Friday, 14 March 1986 The PRESIDENT (Senator the Hon. Douglas McClelland) took the chair at 9 a.m., and read prayers. The Clerk —Petitions have been lodged for presentation as follows: To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the Australian Bill of Rights will do nothing to advance the rights of Australians because it is dangerously ambiguous and will cause confusion within the legal system; it endangers our Federal system; and, it is to be administered in an authoritarian manner inconsistent with the present legal rights of all Australians. Your petitioners therefore pray: That the Senate rejects the Australian Bill of Rights Bill and all cognate Bills. And your pet itioners as in duty bound will ever pray. by Senator Jessop (from 11 citizens). To the Honourable the President and members of the Senate in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth: That the Australian Bill of Rights Bill is a harmful, dangerous and div isive proposal, the provisions of which are authoritarian and anti-democratic. Your petitioners therefore pray: That the Senate rejects this Bill. And your petitioners as in duty bound will ever pray. by Senators Jessop (from eight citizens) and Maguire (from 16 citizens). To the Honourable the President and members of the Senate in Parliament assembled. We, the undersigned citizens of Australia, being concerned that the association of smoking with sport makes smoking attractive to children and that tobacco companies are exploiting the loophole in the law which forbids the advertising of cigarettes on television, and wishing to remove any chance that tobacco advertising could influence children to take up smoking, respectfully call on the Federal Government to enforce the law which forbids the promotion of cigarettes on television through sports sponsorship. And your petitioners as in duty bound will ever pray. by Senator Cook (from 1,473 citizens). To the Honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth: That we the undersigned, having great concern because of the spread of moral pollution in our nation call upon the Government to introduce immediate legislation: 1. To provide strict controls over importation, production, sale, hire or mailing of video-cassettes with the open sale of only G, PG, and M rated video-cassettes; and the total prohibition of the sale of R rated video-cassettes so that R rated films can only be viewed in an adult theatre by persons over 18 years. We totally reject the concept of ``X'' rated video-cassettes which would allow the legal sale of hard-core pornographic films for screening in the homes of our nation, which endanger our children. 2. To dramatically improve the Federal Attorney-General's Guidelines for Classification of Video tapes/discs which restrict the importation, production, sale or hire, screening in private homes and mailing by Australia Post so as to include the total prohibition of any pornographic, obscene or blasphemous video cassette, or film containing child pornography, bestiality, sodomy, group sex, violent sex acts with women, such as rape and pack rape, sadism and torture, etc. Your petitioners therefore humbly pray that your Honourable House will protect our society, especially women and children from moral pollution and its harmful effects. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 54 citizens). To the Honourable President and Members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth: Introduction of any additional capital gains taxes, wealth taxes or death duties is opposed on the grounds that: they adversely affect the small and medium sized businesses in Australia, destroying incentive and discouraging investment in this important area of the economy; the Australian economy, and employment in particular, is heavily reliant on growth in small businesses; any capital gains that might result when owners of small businesses finally sell the business are not ``windfall gains'' but the result of many hard years of work and sacrifice, with very little being taken out of the business by way of salaries so that the maximum amount of money can be ploughed back into the business to create growth and jobs; Your petitioners request that the Senate, in Parliament assembled, will protect the rights of private enterprise and reject any inequitable taxes. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 90 citizens). To the Honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia, respectfully showeth: That the proposed Australian Bill of Rights Bill 1985 will endanger the Federal system in Australia, the State and Federal criminal justice systems, the State and Federal Police Force, the State and Federal education systems, the independence of the churches and religious associations, marriage and the family, children, the unborn, the handicapped, the aged and the infirm, employer and employee relationships and Australian society generally. Your petitioners therefore humbly pray: That your Honourable House defer debate on the Bill for twelve months and circulate the Bill for twelve months for the widest possible debate, scrutiny and discussion. And your petitioners as in duty bound will ever pray. by Senator Brownhill (from 266 citizens). Petitions received. Senator VIGOR(South Australia) —I give notice that, on Wednesday next, I shall move: That leave be given to introduce a Bill for an Act to amend the Judiciary Act 1903 to facilitate the bringing of class actions. Senator RYAN(Australian Capital Territory-Minister for Education) —On behalf of Senator Gietzelt, I give notice that, on the next day of sitting, he shall move: That, in accordance with section 5 of the Parliament Act 1974, the Senate approves the following proposal contained in the report of the Joint Standing Committee on the New Parliament House presented to the Senate on 12 March 1986, namely: The construction of carpark lighting at Section 21, Parkes, adjacent to the Administrative Building. Senator TATE(Tasmania) —I give notice that, on the next day of sitting, I shall move: That the time for presentation of the Report of the Select Committee on the Human Embryo Experimentation Bill 1985 be extended to 5 June 1986. Senator COONEY(Victoria) —In accordance with my notice of intention given yesterday, I now withdraw notices of motion Nos 1 and 3 standing in my name for 11 April 1986 relating to disallowance of Australian Meat and Livestock Corporation Meat Orders and a Commonwealth Employees (Redeployment and Retirement) (Regulations) Amendment. Senator MICHAEL BAUME(New South Wales) —I give notice that, on the next day of sitting, I shall move: That the Senate, noting that- (a) the February 1986 balance of payments figures have revealed a collapse in Australia's mineral fuel export income and a sharp fall in motor vehicle imports; (b) the losses in government revenue involved in lower oil levies and taxes arising both from reduced exports and the closure of the Kingfish A `old oil' production platform (with BHP forecasting an export cut of 80,000 barrels a day through Bass Strait alone), could total $1.5 billion; and (c) the loss in government revenue arising from lower collections of sales taxes and import duties on motor vehicles, indicated by reduced imports and sales so far in 1986 could total $1 billion to $2 billion a year, calls on the Federal Government to- (a) introduce a mini-Budget to resolve as quickly as possible the increasing uncertainty over the economy emerging not only from the leaked Cabinet submission which revealed that the economy was in such a `critical stage' that the only option was to cut spending by $1.4 billion; and (b) end speculation over the fate of the tax cuts promised for later this year by either giving an unequivocal assurance that they will proceed or immediately admit that the Government's economic mismanagement has forced their cancellation. Senator JONES(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate- (a) notes with alarm a statement made in the Queensland Parliament on 13 March 1986 by the State Attorney-General (Mr Harper) that the Queensland Government might take legal action to prevent what he described as the Federal Government interfering with its electoral legislation; (b) notes that Mr Harper stated that the Queensland Government would not stand idly by and allow the Federal Government to amend the Constitution; (c) condemns the threats made by Mr Harper on behalf of the Queensland National Party Government which, by virtue of its latest outrageous gerrymander, can retain office by attracting a mere 35 per cent of the vote; and (d) urges the Federal Government to take all steps available to it to restore electoral democracy in Queensland through a fair and honest system based on the principle of one vote one value. Senator REYNOLDS(Queensland) —I give notice that, on the next day of sitting, I shall move: That the Senate records its strong disapproval of the Queensland Government's environmental policy for failing to- (a) give an assurance to not revoke National Parks, particularly in the Great Barrier Reef Marine Park; (b) participate in the joint funded Rare and Endangered Species Program; and (c) increase the allocation of funds for the further extension of National Parks in the State. Motion (by Senator Boswell) agreed to: That leave be given to introduce a Bill for an Act to amend the Conciliation and Arbitration Act 1904 in relation to industrial matters. Bill presented by Senator Boswell, and read a first time. Senator BOSWELL(Queensland)(9.07) —by leave-I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- This Bill seeks to amend the definition of industrial matters in the Conciliation and Arbitration Act by adding the following words-`A reference in this Act to industrial matters does not include a reference to any matter affecting or relating to superannuation or pension schemes or any provision or proposed provision which directly or indirectly provides that an employer shall contribute to a superannuation or pension scheme'. The Bill will make it totally clear that the Conciliation and Arbitration Commission has no jurisdiction over superannuation and pension schemes. I have received legal advice that this Bill will in no way prejudice any independent court action which is aimed at clarifying the present right of the Arbitration Commission to rule on superannuation arrangements. The Bill is not a radical move. It merely reflects the law as it now stands. The High Court consistently decided that the Conciliation and Arbitration Commission has no power to decide on superannuation and pension issues. To this effect the High Court has always decided that superannuation and pensions do not fall within the definition of `industrial matters'. The best example is R. V. Hamilton Knight ex parte Commonwealth Steamships Owners Association (1952), where it was clearly ruled that the provision of pensions and superannuation are not an industrial matter. This amendment only puts into legislative form what is the law of the land. It is particularly important that the matter is clarified in the light of the ACTU's current claim before the Arbitration Commission, namely that a productivity increase be paid in the form of superannuation entitlements. This claim has the full backing of the current Federal Government which agreed to support it last year. The Government and the ACTU reached agreement without any consultation with employer or industry groups. No regard was given to the individual employers ability to pay. The concept of a 3% rise in productivity is a fallacy which the Government and the ACTU have been trying hard to sell to the Australian public ever since the deal was struck. However, they have clearly not been able to convince the public. Spontaneous employer groups are springing up all over the country to try to tell the Government that this productivity increase cannot be paid by them. Farmers and small business in particular will not be able to play their major role of paying the tax burden if more and more costs are imposed on them. The concept of national productivity is not measurable and there is no way that the Conciliation and Arbitration Commission can measure this validity. There is also no guarantee that the proposed 3% productivity payment in superannuation entitlements is the maximum figure employers will eventually be forced to pay. Already we have seen the Secretary of the ACTU, Mr Kelty, publicly threaten that if the unions do not get this deal they will stage industrial action for superannuation claims between 20% and 30%. We are presently experiencing the disruption caused by a 32% productivity claim in the coal industry. Furthermore, employers are being told by union leaders that the 3% figure only represents the employees' contribution and that an extra 3% will be demanded as the employers contribution. This is why this phoney superannuation plan must be stopped before it takes a hold and this Bill supported. Productivity not only cannot be measured but no other country in the world is using productivity as a measure to get a wage increase. Of course this productivity claim is a wage increase in disguise just as it was when the BLF introduced its BUS scheme, the forerunner of employer funded, union-controlled schemes. Norm Gallagher said then `Let there be no doubt that this is a wage claim.' If this 3 per cent productivity arrangement is paid in superannuation entitlements the union movement in Australia will gain unprecedented financial powers. There is no doubt that unions will attempt to force the implementation of union run industry superannuation schemes, generally at the expense of company operated superannuation schemes. This has already occurred in the building, paint and transport industries. An examination of the operation of these funds shows clearly why the ACTU is so enthusiastic in its promotion of union-run schemes. For example, the BUS scheme in the building industry allows the administrators of the fund to deduct $1 in management fees for every $11 a week employers pay for workers superannuation payments. Figures show that this will give unions in the building industry a minimum of $40 million dollars a year in management fees and trustee fees. There is no doubt that this will be well in excess of any actual administration costs incurred in administrating the funds. No wonder the unions want to run these schemes and will adopt any tactic to achieve it. Of course on top of the administration fee would be the enormous investment funds available to the ACTU-between $3 and $5 billion-if union run schemes were to spread to more than 50 per cent of the work force as the ACTU envisaged. Warnings from the Confederation of Australian Industry and other peak business bodies have been given to the Government that if unions are allowed total control of these massive superannuation funds both local and overseas investment confidence in Australia will be shattered. The Government released guidelines on superannuation funds have failed to allay the fears many people hold in the community over the ramifications of employer-funded, union-controlled superannuation. They have also failed to in any way inhibit the actions of unions who are pursuing union-run superannuation schemes. The Government has tried to sell the superannuation benefit as a means of providing retirement pensions. A 3 per cent payment taken at age 55 years will not provide an adequate pension-the figure is far too low. The union run schemes are not a genuine pension scheme. They are merely a deferred payment. Superannuation for all workers should be encouraged but for the nation's good it must come at a time when it can be afforded. It should also involve an employee contribution. Now is not the time to demand that employers have to bear another 3 per cent cost. I emphasise that the Bill should not be interpreted as meaning opposition to superannuation in the work force, especially where people wish to voluntarily increase their contribution to schemes already operating. The clear intent of the Government to bypass Parliament over the introduction of union-controlled superannuation deserves the strongest condemnation. If this Labor Government wishes to introduce superannuation, it should do it openly and in the Parliament of Australia, not by a back door method via the industrial arena where they know enforcement will be by union industrial action: Where it includes a means to increase the funds and financial power of the union and involves methods aimed at compulsory unionism. This Bill merely states the law as decided by the High Court, that is, that superannuation funds and pensions are not within the jurisdiction of the Conciliation and Arbitration Commission. The changes proposed by the Bill are in no way retrospective in their operation. Legislation can be regarded as retrospective only if it alters rights already in existence not only for the future but also in respect of past transactions. The present Conciliation and Arbitration Commission hearings are in no way concerned with the determination of existing rights but the creation of new ones. Those rights, once determined, will operate prospectively only. The point is amply demonstrated in an article by Mr Justice McPherson of the Queensland Supreme Court in the January issue of the Australian Law Journal at page 13. His Honour points out that the functions of the Commission are `analogous, or at least ancillary, to the legislative function'. There can be no good reason why this Parliament should not, as the proper repository of legislative power, determine that the future rights which may be created by the Commission will not include those sought by the unions in the present superannuation claim. I commend the Bill to the Senate. Debate (on motion by Senator Robertson) adjourned. Motion (by Senator Aulich) agreed to: (1) That the following amendment be made to the Resolution of appointment of the Joint Select Committee on an Australia Card, viz.: Paragraph (12), leave out the paragraph, insert the following paragraph: `(12) That the committee report by 30 April 1986.'. (2) That the foregoing Resolution be communicated to the House of Representatives by Message requesting its concurrence in the Resolution. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Ryan) read a first time. Senator RYAN(Australian Capital Territory-Minister for Education)(9.10) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech reads as follows- The main purpose of the Wool Industry Amendment Bill is to implement changes to the organisational, funding and administrative arrangements for wool research which are set down in the Wool Industry Act 1972. I will refer to this legislation subsequently as the Act. Part VI of the Act which provides the legislative authority for present wool research arrangements is to be repealed. The new provisions for wool research and development are to be contained in Part V. In addition, the Bill provides for amendments or repeal of several sections of the Act concerned largely with day to day operational arrangements. It also includes the necessary transitional provisions to give effect to the new research arrangements. I will deal with these miscellaneous amendments and provisions before discussing wool research. The proposed amendments to sections 8 and 9 provide that persons should not normally serve as members of the Australian Wool Corporation beyond the age of 65 and section 14 provides for the Corporation to meet the travelling expenses of the Government member, as for other members, while engaged on AWC business. The remuneration and allowances of members of Committees established by the Corporation under section 21 of the Act are to be consistent with the relevant provisions of the Remuneration Tribunal Act 1973. The working capital trust fund established by sections 27 and 28 to receive advances of Government loan funds during the early operation of the reserve price scheme is no longer required. The loan has been repaid and following consultation with the AWC the two sections can be repealed. The proposed amendments to section 427 place a greater responsibility on the relevant parties to reach agreement on the principles of remuneration for expenses incurred in making refunds to wool growers from time to time out of the market support fund. If the Wool Council and organisations representing registered persons are unable to reach agreement, the Minister for Primary Industry may appoint an independent arbitrator to recommend on the principles for subsequent ministerial approval. The proposed amendments to sub-section 76 (3) of the Act will provide that any proceeds from the sale of wool stores will be used specifically for the benefit of the wool industry. Section 86 was originally incorporated into the Act to preserve the rights of Commonwealth public servants employed by the AWC or its antecedent authorities. It has become redundant following amendments to the Public Service Act 1922. Some minor consequential amendments to sections 28a, 83 and 84a are necessitated by some of the proposed amendments I have outlined. I will now deal with the main purpose of the Bill, which is to introduce changes to wool research arrangements. This is the third major piece of rural research legislation to be introduced by the Government. It has been preceded by the Australian Meat and Live-stock Research and Development Corporation Act 1985 and the Rural Industries Research Act 1985. The Government's action in establishing a research and development corporation for the meat and livestock industry-that is, the Australian Meat and Livestock Research and Development Corporation; in revamping research arrangements for 12 other rural industries-that is, the rural industries research fund reforms; and the proposed changes to wool research arrangements, illustrates our resolve to establish rural industry research on a fully accountable and cost effective basis. The Labor Government recognises that a high level of such research is vital to the future profitability of the rural sector. The Wool Research Trust Fund is the largest rural industry research fund, with a 1985-86 Budget of around $25m and reserves of some $44m. It is administered by the AWC under the Wool Industry Act 1972. The Government has decided that the AWC should continue to have responsibility for wool research because of the need for close integration of such research with the research co-ordination, promotion, marketing and industry consultation operations of the AWC and the International Wool Secretariat. The changes proposed by the Government will strengthen and support the successful arrangements which already exist for wool research. As distinct from the present Act, the Bill provides for a clear statement of objectives in respect of wool research. These objectives are to: identify more precisely areas of wool research and development that are relevant to the needs of the wool industry; improve the efficiency and effectiveness of wool research and development; encourage the more effective use of the resources and skills of the community in general and the scientific community in particular in wool research and development; and improve accountability for expenditure on wool research and development activities. It is the Government's strong intention that rural research be focused on areas which increase commercial returns to producers who are responsible for funding half of the research expenditure through statutory levies. In line with this intention the Bill provides a broad definition of research and development to cover all aspects of wool production, processing and marketing. Responsibility for evaluating the research needs of the wool industry and identifying priority areas for research expenditure will rest with the Wool Research and Development Council which is to be established under the AWC. The Council will have responsibility for developing wool research and development plans and for making recommendations to the AWC concerning the funding of wool research activities. It will also ensure that activities listed in the annual operational plan are carried out in an efficient manner and will report to the AWC on these activities. The Wool Research and Development Council will consist of nine members comprising a chairperson appointed by the Minister for Primary Industry from at least two AWC nominees. In addition there will be four persons selected by the Research Councils' selection committee which was established under the Rural Industries Research Act 1985 and four members appointed by the Minister on the nomination of the AWC. As for other research councils, it is important that wool research be administered by the best available people with a mix of expertise necessary for carrying out the Wool Research and Development Councils' functions. The Bill provides for the Council to prepare a five- year research and development plan. This plan will be prepared in consultation with the Wool Council of Australia. It will define the principle objectives of the AWC and the Research Council in relation to wool research and development. As well it will outline the strategies which should be pursued to achieve those objectives in the light of an assessment of the economic outlook of the wool industry for the period which the plan covers. The Bill provides for the R and D plan to be submitted to the Minister for Primary Industry through the AWC, for the Minister's agreement. In presenting the plan to the Minister the AWC will be able to make its own written comments. The Minister will consider the plan in relation to whether it is in the interests of the wool industry, whether it is directed towards the objectives for wool research as set out in the Bill and whether it is in accordance with the legislated role and functions of the Wool Research and Development Council. The Bill will allow the Minister to request variations to the plan providing these are made in writing to the AWC and include the Minister's reasons why variations should be made. The Wool Research and Development Council will be required to consider the Minister's request for a variation to the plan, and will be able to make revisions as it considers appropriate. Provision is made in the Bill for the Wool Research and Development Council to review the plan at least annually, or at any other time, and to consider whether variations are necessary. Where a variation is considered necessary, the Council will make a request in writing to the Minister through the AWC for the Minister's agreement to the variation. The Minister will be able to agree with, reject, or make another variation as the Minister thinks fit. In addition to the five-year plan, the Wool Research and Development Council be required to produce an annual operational plan. This plan will describe the particular R and D activities which the Research Council considers should be funded by the AWC. It will include estimates of the maximum financial contribution which the AWC should make for each of those activities in the year to which the plan relates. The Bill provides for the annual operational plan to be submitted through the AWC to the Minister for the Minister's agreement. In presenting this plan to the Minister the Corporation will be able to make its own written comments on the plan. The Minister for Primary Industry will approve an annual operational plan submitted in this way unless the Minister believes it to be inconsistent with the five-year R and D plan to which it relates. In the latter case the Minister may request, in writing through the AWC, that the Wool Research and Development Council revise the plan appropriately. As in the case of the R and D plan, provision is made in the Bill for the Council, through the AWC, to request variations to the annual operational plan at any time. The Government considers that the adoption of corporate and annual planning procedures by the Wool Research and Development Council will enhance the AWC's capacity to actively direct R and D activities towards achieving objectives which have been endorsed by the wool industry. It will provide the Corporation with a strong basis for evaluating projects submitted to it for funding against the strategies, priorities and objectives which are identified in the R and D plan. In addition, the planning process will allow the Minister for Primary Industry to focus on the strategic direction and overall performance of wool research without needing to become involved in the approval of individual research activities and their detailed administration. With regard to accountability for wool research expenditure, the Wool Research and Development Council will be required to prepare an annual report which assesses it achievements against the objectives and activities set out in the R and D and annual operational plans. Provision is made in the Bill for the chairperson of the Wool Research and Development Council to attend a meeting of the Wool Council of Australia to present the annual report and to respond to questions on any aspects of the Research Councils' past or future activities. The Research Councils' annual report will also be included in the AWC's tabled report, thus satisfying the need for direct accountability to the Parliament. In addition to the legislative requirement for the chairperson of the Wool Research and Development Council to consult with the Wool Council of Australia in developing the R and D plan, and subsequently to report and to answer questions regarding its wool R and D activities, the Council will be able to consult with other persons and bodies competent to advise or assist it in any matter relating to its functions. As well, to facilitate an exchange of information about research matters, the chairperson of the Wool Research and Development Council will, along with chairpersons of other industry research councils and the AMLRDC, attend an annual co-ordination meeting to discuss matters of common interest. I would now like to deal with funding arrangements for wool research and their financial implications. At present moneys for wool research are paid into the wool research trust fund. The financial administration of this fund is conducted by the Department of Primary Industry under delegation from the Minister for Finance. Under the provisions of the Bill the trust fund is to be replaced by a wool research and development fund which will be vested in, and maintained by, the AWC. Moneys raised from the wool industry through Wool Tax Acts and allocated to research expenditure will be paid into the new fund, along with the Commonwealth's matching contributions up to a limit of 0.5 per cent of the gross value of wool production. This is consistent with the matching arrangement for other RIRFs and the AMLRDC. At present special arrangements exist for the funding from the Wool Research Trust Fund of research carried out by the Commonwealth Scientific and Industrial Research Organisation and the Bureau of Agricultural Economics. In particular, CSIRO projects are subject to consultation with the Minister for Science. The Bill does not provide for a continuation of these special arrangements and applications for research grants by CSIRO and BAE will be considered along with all other applications. The Government considers that this is necessary to ensure that all wool research proposals are evaluated in a co-ordinated manner on their merits against objectives and priorities specified in the Wool Research and Development Council's five-year plan. In addition, it will enable the Council to be fully responsible and accountable for its recommendations on the disbursement of research funds and for the administration of these funds. I am confident that this new arrangement will not disturb the harmonious relationship between the AWC and CSIRO nor significantly affect the flow of funds to CSIRO and BAE for wool research. With regard to the financial implications of the proposed legislation, I do not expect the changes in wool research arrangements to involve additional costs to the Commonwealth. There will in due course be a transfer of the balance of the wool research trust fund to the new wool R and D fund which is to be vested in the AWC. As I mentioned earlier, the Wool Industry Amendment Bill 1986 represents the third major piece of rural research legislation to be introduced by the Labor Government. It will allow changes to be introduced to wool research arrangements which are consistent with the reform principles underlying research arrangements for other industries. These changes will take place without affecting the special relationship which needs to be maintained between wool research and other promotion and marketing functions of the AWC and the International Wool Secretariat. The Government consulted the AWC and the Wool Council of Australia prior to the development of the wool research proposals. Both bodies support the new arrangements. I commend the Bill to honourable senators. Debate (on motion by Senator Reid) adjourned. Debate resumed from 19 February, on motion by Senator Gareth Evans: That the Bill be now read a second time. Senator PUPLICK(New South Wales)(9.10) —I have the privilege of leading for the Opposition on the Social Security (Proportional Portability of Pensions) Amendment Bill 1985 on behalf of my colleague Senator Peter Baume, who has responsibilities this morning in his capacity as a parliamentary appointment on the Council of the Australian National University. The Opposition is pleased to be able to support this piece of legislation and is grateful that the Government has proceeded with an initiative which was originally undertaken by the Leader of the Opposition, Senator Chaney, when he was Minister for Social Security in the Fraser Administration. My involvement and experience with the question of portability of pensions dates back to the period between 1970 and 1972, when I was on the staff of the then Minister for Social Services, the Hon. W. C. Wentworth, when the first series of agreements were entered into to provide for the portability of pensions. As I recall, during that period agreements were entered into with Italy, Greece, Malta, Yugoslavia, and I think Hungary. The payment of pensions to persons resident outside Australia is already at quite significant levels. As at June 1983 there were some 18,621 beneficiaries of the Australian social security system resident outside Australia and total remittances were some $63,876,000. In 1984 the number of beneficiaries increased significantly to 20,229, with benefits totalling $74,692,000. For the year ended 30 June 1985 there were 22,933 beneficiaries and the revenue remitted overseas was $87,274,000. These people will not in any way be affected by the legislation before the Senate today, as those overseas who are currently in receipt of payments will continue under the existing arrangements. Therefore, this new system applies essentially to those who are currently resident or will be resident in Australia and who satisfy the necessary criteria set down in the Bill for the payment of an overseas pension. In order to qualify for the pension at its maximum rate, it is a requirement that the person concerned shall have been resident in Australia for 25 years within a certain specified period of his or her life. When the Government originally announced its detailed proposals in this regard on 8 May 1985, it proposed that the qualifying period for the maximum rate of pension should be 35 years. This was because of some criticism throughout the community, in particular the migrant community in Australia. The then Opposition spokesman on immigration and ethnic affairs, Mr Philip Ruddock, indicated that the Opposition favoured the reduction of the period to qualify for the maximum pension from 35 years to 25 years. We announced that at the time of the last general election. I am glad to see that the Government has now, in its rethinking of a number of the aspects of this legislation, decided to adopt the 25-year period. There are a number of cases which were cited by the Minister in the course of the second reading speech in which people can fail to qualify for payment of pensions because of certain things which appear almost to be anomalies in the existing situation. For instance, people can fail to qualify because they lived in Australia for less than 10 years. This particularly caused difficulties when applied to the aged parents of migrants who wanted to come to Australia to live with their children. Members of another major group who fail to qualify at present are those who have lived and worked in Australia but have returned to their country of origin before they became eligible for an Australian pension. Under the present law they cannot apply for a pension from Australia while they are resident overseas. A third category arises from the fact that most countries pay pensions only after people have lived and worked in that country for a certain number of years. If a person has not paid contributions from his or her wages for long enough or has not lived in a country long enough, he or she can fail to qualify. Similarly, for some social security systems people need to be citizens of the country. For example, if they have become Australian citizens and have contributed to some other country's social security system, they might lose their entitlement to the other country's pension. Again, under some social security systems, people must be living in a country to claim and receive a pension from that country, and a person can fail to qualify because he or she has moved to another country. Finally, some countries have currency restrictions, so that even if a person is entitled to a payment, he or she may not be able to get it while out of the country. The Minister has estimated that over a million people in Australia and overseas are affected by these problems or will be affected in the future. The reciprocal arrangements that are touched on by this legislation will be designed to overcome a number of those particular difficulties. That, of course, does not mean that this legislation corrects all the anomalies which may exist within the system. I cite three particular anomalies to which it is worth drawing attention while at the same time repeating that, despite these anomalies, the Opposition is still prepared to give its complete support to this legislation. There has been a degree of concern that advantage and disadvantage will accrue respectively to beneficiaries in countries with lower and higher living standards than those of Australia because beneficit payments will be made in Australian dollar equivalents at the same rate as payment is made in Australia. That, of course, will therefore put recipients of those payments into potentially different categories in terms of the fact that where living standards and costs of living are higher than they are in Australia-one thinks, perhaps, of the United States as an example in fact the relative value of the Australian pension, which, after all, is struck in Australian terms in relation to matters such as cost of living, will not be as advantageous to that particular person. The converse of that, of course, applies in countries where the cost of living and standard of living are lower than in Australia-one thinks of countries in southern Europe-where there will in fact be a relative advantage to those people. It is certainly true that this presents some difficulties. In correspondence between the Minister, Mr Howe, and my colleague in another place Mr Blunt, the shadow Minister for Social Security, the Minister, in a letter to Mr Blunt dated 18 February, said: A great deal of research work has been done by many countries with extensive social security systems to see if some equitable way can be devised for adjusting payments to match the standard of living of the country in which the pensioner is living. To date it has proved too difficult for any social security system to follow this course. Indeed, I accept that as entirely correct. I can well accept that the ability to adjust these things relative to other people's standards of living and relative to the cost of living in other countries, which are, of course, very often measured in entirely different ways from the way in which measurement is made in Australia, may cause extreme difficulties. It is therefore only a matter of drawing attention to the fact that among those who are paid pensions overseas, there will be winners and losers, depending on the particular country in which people are resident. The second anomaly relates to the position of women who qualify for payment of pensions. The new scheme requires that a person's working life is defined under the legislation as being between the age of 16 and retirement age and one has to spend part of the 25-year period, to receive the maximum level of payments, within that range of 16 and retirement age in order to establish the proportion of the pension which is to be paid to the recipient. Because Australia pursues what I think is an increasingly less relevant distinction between the retirement age of men and women, this means that with a retirement age of 60 for most women in the work force, a woman has only 44 years of defined working life within which to qualify for the maximum payment at the end of a 25-year period compared with 49 years for males to qualify for the maximum pension. This could potentially disadvantage elderly women who come to Australia late in life compared to elderly men who at least would have that extra five years to qualify for the pension and the extra five years to be countered on the basis of establishing the proportion of the pension which is to be paid to them. Madam Acting Deputy President, you will undoubtedly know that recently in New South Wales there has been some litigation under that State's anti-discrimination laws which has led to the courts and the equal opportunity authorities having basically determined that it is no longer within the New South Wales jurisdiction appropriate to require women to retire at an earlier age than men. I suspect that that is a trend-- Senator Walters —They have the best of both worlds. Senator PUPLICK —Senator Walters says that they have the best of both worlds. Madam Acting Deputy President, as both you and Senator Walters would know, having the best of both worlds is not uncommon for females in this society. The trend which has been established in New South Wales is one which I suspect is likely to spread throughout the whole of Australia over a period. Again, therefore, there will be slight anomalies because under some State legislation, there will be a redefinition of what constitutes the retirement status of women. I think it will take some time before there is any degree of uniformity in this business. Again, it is a difficult problem that potentially arises. Certainly, there is no easy solution. There is no solution which the Opposition is seeking to put forward at this stage. We merely draw attention to the fact that some potential discrimination arises from the way in which the working life concept is defined in the legislation. The final anomaly to which I draw attention is the question of the entitlement of an Australian resident whose resident spouse actually dies overseas. The widows pension is covered by this Bill and is payable to a person who becomes a widow or