million hectares of land or almost 30 per cent of Tasmania's land area. Note the use of the words `The Commonwealth is now seeking to control' such and such-again trying to give the impression that the Government has made a finite decision on the future of the woodchip industry in Tasmania. That is not the case. It is a recommendation by the Minister for the Environment who is entitled to make similar sorts of recommendations based upon his responsibilities under the Act that governs his area. It is quite clear; it is not a decision. Senator Gareth Evans has taken a great deal of flak tonight-unnecessary, emotional, irresponsible flak from people on the other side of the chamber. Senator Walters appeared on Tasmanian television. I was at home on one rare occasion watching television, enjoying the drama and the sport. We then had the appearance of Senator Walters on television-a frightening prospect for any ordinary Tasmanian. It was frightening for people in the industry, who believed Senator Walters when she said that a deal was being done with the Australian Democrats over cash bidding in order that the Democrats could get a trade-off to stop wood chipping in Tasmania. Who did she quote? What were her sources? Her sources were Senator Chipp and Senator Sanders. I am amazed that that one-sided source could be used to indicate a deal. When I grew up, it took two to dance, two to tango. Unless Senator Walters is much more modern than I am, the fact that the Democrats have indicated that a deal was on is not sufficient proof for me. I approached the two Ministers direct-I approached Senator Gareth Evans and Senator Button-and asked: `Is this on? Is that an untrue statement?' They indicated to me that that was not the case and that it was totally irresponsible of Senator Walters and others to indicate that that was the case. Over the last few days I have had a number of telephone calls from ordinary people in the industry as a result of Senator Walters's statements. I am not talking about the $500,000 or $600,000 people who set up a wood chip industry in the south and then sell out for a capital gain. I am talking about people who have $200,000 or $300,000 invested in a truck or rig or people who are working on the floor of APPM or in ANM. They are the people who ought to be protected in this place and they are not being protected by people such as the Liberals opposite, who have used them in every possible way, in a most cynical way, over this whole issue. I am saying to them: `Wait until the final Government decision is made'. People from the top to the bottom of the industry are now starting to realise that they have been led up the garden path by a group of honourable senators opposite, just as they led us up the garden path in Tasmania in 1983. Up to this point the Tasmanian debate about wood chips has generally been sensible, constructive and basically intelligent. I have to applaud the efforts of people on both sides of the debate in Tasmania, the people who are pushing the development line and those who are pushing the conservationist line. The responsibility that both groups have shown has been a vast improvement on the level of debate that existed during the dam debate. Now honourable senators opposite-they will stay in opposition for a very long time-in cahoots with the Premier of Tasmania have taken advantage of the situation and tried to stir up needless trouble in the State. They will not be forgiven for that because after December of this year there will be people who will know that it was a big lie. Honourable senators opposite ought to be condemned for that. I put on record my disgust with the activities of certain Federal senators on that issue. Senator Walters will leap to her feet like a tree suddenly lifting from the forest floor. This will be about the sixth occasion on which she will say something about the Tasmanian wood chip industry. I suggest that she wait until a decision is finally made and then, if she has the courage, I will debate the matter with her at any place, at any time, anywhere and with any group. I am now on record as saying that and if she is prepared to take up the challenge she should stand up and say so now. Senator WALTERS(Tasmania)(11.03) —Today Senator Aulich attended a meeting with a group of people who obviously decided, if my information is accurate, that if 40 per cent of the Australian Newsprint Mills Ltd concessions were taken away, surely it could log more trees from somewhere else in Tasmania. The honourable senator is walking out of the Senate. He does not even know how to behave in this place. Senator Peter Rae —Mr Deputy President, I raise a point of order. I understand that it is regarded as improper behaviour for someone who has just spoken not to wait until the person responding to his speech has been heard. I ask you, Mr Deputy President, whether it is in order for Senator Aulich to slink out of the chamber when he should be waiting to