widower in Australia because the person's spouse has died in this country. That includes a spouse who dies here who is not a permanent resident. A visitor whose spouse dies here is brought within that category. Again, I base that on advice received from the Minister. The question therefore is: What is the status when the spouse actually dies overseas, notwithstanding that both partners were Australian residents? I would assume that the administrative arrangements provided for under this legislation would ensure that that person would not be excluded from the benefit. I would be grateful if the Minister for Education (Senator Ryan) in her reply could give some further clarification of that matter. As I said, those are particular issues which arise. In any scheme such as this there will be similar difficulties. The costs of this scheme are not known. Again, the Opposition accepts that no hard and fast assessment can be made at this stage. However, one of the advantages of the way in which the Government has proceeded with the introduction of this scheme is that each reciprocal agreement with a foreign country will be enacted by way of specific legislation covering the agreement with each country. When the agreement with Italy is finally entered into, which I believe will be fairly soon because negotiations in that matter are well advanced, a specific, separate Bill will come into this place to give legislative authority to the agreement. Because this will be done on a country by country basis, it will allow us at that stage at least to seek to get some indication of the precise cost involved of each of the schemes as they are entered into. So, over a period of years one will be able to build up a more comprehensive profile of the overall cost of this scheme. The proportion and number of aged migrants coming to Australia is a matter of some significance.The report by the Australian Institute of Multicultural Affairs entitled `Aged Migrants to Australia' includes a table on page 14 which indicates, under the heading `Categories of settler arrivals, Australia' that the number of persons arriving in this country under the family migration scheme increased from the 1979-80 level of 18,400 to 34,000 in 1983-84. It is to be assumed that within the family migration category there will be a slight skewing of the figures towards the older age of the spectrum. The report goes on to say: In general, migrants in the family migration category have certain characteristics which differ from those migrants in other categories. One of these is a substantially older age structure. For example, data available for 1980-81 show that the proportion aged 65 years and over in the family migration category was 17 per cent, compared with 10 per cent for the total intake. . . Available data for 1981-82 show that, of the 21,768 migrants in the family migration category, nearly 3,000 (13 per cent) had reached retirement age, while a further 1,100 (5 per cent) were aged parents. Clearly, the number of aged persons entering Australia as family migrants is not inconsiderable. A second report by the Australian Institute of Multicultural Affairs entitled `Ageing in a Multicultural Society' includes certain tables and predictions. If one looks at the table headed `Population 60 years and over by birthplace, sex and age, Australia 1981', one can see that of the total number of persons aged 60 years and over in Australia-1,140,435-260,099 were born overseas. That is a figure of 22.8 per cent. Projections are given for the year 2001. Those projections show that the grand total of persons aged 60 years and over will be 1,745,139, of whom 595,177, that is 34.1 per cent, will be people who were overseas born. That is a rise from 22.8 per cent to 34.1 per cent over the course of the next 25 years or so. The important thing about that is that, whilst not all overseas born persons will be affected by this legislation, it indicates, as is typical of the whole community, that there is a substantial aging of the Australian population and that there is a continuing rise, with the emphasis upon the family migration program, of the number of older migrants coming to Australia. As a result of that there is a potential increase in the number of people who may be beneficiaries of the scheme which is being proposed in the legislation now before us. There is one other matter that I think is worth raising and that is the question of how the assets test is to be policed for people who are resident overseas. I can imagine that there would be no more favoured job in the Department of Social Security than to be the overseas assets test assessor for the Greek Islands or whatever it happens to be. A large number of people in that part of the world will be in receipt of a portable pension and will be subject to the requirements of the assets test. I can imagine that Estimates committees will undoubtedly be paying close attention to the expenditure by the Department on overseas inspectors who travel around the Greek Islands, southern Italy, the south of France, Spain and the Pacific Islands-all of the sorts of rather delightful places to which people may choose to retire with some proportional portable pension in hand-to ensure that people are complying with the requirements of the assets test. Senator Messner —Do you think the fringe benefit will be subject to a fringe benefits tax? Senator PUPLICK —My colleague Senator Messner is absolutely right. A question now arises as to how the fringe benefits tax is going to be adjusted. We undoubtedly also have a difficulty in terms of what the Government is currently doing about the non-averaging of casual income during a 12-month period. One presumes, in a realistic sense, that Australian missions and embassies overseas are going to have some additional responsibility cast upon them for at least taking some steps relative to the assessment of assets in relation to the payment of pensions. Senator Haines —What do they do now in England for Australia and New Zealand? They must have some arrangement operating for Australia and New Zealand? Senator PUPLICK —In response to Senator Haines's intervention, I understand that as far as the United Kingdom was concerned it was simply a matter of forms being supplied to Australia House, Australia House sending those forms to people known to be in receipt of payments in the United Kingdom, those forms being completed and returned, and the adjustment being made. I do not understand that there was any on the ground follow-up as to whether that self-assessment and honesty principle was being properly addressed. Once again I think this is an issue on which we will be grateful to have the Minister's comments when she responds to the debate. It is, however, a difficult situation. One would not want a situation to arise in which persons taking their pension payments overseas were advantaged compared with people who remain in Australia and take a pension. We would not like to see some people thwart the proper operation of the assets test in a way in which people who continue to be resident in Australia are not able to do. As I say, we look forward to the Minister's response as far as that is concerned. As I have said, there are some anomalies and some difficulties and it is almost impossible to find any way in which they could easily be overcome. Despite that the Opposition is happy to support this legislation which picks up an initiative of Social Security Minister Chaney and dates back to the days of Social Services Minister Wentworth when the initial agreements were pioneered in the early 1970s. On the basis of those qualifications, and looking forward to the Minister's reply to a couple of matters which I have raised in the debate, the Opposition is more than happy to give its support to this important piece of legislation. Senator HAINES(South Australia)(9.34) —The Australian Democrats, like the Liberal Party of Australia and, I presume, the National Party of Australia, have no difficulty at all in supporting the Social Security (Proportional Portability of Pensions) Amendment Bill 1985 which, as far as it goes, is an advance on the current system. I say `as far as it goes' because it does not encompass all the countries which for a number of years have been pressing for a reciprocal pensions agreement with Australia. Those countries include Italy, which has been picked up under this legislation, Greece, Malta, Spain, West Germany and Yugoslavia. Certainly as far as the Greek community is concerned this legislation is not adequate for its needs as it sees them at the moment, so there is still a lot of work to be done in coming to some agreement with countries other than Italy. It is, however, at least a start to the conclusion of discussions that began under the previous Liberal Government when Senator Dame Margaret Guilfoyle started, to her credit and to that Government's credit, discussions with a number of European countries with regard to extending the portability of pensions agreement to those countries. Up until then, of course, Australia had had arrangements only with the United Kingdom and with New Zealand. The negotiations were continued under Senator Chaney's Ministership and have gone on under the current Government. The Social Security (Proportional Portability of Pensions) Amendment Bill 1985 is certainly acceptable as far as it goes. We are concerned that the Government appears not to be evincing any enthusiasm for extending the provisions of this agreement to other countries in terms that they find acceptable. While it is necessary for Australia to come to mutually acceptable terms before it includes a country in legislation such as this, I suspect that perhaps it has not tried, in some areas at least, as hard as it could. Certainly it has got a lot further down the track with the Italians than I was led to believe when I was over there several years ago when some of the elements of what I can only assume was an ambit claim by some people in the Italian community were quite unacceptable to the Australian Government or, indeed, to any government with which a portability arrangement was being made. This legislation will help Australians living overseas but more importantly, as Senator Puplick has already pointed, it will help people of other origins than Australian with its portability aspect. The pensions, of course, are not automatically portable for people who have been here for less than ten years. There will, under this agreement, be a proportionally based pension portability which will reach 100 per cent only after 25 years of residence. In that regard it certainly is an advantage over the system that currently operates but it will not put these people at any advantage vis-a-vis Australians, for example, so that it is not a scheme that is more generous to somebody from another country than already exists for those who were born here. Although, as Senator Puplick has quite rightly raised, the issue of assets checking is one which is going to have to be much more closely watched now that the scheme has been extended than it ever was when it applied simply to the UK and New Zealand. Where no negotiated agreement applies, as it currently does not with countries like Greece, the old rules will continue to apply and the Minister for Social Security (Mr Howe) indicated in his second reading speech that he intends to negotiate separately and to introduce legislation after each consultation process has been successfully completed. However, there is some concern in the community that this is a bit of window dressing, that in fact the wording of the Social Security (Proportional Portability of Pensions) Act as it stands is at variance with the expressed intention of the Minister in his second reading speech. He said in that speech: I turn now to the changes the Government has made as a result of the consultations with the ethnic communities: 1. Each reciprocal agreement will be introduced by a separate Bill after it is negotiated. It is possible to introduce them by Regulation. However, introducing them by a separate Bill will facilitate more rigorous Parliamentary scrutiny and will provide the ethnic communities and indeed the whole community with an assurance that a particular agreement cannot come into effect until it has been debated by both Houses of Parliament. 2. The basis for reciprocal agreements and the calculation of all pension payments outside Australia will be 25 years rather than 35 years as previously announced. 3. Many people residing in Australia at 8 May 1985 who are close to retirement have a reasonable expectation of taking a full Australian pension overseas. To meet this expectation, the Government has decided to exempt all people residing in Australia at that date from the new rules until 1 January 1996. After that date, only those who go to a country with which Australia has a reciprocal agreement will be affected. Our concern lies with what appears to be a quite distinct variation between what the Minister said in his second reading speech that he intended to do and what the wording of the Bill before us appears to say will actually happen. The problem is in the wording of clause 4 of the Bill, which relates to proposed new section 83AC. As it stands, the Bill before us means that any future agreement between the Australian Government and a foreign government will have to be in terms of this Bill, not in terms of some other Act. It would appear, at least on the surface, that if some agreement is negotiated with Greece or some other country over portability of pensions, that agreement, whatever else the consultative process takes into account, must be couched in terms applicable under the legislation before us today; that is, only if it is in the same terms as laid out in proposed new section 83AC will the agreement fall into this part of the legislation, and hence anything outside that sort of wording is not going to apply. The problem relates specifically to proposed new sub-section (5) (b) (ii), the relevant part of which reads: This section does not apply to a person who is in a country with which Australia does not have an agreement that affects the operation of this Act. I suggest that there is a more appropriate way of phrasing that which would bring it into line with what the Minister said in his second reading speech that he intended to do. I am not doubting for a moment that what the Minister intends is that negotiations and consultations with other ethnic groups in the community will continue and that, one hopes, some time down the track agreements will be reached which may not necessarily be in the same terms as the current agreement reached between the Government and the Italian community. If that is the case, I cannot see how that sort of agreement can be put into effect under the wording of the legislation before us today. It would seem to me much more useful and much more in keeping with what the Minister, Mr Howe, said in his second reading speech that he intended if that part of the clause actually spelt out the two possibilities; that is, that it said: This section does not apply to a person who is in a country with which Australia does not have an agreement that provides for a pension to be payable to such a person in that country in accordance with this section- or there were added a paragraph (iii) which said: Is in a country with which Australia has an agreement that provides for a pension to be payable to such a person in that country in accordance with provisions of this Act other than this section. It seems to us that that would give the Government the flexibility it clearly indicates that it wants without tying it into simple window-dressing consultations and negotiations which can achieve a successful conclusion only if the legislation ends up in the same terms as those already in the Act with respect to the Italo-Australian agreement. I confess that we had not expected the legislation to be brought up this morning. I apologise to the Minister and, more importantly, to the poor benighted departmental officials who have to make some sort of Yes Minister decision on this matter. I hope that in the hour between now and the Committee stage of the debate, they will have some time, as indeed will Senator Puplick for the Opposition, to look at this. Certainly our advice has been that if this Bill passes in the form that is before us, the law as it will then stand will not allow agreements to be made which contravene this section of the Act. We will find people tied into this agreement when another, but perhaps not identical, mutually agreeable and acceptable arrangement can be come to unless some change in the wording allows for flexibility, so that everbody's needs and interests can be satisfied. I repeat that certainly the Australian Democrats fully support the intention of this Government to extend portability of pensions to other countries. We fully support the application under this legislation to extend it partially to those of Italian descent. We regret, as does everybody, that it has taken so long since Senator Guilfoyle instigated the discussions in the first place. Senator Walters —Senator Chaney. Senator HAINES —No, I think the honourable senator will find that it was Senator Guilfoyle who started it, but it was carried on by Senator Chaney. Senator Walters —It was proposed by him. Senator HAINES —Yes, I said earlier that it was a most appropriate and excellent initiative undertaken by the previous Government and adopted by this Government because if we do not treat these matters in a multi-party way division will be caused in the community. It is sad that it has taken so long to reach agreement, even with Italy. I am afraid that a division will be caused if the Act as I perceive it precludes the Greek or Yugoslav communities from coming to an arrangement with Australia that is different from the one currently being concluded. I certainly hope that with the best intentions on all sides and with the goodwill and everything else that ought to apply in this case some clarification of the problem that I have raised can be brought forward and preferably some change to the wording can be made that will make it absolutely clear that other sorts of agreements can be reached effectively and be put into legislation without being at odds with what is before us today. Senator WALTERS(Tasmania)(9.49) —Today we are debating the Social Security (Proportional Portability of Pensions) Amendment Bill 1985. As Senator Puplick has already said, the Opposition supports these amendments. As Senator Haines said, they were proposed by Senator Chaney in 1982. It is pleasing to see that the Government, although belatedly, has brought forward this legislation. I will explain how the alterations will take place. At present pensioners are entitled to a pension after living in Australia for 10 years; so when they leave the country the pension is fully portable. When they leave Australia to return, as they often do, to their homeland for the remaining years of their lives, Australia pays their full pensions. It has become a very costly exercise. I shall explain the need for this legislation because the figures are disturbing and are causing concern. They are increasing and increasing quite considerably. At June 1983, 18,621 beneficiaries of the Australian social security system were resident outside Australia and remittances totalled something like $63,876,000. In 1984 the number of beneficiaries had increased significantly to 20,229, with benefits totalling $74,692,000. By the end of June 1985 those figures had gone up. There were nearly 23,000 beneficiaries and the figure paid out in benefits was $87,274,000. Is it any wonder that there is a growing concern that something must be done? It is now proposed that pensions be portable on a proportional basis, in line with the proportion of a pensioner's working life in Australia. Working life is defined as being between the age of 16 and retirement age. That is the basis of the alteration. Only where a pensioner had spent 25 years or more of that working period in Australia will a pension be fully portable. As I have said, the Opposition is in complete agreement with that proposition. The categories of pensioners that are entitled to a portable pension will surprise many people. I think most of us feel that only age pensions are fully portable, but that is not so. The age pension, invalid pension-wives of pensioners are also eligible-widow's pension, carer's pension and the supporting parents benefit are fully portable. So a quite considerable cost to the community is involved when the various beneficiaries are taken into account. This legislation will not be retrospective. I believe that is a very important point. Full portability will continue for every person residing in Australia at the time of the original Government announcement on 8 May last year. So anyone who was residing in Australia on 8 May last year and who leaves Australia before 1 January 1996 will be eligible for benefits as at present. Some of these people will also be eligible to receive partial benefits from other countries such as the United Kingdom and New Zealand. As has already been stated, we are still negotiating with Italy in this regard. The problems associated with this Bill have already been mentioned. Mr Blunt, the shadow Minister, referred some of these to the Minister for Social Security (Mr Howe). The Minister was good enough to give a reply. I shall explain some of those problems. The first problem relates to the ability to check the eligibility of people in other countries once they have left Australia. There are a tremendous number of countries to which our residents go. I will just read some of them, as Mr Blunt did when he put them in Hansard in the other place. They are Albania, Austria, Czechoslovakia, Denmark, through to Italy and Malta in Europe; the United States of America, Canada and Argentina in the Americas; Hong Kong, India, Israel, Lebanon, Turkey and other parts of Asia; Africa and, of course, New Zealand and Papua New Guinea. One sees that our residents go to a considerable number of other countries. How do we check eligibility? For instance, can we check the eligibility of someone who has left Australia and is now residing in the Union of Soviet Socialist Republics? It becomes a pretty tricky problem. For instance, what happens with regard to the new assets test in Australia? The Government has been very thorough in checking eligibility under the assets test of our pensioners living here. Senator Puplick —You haven't got a Minister to answer your points. Senator WALTERS —The Minister for Veterans' Affairs, Senator Gietzelt, is here. I would be grateful if the Minister could answer me later as to what happens when someone sells a house, goes to the USSR and takes the money with him. How is that checked? What is the detailed method of checking in those sorts of cases in accordance with the assets test and in line with eligibility criteria for pensioners resident in Australia? I have no idea how that check is made in these countries. What happens in some of the African countries when someone who is eligible for a pension here sells his house, takes the money to Africa and buys something there? How do we check that? When Mr Blunt in the other place asked these questions, the answer of the Minister for Social Security was really that it is virtually impossible to check. In some countries, it is easy. He said: In Europe, the Middle East and most of Africa- I found this very interesting- (where 88% of all Australia's payments are made) payments are made through the Department's office in London. The London office reviews entitlements of pensioners in its areas on a regular basis. I wonder how the Department's office in London reviews the eligibility of people in Africa or the Middle East, in accordance with the assets test. I think that would be a rather difficult exercise, to say the least. I am very concerned that our pensioners living in Australia should not be disadvantaged by the close scrutiny which goes into their private assets under the assets test, as compared with those people who move to the Middle East or Africa. The Minister continued: In addition, as is necessary from time to time, additional reviews are carried out, for example, in relation to medical incapacity. I gather those are for invalid pensioners. But how does the Department know whether someone who is claiming and being paid an invalid pension from Australia is not working in the Middle East or in Africa? The difficulties that this presents are insurmountable and I believe that this is an area that must be looked at fairly thoroughly. The Minister said: In the Americas (accounting for some 5 per cent of payments) payments are made through Australia's post in Washington and in Oceania and some other remote areas (where . . .) payments are made direct by Department of Social Security's State offices. In these areas regular reviews are initiated direct from Australia. I wonder what he means by regular reviews. The Minister on duty in this chamber has just changed and I hope that the Minister for Education (Senator Ryan) who is now here will pick this up. I had asked Senator Gietzelt whether he could explain some of these things. I hope that the officers present will bring the Minister for Education up to date with the questions that I was asking. There is not only that problem associated with eligibility, but also, as Senator Puplick has already said, problems of equity associated with standards of living. If people took our age pension, invalid pension or whatever to India, for example, I believe that their standard of living would be quite considerable compared with that which would apply in Australia. How is that equitable? How can we make it more equitable? If the same pensioners moved to the United Kingdom, which pensioners probably do in greater numbers, they would find that with the fall in the Australian dollar-our dollar is worth only 48 United Kingdom pence at the moment-they would be at a considerable disadvantage. I wonder what we could possibly do about that. The Minister for Social Security has said that this is a fundamental problem resulting from different levels of payments being available under the various social security systems throughout the world. He said: To date it has proved too difficult for any social security system to follow this course . . . My Department is not aware of any country which adjusts its pension payments abroad in this way. I do not really believe that we should discard the idea on that say-so-that it is all too difficult and that no one else does it, so we should not even look at it. I believe that we could successfully look at this matter and tie payments to the ebb and flow of overseas currencies. That is for the Department to try to work out. As has already been said, we are leaving open negotiations for many other countries in this area. If we are to bring down that figure of $87,274,000 which last year was incurred by Australian taxpayers, this must be done and done pretty soon. If we do not have reciprocal arrangements, as we have with the United Kingdom and New Zealand and presently will have with Italy, the Australian taxpayer will be behind the eight ball. I was delighted that on this occasion at least the Government saw the need for not interfering with the planning of people, particularly the elderly. It did not make the legislation retrospective; it allowed 11 years for these new regulations to take effect. As the Minister said in his second reading speech: Many people residing in Australia at 8 May 1985 who are close to retirement have a reasonable expectation of taking a full Australian pension overseas. To meet this expectation, the Government has decided to exempt all people residing in Australia at that date from the new rules until 1 January 1996. He added that, as previously announced, all existing pensioners, whether in Australia or overseas, would not be affected by the new rules. I was delighted to see the Minister acknowledge the hardship that would face pensioners who had planned for their retirement if there were a sudden change in social security arrangements. I am only very sorry that he did not acknowledge the same hardship for pensioners at home when he altered the assets test. The same thing applies. If the Minister says in his speech that he understands the situation that many people have a reasonable expectation of taking their pensions overseas and have planned and made their arrangements to that effect, surely that same Minister should have understood the position of pensioners at home in relation to the assets test. Those pensioners had planned and had reasonable expectations, and he should have allowed time for the assets test to come in. I believe it would have been far more humane to say to the pensioners, those people who are approaching pension age, who have a certain period of their working life left and who have already made their plans on the basis of reasonable expectation, that they could fulfil those expectations. However, I am afraid that that is the way this Government works and there is very little that we as an Opposition can do about it. I am pleased that the Government has brought forward this legislation. As I said, the Opposition will be supporting it. We wish it a speedy passage through the Senate. Senator RYAN(Australian Capital Territory-Minister for Education)(10.06) —The Senate has been debating the second reading of the Social Security (Proportional Portability of Pensions) Amendment Bill which is part of a package of measures designed to improve social security assistance to people who move between countries. The package includes provision to enter into reciprocal social security agreement with each of Australia's major migrant source countries and, indeed, any country that is interested in a reciprocal agreement with Australia. I am pleased to note the support of the Opposition for this legislation and I understand that it is is the fruition of work commenced during the time when some honourable senators opposite had the responsibility for social security matters. I will respond in general terms to queries raised during the debate but at the outset I must point out that the amendment to be moved by Senator Haines on behalf of the Australian Democrats is not acceptable to us. The technical effect of the proposed amendment moved by Senator Haines would be to undermine the whole part pension portability purpose of the legislation because in fact that would mean that people who were in Australia at the time of the announcement by the Minister for Social Security (Mr Howe) would be eligible for all time for a full pension no matter where they chose to live. Of course, the whole intent of the legislation, which has been supported by the coalition parties, is quite different from that. When Senator Haines spoke to her proposed amendment she suggested that the concern of the Democrats was that the Bill in its present form would pre-empt further negotiations for further reciprocal agreements and that perhaps the Government would be tied into a rigid position on account of this legislation and would not be able to negotiate appropriately for future agreements. This is not the case. The position is that an agreement will become part of the Social Security Act by amendment to that Act, thus giving the agreement force of law. That agreement will modify the current provisions of the Act, whatever they may be. In other words, when an agreement is reached with another country there will be a legislative expression of that agreement and the Government will have the capacity to amend the Social Security Act to incorporate the terms of the agreements as they have been reached with the other countries. The agreement Bills will express the override section 83AC and indeed, other provisions of the Act. I point out that this is the normal way of arranging for the domestic law to be modified by international agreement and is the same, for example, under the Income Tax Assessment Act. There is no question of the terms of future Acts which will give effect to agreements being dictated by the Bill currently before the Senate. The terms of a particular agreement will be concluded by negotiation between the governments during which time Australia's position will be a system of proportional pension based on the terms of this Bill. For example, the agreement with Italy just concluded embodies this approach. For these reasons the Democrats proposed amendment is not necessary, I suggest, against the intent of the Bill and is not accept- able to us. I understand that it will not be supported by the coalition parties either. Senator Puplick asked for clarification of the position of a married couple who reside in Australia but are temporarily overseas when the husband dies. The position is exactly the same as if the death occurred in Australia. This legislation will enable the woman to qualify for a widow's pension in the same way as she would if her husband's death had occurred within Australia. The fact of her temporary absence from Australia will not affect her entitlements. Of course, she would have to qualify in other respects just as she would if the couple had been in Australia when the death occurred. The temporary absence does not affect the entitlement of the woman to her widow's pension. The Opposition also sought assurances about the ability of our Government to administer the assets test overseas. Of course, this ability is subject to some difficulties which do not arise in Australia, but the Department's ability to administer the Social Security Act under the proposed regime of proportional portability is no different from what it has been for many years. For example, in the past there was an assets test and an income test, or just an income test alone. In other words, the Department of Social Security has been administering these kinds of tests overseas for very many years; it has the capacity to do that. There are some complications that arise where the recipient lives overseas rather than in Australia, but the Department is confident that it will be able to carry out its responsibilities adequately. I point out that when reciprocal agreements are entered into the Department's ability to administer the Act properly will be enhanced because the agreements will cover administrative co-operation between countries. Senator Walters asked how often regular pension assessability reviews are carried out. Pension payments are assessed regularly. In fact pensions which are paid overseas are actually assessed more regularly than those paid in Australia. Pension payments overseas are, in most circumstances, reviewed about every 12 months. For example, persons selling their house on leaving Australia would have their pension reviewed each 12 months at least to ascertain what had been done with those assets. It is a very regular pro- cess. I am sure that is a satisfactory response. Finally, during the debate there was some suggestion by Senator Puplick that the Department of Social Security officers would have wonderful times travelling to France or Italy, preferably in the spring, to carry out these reviews. On the other hand, Senator Walters pointed out that in the case of a pensioner living in the Union of Soviet Socialist Republics there may not be such enthusiasm on the part of departmental officers to carry out that assessment. I do not think the Opposition can have it both ways. I presume that the job of being an assessor for the Department of Social Security, like most jobs in our society including those of senators, has its ups and downs, and there are swings and roundabouts. I commend the legislation to the Senate. Question resolved in the affirmative. Bill read a second time. The Bill. Senator HAINES(South Australia)(10.13) —Notwithstanding the indication from the Minister for Education (Senator Ryan) that the Government cannot see any point, merit or need to support the amendment, I will be pursuing it. I do not want to go over the ground again. I move: Page 3, clause 4, proposed new sub-paragraph 83AC, (i) (b) (ii), lines 40 and 41, leave out the sub-paragraph, insert the following sub-paragraphs: ` (ii) is in a country with which Australia does not have an agreement that provides for a pension to be payable to such a person in that country in accordance with this section; or ` (iii) is in a country with which Australia has an agreement that provides for a pension to be payable to such a person in that country in accordance with provisions of this Act other than this section;''. Senator PUPLICK(New South Wales)(10.13) —The Opposition will not support the Australian Democrats' amendment. We believe that there are two matters arising from the amendment. The first is in relation to the existing provision which is contained in (5) (b) (ii) of proposed new section 83AC. We understand that to have the effect to preserve the right of people who return to live in countries which have undeveloped social security systems. One thinks in particular of the possibility at some stage in the future of people from South East Asia being able to return to countries like Vietnam, and we would not want to put them in any degree of disadvantage. However, the proposed addition of sub-paragraph (iii) by the Democrat amendment seems to us in fact to extend excessively widely the operation of portable pensions without the qualification of pro rata payment. It means that all payments which are made under the Social Security Act 1947 will basically be saved and made fully portable at their full rate rather than at a proportional rate. Just to confirm our own understanding of the matter, I seek from the Minister the assurance that the passage of proposed new section 83AC in its current form does not mean that when the Government chooses to enter into negotiations with other countries those countries are automatically bound to enter into negotiations only on the basis of the system which is provided for in 83AC; in other words, if they want to enter into negotiations with some other country they are still at liberty to do so without necessarily being bound in a straitjacket by only the provisions of 83AC. The Minister has said that they can come back, when the legislation comes back, to provide for each country by country agreement; that that legislation itself will have the effect of overriding, if necessary, the Social Services Act, or indeed the Social Security (Proportional Portability of Pensions) Act. My concern is whether in fact the initial negotiations have to proceed only along the lines laid out in 83AC. If the Minister assures us that that does not limit the Government on the basis on which countries may enter into negotiations and that as a result of that the country by country agreements are able to override 83AC, we will be perfectly happy to allow the Bill to stand in its current form. While I am on my feet, to save time, may I say that I would be grateful for a further explanation from the Minister of the extent to which the Government believes that it is possible actually to police the operations of the assets test for people being paid pensions overseas. I would be grateful for an assurance that people being paid pensions overseas are not going to be able to avoid the impact of the assets test in a way in which people continuing to be resident in Australia cannot avoid provisions of the assets test. I appreciate there will be swings and round- abouts as far as the Department of Social Security is concerned-undoubtedly we will find out a little about the swings and roundabouts at Estimates committee hearings-but I hope that swings and roundabouts are not going to turn into merry-go-rounds as far as the policing system is concerned, nor indeed that excuses are going to be offered that in places such as the Middle East, because of the difficulties of getting around in the Middle East, it is impossible to make the appropriate assessment of pensions. We do not want to be in a situation in which people not only are treated differently in terms of the operation of the assets test out of Australia and in Australia but also are treated differently depending on the country out of Australia to which they happen to return. At this stage I do not think the Minister has quite answered the extent to which we are concerned that the assets test will apply equally between those resident overseas receiving a pension and those resident in Australia receiving a pension. Senator WALTERS(Tasmania)(10.18) —The Minister for Education (Senator Ryan) referred to the case of a pensioner leaving Australia with a lump sum of money. We know that under the assets test a pensioner can leave Australia with a few hundred thousand dollars, having sold his home and perhaps having gone to the Middle East or Africa. The Minister has told us that those pensions are reviewed annually-far more regularly than are pensions here in Australia. I ask the Minister to tell me two things. If a pensioner here in Australia sells his home for, say, $100,000 and has the money in hand, at what stage is the pension withdrawn? How long is that pensioner permitted to hold that money-it could be as much as half a million dollars-in his hands before the Department of Social Security applies the assets test? I will ask my next question after the Minister has answered that if she likes, because her answer will influence it. The CHAIRMAN —Senator Walters, are these questions relevant to the amendment moved by Senator Haines or are they separate questions? Senator WALTERS —No, they are not relevant to the amendment, but we were taking the Bill as a whole. The CHAIRMAN —I know, but Senator Haines has moved an amendment and that is the matter before the Chair until it is disposed of. I would like to clear that first, and then the Minister can answer your question. Senator RYAN(Australian Capital Territory-Minister for Education)(10.20) —Senator Puplick's concern that there may be a restriction on the basis of negotiation for future reciprocal agreements is answered in this way: The Government will not be bound, in any future agreement negotiations, by proposed new section 83ac. However, I should make it clear that the Minister for Social Security, Mr Howe, has announced that it is the Government's preferred position to seek proportionality of payments. That is a policy decision made by the Government. We would be pursuing that because it is our preferred position, but we are not bound by the Act to seek proportionality; that is a policy decision. Senator HAINES(South Australia)(10.21) —Quite frankly, I cannot see how the Minister or anybody else can say that they will not be bound by this legislation when its wording is as it is, nor am I in the habit of accepting bland assurances from governments that they have a policy decision on something but they are prepared to go outside it. I believe that we owe it to the large number of people in ethnic communities that have not yet had an agreement concluded to draw the problem that we perceive in this Bill to their attention. I suspect that the Minister is at least correct in saying that this is a policy decision and I believe that the wording of proposed new section 83ac is in fact going to be used to pressure, if not actually bludgeon, the ethnic communities from countries other than those with whom agreement has already been reached to knuckle under rather than to continue pursuing their own agreements, their own negotiations. I think that what in practice will happen after this legislation is passed in the form in which it is going to be passed-I gather that not only will the Government not support this amendment but neither will the Opposition-is that some time down the track lengthy negotiations, consultations, will take place with members of the Greek community, the Yugoslav community, the Maltese community, with all sorts of communities that are not picked up in this legislation, and the end result will be that they will be given the clear impression that if they do not take this approved formula which follows Government policy they can wave goodbye to any chance of a successfully legislated portability of pension system. It is my intention to pursue this amendment to a division. Senator RYAN(Australian Capital Territory-Minister for Education)(10.24) —I feel I must make a response because I think Senator Haines has fundamentally misunderstood the nature of the Bill and the explanation I have given. This legislation does not prevent the Government-any government-from negotiating a further reciprocal agreement on whatever terms are agreeable to the two parties. There is no question of bludgeoning or any of those exaggerated terms that Senator Haines has quite inappropriately brought into this debate. The agreement, by its very nature, is something to be negotiated between the two countries and that can be done on terms agreeable to the countries. It is also the case-the legislation permits this; it is within the terms of this legislation-that the Government has a preferred policy of seeking proportionality and we will choose to go into negotiations adopting that position. It may be that with some countries proportionality is not possible, that the payment of full pension will continue. That is a possibility within the terms of this legislation, but it is also important that the Committee understands what the Government's preferred position is, and it is to seek proportionality. Senator HAINES(South Australia)(10.25) —I am not arguing about the Government's preferred position. I think everybody agrees that proportionality is the best way to go. All I am saying is that I will believe it when I see it. If ever an agreement is reached that does not include proportionality, does not go down the line of this particular formula or does not follow almost exactly the Government's preferred policy, I will be surprised. Question put: That the amendment (Senator Haines's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 7 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 44 —— Chipp, D. L. Sanders, N. K. Haines, J. Siddons, J. R. Macklin, M. J. (Teller) Mason, C. V. J. Vigor, D. B. Archer, B. R. Kilgariff, B. F. Aulich, T Knowles, S. C. Baume, Michael Lewis, A. W. R. Bjelke-Petersen, F. I. MacGibbon, D. J. Black, J. R. McIntosh, G. D. Bolkus, N. McKiernan, J. P. Boswell, R. L. D. Maguire, G. R. Brownhill, D. G. C. Messner, A. J. Carrick, Sir John Missen, A. J. Childs, B. K. Morris, J. Coates, J. Parer, W. R. Collard, S. J. Puplick, C. J. G. Cooney, B. Ray, RobertCrichton-Browne, N. A. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Durack, P. D. Ryan, S. M. Elstob, R. C. Sheil, G. Evans, Gareth Sibraa, K. W. Georges, G. Tate, M. C. Gietzelt, A. T. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. Jones, G. N. (Teller) Question so resolved in the negative. Senator RYAN(Australian Capital Territory-Minister for Education)(10.33) —Senator Walters asked a question not arising directly from the legislation, but a general question about the assessment of pensioners' assets after the sale of a house. The answer is that, in principle, the money is an asset immediately it is acquired, whether a person goes overseas or stays in Australia. It technically becomes an asset immediately and pensioners are under a continuing obligation to inform the Department of Social Security about their assets. However, if there are special exceptions-for example, if the person is liquidating one asset to buy another house-the Department of Social Security does not assess that as an asset which could affect pension entitlement. In general, an asset becomes such as soon as it is acquired. Senator WALTERS(Tasmania)(10.34) —Could the Minister tell me this: When a pensioner in Australia tells the Department of Social Security that he or she intends to buy another house, how long is that person given to effect that situation? Senator RYAN(Australian Capital Territory-Minister for Education)(10.35) —That would be presumably for as long as they needed. The Department of Social Security has no desire wrongly to assess an asset. If the intention is to use that money to buy another house, it is not an asset for the purposes of assessing eligibility. Senator WALTERS(Tasmania)(10.35) —That could go on for several years. Does the Minister understand the point I am making? It is not a frivolous question. My question is: Could that go on for several years? Senator RYAN(Australian Capital Territory-Minister for Education)(10.35) —I think common sense would answer Senator Walters's question. If one keeps the money for several years, it is an asset. But if one's genuine intention is to buy another house, one would not take several years to do so. Senator WALTERS(Tasmania)(10.36) —That brings me back to the question I asked originally. What happens to someone who is departing Australia, who has sold a house for hundreds of thousands of dollars and who is going to Africa. How long is it before the Department assesses-- Senator Ryan —Immediately. Senator WALTERS —So he immediately loses his pension. Is that what the Minister is saying, or is he given the same rights as other Australians? Suppose he says: `I have half a million dollars or hundreds of thousands of dollars. I intend to buy a similar house in Africa or India'. Is the pensioner permitted the time to spend that money on a similar asset in a foreign country? Senator Ryan —Yes, a reasonable time. Senator WALTERS —What is the Minister's definition of `reasonable time'? Is it the 12 months that she referred to? Senator RYAN(Australian Capital Territory-Minister for Education)(10.37) —I have already informed Senator Walters on more than one occasion that reviews are conducted at about 12-monthly intervals. Obviously, if at the time when that person was reviewed within a period of 12 months he had bought another house, he would not have the asset. If he had not bought another house he would have the money and he would be assessed. Senator WALTERS(Tasmania)(10.37) —So the Minister has assured me-- Senator Tate —Goodness. Senator WALTERS —It is a bit difficult for Senator Tate to be impatient when he has not taken part in the debate. He should contain his impatience. So someone who is going to some far flung country can take this money out of Australia, still collect the pension from Australia, with full portability, and he will eventually be reassessed-we hope 12-monthly-even in areas in which we have no ability to do so easily? I accept that, if that is the best that the Minister can come up with. Senator RYAN(Australian Capital Territory-Minister for Education)(10.38) —I simply cannot accept Senator Walters's tendentious and misleading interpretations of the answers she has been given. She is putting forward hypothetical cases and seeking precise answers. The general answer is that each case is assessed on its own circumstances. If a pensioner genuinely intends to buy another home, be it in Australia or overseas, that is taken into account. If he intends to keep the money as an asset, whether he is in Australia or overseas, that is also taken into account. The hypothetical imputations from what I have said that Senator Walters is trying to make are quite wrong. The answer is as I have given it. Bill agreed to. Bill reported without amendment; report adopted. Bill (on motion by Senator Ryan) read a third time. Consideration resumed from 13 March 1986. Clause 17 (Mergers and other acquisitions). Senator DURACK(Western Australia)(10.40) —Clause 17 deals with section 50 of the Trade Practices Act and proposes a number of amendments to that section, including the now notorious amendment which has been the subject of such intense public scrutiny, even though public interest in this area was very belated. Long before the public concern and the Australian Democrats' concern, as a result of a public debate-following the debate, not initiating it-the Opposition had given very close attention to clause 17 and the proposal to amend section 50 of the Trade Practices Act. We are proposing an amendment which is to be considered now, before dealing with amendments which have resulted from the Broken Hill Proprietary Co. Ltd take-over proposal. We are concerned about the new sub-section (2a) which it is proposed be inserted into the present section 50. There is an amendment to section 50 (1) which extends the operation of section 50 to a person other than a corporation, with which the Opposition agrees. To recapitulate, section 50 is the mergers section of the Trade Practices Act. In broad principle section 50 (1) states: A corporation shall not acquire, directly or indirectly, any shares in the capital, or assets, of a body corporate if- (a) as a result of the acquisition, the corporation would be, or likely to be, in a position to control or dominate a market for goods or services . . . That is the general principle with which section 50 is concerned. Of course, it does deal with a large number of contingencies which may arise in applying that principle. One of those contingencies, in sub-section (2), deals with a corporation that is associated with other corporations. Naturally, it does not look only at what one corporation does, or what power it has. It looks at what a number of corporations that are associated may have. Proposed new sub-section (2a) provides for a further development of this notion by providing that a body corporate shall be taken to be associated with another body corporate-I am referring only to the major parts of the sub-section-if one of those bodies corporate is, either alone or with another body corporate or other bodies corporate which are related to the dominant body corporate, in a position to exert, whether directly or indirectly, a substantial degree of influence over the activities of the body corporate. The Opposition is concerned about the very broad effect of sub-section (2a), because under the definition of `associated corporation' the body corporate may then exert a substantial degree of influence over the activities of the associated body corporate. We do not see that as being the major question. It is not just a question of whether there is a degree of influence over the body corporate. The degree of influence is not the important matter from the point of view of the Trade Practices Act. What is important is the ability of the dominant body corporate, if one likes to call it that, to influence the market power of its alleged associated company. So we believe that the very wide definition in the Government's amendment should be limited so that the degree of influence-it may be very substantial influence-which one corporation has over another will apply only if that influence is in a market of in the activities of a market. The amendment which we propose seeks to achieve that purpose. Our amendment seeks to amend clause 17 by inserting the words `in a market' after the word `activities'. Proposed new sub-section (2A), as set out on page 8 of the Bill, states: . . . in a position to exert, either directly or indirectly, a substantial degree of influence over the activities of the other body corporate. As I said, we are not really worried about the influence a body corporate may have in a general way. What is relevant from the point of view of the Trade Practices Act is the ability of a body to have a market influence or a dominance. Section 50 is about controlling or dominating a market. Proposed new sub-section (2A) certainly does not do that. I do not think it is intended to have a wider effect. If it is, our amendment will have even greater force in terms of the extended definition of the body corporate which may be able to control or dominate a marker through associated bodies. The merger section will apply only if in fact this degree of influence is able to be exercised in a market. Accordingly, I move: Page 8, paragraph (e), proposed new sub-section 50 (2A), line 9, after `activities' insert `in a market'. Senator HAINES(South Australia)(10.48) —I would just like to point out to Senator Durack that we actually ought to be talking about this amendment in terms of `dominating' rather than `control and dominating' since the earlier parts of the amendment are aimed at taking out those words relating to `control'. So we are in fact looking only at `domination' in a market. I think this is another example of what is becoming known in this place as a bauble amendment. I would say to Senator Durack that it is harmless enough. Indeed, I would say the same thing to the Government. I do not think the amendment is necessary because the whole of clause 17 refers to what is happening `in a market'. The words `a market' appear early in clause 17. After all, the clause is made up of a series of integrated parts and, presumably, if `a market' is referred to earlier on `a market' continues to be implicit in the rest of the clause. However, that is just as much an argument for not opposing the inclusion of the words `in a market' at a later stage of the amendment. While I am sure that Senator Evans is about to launch into an enthusiastic rebuttal by saying that it is in fact a superfluous amendment and it is only a piece of baubling along in here, might I point out to him that this is not some kind of guerrilla raid on the legislation. Had this sort of debate gone on originally maybe section 50 would not be in the mess that it is currently in and we would not be looking at a market-place situation that is in the state that it is in at the moment with regard to conflict over just exactly what section 50 means when it comes to mergers and takeovers of bodies which dominate a market sector as distinct from a body which already has a monopoly in the market. I can only suggest that maybe if a bit of nit-picking and/or baubling had gone on in the original debate perhaps the wording would have been a little clearer and a little less ambiguous. The original intentions may have been more usefully expressed in the wording of the original section 50. If that had happened we would not now be messing about with section 50 (2C). So, if it is any joy to Senator Durack's life, we will be supporting the addition of the words to clause 17 as set out in his amendment. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(10.51) —There are baubles and baubles and this is one, I suppose, that the Government can live with. Senator Haines —This is a small bauble, Senator. Senator GARETH EVANS —It is not even a very shiny one either, it has to be acknowledged, because it really is quite superfluous. The reason for the amendment is somewhat obscure but it seems to be an attempt to confine the areas of an influence of an associated body corporate to influence in a market. If this is intended to remedy a defect-and we do not agree that there is any defect-it should be made clear that activities in the market are relevant, as outlined in an explanatory document. This matter will be made clear by the formal explanation which I now give: SUB-SECTION 50 (2A) There has been some comment that the proposed s.50 (2A) may apply to a situation where two firms could be regarded as associated bodies corporate, notwithstanding that the influence one was able to exert over the other was insufficient to allow the former to make use of the latter's market power. This would not be so because the influence required for the application of sub-section 50 (2A) must be a `substantial' influence and related to market power. Sub-section 50 (2A) must be read in light of sub-section 50 (1) and 50 (2). Sub-section 50 (2A) provides a mechanism for determining, through the application of sub-section 50 (2), whether an acquisition has resulted in dominance or increased dominance of a market for the purpose of sub-section 50 (1). Thus any assessment whether one firm is in a position to exercise substantial influence over the activities of another firm, must have regard to the test of market dominance to which s.50 is directed. In that context, the word `substantial' in sub-section 50 (2A) is intended to signify `large or weighty' or `considerable, solid or big', in the same way as for s.46. (In this respect see also paragraph 40 of the Explanatory Memorandum). To give `substantial' in sub-section 50 (2A) a lesser meaning of merely `real or of substance and not insubstantial or nominal' (see Tillmans Butcheries Pty Ltd v The Australian Meat Industry Employees' Union and Ors (1979) ATPR 40-138 at p. 18, 500) could lead to the result that market power held by one body corporate was not in reality available to an `associated body corporate` within the meaning of sub-section 50 (2A). Having driven Senator Haines from the chamber with this explanation, I still believe, nonetheless, that it will prove to be of assistance to the courts in interpreting this particular provision. It is unnecessary to go down the track of the Opposition's amendment in this matter. But, as I have indicated, superfluous though it may be, we do not resist it. Senator DURACK(Western Australia)(10.55) —Although it is unnecessary for me to intervene further, I would like to say that I have long since given up expecting Senator Haines to please me, but when she does I am nevertheless grateful that the Australian Democrats are going to support us. Amendment agreed to. The CHAIRMAN —There were two foreshadowed amendments to proposed new sub-section 50 (2C), Senator Siddons to leave out the whole sub-section and Senator Durack to add words at the end of the sub-section. To allow the freest debate, I will give the opportunity to Senator Durack to move his amendment first. Senator DURACK(Western Australia)(10.56) —Thank you, Mr Chairman. Senator Haines —I would have thought that it would have been more logical to get out of the way a deletion rather than an addition. Senator DURACK —I am in the hands of the Chairman. The CHAIRMAN —This will allow the freest debate. If Senator Siddons's amendment had been carried, it would have been impossible to debate the desirability of the addition. In this way we can debate the desirability of the addition. If that is added, Senator Siddons can move to delete the whole sub-section. Senator DURACK —I move: Page 8, paragraph (e), proposed new sub-section 50 (2C), at end of sub-section, add: `, unless, in the case of an acquisition of shares, a Part A statement within the meaning of the Companies (Acquisition of Shares) Act 1980 in respect of that acquisition of shares was lodged with the National Companies and Securities Commission in accordance with that Act before the day on which the Trade Practices Amendment Act 1986 received the Royal Assent'. We have now come to the proposed new sub-section in clause 17 which has attracted so much attention and which is obviously going to lead to a good deal of debate now in Committee. The section which the clause seeks to amend is again section 50, the merger section, which states the general principle that a corporation shall not acquire, directly or indirectly, any shares in the capital, or any assets, of a body corporate if as a result of the acquisition the corporation would be in a position to dominate the market. Those words are the result of an amendment which will be passed shortly and which is contained in other provisions of this clause. That wording was introduced in 1977 and it has the effect of saying that, where there is an attempted acquisition of a body corporate which already is in a position to dominate a market or which, in common parlance, is a monopoly, despite the fact that there was already in existence that monopoly or that degree of market domination, section 50 shall apply whereas section 50 of course is really directed at the prevention of monopolies. The effect would be that a monopoly would be protected further because any attempted takeover of that monopoly would have to go through the process of the Trade Practices Commission taking steps to prevent it if it thought that was required or the person seeking to acquire would have to seek authorisation from the Trade Practices Commission under which he would have a very great burden of proving public benefit. This really gives rise to an anomalous situation in the case of existing monopolies or near monopolies, and the Government has proposed that a new sub-section (2C) be inserted to eliminate the existing effect of section 50, which says that it will not apply to the acquisition by a person of any shares in the capital or assets of a body corporate where before the acquisition the body corporate was in a position to dominate a market for goods or services and as a result of the acquisition the person is not and is not likely to be in a stronger position to dominate the market. That amendment of the Government is expressing a view with which the Opposition is broadly in agreement. We have expressed this agreement in principle on a number of occasions since the matter first received attention and particularly since the Australian Democrats started to give it attention. We had already considered this matter in the calmer days before the Broken Hill Proprietary Co. Ltd take-over proposal was launched by the Bell Group, or by Mr Holmes a Court, as people are more commonly referring to it. The Opposition examined closely these amendments to the Trade Practices Act last October or November, or soon after they were introduced by the Government. Although we have grave objections to the general thrust of this legislation and have already voted against giving it a second reading, and although our preference would be that we were not here considering the Bill in Committee clause by clause, we decided that, if we had to go through a detailed consideration of every clause, line or word, this amendment included in the Bill was appropriate. Indeed, there are a number of other provisions in the Bill which we would be disposed to support if the legislation contained just them and did not contain all the other offensive provisions which we are now in the process of seeking to amend. This proposed new sub-section is one which we think in principle is quite appropriate. The reason for that is that we do not think a Trade Practices Commission inquiry in the full authorisation context is the right way to tackle a position of this kind, namely, the future ownership of a monopoly or the way in which it is behaving. There may well be some other way in which it could be done rather than by a Trade Practices Commission inquiry. We make no judgment or proposal one way or the other about that. We are simply dealing with the proposal that it should no longer be dealt with by the Trade Practices Commission under its existing charter. The problem now is that since we came to that conclusion, and indeed long after the debate in the House of Representatives and just before we commenced the debate in the Senate, we had the new phenomenon of the BHP take-over. We are concerned to ensure even-handedness by the Parliament so that people's existing rights and expectations will not be changed by anything we do here right in the middle of the take-over proposals. There are many other things going on as well-the picture is most unclear as to what is going to happen-but certainly we want to ensure that we do not add any further confusion and do not make any changes to the rules of the game as they are now and as they were when the game started. The object of this amendment is to make that quite clear. It applies to any take-over, not just the Bell take-over. We want to make it quite clear that any take-overs that have already been registered-in other words, where there has been a legal step, not just something that has been talked about-will be covered. A legal step has been taken in the case of the BHP take-over. That has been registered. A Part A statement has been registered with the Corporate Affairs Commission of Victoria as agent for the National Companies and Securities Commission. That action has formally and legally commenced the take-over offer process. Despite whatever court proceedings may be going on and whatever delays there may be, the action has commenced. My amendment proposes to ensure that that take-over proposal be dealt with under the law existing at the time the statement was lodged. There is some legal argument as to whether or not this amendment is necessary and whether or not that would not be the case. There is certainly good argument for a change being made because the ordinary rule of interpretation that private rights not be altered retrospectively by changes in legislation probably does not apply in a case of this kind, where no vested legal right is being claimed or litigated. I concede that there may be two views on that question. There is a real prospect, if we pass this legislation now that the requirement that the Trade Practices Commission look at this probable or possible breach of section 50-that in itself may be argued-because an offer has been made to take over an existing company which has monopolies in certain areas, that that power of the Trade Practices Commission will not be preserved. If we change the law now in the middle of the take-over, the Trade Practices Commission may well decide that action is no longer required. The take-over was launched by the Bell group of companies in the full knowledge of the existing state of the law. Whatever changes might be made to alter it, the fact is that the bid was launched in that context. This take-over which was launched under the law in its present form should continue to be processed under the Trade Practices Act and by the Trade Practices Commission under the law that stood on the day that the Part A statement was lodged with the National Companies and Securities Commission. If there is some argument, as one may well be advanced, that this is not necessary, it is quite arguable, that the position is uncertain. That in itself is full justification for our amendment, because as legislators, we should not do anything which will leave a state of uncertainty any greater than is necessary. Lawyers may argue until the cows come home on this matter and people have very fervent views on it in one way or another, but what is not arguable or debatable is that the proposed new section is not clear. We want to make it clear. Therefore the sole purpose of my amendment is to make it crystal clear. This is an important matter. It is a matter of great public interest, a matter of enormous interest, naturally, to the two contestants, Bell and BHP. They want to know where they stand. The Trade Practices Commission needs to know where it stands. It has asked to have a signal from the Parliament. It has issued a most unprecedented statement, and it is our obligation as legislators to give everybody a clear direction. We want to make it perfectly clear that this change in the law that we propose-the Leader of the Opposition, Mr Howard, has put it very neatly-will not change the rules of the game after the game has started. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.10) —Let me begin by saying something about sub-section 50 (2c) of the Trade Practices Act and why the Government has proposed to act as it has in this respect. If one thing is absolutely clear beyond dispute in this whole argument, it is that existing section 50, dealing as it does with the principle and practice of anti-competitive mergers, is a totally inappropriate means of dealing with bare transfers of monopoly power. Section 50 is and was always intended to be and has in practice always hitherto been applied as a provision about mergers which go to reduce competition in some way. The test to be applied under section 50 when it comes to the Trade Practices Commission exercising its capacity to grant authorisations makes that absolutely clear, because the test that is set out in section 50 is a test that is capable of application in any practical sense only in an environment where one begins with a merger or an acquisition which is prima facie anti-competitive. The test that the Commission has to apply in this respect is set out in section 90 (9) of the Trade Practices Act in the following terms: The Commission shall make a determination granting an authorisation under sub-section 88 (9) in respect of a proposed acquisition of shares in the capital, or assets, of a body corporate unless it is satisfied in all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place. The test to be applied by the Commission is a test of net public benefit; it is not a test of public detriment, and that is a very significant distinction. The test is premised on a state of affairs where the Commission is confronted with a merger which is prima facie uncompetitive, increasing market dominance and reducing the number of competitors in a particular market, something which, in other words, is of prima facie detriment, given the whole philosophy of the trade practices legislation and our well-established community beliefs about the dangers of monopolies and increased concentration and reduced competition. The starting point then is something which is pretty clearly detrimental. The task that the Commission has been given in section 90 (9) is the task of weighing against that obvious existing detriment any countervailing benefits which may happen to be clearly evident and determining whether at the end of the day when it balances everything up, the public interest is nonetheless served even though on the face of it, prima facie, there has been a reduction in competition. I suggest that it is only in that context that the concept of a net public benefit test makes any sense at all. To require a net public benefit test to be applied when one is dealing with bare transfers of monopoly power, when by definition there is no reduction in competition, no increase in concentration, no increase in market power and no increase in dominance, is to insulate monopolies permanently and irrevocably from effective attack, from challenge to their entrenched status and from any kind of discipline as a result to improve their performance. That is obviously not in the interests of the economy. The Canberra Times put it very succinctly in its editorial of Wednesday, 5 March, when it stated: It seems ridiculous that a law which stops the creation of new monopolies should be used to protect existing monopolies. The notion of its being able to be applied in this way to protect existing monopolies is one that should be anathema in this place. Of course it has been anathema. Once the anomaly in the existing operation of section 50 was understood, the Trade Practices Commission made it clear that it would not, in the exercise of its discretion, apply the section in such a way that it would impact upon bare transfers of monopoly power-unless there was some element of increased concentration or something there which gave rise to competition related concerns. That is why the Trade Practices Commission responded as it did in the Swan Brewery case, which is still about the only case on record of the Trade Practices Commission having addressed the application of section 50 to a bare transfer of monopoly power situation. So, it has been acknowledged by the Trades Practices Commission, just as it was clearly acknowledged in the debate leading up to the introduction of this legislation, by the Law Council of Australia and other bodies which have an interest in the legislation and have commented upon it. It is worth putting very firmly and very clearly on the record that it has also been acknowledged by the Broken Hill Proprietary Co. Ltd itself. I refer to BHP's letter to me on 15 May 1984, when I was Attorney-General, in response to the proposals for change of the Trade Practices Act. On page 3 of that letter, under the heading `Section 50', it says: As drafted, the proposed new sub-sections (1), (2) and (3) overcome an anomaly in the present Section, in that they will not apply to `bare transfers of monopoly power' . . . So there it is. We have had BHP on the public record-this is a public document-saying that it regarded the application of the existing section 50 to bare transfers of monopoly power as `an anomaly'. That is a position from which BHP is clearly unable to resile as a conceptual matter, however much it might wish to do so in the circumstances of its present corporate difficulties. This is, of course, a position which has been accepted all along, comprehensively and unequivocally, by the Opposition and which is still maintained, to the present day, by Senator Durack. There was no opposition at any stage expressed by the Opposition to the proposed change to section 50 during the lengthy, protracted public debate that occurred in the days before this amending Bill was introduced into the Parliament. There was no reference to this particular issue in the debate in the House of Representatives. There was no opposition expressed to this amending clause in the present Bill, sub-section 50 (2C), in the debate in the House of Representatives in November last year. Since then, support for the principle of this legislation has been expressed on a number of occasions, not least by Mr Howard as recently as last night at his Press conference when he said, among other things: We think it is unnecessary to require authorisation when all that is really happening is a change in the ownership of a monopoly as distinct from some alteration in the concentration of the monopoly power in the market. Again, further on in the transcript of his remarks he spoke in the context of changing the rules of the game-I will come to that amendment in a moment-and referred to the section 50 amendment proposed by the Government. This attracted the approving reference `good though it is in principle'. So, there is a clear acknowledgment that the amendment is good in principle. The clincher is on page 5 of the transcript of Mr Howard's Press conference, when he said: I don't mind saying for a moment that the proposed changes to section 50 are essential ones. I've said that. I said that yesterday. Thus, there is no mystery about this; there is no pretence on the part of the Opposition about the basic changes to section 50, as embodied in the proposed new sub-section (2C), which are sound, properly based in principle and conceptually apt and should proceed. I take it that it would be quite inconceivable that the Opposition now, today, could change course on the proposed amendment in sub- section (2C) and retain any shred of credibility, should it be minded to do so at a later stage in the debate. I say nothing about the credibility of the Opposition should it choose at some later stage to vote against the third reading of the Bill. We will cross that bridge when we come to it. In the context of the particular change to the sub-section 50 (2C), it is inconceivable, given the support-the perfectly correct support in principle-that the Opposition has expressed for this for so long, that it could now turn around and vote against it. It does not seem-although I am anticipating Senator Siddons's amendment to remove sub-section (2C) entirely-that there will be any difference between the Opposition and the Government on the merits of sub-section (2C) and the amendment that contains to section 50. We are now talking about the amendment to sub-section (2C) which adds a gloss, a tailpiece, an addition to this amending clause. That addition is designed, in the words of both Mr Howard and Senator Durack, to ensure that the rules of the game do not change. I put it to the Opposition that the rules of the game have not changed so far. Section 50 remains in its present form, notwithstanding the introduction of the legislation into the House of Representatives and the passage of it to the present stage. I further make the point that section 50 will remain in its present form, as a technical legal matter anyway, until such time as this amending legislation is proclaimed. Whether there has been a breach of the rules set out in the present section 50 will depend and depend only on whether there has been an acquisition, not only set in train but also completed, at the time that section 50 in its present form ceases to have effect. The rules of the game remain as they are embodies in the present section 50-I repeat this-until such time as a change to section 50 is accomplished. Senator Durack —We might break all records and do that today. Senator GARETH EVANS —That does not seem very likely at the present rate of progress. It is not clear what the Opposition is seeking to preserve by this amendment which would not in any event be clearly preserved simply by the operation of the normal legal principles of when laws change and when they do not change. The confusion and misunderstanding that are embodied in the Opposition amendment have crept in because there has been a failure to appreciate that section 50 operates on an acquisition. It does not operate on a threatened acquisition or on the very first step that might be taken to acquire shares or the assets of another corporation. The prohibition on an acquisition occurring without authorisation is something that bites only when an acquisition process is complete. The issuing of a Part A statement is not in itself something that attracts the full force of section 50. If one issues a Part A statement without having sought or obtained authorisation, one is not in breach, as such, of section 50. Prima facie, one is not in breach of section 50 until such time as the acquisition process has been completed and completed without a prior authorisation having been received. Those are the rules of the game which Mr Holmes a Court must confront and those rules will not change up to and until the time the amending legislation is proclaimed. Section 50 is and will remain prima facie applicable up to the time the rules change with the proclamation and the Trade Practices Commission will retain right up to that point exactly the some kind of discretion as it has at the moment as to whether to proceed to act on a threatened breach of section 50 that may or may not occur in the future-a sort of preliminary track that is embarked upon-or to make a decision as to whether, there having been a breach, a subsequent prosecution should be pursued. All those discretions remain available to the Trade Practices Commissioner all the way up until the time that section 50 changes. The notion that one has to put in some kind of language such as this indicating that the rules of the game shall continue to apply to the Holmes a Court transaction, or any other acquisition set in train at some earlier stage, seems to me a misconceived one. Accordingly, the Government's response to this amendment is that it is misconceived and we would oppose it for that reason. Senator SIDDONS(Victoria)(11.26) —Senator Gareth Evans has spent some considerable time and legal argument trying to convince us that section 50 (1a) is an anomaly in the trade practices legislation. That may or may not be the case. I do not intend to take on Senator Evans's legal arguments. I want rather to review the situation as it applies at the moment. Section 50 (1a) is the law of the land right now. The Trade Practices Commission for the first time in its history has been sufficiently concerned about a take-over of a company in a clear monopoly position to initiate legal action. Therefore, prima facie this Parliament is confronted with a take-over bid of immense proportions. Mr Holmes a Court proposes a takeover of Broken Hill Proprietary Co. Ltd, the largest company in the land and a company in a critical position in three overall areas of our economy, steel, coal and oil. The Trade Practices Commission is sufficiently concerned about the legality of that takeover under the existing law to initiate legal action. The Government is saying that there is an anomaly in section 50 (1a). In its defence I must say that the Government has been saying that for a long time. We are not arguing that. That is really not the point at issue. The point at issue is that the rules are being changed. As Senator Durack said, they are being changed at a critical time when the Trade Practices Commission is concerned about the legality of probably the most important take-over bid this country will ever have. Once one man gets control of a company in so dominant a position as BHP, one wonders whether that one man will be in charge of the means of production of the whole of this country. The Government is moving to neutralise section 50 (1a) while this process is going on. Because it sees an anomaly, it has moved to neutralise section 50 (1a), but without putting anything else in its place. That really is the objection of the Australian Democrats. We would be prepared to go with Senator Gareth Evans's legal arguments and perhaps agree with them if at the same time he was putting up legislation which would allow some tribunal in the land to assess whether takeovers of this magnitude were in the public interest or not. I foreshadow that I will be moving an amendment to clause 17 which will have that effect. In the meantime, until the Government gets itself in order and it lets us know what sort of approach it is going to make we will not know where we are. If it neutralises the effects of section 50 (1a) and neutralises the existing law at this critical time where will we be? Suddenly there will no way of assessing the public interest or, in fact, any other breach of the law that may occur. Let us bear in mind that for the very first time the Trade Practices Commissioner has taken legal action in the takeover of a monopoly of this kind. Of course, there have been other instances of takeovers. In the Bond takeover of Castlemaine Tooheys Ltd the Commissioner specifically did not take action. So something is concerning the Commissioner in the proposed takeover by Holmes a Court. I turn now to the specific amendment moved by the Opposition. As I understand it from Senator Durack, what this amendment seeks to do is simply to try to keep the existing rules in place by neutralising section 50 (1a) and going back to the Government's position on section 50 (2C). We cannot see that the Opposition's amendment achieves anything at all. If Holmes a Court wanted to get around it all he would have to do is withdraw his present bid and introduce a new one, say, on Monday morning, if this amendment were passed today. Therefore, as far as the Australian Democrats can see, the amendment does not achieve a thing. I do not know whether the amendment has been put before us on the basis of the Opposition's trying to be very subtle or whether it is being put seriously. However, as far as the Australian Democrats can see, such an amendment would not affect the situation at all. The Trade Practices