hear the response, particularly after making a challenge. The DEPUTY PRESIDENT —Order! There is no point of order. Senator WALTERS —Tonight Senator Aulich challenged me to speak in the adjournment debate and then promptly walked out of the chamber. I will put forward a few of the accusations that he has made and challenge them. Tonight Senator Gareth Evans said that Mr Kerin had said that Mr Cohen's recommendations did not suggest that there would be no logging or forestry operations in the areas listed in Schedule A of the Australian Heritage Commission list and that all he had said was that the boundaries should be revised. I wish I had the Hansard report of Senator Evans's comments, but that is the interpretation of what the Minister said today. I shall read Mr Cohen's recommendations to Mr Kerin because I think it is important that the matter be referred to accurately. Mr Cohen's recommendation reads: It is recommended that no logging or forestry operations be permitted in the areas listed in Schedule A. That is a completely unequivocal statement. No logging or forestry operations shall be permitted in areas listed in Schedule A. Mr Cohen continued: These areas should be reviewed to establish more precise and workable boundaries in the light of the results of the recommended consultations. However, his opening sentence is that there should be no logging or forestry operations in the areas listed in Schedule A. Some of the areas listed in Schedule A take up 40 per cent of the concessions of the newsprint mill in the southern forest. Today, at a meeting which Senator Aulich attended, Government officers said: `If it takes up 40 per cent of ANM, it can surely get concessions elsewhere in Tasmania'. The Government just does not understand the situation. If Senator Aulich expects me to sit back and wait for government decisions to be made before I make my feelings known on this matter, he has picked on the wrong person because I will never sit back and allow the Government to make such decisions. I do not think that Senator Evans will deny that the Australian Democrats have attempted to do deals with the Government. In answer to a question asked today he said: `Negotiations have been going on about many issues. We have talked about a number of things'. He ended up indicating-I do not know his exact words-that if what I had suggested were to occur it would be sheer coincidence. Mr Deputy President, if you do not understand from that that a deal had been considered, I certainly do. Senator Aulich attended a meeting today at which officers of the relevant Department were obviously in agreement with Cohen's recommendations, saying that if 40 per cent of ANM's concessions were taken away, it could surely get more timber elsewhere in Tasmania. This proves that they do not understand the situation at all. It might interest Senator Evans to know that Mr Kerin, in saying that Mr Cohen's recommendations did not state that there would be no logging or forestry operations permitted in the areas listed in Schedule A, is making a completely inaccurate statement. Even though Mr Kerin has made the inaccurate statement, Senator Evans should not repeat it in this place. Senator SHORT(Victoria)(11.09) —I will take a couple of minutes tonight to draw attention to what I think was an omission on our part as a parliament yesterday, and that was to allow 11 November 1985 to pass without acknowledging in the Parliament the real significance of that date, namely, the sixty-seventh anniversary of the end of World War I. Instead yesterday what we had was a day dominated by the media wallowing in an orgy of self-indulgent pity over the tenth anniversary of the most incompetent government in Australia's history being forced to the polls and to the judgment of the people. In doing that, as I said, we as a chamber omitted to acknowledge the great significance of 11 November 1985 as the sixty-seventh anniversary of Armistice Day 1918. I just wanted to place on record my total agreement with the remarks expressed in today's media by representatives of the Returned Services League of Australia. The National President, Sir William Keys, was quoted in today's paper as warning that Remembrance Day was in danger of being overshadowed by the Whitlam dismissal and he urged all Australians to think less about rage and more about sacrifice. Sir William was quoted in today's paper as saying that the events of 10 years ago were a momentary situation in Australia's political history which tended yesterday to overshadow the real significance of the day, and that is that many thousands of Australians died so that we might live in peace and freedom. The State President of the RSL in Victoria uttered similar comments. He pointed out that we were remembering yesterday-11 November -for the wrong reasons and not enough deference was shown on Remembrance Day to the servicemen and women who lost their lives in combat. Australia lost no fewer than 60,000 of the flower of Australia's young people in combat in World War I, a loss that deprived Australia of a great human resource, a loss that set our nation back in terms of its development for very many years and a loss that left many survivors, wives and children in Australia bereft and without loved ones. If we do forget `Lest we forget' we as a nation will be much the poorer, because nations that forget the past are doomed to repeat the errors of their past. I hope that we never ever let the memory and the events of 11 November 1918 go from our memories as a nation because, as I say, if we do we will be very much the poorer and we will be refusing to acknowledge the fact that we are here today in one of the few remaining blossoming, thriving democracies of the world because of the sacrifices that so many people so many years ago made on our behalf. Senator BOSWELL(Queensland)(11.13) —I want to take a few minutes just to put the record right on Senator Jones's speech tonight. One thing one can always say about Senator Jones-he is always wrong. He comes into this Senate like an accident going somewhere to happen. Tonight he was no exception. Senator Jones implied tonight that the speech that I made in the adjournment debate last night was incorrect and that the notice of motion that Senator MacGibbon gave yesterday was also incorrect. Senator Jones gave a notice of motion yesterday which stated in simple terms that the owners of the Camelia Restaurant were going to open a $1.5m restaurant on the south side of the river in the Riverside complex in Brisbane. Of course, that was totally wrong. I read the Camelia Restaurant's owner's explanation into the record last night, where he categorically denied that. He also stated in the telex message that he sent here that he was changing the name of the Camelia, that the Camelia was shutting and that it was moving down lower market into a bistro-type operation. Senator Jones came in here tonight and tried to disclaim that. He is totally wrong again. I draw the attention of the Senate to the previous time that Senator Jones was wrong, when he put up a Dorothy Dix question to one of the Ministers, suggesting by innuendo that Brian Maher had made a donation to the National Party of Australia or to the Bjelke-Petersen Foundation, which I disclaimed and said was totally wrong. On 20 October in the Sunday Sun there was an article on Brian James Maher, where his former colleague Mr Lee Hurley is reported to have said, referring to Mr Maher: `He did make a donation to Bill D'Arcy, I know that', Mr Hurley said. `I cannot remember how much it was. He was a good friend of his'. Once again Senator Jones put his foot in it. He puts his foot in it every time. He is an embarrassment to the Australian Labor Party. I do not mind his embarrassing the ALP and the Federal Government; he can do that as much as he likes. However, I do wish that he would treat the Senate with some respect instead of getting up here, firing from the hip all the time, not knowing what he is talking about and treating this Senate with absolute contempt. Senator PETER RAE(Tasmania)(11.15) —I was concerned tonight to hear one of my Tasmanian colleagues-Senator Aulich-attack Tasmania, attack Tasmanians and then behave in a manner that I believe is unfitting for any member of this chamber. For a senator to attack something in a way which one might expect to provoke a response and then to leave the chamber before hearing that response is a discourtesy. I am reminded of page 152 of the fifth edition of the late Mr Odgers's Australian Senate Practice, where he says: Senators having entered the Chamber after the time appointed for the meeting of the Senate are not permitted to withdraw prior to a Senate being formed, i.e., a quorum of at least one-third the whole number of Senators. Senators may leave the Chamber at any other time, except where the President is putting a Question, when a quorum is called for, or after the doors are locked during a Division. That part is irrelevant to what I wish to say. It is the next part that matters: It is discourteous to the Senate for a Senator to leave the Chamber immediately after finishing his speech. In the `cut and thrust' of debate, it is usual for the next speaker, at the commencement of his speech, to comment on the speech of the Senator who preceded him, and for that reason it is traditional for the Senator who has spoken to remain in the Chamber for a reasonable time. I regard it as disgraceful that Senator Aulich, having taken the action he chose to take to attack his own State and to attack the representatives of his own State on an issue of great importance, to walk out of the chamber before anyone had responded to the rather extraordinary speech he made to this chamber. I repeat this so that it may be recorded clearly and firmly: It is discourteous to the Senate for a Senator to leave the Chamber immediately after finishing his speech. In the `cut and