Commission, which has initiated the legal action at this point under section 50 (1A), presumably would, when a new bid was initiated by Holmes a Court, say, on Monday, if this amendment were passed, not proceed with its legal action and nobody would know what its original objection was. Therefore, for these reasons we will be opposing the Opposition's so-called grandfather amendment, as it has been dubbed by the media. Senator DURACK(Western Australia)(11.32) —I certainly have not heard any very good arguments advanced against agreeing to the Opposition amendment to clause 17. It may be that when we engage in argument on further amendments other things will need to be achieved. However, that is no reason why this amendment should not be supported if, in fact, it has some merit or some requirement. I must say that I am getting increasingly worried about Senator Evans in his present incarnation as a Minister. Although we have had our differences about a lot of things, I have never had any reason to complain about him as a black-letter lawyer. The longer he is in government-he seems to have been getting worse since he ceased to be Attorney-General-the more the answers he gives in this place could be considered just black-letter law, and not very good black-letter law at that. I have a certain distaste myself for black-letter law or legal logic chopping. One thing I prefer about the Senate compared with the courts is that one does not have to engage in so much of that sort of argument. Senator Evans has been putting up a very technical argument and saying that section 50 in fact does not apply unless there is an acquisition. He has said that therefore at this stage there is not and for some time in the future there will not be an acquisition and that until that take-over is consummated this legislation will not make any difference. The fact is that there has been an attempt to contravene the provisions that come within the Trade Practices Act. I refer to section 76 (1) (b), which states: `If the Court is satisfied that a person . . . has attempted to contravene such a provision' the Court may impose the penalty to the same extent as if it has in fact been contravened. Also, under section 80 (1) (e) the Court may grant an injunction in the case of an attempted contravention as well as in the case of an actual contravention occurring. In fact, the Court has done that. The Trade Practices Commission has gone to the Federal Court and obtained an injunction to hold the position, to stop the acquisition proceeding without any further reference to it. That is because there is already another court proceeding in Victoria and other injunctions have been made. The Trade Practices Commission does not need to have an actual injunction at the moment, but the fact is that it has to be given notice under the terms of an order already made. So the Court has taken very clear notice of what has been done by the Bell offer being lodged. Obviously, there is a likelihood, or a possibility-it depends on what the shareholders say-of a breach of section 50 occurring in the present circumstances. It is too late after the acquisition occurs. It would be a nonsense for section 50 only to have any legal significance, if not actual black-letter legal effect, which is Senator Evans's argument, after the acquisition occurs. It would be a nonsense if that were the case and nothing could be done about it before that actually happened. Senator Evans says that we are not necessarily changing the rules of the game by passing this legislation, that the rules will not be changed until it is passed and proclaimed. Again, we do not know when it is going to be passed and, if it is passed, when it will be proclaimed. The Government is giving every indication of wanting to get this legislation through as quickly as possible. We agree with that. I said that yesterday and I will say it over and over again. We want to see this matter cleared up so that everybody concerned-Bell, BHP, the Trade Practices Commission, all those people in the community who are concerned about this matter-will know where they stand. Last but certainly not least, when are the poor old shareholders of BHP, who seem to have been completely forgotten in this whole process, going to be allowed to have a say in this? Senator Siddons has his say, we have our say, the Government has its say. Everybody under the sun is having a say, but when are the shareholders going to get a say? We have to clean it up quickly. I am totally amazed at the argument of Senator Evans that somehow or other this might go on, that there may be no change in the law, no change in the rules. When are the changes going to be made? We might suddenly decide to sit over the weekend or come back on Monday. We might do it on Tuesday. This will still be going on. When it will proceed depends on the outcome of the Supreme Court proceedings in Victoria. It could be some time or it could happen quickly. We simply do not know. We do not know what the Government will do. If the Parliament passes this legislation, it may or may not proclaim it straight away. There is this air of uncertainty. There is uncertainty about the length of time the game, to use this metaphor, is going to take. We are uncertain as to what the effect in law would be for Parliament to pass section 50 (2c) in the existing circumstances. There are enormous doubts and difficulties. One of the problems with processing this legislation is that there are very real legal doubts and uncertainties about the effect of what we are doing. All the Opposition is saying by this amendment is: `Please let us fix this up. Make it quite clear'. Senator Siddons clearly understands what the Opposition is trying to do. I think he probably agrees with what we are trying to do in this limited way. That is why I think the Democrats ought to be supporting us. Senator Evans seems to be part of the total confusion, and his answer to me only added to the state of confusion that he, the Government and its advisers seem to be in. In an area where there is a great deal of confusion, a great deal of misunderstanding, a great deal of uncertainty, we are trying to make a small contribution to what is a major matter which still has lots of uncertainties. We are trying to make a contribution to reduce the degree of uncertainty with this whole business. We think there is a very important principle at stake here, the principle that the rules of the game should not be changed after it has commenced. All the parties are entitled to have the present takeover proposal, which is on foot-it has already commenced legally, not under the Trade Practices Act perhaps but under the National Companies and Securities Commission Act-dealt with and processed from beginning to end under the law as it is now. They are entitled to be assured that it will not be affected by anything we may do. Senator Evans says that we may not pass this legislation while the game is going on. Sure, that may be the case, but it may be that it is brought into effect while the game is going on. When all is said and done, the proceedings in the Supreme Court of Victoria may go on for a very long time. There may be appeals and so on. Certainly, we may make this change before the takeover is complete. Senator Siddons is saying that the Opposition's amendment does not go far enough. I have already said that that is a matter for further debate. We think, and I think Senator Siddons agrees, that it is at least a step in the right direction, even though it does not go as far as he wants to go. He has another amendment to move and we will be debating that separately. Senator Siddons said that Mr Holmes a Court or the Bell Group can easily get over our amendment, if it is passed, by withdrawing this take- over offer and putting in another one. Of course, that depends on the timing of a number of matters, including our own processing of the legislation here. The fact is that that is a matter for Mr Holmes a Court to judge. Mr Holmes a Court has already made his offer under the state of the law as it is. I do not know what arguments he has in his mind. There is a lot of litigation going on. Mr Holmes a Court may have some desire to have this takeover proposal put to the shareholders in the particular form it is in and not some other form at some later date. That is all for him to decide. We are simply wanting to keep open his options, we want to keep open the Trade Practice Commission's options, we want to keep open BHP's options. It is for all those people to make the decisions. It is not for us to be second guessing or suggesting what they will do or may do or can do. We simply have the responsibility as legislators of ensuring that all the players in this game continue to play by the rules under which the game started. As I have said, Mr Holmes a Court, the Bell Group, has started this takeover on the basis there may well be Trade Practices Commission action in this matter. He may, for all we know, have perfectly good grounds for believing he can overcome that, so we cannot assume he is going to withdraw the offer and start again. That may cause him other difficulties and problems; I do not know. That is for him to decide. He seems to be able to work out these things pretty well for himself with his advisers. I do not think we ought to be worrying about what Mr Homes a Court may or may not do. Let us concern ourselves with what we think is the right thing to do in the circumstances as they exist today when we are asked to vote on this in the Committee. Senator SIDDONS(Victoria)(11.45) —We do seem to be in agreement with the Opposition that we should not change the rules in the middle of the game, so that is a step forward; but we are concerned with what Mr Holmes a Court may or may not do. We feel so strongly about the fact that we should not change the rules of the game at this stage that I want to make clear to the Committee the Australian Democrats' position. We will vote against the Opposition's amendment because in our view it will not achieve anything. Senator Durack says that it goes some of the way. It goes virtually nowhere, as far as we are concerned. For that reason, it just confuses the issue and we will not vote for it. An amendment has been circulated in my name which, if passed, would give the Trade Practices Commission power to conduct public interest inquiries. It also would have the effect of deleting proposed new section 50 (2C). If my proposed amendment is passed 50 (2C) will automatically be eliminated. If it is not passed the Democrats will move an amendment to eliminate proposed new section 50 (2C) on its own. We feel so strongly about this issue of changing the rules in the middle of the most important takeover bid in this country, if that proposed amendment is not passed we are prepared to block the whole of the Trade Practices Amendment Bill to enable the status quo to be maintained in this case, to enable the Trade Practices Commission to exercise its right under the existing law of the land and to tell us and the public whether the Holmes a Court bid is legal or not legal in its view. Those are the steps we will take. I will go through them again. We will oppose this amendment. We will move an amendment which will clearly give the Trade Practices Commission the right to make a public interest inquiry and will eliminate proposed new section 50 (2C) at the same time. If that amendment is not passed and the elimination of 50 (2C) is not supported on its own, we will block the entire trade practices legislation. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(11.50) —Let me deal first with Senator Siddons's opening suggestion that this is the first time in the history of the Trade Practices Commission that it has been sufficiently concerned about an exercise of this kind to initiate legal action. It is the common view that the Trade Practices Commission has hung its hat in a vigorous way on the present takeover situation and in effect has expressed opposition to it, but I think it is pretty important in this debate for us to appreciate just what exactly the TPC has and has not done about this matter. In the first place, it undoubtedly has formed a prima facie view that this proposed acquisition, and it is only proposed at this stage, would, if it proceeded to fruition, be in breach of section 50 of the Trade Practices Act because of the way in which section 50 is worded at the moment and because of the way in which that wording has been construed, in particular by Mr Justice Northrop in the Ansett-Avis case-in a very literal-minded way, it must be said in passing; but so be it. The Commission has formed a prima facie view that section 50 in its present form is probably applicable. I add that the TPC has also made its view very publicly apparent on many occasions: It believes the law ought to be changed in this respect and it is no proper part of the TPC's business to be looking at bare transfers and monopoly power, at least under the present machinery provided by the Act, which is wholly inappropriate for that purpose. Certainly that point can be stated. That is the prima facie view that the TPC formed because it felt it had to form that view as the law now stands. What the Trade Practices Commission has not done yet has been to address its collective mind to the question of whether, even if there is a prima facie breach or a potential breach of section 50, Mr Holmes a Court and the Bell Group Ltd in fact should be pursued in relation to that breach, whether by means of a full and formal inquiry by the TPC itself or through the courts; that is to say, pursued in those ways rather than being subject to the exercise of a discretionary decision, as in the Bond case, not to pursue the matter at all in the proper exercise of the Trade Practices Commission's functions, on the ground that it did not think any public interest purpose would be thereby served. What the Trade Practices Commission has done at this stage has simply been to preserve the status quo, for perfectly understandable reasons-because of its concern that the situation be clarified-until such time as the Parliament expresses its will on what precisely the Parliament wants to do with proposed new section 50 (2C). The House of Representatives has unanimously expressed a view that it wants 50 (2C) passed and the existing section 50 modified accordingly. This Committee is in the process today of expressing its will on the same subject. What the Trade Practices Commission has done in the courts so far is simply seek an injunction to stop further steps in the acquisition process until such time as the situation is clarified. What the Trade Practices Commission settled for by way of a court order at the first stage of this was, as Senator Durack said, an interlocutory order requiring that Bell not proceed to actually distribute its Part A offer without first giving two days notice to the TPC. It must be appreciated that during those two days that the TPC will then have to work out what it wants to do it will have at large, in terms of its capacity, at that stage to exercise some discretion as to what then ought to happen. No doubt it will be much better informed as to Parliament's will at that stage as a result of this debate here today. I think it is important not to suggest that the Trade Practices Commission has already in a sense prejudged the actual merits of this issue in terms of the dangers or otherwise to the nation of this takeover proceeding. I think it is understandable that Senator Siddons and others should have construed the public events in this way, but really that is not what has happened. It has simply been a holding action by the TPC. It has felt obliged to take that course by the state of the law as articulated by Mr Justice Northrop and by the uncertain state of what Parliament would do with this. It clearly has not formed a view or stopped to exercise any discretion as to what actually should happen in the circumstances of this case. Let me come back to Senator Durack's amendment. What I want to say again about the amendment is that it adds nothing except further confusion to an already confused situation. If the Trade Practices Commission is looking for a signal of Parliament's intention, Parliament's views, about proposed new section 50 (2C), I cannot think of a more odd and confused signal to send than the one that Senator Durack is now proposing. If we pass his amendment the signal flowing to the Trade Practices Commission from this Parliament, from that decision and this debate, I guess will be in three parts. The first part of the signal will be that Parliament thinks overwhelmingly that section 50 ought not to apply to bare transfers of monopoly power because it is totally inappropriate for the anti-competitive provisions of the Act, with the net public benefit there contained, to apply to a takeover which, whatever else it involves, does not seem to involve any addition to monopoly power or any reduction in competition. The second signal the Commission will get is that Parliament acknowledges that section 50 operates only to prohibit completed acquisitions. That is the only possible way one can read the law and that is the point of my earlier intervention in this debate-to point out that section 50 might have a prospective application which could found an injunction, certainly, but it does not take effect, which means there is no prohibition, unless and until there is a completed acquisition. So it will get that signal from this debate. The third signal it will get, if the Durack amendment is accepted, is that Parliament nonetheless takes the view that section 50 should apply to a particular acquisition now in train but not yet completed. Senator Durack —All acquisitions. Senator GARETH EVANS —No. It should apply to any acquisition which is presently on the stocks, in the form of some Part A statement having been registered, up until the time that this Bill is proclaimed as an Act. Parliament takes the view that proposed section 50 ought to apply to those kinds of acquisitions which are not yet completed and in most instances will not be complete by the time the Bill is proclaimed. It seems to me to be a very odd set of signals to be sending. Far from it being a matter of not changing the rules of the game, it seems to me, on a proper analysis, that it amounts to an exposure of one particular player in the game-maybe there are others as well-who has an acquisition in train to an additional burden which would not apply to this person if the operation of the law took its ordinary course. It is a burden which is not reasonable in the circumstances and which it is not desirable in the public interest that person should bear; Parliament having expressed the view that it is not in the public interest that bare transfers and monopoly power be exposed as a general rule to this kind of inquiry or authorisation procedure. If Parliament has taken that view in principle and is applying it to an acquisition which is not yet complete, an acquisition in respect of which legal rights and obligations have accrued but an acquisition which is still pending, it seems to me that we are applying to a particular player-there may be others as well who have Part A statements outstanding-a burden which is simply discriminatory and is not understandable except as an exercise in somehow wanting to single out that particular player for discriminatory treatment. Mr Holmes a Court is big enough, old enough and strong enough to look after himself. I do not think he needs any help from anyone in that respect; he has demonstrated that over the years. It seems to me to be odd that the rules of the game should not be allowed to run their course in the ordinary way. Given that this particular acquisition is not yet complete and that no prohibitions have already accumulated in respect of it, it is very odd that Mr Holmes a Court should be treated in this way. There would be no problem about it if there were some evident countervailing public interest reason for doing so, but the matter in issue, as far as the public interest is concerned, is the one that the Parliament would be voting on by accepting proposed section 50 (2c); that is to say, that there is no public interest involved in exposing bare transfers and monopoly powers to this particular authorisation procedure or scrutiny. It is a very confused and odd set of signals that the Parliament is sending. In one sense the Durack amendment would add nothing at all to the present law, which is the point I was making earlier. From another point of view, that which I have just been articulating, it would add an extra layer of burden on someone who, on the face of it, does not deserve it because there is no public interest reason that Parliament has opted for which would seem to justify that burden being imposed. For all those reasons it seems to the Government that this is an unnecessary and undesirable amendment and we ought simply to address the merits of sub-clause (2c) on their own terms without complicating the matter further with this ill-fated and ill-directed attempt to somehow preserve a situation which does not justify being preserved. Senator SIDDONS(Victoria)(12.00) —I do not believe that Senator Gareth Evans's attempt to second guess what may or may not be in the mind of the Trade Practices Commissioner serves any useful purpose. All we know at this stage is that the Commissioner has initiated legal action. We know also that the Trade Practices Commission has the power to block a takeover of a monopoly if it sees fit. If it takes that action, it would be up to Mr Holmes a Court to ask for a reference and then the matter would be debated in the context of the public interest and whether it would be to the detriment or benefit of the country as a whole. I get back to the fundamental point I made. We do not want to change the rules. In spite of all the comments Senator Evans has made, it is undeniable that the Trade Practices Amendment Bill will change the rules. As such, we feel very strongly that we should let the existing legislation remain in place. If at a later stage the Government comes along with some new legislation which puts in place a tribunal which can assess takeovers, that is fine and we might listen to the arguments for the deletion of section 50 (2c) from the Trade Practices Act. However, the point is that the Government is taking away the existing power of the Trade Practices Commissioner without putting anything in its place. Senator Crichton-Browne —You are committed to blocking the takeover at any price, aren't you? Senator SIDDONS —We are simply saying very strongly that we do not want the rules changed in the middle of the game. We are saying that it is up to the Trade Practices Commission to decide whether or not the law of the land has been transgressed. We feel so strongly about this that we are prepared to block the whole Trade Practices Amendment Bill to ensure that we do not change the rules in the middle of the game; just simply that. I want to make it abundantly clear to the Committee that we did not come to that decision lightly. The Australian Democrats are very anxious for the amending legislation to the Trade Practices Act to be passed, but we have no option but to oppose it if we cannot prevail upon either the Opposition or the Government to take note of our point that the rules should not be changed in the middle of the game. If there is something of concern to the Trade Practices Commissioner which has caused him to initiate legal action, we want to know what it is. We are so concerned that we are prepared to block the amending Bill before us. I make it clear also that we will introduce immediately a private member's Bill which will be identical with the Bill before us, but with proposed section 50 (2C) deleted. Then it will clearly be up to the Government or the Opposition as to whether they are prepared to support our private member's Bill and get the amending legislation through the Parliament. We can do no more than block the existing legislation and we are prepared to do that rather than see section 50 (1A) neutralised. Question put: That the words proposed to be added (Senator Durack's amendment) be added. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 27 Noes . . . . . . . . . . . 35 —— Majority . . . . . . . . . 8 —— Archer, B. R. Knowles, S. C. Baume, Michael Lewis, A. W. R. Bjelke-Petersen, F. I. MacGibbon, D. J. Boswell, R. L. D. Messner, A. J. Brownhill, D. G. C. Missen, A. J. Carrick, Sir John Parer, W. R. Collard, S. J. Puplick, C. J. G. Crichton-Browne, N. A. Sheil, G. (Teller)Durack, P. D. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Walters, M. S. Hill, R. Watson, J. O. W. Jessop, D. S. Withers, R. G. Kilgariff, B. F. Aulich, T. McIntosh, G. D. (Teller)Black, J. R. McKiernan, J. P. Bolkus, N. Macklin, M. J. Button, J. N. Maguire, G. R. Childs, B. K. Mason, C. V. J. Chipp, D. L. Morris, J. Coates, J. Ray, RobertCooney, B. Reynolds, M. Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Elstob, R. C. Ryan, S. M. Evans, Gareth Sanders, N. K. Georges, G. Sibraa, K. W. Gietzelt, A. T. Siddons, J. R. Giles, P. J. Tate, M. C. Haines, J. Vigor, D. B. Jones, G. N. Walsh, P. A. McClelland, Douglas Baume, Peter Colston, M. A. Short, J. R. Grimes, D. J. Vanstone, A. E. Cook, P. F. S. Reid, M. E. Coleman, R. N. Chaney, F. M. Foreman, D. J. (Senator Zakharov did not vote, to compensate for the vacancy caused by the resignation of Senator Peter Rae) Question so resolved in the negative. Senator SIDDONS(Victoria)(12.10) —I move: Page 8, paragraph (e), proposed new sub-section 50 (2c), lines 18 to 24, leave out the proposed sub-section. The effect of this amendment and the two others I propose to move will be to give the Tribunal the right, at its discretion, to hold broad public interest inquiries into any takeover where it deems that to be necessary, and not just in the case of the takeover of a monopoly, which the existing section 50 (1a) allows. The effect of our amendment will be to delete section 50 (2c). As I have said, the amendment has the effect of neutralising the existing section 50 (1a) under which the Trade Practices Commissioner has already initiated court action. For the reasons I have made clear previously, the Australian Democrats feel very strongly that the rules of the game should not be changed at this stage, that the court action that has already started should proceed and, in any case, that the Government was in error in moving to delete section 50 (1a) without putting in its place legislation which would allow some tribunal in the land to assess whether a takeover is in the public interest or whether it is to its detriment. In the other instance, we are arguing, and will argue in greater detail later, that there should be some tribunal in the land which is capable of assessing whether takeovers are in the public interest. Senator Crichton-Browne —What is the public interest? Senator SIDDONS —I do not intend to pursue the question of what is or what is not the public interest. That is a matter which is assessed by courts in most Western countries and I am sure that our courts are quite capable of doing just that. I do not believe that it is necessary to say any more on this particular amendment. It is quite clear cut. I do not believe it is necessary to take up the time of the Committee by arguing any further. It has already been argued at great length. What remains to be seen is, firstly, whether the Government will support the amendment-I presume that it will not-and, secondly and more importantly, whether the Opposition will support this simple amendment to delete proposed new section 50 (2C) which neutralises the existing law in the middle of the most important takeover that this country has seen. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(12.17) —The Government will, of course, oppose this amendment and support the existing section 50 (2C) provision. The reasons have been made clear in earlier debate but I think they bear repetition. In particular it bears repetition that the position of the Opposition would totally and comprehensively lack credibility if it were to change course at this stage. If there is one thing absolutely clear and beyond dispute it is that everyone, apart from the Australian Democrats with their recent conversion, has agreed at every stage of this process of debating section 50 that it is totally inappropriate as a means of dealing with bare transfers and monopoly power, not least because of the test which has to be applied under the existing provision, which is not just a test of public detriment, which might be understandable in this context, but a test of net public benefit-a test which only makes any sense at all when an evident detriment flows from a reduction in competition and needs some compensating net public benefit to justify it, but a test which makes no sense at all if one is talking about a bare transfer monopoly power. To impose such a test would be to impose a test that would ensure that monopolies remain insulated from any kind of effective challenge and that is in nobody's interest. I indicated in the earlier debate that the Broken Hill Proprietary Co. Ltd itself, if anyone is interested, put on the public record its view that this provision was anomalous and deserved to be amended in the way that the Government is now proposing-a view that it has, of course, subsequently wanted to resile from to accommodate its present dilemmas, understandably, but which it has been unable to do because it is so self-evidently the case. Senator Crichton-Browne —Our position should not be compromised or in any way influenced by what BHP or Holmes a Court says. Senator GARETH EVANS —No, but I would have thought that the Opposition's position would have been to some extent guided by what its own leader is saying, and that is the point that I finally make. The Party has taken no position of opposition to this clause at any stage during the earlier debate-certainly not in the House of Representatives and certainly not in the second reading debate here. As recently as last night-I am going to burden Senator Durack with drawing his attention to these quotations again because they are clear evidence of what the Opposition's position has been on the basic principle of this clause-we had Mr Howard saying that he thought this amendment was in itself good in principle. We then had a further passage from him, and I quote: We think it is unnecessary to require authorisation when all that is really happening is a change in the ownership of a monopoly as distinct from some alteration in the concentration of the monopoly power in the market. We further had a statement from Mr Howard which really does put the matter, I would have thought, beyond belief-beyond belief if he should change his mind at this stage or if his State colleagues should change it for him-when he said as follows: I don't mind saying for a moment that the proposed changes to section 50 are essential ones. I've said that. I said that yesterday. So there it is. The Opposition has not had its way on the further addition it wanted to add to this particular clause which sought in a strange way that we have already debated, to somehow either state the obvious or, if it was not stating the obvious, somehow to act in a way that did amount to a detriment to one particular side in a situation where it wanted to be avowedly neutral so far as the application of the law was concerned. But having failed in that ambition to add a tailpiece to the clause, the Opposition now is faced with the task of responding to the policy issue that is inherent in the clause itself. It has put its position absolutely firmly and unequivocally on the record on innumerable occasions, most recently last night through the unequivocal language of the Opposition Leader. I would have expected members of the Opposition, accordingly, not to make total fools of themselves and to oppose this particular part of the Democrat amendment. Senator DURACK(Western Australia)(12.21) —I have heard some remarkable speeches in this place, even from Senator Evans, and some remarkable arguments. But really, the only argument he advances in favour of his case, which hardly does it justice, is that the Opposition said that it would support it. We have a Minister saying that the only reason why the Government's proposal should be supported is that the Opposition has said that it should be supported. That was a brilliant contribution from the Minister. We are very flattered indeed by the importance that he attaches to our views on this subject and the standing of our arguments. As I said earlier in this debate, the fact is that the Opposition gave very detailed consideration to the Government's Trade Practices Amendment Bill when it examined this legislation back in October or November last year. The Opposition came to the conclusion that, although there were some provisions in the legislation with which it agreed, taken as a whole increased regulatory burdens would be placed on the business community. Consequently, we decided to vote against the whole Bill. We have maintained a consistent position on that. We said that we would vote against it, and we have done so. The shadow Attorney-General, the honourable member for North Sydney (Mr Spender), spoke very strongly against it in the House of Representatives and we voted against the second reading in that place. I took the same approach when the matter came before the Senate. I spoke, I hope strongly, against the Bill being given a second reading. We voted against the second reading. Our continuing object is to defeat this Bill. That will continue to be the case, as Mr Howard also said quite clearly last night. The greatest authority I can quote here to influence the Government is the Leader of the Opposition. I just remind the Committee that that is the stance of the Opposition and it was expressed again last night by the Leader of the Opposition. The position is that the Opposition believes, in view of what has occurred since these decisions were made and since this matter was first considered, that it is desirable to clear up the effect of this clause with which certainly we find no fault in itself. We believe that we need to clarify the position in regard to existing take- overs. We brought forward an amendment which the Committee, without any good reason as far as I can see, has opposed. Therefore, that approach has failed. The Government has brought forward the amendment that is now before us. It has never, incidentally, given any good reasons or explanation as to why it is in the legislation. The Opposition looked at it and said-it is still of this view, as Mr Howard said-that we are disposed to support it. The fact is that the Government has never given any really satisfactory explanations of why it is in the legislation. We, of course, have made our own judgment for our own reasons. We believe that section 50 as presently worded and applied is not appropriate in the case of the takeover of a monopoly. It entrenches a monopoly's power if it virtually cannot be taken over. If there is an attempt to take it over and the Trade Practices Commission enforces section 50-and it has exercised discretions in the past not to require authorisation-authorisation would have to be obtained, and that is an enormously difficult burden in the way of the takeover proposal succeeding because of the tests that are to be applied under the authorisation provisions of the Act. I am surprised that the Government did not consider some alternatives to that. We are now faced with the decision whether to vote for or against a proposal which is going to confuse to some extent the existing position with regard to the takeover offer for BHP. The Senate has not seen fit to support our attempts to clarify that in support of the parties, but we do not believe that that should influence where we stand on this proposed new sub-section. Our position has been fairly well stated, as Senator Evans has been at great pains to point out. We have never had any problem with proposed new sub-section (2c) except in the circumstances that have arisen since the BHP takeover proposal. Therefore, we will not support the amendment that Senator Siddons has moved. Senator HAINES(South Australia)(12.27) —I think I ought to point out to Senator Evans that nobody in this place, I would have thought, is arguing that monopolies ought to be protected from takeover bids. What many of us are arguing is that some members of the public ought to be protected in the case of some undesirable takeover bids that are being made or may be made in the future and that it is public detriment rather than detriment to the monopoly that we are looking at. We also ought to remind ourselves of just exactly why proposed new sub-section 50 (2c) is in the Bill. As I think I said earlier, it was entirely due to some drafting problems in the original which never made it clear that the intention was to exclude bare transfers of monopolies from the ambit of that Part of the Act. I am at a loss to understand Senator Evans's thinking, which is not unusual in this place-most people are on quite a lot of issues. We set out for him yesterday morning what our plan of action was and, if we do not get some satisfaction with regard to proposed sub-section 50 (2c), either through its excision for the time being or through the inclusion of a public detriment or public interest clause, whichever he prefers to call it, ultimately we are going to be voting against the Bill as a whole. Senator Gareth Evans —Well, you never know your luck in a big city. You may change your mind. Senator HAINES —This big city is one in which the honourable senator is running rather unlucky at the moment. There is no luck for him in this big city. Senator Chipp —She does you like a dinner every time. Senator Gareth Evans —She's all class, that kid. Senator HAINES —When you two have finished I will go back to what I was saying. We have made our intention perfectly clear. If we do not get some satisfaction in the area of proposed sub-section 50 (2C) we will vote against the Bill as a whole, reintroduce it without the offending section and start from scratch again. I do not know why Senator Evans does not bow to the inevitable, agree to have the blasted clause excised and then get on with the rest of the business before us. As for the stance taken by the Opposition, if the Government is prepared to see its consumer legislation sacrificed for some whim over proposed sub-section 50 (2C), the Opposition's stance is just as peculiar. Members of the Opposition are prepared to see the only section in the Act that they like removed simply because of their paranoia about consumer legislation. The stance of some of the parties in this chamber today over this sub-section and over some of the divisions that are going to occur defies any sort of logical thought processes. Senator Crichton-Browne —We are a party of principle. Senator HAINES —Senator, you could not spell the word! Senator Mason —It has two spellings. Senator Crichton-Browne —Is it `le' or `al'? Senator HAINES —In your case it is `al' and in mine it is `le', and I think you ought to remember that. Senator Crichton-Browne —There's another spelling-- The CHAIRMAN —Order! Senator Haines has the call. Senator HAINES —I think I can survive attacks from the back bench of the Liberal Party, but thank you, Mr Chairman. Senator Crichton-Browne —Only just. Senator HAINES —I am still standing. Since there is probably no chance of getting the Liberals to see reason on this as their objection to any consumer protection legislation will override their concern about what may or may not happen if sub-section 50 (2C) is or is not in the legislation, I can only turn again, futile as it probably is, to the good sense and possible intellect of the Minister and suggest to him that, if he is faced with two things that are likely to happen, one of which is inevitably worse than the other, he take the better of the two options, bow to the inevitable and support the excision of 50 (2C) or the inclusion of a public detriment or public interest clause. Senator MASON(New South Wales)(12.32) —I rise in this debate, like Senator Haines, in the faint hope that the Liberal Party of Australia might consider supporting this amendment, which I certainly support, in view of the fact that it solves a situation along the lines, I might say, that Senator Durack sort of groped for earlier in this debate. That is why I thought it inconsistent that he should say that the Opposition should oppose this amendment at this stage. The second objective I have in rising now is to make some kind of appeal to the Government to try to get this debate closer perhaps to the realities of everyday life that it so closely concerns. Whether or not this amendment passes, it will probably be in the hands of the Government whether or not the Trade Practices Commission undertakes any kind of serious investigation into this matter. The Australian Democrats believe that it should; that has been our whole motivation. Specifically here I will speak for the steel towns of New South Wales which it is my responsibility to speak for. Newcastle and Wollongong have enough problems as it is with unemployment and things of that kind. In Wollongong 13,000 jobs hang on the future of the Broken Hill Proprietary Co. Ltd. Senator Gareth Evans —One of their problems is their Democrats spokesman. Senator MASON —Listen, Senator Evans, for once, will you; this is real life, not legal points. Behind that is a total of some 30,000 jobs in Wollongong which would be at stake if anything went wrong with the carefully laid plans of BHP in the future. The situation in Newcastle is no better. These two cities have a great deal at stake in this matter. I have no way of knowing and the Democrats have no way of knowing whether a takeover of BHP by the Bell Group would improve the operation or otherwise. I know that there have been assurances by other governments that they have been consulted by Mr Holmes a Court and that he has given them positive assurances. We have been just about driven mad by assurances from the Government that it has made these investigations and is perfectly happy-no reason in the world why anybody should be concerned or worried and the steel operations will continue along the course laid down, which of course has involved a great deal of government intervention and a lot of public money, tens of millions of dollars. What worries me is that under those circumstances the Government is ducking out. If all is as well as it says, why not have the inquiry? Why not have the Trade Practices Commission look at the whole thing and establish the fact? The very circumstance when the Government will not do that is suspicious in itself, and I repeat `suspicious' with malice aforethought. What would the Government lose if it allowed the TPC to have a look at this whole operation in view of the enormous public concern about it? Why do we have to have all the concealment and secrecy? I suggest that it is hardly fair to Mr Holmes a Court and to the Bell Group. It is certainly not fair to BHP or to its shareholders, who I think would want to know as much as possible about what is going on before they take important decisions concerning the ownership of their shares. The Government is saying that these people will be deprived of all those rights. This is a matter that goes beyond Senator Siddons's amendment. The amendment is certainly important and basic to it, but the matter goes further than that. I think that the Government will stand hoist with its own petard if it allows this opportunity to pass-that is my first point-as it will, if, when this amendment is passed, as I hope it will be, it then allows to continue the situation in which it stubbornly refuses to look at a matter which, as Senator Siddons has said, is of such enormous consequence to the country. Because of these considerations the Democrats are forcing this issue-or doing our best to force it. We do not want it on our conscience if this deal goes through and at some time in the future the Bell Group finds that it does not have the money to sustain the steel operation along the lines it hoped to do or that its foreign backers make some kind of decision that they see as being in their interests. I repeat `in their interests' because this is an implication which lies right behind this issue. Where is this money coming from? We do not know. Does the Minister know? Senator Gareth Evans —Yes, of course. Senator MASON —Why does the Minister not say so? Why does Mr Robert Holmes a Court not say so? We do not know what is happening in this area. I get back to my earlier point. Assuming that there are difficulties in future with the steel operation under the new ownership, what will the Government do? Will it underwrite it? Will it guarantee it? Will the Minister give an undertaking here and now that the Government will guarantee Bell Group's operation if it takes over BHP? I press that question, and I think I press it reasonably on behalf of the people of Newcastle and Wollongong. If the Minister will not give that undertaking, he is less than responsible and he will be held to be less than responsible by the people who ultimately may find themselves out of work because of his neglect. I put that point quite strongly. I put two points to the Minister in the Committee stage to which I seek a response. Point No. 1 is: Why is the Government ducking out on an inquiry? Why will it not allow one to be held? Point No. 2 is: What guarantees will the Government give the steel towns? What guarantees will it give that it will underpin the industry and with what amount of money? Has the Government thought about this point? Has it thought about the consequences? Generally, what undertaking has the Government thought about or will the Government think about to underpin the steel industry in the event of there being some problem in the future in the steel operation, the takeover of which the Government is allowing to occur without any proper investigation? Senator CHIPP(Victoria-Leader of the Australian Democrats)(12.37) —I support the questions asked by Senator Mason of the Minister for Resources and Energy (Senator Gareth Evans). I simply wish to add a third question. Will the Minister inform the Senate of the Government knowledge of the original source of the funds that Mr Robert Holmes a Court or the Bell Group is acquiring to purchase Broken Hill Proprietary Co. Ltd? Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(12.38) —I do not think it is appropriate to get into any protracted debate about the details of the Bell Resources Ltd takeover of Broken Hill Proprietary Co. Ltd, although it was inevitable that at some stage during the day we would get into some of these issues. The point needs to be made and made very clearly that the Government has not turned its back on the kinds of public interest considerations about which the Australian Democrats and so many other people in the community are obviously concerned. The position that we have simply adopted is that we do not believe the existing trade practices inquiry route is, for all the reasons earlier spelt out, an appropriate one. The course the Government has taken is, of course, conducting what can reasonably be described as a significant inquiry of its own, engaging both the BHP people and Mr Holmes a Court in something like three hours each of very intensive discussion in which many items of documentation were supplied and, indeed, all of the issues raised by Senator Mason were addressed-issues such as the future of the steel plan, the source of the finance for the takeover and the taxation implications of that. Obviously, it is not possible to put on the public record the details of those discussions for two reasons: First, the obvious constraint imposed by the Victorian Supreme Court case where there could be contempt issues involved and, secondly, just the considerations of commercial confidentiality that are appropriate to any significant market transaction of this kind. The Government made a very great burden for itself by going down this particular track. It is not one that we would be terribly keen about following except in the most exceptional circumstances in the future. But it is because we did acknowledge that there were exceptional circumstances and exceptional concerns governing this takeover that a number of senior Ministers have devoted a great many hours to wrestling with these issues, seeking very detailed information and making a judgment accordingly. For the record, I think it might be appropriate if I were to seek leave to incorporate in Hansard the statement of the Prime Minister (Mr Hawke) of 11 March with its two short attachments which do record the outcome of that Government inquiry. It is a document that every honourable senator has seen. Leave granted. The document read as follows- For Media...11 March 1986 Takeovers of public companies are matters normally left to the judgment of the market subject to compliance with the takeovers code (which is directed to investor protection and fairness) and other relevant legislation. The Government decided that, in the particular circumstances of Bell's current takeover bid for BHP, a committee of Ministers should hold detailed discussions with representatives of each of the companies. As a result of these discussions, the Government is satisfied as to the future integrity of the Steel Plan. Attached are copies of the relevant assurances provided by both parties. As to the revenue implications of the proposed takeover, the Government does not believe, on all the information and advice available to it, that there are any public interest considerations presently apparent which would justify intervention. In relation to the Trade Practices Act, nothing has emerged which would lead the Government to change its position on the amendment to section 50 which has passed the House of Representatives and is now before the Senate. It would not be appropriate for the Government to comment further while the bid is before the market and related issues are before the courts. ATTACHMENT B The following are the assurances provided by Bell Resources Limited on the Steel Industry Plan: ``Contained in our take-over offer is a formal commitment to support the Government Steel Plan. I understand this to be substantially a commitment to: (a) no involuntary redundancies before 1989; (b) the continuation of the three integrated steel plants at Newcastle, Wollongong, and Whyalla; (c) a substantial capital investment programme by BHP of approximately $1.5 billion of which $900 million has either been spent or approved. I would regard these commitments and the tripartite co-operative agreement between the Company, the Government and the Unions to be minimum commitments and to represent the base for future growth and capital investment aimed at ensuring the long term viability and integrity and competitiveness of that industry. Ideally, the steel industry should aim to be sufficiently competitive to compete in export markets bearing in mind that many of these markets are State owned, subsidised or have present surplus capacity. Penetration of these markets can be achieved in two major ways. Firstly, as a result of sheer price competitiveness and, secondly, by developing down stream capacity in other countries relying upon Australia for raw material or unfinished products. BHP has an obligation to ensure that the industry does not again fall into the state of disrepair in which it found itself three years ago. Apprenticeship programmes and other educational programmes are an axiomatic obligation that falls to the major employer in an industry to ensure the steady supply of skilled manpower. I have read the A.I.S. Colliers Rationalisation Plan dated the 14th June 1985 and can confirm that although I have no first hand knowledge of the factors involved I would not seek to disrupt BHP's present commitments. While my commitment represents a clear and genuine expression of present intent I believe that it cannot be varied in the future simply upon the basis that some new and unforeseen factor is present. In such an event I believe that BHP cannot simply act unilaterally. It would need to convince both the Government and the Unions that major changes are warranted.'' Relevant extract from Column 3, Paper 1 THE STEEL INDUSTRY PLAN BHP has more than honoured its commitments under the Steel Industry Plan. 1. Against an indicated $800m, capital expenditure in what then was the Steel Division, $1,021m has been firmly authorised and $399m spent. Further authorisations in the region of $350m covering the old Steel Division areas are likely in the remaining years of the Plan taking total outlays to around $1,370m. (The Steel Group expenditure will be around $1,450m in the five year period. 2. Security of employment has been provided even though productivity in the three steelworks has risen from 250 tonne/man/year at the start of the Plan to 284 tonne/man/year in the last half year. 3. Total bounty payments to the end of December 1985 approximated $75m, 53% of the maximum level provided. This included payment to BHP and its subsidiaries totalling $42. In the half year ending December 1985 BHP bounty receipts were $1.9m. 4. Weighted domestic steel base price increases since the Steel Plan commenced have been 60% of CPI increases. These achievements have been aided by- (a) more buoyant Australian market conditions in the last 18 months. (b) Improved industrial relations. (c) The devaluation of the Australian dollar. (d) Restraint in Government charges increases. (e) Benefits commencing to flow from the capital investment programme. Experience with the Steel Plan has demonstrated that the commitments the Company undertook as part of the Plan were very constructive. It has become clear that to be truly internationally competitive, capital expenditure far in excess of that envisaged at the time the Plan was being developed is necessary and justified, and it will be important to maintain the other Plan benefits. ATTACHMENT A The following are the assurances provided by BHP on the Steel Industry Plan: ``BHP reaffirms the commitment it made to the Government's Steel Industry Plan. As demonstrated in the attached summary (Volume 3, Paper 1) tabled at the Ministerial meeting on March 5, the Company's contribution is significantly in excess of its obligations and the cost to the Government has been significantly lower than had been anticipated. BHP is confident that in the absence of any changes in company managerial direction or financial obligations which might arise should the current partial takeover offer be successful, all commitments under the Plan will be met and many will be exceeded. Specifically, the Company reaffirms that it will- 1. Maintain employment security while ever all parties to the Plan are meeting their obligations. 2. Retain in operation the three major steel making centres, Port Kembla, Newcastle and Whyalla. 3. Invest at least $800 million in upgrading plant in what at the time the Plan was developed, was the Steel Division. 4. Continue to co-operate with the Steel Industry Authority on all matters over which they are empowered to act, including monitoring of steel prices.'' Senator CRICHTON-BROWNE —(Western Australia) (12.41)-I will be brief. I rise to speak in response more particularly to the comments that were made by Senator Mason. The truth of the matter, as I am able to discern the thrust of the arguments put forward by the Australian Democrats, is that they are committed unequivocally to preventing the takeover of Broken Hill Proprietary Co. Ltd. Senator Siddons is arguing that he does not want the rules changed. The thrust of the matter is that the Democrats clearly wish the takeover to fail. In my view, that is the underlying premise of Senator Siddons's amendment. We talk about the future of the steel industry. When the steel plan was introduced and debated in the Senate, and hundreds of millions of dollars of taxpayers' money were underwriting the plan, there were two speakers in the chamber. Neither was a Democrat. Senator Mason —We had our discussions with BHP beforehand. Senator CRICHTON-BROWNE —Do the Democrats have their negotiations outside the chamber? I thought the Parliament was the place to discuss these matters. When the steel plan was being debated, the Democrats were deafening in their silence with regard to their concern about the steel plan at that time. One has to ask oneself what would have happened to the steel industry if it had not been for that steel plan or a steel plan of some type. At that stage BHP was making it very clear that on economic grounds it could not continue to proceed with its steel operation and there was a prospect that Australia could well lose its steel industry. I am not suggesting that the steel plan introduced by the Government necessarily saved the steel industry, but certainly BHP was expressing some grave reservations about its capacity to continue. During the period that BHP was making those observations, not once did I hear an observation from the Democrats as to their anxiety. I am saying these things on the basis that the Liberal Party has made it fundamentally clear that it is totally neutral with respect to the take over bid. We neither support nor oppose Mr Holmes a Court or BHP. We do not believe it is our place to do so. It seems that the Democrats are seeking to have the take over postponed to the point where it will inhibit and frustrate Mr Holmes a Court and that in itself will be of advantage to BHP. If that is the machiavellian motive behind the Democrats' proposal, it seems to me that by any measure they do not have a neutral position. Senator Chipp —How are you neutral, with what you said about BHP yesterday as reported in Hansard? Senator CRICHTON-BROWNE —My view of BHP's management was articulated in a very powerful and persuasive speech, which I am sorry that Senator Chipp did not hear, when the steel plan was introduced. The steel plan was introduced was to rescue and bail out BHP because of periods of-- Senator Chipp —`The most inefficient and incompetent bunch that has ever been in control of shareholders' funds'. You said that. Senator CRICHTON-BROWNE —I must say BHP has improved in the last two years since it has been under some sort of threat of a take over. It is amazing how a little competition can make a company very efficient and very sensitive. Prior to that period its inefficiency was notorious. One has only to read through the Industries Assistance Commission recommendations on the subsidy on steel to reinforce that argument. In terms of this takeover we are absolutely neutral. I do not resile from the position I put with respect to BHP management which caused the demise of the steel industry. At a time when there was an oversupply of steel, world demand for steel was dropping off dramatically and overseas companies were closing down their plants, BHP was still expanding. I thought the company showed fundamental inefficiency at that time. I put it to the Democrats that their concern for the steel industry has not always been demonstrated in their performance in this chamber. Senator SIDDONS(Victoria)(12.44) —If Senator Crichton-Browne had taken the trouble to sit in the chamber through the debate on this Bill, instead of just coming in at the last minute, he would have known that the Australian Democrats are not taking sides in the dispute between Broken Hill Proprietary Co. Ltd and Mr Holmes a Court. We are saying simply that there should be a public inquiry; that there is a very dramatic public interest at stake and the public has a right to hear all sides of the story. Debate interrupted. Sitting suspended from 12.45 to 2 p.m. Senator BUTTON(Victoria-Leader of the Government in the Senate) —by leave-I inform the Senate that the Minister for Health, Dr Blewett, left today for the United Kingdom, to attend a World Health Organisation ministerial conference on drug abuse and for discussions with United Kingdom health authorities. He will return to Australia on 25 March. During his absence the Minister for Education, Senator Ryan, will be Acting Minister for Health. Senator CHANEY —My question is addressed to the Minister for Industry, Technology and Commerce. I refer the Minister to comments attributed to him in Paul Kelly's article in today's Australian on the J curve and to the Minister's alleged view, expressed in that article, about the difficulties of turning round traditional Australian industry and that there is a whole generation of smaller companies and newer managers with different attitudes. I think the Minister is saying that these people are the hope for the future. Are not these smaller companies and their managers likely to be the most severely disadvantaged and discouraged by the Government's proposals for capital gains tax, fringe benefits tax and the superannuation deal with the Australian Council of Trade Unions? Does the Minister agree that these Government impositions go against the sort of entrepreneurial upsurge that he is evidently seeking from these smaller businesses? Senator BUTTON —I have not read Paul Kelly's article in today's Australian; so I do not know what remarks can be correctly attributed to me. I am not in a position to affirm or deny them. I think it would be safer for me to say that I would probably deny them, but I will not do that because the question really has a different point. I am sure I have said that there are many smaller, very innovative companies in Australia which have a newer generation of management and which are very important to this country and will be increasingly so in the future. I was then asked whether those companies would be disadvantaged and discouraged by the capital gains tax, the fringe benefits tax and the proposed superannuation case before the Australian Conciliation and Arbitration Commission. In relation to the fringe benefits tax, I am sure that some of the businesses will suffer some mild disadvantage from their incapacity to have free lunches or lunches at the taxpayers' expense. Senator Chaney —Additional tax burdens are involved. Senator BUTTON —I have not finished the answer. Of course there are other elements of the fringe benefits tax which may or may not impinge on them, depending upon the nature of their business. In dealing with taxation issues and the alleged disadvantages, one must look at the tax package as a whole and take account of the views expressed very widely by economists and the views expressed most cogently in papers such as the Australian Financial Review, that the tax package as a whole will bring very great benefits to Australian industry in the sense that it will discourage investment in non-productive activities and encourage investment in industry-- Senator Messner —Which industries? Senator BUTTON —Not the Surfers Paradise flat industry, but Australian industry. I do not propose to spend Question Time answering Senator Messner, but if he wants that sort of material I will be happy to give it to him. I am surprised that, as Opposition spokesman on finance, he has not read it, because it is quite freely available. In terms of imputation, lower marginal rates and things like that, there will be considerable benefits to people in a number of these businesses. A number of other things that the Government has done will be of immense benefit to people in those sorts of businesses. The improved depreciation allowance, the tax concession for research and development and the revised export market development grants scheme will all be of benefit to a lot of people in businesses of that kind. Of course, in a sense there are swings and roundabouts. I do not think that Question Time is necessarily the best opportunity to be anecdotal, but let me just say this: A week ago I went to the launch at one of these small businesses of a very sophisticated new laser cutting machine tool which was made by a company with a total staff of 35, 12 of whom are qualified engineers. The machine that was launched was going to Germany where it had been sold. The company concerned is talking about taking the Swedes out of the United Kingdom market within two years with that product. It is a very good, innovative company. The managing director of that company made a speech-I did not have any input into it or solicit it; it was made to a wide-ranging business audience-in which he simply made the point about the importance of research and development, about innovation and engineering skills in companies of this kind. He went on to say that in manufacturing Australia was not placed at any competitive disadvantage, in terms of labour costs, when compared with Germany, the United Kingdom and Sweden. They were the three countries he mentioned. He went on further to make the point that his work force had been working until midnight the night before in order to get the final packaging on the machine-- Senator Chaney —They were polishing it up for the Minister. Senator BUTTON —Senator Chaney says that they were polishing it up for me. I would like to think that was so, but I would not be so presumptuous. Because this is also a very good marketing company, I would have thought that they were polishing it up for the customer. That is another important facet. The simple point I am making about this is that those people who are in there battling it out do not always assume the gloomy rhetoric and see all the inhibitions which the lugubrious Senator Messner, who is sitting opposite me, sees for businesses of this kind. There are a lot of such companies around and they are-- Senator Messner —Let us remember that we are competing in Asia. Senator BUTTON —Senator Messner reminds us that we are competing in Asia. I do not know what follows from that. Perhaps he will tell us some time. Those who are out there with new management and new attitudes, who are very aggressive and who see themselves as operating in international markets are the companies that will succeed. They do not go on, in speeches to their colleagues in the business community, about the sorts of things that have been raised in Senator Chaney's question. Senator TATE —My question is directed to the Minister representing the Special Minister of State. Does the Minister agree with recent allegations that the New South Wales Government has emasculated the National Crime Authority? Is New South Wales co-operating with the NCA? Senator GARETH EVANS —Allegations that the National Crime Authority, the premier body for fighting organised crime in this country, is being hindered by a State government are very serious and it is appropriate that they should be raised for response by Senator Tate who played such a central and constructive role in chairing the Senate committee on the National Crime Authority Bill. Mr Young has advised me that he can see no substance at all in the allegations. The New South Wales Government has requested the NCA to investigate a number of major organised crime matters and has issued to the Authority the two formal State references so far requested by the Authority. In respect of these matters the NCA, and Commonwealth and NSW agencies are co-operating fully and effectively. In Mr Young's briefings with the members of the Authority they have indicated that they are very happy with the level of co-operation with the NSW authorities. The Commissioner of the Australian Federal Police has also stated to the Minister that the degree of co-operation with the NSW Police and its Minister is very satisfactory. As to States preventing the NCA investigating matters under its general powers, apart from references, the NCA can of its own volition and without any need for approvals investigate relevant criminal activities in any jurisdiction. In order to use its special coercive powers, however, the NCA requires the approval of a State government before it can investigate matters within that State's jurisdiction using those powers. Proposed State references must, therefore, be approved by the Minister representing the State on the Inter-governmental Committee on the NCA. The Inter-governmental Committee has resolved to announce publicly any case where a reference sought by the NCA is refused by it. The State concerned would then have to defend its decision in public. Obviously, no such circumstance has yet arisen. I repeat the substance of the response that there is simply no foundation in the allegations that have been made. Senator HILL —My question is addressed to the Minister representing the Minister for Local Government and Administrative Services. I ask: Can the Minister explain the increase by almost 30 per cent in the cost of the construction of the Beijing Embassy in the period April 1984 to March 1986, escalating the cost from an estimated $37.4m to a reported $48.5m? As the construction of the embassy is not due to begin until March 1987, can the Minister inform us as to what further cost the Australian taxpayer will be subjected to and what the final estimates will be on completion of the embassy by late 1989. How does the Government justify the expenditure of an estimated $76m until completion on current prices of a property which, firstly, cannot be sold and a gain made on the capital spent and, secondly, will be too small to house Australian staff after the year 2000-only 11 years from the proposed completion date? Senator GIETZELT —I do not have any specific information in my brief about the proposals in respect of the Australian Embassy in the People's Republic of China. I have sought the information but it has not yet been made available to me. However, I can say that the Government's long term aim is to contain the rental bill in foreign countries by acquiring or constructing a higher proportion of publicly owned properties. To this end the Government is continuing a program of removing the increasing cost of accommodation in foreign countries. For example, $75m was spent on overseas properties during the year 1984-85. Of that amount some $33m was spent on renting properties for Australian embassies abroad. It is pretty clear that it is in the long term interests of Australia that we acquire properties in our own right, in particular in countries with which we are going to have long term trade and economic and social interchange and relationships. I would have thought that any steps taken to reach the objectives I have referred to in respect of the People's Republic of China would be understood by honourable senators and would be supported by them. It is pretty clear that there is a tremendous market opening up in that country and that we therefore need to have the human and other resources there to fulfil those long term trade objectives. However, as I have said, I have not got the specific information, even though I have requested it, in respect of Senator Hill's question to me. I hope that before Question Time concludes I will be able to answer it more precisely. Senator BLACK —My question is addressed to the Minister representing the Minister for Social Security. Is the Minister familiar with the Gold Coast based organisation called Safeguard Australia? Has the Minister's attention been drawn to a recent statement in the Gold Coast Bulletin by the director of that organisation, Mr Charles Connolly, suggesting that the supporting parent's benefit has become a reward for promiscuity? Can the Minister advise the Senate how the Government views these rather extraordinary claims and, further, whether the Federal Government is committed to continuing to provide pensions to supporting parents? Senator RYAN —My attention has been drawn to the organisation apparently based on the Gold Coast in Queensland called Safeguard Australia and the particularly vicious and destructive comments the spokesperson for that organisation, Mr Connolly, is reported as having made in the Gold Coast Bulletin of 5 March this year. I can only regret that the poorest people in our community, those who are struggling hardest, namely, single supporting parents, are subjected to this kind of attack and that the media is prepared to promote it, or at least to give it space. I think every honourable senator in this place is aware that any examination of poverty reveals that the poorest people in this community are single supporting parents struggling to bring up children. It is true that the cost of government support for these poor families is very great but it is also true that there is no group in the community that has a greater claim for assistance by government. Far from having any intention to reduce assistance to this particularly disadvantaged group, our Government has managed to increase pension payments to this group in each Budget and to increase the benefits paid for the additional support for children of single supporting parents. At the same time it is true to say that we do not regard the existence of pensions as a desir- able permanent state of affairs for these families. Many of our other programs are directed towards giving single parents the opportunity to get training and skills and employment. For example, our community employment program, which has been enormously successful in contributing to the creation of more than half a million jobs in the last three years, has an outstanding record in providing jobs to women. I think that over 50 per cent of jobs now, certainly in many aspects of the program, have gone to women, many of whom, of course, are single supporting parents. Similarly, an increasing proportion of funds allocated by us to technical and further education colleges is being directed to special bridging courses, access courses, which enable women with no skills and very little education-again, very often single supporting parents, the very unfair subject of this attack by this right wing organisation-to move into a situation where they will be able to come off the pension and gain secure employment. The Government has also announced and commenced a major inquiry into income security which is being conducted through the Social Security portfolio. It will examine all aspects of poverty and the income needs of those in poverty. Again, this group of single parents supporting children will be a major concern of that inquiry. The Senate might also be interested to hear that parallel to this inquiry the Government is conducting an inquiry into maintenance. Failure to pay maintenance, as all honourable senators would know, is one of the contributions to the poverty in which this group exists. It is of great concern to our Government that many parents who are in a position to support their children and their former partners do not do so and are able to evade their maintenance responsibilities. Therefore, the burden for assisting these families falls entirely on the public purse. That is not a fair or equitable state of affairs. The purpose of the inquiry into maintenance which we are now conducting is to find ways in which we can ensure that parents who are able to contribute to the support of their children and their former partners in fact do so. By this means of course we will be assisting many in the single parent population to improve their standard of living. At the same time, I should make it clear that we have no intention of placing any additional burdens on single parents and their children by way of their having to take the responsibility for seeking maintenance. Rather we are looking at ways in which government agencies can do that effectively. So we accept that we have a responsibility to this poorest group in the community. We have no intention of withdrawing support. We have every intention of assisting them to improve their circumstances and trying to get a more responsible performance in maintenance payment by those parents able to do so. I say in conclusion that, again, it is very regrettable that this most vulnerable group is subjected to smear campaigns the likes of which are perpetrated by the right wing organisation called Safeguard Australia. I think it behoves every representative of a political party in this place to disassociate themselves from attacks of this kind. Senator MASON —My question is directed to the Minister representing the Minister for Defence. Is the Government aware that virtually all insurance policies covering Australian homes and their contents, and motor vehicles, have a nuclear exclusion-that is, the insurance company does not provide a cover for damage caused by or contributed to by any kind of nuclear accident due to nuclear fuel, nuclear waste or nuclear weapons? To what extent does the United States Government accept liability for damage which might be caused as a result of an accident to one of its nuclear war ships visiting an Australian city? Do Federal or State governments accept any share of that liability? Is it likely that millions of Australians would lose everything they had, without compensation, in the event of such an accident, even, perhaps, just an escape of radiation? What does the Government propose to do about that situation? Senator GARETH EVANS —I think I had a brief on this some time ago, but it has taken Senator Mason a while to get around to asking his question. I might need to get some further information on that before responding, with the gravity that is necessary for a question of such importance. Senator MAGUIRE —My question is directed to the Minister representing the Minister for Social Security. Which unemployed Australians will benefit from the overdue extension of rent assistance to social security beneficiaries in May? What will be the cost to revenue of this significant anti-poverty measure? How many unemployed Australians will benefit? Senator RYAN —From May 1986 rental assistance of up to $10 a week will be available to unemployed and to special beneficiaries aged 18 years or more who pay private rent and have been in receipt of benefit for at least six months. It will be payable to those under 25 years old only if beneficiaries are not living with a parent or guardian. This initiative will assist in reducing pressure on emergency relief agencies which have found private renters to be a high proportion of their clients. This new form of assistance is another example of our Government's determination to target assistance where it is most needed. As announced in the context of assistance for youth, separate arrangements will be developed to provide appropriate levels of help for the 16- to 17-year-olds who are unable to get support from their parents. The extension of rent assistance to the unemployed is estimated to cost some $10m in 1985-86, and $59m in a full year. This decision will be reinforced by the Government's recent decision to alleviate the poverty traps as a part of the tax reform package. From November 1986, the abolition of the separate income test on rent assistance will mean that those in private rental accommodation will not lose 50c of rent assistance for every dollar they earn, thus making a substantial improvement in their circumstances. Finally, an estimated 115,000 unemployment and special beneficiaries will receive rent assistance. Senator JESSOP —I ask the Minister representing the Minister for Employment and Industrial Relations a question regarding the company Trojan Owen and Associates Pty Ltd which has been the subject of media attention as a result of Senator Short's questions relating to the Footscray Swim Centre, and which has been involved in at least five community employment program projects, to my knowledge, in South Australia. How many CEP projects has Trojan Owen and Associates been involved with in South Australia? How many CEP projects has it been involved with in other States and Territories? Could the Minister provide me later with the details of these projects, including project name, sponsor name, sponsor contribution and CEP contribution? Senator Bolkus —This has already been asked. Senator JESSOP —I have not asked this one. Is it a fact that Trojan Owen and Associates has in some instances obtained preferential and privileged information from Federal and/or State departments involved in the CEP about intending projects of some potential sponsor organisations? Has it been the first and sometimes only company to approach such sponsor organisations offering its services before the project has even been approved? Senator WALSH —I am sure Senator Jessop will be surprised to know that I cannot remember the answers to all those questions. In fact, I cannot remember all the questions. Answers should be obtainable for most of them, I think, and I will try to get them. Senator SIBRAA —Can the Minister representing the Treasurer advise the Senate whether bankruptcy figures are now available for the year 1985? If so, can the Minister further advise the Senate what conclusions can be drawn from these figures? Senator WALSH —The figures on bankruptcies are available for 1985. They show that in New South Wales, Victoria, South Australia, Western Australia and the Australian Capital Territory the number of non-corporate bankruptcies in 1985 was down by 0.7 per cent on the 1984 figure. The picture was different in other parts of Australia. In the Northern Territory, for example, the 1985 figure was up by 103 per cent. Senator Elstob —How much? Senator WALSH —I will repeat that-103 per cent; more than double the 1984 figure. In Queensland the increase was 22 per cent, and in Tasmania it was 21 per cent. It will have been noticed, of course, that those States where there was a very large to enormous increase in the bankruptcy rate are all governed by non-Labor governments. Because of that fact, the national figure was up by 5.6 per cent, despite the better performance in all the Labor States. As a matter of interest, it ought to be noted in passing that the latest Australian Bureau of Statistics employment figures showed that the unemployment rate in the States is highest in Queensland at 10.3 per cent, and in Tasmania at 9.7 per cent; the rate in both of those non-Labor States being higher than the rate in any other State. Senator Sibraa has asked me what conclusion should be drawn from those statistics. The obvious conclusion is that the non-Labor States have a very bad record so far as bankruptcy is concerned. Given that the Northern Territory and Tasmania, being small in population, have little effect on the national average, the other conclusion is, of course, that Queensland is dragging Australia down. As in so many other areas, it is Queensland that is dragging Australia down. Another conclusion to which this points is that Queensland is to an alarming degree displaying the attributes of a banana republic, including capricious leadership. The Premier recently introduced legislation to outlaw strikes in exporting industries, and the same Premier in 1980 supported the coal strike in Queensland against the aim of changing government policy of the day. There are so many of these banana republic systems visible in Queensland that some people have been drawn to draw conclusions between the regime there and the previous regime in the Philippines. One must wonder whether that is the reason for the Premier's close association with East-West Airlines Ltd. The PRESIDENT —Order! The honourable senator was asked about bankruptcies. I ask him to come to the point. Senator WALSH —I am rounding off the question, Mr President. The Premier might need that to skip the country, but I wonder whether Senator Bjelke-Petersen has 2,200 pairs of shoes as well. Senator ARCHER —I ask a question of the Minister representing the Minister for Defence. In view of the revelation that the Australian Department of Defence said it could not provide the necessary resources for an outstanding scientific exercise, what was the estimated cost of providing intermittent night-time landing facilities for the National Aeronautics and Space Administration's Kuiper airborne observatory at Richmond air base-which has now been transferred to New Zealand in order to facilitate the scientific collaboration between Australia and the United States in the study of Halley's Comet and other issues? Did the Department of Defence provide night-time landing facilities for the airborne observatory's last visit in June 1983? If so, at what cost? Senator GARETH EVANS —I am advised by the Minister that there would be some quantifiable costs to the Royal Australian Air Force in the provision of supporting equipment and building space during the proposed NASA deployment. These costs, however, were not a significant consideration in the decision that RAAF support to the deployment could be provided only in normal airfield operating hours. While not quantifiable in dollar terms, the critical and unacceptable cost to Air Force operations would have been the imposition of additional load on the constrained manpower establishment already fully committed to defence tasking. Another unquantifiable cost would have been the environment impact on local residents of repeated night operations by a large jet aircraft such as the C141 over a period in excess of two months. The answer to the latter part of Senator Archer's question as to precedences of this sort of thing is yes, support was provided by Royal Australian Air Force base Richmond, albeit at some manpower detriment, in a climate of lesser manpower restrictions than currently apply. The cost of this support, although not specifically identified, is considered to have been minimal. Senator CHILDS —My question is directed to the Minister representing the Minister for Aviation. The Minister will be aware of recent publicity on the issue of smoking in aircraft. In recent years there have been significant reductions in the flight space available to smokers. Has the Minister given consideration to restricting further the amount of space available? Senator GIETZELT —I think all senators would be aware that there is increasing community concern about smoking in public places, particularly places where there are some restrictions on the movement of air, such as in aircraft. There is no doubt that the aviation industry has taken this into account in making available non-smoking areas in both first class and economy class areas, and in Trans Australia Airlines business class areas. As I understand it, the ratios are: On Ansett Airlines of Australia flights, 75:25 non-smoking to smoking; on TAA flights, 70:30 in favour of non-smokers. I understand that the Minister for Aviation has written to the airlines suggesting that there is a case to be made out for their taking some initiatives on a commercial basis. Perhaps the first airline to make its aircraft