thrust' of debate, it is usual for the next speaker, at the commencement of his speech, to comment on the speech of the Senator who preceded him. . . I think that if one rushes in, thrusts, withdraws and repents by removing oneself from even the embarrassment of having to sit and listen to any correction, it is a measure of the paucity of the argument one has put forward. In those circumstances I suggest that Senator Aulich stands condemned in this chamber tonight in relation to that particular important issue. It was a proper matter for debate, and I do not comment on the debate. I simply comment that we should have been able, and I trust that we will be able, to debate it properly and fully and not on a cut and run basis, which is apparently the basis of approach adopted by the State ALP in relation to this issue in Tasmania. Senator BUTTON(Victoria-Minister for Industry, Technology and Commerce)(11.20) —I thank honourable senators for their contributions to the adjournment debate. I congratulate Senator Peter Rae on his contribution. I think it was one of the most important speeches he has made here in the last couple of years. Senator Peter Rae —At least it drew a response from you for once. Senator BUTTON —That is what I am doing. Let me finish. I heard Senator Aulich's speech and I thought it was very fine. It had a lot of emotional content. I think he was probably exhausted and left the chamber for that reason. Question resolved in the affirmative. Senate adjourned at 11.20 p.m. The following answers to questions were circulated: (Question No. 452) Senator Macklin asked the Minister representing the Attorney-General, upon notice, on 21 August 1985: (1) Has the Attorney-General's attention been drawn to an advertisement by Taveuni Estates Pty Ltd which appeared in the Australian newspaper towards the end of March 1985, urging investment in freehold land on Taveuni Island? (2) Were the people who replied to the advertisment advised by the salesmen representing Taveuni Estates Pty Ltd that they would guarantee citizenship in Fiji if a block of land were purchased? (3) Does the Attorney-General agree in view of restrictions which the Fiji Immigration Department places on people who wish to reside and invest in Fiji, that the advertisement is misleading insofar as anyone who bought land in Fiji would be under the misapprehension that they could build on it and use it, as suggested, as a second home? (4) What action can the Government take to clarify the situation regarding the rights of Australians investing overseas? Senator Gareth Evans —The Attorney- General has provided the following answer to the honourable senator's question: (1) Yes. (2) I have received no representations from persons who replied to the advertisement, and I have no information about the statements made by salesmen representing Taveuni Estates Pty Ltd regarding citizenship in Fiji. (3) I am informed by the Fijian High Commission that currently Australian citizens with independent means are allowed residential status in Fiji, but the process is not automatic. Each application is considered on the basis of its merit. Persons investing $200,000 or more in approved ventures can also seek residential status. Australian citizens do not require a pre-entry visa to visit Fiji, provided they hold valid Australian passports. Hence, Australian citizens purchasing land in Fiji can freely travel to Fiji and can remain in Fiji for up to four months without having to seek residential status in Fiji, but should they later decide to retire in Fiji they would come within the ambit of the provisions regarding persons with independent means, noted above. In all cases persons wishing to live in Fiji must have a clean police record. Regarding the advertisement itself, I am not in a position to express an opinion on whether it is or is not misleading. It would be necessary to take into account all the relevant circumstances of an individual case, including the Fijian Government's residency requirements, whether or not specific representations were made, whether those representations are capable of being seen as mere `puffery', and so on. (4) At the Commonwealth level, the major piece of consumer protection legislation is the Trade Practices Act 1974. Division 1, Part V of the Act prohibits a range of unfair business practices. For example, section 52 prohibits, on a civil basis, a corporation engaging in misleading or deceptive conduct or conduct that is likely to mislead or deceive. Section 53A specifically prohibits a corporation, in trade or commerce in connexion with the sale or grant of an interest in land, making a false or misleading statement concerning the use to which the land is capable of being put or may lawfully be put. The Trade Practices Commission is responsible for the administration of the Trade Practices Act. Where a corporation is contravening the Act, the Commission can seek injunctions to prevent those contraventions occurring in the future, and it may also prosecute corporations who contravene the provisions of the Act other than section 52. In the case of a prosecution, the corporation may be fined up to a maximum of $50,000, although the Trade Practices Amendment Bill 1985 which I introduced into the House on 9 October 1985 includes a provision to increase the maximum fine to $100,000. The Commission can also request the Court to order that the corporation undertake advertising to correct the misleading representation it has made. Further, under section 82, a person who suffers loss or damage by the conduct of a corporation that was done in contravention of any of the provisions of Part V, including section 52, may recover the amount of that loss or damage against that corporation or any person involved in the contravention. An action for damages must be brought within 3 years of the date of the contravention. The Court is also empowered by section 87 to make a range of orders declaring void the whole or any part of a contract between the contravening corporation and the person who suffers loss or damage, and orders requiring the corporation to repay money or refund property to the person, or to pay to the person the amount of the loss or damage. If Senator Macklin has information about possible contraventions of the Trade Practices Act, I would be pleased to receive it and refer it to the Trade Practices Commission for investigation. (Question No. 501) Senator Macklin asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 11 September 1985: (1) What is the latest figure issued by the Australian Bureau of Statistics of the number of people in Australia who are unemployed. (2) Does this figure include people who are in part-time employment but who want full-time jobs. (3) How many people are estimated to want full-time work but have stopped looking for employment. (4) Does the official unemployment rate include (2) and (3) above. Senator Walsh —The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: (1) In unadjusted numbers, there were 587,700 persons unemployed in September 1985 according to the ABS Labor Force Survey. In seasonally adjusted terms 592,800 persons were unemployed. (2) No. Persons employed for one hour or more during the survey week were classified as employed. (3) In March 1985 (latest figures available) there were 23,800 persons wishing to work full-time but who had stopped looking for employment. (4) No. (Question No. 608) Senator Peter Rae asked the Minister representing the Minister for Arts, Heritage and Environment, upon notice, on 8 October 1985: (1) Did the present Government make a specific election promise to restore the funding of the arts to the level, in real terms, which was applying in 1975-76. (2) Is the 1985-86 Budget allocation to the Australia Council a cut by an amount equivalent to 2.3 per cent real terms (based on the Treasurer's own prediction of an 8 per cent inflation rate). (3) Will the Government review the Budget allocation for the arts, with a view to honouring its pre-election promise, and in the interests of avoiding significant loss of employment in the area of the arts, and of promoting the development of the arts. Senator Ryan —The Minister for Arts, Heritage and Environment has provided the following answer to the honourable senator's question: (1) The Government's 1983 election commitment was to restore over its term of office spending on all arts programs to the level achieved in 1975-76. (2) In the 1985-86 Budget the appropriation for the Australia Council was $47m, an increase of $3.4m or 7.8 per cent over the previous year. The Council's allocation for support for the arts has increased in 1985-86 by 8.4 per cent, from $36.7 to $39.8m. Therefore, in this financial year, after allowing for inflation, the Government's support for the arts through the Australia Council has not only been maintained but has been increased in real terms. These figures set aside the one-off additional payment of $802,000 made to the Australia Council in 1984-85 to assist the major performing arts companies. (3) No. The following table indicates the level of Government funding support for the arts and cultural organisations which in total amounts to an overall increase of 42.05 per cent since the Government came to office. Not included in the figures in the table is $27.4m allocated to the arts and arts related activities under the Community Employment Program creating 2,539 full-time positions. GOVERNMENT FUNDING OF CULTURAL ORGANISATIONS Total Commonwealth Parliamentary Appropriations 1982/83 to 1985/86 Units $m Year 1982-83 1983-84 1984-85 1985-86 Percentage Increase 1982-83 to 1985-86 Australia Council... 33.60 38.24 43.58 47.00 39.88 National Library of Australia... 20.27 23.86 30.90 30.10 48.49 Australian Film Commission... 12.03 18.80 19.70 19.70 63.75 *Australian National Gallery... 18.10 13.71 14.22 14.80 -18.23 Australian Archives... 