completely non-smoking will capture that increasingly concerned public and therefore gain a commercial advantage over other airlines. So far the three companies concerned-Ansett, TAA and East-West Airlines Ltd-have not been prepared to make that decision. I am sure that all people who travel in aircraft have often noticed that the non-smoking area in an aircraft is full of passengers and the smoking area has only a small number of passengers. One would imagine that ultimately a commercial decision will be made that will meet Senator Child's objectives. Senator TOWNLEY —Is the Minister representing the Minister for Aviation aware that under the Government's proposed policy of full cost recovery for the Department of Aviation the charges of some small airlines would increase by more than 400 per cent? Is he aware that for the small Airlines of Tasmania Pty Ltd organisation the charges would increase from some $60,000 to almost $317,000 per annum? Does he agree that such an increase obviously will be a financial disaster for the airline and the communities that rely upon the air transport that that airline provides? Will the Minister suspend the introduction of the charges until discussions are held with this airline and any others that are similarly affected? Senator GIETZELT —The question relates to policy considerations and I am not able to give Senator Townley a satisfactory answer from my briefs. I will take the question on notice and ask the Minister to give the honourable senator an early response. Senator BOLKUS —My question is directed to the Minister representing the Special Minister of State. I refer the Minister to the International Police Associations Conference which is planned to be held in Adelaide from 6 to 10 October this year. I ask: Is it a fact that representatives of the South African Police Force are planning to attend the conference? Is it also a fact that New Zealand refused to host members of the South African delegation? Will the Australian Government intervene to prevent representatives from the repressive South African regime from attending this Conference? Senator GARETH EVANS —I am afraid I am having a bad day with my briefs. Senator Bolkus will have to wait until the end of Question Time for an answer to that question. Senator MISSEN —My question is addressed to the Minister representing the Minister for Foreign Affairs. Is the Government aware of the recent demand in the United States Congress that economic sanctions be applied against Ethiopia unless an independent commission is allowed to monitor resettlement camps where, it is alleged, 1,000 people a day are dying from malnutrition? Secondly, what consideration has the Australian Government given to the implementation of this suggestion by us? Thirdly, what independent evidence has the Government obtained from our embassy in Ethiopia and aid organisations in relation to the present situation in Ethiopia? Senator GARETH EVANS —The Government is concerned about reports of human rights abuses in Ethiopia, including those associated with the implementation of the resettlement program, and is aware of United States Government concern that the resettlement program be suspended pending independent investigation of the reports and rectification of abuses. The Australian Government is not aware of United States congressional demands for economic sanctions as such against Ethiopia. The United States hopes to have considered at the current session of the United Nations Commission on Human Rights a resolution calling upon appropriate relief and rehabilitation agencies of the United Nations to ensure that their funds are used in a manner consistent with basic human rights principles and in particular to ensure that no funds are used for the resettlement program until it can be shown that the program does not involve coercion or the involuntary separation of families and is otherwise satisfactory from a humanitarian point of view. The Australian delegation has been instructed to support the United States resolution at the Commission on Human Rights. The Government endorses the view that the resettlement program must be managed humanely, efficiently and in accordance with basic human rights principles. Our concerns in this area have already been made known to the Human Rights Commission in the course of our general debate statement. Australia's support for the resolution does not imply a desire for a reduction in multilateral assistance to Ethiopia. The Government remains committed, with other countries and donor agencies, to providing humanitarian assistance to Ethiopia for use in areas of greatest humanitarian need. As to the last part of the question, representatives of Australian non-government organisations and other aid agencies involved in Ethiopia have discussed the situation there with Australian officials, in both Canberra and Addis Ababa, on numerous occasions. Senator ELSTOB —Does the Minister representing the Minister for Employment and Industrial Relations concur with recent estimates that Australian industry is likely to experience a shortage of up to 268,000 computer personnel during the next two decades? Can the Minister say to what extent the Government has allowed for the development of computer management skills in current education and training programs? Senator WALSH —I understand that the estimate to which Senator Elstob referred was the highest of a range of estimates that had been prepared by the National Institute of Labour Studies for a seminar sponsored by IBM Australia Ltd. In fact, the estimates of what will be the situation by 2001 range from an oversupply of 24,000, in round figures, to a shortage of 286,000. The estimates are essentially illustrative in nature, defining a range of possible outcomes, and they are heavily dependent on trends in economic and labour market conditions, developments in computer technology, levels of computer education and training and so on. However, demand for skilled computer personnel has risen sharply during the past two years in response to the general economic recovery brought about by the successful policies of this Government. Growth in demand, however, has varied according to skill levels and experience. Some shortages of high level and specialist skills are now being reported. The Government is responding to those shortages in a number of ways. Firstly, it is seeking to bring to Australia up to 500 unsponsored programmers and analysts this financial year. Secondly, priority is being given to action to meet future requirements for computer related skills as far as possible from domestic sources through higher education institutions, increased training and so on. Senator BJELKE-PETERSEN —My question is directed to the Minister representing the Attorney-General. Is it not a fact that in 1974 the people of Australia defeated the concept of one vote one value in a democratic elections referendum which was put to the people of Australia by the then Prime Minister, Mr Whitlam? Why, then, is this Labor Government blatantly overriding the view expressed by the people of Australia in doing a deal with the Australian Democrats to introduce separate legislation designed to enforce one vote one value on the Queensland electoral system? Is it not a fact that a constitutional alteration expressly rejected by the people is to be brought into effect by the back door? Is the Government prepared to deal with this issue democratically by putting the question to the people of Queensland once again through a referendum and, in so doing, not to grossly abuse the external affairs power? Senator GARETH EVANS —It is the case that there was an unsuccessful referendum in 1974 on the subject, as I recall, of direct elections and equal electoral boundaries. Senator Mason —Only 22 years ago. Senator GARETH EVANS —Twelve years ago. It seems like a long time, I know. That referendum was defeated, as I recall, following a quite disgraceful campaign of scaremongering and misrepresentation by the forces of darkness opposite, amply represented still in this chamber-- Senator Withers —It was a ripper. Senator GARETH EVANS —In a peculiarly beefy and loud fashion by Senator Withers. It is my recollection also, although I stand to be corrected on this, that the referendum did not give itself the best possible chance of succeeding since the formula chosen for equal sized boundaries was population rather than voters, or the other way around. Whatever it was, it did not appear to be attractive to a number of people at the time. Whatever the circumstances of history may be, the reality of the matter is that in Australia today we have a quite disgraceful electoral situation. It is clear that the situation in Queensland is such that the only conceivable way in which Senator Bjelke-Petersen's husband could expect to stay in power for any longer period in the future is as a result of being propped up by a squalid and undemocratic gerrymander of unprecedented proportions. Those circumstances exist in other parts of the country-one in particular, as we are all aware-and there is an overwhelming case in principle for doing something about the matter. Whether it would be preferable to have another go by way of referendum or, rather, by proceeding down the track the Government has outlined is a matter for judgment. Either way, the Government is determined that this blot on the nation's moral landscape should not be allowed to remain there for very much longer. Senator BJELKE-PETERSEN —I ask a supplementary question. I ask the Minister why the Government did not bring in such legislation before the recent Western Australian election, when Western Australia also has a need for action like this? Senator GARETH EVANS —If there were any chance of having fixed it up before the Western Australian elections, I am sure that is something we would have contemplated doing. The reality of the matter is that a principle has been at stake for some considerable time. The fact that there are wrongs in other jurisdictions does not make the wrong in Senator Bjelke-Petersen's jurisdiction any less immense. It is clear that we have to do something about it and we will. Senator CROWLEY —My question is directed to the Minister for Education and/or Minister Assisting the Prime Minister on the Status of Women. Has the Minister seen the article in the Age today, headed `University a field of opportunity', reporting Margaret Cameron's appointment as Pro-Vice-Chancellor at Deakin University and Fay Marles's election as Deputy Chancellor of Melbourne University? Could the Minister comment on the point raised by Fay Marles that it is important to have women on selection committees for academic jobs because men find it difficult to understand women's backgrounds and qualifications, particularly in view of the affirmative action legislation proposals for tertiary education institutions? Senator RYAN —My attention has been drawn to the article referred to by Senator Crowley. Like Senator Crowley, I was very pleased to see that there have been two recent appointments of women to senior positions in Australian universities. That trend will be rapidly accelerated, we hope, when the affirmative action legislation is implemented. We expect that it will be implemented at the beginning of August this year to cover higher education institutions. While it is true to say that, without the benefit of legislation, there has been some improvement in the appointment of competent women to senior positions, it is also true that that move has been a very slow one. Without a conscious policy of removing structural discrimination against women seeking employment in universities and colleges, we could not expect anything other than a very slow change, which in terms of our equity objectives is not satisfactory. It is interesting to note Mrs Marles's comments, because the absence of women from selection committees in universities, particularly the absence of women who have a comprehension of the range of commitments that many women have, has been, in the view of people who understand these issues, one of the forms of structural discrimination which has existed. We hope that that form of discrimination will be eliminated when universities examine their employment selection processes, and that they will ensure that the processes put in place are fair and equitable, that the merit principle is the basic criterion for selection, but that the merit principle incorporates an examination of all the relevant attributes a woman can bring to a job. Certainly, tenacity and organisational skills, as demonstrates by combining post-graduate study with caring for families, would appear to me to be relevant criteria in many of those cases. It is heartening to see these developments and I expect that we will see many more such highly competent women appointed to senior positions on merit once our affirmative action program is in place. Senator MESSNER —My question is addressed to the Minister representing the Treasurer. I refer to the various answers given by Government Ministers in the past week concerning the Government's economic trilogy commitment. I ask the Minister whether he can clear up some ambiguities as to just what this commitment involves. I will need to go through some detail in this. The PRESIDENT —I hope that the honourable senator does not take too much time. Other senators are waiting to ask questions. Senator MESSNER —I will try not to take up too much time. The Government has said, firstly, that taxation receipts as a percentage of gross domestic product will not exceed the 1984-85 ceiling in 1985-86, 1986-87 or 1987-88; secondly, that Government outlays as a percentage of GDP will not exceed the 1984-85 ceiling in 1985-86, 1986-87 or 1987-88; and, thirdly, that the Budget deficit as a percentage of GDP will not exceed the 1984-85 ceiling in 1985-86, 1986-87 or 1987-88. Senator WALSH —This is getting to be a pretty boring subject. The Budget Papers, to which Senator Chaney referred yesterday, answer Senator Messner's question. They say that there will be no increase in taxation, expenditure, deficit as a proportion of GDP in 1985-86 and over the life of the Parliament. It flows logically from that that it does not necessarily apply to 1986-87 or 1987-88. Senator VALLENTINE —I address my question, with a little notice, to the Minister representing the Minister for Defence. Will the Royal Australian Navy and the Royal Australian Air Force participate in this year's Rimpac exercises? If so, which ships and aircraft will be involved? Will Australian military forces participate in the bombardment of Kahoolawe Island during the exercises? Given that Kahlooawe Island is now on the United States National Register of Historic Places and that the Hawaiian Senate and House of Representatives have called for an end to the bombardment of Kaho'olawe Island, will the Australian Government publicly call on the United States and other allied governments not to shell the island during the Rimpac exercise? Have vessels from the Royal Navy which are scheduled to join Rimpac been invited to Australia after the exercise is completed? Senator GARETH EVANS —In response to Senator Vallentine's question, of which she was kind enough to give me advance notice, the Minister for Defence has supplied the following information: As to the first part of the question, planning for Australian participation is under way. As to the second part of the question about Australian military forces participating in the bombardment of the island during the exercise, the answer is no. As to the third part of the question, the use of Kaho'olawe Island by forces participating in the Rimpac exercise is a matter for relevant governments to decide. As to the fourth part of the question, which concerned vessels from the Royal Navy being invited to Australia after the exercise is completed, the answer is yes. Some of the Royal Navy ships participating in Rimpac '86 will move to Australia after the exercise to participate in the RAN's seventy-fifth anniversary celebrations. Senator KNOWLES —My question is directed to the Minister representing the Minister for Health. The Minister for Health has already stated that there will be at least a $94m blowout in the Medicare budget this year. As the levy for Medicare is currently running at 2 per cent, and not the one per cent that is alleged, can the Minister advise the Senate what measures will be taken to reduce this massive blowout, other than pegging back doctors' fees, reducing benefits or further increasing the 2 per cent levy? Senator RYAN —I have some information with regard to the overrun in Medicare payments. I recall that the explanation given by my colleague the Minister for Health, Dr Blewett, was that it was due largely to the flu epidemic last year which caused a much greater demand on health services than was normal at that stage. As to the way in which the Government will deal with this overrun, that will be a matter for budgetary consideration and Senator Knowles will know that when the Government has made up its mind. Senator MAGUIRE —Has the Minister representing the Treasurer seen the latest unemployment benefit figures released this week? Has he noticed the similarity between the Queensland and Victorian State-wide unemployment beneficiary totals? Has the Minister also noticed that the total number of people receiving unemployment benefits in Queensland is equivalent to the entire population of Townsville, the largest provincial city in Queensland? What policy conclusions can be drawn from these figures? Senator WALSH —I am aware of figures on the number of unemployment benefit recipients, which is not quite the same as registered unemployed. The figures show that Queensland has a far higher rate of unemployment benefit recipients than any other mainland State. Indeed, the figure is virtually the same as the figure for Victoria, even though Queensland has only 60 per cent of the population of Victoria. In round figures 113,000 people in Queensland are unemployment benefit recipients. I did not know that that figure was comparable to the population of Townsville. But I suppose, on reflection, that the city of Townsville must have a population of about that size. Since Senator Maguire said that that was so, I find it highly and readily believable that the number of people receiving unemployment benefits in Queensland is the same as the population of Townsville. Senator Maguire asked what policy conclusions could be drawn from these figures. It has been the custom for the Queensland Premier to assert that the high rate of unemployment benefit recipients in Queensland was because young dole bludgers were coming from the south to laze on the Gold Coast, the Sunshine Coast and in Cairns. If that were ever true, it is certainly not true now, because there is a net movement of people between the ages of 15 and 24 years out of Queensland. Young people are leaving Queensland because of the dismal state of the Queensland economy and the very poor prospects of gaining employment there. Queensland has a sick economy, an authoritarian pseudo-moralistic government, but still has the highest rate of venereal disease and teenage pregnancies in the country. Senator SHEIL —My question is directed to the Leader of the Government in the Senate. I ask whether the Government agrees with the statement by Mr Simon Crean, the Australian Council of Trade Unions President, who, when speaking to an ACTU congress, stated: What we must recognise at this early stage of union involvement in the superannuation issues is that control over the funds will provide unions and governments with considerable financial leverage. That leverage can be used to advance the cause of socialism in Australia. Senator BUTTON —I do not know whether Mr Crean said that. It sounds rather like a garbled quotation from some League of Rights publication or something of that kind. I have no doubt that if one deals with the issues it is quite likely that Mr Crean has made the point that superannuation funds provide a very important source of investment. Just as other countries which have been much more successful in developing investment packages for industry have large superannuation funds in which the employees are participants in the management of those funds, that would follow in Australia if that situation came about. I believe that to be correct. Senator GILES —My question is directed to the Minister representing the Minister for Health. Has the Minister's attention been drawn to an article in yesterday's West Australian in which the President of the Australian Medical Association complains that Western Australians are paid a Medicare rebate inferior to that paid in some eastern States? Does this mean a greater cost for Western Australian health consumers, as is implied, or is the inference misleading and mischievous? Senator RYAN —The inference drawn from that statement-that there is unfair discrimination against Western Australia-is certainly misleading and mischievous. There are historical reasons for the differences between States in regard to the schedule of fees on which the Medicare refunds are based. Generally, however, patients in those States with lower schedules of fees face correspondingly lower charges from doctors. The medical benefits schedule on which the Medicare refund was set was introduced in 1970, based on the most common fee for each State. Western Australian fees were lower than those set in some other States, notably New South Wales and Victoria, because doctors in Western Australia charged less and had lower costs than doctors in those States. Until recently the AMA had always opposed uniform fees and supported the continuation of the historic difference between State fees. However, recently the AMA changed its policy and decided that there should be a move towards uniformity. The Government agrees with this in principle, but believes it should be a gradual move within the context of the overall Medicare budget. Regrettably, the AMA argues that all fees should immediately move up to the level of fees charged in New South Wales. In other words, it wants to slug the public for an extra $100m simply to line the doctors' pockets. The public would rightfully regard the Government as irresponsible if we were readily to agree to this suggestion. Senator KILGARIFF —I direct a question to the Minister representing the Minister for Immigration and Ethnic Affairs. I refer to the six Indonesian fishermen who requested refugee recognition following their arrival at Melville Island in the Darwin area. What is the basis of their claim for refugee status? From what part of Indonesia did they originate? Are they associated in any way with the so-called border-crossers of Irian Jaya? Lastly, what is the intention of the Australian authorities in regard to this group? Senator RYAN —Senator Kilgariff's question is virtually a repetition of a question he asked me yesterday. I have no additional information. Senator Kilgariff —I did not ask it yesterday. Senator RYAN —Certainly I was asked a question yesterday on the status of refugees. I recall it as being from Senator Kilgariff; perhaps it was not. However, questions along the lines asked by Senator Kilgariff were asked of me yesterday. At that time I provided all of the information that I had available from the Minister for Immigration and Ethnic Affairs. I have just checked the brief and I have no additional information available. One of the things that Senator Kilgariff is interested in is whether there is any connection between the Indonesians who have arrived in Melville Island, the circumstances of whose discovery I described yesterday, and the Indonesians or the Irian Jayas who are still, I think, in the Torres Strait. Senator Kilgariff —No, I am talking about the Indonesians. Did they come from Irian Jaya? Senator RYAN —I think the details of the background of the Indonesians who are now in Melville Island or have been taken to Darwin, as I described yesterday, are still being investigated. I realise that Senator Kilgariff has a particular interest in this matter. I will try to get some information for him before the Senate rises this evening. Senator ROBERTSON —Has the attention of the Minister for Finance been drawn to a report in today's Melbourne Sun newspaper in which it is claimed that the Government is considering the sale to private enterprise of the parliamentary catering and refreshment services? Is there any truth in this claim? Senator WALSH —I have seen that report. I decided some time ago that I would be likely to get a number of questions about rumours, alleged leaks and all that sort of thing about possible expenditure changes in the Budget and so on and that I would not comment on any such rumour or report. I will not comment on this one. Senator GIETZELT —Early in Question Time today Senator Hill asked me a question in respect of the Australian Embassy in Beijing, the People's Republic of China. I have now been advised by the Minister for Local Government and Administrative Services that the Beijing Embassy project reflects the great and growing importance of Australia's relationship with China and the need to replace the crowded inadequate accommodation in which Australian staff is currently working. Honourable senators may be familiar with the seventeenth report of 1984 of the Public Works Committee which examined the proposed project and dealt in detail with the works and costs involved. That report confirmed the need for the complex and recommended its construction. At the time of consideration by the Public Works Committee the estimated cost of the work was $33.8m as at April 1984 prices. The Minister advises me that there has been no change in the scope of the works since the Public Works Committee's examination. The increase in the estimated cost to $48.5m reflects both increases in building and manufacturing costs in Australia and China and an exchange rate depreciation in the Australian dollar. Senator GARETH EVANS —Senator Mason asked me a question today about nuclear accidents. I am able to give him the answer now as follows: Compensation arrangements in the unlikely event of a nuclear reactor or nuclear weapons accident on board a visiting United States warship are set out in part 3 of Mr Beazley's response to House of Representatives question on notice No. 629, published in the House of Representatives Hansard on 10 September 1985, at page 457. I seek leave to incorporate in Hansard the text of that answer. Leave granted. The answer read as follows- In the unlikely event of an accident involving a nuclear reactor or a nuclear weapon, Australia is responsible for the overall command, control and co-ordination of the emergency response. The US and UK would provide the maximum assistance practicable. Under Public Law 93-513 the United States accepts absolute liability for nuclear damage which results from a nuclear incident involving the reactor of a United States warship. The UK Government has provided a unilateral assurance to Australia on reactor accident liability comparable to that given by the United States. Any claims for compensation resulting from a nuclear weapons accident would be dealt with through diplomatic channels in accordance with customary procedures for settlement of claims under generally accepted principles of law and equity. In the case of the United States, settlement of claims would take place in accordance with Article 12 of the Agreement between Australia and the US concerning the status of US Forces in Australia. Senator GARETH EVANS —With regard to the latter parts of Senator Mason's question, the contribution, if any, by Federal or State governments in the event of a nuclear weapons accident-the United States Government accepts absolute liability for reactor accidents-would, I understand, be a matter for negotiation and I cannot speculate as to the outcome. Senator GARETH EVANS —Senator Bolkus asked me a question today about South African attendance at the International Police Association Conference. The information available to me comes from both the Special Minister of State and the Minister for Foreign Affairs, as at 19 February. I will supplement this later if there is any further information I can give. I seek leave again to incorporate that information in Hansard. Leave granted. The document read as follows- 1. I am aware that a Conference of the International Police Association will be held in Adelaide in October this year. The conference will be organised by the Australian sector of the International Police Association. 2. No applications for visas to enter Australia to attend the conference have been received from South Africans. If such applications are received, they will be considered by the Minister for Immigration and Ethnic Affairs, in consultation with Mr Hayden, according to current policy. Under that policy, South Africans are normally allowed entry in order to attend international conferences. Each case is, however, examined on its merits, and clearly the attendance of members of the South African Police would be a matter of sensitivity against the background of the present situation in South Africa. 3. As part of the New Zealand Police Centenary celebrations this year, the New Zealand section of the International Police Association (IPA) is organising an international friendship week. It was hoped that many delegates to the Adelaide conference would be able to attend. Before sending out any invitations the New Zealand section sought advice of the New Zealand Government's attitude to attendance by South African members of IPA. It is my understanding that the New Zealand Government informed the section of the IPA that it would consider such an invitation inappropriate, and that it would expect the section to take that view and its general policies towards South Africa into account in deciding whom it should invite. The section appears to have taken that advice and has decided not to invite South Africa to the celebrations. Senator GARETH EVANS —Yesterday Senator MacGibbon asked me a question about the International Year of Peace. I seek leave to incorporate in Hansard some information on this matter. Leave granted. The document read as follows- The answers to the honourable senator's questions are as follows: 1. Yes. 2. Recipients of grants are advised to submit budgets and project plans which, if purchase of equipment is involved, utilise leasing arrangements. In cases when leasing is not cost effective, a project may be approved which entails purchase of equipment. The Department of Finance has advised that it has no objection to the establishment of a threshold for ownership retention. This is consistent with established practice in other government areas where grants are disbursed. Therefore equipment which has a purchase value of greater than $2,000 remains the property of the government at the conclusion of the International Year of Peace. Where a grantee can demonstrate a long term benefit to the community and equipment is less than $2,000, the non-government organisation may retain ownership. Senator CHANEY(Western Australia-Leader of the Opposition) —by leave-I move: That the Senate take note of the paper. I seek leave to continue my remarks later. Leave granted; debate adjourned. Bill received from the House of Representatives. Ordered that the Bill may be taken through all its stages without delay. Bill (on motion by Senator Gietzelt) read a first time. Senator GIETZELT(New South Wales-Minister for Veterans' Affairs)(3.06) —I move: That the Bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows- The Australian Federal Police Amendment Bill 1986 is intended to ensure the more effective operation and administration of the Australian Federal Police (AFP). One of the functions the AFP is currently required to perform is the protection of persons from time to time considered under threat, including ministers of the crown, judges and witnesses. At present it is not clear that the powers conferred on the members of the AFP under section 9 of the Act adequately cover this protective function if it is performed outside the Australian Capital Territory and beyond the limits of Commonwealth places in the States and the Northern Territory. At present, section 9 gives a member of the AFP the powers and duties of an officer of the police in the State in which the member is acting only in relation to certain functions of the AFP. The Bill would extend these functions to include the safeguarding of Commonwealth interests, thereby giving members of the AFP clear power to discharge the protective function. In recent years one of the more valuable tools used by the police in the fight against the drug trade is the use of dogs to detect illicit drugs. No provision is made in the AFP Act or in any other Commonwealth legislation to govern the use of police dogs. Most jurisdictions prohibit or restrict the access of animals to a number of areas. Clearly, there are occasions when the use of police dogs in otherwise restricted places will be highly desirable. Accordingly, an amendment is proposed which would provide that a police dog under the control of a police dog handler may lawfully be in any place where it is lawful for the handler to be, in his capacity as a member of the AFP. This does not give any new rights of entry to the police. It simply allows a police dog to accompany its handler. There are occasions when a member of the AFP is seconded to a State police force or to another relevant body or organisation, or where a member of the AFP is given special leave to undertake service with a foreign government or with certain institutions or to undertake studies or research. Sections 33 and 34 of the Act enable arrangements to be made for secondment or special leave. It is not clear, however, whether members seconded under section 33 or given special leave under section 34 have the powers of an AFP member or are subject to disciplinary provisions normally applicable to AFP members. Provisions of this Bill will make it clear that a seconded member retains powers as an AFP member and is subject to the disciplinary provisions. For members on leave of absence the disciplinary provisions will apply, with the exception of members granted leave to serve as members of the Australian Federal Police Association. The amendment to section 29 of the Act will permit transfer of the administration of AFP promotion appeals and management initiated retirement and redeployment appeals to the merit protection and review agency, in keeping with the object for which the agency was established. Finally, an amendment to section 70 of the AFP Act is proposed to permit the making of regulations in relation to the disposal of unclaimed property. I commend the Bill to the Senate. Debate (on motion by Senator Reid) adjourned. Consideration resumed. Senator SIDDONS(Victoria)(3.08) —Before the suspension of the sitting for lunch I was making the point that the Australian Democrats are not taking sides in the dispute as to whether Mr Holmes a Court or the existing board of the Broken Hill Proprietary Co. Ltd should run that company. What we are saying is that it is a matter of grave public importance to the community at large, to the shareholders of BHP and, indeed, to the defence of this country and, as such, there should be a public inquiry. I also made the point, in response to an interjection by Senator Crichton-Browne that the Democrats, and I, in particular, presumably, are not in favour of takeovers, that that is not the case. We simply say that any takeovers that may involve a public interest should be investigated before a tribunal. Some takeovers, of course, are beneficial to the economy. We have no intention of saying, and we never have said, anything along the lines that takeovers should not be allowed to proceed. We saw the amazing spectacle two weeks ago of the Prime Minister (Mr Hawke) and the Federal President of the Australian Labor Party, Mr Wran, being overruled by the Treasurer (Mr Keating) on intervention in the BHP case before the Cabinet had met to decide the issue. On Friday night Mr Hawke and Mr Wran were calling for an inquiry. By Monday they had changed their tune because the world's most acclaimed Treasurer disagreed with them. All this was dressed up by claiming that Robert Holmes a Court had given assurances that BHP would not be broken up and that no retrenchments would occur. I can only say that we must have an incredibly gullible or dangerously naive Prime Minister and Cabinet if they accept those assurances. The facts of the matter are that no director of a public company can give assurances that are binding upon a public company. The only way that can be done is by a resolution of the board of directors. All of Mr Holmes a Court's assurances have been predicated by saying: `I would do this; I would do that'. Those assurances essentially are worthless. If we are supposed to sit back here and accept that the Government has received assurances which cannot be made public because they could be sub judice, that is a pretty sad state of affairs for the Parliament and the running of this country. Of course, the history of Mr Holmes a Court's assurances to all kinds of bodies before he has involved himself in raids on important public companies is that very few of those assurances have been kept. That is a matter of public record; it is not a matter of BHP spreading rumours, as the Government is trying to get across. It is a matter of public record that Holmes a Court has made all kinds of promises before a take-over about not retrenching staff and about not selling off subsidiaries and has not kept them. No one person can give those assurances. Situations change; companies go broke; they run out of cash; they have to sell subsidiaries; and they have to worry about their cash flows. All that is in the future. One cannot give categorical assurances that people will not be retrenched or that a subsidiary will not be sold. Holmes a Court has no right to give those promises, he is not in a position to give them, and the Government should take no credence from them. Senator Chipp asked the Minister for Resources and Energy (Senator Gareth Evans) where the $2 billion of foreign money being used to finance this take-over is coming from. Senator Chipp —The original source. Senator SIDDONS —The original sources. We know that Mr Holmes a Court is being backed by the Chartered Bank of Great Britain, which has a long history of close association with South Africa and the diamond industry in that country, so it is not unreasonable for us to wonder whether there are any strings attached to this $2 billion loan. That is more money than the Government could afford to expend on honouring a promise to the Australian motorist that it would reduce petrol prices in line with international oil prices, but it is prepared to let $2 billion flow into the country without wondering what its source is and whether there are any strings attached to it. Loan funds are supposed to be neutral. Banks make loans for debt without any strings attached. They are concerned only that the company is able to pay those loans back. But we know, it is a matter of public record, that there are strings attached to this loan. The Chartered Bank is not going to lend money to Holmes a Court unless he can give an assurance that he can get control of BHP. Why is the Chartered Bank concerned about Holmes a Court having control of BHP? I suggest that it could be for only one reason-there is a behind the scenes deal. The Bank knows that, unless Holmes a Court can get control of BHP, he will not be in a position to sell off something, to increase the price of steel or to do whatever is necessary to balance his books. It has been shown in newspapers, particularly in the Age by Kenneth Davidson, that on the arithmetic of this bid the Bell Resources group will be $100m a year short with its cash flow. The money that the Bell Resources group will get from the shares it buys in BHP and the dividends from those shares will not cover the interest bill on the $2 billion; it will be short by $100m. So something has to give. Obviously there are all kinds of scenarios that one could paint as to how that $100m shortfall could be made up. He could increase the price of steel. He could sell off Utah to the Japanese. He could have a reverse take-over and have BHP take over Bell Resources. There are all sorts of things that he could do to balance his books. But we know, it is a matter of public record, that the money is lent to Bell Resources with strings attached, so it is not unreasonable for this Parliament and the Australian people to know what those strings are. How ironic it would be if, in a few months time, the Australian people, the Australian Government particularly and the Australian Labor Party generally, woke up to the fact that Holmes a Court had been a front for South African interests and that essentially BHP, the largest Australian owned company, was now owned and controlled by interests outside Australia. There has to be a public interest inquiry. I have received literally hundreds of letters from small shareholders in BHP. I read only one typical one. It is from Mrs Patrick Andersen. She writes: I am a small shareholder in BHP. I have been listening to media reports about the proposed takeover bid by Mr Holmes a Court and have been very disturbed about what I heard. Last night I saw your interview with Richard Carleton and for the first time I was pleased to hear sound judgment and commonsense at last, from anyone. I had a dream for years to own some share in BHP to help in the growth of Australia. I saved enough a few years ago and bought 100 shares. I think the BHP board have been excellent and don't personally want that changed. I am very distressed that Mr Holmes a Court can borrow $2 billion and we have to pay his interest. That is terribly wrong. Surely that big loophole in our laws has to be changed. Why should we have to pay when Mr Holmes a Court can afford his own interest debt. The Liberal and Labor parties don't seem to be interested and I'm glad you are, and you also have the power to do something about it. Please do. Mr Holmes a Court is effectively a one-man band. He is borrowing $2 billion off-shore. He controls Bell Resources. He has a majority interest in that company through an intricate network of interchanging shares and options and so forth, but essentially that one man can control the voting power of the Bell Resources group and eventually that one man could also control the voting power of BHP if his bid succeeds. To put it in another perspective-and this is not original but I cite it for the record-it is the equivalent of one man controlling General Motors, IBM, General Electric and Rank-Xerox in the United States. Are we going to allow that sort of concentration of power in this country without a public inquiry and without knowing the source of the $2 billion? The Government is abrogating its public responsibility in suggesting that we should sit back and allow that to happen. As far as the Democrats are concerned, much as we want this trade practices amendment legislation passed, we are going to vote against it-there is no shadow of a doubt about that-rather than see no public inquiry conducted. I understand that the Trade Practices Commission made a public statement at lunch time that, if section 50 (1A) remains, there will be a public inquiry. I quote that second hand; I hope I do not misquote him. This is a matter of overriding importance as the Democrats see it and it is the only, the fundamental, the sole reason why we are prepared, if necessary and if common sense is not going to prevail in this place, to block this important trade practices amendment legislation and reintroduce it as a private member's Bill without the offending proposed new sub-section 50 (2C). We are debating whether we will delete 50 (2C). The simple thing would be for the Government to vote with the Democrats and delete 50 (2C). If the Government is not prepared to take the simple course, we seven Democrat senators have only one other course of action-to defeat the whole Bill and reintroduce it, without 50 (2C), as a private member's Bill. I cannot really believe that the Government is so perverse or pigheaded that it will not support our amendment to delete 50 (2C). Let us get on with the important business of the trade practices legislation. Let Holmes a Court, BHP, the shareholders and the Australian public know what is going to happen. The whole matter will then be in the hands of an official public inquiry. We will be able to have the official answers to these questions, and notably where the $2 billion is coming from, the question that Senator Gareth Evans was not prepared to answer when it was asked before lunch by Senator Don Chipp. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(3.20) —I did not want to re-enter this debate because I think the issues have been canvassed, but Senator Siddons's outburst makes it necessary to say just one or two more things. It is very difficult to reply to him without appearing either to take sides, which the Government, of course, has been at the utmost pains not to do in this matter, or, more particularly, to reveal information we are simply not in a position to reveal at least at this stage. I can only repeat, and repeat with the utmost clarity, what I said this morning: The public interest issues in this matter, including every one of the kinds of issues that were raised by Senator Siddons, including even the South African connection, were raised in discussions with Mr Holmes a Court and, where relevant, with the Broken Hill Proprietary Co. Ltd as well, in the course of a very substantial and sustained discussion, supported by a quite substantial amount of written material then subsequently. Senator Chipp —Can you tell us with whom that three-hour discussion was held? If you cannot, I will accept that. Senator GARETH EVANS —With whom? Senator Chipp —Was it with the whole Cabinet? Senator GARETH EVANS —No, it was with the seven Ministers. Senator McIntosh —The magnificent seven. Senator GARETH EVANS —The magnificent seven, as Senator McIntosh rightly says. The Ministers were Hawke, Keating, Evans, Button, Dawkins, Bowen and Willis. That is a matter of public record. It was a sustained discussion. All I can say is that we did receive certain assurances, though it was not in a courtroom situation, it was not under oath. In that sense one might argue that there are limitations in that kind of procedure, but in the case of the kinds of information and assurances we received from Mr Holmes a Court in particular and which led us to the conclusion that there was no public interest issue such as required or justified government intervention, on the information presently available the assurances which led us to reach those conclusions were such that I think the following can be said: Mr Holmes a Court's commercial credibility and certainly his credibility with this or any future government would be wrecked beyond repair if it proved to be the case that what he said to us orally and in writing was either inaccurate or in some way misleading. Senator Siddons —If he gets control of BHP, it ceases to matter. Senator GARETH EVANS —From someone with Senator Siddons's commercial experience, as one of the founding fathers of the Australian spanner, that is really a quite extraordinary assertion. Somebody's commercial reputation is absolutely of the essence if that person is to maintain credibility in the market-place, with all the financial institutions and the banks he deals with in any form of ongoing activity, unless one takes the extraordinary view that what Mr Holmes a Court is about is just a raid on BHP in order to strip its assets and then go into retirement thereafter, never to be seen again in any commercial or governmental environment. Senator Siddons —No, he will run the country instead. Senator GARETH EVANS —For someone who is supposed to be adopting an even-handed approach to this issue, as Senator Siddons indicated he was some little time ago, he is not putting a terribly effective face on it in his presentation of the argument. The point I am making is a very serious one. It is not a matter of legal capacity to commit someone for perjury or something of that kind. Obviously, that is not what is in issue here. It is a matter of credibility-credibility commercially and credibility with government. I suppose that the Government has taken a risk by conducting an inquiry of this kind and bearing the burden of being proved later to be wrong. The justification for our being prepared to assume that risk lies in the point I have just made. We believe that those assurances are reliable. The information we have is reliable. It does go to the issues Senator Siddons addressed. Without being in a position to go into any more detail than that, I simply say, as the Prime Minister (Mr Hawke) said in his statement on behalf of the Cabinet, after it had endorsed the report of the seven Ministers, that there is no public interest issue such as justified intervention. Under those circumstances, let us get back to the point in issue here, which is the justification or otherwise for the retention of this form of inquiry mode. The point here remains, as it has been throughout this debate, that whatever the justification may be in some circumstances for some kind of inquiry conducted by someone, the particular procedures, the particular ground rules, the particular criteria that are involved in a body like the Trade Practices Commission, with all the talent and expertise at its disposal and with the best will in the world, are just not appropriate. They are not the appropriate ground rules to be conducting an inquiry where what we have is a bare transfer of monopoly power. Question put: That the amendment (Senator Siddons's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 51 —— Majority . . . . . . . . . 45 —— Chipp, D. L. Sanders, N. K. Haines, J. (Teller) Siddons, J. R. Mason, C. V. J. Vigor, D. B. Archer, B. R. Lewis, A. W. R. Aulich, T. MacGibbon, D. J. Baume, Michael McIntosh, G. D. Bjelke-Petersen, F. I. McKiernan, J. P. Black, J. R. Maguire, G. R. Bolkus, N. Messner, A. J. Boswell, R. L. D. Missen, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Parer, W. R. Childs, B. K. Puplick, C. J. G. Coates, J. Ray, RobertCrichton-Browne, N. A. Reid, M. E. (Teller)Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Durack, P. D. Ryan, S. M. Elstob, R. C. Sheil, G. Evans, Gareth Sibraa, K. W. Gietzelt, A. T. Tate, M. C. Giles, P. J. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Walsh, P. A. Hill, R. Walters, M. S. Jessop, D. S. Watson, J. O. W. Jones, G. N. Withers, R. G. Kilgariff, B. F. Zakharov, A. O. Knowles, S. C. Question so resolved in the negative. Clause, as amended, agreed to. Clause 18 (Mergers and other acquisitions). Senator SIDDONS(Victoria)(3.34) —by leave-I move: Page 8, line 31, leave out `section is', insert `sections are'. Page 8, before proposed new section 50a, insert the following section: ``Acquisitions within Australia `50aa. (1) Where a person, either alone or together with another person or other persons, proposes to make an offer to acquire, or makes an offer to acquire, shares or assets of a body corporate, being an offer that would constitute, or constitutes a take-over offer, the Tribunal may, on the application of the Minister, the Commission or any other person, if the Tribunal is satisfied that the acquisition of those shares or assets by the person- (a) would affect the national economy in a manner opposed to the public interest and would not, in all the circumstances, result, or be likely to result, in such a benefit to the public that the acquisition of those shares or assets should be disregarded for the purposes of this section; or (b) would otherwise be contrary to the national interest, make a declaration accordingly. ``(2) Where a person makes application to the Tribunal under sub-section (1) with respect to the acquisition of shares or assets of a body corporate by another person, the person shall forthwith- (a) serve copies of the application on that other person and on the body corporate; and (b) cause copies of the application, together with particulars of the date on which a copy of the application was served on the body corporate, to be published in newspapers so that, in each State or Territory on the Stock Exchange of which shares in the body corporate are listed, a copy is published in a newspaper circulating generally in that State or Territory. ``(3) Subject to sub-section (5), upon service of a copy of the application on the body corporate, the taking of any action- (a) if an offer to acquire the relevant shares or assets has not been made-for the purpose of, or by way of, making such an offer; or (b) if an offer to acquire the relevant shares or assets has been made-for the purpose of, or by way of, accepting that offer, varying that offer or acquiring shares or assets in pursuance of that offer, is stayed until the application has been finally dealt with and, if, when the application has been finally dealt with, a declaration referred to in sub-section (1) is in force, until that declaration is revoked. ``(4) Sub-section (3) does not prevent the taking, by a person who, either alone or together with another person or other persons, made an offer to which sub-section (1) applies, of action to withdraw the offer, or the taking of any other action consequential on the withdrawal of the offer. ``(5) Without limiting the generality of sub-section (3), the action that is stayed includes any action that may be taken or is required to be taken under or for the purposes of the Companies (Acquisition of Shares) Act 1980 or of a corresponding law of a State or Territory. ``(6) Any action taken contrary to the provisions of sub-section (3) is void and of no effect. ``(7) The Tribunal may, on the application of the Minister, the Commission or any other person, or of its own motion, revoke a declaration made under sub-section (1). ``(8) Where- (a) an application is made under sub-section (1) or (7); or (b) the Tribunal, of its own motion, decides to consider revoking a declaration made under sub-section (1), the Minister, the Commission, the body corporate to which the application relates, the person who proposes to make or has made the offer and, if the application is made by a person other than the Minister and the Commission, that person are each entitled to appear, or be represented, at the proceedings before the Tribunal. ``(9) The Tribunal shall state its reasons in writing for making, refusing to make, revoking or refusing to revoke a declaration under sub-section (1). ``(10) Upon application made by a person who was entitled under sub-section (8) to appear, or be represented, at proceedings before the Tribunal within 21 days after the Tribunal gives its decision in the proceedings, an appeal lies to the Court or the Supreme Court of a State or Territory against the decision of the Tribunal in the proceedings. ``(11) An appeal referred to in sub-section (10) shall be heard by a Court consisting of not less than 3 Justices and the decision of that Court is final. ``(12) For the purposes of sub-section (3), an application under sub-section (1) shall be taken to be finally dealt with- (a) if an appeal against the decision of the Tribunal in the proceedings is not instituted within 21 days after the decision of the Tribunal is given-upon the expiration of that period of 21 days; or (b) in any other case-on the day on which the Court to which an appeal is made gives its decision on the appeal or on which the appeal is withdrawn, whichever first occurs. ``(13) Where the taking of action is stayed by reason of sub-section (3) and the relevant offer is not withdrawn before the expiration of the period during which the taking of action is stayed, upon the termination of the stay, the time within which any action so stayed might have been taken, might be taken or was required or permitted to be taken is, by force of this sub-section, extended for a period equal to the period during which the action was so stayed notwithstanding that that time is fixed by or under an Act of the Commonwealth or a State. ``(14) In this section ``take-over offer'' has the same meaning as it has in the Companies (Acquisition of Shares) Act 1980.''. The second of these amendments will have the effect of giving the Trade Practices Tribunal the power to conduct broad public interest inquiries into any takeover as it deems necessary. It will have the power to investigate an inquiry at its discretion. I believe that I have said enough today to make the Australian Democrats' position abundantly clear. We believe that there must be a tribunal in the land which can assess the public interest or detriment of any takeover, whether it is a takeover of a monopoly or not. It is common in most Western countries to have some safeguard to protect the public against detriment arising from takeovers, and that is all we are seeking to do. Both the Australian Labor Party and the Opposition parties have made it very clear that they are not prepared to support section 50(1a). They want to neutralise the power of that section. So, it is very important that there be some tribunal in the land that can assess what is happening in takeovers of large public companies and whether this is in the public interest. Surely the case of the Holmes a Court takeover of the Broken Hill Proprietary Co. Ltd cannot be construed in any other way than as a matter involving the public interest. Let us just look at the facts, and I will not take up much of the Senate's time. BHP employs 58,000 people. It pays $1.5 billion annually in salaries and wages. Last year BHP reinvested $880m into the business. It controls the steel industry and controls probably the largest reserves of high grade coking coal in the world. It controls Australia's oil industry, has significant interests in natural gas and controls the heavy engineering sector, and three towns-Whyalla, Wollongong and Newcastle-are totally dependent on that company. Steel is a basic raw material and its price affects most of the other metal industries in this country. BHP has a monopoly position which could easily be abused by an unscrupulous board of directors simply by raising the price ahead of the consumer price index. Steel is strategically vitally important to this country, as are oil and coal. For these reasons there is a very vital public interest. The Government has already put $50m a year over the past two years into the steel division of BHP and it intends to put in another $50m. How could anyone say that BHP, its ownership and the way in which it is controlled, whether by one man or by a responsible board of directors, is not a matter involving the public interest? Of course the public has a very considerable interest, to say nothing of the 180,000 shareholders who also want to make sure that they are not being outmanoeuvred by large shareholders in BHP with pro rata bids, partial bids or whatever. If, as the Government wishes, section 50(1a) is neutralised, there is no tribunal in the land that can look into any aspect of a takeover. It is absolutely free and open slather for market forces. I conclude by saying this: We now have in this country a situation where both the major political parties refuse to confront major matters of national importance. Both parties are breaking their necks to hand over as much of the economic power of this country as they can to foreign interests. Both parties use free market arguments to enable governments to renege on their responsibilities to the Australian people to manage the economy in such a way that the interests of the community are safeguarded. The electors of this country are being sold down the river and this enrages and sickens me. Senator PUPLICK(New South Wales)(3.38) —We have reached the stage where, in terms of the discussion of control or acquisition of monopolies and indeed in terms of the whole philosophy of takeovers and takeover practices in Australia, the focus of debate has been almost exclusively placed on the current Broken Hill Proprietary Co. Ltd takeover battle. Senator Siddons has focused, in his remarks on the proposed amendments to both clause 17 and clause 18, almost exclusively on this one incident. He has now sought to introduce into the Trade Practices Amendment Bill 1985 a proposed new section 50aa dealing with a situation in which the Trade Practices Commission is to be authorised to undertake, almost at large, any sort of investigation, which would, in effect, have the consequence of holding up or, in other cases, negating the role of the share market and of individual shareholders in deciding whether a takeover offer should be successful. One could have some degree of sympathy if the actual proposals contained in proposed section 50aa were in understandable terminology. For instance, we are told that the tests are to include whether a takeover `would affect the national economy in a manner opposed to the public interest or . . . would be otherwise contrary to the national interest'. I am curious in that sense alone to know what is the difference between the public interest and the national interest. I certainly do not understand that. One would be slightly more sanguine if in fact the existing public benefit test had really amounted to anything in the past. If one looks at considerations that have been brought into bear as far as this is concerned, for instance, the determination in the case In re Rural Traders Co-operative (Western Australia) Ltd and Others in 1979 the resultant public benefit was described as being: . . . `a net or overall benefit after any detriment to the public resulting or likely to result from the proposed acquisition has been taken into account'. Similarly in the QCMA case there were comments to the effect that anything of value to the community generally would be considered. It was stated: ` . . . the interests of the public as purchasers, consumers or users . . . fall within it- that is, within the public benefit test- and bulk large'. To that extent I do not think that there is anything reliable or concrete that can be adduced to demonstrate what would be the effect. What I am suspicious of is erecting a regime which would have some parallels with the operations of the United Kingdom Monopolies and Mergers Commission which has, I think, on the initiative of the British Government been used on occasions not so much in the `public benefit' or the `national interest' but in the particular interests of the government of the day. Senator Haines —Is that what you think the John Elliott one was? Senator PUPLICK —Senator Haines rightly raises the John Elliott situation. The Elders IXL take-over appears now to be a failed takeover, a thwarted takeover or a postponed takeover. Above all, the essence of that in fact was a reference to the Monopolies Commission which has been used, not indeed as an instrument of national interest assessment or public interest assessment, but as an instrument of government policy of the day to frustrate those takeovers which the government of the day simply did not like, for reasons which very often were indeed purely political in their operation. Senator Haines —Is it not a matter of terms of reference? Will not the criteria for the inquiry determine whether government policy or the public interest or, more importantly, public detriment were taken into account? Senator PUPLICK —If in fact there were criteria which were objectively laid down within the body of the Act, that might indeed be a point worth considering. The actual amendment which stands before us is in terms of proposed new paragraphs (a) and (b) of section 50aa (1). When one looks at terms used interchangeably, such as `public interest' and `national interest', one is almost reminded of the extent of the fast and loose operation of those terms in dealing with freedom of information legislation as a test; they really do not give us very much confidence that in fact they mean anything other than a convenient excuse for governments to interpret entirely at their will. It seems to me that the whole thrust of the amendments which have been proposed are, to a very large extent, designed to have the effect of freeing the operation of the market and of allowing shareholders to make a determination as to whether a takeover bid should or should not succeed. I think it will come as no surprise if I say that I am not a believer in the unrestrained operation, or whatever is for the moment called `the market'. I do believe that by focusing exclusively on the effect that this has, may have, or may not have on the Bell-Broken Hill Proprietary Co. Ltd takeover battle at the moment one is in danger of making, I suppose, bad law out of a hard case. The thrust of the Government's amendment in this regard are very much in line with the approach to reducing some degree of government control and interference with the operation of the private sector to which the Opposition in this instance certainly does not object. Because I believe that Senator Siddons's proposal in fact is likely to have that detrimental effect on the operation of the private sector I do not believe it should be supported. If the concern really were concern particularised to the BHP situation-again, in his remarks on this clause he has drawn almost exclusively on the BHP situation-I put it to him that the more effective way to have proceeded would have been to have supported Senator Durack's amendment in relation to clause 17 of the legislation. I do not believe that setting up the regime which is proposed in Senator Siddons's amendment is in fact now the correct way to proceed. Senator SIDDONS(Victoria)(3.46) —I want to make one suggestion. The intention of this amendment is purely to set up a mechanism that would allow public interest or detriment factors to be considered in the case of an important takeover. If there is some concern-I concede there can legitimately be concern about the actual language of this amendment because it is an important matter-I ask the Opposition whether it would be prepared to accept the principle and leave the wording of the actual amendment perhaps to a Senate committee. Senator GARETH EVANS(Victoria-Minister for Resources and Energy)(3.47) —I think Senator Siddons's latest enterprise is a trifle disingenuous. The Government will oppose this amendment on a number of grounds, most of which have already in fact been canvassed by Senator Puplick in his contribution to this debate. I am happy on this occasion to have left some of the pedantries to some other senator in this chamber rather than being responsible for all of it myself. Senator Puplick —Actually I prefer being insulted by you rather than flattered. Senator GARETH EVANS —I will do my best to oblige Senator Puplick in the future. What Senator Siddons's proposal seeks to do of course is to subject all takeovers, but not mergers, falling outside the takeover code to possible blocking action by reference to the Trade Practices Commission on the initiative, not just as is presently is the case where neither the Trade Practices Commission nor the Minister may initiate such action, but any other person can in fact do so on Senator Siddons's model. The Tribunal accordingly is then given a very largely unfettered discretion to declare that takeover contrary to the national interest. It can have regard to a variety of criteria not necessarily tied in any way to competition effects; not necessarily tied, that is, to the kinds of things the Trade Practices Act and the Trade Practices Commission are all about. It may or may not be a good thing as a matter of public policy to have some sort of mechanism available to deal with certain takeovers which do not necessarily infringe on competition policy guidelines. There is quite a lively argument as to whether the particular machinery, for example which is available in the United Kingdom with the Monopolies and Mergers Commission, the Office of Fair Trading and so on, has been a useful instrument of public policy in the protection of the public interest in that country. There are arguments on both sides of that. There is an argument that might usefully be held, I guess, at some stage in this country. However, the particular proposal which Senator Siddons has come up with is not one that even with a degree of loving care and attention in a committee for a week or so could I breathe back any kind of life into it because the basic concept behind Senator Siddons's amendment is one that is just full of holes. The difficulty to start with-really this is the central problem-is that takeovers would be automatically stayed by a reference to the Commission. Given the capacity of anyone at all to initiate this proceeding any person could block any takeover for an indefinite period while an inquiry was held into the national interest-a question itself which obviously is an indefinite one and difficult to define. What this would allow is virtually untrammelled intervention into the takeover process, not by government armed with some very keen perception of what the national or public interest might be in a particular case, which is the situation in Britain, where the Government plays the crucial role in determining whether these sorts of blocking manoeuvres take effect either temporarily or permanently, but by anyone at all. There would, as a result, be enormous uncertainty. We really would cut a swath through takeover activity in this country. It would be a paradise for takeover defenders, which may in some instances be appropriate in the public interest, but hardly as a general state of affairs, where takeovers must be regarded as one of the ordinary incidents of the capitalist system and one that make it, for better or worse-whatever one's basic ideological position is-work better. Certainly, this Government has no desire whatsoever to remove from the present business system those elements in its dynamics which do make it work effectively and well within its own criteria. What we then have as part of the Siddons model is a conferring on the Tribunal of a wide open discretion to block particular take- overs-after all the sterilisation of the takeover had taken place-and to do so in a way that does not leave any final decision with government, which is again essentially the British model, but rather leaves the decision with the Tribunal itself, subject only to some appeal on the merits to the Federal Court or a State Supreme Court. The proposal as a whole is not one which I understand has met with any enthusiasm at all from the Law Council of Australia, which in other respects has been something of a guiding light to the Australian Democrats' front bench, if not to its back bench. I just mention that not out of any spirit of scoring a quick debating point, but simply to indicate that to those who would have to make this particular proposal work, it just is not a goer. There are three technical points I also want to quickly make, and which no doubt I suppose could be remedied but not without some damage being caused to the concepts which lie behind this particular model. In the first place, the amendment, by referring to bodies corporate in general terms, without confining it to the categories of corporation identified in the Constitution, is to that extent unconstitutional and runs beyond constitutional bounds. As I say, that is remedial but it indicates the rather quick way in which this draft has obviously been put together and the fact that it is unacceptable in its present form. A much more substantial problem with the present draft, again a technical constitutional problem, is that it provides in proposed sub-section (10) for an appeal to a court from the Tribunal on the merits. But we cannot have in our system an appeal from a tribunal to a court on the merits. The Constitution provides that judicial power can be exercised by courts and non-judicial power can be exercised by non-courts, and never the twain shall meet. While we can have a review procedure from tribunals to the courts to ensure that the tribunals have behaved properly according to the rules of natural justice, or whatever, and have used fair decision-making procedures we cannot have a review on the merits. That point has not been fully appreciated by the drafter of this and there are basic flaws with this particular model as a result. There is a further problem with proposed section 50AA sub-section (5), which would modify the Companies (Acquisition of Shares) Act and thereby would be in breach of the Commonwealth-State formal agreement-clause 47 (1) of it for the enthusiasts among us-unless it was first agreed to by the Ministerial Council for Companies and Securities. So quite apart from anything else, we could not enact that particular part of the model. Again, sub-section 50AA (4) may also modify the Companies (Acquisition of Shares) Act and thereby be in breach of the formal agreement in that from 31 March the offeror must get the consent of the NCSC to withdraw an offer. That follows by virtue of section 21 of the agreement. So for a variety of reasons of high principle, practicality and legal pedantry, the Government resists the Siddons amendment and urges the Committee to vote accordingly. Senator SIDDONS(Victoria)(3.55) —Senator Gareth Evans has mouthed many of the objections of the Law Council of Australia to the wording of the amendment. It is a matter of fact that lawyers do not always agree. My legal advice is that a tribunal does have the authority-it is a matter of fundamental right whether a tribunal can decide to conduct a hearing. It does not have to act on any trivial case that is put before it. That clearly is the position as far as my legal advice is concerned. There is dis- agreement between lawyers. I want to make this point because Senator Evans has tended to denigrate that amendment as though it were ill-conceived and as though there were only one possible legal interpretation of it. I make the point that his legal point scoring could easily be challenged legally by other opinions. I do not believe this is the place to conduct such a debate. The amendment was drafted not hastily, but carefully and with the best advice available. The intent is quite clear. I believe that to sustain the point, as the Law Council tried to do last night, that anybody could write to the Tribunal and hold up a takeover for an indefinite time is not the intent of the words of this amendment. In my view and in my advisers' view it is a misinterpretation of it. Senator DURACK(Western Australia)(3.56) —The Opposition is opposed to Senator Siddons's amendment which proposes to insert into the Trade Practices Act a new section to provide for wide-ranging inquiries in regard to all takeover offers. The Opposition is opposed to it not for any technical reasons which may or may not be able to be fixed up by a committee consideration of it-Senator Gareth Evans has already made mention of this-but we are opposed to it quite firmly on philosophic grounds. This amendment clearly defines the very great gulf there is between their attitude to takeovers and that of the Opposition. Fortunately, it seems to be a view which the Government, or the majority of the Government, shares with the Opposition. We already have had a debate in the Senate on a motion by Senator Siddons expressing his and the Democrats' attitude to takeovers. We have had a great deal of public comment on takeovers from the Democrats over the last few weeks since this became the subject of major debate. It is quite clear that the Democrats' attitude is one which is highly interventionist, highly regulatory. The Democrats want to have the Government, or some agency of the Government, deeply involved as a monitor and controller of takeover activity. This proposal by Senator Siddons goes far beyond anything which we have been debating or which has been debated in the public arena about the BHP takeover. This amendment, it must be remembered, is not another form or extension of the problem with takeovers of monopolies that section 50 (1) and section 50 (2C) have addressed. This proposal refers to all takeovers: `constitutes a takeover offer', the amendment reads. In no way is it confined to the problem we have been debating today and which has been debated in recent days in the public arena about takeovers of monopolies. The difference between the Australian Democrats and us on this is a very deep one indeed. There is no way in which we, on principle, in a discussion with the Democrats would be able to come to some agreement on this sort of proposal. Not only does it apply to all takeovers; as Senator Puplick has already pointed out, it applies criteria which are enormously wide, apart from being enormously vague. So the inquiry would be of the most wide-ranging kind in relation to both takeovers and the considerations that are to be taken into account by the body that is looking into takeovers. Then, of course, that body finally would have this very great power to stop such a takeover taking effect. Leaving aside the question of whether it is possible to do so or not-there is an appeal process-the fact is that this body would be given these enormous powers not only over what are ordinary and common commercial activities and arrangements but also over what, in the Opposition's view, in most cases are very valu- able activities. I am very pleased to see that Senator Evans and the Government seem to have a so much better appreciation of the capitalist economy than they used to have. It goes to the very heart of making the system work. There can be exceptions to any rule, but by and large the likelihood of takeovers, and in many cases the exercise of the right of takeover, proves highly beneficial. Therefore, we could not be a party to any proposals to control takeover activities which would inhibit the whole process to the extent that the Democrats obviously wish. At least we must be grateful that in this amendment the Democrats are giving full expression to their views about takeover activity. Even if there could be advanced a case for a means of investigating a takeover of a monopoly, our view is as we have just expressed it-by a vote here we have given clear affirmation of it-that is, that the powers which presently are in the Trade Practices Act to investigate a takeover of a monopoly are not appropriate. That would be our view even if a different proposal which may have greater commendation could be advanced. However, we are not faced with that. The Government has not put forward such a proposal and the Opposition has not fully investigated it at this point either. No doubt it is something that a lot of people will be thinking about in the light of this experience. Even if there were some other way of approaching this question, in the Opposition's view it certainly would not be of the kind that the Democrats are suggesting in this amendment. As I said, for very deep and strong philosophic reasons and because of the very good and strong arguments that can be advanced in favour of improving and maintaining the present economic system or capitalist system-whatever you like to call it-the Opposition simply could not support the sort of approach that is embodied in Senator Siddons's amendments. Although I was rather amused to hear the suggestion that we and the Democrats might be able to get together-in fact, in a committee-in view of the Democrats' strong vote against the Opposition's proposal to refer the whole of this Bill to a committee, on behalf of the Opposition I can assure Senator Siddons that we certainly do not see any likelihood of being able to reach agreement on this sort of proposal. We will vote against it. Senator SIDDONS(Victoria)(4.05) —I thank Senator Durack for at least making the Opposition's position clear; that there is, as he said, a wide gulf of principle or philosophy separating the Democrats and the Opposition in the initiative this amendment represents. He has made the Opposition's position very clear. There is no change of words that could bridge that gulf. At least we are clear about that. I reiterate that we are being governed at the moment by a parliament which has both the Government and the Opposition in absolute agreement on economic management; that is, hands off the economy, no government interference, let the market forces rule. That is commonly called the dry approach. We have a government which if it were any drier would spontaneously combust, supported by an opposition. It is a tragedy for the country. I say no more. Question put: That the amendments (Senator Siddons's) be agreed to. The Committee divided. (The Chairman-Senator D. J. Hamer) Ayes . . . . . . . . . . . 6 Noes . . . . . . . . . . . 50 —— Majority . . . . . . . . . 44 —— Chipp, D. L. Sanders, N. K. Haines, J. Siddons, J. R. (Teller)Mason, C. V. J. Vigor, D. B. Archer, B. R. Lewis, A. W. R. Aulich, T. MacGibbon, D. J. Baume, Michael McIntosh, G. D. Bjelke-Petersen, F. I. McKiernan, J. P. Black, J. R. Maguire, G, R. Bolkus, N. Messner, A. J. Boswell, R. L. D. Missen, A. J. Brownhill, D. G. C. Morris, J. Carrick, Sir John Parer, W. R. Childs, B. K. Puplick, C. J. G. Coates, J. Ray, RobertCrichton-Browne, N. A. Reid, M. E. (Teller)Crowley, R. A. Richardson, G. F. Devlin, R. Robertson, E. A. Durack, P. D. Ryan, S. M. Elstob, R. C. Sheil, G. Evans, Gareth Sibraa, K. W. Gietzelt, A. T. Tate, M. C. Giles, P. J. Teague, B. C. Guilfoyle, Dame Margaret Townley, M. Hamer, D. J. Walsh, P. A. Hill, R. Walters,. M. S. Jessop, D. S. Watson, J. O. W. Jones, G. N. Withers, R. G. Knowles, S. C. Zakharov, A. O. Question so resolved in the negative. Progress reported. Senate adjourned at 4.14 p.m. The following papers were tabled: Australian Meat and Live-stock Corporation Act-Order 1986-MS 10-Contract Requirements-Shipping of Meat to North America, dated 28 February 1986. Census and Statistics Act-Regulation-Statutory Rules 1986 No. 30. Health Insurance Act-A Statement of particulars of a Ministerial determination authorised under Section 106aa, dated 3 March 1986. Lands Acquisition Act-Land, etc., acquired for Telecommunications services-Grant, Victoria, dated 30 January 1986. The following answers to questions were circulated: (Question No. 156) Senator Bolkus asked the Minister representing the Treasurer, upon notice, on 27 March 1985: (1) Does the Reserve Bank of Australia monitor the overseas operations of Australian banks. (2) What prudential controls are placed on the overseas operations of Australian banks. (3) Could Australian taxpayers, through the Reserve Bank of Australia, be called upon to provide ``lender of last resort'' or other liquidity support facilities to the overseas operations of Australian banks in the event of possible circumstances overseas. (4) Under what circumstances would those facilities be provided and what is the nature of those facilities. (5) Has the Reserve Bank of Australia entered into any arrangements with the Central Bank of any other country to jointly provide emergency liquidity or other support for banks operating in Australia and another country. (6) What are those arrangements. (7) Do these arrangements clearly delineate the responsibilities of the Reserve Bank of Australia and other central banks. (8) In what way are those responsibilities delineated. (9) Do Australian banks operate in any country with limited or no ``lender of last resort'' facilities. (10) Does the Reserve Bank of Australia assume any such responsibilities in such countries. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: (1) Yes. (2) Please refer to answer to part 9 of Question No. 155. (3) and (4) The Reserve Bank has power, at its discretion, to lend to an Australian bank but the Reserve Bank does not assume any specific responsibility of this nature. (5) No. (6) to (8) See answer to (5). (9) Australian banks operate in 13 overseas countries. Arrangements for access by banks to lender-of-last-resort facilities differ from country to country. The bulk of Australian banks' overseas operations is conducted in the UK, US and New Zealand where arrangements by the local monetary authorities to make liquidity available in the local currency are well established. In respect of access to liquidity in international financial markets, the central bank governors of the countries of the Group of Ten (i.e. Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States) and Switzerland in 1974 ` . . . had an exchange of views on the problem of the lender-of-last-resort in the euro-markets. They recognised that it would not be practical to lay down in advance detailed rules and procedures for the provisions of temporary liquidity. But they were satisfied that means are available for that purpose and will be used if and when necessary'. (Bank for International Settlement press communique 10 September 1974). (10) Please refer to answer to part 2 of Question No. 154. (Question No. 548) Senator Zakharov asked the Minister for Community Services, upon notice, on 16 September 1985: (1) What committees and consultation procedures have been established by the Department of Community Services to allocate priorities for funding under the Children's Services Program. (2) What organisations are represented on these committees. (3) What is the proportion of community members and departmental officers represented on these committees from both State and Federal levels, and in each State. (4) What mechanisms exist for appeals against funding decisions made under the Children's Services Program. Senator Grimes —The answer to the honourable senator's question is as follows: (1) Planning Committees have been established in each State and Territory to provide broad advice to me on high priority geographical areas of need for services and the most appropriate services to meet these needs. The Committee's advice is based on its knowledge of and involvement in the children's services area, local area discussions and consultation, on analysis of demographic and service delivery statistics and on review and utilisation of existing services. (2) The organisations represented on these committees vary between States and Territories: Those represented are listed below: NSW Planning Committee Rural representatives Department of Community Services Community Services Development Officer Labour Council Local Government representatives Community Child Care Children's Services Resources and Development Ltd Sydney University Lady Gowrie Child Care Contact (Project for isolated children) Department of Youth and Community Services Family Day Care Association Occasional Care Association NSW Australian Early Childhood Association (AECA) Family and Children's Services Agency (FACSA) Aboriginal Services representative Ethnic Child Care Co-op Network NSW Field Worker Association Victorian Planning Committee Commonwealth Department of Community Services Department of Aboriginal Affairs State Department of Community Services Municipal Officers Association Community Child Care Department of Premier and Cabinet Ministry of Housing Queensland Planning Committee Department of Community Services State Department of Children's Services Australian Early Childhood Association (Qld) Kindergarten and Creche Association Queensland Council of Social Welfare Brisbane College of Advanced Education Outside School Hours Care Association Director of a Child Care Centre Aboriginal and Islander Child Care Agency AECA: Lady Gowrie Child Care Centre Schonnel Education Research Centre Family Day Care and Brisbane Kindergarten Teachers' College Queensland Children's Activity Network Queensland Child Care Centre: Social Worker Community Development Officer Belyander (Central Queensland representative) Social Geographer Director/Administrator North Queensland representative Western Australian Planning Committee Commonwealth Department of Community Services State Department for Community Services State Education Department WA Multicultural and Ethnic Affairs Commission Australian Early Childhood Association (WA Branch) National Association of Community Based Children's Services (WA Branch) Aboriginal representatives Two rural representatives Family Day Care Association Out of School Hours Child Care Association Trades and Labour Council South Australian Planning Committee Department of Community Services ECRAU (Early Childhood Resources Advisory Unit) Aboriginal Child Care Agency Migrant Women's Advisory Group South Australian Association of Subsidised Child Care Centres South Australian Council of Social Service Rural representative Children's Services Officer Facilities Planning Officer Consultant (Child Care) Community and Neighbourhood House Association National Association of Community Based Children's Services Child Adolescent and Family Health Services Tasmanian Planning Committee Department of Community Services Department of Community Welfare, Division of Health Australian Early Childhood Association Nursery and Child Care Association of Tasmania Municipal Association of Tasmania Department of Education Department of Community Welfare Northern Territory Planning Committee Department of Community Services Local Government Association Alice Springs Community Based Children's Service Aboriginal Children's Services (Alice Springs) (Darwin) Darwin Community Based Children's Services Children's Services Bureau Family and General Services Department of Youth, Sport, Recreation and Ethnic Affairs Ethnic Services Department of Community Development A.C.T. Planning Committee Department of Community Services Department of Territories Belconnen Community Services Woden Community Services A.C.T. Council of Social Services (3) In the majority of States, community members outweigh representation of State and Commonwealth Departmental Officers. The proportions are listed below: NSW 2 Commonwealth Departmental Officers 2 State Departmental Officers 13 Community Members Victoria 3 Commonwealth Departmental Officers 3 State Departmental Officers 2 Community Members Queensland 2 Commonwealth Departmental Officers 2 State Departmental Officers 12 Community Members WA 2 Commonwealth Departmental Officers 3 State Departmental Officers 9 Community Members SA 2 Commonwealth Departmental Officers 3 State Departmental Officers 10 Community Members Tasmania 2 Commonwealth Departmental Officers 4 State Departmental Officers 3 Community Members NT 2 Commonwealth Departmental Officers 7 State Departmental Officers 7 Community Members ACT 3 Commonwealth Departmental Officers 4 Community Members (4) There are no formal appeal mechanisms in relation to decisions under the CSP. However, if an organisation feels it has reasonable grounds for objecting to a decision, it should contact the Office of Child Care within my Department's Central Office. Of course, applications for specific documents may be made under the Freedom of Information Act. (Question No. 565) Senator Mason asked the Minister representing the Treasurer, upon notice, on 19 September 1985: (1) Was the action of the executive management of the Commonwealth Banking Corporation in 1974 to remove Mr R. J. Doolan from the management of the Moruya, New South Wales (NSW) branch of the Corporation, after almost 31 years of above average achievement on behalf of the Corporation, related in any way to any complaint to the Corporation by Moruya solicitor Hugh Junior McHugh; if so, what was the date and nature of the complaint first received from Mr McHugh. (2) Did the executive management of the Commonwealth Banking Corporation inform Mr Doolan of such a complaint at the time it was first received. (3) Is the Hugh Junior McHugh who made the complaint against Mr Doolan the same man who was sentenced by Judge Court in the NSW District Court in June 1984 to 8 years gaol for fraud. (4) Did Mr Doolan, in March/April 1974 bring a legal case before the Disciplinary Appeals Board of the Commonwealth Banking Corporation against his removal/transfer, under section 108 of the Commonwealth Banks Act 1959. (5) Did the Executive management of the Commonwealth Banking Corporation argue before the Disciplinary Appeals Board that the Board had no jurisdiction in this area; if so, what were the grounds for this argument. (6) Did the Disciplinary Board accept that it had no jurisdiction in the matter on the grounds given by the Corporation. (7) Was the Corporation required to state in writing the particulars of the action taken by the Corporation in respect of which the appeal had been lodged, and the Corporation's reasons for taking that action, under section 35 (1) of the Commonwealth Banks Act Service Regulations; if so, was this done by the Corporation, and what was the precise wording of the particulars stated. (8) Did the Chairman of the Disciplinary Appeals tribunal have the power, under section 35 (2) of the Commonwealth Banks Act Service Regulations, to direct the Corporation to furnish further particulars; if so, was the Chairman asked to use this power, and did he decline to do so. (9) Did the Chairman, in reaching his decision on this matter say to the hearing, ``It might be, of course, that the Chairman has the power, under that Regulation [35 (2)] to ask the Corporation to supply further particulars; but it cannot force the Corporation to furnish some other reason''. (10) Did section 35 (2) of the Commonwealth Banking Corporation Service Regulations specifically state: ``The Chairman of the Disciplinary Appeal Board may direct (the Corporation) that further particulars be furnished, and the Corporation shall furnish further particulars accordingly.'' (11) Did the executive management of the Commonwealth Banking Corporation introduce Hugh Junior McHugh, a Moruya solicitor, as a witness against Mr Doolan in the case brought by Mr Doolan before the Disciplinary Appeals Board against his removal/transfer; if so, was Mr McHugh the same Moruya solicitor sentenced by Judge Court in the NSW District Court in June 1984 to eight years gaol for fraud. (12) What was the date in 1974 that Hugh Junior McHugh was introduced as a witness for the Corporation before the Disciplinary Appeals Board. (13) Had the executive management of the Corporation informed Mr Doolan of any complaint made by Mr McHugh against him prior to introducing Mr McHugh as a witness. (14) Had the executive management argued before the Disciplinary Appeals Board that Mr Doolan had not been disciplined, prior to introducing Mr McHugh as a witness. (15) Did the Disciplinary Appeals Board rule on 25 June 1974 that: (a) `. . . the Corporation . . . did in effect come to the conclusion that the appellant (Mr Doolan) was either inefficient, incompetent or unfit' and (b) that accordingly it did have jurisdiction to hear Mr Doolan's appeal against such disciplinary action. (16) Does the transcript of the Disciplinary Appeals Board hearing confirm the introduction of Hugh Junior McHugh as a witness for the Commonwealth Banking Corporation against Mr Doolan. (17) Has the executive Management of the Commonwealth Banking Corporation and/or the Chairman of the Disciplinary Appeals Board consistently refused Mr Doolan's requests for a copy of the transcript of the Board hearing following the arrest of Hugh Junior McHugh. (18) Did Mr Doolan recommend to a senior inspector of the Commonwealth Banking Corporation, Mr Arthur P. Steer, in December 1973, that solicitor Hugh Junior McHugh should be reported to the NSW Law Society for forgery and unprofessional conduct; if so, is there evidence supporting such a recommendation in the Corporation's own records. (19) Did Mr Steer subsequently advise Mr Doolan that he would be removed from management and transferred to the relieving staff without promotion. (20) Did Mr Steer refuse to discuss the reasons for the transfer on the grounds that it would be defamatory to do so. (21) Did Mr Steer then direct Mr Doolan to sign a written acknowledgement that Mr Steer had discussed the report with Mr Doolan. (22) Did the Regional Manager of the Commonwealth Banking Corporation, Mr A. Roger Cox, in January 1974: (a) offer Mr Doolan a transfer to relieving staff without promotion; and (b) inform Mr Doolan that he (Mr Cox) had been directed to remove Mr Doolan from the Management of the Moruya branch. (23) Did Mr Doolan, in January/February/March 1974 personally approach the then Managing Director of the Commonwealth Banking Corporation, Mr B. B. Callaghan about this matter in writing; if so, what response did he receive from Mr Callaghan. (24) Did Mr Doolan in January/February/March 1985 personally approach the current Managing Director of the Commonwealth Banking Corporation, Mr Vern Christie, about this matter in writing; if so, what response did he receive from Mr Christie. (25) Did the executive management of the Commonwealth Banking Corporation at any time employ a private detective to investigate Mr Doolan. (26) Is the Chairman of the Disciplinary Appeals Board of the Corporation intended to be totally free and independent of any instruction or advice from the executive management of the Corporation, under the Commonwealth Banks Act. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: Under the terms of the Commonwealth Banks Act 1959, the Board of the Commonwealth Banking Corporation (Corporation) has the power to determine the policy of the Corporation and its constituent banks and to control their affairs. Subject to that provision, the Managing Director of the Corporation is empowered to manage the Corporation. In view of the responsibilities of the Managing Director for the affairs of the Corporation, I sought his advice in respect of the questions raised by the honourable senator. The Managing Director has advised as follows in respect of each of the points raised: (1) No. (2) & (3) There was no such complaint. (4) On 11 April 1974 Mr Doolan appealed under section 108 of the Commonwealth Banks Act to the Disciplinary Appeal Board (now the Tenure and Disciplinary Appeal Board) against his transfer on promotion, to the position of a Relieving Manager, NSW. (5) Counsel for the Corporation submitted that the Board had no jurisdiction to hear the appeal on the grounds that the right to appeal to the Board against transfers only arises when a transfer is made under s.106 or s.107 of the Act, which transfers have an element of discipline, and no right of appeal existed under s.108 against a transfer on promotion. (6) No. (7) Yes. The Corporation provided the following particulars: `Pursuant to Regulation 35 of the Commonwealth Banking Corporation Service Regulations, Commonwealth Banking Corporation hereby supplies particulars of the action taken by the Corporation in respect of which the appeal has been lodged by Robert John Doolan and the reasons for taking that action. 1. The action taken by the Corporation in respect of which the appeal has been lodged was as follows: The applicant was promoted to the position of Relieving Manager, NSW, on 3 April 1974. 2. The Corporation's reasons for taking the above action were:- It considered that promotion of the Applicant to the position of Relieving Manager would be a more effective use of his services than retention of him as the Manager of Moruya branch, Dated this eighteenth day of April 1974.' (8) The Chairman of the Board did have power to direct that further particulars be furnished by the Corporation. Counsel for Mr Doolan at the Board's hearing made submissions to the Chairman to the effect that the Chairman should exercise his power under Regulation 35 (2) of the Commonwealth Banking Corporation Service Regulations to direct further particulars to be furnished. The Chairman made no ruling and issued no direction in regard to that submission. (9) Yes. The Chairman said: `It might be, of course, that the Chairman has power under the Regulation to ask the Corporation to supply further particulars, but it cannot force the Corporation to furnish some other reason. The onus might be on the appellant to prove the real reason behind it was something else.' (10) Yes, except that the brackets and the words `the Corporation' do not appear in Regulation 35 (2). (11) No. After Mr Doolan gave evidence before the Board of the reason for transfer four years earlier of the trust account of Messrs Hugh McHugh and McHugh to another bank, the Corporation caused a summons to be served on Hugh Junior McHugh to give evidence of his reasons for the transfer of that account, but at the commencement of the next hearing before the Board Mr Doolan withdrew his appeal. Mr McHugh did not give evidence before the Board. (12) On 12 July 1974 Hugh Junior McHugh was requested by the Corporation to give evidence before the Board. A summons to Mr McHugh to give evidence was served on him on 15 July 1974, but Mr Doolan withdrew his appeal that day and Mr McHugh was not called to give evidence. (13) Hugh Junior McHugh had not made any complaint against Mr Doolan. (14) Counsel for the Corporation did argue before the Board that Mr Doolan had not been disciplined. Mr McHugh did not appear as a witness. (15) Yes. (16) No. The transcript shows that, after the appeal had been withdrawn by Mr Doolan, Counsel for the Corporation, when dealing with the question of costs, mentioned to the Board he would have been making an application to call Mr McHugh as a witness that day. (17) As to the Corporation, yes. As to the Chairman of the Disciplinary Appeal Board, yes so far as the Corporation is aware. (18) So far as the records of the Corporation show and so far as the Corporation is otherwise aware, Mr Doolan did not recommend to a senior inspector of the Commonwealth Banking Corporation, Mr Arthur P. Steer, in December 1973, that solicitor Hugh Junior McHugh should be reported to the N.S.W. Law Society for forgery or unprofessional conduct. (19) No. Mr Steer did prepare a written assessment on the performance of Mr Doolan in December 1973. The assessment by Mr Steer listed and contained material comment on the main strengths and least effective aspects of Mr Doolan and that information was included in the information taken into consideration when Mr Doolan was transferred on promotion, but the transfer or promotion of all Branch Managers, is, and was at the time, a matter for consideration by very senior officers in the Corporation and at the time was ultimately a matter for decision by the Managing Director. (20) and (21) The answer to both of these questions is no. The Corporation's records show that the subject assessment has endorsed the report prepared by Mr Steer with the words: 2. `I acknowledge that the above report has been read by and discussed with me.' The subject assessment has the following further relevant endorsement on it: `I had refused to provide him with the persons' names who had influenced me to make the statements in the report under `least effective aspects'. I informed him that the reason I was not willing to give him their names was that he would probably sue them for slander. He agreed that this was correct. I have not seen his statement.' (22) The answer to both parts of this question is no. The records of the Corporation show that following receipt of the assessment dated 19 December 1973 of Mr Doolan, Mr Cox telephoned Mr Doolan during January 1974 regarding submission of a statement by Mr Doolan in reply to that assessment. The records of the Corporation show that Mr Cox recalls asking Mr Doolan whether he would accept a transfer from Moruya on grade to Relieving Manager if offered by the Bank. Mr Doolan's reply was in the negative and the matter was not pursued by Mr Cox. (23) Yes. The then Managing Director of the Corporation received letters dated 31 January 1974 and 27 March 1974 from Mr Doolan. By letter dated 1 April 1974 the then Managing Director of the Corporation replied to Mr Doolan in the following terms:- `I have received your letter of 27 March, together with attachments. I have carefully read what is said but, as I see the situation, your letter contains nothing which suggests we might have been in error in approving your recent promotion. I note you refer to a transfer but what is involved is a promotion, on transfer, to higher status in the Corporation.' (24) Yes. A letter dated 15 January 1985 addressed to the current Managing Director of the Corporation signed by Mr Doolan was received on 17 January 1985. Having regard to the number of times the content of that letter had been the subject of consideration and response by the Corporation, to the request in that letter for a response before 6.00 p.m. Friday January 18, 1985 and to the statement by Mr Doolan in that letter that` if I do not hear from you by the above date, I will act on the basis that you intend to take no action,' the Managing Director of the Corporation accepted the advice of its Chief Solicitor that `In view if the unrealistic time limitation imposed by this letter and as Mr Doolan's complaints have been fully considered over an extended period, no further action or correspondence seems to be warranted'. (25) No. (26) The Chairman of the Tenure and Disciplinary Appeal Board (formerly the Disciplinary Appeal Board) is and was at the relevant time intended to be and is totally free and independent of any instruction or advice from the Corporation or its executive. (Question No. 607) Senator Missen asked the Minister representing the Prime Minister and/or the Minister for Immigration and Ethnic Affairs, upon notice, on 8 October 1985: (1) Will the Government, in relation to the Cabinet decision of 17 July 1985 referring to the rejection of the refugee and/or permanent residence status for Ignasius Samkakai, Antonius Gebze, Matheus Yolmen, Ignasius Kaise and John Phillips who entered Australia on 10 June 1985 and are held on Thursday Island, make available copies of: (a) the Cabinet Minute of 17 July 1985; and/or (b) the original Cabinet Minute of the same date for which the now existing minute was substituted. (2) Was the decision so made by Cabinet in conflict with (and if so, in what respect): (a) Article 1 of the United Nations (UN) Convention relating to the status of refugees; (b) section 6A of the Migration Act 1958; (c) section 41 of the Migration Act 1958; (d) the Racial Discrimination Act 1975 of the Commonwealth, and (e) any other and which Commonwealth laws. (3) Will the Government provide copies of the transcripts of statements made by the five men referred to in (1) taken by the representatives of the Commonwealth and presented to the Committee on the Determination of Refugee Status. Senator Grimes —The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator's question: (1) and (2) I do not propose to answer questions directed to the detailed operations of Cabinet. This advice is consistent with advice conveyed by the Prime Minister PQ50 (HR Hansard 16 April 1985, page 1228-1229) and with practices of successive Governments-reference, for example, Mr Fraser's answer to PQ1486 (HR Hansard 4 October 1977, page 1617). (3) No. Successive Governments have given, in respect of all refugee status claims, a specific guarantee to all applicants for the grant of refugee status. This confidentiality guarantee is, in my view, absolute. The reasons for such confidentiality should be obvious to all. (Question No. 738) Senator Reynolds asked the Minister representing the Minister for Health, upon notice, on 2 December 1985: (1) Will the Brisbane Women's Health Centre close next week because the Queensland Government will not allocate any of its $3.1m Community Health Funds to women's health. (2) Can the Minister for Health indicate if women's health projects are funded from community health funds and to what extent other States are accepting responsibility for such projects given that the Federal Government allocates Community Health Funds to the States. (3) Will the Minister urgently investigate the need for a full inquiry into just how Queensland does spend its Federal Community Health Funds, in view of the Queensland Health Minister's complete rejection of the need to fund Aboriginal, migrant or women's health projects, to see to what extent the State Health Department uses the fund to supplement State Government education/welfare and health programs rather than initiate realistic community based health programs as developed in other States. Senator Grimes —The Minister for Health has provided the following answer to the honourable senator's question: (1) Through a Commonwealth grant of $10,000 under the National Consultation and Assistance Program for Women, the Brisbane Women's Health Centre is continuing to operate at a scaled down level. These funds are additional to those provided to the Centre by the Commonwealth during 1985 under the Commonwealth Employment Program. To the best of my knowledge, the Queensland Government has never funded the Centre. The $3.1 million to which the honourable senator refers was made available to Queensland in 1985/86 under the Medicare Agreements, for new or expanded community health services. I am advised that the Centre unsuccessfully approached the Queensland Government for funding. (2) Flowing from a decision of the previous Government, from July 1981, Community Health Program grants were absorbed into the identified health grants which now form part of the general revenue grants to the States. Under these arrangements, it is for each State to determine its own priorities for how these funds are allocated. There is no requirement on the States to inform the Commonwealth of the manner in which the funds are disbursed. While it is possible to identify expenditure of funds made available under the special additional grants under the Medicare Agreements-and the $3.1 million to Queensland was such a grant-those funds account for only $18 million of an estimated $200 million spent on community health services in that year. To identify funds spent on women's projects specifically from that $18 million would probably give a distorted picture of total expenditure by the States on women's health services. (3) No. Under the agreements by which the Commonwealth funds are provided to the States for community health services, I cannot direct any one State in its use of these funds. However, I can assure the honourable senator that I am aware of the difficulties being faced by women's health groups in Queensland. Last year, officers of my Department attended a meeting convened by the Office of the Status of Women in Brisbane to discuss the matter. The meeting was attended by representatives of a number of community organisations with interests in women's health. Following that meeting, a Queensland Women's Health Network was established. I am hopeful that that Network will become an effective lobby group for women's health interests in Queensland. (Question No. 739) Senator Reid asked the Minister representing the Treasurer, upon notice, on 2 December 1985: What was the cost of the advertisement placed by the Department of Finance which appeared on page B11 of the Canberra Times dated 30 November 1985 for a Clerical Assistant Grade 3, which was 2 columns wide and approximately 20 centimetres long. Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question: The Department of Treasury did place an advertisement in the Canberra Times on 23 November 1985 seeking applications for a Clerical Assistant Grade 3 position. The advertisement was 2 columns by 10 centimetres and cost $86. The Department did not place an advertisement in the Canberra Times on 30 November 1985; staff at the Canberra Times mistakenly substituted the Treasury copy from 23 November 1985 for an advertisement placed by another Department for 30 November 1985. (Question No. 801) Senator Bolkus asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice, on 12 February 1986: How is it anticipated that illegal immigrants who do not have an ID card will be detected, and by whom. Senator Grimes —The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator's question: The major benefit of the Australia Card system in relation to illegal immigration is not so much the detection of illegal immigrants but the disincentive to illegal immigration. Because the proposed system would require potential employers and government agencies to sight the Australia Card and quote the ID number, it would be difficult for illegal immigrants to obtain employment or to obtain cash benefits from Government agencies. Without an income as a continuing means of support, the potential opportunity for an illegal immigrant to remain in Australia is reduced considerably. (Question No. 906) Senator Reynolds asked the Minister representing the Minister for Primary Industry, upon notice, on 18 February 1986: (1) What are the number of primary producers assisted under the Rural Adjustment Scheme over the following periods: (a) 1980-1981 (b) 1981-1982 (c) 1982-1983 (d) 1983-1984 (e) 1984-1985 (f) 1985-1986 (2) Can the Minister for Primary Industry detail the budget allocation for the Rural Adjustment Scheme for each of these periods. (3) Are there any plans to develop a comparable urban adjustment scheme to assist small business people when they experience similar financial difficulties over which they have no control. Senator Walsh —The Minister for Primary Industry has provided the following answer to the honourable senator's question: (1) (a) 588, (b) 566, (c) 613, (d) 1634, (e) 877, (f) for the 7 months ended 31 January 1986, 577 (2) (a) $16.6m, (b) $16.2m, (c) $17.3m, (d) $43.2m, (e) $30.5m, (f) $16.8m* * This figure is not comparable with previous years. $10m provides for approvals made but not funded in 1984/85. Under the new Scheme, which commenced on 1 July 1985, the Commonwealth now provides an interest subsidy for Parts A & B which in 1985/86 would allow the equivalent of borrowings in the order of $38.7m if a full 50% interest subsidy is applied. Under Part A the Commonwealth provides interest subsidy of up to 50% of the cost of borrowings for debt reconstruction, farm build-up and farm improvement assistance. Under Part B, carry-on finance, the Commonwealth and State(s) provide equally interest subsidy up to 50% of the cost of borrowings. The Commonwealth also provides all the assistance required under Part C (household support and rehabilitation) of the Scheme. (3) No. Senator Walsh —On 11 September 1985 (Hansard, page 450), Senator Parer asked me, as Minister representing the Treasurer, a question without notice concerning overseas debt and the Government's foreign investment policy. The Treasurer has provided the following information in answer to the honourable senator's question: The Government has recently announced a number of modifications to foreign investment policy designed to further streamline procedures for the screening of foreign investment proposals, ease the policy criteria for certain types of investment proposals and exempt other proposals from examination. The policy liberalisation contributes to the Government's wider aim of reducing, wherever possible and consistent with its economic and social goals, the burden on business of Government regulation. Based on past experience, the changes will exempt from the Foreign Takeovers Act and foreign investment policy about 13 per cent of all proposals and increase by about one-fifth (to more than half) the proportion of proposals which may proceed, in the absence of special circumstances, without being subject to detailed examination. The Government believes that the changes to its foreign investment policy will encourage overseas equity investment that brings worthwhile economic benefits to Australia. Senator Grimes —On 19 September 1985 (Hansard, page 749), Senator Harradine asked me, as Minister representing the Minister for Health, a question without notice concerning hospital day care benefits. The Minister for Health has provided the following information: The basic aim of the hospital day care legislation, which came into effect as from 1 September 1985, was to rationalize and co-ordinate payments of fund hospital benefits for private hospital patients and payments of the Commonwealth daily bed subsidy. Before 1 September 1985, patients had to be in a private hospital for at least 8 hours for the hospital to attract a Commonwealth daily bed subsidy of $20, $30 or $40, depending on the category of hospital. Fund benefits were not necessarily restricted by this ``8 hour rule''-they were paid or not paid according to individual funds' rules. However, most funds would have paid full inpatient benefits for under 8 hour stays. As from 1 September 1985, the Commonwealth daily bed subsidy is not payable for non-overnight stays. A new fund benefit of $80 is payable from the basic table for day only care. Theatre fee benefits are payable from supplementary tables for day only care. The new day care benefit is designed to encourage day care, with its concomitant advantages in terms of financial savings to the community and convenience for patients. The new benefit was introduced only after consultation with the AMA, the private hospital and insurance industries, and the States. Research has shown that there are substantial savings to hospitals in providing day only care. These savings flow from the less serious nature of the procedures provided and the less intensive nursing and support care provided, as well as the cost savings associated with non-overnight stays. Under the pre 1 September arrangements, some hospitals were charging full inpatient fees, plus theatre fees, for day only patients receiving relatively minor procedures. The Government believes that it is reasonable to expect that hospitals realise that their fees should be reasonably aligned with costs. The new day care benefit was set at a level which research showed would cover the cost incurred by an efficient organisation in providing day care surgery (when theatre fee benefits were included). It is important to note that the day care benefit of $80 (plus theatre fee benefit if appropriate) was designed to cover the average cost of providing such care. Thus, the benefit takes into account the fact that costs associated with some procedures would be less than $80, whereas in other cases they may be higher. In framing the legislation, it was considered that one level of benefit covering all procedures would be administratively simpler for hospitals and health benefits organisations than having a separate benefit for each procedure. Therefore, provided that hospitals structure their fees (including theatre fees) so that they bear a reasonable relationship to average costs associated with day care procedures, insured patients should not need to make a significant personal contribution. Likewise, where a patient dies on the same day that he or she is admitted, the cost to the hospital should not, on average, vary significantly from that for persons admitted as day care patients. It is up to individual hospitals to determine their own admission policies. It is to be hoped, however, that the needs of the patient would be of paramount importance. As discussed above, research has shown that there are substantial savings to hospitals in providing day only care. In the circumstances, in respect of a patient requiring only day care services, there would appear to be little justification for a hospital adopting such practices as discharging patients after midnight or admitting them the evening before the relevant procedures are planned to take place. I would like to emphasise to the honourable senator that it is up to hospitals to align their charges reasonably with the costs they incur. The ``hardships'' referred to in the honourable senator's question may in fact flow from a desire on the part of some private hospitals to maintain their past unrealistic and inflated profit levels from day only patients. The community cannot afford to continue to squander scarce financial resources in this way. (Question No. 581) Senator Withers asked the Minister for Education, upon notice, on 8 October 1985: (1) What sum is allocated in the current financial year for hospitality/entertainment which may be expended: (a) by the Department; and (b) by each and every Statutory Authority for which the Minister has responsibility. (2) What were the guidelines in force as at 1 September 1985 for expenditure from the hospitality/entertainment account of: (a) by the Department; and (b) each and every Statutory Authority for which the Minister has responsibility. (3) Following upon the Statement by the Treasurer ``Reform of the Australian Taxation System'' on 19 September 1985 what action is proposed in relation to questions 1 and 2. Senator Ryan —The answer to the honourable senator's question is as follows: (1) (a) Department of education $6,200 Five ACT Technical and Further Education Institutions $3,750 (b) Commonwealth Schools Commission $7,000 Commonwealth Tertiary Education Commission $5,000 (2) Department of Finance Directions 13/1. 13/2 and Department of Finance Guidelines 13/1 and 13/14. (b) Department of Finance Directions 13/1, 13/2 and Department of Finance Guidelines 13/1 and 13/14. (3) Department of Finance Circular 1985/18. The Department and the Statutory Authorities are required to record and monitor entertainment expenses so that when revised rules governing the liability for the new tax provisions are settled, the necessary transfer of funds to revenue can occur. (Question No. 761) Senator Colston asked the Minister representing the Minister for Local Government and Administrative Services, upon notice, on 6 December 1985: When can Senator Colston expect an answer to Senate Question No. 456. Senator Gietzelt —The Minister for Local Government and Administrative Services has provided the following answer to the honourable senator's question: The answer to Senate Question No. 456 appeared in Hansard of 11 February 1986, page 92. (Question No. 834) Senator Colston asked the Minister for Education, upon notice, on 11 February 1986: (1) What are the current Federal and State benefits for isolated students who attend boarding school. (2) What was the last occasion when the adequacy of these allowances was reviewed, and what were the results of that review. Senator Ryan —The answer to the honourable senator's question is as follows: (1) Under the Assistance for Isolated Children (AIC) Scheme, the Commonwealth provides boarding allowances for students who must live away from home to attend school. For 1986 the boarding allowance levels are: $ basic (Free of income test)...989pa additional (subject to income test and boarding costs) senior secondary...1,862pa junior secondary...1,541pa primary...1,303pa State Governments provide varying types and levels of assistance including assistance with travel and boarding costs and, in one State, with tuition fees. Eligibility for State Government allowances in many instances is linked to AIC Scheme eligibility. (2) I am unable to comment in relation to reviews of State Government allowances for isolated students. The AIC Scheme, however, is reviewed annually in the context of the Budget. The 1985-86 Budget made provision for the basic and additional boarding allowances to be increased by 6.7 per cent in 1986, and for the qualifying limit for maximum income-tested benefits to be raised by 5 per cent. (Question No. 912) Senator Jones asked the Minister representing the Minister for Science, upon notice, on 19 February 1986: (1) What plans are in place or projected for early warning systems to aid Bureau of Meteorology Scientists and Forecasters with their cyclone and storm forecasts, in view of the devastation caused on the North Queens- land coast by cyclone `Winifred' on the weekend of February 1 and 2 1986, and the constant threat to Queensland and Western Australia of loss of life, injury and property damage during cyclone seasons. (2) What level of equipment will be required, and at what estimated cost. (3) Can the Minister for Science indicate when a satisfactory system of precyclone warning will be available to scientists and forecasters. Senator Button —The Minister for Science has provided the following answer to the honourable senator's question: (1) Proposals are being prepared, for consideration in the Budget context, to substantially upgrade the Bureau of Meteorology's warning system for severe weather, including tropical cyclones, and to increase capital funding to replace obsolete equipment and introduce new technology. The Bureau's high priority capital projects include initiatives in the following areas: - the upgrading of satellite acquisition and processing facilities; - the improvement of the weather watch radar network; - the installation of computers in Regional Offices; and - the installation of specialised mesoscale networks of automatic weather stations. (2) In 1983 the Australian Science and Technology Council (ASTEC) supported a submission by the Bureau of Meteorology for an increase in funding for capital equipment. The Government responded by increasing the capital funding to approximately $3.5m in 1984/85 and 1985/86. (3) Early detection of tropical cyclones is extremely important and will be considerably enhanced by the acquisition and installation of more sophisticated equipment. However improvement is also required in the scientific understanding of cyclone development and movement. In 1986/87 the Bureau of Meteorology is to undertake a major research project, the Australian Monsoon Experiment (AMEX), aimed in particular at improving understanding of the Australian summer monsoon. The results of AMEX will add greatly to knowledge of the tropical atmosphere and tropical cyclone genesis. These initiatives will improve the scientific basis and the technical capability of the tropical cyclone warning system to a standard appropriate for a developed country such as Australia. Senator Button —On 12 February 1986 (Hansard, page 176) Senator Watson asked me as Minister representing the Minister for Science a question, without notice, about forecasting and warning services in the Bureau of Meteorology. The Minister for Science has provided the following additional information in response to the honourable senator's question: The Bureau of Meteorology already has programs underway aimed at making more effective use of its resources through the utilisation of recent scientific and technical developments. In addition, proposals have been prepared, for consideration in the Budget context, to upgrade the warning system for severe weather and to increase capital funding for the introduction of new technology and replacement of obsolete equipment. The reference to comments attributed to Mr Arch Shields, a former Regional Director of the Bureau of Meteorology in Queensland, presumably refers to an interview published in The Australian of 10 February 1986. It is true that the Bureau cooperative observer network was run down in the 1970s from a peak of approximately 570 stations to approximately 430 due to constraints on the Bureau during that period. It is also true that the Hawke Government is taking steps to improve the observing network. For example, a new Bureau-staffed station equipped with radar was opened recently at Gove and a radar is planned for installation at Weipa this year. The Bureau is attempting to use available resources to maximise the benefits of the observing network, and the technical infrastructure, including satellites, computers and automatic weather stations. The latter are complementary to the land based observing networks and play a vital role in the modern tropical cyclone warning system. Regular satellite pictures provide the broad surveillance of the atmosphere necessary for the detection of tropical storms over the oceans. Without satellite surveillance the warning lead time for coastal communities would be considerably reduced. Interpretation of satellite data also allows very good estimation of the intensity of tropical cyclones. Computers in the Tropical Cyclone Warning Centres are necessary to speed up a variety of data processing tasks, most importantly the preparation and dissemination of warning messages to responsible authorities and the media. During the recent tropical cyclone Winifred, up to 100 addresses were notified of each warning by the Brisbane office. Automatic weather stations (AWS) are essential to provide basic data where it is not practicable to use trained observers. AWS give regular reports from coral reef atolls and islands and they are able to provide regular reports overnight when it it difficult to arrange for cooperative observers. It is true that early model AWS did have reliability problems but modern instruments have been developed to a higher standard. Notwithstanding the above, the Bureau recognises that the networks of observing stations staffed by trained observers and cooperative observers are still vital components of the forecasting and warning system. These networks provide detailed observations of a type not available from satellite data. The Bureau has recently announced a plan to boost training of observers. The investment and distribution of resources between staff and equipment has to be viewed in the context of the Bureau's integrated operational program and not as a series of discrete activities. During the five week period to 14 February 1986 the rider `meteorologists warn that this forecast is based on inadequate information' was appended to 202 forecasts and warnings issued by the Bureau. During the same period more than 50,000 separate forecasts and warnings were issued. Although the rider has been used on a relatively small percentage of occasions the Government is, of course, concerned. The initiative referred to earlier (the proposed upgrade of the warning systems and capital equipment funding, the increased training of observers) will make a significant contribution to the amount and quality of data available to meteorologists. These initiatives will improve the quality of forecast and warning services and thereby further reduce the occasions when meteorologists might consider it appropriate to append a rider to the forecast or warning.