10.20 11.80 17.10 15.40 50.98 Australian Film and Television School... 5.87 6.70 6.78 8.50 44.80 Public Lending Right Scheme... 1.33 1.59 1.78 1.86 39.84 +National Film and Sound Archive... . . 1.28 2.61 3.40 165.62 Australian Heritage Commission... .76 1.20 1.40 1.55 103.94 National Institute of Dramatic Art... .97 1.33 5.70 1.60 64.94 Museum of Australia... .63 2.36 1.88 3.60 471.42 Australian Childrens Television Foundation... .50 .50 .50 .50 0.0 Artbank... .43 .46 .48 .70 62.79 104.69 121.83 146.63 148.71 42.05 * In 1982-83 the National Gallery received a special allocation of $4.85m for loose furniture and display equipment. + Funding for the National Film and Sound Archive commenced in 1983-84. (Question No. 623) Senator Sanders asked the Minister representing the Minister for Arts, Heritage and Environment, upon notice, on 15 October 1985: Why did the Department of Arts, Heritage and Environment advise against an Environmental Impact Statement when 3 of the 6 State Departments of Environment requested that an Environmental Impact Statement be done before any decision is made to import the Eurasian Leafcutter Bee (Magachile Rotundata) from New Zealand. Senator Ryan —The Minister for Arts, Heritage and Environment has provided the following answer to the honourable senator's question: The object of the Environment Protection (Impact of Proposals) Act 1974 is to ensure, to the greatest extent practicable, that matters affecting the environment to a significant extent are fully examined and taken into account in relation to decisions and actions by the Commonwealth. In forming the view that an environmental impact statement (EIS) was not necessary for the object of the Act to be met, the Department of Arts, Heritage and Environment consulted the Australian National Parks and Wildlife Service, the Commonwealth Scientific and Industrial Research Organisation Division of Entomology and the environmental agencies in each State, the Northern Territory and the Australia Capital Territory. The Standing Committee to the Council of Nature Conservation Ministers, which consists of representatives of all State and Territory conservation authorities, at its meeting in March 1985 noted, without disagreement, the Department's intention to recommend that an EIS was not required to meet the object of the Act. The Department of Arts, Heritage and Environment's recommendation, which I accepted, was based on the following: A great deal of information on leafcutter bees (Megachile rotundata) and their possible environmental effect had already been amassed and carefully examined. It was considered unlikely that further useful material could be obtained through the EIS process. (CSIRO supported this view). The proposal had been widely considered by environmental agencies and academic institutions and, following a decision of the Australian Agricultural Council, would be advertised nationally before decisions were taken, and public comment would be sought. Quarantine/pathological questions were being closely examined under the Quarantine Act and any introduction of the bees would be under strict conditions agreed to by the Australian Agricultural Council. The issuing of a permit and authorisation under the Wildlife Protection (Regulation of Exports and Imports) Act, for release of the bees would be considered in the light of the Act's requirements to regulate the import of animals that could have an adverse effect on native flora and fauna. Of the wide range of State and Commonwealth agencies consulted, only the New South Wales Department of Environment and Planning was firmly of the view that an EIS was necessary for further consideration of relevant matters. Victoria and Western Australia advised that an EIS might be an appropriate method for such consideration but did not request one. Queensland, South Australia, Tasmania, the Northern Territory and the Australian Capital Territory agreed with the Department's position. Senator Button —On 10 October 1985 (Hansard, page 990) Senator Missen asked Senator Gareth Evans, in his capacity as Minister who represents the Attorney-General, a question without notice concerning the announcement of a replacement for the former Commonwealth Ombudsman and the staffing level of the Ombudsman's office. Senator Gareth Evans undertook to provide him with an answer as soon as possible. The Prime Minister has supplied the following answer to the honourable senator's question: The appointment of the new Commonwealth Ombudsman is still under consideration. In the meantime Mr J. E. Jordan, an experienced Deputy Ombudsman, is acting in the position until the announcement is made. The Ombudsman's office has had its average operating staffing level (AOSL) maintained when many government departments and authorities have had their staffing levels reduced during the present fiscal restraint. The Ombudsman's office staffing levels over the past four years have been: 52 in 1981-82, 55 in 1982-83, 60 in 1983-84 and 64 in 1984-85.